Official Report of the Grand Committee on the Horserace Betting and Olympic Lottery Bill

HL Deb 06 April 2004 vol 659 cc563-614GC

(Third Day)

Tuesday, 6 April 2004.

The Committee met at two of the clock.

[The Deputy Chairman of Committees (Baroness Fookes) in the Chair.]

Lord Moynihan moved Amendment No. 41B: After Clause 21, insert the following new clause— "EXEMPTION OF OLYMPIC LOTTERY FROM LOTTERY DUTY After section 24(4)(e) of the Finance Act 1993 (c. 34) there is inserted— (f) of an Olympic Lottery within the meaning of the Horserace Betting and Olympic Lottery Act 2004"

The noble Lord said: The amendment reflects one of the key points of difference between us and the Government. It deals with the question of tax on the Olympic lottery. The Finance Act 1993 was responsible for setting the 12p lottery duty on all ticket sales for the National Lottery. The 1993 Act laid out a number of exemptions from that lottery duty. The amendment would add the Olympic lottery to the list of exemptions.

First, let us be clear about the amount of money we are discussing. As the Minister said in a Written Answer: In the event of a successful London Olympic bid, Camelot's estimates as reviewed by the National Lottery Commission are that the new Olympic lottery games could raise £750 million toward the cost of staging the 2012 Olympic and Paralympic Games. Lottery duty of 12 per cent of total sales would be deducted in line with the current arrangements for all National Lottery games, resulting in estimated gross revenue to the Exchequer of approximately £340 million".—[Official Report, 16/12/04; col. WA 143.] In summary, the new Olympic lottery game is expected to raise £750 million toward the Olympics and £320 million—not quite half as much again—for the Exchequer.

When that matter was raised in another place, it was quickly dismissed by the Minister for Sport as a matter for the Treasury. I hope that the Minister will not be tempted to do the same today. The 12p lottery duty is a key issue and it would be most disappointing if the Minister chose to pass the buck on this occasion. This issue is a litmus test—perhaps the litmus test—of the Government's sincerity and commitment to support London's bid for the 2012 Olympic Games.

The Government have made clear that they consider any criticism of their handling of the bid to be tantamount to jeopardising our chances of success, but failing to support the Conservative Party on this question opens them up to justifiable criticism. I agree that Government and Opposition need to present a united front, but to do that, the Government must fulfil their half of the bargain. They must demonstrate their unswerving and absolute commitment to hosting the games in London. The exemption of the Olympic lottery from the 12p duty is a classic example of how the Government could do exactly that.

I do not believe for one moment that it will damage our bid if I remind the Committee that there is no Treasury support for the 2012 Olympic Games on the table—none. I do not take issue with that fact, but I do take issue with the Treasury's potentially massive take from the Olympic lottery. Let us not beat about the bush: the Treasury's take in this case is effectively a raid on other good causes.

The Conservative Party has put down a marker of its commitment both to hosting the Olympic Games and to British sport as a whole. We have pledged to make the Olympic lottery tax available to the London bid. Following the Conservative lead would present a real opportunity for the Government to make a public, bold demonstration of their commitment to the bid not only to the International Olympic Committee but to the sporting world as a whole.

I hope that the Minister will lay aside his brief on this occasion—no doubt it contains details of the large contingency fund and the usual misleading suggestion that any critic of the Government is personally undermining the London bid—and instead announce that the Government intend to follow the Conservative lead by promising to exempt the Olympic lottery from duty. If he cannot make such an announcement today, I hope that he will undertake to do all he can to secure that pledge in the near future. The whole of British sport would applaud him. Failure to take that simple step, which would speak volumes about the Government's commitment to hosting the 2012 Olympics in London, would be far more damaging to our chances of success than the most outspoken critic of the Government's handling of the London bid could ever be.

However, I am cautiously optimistic that there may be some movement within the wheels of the Treasury on the matter.

The recent evidence given by the Economic Secretary to the Treasury to the Culture, Media and Sport Select Committee inquiry into the National Lottery was positive. When questioned about the 12p lottery duty on the lottery ticket sales, the Minister said: I am very much in listening mode, as is the Government. I am prepared, and indicated earlier, to consider this question about whether potential reforms of tax on the Lottery may indeed benefit the amount of money available for the good causes".

These comments are from a Minister in the Treasury—the very same Treasury that has benefited by more than £5 billion in lottery duty since the lottery was set up in 1994–95.

The Committee will be aware that the Culture, Media and Sport Select Committee considered the new Olympic lottery and was decidedly unimpressed by the overall proposals contained in Part 3 of the Bill. Indeed, the Select Committee's conclusions were blunt: We regard the £1.5 billion earmarked by the Government as the Lottery's overall contribution to the Olympics as a straightforward raid". They viewed the taxation of lottery returns for good causes as an. inappropriate double hit for the Treasury".

The Select Committee's report made the following recommendation, upon which I hope the Minister will comment. Returns for good causes should be treated more like charitable giving than other spending on gambling products. Within the gambling sector we note that the Government recognises the unique status of the Lottery for the purposes of regulation but not for the purposes of taxation. This is inconsistent and wrong and, whatever regime replaces the regressive 12 per cent Lottery Duty, returns for good causes should be exempt from tax. A concrete commitment by the Government of this kind is likely to do more for the promotion of the Lottery as a 'good thing' amongst the public than any amount of plaques and open days".

I should also like to draw the Committee's attention to the brief kindly supplied by the National Council for Voluntary Organisations, the NCVO, which similarly calls for the tax on the new Olympic lottery game to be removed, in this instance to minimise the money that may be needed to be diverted from other good causes.

In conclusion. I should be grateful if the Minister would provide an update on discussions which have taken place with the Treasury about the removal of the 12p lottery duty on the Olympic lottery game. It is always heartening to hear that the Government are in listening mode, particularly when those words are issued by a Treasury Minister. I hope that this is the case and that, if so, the Government will not only be in a listening mode but, more importantly, in an action mode so that sport and, indirectly, the other good causes can benefit from the exemption of the Olympic lottery game from the 12p duty.

We have already heard that the Treasury expects a return of about £80 million from the sale of the Tote in Part 1 of the Bill: and in Part 2, the Treasury will be due an additional £17 million from VAT on the new commercial transactions replacing the levy. Let us hope that the Department for Culture, Media and Sport is able to claw back some of this money through the proposed tax breaks in Part 3 of the Bill. I beg to move.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)

As the noble Lord, Lord Moynihan, fears, I could be regimental about this. I could say it is none of the business of this House to seek to amend the Finance Act, whether it is the Finance Act of this year or the Finance Act of 1993. I am not going to do that. I shall argue the case rather more fully than the noble Lord, Lord Moynihan, fears.

He is aware that lottery duty is a matter for the Chancellor and that he keeps lottery duty under review, as he does all taxes, and gives consideration to representations made in the course of the Budget and Finance Bill process. As the Bill was in another place before the Budget, I can give the assurance that the Chancellor considered the representations made in the run up to the Budget.

In his Budget report, the Chancellor signalled that the current tax treatment of the lottery would be considered carefully. alongside other gambling sections, in the context of the wider work that has been going on for some years on the future of gambling taxes and the reform of gambling regulation.

In particular, there will be consideration of whether a gross profits tax structure, which has delivered significant benefits in other gambling sectors, would be more efficient and provide potential to generate more money for good causes. As the noble Lord, Lord Moynihan, will recognise—he has quoted Treasury Ministers on this point—it would do so in the context of maintaining Exchequer revenues. The noble Lord, Lord Moynihan, knows very well, because the National Lottery was set up under a Conservative government, that the 12p apportionment to the Treasury from every pound of a lottery stake was a deliberate decision. Although it was not this Government's decision, it was intended in large part to counter the loss of revenue to the Treasury from other tax sources and diversion of expenditure.

This is not a party-political point and cannot be made into one. The principle of taxation of the National Lottery was accepted by Parliament when the lottery was introduced. Lottery duty brings in more than £500 million a year for spending on the Government's core activities, including essential public services such as schools and hospitals. The lottery is a mainstream gambling activity in competition with other gambling activities. It is reasonable that it should make a fair contribution to revenue for public expenditure at the same time as raising money for good causes.

So much has been a matter of cross-party agreement right from the very beginning. I take it that the change proposed by the noble Lord, Lord Moynihan, is not a repudiation of that cross-party agreement. What he is doing is quite legitimate in the context of the Bill—special pleading, or saying that the government intention that the same principles should apply to the Olympic lottery should not apply in this case. l must make it clear to the noble Lord that we have no plans to exempt the National Lottery from tax, whatever the form of the tax, and we certainly have no intention of exempting the Olympic lottery.

I heard what the noble Lord, Lord Moynihan, said about the Conservative commitment to the Olympic Games. Of course, I applaud that. I applaud noble Lords' desire to boost the Olympic cause, but I am afraid that they will have to find another way of doing it. To make such piecemeal changes in gambling taxation legislation would be entirely inappropriate.

Lord Moynihan

I am deeply disappointed by the Minister's response. He has failed to recognise the clear distinction from the all-party principle of taxation when the lottery was enacted in statute, which was absolutely appropriate because we had no hypothecated games. We have moved on; the specific purpose of the Bill is, to use the Minister's words, to look at a piecemeal game. That is precisely what this is; it is a hypothecated game for the first time in the history of the lottery; it is a game for a single purpose. Unlike all previous games, it requires statutory provisions in primary legislation to allow a specific game to be launched to back a specific purpose—in this case, the hosting of the Olympic Games in London in 2012.

As such, we have moved on from the general principles of taxation on the lottery, on which we had all-party agreement, to a new challenge placed in new legislation for a specific hypothecated game. In the context of a hypothecated game, I do not believe that the electorate or punters would look favourably on a Government who pocket 12p in the pound for every ticket sold, with the specific intention of backing the Olympic Games in London in 2012.

That would be a mistake. We on these Benches would not agree with the Treasury's pocketing that money for whatever purpose it wishes. We would wish to see that money go to the 2012 games also. That is wholly reasonable. We shall return to the issue at a later stage, because it is fundamentally important to send the right signal to the International Olympic Committee that the Government do not intend to pocket 12p. There is no other Treasury money going in. This is an opportunity for the Government, through the Treasury, to support the London 2012 hid.

In conclusion, I very much regret the comments made by the Minister. I appreciate that they may not reflect his personal sentiment, because he is a passionate supporter of sport, but I regret the fact that the Treasury seems to have the upper hand. For the time being and with a clear commitment to return to the matter at a later stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

2.15 p.m.

Clause 22 [Timing]:

The Deputy Chairman of Committees (Baroness Fookes)

Before I call Amendment No. 42, I must point out that if it were agreed I could not call Amendments Nos. 42A or 42B due to pre-emption.

Lord Moynihan moved Amendment No. 42: Page 13, line 21, leave out subsection (2).

The noble Lord said: I offer no apologies for the detailed contribution that I intend to make on the amendment. Together with the Treasury raid on the lottery game tax, they lie at the heart of the Bill. Given the decision by the Government today to pocket the 12 per cent tax take on the game rather than release it to the Olympics, an early start to the game will be a second litmus test for the Government, and for the world of sport to test the Treasury's real commitment to London 2012.

No one should be under any illusion about the credentials of my noble friend Lord Glentoran, whose name is appended to the amendments. He has to his credit an Olympic gold medal, which underpins his belief that London 2012 should succeed. My silver is insignificant by comparison. Today, I would be prepared to sacrifice every race that I had the good fortune to win if I could exchange them to guarantee a successful London Olympic bid. We have no greater desire than to see London 2012 succeed. We have no greater disappointment than watching this Labour Government nervously and uncomfortably approach the starting line in this Bill.

The amendments to Clauses 22, 25 and 26 reflect a key point of difference between the Government and the Opposition on the Bill. Taken together, the amendments would permit an early start to the planned Olympic lottery games. The chief reason for an early start is very simple and utterly compelling. I hope that the Minister will be persuaded of its merits today. It is a straightforward enough equation: the more money the Olympic lottery raises towards staging the 2012 games in London, the less contingency money is likely to be raided from other lottery good causes. The sooner the Olympic lottery game is started, the more money it will raise.

We believe that, if the Olympic lottery is launched almost a year earlier than presently planned—at the time of the Athens Olympic Games this August, instead of at the time of the announcement of the winning city's bid in July next year—there is every reason to expect that it will raise at least an additional £50 million. Once the effects on existing lottery ticket sales and inflation are taken into account, that would translate to an extra sum of almost £13 million towards financing the London games. To put it another way, that advance reserve fund would create at least £13 million of savings for other lottery good causes in the event that the Government's first contingency fund is activated.

There are a number of other reasons for an early start. It would demonstrate that we are serious about winning the bid to host the 2012 games. That has not always been obvious to the international sporting community when the Government's record is reviewed, and such incidents as the Picketts Lock debacle and the Government's broken promises over the IAAF championships in London are recalled. An early start would also provide a significant uplift to ticket sales if we were to launch on the back of a successful performance from our Olympic and Paralympic athletes.

Furthermore, from looking at the Government's latest cash-flow projections for the 2012 games it is clear that there will be something of a funding bottleneck, given that most of the income comes in after 2009 but most of the expenditure will be needed before then. An income stream will be essential for the development of new capital facilities, transport improvements and long-term athlete training and development. An early start to the Olympic lottery game would help to reduce those cash-flow problems.

It is for those reasons that we tabled Amendment No. 42, which modifies Clause 22. As the Committee will be aware, Clause 22 relates to the timing of the launch of the Olympic lottery. Subsection (2) prohibits the promotion of an Olympic Lottery unless the Secretary of State has by order declared that the International Olympic Committee has elected London as the host city for the 2012 Olympic Games". Amendment No. 42 would remove the subsection entirely, thus enabling an earlier start to the Olympic lottery. I want to press the Minister on some of the Government's previous statements with regard to an early start. There is a degree of contradiction and confusion which I hope the Minister will be able to clarify today.

