HC Deb 28 February 2003 vol 400 cc527-43

Order for Second Reading read.

12.41 pm
Mr. Keith Simpson (Mid-Norfolk)

I beg to move, That the Bill be now read a Second time.

I begin by providing some background to the Bill. Parliamentary interest in this issue arose out of an unsuccessful appeal to the Community Fund by theEastern Daily Press "We Care" appeal 2000 for a grant towards an endowment fund. The hon. Member for Norwich, North (Dr. Gibson) introduced a private Member's Bill, the National Lottery (Amendment) Bill, which sought to give the National Lottery Charities Board an additional power to consider, and indeed award, grants towards the endowment of charities under the National Lottery etc. Act 1993, as amended in 1998. The Bill received the support of every Norfolk Member, and many of us were present in the House and I spoke in support of that Bill at its Second Reading on 23 March 2001.

Michael Fabricant (Lichfield)

Is my hon. Friend also aware that that Bill received the implicit support of the Select Committee on Culture, Media and Support, when it too recognised that there needs to be endowment to ensure, when capital grants are given, that progress can be made over the years in fulfilling the projects that they support?

Mr. Simpson

I am very grateful to my hon. Friend, who was present during that private Member's Bill debate on 23 March 2001. He is a leading member of the Select Committee; he adorns the Committee, and always speaks knowledgeably and with great force. I am grateful to him for drawing to the attention of the House the fact that the Select Committee particularly supported that private Member's Bill.

I note that the hon. Member for Great Yarmouth (Mr. Wright) is in the Chamber and intends, if he is lucky enough to catch your eye, Mr. Deputy Speaker, to support the Bill. I received apologies from the hon. Member for Norwich, North, the right hon. Member for Norwich, South (Mr. Clarke), my hon. Friends the Members for North-West Norfolk (Mr. Bellingham) and for South Norfolk (Mr. Bacon), my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) and the hon. Member for North Norfolk (Norman Lamb). All those hon. Members support my Bill, as do many other hon. Members outside the fair county of Norfolk.

I pay particular tribute to the hard work of the hon. Member for Norwich, North, who worked very hard in the last Parliament to get his Bill on the statute book. As you will recall, Mr. Deputy Speaker, the Bill received a Second Reading, but the general election prevented it from reaching Third Reading. Following the general election, Lord Walpole of the county of Norfolk sought to introduce a similar Bill in the other place, but it was withdrawn before Second Reading.

The purpose—the key objective—of my Bill is to make it clear that all lottery distributors, including the Community Fund, which is the lottery distributing body that gives grants to charities and the voluntary and community sector, can distribute lottery moneys by funding endowments, including permanent endowments, for the purpose of establishing endowments as well as for contributing to those already in existence.

The powers of distributors under current statute give lottery distributing bodies power to distribute lottery money for meeting expenditure of the types specified in section 23 of the 1993 Act. However, it does not define what is meant by "for meeting expenditure" or contain any explicit reference to the funding of endowment funds. This private Member's Bill would amend those sections of the Act that refer to "for meeting expenditure" to clarify the fact that, in each case, the term includes funding of endowments.

The Department for Culture, Media and Sport previously advised that distributors other than the Community Fund could fund endowments, and some distributing bodies have made such grants. The Bill would have retrospective effects, which are in clause 1(9).

What are the benefits of the Bill? It would clarify the powers of all the distributors, put the Community Fund on the same legal footing as other distributors in being able to fund endowments and benefit charities such as theEastern Daily Press "We Care" 2000 fund, which wants to apply for lottery funding and which I want to comment on.

Many of us in Norfolk became involved with the appeal. With the support of theEastern Daily Press, a fund was set up in Norfolk to endow the Norfolk millennium trust for carers. It aimed to raise £1 million in cash to establish the trust, which is registered as a charity, and to enable it to become long lasting as well as to provide financial help for an estimated 130,000 unpaid carers in the county of Norfolk. Its purpose was to respond to the identified need of such carers, and it sought to help with the purchase of equipment and improving the quality of life for carers.

So far, the appeal has raised approximately £635,000 and has made more than 100 grants to pay for equipment, holidays and support for carers. I do not have to describe to the House the emotional, financial and physical burden endured by carers, or the loneliness, frustration and sheer exhaustion involved for many of them, some of whom are among the most elderly members of the community.

I pay particular tribute to two groups of people who have been involved in the appeal. I must mention the work done by the editor, Mr. Peter Franzen, and the deputy editor, Mr. James Ruddy, of theEastern Daily Press in driving the appeal forward and the trustees, in particular Mrs. Paddy Seligman, who has worked tirelessly on behalf of the fund. As with other charity funds, it involves tens of thousands of local people and organisations, who run everything from jumble sales to sponsored walks.

