§ 11.51 a.m.
The Minister of State, Home Office (Earl Ferrers)
My Lords, I beg to move that the Report be now received.
Moved, That the Report be now received.—(Earl Ferrers.)
§ Lord Simon of Glaisdale
My Lords, before my noble and learned friend collects the voices, perhaps I may ask why the Bill is being considered on Report 433 only seven or eight days after the conclusion of the Committee stage. According to the Companion to the Standing Orders, 14 days ought to elapse between the end of the Committee stage and the start of the Report stage with Bills of any length and complexity.
The Bill runs to 55 pages. It has 65 clauses and 10 schedules. Of the clauses only one or two are formal. As for the complication, your Lordships need only consider the Long Title. I put the matter in the form of a question to the Government rather than in the form of a complaint because I know that they are under considerable legislative pressure owing to dilatory proceedings on the European Communities (Amendment) Bill. Nevertheless, it is yet again an aspect of the overloading of the legislative programme and the consequent frustration of your Lordships' proper consideration of Bills.
The noble and learned Lord always uses his perspicacity on these occasions. I am not surprised that he questions why the usual length of time has not occurred between the Committee and Report stages. The noble and learned Lord will realise that a number of considerations have to be given to the presenting of business in the House. It was considered and discussed through the usual channels that this would be a suitable method of dealing with this part of this Bill on this particular occasion. I am sorry that the noble and learned Lord was not party to those discussions or that the procedure may have incommoded him in any way. I apologise for that. However, I am sure that he will understand that the reasons are for the better running of the business of the House.
§ Lord Simon of Glaisdale
My Lords, I am grateful to the noble Earl for the courtesy of his reply. There was no reason at all why I should be consulted. I only add that Back-Benchers and Cross-Benchers tend to regard the usual channels as a conspiracy against their interests.
On Question, Motion agreed to.
Clause 4 [Overriding duties of the Secretary of State and Director General]:
§ Lord Allen of Abbeydale moved Amendment No. 1:
Page 2, line 10, leave out ("and") and insert:
("() that nothing in the way that the National Lottery is run, and every lottery that forms part of it is promoted, shall encourage, directly or indirectly, excessive gambling, and").
§ The noble Lord said: My Lords, I disagree with the grouping. Amendments Nos. 10 and 29 have been grouped with Amendment No. 1. Amendment No. 10 seems to me to raise quite a different point and I shall move it separately. I have a good deal of sympathy with the point made by the noble and learned Lord. This has put me to considerable inconvenience. The expedited passage of the Bill means that I shall be unable to be present next Friday if Third Reading is held on that day as I shall be busy awarding degrees at an academic institution.
§ I make no apology for raising again an issue which we discussed at no great length in Committee. I am 434 afraid that this time the amendment may take a little longer than those we discussed a few moments ago. In all modesty, I believe that I can claim to have a rather greater knowledge of the ills of excessive gambling than the officials who have been busily preparing the measure. Indeed, the department responsible has no experience of lotteries of any kind. This country certainly has no experience of lotteries with very large prizes. With the roll-over provisions now in mind, some prizes could be very large indeed.
§ The lottery simply cannot be brushed aside as a piece of harmless entertainment, when experience in other parts of the world in which there has developed a lottery mania suggests that there is a danger of compulsive gambling. Certain forms of gambling or lottery are more addictive than others. I know that the noble Lord, Lord Merlyn-Rees, has in mind some aspects of that problem. I am anxious about the vulnerability of the young and the disproportionate use of lotteries by the lower income groups.
At col. 1712 of Hansard of 17th June when we discussed the issue the noble Earl stated:
The director general will take a reasonable view, when a type of game is proposed on whether it seems fair and honest for the players".
He later stated:
The Government and director general will take action to prevent games where there is a possibility of damage to the interest of players, including those games which encourage excessive repeat play".
That sounds very splendid. If that is so, I cannot for the life of me see why that should not be provided in the Bill.
However, what puzzles me is this. When objecting to my proposed amendment the noble Earl later stated:
There is no way of determining in law what excessive or addictive gambling is or of determining when the Rubicon is crossed between normal and excessive gambling".—[Official Report, 17/6/93; col. 1713.]
We are discussing Clause 4. There is a duty on the Secretary of State and the director general to ensure that the national lottery is run with all due propriety. Can the courts determine when one crosses the Rubicon between propriety and impropriety? I cannot understand why the objection raised to my form of words does not apply equally to the form of words in the Bill. I do not believe that that is a valid objection; I do not understand it.
§ Perhaps one should not put it beyond the ingenuity of the courts to express their views even on matters of this kind. After all, in the Bentley case the courts recently tried to substitute their judgment for the judgment of a Minister—no longer alive—taken over 30 years ago, with the result that they have come up with a most astonishing proposition. I hope that the Home Secretary will ignore it. But that is by the way.
The phrase in the Bill is just as distant from the normal expectation of legal argument as are the words in the amendment. There is one other point. Clause 4(1) (b) states that it is important to secure that:
the interests of every participant in a lottery that forms part of the National Lottery are protected".
Is it contemplated that there should be research to see how the interests of every participant are protected?
Would not the words which I propose provide one pointer in the direction of what form that research should take?
§ Over the years, the Government seem to have changed their attitude to gambling. In my day, the policy was to permit gambling activities only to the extent needed to meet unstimulated demand. It then shifted a little under the present administration to a policy that the demand for gambling should not be unduly encouraged. We now seem to have shifted to a third phase, that it is no part of government policy to prevent gambling.
§ However, I cannot believe that, although the Government are anxious to raise money, they are unaware of the risks of addictive or excessive gambling. I should be most grateful for an explanation —apart from the normal reluctance to accept any amendment from the Back-Benches—as to why Amendment No. I should not be accepted. I beg to move.
§ Lord Boyd-Carpenter
My Lords, the speech and the point made by the noble Lord, Lord Allen, confirms the significance and validity of the objection which the noble and learned Lord, Lord Simon of Glaisdale, made to the way in which the Bill has been hurried through with inadequate intervals between the stages. The lottery is a matter on which many of us would have wished to take advice from responsible bodies and certainly to have had discussions. However, because the usual channels found it convenient to bring this stage of the Bill forward as early as they have, there has not been time for that.
The problem with the amendment is that it is a good confirmation of the desirability of avoiding haste, by the normal rules of the House as to the length of intervals between stages of a Bill. If your Lordships' House is to do its job as a revising Chamber, that is just the kind of issue on which it should have time for consideration before bringing forward an amendment.
If one examines the noble Lord's proposal, it shows how difficult it is to propose an amendment. Clause 4 introduces the element of propriety. I suppose that it is possible for a court to judge whether propriety has been followed in the terms in which various projects have been put forward. However, I cannot see how anyone can know whether the promotion of a particular project would,encourage, directly or indirectly, excessive gambling".It is true that the offer of a scheme may be perfectly normal and reasonable in its effect on many people, but there are those with a gambling temperament who will be encouraged to excessive gambling by that scheme. One is dealing here not with the exact terms in which the scheme is put forward but with the personalities of the people who look at it. For that reason, although I very much welcome the intentions of the noble Lord. Lord Allen of Abbeydale, I feel that his proposal is not workable. I do not think that one could possibly say whether a scheme was likely to encourage excessive gambling and, in particular, whether it would encourage excessive gambling 436 among a large number of people, a small number of people, a minority or a majority. It would put upon the authorities the responsibility for the enforcement of an impossible position. Therefore, although it is well meaning—
§ Lord Allen of Abbeydale
My Lords, I am sorry to interrupt the noble Lord. and I much appreciate the remarks which he made at the beginning, with which I entirely agree. However, will he accept that many experts say that there are certain forms of gambling such as the scratch cards which, experience suggests, tend to encourage excessive gambling? One can distinguish between different varieties in their apparent appeal to the populace.
§ Lord Boyd-Carpenter
My Lords, think that the noble Lord appreciates the difficulty. It is that any particular proposition might encourage excessive gambling in me, but not encourage it in him. It is so much a question of the recipient and his attitude. If one were to take the matter to its logical conclusion and rule out any proposition which could encourage excessive gambling in anyone, then the whole scheme under the Bill would have to be withdrawn.
I hope that the noble Lord will appreciate that I say that with every sympathy for his idea in putting the amendment forward, but I suggest that it is not workable. Although it is well intentioned and in a good cause, it would simply add a complication to the Bill which would be insoluble and make it quite impossible for the schemes which are proposed by the Bill to be operated. I therefore very much hope that, having aired the matter and indicated anxiety that there is a risk under the Bill of encouraging excessive gambling, the noble Lord will not feel it necessary to press the amendment.
§ Lord Merlyn-Rees
My Lords, I support the amendment, but I too wish to raise some of the issues that have just been mentioned by the noble Lord, Lord Boyd-Carpenter. I cannot recall that when I was at the Home Office, before I became Home Secretary, the gambling board had taken over any functions in which the office was involved in this country. I believe that the experience of the noble Lord, Lord. Allen of Abbeydale, in the Home Office—which is far greater than mine—gives him an advantage in talking to us and raising the issue in a way that the new heritage department could not possibly do. That is true of many other matters which have been allocated to the department; the Home Office has accumulated wisdom going back 200 years. I am riot saying that it is all encapsulated in the arguments of the former Permanent Secretary.
At the beginning I must confess to a defect in talking about gambling. I was brought up in a home with perhaps a naive religious view—Methodism and non-conformity—against any form of gambling. I cannot claim that I lived up to it in later years, but it existed then. Indeed, until recently in my own party in Leeds, the voluntary agent was a Methodist lay preacher who would not raise money in any way by 437 gambling. He always pointed out to me that my attitude was prevalent in the Labour Party when it was first set up.
However, there it is, gambling exists, as I know from my own experience as a constituency Member visiting large numbers of working men's clubs at most weekends. I do not say that in my former constituency there were more such clubs than anywhere else, but it seemed like it. I used to visit them on rota most weekends. Gambling was a most important part of their existence. On the whole the money was raised not to keep the clubs going—they got their money in other ways, from sales—but for old age pensioners, children's outings and things of that kind. I observed simple gambling at first hand, and indeed participated in it. I have no objection to that. This amendment is about excessive gambling; and it is excessive gambling that I want very briefly to consider.
The subject of instant lotteries was examined in a research document provided in the Library many moons ago, when this Bill first appeared, called Gambling in the Single Market. (We are back to the European Community again.) From all the documentation, it seems that instant lotteries should most concern us. The document says:there is some reluctance"—I presume that that means in Europe, where national lotteries have been going for years—to allow this type of lottery as a national game for this very reason"—namely, that there is an instant result—that the winner is immediately tempted to re-invest his winnings in the game, which is seen as encouraging excessive participation".So, as the noble Lord, Lord Boyd-Carpenter, said, there is a particular point to be considered on the nature of the gambling that takes place. The instant lottery, it is argued, is a form of gambling that could lead to excess. I know that the noble Lord, Lord Allen, has been concerned about that.
I am not worried about the instant lotteries (the small lotteries) that I have seen in working men's clubs on a very large scale. I noticed that people bought stakes in them in order to make a donation. They would say: "This is a lottery to send the children to Scarborough in a month's time", or, "It is for the old age pensioners". People bought them not so much out of any gambling instinct, but as a means of providing a donation for that purpose. The small lotteries do not concern me. Indeed, I see no harm in them at all. But I come back to the point about the European experience: there is some reluctance in Europe to allow this type of lottery as a national game. In Europe they know what they are talking about because they have had national lotteries for some time. Therefore I suggest that we ought to take that point into account if we are to copy Europe in this respect. It is said that this type of lottery, as a national game, encourages excessive gambling. Therefore, turning again to the point made by the noble Lord, Lord Boyd-Carpenter, what should we be doing in our legislation and in our practice to take that into account?
438 Taking up the point in the amendment, I believe that we ought to hear from the Minister as to how his department sees the national lottery. Will there be a means of investigating and getting information about the effect of the instant lottery which we are to have? Will the experience in Europe be taken into account? Why is it said in Europe:there is some reluctance to allow this type of lottery"?We have to learn from the experience of those who have been in national lotteries for some time. Will the organisers of the national lottery, by statute, have to concern themselves about excessive gambling? Where will they get their information from? I suggest that they will have to take it from the police. Some information will come from the police and some will come from the social services department. But where else will it come from? Where can the information be obtained? To some degree I support the noble Lord, Lord Boyd-Carpenter. How is the judgment to be made? Is it to be made on the nature of the lottery or on the innate fallibility of the individual who is caught up in gambling? I support this amendment, which says:nothing in the way that the National Lottery is run"—the advertising comes in to some degree—and every lottery that forms part of it is promoted, shall encourage, directly or indirectly, excessive gambling".I realise the difficulty. But this does not spell it out in detail.
The noble Lord, Lord Allen, with his experience on the Gaming Board over many years knows what is involved. How will the advertising be done? Will it appeal to the young? Shall we be able to find out from the schools when it starts that the teachers, discover that youngsters are buying tickets.(because they are so cheap) out of their pocket money, which these days is far greater than most of us knew in our young days? It is information that is required. The national lottery organisers must not be in an ivory tower in London not knowing what goes on elsewhere.
I believe that there is good sense in the amendment of the noble Lord, Lord Allen of Abbeydale, and that the discussion has to be taken further, whatever happens to this amendment today. We must look further at the problem of excessive gambling, which one can see at any railway station when one looks at the machines and the numbers of children who are playing hookey from school on a large scale. They will be there. That is where people go and look for them. Excessive gambling is a development in our community. It is much more glamorous, with flashing lights and all that sort of thing. I understand the argument that the instant lottery is not all that glamorous; but it will be cheap and will be, it will be argued, an instant way of making a few bob.
I commend this amendment to the House. I believe that it is on a subject to which we should give far more attention. It is not just a question of the individual caught up in gambling on racing—though as we all know those people exist. That is why 50, 60 or 100 years ago being against drink and gambling was part and parcel of non-conformity. It was because people in the industrial areas saw it on their doorsteps, particularly on a Saturday night. It arose out of their experience. All I hope is that in this Bill we are not 439 creating, not a vast problem, but nevertheless a problem of instant gambling which in Europe, with their experience, they have questioned. We should take their experience into account. The noble Lord, Lord Allen, is to be commended on his amendment, which I support.
§ 12.15 p.m.
§ Lord Holme of Cheltenham
My Lords, I suppose the significance of this amendment is that one could turn the question round and ask: would the Government wish to introduce a Bill that did encourage excessive gambling? Quite clearly they would not wish to do that. I hope that no responsible government would want to do that.
The noble Lord, Lord Boyd-Carpenter, made an extremely cogent point; namely, that people have a different propensity, by personality type, to become addicted to undesirable behaviour. It is impossible to legislate in general for particular problems. That is an important point. I am not persuaded, as is the noble Lord, Lord Merlyn-Rees, that particular product forms are the problem. Nevertheless, I hope that the Government will look sympathetically at the amendment put down by the noble Lord, Lord Allen. I believe that it is right that a government taking this step, about which many of us are very dubious, of themselves becoming the promoter of gambling should wish and should do everything that they can to discourage excessive gambling, particularly among young people. There is nothing in the Bill that addresses itself substantially to the problem of the young. I understand that the noble Lord is to speak to Amendment No. 10. which deals with advertising, and support it later. I may come back in support of him then.
Finally, perhaps I may say this on the question of the process. One of the undesirable by-products of what I think the Government have already conceded in what by any standard is the rather accelerated process for this Bill is that they have not been able to put in front of us the regulations under which the director general will operate. To have those would make a great deal of difference. The devil of this matter will be in the fine print. It is important for us to know the way in which the lottery will be administered.
§ Viscount Brentford
My Lords, I too am concerned about the most vulnerable members of our society in this matter, particularly the young. Some noble Lords may well consider that it is far better for an older teenager to be addicted to the national lottery than to drugs. There may be something in that argument. But I believe that we should put on the face of the Bill a provision that would give protection against excessive gambling, particularly from the point of view of the young, especially the older teenager who will be able to buy tickets either out of his social security, pocket money or earnings. I believe that it will strengthen the issue to have some such clause on the face of the Bill.
Gambling under a national lottery is different from gambling on horses or the pools, in all of which there has to be some thought of what is to be done. One 440 must use some skill and put some effort into it. Simply buying a national lottery ticket is a very different situation. There are many more inducements for people to spend too much of their income on it, particularly the teenager who does not have the maturity of the older member of society. I take on board what my noble friend Lord Boyd-Carpenter said. However, I see the wording as objective rather than subjective and on the face of it being assessed by objective standards rather than the reactions of a particular individual. Perhaps one would look at whether or not a reasonable individual would treat any particular aspect arising under this amendment as excessive gambling. I believe that one can overcome the problem of subjectivity simply by looking at the whole question objectively.
The wording of the amendment may riot be perfect. Such things often happen. But I seriously ask my noble friend the Minister when he comes to reply whether he will consider our pleas on behalf of the vulnerable members of society and take away this issue with a view to some government drafting which will tighten up, on the face of the Bill, what we believe will probably be in the regulations anyway. It would strengthen the issue to have it in the Bill.
§ Lord Simon of Glaisdale
My Lords, it is with considerable diffidence that I follow in the debate a political head and a permanent head of the first department in which I served so many years ago. I entirely agree with what the noble Lord, Lord Boyd-Carpenter, said. The matter does not admit any further development.
I have no objection to the Government, in the words of the noble Lord, Lord Holme of Cheltenham, looking sympathetically at the matter. as long as they do not agree to inscribe in a statute a provision which is quite unworkable because it cannot be policed and nobody knows whether "excessive" means excessive in extent or excessive in relation to the means of the individual. I hope that when the noble Viscount replies he will evince sympathy but not accept the amendment.
§ Lord Birkett
My Lords, I too understand the worries of several noble Lords about excessive gambling. But is it not true that the human spirit is capable of becoming obsessive about any matter whatsoever? Obsession is not by any means confined to gambling. I very much agree with the noble Lord, Lord Boyd-Carpenter, that one cannot guard against it by legislation.
It might be worth reflecting that—so I believe—one of the things conducive to obsession or addiction is the atmosphere surrounding the gambling concern. Casinos have a powerful atmosphere; so have racecourses; so even have amusement arcades. I suggest that the national lottery, however efficiently it is run, will have very little atmosphere about it. To that extent it will be more defended against the obsessive and addictive than other forms of gambling.
§ Lord Donaldson of Kingsbridge
My Lords, perhaps I may add just a few brief words to the discussion. It seems to me that there is a case for not having a 441 lottery. If one objects to gambling so much as that, one should not have a lottery. I do not mind people gambling. I am sorry that some people gamble too much. But if there is to be a lottery, it seems to me absolutely hopeless to try to keep excessive gamblers out of it. It is the first place that they will go to. We all know that. If a lottery exists, gamblers will not refrain from it. Either one has a lottery or one does not.
I want a lottery because I want more money for the arts. I agree with the noble Lord, Lord Goodman, who once said, "I don't care if the money comes from a brothel, if it goes to the arts in the end". I feel that way about gambling. But that is a particular and perhaps rather immoral view. I think it is quite useless to try to limit people's use of a lottery. Either you have a lottery or you do not and you should stick to that. Therefore I am opposed to the amendment.
My Lords, perhaps I may remind your Lordships at the outset of the White Paper which was published by the then Home Secretary in March last year and which preceded the Bill. The Department of National Heritage took on the lottery in April last year. As a result we have worked very closely with the Home Office. Since the publication of the White Paper we have also had time to consult and consider the views of many interested parties.
To start with, perhaps I could answer the point raised by the noble Lord, Lord Donaldson, who talked about excessive gambling on the lottery. Any serious gambler does not play the lottery. Serious gamblers play a game in which they believe that their skill or ability to beat the odds enables them to win a prize—such as knowing which horse will win a race or deciding perhaps by mathematical formula which number will come up on a roulette table. The excessive gambler is not someone who will be very attracted by the lottery. He will look at the odds to see how large they are.
We discussed this amendment at Committee stage in some detail. My noble friend Lord Ferrers set out the position most eloquently. I hope again that I can assure your Lordships that the amendment is not necessary.
The duties and powers currently drafted for the Secretary of State and the director general are clear. There is a specific power to prevent the operation of games which many of us might consider insidious—for example, games which might encourage people to chase their losses—and a duty to protect the interests of participants. That power is a means of controlling types of game. It is of course never possible to control all the potential effects on individuals of any new product. The director general will take a reasonable view when a type of game is proposed on whether it seems fair and honest for the players. He can monitor the effect of any new product and if necessary take steps to vary the licence conditions.
Let me reiterate government policy on gambling. It is based on the principle that the state should interfere as little as possible with individual liberty to take part in the various forms of gambling, but that controls are necessary to prevent crime, to ensure that players are aware of what they are letting themselves in for and to 442 protect the vulnerable in society, in particular young people. That is achieved by taking a reasonable view, for example, on the places where different types of gambling may go on. That was a point made by the noble Lord, Lord Birkett.
