National Lottery etc. Bill

HL Deb 08 July 1993 vol 547 cc1569-632

House again in Committee.

Clause 21 [The distributing bodies]:

[Amendment No. 62 not moved.]

Baroness Birk moved Amendment No. 63: Page 9, line 32, after ("Britain") insert: ("( ) as to 15 per cent. for distribution by a sub-committee of the Arts Council of Great Britain, for expenditure on or connected with film,").

The noble Baroness said: The aim of this amendment is to ensure that the film industry is adequately funded and that the funds are distributed by a body with a knowledge of the industry which can concentrate on film and video issues and ensure a more efficient distribution of resources. It would be able to target projects and maintain a stricter control on spending, as well as providing a coherent national strategy for films.

At present the Arts Council remit on films is very narrow. It is mainly concerned with, and its funds are used for, avant-garde films and documentaries on artists. Looking to the future with the lottery, the Minister during the Report stage in another place said: Under clause 24, we will direct the Arts Council to take into account the need to fund film".—Official Report, Commons, 28/4/93; col. 1068.] But he expected that only a single member of the Arts Council lottery committee would have had experience in the film industry. That is not good enough.

It is not hard, I agree, to make a case for special treatment for all the art forms. But it is true that nevertheless film is a special case and deserves to be given direct access to the lottery funds.

Why is film a special case? Each year over 90 per cent. of adults in the UK watch films at home or in the cinema, and that does not include the many children who get enormous pleasure from films and videos. It is the most popular and accessible art form of the late 20th century. Its popularity and breadth of appeal should be taken into account when funds for the national lottery are being considered.

Film and television are the principal means of articulating the culture of a country. In the United States the film industry is recognised as an important factor in the knock-on effect on the manufacturing and service industries and makes a positive impact on employment. Yet only 59 British films were shot last year and the industry is suffering from a serious slump in investment. In 1986, capital allowances for the industry were withdrawn; and during the fever of deregulation the Eady levy was dropped in 1985. That was a clever system which linked box office success to the future funding of home production. Alas, we do not have it any more.

Despite recent talks and protestations, the Government do not support the industry to the extent that other European governments and the United States Government do their industries. If the present state of affairs continues, the expertise and experience still existent in this country will be lost for ever.

The film industry is fundamentally different from other recipients of Arts Council money. It operates in a commercial environment quite different from the general ethos of the Arts Council. The Arts Council will naturally tend to follow its previous remit and specialise in areas where it has more relevant experience or where its funding has been cut. Funding for films, even if comprehensively addressed, will lag behind.

There will shortly be separate arts councils for England, Wales, Scotland and Northern Ireland. That may be suitable for other art forms but the film industry badly needs a national strategy, both for production and distribution. Lottery Funds could provide much-needed capital for new regional independent cinemas; it would be extremely constructive in that sphere. It would extend the range and quality of films being shown and allow more people access to British films. Other possible projects would be the updating and cataloguing of British film archives where films are stored and are sadly disintegrating. It could also support the Children's Film Foundation, which makes entertaining and educational films for children. That also badly needs much greater support. In the national lottery we have a great opportunity to resuscitate what was once a flourishing industry. I hope that it will not be thrown away. I ask the Minister to smile kindly on the amendment. I beg to move.

8 p.m.

Lord Holme of Cheltenham

I rise briefly to support both amendments of the noble Baroness, Lady Birk. Perhaps I may say how pleasing it is to see her in her place, speaking with her usual eloquence for a cause to which she has devoted so much energy over the years.

Noble Lords

Hear, hear!

Lord Holme of Cheltenham

In this country film has a particular place in the arts which the Government would be wise to recognise in some way in the Bill and in the distribution of the proceeds of the national lottery. I do not refer simply to the contribution film makes potentially to the economy and the balance of payments or to the arts as a whole. Given British pre-eminence in the cinema we would be wise to build on the work of some of our brilliant actors and actresses and our fine producers and directors who make Britain one of the centres of excellence in the sphere of the arts. I refer also to the contribution that film makes to young people's understanding of the arts. In saying that I do not mean simply as people who go to the cinema, but also as participants in film making.

I have recently been involved, as trustee of the Citizenship Foundation, in a competition in which schools were invited to make films. The number of schools participating and the quality of films reveal a flourishing artistic involvement, probably as much as in the graphic arts and music. I hope that the Government will recognise, given our sad record as a nation with our indigenous film industry, that it is worth special consideration. Whether or not the exact wording of the amendments is correct I cannot say. But I hope that the noble Viscount, in responding, will be able in some way to concede the point.

Baroness Mallalieu

I too rise to support the noble Baroness and to express gratitude for the amendment which gives the Committee an opportunity of considering the position of the industry and the ways in which the Bill may afford some relief.

The importance of the industry, its particularly serious position today, and the desperate need for investment in it, are all clear. I hope that the Government will express their view on the importance and the future of the industry and some view of the essential need for further investment —perhaps, at any rate in part, from this lottery. It is clear that there is need for a national strategy in relation to the film industry.

It may be that the wording of the second amendment in the names of my noble friends Lord Donoughue and Lady Birk is to be preferred. We look to the Government for a clear expression that the Bill will provide some means whereby funds can be devoted to the specific needs of the industry before it declines irreparably.

Baroness Wharton

I too support the amendment in the name of the noble Baroness, Lady Birk. As the Committee is aware, the British industry has lost all its tax incentives and many other incentives over the years with the result that raising finance in this country is extremely difficult, given the considerable size of even a modest film budget.

As ours is a shrinking industry through lack of funds, the amendment would provide a helpful way of injecting British money into British films and ensuring that receipts remain firmly in this country. Perhaps the noble Viscount can confirm that the Government consider film and art as eligible for support from the fund.

Lord Birkett

I too support the noble Baroness, Lady Birk, in her plea for the film industry. I have a raft of interests to declare. I have been a film maker for most of my working life. What is more, I am chairman of the Children's Film Foundation—the Children's Television and Film Foundation as it now is. That does not receive any funds from anybody. It lives more or less on the fat in its wool like a Herdwick sheep. Yet what it does is so important that it deserves funds from somewhere. It provides the first seed money—the most difficult money of all to raise—which is used to write the script, do the location recce and put the package together so that we can approach the financiers.

Alas, we do not have enough money to finance films fully, but we can at least provide the seedcorn money that enables story films for children to get off the ground. I say "story films" because those are almost the only thing that nobody makes nowadays. People make serials, swap shops and every known form of programme but rarely tell ordinary stories for one-and-a-half hours like other films.

I would therefore love it if the lottery could provide funds for my children's film foundation and, indeed, for young people in all directions, and for the film industry which has been shamefully underfunded for as long as I have been working in it. Whether or not we can say, "And 15 per cent. to films please", I somehow doubt. I fancy that as soon as one put that in the Bill, all the other art forms would say, "And 15 per cent. for me". By the time they had finished, that would add up to 225 per cent.

I doubt that the specific amendment moved by the noble Baroness is tenable in the Bill. I hope, however, that the Government and those finally deputed to distribute the funds will remember the film industry. It is about the most deserving and underfunded cause I can think of.

Lord Dormand of Easington

As we know, the noble Lord, Lord Birkett, who has just spoken, is an expert on films and has devoted a great deal of his time to the making of them. We all appreciate what he has done. I mention that for two reasons. First, his contribution is extremely valuable to our debate. Secondly, in complete contrast, I am a film buff, a man in the street who, since being a child, has enjoyed seeing films. That gives rise to my interest in this specific debate and this amendment.

I strongly support the amendment for two basic reasons. First, this country has some of the world's best film makers. Secondly, as I am sure most Members of the Committee are aware, the film industry is in a disastrous condition. It is a terrible state of affairs that almost all of our best directors have had to go to America, to Hollywood in particular, to be involved in film making. I find it impossible to understand why financiers in this country are not prepared to invest in film production in Britain.

The situation has given rise to some unfortunate events, to put it mildly. I shall give some examples. When the old Associated British Picture Corporation studios were sold to Cannon, Cannon sold off the film archives to an American company. Those archives are the treasure of our nation's history. Members of the Committee will have seen many of them on television from time to time. Elstree Studios were sold off by Cannon with the result that their film archives are being transferred elsewhere. The British Film Institute, which plays a major role in the film industry in this country, wanted to buy those archives but it did not have sufficient money. As a result, precious millions of feet—literally millions of feet—of film may well be lost and with it a vital part of our heritage. Those archives were sold to a French company. If ever there was a case for public money to be used, that was it.

Then there are our feature films—many of them, by any standards, among the best movies ever made. The allocation of lottery money to the British Film Institute to preserve and keep them in this country is essential if we are to put any value on them. They must surely be part of our most precious heritage. It is some time ago since attention was drawn to the fact that until the mid-1950s film was developed in cellulose nitrate stock. After some time it simply disintegrates. It can be transferred to cellulose acetate stock which does not degenerate, but it is a very costly process. The BFI's existing grant cannot be used—it is not permissible—for that purpose. An allocation of funds from the lottery would be a godsend. It would secure that stock permanently.

Many individuals and organisations interested in film production, including the British Screen Advisory Council, strongly believe that in the establishing of a body which could be called—I suggest this as a name which has been used on more than one occasio—a National Film Corporation. It could focus on film production and bring together the essential requirements for such work. Here again provision could be made by money from the national lottery. If that does not occur, it is difficult to see how such an important—indeed essential—body could get off the ground.

According to Screen Finance, which is published by the Financial Times. on 24th March this year there were just four films involving British production companies envisaged for the first three months of this year. Things could hardly be worse than that. I am sure that Members of the Committee remember the golden era of British film production when literally hundreds of films were produced in this country every year. It is particularly disappointing in that cinema admissions are now increasing. The low of 53 million admissions in 1984 to the 100 million in 1992 must surely give rise to some optimism. If the entrepreneurs wit h some help from the Government—perhaps in the form of taxation policy and lottery money—cannot take advantage of the prospect, we are indeed in a sorry state.

I am aware of the Government's philosophy of standing on your own two feet but there are some features of our national character, history and culture which should legitimately be helped by the state—by the state I mean by society as a whole. Do the Government not accept that what is happening in Australia and France in particular, although other countries are taking the same kind of action, with film making is a perfect example of the view that I have just expressed? Perhaps the Minister will comment on this when he replies.

I conclude by asking the fundamental question in this matter. Do the Government think that films are part of our heritage, our culture, our way of life and that in the films we can make and have made in this country is an essentially British aspect? Our history and record of film making gives a resounding yes to that question. The national lottery funds provide a timely opportunity not only to save but to develop talent which is second to none. I hope that the Government will grasp it with both hands. The important point of this amendment is that there should be a sub-committee with special responsibility for film. If present proposals are maintained, there will be little doubt that the industry will continue to be treated as the poor relation. It is a sorry position to many of us that the so-called "high" arts enjoy a privileged position. The time has arrived for that to be changed. I hope that the Government will now recognise the very strong case being made for film inside the House, inside another place and indeed outside Parliament.

8.15 p.m.

Viscount Astor

I can assure the Committee that the Government are well aware of the importance of the film industry, which receives our support in a number of ways. For example, the Government provide £5 million of public money for film production and put some £15 million into the British Film Institute for its excellent work. An important new recent development is the series of seminars which the Secretary of State has initiated with those involved in the film industry to work out answers to some of the difficult challenges which face the film world.

In the Bill we have chosen to use one body—the Arts Council—to distribute lottery money for the arts. We are quite clear that the arts include film and, for example, crafts. We decided that it would not be practicable to use specific film bodies for distribution in this area simply because if we did so for film in the arts sector there would he no reason why we should not multiply the number of distribution bodies in other sectors, too. We deliberately chose the National Heritage Memorial Fund as a distributor rather than several bodies dealing with the different aspects of our heritage, such as the countryside or important historical buildings. If we did so, we could open the flood gates to claims for specific areas to have their own body. That would lead to an increased bureaucracy, each with its own penny packet of lottery funds to dole out. The distributors would not be able to take a strategic view. That is not what the Bill is about. An important principle of the Bill is that the distributing bodies do not receive lottery funds themselves for their own use.

What we are proposing is that through Clause 24 we shall direct the Arts Council to take into account the need to fund film applications. We will also generally direct the Arts Council and other distribution bodies that where they do not have specific expertise in a particular area they should take account of the need to seek it from a relevant expert body unless of course that expert body is the one applying for funding. In considering applications for lottery funding, the Arts Council is proposing to use a special lottery committee which will have on it at least one member with expertise on film. I understand that the committee might be supported by a special advisory committee dealing purely with film applications. It will call on the advice of other expert bodies such as the British Film Institute to help it make its decisions. We are convinced that this offers a very flexible framework within which film stands to benefit a great deal from lottery proceeds.

I fully accept the spirit behind Amendments Nos. 63 and 71 to Clause 23 but I should like to assure your Lordships that they are unnecessary. It is clear from the wording of the Arts Council charter that the council can fund film. In its annual report on how it has distributed the lottery proceeds the Arts Council has to publish the directions and demonstrate achievement against those directions. If film is not being given a fair crack of the whip, it will be quite clear. On a practical level it is now up to the Arts Council and the interested bodies to work together to find the best way to distribute the film element.

I hope that I have made it clear to the Committee that we understand the problems of the film industry. I have described the distribution mechanism that will deliver to film a fair share of the lottery proceeds. I hope that with that assurance the noble Baroness, Lady Birk, will feel able to withdraw her amendment.

Baroness Birk

I thank all those—colleagues and others—who have supported the amendment. All of them in different ways have some expertise in the film industry. I was not quite as happy about the Minister's reply, which I found very disappointing. I spent several years as a governor of the British Film Institute. There is no doubt that every which way was used in order to economise and in order to make the small amount of money go to the best use.

With the ending of the Eady levy and the change in taxation, it was quite impossible for the film industry, without more positive help, to get anywhere. Although I would not stick completely to the figure of 15 per cent., I believe that films are in a different category from, say, music, the arts and the theatre with which the Arts Council is used to dealing.

In order to get films back to nearly where they once were it is important that they should have, if you like, some positive discrimination with a lead which will enable the industry to return not only to where it was, but to Improve. We lose such a great deal. As the noble Lord, Lord Holme of Cheltenham, and others pointed out, it is not only a question of economics but also of culture and art. The industry is very important for the country.

The more we lag behind, the less possible becomes success. There is a great deal to get through at this time of night. I shall beg leave to withdraw the amendment, but I reserve the right to return with it or something different at Report stage. In the interim I hope that the Minister will think about it and perhaps discuss the matter with his colleagues in order to see whether there is some way in which films can be given more positive help—even though I know that the Minister was doing his best—than he was able to offer me.

Amendment, by leave, withdrawn.

Deputy Chairman of Committees (Viscount Allenby of Megiddo)

Before calling Amendment No. 64, I should inform the Committee that if that amendment is agreed to, I cannot call Amendment No. 65.

[Amendment No. 64 not moved.]

Lord Swinfen moved Amendment No. 65: Page 10, line I I, after ("millennium") insert (", which shall be allocated in equal part to projects connected with the arts, sport, the national heritage and charitable purposes,").

The noble Lord said: The purpose of this amendment is to provide that the Millennium Fund is spent equally on the arts or heritage charities otherwise there is a danger that too great a proportion of lottery funds will be spent on large, high prestige projects and the funding will not reach charities or other local community initiatives.

During Report stage in another place Mr. Key (who was then the Minister) made a statement which he had already made at Committee stage. He said that the Millennium Fund would be spent on a few large-scale projects and a large number of smaller community projects. That might seem like ample reassurance as to the way in which the Millennium Commission resources will be spent. However, he also suggested that that commission would be a slim, fit body and not over-burdened with bureaucracy.

In my view those statements are incompatible. How is the Millennium Commission to make good funding decisions across the range of community activity if it is to have very few staff? I have heard it said that civil servants are suggesting that the commission could be serviced by only four staff.

Amendment No. 65 and Amendment No. 66 which is grouped with it, would resolve that apparent contradiction. They provide that the fund be spent in equal measure on the arts, sport, heritage and charities. I suggest that that should be acceptable to my noble friend since the range of projects which the manifesto suggested might be funded by the Millennium Commission falls into each of those categories. I beg to move.

Lord Holme of Cheltenham

Although we on these Benches agree with Amendment No. 65 in the name of the noble Lord, Lord Swinfen, in particular I wish to speak briefly to Amendment No. 66 which is grouped with it. If I heard the noble Viscount correctly earlier in the debate when we were discussing the Millennium Fund, the proposal in Amendment No. 66 is acceptable to the Government because it simply provides that the,

Commission shall consult with the relevant body or bodies specified in section 21". When the Minister replies, I hope that he will be able to confirm what I believe he said earlier—that it was the intention that the Millennium Commission should only operate in close consultation with each of the four sectors, in which case I imagine that this amendment is acceptable to him.

Lord Annan

I hope that we do not accept Amendment No. 65. It will simply torpedo the whole purpose of the Millennium Fund.

Viscount Astor

I think that the noble Lord, Lord Annan, has put the case very succinctly about Amendment No. 65. As I said earlier, we intend the Millennium Commission to be able to exercise vision in the task it will be given. We are not yet in a position to say precisely in which fields the best projects will be proposed. That is why the Government cannot accept Amendment No. 65, proposed by my noble friend Lord Swinfen. It is no doubt likely that several possible millennium projects will be in the areas which will also benefit from their own allocation in the Bill. But I do not think that we should limit the commission to these areas.

To do so would possibly rule out forever other valuable and far-sighted projects, which I am sure the Committee would feel should not be missed out. For example, there may be applications to the commission for a new environmental, scientific or design projects, as well as for artistic, sporting or heritage projects. In short, I am fearful that this amendment would allow the commission to commemorate, but would stifle its ability to innovate.