We in this country are proud that although considerable public expenditure is given to support the needy, and rightly so—I pay tribute to the work done by previous Governments and by this Government—a lot of money, work and sheer commitment are given by thousands of individual volunteers as well as the voluntary sector. It is not an either/or. They provide something that is extra that is not just money. The mission statement of theEastern Daily Press "We Care" appeal is

to relieve the elderly, infirm, sick or disabled in Norfolk by providing financial aid and practical support to carers, either individually or through carers' groups. It is estimated that one in seven of the population in the United Kingdom are unpaid carers. In the county of Norfolk, that comes to some 110,000 people, which means about 12,000 in my constituency of Mid-Norfolk. It has been calculated that, nationally, carers save the Government approximately £34 billion a year, so anything that we can do to help carers not only saves the Government and the taxpayer literally billions of pounds but, most important of all for organisations such as the "We Care" campaign, brings relief to tens of thousands of carers, who often have to do a job in addition to looking after a sick parent, partner or child.

At the moment, all lottery distributors are able to make grants to endowments but the Community Fund is not. Charities such as the "We Care" appeal and other local voluntary groups cannot bid to the fund to augment their endowment funds. My Bill would give the Community Fund power to fund endowments and would clarify further the powers for other distributors to make grants to endowments.

What are the benefits of endowment funds? They can be a useful way of providing long-term revenue funding, particularly for voluntary sector bodies. They can enable bodies to plan strategically and with some certainty on the security of funding, enabling them to operate more effectively on behalf of their client groups. They can also improve creditability with potential third-party funders and partners secure in the knowledge that core funding is guaranteed.

Nevertheless, I recognise that endowment funds require large sums up front to provide reasonable returns in the longer term and that future income levels are subject to variations in interest rates. However, the power in my Bill is a permissive rather than a mandatory power for distributors. It would ultimately be up to the distributors to determine how to treat applications for grants to endowment funds against other calls for lottery funding. I understand that, should my Bill be successful, the Minister's Department intends to assist distributors by issuing guidance.

What is the regulatory cost of the Bill? I suppose that you, Mr. Deputy Speaker, would expect a Conservative to look with a gimlet eye at the cost of regulation. As a permissive power, there would be no regulatory cost to businesses or the voluntary sector resulting from my Bill. Indeed, the measure is intended to assist charities in the sector and other good causes by enabling them to apply for lottery funding to help set up or augment their endowment funds, and thus to help manage their operations more effectively.

That power may result in additional calls on distributors' resources, but, ultimately, it would be a policy decision for distributors on how to prioritise such applications against others for non-endowment grants. Therefore, it would be a permissive, not a mandatory power. That is the great appeal of the Bill. There would be no impact on the expenditure or manpower of central or local government. I am sure that that would appeal not only to hon. Members present and the Minister but to the Treasury, which oversees all public expenditure.

This Bill would affect all national lottery distributors' powers and therefore would be UK-wide. The policy for the lottery is a reserved issue, but I understand that the Bill has attracted the support of the devolved Administrations.

This Bill is the outcome of a Bill that was introduced as a private Member's Bill in the previous Parliament. It has been redrafted and enjoys, I believe, widespread support. I hope that the Government can support the principles of my Bill, which will enable endowment funds to be drawn upon by a wide range of charities and voluntary organisations, not only directly saving national and local expenditure, but also bringing relief to the tens of thousands of our fellow citizens who work so hard to care for many of the most vulnerable people in our community.

As Members of Parliament, it is not often that we can do something really constructive. Two or three years ago, my son, who was then about nine or 10, asked me about my job, and I explained about the parents of his friends in his class who were teachers, doctors or farmers; he understood all that. Then I attempted to explain what a Member of Parliament's life was like, and what one did. He fixed me with a sceptical look, as young children do, and said, "Yes Dad, but what exactly do you do?" That is usually the problem—but, occasionally, we in Parliament can do something practical beyond the narrow confines of party politics and the constraints of party discipline.

I hope that the House will approve the Bill today. I commend it, and hope that it will find widespread support.

12.56 pm
Mr. Anthony D. Wright (Great Yarmouth)

I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on securing a high place in the ballot and introducing the Bill. My comments will be very brief, first because he has already adequately covered all the points, and secondly because there are three or four other private Members' Bills to be debated.

It is hard not to feel a slight sense of déjà vu as we discuss this Bill, because we debated a similar Bill promoted by my hon. Friend the Member for Norwich, North (Dr. Gibson) two year ago. As we all know, that Bill eventually failed because of the general election, but we hope that the same fate does not await the Bill before us today.

The fact that we are again assembled here today to debate a Bill whose main aim is to allow lottery distributors to fund endowments is a remarkable testament to the degree of cross-party support for the idea, because it was a Labour Member who introduced the private Member's Bill in the last Parliament, and the Bill that we are now debating was introduced by a Conservative Member. If I can be a little parochial for a moment, I might add that it is also a testament to the unity of the hon. Members representing the county of Norfolk, because they have been the driving force behind this legislation.

I pay tribute to those who support the Bill, but I must also congratulate theEastern Daily Press on its "We Care" appeal. It was the EDP that originally drew attention to the anomaly in the National Lottery etc. Act 1993 that the Bill seeks to address. I know that the appeal's director, Mrs. Paddy Seligman. has worked hard to raise funds, and I add my congratulations and thanks not only to her but to Peter Franzen, the editor, and James Ruddy, as well as to the hon. Member for Mid-Norfolk.