The noble Lord, Lord Allen of Abbeydale, acknowledged that the duties under Clause 4 make it clear that the interests of the participants must be protected. That is the right place for a matter of this kind to be stated. The director general has to act in accordance with that principle in granting Clause 6 licences. There are many matters that he will need to consider in doing that, not just the need to avoid excessive gambling. To set out one matter would beg the question of setting out more. The Gaming Board regulates most lotteries and of course casinos and other gambling. But it has no statutory duty to prevent excessive gambling. Under Section 10 of the Gaming Act 1968 the statutory duties of the Gaming Board are more vague than those set out for the director general. It only has to keep gaming under review.
On a point raised by the noble Lord in regard to knowing the effects, performance information covering participants' complaints will need to be provided by the operator to the director general of Oflot. The noble Lord, Lord Allen of Abbeydale, said also that scratchcards may be addictive. I do not believe that is so. Do we really believe that the scratchcards used by various charities in this country—for example the lotteries of the RSPB—are addictive? I have difficulty in accepting that proposition.
The Government and the director general will take action to prevent games where there is a possibility of damage to the interests of players, including those games which encourage excessive repeat play. But the way normal and acceptable games are played by individuals is not a matter for statutory control.
As my noble friend Lord Boyd-Carpenter pointed out, to impose a duty of the type proposed by the amendment is not workable. We want the Bill to be a practical measure. We do not want attached to it measures which, though laudable and well intentioned, do not work. There are measures in the Bill which will ensure that the lottery is promoted responsibly. Part of the director general's powers will be applied through the licence and part through codes of conduct.
I was impressed by the words of the noble and learned Lord, Lord Simon of Glaisdale. He expressed the matter clearly. I hope that my reassurance goes some way towards calming the fears of the noble Lord, Lord Allen; that the national lottery will not generate outlandish or undesirable prizes and that it will not have what one may call an hysterical effect on those who play, as happens with lotteries in the United States. Our lottery is very different to those. The national lottery in this country will not encourage excessive play. I hope that having heard my explanations the noble Lord will see fit to withdraw his amendment.
§ 12.30 p.m.
§ Lord Allen of Abbeydale
My Lords, we have had an interesting debate. I am grateful to those who have spoken. I cannot say that the noble Viscount removes all my fears; but I shall pick up only one or two points.
I was astonished when he said that the Gaming Board's responsibilities are vague. I thought that they were crystal clear. Its duty is to prevent a stimulated demand for gambling. All the regulations in regard to membership, advertising, and so forth, are directed to that end. When the noble Viscount talks of high gamblers being concerned with skill, he has obviously never played Punto Banco.
I was interested also in the concept conjured up by the noble Lord, Lord Boyd-Carpenter, in an interesting contribution about courts deciding whether the Secretary of State behaved with propriety. I look forward to that day. There is experience elsewhere to show that large prize lotteries result in excessive gambling. The efforts which the director general must make on the lines suggested by the noble Viscount indicate that he is to do precisely what the amendment tries to achieve. I do not see any point in pursuing the matter. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Donoughue moved Amendment No. 2:
After Clause 4, insert the following new clause: ("Charitable income report
.—(I) As soon as possible after the first anniversary of the sale of tickets or chances in any lottery forming part of the National Lottery, the Secretary of State shall make a report on the impact of the National Lottery upon the income of charities.
(2) The Secretary of State shall make such a report on each of the following four anniversaries.
(3) The Secretary of State shall lay a copy of every such report made by him under this section before Parliament.").
§ The noble Lord said: My Lords, in moving Amendment No. 2, I wish to mention also the inadvertent omission of the section referring to the betting levy, which was included in the original amendment at Committee stage.
§ The amendment is the gentlest of probes. It is also an opportunity to thank the Minister for the Government's flexibility and understanding on the issue. I was regrettably absent abroad for the Committee stage last week, but received the Minister's letter and read Hansard. What is said on this matter is most welcome.
§ In particular we are extremely pleased that the Minister will establish regular monitoring of the impact of the lottery on the betting levy and charitable incomes, and especially that he will do so in co-operation with all interested parties. Charitable parties and the new British Horseracing Board will welcome that. The Minister also said that he would establish the monitoring in the light of the information available. Perhaps he can explain what that means. Will the Government initiate the collection and analysis of the relevant information of the lottery, or will they rely on others? My preference is that 444 government departments should be involved in the collection and analysis prior to the reporting Ito Parliament.
§ That is basically all I wish to say. It is an opportunity for the Minister to reaffirm his view. I beg to move.
§ Lord Holme of Cheltenham
My Lords, if, as I understand from Committee stage, it is the Government's intention to accept the amendment, that is extremely welcome. If that is their intention, will it be the version referred to by the noble Lord, Lord Donoughue, including not just charities but his beloved "gee-gees"? Will it include the betting levy board as well as charities?
I imagine that for most people observing our deliberations it will be the charities that will be of interest. It will be extremely important for the whole of the charitable and NGO sector in Britain to follow the results of the report every year and to see whether some of the fears expressed during the course of the debates are justified. If it is the Government's intention to move with the feeling of the House on this matter, despite earlier reproofs for the speed with which they are handling it, it will be a welcome sign of flexibility.
§ Lord Swinfen
My Lords, I welcome the amendment. I hope that my noble friend can give an undertaking that the Government will carry out the necessary research to see what is the effect of the national lottery on charities.
As the House is aware, I work for a charity. I fear that among a number of charities there may be a tendency to exaggerate the effect on them of the national lottery once it is in operation, to give an excuse in some instances for their own lack of efficiency in raising funds elsewhere; for not making certain that their lists of supporters are up to date, and that they have not wiped off those who have died.
It is easy to produce an excuse for one's inefficiency. I have done it myself in the past. It is important that the Government, or organisations instructed by them on their behalf, carry out an independent survey so that we can have a proper and accurate report before Parliament of the effect of the national lottery on charities.
§ Lord Boyd-Carpenter
My Lords, the need for a statement on the effect on charities is accepted on both sides of the House. The only question really is whether we need to put it formally into the Bill, as proposed in the amendment. In any event, as I am sure my noble friend the Minister knows, he will be asked to make a statement very regularly by way of parliamentary question, and I have no doubt that the same will be so in the other place. But if it is thought desirable to put it formally into the Bill, I can see no particular objection, although I do not think it would do in precisely this form.
Subsection (2) of the amendment states:The Secretary of State shall make such a report on each of the following four anniversaries".Making it an anniversary statement gives It a rather sentimental atmosphere. In addition, from a purely practical point of view, it is almost certain that one of 445 the first four anniversaries will be a Sunday. It is improbable that putting out the report on a Sunday would be useful. I shall be interested to hear what my noble friend the Minister says, but I hope he will make it clear, as I think all your Lordships do, that the House, and another place for that matter, will be kept fully informed as to the effect of the Bill on the charities concerned.
§ Lord Mackay of Ardbrecknish
My Lords, although the noble Lord's amendment does not, as he pointed out, mention the horserace betting levy, originally it was certainly intended to do so. I know that my noble friend the Minister has written to a number of us, copying a letter which he sent to the noble Lord giving an assurance that such a review will take place, not only of the impact on charities but also of the impact on the horserace betting levy. Perhaps I may say on behalf of a number of my noble friends who are interested in horseracing but who are unable to be here that they welcome the assurance and look forward to the reports.
My Lords, it is by no means clear that the introduction of the national lottery will have a detrimental effect on the income of racing or indeed the income of charities. I must tell the noble Lord, Lord Holme of Cheltenham, that the Government do not accept that a statutory requirement to report is an appropriate or practical way forward. However, I considered further, following our Second Reading debate, what could be helpful in terms of an undertaking to report on the matter. I am happy to repeat the undertaking that I alluded to in Committee that once the national lottery is established the Government will regularly monitor the situation in the area of charitable incomes and the level of the horserace betting levy. We shall do that in the light of all the information available and in co-operation with all the interested parties. We shall also place a report containing any relevant information each year in the Libraries of both Houses and consider carefully any conclusions that might be drawn.
§ Lord Swinfen
My Lords, I do not want to delay proceedings but my noble friend talked about the available information. Will the Government do any research of their own or instruct an organisation to do research on their behalf rather than just trawl in the charitable and the horseracing world for information?
My Lords, perhaps I may deal with horseracing first. I believe that the levy board is best placed to collect information on the level of the levy. That is its function. The board is a Home Office non-departmental public body.
As regards the charitable sector, I believe that it will be very quick to come forward with information that it considers relevant. The Home Office is already having discussions with the NCVO on co-operation and how this might proceed in the future. We will of course study the information that we receive and I am sure that the various worlds that are involved will not be slow in coming forward with all the information that they regard as pertinent.
446 I am grateful for the welcome that my assurance has received both within the racing industry and within the charitable world.
§ Lord Donoughue
My Lords, I thank the Minister for restating what the Government have conceded. It is of considerable importance, especially to the charitable sector and also to the horseracing industry. It is a major advance and settles some of our concerns about the Bill. The point raised about the collection of information is an important one. What the Minister said is helpful but I hope that he will inform his department of the feeling of the House that it should be systematically co-ordinated within the department, utilising all those bodies which the Minister rightly mentioned. That would make for the best possible exercise. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 5 [Licensing of a body to run the National Lottery]:
§ [Amendment No. 3 not moved.]
§ 12.45 p.m.
§ Clause 6 [Licensing of bodies to promote lotteries]:
§ Lord Swinfen moved Amendment No. 4:
Page 3, line 4, at end insert:
("() A licence under this section shall not be granted in respect of any lottery offering an instant win.").
§ The noble Lord said: My Lords, I am aware that the question of instant win games has been raised previously while the Bill has been going through the House. However, I believe that the use by the national lottery operators of this form of game will pose a considerable threat to the income raised by a significant number of charities and other voluntary organisations.
§ At the moment the most common form of instant win game is the scratch card, but as technology develops the form of game may change. It is that principle of the instant win that is important, not the technology. It is that which attracts people to buy a chance for a small sum, and it is the attractive nature of the instant win game that may tempt the national lottery operators to use it as the "lead in" for the national lottery.
§ According to the Lotteries Council, an organisation which offers support and advice to sports clubs, community groups, and charities that run "small" lotteries, instant win scratch card games are an important source of income for its member organisations. Anecdotal evidence from the Lotteries Council suggests that instant win scratch cards are a vital source of income for many organisations. That income would be severely reduced if the advertising resources of the national lottery set about promoting instant win games.
§ Two organisations which rely on instant win scratch card income are Tenovus, a charity which funds cancer research and support services for sufferers, and UK Charity Lotteries. Their experience may serve to illustrate that of other organisations. In the last financial year, Tenovus sold scratch card tickets to a total value of £3.6 million. After expenses and prize money were paid, nearly £1.25 million was 447 available to fund cancer research, support services for cancer patients and hardship grants for cancer sufferers.
§ As well as bringing about a reduction in charity income by sheer promotional capacity, the use of instant win games by the national lottery poses a further threat to instant win charity lotteries. In state lotteries overseas, on-line lotto games produce approximately 75 per cent. of lottery turnover. Instant win scratch cards generate 25 per cent. of sales. That might seem to imply that the national lottery needs scratch card games. However, I understand that it is widely acknowledged that the main motivation of lottery operators in using instant win scratch card games is to secure a monopoly position in the market. Lottery operators are prepared to admit this privately but are obviously less keen to make the same admission in public. In New Zealand, the practice of the lottery operators suggests that they are using instant win tickets to stifle competition. There the lottery operator has introduced, then withdrawn, then re-introduced, instant win tickets, apparently in response to attempts by charities to enter the market.
§ In debates on this matter in the other place, the Government expressed the view that it would be inappropriate to prevent the national lottery using instant win scratch card games on the grounds that they do not want to tie the hands of the lottery operator. In the view of the Government the lottery operator is best qualified to decide how the lottery may be run in order to secure its success.
§ The then Minister, Robert Key, acknowledged, however, that there is evidence to suggest that instant-win scratch card games may encourage excessive play. Despite also having given an undertaking that games likely to encourage excessive play would not be licensed, he did not address that apparent contradiction in the Government's position, apart from observing that the prizes in these games are so small that they are unlikely to prove a real danger if licensed. I beg to move.
§ Lord Airedale
My Lords, I support this amendment. My concern is the opportunity for fraud. The great merit of the big lottery —assuming that there is any merit in a lottery at all—is that at least the ticket seller can have no idea whether he is selling a winning or a losing ticket. But with scratch cards there is, to begin with, the process of printing the cards. I do not know how much of the security which goes into the printing of bank notes, for instance, goes into the printing of scratch cards. There is then the question of the distribution of the cards down to the ultimate seller. He is in possession of a collection of winning cards. I do not know what the arrangements are for making sure that the seller cannot identify them.
In Committee I believe I mentioned the case of certain terrorists whose conviction was upheld by the Court of Appeal. After that a machine was invented which showed that a policeman's notebook had been altered, which had not been apparent before. That matter led the Court of Appeal to reverse its decision. The noble Lord, Lord Swinfen, spoke about the technology. With that kind of technology becoming increasingly available, I am not satisfied that sellers 448 are not going to be able to identify the winning cards and, if they are dishonest, distribute them among their friends. If they are popular sellers, at the end of the week they and their friends will have a tidy little sum to share out between them.
I hope that that kind of thing will not happen because if it does it will be a very serious slur on the national lottery movement, which will tend to come into disrepute. Therefore, I have very grave concerns about this. Unless and until a Minister is going to take very careful precautions to see that scratch cards are honestly dealt with, in the meantime it is much better that the noble Lord's amendment should be agreed to.
My Lords, perhaps I may first deal with the points raised by the noble Lord, Lord Airedale. There are many scratch cards in existence at the moment and they are mainly operated by charitable lotteries. I do not believe that they have many problems such as those that the noble Lord has outlined. The printer sells losing as well as winning tickets, and there is already security. One does not know whether one has won with a scratch card until one has scratched it. That is how it works. I do not believe that there is any abuse at the moment. One of the duties of the director general of Oflot will be to ensure that all lotteries are carried out properly. The noble Lord, Lord Airedale, is concerned that somehow it is easy to cheat with a scratch card. He can be assured that it is not easy to do so.
Turning to my noble friend's amendment, it seeks to stop the national lottery from running any game in which players may win and claim an instant prize. These lotteries are run with so-called scratch cards. The players buy a ticket and then scratch off a panel on the ticket to see whether they can claim a prize. If we accepted this amendment we would not have a national lottery which would produce worthwhile sums of money for good causes. Experience suggests that up to 40 per cent. of lottery sales can come from scratch cards and that scratch cards give an important impetus to the overall marketing of lotteries and therefore increase interest in the on-line Lotto.
If scratch cards were banned, the lottery might then fail to fulfil its expected turnover by perhaps up to or beyond 40 per cent. The reason given for proposing such an assault on the lottery is that charitable lotteries will be hounded out of the market by the national lottery. We do not accept t hat the two types of lottery share a market. People buy charity lottery tickets because they sympathise with the cause on whose behalf the lottery is promoted.
Local political organisations run lotteries. Even if the prize were enormous, I do not think that my noble friends on this side of the House would be tempted to purchase tickets from noble Lords on the opposite side of the House if they were promoting a lottery in favour of their party. Charity lotteries are most often seen as a fun way of giving, like fun runs or perhaps tombola. I remind your Lordships that at Committee stage we substantially increased the proceeds and the prize limit for society lotteries to £1 million and £100,000 respectively. The new limits should ensure that such lotteries can continue to operate successfully side by side with the national lottery.
449 First and foremost, the national lottery is a game with a chance of winning a prize. It is not primarily a way of benefiting good causes. The range of good causes is so wide that it is unlikely that people will buy tickets in the belief that it will benefit one of their favourite local good causes but rather because playing lotteries is fun and there is the chance of winning a large prize. If we wish the turnover from a lottery to produce a substantial amount for good causes we must not fetter the national lottery. I hope that, with the explanation which I have given about scratch cards and the reminder that we have increased the limits for society lotteries, my noble friend Lord Swinfen will feel able to withdraw his amendment.
§ Lord Swinfen
My Lords, my noble friend is very naive if he thinks that the national lottery will not share a market with lotteries run by other organisations. It is similar to saying that there is no share of market between the greengrocer operating in a shop and the greengrocer operating from a barrow 50 yards down the street. If you believe that you stand a better chance of buying good vegetables, you will go to a particular vendor in exactly the same way as you would go to the vendor for the organisation where you feel that you stand a better chance of winning a prize.
However, I wish to reflect further on this matter because there has not been a great deal of time between now and Committee stage, as has been mentioned before. I reserve my right to come back to this issue at Third Reading. In the meantime I beg leave to withdraw the amendment.
§ Amendment, by leave withdrawn.
§ Lord Donoughue moved Amendment No. 5:
Page 3, line 8, at end insert:
("() information under subsection (3) shall include material demonstrating to the satisfaction of the Director General that tickets or chances for the lottery under consideration will not be sold or otherwise made available on the street, whether from kiosks or otherwise.").
§ The noble Lord said: My Lords, my concern here is with the possibility that special kiosks will be set up to sell lottery tickets on street corners or, even worse, that there will emerge itinerant sellers on the streets. I believe that there would be a number of dangers in that. There is the aesthetic question of ugly litter on our already dirty streets. What is probably most important is the social question; namely, that such kiosks, or even itinerant sellers, will be concentrated especially in the poorer urban districts, and often perhaps on urban housing estates lacking shops and other entertainment. So they would become an undesirable focus. We know that that has happened to some extent in the United States, as research quoted in another place during the earlier stages of the Bill's consideration showed.
§ There is also the question of security. Such kiosks may be subject to crime or vandalism. There is also the impact on the traditional role of the streets in street collections. I refer to flag days and other charitable collections on our streets. Those are all matters of genuine concern.
§ This is only a probing amendment but it raises an important point. I do not think that street kiosks 450 would be helpful to our national heritage or our urban environment. It is important that the lottery, about which there are a number of reservations, should, where possible, have the maximum quality image. I wonder whether the Government can give us some assurances on this matter. I beg to move.
§ 1 p.m.
§ Lord Redesdale
My Lords, I am afraid that I cannot support the amendment for a number of reasons. Kiosks already operate in many cities for local authority lotteries. They are fun stalls. I have frequented the one in Eldon Square where I was quite skilful in winning 50p and £1 coins. As for the point that kiosks will not be pleasing aesthetically, many streets in Paris and Barcelona are actually enlivened by advertisements for the lotteries.
One aspect that has caused anxiety is that as large an amount of money as possible should go to good causes. If the cost of selling the lottery tickets could be reduced by direct selling through kiosks or by any other means, that might be a useful route for the national lottery to take.
§ Lord Swinfen
My Lords, I take the noble Lord's last point on the reduction of administrative costs but, despite that, I support the amendment which has been moved by the noble Lord, Lord Donoughue, because a number of charities as well as local authorities already sell lottery tickets from kiosks.
I understand that the amendment covers the sale of lottery tickets door to door. In my view, selling lottery tickets door to door would seriously interfere with the door-to-door collection activities of charities, such as Christian Aid. That charity has a very big door-to-door collection annually and, because the charity is well organised, it is extremely difficult not to give to it no matter what one feels about Christian Aid, although I do support its work and aims.
The amendment has a great deal of merit and, if he is not going to accept the amendment, I hope that my noble friend Lord Astor can satisfy the House that the regulations governing the way in which the national lottery is to be run will be such as to protect the activities of charities and other small organisations.
§ Lord Holme of Cheltenham
My Lords, before the noble Viscount replies, having consulted with my noble friend Lord Redesdale, perhaps I may say that we on these Benches would be extremely unhappy at door-to-door selling of lottery tickets. Again we come back to the question of the regulations. This is an area in which governments have conventionally intervened to stop the door-to-door selling of certain products. It is important to know whether the Government envisage that as a possibility in this case.
My Lords, the noble Lord, Lord Donoughue, is concerned to ensure that national lottery tickets are not sold in the street. Clause 12 of this Bill clearly states that the Secretary of State may make regulations, breach of which shall be a criminal offence, regarding the places in which tickets may be sold or persons invited to buy them. Society and local authority lottery tickets may not be sold in the street 451 under a similar type of regulation—Regulation 5 of the Lottery Regulations 1977. This ban is not in the Lotteries and Amusements Act and is not to be found in primary legislation elsewhere but in regulations made by the Home Secretary. I think that it is a good model for regulations of this sort. That is precisely what the Secretary of State intends to do in the case of the national lottery. I can assure the noble Lord, Lord Donoughue, that national lottery tickets will not be on sale in the street or door to door.
The noble Lord is also troubled by the prospect of kiosks being employed to sell tickets. Society and local authority lotteries are not prevented from using that type of outlet. As the noble Lord, Lord Redesdale, pointed out, they are often seen in public places, such as in the square that he mentioned, and at busy railway stations. A stand-alone kiosk is considered to he useful for the lottery promoter, and certainly does not seem to cause undue distress to non-playing members of the public.