It is clear that the Millennium Commission, like all of the other distributors, will have as its underlying brief the improvement of the quality of life. I suggest that we can trust to the good judgment of the commissioners to judge the best projects from any field. Therefore, I hope that my noble friend will agree to withdraw his amendment.

As regards Amendment No. 66 which requires the commission to consult, the scope of the Millennium Commission will be very wide, and consultation on particular projects will go far wider than the four distributors listed in Clause 21 of the Bill. That is not to say that we do not expect those bodies to be consulted—they will be, as will many other bodies. The directions which the Secretary of State is minded to make under Clause 24 will specify that expert bodies should be consulted as appropriate on applications. This is intended to apply to the Millennium Commission as to the other distributive bodies. It would he a mistake to describe—

Lord Holme of Cheltenham

I am grateful to the noble Viscount for giving way. I want to be clear about this. Although the Millennium Commission may consult with other expert bodies, the noble Viscount is saying that they will be instructed to consult with the bodies nominated in the four specific areas and that that will happen. Did I hear that correctly?

Viscount Astor

Perhaps I may repeat. I said that the particular projects would go far wider than the four distributors listed in Clause 21 of the Bill. That is not to say that we do not expect those bodies to be consulted. They will be consulted; but the point is that so will other bodies. It will not be limited to those four bodies and the directions—

Lord Holme of Cheltenham

This is the nub of the matter. I am grateful to the noble Viscount for again giving way. When the Government say that they expect them to be consulted, that is rather loose language. He then made it more specific by saying quite emphatically that the bodies will be consulted. Is that the version on which we should rest our understanding?

Viscount Astor

What I said was that the directions which the Secretary of State is minded to make under Clause 24 will specify that expert bodies should be consulted, as appropriate, on the application including the four distributor bodies. I hope that that explains that point to the noble Lord, Lord Holrne.

Perhaps I may return to Amendment No. 66. believe that it would be mistake to describe in the Bill some bodies and not others as those who are to be consulted. That is why it is better that the Secretary of State should be allowed to do that by order under Clause 24. Therefore, with that reassurance that the commission will be asked to consult with appropriate expert bodies, I hope that my noble friend will feel able to withdraw his amendment.

8.30 p.m.

Baroness Seear

Before the noble Viscount sits down, did I understand him to say that the commission will be able to consult because the Secretary of State said that it would? Will the Secretary of State specify the bodies that the commission will be allowed to consult or can it consult whoever it wishes plus the people that the Secretary of State says that it shall consult?

Viscount Astor

The noble Baroness is quite right. I said that the Secretary of State will say that the commission shall consult with those bodies, but we do not want to limit the number of bodies with which it can consult because it could consult a great many other expert bodies also.

Lord Swinfen

I wonder whether my noble friend can comment on the number of staff at the commission? He said that the commission will be innovative and that it "shall consult". If the rumour that the commission will have only four staff is correct, I must advise him that they will not have the time to do all the digging around that will be necessary if they are to be innovative and they certainly will not have the time to consult properly.

Viscount Astor

What my noble friend has said about four staff is total speculation. It is obvious that the Millennium Commission will have to have an adequate number of staff to be able to carry out its duties and to deal with applications. I said earlier that we expect that number to be small because the staff will not be involved with the very large number of projects that some of the other distributing bodies will be handling.

Lord Swinfen

I thank my noble friend for that information. I shall read the earlier part of his answer to my amendment but, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 66 not moved.]

Clause 21 agreed to.

Clause 22 [Payments from Distribution Fund to distributing bodies]:

Lord Swinfen moved Amendment No. 67: Leave out Clause 22 and insert the following new clause: ("Payments out of the Distribution Fund 22. The Secretary of State shall, each quarter, make payments out of so much of any money in the Distribution Fund as is held for distribution by a body specified in section 21 of the amounts needed by that body to meet its current distribution requirements.").

The noble Lord said: In moving Amendment No. 67, I should like to speak also to Amendment No. 73 which is grouped with it. The power of the Secretary of State provided for in Clause 22 is one of a number of powers, the extent of which gives rise to a concern often expressed in this Committee. The passage of this legislation through the other place revealed that that power is of greater extent than my noble friend and his colleagues have any intention of using. It would therefore seem reasonable for us to seek to clarify that power and to make sure that the clause expresses more precisely what power it is that the Secretary of State is to have.

No one has any doubt that my noble friend and his right honourable friend the Secretary of State would use the power given to them by this clause in anything other than a wise and appropriate way. But it is not good in principle for Parliament, and in particular for this House, to extend the powers of government unnecessarily. We must not forget that we are granting powers to all future Secretaries of State.

As I understand the position, the Government intend that the distributing bodies will apply for money to be made over to them from the distribution fund. The then Minister, Mr. Key, speaking in Committee in the other place, made that clear in his reply to a debate there, saying: The reference to 'such terms' and 'payments of such amounts' as the Secretary of State thinks appropriate will ensure that the distributing bodies can draw down funds as and when they need them".—[Official Report, Commons, Standing Committee A, 23/2/93; cols. 263–4.] So why does the clause not say that? Even more, why does it say almost precisely the opposite?

In his reply in the other place, the then Minister also referred to "the agreed financial arrangements". I should be grateful to my noble friend if he would spell out, for the benefit of the Committee, what those arrangements are and between whom they are agreed. These matters may be clear to experts in the field but I, for one, am not an expert.

I know that an attempt was made in the other place to remove the power to control the distribution fund from the Secretary of State, and I can appreciate why the Government resisted such a move. Every care must be taken to secure the proper stewardship of lottery proceeds and that the proceeds are wisely invested on behalf of the distributing bodies.

The amendment standing in my name and in the names of the noble Lords, Lord Allen of Abbeydale and Lord Holme of Cheltenham, would not interfere with the principles of control and stewardship in any way. It seeks to set out the Government's intentions as expressed in Committee in the other place. The specification of quarterly payments is included because it seems reasonable to set out a basis for payment in order to assist the distributing bodies in making their awards, and I understand that the quarterly payment of grants is a commonly adopted practice. I beg to move.

Lord Allen of Abbeydale

I was glad to add my name to this amendment, and should like to support what the noble Lord, Lord Swinfen, has said. I shall confine my remarks to Amendment No. 67. I comment on Amendment No. 73 only to say that its spelling seems a bit shaky.

The clause is expressed in such wide terms that, as I read it, there is nothing to stop the Secretary of State from holding up payments from the distribution fund to a particular beneficiary if he disagrees with that beneficiary's allocation policies, perhaps on the grounds of politics and perhaps—if I dare mention the word again—on grounds of additionality. I, too, had noticed that the clause seems to provide exactly the opposite of what Mr. Key said that it would provide in Standing Committee in the other place. I naturally go along with the understanding that the present Government have no sinister intentions of using this clause in the way that one fears, but anything that they say is not binding for all time on future Governments. It is much more satisfactory to have the position clearly spelt out in the Bill, as this amendment tries to do.

There is one other rather puzzling feature about all this. In the other place the then Minister said that the broad power given to the Secretary of State in this clause was dictated by Treasury rules and that those rules applied because the lottery money was raised from the public. In the light of some pressure there, he undertook to discuss further with the Treasury the management of the resources in the distribution fund. I hope that the noble Viscount will be able to let us know the outcome of those discussions with the Treasury.

What are the Treasury rules which apply to the management of the money in the distribution fund? As a former member of Her Majesty's Treasury, I suppose that I ought to know, but I certainly do not. It is not public expenditure in any ordinary sense of that term. It is money raised from the public for specific purposes, so no question of hypothecation comes into the picture. It is not government revenue raised from taxation, to which ordinary rules apply. I wonder whether the Minister will be able to explain in a bit more detail what this is all about.

The net effect of the clause as presently drafted is to leave the recipients of the money in a state of uncertainty. I think that everyone would agree that that is most undesirable if they are to be able to plan sensibly how to distribute the money once they have received it.

To sum up, could the Minister clarify what the rules are; why they have to apply to lottery proceeds; and the reasons, if any, for not accepting this admirably drafted amendment?

Baroness Seear

Perhaps I may follow up the question asked by the noble Lord, Lord Allen of Abbeydale. It is the question of this money being public money. When money is subscribed voluntarily, as it is in a lottery, it is not tax money. Any charity which raises money is raising it from the public. In what way is money raised from the public for a lottery different from any money raised for a lottery, or, indeed, a jumble sale, if it comes to that, for a charitable purpose? I hope that it would never occur to the Treasury that it had any control over those moneys. Why should it have control over the lottery money? What is the difference?

Viscount Astor

New clause 22 seeks to ensure that the Secretary of State will make quarterly payments to the distributive bodies to enable them to meet their needs. It is entirely accepted by the Government that the distributive bodies should be able to draw down the funds being held and invested on their behalf as and when they need them. That will of course need to be done regularly and may even be more frequent than every quarter. I can assure the Committee that the Secretary of State will establish the most practical arrangements designed to meet the needs of the bodies. Those are not, however, an appropriate matter to be set in primary legislation.

Amendment No. 73 aims to ensure that distributive bodies may enter into a forward grant commitment to a beneficiary of up to five years and that revenue grants can be paid.

I can confirm the Government's intentions in this matter. The Government are prepared to allow considerable freedom in the application of national lottery funds. Such funds, unlike public expenditure, will not be subject to rules on annuality. That will allow them to accumulate, if that is desirable, and also allow flexibility over the year end. The funds will also be invested, with the interest on investments being returned as appropriate to the account for each distributive body. It will be for the distributive bodies to assess the forward commitments that they should make to grant recipients. It will therefore be possible for a distributive body to commit a five-year grant after considering the effect upon their national lottery funds and the needs of other potential applicants. It will be for the distributors themselves, within the appropriate accounting rules, to manage their funds to achieve the best use.

The national lottery distribution fund is under the stewardship of the Secretary of State on behalf of the distributive bodies. The Secretary of State must account for the fund to Parliament. The rules for drawing down funds may be complex and will need to be set out with precision. They should not be set out in statute. The main Treasury requirements are likely to be that the funds should not be drawn down by the bodies before they are needed. That would be wasteful because the bodies themselves do not have powers to invest the money. It will be invested for them by the National Debt Commission. I hope that that clarifies the point.

Baroness Seear

The Minister hopes that it does, but I do not know that his hopes are entirely justified. I cannot see where the Treasury comes into this. The Secretary of State in this case is not the Chancellor of the Exchequer; it is the Secretary of State for National Heritage, is it not? The money raised from the public is not tax money. What does it have to do with the Treasury?

Viscount Astor

The point is that the funds can be drawn down when they are needed. The funds are held and invested as a pool. The distributive bodies have no powers to invest money, so they should receive the money only when they need it. It is merely proper practice that requires that. I made it clear that the funds will not be part of government expenditure. The categorisation of money is a matter determined b:y the Central Statistical Office against a number of established criteria. While not categorised as expenditure within the controlled total, the national lottery expenditure is general government expenditure spent in the public sector. That is the important difference.

Lord Allen of Abbeydale

The Minister has not explained the need for the provision contained in the clause that we are seeking to replace which provides: At such times as the Secretary of State thinks appropriate, payments of such amounts as he thinks appropriate may be made to a body specified in section 21". There is nothing about Treasury rules or anything of that kind. The payment is entirely in the hands of the Secretary of State. If he chooses not to give money because he does not like the gifts proposed, there is nothing to stop him in the clause as drafted.

Viscount Astor

The purpose of the clause is to ensure that the money can be held and invested on behalf of the distributive bodies and then handed to them as it is needed. That, as I said earlier, might need to be done regularly. It might need to be done more frequently than every quarter. That is the point that I was making.

Lord Allen of Abbeydale

If the clause said that we should all be happy, but it does not say that.

8.45 p.m.

Viscount Astor

The clause grants the Secretary of State the power to do that. I said that the practical arrangements designed to meet the needs of those bodies will need to be complex. They are not appropriate to be set out in primary legislation.

Lord Dean of Beswick

I should like to take a step further what the noble Baroness, Lady Seear, said. We are talking about what could eventually be enormous sums of money. Our recent experience —I do not wish to be accused of being political—is that other huge sums of money being held in reserve are riot being made available to the people who own them to use for the purposes for which the money was raised. Let us suppose that an enormous sum of money started to accumulate and was held in reserve. Has the Secretary of State the power—if this Government or a future government were in a serious financial position—to put a financial moratorium on those funds?

Viscount Astor

The noble Lord has missed the point. Someone has to be responsible to Parliament for the fund. That person has to be the Secretary of State. I have explained the different criteria relating to the money. The money is not categorised as expenditure within the controlled total so it cannot be moved from where it is to somewhere else and spent on something different. Someone has to account for the money. The money is categorised by the Central Statistical Office as general government expenditure expended for the public use. If the noble Lord considers that point, he will see that the Secretary of State has no power to spend money except by passing it on to the distributive bodies under the Bill.

Lord Lucas

Could my noble friend enlighten me on another related point? Is it decided what rate of taxation will be payable on the interest earned on the sums on deposit?

Viscount Astor

My noble friend raises an intriguing point for which I do not instantly have an answer. I believe the answer is—if I am wrong I shall write to Members of the Committee and correct it—that the tax the Treasury collects on the national lottery is a tax on turnover. It is not a tax on the distributed funds. That is the difference. Having thought about it a little further, I can tell the Committee that no tax is payable on the interest.

Lord Swinfen

I am interested in what my noble friend has just said. My memory takes me back a not inordinately long time—indeed, shortly before dinner —to when he told the Committee that there was no tax payable on the funds raised for the national lottery. I asked him whether charitable organisations might be able to claim back the tax paid on funds distributed to them. He told me that a levy was raised on the funds by, not the Inland Revenue, but HM Customs and Excise. My noble friend may be in some difficulty in producing an answer this evening and I shall not press him for one.

Viscount Astor

Perhaps I may interrupt my noble friend. I made it clear that the tax is levied by Customs and Excise. That is a tax in the general sense and my noble friend must not try to split hairs with me.

Lord Swinfen

I am trying to ensure that charities can receive a little extra money, which I am sure they would like.

I am not entirely satisfied with my noble friend's answer to the issues raised on the amendment. However, I shall not press him further tonight. I shall read what was said by him and by other Members of the Committee and may well return to the matter at a later stage. I appreciate that it may be limiting to make payments only on a quarterly basis but we need to ensure that when payments are necessary the Secretary of State is not in a position to withhold them for some reason which none of us can think of at the moment. I shall not speculate because that would be unwise. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 agreed to.

Clause 23 [Application of money by distributing bodies]:

[Amendments Nos. 68 to 71 not moved.]

Lord Howell moved Amendment No. 72: Page 10, line 30, at end insert: ("( ) In subsection (1) of this section, "expenditure of the relevant description" shall include expenditure for the purposes of revenue assistance, where appropriate, as well as on capital projects.").

The noble Lord said: Amendment No. 72 deals with the important question of whether the funds as regards sport can properly be spent for revenue purposes or whether they will be earmarked mainly for capital projects.

We are concerned about the matter because in Standing Committee A in another place the then Minister, Mr. Robert Key, said: The national lottery proceeds will mostly be devoted to capital projects".

Later in this speech he stated: The presumption in favour of capital projects will not apply to charities. Projects for capital or revenue grants will be eligible to apply".—[Official Report, Commons Standing Committee A, 23/2/93; col. 277.]

On another occasion Mr. Peter Brooke, the Secretary of State for National Heritage, made a similar comment. That has caused great anxiety to some of us, especially to those involved in sports and other bodies. These days sport does not need many capital projects. The great priority is for revenue projects. The noble Lord, Lord Brabazon, will correct me if I am wrong in saying that the Foundation for Sport and the Arts, which is doing good work of a unique character, spends most of its money on capital projects. Therefore, there is an imbalance that I hope the lottery will correct.

Forty years ago some of us in and out of ministerial office were urging all kinds of bodies to build facilities such as golf clubs, tennis clubs, sports clubs and so on. Many of them did so. Since most of those sports facilities do not make a profit and cannot run at a profit the problem today is to refurbish the facilities which are now crumbling. I shall not bore Members of the Committee by giving a long list of such projects, but I could do so. For example, I am a director of Wembley Stadium, which I declare. After taking over the stadium the present board has had to spend £75 million in order to modernise it and make our national stadium comparable with those in other countries. I am not making any claim on the funds of the national lottery for that purpose, and I do not think that we have any intention of so doing but that illustrates the point that within three or four generations facilities will need a great deal of money spent on them in order to keep them up-to-date, not least from the point of view of health and safety.

I am thinking in particular of small tennis clubs, swimming clubs, soccer clubs, rugby clubs, athletics clubs and the like which have their own facilities as a result of great effort and sacrifice by their members. Since we have a national lottery they might reasonably expect to make a claim on it for any money they spend on keeping those facilities up-to-date. The need for the refurbishment of sports facilities is forever with us. Therefore, I urge on the Committee for consideration the revenue aspect of capital projects.

I turn to the money needed by sports bodies. I could read out to the Committee a whole catalogue of 64 or more sports and their governing bodies in this country and make a case for each one, but I shall confine myself to the British Olympic Association. I believe that its purpose is supported by every Member of the Committee. It has to raise large sums of money to take teams for both the winter and summer games in each cycle of four years. Like other sporting bodies, the British Olympic Association has to pay a great deal of money in corporation tax and it does not like that. I can understand the difficulties of the Treasury at a time like this in saying there shall not be any alleviation of corporation tax for sports bodies. However, I hope that in better times we can alleviate the situation. Between 1989 and 1992 the British Olympic Association paid £1.47 million in corporation tax. Every penny of that had to be raised or donated by the public. People hardly take kindly to the fact that while they voluntarily give money for our wonderful Olympic athletes the Government are taking a large slice of that money.

