Official Report of the Grand Committee on the National Lottery Bill [H.L.]

HL Deb 22 January 1998 vol 584 cc59-106GC

Thursday, 22nd January 1998.

The Committee met at four of the clock.

[The Deputy Chairman of Committees (Lord Strabolgi) in the Chair.]

The Deputy Chairman of Committees (Lord Strabolgi)

Clause 5, Amendment No. 19: the noble Lord, Lord Skidelsky.

Lord Rees

I hope I may be permitted to speak briefly before my noble friend moves this amendment. On Monday we were debating this very same clause, Clause 5, and I ventured to intervene. I made the proposition that if the clause were passed unamended—and I had drawn attention to the anxieties that I and other people in Wales felt about it—it was quite possible that Wales would have no maritime, no industrial and maybe even no mining museum. The noble Lord, Lord McIntosh, was kind enough to say that he would write to me on this point—I hope, to reassure us. In fact, in Hansard it is reported at column CWH 40 on Monday, 19th January, that I said that not just Wales but every part of the United Kingdom would be deprived of museums of this character.

First, because I feel that the record should be corrected and, secondly, because I do not want the noble Lord to have to go to the trouble of writing to me on the basis that every part of the United Kingdom would be so deprived, I hope that it may be possible to correct that error, or at any rate to put this on the record. I fully understand the difficulties of the Hansard reporters on Monday evening; indeed, it was drawn to the attention of the Committee that they found it rather difficult to hear people speaking from the back row and I had modestly on that occasion spoken from the back row, so I quite understand how this arose. However, I hope that noble Lords will feel able to allow me to have this corrected.

Lord McIntosh of Haringey

I shall be glad to send a shorter letter to the noble Lord.

Clause 5 [The new good cause and the re-allocation of lottery money]:

Lord Skidelskymoved Amendment No. 19: Page 8, line 12, leave out subsection (9).

The noble Lord said: The purpose of this amendment is to prevent the retrospective re-allocation of lottery money to the new good cause. On 1st October last year the Secretary of State announced that the money would start being set aside for the new good cause and NESTA from 14th October. I accept that it is desirable that the new opportunities fund should be able to start work as soon as possible, but that does not justify backdating its cheque to 14th October. When the Minister made his announcement he did not have the power to do that. That power was not given by the 1993 Act because the new good cause did not exist; it was not in that Act. In our submission, he has had no legal basis for depriving the existing distributors of the use of National Lottery money since 14th October.

These are not negligible sums. Back-of-envelope calculations suggest that their loss has been running at about £3 million a week since October, and by the time the Bill becomes law he will have robbed arts, heritage and sport of over £50 million.

Clause 5(9) seeks to make this robbery retrospectively legal. I can see why the Government need to do this, but there is no reason why we should aid and abet them in their felony. I beg to move.

Lord Redesdale

I rise to support this amendment. This is something that I spoke about at Second Reading. Indeed, I should like to come back to what the Minister said at Second Reading: he said that he was able to announce that the Government could do even better. They had taken steps to ensure that the money from the lottery would flow into the new opportunities fund ahead of legislation.

I would not go so far as to say that it is a felony to do this. But it is highly regrettable that the Government have decided to adopt this position. The Minister gave an assurance to the Committee that there was a precedent. But exactly what precedent could there be, given that this is the first National Lottery Bill that has come before the Chamber? I am worried about future legislation on the lottery because, as I said on a previous occasion, I do not believe this will be the final piece of legislation on the lottery. What can we hope for from the Government in the future?

Lord Birkett

I confess I have considerable sympathy with this amendment. The original intention was to make the arts, sport, heritage and the environment the beneficiaries of the lottery. The Committee may recall that as long ago as 1988 when we had the first debate on the subject in the Chamber, long before a lottery was even considered to be a good thing by the Government, the lottery was established to benefit those causes. The thinking behind that was that education and health, although absolutely vital to the nation, should be funded by the taxes of this country as they were too essential to be at the mercy of a lottery, however successful and well-heeled that lottery might be. I hope therefore that the noble Lord, Lord McIntosh, will be able to reassure the Committee that it is not the Government's intention to spread the benefits of the lottery wider than those causes it will properly be able to support; namely, the arts, sport and the environment, with an allowance for charities on the basis that they may suffer as a result of the lottery. I hope the noble Lord, Lord McIntosh, will reassure us that those are still the main objectives of the lottery, and that the Government do not envisage any reversal of that principle.

Lord Redesdale

I rise to make a point that I have neglected. I seek guidance from the Minister as I do not wish to make allegations before hearing his reply. The Minister said at Second Reading that allegations that it was illegal to take the step we are discussing were completely unfounded. Can he tell me how—without the appropriate legislation—it is not illegal? I would hate to think that I had made an unfounded allegation.

Lord McIntosh of Haringey

We have certainly started off this Session of the Committee with a bang—the Government are being accused of robbery! The noble Lord, Lord Birkett, whom we are glad to see among us, is raising issues of additionality which we discussed at considerable length in his absence on Monday. I have no objection to that because I am not in any way afraid of the arguments. Before I discuss the specific amendment let me say to him that at that time it was indeed the intention of the government and of Parliament that the arts, sport, heritage, charities and the millennium should be the good causes to benefit from the lottery. However, there is nothing sacred about that. As I sought to argue—without for a moment convincing the noble Lord, Lord Skidelsky—it is a fallacy to think that the arts, sport, heritage, charities and the millennium are wholly, of their nature, additional to normal or core government spending, whereas health, education and the environment are not. In all of these sectors of activity there are some elements which are core expenditure—I hope at least that the noble Lord, Lord Birkett, with all his experience will agree that this is true of the arts—and which ought to be core government expenditure. In 1993 the then government opened up additional possibilities with regard to lottery money. That is exactly what we are doing with education, health and the environment now.

I turn to the issue of retrospection, which is at the heart of the amendment tabled by the noble Lord, Lord Skidelsky. He has said that this subsection is objectionable because it is retrospective, that it is unfair and that it is illegal. Let me give a little of the history of how this provision has come about. We want to set up the new opportunities fund and NESTA as soon as possible so that the country can benefit from their work. We also want to ensure that the existing good cause distributors can plan sensibly in their own sectors.

It is now nearly 10 months since we announced our intention, before the election, to create a new good cause and to divert £1 billion into it and into NESTA by 2001. We said—we have stuck to this—that it would be done without undermining the existing distributors' original expectations of an income of £1.8 billion by the end of the licence period. Therefore, as soon as we were elected—not on 1st October, but immediately after the election—we began to discuss with the distributors how best to effect this change.

We had two options. We could have waited for the passage of legislation and then adjusted the percentages so that the new good cause would receive £1 billion in the time remaining between Royal Assent and 2001. That would have meant making a considerable reduction in the percentage shares and would have created a period of unnecessary uncertainty, blighting the ability to plan. Alternatively, we could have agreed to make the necessary adjustments over a longer period of time, allowing the distributors to adapt and plan sensibly. It was no surprise that the distributors preferred the latter to the former.

The Secretary of State therefore announced on 1st October that, as agreed with the distributors, as from 14th October they should plan on a reduced percentage share, as is set out in the Bill. Working with the distributors we have, therefore, set up shadow accounts for their shares of the National Lottery Distribution Fund in line with this agreement. There is no question that we are acting unlawfully. The funds flowing into the NLDF are being properly allocated to each good cause in line with the provisions of the existing legislation, while the distributors are planning on the reduced levels tracked in the shadow accounts. The actual reallocation of funds will take place only if the Bill is passed.

The Secretary of State's announcement in October also informed lottery players of the change, so that they would know where their money would be going. Therefore, I do not accept the arguments put forward in support of this amendment.

I have been asked specifically about retrospective legislation. There is some misunderstanding here. I have not claimed that the original Act of 1993 was retrospective legislation. Clearly, it set up a new lottery which did not already exist. There was no occasion for retrospective legislation and I am not claiming that what we are doing now had any precedent in the 1993 Act. I am, however, saying that there are many benign examples of retrospective legislation. I shall gladly write to the noble Lord, Lord Redesdale, on that point, and place a copy in the Library between now and Report stage.

May I offer two or three examples? The Recreational Charities Act 1958 was overturned by the Judicial Committee of your Lordship's House, but that Act had restored retrospectively to recreational charities the tax benefits to which they had been accustomed. In fact, I do not have two or three examples, and shall cite only that one in the short time available. However, there clearly are many examples of provisions which are made where, in order to secure continuity of provision, whether in taxation or in other areas, the legislation allows for some provisions of that Act to come into force when first announced, rather than when the Act is passed. That is true every single year for the Finance Act, because the provisions in the Budget sometimes come into effect at six o'clock or at midnight on Budget day, but they are not authorised by legislation until the Finance Act is passed.

Lord Rees

I hope the noble Lord will allow me to correct him on one point. Such provisions are, of course, authorised by legislation under the Provisional Collection of Taxes Act. That, if I may be permitted to say so, is a bad precedent.

4.15 p.m.

Lord McIntosh of Haringey

I accept the correction of the noble Lord, who served in the Treasury with great distinction, and it will teach me not to give examples off the top of my head. The point of all of this is that the effect on the distributors' income is the same, whether or not the percentages are changed after Royal Assent and whether or not a shadow account is set up on 14th October. There is no distinction in the end. Therefore, the word "robbery" is quite inappropriate. The distinction is whether it is done in a way which allows the distributors to undertake sensible planning on the basis of what they know will be the resources available to them, rather than having to do things at the end of the day. In the end not a single penny more goes to or from any of the distributors whether or not the shadow accounts were set up on 14th October.

Lord Redesdale

I apologise for intervening. I am not a finance expert, and I think this is an area that would do well to see the light of day. May I ask whether there is any precedent for these shadow funds? I realise that such funds can be set up only rarely.

Lord McIntosh of Haringey

I am not aware of any comparable examples because there has not been any subsequent lottery legislation in the past. This is clearly a matter on which I need to take advice, and I shall need to reply to the noble Lord before the next stage.

Lord Skidelsky

Can the noble Lord confirm that the money deposited in the shadow accounts of the new opportunities fund since 14th October has not been available to the other distributors? Is it not money that has been subtracted from what they would otherwise have received?

Lord McIntosh of Haringey

They have agreed that this money should be put in a shadow account in order that there should be continuity of provision and in order that the new opportunities fund should be able to start its activities as soon as possible. If they had wanted to spend, they had a long period of notice—nearly 10 months—of the fact that we were going to restrict their funds to that which they had expected when the lottery started, and when the Lottery Act was passed in 1993. They have had a very clear view of their future commitments. As far as I know, no commitments have been made which would use the money which has been put into the shadow accounts. Therefore, they have not lost the ability to make any particular distribution of their funds.

Lord Skidelsky

The fact that someone agrees to a robbery does not make it any less of a robbery. It does not alter the fact that, with their agreement or not, the distributors have had less money to plan for as a result of the announcement of the setting up of the shadow account of the new opportunities fund. As I have hinted, they have had some £60 million less than they would have had. That seems to me, on the face of it, to contradict the Minister's assertion that the other causes would get not a penny less than they would otherwise have received. I just do not see how he reconciles those two facts.

Lord Montague of Oxford

I wonder if I may comment on how the distribution system works. At our last Sitting we debated the fact that there is between £3 billion and £4 billion in surplus doing nothing, and we considered what could be done to release that money. So, there is no shortage of liquidity. What we have here is notional accounting. That is what the Minister is referring to when he says—that the good causes will not have less money than was forecast. They have not had less money than was forecast, but we all know that the actual amount varies depending on whether there is a roll-over and on other factors which influence the amount the public spend on the lottery.

Lord McIntosh of Haringey

Perhaps I may reply with the help of my noble friend to the noble Lord, Lord Skidelsky, before the next point is made. He says, "I am not an expert on the Theft Act", but he also says, "robbery is no less robbery if it is agreed to". I rather think that, since it is his analogy and not mine, robbery is not robbery if it is agreed to, but I do not hold either of us responsible for the analogy to which he has committed himself. However, the point is that, if we had not set the date of 14th October 1997, we would have had to set up the new fund from the date of Royal Assent and the percentages would have had to be different in the Act. Therefore, knowing that there was, shall we say, a high probability that Parliament would pass the Act, it would have been wise for the distributors to plan for exactly the effect that would have happened if the change had taken place on Royal Assent rather than on 14th October.

What has happened now is that a notional account, as my noble friend Lord Montague has said, has been set up and the distributors know that when the Act is passed they will not have access to it. If by any chance—his is the only realistic point which arises from this debate—the Act was not to pass in these terms, was either to be rejected totally or the percentages changed by Parliament, the shadow accounts would not have effect and nothing would have been lost to the existing distributors.

Lord Skidelsky

I thank the Minister very much for that reply, which does not seem to get him out of his hole. Is the Minister denying that, as a result of the Secretary of State's announcement, the other good causes have had £60 million less to spend than they would otherwise have had? That is the point I am making. Into the shadow account of the national opportunities fund has been going a certain amount of money every week in accordance with the Secretary of State's announcement. That money has not been available for others to spend. The issue of whether they would or would not have spent it in the time concerned is completely immaterial, I am afraid, and these facts seem to be completely incompatible with the Minister's statement that the Secretary of State's announcement did not make any difference to how much money the different distributors would get in the end. I have just been arguing that it has made £60 million difference already.