We do not intend to rule out the sale of national lottery tickets from enclosed kiosks, either in larger shops or shopping centres or anywhere else. That should be a matter for the operator to consider. I hope that your Lordships will agree that there is a large difference between selling lottery tickets in an enclosed kiosk and selling them on the street or door to door. I can assure your Lordships that that will not be the case. With that assurance, I hope that the noble Lord will be satisfied and will feel able to withdraw his amendment.
§ Lord Donoughue
My Lords, this has been a brief but useful and clarifying discussion. I take some of the points that were made by noble Lords on the Liberal Bench that there could be circumstances under which enclosed kiosks are appropriate and, provided that the regulations are proper, I think that that would be acceptable. However, we should bear in mind that the fact that such kiosks already sell charitable tickets is not only a plus point. It means that it is an area where the national lottery, with much bigger prizes, might eliminate the market for local lottery tickets.
I am pleased by what the Minister has said about door-to-door or what I call street itinerant sellers. Provided that the department is apprised of the potential problem and that when we finally see the regulations they are appropriate, I am content to beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 7 [Licences under sections 5 and 6: further provisions]:
§ Viscount Astor moved Amendment No. 6:
Page 3, line 31, at end insert:
("() to refer matters to the Director General for approval;
() to ensure that such requirements as the Director General may from time to time determine or approve are complied with;").
§ The noble Viscount said: My Lords, this amendment is a simple one which will make it clear that licence conditions can require the licensee to refer matters to the director general for approval and can require the licensee to ensure that requirements approved or determined by the director general are 452 complied with. In particular, it will allow the director general to approve codes of practice prepared by the operator which will cover such matters as advertising and marketing, customer relations and other matters.
§ It is important that the director general is given the ability to approve such codes of practice, as these will allow him a considerable degree of flexibility in ensuring that the national lottery is properly run in all aspects of its operation. I beg to move.
§ On Question, amendment agreed to.
§ Viscount Astor moved Amendment No. 7:
Page 3, line 46, at end insert:
("() to do such things (and, in particular. to effect such transfers of property or rights) as the Director General may require in connection with the licence ceasing to have effect and the grant of a licence to another body.").
§ The noble Viscount said: My Lords, in moving Amendment No. 7, I should like to speak also to Amendment No. 9. These amendments will allow provision within the licence requiring the licensee to do things in connection with the licence ceasing to have effect and a new licence being granted. They would cover, for example, the provision of information for the director general after the end of the licence period and the transfer of rights to the national lottery logo or identity. It is important that the identity of the national lottery can continue even if the operator's licence is transferred to another body.
§ This measure will not be able to be used without the prior knowledge and agreement of the operator. The amendment to Clause 8 provides the safeguard that the licence cannot be varied without the consent of the licensee if the variation would result in a condition requiring the licensee to transfer property and rights. The intention to transfer such property or rights will therefore have to be set out in the initial licence and those who bid for it will be aware of the intention.
§ It is important that, in the event of a change in operator, there is a degree of continuity in the image of the lottery. In allowing the transfer of the logo to Secretary of State these amendments allow such continuity to take place. I beg to move.
§ On Question, amendment agreed to.
§ Viscount Astor moved Amendment No. 8:
Page 4, line 4, at end insert:
("() Conditions in a licence granted under section 5 or 6 may impose requirements to be complied with by the licensee after the licence has ceased to have effect.").
§ The noble Viscount said: My Lords, Amendment No. 8 is a technical amendment which will ensure that once a licence has ceased to have effect the Director General will still be able to receive information, which he might require, for example, to ascertain whether the proper sums have been handed over to the National Lottery Distribution Fund or to present his annual report. Indeed, without this provision, it might not be possible for the distribution fund to receive funds which might be owing to it.
§ Therefore, this is a practical measure which is necessary for the proper running of the lottery. I beg to move.
§ On Question, amendment agreed to
§ Clause 8 [Variation of conditions in licences]:453
§ Viscount Astor moved Amendment No. 9:
Page 4, line 16, leave out from beginning to ("in") in line 17 and insert ("Subsection (2) does not apply—
§ The noble Viscount said: My Lords, I spoke to this amendment when moving Amendment No. 7. I beg to move.
§ On Question, amendment agreed to.
§ Clause 11 [Directions to the Director General]:
§ Lord Allen of Abbeydale moved Amendment No. 10:
Page 5, line 27, at end insert:
("(c) with the drawing up of a code of conduct for advertising the National Lottery and the lotteries that form part of the National Lottery.").
§ The noble Lord said: My Lords, at the Committee stage I tabled an amendment relating to advertising in so far as it might affect charities. I was concerned about two issues. The first was that there might be a temptation for those running the advertising campaign for the national lottery to concentrate on charities and that pictures of suffering children or disabled people might be more attractive as a money-raising operation than pictures of a sports stadium. I took the point that advertising for such people was specialised, especially if one is to avoid patronising or offending them by the way in which the advertisements are drawn up. I was also nervous about the fact that the more concentration there was on advertising for charity the more temptation there would be for people to believe that they were doing their bit for charity by contributing to the national lottery rather than directly to the charity.
The noble Viscount's reply was perhaps addressed to a different point. It was delivered at the end of a long and arduous day. He has since been good enough to write to me confessing that he did not quite address the issues that I raised. Perhaps I may read the main part of his letter, as I wish to put it on the record. He stated:
Initial work which the department has undertaken on the licence has led us to conclude that on matters such as advertising, the best way forward may well be through codes of conduct. I am happy to agree that, if the need arose, such codes of conduct could contain references to the use which might be made of charitable images. This would include, of course, obtaining permission from the charity concerned if images of that charity are to be used in advertising. I have to say I think that the need is unlikely to arise, as the Lottery will not be promoted principally on the basis of good causes but on prizes and the attraction of participation. However, I think you are right to suggest that it is best to be sure that if the need arose, the Director General would be able to cover it. I am happy to give that reassurance".
§ I am extremely happy, as I know other Lords will be, to have that reassurance firmly written in Hansard. However, I should be even happier if the provision were written on the face of the Bill. If one looks at the statute books one will find ample precedents. That is the purpose of the amendment and I beg to move.
§ 1.15 p.m.
§ Lord Holme of Cheltenham
My Lords, this amendment may be one of the most important that we are discussing this afternoon. I am grateful to the 454 noble Lord, Lord Allen, for persevering with it. His anxiety that charities should not be abused in the presentation of the national lottery is extremely important. I too welcome the reassurances that the Government have given by letter as regards their intentions on the code of conduct.
There is another aspect to this issue which arose in Committee. Given that the national lottery will involve one of the biggest advertising and marketing launches that this country has seen for some time—bigger than some consumer brands and no doubt advertised heavily on television and in the press—the way in which that is couched in terms of young people is of crucial importance.
We accept that certain products and substances when used in moderation can promote general well-being. Alcohol is one of them. Alcohol used in excess is extremely dangerous. Is that not a direct analogy? Earlier we discussed excessive gambling and the propensity of certain personality types to be attracted by that form of compulsive behaviour. The personalities of young people may not be fully and strongly formed. Young people may have their own problems of growing up and of adjusting to the world and they may be particularly vulnerable to fantasies of instant wealth and success. Therefore, we must consider the way in which the advertising of the lottery is directed towards them much as we are prepared to consider and limit the way in which alcohol is advertised to young people.
It will be well known to your Lordships that advertisements for alcohol are not supposed to show young people having a good time. They are not supposed to indicate that drinking alcohol is' a way in which you, as an 18 year-old, can fulfil yourself and become a success in society. That is a reasonable inhibition to place on the advertising and promotion of the lottery. After all, in talking about "a bit of a flutter" the Government have acknowledged that they are really saying that people can have harmless dreams of affluence at a small price. A few will become very rich but they will be able to have harmless opiate daydreams. They are harmless, perhaps, to mature people but they are potentially dangerous to young people who are trying to find their way in the world.
I hope that in drawing up a code of conduct the Government will be prepared to address themselves frontally to an inhibition and restraint on promoting the lottery directly to young people in the way that is done with other products. I too hope that the Government consider that it will be better to place a code of conduct relating to advertising on the face of the Bill. That is not like other codes of conduct: advertising is central to the lottery.
My Lords, perhaps I may deal first with the point made by the noble Lord, Lord Rix. I shall attempt to give him an answer now; but, if I have to correct it, I shall write to the noble Lord and send 455 a copy to other noble Lords who are interested. We do not want the national lottery to be marketed with any logo other than that of the national lottery. We do not want the national lottery to be marketed with images which relate to a specific charity which would in any way give the impression to people buying a lottery ticket that there is a specific intention to promote or help a particular charity.
The operator, the regulator and the distributing bodies are entirely separate. That is one of the crucial elements of the Bill. Therefore, the operator has nothing to do with the distributing bodies. The distributing bodies will hand out the money as they see fit and as it is proper to do under all the clauses covering that aspect in the Bill. I hope that answers the noble Lord, Lord Rix.
We agree that codes of conduct which cover matters such as advertising are necessary. I have already moved Amendment No. 6, the effect of which was to make clear that licence conditions can require the licensee to refer matters to the director general for approval and require the licensee to ensure that requirements approved or determined by the director general are complied with. That will allow the director general to be able to approve codes of practice prepared by the operator. I said that they may cover, for example, advertising, marketing, customer relations and retail sales. Together with the undertaking which I gave to the noble Lord, Lord Allen, which he repeated, that in drawing up the codes of conduct the director general will consider how he can address the need to ensure that the national lottery is properly promoted, that will ensure that the noble Lord's anxieties about excessive gambling are taken into account.
I hope I have made it clear that those are the areas —and they are related areas—which the director general will have to consider carefully. I hope that your Lordships will think it is better that those matters are not put on the face of the Bill because that could have a detrimental effect. It may restrict what the director general can and cannot consider. We have given him extremely wide powers in that regard. Our policy is very clear.
§ Lord Holme of Cheltenham
My Lords, before the noble Viscount sits down, my anxiety in this context is not so much excessive gambling as excessive gambling among young people. It would determine my attitude to the amendment if the noble Viscount were to address himself to the undesirability of advertising directed at young people.
My Lords, I take the point which the noble Lord makes. I give him an assurance that when the director general is considering the codes, guidance and how the lottery is operated, he will take those matters into account.
§ Lord Allen of Abbeydale
My Lords, I cannot say that I am completely happy with the answer given, although I am glad to have those assurances on the record. Had circumstances been different, I might 456 have been tempted to test the view of the House but I shall have to leave it with the exchanges which have been made. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Viscount Astor moved Amendment No. 11:
After Clause 15, insert the following new clause:
False representations as to the National Lottery
(".—(1) If a person advertising, or offering the opportunity to participate in, a lottery, competition or game of another description gives, by whatever means, a false indication that it is a lottery forming part of, or is otherwise connected with, the National Lottery, he shall be guilty of an offence.
(2) A person guilty of an offence under this section shall be liable—
§ The noble Viscount said: My Lords, this amendment will ensure that there are adequate safeguards for the consumer, so that when a customer plays the "national lottery", he can he sure that he is indeed playing the national lottery, and not something which purports to be it.
§ There will clearly be safeguards. For example, those selling national lottery tickets will have to display the national lottery logo, so that it will be clear that he or she is buying from a reputable outlet for the national lottery. The national lottery will, we hope, be a success. Given that success, it may be tempting for an unscrupulous organiser of a competition to try to mislead consumers that a lottery or other competition he is running is part of the national lottery. These clauses seek to prevent that and provide important safeguards. I beg to move.
§ Lord Swinfen
My Lords, I welcome the new clause. I wonder whether the fines may not be insufficient if someone succeeds in making a quick kill. Will the statutory maximum be sufficient to deter? I wonder whether there should be some relationship—I am not sure how that could be achieved—with the amount of money that the individual has made.
My Lords, we are rather straying into a different area. It is important that the amendments enable the national lottery to be protected. I am sure that both the operator of the national lottery and the director general of Oflot will hear very quickly if any other lottery is being operated which purports to be the national lottery. Immediate steps will be taken to prevent that.
On Question, amendment agreed to.
Clause 21 [Apportionment of money in Distribution Fund]:
§ Lord Allen of Abbeydale moved Amendment No. 12:
Page 9, line 20, leave out subsection (3) and insert:
("(3) Of the balance
§ The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendment No. 19 which is consequential on it although it is not grouped with it. I hope that your Lordships will forgive me if I take a few moments to develop my thoughts on this matter because, from my point of view, this is the most important of the remaining amendments.
§ I promised to read and to study all the exchanges which took place in Committee when a similar amendment was debated and withdrawn. I have done that. I am afraid that has merely confirmed my feeling that the proposals in the Bill are not very satisfactory, and that there is a powerful case for changing them.
§ Let us look at what is in the Bill as an administrative problem. We begin with a Millennium Commission presided over by a Minister who presumably will have one or two other things to do. As the noble Viscount promised the noble Lord, Lord Boyd-Carpenter, there will be a small staff. There will be no regional organisation. There will be quite a lot of money. Nobody knows how much money there will be but for debating purposes, let us take the figure of £400 million. There is not all that much time available if the year 2000 is to be marked with the kind proposals which have been talked about. I realise that the commission will remain in existence; but it will not, as I understand it, start any new projects after that year.
§ What does that organisation have to do? We are told that it will be for the commission to decide that for itself and that it will start off with a clean sheet but various ideas have been floated by government spokesmen on various occasions.
§ I give your Lordships some examples of what has been suggested. We are told that there will he a large variety of small projects, including, for example, making all the clocks work in the village of Grantchester and other villages. My noble friend Lord Annan suggested that there should be street parties. We are told that it will restore the fabric of our nation; that is, our great inheritance of buildings. That was in the party manifesto. There will be bursaries for schemes designed to change the face of the United Kingdom by the year 2000. Further, we may be helping Manchester with its project to house the Olympic Games. There will be help to another large city to organise a trade fair, there may be provision for a large sports complex to international standards and even provision for a multi-media arts centre. There is also the possibility of a new building for an important charitable enterprise. Quite clearly, a great deal of time will have to be taken negotiating with the bodies responsible for the other good causes; as many such projects would naturally fall within their province and it would be desirable to avoid too much duplication and the prospect of some getting in each other's way. I imagine too that, as the year 2000 is, after all, the year AD2000 (Anno Domini, the year of our Lord) some considerable proportion of effort should be diverted to what might loosely be described as "enterprises with some religious connotation".458
§ That is a fairly formidable list, which consists mainly of preliminary ideas that have been suggested. However, if one looks at it a little more closely and takes a large individual project, rather like the new station at Waterloo (which I believe cost about £140 million), there is much to be done. For example, one has to decide first what is to be provided, where it would be provided—obviously, not everything would be concentrated in London—and one has then to work out a scheme and consult the Royal Fine Art Commission. One would have to engage an architect, obtain planning permission and give evidence at the inevitable public inquiry that would be held for such a project. The scheme would then be put out to contract, and so on—or, perhaps, to use the regrettable word in the regrettable Title of this regrettable Bill, "etketera" (etc.). Of course, some of the work may be contracted out, but one would need a very powerful finance organisation to supervise those who were carrying out the work and deal with the audit of the commission's own accounts, the arrangements of which were described to us in some detail on an earlier occasion.
§ We have heard reference to the success of the Sydney Opera House, which was erected as a result of a lottery. But if noble Lords remember, that took many years to build and staggered on from crisis to crisis; indeed, fresh lotteries were needed to cover each phase of the building works. That is perhaps one reason why it is so spectacular on the outside and such a mess inside. We have even had references to the Barbican. I was involved, I cannot remember how many years ago, with some of the initial projects in that respect. The whole process took many years. If the commission was to start on such a project, it would be in for a very long innings.
§ I feel bound to conclude from all that that the project has not really been properly thought through. In my view, it would be much better in the interests of the Government to have a much more limited and specific enterprise with a more limited budget and a more limited aim. Even on the reduction proposed in the amendment, there would still be quite a lot of money for various projects. But, as it is, the fund will be open to demands to do everything and anything. I cannot see that that is right. I certainly would not like to be the administrator in charge of the enterprise. I beg to move.
§ 1.30 p.m.
§ Lord Holme of Cheltenham
My Lords, I rise briefly to support the amendment to which my name is attached. It was striking to note that in Committee those of us who were suspicious about the Millennium Fund were somehow dubbed as being "spoilsports". I remember a marvellous speech from the noble Lord, Lord Annan, in which he said how important it was to have a very good party. Well, those of us who support the amendment are all in favour of a good party. Indeed, I should have thought that the £100 million that would be left under the terms of the amendment would provide, even by the noble Lord's high standards, an extremely good party.
459 The trouble with the Millennium Fund is that it is what. I think psychologists would call a "projective device". In other words, everyone projects on to the Millennium Fund his own favourite project, whether it be a building, a party or whatever. My first suspicion is that the fund is too much dominated by the discretion of the Government. It is a very large sum of money to be dominated and decided by the Government—that is, not just this Government but any government.
Secondly, I should prefer to have projects that are much more down to earth and that are decided by the four very desirable and active bodies that are actually in touch with the needs of the country rather than having large, speculative and grandiose schemes. I hope that the Government, even at this stage, will take the amendment most seriously.
§ Baroness O'Cathain
My Lords, it will be no surprise to your Lordships to know that I disagree with my noble friend Lord Allen and the noble Lord, Lord Holme. I believe that reducing the amount from 20 per cent. to 5 per cent. will be so parsimonious and so penny-pinching that the millennium will not be marked. With the greatest respect to my noble friend Lord Annan, the fact is that a party is here today and gone tomorrow. We want to mark the millennium so there will be something for future generations to look back on and see what we actually did at the beginning of the third millennium.
I have an enormous amount of sympathy with what my noble friend Lord Allen said about spending the kind of money involved and also with his catalogue of suggestions—half of which, I believe, were put forward somewhat in jest in an effort to deride the whole concept of the millennium. I should stress that he was merely categorising what other people had suggested. The reality is that if we go for 5 per cent. of the national lottery—and the first full year of operation of the lottery will, I believe, be 1995–96 —at most we shall have received about £400 million in the period up to the millennium. However, £400 million spread over the whole of the United Kingdom to mark the millennium will not actually go very far.
I believe that to spend £100 million per major region of the United Kingdom to mark the millennium is really about the minimum that one could get away with in order to do something really fundamental, bearing in mind the huge increase in building costs (if it is to be a grand projet) or in running costs, and so on, that have taken place since such projects like the South Kensington Museums, the Royal Albert Hall and the Albert Memorial were constructed during Victorian times. In my view it would be very shortsighted, although not necessarily small minded, if we were to adopt the amendment. Frankly, I think that now is the time for a grand gesture. Our country has been so slow in making such grand gestures in the past that we have really been put to shame by other countries.
The other projects that have been listed, or those which people have merely thrown out as ideas, will obviously be considered by the Millennium Commission. But it is for the commission, not us, to specify what those projects should be. I am quite convinced that the Government will be able to appoint 460 people who have the breadth of vision, who are creative and who really want to do something dramatic to mark the beginning of the third millennium. I suggest that we leave it to them.
§ Lord Rix
My Lords, I am, as one might say, between the devil and the deep blue sea because I am sitting between my noble friends Lady O'Cathain and Lord Allen. That is perhaps best illustrated by the seat that I am occupying at present which, I understand, is a matter of some dispute betwixt the Labour Party and the Cross-Benchers.
I wish to support my noble friend Lord Allen in this respect. Speaking on behalf of a major charity and, I am sure, other charities, we should like to see the additional money made available for projects between now and the year 2000. I am sure we are perfectly capable of providing grandiose projects which would have appealed, in the normal course of events, to the Millennium Commission. I also speak as an ex-member of the Arts Council of Great Britain. That body, I know, would view with favour the dispensation of money now towards the maintenance and support of buildings and theatres around the country. That might possibly include the building of a new theatre or a new opera house. I believe that such a project would have the support of the current Arts Council, of which I am no longer a member.
The Millennium Fund is perhaps an ephemeral dream which will be forgotten by the year 2001 or 2002. I believe that money now in the pot for the arts, sports and the other two good causes we are concerned with could be spent to better effect between now and the year 2000.
§ Lord Swinfen
My Lords, my name is also linked to this amendment. I need say no more than that I support everything that the noble Lord, Lord Allen of Abbeydale, said.
My Lords, I hope very much that the House will reject the amendments. I agree with everything that the noble Baroness, Lady O'Cathain, said. In addition, it seems enormously important that we should do some big things with this lottery and that it should make its mark for the year 2000. The other four segments of the lottery money will not be able to achieve large projects as there are so many claims on them and so many people will feel they have a right to part of the money. The glory of the indefiniteness of the Millennium Fund's objectives is that nobody can say they have a right to any of its money.
§ Lord Donoughue
My Lords, I have had reservations about the Millennium Fund which I expressed at Second Reading. It has too much the air of a half-baked idea and it contains within it a danger of political influence in the final spending. I hope that when the Minister replies he will give us reassurance on that. It would be helpful if at this stage, or at Third Reading, the Government could give a more coherent sense of what the money will be spent on rather than the rag-bag of suggestions which the noble Lord, Lord Allen, summarised.
