Lords Sitting of 27 May 1993

Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers— Read by the Lord Bishop of Chichester.
Lord Rothschild Lord Rothschild —Took the Oath.

Tuberculosis: Immunisation Programme
Baroness Jay of Paddington Baroness Jay of Paddington asked Her Majesty's Government:
Whether, in view of the declaration by the World Health Organisation that tuberculosis constitutes a global public health emergency, they will reconsider proposals to end the national programme of vaccinating children.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, there are no plans to end the schools BCG immunisation programme.
Baroness Jay of Paddington: My Lords, I am grateful to the Minister for that helpful reply. However, is she aware that, because the communicable disease report in May showed that TB in this country has risen by 5 per cent over the past year, there is concern about some of the causes of that rise? One of the factors which is of greatest concern is the interaction between HIV and the increase in TB. Can the Minister give the House any further information?
Baroness Cumberlege: My Lords, we are aware of the concern about the fact that the HIV pandemic is having an effect on the rates of tuberculosis in the USA and elsewhere. However, we have some very robust screening programmes so that those coming into this country who may have TB because they come from a high prevalence area are screened before they take up residence.
Lord Swinfen: My Lords, can my noble friend assure the House that immunisation against tuberculosis will continue well after the last case is diagnosed in this country, bearing in mind that the World Health Organisation has said that smallpox has been eradicated but that recently two cases were diagnosed in Asia?
Baroness Cumberlege: Yes, my Lords; the Government are very concerned about the issue. We have recently written to regional health authorities to remind them of their obligations. It is a disease which has largely been eradicated, and we are determined that it does not become reintroduced into the country.
Lord Ennals: My Lords, my noble friend referred to the "helpful reply" from the Minister. However, I have to say that I found it most disappointing. Does not the Minister accept the report by the Public Health Laboratory Service, Communicable Diseases, which links homelessness with tuberculosis? Bearing in mind
386
that the problems of homelessness in our society are steadily increasing, will the Minister think again about the reply that she gave to my noble friend?
Baroness Cumberlege: My Lords, we know that there are many factors which affect the spread of tuberculosis. But the Government are addressing the vulnerability of homeless people to this particular disease. Last year we funded a tuberculosis screening programme at Crisis Open Christmas. We are in consultation with that organisation, and other organisations, to see how best to tackle the problem. In fact, the Department of Health is funding nearly 30 projects to help ensure that homeless people have ready access to any medical services that they require.
Lord Mackay of Ardbrecknish: My Lords, is my noble friend the Minister aware that I, and perhaps many other noble Lords, were very concerned when we read the Question? We are delighted at the very positive response that she gave. It shows that the basis of the Question was unfounded. Can my noble friend tell the House whether the success of all the vaccination and immunisation programmes is having a major impact in removing all the diseases that are capable of being removed by such measures? Will she give a commitment that the Government will maintain their policy of maximum uptake of immunisations and vaccinations in order to keep herd immunity as high as possible?
Baroness Cumberlege: My Lords, I am grateful to my noble friend for that question. He is quite correct in his assumption that we are tackling some of the endemic diseases that used to be very prevalent years ago. In the past two years not a single child has died of measles. The Government are anxious not only to maintain the present programme but also to improve it. We have set stringent targets that childhood immunisation should achieve a 95 per cent coverage by 1995. We are not as ambitious as one South American country where the former Minister of Health assured me that they had achieved target rates of 110 per cent
Baroness Gardner of Parkes: My Lords, is my noble friend the Minister aware that the regional health authorities—and I speak as a member of one—recognise that the TB resurgence is a very serious matter? They are not only carrying out immunisation, but they are also undertaking research into the particular factors that cause the spread of the disease so as to contain it where it does occur in the community.
Baroness Cumberlege: My Lords, as the vice-chairman of a regional health authority my noble friend is obviously quite correct on the issue. The Government are committed to reviewing the policy to absolutely ensure that it is meeting all the targets. A national survey of notifications of tuberculosis in England and Wales is taking place during 1993, from which we expect some useful information to be produced.
Baroness Jay of Paddington: My Lords, I return to the point which was also mentioned by my noble

387
friend Lord Ennals about the helpfulness, or otherwise, of the reply of the noble Baroness. The noble Lord, Lord Mackay, also referred to the matter I am about to mention. I hope the Minister can confirm that this Question is not based on a misunderstanding. I understand there is to be a review of the schools vaccination programme. I am grateful that the Minister has indicated that that review will have a positive result in the sense that vaccination programmes will continue.
Baroness Cumberlege: My Lords, the Government have a good record in this field. We are one of the leaders in the world in terms of vaccination and immunisation programmes. Our healthy children are proof of the success of the programme.

Welsh Affairs: Report
11.13 a.m.
Lord Aberdare Lord Aberdare asked Her Majesty's Government:
What is their reaction to the report Wales 2010 — Creating our Future published by the Institute of Welsh Affairs.
Viscount St. Davids: My Lords, the report is clearly the result of a great deal of hard work by a number of committed people within the institute. It deserves careful consideration.
Lord Aberdare: My Lords, I am grateful to my noble friend for that positive reply which certainly recognises that this is an important and most interesting report. I have two questions for my noble friend. First, when considering the report will the Welsh Office pay particular attention to those recommendations for which it will have the prime responsibility if they are to be put into effect? The recommendations are listed at Appendix 5 of the report. Secondly, will the Secretary of State consider meeting with the authors of the report at some suitable date to discuss with them how best the various recommendations in the report can be carried forward?
Viscount St. Davids: My Lords, my right honourable friend the Secretary of State for Wales has asked his department to consider the report's findings in detail. I am pleased to say that arrangements are already in hand for such a meeting to take place.
Lord Molloy: My Lords, will the department be prepared to consider consulting the many important local authorities in both South and North Wales on this matter?
Viscount St. Davids: My Lords, I am quite sure that my right honourable friend the Secretary of State for Wales takes all such opinions into consideration when making his plans.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that the reply he gave to my noble friend did not seem to indicate positively that the Government have read the report? Have they read it?
Viscount St. Davids: My Lords, I can assure my noble friend that the Government have read the report.
Baroness White: My Lords, does the noble Viscount agree that the brave new world envisaged in this interesting and exciting report, of which I too have a copy, is unlikely to be reached by the year 2010 unless certain districts in Wales can retain for some time longer the assisted area status that they currently enjoy?
Viscount St. Davids: My Lords, I agree with the noble Baroness that the report is optimistic in what it seeks to achieve. However, the Government's response to the report will be subject to financial constraints.
Lord Hooson: My Lords, does not the noble Viscount appreciate that the very preparation of the report implies a concern about the next century in Wales and that steps must be taken in time to ensure the prosperity of Wales in the next century? What are the Government doing about that?
Viscount St. Davids: My Lords, as I have said, my right honourable friend the Secretary of State for Wales is meeting with the institute' and these matters will be considered.
Lord Prys-Davies: My Lords, I invite the noble Viscount to be a little more specific. This document contains about 82 initiatives set out in Appendix 5. The report assigns the 82 tasks to 17 organisations, or categories of organisation. If the Welsh Office is to give careful consideration to this document, will it initiate a round of consultations with all the organisations which are named in Appendix 5? Unless the department is clear about that and unless it is prepared to undertake such an exercise, how can it form an objective view of the merits of these recommendations?
Viscount St. Davids: My Lords, the noble Lord, Lord Prys-Davies, must be aware that several of the most successful initiatives of the Welsh Office have been born from ideas that originated within the Institute of Welsh Affairs. I refer to two of those initiatives; namely, the A.55 and the valleys initiative. I am sure that these initiatives would not have been embarked on if there had not been consultations held at a meaningful level between the Welsh Office and the Institute of Welsh Affairs.
Lord Prys-Davies: My Lords, we are the first to acknowledge the contribution of the Institute of Welsh Affairs. However, I specifically drew attention to the 17 organisations, and the department should be consulting with them.
Viscount St. Davids: My Lords, I am quite sure that my right honourable friend the Secretary of State for Wales is well aware of the points raised by the noble Lord. I am sure that he will take them into consideration when he takes these matters further.
Lord Richard: My Lords, is the Minister aware that if, as the Government claim, there has been some

389
economic success in Wales in recent years, that is due to a combination of proper planning authorities; proper co-operation with local authorities; an interventionist policy directly pursued, and announced as such by the Welsh Office; and a sympathetic attitude by the Government towards public expenditure in Wales? If that can work in Wales, why on earth cannot it work elsewhere?
Viscount St. Davids: My Lords, I am glad that the noble Lord the Leader of the Opposition recognises the work that has been done in Wales by the Welsh Office and by my right honourable friend the Secretary of State.