The British Olympic Association states that sport is dealing with human resources, and I believe that that applies also to the arts. It must train our British teams to a high standard of perfection and take them overseas, sometimes, indeed, to distant parts, in order that they can compete adequately. For example, it has been calculated that this year our top rowers will have to pay £3,000 each in order to travel and compete in international regattas. The same story applies to most of the other elite British athletes. Governing bodies are seriously underfunded and not able to finance properly their international teams. That is verging on a disgrace for this country. One hopes that the advent of the national lottery will help to redress that situation.

The way in which Britain suffers compared with other countries can be well illustrated by the fact that French athletes are reimbursed for loss of earnings from a fund of £5 million per annum, whereas the United Kingdom Sports Council grant to the National Coaching Foundation, which is so important in that respect, is £1,420,000 per annum. Another illustration of the same point is that Germany spends £8 million per year on coaches and coach education, which is another important revenue consideration.

Therefore, I trust that the Committee will see the need to ensure that revenue and capital considerations receive an equal share of the proceeds. I hope that when the Minister responds to the amendment he will give us a satisfactory assurance which will enable us to proceed with the Bill. I beg to move.

9 p.m.

Viscount Astor

I have no intention of preventing any Member of the Committee from speaking on the amendment, but it may help if I answer some of the points raised by the noble Lord, Lord Howell. I may be able to give some assurances which the Committee will find useful.

The Government have no intention of ruling out revenue grants. Experience will suggest what is good practice in this area, as in others. It is clear that the charities sector will need to be able to make revenue grants. We are also clear that other distributors may need to make provision for revenue expenditure or endowment grants in certain exceptional circumstances. For example, if the maintenance cost of a new building funded from the national lottery cannot be raised from elsewhere, and that building is seen as a high priority project, a revenue grant or endowment might be made to support the project for a number of years.

We feel that there should be a presumption in favour of capital; but of course refurbishment projects are very often capital projects. None of the fine details of what the Sports Council will fund has been ruled out, nor has it been ruled in. It would not be proper to prejudge the outcome of the task which the Sports Council will have in working out guidelines on how the money is to be spent. I hope that I have shown that there is considerable flexibility. We have no intention of ruling out revenue grants. I hope that the Committee will be satisfied with that assurance, and that the noble Lord will withdraw the amendment.

Lord St. John of Bletso

I had intended to add a few remarks to what the noble Lord, Lord Howell. said on the work of the BOA. As the Committee may be aware, the BOA is self-funding. Will the Minister give the Committee an assurance that distributions will be made to the BOA as laid out in Clause 20(3) (b)?

Viscount Astor

We are working on the guidelines. I should not rule out any sporting organisation receiving lottery funds. In all our debates If have made it clear that it will be for the distributor bodies to distribute the funds as they see fit.

Lord Holme of Cheltenham

The noble Viscount's intervention has allowed me to be even briefer than I would have been; and I thank him for that. The reason that my name is to the amendment is straightforward. My amendment seeks to ensure not that the Government, through the lottery, should want to show flexibility, but that they will show flexibility. As any businessman will tell them, inevitably every capital project has revenue costs attached to it. Therefore, in making a capital grant or a capital investment of any kind, it is almost inconceivable that that will not attract to it revenue implications. It is not just desirable that the Government should be flexible, but to make capital investment successful it will be essential that allowances are made for the revenue implications.

Baroness Mallalieu

The noble Viscount's intervention has made it unnecessary for me to speak at any length. Although I note that the noble Viscount seems to favour the balance being tipped in favour of capital expenditure as opposed to revenue, it is welcome to hear that he does not rule out revenue expenditure. I hope that in adding that caveat, he does not rule out the possibility that there will be occasions when the need for balance demands that greater revenue expenditure will be required in some areas. There is clearly no point in building magnificent new capital projects and then having insufficient lands either to staff or maintain them. I am glad that the Government appreciate that and appear to have slightly changed their stance.

Lord Brabazon of Tara

The noble Lord, Lord Howell, mentioned the Foundation for Sport and the Arts—and he was very kind to do so. As the Committee may be aware, I am deputy chairman of the trustees.

The noble Lord suggested, correctly, that the foundation is inclined more towards capital projects than revenue projects. However, our problem is that we do not have the same definition of revenue projects that the noble Lord suggests we have. We do not like spending money on core revenue funding—that is, the payment of salaries and so on, because we cannot be certain that in future we can maintain that at the same level.

What we are keen on—and what an enormous number of applications which we approve comprise—is the type of repair and refurbishment to which the noble Lord, Lord Howell, referred; for example, the resurfacing of tennis courts, all-weather surfacing of running tracks, and so on. I consider that to be capital expenditure because it is expenditure on works. The noble Lord regards it as revenue. However, we take the attitude that it is capital, although it achieves the result which the noble Lord seeks because it brings those facilities up to date and ensures their continuation.

The British Olympic Association was mentioned. The foundation gives money to that association. At present I am considering bids for the next winter Olympics in 1994. Indeed, we made a recent decision to give to the Sports Aid Foundation. Therefore, we are not as inflexible as the noble Lord may have suggested. For example, the trustees have decided to give £1.3 million towards the Sports Aid Foundation for the training and expenses of our top athletes so that they may take part in the forthcoming Olympic Games. I believe that it is merely a question of definition between revenue and capital. I hope that that point can be clarified. I was delighted to hear my noble friend the Minister say that the Sports Council, through the lotteries, will be adopting much the same attitude as we have.

Lord Howell

We have had a most useful debate. I am grateful to all who have taken part. I am especially grateful for what the Minister said. However, in response to the noble Lord, Lord Brabazon of Tara, I agree that it would be helpful if we could clarify the definitions. As I was responsible for the noble Lord becoming involved in the discussion, I should point out that it has recently come to my notice—and I shall be writing to him on the matter—that there is a difficulty about definitions regarding exactly what sport is. I am astonished to find that the Foundation for Sport and the Arts has told the Croquet Association that it cannot have any money to establish a centre of excellence for croquet (available for a short time only on land donated by Cadbury in Birmingham) because someone has said that the betting Acts, which provide the money for the foundation, do not allow it to be used for non-athletic purposes.

If Members of the Committee have been watching Independent Television recently and have seen the bogus detective walking around—I forget in whose interests he is doing so —they will have noted that at one point he picks up a croquet hammer, bashes a ball very hard and knocks out his fellow detective. That seems to suggest that it is very much an athletic pursuit.

Wimbledon is the home of lawn tennis and croquet. It would be quite ludicrous if grant could be awarded for tennis activities but not for croquet activities. I hope that the Minister or the foundation will, at some point, try to clear up the matter so that the level playing field applies to croquet as well as to other sports. I see that the noble Lord, Lord Brabazon, wishes to intervene. I give way.

Lord Brabazon of Tara

I am most grateful. I shall be brief. The foundation is at present limited to the definition of "athletic sports". However, we are re-negotiating our trust deed which will—it is to be hoped—allow us to contribute also to non-athletic sports. As I said, we are in the process of re-negotiating the trust deed.

Lord Howell

I am very glad to hear that. However, I am bound to say that if the Treasury wants to decide what is or what is not athletic sport, then the trustees of the foundation of which the noble Lord is deputy chairman should have told it to go and jump in the canal. It is not for the Treasury to decide what is or what is not an athletic sport, or to make a distinction between croquet and other sports. However, I shall come to the aid of the noble Lord. I hope that the matter that has been dragging on will be settled very quickly. Indeed, if he wishes to table any further Questions to prompt the Government, I shall be happy to join his campaign.

As I said, I am grateful to all those speakers who have taken part in the debate. I am especially grateful that the Minister has made it clear that, so far as concerns revenue expenditure, there will be no constraints. That rectifies the imbalance created by earlier statements. In those circumstances, while assuring Members of the Committee that we shall keep the matter under review when the Minister produces his guidelines, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 73 to 75 not moved.]

Clause 23 agreed to.

Clause 24 [Control of distributing bodies by the Secretary of State]:

Viscount Astor moved Amendment No. 76: Page 10, line 36, leave out subsection (2).

The noble Viscount said: The purpose behind Clause 24(2) is a desire to ensure that the distributing bodies do not act in a way which might give rise to conflicts of interest. That is in line with our stated intention that distributors should never be beneficiaries. A conflict of interest would arise if a distributor made grants to a body which it owned or wholly sponsored, or whose members were all appointed by the distributor, or, indeed, whose membership was the same as that of the distributor.

It would be quite wrong for there to be any question of bodies in the future, when circumstances may be different from now, being put in a position where they might be accused of feathering their own nests with lottery money. It is important to note that the power is only exercisable by order. I hope that Members of the Committee will accept that it is crucial that the Secretary of State should have some power to prevent that happening.

We took account of concerns expressed in this Chamber on Second Reading and in another place that the power, as drafted in the Bill, might be used in a much wider way and that our intentions for its use were not perhaps as clear as they might be. For this reason, we have tabled a new government amendment which sets out very clearly the circumstances in which the Secretary of State may prescribe a body or class of bodies which may not receive money.

This might happen if the distributor were a member of the proposed beneficiary, or if it appears to the Secretary of State that the distributor is in some other way able to influence the proposed beneficiary. This might be the case, for example, if a distributing body had representatives on the board of trustees of a charitable trust, and would be able to influence it in that way. Another example might be where members of the distributing body were closely associated with an applicant for funding. In these cases, or others in which a person might reasonably assume that there was a degree of influence over the benefiting body, the Secretary of State should be able to take a view on whether this might give rise to a conflict of interest, and take action to avoid this. I believe my amendment addresses the anxieties raised by this Chamber at Second Reading. I beg to move.

9.15 p.m.

Lord Gibson

I am grateful to the Government for taking over the amendment which I originally tabled. I regard their Amendment No. 78C as much better than the subsection which Amendment No. 76 seeks to delete. It is better because it focuses much more narrowly on the need, which the Minister assures me exists, to arm the Secretary of State with the power to prevent the distributing bodies from giving money to themselves or to bodies under their control. The subsection at present in the Bill would give him much wider ranging powers of prohibition and—if the Committee agrees —I shall be glad to see it go.

However, I am not wholly happy with Clause 24 even with the proposed amendments in this grouping, although I think all of them would improve the clause. I say this because I originally tabled Amendment No. 76 in order to obtain a debate on the extent to which the Secretary of State needs the powers which it is proposed to give him in the Bill. I feel that the way in which the Arts Council and the National Heritage Memorial Fund were first set up, and their powers defined, is preferable to the method by which Clause 24, even as amended, will control them.

Apparently, as the Minister explained to me most courteously before we began the Committee stage, as the distribution of the proceeds of the lottery does not constitute government expenditure, the Secretary of State will have no control of it unless the Bill specifically arms him with such powers. Clause 24 is supposed to do just that. I must say that after three weeks' reflection, I still feel that the whole of Clause 24 gives him rather more control than he ought to have. The question in my mind is: why should he have powers over the distributing bodies in respect of their lottery money which he does not have in respect of their statutory grants? In spite of the point about lottery money not being government expenditure, I still do not quite understand the answer.

I have looked up the two Royal Charters which incorporated the Arts Council. They made no mention of any special powers for the Secretary of State. All they said was, All moneys and property, however received by the Council"— the Committee should note that is not necessarily government expenditure because the Arts Council can, and I believe has, received moneys which do not come from the Government— including any money voted by Parliament, must be applied solely towards the promotion of the Council's objects and no portion of it, except as otherwise provided by the Charter may be paid directly or indirectly to Council members". In the case of the National Heritage Memorial Fund, the same principle is secured under the National Heritage Act 1980 under which the eligibility of recipients of grants simply has to be consistent with the objectives laid down for the fund. In other words, the Act achieves its objectives not negatively by giving the Secretary of State powers to intervene, but positively by saying in effect that anything is excluded which is outside the scope of the fund as laid down by parliament.

I shall be glad if the Committee agrees that subsection (2) is to go. However, I find the whole of this clause less than satisfactory. Subsections (1) and (3) of Clause 24 allow the Secretary of State to tell the distributing bodies what to take into account in making grants. Why is it necessary to breach their independence in this way? The Royal Charters, or, in the case of the heritage fund, its Act of Parliament, state what those bodies can do. Surely that is enough when it is a case of dealing with lottery money, as is the case when dealing with government expenditure, particularly as, in the case of the Arts Council., its charter deals with money that does not emanate from the Government, as I have already said.

I hope the Minister can tell us what are the reasons for giving the Secretary of State powers over the distributing bodies which he does not have, and does not need to have, in respect of their existing grants, or in respect of other moneys received by them which are not government expenditure. Further., why cannot the reasonable objective of preventing unsuitable recipients from receiving grants be achieved by stating who or what is eligible—that is how it is done now—and then allowing the distributing bodies to act with their present freedom? I hope that the Minister can explain the matter. If I remain unconvinced, I can always return to the issue at a later stage.

Baroness Mallalieu

The anxieties which have just been expressed about Clause 24, even after the amendment proposed by the noble Viscount, are shared by those of us on this side of the Chamber.

I am grateful to the noble Viscount for his explanation of the Government's intentions., but I still query why it is that a Bill which is supposed to create an independent source of funds for sport, the arts and for the heritage should be so closely controlled by government in this way. It could be argued that if these were taxpayers' funds which were to be disbursed, the Government should exercise hands-on control. However, in this case the National Heritage Memorial Fund will be working closely with the department. With very few exceptions—I believe that I am right in thinking there will be only one—its members will have been appointed by the Prime Minister and the Secretary of State. That being so, since the Government are in essence choosing who will serve on that body, one would have thought that those chosen would be people who would be trusted by Her Majesty's Government to distribute the funds to suitable bodies.

The proposed amendment in the name of the noble Viscount does not have the merit of the simplicity of Amendment No. 78. I am grateful—although I express my gratitude rather grudgingly—for the explanation which the Minister gave, which goes some part of the way to allaying the fears which led to Amendment No. 78 being tabled.

Lord Charteris of Amisfield

I should like to support warmly what the noble Lord, Lord Gibson, said. I am particularly interested in the National Heritage Memorial Fund and how its affairs will be conducted in the future when the national lottery is in operation.

I want to make it plain that, as I said at Second Reading, the success of the National Heritage Memorial Fund in the first 13 years of its existence —a success which is underlined by the fact that it has been chosen by the Government to distribute the heritage money from the lottery —is based on two factors. The first is the marvellous support which it has been given by the Government. The second is that hardly ever was any attempt made to interfere with how the money was spent. That is how matters should be run.

One of the objects in setting up the fund in 1980 was to take out of politics the questions of which house or which picture should be saved. That object has been successfully achieved during the past 13 years. If the Secretary of State is to have the power to direct how the money is spent, the whole matter will be right back in the political field. One may be quite certain that if anything goes wrong, the Government will get the full blame for it. Therefore, if they have any sense they will not take to themselves the right to direct how the money is spent.

I know that the position is more difficult now because much more money is involved. When the National Heritage Memorial Fund was set up, there was very little money to spend and people did not mind so much how it was spent. Now there is a great deal of money and the Government are more interested in how it is spent. The way to control the fund is this: the Secretary of State is responsible for appointing the chairman and trustees; if he does not like the way they operate, all he has to do is to appoint somebody else in their place.

Lord Cavendish of Furness

I rise to speak to Amendment No. 78A standing in my name. In doing so, I shall not detain the Committee for long.

The amendment deals with the powers of Ministers to make directions under Clause 24, and in particular the importance of their accountability to those whose actions they seek to direct. My anxiety stems from the apparent width of the powers which this clause would seem to give to the Secretary of State to direct where money shall and shall not be distributed. I was grateful to the Minister for making clear that the intention of the clause is to cover a number of administrative matters and not to seek to influence policies which properly lie with the distributing bodies.

I was also grateful for the assurance that there would be a fresh look at the wording to remove ambiguities. The purpose of my amendment is to tighten up that process.

An amendment was tabled in another place requiring Ministers to give affected parties the reasons underlying any proposed direction. What could be fairer than that? Nevertheless, the amendment was opposed. However, Ministers have amended the Bill to require consultation with affected bodies—and of course I welcome that.

However, why is it considered unreasonable to concede a duty to give written reasons to the National Heritage Memorial Fund, the Arts Council or whoever else may be the object of a proposed direction? I cherish the hope that the Minister will wish to go further and fare better than to say, as was said in another place, that such a course of action would be burdensome to Ministers. One letter to four, or at most five, bodies would hardly seem to be burdensome. Alternatively, it might be objected that it would set a precedent. I say to that, "Why not?"

My amendment makes negligible inroads into the structure of the Bill and, I venture to suggest, adds to the transparency of its operation. Put simply, I need to know why the Government believe that they are entitled not to explain their actions.

In fairness, I have had extremely helpful private correspondence from the Minister for which I am most grateful. I have been largely reassured. However, in moving the amendment, I believe that it is sufficiently important for a reply to be put on the record.

Lord Birkett

I support the anxieties of my noble friend Lord Gibson. Bodies such as the Arts Council, in their independence from government, have always been supposed to operate under the arm's length principle. All of a sudden in this Bill the Arts Council and other bodies will be in the position of being told what to do by the Secretary of State. For a long time I have maintained that the arm's length principle is a good one but that the arm is growing shorter. I ask my noble friend whether the National Lottery etc. Bill represents its final amputation.