Having said that, I would not be willing to support the amendment for two reasons. The first is the reason 461 cogently expressed by the noble Baroness, Lady O'Cathain. I suspect it is true that only through the Millennium Fund will we achieve a really big, dramatic project and that the pressures from regions, supplicants and their smaller constituencies on the other distributing bodies mean that funds will be spent on smaller projects—those projects would almost certainly be commendable—and that a pool of money will not be available for a dramatic arts or sporting project which I would like to see. I suspect also that the passing of the amendment would constitute something of a small coach and horses, at this stage, through the Bill and would cause difficulties. Therefore it is not my intention to support the amendment.
§ Lord Annan
My Lords, I rise to support the noble Baroness. I felt that the noble Lord, Lord Allen of Abbeydale, was speaking with all the experience of a great and renowned civil servant. He sees all the difficulties in the problem: I can picture him advising a Minister of those difficulties. Of course there are difficulties but I must say first that one does not have to have the building, or whatever it is, completed by the year 2000. It takes time to go out to tender and do all the other things that must be done when a great project is being embarked upon. However, one must take a decision to do something before the year 2000.
Secondly, it is true that I said in Committee I hoped some of the money would be spent on a jolly good party. However, I believe I added at the same time that there was something more in my mind than that and that to spend £400 million on a party was perhaps going rather far. I can only echo what the noble Baroness said. This is a chance in our generation to do something of which future generations will say, "Well, that is what they did". That, after all, is what we say when we look at the Albert Hall and indeed at the Albert Memorial.
There have been times when to look at the Albert Memorial and to express horror was fashionable. Now, of course, it is totally different. This dear friend of ours is swathed in scaffolding and is lauded by all sorts of' people in the artistic world. Let us have courage, even though some people may say, whatever choice is made, that the project is a bad idea or is an example of bad architecture. There are so many things that can be done. I had hoped to elicit great support from the Labour Benches by suggesting that a Welsh opera house might be built. However, I see the Welsh have deserted us on this occasion. I hope we shall still retain the imagination which I believe lay behind the idea of appropriately celebrating the year 2000.
§ 1.45 p.m.
My Lords, the noble Lord, Lord Allen of Abbeydale, is not an enthusiast of the national lottery. I believe he would rather not have a lottery at all. He shows an even greater lack of enthusiasm for the Millennium Commission that has been established to celebrate the year 2000. At an earlier stage, the noble Lord, Lord Allen of 462 Abbeydale, said that I was treading on dangerous territory when I reminded your Lordships that the British Museum was in part funded by a lottery in 1851. I do not believe that I was treading on dangerous territory in saying that. Our lottery Bill separates the operator, the regulator and the distributor. We should have a national lottery in this country. We do not wish foreign lottery tickets to be sold in this country, the proceeds of which will fund projects in Barcelona or wherever.
At an earlier stage the noble Lord, Lord Holme of Cheltenham, asked me to give examples of what the Government had in mind. The noble Lord, Lord Donoughue, asked for a coherent reply as regards what the Millennium Fund might achieve. I gave some examples which were purely illustrative. The noble Lord, Lord Allen of Abbeydale, uses those examples to tease your Lordships. The Millennium Commission will make its own decisions. The noble Lord, Lord Holme of Cheltenham, talks about government control of the Millennium Commission. The noble Lord must look at the schedule on page 38 of the Bill which states:The Millennium Commission shall consist of nine members appointed by Her Majesty on the recommendation of the Prime Minister, of whom two shall be Ministers of the Crown, and one shall be a person nominated by the Leader of the Opposition".They will be in the minority. There will be six independent members—
§ Lord Holme of Cheltenham
Who will appoint the other members of the commission? Will it be the Government of the day?
As I have said; the schedule states:The Millennium Commission shall consist of nine members appointed by Her Majesty on the recommendation of the Prime Minister".We have discussed these proposals before, and I have made it clear that we cannot accept such a drastic assault on the potential success of the Millennium Commission. The commission will only receive its 20 per cent. share of the funds generated until the end of the year 2000. That would only be extended in exceptional circumstances—for example, to prevent the prospect of a building remaining half-finished. It would be unrealistic to expect the commission to fund the several major and lasting projects which it is to be set up to do, and to furnish us with a new heritage to pass on to future generations, with only 5 per cent. of the proceeds.
I remind your Lordships that funding for the Millennium Commission will be short-lived. It will be for six years at the most, a very short time out of the long years ahead during which we expect the lottery to operate on behalf of the other sectors and good causes.
Nobody knows how much the national lottery will raise for good causes. If in the event the Millennium Commission has more funds than it can use wisely and sensibly on high quality projects, it will be possible for Parliament to alter the balance at that stage. As my right honourable friend the Secretary of State said, he intends to put the split of funds to Parliament once every Parliament.
463 The noble Lord, Lord Annan, was quite right to say that the Millennium Commission does not have to finish projects by the end of the year 2000. The point is that the money will stop flowing into the Millennium Commission at that stage. It may take four or five years to complete some of the projects and the commission will keep money in hand in order to be able to finish those projects.
We have thought out the provisions relating to the Millennium Commission. I accept that, as the noble Lord, Lord Allen, said, some of the projects will be expensive and some will be complicated. I believe that we have the ability to deal with that. To deny the Millennium Fund a reasonable amount of money would not be sensible. We want the Millennium Fund to be successful. I urge your Lordships to reject the amendment.
§ Lord Allen of Abbeydale
My Lords, I have never made any secret of the fact that I dislike the lottery, and I have never been very keen on the Millennium Fund, for the one reason that I have never really understood what it was supposed to do. I still do not quite understand that.
I was interested to learn that the views of the noble Lord, Lord Donoughue, do not entirely coincide with the views which the noble Lord, Lord McIntosh, expressed at an earlier stage.
The noble Viscount keeps harping on about the British Museum. Perhaps one day he will go on to explain how it came about that it was decided that it was right to abandon the financing of public projects by lotteries in this country. I expect that, long after my time, with a change of public sentiment it will be decided to abandon this lottery. However, I know that that is some years ahead.
I do not mind being accused of being a civil servant and of looking at this matter as an administrator. I still view it with grave anxiety. I am afraid that in five or six years' time—if I live long enough—I shall be able to say "I did tell you so". I do not mind if the scheme works out and we have some admirable large schemes, but I simply do not believe that the machine is geared up to doing that. We shall see.
There is obviously no point in pursuing the matter further. Having placed my views on record, I beg leave to withdraw my amendment.
§ Amendment, by leave, withdrawn.
§ Clause 23 [Payments from Distribution Fund to distributing bodies]:
§ Lord Holme of Cheltenham moved Amendment No. 13:
Page 10, line 19, at end insert:
("() A body shall, for the purposes of distributing any money paid to it under section 22, ensure that it has set up a structure to enable it to apply that money on a regional basis.").
§ The noble Lord said: My Lords, the purpose of the amendment is to ensure that the distribution by the distributing bodies of moneys raised by the lottery shall as far as possible take into account the fact that it should be spread across the kingdom. It is a cliché that this country is dominated by London to too great an extent. The capital is the financial capital, the 464 commercial capital, the business capital and the cultural and artistic capital. London dominates Great Britain. Yet the moneys which are raised by the lottery will come from people all over the country. Some have even argued that the money will tend to come from people in the less prosperous parts of the country because it will be a small price to pay for buying dreams of affluence. Therefore, the money will come from all over the country, and there must be a danger that even the illustrious distributing bodies will, perhaps without realising it, tend to focus too much of their effort and attention on the capital and that the emphasis will be too metropolitan.
§ As I understand it, the Government do not wish that. I believe that they, too, wish the proceeds of the lottery to be distributed so that they benefit all parts of Britain. I recognise that that is not susceptible to mathematical calculation, but I believe that it is important that a regional component is built into the structure of distribution. Since the Government are sympathetic to the principle, I hope that they will accept the argument that it should be on the face of the Bill. I beg to move.
My Lords, the noble Lord, Lord Holme of Cheltenham, has proposed an amendment with admirable intent. We are clear that the benefits of the national lottery should be available across the whole of the country.
The noble Lord proposes a statutory requirement that the distributors should establish a structure which enables them to make sure funds are fairly distributed between the regions. We are quite clear that the lottery should benefit the whole nation. We are quite clear that when we speak of England we mean all of England and not just London and the home counties. The Secretary of State will, in those sectors where it is necessary, be able to stipulate the need to ensure national coverage in directions to the distributors, and their performance on this matter can be judged through their annual reports.
We cannot accept any suggestion that funds, once allocated for distribution by a particular body, should then be allocated on a regional basis before applications were considered. A strict geographical allocation would interfere with the distributors' ability to consider projects on the basis of quality and priority. It would be possible for a certain type of project not to receive funding purely because there was no money left in the regional budget, even though it was every bit as good as one for which funds were available in the neighbouring region.
We are in no doubt that under the Bill the distributors will be expected to give fair consideration to applications from everywhere in the country—and in the case of the Charities Board, from overseas as, well. The distributors which already exist do this now with respect to their grant in aid, and we expect them to continue to do so, and those bodies which the Bill will set up will also do so.
Under Clause 25, the Secretary of State can direct the matters which distributive bodies must take into account. If it emerged that a particular body was 465 exercising a consistent and continuous regional bias in approving applications, it would be possible for a direction to be given on the matter.
I hope that with that assurance the noble Lord, Lord Holme of Cheltenham, will agree to withdraw his amendment.
§ Lord Holme of Cheltenham
My Lords, I thank the noble Viscount for that assurance. I believe that, as we see the effects of the lottery in future years, it will be important to see that severe regional distortions in distribution do not develop. It is certainly true that the Secretary of State would be able to deal with such a problem by instruction, but that is possibly a less satisfactory solution than the distributing bodies being under such an obligation from the beginning. However, the clear terms in which the Government have stated their position on this matter will help to set a pattern. Therefore, I am happy to beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Swinfen moved Amendment No. 14:
Leave out Clause 23 and insert the following new clause:
("Secretary of State's power to make payments from the Distribution Fund
The Secretary of State shall make payments out of so much of any money in the Distribution Fund as is held for distribution by a body specified in section 22 of the amounts needed by that body to meet its current distribution requirements.").
§ The noble Lord said: My Lords, I should point out to your Lordships that there is a typographical error in the third line of the amendment as printed on the Marshalled List. It should read "section 22" and not "section 21".
§ In the original debate in Committee in the other place on an amendment to this clause the Government suggested that the opaque wording of the clause was a symptom of the Treasury rules which would govern the use of money in the distribution fund. In Committee I referred to the absence of information about those rules. I ask my noble friend again whether he can further explain those rules to us since I am at a loss to understand what they are and since they have been called in aid in justification and therefore may be capable of explaining much of the obscure wording of the clause.
§ In debate on a similar amendment in Committee the noble Viscount said simply that the rules were complicated and that they were not a matter for primary legislation. I do not ask that they should be included in the legislation. However, I do ask for an explanation as to why the clause needs to be worded in this way. If a cynical person were to consider the Bill, he might say that the Government have drafted it so that there could be political interference with the money in the distribution fund. I do not say that myself. However, I might say that the Bill as currently drafted leaves the way open for future Secretaries of State to use those powers in a political way if they so wish.
§ The Bill variously contains the power for the Secretary of State to make or withhold payments of whatever amount he pleases from the beneficiary 466 allocations in the distribution fund. It allows the Secretary of State to change the apportionments in the distribution fund for particular beneficiaries at the same time as beneficiary shares are reviewed. That is Clause 27. It allows the Secretary of State to allocate the interest held on the distribution fund investment between beneficiaries in whatever way he likes. That is Clause 31. Yet my noble friend says that the distributing bodies will be able to commit a five-year grant. That was reported in Hansard on 8th July, at col. 1581. That may not be good grant-making practice if the Government have the power to erode the money that a distributing body thought would accumulate or was accumulating in the distribution fund for its use. I beg to move.
§ 2 p.m.
§ The Deputy Speaker (Lord Strabolgi)
The amendment proposed is:Leave out Clause 23 and insert the new clause with the manuscript amendment as follows.("Secretary of State's power to make payments from the Distribution FundThe Secretary of State shall make payments out of so much of any money in the Distribution Fund as is held for distribution by a body specified in section 22 of the amounts needed by that body to meet its current distribution requirements.").
§ Lord Allen of Abbeydale
My Lords, I put my name to the amendment and support what the noble Lord, Lord Swinfen, said. The statements of the noble Viscount in Committee as to what the practice was going to be were perfectly satisfactory. The trouble is that they did not seem to fit in with what is in the clause. There is no suggestion by any of us that the clause itself should deal with Treasury rules. The existing clause does not do so; neither does the proposed substitution. However, the proposed substitution sets the matter out more clearly. It is in accordance with the policy which the noble Viscount announced.
My Lords, when we discussed the matter in Committee I explained that what my noble friend's amendment states will happen in any case. The reason that Clause 23 is drafted in the way that it is is because the Secretary of State is responsible to Parliament for the stewardship of the National Lottery Distribution Fund. The distributors would be responsible for deciding to draw down funds to cover the applications that they have approved, and the Secretary of State will allow them to draw down the funds to cover them.
The amendment seeks to compel the Secretary of State in statute to pass money from the distribution fund to the distributors. That is precisely what must happen anyway. Several noble Lords asked in Committee why, if that is what will occur, it is not what the Bill states. It is purely a matter of accountability. It is right that for a national lottery run on behalf of the nation, a Minister of the Crown should account to Parliament for the financial probity and correctness of the running of the fund. But the 467 Secretary of State has no power to distribute any of the fund himself. must pass to the bodies named on the statute.
I hope, therefore, that my noble friend will not be anxious that, because of the clause, the Secretary of State could hold up funds that need to pass to the bodies. The funds must pass to the bodies named on the statute.
I repeat again that someone has to be responsible for the National Lottery Distribution Fund. It is right that the Secretary of State should be responsible and accountable to Parliament.
§ Lord Allen of Abbeydale
My Lords, before the noble Viscount sits down perhaps I may say this. He states that there is nothing in the clause to enable the Secretary of State to hold up a grant. But the clause begins,At such times as the Secretary of State thinks appropriate".He can sit on the money for as long as he likes.
My Lords, we discussed that point at an earlier stage. A suggestion was made that the money should be paid quarterly. I stated that it should be paid when the bodies needed to cover their applications. There has therefore to be a word in the provision to cover that process.
§ Lord Swinfen
My Lords, I am not satisfied with my noble friend's answer. As the noble Lord, Lord Allen of Abbeydale, said, the Secretary of State can, if he wishes, hold up the distribution. What if the unthinkable happened and I was the Secretary of State? I do not approve of the Millennium Fund. I would not want any money distributed to the Millennium Fund. I would exercise the powers in other clauses of the Bill allowing me to vary the percentage of distribution. My noble friend has not answered that.
My Lords, with the leave of the House, perhaps I may answer my noble friend's point. I believe that he has got it wrong. If he reads carefully, he will see that the Secretary of State can bring before Parliament proposals to alter the amounts that go to the various distributive bodies. Indeed, a minimum 5 per cent. has to go to all the four bodies. The Secretary of State cannot stop money going to one of those bodies. To do so would require primary legislation —a new Act. It is not possible for that factor to occur.
§ Lord Swinfen
My Lords, my noble friend may say that I am quibbling, but he is quibbling over percentages. I shall not delay the House any more today but I shall consider the matter again. I do not believe that he has given a satisfactory answer. I hope that between now and Third Reading he will consider with his advisers whether the wording of the clause can be improved. I seek to improve the clause, and the Bill as a whole. With those words, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 24 [Application of money by distributing bodies]:
§ Baroness Birk moved Amendment No. 15:468
Page 10, line 32, at end insert:
("() The Arts Council of Great Britain shall comply with any directions given to it by the Secretary of State to remit a fixed amount annually direct to the film industry for the purpose of establishing a fund to assist British film production, distribution and exhibition.").
§ The noble Baroness said: My Lords, at Committee stage there was all-party support for an amendment in my name which sought to make an allocation of lottery funds specifically available to the British film industry. A number of noble Lords spoke with feeling about their love of cinema and how it is part of the very fabric of our lives. It provides us not only with entertainment and information but also contributes to how we see, and consequently relate to, the world around us as well as projecting something of ourselves to the rest of the world.
§ With the centenary of cinema fast approaching, we find ourselves in the apparently paradoxical situation' characterised by, on the one hand, a production sector languishing in the doldrums, while at the same time cinema attendances continue to rise, the popularity of films on television, both terrestrial and satellite, remains firm, the sale of books and magazines on the cinema is buoyant, and the demand for courses on film and other media continues to rise.
§ But what audiences see are films from another culture. They do not—indeed they cannot—see indigenous British productions. Our film makers have to go to Hollywood to work and the profits from the booming exhibition and distribution sectors are expropriated overseas and lost from the UK economy.
§ Among the noble Lords who spoke and supported the special case for films were the noble Baroness, Lady Wharton—she works in the industry—my noble friend Lady Mallalieu on the Front Bench, my noble friend Lord Dormand and the noble Lord, Lord. Holme of Cheltenham. He said that we should also consider the contribution that film makes to young people's understanding of the arts. The same point was reiterated by the noble Lord, Lord. Birkett, so we received a wide range of ideas and support.
§ However, I was not happy with the noble Viscount's assurance that we did not have to be concerned with how much would be made available to film out of the arts segment of the lottery funding. He used the argument that is always used on these occasions that if one makes a special case for one thing, one has to do it for all the others. I submit that that does not apply to film, which is a special case. Great commercial factors are attached to it, and it is not like the other parts of the arts. If we have to rely on the Arts Council—bearing in mind what happened to some of our orchestras last week—that makes my heart sink. I find that I do not have a great deal of confidence in leaving the decision to the Arts Council.
The Minister stated at Committee stage:
I understand that the [lottery] 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 decision".—[Official Report, 8/7/93; col. 1574.]
I should like the noble Viscount to assure us today that the "might" has been changed to "will" and the committee will be supported. I find the word "might" not firm enough for us to act upon.
§ The House has heard the cultural arguments for film to be supported and will be aware that there is considerable support for the film industry. However, supporting distribution needs the resolve to spend huge amounts of money on marketing, prints and advertising. In order to save time, I shall just say that a big investment in the film industry is required which will pay off very well. I hope that the Minister will be able to give me rather more assurance today. Unfortunately, he told me that he did not think he would be able to accept the amendment; perhaps he has been able to change his mind. If he does not accept it, I should like him to acknowledge that there is a difference between film and some of the other arts, and also that there would be an advisory committee attached to the lottery committee. I beg to move.
§ 2.15 p.m.
§ Lord Holme of Cheltenham
My Lords, I supported the noble Baroness, Lady Birk, at Committee stage on the matter of film, and I am delighted to do so again today and to put my name to her amendment. If we had an industrial strategy in the country, film would be one of the things on which we would concentrate. We have an enormous home market; incredibly in an age of television, the number of people going to the cinema doubled between 1984 and 1992: 100 million people go to the cinema every year. Yet, our own industry which, since the Second World War, was the home of so much talent and creativity, is in a relatively feeble state. That is well known to the Government, I know, and here is a chance for them to do something for the British film industry of a practical nature which could improve the prospects for British film makers.
It may be that the Government cannot accept the amendment exactly in that form; but the House would be interested to know what specific comfort the film industry can draw from the way in which the lottery will be distributed and administered, and exactly what the Government have in mind. I look forward to the Minister's reply.
§ Lord Birkett
My Lords, it is a great shame that Sir Richard Attenborough cannot be with us today in the form of Lord Attenborough. No doubt he is regrouping his dinosaurs and putting his Jurassic Park back in order. Although I must not put words into his mouth, I should not be surprised if he thought that it was a shame that it should have needed the national lottery for the noble Baroness, Lady Birk, to move the amendment. What she has written as an amendment seems to me to be entirely admirable. It ought to take place, either within or without the lottery. If we read the words quite independently of the lottery Bill, they read well. I believe that Sir Richard would have said the same thing, it is high time that the British film industry was given decent support. It has been decades since any real, serious support was given to the film industry. I urge that on the Government, quite independently of the Bill.
The reason I am hesitant about it as an amendment is because I am frightened of making special cases for anyone within the Bill because everyone else will jump 470 on the bandwagon, and it is a poor principle. Nevertheless, I support the idea that the film industry has long deserved better support than it receives. So I thank the noble Baroness for her amendment, but doubt whether I can quite support it as part of the Bill.