Lord McIntosh of Haringey

It is not immaterial. The point is that all of the existing distributors have very large balances. They are not deprived of cash-flow as a result of the announcement that has been made. That is not the issue. The issue is whether the change takes place when it is announced, after consultation, or whether it takes place on Royal Assent. In the end there is no difference in what they get, and in the interim there is no difference in their cash-flow because they have the necessary balances.

Lord Crickhowell

I am surprised that the noble Lord is pursuing this argument and delaying on this point. In an earlier intervention, he made a perfectly fair summary of the situation, except for the fact that if he had lived in the age of highwaymen he might have thought that giving consent to robbery did not lessen the fact that it was robbery.

The simple fact is that it does not matter what the cash-flow situation is. The analogy produced from the Benches opposite does not add to the argument. The Government have stated that there will be less money available than there would have been otherwise. In that situation, the distributors would be very foolish not to take note of what the Government's intentions are, and that therefore there is less to spend. It is not a question of cash-flow. A declaration has been made by Government that there will be less money—I take the calculation of my noble friend Lord Skidelsky, I have not calculated it myself—than there would have been. Legislation will be put forward in due course and the distributors had better act accordingly. We can go on arguing about what words we apply to the process, but the process seems to be perfectly clear to me. I do not see why the Minister continues to deny it, when in at least one statement from the Dispatch Box he described that statement which describes that situation precisely.

Lord McIntosh of Haringey

I have already made it clear that whether the date chosen is 14th October 1997 or the date of Royal Assent the effect both for the new opportunities fund and for the existing distributors will be the same. I have already made it clear that in the interim the effect on the individual distributors is the same because they have had adequate warning. Agreement has been achieved on the setting up of the shadow accounts, but their existing balances are such that they do not need the shadow accounts.

Nobody has asked me why we should do this if in the end the effect is the same. The answer is very similar to the answer which the previous government gave when setting up the Millennium Commission. They provided money for the Millennium Commission before legislation had been passed to authorise the existence of the commission. The answer is that between now and Royal Assent the new opportunities fund and NESTA will need money, and money will be available for them to set themselves up in order that they can start work as soon as possible. There are positive benefits from proceeding as proposed in subsection (9). There are no conceivable disbenefits to the existing operators either in the future or now. I must resist the amendment.

Lord Redesdale

Before the Minister finishes the argument, I hesitate to press him on these points, but as he has stated himself, there are few precedents for the actions which the Government are taking. This is our first opportunity to press him on some of the issues that concern many people.

May I ask him two points? I will not use the word "robbery" because the Government in conducting legislation are entitled to undertake forced distribution of lottery wealth however unwelcome it may be. The first concerns the shadow accounts, which are fairly unprecedented. Where does the interest go from these accounts? This may be a totally superfluous question but it has a bearing considering the amounts involved.

I would welcome the Minister's assurance on my second question, which many will be asking. I understand the point he makes that in the long term it will have no effect on the money distributed and that, perhaps in the medium term, before the new opportunities fund was set up, the distributors were making allocations on the basis of the amount of money they expected to receive. Have there been any cases where the five good causes have allocated money in the very short term to projects—perhaps a building development or whatever—and have had to rein in that finance because, in the extremely short term, they will not receive the money that is now allocated to the new opportunities fund? I realise that they will receive the same amount of money in the fullness of time, but if you are involved in a building contract, in the very short term that will mean putting developments on hold. I would hope that this is not the case.

4.30 p.m.

Lord McIntosh of Haringey

There are two questions there. The first is, where does the interest from the shadow account go? The answer is that it goes to the new opportunities fund. The answer to the second question is that, pursuant to what I have already said about the distributors having large balances, they do not just have large balances in cash. As we have already discussed, the fact that they award a grant does not mean that the money is paid out all at once. My understanding is that none of the existing distributors had made decisions that had to be cancelled because of the setting up of the shadow account.

Lord Skidelsky

I think we have examined this topic sufficiently but I would like to say a few things at this point. As a historian I hate to say this, but when a politician resorts to history one knows that he is not going to answer the question. Indeed. I was justified in that belief.

Lord McIntosh of Haringey

The noble Lord, in his current position at the Dispatch Box, is no more a historian than I am a market researcher—we are both politicians for the purposes of this debate!

Lord Skidelsky

Absolutely, and I am not going to resort to history either.

Let me go through some of the arguments. In all honesty, the Minister has not produced one single good argument in support of this retrospection. He said we are committed to providing £1 billion for the new opportunities fund and NESTA by the year 2001, but that is simply no argument for allocating National Lottery money to these bodies before parliamentary consent has been obtained. He has said that, had the money not been allocated before the Bill was passed, a considerable adjustment of its percentage share would have been suffered by the national opportunities fund. In fact, my back of envelope suggests, and he has not challenged the figure, that it has been about £60 million: £60 million out of £1 billion is not a considerable readjustment, and they could not even wait five months before starting the reallocation.

The Minister said at Second Reading that people buying lottery tickets after 14th October would know that part of the money was going to the new good cause, and that this would be very gratifying to them, but the Secretary of State had no right to tell them that. The Minister said that distributors can plan their commitments and expenditure on the basis of the new percentages, but it is immaterial whether the new percentages start in October or when the Bill becomes law. They know, within a very small margin, when the Bill will become law, and they would have had a basis for planning just as well on the basis of a legal development.

The Minister said we are trying to avoid the problem of underspending. The way to do this is to speed up the processing and prune red tape and not divert underspent sums to purposes for which they are not intended. Underspending is a slippery concept. Moneys may be allocated and not spent, and it is inevitable that this should be so when capital projects are considered. A great deal of money is allocated. The Arts Council has allocated £1 billion, a great deal of which is unspent and in balances simply because it takes time to put up a building.

I return to my original question. Where, in the 1993 Act, was power given to the Secretary of State to make the decision he announced on 1st October 1997? Does the Minister persist in denying that in fact the other good causes have lost a definite sum of money as a result of that decision? Because there has been no good argument that I can make out in support of the position set out in the Bill, in withdrawing my amendment I retain the right to come back to it at a later stage.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

Clause 6 [The New Opportunities Fund]:

Lord Skidelsky moved Amendment No. 20: Page 8, line 41. leave out ("such").

The noble Lord said: I draw the Committee's attention to the fact that Amendment No. 22A was intended to be the successor to Amendment No. 22, which I shall not move.

This group of amendments is designed to call a halt to what my noble friend Lord Gowrie called on Second Reading the whittling away of the hands-off principle. It aims to safeguard the independence of the new opportunities fund and place it in the same statutory relation to the Secretary of State as the other distributing bodies.

Just as we have had a reinterpretation of additionality, so we have had a reinterpretation of the arm's length principle; it is no longer what we used to think it was. The Government do not tell the Arts Council that it will spend so much on literature, so much on violin playing, and so on, but here we have exactly that position. The new opportunities fund will make decisions on individual applications independently. That is the only liberty it has. It will be told about everything, and it will be given the freedom to decide among the various applications which ones it will support. I would hardly expect the noble Lord to spend his waking hours going through thousands of applications. I am glad that he has delegated that to the new opportunities fund. But that does not seem to me an expression of the hands-off principle as it has been commonly understood.

We want to safeguard the hands-off principle in its original meaning, so Amendments Nos. 20. 21 and 22A are designed to remove the Secretary of State's power to tell the new opportunities fund on what to spend money or, as the Bill puts it, to order the fund to spend money on particular initiatives connected with health, education and the environment.

I suggest to the Committee that the Government's determination to control the distribution of grants from the new fund is itself evidence that they regard the new good cause as much closer to the sphere of their responsibilities than the old causes; they want to have as much control over the spending of National Lottery money on the new good causes as they exercise over normal tax finance spending. The powers being claimed by the Secretary of State in respect of the new good cause goes far beyond the general power given to the Secretary of State under Section 26(1) of the 1993 Act, which simply states that, a body shall comply with any directions given to it by the Secretary of State as to the matters to he taken into account in determining the persons to whom, the purposes for which and the conditions subject to which the body distributes any money". That seems to me a perfectly fair statement of the relationship.

To be directed to take something into account is very different from being ordered to do something. We have only to compare the framework conditions specified for the old distributors with those laid down in new Section 43B for the new distributor to appreciate the much greater control that is now being inserted in this Bill. I beg to move.

Lord Redesdale

I speak particularly to Amendment No. 21 which is grouped with these other amendments. I have to admit that there is a degree of open-endedness about the expression—I realise it is a legal term— may from time to time be specified in an order made by the Secretary of State". One of the problems we have with the new opportunities fund is that it seems to be so open-ended. Almost anything that enters the Secretary of State's mind on that particular day of the week may be inserted into the new opportunities fund, and the wording of this clause gives no indication of where limitations should be put on the Secretary of State over his actions. I would like clarification from the Minister on whether measures are to be taken to specify under what circumstances he is from time to time to make these decisions.

Lord Crickhowell

First, I should like strongly to support what has been said by the noble Lord in moving these amendments. I, too, share the concern and regret that it seems to be a whittling away of the arm's length principle in the arts. Indeed, the whole government machine seems now to display a growing tendency to interfere with bodies that were set up to be at arm's length and independent. I understand, for example, that the Environment Agency, which is the successor to the National Rivers Authority, which I chaired, now has to submit to a constant barrage of interference by questions from Ministers. Whenever an environmental body complains about anything, the government thought police ring up the Minister, the Minister instantly rings up the chairman, and the whole process of having an independent agency seems to be whittled away.

For many, many years and under successive administrations, the arm's length principle has been at the heart of the good administration of the arts and I believe has been to its enormous benefit. I am afraid that the previous government made a very bad move in putting a Minister as chairman of the Millennium Commission. That in itself was a mistake because it effectively brought departmental involvement close to one of the lottery's distributing bodies. I have expressed the view elsewhere, and I do not intend to repeat or to justify it at any length today, that that led to a situation where in many ways—I am speaking in the presence of the former Millennium Commissioner—the Millennium Commission is a less satisfactory body than the other lottery distributors. An extension of this principle and growing interference in what is done by the distributing bodies will be detrimental and we will all regret it in the longer term. Therefore, I support the amendment.

I hope it will not be considered unreasonable if I also use this group of amendments to raise another issue. I do it in the sense of being helpful. The last time we met, my noble and learned friend Lord Fraser of Carmyllie asked for an indication of what parts of the Bill would come within the legislative competence of the Scottish Parliament. Most helpfully, the Minister undertook to prepare a paper and give us guidance at Report.

I thought that we could perhaps leave the matter there; and I should explain that I choose to raise the issue at this point because of the reference in my noble friend's amendment to the deletion of the part of Clause 6 (new Section 43B) which refers to the order-making powers of the Secretary of State. Because it refers to order-making powers, it is an appropriate moment to give notice, so that the Minister will have more time to consider, though I do not expect him to reply today, of the important and complex issues that have emerged on the Floor of another place in the two debates that have taken place this week on the Welsh assembly Bill.

There has been a very extensive, very interesting set of debates about whether the new assembly would have the power to block or initiate legislation. There has been—and I shall not trouble the Committee with the frequent references that I could quote—notably on 20th January (Hansard cols. 831 and 832 particularly), later in Mr Win Griffiths winding-up (cols. 860 and 861) and again in an intervention by the Secretary of State for Wales (col. 867), a thorough examination of the circumstances in which powers might be transferred. The Government have helpfully tabled elsewhere a draft transfer order which indicates the powers that will initially be transferred. It is indicated that it is only the first draft, that there will be other drafts and that the thing is likely to be amended considerably by the time we get to the passing of the Bill.

The Ministers made it absolutely clear in those debates that whatever happens to any particular piece of legislation in regard to the transfer of powers to the Welsh assembly—and I expect the same will be true of the Scottish Bill—will depend crucially on the way that the order-making powers are drafted subsequently in those Bills. Here we have a reference to something that may be done by order by the Secretary of State. The words "may" or "shall" are going to have crucial relevance to whether powers are transferred to the assembly.

As those debates covered several hours on the Floor of another place and because they were in such detail, I do not intend to detain the Committee tonight. However, it struck me when I turned up Hansard and read them that we had come right back to the fundamental and crucial issues that had been raised by my noble and learned friend Lord Fraser of Carmyllie when we last met. Since our Bill is being examined in Parliament in parallel with the Bill that is before another place, it is not absolutely certain that the draft transfer order, when it is finally tightened up and follows on from the Welsh assembly Bill, will cover exactly what goes into this Bill. It is certainly clear that every time a Bill comes before Parliament in future it will have to be examined in minute detail as to exactly what the intentions of Parliament are with regard to the powers that go to the Scottish and Welsh assemblies. Also, it will have to be noted whether they allow some discretion for further change, or for not implementing the powers given in the Bill, as well as a variety of other related topics.

I draw the attention of my noble friend on this side of the Committee to this matter because we may wish to return to it at Report stage, when we have had an opportunity to consider the issues that have been raised in another place. I draw it to the attention of the Minister because, when he comes to respond with the paper he has promised, he should consider very carefully these issues which his right honourable friend the Secretary of State for Wales has acknowledged are both complex and important.

4.45 p.m.