I understand that the Department for Culture, Media and Sport and the Minister for Sport, who is here today, also support the Bill, so we hope that in due course it will make it on to the statute book. The purpose of the Bill is expressly to permit all lottery distributors to distribute lottery moneys by funding endowments, including permanent endowments—both establishing endowments and contributing to endowments already in existence.

When we debated this matter in 2001, there was some discussion about whether it was a good idea to make the change. It was pointed out that granting an endowment would inevitably tie up a relatively large amount of capital, so it might be better for the money to be distributed to more recipients in the short term. It was further argued that the current low returns on endowments were another reason not to make the change. Although I appreciate those arguments, I do not agree with them. TheEastern Daily Press "We Care" appeal provides a perfect case study of why the proposed change should be made.

The amount raised by the appeal stands at £650,000, which is a magnificent effort. All the income produced from investing that sum goes in awards to carers throughout Norfolk. I was pleased to learn that, as the capital is invested for safe income rather than capital growth, the rate of return has not been badly affected by recent falls in the stock market. However, the "We Care" appeal target is £1 million because such an investment would provide a sufficient return to allow the organisers to deal adequately with the requests for assistance that they receive from carers throughout Norfolk. I am told that they are not always able to grant the full amount requested, even in the most deserving cases, because they do not have enough funds. Although they have demonstrated great persistence, determination and professionalism to raise £650,000, the law does not allow them to apply to the lottery for assistance to reach the £1 million target simply because the fund is constituted as an endowment.

It seems wrong in principle that those who are in charge of the various lottery distributors, who discharge the difficult duty of deciding which groups should benefit from lottery funds, should have their hands tied by not being allowed to make grants to endowments. It may be that the present low rates of return on investments and the long-term tying up of capital militate against the funding of endowments in some cases, but surely we should trust those who have been empowered to make such decisions and allow them the flexibility to consider the widest range of possible applicants for the widest range of benefit to the community.

In any case, there is another thing in favour of funding endowments, as I told the Department for Culture, Media and Sport when it invited responses to its Green Paper, "Review of Lottery Funding". Put simply, the long-term and stable nature of the funds that an endowment provides is desirable. No Government have stressed the value of long-term economic stability, nor done as much to bring it about, as this Government. So if we can give the lottery fund distributors the freedom to encourage that outcome for those who receive their grants, we should do so.

I understand that there is a difference between today's Bill and the Bill promoted by my hon. Friend the Member for Norwich, North in 2001. This Bill is more widely drawn and specifically allows all the lottery distributing bodies to fund endowments. The purpose of the previous Bill was to allow the National Lottery Charities Board to fund endowments, which, at the moment, it is specifically not allowed to do. The situation for the other lottery funding boards is unclear but would be clarified by the Bill. A welcome effect of that would be to include not only charities but the range of voluntary groups as possible recipients of lottery endowment funding.

I know from my constituency how deeply ingrained the culture of volunteering is in our society. Last year, I held a reception for representatives of voluntary groups in the borough and was shocked to find that in my constituency of 90,000 people there are no fewer than 350 charitable and voluntary groups. I am hopeful that, if the Bill is passed, some of them will be successful in applying for lottery endowment funds. So I hope that it proceeds with the wholehearted support of the House.

1.3 pm

Mr. Malcolm Moss (North-East Cambridgeshire)

I congratulate my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) on his success in coming high in the ballot for private Members' Bills and on taking the opportunity to reintroduce a Bill, suitably amended, that secured widespread support when first introduced by the hon. Member for Norwich, North (Dr. Gibson) two years ago.

The original Bill focused on the anomaly in the National Lottery etc. Act 1993 which prevented the National Lottery Charities Board from distributing funds to local charities in the form of endowments. A particular charity was mentioned at that time and the change was proposed in a campaign run by theEastern Daily Press, in conjunction with the hon. Member for Norwich, North, known as the "We Care" appeal 2000. The aim was to raise £1 million to establish an endowment fund for unpaid carers in Norfolk. In my hon. Friend's eloquent speech, he re-emphasised the importance of funding carers in his county. Not only is that vital to him and his constituents, but it serves as a timely reminder of how important carers are in our communities throughout the country.

When the original Bill was debated, although there was general support for it, concern was expressed on all sides about its rather narrow and prescriptive proposals, linked as they were to only one of the seven lottery fund distributors—the National Lottery Charities Board. As my hon. Friend the Member for Ryedale (Mr. Greenway) said at the time: The question for us is whether the proposed change is desirable, whether it would improve the working of the NLCB and provide greater equity of opportunity to obtain grants from the board, or whether it would have adverse consequences for the work of the board or the operation of the lottery funding bodies."—[Official Report, 23 March 2001; Vol. 365, c. 594.] It is the latter point that is crucial. Would a facility offered exclusively to the NLCB have adverse repercussions for any of the other distributing bodies? This point was not teased out in Committee because the original Bill fell with the looming general election of 2001. However, the Government did then share that concern, along with spokespeople on the Opposition Benches.

These problems have, in our view, been properly and wisely addressed in the amended Bill of my hon. Friend the Member for Mid-Norfolk. It adds to the powers of distributing bodies by including the distribution of money for the purpose of establishing, or contributing to, endowments in each appropriate section of the National Lottery etc. Act 1993: sections 22, 25, 25B, 38, 41, 43 and 44. My hon. Friend's Bill now gives each and every distributor of lottery funds the option of contributing either to the establishment of a new endowment, or to an existing one.