§ Lord Donoughue
My Lords, I support everything that has been said, especially by my noble friend Lady Birk. The matter has been raised, I think, at every stage of the Bill and still doubts persist about the Government's assurances. The heart of the matter, the centre of it, has been raised, I know, with the Secretary of State, by BECTU, the Broadcasting, Entertainment, Cinematograph and Theatre Union. The heart of the matter which they raise concerns whether the Arts Council, which will be the distributing body, is the most appropriate body to distribute the relevant funds to the film industry. That is not intended to criticise the Arts Council, especially since many others are currently enjoying that sport. But the fact is that the Arts Council has no historical experience of serving film. It is just not structured that way, it does not think that way and it follows that the new regional arts boards—and I must declare that I am a member of the London Arts Board—immediately hived off film because it was recognised that the Arts Council regional arts boards' structure which exists in this country was not the appropriate one to handle the interests of the film industry.
In future, when the Arts Council is split tribally into the four nations of the kingdom, that fragmentation will make the matter worse. It will be inappropriate for our film industry which must operate nationally and internationally. For those reasons, I support what has been said and look forward to more comfort and reassurance from the Minister than we have so far received.
My Lords, the noble Baroness, Lady Birk, would like the Secretary of State to be able to direct the Arts Council to spend a fixed amount on film. The powers granted to the Secretary of State by the clause as it stands do not include any power to tell distributors how much of their money should be spent for any purpose. That is entirely deliberate.
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, then 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.
However, we cannot accept that the Secretary of State should have the power to decide that, for example, for the purposes of the lottery, film constitutes 15 per cent. of the arts or that the distributors may only distribute money on condition that they use 15 per cent. for a predetermined purpose. The powers to direct distributors are intended to ensure proper management of money, and to ensure that bodies take relevant matters into account. There is no intention of allowing the Secretary of State to set out policy priorities in the arts or any other sector.
471 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 that committee might be supported by a special advisory committee dealing purely with film applications. I note that there is a proposal from BAFTA that there should be a film sub-committee. I must repeat that there is nothing to stop the Arts Council setting up a film sub-committee to advise it on 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.
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 its fair share, it will be quite clear. On a practical level it is up to the Arts Council and the other interested bodies to work together to find the best way to distribute the film element.
I agree with the noble Baroness that it is clear that film has a particular and important place in our society—and I am sure that the Arts Council agrees with that too. It is a distinct and popular art form with a special appeal to a great many people. It is important that film is able to benefit from the national lottery, and there is no doubt that it will. I hope therefore that the noble Baroness will accept, with my assurance—I am trying to make her happy, as she said, and give her the assurance that she requires—that what I have said will allow her to withdraw the amendment.
§ Baroness Birk
My Lords, I thank the Minister for his very courteous and helpful reply. But I cannot say that I feel very cheered up by it. In fact, I feel very disappointed.
The noble Lord, Lord Birkett, made the point that film should not have to rely on lottery funds, and he is right. Nevertheless, as we have tried everything over the years—the noble Lord knows this very well—it seemed the right moment to have another go and use the new fund that is coming along. If one does not put in a very strong plea for film to be supported from those funds, the old system will simply continue. So I believe that there is a very strong reason for talking about it now when we are thinking of it in terms of a lottery.
I am still disappointed that the Minister did not change the "might" to "will" in respect of having an advisory committee. The point has come when, frankly, the Arts Council ought to be told by the National Heritage ministry that it really has got to do something about film. To have one person on the committee—which appears to be the case at the moment—when a great deal of expertise is needed, and not to say, "Yes, there will be an advisory committee on film", is extremely disappointing. Even if the Government did not go as far as I wanted to go in the amendment, that would have been a great help. But I am realistic enough to see that there would not be much point in dividing the House on this matter now. People would just fall in from everywhere and 472 would not even know what we were talking about. They would not know that the amendment was about film, and I should not get very far. In the circumstances, therefore, I am afraid that I have to withdraw the amendment. Nevertheless, I hope that the Minister, who is always, I have to say, extremely helpful, will push a bit harder for us, or will go on pushing harder, in aid of the film industry. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Baroness Birk moved Amendment No. 16:
Page 10, line 32, at end insert:
("() Any money paid under section 23 to the Arts Council of Great Britain shall be used solely for purposes relating to the improvement of the fabric or the construction or acquisition of buildings used for the performance, creation, presentation or preservation of works of art and associated purposes, for the endowment of buildings or arts organisations occupying such buildings previously benefitting from money granted from the Distribution Fund, and for new projects not requiring recurring revenue grants from the Arts Council of Great Britain, the Regional Arts Boards, the Welsh Arts Council or the Scottish Arts Council.
() Any money paid under section 23 to the Arts Council of Northern Ireland shall not be used for the recurrent revenue needs of organisations in receipt of grants from that body.").
§ The noble Baroness said: My Lords, this amendment is an attempt to lay down some broad principles to guide the Arts Council and to reinforce the principle of additionality. Ministers now need to be more specific in their guidelines for funding. Otherwise, the danger is that the funds could be dissipated into the general pot. Although the amendment covers buildings relating to a great variety of works of art, I am mainly concerned with theatres, and with the Theatres Trust in particular.
§ Here I must declare an interest as a trustee of the Theatres Trust. We are the main body concerned with the fabric of theatres and their uses. The Theatres Trust is a very small outlet which exists on a financial shoe-string. But it is of great importance and does a great deal of work. It is the only body doing work of that kind in regard to the theatres.
§ The amendment also specifically mentions endowments as well as capital expenditure coming from the lottery fund. Although on various occasions the Minister has indicated that revenue funding for lottery buildings should be derived from other sources, there is a need for endowments to ensure the maintenance and upkeep of these capital projects. That would provide a form of security for the future of these buildings which is unobtainable in any other way.
§ Nearly 40 per cent. of theatres surveyed by the Theatres Trust in its recent report were judged to be in poor or fair condition, with seating, foyers, toilets, heating, ventilation and stage equipment heading the list for badly needed repairs. Fewer than one in four theatres had any planned maintenance programme at all.
§ A common pattern, and one which should be avoided at all costs for lottery funded buildings, is for large capital expenditure to be followed by a long period of inadequate care. That is what has happened up to now. Unless something is done about it, there is no reason why it would not continue, even with lottery funding. Then panic fund-raising is necessary to repair 473 the damage. Naturally, the amounts needed have increased. Endowments can break that pattern for good and ensure that the standard of a building is maintained. This amendment would allow such endowments for lottery funded buildings, in particular so that the heritage of our theatres can be maintained.
§ Although the Government have consistently asserted that they do not wish to see the concept of additionality within the Bill, I hope that Ministers will take this opportunity to confirm that lottery funds can be used for endowments to support planned maintenance and that the Theatres Trust itself—which is the only body in the field doing this job —will be consulted on all the issues relating to theatre buildings. I beg to move.
§ Lord Birkett
My Lords, perhaps I may for a moment echo the tribute paid by the noble Baroness to the Theatres Trust, and say—as perhaps I can and she cannot—that that body does a marvellous job. It is quite the most active, the most scholarly and the most knowledgeable body concerned with the fabric of theatres in this country, and in particular the fabric of historic theatres. The world of theatre would be infinitely poorer without it.
Behind this amendment stands the famous question of additionality. Noble Lords in all parts of the House, including those on the Government Front Bench, have said that this lottery is not supposed to provide funds to replace what is already spent by the Government upon arts funding; or indeed, upon sports funding.
Numerous formulae have been tried out to see whether there is a way of expressing that concept in the Bill. I suspect that this amendment comes closest to expressing the idea of additionality as opposed to replacement. Whether it will quite fit into the Bill, I am still not sure. But certainly I agree with the idea that the majority of the lottery fund should be for capital purposes. I also agree with the idea —in fact, I believe it is essential—that some new projects will absolutely have to have endowment from the lottery funds. Although the amendment says:for projects not requiring recurring revenue grants from the Arts Council",I think it is probably more likely that it should say: "new projects not likely to receive recurring grants from the Arts Council"—not because the projects might not be suitable but because the money would not be enough. I entirely approve of that principle. It comes as close to expressing the idea of additionality as any amendment so far proposed. Therefore, if your Lordships and, in particular, the Government are inclined to feel that something in the Bill should express that intention, that is probably the closest that we can come to it.
§ Baroness Birk
My Lords, before the noble Lord sits down I should like to clarify one point. The amendment includes "for the endowment of buildings", which covers his point. The amendment may mean some redrafting but I was careful to include that provision because it is so important; otherwise, the planned maintenance will not work.
§ 2.30 p.m.
My Lords, the effect of the amendment proposed by the noble Baroness for the arts sector would be to forbid the distributors spending lottery money in areas at present funded from public expenditure. That could mean that the Arts Council could apply two different sets of criteria for grants; for example, one from its lottery money and one from what it normally receives.
I understand the point about additionality. We discussed it at an earlier stage. It is important to ensure that it is the distributing bodies which will be handing out the money. The Bill will compel every distributor of lottery money to prepare a report on its distribution separate from the use of other money that it receives. Parliament will be able to scrutinise those reports and compare them with the levels of government provision in the same areas.
The Government are firmly committed to the principle of additionality. But it is clear that legislation will not achieve that and we cannot accept the proposed amendment. It is up to the distributors to satisfy themselves that making a grant for a project out of lottery money is not and will not be seen as substitution for mainstream public expenditure. The distributors will have no interest in substituting lottery funds for grant in aid and will wish to consider that point in relation to each application. We ought to trust in their good judgment. We have said that we feel that the use of lottery money should have an emphasis for capital projects but we have not ruled out any other type of funding.
We have to accept that it is not possible to seek freedom from government interference in the individual decisions of those bodies—the arm's length principle—and then complain when those bodies act within their own expertise and independence both of each other and the Government.
The restoration of the fabric of our theatres is at the very heart of the aim behind the Bill. We have said that revenue endowment funding is possible but might not be desirable as a norm because of the effect that it would have on the other funds. I cannot promise on behalf of the Arts Council that it will fund any particular theatre or theatre's trust. But I can say that it will have to take relevant expert advice, which obviously includes advice from the Theatres Trust when it looks at programmes and applications for restoration of theatres.
I hope that the noble Baroness is somewhat reassured by that explanation and by the fact that theatres are indeed part of the Bill and that their applications will be considered by the Arts Council.
§ Baroness Birk
My Lords, I thank the Minister for that reply. In answer to the point about two sets of money, the question of endowment is very important. It applies in a great many fields of art connected with the theatre. I do not find that at all contradictory. Unless there is endowment, one will not be able to have any planned maintenance. That is what has been 475 happening up to now. It is a kind of hand to mouth existence with far too many theatres. Many of them are graded, in some cases as Grade 1. Most of those in London and in a great many other cities are certainly Grade 2 theatre listed buildings.
It is important for us to feel that that is both understood and taken on board. I was glad to hear the Minister refer to consulting the Theatres Trust. The experts working there want to feel assured that they would be considered as the main advisers and consultants in that area. That is not because of any competition but because, as the noble Lord, Lord Birkett, very kindly said. they are in that position with that expertise covering the enormous amount of work with a very small staff and very meagre funds. Things go wrong when people who do not know very much about the matter jump in and the trust itself has not been consulted. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 25 [Directions to distributing bodies]:
§ Lord Annan moved Amendment No. 17:
Page 10, line 35, leave out ("the matters to be taken into account") and insert ("the propriety").
§ The noble Lord said: My Lords, at Committee stage the noble Lord, Lord Gibson, and I were disturbed by the fact that the Bill as drafted seemed to enable the Secretary of State to interfere and overrule the decisions of the chairmen, boards and trustees of the distributing bodies. Accordingly we drafted an amendment. But with remarkable perspicacity the noble Viscount had also spotted that point. With foresight he realised that someone else would see it, and with courage he took on his department and himself produced an amendment to the clause. It is that amendment which stands as part of the Bill in Clause 25.
§ We were very grateful. We realised how difficult that had been to achieve. At the same time we still had a residual worry about the matter. That is why I bring forward this amendment today. The noble Viscount explained that the Secretary of State must be in a position to stop a distributing body acting with impropriety. By that he meant giving grants to a person or some cause which was totally outside the remit of that body. Clearly that would be improper.
§ Perhaps I may give an example. Suppose that a rich man bought a park and decided that he would re-create in it a replica of an 18th century park replete with follies, rotunda, lakes, waterfalls and temples. He then decided that the park should be a cause to which the National Heritage Memorial Fund should contribute, arguing that it was such a splendid creation that it would very soon become part of the national heritage. The Secretary of State might well take the view that if the National Heritage Memorial Fund had been so foolish as to contribute to it, then it was a contribution to an individual and had nothing to do with the heritage at all. Whether in 100 years' time that park might have become part of that heritage would be an entirely different matter. But at the moment it was totally outside the remit of the National Heritage Memorial Fund.476
§ On the other hand, when the National Heritage Memorial Fund made a noble contribution to the rehabilitation and restoration of the temples, rotunda, grottoes, gardens, lakes, vistas and woodlands of Stowe Park, which is one of the most remarkable 18th century parks in the whole of our country, it was totally within its remit and the Secretary of State would have been entirely ultra vires had he tried to interfere with that decision on the grounds that a great school occupied the mansion within that park. That is the kind of worry which persuaded me to insert the word "propriety".
§ Can the national distributing bodies be trusted to control impropriety within their remit? At Committee stage I argued that they could be so trusted. Perhaps I can give an example. Twenty years ago an exhibition of modern art was put on on the South Bank. One of the exhibits was by an American artist. It consisted of a large water tank in which a catfish was placed. The idea behind that work of art was that every two hours the catfish should be electrocuted and another catfish substituted; in due course that too would be electrocuted.
§ My noble friend Lord Goodman, who was then chairman of the Arts Council, took the view that that would neither redound to the credit of the Arts Council in putting on an exhibition in which such a merciless activity was carried on, nor was it necessary for the benefit of modern art. He therefore stopped it. He was criticised by people for interfering and censorship but, as we all know, his shoulders are broad enough to bear that kind of criticism.
§ My point is this. The Secretary of State should not interfere in matters which are entirely within the remit of the distributing body. But of course it is absolutely right for him to interfere if he thinks that the distributing body is about to make an improper allocation of funds from the lottery fund. If the noble Viscount feels that the wording suggested is inappropriate, I implore him to take the amendment away and return at Third Reading with an alternative. I understand that that will require further reflection on his part, particularly as I tabled the amendment relatively late. I beg to move.
§ Lord Birkett
My Lords, I entirely support the amendment. It is mild but symbolic. It takes out the words,the matters to be taken into account",and substitutes the words, "the propriety". Everybody would agree that the powers of the Secretary of State should deal with matters of propriety. If the noble Viscount does not accept the amendment at this stage—I hope that he will—he may like to give an instance of any matters which may be taken into account which would not come under the heading of "propriety". I have a strong suspicion that no other matters should be taken into account and that the powers of the Secretary of State should be limited to the matter of propriety. I welcome the Minister's comments on that point.
My Lords, the noble Lord, Lord Annan, remains concerned that the Secretary of State has too wide a power of direction to distributors. His 477 amendment would restrict directions only to matters of propriety. I understand the sentiment behind the amendment. It reflects the belief, which the Government share, that decisions on grants made on lottery money should not be decided or dictated by the Secretary of State.
The noble Lord, Lord Birkett, asked what other matters could be taken into account. There are matters other than issues of pure propriety that should be taken into account. The power in Clause 25(1) will allow the Secretary of State to ensure that, for example, the Arts Council takes account of the fact that it is expected to fund the whole of the arts sector with its lottery allocation, including crafts and film, even though it does not at present distribute grant-in-aid in those areas.
Perhaps, more importantly, the Secretary of State will be able to direct distributors to consult appropriate expert bodies on grant applications. That clearly is to the benefit of the distribution process, but it is not an issue of propriety. It is a matter that needs to be taken into account. It will also enable the Secretary of State to direct that there should be a fair response to applications across England, Scotland, Wales and Northern Ireland where separate bodies for the countries do not exist.
There are regional considerations which were raised by the noble Lord, Lord Holme of Cheltenham. Again, those are issues not of propriety but of importance to many people. We have to draw a fine line. We do not want the Secretary of State to be able to direct which projects, but we want him to direct what the principals of the different bodies should take into account and what consultations should take place with expert bodies.
I hope that the noble Lord, Lord Annan, will accept my assurance that the Secretary of State will not, and indeed cannot, impose his shopping list of projects on the distributors. He will not; he cannot —not even the subject of catfish for an exhibition.
§ Lord Annan
My Lords, I am grateful to the noble Viscount. The best thing I can do is to consult my noble friend Lord Gibson who, unfortunately, cannot be present today. We will consider whether or not to raise the matter again at Third Reading. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 2.45 p.m.
§ Clause 26 [Power to prohibit distribution in certain cases]:
§ Viscount Astor moved Amendment No. 18:
Page 11, line 26, at end insert:
("(3A) Where subsection (3B) applies, the Secretary of State may give directions to a body—
(3B) This subsection applies if at the time the directions are given the Secretary of State considers that—
(3C) In subsection (3B) "benefit" includes benefit of a non-financial nature and, in particular, an enhancement of reputation.
(3D) A body may not disclose to any other person either the identity of any person specified in directions given to it under subsection (3A) or any information that might lead to the identification of such a person.").
§ The noble Viscount said: My Lords, this amendment concerns Northern Ireland matters and would have the following effect. When the Secretary of State for Northern Ireland considers that if a distributing body were to fund a particular application a terrorist organisation could benefit, he would be able to seek information from the distributing body and, if appropriate, direct the body to refuse the application. The distributing body could tell the applicant why its application was refused but could not disclose publicly the name of the applicant. The powers could also be exercised to prohibit the funding of a particular project by what might be an otherwise acceptable applicant.
§ We have chosen to confer on the Secretary of State a power to direct the distributing bodies in Northern Ireland. That will make it clear to terrorists in Northern Ireland that, if they are deprived of access to funds and influence, it is by a decision of the Government, not because of any initiative by a distributing body itself. By doing so, we intend to safeguard Northern Ireland distributing bodies from any unfortunate consequences of a decision to withhold funding in a particular case. Similarly, we are prohibiting the bodies identifying to the general public those subject to direction, as such a direction might be taken as implying that the applicants are themselves terrorists and thus make them targets for unlawful threats. I beg to move.
§ Lord Holme of Cheltenham
My Lords, the intention of the amendment must be right. It would be deplorable if moneys raised through individual donations throughout the country ended up in any way supporting the activities of terrorists in Northern Ireland. However, speaking as someone who, from these Benches, also has responsibility for Northern Ireland, I should like to raise two points on which the noble Viscount may be able to reassure me. Obviously, all cultural activity in Northern Ireland is disproportionately important. It is a way of encouraging normal life there instead of the terrible half-life that people have to live in the Province.
When looking at subsection (3C), I am slightly worried that the,benefit of a non-financial nature",may be taken as merely passive participation; for example, someone who is present as a spectator or viewing an arts exhibition. The term "benefit" could taint the occasion and therefore the donation of the grant. Noble Lords with experience of Northern Ireland will bear out that there is a spectrum of 479 opinion which leads ultimately through nationalism and loyalism to people who become enemies of society. There are many people who, in the course of normal events, will be present at occasions with those people, as we saw on the recent occasion of the visit of President Mary Robinson to Northern Ireland.
Perhaps the noble Viscount can therefore reassure me that indirect non-financial benefit will not include merely passive participation at an occasion. If he were able to reassure me on that score, I would wholeheartedly support the amendment.
§ Lord Swinfen
My Lords, is there any right of appeal for applicants for funding who are turned down? If they can prove that the information alleging that they are somehow mixed up with a terrorist organisation may be wrong, is there any form of appeal against a decision?
§ Lord Holme of Cheltenham
My Lords, before the noble Viscount replies, I recall the other point that I wanted to raise. There is a danger that this legislation, which is meant to stand for some period of years, may still be in existence after the North Ireland (Emergency Provisions) Act has fallen. We must all devoutly hope that the time will come when there are not emergency provisions and Northern Ireland is not run, as it is at the moment, under fairly draconian legislation. If the EPA ceases to be in application, will this clause continue to apply?
§ Lord Donoughue
My Lords, perhaps I may express reservations about the clause merely on civil liberties grounds. Naturally we bow to no one in wishing that proscribed organisations should not in any way get in on this Act or benefit in any way from it. Is the Minister convinced that the draft clause adheres properly to the principles of natural justice? It appears that there is no need for evidence to be provided. There is no provision for appeal on the part of a body so excluded. There is an air of secrecy about it that leads to a certain concern on our part.
My Lords, subsection (3B) sets out the circumstances in which the power of discretion may be exercised. The Secretary of State must be satisfied that a proposed distribution of funds to any person or group would directly or indirectly confer a benefit, including enhancement of reputation, on a proscribed organisation or on any organisation which in his opinion is concerned in terrorism in Northern Ireland or in promoting or encouraging it—the criteria for prosecution under the Northern Ireland (Emergency Provisions) Act 1991.
I can assure the noble Lord, Lord Holme of Cheltenham, that this does not catch the spectator at the exhibition but the organisation behind it. My noble friend Lord Swinfen and the noble Lord, Lord Donoughue, asked me why there is no right of appeal. The information upon which the Secretary of State will base most of his decisions cannot be disclosed —and I think for the very obvious reasons that your Lordships will realise. An appeal would therefore have to he considered in a void. Provision of such a mechanism is not considered to be of any value. Bodies and persons have the normal right of a citizen 480 to make representations to government about the operation of their policies. I have no doubt that the Secretary of State will give full consideration to any representations made to him, and there is always, scope for judicial review.