Lord Swinfen

In the event of the Committee accepting Amendment No. 76, I shall not move Amendment No. 77. I hope that my noble friend will feel able to assure the Committee that between now and Report stage he will reflect on what has been said by other Members of the Committee and consider bringing forward further amendments to satisfy the House at that time. I have the feeling tonight that the Committee is not satisfied with the efforts of the Minister even though it is grateful for those efforts. I urge him to let the Committee know that he is prepared to consider the matter and possibly to go further at another stage.

Lord Annan

1 support my noble friend Lord Gibson. I believe that the clause has a sinister ring to it. Civil servants in departments are always looking for chances to increase the powers of the Secretary of State because by so doing they increase their own powers. It is they who will advise the Secretary of State to interfere in the matter since the power is already there for him to do so by an ingeniously constructed clause in the Bill.

What is the need for such a provision? I can hear the civil servants saying, "Secretary of State, we must have a clause to stop these people feathering their nest". Whoever has suggested that any one of those quangos—the National Heritage Memorial Fund or the Arts Council--will feather its own nest? Indeed, how can they, when each year they produce a report showing exactly what has happened to their funds? Parliament is always able to debate that report.

The clause is unnecessary and sinister, and I very much hope that the noble Viscount will have further conversations with the noble Lord, Lord Gibson, to see whether they can do what in my view ought to be done; that is, have it totally deleted or very much watered down. The whole principle of those bodies being independent of the Secretary of State has been whittled away gradually over the past 10 years. One has seen this tendency, more and more, of the Government's desire to put into the grasp of the Secretary of State powers that really ought to be in the hands of the chairmen and trustees of the bodies.

Lord Lucas

In pursuing, as I hope he will, the laudable aims of the noble Lord, Lord Gibson, and others, I ask my noble friend Lord Astor not to go so far that he makes himself unable to fulfil the assurance that he gave earlier to retain powers to persuade the Arts Council to do a great deal better than at present for film and amateur arts when it has the money from the lottery.

Lord Houghton of Sowerby

Just a moment. I agree with everything that the noble Lord, Lord Annan, said, but I cannot conceive of civil servants saying to Ministers, "We must stop these people feathering their own nests". There is no need for it and no suggestion of it. I agree with the acquisition of power, but we should not put into the minds of this Committee that permanent civil servants talk to Ministers about other bodies "feathering their own nests".

9.30 p.m.

Viscount Astor

Perhaps first I may deal with the point raised by the amendment of my noble friend Lord Cavendish. It would require that the Secretary of State furnish a body with written reasons for any direction under this clause. Perhaps I may explain what we expect to happen under Clause 24. The Secretary of State may not give a body a direction without first consulting it. During this consultation period, the body will be able to consider and explore the reasons given by the Secretary of State for each direction. The directions will be given by letter and the Secretary of State is likely to reiterate his intentions for these in the body of the letter. Of course, Parliament is always able to require the Secretary of State to account for any direction given, just as it may over the use of any power.

I suggest, therefore, that my noble friend's amendment is unnecessary, since the Secretary of State may not refuse to account for decisions taken in the fulfilment of his duties. During the consultation process before a direction is issued the distributors will be made aware of the intentions behind each direction. If a direction appeared to be based on unreasonable grounds the Secretary of State could be asked by Parliament to account for his decision because the annual report of the distributor will contain the directions and will be laid before Parliament each year.

The Government cannot accept the introduction of a statutory duty on the Secretary of State to provide a formal list of reasons when this duty does not exist in other comparable uses of delegated powers. Secretaries of State are not required by statute to explain their reasons for taking executive decisions; they are required to behave reasonably, and they are held accountable by Parliament if such account is considered necessary. Therefore, the Government cannot see the special advantage of a statutory requirement in this matter. I hope that reply reassures my noble friend Lord Cavendish.

Perhaps I may turn to the other points about Clause 24. I said at Second Reading that I should consider Clause 24. I have considered it and have come forward with the new clause. The noble Lord, Lord Gibson, said: "What is the difference between government expenditure and lottery money?" There is a big difference. The Government can decide not to fund one of the bodies for which they are responsible; they can withdraw the funds. However, once the Bill is passed the lottery money will flow through to those distributive bodies. The Secretary of State cannot stop it flowing through; it will arrive. What is more, the noble Lord will see from subsections (1) and (2) of Clause 25 that the Secretary of State can make an order to amend the percentages. But we have said that the Secretary of State will only look at that once in every Parliament. Subsection (2) (a) states that, no percentage lower than 5 per cent. is specified in section 20(3)". So the Secretary of State cannot take away lottery funds as he can government expenditure. That is why there has to be some power. The noble Lord, Lord Charteris, said that directions would be given to the distributing bodies as to how to spend the money. That is not the point. The only time that the Secretary of State would have to act under this clause would be on the question of how they should not spend the money. Perhaps I may give the Committee some examples.

An example of a type of body which is too close to a distributing body and therefore should not be enabled to benefit from that distributing body's decisions is the Sports Council's trust company. That is because one of the members of the Sports Council's trust company is the Sports Council itself. Although we are confident that the Sports Council will accept that funding such a closely allied body would be improper, it is important for the future that the Government have the power to prevent that sort of arrangement from taking place.

There are other ways in which one body might have a material influence over another body as well as in the sense of owning it. For example, a distributing body may appoint some or all of the trustees of a charitable trust without owning it or sponsoring it and be able to, or be seen to, influence that trust. The Secretary of State should be able to consider where a distributing body has this sort of influence even when it does not own the body.

As I have said, there is no power in Clause 24 for the Secretary of State to get his hands on the money. Clause 24 deals with the general matters of propriety rather than the specific details of what not to spend it on. The reason why it is important to ensure that distributors cannot be beneficiaries or control them is that once the national lottery is running the money will pass statutorily to the distributing bodies without any government intervention except for rules on the drawing down of funds.

The aim of the national lottery is to allow funds to flow through to a wide range of applicants. For a distributing body to devote funds to its own close purposes rather than responding to those applicants would be a failure for all concerned. The Secretary of State will prevent a body from being a beneficiary only in the very restricted circumstances that I have outlined. I believe that the Committee will accept that the Secretary of State needs this power.

The noble Baroness, Lady Mallalieu, asked: why not say who it should go to? That is one thing that the Secretary of State is not saying. The distributing bodies will decide where the money from the lottery will go. The only thing that the Secretary of State has to make sure of is that they do it with propriety. If they do not do it with propriety and it goes to a body over which they have some control, he must have a reserve power to act if necessary.

It is an absolutely crucial part of the way that the national lottery is set up that the operator must be entirely separate from the regulatory body and that the regulatory body, OFLOT, must be different from the distributing bodies. These must be three separate legs. It is crucial that the distributing body is never seen to benefit from the proceeds.

Lord Gibson

As I listened to the Minister I had the impression that we were shooting past each other. I should therefore like to reserve the right to come back at a later stage.

On Question, amendment agreed to.

[Amendments Nos. 77 to 78A not moved.]

Viscount Astor moved Amendment No. 78B: Page II, line 9, leave out subsection (7).

On Question, amendment agreed to.

Clause 24, as amended, agreed to.

Viscount Astor moved Amendment No. 78C: After Clause 24, insert the following new clause: ("Power of the Secretary of State to prohibit distribution of money in certain cases

.—(1) Where subsection (2) applies, the Secretary of State may by order prohibit a body from distributing money under section 23(1) to a person specified in the order.

(2) This subsection applies if at the time the order is made—

1. (a) the person specified is a company of which the body, or a wholly-owned subsidiary of the body, is a member, or
2. (b) the Secretary of State considers that the body is able (whether directly or indirectly) to control or materially to influence the policy of the person specified in carrying on any undertaking or performing any functions.

(3) In subsection (2)—

1. (a)"company" means a company formed and registered under the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 or a company to which the provisions of that Act or Order apply as they apply to a company so formed and registered, and
2. (b)"wholly-owned subsidiary" has the meaning given by section 736 of that Act or Article 4 of that Order.

(4) A body shall provide the Secretary of State with such information as he may require for the purpose of exercising his powers under this section in relation to the body.").

On Question, amendment agreed to.

Clause 25 [Power to amend section 20]:

[Amendments Nos. 79 to 85 not moved.]

Clause 25 agreed to.

Clause 26 [Power to amend section 21]:

Viscount Astor moved Amendment No. 85A: Page 12, line 19, at end insert: ("( ) Without prejudice to the generality of subsection (1), the Secretary of State may exercise his powers under that subsection so as to remove from section 21 any body that has contravened or failed to comply with a requirement or prohibition imposed on it by or under section 24 or (Power of the Secretary of State to prohibit distribution of money in certain cases).").

The noble Viscount said: I spoke to this amendment with Amendment No. 76. I beg to move.

On Question, amendment agreed to.

Clause 26, as amended, agreed to.

Clause 27 [Winding up of fund allocated under section 20(3) (e)]:

[Amendment No. 86 had been withdrawn from the Marshalled List.]

Lord Swinfen moved Amendment No. 87: Page 12, line 32, leave out subsection (3).

The noble Lord said: In moving Amendment No. 87 1 shall speak also to Amendment No. 108 in my name and that of the noble Baroness, Lady Seear.

The purpose of the amendment to Clause 27 is to remove the power of the Secretary of State to extend the life of the Millennium Fund beyond 31st December in the year 2000. 1 am concerned that unless that power is removed from the Bill the fund may continue indefinitely.

As the Bill is currently framed, the Millennium Fund will receive the same share of lottery proceeds as the arts, sport, the heritage and charities. That seems inappropriate given the lack of clarity which at present obtains in regard to the aims of the fund. The Conservative Party manifesto said that the fund would finance projects which celebrate the start of the next millennium and will be of lasting benefit to the nation. I cannot see how a street party can be of lasting benefit to the nation, which is something that was mentioned as possibly being funded.

Despite the Government's assurances to the contrary, there is a danger that the fund may provide resources solely for large prestigious projects. There is also a danger that, once established, the fund may provide resources for projects which, in its absence, the Government would have funded. For example, if the Government did not decide to mark the start of the next millennium with lottery proceeds, they would dedicate money raised from general taxation to that purpose.

If the Government do not wind up the fund at the end of the year 2000, we may find that they suggest other projects on which the money should be spent—other celebrations, other anniversaries—which, in the absence of the lottery, would have been funded from general taxation revenue or public subscription. I am not necessarily talking of this Government. There is some time between now and the year 2000 and there will be another government, no matter what colour. By law we have to have an election between now and then.

It is vitally important that the fund should be wound up at the end of the year 2000 and that the resources previously dedicated to the fund should be spread equally between the four other recipients. The Government suggested that they wished to keep the reserve power to extend the life of the Millennium Fund in order to provide for circumstances where projects already started with Millennium Fund grants required continued funding for their completion. However, it is not necessary to leave a power in the Bill for the Secretary of State to extend the life of the fund in order to achieve that objective.

Amendment No. 108 to Clause 38 allows for those circumstances; it gives the Millennium Commission a duty to, ensure that funds are provided to secure the continuation of projects after 3Ist December 2000, where this is appropriate". The Millennium Commission will therefore be expected to do its job responsibly and ensure that it has built up sufficient endowment funds to meet ongoing commitments. I beg to move.

Baroness Seear

I rise briefly to support the amendment to which I have also put my name. Those of us who were not in favour of a Millennium Fund in any event would wish to see it drawn to an end as soon as possible. Any money that goes to the Millennium Fund is money that does not go to other causes. In the view of many of us, the sooner that that money finds its way to the other causes, the better. Any danger that it should linger on or require additional money in a few years is therefore to be deprecated. We hope that the Government will put a date on the ending of the Millennium Fund.

9.45 p.m.

Viscount Astor

My noble friend's amendment would remove any flexibility to ensure that the Millennium Commission is able to complete funding for one project or another. There is at present no intention of using this—otherwise the Bill would not contain the provisions winding up the Millennium Fund. But we do not know whether it might be necessary to do so, and to leave the Secretary of State with no means of preventing a project from becoming a folly, perhaps unfinished, unused and unfunded, would seem more than unwise. It would be positively wasteful.

The Millennium Commission will when considering a project wish to satisfy itself that there are sufficient funds for the completion of the project, as is proposed by my noble friend in his Amendment No. l08, but. the reserve power in Clause 27 is needed in case exceptional circumstances make it appropriate.

I should also point out that to continue funds going to the Millennium Commission beyond the end of the year 2000 would require the Secretary of State to consult Parliament. The order is subject to affirmative resolution so Parliament would have to consider explicitly any case to extend the Millennium Fund. I hope that, with that explanation, my noble friend will be able to withdraw his amendment.

Lord Swinfen

My noble friend goes some way towards satisfying me. I want to ensure that the fund comes to an end. I also want to make certain that. where a project has been started that is designed to reach fruition or completion after the end of this millennium, funds are put aside specifically for that project. That is what the two amendments are designed to do. I shall look at the matter again between now and the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 27 agreed to.

Clauses 28 and 29 agreed to.

[Amendment No. 88 not moved.]

Clause 30 [Accounts of the Secretary of State and National Debt Commissioners]:

Baroness Seear moved Amendment No. 88A: Page 13, line 44, at end insert: ("( ) Each account prepared under subsection (1) or (2) and each report prepared under subsection (3) shall he referred for scrutiny to a joint committee of both Houses of Parliament.").

The noble Baroness said: It will not have escaped the attention of the Government and indeed of the Committee that there is considerable anxiety as to how these moneys will be handled. Those of us. including myself, who initially were opposed to the whole idea of a national lottery were converted to it because of the desirability of having available to charities, sport, arts and the heritage moneys which are free of government control and which can be obtained from another source irrespective of the attitude of government towards the work that they are doing. This is particularly important in the case of voluntary organisations and charities whose major function is to take up issues which may well not be welcomed by government and may therefore lead to a limitation in government funding. It is the possibility of access to independent funds which has converted a number of us to support for the national lottery and for this Bill. But that whole argument falls if in reality the Government maintain a considerable amount of control over how these moneys are to be allocated and the Treasury has its hands on the money. It is to ensure that that does not happen that Amendment No. 88A, together with Amendments Nos. 91A and 110A, is being moved.

These are large sums of money and there must be proper inspection and proper control by responsible persons. But that does not necessarily mean the Treasury—far from it. That is why we are suggesting here that there should be an annual report to a joint committee of both Houses and that this should include the opportunity for detailed study of how the money has been handled, how it has been allocated and, very important indeed, how the Government have been handling over the years the allocation that they have made to organisations. It can then be seen whether there has been any reduction in government funding because of the funding that has been coming from the Treasury. We have all too much experience of the problems of additionality in connection with European funds to wish to risk it again in connection with the lottery.

It is for those reasons that we would like a report to be made to a joint committee of both Houses which can be examined in the thorough way in which such matters are examined by joint committees. That will give far better, and public, control over the moneys than if such control is in the hands of the Treasury. It also gets rid of the fear that the Government will take a high proportion of the money to themselves by one route or another and therefore undermine what is, in the eyes of many of us, the justification for having a national lottery. I beg to move.

Lord Hylton

I support this series of amendments. I have grave misgivings about the whole Bill. It creates possibilities for patronage and influence of an unpredictable sort. The more parliamentary control that there can be over the result the better.

Viscount Astor

I hope to be able to explain to the noble Baroness that these amendments are unnecessary. First, the Bill already contains a high degree of parliamentary scrutiny of the activities of the Secretary of State; secondly, the amendments place a burden on Parliament which as well as being unnecessary is unacceptable.

Amendment No. 88A calls for the report of the Secretary of State on the National Lottery Distribution Fund, and the report on the investments of the fund by the National Debt Commissioners, to be scrutinised by a Committee of both Houses. That will duplicate the work of the Public Accounts Committee, who will already be able to scrutinise these essentially factual sets of accounts, as well as the Heritage Select Committee, who will have a proper role in examining all matters to do with the national lottery. If those bodies come up with any matters for concern in their deliberations, then the concerns will be able to be taken up in the usual way in both Houses. The reports will be laid before both Houses which represents, I believe, the right degree of scrutiny. It is far better to give Parliament the opportunity to act if it seems necessary than to force a parliamentary workload that is already overburdened to take on an additional and unnecessary task without discretion as to its necessity or desirability.

Amendments Nos. 91A and 110A call for the reports of the nine distributive bodies also to be scrutinised by such a committee. The amendments are unnecessary for similar reasons to those I explained earlier. The scrutiny machinery already exists and we would be placing an unnecessary additional burden on Parliament. It is intended that the National Audit Office will audit the accounts of those bodies and that the Comptroller and Auditor General will have full rights of access to, and inspection of, the lottery accounts, and that the Public Accounts Committee will be able to scrutinise fully the way in which that money is accounted for.

The National Heritage Select Committee (in the case of arts, sport, heritage and the Millennium Commission) will be able to consider the work of the national lottery in general and scrutinise the performance of the way those bodies have performed in their task of distributing the lottery money. The Home Affairs Select Committee will be able to scrutinise the work of the charities board.

So it is clear that the machinery for proper and effective parliamentary scrutiny already exists. With that explanation I hope that the noble Baroness will see that her amendments are not necessary.

Lord Dean of Beswick

I listened with care to the Minister's reply to the amendments as regards the safeguards that exist at present. But the latest information concerning the work of the Public Accounts Committee gives a clear indication that they do not fulfil the preventive function described. One has only to refer to the recent Public Accounts Committee report on the West Midlands Regional Health Authority and the one which is about to be unleashed regarding the appalling situation in the Wessex Regional Health Authority. There is also the matter referred to in the headlines of the Evening Standard tonight of what has taken place in the Welsh Development Agency.