The previous debate also cited the endowment funds of the National Endowment for Science, Technology and the Arts as a precedent already established by the Department for Culture, Media and Sport, and as a template for possible national lottery endowment funds to follow, given the similarity between NESTA and various registered charities. Not only was the method of funding by endowment at that time praised; the freedom and continuity afforded to NESTA trustees, without undue interference from Government, was noted as both preferable and positive when targeting particular groups in need of support.

As my hon. Friend the Member for Mid-Norfolk has pointed out today, however, one of the downsides to the endowment route is the variation in interest rates. Only a few weeks ago, the Minister and I confronted each other, in a statutory instrument Committee, on this very point. NESTA, in receipt of an original endowment, found that the income that it was anticipating—and was presumably spending—had decreased because of lower interest rates. NESTA appealed to the Government and to the Minister's Department for additional capital moneys to put into the endowment fund. So a real problem has raised its head in respect of NESTA, which, at the time, was described as a useful template for others to follow and to adapt.

Another potentially detrimental aspect of the Bill's proposed amendments is that in funding endowments, less money would be readily available for projects in need of immediate funding. This is due, of course, to the large sums needed to initiate an endowment fund. Potentially, that would deny projects immediate funding in the short term. However, the benefits of establishing an endowment fund that can provide funding for an unfixed and prolonged period may prove more advantageous and beneficial in the long run.

As I understand it, the legal position for an endowment is that the money is conferred upon that endowment in perpetuity. Indeed, the Bill's amendment to section 44 of the 1993 Act specifically refers to "permanent endowment". Of course, that has the considerable advantage for the recipient bodies of guaranteed continuity of income, and overcomes the problems faced by many bodies currently in receipt of lottery funds, including charities, when their short-term funding—usually of three to five years—comes to an end. But what happens to endowed funds if the recipient body ceases to exist, for whatever reason? Does existing legislation allow sufficient control to avoid funds falling into the wrong hands or being misappropriated in any way? Who would have the ultimate responsibility? Would it be the recipient charity controlling the endowment, or the lottery distributing body that countenanced the funding to the endowment in the first place?

This Bill highlights an anomaly in the original National Lottery etc. Act which denied the funding of endowments by omitting it from the defined expenditure of the various funding distribution boards. No reason has been specified for denying funding of, or contribution to, endowment funds. Since the original Act, the NESTA fund has provided a framework, and precedents, for the establishment of endowments in all areas of national lottery funding.

As I have said, the short-term effects of a change may he detrimental in denying money to organisations that require immediate funding, as the cash will be directed into the establishment of an endowment fund. However, by allowing the funding of endowments, the long-term benefits include prolonged and sustained funding to worthwhile projects.

On this side of the House, we will need reassurance on the technical issues that the Bill raises. However, we are confident that those can be teased out in Committee. The lottery has been a major success since its introduction by the Government of the former Member for Huntingdon. Nevertheless, it is in need of reform to meet changing circumstances. We believe that the Bill introduces welcome—although overdue—reform. We intend to give it a fair wind on this, its Second Reading.

1.11 pm
Dr. Vincent Cable (Twickenham)

I add my congratulations to the hon. Member for Mid-Norfolk (Mr. Simpson) on the persuasive way in which he introduced the Bill. He has made great efforts to ensure that this is a non-partisan, cross-party Bill. He has involved the hon. Member for Great Yarmouth (Mr. Wright)—from the opposite side of the House—as well as my hon. Friend the Member for North Norfolk (Norman Lamb), who I am sure would want me to do all I can to expedite the progress of the Bill.

The hon. Member for Mid-Norfolk highlighted something that I recognise from constituency work. Organisations that are involved with carers face particular difficulties in raising funding. It is a difficult and unique problem. In my constituency, there is a wonderful group called Home Link, which is associated with St. Augustine's church. The group specialises in providing day respite care for carers. Carers come, and their elderly or disabled relatives are left for the day. Such organisations perform an enormously valuable social function, but they genuinely find it difficult to raise funding because they fall down the crack between health and social services. They may get a bit of cash now and then from hospitals, but they are not directly related to health care and do not provide mainstream primary hospital care; similarly, social services departments are always strapped for cash and are therefore reluctant to take on optional items such as respite care. As a result, such groups struggle constantly. They have to pay professional fundraisers and find themselves on a perpetual treadmill of fundraising activities. I can therefore see the logic of what the hon. Member for Mid-Norfolk is proposing. Secure, long-term funding that provides an income stream is exactly what such groups require to give them stability.

Michael Fabricant

I am interested in what the hon. Gentleman says. I feel strongly that funding of this type should not be used to breach the additionality principle, but does the hon. Gentleman feel that hospices should be considered in this discussion? Although partly funded by the state, they are mainly funded by charitable organisations.

Dr. Cable

That is a sensible and helpful suggestion, and I am sure that hospices could be included if this Bill progresses. The basic problem that hospices face is a lack of government support. Many of us have tried to address that issue.