Humanitarian Relief: Spending
11.19 a.m.
Lord Judd Lord Judd asked Her Majesty's Government:
What proportion of their total overseas aid budget in each of the past three years was spent on humanitarian relief work and projects; and what is the estimate for 1993–94.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, of our total aid programme to developing countries humanitarian relief accounted for 9.6 per cent in 1989–90, 9.9 per cent in 1990–91 and 14.4 per cent in 1991–92. The figures for 1992–93 are not yet available. It is not our usual practice to publish estimates, which can often differ greatly from actual expenditure, especially in relation to emergency relief, which by its very nature is unpredictable.
Lord Judd: My Lords, while I thank the Minister for that reply, does she not agree that with more than 40 significant conflicts raging in the world and almost 40 million refugees and displaced people, and in the light of all the evidence that every major famine of recent years has been conflict related, that trend in the aid programme demonstrates that absolute priority must be given to pre-emptive diplomacy, conflict resolution, peacemaking and peacekeeping? What are the Government doing strategically towards those objectives?
Baroness Chalker of Wallasey: My Lords, I sympathise as regards the problems because I am the one in the hot seat who has to deal with them all the time. While one cannot predict where one is going to need to spend resources as a result either of natural disasters or of the man-made disasters of war which affect so many millions of people, we have a firm strategy for being ready to respond. We make sure that we have sufficient resources to expend when called upon to do so. We have learnt many lessons in the past two years, when we have had the greatest number of conflicts ever. I am glad to say that I have managed to make sure that life-preserving humanitarian aid takes the highest priority but also not to curtail development aid in order to provide such humanitarian assistance.
Lord Mellish: My Lords, first, no one doubts the generosity of this Government towards overseas aid.
390
However, is the aid going to the right people? What efforts are being made by this Government, or any other government for that matter, to ensure that the money we give goes to the people who really need it?
Baroness Chalker of Wallasey: My Lords, I can assure this House that the British Government have one of the most effective and carefully controlled systems for assessing need before deciding what resources are needed and by what means they should be expended. I have no doubt that there are some donor countries in the world which are not as precise as we are. If the noble Lord has a specific case in mind, I hope that he will write to me about it because I have never failed to investigate such suggestions and, if there has ever been the slightest doubt in my mind, to put in extra staff to make sure that the money is spent on those things which we say it should be spent on.
Lord Ennals: My Lords, does the Minister accept that many noble Lords on these Benches do not accept the generalisation just made by the noble Lord, Lord Mellish? Many of us feel that the aid is inadequate. Will the Minister accept my congratulations on the fact that she distributes an inadequate budget as fairly as she can? Do the Government still accept 0.7 per cent of gross domestic product as the target for our overseas aid programme? Does she believe that progress year by year is now moving towards that figure? When will we reach that figure?
Baroness Chalker of Wallasey: My Lords, I believe that the House already knows that the Government have never given a date by which, under any administration, we would meet that figure. It is a target. Over the past five years we have averaged 0.3 per cent of gross domestic product. I am doing my best to ensure that every single pound of the resources we have is spent to maximum effect and with the minimum administrative cost. However, one has always to be conscious of the fact that, with more than 30 million refugees and displaced persons and with the role of modern media in creating additional demand for help with problems about which a few years ago we knew nothing, we have a real difficulty. I shall do my best with the resources that are available.
I say to the noble Lord in all sincerity that any responsible government must spend only what it can afford. I am very conscious of the need to do the very best I can with those resources that I can obtain. However, we have to make sure that we have the resources to pay for the programmes that we want to implement.
Lord Peyton of Yeovil: My Lords, bearing in mind both the number and dimension of the problems, does my noble friend agree that whatever resources were applied they would be inadequate but that in the circumstances most of us warmly endorse the views expressed by the noble Lord, Lord Mellish?
Baroness Chalker of Wallasey: My Lords, I am grateful to my noble friend Lord Peyton for what he has just said. I believe that we have to be very strict about the spending of resources. That is why over recent years we have sought to improve government

391
systems in many of the countries receiving aid, particularly relating to the administration of their own economic resources, so that we can make sure that all the money we give can be given to countries which are themselves pursuing sensible economic reform and structural adjustment.
Lord Molloy: My Lords, while I acknowledge that our Government have an excellent record in these matters, is the Minister satisfied that other wealthy countries are making as good an effort as we are? Is that not a vital question which our Government should address, because some countries would have difficulty in equalling our record but ought to do as much as we do?
Baroness Chalker of Wallasey: My Lords, the House is very well aware that, if Britain undertakes a commitment to pay money to an international organisation, we pay up. Others are not always so good at doing that. It is one of my jobs—and will be next week —to encourage others to pay their dues.
Lord Ennals: My Lords, as a supplementary point to the question I asked earlier, does the Minister accept that some of the Western countries which, like us, have been going through a very difficult recession have reached and exceeded the target of 0.7 per cent?
Baroness Chalker of Wallasey: My Lords, I am glad to note that the noble Lord, Lord Ennals, is aware that many countries have also suffered this bad recession. Sometimes his colleagues on the other side of this House do not seem to realise that other countries have also suffered a bad recession. None of those countries which have reached or surpassed the figure of 0.7 per cent have anything like our global responsibilities. Nor do they have the same ability to contribute in many different fields overseas. Therefore, while countries like the Netherlands may have a laudable and very acceptable system, they do not have the other demands upon them that the United Kingdom bears and which we have to be able to pay for.
Lord Judd: My Lords, does the Minister not agree that the figures she herself has given today illustrate that there has been an increase of the order of 50 per cent in the amount of the aid programme being spent on relief as distinct from development? Does she agree that that is directly related to conflict and that if we are to create the conditions in which development can take place on a sustained basis priority must be given by the international community to conflict resolution and peacekeeping? We are Permanent Members of the Security Council: what are we doing about it?
Baroness Chalker of Wallasey: My Lords, if the noble Lord, Lord Judd, had seen the volume of telegrams on the subject of conflict resolution which emanates from and is received by the United Kingdom's mission at the UN in New York, he would know just how hard we are seeking to work with others on conflict resolution. I agree with him totally that conflict resolution can be the solution in some cases, but the difficulty for the Permanent Members,
392
who now work together better than at any time that I remember, is that whatever the Security Council resolves has to be implemented in some countries which have no interest in that conflict resolution.
Lord Rea: My Lords, at the risk of my point being considered wide of the Question on the Order Paper, will the noble Baroness give us some idea of the military expenditure which has been engendered by the support for our humanitarian work in various countries where British forces are engaged over and above what one might call the normal running costs of the Armed Forces?
Baroness Chalker of Wallasey: My Lords, I understand what the noble Lord asks. I am afraid that I do not have the figures to hand; and the question is a long way from the original Question of the noble Lord, Lord Judd.

Parliamentary Questions: Cost
11.31 a.m.
Lord Bruce of Donington Lord Bruce of Donington asked Her Majesty's Government:
What criteria they have for deciding that a Parliamentary Question could only be answered at disproportionate cost.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, any Written Question where the marginal cost of preparing the Answer is considered likely to exceed the threshold of £450 may be referred to the appropriate Minister who may decline to answer in whole or part on the grounds of disproportionate cost.
Lord Bruce of Donington: My Lords, I am grateful to the noble Lord for that reply. My Question was intended to be of general application. Is he aware that it was sparked off by a Question put to the Government by his noble friend Lord Tebbit? At col. WA61 of the Official Report of 11th May he put to the Government the following Question:
"Whether they will list those meetings of the Council of Ministers within the last five years at which directives have been agreed or decisions affecting United Kingdom citizens have been taken which have involved participation by Ministers subsequently arrested for, or known to be under investigation in connection with, financial corruption".
The reply was given in the sense as I have already indicated.
Is the noble Lord aware that the information requested by his noble friend ought to be in the possession of the Foreign Office? Alternatively, a few telephone calls to embassies throughout the Community would have yielded the information. Does not his Answer imply that the inference contained in the Question asked by his noble friend is probably true, and on a very wide scale?
Lord Strathclyde: My Lords, I do not know how the noble Lord, Lord Bruce of Donington, infers his conclusion, having said what he has said. The point is this. Parliamentary Questions are answered without charge. It is a very valuable service to Members of this House. The threshold of £450 focuses attention on