In January the Minister told me, On the point about the start of the specific Olympic lottery, he will know that the International Olympic Committee does not permit a lottery of this kind for the benefit of the bid to be started before a candidate has been chosen".—[Official Report, 15/1/04; col. 676.] However, after pressing the Government hard on this subject, a week later the Minister for Sport and Tourism in another place was forced to admit that the IOC would permit an earlier lottery for other Olympic causes such as, for example, Team GB, the British Olympic Association or the British Paralympic Association. This is precisely what our amendments intend to achieve. However, I fear that the Government are now forced to look for another reason to reject our proposals as set out in these amendments. It appears that they have promised the good causes that the Olympic lottery would not start early.

The Written Answer sent to me by the Minister on 16 March speaks volumes: My right honourable friend the Secretary of State did however write to the chairs of distribution bodies on 13 February seeking their views on this matter. Several distributors have responded to date and all bar one have expressed the view that, given the likely impact of the Olympic Lottery games on income to the existing good causes, the games should not be introduced before July 2005".—[Official Report, 16/3/04; col. WA 36.] The key part of this reply is the last section— given the likely impact of the Olympic Lottery games on income to the existing good causes". That is an entirely false premise; indeed, the opposite is true. If we start the Olympic lottery early and if we win the bid, the other good causes will be saved money over the long term.

However, I am aware that these amendments raise a number of issues and I wish to assist the Committee by addressing them in some detail. First, there is the question of whether an early start to the Olympic lottery game will really generate the significant additional revenue to which I have referred. Secondly, the effects on existing lottery ticket sales, and thus on other lottery good causes as raised by the Minister in his reply to me last month, must be taken into consideration. Thirdly, in the event of a successful London bid, an assessment must be made of the likelihood that the Government's contingency fund will be required. Fourthly, there is the question of what should be done with the extra funds before the winning bid is announced and/or if London's bid fails. I shall deal first with the last of these points.

I do not believe that there is any problem or controversy about seeking to raise funds to stage the games in 2012 before the winning bid is announced. There should be no nagging sense of superstition that we are counting our chickens before they are hatched, or any other such nonsense. If anything, this would put down a further marker of the Government's absolute commitment to hosting the games. However, this legislation would need to make provision for the use of the funds both in the unwelcome event that London's bid does not succeed, and in the 11 months before the winning bid is announced.

These amendments are drafted to enable the Olympic lottery games to start as soon as the Bill is approved. However, the funding from those games would not go to the Olympic lottery distributor until after London had won the hid. In the time running up to the announcement, the funds will be available to the British Olympic Association and the British Paralympic Association in accordance with IOC rules on Olympic lotteries. Thus Amendment No. 46A provides for additional revenue deriving from the Olympic lottery to go to the British Olympic Association and the British Paralympic Association. Clause 25 is modified by this amendment to include a new subsection (A1) stating: The Secretary of State may make regulations permitting payments from the Olympic Lottery Distribution Fund", both to the National Olympic Committee and the National Paralympic Committee.

Amendment No. 47 revises Clause 26(1) so that sums from the Olympic Lottery Distribution Fund may be paid to the Olympic Lottery Distributor, only after the Secretary of State has by order declared that the International Olympic Committee has elected a United Kingdom city as the host for the Olympic Games".

Similarly, Amendment No. 48 modifies Clause 26(2): The Secretary of State may make regulations permitting payments from the Olympic Lottery Distribution Fund only if he has by order declared that the International Olympic Committee has elected a United Kingdom city as the host for the Olympic Games".

Before I turn to how much an early start is really likely to generate, the issue of the likely returns from an early start is important. Clearly, the calculations on which I am basing my argument in favour of an early start rely on a number of assumptions, all of which are not only entirely possible but are also entirely probable.

The first assumption is obvious: namely, that, as we all hope, London wins its bid to stage the 2012 Olympic and Paralympic Games. The second assumption is that the cost of staging the Olympics in London would be such that an absolute minimum £50 million of the Government's £735 million contingency fund would be required.

Experience from previous Olympic Games suggests that that is a fair assumption. It is almost a rule of thumb that the actual cost of staging the Olympics, wherever it takes place, proves to be double the initial estimated costs. Therefore, I am talking about a rule of thumb of double the estimated initial costs against an absolute minimum £50 million of the Government's £735 million contingency fund being required.

Finally, those figures assume that the Olympic lottery games will not raise more than £1.1 billion, thus rendering the use of contingency funds unnecessary. That would seem to be a reasonable assumption since Camelot's figures, sourced from the December 2003 Department of Culture, Media and Sport regulatory impact assessment, indicate that the Olympic lottery games will raise a total of £753 million by 2012. An early start would mean the addition of at least an extra £50 million, taking the total raised to more than £800 million.

The precise returns would depend on the timing of the introduction of the new games. Further research will need to be undertaken. However, Camelot's estimates of the returns to the Olympic Lottery Distribution Fund from 2005 to 2012 provide the most sensible starting point available from which to calculate how much additional money could be raised by introducing the Olympic lottery games almost a year earlier than planned.

Camelot estimates returns of £35 million in 2005. rising annually to £50 million, £53 million, £81 million, £126 million, £156 million, £155 million in 2011, and falling to £97 million in 2012 when the Olympic lottery would run until the Olympic Games took place that summer. The figure of£35 million for 2005 covers only the six-month period from July to December. If the Olympic lottery games start in August of this year, there would be an additional 11 months of income. Thus, the returns for the first whole year are likely to be somewhere between £50 million—the amount estimated for 2006—and £70 million, which is double the £35 million for the half year of' 2005.

As such, it is a conservative estimate to suggest that starting the Olympic lottery games early will raise an additional £50 million. I am confident that it may be more. There is no doubt that there would be popular uplift in the event of a successful London bid. As I said, it is not only feasible but also entirely likely that there would be a similar uplift if the new games were launched at the time of this year's Athens Olympics. Such an uplift in the public mood, translated into keen interest and eagerness to play the new Olympic lottery games, could result in the generation of even more money. It would be sensible for the Government to capitalise on the enthusiasm and goodwill towards the Olympic Games that has always been a hallmark of this country.

I now turn to the effect that an early start for the Olympic lottery games would have on existing ticket sales. An argument has been put forward—including from the Minister—that an early start could risk cannibalising existing lottery sales instead of increasing them. Labour politicians have clung on to the view that it would be a case of robbing Peter to pay Paul. I do not accept that argument. The facts do not support it.

According to the December 2003 regulatory impact assessment: Camelot will conduct further research during the development of Olympic Lottery games to obtain a more detailed view of likely sales and the extent to which these would divert sales from existing games. Camelot will seek to differentiate Olympic Lottery games from existing games in order to minimize this effect. However, drawing on past experience of the introduction of games, Camelot's proposals, as reviewed by the NLC, indicates that Olympic Lottery games might derive up to 59 per cent or their sales from existing Lottery games (and therefore from existing Good Causes)".

It is clear that there would be a cost to the lottery good causes from an early start in August 2004, but it would be only short term. If the Olympic lottery is started early, and if 59 per cent of Olympic lottery sales are diverted from current ticket sales and thus from existing good causes in the I I months from August 2004 to July 2005, that would amount to a cost of £29.5 million. However, there would be an overall benefit to the good causes calculated by offsetting the loss of £29.5 million in 2004–05 against the gain of an additional £50 million in 2009. Therefore, there will be a benefit of £20.5 million to the good causes from starting the Olympic lottery early.

Without an early start, that £50 million will be entirely siphoned away from the good causes as part of the Government's £410 million first contingency fund for the London Olympics. Of course, that figure of £20.5 million needs to be modified to take account of inflation. Assuming a discount rate of 3.5 per cent, as recommended by the Treasury, the benefit of an additional £50 million to the good causes in 2009 will be worth only £42.1 million. The total benefit to the good causes from starting the Olympic lottery early can therefore be calculated at £12.6 million. I hope that the Minister will agree that that is a benefit worthy of the Government's serious attention.

At present, the total cost of staging the games is unclear. That is hardly surprising—it is to be expected, given the complexity of planning such a major event eight years ahead of its occurrence. Indeed, the 2012 London hid team is still finalising construction costs. However, based on the Government's critical appraisal of the Ove Arup report, an upper limit of £4.674 billion has been set. The Government have undertaken a detailed analysis of all the costs and risks involved in hosting the games. Revenue of between £2.050 billion and £2.450 billion is expected from the sales of rights and tickets, sponsorship and other commercial support for the games.

I hope that the Minister will confirm today the Government's belief that the public subsidy contains significant provision for risk and contingencies. The total level of public subsidy provided for within the package is £1.5 billion from the National Lottery, which breaks down into £750 million from the Olympic lottery, £340 million from the lottery sports fund, and £410 million from good causes. The council tax will provide a further £625 million. In this context, I ask the Government whether they intend to levy a precept on those living in areas outside London near venues that will host Olympic events and receive a sporting legacy for their communities. The London Development Agency provides a further £250 million, so the total amounts to £2.375 billion.

I shall move on to the contingency funds, and the level of expectation that they will be used. The minimisation of a raid on the contingency fund, and thus the protection of the lottery good causes so far as possible, is at the heart of the argument for an early start to the Olympic lottery. The Government's figures for the funding of the Olympic Games appear to allow a contingency fund of £735 million. However, the exact figure is unclear, as it is hard to differentiate between high-end estimates and contingencies. I hope that the Minister will be in a position to clarify that today.

There are four sources for the contingency funds, as set out in Olympic Funding: Memorandum of Understanding between the Government and the Mayor of London in June last year. Those various funding pots will be drawn down in order, starting with the £410 million from the lottery good causes, followed by an additional £75 million from the Olympic precept, £250 million from the London Development Agency and, finally, the Mayor of London and the Government through the lottery.

At Second Reading, the noble Lord, Lord Davies, described the use of funding up to £410 million from the lottery good causes as "a precautionary measure" only for use "in dire extremis". I was very surprised by that view; it is certainly hard to justify, and I would like to press the Minister further on the matter today. Will he confirm that the £410 million from the other lottery good causes will be the first contingency fund used in the event of a shortfall? Does he further agree that the record of previous host cities and other major sports capital projects in the UK strongly suggests that the contingency fund will be called upon? Some would argue that that is only to be expected, given the complexity of staging the Olympic Games and the number of variables and unforeseen circumstances, not to mention the long time cycle and immovable deadline involved. Budgets drawn up today are extremely unlikely to remain absolutely accurate in all respects in eight years' time.

Does the Minister recall that yesterday I referred to the Minister for Sport, who told the Culture, Media and Sport Select Committee last January that: On the financing, one point that was interesting on our visits to cities that have already run Olympics was that in broad terms, on the cost, every one of them has doubled from the first figure that was given"? Is he also aware that the Secretary of State for Culture, Media and Sport told the same Select Committee on 15 January last year that the Commonwealth Games in Manchester more than doubled in cost? Furthermore, evidence admitted by the DCMS on 17 January last year to the Culture, Media and Sport Select Committee shows that, for the highly successful Sydney 2000 Olympic Games, the public subsidy was six times more than the initial estimate and that the cost of staging the games doubled from £1 billion to £2.3 billion. Similarly, for Athens this year the original cost of £1 billion had increased to £1.23 billion by January last year and is still rising.

The timing of drawing down contingency funding is key. If the Government decide to draw on the contingency funds diverted from the lottery good causes, they will need to commit to doing so in 2009, when the current licence expires. The Olympic lottery games projections show that 55 per cent of revenue will come in after 2009, with only £342 million expected to be raised before 2009. Therefore, the Government will have to make an early decision, in 2009, whether to use the contingency powers to divert money from the lottery good causes. Given the pressure for the games to be a success, it would be no surprise if the government of the day took a conservative view and put in place the mechanism to start to draw down the first contingency funds in 2009. The inevitable delays in drawing down lottery funds from other good causes mean that an early decision is all the more likely.

It is inevitable that the planning for such a major future expenditure necessitates a large element of guesswork and conjecture. To some extent, we must be guided by precedent; in this case, the precedents from other Olympic Games strongly suggest that contingency funds will be used. It would certainly be the case if the Olympic lottery games failed to raise Camelot's estimate of £750 million. The Government have admitted already that further research needs to be undertaken on the reliability of that figure, as there is uncertainty about it. We await the findings of that research.

Additionally, exchange rate fluctuations will significantly affect income. Although to some extent those can be offset through the international financial markets, there have already been significant adverse changes to the strength of the US dollar, which will have to be taken into account. The London 2012 bid team, in its response to the questionnaire for cities applying to become candidates to host the games of the 2012 Olympiad and the Paralympic Games, used an exchange rate of £1 to 1 dollar 70 cents. Those issues are critically important.

Although the calculations that I have run through today are undoubtedly complex and although there are still many unknowns—as one would expect when dealing with the possibility of hosting a £4 billion-plus multi-sport project eight years hence—the message is simple: it seems highly likely that the Government will have to use at least some of the contingency fund. The first contingency fund to be used would divert money in 2009 from the existing good causes. If this is the case, then an early start to the Olympic lottery game could generate an additional £50 million to the Olympic lottery and, most importantly, save other good causes £12.6 million at today's prices. Starting the Olympic lottery early is not only a win-win situation, it is a win-win-win situation: win for the Government; win for the London 2012 Olympic Games; and win for the other lottery good causes.

I hope the Minister will give this matter his careful consideration today. I am fully aware that I have given him much detail and I do not anticipate, nor expect, that he will respond to the significant detail now on record. However, I hope that he will agree to a meeting with me in advance of Report to discuss the figures that I have put before the Committee and these amendments. I hope that he will accept the need for an early start to the Olympic lottery as a result. Action not words is now needed at the heart of the Government's sports policy. We stand ready to support them if they demonstrate commitment both to an early start to the game and to directing the tax take of the game to London 2012. I beg to move.

Lord Addington

Perhaps I may be allowed to speak briefly—at least in comparison to the previous speech. A series of questions are raised by the amendment. Can the Minister inform the Committee reliably whether there is any reason why the course of action proposed by the noble Lord, Lord Moynihan, is impossible?