I would take some comfort from what the Minister has said if those three incidents had been avoided, but the fact is that the Public Accounts Committee, as I see it, is not a safeguard. It can act only when such incidents are reported to it. Clearly, it only got to know about the cases to which I have referred once the horse had bolted. That is when the stable door was locked.

What the Minister has said tonight does not give me any comfort that Secretaries of State for various departments, who have asked for powers in this House and another place, and who have said that they should provide a safeguard and be the custodians of public expenditure, will actually provide that safeguard. They have let the side down. Given the three performances that I have quoted, the Minister has not assured me—I am sure that he has not assured other Members of the Committee either—that Ministers will be in a different position in future and that they will be able to prevent what has happened before from happening again in the future. What is needed is current scrutiny—not scrutiny once disasters have occurred. I hope that the Minister can be a little more forthcoming about that.

Baroness Seear

I do not think that the Minister will be surprised to hear that I was not at all satisfied by his reply. As the noble Lord, Lord Dean of Beswick, pointed out, leaving all this to the Public Accounts Committee is not a substitute in any way. I do not think that it is for the Government to try to protect Parliament from carrying out a duty of scrutiny. If Parliament decides that it does not want to do that, then that is what it has decided; but it is for Parliament to say whether it wants to set up a piece of machinery (on a joint basis between the two Houses) to carry out a proper examination of these reports, and to be able to go into them in detail.

The Minister underrates the anxiety, and indeed, the suspicion, which a great many of us feel about the way in which these moneys will be handled. If he wants to quieten that suspicion and to reassure us, he should accept the suggestion in the amendment, rather than reject it. Tonight is not the time to test the opinion of the Committee, so although I shall beg leave to withdraw the amendment, I shall most certainly consider bringing it back at a later stage. However, for the time being, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 30 agreed to.

Clause 31 [Annual reports by distributing bodies other than Millennium Commission]:

[Amendments Nos. 89 to 92 not moved.]

Clause 31 agreed to.

Clause 32 [Accounts of distributing bodies other than Charities Board and Millennium Commission]:

[Amendment No. 93 not moved.]

Clause 32 agreed to.

Clause 33 agreed to.

Schedule 4 [Amendment of the National Heritage Act 1980]:

Viscount Astor moved Amendment No. 94: Page 30, leave out lines 27 to 32 and insert: ("(6) In subsection (6) (d) (the Secretary of State acting in the discharge of certain functions is an "eligible recipient") the words from "acting" to "1979" shall be omitted.").

The noble Viscount said: Amendments Nos. 94 and 131 are technical in nature but remove an anomaly which would have prevented certain monuments principally in Scotland and Wales from being able to receive any money from the lottery. Without these amendments, it would not, to take a purely illustrative example, be possible for the Secretary of State in Scotland to apply for a lottery grant for an additional capital project for, say, Edinburgh Castle, whereas it would have been possible for English Heritage in England to apply for lottery funds for such a project, say, at Dover Castle.

These are straightforward amendments which put right a genuine oversight. I beg to move.

On Question, amendment agreed to.

Schedule 4, as amended, agreed to.

Clause 34 agreed to.

Schedule 5 [The National Lottery Charities Board]:

[Amendment No. 95 not moved.]

10 p.m.

Viscount Astor moved Amendment No. 96: Page 31, leave out lines 8 to 26 and insert:

("Committees

2.—(1) The Charities Board shall establish four committees for the purpose of exercising the Board's functions in relation to applications by charities for grants in respect of appropriate activities in England, Scotland, Wales and Northern Ireland respectively.

(2) In sub-paragraph (1)—

• "appropriate activities" means activities in relation to which the Charities Board consider it appropriate to delegate their functions to a committee established under that sub-paragraph, and
• "charities" includes institutions such as are mentioned in paragraph (b) of the definition of "charitable expenditure" in section 41(1).

(3) Subject to sub-paragraph (1), any function of the Charities Board may be exercised by any committee of theirs authorised by them (whether generally or specially) for that purpose.

(4) A committee of the Charities Board shall consist of a chairman and two or more other members.

(5) Subject to sub-paragraph (6), all the members of a committee of the Charities Board shall be members of the Board.

(6) In the case of a committee other than one established under sub-paragraph (1), any member other than the chairman may be a person who is not a member of the Charities Board but is appointed to the committee by the Secretary of State at the Board's request.

Tenure of office

2A.—(1) Subject to the following provisions of this paragraph, a person shall hold and vacate office as chairman or other member of the Charities Board or a committee of theirs in accordance with the terms of his appointment.

(2) The Secretary of State shall not appoint a person to hold office as a member of the Charities Board or a committee of theirs for a term of more than five years.

(3) A chairman or member of the Charities Board or a person appointed to a committee of theirs by the Secretary of State may at any time resign his office by notice in writing addressed to the Secretary of State.

(4) A member of the Charities Board or a person appointed to a committee of theirs by the Secretary of State may be removed from office by the Secretary of State on the ground that—

1. (a) he has been absent for a period longer than three consecutive months from meetings of the Board without the Board's consent or (as the case may be) from meetings of the committee without the committee's consent,
2. (b) a bankruptcy order has been made against him or his estate has been sequestrated or he has made a composition or arrangement with, or granted a trust deed for, his creditors, or
3. (c) he is unable or unfit to discharge the functions of his office.

(5) If a chairman of the Charities Board or a committee of theirs ceases to be a member of the Board he shall also cease to be chairman.

(6) A person who ceases, otherwise than by virtue of sub-paragraph (4), to be a member or chairman of the Charities Board or a committee of theirs shall be eligible for re-appointment.").

The noble Viscount said: For the distribution of charities' share of the lottery proceeds, the Bill proposes a charities board of 16 members plus a chairman, appointed by my right honourable friend the Home Secretary. The Home Secretary has agreed that of those 16 he will appoint three on the nomination of each of the Secretaries of State for Northern Ireland, Scotland and Wales. He will also appoint three in respect of England and four in respect of the UK as a whole. Each group of three nominees will form the majority membership of the national committees which the board will be required to establish.

The size of the charities board can be increased by order, but anything much bigger would be unwieldy as a central policy-making body. The committee responsible for any constituent part of the UK will be composed predominantly of those nominated by the relevant Secretary of State. They will sit on the charities board, and they will form a majority of the board members (that is, nine out of 16). Thus, the interests of the UK as a whole and of its constituent parts will be protected.

It has been suggested to us, however, by the charitable organisations that the board, as envisaged, will not be adequate for the volume of applications expected. That may be as many as 100,000 grant applications per year. The organisations speak from a wealth of experience of grant-making, so I understand the concern.

The amendment addresses the concern. It enables the Home Secretary, at his discretion but on application by the board, to appoint as members of any board committees other than the four national ones—for example, a committee for charities operating overseas, perhaps in the Commonwealth—people who are not members of the board itself. Their decision-making powers will be restricted to the committees upon which they serve; the committees will be required to have a board member as chairman, and there must be at least one board member at each committee meeting.

We believe that the amendment will enable the board to have whatever additional decision-making power it needs without giving rise to other problems. It will not affect the structure of the board, its size and composition, its duty to appoint national committees, its power to appoint other committees, and its ability to regulate its own procedure. It will be for the board to decide what committees to appoint, what decisions to delegate to them and what their relations should be with the national committees. I commend the amendment to the House. I beg to move.

Baroness Mallalieu

I speak to Amendments Nos. 101 to 103 which are grouped with Amendment No. 96 and which are in the name of my noble friend Lord McIntosh of Haringey. I hope that the Minister will think that these are all helpful additions to the Bill. Amendment No. 101 is designed to place on the face of the Bill the Government's intention that the committees of the charities board shall have sole responsibility for dealing with applications for funds to benefit the areas that they cover. The last part of the amendment will make it possible for the board to delegate other functions to the committees.

The Rothschild Royal Commission Report on gambling published in 1978 recommended devolution of decision making to boards in England, Scotland, Wales and Northern Ireland. That was done largely upon the basis of the size and complexity of the task of distributing grants which, given that nearly 500,000 voluntary organisations are involved, is clearly a vast one.

The Bill partially recognises the principle of devolution in that it proposes separate grant-making committees for England, Scotland, Wales and Northern Ireland; but what is at issue—it is an issue on the face of the Bill as it stands—is the degree of independence that those committees will be allowed.

Amendment No. 101 is aimed at securing some assurances from the Minister that the distribution committees proposed in those areas will have the powers to develop grant-making policies within the broad framework which is agreed by the National Lottery Charities Board. We understand that it is the Government's intention that the committees should have that degree of independence, but the provisions of the Bill would leave the way open for the National Lottery Charities Board to take all decisions centrally. If that turned out to be the case, the mechanism set up to distribute the charities' share of national lottery proceeds would not be sensitive enough to the needs of a voluntary sector as they apply separately in each of the different areas.

It is surely important that the national committees should have the independence to develop their own grant-making policies, because the voluntary sectors in those areas are different from one another. Funding decisions which are made at a nation level can appreciate and take account of those differences in a way that a centralised distribution system hinging on a central national lotteries board could not. Similarly, a central distributing board will not be able to see and to respond to the particular needs of its area in anything like as sensitive a way as a national committee could.

Another reason why it is important that a distribution system should be decentralised and each committee allowed the power to develop its own policies is that there is otherwise a danger that current patterns of funding will be replicated and that Scotland, Wales and Northern Ireland will thus lose out. Those countries are already at a disadvantage because there are few charitable trusts based in or dedicated to funding voluntary activity in those areas. This bias in trust funding has been recognised in the sector and, as a consequence, some trusts such as the Baring Foundation have introduced what might be called positive action programmes to get funding into those areas.

It is recognised that the central UK National Lottery Charities Board will decide the broad policy parameters within which each of the nation committees will operate. For instance, the board will have to decide which categories of activity can best be funded centrally—for example, overseas aid—and how applications which cross nation boundaries will be handled. It will also need to establish guidelines in relation to good administration and so forth. However, the board will not be sufficiently close to the ground to decide what are the strategic funding priorities in each of those areas.

To sum up, the purpose of Amendment No. 101, which I hope the Government will accept, is to obtain a commitment that they intend that the committees set up to administer grants in each of those areas will have the power to develop their own grant-making policies within a broad framework established nationally. That is vital if the mechanism is to be sensitive to the particular needs of those areas.

Amendment No. 102 sets out the formula for the composition of the nation committees of the charities board. It retains the original provision of the Bill that three members of the board shall be on each nation committee while referring to the earlier amendment providing that one of them shall have been specifically appointed following a process of open selection to chair the nation committee. The Government have indicated that it is their intention that the three board members specified in the Bill as it stands shall be from the relevant nation. Increasing the membership is intended to ensure that the nation committee is large enough to carry out the necessary tasks and also that it will be as representative as is likely to be possible.

The amendment removes the Bill's provision that committees of the board shall consist of three or more members of the board. I understand that the Home Office has indicated that the committees provided are to serve as regional and policy advisory committees. Requiring them to consist of three members of the board is impracticable for two reasons; first, it significantly limits the number of committees which it would be possible to set up and, secondly, it prevents the involvement of people with relevant expertise.

Amendment No. 103 is intended to ensure that the National Lottery Charities Board consults the relevant nation committee before making decisions about awarding grants which would be of particular benefit to two or more of the four nations. It is generally agreed that one of the important functions of the National Lottery Charities Board will be to decide grants for projects where the activity to be funded is of benefit to the United Kingdom as a whole; for example overseas aid or medical research, or where applications are made for work which crosses boundaries. Where work is of benefit to only one nation in the United Kingdom the work will be funded by the relevant nation committee. The Government appear to envisage that the National Lottery Charities Board will set up specialist advisory committees to offer advice on funding for areas which it funds centrally because they are of benefit to the United Kingdom as a whole, as in the cases of which I have given examples, or where the charity is engaged in providing overseas aid.

The National Lottery Charities Board will also consider applications for work which crosses UK boundaries in the same way as it would be sensible for specialist advice to be obtained about areas such as medical research or overseas aid. Where the National Lottery Charities Board is funding work which crosses boundaries but which gives particular benefit, for example, to people in Wales and England, it would surely be sensible for the grant making committees in those two nations to be consulted about the appropriateness of the particular scheme to meet the needs of their areas.

The amendment would ensure that the National Lottery Charities Board will take the best possible decision when it is considering applications for work which crosses boundaries in that way and which is of particular benefit to two or more nations simply by requiring the board to consult with the relevant nations on the merits of those applications. I hope that the noble Viscount will riot consider that to be a startling proposition.

Viscount Astor

It may help the Committee if I reply to the amendment at this stage. The first part of the amendment would effectively establish a national committee as a separate board. The Government considered carefully the idea of separate boards for England, Northern Ireland, Scotland and Wales but rejected it because it ignored overseas issues. Some organisations operate nationwide or in more than one area. Some beneficiaries might provide in one area a resource which benefits all. Some might conduct research that benefits all. The board must be able to address those issues.

It must also have a policy overview and be able to decide, for example, when there is a need for consistency across the nation or when there needs to be a concerted UK response to an EC or UN initiative. For those reasons, the board needs to be able to regulate its own procedures. That includes deciding what are appropriate activities for delegation to the committees. National interests will be protected by the fact that the majority of the board are members of those committees.

The board and its committees will have the power to appoint expert advisers and these could be from the local voluntary sector. We recognise that there may be a need for more people with a power to take decisions and I brought forward an earlier amendment to that effect.

Those extra committee members will be appointed by my right honourable friend the Home Secretary at the request of the board. They will not be available to sit on the national committees, in order to ensure that the majority on those committees are appointed by the relevant Secretary of State and together comprise the majority of the charities board itself. It will be for the board itself and for the national committees to decide what other committees to appoint, what will be their functions and how they will relate to the national committees. For example, a national committee may decide that certain decisions should be dealt with by regional committees or that there should be a special committee for special types of application. The government amendment will provide that the chairman of any committee must be a member of the board and that the committee's proceedings will not be valid unless one of those present is a board member.

I turn now to Amendment No. 103. The procedures of the National Lottery Charities Board are for that body to decide. But it will of course, in appropriate cases, ensure that consultations take place with the statutory national committees (of which they are the members) on any application which benefits more than one of the countries of the UK. I remind the Committee that 12 members of the 16 on the board will be from the national committees. It will be in their interests to get their procedures right, and I have every confidence that they will do so. In the light of that explanation, I hope that the noble Baroness will withdraw the amendment.

Lord Holme of Cheltenham

I recognise that the Government are alert to the need to be sensitive to the different needs of Scotland, Wales and Northern Ireland. But listening to the noble Baroness's comprehensive and clear exposition of the amendments which stand also in my name, I fear that the Government have not gone far enough. There is a tremendous suspicion that the whole of the national lottery will turn out to be English dominated—and not just English dominated but London dominated. It will be metropolitan in its priorities.

Whether or not we pursue the matter this evening, the Government must look at the sense of these three amendments to see whether they cannot specifically recognise that Scotland, Wales and Northern Ireland will wish there to be a substantial measure of strategic direction within their own territories. I have some parliamentary responsibility for Northern Ireland. I can assure Members of the Committee that it will not be adequate for Northern Ireland to say as and when they may be consulted. Something more is required.

On Question, amendment agreed to.

Viscount Astor moved Amendments Nos. 97 and 98: Page 31, line 31, leave out ("and other members") and insert ("and any other member of the Board or any committee of theirs"). Page 32, leave out lines 22 to 37.

On Question, amendments agreed to.

The Deputy Chairman of Committees (Lord Brougham and Vaux)

I must advise the Committee that I cannot call Amendment No. 99 because Amendment No. 98 has been agreed to.

[Amendment No. 99 not moved.]

[Amendments Nos. 100 to 103 not moved.]

Viscount Astor moved Amendment No. 104: Page 32, line 43, at end insert: ("( ) No committee of the Charities Board may exercise any function of the Board at a meeting unless one of the members present is a member of the Board.").

On Question, amendment agreed to.

Schedule 5, as amended, agreed to.

Clauses 35 and 36 agreed to.

Clause 37 agreed to.

Schedule 6 [The Millennium Commission]:

Lord Holme of Cheltenham moved Amendment No. 105: Page 33, line 38, at end insert: (" (c) one shall be nominated after consultation with the leaders of the minority parties other than Her Majesty's Opposition.").

The noble Lord said: In moving the above amendment I shall speak also to Amendment No. 106. We have opposed the whole concept of the Millennium Fund and the Millennium Commission, but it seems that the Government are determined to have it. However, if they are determined to have it, there are two reasons why they should consider the inclusion on the commission of a representative of the minority parties. First, regularly at general elections in this country for some decades now one in four voters has not voted for either the Conservative or Labour Parties. Some account should be taken of that fact.

The second reason why the Government should consider the inclusion of a representative of the minority parties as well as a representative of the Labour Party on the Millennium Commission is that there are to be two representatives of the Government. At recent elections the Government received somewhere between 40 and 45 per cent. of the votes of the people of this country. As we were assured earlier by the noble Viscount, the commission is not meant in any way to be government-dominated. Surely, therefore, they could give effect to that non-government domination by having two representatives of the government and two other representatives; for example, one from the Labour Party and one from the minority parties.

I realise that giving such a speech from these Benches will seem to be self-interested. However, it is not directly self-interested; it is a plea to the Government to try to make the Millennium Commission as broadly representative of the people of this country as possible. In that sense, I hope that they will take on board the arguments that I have put forward. I beg to move.

Viscount Astor

In establishing the Millennium Commission, we recognised that we were establishing a far-reaching and visionary body which would be of interest to the whole nation. We want the membership of the commission to reflect a wide spectrum of the experience, skills and opinion, besides those of politicians. Therefore, we thought it right that only two members out of nine on the commission should be Ministers of the Crown—that is right because the focus of the commission will cross the interests of a number of government departments—and also that that minimal political representation should be complemented by one member nominated by the leader of Her Majesty's Opposition. Of course, it is a delicate political matter.