The hon. Member for North-East Cambridgeshire (Mr. Moss) spoke about NESTA. It provides a legal precedent and it also handles large amounts of money. I understand that the endowment for NESTA is about £200 million. That involves a substantial undertaking and provides a lot of useful funding, particularly in scientific innovation and the arts.

My final point is not a criticism of the Bill, but I would like to ask a question that the Minister may also wish to address. What effect will this type of approach to the use of lottery funding have on the overall success of the lottery?

Currently, we are not dealing with a successful concern; the lottery is in considerable trouble and people are increasingly reluctant to use it. There are many reasons for that. Lotteries all over the world peak and then decline as people become used to them and get bored. There may be a particular problem for the UK lottery because it has such huge jackpot prizes with a small tail of lesser prizes, so the incentive to keep playing it is eroded.

A subsidiary reason for the loss of appeal is that many punters see only a distant connection between the money that they invest and the good causes. There is a danger that endowments might make that problem worse. The punter putting in his or her money will not see the end product because the money will go into a financial investment vehicle, although of course it will be working for good causes. Considerable promotion will be required to explain to the public that endowment is a useful good cause and that they will not lose the direct connection between the money that they put on the lottery today and the money given to good causes tomorrow. That is a psychological danger and it should be addressed, although it is not a fundamental argument against the proposals. It is part of the lottery problem.

Michael Fabricant

The hon. Gentleman raises an interesting point. When we get some of our own money back from the European Union, we have to erect a big plaque and a flag to show that it is EU money, so perhaps it should be compulsory to do something similar for anything funded under the auspices of the Bill—shortly, I hope, to become an Act. Perhaps the Minister might consider that point.

Dr. Cable

In my area, such appreciation is advertised and expressed to the fund for most projects that receive substantial lottery funding, but I am not sure that we should make that practice highly prescriptive, nor what penalties should be imposed on charities that do not show due appreciation. However, the hon. Gentleman obviously has a fund of ideas, so perhaps he should make a speech and give us the benefit of them.

That is the limit of my contribution. I acknowledge the effective way in which the hon. Member for Mid-Norfolk introduced the Bill. I support him and my colleagues and hope that we can consider the more technical aspects in Committee in due course.

1.17 pm
Michael Fabricant (Lichfield)

My chance to speak has come sooner than I anticipated; I am grateful to you for calling me, Mr. Deputy Speaker.

I, too, congratulate my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) on his ingenuity in coming so high in the ballot and on his good sense in promoting the Bill. I was in the Chamber when the earlier Bill was discussed. It had support on both sides of the House and only the general election, which sadly had to come about, meant that it did not pass at that time.

The hon. Member for Vauxhall (Kate Hoey), who was then the Under-Secretary of State for Culture, Media and Sport, said: The Government sympathise with what my hon. Friend the Member for Norwich, North"— as has been said, the hon. Member for Norwich, North (Dr. Gibson) was the promoter of the original Bill— is trying to achieve. We may wish to offer technical improvements should his Bill make further progress, but we shall not oppose it today."—[Official Report, 23 March 2001; Vol. 365, c. 621.] I hope that the Department of Culture, Media and Sport will treat my hon. Friend's Bill in the same way [Interruption.] He nods in affirmation. There will not be a general election in the immediate future, although one might wonder about that given the way things are going, so I hope that the Bill will become law sooner rather than later.

I very much welcome the Bill. As my hon. Friend has already pointed out, one in seven people are carers and the Bill is particularly directed at the National Lottery Charities Board. The measure would provide many opportunities for lottery money to be used to support carers throughout the country. However, as I said in my intervention on the hon. Member for Twickenham (Dr. Cable), the money need not be used only for that; some of it could also be used for hospices, because the Government do not support hospices at present.

Many people have been touched by hospices, either because relatives are there or because they work in charities that support hospices. I have a hospice in my constituency—the St. Giles hospice—and huge amounts of effort go into supporting it. If it could receive additional support by virtue of this Bill becoming an Act, many people will appreciate it.

As others have pointed out, this measure has expanded since the original Bill, as it will also take into its orbit the other lottery boards. At the moment, there is a lack of clarity. I mentioned to my hon. Friend the Member for Mid-Norfolk that the Select Committee, under the flamboyant chairmanship of the right hon. Member for Manchester, Gorton (Mr. Kaufman), examined the funding of organisations by lotteries. It was accepted that, often, large grants are given to museums, theatres and so on, which then find that they do not have the money to fund running costs. I am therefore particularly pleased that this Bill will enable lottery boards to provide endowments—if those are the most suitable means—for organisations such as theatres and museums. I suppose that I should mention that one museum in my constituency, the Erasmus Darwin museum, would be a particularly suitable recipient of such funds. That would provide additional flexibility to organisations such as the Arts Council and the Heritage Lottery Fund to provide funding for those organisations, which are so worth while.

I appreciate, however, the caveats that were raised by my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss). Controls must exist to ensure that, over time, moneys received from long-term endowments are used wisely and as was originally planned. I hope that the Minister will assure me and other Members that such provisions will be in place to ensure that moneys cannot be misused.