The scenario created sounds very plausible: if we collect the money in early we will have the money available, and that will make the long-term raid on the good causes fund less drastic. Every project taken over by the National Lottery is always at the mercy of people buying tickets. It is a long-term problem, especially as we are in a downward spiral of ticket sales and we do not know when it will bottom out. So an early start to the Olympic lottery may help with the long-term planning for other good causes.

Can the Minister say why this should not happen even under a gentleman's agreement? It is a very important issue. If he can give a good answer as to why it should not happen, I will be happy. If he cannot, the Government will have a case to answer.

As the sole representative of the Liberal Democrats present, I should mention our participation, following the several plugs given to the Conservative Party in the noble Lord's speech. We believe that we should be given some indication of the Government's thinking. The Minister will no doubt have an interesting argument. It is right that we should try to pull it apart now and find out exactly where we stand.

2.45 p.m.

Lord Glentoran

I supported the nub of the amendment at Second Reading. I feel that I need to reiterate that point and to make a couple of others.

First, I understand there are some technical problems raised by the IOC which may prevent an early start to the Olympic lottery. However, I do not believe that it is not within the wit and power of the Government, if they so choose, to work their way round those problems. It is a purely practical point and there is no reason why the early start should not happen.

Secondly, I believe it extremely important that we should start to wise the British public overall up to the fact that we are hoping and attempting to win the 2012 games for London and the UK. It will be a London hid but they will be the UK games. I have made that point before in my speeches in the Chamber.

Thirdly, the amendment would be an extremely strong signal to the IOC and those concerned that Britain is serious about the bid; that Britain will do everything it can; and that Britain will start early to get its population seriously on board. Starting the lottery at this time is appropriate because the Athens Olympics makes a wonderful launch pad.

Furthermore, revenue from the lottery has been falling—not dramatically, but by 2 or 3 per cent. This is an opportunity to arrest that and to divert the focus. Putting forward perhaps an uneasy political point, under the new legislation no fund will have 50 per cent of the good causes money to distribute. That will be done in the way the Government want it to be done. It will not be in response but through the body's initiatives, which will be prompted by all kinds of people including government Ministers.

I can see no better prompt or mission for the expense of a new lottery fund than the Olympic Games. I make the point now—we will return to it later on some of my amendments—we could be equipped to handle the fund now. In order to be successful, Olympic athletes and sports in this country need strong revenue support leading into the games. There are mans sound arguments, outside the straight financial ones that my noble friend made, to support an early start to the games.

Lord Jopling

I apologise for arriving a few seconds after my noble friend Lord Moynihan began his remarks. I begin by reminding my colleagues that when the announcement was made on the Floor of the House that the Government would support a bid for the 2012 Olympic Games, I was the only Member who voiced the thought that I would not shed a tear if the whole thing failed.

I have felt that for a long time. I hesitate to say so in the presence of two Olympic medallists, but years ago when I was a representative in another place, I was the only Member in north-west England who refused to back Manchester's earlier bid for the Olympic Games. I believe that to have the Olympic Games here is a surefire recipe for bombs, bullets, bloodshed, boycott, blackmail and bogus budgets. I am unenthusiastic about the whole proposal.

After I made my remarks on the Floor of the House, I was astonished by how many Members from all sides said how much they agreed with me. During the weekend, I spoke to three Members of your Lordships' House and repeated my beliefs to them. They all said that they agreed with me, as did another in the Bishops' Bar not half an hour ago.

Members of the Government—certainly the noble Lord, Lord Davies of Oldham, who moved the Second Reading—and my noble friend, have a habit of saying, "This bid, which we all support", but that is not entirely accurate. A large number of people do not share those view's.

I have always found it difficult to understand in the financing of the Olympic Games, if we should succeed in the bid, the fairness of imposing on the good citizens of London such a large proportion of the costs, which amount to about £652 million. The temporarily budgeted costs amount to £2.375 billion. I cannot understand why the citizens of London should be burdened with that huge extra cost, about which I tabled a Question for Written Answer in June last year. The annual expenditure for London ratepayers will vary between £13 and £40 a year, which is no doubt a low estimate. When Londoners are faced with these charges, there will no longer be a stony silence, which we have witnessed since the bid was announced. I believe that there will be a good deal of resentment.

During the past year or so, I have tabled a number of Questions. Only this week, I asked what consideration has been given to London residents receiving preferential access to tickets for the Games in the event of a successful bid. The noble Lord, Lord McIntosh, was kind enough to reply extremely promptly, for which I thank him. He stated: There are no plans for London residents to benefit from a preferential ticketing policy". There was then an extraordinary further sentence in which he stated: However, a number of events such as the marathon, road cycling and triathlon are likely to be able to accommodate large numbers of local people watching free of charge".—[Official Report, 5/4/04; col. WA 215.] In fact, they will have paid a lot for that. I cannot believe that more than 20 per cent of the citizens of London will see in the flesh any part whatever of the Olympic Games. The other 80 per cent, who will have to pay, will see whatever they want to see on the television. That will put them on the same level as everyone else in the rest of the country.

In January this year, I asked the Government, in the event of a successful bid: What steps they propose to take … for local taxpayers in areas outside London where events might take place to have similar levies put on their local taxes as has been proposed for local taxpayers in London". Again, the noble Lord, Lord McIntosh, replied, stating: The Government have no plans to increase council tax payments for staging the Olympic and Paralympic Games in areas outside London. Almost all the events outside Greater London will take place in existing or already planned facilities at comparatively limited additional cost".—[Official Report, 29/1/04; col. WA 56.] It seems that here again there is an unfairness. Where events take place out of London, the local people will be in much the same position as the citizens of London, yet they will not have had to pay.

If the bid is successful, the money ought to be raised in an infinitely fairer way. There ought to be a set levy on everyone in the country. Noble Lords on both sides of the House are ratepayers in London and outside, and it will not make much difference to us. If the tax were extended, we should have to pay somewhere else as well as London, but it would be much fairer. I was most struck with the introductory speech of my noble friend, in which he produced convincing evidence that the estimated budget was likely to double to £4.75 billion. I asked a Question about that and it was kindly answered by the Minister only yesterday. I asked: What would happen if the estimated cost of £2.375 billion required to stage the 2012 Olympic Games, in the event of a successful bid, overran; and whether the Government would cover the deficit". The Minister's Answer is quite extraordinary. He said: On current contingency plans, the Government would expect to discharge this responsibility, should it arise, in a sharing arrangement to be agreed as appropriate with the Mayor of London and for their part seeking additional National Lottery funding. These expectations will be further reviewed in summer 2005".—[Official Report, 5/4/04; col. WA 215.] From that answer, it seems to me that in the event of an overrun the Government will go back to the Mayor with their hands stretched out in order to raise another huge sum of money. If the overrun doubles and is, as my noble friend suggested, £2.375 billion, an additional amount of money must be raised. The Government are now talking about a sharing arrangement to be agreed as appropriate with the Mayor of London, and for their part seeking additional National Lottery funding. if my noble friend's estimate is right, the Mayor of London and the National Lottery funding must between them find a further £2.375 billion.

At the moment, the Mayor of London is expected to raise £6.25 million and the London Development Agency £250 million. However, it seems—and I quote from the noble Lord, Lord Davies of Oldham, at Second Reading—that, new Olympic lottery games, as provided for in the Bill. would generate an estimated £750 million towards an overall £2.375 billion".—[Official Report, 2/3/04; col. 555.] A total of just under £1.4 billion will already have been raised. If my noble friend is correct in his estimate that the cost could double, a further sum in excess of £1 billion will have to be raised by the joint efforts of the Mayor of London—meaning the poor old ratepayers of London again—and a national lottery. Whether a national lottery would be able to begin to raise such sums in the event of an overrun I do not understand.

I suggest that the Government's plans for funding a successful bid for the Olympic Games are in a state of total chaos. It is uncertain what will happen. The Government have not said that they will put their hand in their pocket for a single penny if the cost should overrun. This is an extraordinary state of affairs and we are going into a black hole in financing a successful bid. I eagerly await what the Minister has to tell us.

Lord McIntosh of Haringey

I begin by reassuring the noble Lord, Lord Jopling, that his opposition to international sporting events is of ancient and honourable lineage. I could go back further, but I shall go back only to 1946, when George Orwell wrote an effective piece denouncing the visit of Moscow Dynamo to Britain on the grounds that international sporting events had a tendency to increase international disharmony rather than to produce the harmony that is expected.

Lord Jopling

In declaring my interest in these matters, perhaps I may say that until a few weeks ago I was, for 15 years, the president of the Auto-cycling Union, the governing body of motor-cycle sport in the United Kingdom. Therefore, he should not accuse me of not being in favour of international sporting events. I have been closely involved with them for many years.

3 p.m.

Lord McIntosh of Haringey

Clearly, George Orwell went much wider in his view than the noble Lord, Lord Jopling, whose objection is to the Olympic Games, in particular, and, as I understand it, also to the previous Manchester Commonwealth Games. But lie is not alone in that. There are people who hold not only the noble Lord's view but also George Orwell's view. I shall go no further than to say that for 50 years after that article was published—before I became a member of the Government—I was a great admirer of George Orwell. I shall say no more than that.

However, I was disappointed in what the noble Lord, Lord Moynihan, said. In responding to the previous amendment, I went out of my way to acknowledge the dedication and sincerity of the Conservative Opposition in its support for the Olympic Games. Of course, I am honoured that that is represented by a gold and a silver medallist in this Committee.

In response to that, it is not very helpful for the noble Lord to speak, as he did just now, of a Labour Government nervously and uncomfortably approaching the starting line. If I were the Mayor of Paris or New York, I would take account of that and I would be inclined to ensure that members of the International Olympic Committee knew what was being said. We would be better off if we respect each other's sincerity and respect the fact that we may have different views about the way in which we should approach the Olympic Games and the way in which they should be funded. But we should not criticise the approach being taken, which I have taken to be completely non-partisan.

I applaud the noble Lord, Lord Moynihan, for his quite elaborate analysis of the funding of the Olympic Games. Some of that is relevant to these amendments; to that extent, I shall seek to reply to them. Of course, some of it goes very much wider and could have been addressed at Second Reading. Perhaps, to some extent, it was addressed at Second Reading. It would not be appropriate for me to respond to all of the points.

Amendment No. 42 proposes the removal of Clause 22(2), which ensures that Olympic lottery games will not begin until the Secretary of State declares that London has been awarded the 2012 Olympic and Paralympic Games. We shall know that on 6 July 2005. Only the unique opportunity of hosting the Olympic and Paralympic Games can justify the establishment of a hypothecated lottery fund. In proposing the previous amendment, the noble Lord, Lord Moynihan, made a great deal of the significance and unique characteristic of a hypothecated fund.

Camelot's estimates, as reviewed by the National Lottery Commission, are that more than half of the new lottery sales might represent sales diversion from existing games. That could lead to a reduction in income to the existing good causes of £440 million over the seven-year period. I think that the noble Lord, Lord Moynihan, confirmed those figures. That would represent an average annual reduction of £64 million.

Clearly, the other good causes are worried about that. They have made their worries very clear. They are worried about our proposals for the Olympic lottery games. We have asked them to work with us to ensure that we manage that impact in the event of a successful bid because of the wide-ranging benefits that hosting the Olympics will bring. The Secretary of State wrote to the chairs of the lottery distribution bodies on 13 February seeking their views on the precise issue of an early start to the Olympic lottery games. All but one of those who responded has expressed the view that the Olympic lottery games should not be introduced before July 2005.

Alastair Dempster, chairman of Sport Scotland, said: We would oppose the introduction of an Olympic Lottery game for funding other Olympic causes in general, as well as introducing such a game before the outcome of the London 2012 bid is known". Diana Brittan, chair of the Community Fund, commented that, the earlier launch of the hypothecated games would be difficult to justify and would exacerbate the concerns of the NCVO and others. [It] would be unpopular with the voluntary and community sector". Peter Hewitt, chief executive of the Arts Council, said: I agree with the Government's view that only the wide-ranging benefits, wholly exceptional scale and one-off nature of staging the Olympics can justify a separate funding stream. The Bill as it stands provides the correct timetable for the introduction of Olympic Lottery games". Sir Alan Parker, chairman of the Film Council. has said, the UK Film Council has real concerns as to the impact of these new Lottery games on our share of Lottery receipts. I would therefore totally support your approach of resisting calls for the Sport Lottery game [his words] to be brought forward". Philip Carling, chair of the Sports Council for Wales, said: We agree that only the wide ranging benefits, wholly exceptional scale and one-off nature of staging the Olympics would justify a separate funding stream from the Sports Lottery one". Professor Eric Saunders, chairman of the Sports Council for Northern Ireland, said: I have concerns that initiating an Olympic Lottery game prior to July 2005 could lead to a significant level of discontent among Lottery distributors, grant applicants and the general public. We believe that such a move would serve only to create antagonism towards sport as a worthy cause for Lottery funding". Liz Forgan, chair of the Heritage Lottery Fund, said: We agree with your conclusion that it should only start when we have heard that we have won the bid". I shall leave the response from the New Opportunities Fund until we come to deal with that particular threat in the later amendment.

I turn to Amendment No. 46A, which would enable the Olympic and Paralympic committees to receive payments from the Olympic Lottery Distribution Fund, but these payments would not be conditional on a successful UK bid. On the other hand, Amendments Nos. 47 and 48 would enable other payments from the fund to be made only after the Secretary of State had declared, by order, that a UK city had been elected to host the Olympic Games.

So these amendments would enable payments to be made in the event of either a successful or an unsuccessful hid. We believe it is the intention, by distinguishing between the two types of payments, to enable early lottery games to raise revenues for Olympic and Paralympic purposes.

The real point is that only the wide-ranging benefits, the wholly exceptional scale and one-off nature of staging the Olympics can justify a separate funding stream from the normal sports lottery one. As I have said, most lottery distributors share this view.