We have chosen to seek a nomination from Her Majesty's Opposition because the official Opposition has a particular and definable role within our constitution. It is a fact, however regrettable to the noble Lord, Lord Holme of Cheltenham, that the official role is not available to the minority opposition parties at present. If it were to become so, the position could be reconsidered by, for example, the then Prime Minister in advising Her Majesty the Queen who appoints members to the commission on the advice of the Prime Minister.

Lord Holme of Cheltenham

The noble Viscount certainly gives our party a substantial incentive to continue our advance towards the citadels of power, including the Millennium Commission. It is too late at night for us to press this amendment but it is a subject to which we shall return. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 106 not moved.]

Schedule 6 agreed to.

Clause 38 [Grants in respect of projects]:

[Amendments Nos. 107 and 108 not moved.]

Clause 38 agreed to.

Clause 39 [Annual report]:

[Amendments Nos. 109, 110 and II0A not moved.]

Clause 39 agreed to.

Clauses 40 to 42 agreed to.

Earl Ferrers moved Amendment No. 111: After Clause 42, insert the following new clause:

Importation and exportation restrictions

(".—(1) In section I of the Revenue Act 1898 (prohibition on the importation of advertisements and notices relating to lotteries) as it applies in the United Kingdom, after "importation" there shall be inserted "from a place outside the British Islands and the member States".

(2) In section 2(1) of the 1976 Act (general lottery offences)—

1. (a) in paragraph (d) (bringing or sending lottery tickets or advertisements into Great Britain) after "Great Britain" there shall be inserted "from a place outside the British Islands and the member States", and
2. (b) in paragraph (e) (sending lottery proceeds etc. out of Great Britain) after "Great Britain" there shall be inserted "to a place outside the British Islands and the member States".

(3) In Article 132(1) of the Betting, Gaming. Lotteries and Amusements (Northern Ireland) Order 1985 (general lottery offences)—

1. (a) in paragraph (d) (bringing or sending lottery tickets or advertisements into Northern Ireland) after "Northern Ireland" there shall be inserted "from a place outside the British Islands and the member States", and
2. (b) in paragraph (f) (sending lottery proceeds etc. out of Northern Ireland) after "Northern Ireland" there shall be inserted "to a place outside the British Islands and the member States".").

The noble Earl said: In moving Amendment No. 111, I wish to speak also to Amendment No. 136. The new clause does no more than remove the border control on lottery material; in other words, bringing tickets and advertising material into the country via the ports and via the post. At the best of times this has not been a particularly effective method of enforcement. The real enforcement will be that, once in this country, the material cannot be used to advertise the lottery of another country. The prohibition on the promotion of foreign lotteries in this country, including lotteries which emanate from our European partners, will therefore continue to apply.

The only difference resulting from this amendment is that in relation to lottery material coming from a member state, the enforcement of the prohibition will rely exclusively on the inland controls and not on a mixture of border and inland controls. I beg to move.

On Question, amendment agreed to.

Clauses 43 and 44 agreed to.

Schedule 7 [Registration of societies]:

Earl Ferrers moved Amendment No. 112: Page 36, line 25, after ("refuse") insert ("or revoke").

The noble Earl said: In moving Amendment No. 112 I wish to speak also to Amendments Nos. 113 to 116.

Paragraph 3A of Schedule 1 of the 1976 Act requires a local authority to refuse an application for the registration of a society if the Gaming Board has in the past five years refused or revoked the registration of the society under Schedule 1 A. This is designed to prevent a society, which has had its registration refused or revoked by the Gaming Board, from promoting lotteries instead under a local authority registration.

The scheme of the 1976 Act, which is amended by Part III of the Bill, is that a society must promote its lotteries under either a Gaming Board registration or a local authority registration, whichever is appropriate. There is, though, nothing to stop a society from maintaining a "dormant" local authority registration during the period when it is promoting lotteries under a board registration.

Amendments Nos. 112, 113 and 115 therefore extend a local authority's duty from refusing a registration in the circumstances which I have described, to including a duty to revoke a current registration. This will ensure that new paragraph 3A will operate in the way intended. Amendment No. 114 disapplies paragraph 3A where the board has refused or revoked a registration under this head. The local authority will clearly not need to know in these cases that a refusal or a revocation by the board has, in fact, occurred. Amendment No. 116 absolves the board of the requirement to notify the local authority. I beg to move.

On Question, amendment agreed to.

Earl Ferrers moved Amendments Nos. 113 to 116: Page 36, line 27, leave out from ("below") to end of line 29 and insert ("within the last live years"). Page 36, line 29, at end insert: ("( ) Sub-paragraph (1) above does not apply where the ground for the Board's refusal or revocation was that specified in paragraph 3(2) (e) of Schedule IA below."). Page 36, line 30, after ("refuse") insert ("or revoke"). Page 39, line 28, after ("and") insert (", except in the case of a refusal or revocation on the ground specified in sub-paragraph (2) (e) above,").

On Question, amendments agreed to.

Schedule 7, as amended, agreed to.

Clause 45 agreed to.

Schedule 8 agreed to.

Clause 46 agreed to.

Schedule 9 agreed to.

Clause 47 [Frequency of lotteries]:

Earl Ferrers moved Amendment No. 116A and 116B: Page 19, line 31, leave out from ("that") to ("under") in line 32 and insert ("may be promoted"). Page 19, line 33, after ("months") insert ("on behalf of the same society or by the same local authority").

The noble Earl said: Amendments Nos. 116A and 116B are drafting amendments. I beg to move.

On Question, amendments agreed to.

Clause 47, as amended, agreed to.

Clause 48 [Rules for lotteries]:

Lord Swinfen moved Amendment No. 117: Page 20, line 10, leave out ("10") and insert ("20").

The noble Lord said: Although Amendment No. 117 is grouped with Amendments Nos. 118 and 118A I shall speak only to Amendment No. 117 as the other amendments concern a different subject.

The purpose of the amendment is to increase the limit on the maximum prize in a society lottery from £25,000 or 10 per cent. of potential ticket sales to £25,000 or 20 per cent. of ticket sales, whichever is the greater.

Research suggests that the national lottery could have a dramatic effect on charitable income from small lotteries. Charities in the Republic of Ireland have experienced a 60 per cent. drop in their small lottery income since the creation of the state lottery in 1987. According to a report in the Guardian, the Government's own GAH report suggested that the drop in small lottery income in the United Kingdom as a result of the national lottery could be as great as 50 per cent.

The Government are shortly to bring forward Amendment No. 118A which will increase the limit on the size of a small lottery from £500,000 to £1 million, which I welcome.

It has been argued during the course of debate on the Bill that the size of the top prize in the national lottery will be the crucial factor in determining sales. Surely, the same argument holds for small lotteries run by charities, sports clubs and community groups. As I believe I have heard my noble friend Lord Ferrers say on more than one occasion, what is sauce for the goose, is surely sauce for the gander. I therefore believe that the maximum top prize in a society lottery should be increased from £25,000 or 10 per cent. to £25,000 or 20 per cent. of potential ticket sales. I beg to move.

10.30 p.m.

Earl Ferrers

The amendments are grouped together. Perhaps I may take the opportunity to speak to my amendment, Amendment No. 118A.

Lord Swinfen

If my noble friend will forgive me, I said that I spoke only to Amendment No. 117. I warned our mutual noble friend Lord Astor at the beginning of proceedings that I would be dealing only with Amendment No. 117.

Earl Ferrers

I understand that my noble friend wishes to speak only to Amendment No. 117. However, the three amendments are grouped together. By putting down Amendment No. 1 18A we have gone a great deal of the way to meet the points which my noble friend has in mind. It was suggested that the prize limits should be doubled. I suggest to the Committee that it would be right to do that and not to go to the largest increase which my noble friend suggested. If that suggestion were to be accepted, the increase in prize money would be very substantial. It would mean that the maximum proceeds would increase from £180,000 to £1,250,000. It would also mean that the maximum annual proceeds would increase from £2,340,000 to £5 million and that the maximum single prize would increase from £12,000 to £125,000. I understand that my noble friend would like those increases. However, they are fairly substantial. If I might so suggest, it would be better if we have the ones that we propose.

Lord Airedale

I wish to speak to Amendment No. 118A. I do not understand how the provision will work. Amendment No. 118A amends subsection (6). As amended it would state that, The total value of the tickets…sold…shall not exceed £1,000,000". The only way I can see that a promoter can be sure of complying with that requirement is for him to print no more than £1 million worth of tickets and hope that his sellers manage to sell them all. However, I believe that any promoter would say that that is not a recipe for running a successful lottery.

It is not an exact science, but in practice you try to estimate how many tickets you think each seller will manage to sell. Then you give him a surplus in the hope that he will be more successful than you expect and will compensate for the disappointment you may have in other sellers who do not manage to sell as many tickets as you expect. When the money and the unsold tickets come in at the end of the selling period, more than £1 million worth of tickets may have been sold and the promoter will be in breach of the subsection. But all that he has sought to do is to run a successful lottery and to comply with the law so far as he can.

I therefore hope that the Government will consider the matter again and seek to formulate words which will allow the promoter to run a successful lottery and comply with the law. As drafted at present, the subsection makes life very hard for the promoter. It will not lead to a successful lottery.

Lord Mancroft

Perhaps I may speak briefly to my amendment, Amendment No. 118. The purpose of my amendment was not to alter a principle but to make it easier for the operators of society or charity lotteries to reach the Government's allotted annual target. To reach that target 10 lotteries had to be run. Amendment No. 118 would not alter a principle. It seeks to make the position easier in practice.

My noble friend Lord Ferrers has brought forward Amendment No. 118A to which he has spoken. It supersedes my amendment. I say with gratitude that it is better than the amendment in my name. Amendment No. 118A solves the problem —it is a technical one—and allows the promoters of smaller charity or society lotteries to run them more satisfactorily.

I shall not attempt to get into the area that my noble friend Lord Ferrers and the noble Lord, Lord Airedale, did of describing the figures exactly and how the provision would work, because it is almost impossible to describe it in such a way that those listening can understand it. Suffice it to say that those of us who were worried that the national lottery would swamp the smaller charity lotteries are extremely grateful to the Government for bringing forward the amendment. It answers our problems completely and I hope that the Committee will accept it.

I have not spoken to the amendment of my noble friend Lord Swinfen, which is slightly different. It is aimed at the same area of helping and protecting charity lotteries, but I am not absolutely certain that his amendment does that. Nevertheless, I conclude by saying that I am grateful to the Minister for bringing forward Amendment No. 118A, which means that I shall not have to move my own Amendment No. 118.

Baroness Mallalieu

From these Benches, perhaps I may echo what the noble Lord, Lord Mancroft, said. We very much welcome Amendment No. 118A and congratulate the noble Earl on introducing it.

Earl Ferrers

I am grateful for those most generous remarks from the noble Baroness, Lady Mallalieu. Perhaps I may try to address the point of the noble Lord, Lord Airedale. He said that all the promoters wanted to do was to operate within the law. If the Committee agrees to Amendment No. 118A the promoters will be able to operate far more easily within the law because the proceeds limit will have been increased from £500,000 to £1 million. The prize limit goes up from £50,000 to £100,000. The noble Lord is worried that the promoters will have to print more tickets. Of course, that happens at present; people print more tickets and take a risk. That is part of the professionalism of running a lottery or any business. The point is that the limit will be £1 million and they must not go over the limit. If they do, if they take a risk and are wrong, then they breach the law.

Lord Swinfen

My noble friend has increased the size of the lottery that can be run by a society, which is very welcome. He has not raised, as I seek to raise, the prize money available to those who wish to participate in the lottery.

When we were discussing the national lottery, a figure of 50 per cent. of the proceeds was suggested as being available for prize money. I do not suggest that. I suggest a maximum of 20 per cent. It is a matter of making charitable lotteries as attractive as the national lottery to those who may wish to take a chance on them. As has been mentioned, charities fear that they will lose income to the national lottery. I should be grateful if, between now and the next stage, my noble friend would consider that. I shall also give his comments some thought because it may be that the wording of this subsection needs to be slightly changed to show that it is the total value of prizes that I am after, not just the value of one prize. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 118 not moved.]

Viscount Astor moved Amendment No. 118A: Page 20, line 13, leave out ("£500,000") and insert("£1,000,000").

On Question, amendment agreed to.

[Amendment No. 119 not moved.]

Earl Ferrers moved Amendment No. 120: Page 21, line 6, at end insert: ("(16) The amount of the proceeds of a society's lottery or a local lottery appropriated for the provision of prizes and the amount of those proceeds appropriated on account of expenses (exclusive of prizes) shall not exceed in aggregate a prescribed percentage of the whole proceeds of the lottery.").

The noble Earl said: In moving this amendment I shall speak also to Amendments Nos. 121 and 122. Amendments Nos. 120 and 121 will enable the Secretary of State to prescribe a maximum proportion of the proceeds of a lottery which may be used for expenses and prizes. The effect of a maximum like this would be to guarantee a minimum proportion for good causes. If, for example, a maximum of 75 per cent. was prescribed, the good causes would be guaranteed at least 25 per cent. of the proceeds.

Amendment No. 122 would enable an order prescribing the maximum percentage of the proceeds which may be used for prizes and expenses and to make different provision for different cases or circumstances. There may be a case, for example, for prescribing a higher percentage for instant lotteries, which tend to return a higher proportion of stakes in prizes than for traditional draw lotteries, where the amount spent on the provision of prizes tends to be rather less. I beg to move.

On Question, amendment agreed to.

Clause 48, as amended, agreed to.

Clause 49 [Defence in respect of a contravention of section 11(5) of the 1976 Act]:

Earl Ferrers moved Amendment NO. 120A: Page 21, leave out lines 7 and 8 and insert: ("(1) Section 13 of the 1976 Act (offences relating to societies' lotteries and local lotteries) shall be amended as follows. (2) In subsection (1) (contravention of requirement of Act or of regulations made under it) for "or of any regulations made under it" there shall be substituted ", of any regulations made under it or of any order made under section 10 above". (3) After subsection (2) there shall he inserted-").

The noble Earl said: In moving this amendment I should like to speak to Amendment No. 120B. These two amendments are consequential upon the provisions of Clause 47 of the Bill. I beg to move.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 120B: Page 21, line 20, at end insert: ("(4) In subsection (4) (defence in respect of contravention of section 10 etc.) after "contravention of" there shall be inserted "an order made under".").

On Question, amendment agreed to.

Clause 49, as amended, agreed to.

Clause 50 [Powers of the Secretary of State to vary monetary limits and to prescribe or vary fees]:

Earl Ferrers moved Amendments Nos. 121 and 122: Page 21, line 27, at end insert ("or prescribe the percentage referred to in subsection (16) of that section"). Page 21, line 38, leave out from ("(2)") to end of line 40 and insert ("for "subsection (1) (e) above" there shall be substituted "subsection (1) above may make different provision for different cases or circumstances and an order made by virtue of paragraph (e) of that subsection".").

The noble Earl said: I move Amendments Nos. 121 and 122 en bloc. I spoke to them with Amendment No. 120. I beg to move.

On Question, amendments agreed to.

Clause 50, as amended, agreed to.

Clause 51 agreed to.

Clause 52 [Removal of prohibition on the use of premises for the delivery of football pools coupons and stakes]:

Lord Brabazon of Tara moved Amendment No. 123: Page 22, line 33, after ("forecasts") insert ("(i)").

The noble Lord said: With the leave of the Committee, I shall speak also to Amendments Nos. 124 and 125.

We now move on to Part IV of the Bill, a completely different area to all that we have been discussing so far. I have to say to my noble friend that there are four important issues which are covered in the series of amendments to Part IV of the Bill. My noble friend's amendment on roll-over is very important. With the best will in the world, I do not believe that we shall be able to cover the whole of the issue of Part IV of the Bill in the next 18 minutes. I really do feel that Part IV of the Bill, which concerns the football pools industry, a major industry in this country, deserves more than 18 minutes' worth of consideration at Committee stage. However, I shall commence on the amendments.

The Committee will already be aware that during the Bill's passage in another place several amendments were made to take account of the pools industry's right to compete fairly and equally for its existing markets with the national lottery.

From the earliest stages of the Bill—indeed, before it was even introduced—the pools were arguing that their product and the lottery were equivalent forms of long-odds, low-stake gambling which would be competing for similar markets. It was therefore vital that they be afforded the same treatment in the market as was given to the lottery. I am pleased that the Government have agreed to take account of the industry's case, and I am delighted with the distance that they have travelled to accommodate the concerns that have been voiced from many quarters.

Without the amendments the impact of the national lottery would have had serious implications for pools business and, consequently, the jobs of its many thousands of employees on Merseyside, and in Cardiff, Glasgow and London.

Furthermore, the £100 million that the industry currently contributes to good causes through the Foundation for Sport and the Arts and the Football Trust would also have been threatened. Most importantly for the Chancellor, of course, a downturn in pools business would also have meant a reduction in the £320 million received by the Treasury in tax revenue.

One of the amendments accepted by the Government to annul those fears dealt with the sale of pools coupons in shops. In short, whereas before it was illegal for pools coupons to be sold in shops, the Government now recognise that if lottery tickets are to be sold from those premises, so too should pools coupons.

Although technically illegal, it is widely known that pools coupons have, for a long time, been available from shops. In practical terms, therefore, the legalisation of the sales will now make easier the marketing of pools coupons which will be better able to compete with the sale of lottery tickets from the same premises.