Lord Monro of Langholm

I should like to intervene only briefly, since I spoke at our previous Sitting of how much I disagreed with the sixth good cause, which would certainly take money away from the five already in the National Lottery Act. I share with my noble friends Lord Skidelsky and Lord Redesdale very strong reservations about the hands-off attitude. We were only too pleased, with Ministers in the last government, to have had direct involvement in saying how the money would go to the various five good causes. But we were absolutely firm that it must be on a hands-off basis and that individual organisations which we set up would allocate the money after applications had been received. The Ministers were to stand right back and have nothing to do with it.

Here we are going over that principle and saying that the Government can give directions to the sixth good cause, and they are doing so already. Last week the Scottish Office announced that £25 million was going to information technology. This was announced before anyone had considered whether or not they felt it was a good idea, so there was no question of a hands-off attitude to the Bill. I therefore strongly support my colleague on this side of the Committee that we should have a hands-off attitude rather than government direction as to where this lottery money should go for the sixth good cause.

I share with my noble friend Lord Crickhowell a concern about where we are relative to Scotland, and how the matters relating to the sixth good cause will stand under the direction and responsibility of the new Scottish parliament. How will the interchange work, particularly over the next year or two, with the Secretary of State for Scotland—if he still is in post in the Cabinet—or will it be the first minister for Scotland who will make the decisions? We want clarification on that point, so that people know how things stand in relation to the legislation coming to this House in due course.

Lord Chorley

Speaking as it were from the Cross Benches, I have some sympathy with the amendment of the noble Lord, Lord Skidelsky. Like the noble Lord, Lord Crickhowell, I am worried about the erosion of the arm's length principle. I call it Lord Keynes's principle because I believe he first advanced it when the Arts Council was set up all those years ago.

I shall be interested to see how the Minister replies. As I read it, there seems to be a distinction between the additional powers which the Bill seeks to award to the Secretary of State in respect of the new opportunities fund and the original funds. If I am right in that, I wonder what is the Government's thinking. Why is there something special about this fund which does not apply to the other three funds? I suspect it may be something to do with additionality and perhaps the long arm of the Treasury. I do not know but I shall be interested to hear what the noble Lord has to say.

Lord McIntosh of Haringey

I am grateful to noble Lords for those contributions because it gives me an opportunity to answer the points that have been made about the differences between the new opportunities fund and the existing distributors. If I address my remarks particularly to the noble Lord, Lord Chorley, who posed his remarks as questions rather than as challenges, perhaps I may be forgiven.

Of course, the relationship between the Secretary of State and the new opportunities fund, as proposed in the Bill, is different from that which exists between the Secretary of State and other lottery distributors. There is no pretence otherwise. However, I do not accept, or even recognise, the description of the relationship which the noble Lord, Lord Skidelsky, in particular has put forward and I would argue that the arm's length principle has remained intact in this legislation.

The relationship is different because the new good cause is different. The existing good causes are pretty well defined and the distributors are in the main well established as expert bodies within their fields. In the case of sport and the arts, the distributors are the key sectoral bodies; the Heritage Lottery Fund was not the biggest player but was well placed to understand the whole sector, and the National Lottery Charities Board has quickly established itself as a respected and knowledgeable body in the charitable field.

By contrast, the new good cause ranges over a vast area. It encompasses health, education and the environment, each of which in itself is broader than any of the other good causes. If, as we do, we want these areas to benefit in a sensible and focused way from the lottery, then we clearly need a different approach. That is why we proposed right from the outset that the new good cause should focus on a limited number of initiatives at any particular time, targeting its money effectively so that it could make a tangible difference through time-limited programmes and then be free to move on to a different priority. The nature of those initiatives will vary from time to time, as the noble Lord, Lord Redesdale, said, and Parliament should and will have the opportunity to decide what they should be.

Let me focus particularly on the point made by the noble Lord, Lord Redesdale. He seems to be worried about the phrase "from time to time" as if it was something that the Secretary of State should have in mind on a particular day of the week. That is far from the truth. What is provided here is that the new initiatives, which are broad initiatives designed to cover a range of particular provision, should be decided after consultation and after parliamentary approval. I remind the Committee that the parliamentary approval proposed here—the affirmative resolution procedure—has been accepted by the Delegated Powers and Deregulation Committee as being the appropriate parliamentary conclusion, provided that I give the assurance—as I have—that the provisions for the first three initiatives, which have already been announced, are not extended to future initiatives.

As to the phrase "from time to time", new initiatives will be initiated through consultation and through parliamentary action when the resources are available. Clearly the first tranche of funding to the new opportunities fund is going to the three initiatives which have already been announced. That is a rather different pattern of decision-making on new initiatives from that which some Members of the Committee have described.

Lord Redesdale

I apologise to the Minister. Through the affirmative resolution procedure I believe that there will be the opportunity to debate the merits of each of the new areas to be covered by the new opportunities fund. During these debates would it be possible, if it was proven that the area under discussion fell into the area of additionality, that the Government might withdraw at that stage?

Lord McIntosh of Haringey

I cannot anticipate what Parliament might do on any future date whether this Government are in Office or any other government. Governments would be well advised to respond to proven process—that is a high test to apply—but of course the whole process of formulation of a new initiative will be drawn up on the basis that it does not breach the principle of additionality. That is largely what the consultation will be about. If it is proven that it is not additional—and it is difficult to do that because, as we have seen from Monday's debate, it is difficult to define additionality—I have no doubt that any government would take seriously the views of Parliament when it comes to applying the affirmative resolution procedure.

If I may return to the nature of the new opportunities fund as a distributor, we see it as being a small and flexible body, able to run quite different programmes concurrently, working with different partners and drawing on different knowledge and expertise. It will have an independent chair and independent members rather than politicians. In other words, the people who will be on the new opportunities fund will be—as all such appointments are under this Government—appointed under the Nolan procedures. It will not just decide, as has been suggested, individual applications. It will have a considerable role in designing the delivery of the initiatives within the limits set by the order and by the directions.

We propose that the new opportunities fund priorities, the initiatives, should be decided after broad consultation, and the new opportunities fund will play a part in these consultations. It is right that the results of the consultations should be considered by government and then by Parliament, and that is why the order is subject to the affirmative resolution procedure.

In these circumstances the provisions of the order making powers, which the noble Lord's amendments seek to remove, are sensible provisions. He seeks to remove them because he is afraid that the Government rather than the new opportunities fund will make all the directions. I simply do not agree with that. Parliament will approve each initiative, and the Government will set a high level framework for each initiative through the directions under new Section 43C(1). The order will set the initiative and its geographical extent. Directions under new Sections 43C(1) and (2) will be used to set the parameters, and they might encompass targets, for example providing IT training for 450,000 teachers. They could set indicative funding levels and target or priority groups, for example priority for out of school hours activities in education action zones.

The direction making power must of necessity be broadly cast to accommodate the range of issues which may need to be covered, which will vary from initiative to initiative. The new opportunities fund will then be responsible for designing and implementing each initiative, and in particular for making the key decisions on who should get the money, just as the other distributors do. The new opportunities fund will invite bids, assess them on their merits, and award grants entirely free from government intervention.

Perhaps I may refer to the point made by the noble Lord, Lord Crickhowell. I am ready to reaffirm to him the assurances I gave to the noble and learned Lord, Lord Fraser of Carmyllie, on Monday. I understand the point he makes but that is true of all legislation. The government of Wales Bill and the Scotland Bill will take time to pass through Parliament and legislation on other subjects must proceed as those two constitutional measures proceed. The assurance I gave to the noble and learned Lord, Lord Fraser, and which I repeat to him now, is that the paper which I will produce in good time before Report stage, will cover both Wales and Scotland and will consider the issue of reserved powers between the Welsh assembly and the Westminster Parliament, just as they will consider the issue of reserved powers between the Scottish parliament and the Westminster Parliament.

5 p.m.

Lord Crickhowell

I am grateful to the Minister for what he has just said. However, listening to his remarks about the nature of the powers being given under this section, I am struck by the extreme importance of the issue I have raised with regard to Scotland and Wales for the very reason that he has identified the difference of this part of the Bill to the legislation covering the existing body. He gave two examples of the way in which further schemes might be brought forward, for example for teaching and activities in education. Those, of course, are precisely the responsibilities that are to be transferred to the new Scottish parliament and the Welsh assembly.

It will therefore be important for us to be precise as we deal with this legislation as to whether we are introducing powers that will simply be transferred as they are, or whether the Welsh assembly—and I will concentrate on simply one body rather than two—will have a discretion as to whether it uses these powers, and indeed as to whether these are its priorities. if you take the two examples given by the Secretary of State, the needs and requirements in Wales might be wholly different from those in England, and I speak as someone who had responsibility for education in Wales for eight years. The very fact that we have the Welsh language and other needs means that the requirements in Wales are wholly different.

I say with due deliberation that it may be necessary at Report stage to decide whether the drafting of this Bill is adequate or whether this point will be picked up in the parallel legislation that is passed. The worst possible situation would be for the devolution legislation to be passed, and for this to pass almost in parallel, and we find that we have an unresolved situation which will leave both Parliament and the assembly unhappy. Once again I give notice to the noble Lord that these are important practical issues; it is not just a question of guidance, but it is a question of getting the drafting of one or other, or both Bills, right before they leave Parliament.

Lord McIntosh of Haringey

I do not deny the importance of the issues which the noble Lord has raised, nor indeed the issues which the noble and learned Lord, Lord Fraser, raised in relation to Scotland on Monday. I agree with him that we have to give careful consideration to ensuring that, at the end of the day, when all the legislation has been passed, it is coherent. The principle which governments have adopted over many years has been that interim legislation is sometimes necessary, or you have to have legislation which is subject to amendment even by other legislation going through Parliament at the same time. As long as when the last piece of the jigsaw puzzle has been put in place the thing works, then honour and parliamentary scrutiny and good administration are satisfied.

I am anxious to have these matters as much out in the open as possible, and that is why I have given the undertaking that I have. If the noble Lord has any particular worries, I am happy to answer them before Report stage as well, if he cares to write to me or comes and sees me to talk about them. Of course, that applies to any noble Lords who make similar points. In the end, it is the legislation on the government of Wales and of Scotland which will define the relationships in detail. The Welsh draft transfer order, to which the noble Lord referred, is, as he rightly says, in draft form. It will be changed, I hope, because of the views expressed by Parliament as the Government of Wales Bill proceeds and that is exactly as it should be. It is right that Parliament should be as well informed as possible of the Government's thinking at the time, but it is also right that government should pay attention to the views of Parliament as the legislation proceeds.

I return to the issue raised by the amendments. I believe that the provisions of the Bill protect the interests of Parliament and preserve the arm's length principle. I ask the noble Lord to withdraw the amendment. I know that he will do so under the procedures of the Grand Committee, but I ask him to understand why the Government resist these amendments.

Lord Skidelsky

We are all grateful to the Minister for saying two things: first, that the new good cause is very different from the old good causes—we have argued that, but I did not think that the Minister was so willing to admit it on Monday—secondly, that the new good cause ranges over a vast area, so presumably its potential for spending money also ranges over a vast area.

In this short debate, there has been expressed a general feeling that the arm's length principle should be supported and some disquiet that the clause weakened it. The noble Lord, Lord Chorley, asked a question about that. My noble friend Lord Monro supported the arm's length principle, but the noble Lord, Lord Redesdale, was worried, as was my noble friend Lord Crickhowell.

In view of that disquiet and also in view of the powerful arguments that my noble friend Lord Crickhowell presented about the possible inconsistency of drafting between this Bill and the Welsh Bill going through Parliament, I beg leave to withdraw the amendment but I reserve the right to consider the matter at a later stage.

Amendment, by leave, withdrawn.

[Amendments Nos. 21 and 22 not moved.]

The Deputy Chairman of Committees

I must inform your Lordships that if Amendment No. 22A is agreed to, I cannot call Amendment No. 23.

[Amendment No. 22A not moved.]

Lord Redesdale had given notice of his intention to move Amendment No. 23: Page 9, line 40, at end insert (", including such persons as appear to him to represent local government").

The noble Lord said: The Minister gave a very full assurance at the previous stage that he would consult local government on these amendments, and in the light of that, I will not move the amendment.

[Amendment No. 23 not moved.]

Clause 6 agreed to.

Clause 7 [Provisions supplemental to section 6]:

Lord Skidelsky moved Amendment No. 24: Page 11, line 7, leave out subsections (5) and (6).

The noble Lord said: These amendments are consequential to Amendments Nos. 20 and 21. They relate to the orders to be given under Section 43B. We are seeking to remove the Secretary of State's power to give such orders. As I have already withdrawn the previous amendment, I am not quite sure whether I automatically withdraw the consequential amendments without having to speak to them. I would like to be advised of the procedure by the Deputy Chairman.

The Deputy Chairman of Committees

The noble Lord has a perfect right to speak to the amendments, even if they are consequential.

Lord Skidelsky

In that case, to give the Minister an opportunity to speak, I beg to move.

Lord McIntosh of Haringey

I am grateful for that. I love to hear the sound of my own voice! I answered the points raised by this amendment in response to the previous amendment. I pointed out that our policies were endorsed at the election, in the following White Paper, and in the consultation on the White Paper. I also pointed out the provision for parliamentary scrutiny which is set out in the Bill. I understood that the noble Lord did not accept my arguments and I respect that, but I doubt that the Committee would thank me for repeating them.