We have always said—there is no need to force us to say so because it has been entirely clear—that the International Olympic Committee would permit an earlier Olympic lottery for other Olympic causes such as Team GB, the British Olympic Association or the British Paralympic Association. Those are worthy causes, but we do not believe they can justify a hypothecated lottery stream, or the consequential impact on the other good causes.

This is the way that we propose to use lottery funds. I respect that there may be different views, but I suggest that the fact that it is held by all the other good causes is reason enough in itself to resist these amendments.

I have been asked a number of specific questions about the funding method. Some of them are relevant to these amendments and I shall try to respond to them, but some, while of course of public interest, are such that I shall seek to answer them in writing. The noble Lord, Lord Moynihan, asked whether the £410 million of lottery funds would be the first of the contingency funding sources to be used. That is relevant in the sense that we are talking about the cash flow for the Olympics. However, it is difficult, so far in advance, to predict how the different funding strands will be utilised. We intend that the first £2 billion and £50 million will be met from up to £1.5 billion from the lottery and up to £550 million from the London Olympic precept. By the way, there is no intention of having a precept outside London. After all, most of the long-term gains to sport, transport and other infrastructure will be in London and for the benefit of Londoners.

The answer to the question by the noble Lord, Lord Moynihan, is, I think, yes. That is the situation as set out in the memorandum of understanding, but the memorandum would have to be reviewed in July 2005 in the case of a successful bid.

The noble Lord asked who would be the ultimate guarantor of funding for the games. The Exchequer must be the ultimate guarantor; that is what the International Olympic Committee requires, and it has always done so. But it is the intention that London would share the financial responsibility for the guarantor, as set out in the memorandum of understanding of June 2003. That document states: The Government expects to discharge that responsibility … in a sharing arrangement to be agreed as appropriate with the Mayor of London and through seeking additional National Lottery funding". The noble Lord, Lord Moynihan, quoted this. The funding package of £2.375 billion was based on Arap's proposals for a specimen games and contains substantial contingency. That contingency is over double what Arap estimated, which is in line with experience—I am sorry to say—of other bids.

The noble Lord, Lord Moynihan, asked whether we would meet him to discuss those matters in as much detail as he would like. I have set out the Government's position, but of course I am delighted to seek an opportunity for Richard Caborn, the Minister responsible, to meet and talk to him and any other noble Lords interested in these matters before Report.

Lord Glentoran

I would like to correct an omission. I declare an interest as a member of the Millennium Commission.

Lord Moynihan

I am disappointed by the Minister's response. I am surprised to hear him say that the Government do not wish to entertain any constructive criticism about their proposals for supporting London's bid to host the 2012 Olympic Games. There has been widespread support across the parties, as evidenced in all our debates in the subject. But it is absurd for the Government to say that no constructive suggestions, proposals or criticisms should be levelled at the Government's performance in backing London's Olympic bid because it might damage our credibility with the International Olympic Committee.

It is by their actions and the primary legislation they have brought before this Committee and the House that the Government should be judged. They must not expect to demand respect for their stance on hosting the Olympic Games in London in 2012; they must earn that respect. In earning that respect so far today, they have damaged their reputation by refusing, first and foremost, to ensure that the 12p on the hypothecated game goes towards London's successful hosting of the Olympics. They have damaged their reputation in debating this group of amendments by demanding strictures on anybody who dares to suggest improvements to the legislation or criticisms of the Government's handling to date in their support of the outstanding work undertaken by 2012 Olympic committee.

I place that on the record because, although the strictures that the Government are imposing on everybody may be fine for those who wish to be on message with new Labour, they are inappropriate for Parliament. My noble friend Lord Jopling most appropriately looked at some of the detail in respect of the figures. I am pleased that in protecting other good causes, my argument that a contingency would necessarily need to be raided would merit starting the game early in order to minimise the negative impact that would otherwise occur on good causes from the contingency being raided.

In that context, if not in too many others, vis-à-vis the hosting of the Olympic Games in any city in the United Kingdom in the future, we are at one. I was not suggesting that currently there is a hole in the Government's figures. The difference between the total public subsidy that we have been talking about from the National Lottery, the council tax and the LDA moneys comes to £2.375 billion. To get from that to the total cost of the Olympic Games, which is £4.674 billion on present estimates, there is an anticipated revenue stream of £2.45 billion, which includes broadcasting, sponsorship revenues received by the IOC, ticket sales, and so forth.

The whole of my argument is that the benefit of starting the games early, in terms of protecting other good causes, requires only £50 million of the Government's proposed £735 million contingency fund to be required. Anything more than the £50 million strengthens my argument time and time again.

The Minister read out a series of comments from bodies that he had consulted, but he did not consult them on the basis of the detailed statistics that I have put before the Committee. He could not have done so because many of the figures to which I have referred were available to the Committee only in very recent months. I have attempted—the Government have not, nor has any other organisation—to put a very detailed analysis for the first time. At the outset, I offered my apologies for the detail of my speech, but this analysis is unprecedented. Now that we have the analysis, it is important to distribute it to those bodies for further consideration. They can look at the figures and come to a judgment, using the first comprehensive analysis that is based on government statistics, about the possibility of the contingency being raided. With that possibility, there is a likelihood that good causes other than sport effectively will have to carry that cost as that contingency is raided in years to come. I give way to the Minister.

3.15 p.m.

Lord McIntosh of Haringey

That is why I expressed my gratitude to the noble Lord, Lord Moynihan, for setting out his arguments about the early start to the game in such detail. It is unusual to have to read it in Hansard rather than in the paper, but I do not complain about that. That is why I agreed that we would discuss these matters at a meeting between now and Report stage.

Lord Moynihan

Both those comments I welcome. However, I would not want the Minister to get away with the suggestion that all those consultations he has undertaken—which I welcome the Government for undertaking—have been based on an analysis of the figures that are now before Parliament. They could not have been: the figures simply were not available. It would be highly appropriate for a further consultation exercise to take place before Report and Third Reading. The very people who have been consulted to date should look again in detail at the impact on their own good causes should the Government, as is likely, need to raid the contingency fund.

I totally accept that the Minister was generous in his welcome and his appreciation for the case that I laid out in some detail, which needs to be answered and to be given consideration. I hope that I was equally generous in not pushing the Minister to respond to that case today, but to suggest that we had a meeting at a later stage. I also welcome his response to that; it is absolutely essential.

The bottom line is that there is real benefit to all good causes for an early start to this game: we have an opportunity to amend this legislation in order to enable an early start. I concluded my remarks by saying that we would have a win-win-win arrangement. The Government would win; sport would win; and other good causes would win. I look forward to receiving detailed responses to the analysis that I have presented before we meet to decide whether this matter should be pressed to a vote. I anticipate that it will be; I spent a great deal of time working on these figures to make a compelling case. We have a compelling case before the Committee. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Moynihan moved Amendment No. 42A: Page 13, line 23, leave out "London" and insert "a United Kingdom city

The noble Lord said: The amendments allow the lottery to fund a 2016 or 2020 Olympic bid in a city other than London. I anticipate that that will not meet with the approbation of my noble friend Lord Jopling, since it goes further even than the hosting of the Olympic Games in London in 2012. However, perhaps I may be able to persuade my noble friend that, as we have the Bill before us, there is merit in accepting the amendments.

In that context, it might be helpful if I first list what the amendments do not do. They do not commit the Government of the day to support for a bidding city to host the Olympic Games in any future Olympic year—2016, 2020 or 2024. Nor do they commit the Government of the day to supporting London again if it decides to bid for a future Olympic Games.

The amendments are intended—here, I should express my gratitude to the Public Bill Office for its help and advice—to extend the shelf life of Part 3. I hasten to add without fear of contradiction that that impartial, professional advice was not given from any perspective either in favour of or against the amendments but, as always, the Public Bill Office was offering its expertise in assisting noble Lords to be clear about the purpose of amendments.

The committee will be well aware that primary legislation is time-consuming. It is complicated and, more important, it is not always easy for a Minister— especially, if I may say so from personal experience, the Minister for Sport—to obtain parliamentary time for legislation. If London is not successful in its bid for the 2012 Olympic Games and the government of the day decides that they would like to support a UK city in a future bid to host an Olympic or Paralympic Games—indeed, they are now always taken together—the amendment would circumvent the need to introduce another Bill to set up an Olympic lottery game. My amendments are worded in such a way that the hands of future governments are not tied by the requirement for London and London alone to bid. Another UK city could equally bid for the games.

I am aware that the IOC has clearly said that it would prefer a London bid, but looking to the future, as the amendments do, we should not rule out a bid from one of our great cities, be it Manchester on the back of a successful Commonwealth Games, Birmingham, or another city. Indeed, I should like to ensure that other capital cities within the United Kingdom are not excluded. In another place, there was a tepid reception from the Scottish Nationalists for the Bill and distinct unease, on the basis that it is too London-centric for their liking. I recently mentioned the idea behind the amendments to the Minister during a brief meeting to discuss the Bill and, if I may say so, he seemed surprised but not entirely unsympathetic to the underlying rationale. In that light. perhaps I am not being too optimistic in hoping that the Minister will be able to accept the amendments or, at least, to return at Report with a revised wording. I beg to move.

Lord Addington

The noble Lord, Lord Moynihan, is absolutely right about giving parliamentary time to put a measure through. As a fall-back, the provision might be an interesting thing to have in the Bill. I know that there is a danger that we might be seen as being slightly negative, but that might be an interesting provision to have. Will the Minister consider whether it would do any harm in giving us a fall-back position? I leave him with that thought.

Lord Jopling

Perhaps I could ask my noble friend a question. Do his amendments, when taken together, absolve London totally from a rate surcharge? Do they embrace imposing a similar surcharge as is proposed for London on whatever other city turned out to be involved? He mentioned other capital cities. If, for instance, a successful bid came from Cardiff, a much smaller city than London, would Cardiff then have to raise the same amount of money—which would of course be an infinitely heavier imposition than the present surcharge on the citizens of London?

Lord Moynihan

Let me answer the important point raised by my noble friend as clearly as I can. First, the amendments would have no impact whatsoever on the financing plan that would need to be separately considered by a future city bidding to host the Olympic and Paralympic Games in the United Kingdom. The financing plan is separate from the amendments. The financing plan fora bid, say by Cardiff for 2024, would be a matter for the organising committee of Cardiff then set up, in consultation with the government of the day and the British Olympic Association.

So there is no link between my amendments and the Financing of a future Olympic and Paralympic Games in the United Kingdom. They are totally separate. Indeed, I would go further. Had we been in power at present, far greater emphasis would have been placed on private sector funding for the London 2012 bid, given that the City of London is within two to three miles of where the Olympic village and most of the venues will be. Its potential, both in financing and in overall presentation of a London bid, is something on which, had we been in government at present, we would have placed a far higher priority than have Ken Livingstone and the current Government.

I hope that that satisfactorily answers the points raised by my noble friend. In summary, they are completely separate. The amendments would simply save money—something that I know that my noble friend is always keen to do—when it comes to refer the bid to host the games and allow a lottery game to be used to finance those games in part, should another city in future want to bid for the Olympic and Paralympic Games. We would not need to come back to the House with new primary legislation.

Lord McIntosh of Haringey

I start by saying that of course there is nothing malign about the amendments. I take them at face value, as a genuine attempt to help and to save money. Unfortunately, they would not. It does not work that way; I wish it did.

The decision to back this particular London bid for the Olympics in 2012 was taken deliberately and affected the decision to establish a hypothecated lottery scheme as part of the National Lottery. We considered the funding arrangements for a London Olympics, the current lottery arrangements and the level of public support for the bid and tailored the legislation specifically for that purpose. We carried out an extensive cost/benefit analysis by the consultants, Arup, and negotiations between the Government and the mayor to agree an appropriate funding package. That is why we have the memorandum of understanding. The necessary Cabinet authority given for the Bill was based on the bespoke policy framework for a 2012 Olympics bid in London.

There is nothing that could not have been changed about any of that, but it is the case that the rigorous process that the United Kingdom applied before deciding to bid attracted the praise of the International Olympic Committee chairman, Jacques Rogge.

So, what would be saved by the amendments? The first thing to be said is that, if we did not have them, we would need primary legislation in the form of an Olympic lottery or Olympic funding amendment Bill. However, we would need one even if the amendments were carried, because the Bill is so specific to London and the funding arrangements. The amendments are, of course, restricted to 2016 and are not open to 2024 in Cardiff, as the noble Lord, Lord Moynihan, appeared to suggest in one part of his speech.

There is nothing to be gained from accepting the amendments. We have put a great deal of time and effort into the preparation and consideration of the Bill. That work would not be lost. The additional work that would be required to adapt it for a later bid is still there and it can be done without the amendments, so they are unnecessary. I say with a heavy heart that it is possible that a misinterpretation in the wrong eyes could lead some people to think that we were not quite as serious about the London hid as we are.

3.30 p.m.

Lord Moynihan

I completely reject the last point; no one who follows the work undertaken by London 2012, including all the politicians and those involved in sports politics outside the House, is in any doubt whatever about the commitment behind the London 2012 bid. The amendments do not in any sense dilute that commitment. On the contrary, they provide a framework that would demonstrate that the Government are keen to continue to look favourably on other cities put forward by the British Olympic Association to host the Olympics in future, and to do so to the point at which they provide enabling legislation to achieve that objective.

Nothing raised by the Minister in any way impacts negatively or drives a coach and horses through a Bill that would be turned, as a result of the amendments, into an enabling measure. Making it such a measure would send a very important signal. I emphasise that I hope not only that London will win, but that other cities will be able to avail themselves in future bids of the provisions within the legislation.

I totally accept the Minister's comment that, as amended, the Bill would impact only on 2016. I tabled the amendment for 2016 as a probing amendment. Had he responded positively, I would have come back on Report with a far more open-ended amendment. I am disappointed that he has not given me that opportunity. Nevertheless, it is not beyond the wit of man to go away from the Committee and seek alternative wording. There is a real danger in focusing too much on what Jacques Rogge said in terms of his preference for London. Many cities in the United Kingdom could put together a first-rate Olympic and Paralympic bid.