While I fully support the spirit of the amendment, I still have a number of concerns in regard to the definition of "qualifying competition" in Clause 52; that is, the type of competition that is allowed on pools coupons sold in shops. The offending text in subsection (4D) (a) of Clause 52 reads: a competition for prizes for making forecasts as to association football games to be played on a Saturday, a Sunday or a day that is a bank holiday in England and Wales or in Scotland under the Banking and Financial Dealings Act 1971".

While the Government have come some way in broadening the definition of a "qualifying competition" through the inclusion of association football matches played on Sundays and bank holidays, there is still the problem that the definition does not yet include events other than football —for example, major horse races and cricket matches. Currently, pools companies do, from time to time, use such non-football events on their coupons and, if the amendment is not accepted, will now be unable to do so on their coupons sold in shops.

It is absurd that the pools companies will only be allowed to sell in shops coupons which use football matches while on those coupons which are, for example, sold door to door, they will be allowed to use a number of different sports. The ludicrous situation will be created where the pools would be forced to issue two types of coupons; the first type for sale in shops, which would relate only to football matches, and the second, which would cover the rest of the business.

The Government should therefore consider carefully whether to continue with what I and the pools companies regard as a needless, and extremely petty, restriction. After all, it is already an established practice to run pools competitions on sporting events other than football.

I suspect that my noble friend will resist the amendment on the grounds that it may open a Pandora's Box of pool betting in unlicensed premises. With respect to him and the Government, that is nonsense. Does anybody believe that in 70 years of pools operations in this country it would not have been possible before now, had a market existed for it, to introduce the sort of pools competition the Government now appear to fear. The truth is that the market is limited. How can it be otherwise when the amount of disposable income is limited and 47.5 per cent. of pools turnover disappears in tax and in contributions to good causes even before the proportion available for winners is determined.

All I am seeking is the opportunity for the pools to have the right to continue to operate their business as they have done up to now. If the amendment is not accepted, it will mean that as well as introducing a national lottery into the United Kingdom, the Bill will also effectively take from the pools industry part of its established business. That can neither be fair nor sensible. I beg to move.

10.45 p.m.

Lord Mackay of Ardbrecknish

Perhaps I can open the Pandora's Box because, although my noble friend is understandably concerned about the football pools, my concern is in regard to horse-race betting, the levy and horse racing itself. What my noble friend's amendments would do is allow pools betting, as already happens on, say, the Grand National, and that could be extended to other horse racing. That means that horse-race pool betting would be taking place in unlicensed premises. While the horse-race betting industry accepts that the lottery will come along, and that it will have an impact, it does not believe that it is right that that kind of pool betting should be allowed on unlicensed premises. I hope that my noble friend will resist the amendments.

Lord Dean of Beswick

I listened with care to what the noble Lord, Lord Brabazon, said in moving the amendment. He made an extremely good case. As he said, it is a complicated subject and needs extensive discussion, in spite of the eloquent speech he made. It is unfortunate that tonight we are severely restricted by time. We are expected to finish our business in 11 minutes, which means that there is little time to argue the case. Although some time may be available in the spill-over, it is a very small amount of time indeed. On that basis, I support the amendments moved by the noble Lord, Brabazon. I do so in an individual capacity—that is why I am not speaking from the Front Bench. I have no doubt that if the issue is not taken tonight we shall be debating the matter at greater length at the Report stage.

Earl Ferrers

I agree with both my noble friend Lord Brabazon and my noble friend Lord Mackay of Ardbrecknish. My noble friend Lord Brabazon thought that I would probably resist the amendment. He is quite right. My noble friend Lord Mackay of Ardbrecknish hoped that I would resist it; and he is right. So we start off in agreement.

These amendments seek to extend the definition of a "qualifying competition". As it is set out in the Bill, the definition relaxes the law to football pools coupons only. The reason for that is simple. As my noble friend Lord Mackay suggested, if we allow pool betting on other sports to take place in newsagents arid other shops, it could potentially turn those shops into unlicensed premises and unregulated betting offices. We should be wary about going down that road.

We have some sympathy for the pools in their companies' desire that existing pool companies should be able to market their other existing pools competitions through retail outlets at the same time as their football competitions. We have therefore given careful consideration to these arguments. But having studied them, I am afraid that they serve only to reinforce our view that it would not be possible to amend the Bill to allow existing pool promoters to market all their other existing pools competitions through shops without opening up the possibility cif large-scale pool betting on a whole variety of sports —such as horse-racing and dogs: the Pandora's box as my noble friend referred to it —taking place in these premises. The effect would be to undermine the systern of licensed betting offices.

We see two particular difficulties with the amendments. First, I do not think that the well intentioned attempt to limit a pool promoter to 52 other qualifying competitions a year —in other words, competitions which are not based on football —willl achieve its purpose. This restriction could easily be evaded by a parent company setting up any number of subsidiaries, each of which may register as a pool promoter and run its so-called quota of 52 competitions a year.

The second difficulty which we have with the amendments is the definition of a, customary pool betting game or sporting event I appreciate that the phrase, of the same kind as or is broadly similar to", has a precedent in the British Telecommunications Act 1981, but in this context we believe that it would be too expansive and vague. The phrase could, for example, open the way for pool betting on any horse or greyhound race to take place in ordinary retail outlets.

For those reasons I hope that the Committee will agree that the Bill would be better without my noble friend's amendment.

Lord Brabazon of Tara

I have listened carefully to my noble friend's reply and naturally I do not intend to press the amendment tonight. I should like to consider his reply. As I said in my opening remarks, there will be this anomaly in the difference between football pools and pools on other sports except that the only difference in the anomaly is that they will not be available for sale in shops. They will still presumably be available for sale by collectors going round houses or factories, as happens at the moment, so the concerns of my noble friend Lord Mackay will not be entirely satisfied. But that is what happens at the moment. However, in the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 124 and 125 not moved.]

Clause 52 agreed to.

Clause 53 agreed to.

Earl Ferrers moved Amendment No. 126: After Clause 53, insert the following new clause:

Roll-over of prize money

(".—(1) Schedule 2 to the Betting, Gaming and Lotteries Act 1963 (registered pool promoters) shall he amended as follows.

(2) In paragraph 13 (requirements with which the pool betting business of a registered pool promoter must comply) for sub-paragraph (e) there shall be substituted—

(e) the total amount payable by way of winnings shall, in the case of each competition, be calculated in accordance with paragraph 13A of this Schedule;".

(3) After paragraph 13 there shall be inserted—

13A.—(1) In any competition the total amount payable by way of winnings shall be the aggregate of—

1. (a) the total amount of the stakes in respect of entries in the competition, less the relevant percentage of that total amount; and
2. (b) any amount that has been duly carried over to the competition from a previous competition in accordance with any provision made under paragraph 14A of this Schedule;

less any amount that falls to be carried over from the competition in accordance with any such provision.

(2) In sub-paragraph (1) of this paragraph "relevant percentage" means such percentage as may be determined by the promoter, being—

1. (a) the same percentage in respect of all his competitions which depend on the same events or on events taking place on the same day; and
2. (b) a percentage which is determined and notified to the accountant before that day."

(4) In paragraph 14—

1. (a) after "paragraph 13(d) or (e)" there shall be inserted "or 13A", and
2. (b) for "paragraph 13(e)" there shall be substituted "paragraph 13A".

(5) After paragraph 14 there shall be inserted—

14A.—(1) Subject to any directions under paragraph 14B of this Schedule, the rules applicable to any competition may provide that if none of the bets in the competition qualifies for, or for a share in, the first prize—

1. (a) the amount of that prize shall be carried over to the next relevant competition, or
2. (b) part of that amount shall be carried over to the next relevant competition and the balance shall be applied as mentioned in paragraph 14(1) (b) of this Schedule.

(2) In sub-paragraph (1) of this paragraph—

1. (a) "the first prize" means the highest prize that can be won, having regard to the outcome of the events on wl'ich the competition depends (and not any higher prize that could have been won had the outcome of those events been different),
2. (b) "the next relevant competition" means the next competition to be held by the same registered pool promoter under the same rules within the fourteen days following the day on which the result of the competition is determined, and
3. (c) the reference in paragraph (b) to part of the amount referred to in paragraph (a) is to such proportion of that amount as may be specified in the rules or as may be determined by the promoter in accordance with the rules.

14B.—(1) The Secretary of State may direct that any provision made under paragraph 14A of this Schedule—

1. (a) is not to have effect, or
2. (b) is to have effect subject to such limitations as are specified in the direction.

(2) The limitations that may be specified under sub-paragraph (1) (b) of this paragraph include—

1. (a) limitations as to the number of competitions from which amounts may be carried over, and
2. (b) limitations as to the period within which any such competitions may be held.

(3) Any directions under this paragraph shall be given in writing and may be varied or revoked by subsequent directions.

(6) In paragraph 15—

1. (a) after "paragraph 13(d) or (e)" there shall be inserted "or 13A", and
2. (b) for "paragraph 13(e)" there shall be substituted "paragraph 13A".

(7) In paragraph 20(1) (information relating to a competition which the promoter is required to include in a statement to the accountant) after paragraph (b) there shall be inserted—

1. "(bb) the amount (if any) carried over to the competition from a previous competition in accordance with any provision made under paragraph 14A of this Schedule;
2. (bbb) the amount (if any) carried over from the competition in accordance with any such provision;".

(8) In paragraph 21 (statement as to commission and expenses which the promoter is required to send to every competitor in a competition)—

1. (a) in sub-paragraph (1) (a) for the words from "after deducting" to the end there shall be substituted "after making in respect of each of those competitions the deductions mentioned in sub-paragraph (1A) of this paragraph;", and
2. (b) after sub-paragraph (1) there shall be inserted—

(1A) In relation to any competition, the deductions referred to are—

1. (a) a deduction of the aggregate of the total amount payable by way of winnings in the competition and any amount carried over from the competition in accordance with any provision made under paragraph 14A of this Schedule, less any amount carried over to the competition in accordance with any such provision, and
2. (b) a deduction of the amount of pool betting duty payable in respect of the competition."

(9) In paragraph 23(1) (content of annual statement to be sent by registered pool promoter to accountant and registering authority) in paragraph (b) for the words from "after deducting" to the end there shall be substituted "after making in respect of each of those competitions the deductions mentioned in paragraph 21(1A) of this Schedule;".").

The noble Earl said: This new clause fulfils an undertaking which was given by my honourable friend the Minister of State in another place to bring forward a government amendment which will afford the pools companies the opportunity to roll over prize money on terms similar to those which apply to the national lottery. The clause amends Schedule 2 to the Betting, Gaming and Lotteries Act 1963. I beg to move.

Lord Brabazon of Tara had given notice of his intention to move, as amendments to Amendment No. 126, Amendments Nos. 126A to 126E: Line 53, leave out ("fourteen") and insert ("twenty eight").

Line 55, after ("determined") insert ("or either of the following two such competitions (whether or not falling within that period)").

Line 59, at end insert:

("(3) If at any time it appears to the Secretary of State—

1. (a) that the effect of this paragraph or paragraph 13 above or both those paragraphs is to impose a prohibition or restriction on the carry over of prizes in a competition; and
2. (b) that that prohibition or restriction—
1. (i) does not apply to the carry over of prizes that can be won in a lottery forming part of the National Lottery, or
2. (ii) is more restrictive than the prohibitions and restrictions which apply by virtue of any enactment to the carry over of those prizes,

he shall by regulations make such modifications of this Schedule as he considers are necessary or expedient for the purpose of securing that that prohibition or restriction ceases to apply or, as the case may be, that it is no more restrictive than those prohibitions and restrictions.").

Line 70, at end insert:

("(2A) Where the Secretary of State gives a direction under this paragraph in respect of any provision in any rules applicable during any period to a competition promoted by a registered pool promoter, he shall also give directions to the same effect in respect of any similar provisions in any rules applicable to a competition promoted by another registered pool promoter in that period.

(2B) No direction may he given under this paragraph the effect of which is to impose a prohibition or limitation on the carry over of the whole or part of the amount of a prize in a competition unless a corresponding prohibition or limitation applies to the amount payable as the highest prize that can be won in a lottery forming part of the National Lottery.").

At end insert:

("(10) In section 7 of the Betting and Gaming Duties Act 1981 (pool betting duty) after subsection (4) (which provides that the expenses and profits taxable under subsection (1) (b) of that section are to exclude expenses provided out of stake money) there shall be inserted—

(4A) Where any amount carried over in accordance with paragraph 14A of Schedule 2 to the Betting, Gaming and Lotteries Act 1963 would not (apart from this subsection) be treated for the purposes of subsection (4) as provided for out of the stake money, it shall be so treated.".").

The noble Lord said: In view of the lateness of the hour I do not propose to move the amendments to my noble friend's new clause, but I shall wish to return to them at the next stage.

Baroness Mallalieu

In supporting these amendments there is a matter which I understand was raised by my noble friend Lord Howell at an earlier stage. It seems that by these amendments the pools promoters are receiving every consideration in this Bill. It is to be hoped that the Minister will perhaps be able to persuade them that their accounts, which I understand are still not published, and other matters, are placed in the public domain. It would be helpful if, in addition to having placed in the Library of this House, information about the effect of lotteries on charities and also on the Horserace Betting Levy Board, we could have similar information about the pools. It would seem, because of the consideration which they have received in relation to this Bill, the least that the pools promoters could do is to ensure that that information is provided not only to this Committee but also to the public.

Earl Ferrers

Perhaps I may answer the noble Baroness. I believe that the pools companies are themselves best placed to provide information on their income. We shall of course be more than happy if they volunteer to share such information with Members of this Chamber and of another place. I shall certainly bear in mind what the noble Baroness said.

[Amendments Nos. 126A to 126E, as amendments to Amendment No. 126, not moved.]

On Question, Amendment No. 126 agreed to.

Clause 54 [Pools promoters' dividends]:

Earl Ferrers moved Amendment No. 127: Page 23, line 28, after ("by") insert ("section (Roll-over of prize money) (4) and").

The noble Earl said: I spoke to this amendment with Amendment No. 126. I beg to move.

On Question, amendment agreed to.

Clause 54, as amended, agreed to.

Lord Lucas had given notice of his intention to move Amendment No. 126F: After Clause 54, insert the following new clause.

("Announcement of game of skill or competition

.—(1) The codes drawn up under sections 9 and 93 of the Broadcasting Act, 1990 (which provide for the control of advertisements broadcast on television and on radio) shall require that any advertisement or announcement concerning a game of skill or other competition (not being a lottery) shall state the expected percentage return to participants, determined in accordance with (2) below, unless the value of the prizes offered varies in direct proportion to the number of participants, when the ratio (P) (N) below shall be the actual value of the prizes offered per participant.

(2) The "expected percentage return" shall be determined from the formula: (P/N) * (100/S) where

P is the lower of the cost of the prize(s) in the game to the promoter or their retail value to the participants.

S is the cost (or expected average cost) to each participant or participatory in the game, including the costs of postal or telephone communication.

N is the expected number of participants in the game, which shall be the maximum allowed number of such participants unless there is no such maximum, when it shall be the greater of

1. (a) the number of participants in the most successful game run in the previous year by the promoters, or
2. (b) the number of participants in the most successful game promoted in the previous year on the television or radio station concerned, or
3. (c) 10,000.").

The noble Lord said: I shall return to this amendment at Report, but for the moment the amendment is not moved.

[Amendment No. 126F not moved.]

Lord Brabazon of Tara moved Amendment No. 128: After Clause 54, insert the following new clause:

("Control of broadcast advertisements as respects lotteries and pool betting competitions

.—(1) Subject to subsection (2), the codes drawn up under sections 9 and 93 of the Broadcasting Act 1990 (which provide for the control of advertisements broadcast on television and on radio) shall not discriminate between advertisements promoting activities falling within different paragraphs of subsection (3).

(2) The code may impose different conditions in relation to such advertisements if—

1. (a) the conditions imposed in relation to an advertisement for an activity falling within one of those paragraphs would be inappropriate in relation to an activity falling within another of those paragraphs; and
2. (b) conditions are also imposed in relation to advertisements for that other activity which are of a broadly similar commercial effect.

(3) The activities referred to in subsection (1) are—

1. (a) a lottery forming part of the National Lottery for the purposes of Part I of this Act;
1623
2. (b) a lottery which is declared by section 3, 4 or 25(6) of the Lotteries and Amusements Act 1976 not to be unlawful;
3. (c) a society's lottery or local lottery within the meaning of section 5 or 6 of that Act; and
4. (d) a competition conducted as part of the pool betting business carried on by a registered pool promoter (within the meaning of section 4 of the Betting Gaming and Lotteries Act 1963) or by way of sponsored pool betting.").

The noble Lord said: We now turn to the issue of broadcasting advertising. I have already spoken today —as well as at Second Reading—on the pools industry's right to compete fairly and equally for its existing markets with the national lottery. The pools, as the Committee will be aware, have fought hard to ensure that, following the introduction of the national lottery, they have the necessary freedoms to operate in the market place and to compete effectively with the lottery for their existing clients.

I have tabled this amendment, similar to those tabled in another place, in the same spirit of free and fair competition. It is vital that the pools are given the same rights to market their products as will be given to the national lottery. These measures are necessary, as I said in moving my earlier amendment, to protect the jobs of pools employees as well as the contributions, which I referred to, for good causes. I am not ungrateful, and I welcome wholeheartedly the amendments that the Government have brought to the Bill to ensure that the pools are given a fair deal.