The hon. Member for Twickenham talked about the fact that moneys coming into the lotteries have fallen. That is true. Their total income has fallen by something in the order of 5 per cent. since April. Camelot says that interest in the main lotto game is declining for all sorts of reasons, one of which, as the hon. Gentleman pointed out, was simply familiarity with lotteries. That was not helped by somebody—I think she was the chief executive of Camelot—stating the obvious fact that one stands a greater chance of being struck by lightning than of winning £6 million or more. For whatever reason, however, income has fallen.

Camelot has said that one reason why interest in lotteries has fallen is that grants have been made to unpopular causes. It would be interesting to consider a couple of examples. The Rhondda Community Development Association received £200,000, which sounds fine until we find that the money was to improve the lives of Bolivian miners. At least a kind of synergy exists between Bolivian miners and miners in the Rhondda. The Blue Cross animal charity, however, received more than £180,000 to expand a helpline for mourners of pets. When income has fallen by 5 per cent., and there are so many worthwhile causes, one wonders about grants to mourners of pets. I remember once being mugged, and I had ladies from Victim Support constantly phoning me up, and I had to say, "Actually, I'm okay." If Victim Support does not receive lottery money, why should mourners of pets do so?

To me, the most amusing example, however, was the £295,000 given to a Worcestershire charity to breed giant guinea pigs in Peru. I do not know about you, Mr. Deputy Speaker, but I have walked in Peru, and I can tell you that giant guinea pigs are not kept as pets in Peru; they are eaten. I have to confess—I know that I will receive many letters for having done so—that I have eaten a giant guinea pig in Peru.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I should tell the hon. Gentleman that my son's girlfriend is currently in Peru, but that has as much relevance to the debate as his comments.

Michael Fabricant

I am fascinated to know that, Sir. I only hope that your son's girlfriend does not try a giant guinea pig in Peru or elsewhere.

We must think wisely and carefully about where the money goes. It is particularly poignant to learn that the Royal British Legion was refused £500,000 for a residential home and that the Battle of Britain Historical Society was refused money for a memorial. We must always consider carefully how the money is spent. On balance, the Bill is overdue. Personally, I think that it should not be called the National Lottery (Funding of Endowments) Bill but simply the Norfolk Bill. I commend all Norfolk Members as well as theEastern Daily Press on being its progenitors.

1.26 pm
Mr. Bill Wiggin (Leominster)

It is a great pleasure to follow my hon. Friend the Member for Lichfield (Michael Fabricant), who is fast becoming a national treasure. I wish that he had time to tell us how the guinea pig tasted before he was stopped in his tracks.

The lottery has not always been disastrous in its handing out of funds. I should like to touch on one or two successful appeals in my constituency. Herefordshire Headway provides education, day care and rehabilitation for adults with brain injury, and was lucky enough to receive £198,000. Bromyard public hall, Age Concern Leominster, and North Herefordshire and Tenbury area council for voluntary service all received lottery funding, for which they are extremely grateful. I was deeply concerned that my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) found that it was occasionally difficult for a Member of Parliament to be constructive. I suspect that he was referring to his time in the Whips Office.

It is important to declare my interest as a trustee of the Eveson charitable trust, which gives large donations to charities. The Bishop of Hereford, other trustees and I spend a great deal of time and effort to try to ensure that the best causes receive funding and focus particularly on who will do the most good locally. I do not envy people who have the job of making such decisions on behalf of the lottery. It would be a tragedy if they were prohibited from giving endowments, so I hope that the Bill is successful in altering that. I should also like to declare an interest as someone who has been lucky enough to get five numbers in the lottery. Unfortunately, I was part of a large syndicate of 18 colleagues, and we won the princely sum of £25 each. I sat next to the young man who chose the numbers and I was appalled to overhear a colleague say, "Well, why didn't you get the sixth one right, you idiot?" That just shows how ungrateful some people can be.

When looking at endowments to charities, we should remember that their purpose is to ensure that charities' good work continues. I recall a visit to the volunteer bureau in Leominster, where I witnessed something that most Members who have visited such bureaux will have witnessed. People were trying desperately hard to do something good—working hard for charity—only to find that halfway through their term they had to turn their attention away from charitable work and start to concentrate on funding their work for the next three years. Endowments would make that unnecessary, so the proposed change is thoroughly commendable.

I am grateful to my hon. Friend the Member for Lichfield for mentioning the hospice movement. I am a patron of St. Michael's hospice in Bartestree in my constituency. Palliative care touches people so intensely personally, and the Government should consider the funding of it.

I am pleased to have had an opportunity to speak on this important subject. Like all those involved in charitable work, I believe that we should do it to the best of our ability and ensure that the work continues unabated. To that end, I support the Bill.

1.30 pm
The Minister for Sport (Mr. Richard Caborn)

I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on his successful introduction of the Bill. As many hon. Members have said, it is pleasing that he took the opportunity afforded to him to bring the Bill before the House. I know how much the issue addressed by the Bill means to the hon. Gentleman and his colleagues in the wider Norfolk constituencies, many of whom are present and have contributed to the debate.