393
cost and the potential scope for abuse. It is always open to the noble Lord, Lord Bruce of Donington, to recast the Question of my noble friend, or indeed to pursue the matter through some other parliamentary or Ministerial route.
Lord Jenkins of Putney: My Lords, will the noble Lord inform the House of the cost of answering a Question about the intentions of the Chancellor of the Exchequer?
Lord Strathclyde: My Lords, the noble Lord should perhaps put down a Question to that effect.
Lord Ennals: My Lords, while ever mindful of the rights and privileges of this House, will the noble Lord say whether the rules which apply in this House as to whether it is worth while paying for the research are the same as in another place?
Lord Strathclyde: My Lords, yes. The threshold is government-wide and includes both Houses of Parliament.
Lord Swinfen: My Lords, will my noble friend advise the House when the threshold was last set and when it is next due for review?
Lord Strathclyde: My Lords, yes. The cost of PQs was clarified and announced by a PQ on 14th January 1992. The threshold itself was further increased in February 1993. It is a figure which is regularly reviewed. It has been in place since 1965, when the threshold was £50.
Lord Taylor of Gryfe: My Lords, was the reason why the threshold was exceeded in that particular case due to the fact that a large number of cases were involved?
Lord Strathclyde: My Lords, it was certainly a very wide Question which required an enormous amount of research. As I said to the noble Lord, Lord Bruce of Donington, if the Question were recast in a different way, he might receive another answer.
Lord Harmar-Nicholls: My Lords, my noble friend explained that one of the considerations taken into account was whether the information could be obtained by another route. Will he tell me what other route could generate the answer to the Question posed by my noble friend Lord Tebbit other than via the lips of the Minister?
Lord Strathclyde: My Lords, I do not wish to give the impression that there was another non-parliamentary route. There are a number of ways of asking Ministers questions. There are Oral Questions such as this Question. Other forms of questions can be asked. As regards that particular Question for Written Answer, the Answer would have broken the threshold quite substantially.
Lord Richard: My Lords, in order that we are all aware of the position, will the Minister confirm that there is no advisory limit so far as concerns Oral Questions? If an Oral Question had been asked by the noble Lord, Lord Tebbit, presumably some Minister could have sanctioned the expenditure so that it could
394
properly be answered. Will he confirm that even when it is a Written Question, if the advisory cost limit looks as though it will be exceeded, and the civil servant says to the Minister, "It looks likely that the cost will go over £450", it is then at the discretion of the Minister to decide whether or not to answer the Question, even if the cost is more than £450? Will the noble Lord tell us what criteria the Minister will then adopt? Does he consider the issue and say, "It will cost £450. It is a difficult question. I shall not bother to answer it"? Alternatively, does he say, "It will cost £1,000, but I should like to answer the question. Therefore I shall do so."? Are there any criteria or is it just the length of the Minister's foot?
Lord Strathclyde: My Lords, the noble Lord the Leader of the Opposition started his question off well. He is indeed right that Oral Questions do not have a financial limit because they are different types of Questions and, of course, there are any number of possible supplementary questions.
On the point of Written Questions, yes, when the threshold is broken it is up to the discretion of the Minister to decide whether or not that expenditure is worth while. Clearly in this particular case my noble friend decided that it was not worth breaking that rule. Overall, government decide not to answer some 2.2 per cent of all Parliamentary Questions that are put down. I believe that that is a good record and shows the real willingness of Ministers to answer all questions, even when they are difficult.

Education Bill
11.36 a.m.
Viscount AstorMy Lords, I beg to move the Motion standing in my name on the Order Paper
Moved, That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 to 3,

Schedule 1,

Clauses 4 to 33,

Schedule 4,

Clauses 34 to 48,

Schedule 3,

Clauses 49 to 53,

Schedules 5 and 6,

Clauses 54 to 57,

Schedule 7,

Clauses 58 to 160,

Schedule 8,

Clause 161,

Schedule 9,

Clauses 162 to 174,

Schedule 10,

Clauses 175 to 208,

Schedule 11,

Clauses 209 to 228,

Schedule 12,

Clauses 229 to 231,

Schedule 13,

Clauses 232 to 240,

Schedule 14,

Clauses 241 to 247,

395

Schedule 15,

Clauses 248 to 267,

Schedule 16,

Clauses 268 to 274,

Schedule 17,

Clauses 275 to 284,

Schedules 2 and 18 to 20.—(Viscount Astor.)

On Question, Motion agreed to.

Reinsurance (Acts of Terrorism) Bill
11.37 a.m.
Viscount St. Davids: My Lords, I beg to move that this Bill be now read a second time.
The Bill is a short enabling measure. Last November the insurance industry announced that, with effect from 1st January this year, it would severely limit the cover given to industrial and commercial properties for damage caused by acts of terrorism. That limitation of cover was for prudent commercial reasons following the loss of their own reinsurance protection from predominantly large European reinsurers. That action was against a background of a sharp contraction in reinsurance capacity worldwide and worsening claims experience in mainland Great Britain.
That development was understandably of great anxiety to British industry and commerce. The Government concluded that it was necessary to ensure the continued availability of insurance cover for loss and damage arising from acts of terrorism. Accordingly, after discussion with interested parties, my right honourable friend the President of the Board of Trade announced on 21st December 1992 that the Government would act as a reinsurer of last resort to insurers of industrial and commercial property in Great Britain with effect from 1st January this year.
I should say that while it is primarily industrial and commercial property that is affected, the restriction on coverage of losses stemming from terrorism applies also to other properties for which the policyholder was not a private individual. So the new arrangements apply to all such property, including buildings such as churches, about which I shall say more later.
The arrangements deal with the consequences of a partial market failure. The Government's involvement will last only as long as is necessary to remedy that failure. The arrangements do not represent a subsidy by the Exchequer, nor do they represent state aid. Over their lifetime, the arrangements are expected to be at nil cost to the taxpayer, but at the same time the Government seek not to expose insurers to undue risks which might threaten their solvency. I must emphasise that the arrangements provide for reinsurance, not compensation. If insureds do not buy the proper insurance cover, the Government will not entertain claims for compensation in the event of loss or damage.
The structure and operation of the arrangements are described in the explanatory summary attached to the Notes on Clauses, copies of which are in the Library. Briefly, insurers wishing to offer property
396
insurance, including terrorism cover, will become members of a mutual reinsurance company, the Pool Reinsurance Company Limited. Pool Re (as it is now known colloquially) will reinsure all terrorism risks situated in Great Britain, borne by its insurer members, for which an additional insurance premium has been paid by the insureds. In turn, the Secretary of State will reinsure Pool Re, and Pool Re will pay the Government a reinsurance premium.
An important feature of the arrangements is that insurers will provide, within their basic property damage policies, £100,000 of cover for each of buildings, contents and business interruption. That will occur automatically and without the need to pay an additional premium. This is especially helpful to small businesses. Where there are claims, the insurers will bear the first £100,000 under each section of the basic property policy, recovering claims beyond that amount from Pool Re. They will be paid for out of the premiums received. If those resources are exhausted, the company will raise a levy on its members of up to an equivalent of 10 per cent of the premiums they have remitted. Should those additional resources also be fully used up, the company will claim on its reinsurance contract with the Government.
Turning to the Bill itself, Clause. 1(1) empowers the Secretary of State to make payments in fulfilment of the obligations he has entered into under the agreement to provide reinsurance cover. The clause also empowers the Secretary of State to make payments under any guarantees he may have given. It is envisaged that he may wish to give guarantees to lenders to ensure that Pool Re could make prompt payment of claims from its members. Entering into the agreement and any guarantees would be subject to Treasury approval. Clause 1(2) would require that the agreement with Pool Re be laid before Parliament after the passing of the Bill and as soon as it is entered into. Clause 1(3) requires government premiums from Pool Re to be remitted to the Consolidated Fund.
Clause 2 defines the reinsurance arrangements to which the Act would apply. Clause 3 provides that the Act does not extend to Northern Ireland, where there are separate arrangements in existence.
I think I should comment on the degree of retrospection provided by the Bill. The Bill will not authorise any payments that might have been made before it comes into force. However, the provisions of Clause 1(1) would authorise payments to be made in future under an arrangement that may have been entered into before the Bill comes into force. The provisions of Clause 2(1) authorise payments to be made under an agreement which relates to events that occurred before that agreement came into being. If the passage of the Bill is completed quickly, it is the latter situation which will occur, and the agreement to be concluded will cover events occurring since 1st January 1993, notably the Bishopsgate bomb.
Before concluding, I should like to comment on two issues which I know cause some anxiety. First, the premiums that policyholders will have to pay in future to insure against terrorist damage are an unfortunate extra cost that businesses and others will have to face. We have no wish to see any unnecessary increases in