The ability to sell and to market pools coupons in shops properly was a welcome initial step forward. And the Government's new clause on roll-over to be debated in due course seeks to give equal treatment on roll-over for pools and lottery. Furthermore, the decision to reduce the minimum age of pools customers to 16—in line with that which the Government have told us will be applied to lottery customers—and to allow the pools to sponsor television and radio programmes, are additional signs that the pools case has hit home. We have, I feel, almost reached the stage where the pools and lottery can both look forward to the 21st century with confidence. With a few further amendments to the Bill —including the one on advertising, which I am putting forward today—the pools industry can continue in its role as a major employer in high unemployment areas across the United Kingdom. It can continue to make the contributions to which I have already referred.

We all appreciate that the power of advertising in the mass media is immense. To allow the lottery access to that power while denying it to the pools industry would be grossly unfair. Indeed, given the Government's decisions regarding roll-over, the sale of pools coupons in shops and the minimum age for pools customers, I find it difficult to imagine any basis on which they can sustain this position.

Giving the lottery a right to advertise on mass-audience media when its direct competitor is not given the same freedoms is tantamount to market rigging. It is, for instance, undeniable that the hype associated with a television draw leads to increased last-minute ticket sales. Indeed, I am told that it is possible with some on-line games to purchase tickets up to 10 minutes before the draw. Such a powerful marketing tool would give the national lottery a huge and unfair advantage over the pools.

Of course, I welcome and advocate fully the principles of free and fair competition. There is no reason why the national lottery should not try to convince people who play the pools to buy a lottery ticket. That is only right. What is not right is that the lottery should be allowed to advertise its product—a product which is so similar to that offered by the pools - on media from which the pools are excluded. I hope therefore that the Committee and my noble friend will feel able to accept the new clause. I beg to move.

11 p.m.

Lord Birkett

The amendment ought to have included something about bingo clubs. They cannot advertise the size of their prizes—except for the national game - and they cannot advertise where one can play. I do not expect an answer from the Government about bingo clubs tonight, but perhaps my noble friends will consider the matter and write to me about it.

Lord Aberdare

I warmly support my noble friend's amendment. I think that I should repeat the declaration of interest that I made on Second Reading as chairman of the Football Trust. We get our funds either directly or indirectly from the pools companies and are therefore vitally interested in fair competition between the pools and the national lottery. I shall make my remarks as quickly as I can because time is moving on and my noble friend has put the matter very succinctly.

I, too, am most surprised at the Government's refusal to allow the pools to advertise on television and radio. It is obvious that television will be used by the lottery companies - and used very effectively -while the pools companies will not be able in any way to refute what they may say or to make any impact at all on what is the most influential of all media.

Giving the lottery a monopoly will give it a massive competitive advantage over the pools. All along the Government have told us that they do not wish to impede the pools' progress or to damage them. However, not allowing them to advertise on television is, in gambling terms, to load the dice heavily in favour of the lottery. I hope that my noble friend on the Front Bench will take careful note of the amendment and possibly agree to it.

Lord Mackay of Ardbrecknish

As was the case with my noble friend's previous amendment, I would be happier if this amendment extended the level playing field argument to horse-racing. I trust that my noble friend the Minister will either resist the amendment or suggest that he will introduce a proper level playing field on advertising at a later stage.

Lord Dean of Beswick

I rise briefly to support the amendment so ably moved by the noble Lord, Lord Brabazon, which received knowledgeable support from his colleague the noble Lord, Lord Aberdare.

The case for the amendment has been made. I think that it will provide a level playing field. The noble Lord, Lord Mackay, seems to have become the hit-man tonight for the horse-racing industry. In my opinion, that is one of the industries in this country which has always been able to look after itself. He would do better to produce something of his own instead of latching on to other noble Lords' amendments. The amendment will level the playing field., and I give it my support. This issue is too big for this time of night. We shall no doubt return to it at a later stage.

Earl Ferrers

My noble friends Lord Brabazon and Lord Aberdare want the football pools to be afforded the same opportunity to advertise on television and radio as is afforded to lotteries. My noble friend Lord Mackay of Ardbrecknish hoped that I would resist the amendment unless it applied also to horses, in which case there would be a level playing field. I merely tell my noble friend that horses do not run on playing fields. There is a perfectly good playing field at the moment because the arrangements for the broadcast advertising of gambling are well established. Lotteries may advertise on commercial television and radio, first, because they are at the "soft" end of the gambling spectrum; and, secondly, because they are promoted primarily to benefit good causes. Betting and gaming, on the other hand, are promoted for commercial ends. and are therefore prohibited from advertising in the broadcast media. That is a good distinction. We do not believe that it is right to change that arrangement.

One of the reasons why we do not think it is right to do so is because the Rothschild Royal Commission on Gambling addressed that question. What it says still holds good today. In 1978, the report concluded: We approve of the IBA ban on the advertisement of pool betting, even though it is now possible, and under our proposals will remain so, to advertise lotteries, including a national lottery for good causes, on radio and television. Considered as forms of gambling, there are similarities between the pools and lotteries, but the latter can be mounted only for good causes while the former are run for private profit and this justifies the lotteries' advantage". That is what we have followed. That diktat still holds good, and it holds good for this Bill too.

Lord Brabazon of Tara

I am grateful to my noble friend for his explanation. Naturally, I do not accept his argument. If there is such a difference between the pools and a lottery, why have my noble friend and the Government conceded so many issues up until now? We are merely speaking of that level playing field. I say to my noble friend Lord Mackay that horse racing is a different kettle of fish altogether—if I may put it like that—because it is short odds gambling as opposed to the low stake long odds gambling of the pools and the future lottery. However, in view of the lateness of the hour, beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Airedale moved Amendment No. 129: After Clause 54, insert the following new clause: ("Disapplication of s.I of Lotteries and Amusements Act 1976 . Section I of the Lotteries and Amusements Act 1976 (Illegality of Lotteries) shall cease to apply to the conduct of a football pool.").

The noble Lord said: This is the season of the year when Members of the Committee may expect to find in their junk mail a letter from a football pool promoter advising them that they are much too busy to take part in the football pools week by week. So, says the promoter, why not have a standing entry to last, intact and identical, for the whole 42 weeks of the football season? In that way, for a modest weekly contribution, they will have the weekly thrill that they may win a sizeable sum without any further trouble.

The difficulty is that the legality of the football pools depends upon their being regarded as a game of skill, which they are. That is made clear in a House of Lords case called Singette Ltd. and others v. Martin decided in 197O, reported in [1970] 3 All England Reports at page 938. I shall not go into the judgment.. I propose merely to quote about 12 words from the headnote of the case which states: Football pool betting scheme—Necessity for element of skill in forecasting to comply with statutory requirements".

The difficulty is that if you enter a standing entry for 42 weeks, after about the second week you have no idea which teams will be taking part in the matches opposite the places where you have made your marks on the coupon. Skill has obviously gone out of the window and you are taking part in a lottery. You probably know that you are taking part in a lottery. The promoter will certainly know that you are taking part in a lottery. This is a wide departure from the law and it brings the law into contempt.

I obtained permission from the noble and learned Lord, Lord Hailsham, to quote what he said about the rule of law. He said that the rule of law is really a gigantic confidence trick. It only works because people want it to work and because they believe in it. If the law is constantly flouted, as it is in this case. whether in relation to football pools, gambling, Sunday trading or anything else, that tends to bring the rule of law into disrepute. That is serious because nothing stands between us and anarchy except the rule of law.

Why has the law in this case been allowed to be flouted all these years? Is it something to do with the fact that the Chancellor of the Exchequer is by far the biggest winner on the football pools? Every week the Chancellor has a magnificent win on every football pool. Perhaps Government thinking is: why disturb the bird which lays these marvellous golden eggs? It is a very unsatisfactory state of affairs.

There are three things to be done about a law which is being flouted; you can enforce it, you can amend it or you can repeal it. The one thing which is inexcusable is to do nothing about it. This amendment seeks repeal, and I hope that it will be acceptable. What can it matter if a few people want to have a standing entry in a football pool throughout the season? It will not change the nature of the football pool at all. Every week the vast majority of punters will be exercising their usual skills to forecast the next. Saturday's matches. If a few people want a standing entry, why not allow them to have that without forcing them to break and to flout the law? I hope that the Government will accept the amendment and tidy up this very unsatisfactory state of affairs. I be,g to move.

Earl Ferrers

The noble Lord, Lord Airedale, wants to remove the requirement that the football pools must take the form of a forecasting competition. The effect of such a change would be to alter the whole character of the football pools and, in effect, set them up as rival national lotteries. But whereas the national lottery will be promoted to benefit good causes, the lotteries run by Littlewoods, Vernon's, Zetters and so forth will be promoted for commercial gain.

The noble Lord said that the pools was a game of skill. I do not deny that there is not an inconsiderable element of chance in the football pools, but that is the nature of all betting. However, there is some skill and judgment; and the exercise of that must improve the chances of winning. That football pools may to some appear like a lottery is immaterial. The fact is that they are not lotteries. As the pools are a game of skill, they should be subject to a different regulatory regime from the national lottery and from other lotteries, which are of course a game of chance.

The pools companies have argued that they have no intention of denying those who want to exercise skill the opportunity to do so. That is as may be. But they also say that the character of the pools as a skill-based competition is an inconvenience. What they want is to market the pools not as a form of long-odds betting but as a lucky numbers game—a lottery. It is that proposition which we find difficult to accept.

I cannot advise the Committee to accept the amendment. The fact is that there is a difference between a game of chance and a game in which skill is involved. That is why the two forms of betting or gaming are covered by different regulatory regimes. I hope that the noble Lord, Lord Airedale, will agree that it would not be suitable to make that alteration in the Bill.

11.15 p.m.

Lord Swinfen

How can it be a game of skill when you buy your weekly entry for 42 weeks or whatever it happens to be and you do not know which teams will be playing in the later weeks? You cannot, from your judgment, decide which team will beat which. How can that be a game of skill?

Earl Ferrers

The effect of the amendment would change the nature of the football pools. At present, they are a form of gambling in which skill is advocated. My noble friend is saying that if everyone fills in the same old form for 52 weeks each year there is no skill involved. My noble friend is trying to change the football pools into a lottery. I suggest that that is not the proper course to follow.

Lord Airedale

The gravamen of what I am saying is that the law is being flouted. I hope that the noble Earl will think about that. I will withdraw the amendment and consider carefully what the Minister said.

Amendment, by leave, withdrawn.

Clause 54 agreed to.

Clause 55 [Orders and regulations]:

Lord Swinfen had given notice of his intention to move Amendment No. 130: Page 23, line 40, after ("25") insert (", 26").

The noble Lord said: I do not propose to move the amendment owing to the lateness of the hour. However, before we return to the Bill on Report perhaps my noble friend will reflect on whether or not Parliament should approve the powers exercisable by the Secretary of State under Clause 26.

[Amendment No. 130 not moved.]

Clause 55 agreed to.

Clauses 56 to 59 agreed to.

Schedule 10 [Repeals]:

Viscount Astor moved Amendment No. 131: Page 50, line 25, column 3, leave out from ("section") to end of line 27 and insert ("3(6) (d), the words from "acting" to "1979".").

On Question, amendment agreed to.

Schedule 10, as amended, agreed to.

Clause 60 [Commencement]:

Baroness Mallalieu moved Amendment No. 132: Page 24, line 22, at beginning insert: ("(1) Subject to subsection (2B) below,").

The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 135. The purpose of these two amendments taken together is to bring into force, with effect from the day on which the Bill receives Royal Assent, those aspects of the Bill which amend the provisions relating to existing lotteries governed by the Lotteries and Amusements Act 1976. The effect of that would be to enable charities and other voluntary groups to raise increased revenue from their own lotteries at the earliest possible opportunity. I hope that the amendments are acceptable to the Government. I beg to move.

Lord Brabazon of Tara

I shall speak to Amendments Nos. 132A and 134A. My first amendment tackles the issue of the sale of pools coupons in shops. As I have already made clear, I am very pleased that the Government saw fit early on in the passage of the Bill to make provision in the legislation for that already wide-spread practice. I seek to make sure that that very sensible decision, based on practicality rather than bureaucracy, is implemented as quickly as possible—to be precise, within one month of the passing of the Act.

It is the case that the legislation on the sale of pools coupons in shops was introduced because the letter of the law sat so uncomfortably with established practice. The Government recognise that many thousands of retail outlets across the country have been selling coupons for years. Consequently, they decided to adjust legislation to accommodate that reality.

My right honourable friend the Minister of State at the Home Office has indeed recognised that the decision to legalise the sale of pools coupons in shops is based entirely on the need to bring the law back into line with reality. During consideration of the Bill in Committee in another place he said: By authorising the delivery of completed coupons and stake money only, but not the paying out of prize money, the new clause does no more than legalise existing practice". As that is the case, there can surely be no reason for a time delay between Royal Assent and the legalisation of the existing practice. Many thousands of shopkeepers receive a considerable income from the sale of pools coupons, and it would be most unfair to them if they were to be denied this because of a delay in implementing what we must all recognise as a very sensible change in the law.

The second amendment simply makes the point that fair and level competition on roll-over should, in line with government commitments, be brought in as soon as the lottery comes into effect. I hope that my noble friend can give me some words of comfort on my two amendments.

Lord Aberdare

Again, I should like to support the remarks made by my noble friend Lord Brabazon of Tara. I understand that there are about 20,000 retail outlets already selling such football pool coupons; and, indeed, they have been doing so for years. As soon as the practice is properly legalised, the better it will be. Therefore, there is no reason for a delay between Royal Assent and legalising the existing practice.

Lord Mackay of Ardbrecknish

I should like to speak to Amendment No. 133A in respect of which am slightly more impatient than my noble friend. However, the reasons behind the amendment are exactly as my noble friend gave; namely, that it seems only sensible if we are regularising the law that we should do so immediately we have the legislative opportunity. In addition, the proposed amendment would mean that Clause 52 would allow the football pools to negotiate with the betting shop industry to use betting shops as well as ordinary shops as an outlet.

Lord Birkett

I have tabled two amendments in the present group, Amendments Nos. 133 and 134. I put them forward only to prevent the football pools inventing a national lottery before the real national lottery is established. As I am quite sure that the Government do not want that to happen any more than I do, I shall not move my amendments.

Earl Ferrers

Clause 60 leaves the commencement date for the different provisions of the Bill to be determined by my right honourable friends the Home Secretary and the Secretary of State for National Heritage. While I fully understand and sympathise with the thinking behind the amendments tabled in the name of the noble Lord, Lord McIntosh, which the noble Baroness, Lady Mallalieu, moved, I am afraid to say that for practical reasons it simply will not be possible to bring Part III of the Bill into operation as quickly as the noble Baroness would like.

In particular, a period of time will be needed to enable possibly up to 1,000 societies to register with the Gaming Board under the new Schedule 1A to the 1976 Act, inserted by Schedule 7 to this Bill. In addition, there are a number of consequential changes that will need to be made to the lotteries regulations of 1977. We are required to consult the Gaming Board and local authority associations about such changes. We shall also want to hear the views of the promoters of society lotteries. Again, such consultations will take a little time.

I know that any delay in bringing Part III into force will come as a disappointment to a number or charities hoping to benefit from the new monetary limits. But I hope that the noble Baroness will accept the reasons for that and my assurance that we shall do all we can to keep the delay to an absolute minimum.

With regard to the commencement of the provisions in Part IV of the Bill which relate to the pools, we propose to adopt the middle way between the approaches suggested, on the one hand, by the noble Lord, Lord Birkett (who does not propose to move his amendments) and, on the other hand, by my noble friends Lord Brabazon and Lord Mackay of Ardbrecknish. It is our intention to bring those provisions into force as soon as the national lottery is, as they say, "up and running".

My noble friends Lord Brabazon and Lord Mackay have suggested that there is no case for delay in commencement of Clause 52. I cannot agree. Bringing the provision into operation one month after Royal Assent, as proposed by my noble friends, would give the pools an unfair advantage over the lottery. The pools companies would be able to expand their customer base by advertising the coupon collection service available in newsagents and other shops before the national lottery was functioning and was in a position to compete. Therefore, I think that it would be unfair. I hope that my noble friends will agree not: to press their amendments.

Baroness Mallalieu

I confess that I am disappointed by the answer given by the noble Earl. He must he aware that many charities, especially large ones. are already registered with the Gaming Board. I find his answer incompatible—although, perhaps, he may be able to explain—with a Written Answer that he gave to my noble friend Lord Morris of Castle Morris, or 7th June of this year. My noble friend asked the Government: Whether they will provide an estimate of the number of charities that will need to de-register from local authorities and re-register with the Gaming Board in order to comply with the new provisions under the National Lottery etc Bill relating to society lotteries". The noble Earl, Lord Ferrers, answered: Given the large increases in the threshold limits under the Bill, probably very few, if any".—[Official Report, 7/6/93; col. WA 44.] I am not quite clear where the thousands that will cause the delay have arisen from. But given the lateness of the hour, clearly this matter cannot be taken further today and, with the leave of the Committee, I shall withdraw the amendment but may well wish to return to it at a later stage. I beg leave to withdraw the amendment.

Earl Ferrers

Before the noble Baroness does that, I hope I may answer her question. The Written Answer I gave referred to a net increase in board registrations.

Amendment, by leave, withdrawn.

[Amendments Nos. 132A to 135A nor moved.]

Clause 60 agreed to.

Remaining clause agreed to.

In the Title:

Earl Ferrers moved Amendment No. 136: Line 6, leave out from ("amend") to ("the") in line 8 and insert ("section 1 of the Revenue Act 1898 and the Lotteries and Amusements Act 1976: to amend").

The noble Earl said: I spoke to this with Amendment No. 111. I beg to move.

On Question, amendment agreed to.

Title, as amended, agreed to.

House resumed: Bill reported with amendments.

House adjourned at twenty-seven minutes past eleven o'clock.