I put on record a tribute to my hon. Friend the Member for Norwich, North (Dr. Gibson) who, as has been mentioned, introduced a similar Bill back in 2001, seeking at the time to apply the Bill's provisions solely to the Community Fund. My hon. Friend's Bill reached its Third Reading before the general election intervened to prevent further consideration. That was unfortunate, to some more so than to others. Although we believed the Bill to be technically flawed, as my hon. Friend the Member for Vauxhall (Kate Hoey) explained from the Front Bench, we were sympathetic to the principle. That, together with the help of my Department, has enabled the hon. Member for Mid-Norfolk to produce a Bill that is technically sounder than the previous one.

It would be remiss of me not to mention the comments of the hon. Member for Twickenham (Dr. Cable) about the lottery in general and the subject of good causes in particular. Several hon. Members have referred to their experience with the lottery. I remind the House what an institution the lottery is, and credit for its existence is due to both sides of the House. The lottery has raised £12.4 billion for good causes. One or two have been highlighted today, including guinea pigs in Peru. That £12.4 billion has benefited 127,000 individual projects. Independent audit has shown the UK lottery to be among the most efficient lottery operators in the world, and it is considered to return more money to good causes than do lotteries in many other countries. The Lotto, which is a large part of the portfolio—Camelot is looking into that—ranks in the top two lottos in the world. By any standards, it has been a huge success.

Bob Spink (Castle Point)

I am listening carefully to the Minister. Does he accept that it would help the lottery to get more money in and facilitate endowments under the Bill if we could attract more support for the lottery? One way of doing that is to ensure that the lottery money is spread more evenly among the constituencies, and that constituencies such as mine, which receive only the bottom 5 per cent. of receipts, receive more lottery funds.

Mr. Caborn

The hon. Gentleman was successful in raising questions on the matter a little while ago, and I responded in detail. He knows that, with agreement across the House, we have tried to refine the distribution of lottery receipts for good causes, and we will continue to work at that. I told him that I would write to him about the possibility of his constituents making more applications—they can get the money only if they make an application, and unfortunately his constituents had not made as many applications as others.

Finally on that point, I have had discussions—as late as this week—with Camelot about hon. Members' genuine concerns about the decline in lottery sales, although, as I say, such things are relative and must be put in context. Camelot is very mindful of that and, I think, will produce some innovatory ideas about how it can return to the growth path and encourage more people to participate.

I wish to say very genuinely that although it is easy to make fun of one or two of the causes being supported, it is incumbent on all hon. Members to get behind the lottery because at the end of the day all our constituents gain from it. If hon. Members on both sides of the House can agree on that, it will be a win-win situation for everyone. Indeed, at the beginning of this month the tally was that about £135 million had been awarded to good causes just in Norfolk, including £21.6 million from the Community Fund to charitable and voluntary bodies.

We have heard very firmly that the Bill was originally inspired by theEastern Daily Press "We Care 2000" appeal, which was launched back in October 1998, with the aim of raising £1 million to establish an endowment fund entitled "The Norfolk Millennium Trust for Carers". So I join many hon. Members in saying "Thank you very much" to theEastern Daily Press, particularly its editor and deputy editor, as well as the fund's trustees who have undoubtedly done a sterling job.

It is pleasing that, from time to time, the House focuses on groups of people throughout the country. We sometimes forget carers. Indeed, they are the unsung heroes who deserve our admiration and support for the work they do week in, week out; year in, year out. It is great that the House can acknowledge that, and a paper, such as theEastern Daily Press, can bring that to the fore.

It is unfortunate that the existing lottery legislation does not expressly refer to the power of distributors to fund endowments. I am sure that it was not the deliberate intention, when the National Lottery etc. Act 1993 was originally drafted, to prevent any distributor from awarding grants to establish or augment endowment funds, so it is good that we can take this opportunity to tidy up the legislation in the way that the Bill will allow.

I asked my office to take a quick look at the other endowments, as we tend to home in on the National Endowment for Science, Technology and the Arts, which is the big one. I wish to say briefly that the New Opportunities Fund has given £50 million to a 10-year endowment, as part of the fair share initiative. The Millennium Commission has awarded £16 million, as a 10-year expendable endowment, to the millennium seed bank. Under the stabilisation and recovery programme, the Arts Council of England has given three awards to endowments, totalling less than £2 million. The Heritage Lottery Fund has also given a few awards to endowments—probably three or four—totalling about £15 million. So we can see that endowments have been used effectively to top up or stabilise certain funding.

I hope that we can tidy up the legislation that is already on the statute book That is why I welcome the Bill, which expressly provides all distributors, including the Community Fund, with the power to use lottery money to set up or contribute to endowments if they choose to do so. As the hon. Member for Mid-Norfolk has highlighted, the Bill will clarify that all the distributing bodies have powers to fund endowments, so it will ensure that charitable bodies are not put at a disadvantage in gaining access to lottery funding. Expressly enabling charities to create or augment endowment funds through lottery money would allow voluntary sector organisations to manage their funds much more effectively.

The Bill also fits in well with the key theme emerging from the Department's review of lottery distribution, and I refer the hon. Member for Twickenham to the review that we have undertaken. A number of announcements have been made earlier this week, including on bringing together the community programme and the NOF.