397
premiums. But we must ensure that the scheme operates properly and that so far as possible normal market conditions apply. Unless the premiums charged have proper regard to perceived risks and to claims experience, it will be impossible to return them to normal market conditions.
No one would wish to see government involvement as a permanent feature of this sector of the market. Such involvement would of course have to be paid for by taxation. Although terrorism premiums are a new charge, we must keep them in perspective and the sums involved are small compared with other business costs. The figures available to the Government suggest that terrorism premiums for large city centre properties are of the order of one-quarter to one-half of I per cent of the annual rent of a typical property.
Secondly, I should like to clear up some confusion about availability of cover for churches. Churches are eligible to be covered by the arrangements. However, it is for the individual Church authorities to decide whether to cover particular churches by paying an additional terrorism premium.
I commend the Bill to the House. The swift passage of the Bill, following the example of another place, will send a clear message both to business in London and throughout the country and to terrorists. The message to terrorists is that business and government together will not permit mindless criminal damage to interfere with normal life for a moment longer than is necessary. I beg to move.
Moved, That the Bill be now read a second time. —(Viscount St. Davids.)
11.47 a.m.
Lord Clinton-Davis: My Lords, I thank the Minister for the brief introduction of the essential purposes of the Bill, and I especially endorse the message, to terrorists in particular, that he announced at the end of his speech. We support the Bill and the reasons which require all the stages of the Bill to be undertaken today. Nevertheless, there are serious disadvantages in undertaking, as a revising Chamber, a Bill on this basis. However, I believe it is the right course to undertake.
I wish to make some brief comments in the next five minutes. Perhaps I may say at the outset of my remarks that we certainly deplore the loss of life and injuries which have been occasioned by the recent acts of terrorism, but which go on all the time in Northern Ireland. Equally, we deplore the scaremongering and hyperbolic press reports by so-called experts about the costs which were occasioned by the explosions at St. Mary Axe, and recently at Bishopsgate. That I believe is to play the game of the IRA and those people serve no value at all in making instant comments.
The Bill has been necessitated because of a shortage of capacity in the international reinsurance market arising from a number of catastrophes over recent years, not confined to terrorism. There has also been a withdrawal of support from Britain's insurance market by a number of European reinsurance companies. Consequently, in the wake of the events referred to by the Minister and because market forces
398
simply cannot deal with every contingency, even this Government have recognised that it was necessary to intervene.
A suggestion was raised in another place on Second Reading that the arrangements contemplated in the Bill might be incompatible with Article 85 of the Treaty of Rome—a point which was not dealt with by the Minister. He referred to state subsidies, state aid, dealt with under Article 92, which is quite different. Article 85 deals with agreements between undertakings on concerted practices which may affect trade between member states and have as their purpose or effect the prevention, restriction or distortion of competition within the Community. The article specifically prescribes certain such arrangements. Can the Minister indicate whether the Commission was consulted about the provisions of this Bill, and say whether he is satisfied that no such infringement of Article 85 arises, bearing in mind the fact that any agreements or decisions prohibited under that article would render them automatically void?
My next point is about reports that have appeared in the financial press to the effect that moves to increase the cost of terrorism insurance could prejudice the effectiveness of the scheme which we are currently considering. Can the Minister indicate whether higher premiums are likely; whether these might, as the press reports indicate, deter people from taking out the cover; and whether the Government are pressing Pool Re to increase its rates? Is the take-up of the new terrorism policies likely to be more restricted than is anticipated?
My own view concurs with that of the Minister. I believe that the premiums in this context represent a very small part of the total costs. But having said that, I am not an expert. The chief executive of the Association of British Insurers has indicated that he believes that the insurance cover will not be taken up on the scale expected. Can the Minister deal with that point?
Finally—since, understandably, we are legislating here with enormous haste, and because the Bill, although small, is nevertheless quite complicated, and in such circumstances mistakes can occur all too easily in practice—I hope that the Government will ensure that Parliament will be kept properly informed periodically about the way in which the scheme will operate. Perhaps he can give an undertaking to that effect.
11.52 a.m.
Lord Boyd-Carpenter: My Lords, before my noble friend replies, perhaps I may take up the point made by the noble Lord opposite as to the undesirability —particularly in view of the function of this House as a revising Chamber—of taking this Bill through all its stages in one day. It is clear to all of us who have listened to both speeches that have been made that it is a complicated Bill involving technical questions of insurance. It would have been much more useful if the House had been able to have a Second Reading debate and then, some days later after consideration of what had been said, noble Lords may have wished to put down amendments, at least to test the soundness of

399
the proposals. I quite realise the need for haste, but I wonder whether it is really the case that the Bill could not have been taken for Second Reading a day or two earlier and a gap introduced.
Another Bill has been similarly treated this week. I believe it is a dangerous tendency of those who manage our business to cut down debate on Bills to one day, all stages other than Second Reading being taken straight away. I hope therefore that my noble friend the Minister will indicate some penitence about the procedure followed and, as the Deputy Leader of the House is present, that we may be assured that this will not become a common practice.
Lord Graham of Edmonton: My Lords, the Opposition were fully consulted on the timetable. If by any stretch of the imagination the noble Lord is under the impression that the intention behind the speed and shortness of time was to cut out the opportunity for debate, I can tell him that that was the last thing in the minds of the business managers. They had in mind the imperative to get this legislation on to the statute book as quickly as possible. Bearing in mind the enormous pressure of the past two or three weeks—and noble Lords will know that there are more than 100 names on the list of speakers for the debate on 7th and 8th June—the House will appreciate the impossibility. Nevertheless, when the business managers look at the business—the approach to facilitate this measure came very much from the Government —they will certainly bear in mind what has been said.
Lord Boyd-Carpenter: My Lords, I neither said nor intended to say that there was any deliberate intention, either on the part of the Government or the Opposition, to eliminate discussion. All I said was that the procedure had that effect; and that, particularly for a revising Chamber, that is very unfortunate and ought, if at all possible, to be avoided in all cases. I was hoping for some assurance from my noble friend the Minister that this will not become a common practice, whether with the agreement of the Opposition or not.
Lord Harris of Greenwich: My Lords, I share some of the anxieties of the noble Lord, Lord Boyd-Carpenter. I also accept that there is need for urgency so far as concerns this Bill, for reasons which we all understand. But as the noble Lord, Lord Boyd-Carpenter, said, this House lives or dies on the basis of its position as a revising Chamber. I am concerned about the increasing tendency in recent years to have arguments of this kind advanced in late May, June and July. I understand the case for the Bill proceeding in the way that has been suggested, but I hope, with the noble Lord, Lord Boyd-Carpenter, that the noble Earl, Lord Ferrers, as Deputy Leader of the House, will understand our concern about procedures of this character.
The Minister of State, Home Office (Earl Ferrers): My Lords, obviously there is considerable concern among your Lordships that these matters of great importance should not be expedited unduly and unfairly. Of course it is important that they should be given proper consideration. Also, there is the difficulty
400
of trying to fit in a timetable, and the usual channels have to work out a very difficult system by which everything can be dealt with and given its due weight of importance. Certainly I shall take into consideration the matters that have been mentioned.
11.56 a.m.
Viscount St. Davids: My Lords, I am grateful for the constructive approach adopted by noble Lords and for the helpful attitude taken towards the rapid passage of this Bill. I am particularly grateful to the noble Lord, Lord Clinton-Davis, for his courtesy in giving me advance notice of the questions that he wished to raise.
As regards the relationship of the arrangements to the Treaty of Rome, officials have discussed the position with Commission officials and no problems are expected. The terms of the agreement will probably need to be notified to the Commission under Article 85 of the Treaty. But our discussions with officials in Brussels have indicated that there should be no insuperable problems.
As regards the suggestions that there may be increases in premiums, the Government, with Pool Re, have a duty to keep the level of income into Pool Re under review, particularly in the light of claims experience. As with any insurance policy, increased incidence of losses leads inevitably to increased premiums. But the Government remain firm in their commitment to provide the reinsurance cover that the market is currently failing to provide. The Government have no wish to impose unnecessary costs on policyholders and will not wish to see premiums raised unnecessarily. Insureds must remember that the premiums will normally remain only a small part of their total costs.
I will, of course, bring to the attention of my right honourable friend the President of the Board of Trade the request by the noble Lord that the House be kept informed on the progress of this policy and of Pool Re in future.
The support for these matters that is evident in this House, as it was evident in all parts in another place, shows that we are united in our desire to ensure that terrorism will never win. I ask the House to give the Bill a Second Reading.
On Question, Bill read a second time; Committee negatived. Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution of 20th May), Bill read a third time, and passed.