The amendment would have sent a signal to Jacques Rogge that the Government and Parliament were committed not only to the London 2012 Olympic bid, but to the principle of cities in the United Kingdom bidding in future. The provision of an enabling framework to achieve that objective would have been very helpful and sent absolutely the right message. However, in the circumstances at this stage of our proceedings, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 42B to 42F not moved.]

Lord Addington moved Amendment No. 43: Page 13, line 29, at end insert— ( ) An order, as set out in subsection (3), shall contain a duty to commission a study of the London bid to host the 2012 Olympic Games that may include a comparative analysis of the London bid with the other applicants, and when completed will report its findings to Parliament.

The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 54. The amendments are aimed at achieving a model for what happens to the bid in the two different circumstances. The intention behind Amendment No. 43 is that if things go badly, we should at least know why. We would need to look at what we did not have that another city had and to try to draw on that example. If we were successful, the intention would be to draw another model to tell us exactly what we did right.

Both provisions are important because the Olympics are at the top of the pyramid of international events—cultural, sporting, et cetera—that we often regard as beneficial and that we try to attract. I hope that the Government will take the opportunity to learn so that in future we can deal with other projects on an international level. We should construct a model as a result of the bid, be it negative or positive. Let me put it in straightforward terms: I hope that the bid will be positive. The Olympic movement as a whole—I refer also to the Paralympics as an integral part of the process—would be wholly beneficial. However, if we fail, we should at least know why. That is what I wish to know about. The lessons that we learn could be applied to all other sporting and cultural events.

I hope that the Government will look favourably, if not on the amendments, at least on the idea behind them. Studying the process and how it develops could be very beneficial internationally to virtually every city that takes part in the process. I beg to move.

Lord Moynihan

I welcome the principle of Amendment No. 43. The noble Lord has made a convincing argument for it. I agree with the thrust of everything that he has said. If, sadly, London's bid fails—I sincerely hope not—it should be standard best practice to hold a review into what went wrong and what lessons can be learnt. I remain convinced that primary legislation is needed to require such a report. Therefore, I see significant merits in the amendment and support it.

Lord McIntosh of Haringey

Let me respond positively to the request of the noble Lord, Lord Addington, by saying that I support the idea behind the amendments. The Government certainly agree that if our bid for the 2012 London games fails, we would want to know why. However. it is not necessary to use primary legislation for that purpose. I cannot believe that there would not be very detailed, critical parliamentary scrutiny of the situation, not just by the Culture, Media and Sport Select Committee but almost certainly by the National Audit Office and the Public Accounts Committee. That would apply whether we were unsuccessful at the beginning or if a decision to award the games to London was revoked subsequently by the International Olympic Committee. There will be scrutiny, but it does not require the inclusion of those powers in the Bill.

Amendment No. 54 is a little different. I am not entirely sure that I understand its impact, but I think it seeks to extend the Olympic lottery distributor's grant-giving powers to cover the costs of commissioning a study to run until the completion of the games—I do not know what is meant by "completion of the games"—and then to report the findings to Parliament. Such a provision is unnecessary because that will happen whether we like it or not. The commission of such a study is the responsibility of the organising committee of the Olympic Games. The host city contract requires that, within three months of the conclusion of the games—that may be what the noble Lord, Lord Addington, is saying—the organising committee of the Olympic Games submits to the IOC a report on all aspects of the organisation of the games, including an analysis of performance. Such a report has been produced ever since the first Olympic Games in Athens in 1896, so it is unnecessary to include the proposed provision in the Bill.

The noble Lord, Lord Addington, may be seeking a study on the use and effectiveness of lottery funds. Again, the extension of the distributor's funding power, as sought in Amendment No. 54, is not necessary. If the Olympic lottery distributor considers it beneficial to the exercise of its functions or to the successful delivery of the Olympic and Paralympic Games to commission such a study, it would be able to meet the costs from payments under paragraph 21 of Schedule 5. Of course. it would have to avoid prejudicing its primary objective, which is to provide funding for the staging of the Olympic Games. I repeat that the idea of having such research is very acceptable to the Government, but we simply do not need the amendments.

Lord Jopling

I hope that the Committee will excuse me if I leave shortly. because I am due to attend the heady excitements of the Merits of Statutory Instruments Committee. I am sure that I carry with me the envy of every Member of the Committee as I go to such an enthralling meeting.

If the noble Lord, Lord Addington, wishes to pursue the matter on Report, he could do so by being more specific in Amendment No. 54 on what he means by "study". On the other hand, if the report is produced in any case and has been made since the first Olympic Games, as the Minister suggested, the noble Lord might table an amendment suggesting that the report produced for the International Olympic Committee should also be submitted to both Houses of Parliament. What the Minister described sounds exactly like what the noble Lord, Lord Addington, wanted. If that report were also given to Parliament, it would cover his point. I am trying to be helpful.

Lord McIntosh of Haringey

I am not sure that that is possible because I do not think that the report would belong to the Government; it would belong to the IOC. However, I am sure that a way can be found around that.

Lord Addington

When I tabled the amendment, I suspected that the Minister would answer roughly as he has. Amendment No. 43 is probably the more important safety net, because if we actually have a successful games that take place and finish, no doubt everyone would try to cash in on them and say how well we have done. I was trying to make specific to Britain the experience Britain had gone through, and then there would be subsequent benefits. Also, we are talking about not only the Olympics, but all major sporting and cultural events. The Olympics are the big one, but there are many other things that we want, such as championships and the Commonwealth Games. We want to safeguard that.

We wanted to draw everything together into a point accessible to other events. The Minister was correct. I did not expect the amendment to be perfect at this point, but I was trying to do what we are supposed to do in Committee—to get an idea about what is going on. If the Minister would care to have a meeting where we could try to formalise the matter and let people know where the information is likely to be kept, we would address all these points. That might save a great deal of time and people chasing around. That is the point I was trying to reach.

Lord McIntosh of Haringey

I do not resist a meeting; let me write to the noble Lord on that.

Lord Addington

I thank the Minister. The point has been made, and I hope that we stand a chance of making progress. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 agreed to.

3.45 p.m.

Clause 23 [The Fund]:

Lord Glentoran moved Amendment No. 43A: Page 14, line 4, leave out "Secretary of State" insert "Millennium Commission

The noble Lord said: In tabling the amendment, I am pursuing a suggestion that I made at Second Reading. It would enable the Millennium Commission to maintain and manage the Olympic Lottery Distribution Fund. The amendment to Clause 34 amends the National Lottery etc. Act 1993, so that the Millennium Commission's remit includes being able to make grants out of the money it receives to assist in the funding of projects for the hosting of the Olympic Games by a UK city in 2012 or 2016. It would affect Section 41(1) of the Act, which concerns grants in respect of projects.

The Millennium Commission has been in existence for 10 years. It has had a very wide remit and has managed a number of seriously large national projects, as well as many on a smaller scale. Unlike the other lottery bodies on heritage and sport, it is not particularly tied to specific disciplines. It is due to be wound up in 2006, but it will almost certainly not have completely finished seeing its final projects through by then, so work will remain to be done. It has considerable assets, including its legislative powers, which took a long time to sort out, requiring part of a major piece of primary legislation. We had considerable debates in the early days when it was first set up on financial directives and so on. There have been government amendments to it.

I have been a member of the commission since its inception, and I am now serving under my fifth chairman. They have come from both parties. All the chairmen—I shall not make any exceptions—have quite clearly left that red box outside the room when they have come to chair the commission, and have operated as its chairman rather than as the Secretary of State, which says a great deal for all of them and the commission's work.

In order to set up a new good-cause body—the National Lottery Olympic distribution body—a great deal of re-working will have to be done. There will be quite a lot of primary legislation through both Houses, with many points to be argued and debated and so on, although they may not need to be. That could be cut short by accepting the amendment.

In key terms, these are the advantages that I see. The commission is already set up and running, so will avoid any costs that would be incurred in setting up another body. It is already a distribution body working with the National Lottery. The chairman and members are long established and know what they are doing. There is a great history and some of the staff, particularly on the policy and project side, have considerable experience of negotiating, dealing, managing, balancing, and not getting into trouble by falling out with too many people.

The commission is a tried and tested body with a proven record in terms of work and achievement. It is highly thought of by the general public and lottery players in the country. It would be very easy to add the Olympic lottery distribution to its remit. It is suitably at arm's length from government, but at the same time has a very sound relationship with the DCMS, which understands how it operates extremely well.

The commission could help to stimulate private sector involvement, because part of the remit of our objectives has been that our funding comprises only 50 per cent of any project. It has therefore funded only 50 per cent of anything so far, and has levered in something like 52 per cent of its total expenditure. Perhaps the figure is higher; it is certainly on a basis of 47 per cent spent by the commission and 53 per cent from the private sector. It therefore has experience of levering in considerable sums of money from the private sector. I am not saying that on account of any personal interest. I have done my 10 years, and I assure Members of the Committee that I do not seek another 10. But the Millennium Commission would be well capable, if finely tuned, to take on the role without going through the process of reinventing the wheel. I beg to move.

Lord Moynihan

I welcome the amendments. Amendment No. 43A to Clause 23 would give control and management of the Olympic Lottery Distribution Fund to the Millennium Commission instead of to the Secretary of State, as currently envisaged by the Bill, and thus the Millennium Commission would maintain and administrate the Olympic Lottery Distribution Fund.

Amendment No. 59A would modify Clause 34. It would allow the National Lottery etc. Act 1993 to be amended to extend the Millennium Commission's ability to make grants out of the money it receives. I share my noble friend's view that that would assist greatly in the funding of projects connected to the hosting of the Olympic Games by a UK city in 2012 or 2016. As my noble friend has said, the Millennium Commission is coming to the end of its original remit—namely, the co-ordination of the celebrations for 2000. It is currently expected to finish its work in 2006. However, the two amendments tabled by my noble friend would enable the commission to manage the Olympic Lottery Distribution Fund. The Millennium Commission would be ideally placed to continue its excellent work on this new and very important project.

I also agree with my noble friend that there are significant advantages to the proposal. The Millennium Commission is already set up and running, so there would be none of the costs incurred through the establishment of an entirely new body to perform the same functions. Moreover, it is already a distributing body that works with the National Lottery. Its chairman and members are well established and experienced. It is tried and tested; it has an outstanding track record of work and achievement; and it is highly thought of by the public and lottery players in this country. It would be very easy to add the Olympic Lottery Distribution Fund to its remit. Furthermore, it is not perceived as an agency of government and thus can maintain a suitably arm's-length distance from government. That relationship has regrettably been lost to UK Sport and Sport England.

In conclusion, as my noble friend has stated, there could be further benefit. The Millennium Commission's involvement could help to stimulate further private sector involvement, which is much needed and a priority of the Opposition in the context of financing London 2012. For all those reasons, I have no hesitation in warmly supporting the amendments, and I hope that the Minister will do the same.

Lord McIntosh of Haringey

I listened with particular care to what was said by the noble Lord. Lord Glentoran—first, because he is a distinguished Millennium commissioner and nothing that I say will involve any criticism of the Millennium Commission, and secondly, because I wanted to understand why Amendment No. 43A is tabled where it is. From what the noble Lord says, I think that he thinks his amendment would establish the Millennium Commission as the distributor for the Olympic lottery. That is not the case. Clause 23, to which Amendment No. 43A would apply, sets up the Olympic Lottery Distribution Fund, the parallel of the National Lottery Distribution Fund. It is not a distributor; the distributor for the Olympic lottery is set up under Clause 29, not Clause 23. The parallel between the Olympic lottery distributor and the Millennium Commission would be achieved by an amendment to Clause 29, not Clause 23.

I do not want to encourage the noble Lord, Lord Glentoran, to rework his amendment so that the Millennium Commission becomes a distributor rather than the fund, because that would not be appropriate either. Again, I say that without any criticism of the Millennium Commission.

In Clause 29 we provided for the creation of a new Olympic lottery distributor to distribute funds from the Olympic Lottery Distribution Fund in connection with the staging of a 2012 London Olympic and Paralympic Games. The creation of a new distributor is essential because of the very specialised nature of the expenditure involved in staging the Olympics. Frankly, it is no criticism to say that the Millennium Commission does not have that experience. We are looking for expertise in the staging of international mega-events, sport and regeneration.

The Millennium Commission has experience, of course, of distribution of lottery funding. It has funded a wide range of projects, from Tate Modern and the Eden Project to village halls and community festivals, but it does not have the specialist expertise required to fund the staging of a single large-scale international event, or a series of very closely linked international events, such as the Olympic and Paralympic Games.

Our intention for the Millennium Commission has already been stated. Its future will be in the context of the establishment of a new distributor from the merger of the community fund and the New Opportunities Fund. The merged body will take on the powers of the Millennium Commission to fund transformational projects, and will take on its assets, archive and future income from the Millennium Dome. We plan to use the valued expertise of the Millennium Commission staff in capital project management while setting up the new merged body.

Our intention is that the Olympic lottery distributor will be lean and focused with a small and expert board, with staff numbers and other overheads kept to a minimum. Any additional cost of a new body would be minimal and recouped through the efficiency savings to be made by having a focused organisation with relevant expertise. Of course, it could draw on other experience and expertise, including the Millennium Commission, wherever appropriate, but the amendment would not be the best approach.

I am sorry to have to comment on the location of the amendment, but I do not think that it would be a good idea, even if it were in the right place. Amendment No. 59A would also allow the Millennium Commission to distribute funds from an Olympic Lottery Distribution Fund to meet expenditure in connection with the staging of an Olympics in a UK city in 2016. We have dealt with that issue in considering a previous amendment.

Lord Glentoran

I thank the Minister for that, and clearly accept that my amendment should have been to Clause 29, not Clause 23. I apologise to the Committee for having got that wrong. Those who are knowledgeable of the intricacies of such matters may have some sympathy with my mistake, but it was a mistake.

I hear what the Minister says. Obviously, I knew what the plans for the commission were; indeed, I have been part of the negotiations on them with the Secretary of State. However, I still think that there could be benefits. I was part of the teething process of setting up the Millennium Commission and, whatever the Government set up, there will be serious teething problems in getting right the balance of staffing, their payment and overhead costs.