Lord Skidelsky

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 agreed to.

Schedule 2 [The New Opportunities Fund: Schedule 6A to the 1993 Act]:

Lord Redesdale moved Amendment No. 25:

Page 25, line 15, at end insert—

(".—(1) The New Opportunities Fund shall establish four committees for the purpose of exercising the Fund's functions in relation to applications for grants in respect of the appropriate activities in England, Northern Ireland, Scotland and Wales respectively.

(2) Section 25A shall apply in relation to the establishment of the four committees.").

The noble Lord said: I would be very surprised if the amendment is not accepted by the Government although I am a hostage to fate for saying that. The amendment is based on Schedule 5 of the 1993 Act and is consistent with the setting up of the National Lottery Charities Board Scottish Committee. The purpose of the amendment is to devolve powers that should go to the Scottish parliament in respect of the new opportunities fund.

The major issue behind the proposed amendment is an apparent discrepancy in the Government's approach to the decentralisation of decision-making. The National Lottery Bill and the Bill on Scotland highlight this discrepancy. While the Scotland Bill gives certain autonomous rights to Scotland, including health, education and the environment, the National Lottery Bill holds firm centralised control over the distribution of the new opportunities fund in these areas. In the long term it is likely that the Scottish parliament will oppose the lack of statutory Scottish representation for the new opportunities funds. Therefore it would be prudent for the Government to legislate for a Scottish committee in the National Lottery Bill.

The National Lottery White Paper states that the new opportunities fund structure will be designed to take account of the needs and structures of each part of the UK. The structure of the new opportunities fund outlined in the National Lottery Bill makes provision for the delegation of powers to a committee. However, there is no mention of the constituent parts of the United Kingdom. With a membership of only eight to 12, it is hard to see how fair representation can be achieved.

The Scottish Council for Voluntary Organisation welcomes the proposal that the new opportunities fund will be able to delegate decision-making. However, there is deep concern that the new opportunities fund will not choose the correct institutions to implement ideas relating to health, education and the environment and that the expertise of the voluntary sector in these areas will be overlooked.

The National Lottery Act 1993 provided for distribution of funds to be based on England, Scotland, Wales and Northern Ireland for arts, sport and charities. It is necessary for the new opportunities fund to embrace that same vision and to have the same equality of representation for distinct areas such as health, education and the environment. I very much hope that this committee has been overlooked by the Government in drafting the legislation, and I believe that this is the right opportunity to put this amendment forward.

I must apologise at this stage that my noble friend Lord Mar and Kellie, whose name also stands to the amendment, has not been able to speak, but I believe that his absence has highlighted why there should be a separate Scottish committee as he is on his way to the station to take the last train to Scotland. I beg to move.

5.15 p.m.

Lord Randall of St. Budeaux

I rise to speak because I am confused as to what the motives are behind the amendment, although the noble Lord, Lord Redesdale, made it clear that he felt that the amendment was necessary in order to replicate the points in the White Paper, particularly with regard to decentralisation and the way in which the new distributing body, the new opportunities fund, should represent the different parts of the United Kingdom. I felt that that had been covered by the Bill itself in that the members of the particular board should have knowledge of the interests of Scotland, England, Wales and Northern Ireland. In a way, the notion of the decentralisation of power and the need to have a board that represents these interests seems to me to be incorporated in the Bill.

There is a point of concern, about which I am confused, as to whether this amendment is there in order to have block funding to the Scottish parliament. If that is the case, I would ask my noble friend the Minister whether the Government would be satisfied that, in having block funding, that could result in inefficiencies as far as the administration of the fund is concerned. Many of us have experience of local government where big blocks of money are allocated. We have heard about the Barnett formula and we have to consider whether having a system whereby money has to be spent at the end of the year is not more wasteful than one which looks at the merits of individual cases when they are submitted.

Also if we were to have these four committees which have been proposed in the amendment, how would this affect the number of people on the board? It is stated quite clearly that there should be between eight and 12 people on the board, so the number could be as few as eight with a chairman. How would we allocate these people to the various committees? Are we saying that we would divide eight by four and have two per sub-committee looking after individual parts of the United Kingdom? If that is the case, it would look frankly absurd. You could not possibly have a small number of people allocating moneys in this way. It would not be in the interests of the board or of the nation to do that. Does the Minister agree that, if there were to be a change of this kind to have four committees, the other parts of the Bill would have to be changed in order to increase the number of members on the board?

Those were the main points I wanted to raise. I would like to know a little more about the motives behind the amendment, and whether it genuinely is a question of having some kind of Barnett formula in order to ensure that certain sums of the total money in the fund are allocated to particular parts—particularly Scotland, Wales or wherever—or looking at the White Paper and trying to help the Government in pursuing their policy of distributing powers to the various parts of the United Kingdom.

Lord Redesdale

I find myself in the unusual position of answering questions, which I must admit I rather enjoy. Indeed, the noble Lord, Lord Randall, has raised a point which this amendment tries to address, namely the constitution of the board. When we talk about that board, I assume that it will be based in London.

The noble Lord went on to talk about local government. But we are not talking about local government here with devolution. We are talking about a Scottish parliament which will have its own separate legislative abilities in the areas of health, education and the environment. The whole purpose of this amendment, although I realise it will have knock-on effects in the make-up of the committee and this will have to be looked at, is to bring about decentralisation away from London so that these issues can be looked at within Scotland or Wales or in the other committee. In the future I believe it is going to be a very sore point indeed within the Scottish parliament that distribution of the new opportunities fund may be from London, whereas it should perhaps be taking place in Scotland. The point of the amendment is to help the Government in an area that should not be overlooked at this point with regard to devolution and the legislation that is about to be introduced.

Lord Randall of St. Budeaux

I point out to the noble Lord that if one looks at page 25, paragraph 1(2) says that four of the members of the board shall:

be suited to make the interests of England, Scotland, Wales and Northern Ireland, respectively, their special care". So in fact the Bill suggests that, although we are talking about a very small committee, its members would be informed about the special needs of the constituent parts of the United Kingdom. In that sense, we would have a mechanism that would ensure that those interests are protected and there will be somebody on that board who will be able to speak up for, and be in contact with, for example Scotland. I would need to be persuaded that we need to go further than that current arrangement and to have this rather cumbersome committee structure advocated in the amendment which, according to the other parts of the Bill which refer to the maximum and minimum numbers, would not be viable.

Lord Crickhowell

I had not intended to speak to this amendment, but one of the advantages of the procedures we are following in this Committee is that it gives an opportunity to raise issues which have not occurred to one before, or for others to raise issues. I have to say that the comments of the noble Lord, Lord Randall, again drew attention to the difficulties that we now face.

I start with sympathy for his view that you do not want to break up United Kingdom organisations unnecessarily. I argued as strongly as I possibly could when I had responsibility for the National Rivers Authority that it would be mad, for all sorts of reasons, to break up the NRA, not least because the Almighty had decided that the rivers that rise in Wales flow through England, and also because of the waste of the highly technical and professional resources that such a change would involve. Even then we had to set up a special Welsh committee answerable to the Secretary of State when such an organisation and structure already existed.

I also have a certain sympathy for the idea that there are problems in breaking up the funding arrangements within the lottery. One of the reasons that in an earlier incarnation I had the unpleasant experience of having to do business with the Millennium Commission over a certain bid for an opera house in Cardiff, rather than the Arts Council, which I believe would have understood the whole proposition better, was that the Welsh Arts Council share of the lottery was too small to consider such a large project. Therefore there are real difficulties. There may also be difficulties here if you subdivide and allocate particular sums of money to one country or another. However, as I observed in an earlier intervention, we are dealing with central responsibilities that are going to be given to the new Scottish parliament and to the new Welsh assembly. Education, the environment, and so on, are exactly the subjects for which they are going to be responsible and with which they will wish to deal.

I simply state as a fact—one which I do not believe would be challenged by anyone who knows anything about Scotland or Wales—that if this is left to a UK structure as proposed in the Bill, without special provision for Scotland and Wales, it will not be acceptable to the new Scottish parliament or the new Welsh assembly.

At the moment I do not have a solution, but this is yet another subject to which further thought must be given as the Bill proceeds to a later stage. Otherwise we will be creating a situation which will be unstable, which will cause conflict quite soon, and which will not last. We should be grateful to the noble Lord who moved this amendment for raising the issue. He himself probably does not think that his amendment provides the final solution, but he has enabled us to think again before reaching the next stage about how to address this kind of problem.

We are going to face this type of problem with almost every single Bill that we pass through Parliament in future, and it is going to cause a great deal of difficulty. Every time we consider a Bill we will have to think in minute detail about exactly what powers are or are not being transferred to the Scottish parliament or the Welsh assembly and how that is to be done. I do not envy the Government's business managers having to handle that problem.

Lord Redesdale

Before the Minister replies, and before anyone else intervenes, I would like to say that the problem which the amendment brings out is that we are still talking in terms of centralisation, whereas there has been the referendum on devolution. Although the Minister will produce the minutiae involved in bringing about the distribution of funds, this will he a source of conflict in the future if it is not dealt with at this stage. I would like the Minister to give an assurance that something will be done about this situation, or to explain why it will not be a point of conflict.

Baroness Rawlings

I, too, support the amendment of the noble Lord, Lord Redesdale. It follows clearly the point made by my noble and learned friend Lord Fraser of Carmyllie the other day in relation to Scotland and also my noble friend Lord Crickhowell's point regarding Wales today. It seems to me rather pointless, however, to legislate now, knowing that it will have to be changed. As the Minister so rightly said—he repeated this twice when speaking on the last clause—it will have to be changed, and this is in the space of less than two years.

Lord Randall of St. Budeaux

I feel we are now moving down the path of deciding other matters outside the framework of this Bill, particularly regarding the way in which not only the new opportunities fund but a whole host of other systems are funded. I feel that it is outside the scope of the Bill. Perhaps the Minister could advise us whether this is the case? In looking at this particular amendment, we should decide on the basis of ensuring that the fund is administered in the best possible way and that the money that has been put into this fund—I understand about £1 billion pounds—will be spent efficiently and effectively. This Committee must start and finish on that basis.

If there are other matters regarding the decentralisation of funds, which could cover a whole host of programmes and pieces of legislation, perhaps those should be dealt with quite separately. There should possibly be some other kind of legislative structure which would apply to the Bill when it becomes an Act. We are outside the scope of the Bill and I return to the fact that the decisions here should be made on the good administration of this particular fund. I would argue that having block allocations is not necessarily the most effective way of dealing with this matter and that each submission to the board should be looked at on its merits.

Lord McIntosh of Haringey

This is a most interesting debate. I spent half an hour earlier this afternoon being attacked on the grounds that the Government was breaching the arm's length principle for the new opportunities fund. This was on the grounds that the orders and directions concerned with initiatives to the new opportunities fund were an intrusion and that somehow we were introducing direct government control of expenditure by the new opportunities fund. I enjoyed that debate because I thought I had a good answer to it.

Now, my opponents have gone round behind my back 180 degrees. The noble Lord, Lord Redesdale, and the noble Baroness, Lady Rawlings, are now saying that we must introduce additional directions to the new opportunities fund. They are now saying that something which we believe should be, and can be, within the scope of the new opportunities fund's own decision, should be decided by Parliament in a direction to the new opportunities fund. I am flabbergasted that noble Lords should think that it is appropriate to have such detailed central direction of the expenditure of lottery money.

Of course, I share the concern to protect the interests of Scotland, north Wales and Northern Ireland, and the Bill provides in Schedule 2. paragraph 2 that the Secretary of State shall appoint members who appear to him to be suited to making the interests of Scotland, Wales and Northern Ireland their special care. I can assure him that in making those appointments the Secretary of State will have regard to the views of the Secretaries of State for Scotland, for Wales and for Northern Ireland. If that is the way that the legislation on the government of Wales and of Scotland works in due course, that will be a matter for the Scottish and Welsh bodies.

But what is wrong with the new opportunities fund itself setting up the committees rather than being directed to do so by the Secretary of State? Of course, the members can do that; it is entirely within their powers. They can appoint outside members for that purpose; there is no difficulty about numbers; there is no difficulty under those circumstances. They would not have the difficulty to which my noble friend Lord Randall referred. Indeed, since these are major initiatives which, if the first three are to be any example, will be on a UK-wide basis, but which will be different as initiatives proceed, they could well set up special committees to deal with particular initiatives, comprising in Scotland people with particular knowledge and expertise of the area. We should not be restricting the new opportunities fund in the way that the noble Lord is proposing.

5.30 p.m.

Lord Redesdale

I apologise. I ask some clarification. We are talking about the setting up of one committee at the moment, which then could set up sub-committees. The Minister has said that it would be perfectly reasonable for it to do that. What is the difference between setting up one committee and three sub-committees, and four committees at this point?

Lord McIntosh of Haringey

The difference is that the new opportunities fund, which will be set up by statute, will have the freedom to do what it thinks appropriate when it has asserted its priorities and set out its programme of work. I do not deny that it may decide that separate committees for Scotland, Wales and Northern Ireland would be appropriate. It may decide that permanent committees for Scotland, Wales and Northern Ireland would be appropriate, or it may decide that special committees for different initiatives would be appropriate. I do not know, and it is not government's job to second-guess it.