National Lottery etc. Bill
11.59 a.m.
Earl Ferrers: My Lords, I beg to move that this Bill be now read a second time. It is quite clear from the list of speakers that the Bill has evoked an impressive array of noble Lords who obviously have an interest in it. I can only say in anticipation that I hope that your Lordships' interest will prove to be a helpful one.
The whole purpose of the national lottery which is provided for in the Bill is to benefit good causes and to help to improve the quality of life of people in this

401
country. If one can do that and at the same time react to a perfectly natural inclination of most human beings periodically to want to have a bit of a flutter, it seems that we have, as it were, killed two birds with one stone.
"Quality of life" is not an expression which particularly endears itself to me, but its sentiment does. Life is pretty short. It holds for most people a pretty good quiverful of anxieties, fears, worries and apprehensions. Life should consist of more than that. 1 f we can enable people to enjoy their lives just a little more than they otherwise might have done, perhaps we may have achieved something.
A visit to a film or a theatre; participating in sport or watching it; and learning from the rich heritage of our past all add to our knowledge, experience and enjoyment of life. That is what we hope to encourage with the proceeds from the lottery.
The idea of a national lottery to fund good causes is not unfamiliar in this country. The first state sponsored lottery in England and Wales took place in 1569. It was mainly to raise money for the repair of the Cinque Ports. The prizes were fairly glamorous, being in the form of plate, tapestry and money.
Then there were lotteries in the 17th century. They were set up to bring fresh water to London and also to raise money to bring home English slaves who were held captive in Tunis. In 1698 a law was passed which stated that only lotteries which had been authorised by Parliament would he allowed. That was because of concern which had arisen about the conduct of privately run lotteries.
In 1753 another lottery was established. The proceeds from that were used to buy and house nothing less than the collections of the British Museum. The last state lottery in England took place in 1826. By that time the black market in illegal betting on the outcome of the lottery had become even bigger than the lottery itself. So the idea of lotteries was abandoned. So lotteries in England are not new, even if they have a spirited history.
Although there are some natural apprehensions expressed about the introduction of a national lottery, it is not such a terrible invention. Regrettably, Britain is not for once leading the world—anyhow on this matter. Almost every other major country in the world has a national lottery; and we are the only country in Europe at present without one. There was one other fellow recalcitrant European country which did not have a national lottery. But that happy state of affairs came to an end 12 months ago when Albania decided to introduce a lottery. So we are, if one may use the vernacular, in this respect on our tod.
We hope that the lottery will enable more and better facilities for people to take part, appreciate and, if they can, achieve excellence in the field of the arts, sport and our heritage. It will also provide a nostalgic opportunity for us to look back and reflect on what was the best in the old millennium as we look forward to the new one and to the projects which will be funded by the Millennium Commission.
The Bill will also create the National Lottery Charities Board. The board will fund undertakings which will aim to help those who are in need or in
402
distress, improve the quality of life for individual groups and the community as a whole and help to enable citizens of the United Kingdom to take part in voluntary activity.
There are though, I know, some who have misgivings or doubts about a lottery from a moral point of view. Indeed, I am sure that I am not alone among your Lordships in having been deluged with letters from people who have anxieties about a national lottery. I can understand those feelings. I think that most of us somewhere in the inner recesses of our psyche question the virtue of making money out of doing nothing—but love it when we do. The Bill has, therefore, a number of safeguards which we think will ensure that the national lottery will not encourage excessive gambling.
Some of your Lordships may look back, possibly with nostalgia, to the rumpus which was caused when, as Chancellor of the Exchequer, Mr. Macmillan, 35 years ago, introduced premium bonds—that institution which is much loved by doting grandparents who give them to their favourite grandchildren, if they are lucky.
The same moral qualms as are applied to the national lottery now were expressed about the premium bonds then. It was the Member for Lanarkshire, North (Miss Margaret Herbison) who said in a trenchant observation that:
"All who wish our young people to be trained on the soundest moral principles regard this policy of the Chancellor as one of the lowest projects any Chancellor in Britain has introduced".
Well, that was a view. But the notion of the premium bond being an instrument for social evil is one which in hindsight has gone perhaps, shall we say, a little over the top. I think that those who express similar qualms today about the national lottery may be seen in 30 or 40 years' time to have been a little over-cautious.
The lottery will be run by the private sector. We think that that is the right approach, because the need to earn a profit will ensure that the operator will run his operation as efficiently and successfully as possible within the framework of regulation which will be provided by the Bill. The director general of the national lottery will be appointed by the Secretary of State. He will set the framework, through the licence, to ensure that the lottery will be run with propriety, that the interests of the consumer will be protected and that the operator of the lottery will work in a way which will result in the maximum amount of money being available for good causes.
Distributing the lottery money will be an important responsibility. We want those who distribute the money to respond with imagination to the ideas which may emerge from those who apply. They will have to ensure that the money will be used for projects which will be important, lasting and worthy.
The lottery will consist of three elements: the operation, the regulation and the distribution. We have adopted the approach of separating the functions into those three different parts after having given careful consideration to all the possibilities, including that of having only one body to be responsible for everything.

403
We took the view, which has been reinforced by consultation after publication of the White Paper, that each of the three elements of the lottery would best be served if they were undertaken by separate organisations. Our fear was that one large body, which might be overseen by a board of what one might describe as the great and the good, would have to rely upon the advice of other bodies which actually had the expertise. We would therefore be creating, albeit unwittingly, an extra layer of bureaucracy; and in the terms of 1066 and All That, that would be a "Bad Thing".
The amount of money which will be available for distribution from the lottery may well prove to be more than £100 million a year—not in total but in each of the five categories of art, sport, the national heritage, charities and the Millennium Fund. There could, in other words, be some £2 million a week being made available to each of those categories. By any standard, we shall be dealing with very large amounts of money for a wide variety of different causes. That is one reason why we think that separate bodies for the five categories will be appropriate; it is simply so that the amounts which will be dealt with can be handled correctly.
Each of the bodies will be accountable separately to Parliament. Only Parliament will be able to change the proportions to be distributed between the different categories—that will be by affirmative resolution—and there will be the safeguard that no one category will be able to get less than 5 per cent of the total.
In setting up the Charities Board and the Millennium Commission we shall be establishing two important, new, independent foundations. Together with the sports councils, the arts councils and the National Heritage Memorial Fund, we shall have five responsible bodies which will ensure that the money distributed is used wisely.
By setting out the arrangements for the distribution of the proceeds of the lottery in such detail, the Bill is quite different from the legislation which obtains in many other countries. Any lottery money which an organisation receives is intended to be additional to any other public money which it may receive. It is not intended to supplant it.
By setting up the lottery we shall be creating a substantial new business. There will be the operation of the lottery itself; a headquarters organisation; all the technology which will be necessary to run the lottery; the retail network; and a substantial marketing venture too. All of that is likely to create many hundreds of new jobs.
In other words, in the jargon of the commercial world, the Bill will be creating a completely new "product" in this country. Large numbers of on-line computer terminals will be needed. It is those computer terminals which will be used to play the national lottery. Those who want to play an on-line lottery game might choose, say, six numbers from 39 and they then mark their choices on a card which is fed into the lottery terminal. The chosen numbers are registered in the lottery's central computer and the machine issues a ticket. The whole transaction takes
404
less than a few seconds. Alternatively, players can buy an instant scratch-card ticket and win more, but lower-level, prizes.
Lottery tickets may be available from a variety of outlets, possibly in shopping centres, in railway stations, at corner shops and in supermarkets. The choice of retail outlets will play an important part in any successful bid to run the lottery. And the end result will be that thousands of businesses, both large and small, should benefit from the commission income which will be provided by the lottery. They will also benefit by attracting people into their premises and by increasing their sales of other products.
An important part of the Bill concerns existing lotteries which are run by charities, sports clubs and others. My right honourable friend the Home Secretary recognised the concerns of those who are engaged with existing society lotteries, increasing substantially the limits on turnover and on prizes, so that those who run small lotteries for the benefit of their own organisations will not be disadvantaged.
We understand the importance which is attached to lotteries by a large number of charitable organisations. Our view is that lotteries which are run by particular societies will continue to be supported, as they are now, by those people who are motivated to contribute to the causes which those societies espouse. I think that there will always be a clear distinction in the minds of the public between a national lottery and small charitable and local lotteries.
During the course of the Bill in another place, there were many discussions about the football pools and the possible effects on them of the introduction of the national lottery. There is, of course, the argument that there is only a certain amount of money in the system and that any money which is diverted towards the new national lottery can only be at the expense of some other body or charity which is at present benefiting; there is not any new money being created by the lottery. That, of course, is true, but research in other countries has shown that the main source of funds for their lotteries has not been at the expense of other gambling or charitable giving; it has come from a wide spectrum of general expenditure.
However, we have taken the opportunity of this Bill to modernise the regime which applies to the football pools, and we have taken steps which we think are fair and which will give the football pool companies considerable new advantages. In addition to those steps, we also propose to bring forward an amendment which would allow the pools a rollover facility which will match that of the lottery.
I have outlined the main points of the Bill today and the Government's philosophy behind it. The Bill will enable everyone in this country to participate in a new national lottery which, as well as giving them the opportunity to win a prize, will raise substantial amounts of money which will be available for a wide range of worthy causes. The lottery will also be an important new business opportunity, which is already being seized upon by those who think that they might be able to participate in providing some of the services required.