The noble Lord, Lord Holme of Cheltenham, raised some technical points in the second part of his question. If I may, I should like to write to him.
On Question, amendment agreed to.
Clause 27 [Power to amend section 21]:
[Amendment No. 19 not moved.]
Clause 31 [Investment of Distribution Fund]:
§ Lord Allen of Abbeydale moved Amendment No. 20:
Page 14, line 1, leave out subsection (5).
The noble Lord said: My Lords, in moving the amendment, I should like to explain that its purpose is to find out what this subsection means. On 8th July the noble Viscount said:
The funds will also be invested, with the interest on investments being returned as appropriate to the account for each distributive body".—[Official Report, 8/7/93; col. 1581.]
That is precisely what one would expect. But subsection (5), in so far as it is possible to understand it, does not seem to say that at all. What it seems to say is that the Secretary of State will have discretion to decide how the interest on the money invested on behalf of lottery beneficiaries is apportioned. It is rather similar to the point we discussed earlier on Clause 23 that the provision in the Bill does not correspond with the intention. I should be most grateful for an explanation.
My Lords, the noble Lord is concerned that too much power over the apportionment of funds is to be given to the Secretary of State. I hope I can assure him that this is not an excessive power over lottery funds. It is there rather in recognition of the fact that, in order for the distributors to benefit from the interest earned by amounts held for distribution, someone has to say how this is worked out. And the Secretary of State is the proper person for this role.
Clause 31 puts beyond doubt that interest or sums received on the realisation of investments can be retained and reinvested by the National Debt Commissioners. Under the original drafting of this provision it might have been impossible for the National Debt Commissioners to reinvest the interest earned on an investment without first passing it back to the distribution fund. That would clearly have been an accounting nonsense.
The National Debt Commissioners will make the best return for the distributors by investing funds in large blocks. But someone has to determine, or determine the principles which will govern, the extent to which the proceeds of that investment are attributable to sums invested out of money held for distribution by a particular body. When the proceeds are paid back into the investment fund of the National Debt Commissioners there may be several methods of apportioning them between distributing bodies. It will be a complex matter. For example, the valuation will need to take account of payments in; sums drawn 481 down; investments made; interest earned; investments realised—all of which may of course alter from day to day and for each body.
It is the intention that these sums should be allocated in line with monthly valuations of each distributing body's account. To set this in statute, however, would not allow the flexibility to change arrangements if this became appropriate; for example, if it were more efficient to do this in line with weekly valuations. While the National Debt Commissioners will undertake the work, the principles to which they work must be a matter for the Secretary of State, who is accountable to Parliament for the fund. This allocation of sums will then form the basis on which amounts paid back into the distribution fund are attributable to sums invested out of money held for distribution by a particular body.
I hope that the noble Lord, Lord Allen, will be satisfied with that rather complicated explanation of what is a comparatively simple point, and will feel able to withdraw the amendment.
§ Lord Allen of Abbeydale
My Lords, I cannot profess to have understood that. It is certainly extremely complicated. Perhaps I may ask a simple question. Does it mean in practice that the interest will be added to the appropriate account for each distributive body?
Yes, my Lords, it will be, and the interest earned on it will not be subject to taxation.
§ Lord Allen of Abbeydale
My Lords, it seems an extraordinarily complicated way of arriving at a simple solution. But if it is the right solution, and it is on record in Hansard, I must be content. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 32 [Accounts of the Secretary of State and National Debt Commissioners]:
§ Lord Holme of Cheltenham moved Amendment No. 21:
Page 14, line 14, at end insert:
("() Each account prepared under subsections (1) and (2) and each report prepared under subsection (3) shall be referred for scrutiny to a joint committee of both Houses of Parliament.").
§ The noble Lord said: My Lords, the purpose of this amendment is to make sure that Parliament makes the maximum use of the report or the account that is to be produced annually for it to look at. It is to that end that we are suggesting that there should be a joint committee of both Houses to scrutinise the report when it arrives.
I was struck by the Government's new White Paper, which states:
The aims of the new code of government information are to improve policy making and the democratic process by extending publication of facts and analyses which provide the basis for consideration of the proposed policy".
In other words, it is not simply the information but it is the analysis which makes the information useful. On these Benches we believe that scrutiny by a Select
Committee would achieve all those objectives. We must recognise that there are large sums involved, so thorough scrutiny is required.
§ When a similar amendment, which we subsequently withdrew, was discussed in Committee, the noble Viscount, Lord Astor, said that what was proposed would duplicate the work of the Public Accounts Committee and the Heritage Select Committee.
§ However, although, as we know, the Public Accounts Select Committee does sterling work, it finds out in retrospect what went wrong. What we are all concerned with here is a forward look to ensure that the national lottery is working as we would hope. It is not there to act as a safety net for disasters so much as to improve policy making. I can understand that the Government would prefer not to take that course, but I ask them to consider very carefully whether Parliament would not do better in its deliberations on the national lottery—a great enterprise on a massive scale—if there were such a committee. I beg to move.
§ 3 p.m.
My Lords, the Bill already contains a high degree of parliamentary scrutiny of the activities of the Secretary of State and all the distributive bodies, and indeed the regulator. This amendment 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 would duplicate the work of the Public Accounts Committee and the National Audit Office, which will already be able to scrutinise these essentially factual sets of accounts, as well as the Heritage Select Committee, which will have a proper role in examining all matters to do with the national lottery. If these 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. I may add that the reports are to be laid before both Houses, and I believe that that represents the right degree of scrutiny. It is far better to give Parliament the opportunity to act if it seems necessary rather than forcing Parliament to act whether or not it is necessary.
The noble Lord, Lord Holme of Cheltenham, asks that we look forward. That will be very difficult when I am not sure that his proposal would enable that in any event. The machinery for proper and effective parliamentary scrutiny already exists. Therefore, the amendment is unnecessary
§ Baroness Seear
My Lords, will the Minister think about this again? We are discussing something which is new and about which many of us have had a great many reservations and anxieties. There are policy issues to be taken into account. It is also a matter on which your Lordships' House has spent a great deal of time and acquired a great deal of knowledge. Scrutiny —preferably by a Select Committee of both Houses —would enable this very new kind of activity to be under a different type of supervision from simple control of accountancy and finance. Examining how 483 the whole scheme has been working out over a period of time is a different matter. It will call for a different kind of scrutiny from that which we normally get through the existing procedures.
My Lords, the scrutiny which the noble Baroness, Lady Seear, speaks about is there because the Heritage Select Committee of another place rightly scrutinises the national lottery and its effects. The noble Baroness is quite right when she speaks about the Public Accounts Committee, which examines factual sheets of accounts. If the noble Baroness is concerned about the overall scrutiny of the operation of the lottery, although I cannot speak for the Heritage Select Committee, I am absolutely sure that this is an area which it will look at in future. There is the opportunity for Parliament to act where it seems necessary and Parliament wishes to do so.
§ Lord Holme of Cheltenham
My Lords, it is fair to say that, although the noble Viscount has replied thoroughly, as he did at Committee stage, and according to his brief, it is a slightly disappointing reply. This Bill confers very extensive powers on the Secretary of State. At this stage it is a great national pig in a poke because one does not know quite how it is going to work. It is right that Parliament should have every opportunity in every way to look at the outcome of the first year or two of the lottery, and in particular to see what changes need to be made for the future. I do not believe that this is a matter which we wish to press this afternoon, but it may be something to which we shall need to return at Third Reading. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 45 [Importation and exportation restrictions]:
§ Earl Ferrers moved Amendment No. 22:
Page 17, line 28, at end insert:
("() That section so far as it applies in the British Islands outside the United Kingdom shall cease to have effect.").
§ The noble Earl said: My Lords, in moving this amendment, I shall speak also to Amendment No. 42. These amendments are consequential upon new Clause 45, which was inserted in the Bill in Committee. They repeal Section I of the Revenue Act 1898, which prohibits the importation of advertisements and notices relating to lotteries, so far as it applies to the Channel Islands and Isle of Man. The islands now rely on their own legislation to prohibit the promotion of foreign lotteries in their islands. The provisions of the 1898 Act are, therefore, no longer needed. I beg to move.
§ On Question, amendment agreed to.
§ Clause 51 [Rules for lotteries]:
§ Lord Swinfen moved Amendment No. 23:
Page 21, line 3, leave out ("10") and insert ("20").
§ The noble Lord said: My Lords, this amendment is intended to increase the maximum single prize allowed in a society lottery from £25,000 or 10 per cent. of potential ticket sales, whichever figure is the greater, to £25,000 or 20 per cent. of potential ticket sales—again, whichever figure is the greater. In another place the Government introduced an amendment which 484 increased the limit on the size of a single lottery from £250,000 to £500,000. At the same time they produced an amendment which changed the maximum single prize limit from £25,000 to £25,000, or 10 per cent. of potential ticket sales, whichever was the greater. Subsequently, in this House an amendment raising to £1 million the maximum ticket sales in a society was introduced by my noble friend.
§ These changes are most welcome not only by me but throughout the charity world. I trust that it will not seem ungracious of me to argue that there is one further change to be desired which would round off the whole small lottery package in a logical and coherent way. That would be achieved by this amendment.
§ We have heard it argued in this House that the size of the top prize in the national lottery will be a crucial factor in determining sales. If that is so for the national lottery, surely the same argument holds for the smaller lotteries run by charities, sports clubs, community groups, etc. If the alternative to the maximum top prize in a society lottery were increased from £25,000 or 10 per cent. to £25,000 or 20 per cent. of potential ticket sales, now that the Government have sensibly amended the Bill to allow maximum ticket sales of £1 million, that would result in a lop prize of £200,000 in a society lottery and would ensure that such lotteries remained attractive in the face of competition from the national lottery.
§ In Committee my noble friend Lord Ferrers said that the Government were not prepared to allow small lotteries which would compete and poach sales from a national lottery. It is fanciful to suggest that a charity lottery with a turnover of £l million and a 20 per cent. maximum prize, could really be regarded as being in competition with a national lottery with jackpots which could reach, with a rollover of three games, a figure which I understand to be £44 million.
§ The purpose of this amendment is to follow the logic of the Government's amendment in raising the maximum size of a society lottery by increasing the limit on the maximum single prize in order to ensure that charitable and other society lotteries are able to survive and prosper, given competition from a heavily promoted, multi-million-pound prize national lottery. I beg to move.
My Lords, my noble friend Lord Swinfen said that in tabling this amendment he hoped he would not seem ungrateful for what has already been done. I do not think that he is ungrateful at all. He is rather like a little boy with sweets. He has had some sweets and would now like another one. That is understandable.
The amendment would allow a maximum prize of £200,000. That seems to me to go way beyond reasonable bounds for these lotteries. We have to remember that, under the present law, the maximum prize is just £12,000. For the maximum prize to go from £12,000 to £200,000 is, by any standards, a massive jump.
The charitable sector, about which my noble friend is rightly concerned, has shown itself to be very good horse traders. Under the present law, the maximum prize is £12,000. When this Bill was first introduced in 485 another place, the maximum prize was set at £25,000. In Committee in another place, we increased the maximum limit to £50,000. But that was not enough. No, we had to do a little more. In Committee last week we put the maximum up to £100,000. I suggest that that is a huge jump, and I really think that my noble friend has not much about which to complain when the maximum prize goes up from £12,000 to £100,000. But being a good horse-coper, he wants to try for a bit more. I suggest that there is a limit, and that we have reached it. I suggest to my noble friend Lord Swinfen that it is time to accept the figure of £100,000 as being sufficiently attractive to enable societies' lotteries to be marketed effectively.
Having listened to my noble friend's remarks last week, it could be—I make this observation only in case there is some anxiety or misapprehension in my noble friend's mind—that there is concern not only about the maximum prize, but about the size of the total prize fund. The Lotteries and Amusements Act already allows societies to use up to 50 per cent. of the proceeds of a lottery in prizes. That figure is on a par with what will happen with the national lottery. This Bill does not change the figure of 50 per cent. The figure of 10 per cent., which was introduced by Clause 51, limits only the size of the top prize. Therefore, in the case of a £1,000,000 lottery, the promoter may offer a top prize of £100,000 and many smaller prizes totalling £400,000. In total therefore £500,000 may be given away in prizes.
I hope that that clarifies the position for my noble friend if he remains in any doubt at all. I hope also that the explanation that I have given will lead him to believe that the figure of £100,000 is the correct one.
§ Lord Swinfen
My Lords, I appreciate my noble friend's comments about 50 per cent. I think that I got rather muddled and misled the Committee. I was concerned purely about the size of the top prize, not about the total amount available for prizes.
I must admit that I would prefer my noble friend to describe me as a "horse-trader" rather than a "horse-coper" because the latter gives the impression that one is trying to disguise a fault in a horse when selling it. I hope that I am an honest trader, not a coper. However, I shall take it that my noble friend was simply trying to vary his phraseology.
My noble friend will appreciate that, in a bargaining situation, one keeps trying to get the best deal that one can. I recognise that this afternoon I am not going to be able to persuade my noble friend to go any further irrespective of whether I am a coper or a trader. In those circumstances, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 3.15 p.m.
§ Clause 55 [Removal of prohibition on the use of premises for the delivery of football pools coupons and stakes]:
§ Lord Brabazon of Tara moved Amendment No. 24:
Page 23, line 40, after ("forecasts") insert ("(i)").
§ The noble Lord said: My Lords, in moving Amendment No. 24, I should like to speak also to Amendments Nos. 25 and 26. Again, we return to Part IV of the Bill which concerns the football pools. I made clear during consideration of the amendments in Committee that I very much welcomed the Government's decision to legalise the sale of pools coupons in shops. It is a significant step towards securing a fair and equal competitive framework between the pools and the lottery. Coupons have been sold from shops for many years, and an amendment to the law to recognise that fact is already well overdue. I hope therefore that my right honourable friend the Home Secretary will see fit to use his powers of commencement to introduce the provisions of Clause 55 as soon as possible after Royal Assent, but we shall be coming to that issue shortly.
§ My amendments to Clause 55 are of considerable importance to the pools industry. As it stands, the clause limits the competitions that may be included on the pools coupons that are sold in shops to football matches played on Saturdays, Sundays and Bank holidays. However, the pools also run a limited number of competitions which are based on other sporting events, such as major horse races and cricket matches. Under the current provisions of the Bill, those competitions would be excluded from appearing on pools coupons sold in shops, but would be allowed to be used on pools coupons sold door-to-door. Such an absurd situation would mean that pools companies would be forced to bear the expense and inconvenience of having to produce two types of pools coupons, one to be sold in shops and another to cover the rest of the business.
§ That would be a particular problem for the smallest of the pools promoters, Zetters Pools, which counts on cricket pools for an important part of its summer business. It would be quite unfair to penalise that company by limiting the qualifying competition in the way that Clause 55 limits it at present. My amendment is tightly drawn and covers the sorts of competitions which the three main promoters have been running harmlessly for years. There is no risk of it being used by others to open up betting in unlicensed premises. Therefore I hope that my noble friend will be able to accept this modest improvement to what is already a most helpful clause. I beg to move.
My Lords, I am grateful to my noble friend Lord Brabazon for having been good enough to come to see me to discuss with me his anxieties about the Bill. It made me understand them better, and I have now had time to consider them. He returns to the same amendments that we considered in Committee last week. I explained then why the Government did not feel able to accept them.
We have deliberately limited the change in the law so that it should allow only coupons for football competitions to be collected in newsagents and shops. As I explained last week, if we were to allow pools betting on other sports to take place in newsagents and other shops, it could potentially turn these shops into unlicensed and unregulated betting offices.
My noble friend referred to the fact that some people would be disadvantaged. If we were to allow 487 coupons for cricket competitions, for instance, to be collected in shops, it would be difficult to argue against snooker competitions, horseracing competitions or any other kind of competition. My noble friend referred to one company in particular, Zetters Pools. I can understand that company's difficulty, and I have sympathy with it; but my noble friend will realise that this is a public Bill. It is not a Bill in which it would be right to aid one particular pools company over another—and one which happens to run a cricket pool. Clause 55 is of course concerned with football pools coupons, and we feel that it ought to be left like that.
The Government have a great deal of sympathy with the point of view which my noble friend has put forward, but I am bound to say that we find it difficult to share his confidence. If one were to allow the collection of any pools coupons through ordinary retail outlets, that would create a new situation and could well lead to an expanded market for pools betting. I do not think that we can rely on the history of the past 70 years or say that what will happen in the future will be exactly the same as happened in the past. What happens in the future is a matter for the future and we must pass legislation to allow for that.
Even if my noble friend were right and there is nothing to fear from his amendments, the pools companies are not losing much by Clause 55 as it is at present drafted. They will, of course, on occasions have to print two different pools coupons; that is, one for use in shops and one for use elsewhere. I recognise that and that inconvenience and expense are involved. But the pools companies are gaining something. Clause 55 legalises a practice which is at present being conducted by a number of people but which is in fact illegal. What is being done now—harmless as some of your Lordships may feel, even socially beneficial as some of the broader minded of your Lordships may feel—is actually against the law.
What we are doing by Clause 55 is to legalise—to permit—pool betting to take place in shops; but for football pools only. The football pools account for some 98 per cent. or even more of the turnover of pools companies. Despite my noble friend's arguments I find it hard to believe that Clause 55 as drafted will cause them any real difficulties. However, I accept that it will cause the shoe to pinch in certain places.
In the circumstances, I think that it would be prudent for us to work with the existing definition of a qualifying competition.
§ Lord Brabazon of Tara
My Lords, I am grateful for the consideration which my noble friend has given to the amendment. I should have said in my opening remarks that I am grateful to him for seeing me on Wednesday to discuss these matters.
I am of course disappointed with his reply. He said that we cannot rely on the history of the past 70 years. I believe that one can do so. During those years a number of pools companies attempted to make competition in a number of different areas. Most of them were unsuccessful. There is only the example that I gave relating to cricket and a pools company which runs a competition on the Grand National. If it 488 were possible to run successful pools on other competitions I am sure that the pools companies would have done so.
We are left with the curious anomaly that pools companies will be able to continue to make competitions on cricket and horseracing if they wish and to sell the coupons door to door. However, they will not be allowed to sell them in shops. The danger that that might open up all kinds of other types of unlicensed betting in shops is not borne out by the facts. The pools companies are of course subject to tax at 37.5 per cent. That is considerably higher than the rate paid by the owners of betting shops taking bets on horse races. Therefore, they are unlikely to be able to compete in terms of tax.
I do not believe that there is any future in trying to take my amendment further, and I beg leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 25 and 26 not moved.]
§ Lord Allen of Abbeydale moved Amendment No. 27:
After Clause 58, insert the following new clause:
("Disapplication of s.1 of Lotteries and Amusements Act 1976
§ The noble Lord said: My Lords, the amendment has been tabled again after discussion in Committee in the hope of seeking enlightenment. In Committee the noble Lord, Lord Airedale, whose name also appears to the amendment, explained the problem clearly. For once, and it was unusual, the noble Earl, in reply, did not take the point that had been made. He suggested that the amendment involved altering the whole character of football pools. That was not the intention: the intention of the amendment was to be helpful.
§ The point is simple. I understand that a small minority of the people who take part in the pools attempt each week to exercise skill and judgment in working out whether Blackburn Rovers will defeat Sheffield United and whether Arsenal are likely to draw with Manchester United. They fill out their pools coupon accordingly. However, the vast majority—I understand that it is about 90 per cent.—simply put down the same numbers week after week. The question is whether that still means that the pools are a game of skill.
The doubt raised in one's mind stems from the decision of the House of Lords in the case of Singette Ltd. and others v. Martin in 1970, referred to by the noble Lord, Lord Airedale. That was not a pools competition run by one of the big companies but it was a small affair. Lord Pearson said:
For the 99 per cent in any week, who make no forecast but win prizes if their numbers happen to be lucky numbers for that week, the competition has the character of a lottery … Is the competition saved from being a lottery by the fact that the participants have in each week an option to substitute chosen numbers, involving a choice of teams, and on the average 1 per cent of them exercise the option in any week? In my opinion it is not saved from being a lottery by that fact'.
§ If there is a point—and I await the Government's explanation—it is not surprising that it was not 489 covered by the 1976 Act which made illegal lotteries other than those for which specific provision was made. That Act was introduced at short notice, despite the guns of a Private Member who had a Bill well on the way. It was a very rushed affair.
§ I know that the present pools operators are in no doubt that they are perfectly well within the law. No doubt they have taken good legal advice and I understand that the Home Office is satisfied that they are within the law. But the question remains: in view of the way that they are run, are they games of skill? If they are not, the matter can easily be put right. If they are, will the Minster explain what we have missed out in the chain of argument in leading us to doubt whether the pools as at present organised are not lotteries but games of skill? I beg to move.