What we are saying is that what the noble Lord is seeking to achieve by this amendment, which is flawed in the way that my noble friend Lord Randall has pointed out, can and should be achieved without legislation on the initiative of the new opportunities fund. That is my argument against the amendment.

The noble Lord raised the issue of the National Lottery Charities Board, and I think it is right that I should respond to that. The NLCB has a different remit, and it operates in a different way. because it does not pursue broad initiatives in the way that the new opportunities fund will. What it does is give out grants which, of their nature, are normally geographically more limited. The new opportunities fund initiatives—if we are to take the first three initiatives as examples—are nationwide.

I referred on Monday to the IT training for teachers. The proposal here is that IT training should be provided for about 450,000 teachers. It should be provided for all those teachers in need of IT training. Not all teachers are in need of IT training; we do not know where they are. The allocation of funds should reflect the need for IT training for teachers; in other words, it should reflect the numbers of teachers who need training at different levels. We do not know that in advance. If the Scottish education system, as Scots claim, is so much better than that in other parts of the United Kingdom, presumably Scotland will need less money for IT training than other areas. If, on the other hand, other initiatives are concerned with issues where there is greater need in Scotland. Scotland will need more money. The flexibility that I am describing is appropriate for all of those circumstances.

Lord Redesdale

The Minister said that he would have no objection to the main committee setting up permanent sub-committees in these areas. The purpose of the amendment is to make sure that the views of those in Scotland, Wales and Northern Ireland are listened to. Indeed, there has been some well founded criticism that centralised bodies based in London do not have the ability to look at problems in Scotland in the detail that those in Scotland would wish. I suggest to the Minister that it would have no effect upon the arm's length principle if he says now that he would have no objection to the main committee being set up with three permanent sub-committees being set up at the same time. Clearly, that would not change the nature of the permanent committee but it would address one of the fundamental ideas behind the amendment, which is that the views of those in Scotland, Wales and Northern Ireland should be addressed by people within Scotland, Wales and Northern Ireland.

Lord McIntosh of Haringey

I do not think the Secretary of State would have any objection. I clearly failed to make my point clear. What we are saying is that it must be a decision for the new opportunities fund itself. If it decides that committees of the sort that the noble Lord is proposing are desirable, the Secretary of State will certainly not intervene to ban them. If it decides the other way round, that again is its prerogative. We believe in the arm's length principle.

Finally, it is by no means certain that the new opportunities fund will be set up in London. The shadow fund is to be set up in London, but the actual new opportunities fund could be set up anywhere in the United Kingdom.

Lord Redesdale

I do not believe I shall make any further gains this evening, but I do believe that there is a case to be heard. However, if the Minister likes the idea of setting up a committee that does not have bodies in Wales, Scotland and Northern Ireland, he is fundamentally missing the central point of devolution. I reserve the right to bring this matter back at a later stage, but I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Clause 8 [Power of distributing bodies to solicit applications]:

On Question, Whether Clause 8 shall stand part of the Bill?

Lord Howell

I rise to support Clause 8. I had prepared a great speech, which my noble friend Lord McIntosh will be delighted to know I do not now intend to deliver in the absence of the criticism of the noble Lord, Lord Skidelsky, which I was anticipating in view of his speech at Second Reading. He throws his arms up in disbelief and surrender! I am very pleased about that. I simply say that I regard this as the most welcome part of the Bill because there are great vacuums all over the country in the provision of sports facilities in particular, and no doubt of arts facilities. The need for the Sports Council to develop strategies, to go out and encourage grant applications to meet great deficiencies in the needs of local communities and above all, to issue a strategy for sports provision, is absolutely essential. I appreciate and welcome the Bill.

Clause 8 agreed to.

Lord Howell moved Amendment No. 26:

After Clause 8, insert the following new clause—

DISTRIBUTING BODIES: VOUCHER SCHEMES

(" . In section 25 of the 1993 Act (application of money by distributing bodies) after subsection (2B) there shall he inserted—

"(2C) A body may, in connection with any distribution falling within subsection (1). make provision in relation to the availability of any facilities or services to which the distribution project or arrangement relates.

(2D) The provision which may be made under subsection (2C) includes provision—

1. (a) for any facilities or services to which the project or arrangement relates to be made available to persons holding vouchers, and
2. (b) for or in connection with the issue of such vouchers.".").

The noble Lord said: I hope this amendment is welcome to the Government too because it follows from the strategies and initiatives which I mentioned a moment ago which I would like to see the Sports Council, the Arts Council and others operating. At the moment there is considerable Treasury bureaucracy as regards grants. A by-product of moving these amendments is to ask my noble friend if, when he has time—because he seems to be the busiest man on the Government Front Bench at the moment—he would kindly look at all this bureaucracy. I understand that there are 40 pages of Treasury documentation guiding these councils as regards applications that can be made, and how they are to be considered.

When people make applications for grants, these 40 pages have a big effect upon them. To a certain extent, we now have a new industry growing up of people advising others how to make grants. This all comes from this ridiculous bureaucracy. One can understand that if you are proposing to build a national stadium there have to be careful guidelines about matters of that magnitude. However, when we are talking about local tennis clubs and so on that cannot be true, but this is in fact what is happening.

It has been pointed out to me, for example, that if you want to make an application to resurface a tennis club, you have to go through the same bureaucratic procedures as if you are making an application to build a £2 million sports centre, and yet the difference between the two is enormous. This cannot possibly be right. In pursuing my amendment now I would just express the hope that my noble friend the Minister will look at that to see what can be done to ease the situation.

One of the ideas that has come forward to help us with small applications is contained in my Amendment No. 26 which seeks to enable the Sports Council, the Arts Council and others to distribute vouchers in lieu of actually making payments. That can have considerable benefits in relation to tax as well as in other areas. For example, it will be possible—speaking about sport, which I know more about—for the Sports Council to give a school vouchers to buy cricket equipment. They could then buy the cricket equipment with the vouchers and it would cut out a great deal of the bureaucracy we are complaining about. The same could also happen in other areas. With community awards, for example, if you knew a local community needed football equipment but that giving it money would involve all sorts of bureaucratic complications, then it would be sensible to give vouchers. Voluntary sports clubs and schools, in particular, could benefit from this amendment, which I know has the support of the Sports Council which has considered it carefully. There is no need for me to say more to make my case. I hope the Minister is sympathetic to it. I beg to move.

5.45 p.m.

Lord Addington

As somebody who has spent a great deal of time involved in sports clubs, I can safely say that the noble Lord is absolutely correct to say that paperwork is incredibly difficult for amateur bodies to deal with on a large scale. If you put 20 forms in front of somebody, with about three people having to read them, the chances are that nobody will go through them at all. Something that is straightforward and cuts out a totally unnecessary piece of red tape is surely to be welcomed by all those involved. I would hope that even if this particular scheme is not appropriate something like it could be included in the Bill because it would mean that those people who need the money or maintain activity in these sectors would receive direct support much more easily. Surely this is something which could easily be done and it should have been done earlier.

Lord Skidelsky

I nearly always agree with what the noble Lord, Lord Howell, says and I certainly do on this. Anything that can cut down bureaucracy is to be welcomed and I am absolutely sure that some of the money that is unspent—not all of it—is simply the result of bureaucratic delays in processing applications. What I am not quite sure about is how vouchers—and perhaps he was a little too short on that—which are the right to spend money, differ from money?

Lord Howell

I agree with the noble Lord that in essence they are not different from money. In practice, however, they save all the bureaucracy that we have been talking about. I hope the provision will be acceptable to the Government as it will enable applicants, as the noble Lord has said, to avoid the detailed processes of filling in forms and so on. It will enable the Government to know that they are making grants which will he accountable—which is not always the case with money grants—because the vouchers will be spent and the information as to where they have been spent will come back to the Sports Council, so there is a great safeguard there as regards public funds.

Lord McNally

On that point the difference between vouchers and money is that the accountability trail is much surer with vouchers than it is with cash, and that is the appeal of the scheme. I would like strongly to support this idea which has been raised before at Second Reading and in this Committee. There is worry about what I termed before the sclerosis in dispersing funds, and it seems to me that this is one sensible way of getting funds out quickly.

The other thing that really attracts me about this concerns another fault or snag in the lottery system, which is how we get funds down to small projects that can make a real difference. Again at Second Reading I mentioned the matter of primary schools falling foul of some of the big rules in getting funds. It seems to me that in this amendment the noble Lord, Lord Howell, has come up with a good solution, which will get funds down to areas that strike me in particular, for example inner-city schools and inner-city clubs where they do not need, or cannot build, a new pavilion or some other such grand scheme, but where the supply of some basic equipment can make all the difference to the success or otherwise of a sporting venture. I understand the English Sports Council would consider grants as low as £100 and thinks that if it did that it might be able to help over 100,000 recipients. That is a much more exciting way of using lottery funds than through some bigger projects that we could mention. So I really hope that at this stage we are going to hear not the ministerial "dead bat" on this but a reception that treats an imaginative proposal with the imagination that it deserves.

Lord Monro of Langholm

The noble Lord, Lord Howell, and I have been friendly sparring partners on sport for longer than I care to remember, and often we have come to the same conclusion. Here is a case in point and I strongly support the principle behind his amendment; for goodness sake let us with the proposed new clause try to reduce the bureaucracy in distributing grants. Like other noble Lords I am also deeply involved in sport and community work. When one looks at the detail required to fill in an application form for a grant, I am surprised that anybody ever asks for anything at all. I really believe that we have to aim for simplification. It is a slight paradox of what I was saying earlier that I want arm's length control by the distributing bodies. Here I am saying that it should be in the Bill and that that would make life simpler for those who wish to apply. Sometimes I feel we allow the distributing bodies to insist on matching funding, which often puts the whole project out of court from the point of view of costs.

Broadly speaking, I know the Minister will have taken on board that we are all very much in favour of trying to do something on the lines recommended by the noble Lord, Lord Howell, and I hope he gives us a favourable response.

Lord Chorley

I feel my former profession of accountant coming upon me. I do not see how the voucher scheme makes a great deal of difference, with the greatest respect to the noble Lord, Lord Howell. The fact is that the voucher is a right to spend money, and therefore the same sort of control has to be applied to the actual spending of money. There may be some saving later on, but surely any of the grant giving bodies have to pay just as much attention to the issuing of vouchers as to the spending of cash.

I spent this morning going through a charity's fund application which was 35 pages long. I had put my name to it as a referee, wisely or unwisely, and I rather wilted. If money is going to be spent properly, it has to be controlled. It is an interesting idea. Perhaps there is too much bureaucracy. There was not too much in the one I looked at this morning, even though it took rather a long time.

I have sympathy with the amendment, but if it came to a vote, I am not sure I would support it because it would not have the effect that the noble Lord seeks. I suspect I may be doing the Minister's job for him to some extent.

Lord Montague of Oxford

I wonder whether that is totally true. The assumption has been that the voucher will be for cash. It is a redeemable voucher which could be for any sort of equipment and it might enable the distributing body to engage in some bulk purchase at a very advantageous price. It could be redeemed through a voucher for the specific item.

Lord McIntosh of Haringey

Before I turn to the amendment itself, let me refer to the wider issues which my noble friend Lord Howell raised both in introducing the amendment and in speaking on Clause 8 stand part. He is right, of course, that it is important that we should as far as possible avoid bureaucracy in the issue of grants. I speak with some feeling having been involved before the election in the preparation of a grant application to the National Lottery Charities Board, which incidentally did not succeed. That may be my fault. Certainly, the complicated calculations which had to be made on the distribution of expenditure and benefit over an artificial number of years was extremely difficult. I quite see, as the noble Lord, Lord McNally, says, that people such as governors of primary schools will have enormous difficulty in dealing with matters of that sort.

The fundamental rules behind which bureaucrats shelter are propriety and accountability. We have to admit that they are right. If you relax the rules too far, you will get money going out in a way which is not accountable and may far too easily go to friends or to people who are not the most appropriate recipients of public money. We are keen to see that bureaucracy is kept to a minimum, and I give one particular example.

The community grants scheme, which we are going to pilot in Scotland and which we hope will extend to other parts of the United Kingdom in due course, will provide a simple, user-friendly, one-stop shop service for small groups including community sports organisations. If we can do that on a wider scale, I believe we will be making progress. A large section of this part of the Bill is concerned with trying to reduce bureaucracy. The parts which we have agreed without comment, which are concerned with the power to delegate from the major body to other people, to officers or to outside advisers, all contribute to this.

The power to solicit funds in Clause 8, to which only my noble friend Lord Howell referred, is concerned with seeing that we have a proper balance, because bureaucracy has sometimes, as noble Lords have suggested, inhibited a proper balance. I am sympathetic to any initiatives, including those in this legislation, to reduce bureaucracy.

I turn now to my noble friend's specific amendment. I am grateful to him and to the noble Lord, Lord Weatherill, for tabling it. I am also grateful to the English Sports Council, whose officials have been in consultation with mine over the possibility of extending the powers to distribute by other means than cash grant, which we propose for the new opportunities fund to existing distributors. I do not think it is entirely clear from the debate that what my noble friend is proposing is not something new; he is proposing that the voucher system which applies to the new opportunities fund should go to existing distributors.