405
I hope that your Lordships will agree that it is a good Bill; one which will generate a great deal of interest and one which will benefit a large number of people in a large number of different ways. I commend the Bill to your Lordships.
Moved, That the Bill be now read a second time. (Earl Ferrers.)
12.14 p.m.
Lord Donoughue: My Lords, I thank the Minister for introducing this unusual Bill, which cuts across party lines. That is something which this House usually manages to debate extremely well. I note that in another place the Government had a three-line Whip, though some of their Members were clearly against; the Liberal Democrats had a Whip against, though some were clearly for; and the Labour Party —ever practical—had no Whip on the Second Reading, with Members speaking and voting both for and against, and on the Third Reading the Front Bench voted for.
We on these Benches today are broadly positive to the proposal, though with specific reservations which I shall identify later. We do not oppose the lottery in principle. Many people will enjoy a flutter, as the Minister said, and as some do successfully in other lotteries in most other countries. Market research and polls show that three-quarters of the British people would welcome a national lottery and participate in it. We do not wish to be patronising and suggest that people cannot be trusted to gamble.
We accept, also politically, that a lottery may be the only way under this Government to make major strides towards improving the quality of our artistic and sporting heritage. Its collapsing infrastructure needs more than the customary annual slice of inflation plus or minus the odd percentage. It needs major capital injections beyond the existing provisions.
At moments of optimism, contemplating this project, we may recall that the British Museum and Westminster Bridge in the 18th century, and the Sydney Opera House in the 20th century, were built from lottery proceeds. The V & A, the Science Museum and the Natural History Museums were built from surplus funds of the 1851 Great Exhibition. Indeed, moving almost effortlessly towards near euphoria, we can all share a vision of Britain blossoming with great cultural and sporting projects demonstrating our national architectural genius—a talent which has lately been inexplicably hidden from our gaze. If realised, that vision would also create much welcome employment.
Those are uplifting thoughts and I am reluctant to deprive noble Lords too precipitately of their enjoyment. However, I should warn them that that great vision does not wholly survive the close scrutiny which we propose to give the Bill. Indeed, many on my side will question from the beginning why such a noble vision requires such complex and costly bureaucratic vehicles. If the Government really wish to improve our cultural infrastructure there are simpler, cheaper and well-tested ways to do it which do not involve four new quangos, hundreds of millions of pounds of
406
administrative expenses and 16 year-olds scratching lottery cards. That simple method is direct public expenditure from fair and progressive taxation.
However, we accept that our traditional simple and cheap approach is not politically correct in present government circles. Therefore, this rather convoluted approach may be the best hope which the artistic and sporting worlds have on offer. The choice seems to be between a collapsing cultural infrastructure, which may be partly rescued by the lottery, or one which is not rescued at all, particularly bearing in mind that central and local funding for the arts, the sports and heritage are scheduled to fall in coming years.
I am intrigued also that it is assumed to be politically correct for the Government to sponsor a state-driven expansion of gambling which involves reducing the age of consent to 16 for football pools as well as the lottery. The Minister spoke of the pleasures of a flutter, and I totally agree with him. But I invite the Minister, in winding up to entertain the House with more lofty and philosophical thoughts on the matter. Where does the proposal fit into the Government's view of society? We know it offends the puritanical, non-conformist strain in our society—our heavy postbag tells us that—and many see it as bread and circuses.
I must admit that I am not from that stable, if I may be permitted to use that phrase in this puritanical context. I am more inclined towards the cavalier tendency. But I respect that puritanical strain as a legitimate voice in our society. Many of the noblest spirits on this side have derived from that pedigree. Much of Britain's greatness was built on the Protestant work ethic. I wonder whether the Government have a view on the Protestant work ethic. Perhaps they feel that growth in gambling is the only economic growth they can achieve. I understand that. As for the work ethic, they may feel that the swinging sixties did away with the ethic, and in the 1980s and the 1990s this Government have done away with the work. But seriously, we should like to tease out the philosophy behind this approach. Is it really—I hope it is not the case—just a device to allow cuts in public expenditure and direct taxes; or perhaps it simply involves buying a ticket to a classless society.
Turning to the contents of the Bill, I have to observe that many aspects of the working of the lottery remain obscure. The Bill does not tell us how, or how regularly, the lottery will operate or what it expects to raise. Turnover has been variously estimated between £1.3 billion and more than £4 billion. That is quite a range. At the upper level is a huge industry, with a significant impact on other marginal consumer expenditure. At the lower level it offers only relatively small sums for the five good causes and may not be worth doing after the Treasury and the operator's expenses have taken their cut.
We also need to know more about the operator under Clause 5; the key body which will apparently devise, propose and manage the lottery. It is very important to control its expense levels because that comes off the distribution to others. It is also important that it should be British. There are rumours of a very impressive American bidder. But bearing in