I shall put something on record that is to my latest knowledge up to date. It goes back to a statement that I made in the commission's first year of being. I said, "I refuse to work for charities that have an overhead of more than 10 per cent. We should insist that we contain our overheads to less than 5 per cent". We have contained it to around 3 per cent or 3.5 per cent until the present day. We are decreasing and still have some difficulties, but we are now operating at around 4 per cent cost. Under any terms, that is a satisfactory set-up. It is a position in which I hope the Government intend the new Olympic Lottery Distribution Fund to be. We do not want to see it set up and then having a 25 or 30 per cent costs overhead.

4 p.m.

Lord McIntosh of Haringey

That is a very worthwhile challenge.

Lord Glentoran

I am delighted that the Minister accepts that. I shall give this issue a little more thought and have further discussions on it. I may come back with it and try to be more persuasive but, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 agreed to.

Clause 24 agreed to.

Clause 25 [Payments into Fund from National Lottery Distribution Fund]:

Lord Moynihan moved Amendment No. 44: Page 14, line 20, leave out subsection (2) and insert— ( ) A payment by virtue of an order under subsection (1) shall be treated as if paid out of money allocated for the New Opportunities Fund.

The noble Lord said: This is a probing amendment which is designed to cover one of the more controversial aspects of the Bill—that is, the ability of the Secretary of State to take money from lottery good causes and to divert it to the Olympic lottery. My amendment proposes that, rather than divert money from all of the good causes, the Government would be able to divert money only from the New Opportunities Fund.

There are a number of reasons for this approach. First, the New Opportunities Fund receives twice as much money as the other good causes—33 per cent as opposed to 16.6 per cent, the equivalent of some £400 million a year. Secondly, there is a view among many in the voluntary sector that the New Opportunities Fund is already blurring the boundaries of acceptability in terms of what the National Lottery should fund. The New Opportunities Fund—perhaps unfairly—has been described by some as a government slush fund. The NOF moneys are distributed between health, education and the environment, and the category of young people has recently been added to the list of disbursements.

We heard at Second Reading from the noble Lord, Lord Davies, that the Government do not envisage using the powers within Clause 25 except "in dire extremis ". I trust that the Government will therefore have no difficulty in accepting the amendment. I beg to move.

Lord McIntosh of Haringey

It is certainly true, as the noble Lord, Lord Davies, said, that this is a power to be used only as a precautionary measure. But, of course, the argument then works the other way. I hope I have sufficiently wearied the Committee with my arguments in favour of the good causes as a whole.

As to the attack on the New Opportunities Fund—to which the noble Lord, Lord Moynihan, has carefully not put his own name; he cites some unnamed other person as making the accusation that it is a government slush fund—my arguments are even stronger in relation to that fund.

If the New Opportunities Fund were to sustain all the losses, it would have a disproportionate effect on its funding. More importantly, perhaps, in the eyes of the noble Lord, Lord Moynihan, it would affect the commitments that the New Opportunities Fund has, and will continue to have, for good causes in health, education and the environment.

The New Opportunities Fund is responsible for worthwhile projects. For example, it is funding £205 million for out of school hours learning, including £25 million for summer school; £300 million for healthy living centres to promote good health in the widest sense, with the aim of reaching 20 per cent of the population; and very considerable funding for sport, including the PE sport programme, for which £750 million is available across the UK for building and modernising PE and sports facilities in primary and secondary schools, and for activities that promote the community use of these facilities. I suggest that that funding stream is of particular value in ensuring that we are serious competitors in the Olympic Games and not only the hosts in London 2012.

Lord Moynihan

At the risk of throwing back to the Minister his sometimes quoted response to my amendment that he has gone wide of the mark, I shall take the opportunity to respond to the rather broad comments he has made. Before I do so, we came very close to smoking out the obvious need for the contingency fund to be raided. I pay credit to the Minister for ducking that bouncer, but he walked straight into the next one when he gave the example of £750 million being committed by the Government, through the New Opportunities Fund, for school sports facilities.

Let me explain why he walked into that bouncer. The £750 million to which the Minister referred was announced by the Prime Minister at the Labour Party conference in 2000. That money was to be committed and spent within three years. Out of that £750 million, how much does the Committee believe was committed to the benefit of school sport in those three years? I shall tell the Minister precisely the figure. As at January of this year it was £8.5 million. That is a lamentable record. It is not a good example for the Minister to quote that of the £750 million for school sport provision only £8.5 million has been spent. If he is using that as an argument, as he did, to show the International Olympic Committee the success of the wider government policy for sport, he has chosen a bad example.

As to the amendment, I am grateful to the Minister for focusing on the specific points I made. He erred on one issue. He stated that I had referred to one person who might have unfairly described the New Opportunities Fund as a government slush fund. For the record, I said that it was a view taken by a number of people. As the Minister will know if he follows proceedings in another place, it is a view that is taken by a considerable number of other people. I make that point for the record because I would not wish him to misinterpret my remarks in moving the amendment.

Lord McIntosh of Haringey

The noble Lord, Lord Moynihan, has not been keeping up with "West Wing". He has forgotten the immortal words of C.J. Cregg, who said, "The President does not respond to unsourced quotes. We simply assume you made them up".

Lord Moynihan

The Minister is absolutely right. I have not had time to watch "West Wing" recently. I have spent hours looking in detail at the amendments we have been considering over the past three days in Committee.

It is a pity that the Government have not responded positively to the amendment. As I said, if the Government really believed that there was no chance of the powers being used, they would have no problem whatever in accepting the amendment. Given the way in which the financial arrangements for the Olympics are currently structured, it is of course inevitable that there will be a raid on the contingency fund. In view of the Minister's response, for which I thank him, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 45 had been re-tabled as Amendment No. 46A.]

[Amendment No. 46 had been withdrawn from the Marshalled List.]

On Question, Whether Clause 25 shall stand part of the Bill?

Lord Moynihan

In opposing the Question that the clause shall stand part of the Bill, it may be helpful if I refer the Committee to the Explanatory Notes, which state: An order under this clause would be made only in exceptional circumstances. For example, in the event that the Olympic Lottery Distributor needed to make a grant or loan but had not received sufficient funds from the OLDF, and where the OLDF could not provide those funds". This is all about cash flow.

Following our earlier deliberations the Committee will be aware of my concerns that significant cash flow shortfalls will arise from the Government's Olympic funding model. I have elsewhere made the case that the Olympic lottery game should start this summer and that this would help reduce any potential cash flow problems. It is worth once again drawing the attention of the Committee to the fact that our proposals for an early start to the Olympic lottery game have the added benefit of favouring other good causes by almost £13 million, a substantial sum.

The course of action I suggest presents an infinitely preferable option to that currently allowed by the Bill. It begins to address any cash flow crisis and it saves the other good causes money. On 14 January this year the Minister demonstrated the extent of the cash flow challenge that the Government will face. Indeed, in an exceptionally helpful and comprehensive response to me he indicated that there would be a cash flow problem—in other words, expenditure significantly in excess of income—in every single year up to 2012, on these figures, starting from last year. So there is a real problem in matching income to expenditure in terms of financing the games.

There was a surprising figure for 2004. On the Ove Arup figures, which the Minister quoted as his source, there is an income figure of £231 million, which I do not begin to understand. No doubt he will be able to clarify where that figure has come from.

Suffice it to say that there is a cash flow challenge. In financing the games it is absolutely straightforward that most of the money that will come from the Olympic lottery game will come late in the day and most of the money which needs to be spent on the new facilities will come up front. How the Government intend to bridge that apparently insurmountable gap in terms of the London Olympic Games cash flow will be of significant interest to both myself and the Committee.

It is for those reasons that I have tabled the probing intention to oppose the Question that Clause 25 stand part of the Bill. I hope that the Minister will clarify the extent of the cash flow challenge when he comes to reply.

Lord Glentoran

What we have not heard from the Government—and I look very much to my noble friend Lord Moynihan to help on this—is what their plans and proposals are for raising money from the private sector.

Lord McIntosh of Haringey

It is indeed all about cash flow. I am afraid that I am at a disadvantage. I do not have with me the Written Answer that I gave in January. I am a little take aback to hear the noble Lord, Lord Moynihan, quote expenditure of £231 million in 2004.1 wonder whether we are talking about the same thing. I shall have to write to him on that point.

Lord Moynihan

In fairness, the Minister may recall that the Government requested Ove Arup to model anticipated yearly incomes and expenditure flows as part of a cost benefit analysis of a specimen London Olympic Games. The point on which I requested clarification is in the figures with which the Minister kindly provided me. There is a consistent mismatch—which is understandable; it came as no surprise to me—between the timing of receipt of Olympic Games lottery revenues and the expenditure that would be required up front.

I am not seeking a detailed response from the Minister to a specific parliamentary question—that would be an unfair ball to bowl, if I may use a sporting metaphor—but I should like him to address an issue on the financing of the games with which I have some difficulty. If we are successful in Singapore in July 2005 then, by definition, we immediately have to get to work on the construction of sites. These will be very capital intensive and will require significant funding. Any projection of income against expenditure based on the Government model, which was built on the Ove Arup model, will not match the two.

It will not come close to matching the two because. again by definition, the excitement of the community in buying lottery tickets will be far greater as we get closer to the year in which London will host the Olympics than earlier when we are five or six years away. My worry is that that gap needs to be filled. If there was a £200 million capital expenditure shortfall in 2007, is it the intention that the Treasury should step in and provide a loan? What financial mechanism do the Government have in place to overcome this mismatch in the timing of the cash flow between the winning of the Olympic bid in Singapore in July next year and the hosting of the games in 2012?

Lord McIntosh of Haringey

I do not know the answer to that. It is counter-intuitive to me that there should be a cash flow problem of that kind because the lottery money will start coming in from 2005 and the council tax funding would start coming on stream in 2006–07. A very significant part of the expenditure will fall towards the end of the 2005–12 period when the construction work is going on. So, on my understanding of the cash flow issues, I come to the opposite conclusion. But I may be wrong. I shall write to the noble Lord, Lord Moynihan, and other noble Lords about that.

The noble Lord, Lord Glentoran, asked about private funding. London 2012 is already attracting significant private sector support and we will report on that at regular intervals as on everything else. We have no reason to suppose that we will not do well with private sector support. After all, Sydney attracted more than £500 million in sponsorship and more than £500 million in television broadcasting rights. There will also be income from ticket sales and income from a number of public-private funding initiatives such as the Olympic village. I would not like it to be thought that we are relying entirely on the council tax and the Olympic lottery for the funding of the Olympic Games. That has never been our position.

4.15 p.m.

Lord Moynihan

I am grateful to the Minister for his response. It is not now a matter of withdrawing an amendment because we are debating clause stand part.

The Minister has responded to the principal issues that I have brought forward for the attention of the Committee. I am particularly grateful to him for undertaking to write to me on the important subject of the cash flow mismatch that exists in the Ove Arup model and how that will be funded. Even if he feels that there is no mismatch—which I can assure him there is—let us hypothesise that there is. What mechanism do the Government have in mind for funding the initial construction costs of the Olympic village and some of the Olympic sites in the event that that should need to be covered in advance of receipts from the lottery? I believe the Minister has some additional hot news to give to the Committee.

Lord McIntosh of Haringey

I do not know about additional hot news but, if we find that the cash flow situation is different from that which I expect, I shall include the answers to those questions in my letter. In the mean time, I should make it clear that we have taken precautions to ensure that the power to transfer money from the National Lottery Distribution Fund to the Olympic Lottery Distribution Fund is exercised with all due seriousness. We have built in a requirement for the Secretary of State to consult with the existing good causes before laying an order in draft, which must secure an affirmative resolution from both Houses of Parliament.

Lord Moynihan

I appreciate that additional information. Before concluding my remarks I should like to place on record again a response to my noble friend, whose helpful intervention on the issue of private sector funding raises an important question.

On many occasions, both outside the Committee and inside the House, Her Majesty's Opposition have focused on the absolute importance and priority of ensuring that the private sector is not only involved in sponsorship and ticket sales but is instrumental in the overall bidding process, the design, the funding, the management and the presentation of the bid internationally.

We have a tremendous opportunity for the City of London. At the moment we are missing it, in part because Ken Livingstone's mindset has never been one of active promotion and encouragement of private sector funding. In my view, that is a great pity. If you look at the very good analogies of Los Angeles and Sydney, you will see the real benefits of business being at the heart of the whole process from day one. That has been missing to date. When we are elected to government next year it will be a top priority for the Conservative government of the day to focus on the private sector role in the overall delivery of a successful bid for the games in London in 2012.

Clause 25 agreed to.

Clause 26 [Payments out of Fund]:

[Amendments Nos. 46A to 48 not moved.]

Lord Glentoran moved Amendment No. 48A: Page 14, line 31, leave out paragraph (a).

The noble Lord said: The amendment seeks to remove the ability of the Secretary of State to pay himself expenses from the Olympic Lottery Distribution Fund in respect of functions under this part of the Bill. Can the Minister justify why the Secretary of State should have this power and receive such funds? The wording is very open ended and, casting no aspersions anywhere, I wonder whether that could leave the power open to abuse.

I emphasise that in no way do I suggest that any Secretary of State would knowingly abuse the power, but all kinds of funny things happen these days. The bottom line is why should a quango—which I imagine the fund will be—pay expenses to the Secretary of State, which I understand Clause 26 allows? I beg to move.

Lord McIntosh of Haringey

If there were any risk of abuse it would have happened a long time ago because these are exactly the provisions in the 1993 Act with respect to the National Lottery Distribution Fund. It has always been the case that the Secretary of State can recover expenses as necessary.

The expenses could be, for example, for the processing of payments from the Olympic Lottery Distribution Fund to the Olympic Lottery distributor, exercising any of the order-making powers created by Part 3 of the Bill and issuing directions to the Olympic Lottery distributor under Schedule 5 to the Bill. All of these have been possible for the National Lottery Distribution Fund since 1993 and no one has ever suggested there is any problem.