§ Lord Airedale
My Lords, I support the amendment. We must go back in time and reflect upon the days when the football pools were growing up. In those days the Government's attitude towards lotteries was different beyond recognition from their attitude today. In those days lotteries were confined to village garden fêtes and the like. In those days the football pools companies, in order to escape from being regarded as lotteries, got themselves accepted as promoting games of skill. The competition was accepted as an exercise of skill whereby each week entrants would examine the matches to be played on the following Saturday, examine the form and reach their decision about the likely outcome.
Just as the Government's attitude to lotteries has changed out of all recognition, so has the conduct of the football pools companies. When I moved the amendment in Committee I had no means of knowing what percentage of punters were using the pools as a lottery, not sending in identical coupons each week, but, at the beginning of the season, sending in one coupon and stating, "Repeat this coupon every week of the season. I enclose my cheque for the total amount due". There is a difference there. In consequence of my efforts in Committee I received a letter from the managing director of Littlewoods Pools. I nearly fell down when I read:indeed 90 per cent. of them [his clients] tend to use the same numbers on the coupon week after week".I believe that that is an increasing figure. Of course, it is very much in the interests of the pools to encourage those standing entries because the punter pays his money in advance, nothing has to be paid out for many weeks ahead and there is a tidy sum to be placed on deposit by the promoter in the interval.
It is like the betting shops. Every transaction is in cash. You can bet months ahead on the results of the big horse-races. Even today the bookmakers are advertising the odds on the results of next year's football championships. Therefore, all the money which is being paid over in the betting shops is available to be placed on deposit by the promoters for months until at some future date some of the money has to be returned to the lucky winners. Therefore, it is very much in the interests of the promoters to boost that 90 per cent. lottery aspect of the pools.
490 The only other reference that I shall make to the managing director's letter is that his second paragraph begins:Whilst understanding your wish to be helpful to the pools industry";and his last paragraph reads:In view of the fact that you have made such a serious—and untrue—allegation against our company, I should be grateful if you would please place a correction on the record in the House of Lords at the first opportunity".That is rather hard because I never mentioned his company from beginning to end. I take that rebuke with as much fortitude as I can command.
The argument of the pools promoters is that the pools are lawful because an opportunity is provided for the exercise of skill if the punters wish to use it, even though none of them, or hardly any of them, exercises that skill, taking advantage of the opportunity.
Lord Pearson's judgment in the House of Lords' case which disposes of that argument has been cited to your Lordships by the noble Lord, Lord Allen. The noble Earl, Lord Ferrers, knows a good deal about this matter, as one would expect. In Committee he stated that the pools companies: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".—[Official Report, 8/7/93; col. 1627.]That is not a proposition; it is a fact. The football pools are now being used overwhelmingly as a lottery. Would it not be helpful, therefore, for the noble Earl to accept the amendment?
The amendment does not change anybody's life. It merely clothes with legality the unlawful procedures being adopted by the football pools by acknowledging that it does not matter that they are using the football pools as a lottery. That is all there is to it.
Of course, the Government could jump the other way if they chose. They could say, "Very well, let us go back to square one. Let the football pools be regarded as they originally were, only as a game of skill. Let there be no lottery element in it. Let the punters who wish to engage in a lottery go over to the national lottery. Never mind if a lot of people in Liverpool will be thrown out of work. That does not matter at all". I do not suppose that that would win the Government many votes and I do not believe that that would be the line that they would take. But why do they not take this line and accept the amendment, which merely legalises the unlawful practices which are being used at present by the football pools companies to everybody's satisfaction?
§ 3.30 p.m.
§ Lord Brabazon of Tara
My Lords, I hope that the Minister will resist the amendment. I recognise that the noble Lord, Lord Allen, tabled the amendment with the best of intentions but I do not believe that there is any need whatever for it.
The pools are indeed a game of skill. But the companies are obliged to offer their clients the 491 opportunity—and I emphasise the word "opportunity"—to use skill and judgment. Singette Ltd. and others v. Martin, to which the noble Lord, Lord Allen, referred, makes that point.
However, that does not mean that pools clients must use skill. Indeed, as has been said, 90 per cent. tend to use the same numbers on the coupons week after week. That in no way challenges the legality of the competition or invalidates their entry into it. That is the principal reason why the pools and a numbers-based national lottery are such similar products, appealing overwhelmingly to the same market.
With regard to the pools standing forecast promotional literature, it is made clear to clients that they are free to change their forecasts at any time. They do not have to keep to the same numbers from the beginning of the season to the end of it. If they wish to make a different selection on different weeks, they can do just that.
I am advised, as the noble Lord, Lord Allen, said, that those matters have been the subject of counsel's opinion and have been closely scrutinised by the Home Office. They passed the legality test in every respect and it is unfortunate that the noble Lord, Lord Airedale, sought to argue, as he did in Committee, that the pools companies have been flouting the law for years. Indeed, the reverse is the case. The companies have repeatedly sought to abide not only by the spirit but also by the letter of the law, especially as regards those aspects designed to encourage the stimulation of gambling or its proliferation and the need to protect the young and the vulnerable.
§ Lord Airedale
My Lords, before the noble Lord sits down, of course the punters are given the opportunity to exercise their skill, but over 90 per cent. of them do not take up that opportunity. That led Lord Pearson, when expounding the House of Lords' decision, to say that that does not save the pools from becoming a lottery.
§ Lord Brabazon of Tara
My Lords, the fact is that the punters have an opportunity to make a selection. Whether or not they make it is up to them. But the opportunity is there.
§ Lord Swinfen
My Lords, there was a time when I did the pools. I sent off a cheque for a complete season. I may have known at the time the name of the teams who were playing in the first four weeks of the season but certainly not beyond that. I do not recall being given the opportunity to change the forecast for draws, wins or whatever my forecast was. In my view it was a set of numbers put down with the hope that something would come up at the end of it.
It may be that this is a very fine point. I am sure that the pools promoters have taken legal advice and that they are making certain that they are lawful because they would not want to lose their income which must he fairly large. However, I think it would be wise to put the amendment in the Bill to ensure that the matter is clear, beyond doubt and settled once and for all. I support the amendment.
My Lords, the noble Lord, Lord Allen of Abbeydale, said that he sought enlightenment by way of the amendment. He looked to me to give him that enlightenment as he said that I had become confused—though they were not his exact words; he merely insinuated—when the amendment was moved in Committee. The amendment has caused a great deal of trouble. However, I shall try to enlighten the noble Lord.
I can enlighten him first by saying that the amendment would not change anything because Section 1 of the Lotteries and Amusement Act 1976 does not apply to the pools. Therefore, the amendment would achieve nothing. I turn now to the noble Lord, Lord Airedale, who was very dismayed because he had received a fairly pungent letter from the Managing Director of Littlewoods Pools who suggested that he had got it wrong. However, if it comforts the noble Lord, I can tell him that I also received a letter from the Managing Director stating that I, too, had the matter wrong. Of course, he was in fact correct.
The onus of the complaint that the noble Lord, Lord Airedale, made in moving his amendment was that the law is constantly flouted. He then proceeded. to make his case. My reply to him in Committee, which he quoted this afternoon, was as follows:The pools companies have argued that they have no intention of denying those who want to exercise skill the opportunity to do so … What they want is to market the pools, not as a form of long-odds betting but as a lucky numbers game—a lottery".—[Official Report, 8/7/93; col. 1627.]Those are the words that the noble Lord, Lord Airedale, quoted. My mistake was to say that that was. what the pools were saying, whereas I should have said that that was what the noble Lord, Lord Airedale, was saying. I wrongly thought that the amendment he tabled was on behalf of the pools company. Therefore, I was translating his remarks as being those of the pools company. I apologise unreservedly to the Managing Director of Littlewoods Pools for having got it wrong. I relate the remarks that I then made not to the pools company but to the noble Lord, Lord Airedale.
I turn now to the concern of the noble Lords, Lord Airedale, and Lord Allen of Abbeydale; namely, that people who habitually put down the same numbers week after week are not in fact operating any form of skill and are merely using the pools as a lottery. The football pools is a game in which skill and judgment can be exercised to improve the chance of winning. It depends on events which can be forecast with a greater or lesser degree of accuracy. To argue that many people do not exercise that skill does not alter the basis of the game. I could—no doubt the noble Lord, Lord Airedale, could if he was so brave—place a bet in horseracing that the No. 3 would win at four races during the coming week. The noble Lord might think that number three was a lucky number. If he did so, it would not alter the fact that, if he were to study form to help his judgment, he may well improve his chance of winning. That does not turn on-course or off-course betting into a game of pure chance.
My noble friend behind me—as, indeed, the noble Lord, Lord Airedale, did last week and the noble 493 Lord, Lord Allen of Abbeydale, did this week—referred to the House of Lords' case of Singette Ltd v. Martin. It was held that there was an element of skill in the making offorecasts as to sporting or other events".In his judgment, Lord Pearson pointed out that,a person who has no knowledge or experience in the relevant field of sporting or other events cannot use any skill in his forecasting, and even a person who has such knowledge or experience may choose not to make use of it on a particular occasion".Therefore, we must look at the overall character of the competition and not at how it is played by any particular entrant. It is for the pools companies to satisfy themselves of the legality of their competitions. I understand that they have done so. I imagine that the advice that they have received rests on the fact that the football pool competitions which they promote are run on different lines to the competition which was conducted by Singette Limited and which was held to be unlawful. In that case, the pool promoter allocated numbers to those people who were taking part in the competition.
Of course, the reverse is the case with the football pools which are conducted today. It is the participant that chooses his or her own numbers. In making the selection, the opportunity is there to exercise skill. Even if the entrant chooses not to exercise skill, the pools promoter can hardly compel him or her to do so. With the pools, the opportunity is there to use the skill. Whether or not a person wishes to use it is a matter for him or her.
§ Lord Airedale
My Lords, what the noble Earl has omitted to refer to is that in the judgment of Lord Pearson he said that, even if 99 per cent. of the punters do not avail themselves of the opportunity to use the skill, it does not save the competition from being a lottery.
My Lords, with the leave of the House, I should like to reply to the noble Lord, Lord Airedale. However, I should point out that, although the noble Lord is a stickler for rules and procedure, he has now made three speeches on the amendment, whereas he should only have made one. However, we shall pass over that fact. The content of his amendment last week and that of the amendment of the noble Lord, Lord Allen, moved this week, together with the observations that he has just made, which are a repeat of those made in Committee, all go to insinuate that the noble Lord is saying that the football pools are a lottery and not a game of skill. I do not agree with him.
§ Lord Allen of Abbeydale
My Lords, that, in the light of what Lord Pearson said, is the crux of the matter. When 90 per cent. of those who take part exercise no degree of skill, I still find it difficult to follow the argument that the fact that there is an opportunity for those who wish to do so is enough to ensure that the whole thing is regarded as a game of skill. But, having made that point, I do not think that we can pursue it further. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.494
§ 3.45 p.m.
§ Lord Brabazon of Tara: moved Amendment No. 28:
After Clause 58, 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—
(3) The activities referred to in subsection (1) are—
§ The noble Lord said: My Lords, the above amendment also stands in the names of the noble Lords, Lord Dean of Beswick and Lord Holme of Cheltenham—
§ Lord Williams of Elvel
My Lords, I apologise for interrupting the noble Lord, whose contributions are much appreciated. However, before he proceeds with his speech, perhaps he can clarify one point.
I understand that on Second Reading the noble Lord declared an interest in that he is Deputy Chairman of the Foundation for Sport and the Arts which receives money from the pools. He very properly declared that interest. Are we to assume —it is to be hoped that we can—that that interest is an honorary one and that there is no pecuniary interest involved?
§ Lord Brabazon of Tara
No, my Lords; I did not say whether or not it was a pecuniary interest. I do receive a payment for being Deputy Chairman of the foundation. The reason that I am moving the amendment is because the income for the foundation (which is some £60 million a year, to which I referred on Second Reading and, again, in Committee) comes wholly from the pools companies. Therefore, it is in the interest of all the beneficiaries of the foundation that the pools should continue to have the income to give to the foundation. That is the reason why I support the amendments which are aimed to help the pools companies.
I can assure the noble Lord that I do not have any direct financial interest in the pools companies. My 495 interest is merely as Deputy Chairman for the Foundation for Sport and the Arts. I hope that that clarifies the position.
§ Lord Williams of Elvel
My Lords, I am most grateful to the noble Lord for those comments. I do not wish to pick on the noble Lord, as we all appreciate his contribution to this House. I just feel that if someone has a pecuniary interest it should be declared, as stated clearly in the Companion. I understand —as the noble Lord says—that he has an indirect pecuniary interest in this matter but I shall not pursue the matter further.
§ Lord Brabazon of Tara
My Lords, in so far as it is an indirect pecuniary interest, I declare it. As I have said, I am not paid directly by the football pool companies and, if I had been, I would have made that clear at a very early stage. However, I am deputy chairman of the foundation, which does good work in handing out £60 million a year, and my interest here is to try to maintain that income so that the football pool companies can continue to pay out that money to sport and the arts.
I return to the purpose of this proposed new clause. It seeks to allow the pools industry the same access to advertising on television and radio as will be allowed to the lottery. As many of your Lordships will know, I tabled this same new clause for consideration in Committee but, owing to the pressure of time, there was insufficient debate on what I consider to be a very important subject. I have therefore brought it back for further discussion.
As I indicated in Committee, the pools and the lottery are considered by the Government, by the National Heritage Select Committee and by the great majority of MPs in another place as directly equivalent forms of long odds, low stake gambling at the very softest end of the spectrum. Ministers have recognised the fact by introducing a number of amendments to the Bill which will give the pools the opportunity to compete more effectively and fairly with the lottery for their existing market.
The rolling over of prize money from one week to the next is one of those areas where the Government have seen fit to allow parity between pools and the lottery, and the legalisation of the sale of pools coupons in shops and the equalisation of the minimum age for the pools and the lottery are two more. What puzzles me, however—this is the primary motivation for my new clause—is why the Government have stopped at these three particular changes. If they recognise that the pools are equivalent forms of gambling, as they clearly have done, surely it is only right and proper that the industry is allowed to compete in the one area—television and radio advertising—where the market can so strongly be influenced in favour of one product at the expense of another.
During the very brief debate on this new clause in Committee, my noble friend gave two reasons for allowing the lottery to advertise on the broadcast media while denying the same facility to the pools. The first was that the pools are run for profit while the lottery is not. The second was that the lottery will be 496 run for good causes. My noble friend appeared to base these arguments on conclusions contained in the report of the Royal Commission on gambling. But that report is now 15 years old. A great deal has changed since then. Let us just look at the pools industry and the contribution it makes to good causes and the amount of tax it pays. In 1978 the Football Trust or, to be precise, its predecessor the Football Grounds Improvement Trust was in its infancy, the payments made to the game from the pools' Spot the Ball competition were running at under £1 million a year and pool betting duty was generating £103 million a year for the Chancellor.
The contribution this year from the pools to good causes—to football, other sport and the arts—which I have just referred to in reply to the noble Lord, Lord Williams of Elvel, will exceed £100 million. The amount raised from pool betting duty will be more than £320 million. These contributions amount to almost half the turnover of the pools. The likely equivalent figure for the lottery, as we have heard on many occasions, will be no more than 35 per cent.; that is 12 per cent. tax and 23 per cent. for the five designated good causes. To talk of the pools being run for commercial gain is to ignore the fact that their profits are limited—in the case of Littlewoods, for example, to less than 3 per cent. on its turnover. That is a very modest amount by any standards.
The lottery will also, of course, be a source of profit for its operator. It will be interesting to see whether the successful company is content with as little as 3 per cent. Given the fact that the pools and the lottery occupy similar positions in the soft, long odds, low stake gambling market, and that they both possess great potential to contribute to good causes and in payments to the Treasury, there can be no case for discriminating against the pools on advertising. I feel it is necessary for your Lordships to recognise the importance of advertising on the broadcast media. If the lottery is allowed to advertise itself across the UK to millions of people, while the pools are not, that is giving an enormous competitive advantage to one at the expense of the other. I beg to move.
§ Lord Holme of Cheltenham
My Lords, I rise to support this amendment, to which I have added my name. I must confess there has been a certain awkwardness as regards the pools in the past 10 minutes. We have heard about the animated correspondence to the noble Lord, Lord Airedale, from the managing director of Littlewoods, and there has been a slight awkwardness over the auspices of this amendment. Therefore I believe a word ought to be said for the football pools. The football pools, above all, have the great merit that they are not run by the government of this country. They are a genuine entrepreneurial activity which was started, as we know, many decades ago. They have a great grip on the affections of many people in this country and are run in a fairly decent, ethical manner. The pools give harmless pleasure to many people and they remit a substantial part of their proceeds to charities, the arts and sport, which provide employment and provide money for the Exchequer. What is more, they are an existing institution in this country. I think it is right 497 that the Government should provide something which in other contexts is dear to their heart, and that is a level playing field.
I have already made it clear that I would much prefer it if the Government had not decided to go in for gambling but, as they have done so, I think it is quite wrong they should give themselves an advantage over those already established in the field. I hope that when the noble Earl replies he will bear in mind the merits of that level playing field the Government so often commend to us.
My Lords, successive governments have always drawn the line between gambling which is promoted for the explicit purpose of raising money to benefit good causes and gambling which is promoted fundamentally as a commercial exercise for commercial profit. I know that my noble friend Lord Brabazon jibs at that but it is a fact. That is the reason why the pools were set up in the first instance. As my noble friend has pointed out, the pools may give to different causes, but the fundamental reason for their establishment is commercial profit. That is distinct from the national lottery, which is being set up specifically to raise money for good causes.
Once that distinction is blurred and the line is crossed it would be very difficult to limit the change to the football pools alone. Last week we heard the noble Lord, Lord Birkett, put the case for the bingo industry being allowed to advertise and my noble friend Lord Mackay of Ardbrecknish put the case for the bookmaking and horse racing industries being allowed to advertise, too.
To allow all these different sectors of the gambling industry to have access to the broadcast media would, I think, be undesirable and it would be likely to lead to a considerable increase in the volume of gambling which takes place, with all the consequences which that may have for the incidence of excessive gambling. I would find it hard to advise your Lordships that that is a road down which we ought to travel.
My noble friend Lord Brabazon has sought to argue that the pools also raise considerable sums for good causes. That is perfectly true. For that matter the bingo industry raises considerable sums of money for charity, and the bookmaking industry supports both horse racing and greyhound racing to the tune of some £50 million. The essential point is that pool promoters are in the business in which they are in principally in order to make profits for their shareholders, whereas, with the national lottery and other lotteries, the overriding objective is to support good causes. I suggest that the distinction is clear and it ought to be maintained.
As I mentioned in Committee—my noble friend has referred to this today—the Royal Commission on gambling drew this distinction and suggested that it should be adhered to. My noble friend Lord Brabazon said that was 15 years ago. Fifteen years is not such a long period of time in life and in the pattern of gambling. We think that that argument is just as valid now as it was then and we feel that this distinction ought to be maintained.
§ 4 p.m.
§ Lord Brabazon of Tara
My Lords, I am most grateful to the noble Lord, Lord Holme, for the support which he was able to give to the amendment.
I should like to pick up a couple of points which my noble friend Lord Ferrers made in his reply. He spoke about the amount of money which benefits good causes. I assume that my noble friend, as a Minister, would regard the Treasury as a good cause. The amount of money which the pools presently give to good causes is approximately 47.5 per cent. whereas, as I said in my opening remarks, only 35 per cent. of the proceeds of the national lottery will go to the same good causes.
Secondly, I am not suggesting that it should be permitted to advertise horse-race betting or grey-hound racing. My argument is that the pools are the same type of long odds, low stake gambling as the national lottery will be. That is the parallel I tried to draw. I am not seeking to allow other forms of betting to be advertised.
My noble friend said that while it was 15 years since the Royal Commission reported, that was not such a long time ago. I did not seek to argue that it was a particularly long time ago. My point is that a great deal has changed in those 15 years in that the pools companies have supported, first, the Football Trust and, secondly, the Foundation for Sport and the Arts, of which I am deputy chairman. What has changed in the interim since the Royal Commission reported is that the football pools companies support those two good causes.
I can only take note of what my noble friend said in his reply. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Lucas moved Amendment No. 29:
After Clause 54, insert the following new clause:>
("Announcement of game of skill or competition
. The codes drawn up under sections 9, 93 and 152 of the Broadcasting Act 1990 (which provide for the control of advertisements broadcast on television and on radio and for broadcasting standards) shall set out appropriate standards for the information to be contained in any announcement of advertisement for, or programme concerning any competition, including inter alia lotteries and games of skill.").
§ The noble Lord said: My Lords, in moving the amendment I should like to draw your Lordships' attention to two printing errors on the Marshalled List. The word "code" on the first line should clearly be "codes", and the amendment belongs after Clause 54 of the Bill.