407
mind that British lottery promoters and products are prohibited imports to the United States, it would seem to me curious if an American operator were handed this huge prize.
Even more frustrating, though quite understandable, is that we yet do not know what the five beneficiaries will receive as a collective percentage. We know that tax takes 12 per cent, which is unnecessarily high—double the European average—and should be reduced. But until we know the percentages also allocated to prizes and to expenses we can get no idea of the final benefits. For instance, if prizes take 50 per cent and expenses 15 per cent, with tax at 12 per cent, that leaves only 23 per cent for the five good causes, or 4.6 per cent each. On a turnover of £1.5 billion that is £60 million to £70 million each a year—certainly no bonanza for the arts, charities and sport, given their needs, though relatively more helpful to heritage. It would help us if the Minister could give the House some idea of those percentages. We should like to see a guaranteed 35 per cent to the good causes.
We also need some idea of the financial dimensions of potential distribution if only to constrain the vibrant imaginations of various arts and sporting organisations, whose administrators, from what I read, have already in their minds pre-empted and spent some 73 years' anticipated receipts from the lottery.
Looking more closely at the details of the Bill, it has undoubtedly been improved by generous concessions by Ministers at the Committee and Report stages in another place. The voluntary and charitable sectors and especially the pools have benefited from that. But it remains deficient in several ways which I will now identify briefly. We propose to try to introduce further improvements at later stages in this House.
The first and fundamental question concerns additionality. The proceeds of the national lottery must not be subtracted from or substituted for existing or future public expenditure. It must be truly additional—distributed to projects which otherwise would not get state aid. That will not be easy to prove. It will be hard to demonstrate what the Government would or would not otherwise have done. But unless we are confident that all parties in this enterprise, including the Treasury, are positively committed to this principle—that there will in future be no subtractions from heritage funding because of the lottery—then it is not really worth doing. We should not set up this complex apparatus just to slice the same heritage funding in a different way. We want more.
The Secretary of State has given many assurances that the lottery projects will be truly additional. I trust him. He is an honest man. We welcome him to our debate. But I am not sure about future Ministers. There are often whiffs of a reshuffle and Ministers come and go. I am certainly not sure about the Treasury, which has never been trustworthy in these respects. It is already moving the goal posts on access to the public expenditure reserve for works of art. We also note that heritage spending is scheduled to fall by 5.4 per cent in real terms in 1993–94, curiously
408
coinciding with the expected launch of the lottery. I am a naively trusting man but if I am told that the Treasury's word is its bond, I would still prefer to take a bond. We need guarantees of additionality. I accept that it is difficult to entrench it in legislation, but we will look at ways of doing so at the Committee stage.
A major area of concern to us is the potentially damaging impact of the national lottery on charitable and small lottery income. Many football clubs depend on that. The NCVO estimates diverted revenues from charities of between £120 million and £230 million. We will urge the Home Office to monitor and report on such damaging effects. My noble friend Lord McIntosh, who is winding up from this Bench, will give particular attention to the concerns of charities and small lotteries in the Bill, so I will say no more on that very important point.
We are also concerned about the potentially regressive nature of this measure. The revenues may —if US research is correct—be raised disproportionately from poorer communities. There is an even greater likelihood that the proceeds will be redistributed to high prestige projects in the metropolis and more prosperous regions. It is very important that the redistributional aspects are monitored and reported on and especially that new cultural and sporting projects are built in less prosperous regions.
In another place much concern was expressed about the huge powers given to the Secretary of State in Clause 24. Improvements were introduced but the powers remain quite draconian. He can forbid a beneficiary, direct proper management, sack beneficiaries and managements, dictate purposes and change the percentage going to good causes from 20 per cent down to 5 per cent The man in Whitehall certainly knows best here. But I am not sure that unconventional theatre companies and art galleries will happily survive those powers. We are particularly concerned about the power to reduce allocations from 20 per cent to 5 per cent That may be too great and too abrupt.
One major and dubious proposal which I should like to see not survive the scrutiny of this House is the fifth distributing body, the Millennium Commission. It was not in the original White Paper. It suddenly popped up in the 1992 Tory manifesto, a provenance which I note has not offered much lasting value in other policy areas. It is quite superfluous. Most of the projects proposed under it so far rest naturally with three other good causes—the arts, sport and heritage. Projects such as the Manchester 2000 Olympics are a blatant example of non-additionality. The danger is of bloated national prestige projects ahead of a general election—a "Peter Lilley Memorial Post Office" in some marginal constituency springs to mind. Certainly it adds an unnecessary fifth layer of administrative costs. We will look at how best we can deal with that.
There are several other areas of particular concern which, due to the shortage of time, I shall leave to my colleagues, though I stress that the film industry needs consideration. Not surprisingly, I am bound to mention the possible impact of the lottery on the

409
revenues to the racing industry, especially if £8 million is forecast to be lost. I trust that other noble Lords will stress that at greater length. Presumably, it is not the intention of the Government to wipe out the benefits of their recent commendable reform by diverting: Toney away from racing.
In conclusion, we on this side of the House support the lottery on the basis that it will be made a success and will significantly benefit the appropriate good causes without seriously damaging others. But we are embarking on an enterprise without knowing how the lottery works or what its impact will be. The lottery revenues come from somewhere—it is not magic money—and there will be losers as well as winners. We should be concerned to monitor and mitigate those impacts. At Committee Stage we shall move amendments to secure that. We look forward to receiving support from, and offering support to, all sides of this House in that important endeavour.
12.31 p.m.
Lord Holme of Cheltenham: My Lords, I have listened with great instruction and indeed entertainment, to the introductory remarks of the noble Earl and of the noble Lord, Lord Donoughue. The House may think that so far this morning it has heard two relatively carefree cavaliers. It is now going to hear from a rather reserved roundhead on this matter. We on these Benches, my honourable and right honourable friends in another place, and my noble friends in this place, find, great difficulty in supporting this Bill in principle with any great enthusiasm.
We have two important reservations which deserve to be articulated in this Second Reading debate. The first is whether the Government of this country should be the initiator and promoter of popular gambling on an unprecedented scale. There are many who believe that gambling is in itself immoral and a social evil. I shall look forward with great interest to the remarks of the right reverend Prelate on this.
Of course that is a fundamental view which should be respected. But one does not have to share it completely to be worried, as I am, about the Government moving from the role of regulation of gambling to that of active promoter of gambling. The noble Earl was most interesting when speaking about mediaeval history, but in modern times, as he acknowledged, I suppose we have the precedent of the Macmillan Government and premium bonds to which he referred. In a sense this is a sort of Conservative primrose path on which we are led into the diversion of the populace with bread and circuses of one sort or another.
The second reservation which we on these Benches entertain is the view that, if the money raised is to be spent on investment and activities which most civilised countries would regard as a proper burden on the public purse, then that is wrong. That is a subject to which I shall return. However, we accept that this is a clear Conservative manifesto commitment and therefore, in so far as this Government are determined on anything, they seem to be set on this Bill.
Today I want to address some of the serious concern about the operation of the Bill to which I
410
hope we can return in Committee with constructive amendments. There are essentially two over-arching questions about the source and use of funds for this lottery. How big will the cake be and how will it be divided? The size of the cake for the national lottery depends on the prizes, the products and the forms of gambling to which the noble Earl and the noble Lord, Lord Donoughue, referred; and on the efficacy of the promotion. I suspect that from an economic point of view there is some elasticity of demand and that there will be extra funds drawn from this form of gambling which are not at present drawn into other forms of charitable gambling. If, as the noble Earl and the noble Lord both say, the British like a flutter, we have estimates that the revenue achieved by this lottery could be anywhere between £2 billion and £6 billion. The noble Earl prudently used a lower figure in making his estimates to the House.
I take the median figure of £4 billion. If the size of the cake were to be roughly £4 billion, how will it then be divided? Unsurprisingly, at the very front of the queue is Her Majesty's Treasury. That can be no real surprise. It is stunning us with its modesty in requiring a mere 12 per cent., which is a lower figure than it originally started out with. I suppose that we are meant to be grateful about that. The noble Lord, Lord Donoughue, asked why it should be 12 per cent and not a lower figure. I wish to ask a more fundamental question: Why should the Treasury have any money at all from a national lottery? In round terms, and to use my own calculations on £4 billion, that is £500 million. Why that figure? Perhaps when the noble Viscount replies at the end of the debate he can tell the House exactly why, approaching this fresh subject with an open mind, the Treasury should get any tax revenue from it at all.
Noble Lords opposite on the Government Benches may be aware that there is no tax paid at all in Ireland and Norway on their national lotteries. As the noble Lord, Lord Donoughue, said, the average level throughout the European lotteries to which the Government referred, is about 5 per cent That is a tax level which the NCVO suggests might be appropriate. When he comes to reply, I hope that the Minister will be kind enough to talk to us about the case for tax at all, and if tax, why that kind of level.
There is another question on taxation. The Government propose 12 per cent What assurances do we have that that 12 per cent will be maintained into the future or, as the columnist, Mr. Joe Rogaly, said in the Financial Times two days ago, that shortly, in a year or two and when the Government are in a fix, they will not see it as an automatic milch cow for the Exchequer to milk in order to get the books straight?
I now wish to turn to the cost of operation. We have the Treasury cost and that of the operators. It has been said that the contract which is to be awarded to run the lottery is so massive that it will make a new FT 100 company. That is the scale of the contract which we are talking about awarding. It will he of great interest to hear exactly what the basis of that contract will be. I do not agree with the noble Lord, Lord Donoughue, when he says that American companies, or companies with American participants, should not