Lord Moynihan

I have just had an idea which may allow the Minister to reflect further on what he said. In line with the earlier point that I made about the clear distinction between the original intention of setting up the National Lottery and a hypothecated game, and in line with my argument that the Treasury should agree with the Opposition's view that the 12p duty should go directly to the Olympics, here surely is another case exactly along those lines. My noble friend Lord Glentoran has ably demonstrated the need for the money to go to benefit the Olympic Games. Why should even the small amount we are talking about go to the Secretary of State?

So here is another opportunity, building on exactly the same logic I expressed earlier, for the Government to say, "We accept the original all-party agreement over the establishment of the National Lottery and its financing, but here we have an opportunity of ensuring that the Olympic Games in London in 2012 are a success. We need to ensure that the money raised by the Olympic lottery goes towards the very purposes for which it was set up—in other words, it must benefit the Olympic Games—and the Secretary of State will forgo her expenses from the Olympic Lottery Distribution Fund with respect to functions under this part of the Bill and dedicate that money to the success of the games".

I am sure that that compelling argument will be well received by the Minister. It will send exactly the kind of signal that Her Majesty's Opposition are hoping the Government will send to the wider public.

Lord McIntosh of Haringey

Ingenious but far fetched. Subsection (2)(a) is very clear. It states: in respect of expenses of the Secretary of State in connection with functions under this part". It will be a very limited amount of money. If the noble Lord, Lord Moynihan, had had his brilliant idea in 1993 and had prefaced his trumpeting of the benefits of the good causes at that time by saying, "In order to prove our good will the Secretary of State will forgo any compensation for expenses", I might have listened to his proposal a little more seriously.

Lord Addington

Perhaps I might intervene. We seem to be covering a great deal of the ground we will cover in the next group of amendments. Under what circumstances is it normal for the Secretary of State to take his expenses? What kind of expenses does he take under previous lottery Bills? It would be helpful to those of us who are not part of the "We did it, you didn't" process if we could have a rough idea of what is going on. We would then know how to react to the amendments.

Lord McIntosh of Haringey

I thought I had answered that question. I said that we were talking about the cost of the processing of payments, the exercising of order-making powers and issuing directions to the Olympic Lottery distributor. They are expenses connected with the exercise of functions under Part 3 of the Bill. I think the amounts are relatively small but I am happy to write to the noble Lords. Lord Addington, Lord Glentoran and Lord Moynihan, with a breakdown of the comparable expenses under the 1993 Act.

Lord Addington

That would clear up the matter and we would not have to go over this ground again. It would be very helpful.

Lord McIntosh of Haringey

It suits me.

Lord Moynihan

The more the Minister argues the case that they are de minimis—which they are—the greater the opportunity for the Government today to send a signal from the House that they recognise there is a major distinction between the establishment of the lottery in the last century and the Bill before the House, which is absolutely dedicated to the hypothecated game for a specific purpose—namely, the London 2012 games.

There is an absolutely clear distinction. We are focused on the London 2012 games and we hope that the Government will come forward with a series of measures that will send a signal to the wider sporting community that they will take steps that they have never taken before. The de minimis expenditure involved here touches the side of the expenses that the Secretary of State controls. It is a wonderful opportunity to send the right signal to the wider sporting community and the International Olympic Committee.

I hope that the excellent amendment proposed by my noble friend will be given yet further consideration by the Minister between now and when we return to the issue at Report.

Lord McIntosh of Haringey

I will gladly recommend the views of the noble Lord, Lord Moynihan, to the spin doctors—but we prefer reality to spinning.

Lord Glentoran

I find some of the Secretary of State's powers very wide. I was quite unaware that they have been in existence since 1991. The Minister said 1993, but I think the current lottery was set up in 1991. No. It was 1993. I beg the Minister's pardon.

I was also unaware that the National Debt Commissioners were remunerated. I had reason to have a meeting with them not long ago; that was the first time I knew they existed and what they did. I called them in for advice. It was interesting. I can see that they would be paid if they were asked in to do a specific job, but it seems to me that the clause allows specific regulations to be made to pay rather large sums of money to the bodies listed. Will those regulations come before either House of Parliament?

Lord McIntosh of Haringey

As far as I can see, there is no provision under Clause 26 for parliamentary approval. The matter has been considered by the Delegated Powers and Regulatory Reform Committee, which has not recommended that there should be.

Lord Glentoran

I thank the noble Lord for that answer. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.30 p.m.

Lord Moynihan moved Amendment No. 49: Page 14, line 36, leave out paragraph (d).

The noble Lord said: This is the first of a group of amendments designed to prevent the Secretary of State making payments directly from the Olympic Lottery Distribution Fund to the Greater London Authority, thereby bypassing the Olympic Lottery distributor.

I should stress that we recognise that the Greater London Authority is a key stakeholder in the London 2012 Olympic bid and that it may require funds from the Olympic lottery to help stage the 2012 games. However, I have tabled this amendment because there is no reason why the funding to the Greater London Authority should not come through the Olympic Lottery distributor. I would be grateful if the Minister could explain the circumstances in which the Government envisage making payments direct to the Greater London Authority and why the powers contained in this clause are felt to be necessary.

I turn briefly to Amendments Nos. 51 and 52. They are designed to ensure that any money which the Greater London Authority receives for the Olympics must be specifically earmarked for sport and for sport alone. In other words, it cannot be used for whatever the Mayor of London so desires. I do not wish to imply that the Mayor would necessarily have in mind alternative uses for such money—certainly not under Mayor Norris—but I feel that it is only fair to British sport that this condition be enshrined in law. I beg to move.

The Deputy Chairman of Committees (Lord Brougham and Vaux)

I should advise the Committee that if this amendment is agreed to, I shall not be able to call Amendment No. 49A. Further, if Amendment No. 51 in this group is agreed to, I shall not be able to call Amendments Nos. 5IA to 52ZA inclusive.

Lord McIntosh of Haringey

The basis for the expenditure is set out in the memorandum of understanding between the Government and the Mayor of London, which was published in June last year. It sets out the broad intention that lottery funding should be spent on sports investment, Olympic facilities and event staging, which I think is the way that the noble Lord, Lord Moynihan, understands it. Moreover, council tax should address the capital requirements of the games, including transport infrastructure. That will be spelt out as we come closer to defining the games in more detail, but my understanding is that the Opposition has never opposed the view that there would have to be infrastructure investment in order to make the games possible. That could include, for example, transport infrastructure.

However, the memorandum also recognises that it is not possible to earmark particular strands of funding to discrete objects. In managing the flow of funds, it may be necessary to reimburse the GLA for expenditure incurred. This provision also enables the GLA, as the other main source of Olympic funds, to be reimbursed in the event of an Olympic lottery surplus—I am glad that the noble Lord, Lord Jopling, is no longer with us—if that were the right thing to do. That possibility is also set out in the memorandum of understanding. So subsection (2)(d) allows payments from the Olympic Lottery Distribution Fund to the Greater London Authority as the other main source of public funding.

Of course there will be appropriate mechanisms and controls in place as we do not yet have certain knowledge of the flow of Olympic funds. Were we to remove the provision to make payments to the GLA, which these amendments seek to do, that would remove the flexibility that might be required later on.

In relation to Amendments Nos. 51, 52 and 52ZA, we think it would be wrong to remove or limit the powers for the GLA to spend revenues received from the Olympic Lottery Distribution Fund on whatever it sees fit. For example, in managing the overall flow of Olympic funds, the GLA may be required to spend its own money which it had earmarked for non-Olympic purposes on an immediate Olympic need. The Bill as drafted would enable that money to be repaid and spent on purposes to be determined by the G LA.

I should add that this approach to the public funding of the Olympics has been one of partnership. The Government and the Mayor are working closely together and unity of purpose is one of our key strengths in the view of the International Olympic Committee. It would be weakened if these amendments were pressed.

Lord Moynihan

I note what the Minister has said about the amendment. I shall take away his response and consider it because I think that we may be able to achieve the objective through the amendment, or rather by revisiting the issue at a later stage in an amendment tabled by my noble friend Lord Glentoran, that is more widely drawn. However, despite being broader in scope, it would at least tighten the wording of the Bill to ensure that the money given to the Greater London Authority, or to any other authority, is used only for purposes related to hosting the Olympic Games in the United Kingdom and not for any purpose which that authority is authorised to incur. That might be a better way to proceed because it would provide the flexibility for infrastructure spend that the Minister cited in response to my amendment. However, I am conscious that we would need to address the wording.

All those issues can be managed and dealt with. For the moment, and with the proviso that further consideration will be given to the Minister's response and the possibility that we shall return to this matter at a later stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 49A not moved.]

Lord Moynihan moved Amendment No. 50: Page 14, line 42, at end insert— ( ) Regulations by virtue of subsection (2)(c) and (d) shall permit payment only when the Olympic Lottery Distribution Fund has received total income in excess of £1.5 billion.

The noble Lord said: This might be called the "Jopling amendment" if my noble friend was in his place. I am sorry that he will not hear the exchanges that are about to take place, but we all appreciate that he has other important work elsewhere in this House.

The amendment is designed to probe the circumstances under which it is envisaged that the Secretary of State can return money from the Olympic lottery to the National Lottery Distribution Fund and the Greater London Authority. Members on this side of the Committee recognise and hope sincerely that there may be excess money raised by the Olympic lottery and that, as such, it is sensible to put in place measures to return such money to the good causes and the Greater London Authority.

In that context, I draw the attention of noble Lords to the Explanatory Notes which accompany the Bill on this point. These notes state that the Government's Memorandum of Understanding with the Mayor of London, makes provision for costs of staging the Olympics to be met from a variety of sources in varying proportions. These include from the GLA through an Olympic Council Tax, from the National Lottery through Olympic Lottery games, and from existing Sports Lottery distributors. It also gives an indication as to how it is proposed payment may be reimbursed in the event that the Olympic lottery games generate a surplus". This amendment is designed to prevent such a reimbursement until such time as it is clear beyond doubt that the Olympic lottery games have generated a surplus. In this probing, exceptionally optimistic and unrealistic amendment on providing cover for "extreme circumstances"—a phrase that has been used by the Minister on a number of occasions in justification for getting legislation right—we have chosen the figure of £1.5 billion. However, we recognise that the Government may prefer to choose an alternative wording to address the possibility, albeit an extremely unlikely one, of the games coming in under budget.

I am open to any positive suggestion the Minister may have on this point and I look forward to hearing his response. I beg to move.

Lord McIntosh of Haringey

I am too old a bird to fall for that one. If the noble Lord, Lord Moynihan, thinks that suggesting a figure of 1.5 billion is extreme and unrealistic and that I am going to agree to £1 billion or some other figure, I am not. Were he to put forward a figure such as £10 million, we might argue that it would not do any harm. However, of course I have already debated the subject matter of this amendment when responding to previous amendments.

The Memorandum of Understanding between the Government and the Mayor of London recognises the need for flexibility in managing income and expenditure. The Bill allows for payments from the National Lottery Distribution Fund to the Olympic Lottery Distribution Fund, and in the other direction, according to cash-flow requirements. There is the possibility that we may use the provision set out in subsection (2)(c) in circumstances where Olympic lottery games generate a surplus. At that point there certainly would have to be a transfer of funds to National Lottery good causes. Those funds could be used to compensate to some extent for the loss of income they would have suffered as a result of sales diversions from core games to the new Olympic lottery games. Alternatively, the power might be required to repay funds which have been transferred from the National Lottery Distribution Fund to the Olympic Lottery Distribution Fund under Clause 25.

Clause 26(2)(d) allows payments from the Olympic Lottery Distribution Fund to the Greater London Authority. It will be the other main source of public funding and at some point it may be necessary to reimburse the GLA for expenditure incurred.

I shall write to all noble Lords about the cash flow issue. This is another extension of that issue, and I shall make sure that my letter covers the points raised by this amendment.

Lord Moynihan

It was worth a try. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 51 to 52ZA not moved.]

Clause 26 agreed to.

Clauses 27 to 29 agreed to.

Schedule 5 [The Olympic Lottery Distributor]:

Lord Glentoran moved Amendment No. 52ZB: Page 37, line 9, leave out "5 members" and insert "9 members, including the Chairman,

The noble Lord said: I wish to make only a few points in relation to this amendment. As I understand the schedule, the Secretary of State shall aim to ensure that the distributor has at least five members at any time.

It is my considerable experience that a board of five members will not be satisfactory in any way. Nothing in the schedule suggests what the Secretary of State would expect a quorum to comprise, which is extremely important. I would expect that a quorum will be set, assuming that a quorum of the chairman plus two for a body dealing with the distribution of funds of this kind is rather small. Although my amendment does not put it quite like this, I suggest that the quorum should be five members—the chairman plus four—and that in order to rely on a quorum of that number, the body itself would need considerably more than five members.

The Millennium Commission has operated with nine members. At times, particularly now, it has been quite difficult to maintain a quorum of five. However, when dealing with millions of pounds of public money, to have a quorum of fewer than five suggests a certain measure of arrogance or the formation of a clique. It could become very difficult to reach appropriate decisions and in my opinion would be pretty unsatisfactory.

I should also like to ask whether the terms of this schedule provide that the Secretary of State has the power to appoint herself as the chairman, if she so wishes. Paragraph 1(1) states: The Secretary of State

1. (a) shall appoint the members of the Olympic Lottery Distributor, and
2. (b) shall appoint one of the members as Chairman".

Is she in a position to appoint herself or one of her departmental Ministers as chairman? Perhaps the Minister will tell me that that is already provided for, but this, too, is extremely important. If I were in government with my noble friend Lord Moynihan I would like one of my Ministers to chair such a body, as was the case throughout my time with the Millennium Commission.

Perhaps the Secretary of State would also want to be more specific about who would have to serve on that body. Although I do not know the organisational structure, perhaps there is someone within it who is running the show overall. That person should be involved.