§ The amendment has its genesis in an amendment which I put down at Committee stage but which I did not speak to because of the late hour at which it came up. It was a long, complicated and technical amendment seeking to rectify a limited and specific problem. My noble friend Lord Astor was kind enough to write to me after the Committee stage pointing out that the amendment was too narrow to achieve the effect that I wanted and too long and complicated to be operable. Therefore, I have replaced it with this much wider and, I hope, less complicated amendment.499
§ The amendment covers quite a wide spread. It invites the existing bodies for the control of advertising and broadcasting standards to set up regulations which will govern the advertising of the lottery and all other competitions. In addressing the amendment I shall confine myself to the particular problem that I wish to remedy, because I would be entirely easy if the Government, accepting my argument, chose to remedy the problem in a different fashion.
§ I seek to address the abuse of reputable media to promote facile games of skill using premium rate telephone lines for the benefit of commercial concerns and offering a derisory return to punters. The running of such competitions has become widespread. I have personally seen or heard them on ITV, the BBC and Classic FM. My objection to them is that they abuse the public's trust in the regulated broadcast media in order to make excessive profits at the expense of the public.
§ A typical game might run as follows: "Now here is a bit of fun for those of you who think they know their geography. We are offering a prize of a holiday for two in the South of France worth £500 for the winning entry. You can enter as many times as you like to increase your chances of winning. We will choose a winner from those entrants who can correctly tell us the name of the river which flows through Liverpool. Is it (a) the Mersey, (b) the Thames or (c) the Severn? Ring now on 0891 etc." That is a real example, although the exact words are mine.
§ When the punter rings up the question may be repeated, slowly, to ensure that the call runs into the second or third minute. If we assume that 4,000 punters ring—a fairly usual response—at a cost of £1 a time, the return to the average punter is 12.5 per cent. Noble Lords will be aware that if the punter knew that he would not enter, but he trusts the BBC not to trick him in this way.
§ The formula is, of course, an old-established one. A typical national Conservative Party raffle with a prize of £1,000 is just such an example. But when competitions are for a good cause, low rates of return are expected and accepted. It is just a bit of fun for the giving. But telephone lotteries now being run are for commercial gain—a quite different thing.
§ All forms of gambling that I can think of enable the punter, either immediately or easily, to find out what his likely rate of return is. There are various laws which make sure that he can do so. I am unaware of any other form of public gambling where the participant can have no idea of his likely rate of return.
§ Simply stated, my case is that we should be able to trust the broadcasters, within reason—and many of us do—that in promoting these games they are abusing that trust, and that they should be discouraged from doing so. I hope that my noble friend agrees and that a suitable clause may sit easily in this Bill. I beg to move.
§ Lord Birkett
My Lords, on reading the amendment I did not realise the point which the noble Lord, Lord Lucas, intended to make. I am so glad that he made the point. My small son is for ever trying to win 500 me holidays in the South of France by phoning up and saying what river runs through Liverpool. I had not realised the abuse to which my family was subject until the noble Lord, Lord Lucas, pointed it out.
There has been a great deal of talk today about the advertising of the lottery. I hope that the advertising agency which gets this contract—and a whopping great contract it will be—will represent it simply and fairly and will say that people have a reasonable chance of winning a small prize and an almost inconceivable chance of winning a big one, and will then mention the five good causes which will receive the money which we put in but with which we do not win, without being particular about it. If it does that and succeeds in doing it both cheerfully and stylishly. I for one shall be very happy.
My Lords, I do not believe that any of your Lordships would wish to promote an amendment which would in any way prevent the noble Lord, Lord Birkett, from winning a holiday in the South of France. I am sure that we would all wish him a very nice holiday this summer, even if he does not win one and has to pay for it.
I understand that my noble friend is eager to see the rate of return stated in any advertisement for such games of skill and other competitions. However, I doubt whether that particular information is of much relevance to the participants. The information which is relevant is the cost of entry and the prize on offer. It is the latter which provides the inducement to take part. To my knowledge the cost of entry is no more than the cost of a letter or telephone call. Where a premium rate telephone number is used, the television or radio station is already obliged to state the cost of the call per minute. As for the prize, again to my knowledge it is clearly stated. In those circumstances, I would have to be persuaded that television viewers and radio listeners are being seriously misled.
I have to point out again to my noble friend that his amendment would not achieve his objectives. It would apply to very few competitions. The amendment covers only those competitions which are featured in paid advertisements and therefore covered by the advertising codes of the broadcasting authorities. Those competitions staged by television and radio stations would be excluded.
The advertising codes of both the Independent Television Commission and the Radio Authority already contain rules relating to advertisements for competitions. In each case the codes require that advertisements may be accepted only if arrangements have been made for prospective entrants to obtain printed details of the conditions governing the competitions, the announcement of the result and the distribution of prizes. The ITC code also requires that any special conditions governing entry to the competition must be given in the advertisement. The punter knows the cost of entry and the prize on offer. Furthermore, the Radio Authority codes already require printed details of a competition to be available to participants. With that explanation, I do not believe that my noble friend's amendment is necessary.
My Lords, I thank my noble friend for giving my arguments consideration. I am sorry that he does not agree with them. In the circumstances, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 59 [Orders and regulations]:
§ Lord Swinfen moved Amendment No. 30:
Page 27, line 13, after ("27") insert (",28").
§ The noble Lord said: My Lords, because the hour was so late, at Committee stage I did not move Amendment No. 130. However, I asked that my noble friend would reflect upon the powers of the Secretary of State under what is now Clause 28 of the Bill. I hope that in the intervening week he has found time so to reflect.
§ The power provided to the Secretary of State in Clause 28 is considerable. He may substitute another body for one of the distributing bodies specified in Clause 22. He may add another body to the list set out there. He may remove any one of those bodies from the list. He may change the relative share of the proceeds which they are able to distribute from that set out in Clause 22.
§ Those are significant powers. They can be exercised without the Secretary of State necessarily having to explain his use of them either to this House or to the other place. It would depend on the matter being raised by a Member of either place so that the Secretary of State was obliged to respond. I contend that those powers are such that the Secretary of State ought not to be able to exercise them without the express approval of Parliament.
§ When an amendment providing for Clause 25 to be made subject to the affirmative resolution procedure was debated in Committee in another place, the then Minister, Mr. Key, argued that the two clauses in the Bill which are subject to that procedure—they are now Clauses 27 and 29—go to the heart of the Bill and its purpose; that is, to raise money for good causes. Clause 27 gives the Secretary of State power to change the percentages allocated to the different sectors. Clause 29 makes it possible for the Secretary of State to extend the life of the Millennium Fund.
§ Those are indeed vital powers for the exercise of which the approval of Parliament ought to be sought. However, I argue that the powers in Clause 28 go quite as close to the heart of the Bill as do those in Clauses 27 and 29. They are not merely operational powers—a distinction made by Mr. Key in the debate in another place. In passing the legislation, we know exactly which are the bodies we have approved as being responsible for the distribution of the proceeds of the national lottery.
§ The approval of Parliament should be sought before changes affecting those bodies and the percentages are made. If the Secretary of State's case is good, he will have no difficulty in securing that approval. However, his powers under the clause should be subject to the safeguard of a guaranteed examination by Parliament. I beg to move.
My Lords, the effect of Clause 28 is to allow the Secretary of State by order to change the proportions going to the bodies listed in Clause 22. 502 The provision would be used only where absolutely necessary—for example, where it was patently necessary for the good of the sector concerned, or, for example, if the Scottish or Welsh arts councils were set up and therefore it was necessary to change the Arts Council so that those parts could be included. At present, as I am sure my noble friend is aware, the Arts Council covers the whole country.
The House of Lords Delegated Powers Scrutiny Committee considered the provisions of the Bill and noted the Minister's undertakings on the use of the power in the clause. The committee pointed out that the Joint Committee on Statutory Instruments will be able to refer to those assurances and will be able to judge whether an order proposed to be made is unusual or unexpected use of the powers in the clause and will be able to compare them. In the light of that, the Lords committee made no objection.
If any action were taken under this clause, there would be an opportunity for the measures to be debated. I should remind my noble friend that even if the Secretary of State uses Clause 28 to alter the proportions set out in Clause 22, under Clause 27 (2) (a) no proportion going to any of the five good causes, or four, after the Millennium Commission ceases to receive funding at the end of the year 2000, can fall below 5 per cent. To reduce the 5 per cent. further or, for example, to introduce a totally new category would require primary legislation; that is, a new Bill. I hope that with that explanation my noble friend will see fit to withdraw his amendment.
§ Lord Swinfen
My Lords, I thought, when my noble friend started responding to the amendment, that he was putting the argument for it. I still think that the amendment would give the Secretary of State an opportunity to come forward and explain himself and that he would be delighted to do so because it would probably be good news that he was giving to Parliament. However, as it is fairly late, I shall withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 4.15 p.m.
§ Clause 62 [Northern Ireland]:
§ Viscount Astor moved Amendment No. 31:
Page 27, line 35, after ("Lottery") insert ("that are not excepted matters for the purposes of that Act").
§ The noble Viscount said: My Lords, Amendments Nos. 31 and 32 are technical amendments related to Amendment No. 18 to which I have already spoken. I beg to move.
§ On Question, amendment agreed to.
§ Viscount Astor moved Amendment No. 32:
Page 27, line 35, leave out ("the purposes of that Act") and insert ("those purposes").
§ On Question, amendment agreed to.
§ Clause 64 [Commencement]:
§ Lord Donoughue moved Amendment No. 33:
Page 27, line 40, at beginning insert:
("(1) Subject to subsection (2) below,").
§ The noble Lord said: My Lords, I beg to move this amendment and, with the leave of the House, to discuss with it Amendment No. 35. I begin by 503 congratulating the Minister on taking this opportunity for raising the limits on individual lotteries. That has been much welcomed and appreciated throughout the charitable field.
§ The purpose of the two amendments is to bring into operation at Royal Assent to the Bill those provisions which amend the legislation relating to existing lotteries governed by the Lotteries and Amusements Act 1976. If achieved, that would enable many charities already registered with the Gaming Board to raise revenues from lotteries at the earliest possible moment.
§ I can see the Government's problem in that at present, as I understand it, it is the scheme which is registered with the Gaming Board and time will be needed to register the society. There must be a period of consultation covering the changes to the regulations; so I understand the Government's dilemma.
§ However, even accepting that, there is a problem for certain societies. I have in mind the Royal Society for the Protection of Birds, which is the largest conservation charity in Europe. Large societies already registered with the Gaming Board are ready to participate in the lottery under the new limits at the earliest possible time, but they will be delayed, as I understand it, by waiting for hundreds of others to register. So they will lose the opportunity to run early lotteries and potentially lose several million pounds.
§ I said that I recognise the Government's difficulties in the area, but I wonder whether the Minister can help us. Is he able to say something favourable about how the process could be speeded up; in other words, that the new limits apply to societies as soon as they register, without waiting for every other charity to be registered? This is a probing amendment to see whether the Minister can help in any way. I beg to move.
§ Lord Brabazon of Tara
My Lords, my Amendments Nos. 34 and 36 have been grouped with this amendment, which the noble Lord, Lord Donoughue has moved, although they address a completely different issue. Nevertheless, both relate to the issue of the commencement date. We have already had an opportunity to consider my amendments in Committee, but time was pressing hard on us at that late hour on the Thursday evening, as it presses on us at twenty-past four on a Friday afternoon. I shall be brief, and return to the issue.
First, it is worth reminding noble Lords of the words of my right honourable friend the Minister of State at the Home Office during the consideration of the Bill 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".These words could not be clearer. The new clause does no more than legalise existing practice. The Minister accepts that the provisions of Clause 55 have no purpose other than to give legal recognition to a practice that has been going on for years. There are no other hidden nuances. It is simply a case of allowing common sense to prevail.
504 As that is the case, why can we not have what is an existing practice legalised as soon as possible, rather than having to wait until the lottery is—in the words of my noble friend the Minister of State—up and running. After all, this is not an issue which has anything to do with the lottery. It is all about bringing the letter of the law into line with current practice.
Many thousands of shopkeepers across the country will still continue to sell pools coupons in shops between now and the start of the lottery. Indeed, I suspect that it is quite possible that a number of noble Lords may take advantage of that facility between now and then. Technically, of course, that would be breaking the law. But in reality one would simply be indulging in a highly popular pastime that has formed part of the British way of life for many years. It is a quite absurd situation which my amendment would easily resolve.
In Committee, my noble friend resisted this amendment on the grounds that to allow an early commencement of the shops provision would give the pools an unfair competitive advantage over the national lottery. I have some sympathy with my noble friend's view. But I believe that there is a way round this problem.
As my aim is simply to legalise the existing arrangements in the 20,000 or so shops where pools coupons are distributed and collected, the answer is for my noble friend to obtain an undertaking from the pools companies that they will not seek to extend their market into types of shops or other premises other than the confectioners, tobacconists and newsagents sector where the coupons are predominantly found. I know, for example, that the managing director of Littlewoods Pools has already offered such an undertaking in writing to my right honourable friend the Home Secretary in respect of licensed betting offices. I believe that he and representatives of the other two main pools companies would be prepared to come to an agreement with the Government on a somewhat wider basis. I am looking for a sensible way forward here. I hope that my noble friend will be able to respond helpfully and constructively.
§ Lord Birkett
My Lords, I put down two amendments on this subject at Committee stage. But it was then so late that I managed not to move them in one sentence. However, I return to the matter very briefly today simply because these amendments and the timing of this Act worry me considerably. I am all in favour of a level playing field. But one cannot have a level playing field on to which one invites one of the teams before the other. It seems to me that there is a serious danger that the national lottery might be overwhelmed by clever and ingenious people in gambling or other forms of commerce before it gets up and running and has a proper start. Not only should the playing field be level, but the start should be like any good horse-race, with everybody in line at the same moment. I hope that the Government will reassure me that that is their intention as well.
My Lords, my noble friend Lord Brabazon and the noble Lord, Lord Donoughue, have quite reasonably and properly returned to the subject 505 that was discussed for a very short period of time late at night last week. I had the advantage of speaking to my noble friend Lord Brabazon about these matters. We have therefore been able to give some further consideration to them. I do not know that I can be too helpful to my noble friend, although I always long to be.
It is the Government's intention to bring all the provisions of Part IV of the Bill, including Clause 55, into force as soon as, but not before, the national lottery is set up and is operational. Perhaps I may deal with my noble friend's amendment first and then come to that of the noble Lord, Lord Donoughue, even though he spoke first.
By deferring the commencement of Part IV, we will ensure that football pools do not have a head start on the national lottery. We shall be letting, as the noble Lord, Lord Birkett, said, all the horses, as it were, out of the starting gate at the same time. That seems to me to be perfectly reasonable. My noble friend Lord Brabazon suggested that there is no danger of unfair competition and that this just makes legal that which is already happening, whereby newsagents and other small shops collect completed pools coupons as stakes for forwarding to the pools promoter. I find it difficult to accept the argument that because the Government try to legalise a practice which is at present carried out but which is illegal, the people benefiting from the changes should have the advantage of a double benefit by permitting their legality to come into force in advance of that of their competitors.
My noble friend Lord Brabazon, in a most charming way, almost as an aside, said that all we are doing is putting the letter of the law into current practice. That is a most astonishing argument. If he pursued that argument, he would say, "Let us change the speed limit of motorways to 90 miles per hour because that is the speed at which most people seem to drive". The fact that the law is being broken apparently would have no effect.
What is clear is that Clause 55 offers the pools companies new opportunities. That is what they campaigned for. We recognised the strength of their arguments and acceded to them. They have had their slice of cake. Now it seems they want the icing and the candles as well. I do not blame them for that. We all have heady aspirations. But I remind the House of what Vernons and Zetters said in a report published as recently as 1991. My noble friend Lord Brabazon will agree that that is not ages ago and not like the Royal Commission which took place 15 years ago; it was only the other day. The report said:By legalising collection of pools coupons within shops, we believe this would create a level playing field"—that charming word which the noble Lord, Lord Holme, dislikes and which the noble Baroness, Lady David, dislikes and so too do I—on which Vernons and Zetters can compete with Littlewoods through creative use of point-of-sale materials, local advertising and a range of sales promotion ideas".So that is what they want to do.
If Clause 55 were brought into force one month after Royal Assent, the pools companies could proceed to adopt the creative use of point-of-sale 506 materials, local advertising and a range of sales promotion ideas. They would then have a number of months' headstart over the national lottery. During that time they could organise and greatly expand their retail network before the lottery was even in existence, let alone being in a position to compete. In schoolboy's language: that is not fair.
The noble Lord, Lord Birkett, said that if we are to have a level playing field, for goodness' sake let us be sure that all the people playing on it get on to the field at the same time. I agree with him.
We now come to the amendments of the noble Lord, Lord Donoughue. He asked whether I could help him. I shall do my best. But sometimes when I try to help noble Lords they do not always realise what I am doing. I sympathise and understand the thinking behind his amendments. We have every intention of bringing the provisions of Part III of the Bill into force as soon as possible so that charities and others can benefit from the new monetary limits on prizes and proceeds. But there are practical reasons why that cannot be done as quickly as the noble Lord and others would like.
There are essentially two reasons why there has to be a delay in bringing into force the provisions of Part III relating to societies' and local authorities' lotteries. The first is that there are essential consequential changes which have to be made to the Lotteries Regulation 1977. The Lotteries and Amusements Act 1976 requires us to consult the Gaming Board and local authority associations before any fresh regulations are made. Those consultations are bound to take a little time. They cannot be rushed.
The second reason is that the Gaming Board will need time to register societies under the new Schedule lA to the 1976 Act. One of the changes made by Part III of the Bill is to simplify the registration arrangements for societies which promote larger lotteries. At present those societies must register themselves with a local authority and also they must register their lottery schemes with the Gaming Board. That dual registration system is cumbersome and unnecessary.
The Bill therefore provides that societies which are promoting larger lotteries will register solely with the Gaming Board. It will be necessary, as part of the transition from the old to the new system, for those societies which already have lottery schemes registered with the board to re-register under the new schedule. That will be a relatively quick and straightforward process for the societies concerned. But there are possibly up to 1,000 societies which might need to re-register, and the whole exercise therefore will necessarily take some time. It would be fairest for all the societies to benefit from the new limits at the same time and therefore arrive on the same playing field together. We believe therefore that all societies should be registered before bringing the provisions of Part III into force.
The noble Lord, Lord Donoughue, asked whether or not I could give an idea of the timescale. I cannot. I can, however, assure him that both the Home Office 507 and the gaming board will do their best to keep any delay in bringing Part III into force to a minimum. However, there is bound to be some delay.
§ 4.30 p.m.
§ Lord Donoughue
My Lords, I thank the noble Earl for his reply. Obviously there will be delays. I hope that the department will do everything to minimise them. It will be unfortunate for those lotteries which are up and ready to go if they have to sit around clicking their heels while hundreds of others are processed. I thank the Minister for his affirmation of good faith and we look forward to seeing how long it takes. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 34 to 36 not moved.]
§ Schedule 5 [The National Lottery Charities Board]:
§ [Amendment No. 37 not moved.]
§ Lord Donoughue moved Amendment No. 38:
Page 35, line 36, leave out ("four") and insert ("five").
§ The noble Lord said: My Lords, in moving Amendment No. 38 I shall speak also to Amendment No. 39. The purpose of the amendments is to secure confirmation that UK charities which work overseas will be able to benefit from the national lottery, and specifically that the National Lottery Charities Board should be restructured in such a way as to ensure that overseas charities are rewarded.
§ I do not wish to delay the House at this late hour. I know that the Minister wrote a letter dated 13th July. I wish to ask him to state to the House the contents of that letter. I beg to move.
My Lords, due to time we were not able to debate this amendment at Committee stage. I am grateful therefore for the opportunity to speak to it. We are absolutely clear that the National Lottery Charities Board will have the power to make grants available to bodies working overseas. We have every expectation that it will wish to do so. The board will also have the power to set up one or more committees to deal with overseas applications; perhaps a specific one to consider emergency aid and another to appraise proposals for development or educational work. How the board organises its structure to deal with different types of charity work will be for it to decide.
I am sure that the charities board will wish to concern itself not only with charities in countries with which we have close links such as those of the Commonwealth, but also other parts of the world where it feels there is an apparent need. There is no need for that to be explicit in primary legislation. There is no doubt about the powers or the policy. With that assurance I hope that the noble Lord, Lord Donoughue, will feel able to withdraw the amendment.
§ Lord Donoughue
My Lords, in the light of the Minister's statement in his letter that there is no doubt about the purpose, the policy or the powers, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 39 to 41 not moved.]
§ Schedule 10 [Repeals]:508
§ Earl Ferrers moved Amendment No. 42:
Page 55, line 10, at end insert:
|("61 & 62 Vict. c. 46.||The Revenue Act 1898||Section I so far as it applies in the British Islands outside the United Kingdom and section 6(2).")|
§ The noble Earl said: My Lords, I spoke to this amendment with Amendment No. 22. I beg to move.
§ On Question, amendment agreed to.