Not all distributors have asked for this, but we see no reason at all why the voucher system—for the reasons that my noble friend, and indeed my noble friend Lord Montague, gave—should not be applied to other good causes. It is particularly valuable where large numbers of small awards are being made for similar easily defined purposes. The accountability insisted on for the first award could then be more easily extended to other awards. It allows a much more cost-effective and less intrusive approach to monitoring.

I cannot see any objection to what my noble friend is trying to do. If he will allow me, his amendment is technically defective in the sense that there are going to be other amendments required to the 1993 Act if it is to have effect. We would need to consult some other departments, and we would certainly want to consult other distributors to see that there is no objection that we have not thought of. Subject to that consultation, I can undertake to my noble friend that I will table amendments at Report stage which will give effect to what he wants, and on that basis I ask him to withdraw his amendment.

6 p.m.

Lord Howell

I am extremely grateful to my noble friend for that very wise and welcome statement. I would only say to him that I am always surprised if any amendment I move is found to be technically in order, so I have no difficulty in allowing him to improve on the wording.

I am sorry the noble Lord, Lord Chorley, has doubts about it. I would simply say to him as an accountant that vouchers are much more accountable than cash grants. I know that the Sports Council and others have had difficulties when they have made grants in ensuring themselves that the money has been properly spent. Here I have no doubt we will have auditors and accountants—finding more work for the noble Lord's profession, may I say—checking up on how these vouchers are spent, and that indeed it will produce a great deal of information which will be welcome to us in our future considerations.

In view of the extremely helpful statement by our noble friend, and with that spirit very much in mind in the Committee, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 [Delegation by distributing bodies of their powers of distribution]:

[Amendment No. 27 not moved.]

Lord McIntosh of Haringey moved Amendment No. 28: Page 13, line 9, at end insert ("only").

The noble Lord said: This is purely a drafting amendment. Clause 9, among other things, ensures that a charity which by mutual consent accepts the delegation of functions by a lottery distributor is thereby empowered to exercise those functions, notwithstanding the absence of specific provision for that in its governing instrument. In making this provision, the Bill needs to define what is meant by "charity". It was intended to use the standard definition in Section 506(1) of the Income and Corporation Taxes Act 1988, but the word "only" was inadvertently left out of the end of the definition. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 29: Page 13, line 25, at end insert ("(or the holder of any corresponding office in relation to)").

The noble Lord said: This is what I am told is a precautionary drafting amendment. Clause 9 provides for the delegation of the lottery grant-making functions of a body to, among other bodies and persons, committees of its own members or members of another body. For the avoidance of doubt, the Bill already makes it clear that the members of a body include its chairman or deputy chairman. However, in some organisations the holders of equivalent offices go by other names. We would not wish the legislation inadvertently, for example, to exclude the convenor of a body from membership of a grant-making committee because he or she was not styled "chairman". I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 30: Page 13, leave out lines 29 to 32 and insert— (""(3A) In exercising any power under section 25A, a body which distributes money under section 25(1) shall comply with any directions given to it by the Secretary of State."").

The noble Lord said: I understand that the noble Lord, Lord Skidelsky, has agreed that his amendment, Amendment No. 31, will be grouped with this amendment. It may be for his convenience and the convenience of the Committee if I first explain my amendment and then say a word about his.

I am sure that those who feel that we are seeking to destroy the arm's length principle and dictate to distributors exactly how they should distribute their money—although I have already assured the Committee that that is not our intention—would agree that it would not be right for Ministers to direct distributors to delegate functions against their will or to direct distributors to delegate to particular bodies. Unfortunately, following representations from, among others, the chairmen of the Scottish Arts Council and the Arts Council of Northern Ireland, for which I am grateful, we now conclude that the drafting of subsection (2) as it stands inadvertently gives us that power. The amendment seeks to deal with that problem.

The amendment of the noble Lord. Lord Skidelsky, is similar, I believe, in objective. The purpose of Clause 9 is to enable lottery distributors to delegate any of their functions relating to the distribution of funds. In drafting the Bill, we were sure that noble Lords and others would be concerned that to ensure that if distributors were to be given the power to delegate functions, we would, by various means, provide for proper accountability and controls over their exercise of that power.

I appreciate that Amendment No. 31 in the name of the noble Lord, Lord Skidelsky, seeks to serve the same purpose. However, his wording would enable the Secretary of State to direct distributors only on the financial aspects of delegation. We believe that the Secretary of State needs a wider power of direction. He may need to direct distributors on matters of policy concerning delegation; for example, by requiring them to obtain his consent before they delegate to, say, local authorities the responsibility for monitoring the projects that they are funding. Our amendment limits the power to direct on delegation to that which we intended all along and enables the Secretary of State to direct distributors on policy as well as on financial issues.

Before I leave this, it may be helpful if I make it clear that we have no intention of using these powers to interfere in a detailed way with distributors' approach to delegation. We will also make directions only after careful consultation with distributors, as provided for in Section 26 of the 1993 Act. In particular we see internal delegation as very much a matter to be guided by the good sense of the bodies concerned and their accounting officers. The directions will merely specify broad requirements which give the Secretary of State and his Permanent Secretary (as accounting officer for the NLDF) sufficient assurance that there is no doubt about the importance of, for example, delegating decisions only to those who are properly qualified to make them or ensuring that major decisions are not made on the say-so of one individual. We have no intention of using the directions to go beyond that; for example, to say which staff in a distributor body should take particular decisions, or who should counter the decisions. I hope that the noble Lord, Lord Skidelsky, will recognise that his amendment, with similar objectives to mine, ought to be withdrawn and that mine should be accepted. I beg to move.

The Deputy Chairman of Committees (Lord Brougham and Vaux)

I have to advise the Committee that if Amendment No. 30 is agreed to, I cannot call Amendment No. 31.

6.15 p.m.

Lord Skidelsky

I do not agree with the Minister. He has confirmed my suspicion that his amendment is rather more than a drafting amendment. It certainly simplifies the convoluted language of the original subsection, but it achieves that by widening the Secretary of State's powers. In the original, the body is to comply with any directions given to it by the Secretary of State with respect to the exercise of certain powers which are then specified. However, in the new subsection, we are to have, a body which … shall comply with any directions given it by the Secretary of State". There is no limitation there. That is certainly unfortunately in line with an attempt throughout the Bill to widen the powers of the Secretary of State wherever possible. Our amendment seeks to narrow them to a particular point which, as the noble Lord said, is to secure: the proper management and control of money paid to the body". Our amendment is somewhat narrower in scope than the original, but we prefer the original to the Minister's amendment. The amendment is exactly contrary to what the noble Lord said: it widens, rather than narrows. I may have misinterpreted that, but to say that: a body …shall comply with any directions given to it by the Secretary of State", in exercising any power under new Section 25A is ambiguous. The Minister's amendment states: In exercising any power under section 25A, a body … shall comply with any directions given to it by the Secretary of State". That seems to be a very broad remit.

Lord Birkett

I am glad that I think I understand the distinction between the two amendments. I was going to propose a more radical way out of the dilemma, which was to remove the whole of Clause 9 and not replace it with anything. I cannot see why the Secretary of State needs to have powers to direct in this matter at all.

As the noble Lord, Lord Skidelsky, said, the whole question of the powers of the Secretary of State dogged the original lottery Bill right the way through. I remember thinking then that the Secretary of State figured far too much in the 1993 Bill. I seem to recall prominent Members of the Front Bench of the Opposition of the time agreeing with me on that subject.

Therefore, the helpful suggestion I make is to remove the clause altogether. I say that for three reasons: first, in Clause 9(1), new Section 25A(4) defines very narrowly the kind of bodies to which the present distributing bodies can delegate—very sensibly so. Secondly, the distributing bodies themselves are, after all, in a position now to dispose unilaterally of enormous sums of money. They have very sensibly been trusted to do that, and I cannot see why they should not be trusted to delegate their powers to the right sort of people. Thirdly, when you are dealing with very large sums of money, such controls invariably arise because people tend to think of such moneys as public money. Lottery funds are not in any sense public money. The fact that they are very large makes the Treasury look at them in rather a different way than it might look at smaller sums. It is not, however, public money and therefore does not need the degree of ministerial control required by public money. By far the best solution is not to allow the Secretary of State to meddle with the question of delegation at all, but to leave it to the good wisdom of the present distributors.

Lord McIntosh of Haringey

As there is disagreement about this, let me take it in stages. First, what is the intention of the Bill as drafted in Clause 9(2)? Secondly, what is the effect of the existing wording? Thirdly, what is the effect of the wording as proposed in my amendment? The intention of subsection (2) is to give the Secretary of State powers to direct distributors on requirements they must observe in using their power to delegate. For example, it will enable the Secretary of State to require a distributor to ensure that the body to whom it delegates decision-making is capable of doing so properly and efficiently and within appropriate financial controls. The intention was that the distributor should decide whether to delegate these powers. He cannot, however, be forced to do so by the Secretary of State.

As I said earlier, the Chairman of the Scottish Arts Council and the Chairman of the Arts Council of Northern Ireland have expressed the view that the subsection as drafted could enable the Secretary of State to insist on delegation and even to insist on delegation to particular bodies. New Section 26(3A) says: A body shall comply with any directions given to it by the Secretary of State with respect to the exercise of its powers to"— and I summarise—delegate. They considered that to be undesirable, as we do.

What we are saying, therefore, in Amendment No. 30 is that, in exercising any power under Section 25A—which means it is up to them to decide whether to exercise that power or not—a body which distributes money under Section 25(1) shall comply with any directions. That really is a reduction in central power rather than an increase, and I hope that that allays the fears of the noble Lord, Lord Skidelsky.

On Question, amendment agreed to.

[Amendment No. 31 not moved.]

Lord McIntosh of Haringey moved Amendment No. 32: Page 14, line 5, at end insert— ("(6) In paragraph 3 of that Schedule (tenure of office) in sub-paragraph (4)(a) (removal on grounds of absence from meetings) for "or (as the case may be) from meetings of the committee without the committee's consent" there shall be substituted "or from meetings of a committee of the Board without the committee's consent".").

The noble Lord said: In moving Amendment No. 32, I should like to speak also to Amendment No. 46. These amendments correct the inadvertent removal of a provision in the 1993 Act allowing for the removal of board or committee members of the National Lottery Charities Board from meetings of its committees. The amendments mean that unauthorised absence from meetings of board committees will continue to be grounds for removal from office, as is continued unauthorised absence from board meetings. I beg to move.

On Question, amendment agreed to.

Clause 9, as amended, agreed to.

Clause 10 [Joint schemes for distribution of money by distributing bodies]:

On Question, Whether Clause 10 shall stand part of the Bill?

Lord Crickhowell

I would like to say a word about Clause 10, or I would like an explanation. It is perfectly possible at the moment for co-operation to take place between funding bodies. Indeed it has done so in at least one well-known case: the arts centre at Salford Quays. The arts centre there and the three funding bodies produced a total of around £60 million for that project. It was the intention that there should be joint funding in connection with the project to which the noble Lord, Lord Rees, has referred in earlier interventions: the arts centre in Cardiff that was a successor of a project with which I was involved. I do not intend to speak about that project because I have written about it elsewhere and I have made very plain my criticisms of what happened. I had no involvement in the project that succeeded and I want to refer to one or two things that happened there, because it raises some significant issues.

I believe I understand the purpose of this clause in that it goes rather further than the powers that were available before. It was possible, where there were three clearly separate component parts, for people to get together and the separate funding bodies each to fund part of the building. The clause here enables a rather more flexible approach. I simply want to make the point that whatever happens we really need to have sensible, practical, working arrangements between the funding bodies if we are not to have disaster.

I point to the example of what I regard as an extraordinary piece of mismanagement of the scheme to which my noble friend Lord Rees referred the last time we met. This was a project to build a centre for the performing arts which was to be funded jointly by the Arts Council in Wales, the Millennium Commission and the National Heritage Memorial Fund. The original intention was that the leadership was to be provided by the chief executive of the Millennium Commission. However, there have been a number of changes in the role of the chief executive of the Millennium Commission, and the person originally involved, Jenny Page, moved on and events moved on.

The reason I raised the issue and voiced my criticisms and my concerns was that after these three bodies had considered this project for a very long time, perfectly properly going into the business plan and the design and all the things that have to be done, we suddenly had an announcement by two of the bodies, the Millennium Commission and the Arts Council of Wales, that they were approving the project to the tune of £37 million between them, but that the National Heritage Memorial Fund had not come to a decision about the bid to it of £19 million for the wing which was going to be occupied by the national Museum of Wales, which has been mentioned by my noble friend Lord Rees.

Several weeks passed and then, for reasons which have been touched on by my noble friend Lord Rees, the National Heritage Memorial Fund said, "We cannot agree to our part of the project". That creates a pretty extraordinary situation. You have a building for which £51 million is being sought from public funding and suddenly £19 million is taken out, and at the very least if the project is to go ahead, and it is uncertain at the moment in what form it will go ahead or indeed if it will go ahead, you have to take out a major section of the building, you have to re-design it at considerable additional cost. If you take out one-third of the building, it is very unlikely that you will reduce one-third of the capital costs and, whatever else is uncertain, one thing that is absolutely certain is that the business plan cannot be the same as the business plan which has been the basis of the approval given by the first two funding bodies. Public money—I am not allowed to call it public money—lottery money is at risk and considerable sums of private money directed into the project by the architect, by the backers and by everyone else, is put at risk.