The general thrust of that consultation has been mentioned in the debate, and we must ensure that lottery decision making ties in with what people believe the lottery should be used for in their localities. That would help to bring certainty back, and we will endeavour to achieve that over the coming months and years. Making lottery funds more responsive to the needs and priorities of local communities is important. Giving distributors express powers to fund endowments will give them much more flexibility to respond to the needs of applicants and help to give charitable organisations a little more flexibility in managing their resources.

I would now like to respond to some concerns highlighted in the debate. Several hon. Members asked about the powers that we would have to make sure that the moneys would continue to be spent well. Section 23(3) of the National Lottery etc. Act 1993 gives the Secretary of State the power to issue a statement on financial requirements to each distributing body. It is quite a wide power, so the House can be reasonably certain that we will keep control of the matter. However, it is always possible for the House to challenge the Department or the Secretary of State.

We recognise the concerns expressed over the value for money of grants to endowment funds. Although endowment funds can be a useful way of providing long-term revenue funding for voluntary bodies and enable them to manage their funds in a more effective way, it is true—we have had experience of this—that they require large sums of money up front to provide a reasonable level of revenue in the longer term and that future income levels are subject to variations in interest rates. Nevertheless, I do not believe that those factors should prevent us from clarifying the powers of distributors in this area. As has been suggested, this is a permissive, rather than mandatory measure, enabling distributors to grant funding for endowments should they choose to do so. It will be a judgment for the distributors.

There is little evidence that distributors intend to use the power on a regular basis or that they would be flooded with applications for grants to endowment funds. Nevertheless, I can announce that, should this Bill proceed—I hope that it will—my Department will issue guidance to distributors on this matter, and that a draft of the guidance will be made available to peers during the Lords stages of the Bill.

Another related issue has been the effect of the measure on non-endowment applications. As I have already said, endowment funds can and do tie up large sums of money in the short term. This is, however, a factor that distributors will need to bear in mind in the grant assessment process against other, non-endowment applications. I expect this issue to be flagged up in my Department's guidance note to distributors. Distributors will need to make difficult decisions on the best use of lottery funding, but it should be remembered that they already have to make hard choices in assessing grant applications. The contributions of hon. Members have already made that clear, and there will be nothing to prevent bodies from applying for non-endowment funding.

This has been a good debate and the Bill has received all-party support. However, when I read theHansard report of the previous debate on the issue, I saw that the then right hon. Member for South Norfolk—now Lord MacGregor of Pulham Market—made a number of predictions. I see that the hon. Member for Mid-Norfolk has not gone that down route, but Lord MacGregor responded to the statements that my hon. Friend the Member for Norwich, North (Dr. Gibson) had made in the opening remarks of that debate by saying:

I congratulate the hon. Gentleman on his success in the ballot, and I am delighted that he has chosen this subject. I agree with everything that he said, apart from two points. In his tribute to my hon. Friend the Member for North Norfolk (Mr. Prior), he suggested that his seat might be in jeopardy. I assure him that that is not the case. My hon. Friend has done remarkable work in his constituency, which will be well rewarded by an increased majority. The then hon. Member for North Norfolk lost his seat. Lord MacGregor continued:

The other point on which I disagreed with the hon. Gentleman was when he said that he hoped to be performing in one of the appeal's charitable concerts in the summer. I do not know when the election will be, but I am sure that he is hoping that it will be way beyond the summer, because I am sure that he will not want to participate as an ex-Member."—[Official Report, 23 March 2001; Vol. 365, c. 587.] My hon. Friend the Member for Norwich, North was re-elected. Those predictions were not very accurate.

In our view, the Bill is compatible with the European convention on human rights. As the hon. Member for Mid-Norfolk said, my Department has also prepared a regulatory impact assessment for the Bill that I will place in the Libraries of both Houses.

We consider the Bill useful, and I am grateful to the hon. Gentleman for introducing it. It will clarify the powers of all distributors to fund endowments should they choose to do so, and will put charities on a footing equal to that of other applicants for lottery grants. I am happy to offer the Government's support.

1.45 pm
Mr. Keith Simpson

I shall speak briefly, because another hon. Member wishes to speak on his Bill.

I am much heartened by the support of a number of hon. Members. I thank the hon. Member for Great Yarmouth (Mr. Wright) for his support, and for what he said about the impact of charities on his constituency. The hon. Member for Twickenham (Dr. Cable) rightly raised points about the future of the national lottery, as did my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss), who also raised technical issues that I hope will be dealt with in Committee if I am lucky enough to secure a Second Reading. I thank him for his generous support. My hon. Friend the Member for Lichfield (Mr. Fabricant) provided strong support; we shall probably never know about the giant guinea pigs in Peru, but they may be the subject of a future Adjournment debate. My hon. Friend the Member for Leominster (Mr. Wiggin) was also very supportive.

I thank the Minister for his comments and his general support. I was grateful for the technical help that I received from officials in his Department. He mentioned the former Member for North Norfolk, my friend David Prior. I know that, despite his slightly chiding comment, the Minister will accept that David Prior raised thousands of pounds for theEastern Daily Press "We Care 2000" campaign. I also know that Members on both sides of the House believe he will be a great success as chairman of the Norwich and Norfolk hospital trust.

Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).