I am not happy with the current provision. I do not pretend to be as familiar with this Bill as I have been with others I have dealt with and I apologise for that. Equally I apologise if I have this wrong. I look forward to the Minister's comments on a quorum, on the total number of members required to maintain a quorum, and on the specific posts that should be represented on the body such as the Secretary of State herself or himself, or a Minister. I beg to move.

Lord Addington

I want to interject that the idea of a committee of that nature consisting of only five—I know that the provision says, "at least five"—is, as the noble Lord said, too small. The problems experienced by any committee on which I have served in trying to get a quorum mean that we will need a bigger group. Let us use your Lordships' House as an example. If we employ people who are very important at doing other work, they tend to get taken off to do other things. Getting the right number of people together would be difficult. I hope that the Minister will assure us that a body consisting of only five people would never be considered.

4.45 p.m.

Lord McIntosh of Haringey

Please do not use your Lordships' House as an example. However, the noble Lord, Lord Addington, has answered the noble Lord, Lord Glentoran. The schedule provides that the Secretary of State, shall aim to ensure that the Distributor has at least 5 members at any time". That is cautious in the extreme. It is cautious by stating "aim to ensure" rather than ensuring. They could all be on a bus that runs into the River Lea on Hackney Marshes and drown. He cannot ensure that there are always five members.

Lord Glentoran

I think that the noble Lord has slightly missed the point—I do not mean that aggressively. Sure, a quorum of five is great, but it is difficult to get five people to spend half a day fortnightly, perhaps. We do not know what the workload will be. I was told when I joined the Millennium Commission that I was going to have one lunch a month and that that would be it, but I actually spent a huge amount of time on the project in the early stages—this body will be in its early stages. This will be a demanding organisation if it does its job right. The noble Lord has missed the point. We need a number of people who are members of that organisation that will allow at least five to be there at any one time.

Lord McIntosh of Haringey

The noble Lord, Lord Glentoran, was fortunate enough not to serve in opposition in this House, as I did for 14 years. The order came down from on high from the Thatcher government: "small committees". Whenever we tried to get representation for particular groups on committees we were told, "No, no, it must be small to be effective". We constantly fought that battle.

I listen to what the noble Lord says. I think the point is covered in the "at least" provision. Paragraph 15 of Schedule 5, under the heading "self-regulation", answers the question about a quorum by stating: and in particular may specify a quorum for meetings". I can confirm that we do not intend the Secretary of State should appoint herself either as the chairman or as a member of the Olympic Lottery distributor, although I suspect that the noble Lord would not be opposed to such an appointment. However. she has other things to do that might make it difficult for her to form part of a quorum. Without much hope, I will reconsider the matter, but I think that "at least" is enough protection.

Lord Moynihan

I very much hope that the noble Lord will think about it. He was right to reflect on the fact that to be small to be effective is an admirable Thatcherite mantra—something which I personally greatly support. As he was so wise on that point—his recollection is accurate—I hope that he will be wise on this one. It is clear from our exchanges in Committee that a board of five members is insufficient to deal with a project on this scale. I hope that the Minister will give due consideration to whether the board can be enlarged later under an appropriate amendment.

Lord Glentoran

I thank the noble Lord for that useful debate. As my noble friend said, we will return to the matter later. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 5 agreed to.

Clause 30 [Distribution]:

[Amendments Nos. 52B to 52G not moved.]

Lord Addington moved Amendment No. 53: Page 16, line 22, at end insert ", and ( ) the long term benefit of the promotion and participation in sport and physical activity throughout the United Kingdom beyond the 2012 Olympic Games

The noble Lord said: This is a probing amendment. I am not absolutely sure what the definition of a probing amendment is, but this amendment is an attempt t o dig out how far one of the major perceived benefits of the Olympic Games—the long-term sporting heritage and structure in the country—will be worked in. The amendment provides for: the long-term benefit of the promotion and participation in sport and physical activity throughout the United Kingdom beyond", 2012.

One thing that has sold the idea to many people is that the Olympics will be beyond London and beyond one big event—that they will be one big party. one big celebration. That is important and is something unique to the Olympics. But we need further assurance that that idea will be worked in. I may have missed it, but that commitment needs to be made. The final two amendments on the Marshalled List in the name of the noble Lord, Lord Moynihan, go towards the same ground, and if it were convenient to take those at the same time I would welcome that. They may even be slightly better amendments. I am trying to address the long-term physical inheritance from the games, providing that we win. We need some assurance on that. I beg to move.

Lord Moynihan

I am pleased to support this amendment. As eloquently explained, it will ensure that the Olympic Lottery distributor is mindful of the long-term benefit to sport from the Olympic and Paralympic Games. The Minister rightly spoke at length about the lasting legacy bestowed on sport as a result of hosting the Olympic Games, so it is right and proper that the Committee assist with fine-tuning the mechanics of the Bill to help to deliver the Government's promises. It is of course possible that there could be a conflict between the funding priority for the games and for the enduring sporting legacy bequeathed as a result, but that is something that the Olympic Lottery distributor should be able to avoid with a measure of skill and foresight.

Without the amendment, the Olympic Lottery distributor could struggle to take account of the legacy in its granting of awards. That cannot be right and we must seek to avoid that. The amendment fits the bill in that respect and I am pleased to support it. I look forward to hearing the Minister's thoughts on the matter.

Lord McIntosh of Haringey

The amendment is in a slightly odd place, because it is to the clause dealing with the distribution of money by the Olympic Lottery distributor, and most of the other elements there are pretty practical rather than long-term aims. But I shall make little of that. I am glad to be able to tell the noble Lords, Lord Moynihan and Lord Addington, that the points that they make about long-term benefits for sport are already well covered.

The amendment would provide that the Olympic Lottery distributor should, in exercising its functions, have regard to the Olympic Charter and the other points. The Olympic Charter already covers the points in the amendment, stating that, the practice of sport is a human right. Every individual must have the possibility of practising sport in accordance with his or her needs". It acknowledges the benefits of educating, youth through sport … with a spirit of friendship, solidarity and fair play". Its programmes include the development of the technical sports knowledge of athletes and coaches, the training of sports administrators and pursuing objectives through the propagation of sport.

So everything that is provided for in the amendment is already provided for in the Olympic Charter, which Clause 30(3) already contains. I would not mind that duplication too much, except that there are other objectives than those included in the amendment. The Olympics is an event that is not limited to sport. Clause 34 recognises the power of the distributor to fund non-sporting expenditure, such as cultural events that are required as part of an Olympic Games. If it were required to have regard to the promotion of participation in sport, that could hinder the operation of that clause. Of course, physical activity has long-term benefits and we shall work to maximise the opportunities that hosting the Olympics will bring in 2012 and beyond. However, it is not necessary to repeat in the Bill the objectives already stated in the Olympic Charter.

Lord Addington

The Minister has given a very good answer but I was trying to highlight the need to tie into the long-term existing development. I realise that I probably did not give the Minister enough straw to make bricks. Possibly I should try to address the issue again to see whether it can worked in later. There is a need for long-term development of existing plans and the dovetailing of ongoing programmes with the Olympics themselves. I see the Olympics as a continuum or extension of what we are already trying to do through existing programmes. That is one of the most important aspects.

I hear what the noble Lord has said. I would like to think about a future amendment to try to drag out something more.

Lord McIntosh of Haringey

The noble Lord, Lord Addington, makes an additional valuable point about the long-term legacy. I can confirm that that will be an important element of any successful bid. We would not get to host the games in London in 2012 unless we had that long-term legacy, but it is a cultural legacy as well as a sporting one.

Lord Addington

I hear what the noble Lord has said. I shall think about whether there is any more mileage to be had on the issue. With that proviso, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 54 not moved.]

Clause 30 agreed to.

Clause 31 [Distribution policy]:

[Amendment No. 54A not moved.]

Lord Moynihan moved Amendment No. 55: Page 17, line 18, at end insert— ( ) the National Paralympic Committee, and ( ) the Sports Councils of England, Scotland, Wales and Northern Ireland

The noble Lord said: The purpose of these amendments is to ensure that when the Olympic Lottery distributor draws up its distribution policy, it is required to consult the British Paralympic Association and the home country sports councils. The second amendment would ensure that the British Paralympic Association and the home country sports councils receive a copy of the distributing policy for the Olympic lottery.

I should like to say a few words about the British Paralympic Association. I am sure that the Committee will be aware of the great success of our paralympians in Sydney, when we came second in the medal table. I know that Members of the Committee will join me in wishing the team every success in Athens this summer. I am sure that they will return with even more glory.

The Committee will excuse a brief foray into our sporting history. I should like to point out that a British neurosurgeon, Sir Ludwig Guttman, began the Paralympics. A sports competition for 200 World War Two veterans with spinal cord injuries was held at Stoke Mandeville to coincide with the London Olympic Games in 1948. Those games evolved to become the modern Paralympics.

I am concerned that the Bill places far too little emphasis on the British Paralympic Association. That is reflected in the fact that the Bill does not even require the Olympic Lottery Distributor to consult the BPA, even though it is required to consult the BOA. It is essential that the British Paralympic Association he involved in the distribution policy. Paralympic sports and athletes can have very specialist requirements, and the British Paralympic Association is the best placed by far to advise on those requirements.

I assume that the absence of that amendment was a drafting error, otherwise it would be a glaring and shameful omission that there is no statutory requirement to consult the British Paralympic Association over the distribution of funds to stage the Paralympic Games in London. I trust that the Government will seek to remedy the matter.

These amendments are also designed to ensure that the Olympic Lottery distributor liaises closely with the home country sports councils. We have a duty to ensure that the money spent by the Olympic Lottery distributor has a lasting legacy for sport. It should not duplicate existing policies. It is the responsibility of the Bill to guarantee that the new Olympic Lottery distributor will work closely with the existing sports lottery distributors to ensure the most efficient use of lottery money. That is what my amendment seeks to achieve. I trust that the Government will respond positively. I beg to move.

5 p.m.

Lord Addington

Briefly, I should like to add that the Paralympics are an integral part of the modern Olympic Games as most people perceive them. If the Minister cannot tell us where the National Paralympic Committee is being consulted on a basis that is commensurate with its importance to the whole event, this amendment or something very like it should be included the Bill.

Lord McIntosh of Haringey

If that is the thrust of the amendment, it is relatively easy to respond. Clause 33 makes it clear that the word, "Olympics" embraces Paralympics on every occasion. Clause 33(1)(a) states: a reference to the 2012 Olympic Games is a reference to—

1. "(i) the Games of the Olympiad that are to take place in the year 2012, and
GC 612
2. (ii) except where the context otherwise requires, the Paralympic Games that are to take place in that year".

Whenever we refer to the Olympic Games, we are also referring to the Paralympic Games throughout Part 3 of the Bill. Clause 33(1)(d) states: 'the Paralympic Gaines' means the events known by that name and in connection with which the Organising Committee has functions by virtue of an agreement between that committee and the International Olympic Committee". The importance of this will become apparent. Paragraph (f) states: any expression used in connection with the Olympic Games (including an expression mentioned in this section) shall have the meaning which it has in or in accordance with the Olympic Charter of the International Olympic Committee (as in has effect from time to time)". Somewhere the Bill must say that the Olympic Charter of the International Olympic Committee includes Paralympics. No? It is always the intention of the International Olympic Committee that the Paralympics should be of equal status in all respects, including consultation with the Olympic committees. I shall write to noble Lords to explain how that appears in the legislation.

Lord Moynihan

I am grateful to the Minister. Of course, we are in complete agreement with the sentiments that he expressed. However, I am not sure that the intent of what the Minister has just said is in the legislation. He has referred the Committee to the miscellaneous provisions in Clause 33(1)(a)(i) and (ii). He then read back to Clause 31, on distribution policy.

However, in Clause 31 there is no reference to the 2012 Olympic Games. Clause 31(1)(a) and (b) covers the submission of a revising policy. The consultation exercise is very specific. The distributor must consult:

1. (i) the National Lottery Commission,
2. (ii) the Mayor of London, and
3. (iii) the National Olympic Committee".

I appreciate—this may be where the Minister was coming from—that under Clause 31 all activities refer hack to Clause 30. If that is the case and therefore this issue is covered, I am not sure why we had any reference to the National Olympic Committee, let alone the National Paralympic Committee, in Clause 31(4)(b). It would be irrelevant and unnecessary if the interpretation of the Minister is correct.

The Minister has accepted the need to go away and study the matter further. In any event, there would be real merit in clarifying the position and ensuring that under Clause 31(4)(b) there is an additional requirement in the legislation to consult the National Paralympic Committee. Either way, the interpretation of the Minister is open to doubt and requires further clarification. That being said, I am grateful to him for undertaking to do that and to come back to the Committee. This is one amendment that, quite genuinely, the Minister can accept in the spirit in which it is proposed, against a background of widespread support for the work of the British Paralympic Association. There would also be every benefit in sending another message from this Committee about the importance that we attach to the BPA. It gives a remarkable service to our paralympians. It is an absolute necessity that it should be consulted under Clause 31(4)(b), which should be on the face of the Bill.

Lord McIntosh of Haringey

That will teach me to respond to the speeches and not to the amendment. I am perfectly happy to take that on board and will write regarding the paralympics. I have good reason to respond differently about the national sports councils. But since that issue has not been raised, I shall not raise it.

Lord Moynihan

Nor shall I pursue that point. In proposing the amendments, my focus is very much on the British Paralympic Association and its work. I welcome the remarks made by the Minister. I look forward to his response. I hope that we shall return to it at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 55A and 56 not moved.]

Clause 31 agreed to.

Clause 32 agreed to.

Clause 33 [Interpretation]:

[Amendments Nos. 57 to 59 not moved.]

Clause 33 agreed to.

Clause 34 [Consequential amendments, &c.]:

[Amendment No. 59A not moved.]

Clause 34 agreed to.

Clauses 35 to 38 agreed to.

Schedule 6 agreed to.

Clauses 39 to 42 agreed to.

In the Title:

[Amendments Nos. 59B and 60 not moved.]

Title agreed to.

Bill reported with an amendment.

The Committee adjourned at seven minutes past five o'clock.