My simple point is that, if you approach three funding bodies in the City, three merchant banks, for financial support, I would consider it a pretty gross display of mismanagement if two of them were suddenly to announce that they approved the project and three weeks later the third one said, "We are going to turn down our bit of it". What they would do is get their act together. Here we have the situation where one of the funding bodies is chaired by the Secretary of State. I should have thought that in that situation one would have effective co-ordination. It is a public scandal that needs investigation as to why there was not effective co-ordination. We shall have to inquire in due course whether there has been a fresh look at the business plan and so on.

I rise to speak on this occasion with two purposes: first, because I want to understand exactly what Clause 10 will make possible which is not possible under the existing legislation. Secondly, I want to urge in the strongest terms I can that if we are to have co-operation between the funding bodies, we must ensure that it is conducted in a sensible manner and that the people who approach those funding bodies are not landed in the frankly lamentable situation that those responsible for this project now face. I know some of the individuals well. I know that they are struggling to rescue the project. However, after suffering one disaster in Cardiff with the demise of the so-called "Opera House" project, there is the possibility that the second, with identical objectives, with exactly the same things going into it, and with the original total cost not very different, might fail simply because of the administrative incompetence of the funding bodies being unable to get their act together. That is a public scandal of major proportions.

Lord Rees

I had not intended to intervene again particularly as I had sketched out some of the problems with which we have been faced, and I declared my interest on that occasion. Perhaps I should say again that I have been a member of the court and council of the Museum of Wales which was a great privilege. I am still a member of one of the committees.

My noble friend, who speaks with the authority of someone who has held high ministerial office in the Principality, has outlined some of the problems with which I am acutely concerned more lucidly and more authoritatively than I could. I hope therefore that we shall be privileged. I cannot expect the Minister to give us a reply today because he has not been given notice. He may be in a position to do so, but if he is not, if there are certain factors that he would like further time to consider, I hope he will be able to write to us, so that in the future we will be better informed. These are all continuing problems and if one project grinds to a halt it may be resurrected in some other form. It may be that the problems we have regrettably faced on one or two occasions in the Principality may be reproduced elsewhere in the United Kingdom. I am not in a position to say whether that will be the case.

I should like to be reassured on a further point. It may be that had I read the Bill with a more practised eye I need not have asked this question, but I do ask it and I hope I can be illuminated by the Minister when he comes to reply. If what has happened in the recent case in the Cardiff bay development affected the museums part of the application and were to arise again, could the difficulties be avoided by the passage of this subsection, or does this have no direct bearing on it? In other words, had this provision been law at the time this last application was made, would there have been some possibility, through whoever chaired or co-ordinated it, of resolving the problem? I do not want to go over the ground my learned friend has covered so eloquently, but there seems to be a faint absurdity in this particular case which has struck us acutely in South Wales.

Lord Crickhowell

Before the Minister replies, I should probably have declared an interest. I have no direct involvement with the project but I am a director of Associated British Ports who actually own the land on which this project will be constructed. I declare that interest.

Lord McIntosh of Haringey

I can offer the noble Lords who have spoken unstinted sympathy for the frustration they must have felt when two out of the three funding bodies agreed and one did not, but I cannot give unhesitating assurances that problems of that sort will never arise again. We are back to the arm's length principle. If we stick to the arm's length principle, then the bodies to which we give these responsibilities must make their own decisions and they will sometimes make wrong decisions. By the way I am not saying that anybody concerned made a wrong decision. I have undertaken to write to the noble Lord, Lord Rees, and I shall do so.

I can confirm that in certain circumstances Clause 10 will make it easier for there to be effective co-ordination and effective working relationships between bodies. I have to say that Clause 10 is not mandatory: it says that distributors may collaborate and they are not forced to. We could have exactly the same situation in Cardiff as we had before if the distributors decline to collaborate, but the provisions here in Clause 10 for joint schemes are provisions which have been requested by the distributors. They are given by the Government in this scheme because it is believed that they will result in more sensible working arrangements.

It is unlikely that these joint schemes will be for such major capital projects as the one to which the noble Lords have referred. It is much more likely that they will be used for smaller community schemes like the Scottish community grant scheme to which I referred earlier today. In that case they are indeed working together to establish sensible working relationships when the delegation provisions come into force. They will find it easier to handle applications which span the boundaries between the individual good causes because they could, for example, delegate the processing of an application to a single lead body which would make it more effective. We are of course in favour of more effective co-ordination, but that does mean that, with these extra powers, mistakes will not be made.

Lord Rees

I am grateful to the Minister and I apologise to him and to the Committee for intervening in the middle of his speech. He has made such an interesting and important point for the future that it is unlikely that the powers of co-operation and co-ordination would apply in relation to a scheme of the size of the one to which my noble friend Lord Crickhowell and I referred to, but rather to a much smaller one. Is that to be derived from the Bill, or is there some code of conduct, or some governmental direction? What leads him to make that point? I am not querying the merits of it, but I just want to know why that should be the case so that those of us who have to be at all concerned, in whatever capacity in the future, may have a little guidance on this.

Lord McIntosh of Haringey

There is nothing in the Bill which says it shall not be for large capital projects, and there is nothing I am saying which should be used in Pepper v. Hart terms to indicate any ulterior motive behind what I say. I am simply observing as a layman in this respect that the cost of setting up joint schemes will be significant as will the administrative time involved. However, they are more likely to be worth that administrative cost if they are schemes like the Scottish community grant scheme which apply to a large number of applications which could be handled more simply by a joint scheme. On that basis that is more likely, objectively, to be the way in which they will work, but I could be wrong.

The other objective point I would make is that one of the participants in the scheme to which the noble Lord referred was the Millennium Commission which has virtually run out of money. That additional participation is highly unlikely to occur again.

Clause 10 agreed to.

Schedule 3 [Joint schemes: Schedule 3A to the 1993 Act]:

6.30 p.m.

Baroness Rawlings moved Amendment No. 32A: Page 27. line 14, leave out ("£5 million") and insert ("£10 million").

The noble Baroness said: I beg to move Amendment No. 32A. The amendments in this group cover joint schemes and authorisation or approval by the Secretary of State. They are probing amendments intended to establish the real intention of the provisions. The first one is intended to ensure that the allocation of funds between the distributing bodies, as voted by Parliament, is respected and not improperly diverted to other purposes through joint schemes. I ask the noble Lord whether it gives the opportunity to the Secretary of State to intervene in the day-to-day decisions over joint scheme applications by the distributing bodies.

We fear that the financial limit in the Bill of £5 million is too low. If the joint scheme involves three bodies, the contribution of each would be only £1.6 million but would nevertheless trigger the requirement of an order from the Secretary of State. We do not think that these provisions will make the distribution process work better for the applicants, as the White Paper claims. We fear that it will make the application process more bureaucratic unless the requirements are more limited. For these reasons, we are proposing to raise the upper limit in the second amendment to introduce a lower threshold of £100,000, below which no approval will be needed.

Will the Minister give an assurance that these provisions do not represent an erosion of the arm's length principle, and will he also undertake to reconsider the limit and the bureaucratic consequences of the provision?

Lord McIntosh of Haringey

I am grateful to the noble Baroness for the care she has taken to probe the way in which joint schemes will operate. She clearly feels that the provisions in Schedule 3 are too cautious, and she may be right; I am certainly not saying she is wrong. There is a good reason why we set the approval limits at the level they are. We believe that Parliament will be concerned that distributors taking part in joint schemes should not be permitted to undermine significantly the controls over the allocation of lottery funding which are laid down in the 1993 Act. At first sight I am not sure whether there is any need for a category of very small joint schemes for which there is no approval mechanism. We think it is highly unlikely that any joint scheme will involve expenditure of less than £100,000, and that refers to the second amendment of the noble Baroness, Lady Rawlings.

However, in the light of the noble Baroness's amendments and the arguments that she has put forward, and subject to the views of other noble Lords—this is, after all, an issue of what Parliament is prepared to delegate—I am certainly prepared to give her amendments further consideration. I think they would have to be discussed with the distributors, and it could be that the limit on her first amendment could be higher than £10 million. I just do not know. I certainly would not reject the amendments out of hand, and perhaps we can talk about it between now and Report stage.

Before sitting down, I ought to assure the noble Baroness that there is no interference involved here in the day-to-day decisions of the distributors. Once a scheme has been set up with the approval of Parliament for the reasons I have given, the day-to-day operation of the scheme is entirely a matter for the distributors.

One further point I would wish to correct: the noble Baroness is implying that the contribution of different distributors in a scheme would always be equal. That is not necessarily the case, as indeed the example of the Cardiff Opera House shows. On that basis, I hope that the noble Baroness will feel she has achieved what she wanted in these amendments and that she is able to withdraw them now.

Baroness Rawlings

I thank the Minister for his very clear answers to the questions, and I look forward to discussing the matter further with him. For the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 32B not moved.]

Schedule 3 agreed to.

Clause 11 [Strategic plans for distributing bodies]:

Baroness Rawlings moved Amendment No. 32C: Page 14, line 42, leave out from beginning to ("in") in line 43 and insert ("A body which distributes money under section 25(1) may.").

The noble Baroness said: In moving this amendment let me say at once that we are not against distributing bodies drawing up strategic plans. Such plans may reveal gaps in coverage which should be filled. We think that, most of all, the distributors will draw up such plans, but we are against them being told to do so by the Secretary of State. We would prefer the language of this clause to be permissive and encouraging rather than imperative. We do not see why the Secretary of State should insert himself into the process. I beg to move.

Lord McIntosh of Haringey

I am grateful for that explanation. I have to say that the purpose behind this part of the Bill is not that which the noble Baroness implies. We have always been committed, as we were in the White Paper, to ensuring that lottery funds are spent according to strategies based on an assessment of need: put simply, getting the money where it is most needed and can be spent most effectively.

The lottery distribution bodies are doing a tremendous amount of valuable work already and their approach is by no means reactive or demand-led. The National Lottery Charities Board, for example, has run a whole succession of themed rounds, each for a particular segment of the charitable and voluntary sector. The Heritage Lottery Fund's programme of grants for urban parks is an excellent example of how an area which needed funding can be identified and funds channelled to it. We want to build on this existing success and take it even further.

One aspect of this is the relaxation of some legal restrictions imposed by the current law, and that is the subject matter of Clauses 8, 9 and 10 which we have already agreed to. We also intend to revise thoroughly the policy directions issued by the previous government to ensure that they do not prevent the kinds of development by the distribution bodies which we are talking about.

This clause deals with another element of the policy—our desire that distribution bodies should produce a strategic plan every three years or so based on widespread consultation, making an assessment of the needs of their sector and setting out their priorities and dealing with them. This formed part of the approach we put before the electorate last year, which we incorporated in our White Paper and which was widely welcomed in responses to it. Distributors also have welcomed this element of our proposals.

The clause is at the heart of our plans to build on the success of existing lottery distribution; it is not an optional extra—yet I am afraid that the amendment of the noble Baroness would make it an optional extra. It would say: "The bodies may prepare a plan". Whether they did so or not, and when, would be entirely up to them. I do not believe that gives sufficient weight to our proposals.

This is not an interference with the arm's length principle. The strategies we require will be developed by, and belong to, the independent distributor bodies. They will not be imposed by the Secretary of State. Subsection (5) provides for him to be consulted, not for his approval.

The assessment of need is not only a matter for the internal good governance of the distributing body. It is also an element of open government. These strategy plans will be published. They will be available to the general public for them to react to. They will be available to potential applicants so that they can understand the context in which grants are being made. For that purpose, we believe it should be a requirement on the distributing bodies rather than an optional extra, as is proposed by the amendment.

Baroness Rawlings

I thank the Minister for his explanation, but I still feel the provision interferes with the arm's length principle when it says very clearly that the Secretary of State "instructs" it to do so. I will for the moment withdraw the amendment, but I hope we will consider it later.

Amendment, by leave, withdrawn.

Lord Redesdale moved Amendment No. 33: Page 15, line 23, at end insert— ("() a statement of the body's assessment of how the strategic plan will further sustainable development, and ()a statement of how the body intends to assess the environmental impact of the projects they propose under section 25(l)").

The noble Lord said: The purpose of this amendment is simple. It is that we wish to put the environment on the agenda for applications for lottery funding. The purpose of this is that many lottery funds involve large tranches of money that can have a significant impact on local strategies in the way that planning application is sought and granted. Indeed, the very fact that a large amount of lottery money is to be available will have a direct impact on how that application is dealt with. The purpose of the amendment is to ensure that the environment is protected and that on the forms and applications the strategy concerning the environment is involved. The purpose is also to fulfil the obligations under the Amsterdam Treaty, which says that environmental policies should be included in routine legislation. I beg to move.

Lord McIntosh of Haringey

These are very important issues which were raised by the noble Lord at Second Reading and also by my noble friend Lady Young of Old Scone. As the White Paper makes clear, the Government share the view that these are important issues, and I am sure that distributors will want to cover them in their plans.

Sustainable development is a concept which goes much wider than simply environmental protection. This is why in Clause 5 we extended the definition of environment to cover also the living and social environment. The definition of sustainable development comes from the Brundtland definition from the Rio Earth Summit: development that meets the needs of the present without compromising the ability of future generations to meet their own needs". The Government, and their predecessor, have expanded this in terms of broad objectives which will be very helpful to distributors and particularly the new opportunities fund in considering their funding programme—social progress, which recognises the needs of everyone, effective protection of the environment, prudent use of natural resources, maintenance of high and stable levels of economic growth and employment. We are very much in agreement about the objectives and the thinking behind the noble Lord's amendment.

I believe the distributors have this well on board already and they undertake environmental assessments where necessary and include environmental impact as an assessment criteria. Many lottery projects have made significant contributions both to improving the environment and to sustainable development. The Millennium Commission, for example, has made an award of £30 million to the Millennium Seedbank project to collect seeds of almost all UK flowering plants for preservation through the next millennium, for academic research and re-introduction to the wild. The Heritage Lottery Fund has made an award of £400,000 to the Pollockshields Burgh Hall Trust in Glasgow to restore a Grade A listed Victorian Renaissance building, permitting its continuing use as a community centre. The National Lottery Charities Board has just undertaken a themed round—Improving People's Living Environment—which specifically addressed many sustainable development issues such as environment, housing and poverty.

This amendment adds to the very limited list of fundamental requirements for the plan contained in new Section 25C(3), taking it beyond the most basic issues of resources, needs and priorities, to specific points of content. I recognise how important the specific points are, but we can leave it to the good sense of distributors to include that in their plans. Once we start adding topics of this nature, however important, to the list in the legislation itself, I am sure that the noble Lords and others would find many other points which could be mentioned, both of a general nature and specific to each good cause. It would be better to confine the requirements of the clause to the basic list of resources, needs and priorities as drafted in Clause 5, to which I have already referred. I hope that, on that basis, the noble Lord will think it proper to withdraw his amendment.

6.45 p.m.

Lord Redesdale

It is unfortunate, considering the impact that many of the larger projects will have on the environment, that it is not a requirement to put such a provision on the face of the Bill. I understand the Minister's point that it is a requirement of many of the distribution bodies that an environmental impact assessment is undertaken, but I find it disappointing that he does not see it as one of the core provisions—even though the number is limited—that can be put on the face of the Bill. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 34 to 36 not moved.]

Clause 11 agreed to.

Clause 12 agreed to.

Clause 13 [Orders and regulations]:

[Amendment No. 36A not moved.]

Clause 13 agreed to.

The Lord Bishop of Oxford moved Amendment No. 37:

After Clause 13, insert the following new clause—

PARTICIPATION OF YOUNG PERSONS IN THE LOTTERY

(". A licence under sections 5 or 6 of the 1993 Act shall include a condition that the minimum age for participation in the National Lottery or in any lottery or description of lottery specified in the licence is eighteen years.").

The right reverend Prelate said: This amendment concerns the age at which people should be allowed to take part in the lottery. The Churches arrived at a common view on the lottery in November 1995. Among the agreed positions was a concern that the minimum age for play should be raised to 18. We twice visited the Secretary of State to discuss the issue. On both occasions we requested that more effort be directed to research into the study of gambling, particularly among young people. We also requested that the age for lottery play should be raised to 18.

There are four reasons for taking that approach. The first is Oflot's research findings on under-age gambling. The department has had a clear commitment under this, and the last, Government to conduct research into the gambling aspects of the lottery. It is understandable that the Government should wish to see the results of more extensive research before making up their minds on my question, including on the age for participation in the lottery. They have been greatly helped in that by the quality of the research commissioned by Oflot, the lottery regulator.

The study (published in 1997) indicated that there was a connection between young people's problem gambling on fruit machines and under-age participation in the lottery. The 1997 study suggested that this connection was leading to a measurable and worrying degree of excessive under-age play on the lottery, particularly with instant gains games.

Oflot's response was open and immediate. The regulator directed the operator to require retailers to be much more stringent in their vetting of young people's participation. Further research was commissioned. This research has been published in the last day or two and it confirms that 18 should be the age at which people should be allowed to gamble. It indicates a strong factual foundation for not allowing people of 16 to take part in the lottery. So, first, there are the research findings (which more and more people regard as highly significant) about the addictive effects of gambling on young people.

Secondly, we should take into account American and European views. Neither the United States nor our European partners permit gambling under the age of 18. It is not necessarily wrong that the age limits for gambling should be so distinctively low in Britain, but if research is leading us in that direction it seems reasonable to explore the value of other people's experience.

Thirdly, there is the commonsense attitude to teenage multi-millionaires. It seems out of proportion, indeed unseemly, that a government scheme to raise money for good causes should invite 16 year-olds to win £20 million. Again, neither the United States, nor any of our European partners, permit such a thing.

Finally, there seems to be a growing consensus on raising the age limit. It is understood that neither the operator nor the regulator wishes to resist the raising of the age for understandable reasons. The present scheme is accompanied by scandal, harm and difficulty: scandal, in that large amounts can be won by quite young people; harm, in that the accumulation of research is showing that the lottery is associated with problem gambling among a minority of young people; and difficulty, in that the scheme is hard to police without placing undue pressure on already hard-pressed retailers.

The lottery was introduced on the basis of an age limit of 16. That is not in the Bill, but is specified by regulation. It was probably necessary for some time to elapse before the initial policy decision could be reconsidered. That time, and the time for decision, has now arrived. I beg to move.

Lord Redesdale

I rise to support this amendment. I hope the Minister will give some guidance on whether this provision includes scratch cards. Although it was envisaged originally that the lottery itself—now with two draws a week—would encourage only adult gambling, scratch cards are a completely different issue. Although the sales of scratch cards have fallen away, as by their very nature they can be quite addictive—especially to those in the 16 and 17 years age group—perhaps their sale should be limited. The figures given are that there will be a shortfall to good causes of between £17 million and £18 million per year, out of the £1.5 billion per year which is to go to good causes. Considering the aims of the lottery and the aims of the good causes, this must be a small price to pay. I hope that the Minister will support the amendment.

Lord Rees

I had not intended to intervene in this. In general terms, one must approve of measures which discourage the young from involving themselves in gambling to any considerable degree. However, the right reverend Prelate the Bishop of Oxford struck a jarring note to me, in saying that it was obscene for a young person to win a great prize. I see no reason why that should be so. It is no more obscene than anyone else being worth a great deal of money.

The noble Lords opposite, with their egalitarian traits, may dislike the whole concept of anyone having a large sum of money, but I do not see why it should depend on a person's age. It is not for me to speculate about settlements, or trusts, set up by, or for, any Member of either House. Their children may well be entitled to participate in and to benefit from those trusts. Does that strike a jarring note with the right reverend Prelate the Bishop of Oxford? If so, what measures does he propose introducing?

I am also worried about the practicalities of this amendment. It must be difficult for anyone selling lottery tickets to ask young people to confirm their age. Is this a prelude to the introduction of identity cards and so on?

Finally, supposing this amendment is carried, and someone under the age of 18 wins a huge sum, what will be the consequences? Is the right reverend Prelate the Bishop of Oxford suggesting that that person should be deprived of their prize? Again, I am uninformed about the legalities. Perhaps the Minister can help us. If some child of, say, 16, looking mature (as so many do these days), flouts the law and wins a vast sum, is he able to handle it? Would he be required to surrender the prize? Can the right reverend Prelate enlighten us on the legal consequences of this amendment if it should be carried?

Lord Montague of Oxford

Perhaps I may comment on the proposal. I have not read the study which finds that 18 would be the appropriate age. I have not been everywhere, and seen everything that goes on with the lottery, but I have not observed that this thing is so addictive and so damaging to anybody, young or old. What I have observed is that the lottery gives a tremendous amount—indeed, a disproportionate amount—of pleasure and fun, and why we should deny that pleasure and fun to those between 16 and 18 years I do not quite understand.

Lord Crickhowell

The noble Lord quoted a figure of £17 million to £18 million as a consequence. Is that soundly based? If it is, it suggests that the problem is a pretty small-scale one in terms of the number of people under the age specified by the right reverend Prelate the Bishop of Oxford who are actually gambling to a significant extent. I would like guidance as to whether those figures are accurate and how that translates into the volumes with which we are concerned.

Lord Redesdale

Perhaps I may be of help. These figures come from Camelot itself, and, of course, the amount going to good causes is not the amount spent on tickets. It is only approximately 28 per cent. of the amount. That indicates that we are talking of at least £18 million-plus in this case.

May I also ask the Minister one question, because I believe scratch cards are more of an issue here than the actual National Lottery? Because the age definition has been brought up, have there been any studies into how many 14 and 15 year-olds regularly undertake the playing of scratch cards?

The Lord Bishop of Oxford

It may be appropriate for me to comment on one or two of the points which have been directed towards me. First of all, there is the question of big prizes. One has to be honest and say that all the Churches have been worried about the big prizes on the lottery. We have felt that the huge prizes have been unseemly and inappropriate. We are thinking of a 16 year-old suddenly winning £10 million and posing questions about his or her ability to cope and retain any kind of sanity or sensible lifestyle. Of course there can be a difference of judgment on it. From the Church's point of view there is no doubt that there is a worry about those vast prizes coming to teenagers.

But that was not the strongest argument. The strongest argument is the research which has been published in recent days to show that teenage gambling, particularly on something like scratch cards, but also the lottery, can be addictive and therefore destructive of a person's whole life.

The point was made about the difficulty of enforcement, but we now have a law forbidding people under a certain age to buy cigarettes, and that law is quite enforceable. It seems to me that it would be equally enforceable to impose an age limit on people buying either scratch cards or lottery tickets; it would probably make it easier than enforcing the present system.

I am not qualified to comment on legal consequences. It may be that there have yet to be laws enacted which would answer the noble Lord's question.

Lord McIntosh of Haringey

I am grateful to the right reverend Prelate for raising the issue, which has certainly stimulated a very interesting debate. I should begin by saying that the changes to the minimum age limits may be made without primary legislation. There are provisions within the current Act—in Section 12—to allow the Secretary of State to issue regulations to change the minimum age limit. The matter is also dealt with by directions under Section 1 I of the Act for the director general to ensure that the licensee allows sufficient controls to prevent National Lottery tickets being sold to persons under the age of 16, which is the current age limit. I understand that the right reverend Prelate's purpose is to raise the issue in Parliament, and I value that.

The current minimum age limit for participation in the National Lottery was set, in line with that for other lotteries, at 16. Society lotteries and the Pools have the same age limit. Sixteen year-olds can also play certain types of amusement machines. These have always been considered to be relatively harmless forms of entertainment at the softer end of the gambling spectrum, where the possibility of addiction or major losses is seen as minimal. For this reason the age limit of 16 has been considered to protect adequately the interest of players on the National Lottery.

As part of the director general's statutory duty to protect the interests of participants, his office has undertaken, and continues to support, a programme of lottery gambling research by leading academics and researchers, and they regularly publish the results. These reports have not so far indicated that the age limit should be re-visited. I have not seen the research to which the right reverend Prelate refers as having been published in the last few days. If the research appears to indicate that the age limit should be revisited, the director general and the Government would certainly look at it very carefully under existing powers. At the moment, we are not persuaded that there is a case to make for the age limit, but we have a very open mind on this issue.

The noble Lord, Lord Redesdale, referred to scratch cards. We have research on scratch cards for 16 to 18 year-olds. It should be remembered that the director general has a duty not to license games that lead to excessive participation. His research suggests that, on average, only 10 per cent of the adult population regularly buy National Lottery scratch cards, compared to more than 60 per cent who play the on-line game regularly. Of those 16 to 18 year-olds questioned, some 8 per cent.—in other words, less than the average—report playing at least weekly. I do not have any statistics on 14 to 15 year-olds using scratch cards, and I am suspicious of research which asks people if they break the law.

On the question which was raised as to whether someone who played under age and won a huge prize would be entitled to his prize, I am advised that to play a game under age is itself a criminal offence. Presumably the courts would therefore have to make a decision on whether, in addition to any other penalty, the prize itself should be forfeited.

There have been views expressed in the Committee in response to this question. We do not have a closed mind and under certain circumstances we might well be prepared—either ourselves or the director general—to make changes in the age limits. I would very much welcome an opportunity to see the research to which the right reverend Prelate has referred, and if he would like to discuss the matter between now and Report I would be glad to do that. In the meantime, I hope he will consider it proper to withdraw his amendment.

The Lord Bishop of Oxford

I thank the Minister for his expression of openness of mind on this. I will certainly ensure that the research is sent to him and I am very grateful for the assurance that this will be looked at as objectively as possible. I can quite see the difficulty of having one age range for the lottery and perhaps scratch cards and others, say, for fruit machines. I can see there could be a difficulty if there was that difference, but nevertheless the lottery and scratch cards do pose a particular kind of problem. It could be relevant that there should be either a regulation, or a direction at least, which indicates a different age group for the lottery and scratch cards. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey

I beg to move that further consideration in Committee be adjourned until Thursday next at 4 p.m.

The Committee adjourned at three minutes past seven o'clock until Thursday next at four o'clock.