411
be allowed to tender. If we are to have such a lottery we need the best experience available. By the same token, I do not see why pools companies should not be allowed to tender. We need to get the best people to operate this lottery for us.
What concerns me most is not who is allowed to bid, but what will be the basis of the charge that they are allowed to make for this important service. Presumably it will have a fixed and a variable element. Presumably also it will have what in other privatised industries the regulators call the K factor, which is a factor for efficiency of some sort. Will there be some kind of factor added to the formula for success? Will there be some incentive to make a success of the lottery?
On all those questions depend whether we as a nation end up paying about 8 per cent or 15 per cent for the operation of the lottery. The sums of money involved are so immense that I believe that OFLOT and the Government, in awarding these contracts, have to be a great deal clearer on what the basis of a successful commercial tender would be.
If we start with £4 billion and take off the Treasury cost, the cost of operation and the cost of prizes, which must clearly be substantial if they are to be fair and are meant to motivate people in any way to take part, it has been estimated that there will be about 35 per cent left for the good causes which I am sure we all want to see supported.
But there are so many variables. What is fixed in the equation? Is everything fixed except the wretched good causes or are they simply the residuals which will get whatever is left? Would it not be a great deal better conceptually to start the other way round and to say, "Whatever happens, 35 per cent must be available to be distributed"? If I understand the noble Earl, that is the very purpose of this whole exercise and of the lottery. As I have made painfully clear already, if anyone is to be squeezed I should rather see the Treasury squeezed and greater pressure put on the efficiency of the operators than see the recipients squeezed in that way.
I turn now to the issue of additionality to which the noble Lord, Lord Donoughue, referred. I have already mentioned the predatory instincts of the Treasury. We do not have to look further than the way in which the European regional fund has been administered to see evidence of the Treasury's preference, if it sees a new source of money, then to withdraw funds of its own. That is exactly what has happened over the years with the European regional fund. We shall need the most categorical assurances from the Government that money raised and disbursed in this way will be additional funding and will not in any way be regarded as replacement finance by the Treasury.
I realise how extremely difficult it is to enshrine such provisions in legislation. It is not at all easy. It may be that we shall have to be content with the greatest possible transparency in the operation of the lottery and with the annual reports by the Secretary of State on the way in which the money has been disbursed. I wonder whether other spending departments involved in the arts, sports and charities could
412
be required to append their own statements to the Secretary of State's annual report declaring and showing that they have not in any way substituted income from this source for expenditure that they would otherwise have made. I suppose that one way of ensuring adherence to the additionality principle might be, to the maximum extent, to encourage the use of lottery money to fund either one-off, capital or non-recurring projects rather than current expenditure. It is probably easier to do that in the realm of art and sports than in relation to charities.
I turn now to the geographical distribution of the charities' disbursements. It is exceptionally important that the money gets outside the metropolitan area of greater London and that it is spent around the country. It must be spent at the grass roots and on people who would not otherwise have easy access to such funding. The money should fructify in the hands of the people. It should not simply go to a few large, prestige projects.
The noble Lord, Lord Donoughue, referred to the ideal, which we on these Benches support entirely, of protecting the young from acquiring the habit of gambling at an age when they are most impressionable and defenceless. The noble Earl referred jocularly to the enjoyment of gambling. I do not criticise that because clearly, for those who win, gambling can be enjoyable. However, there are many aimless young people in this country between the ages of 16 and 18 who in many cases do not have employment or a great deal of money and whose lives may not yet have taken a shape of clear principle and clear organisation, and they need our protection. It is extremely important that, far from lowering the age limit for participation in the pools to 16, we insist on a minimum age of 18 for participation in gambling of this sort.
I agree also with the noble Lord, Lord Donoughue, on the question of the Millennium Fund and trust. I am dubious about the value of that extra wheel on the chariot. It will be a tremendous temptation for the Government of the day (whoever they may be) as the millennium approaches to put money into triumphalist projects of one sort or another which our successors will look back on in a few years' time with great embarrassment and ask, "Why on earth did they spend money on that?" Surely it would be better to give out that money according to the principles that have been set for the other 80 per cent of the money and to allocate it for particular charitable, arts, sports and national heritage purposes rather than putting it into some pot for undefined projects in the future.
I turn now to the issue of good causes marketing. We must all be concerned that the introduction of the national lottery should not make it impossible for smaller, more humble good causes to raise funds through other forms of gambling. That could be avoided by saying that certain product forms, such as scratch cards, cannot be used by the national lottery, but I am not sure that it will be easy to try to specify product definition in that way. However, one thing that could be done would be to place some obligation on the promoters of the national lottery to indicate at the point of sale or on tickets the exact percentage of the national lottery money that will be spent on good

413
causes. That would mean that the people whose primary motivation is to say, "I wish in a small way and through this medium to see that my flutter goes to a good cause", can see the relative efficacy for charities of this versus other sorts of gambling.
In summary, the attitude of these Benches is slightly different from that of the Labour Party. As I understood him, the noble Lord, Lord Donoughue, said that the Labour Party would be able to support the Bill if certain changes are made. Our position is probably that we will not be able to support the Bill unless certain changes are made. In practice, we may well find that we are working together on a number of amendments that will unite noble Lords across the House. I hope that that will be the case, because I very much agree that this is not primarily a partisan issue. We look forward to being able in Committee to present the Government with constructive amendments on the lines that I have outlined.
12.46 p.m.
The Lord Bishop of St. Albans: My Lords, I am happy to associate myself with the remarks of the two previous speakers in thanking the noble Earl, Lord Ferrers, for his engaging introduction of the Bill and for the clarity with which he made that introduction. If I am not thought impertinent, I should also like to congratulate him on his courage in trying to lead your Lordships' House to follow the example in this particular respect of that progressive and forward-looking country, Albania.
I am sure that your Lordships would not expect someone speaking from these Benches to be wildly supportive of this Bill—and I shall not disappoint you. It would be easy for me to confine my remarks to suggesting ways in which the Bill could be improved here or modified there but, judging from the remarks already made, it looks as if the Committee stage will provide a field-day for alterations and suggestions, and I have no doubt that voices from these Benches will be raised in support of many of the amendments.
Following the examples already given, it is right that today we should speak generally about the Bill and the principles which have guided its introduction. I thought that I was going to be alone in (and that I should need to apologise for) striking a discordant note, but I am grateful to the noble Lord, Lord Holme of Cheltenham, for preparing the way for me. I want to say right at the outset that I deplore the Government's decision to go down this path. I do not believe it to be right. As an expedient, I believe that it is morally flawed and, speaking as a representative of the established Church, I would not be serving the interests of your Lordships' House were I not to say so in rather stark and uncompromising terms.
In the short time allowed to me—and I intend to be brief as well as stark—I cannot hope to justify such a sweeping condemnation, but perhaps I may mention three specific anxieties which weigh heavily with me. The first is about whether we need a national lottery. I am well aware that in the past lotteries have been used to raise funds for specific projects such as the building of the British Museum and bringing soldiers back from Tunis. And in some of the literature great
414
play has been made of the fact that a former Archbishop of Canterbury was, for a while, a trustee of a lottery. But what is it now which makes a national lottery desirable or imperative? That is the question. We should not be concerned with the situation 200 years ago.
I have considerable sympathy with the 1932 Royal Commission on Gaming and Lotteries which said of the idea of a national lottery that:
"In the history of public finance lotteries take their place among the expedients which are resorted to when other and more reputable methods of finance have failed".
This is the less reputable—I do not say disreputable —way. If the lottery is to fund projects which will be of such benefit to the public, why are they not being funded in more reputable ways from general taxation, as is English Heritage and as are the arts and sport, although it is said that they are supported with insufficient generosity? However, that seems to me to be a more reliable and equitable means of achieving the desired ends and is open to scrutiny in a way in which the distribution of the lottery funds may not be.
It seems to me that there is something implicitly deceitful about the state encouraging people to part with their money through the enticement of personal gain in order to spend the proceeds on matters which should be funded more properly from the public purse. Furthermore, there is a real difference in moral terms between an occasional one-off effort for a specific limited project and using this particular procedure for a continuing provision of resources for whatever cause. As everyone recognises, the lottery is likely to be supported more by those people who can least afford it than by those who can readily afford it.
I did not quite catch what the noble Earl, Lord Ferrers, said in his introduction about the places where such lottery tickets could be purchased. Did the noble Earl say that they could be purchased at drop-in centres or job centres? If the latter is the case, that would be the crowning irony.
Secondly, I am concerned that a national lottery, by virtue of its scale, will undermine the whole idea of charitable giving. The charities have said that already and I say it again on their behalf. I should want to be the first to compliment the Government on the encouragement that they have given, through payroll giving and favourable tax arrangements for covenanted giving and in many other ways, to the work of charities. The charities have benefited enormously from the flow of direct giving which those concessions have produced. I do not underestimate the sympathy which this Government have shown and continue to show for the charities. But the charities share my anxiety about the effect on their revenues of a highly promoted national lottery.
The worry is not just about where the money goes. I believe that we are likely to see an erosion of altruism —the spontaneous response to an appeal, the spur of the moment gift to the collecting box—in favour of the opportunity, albeit remote, to get rich quick. I believe that one of the great strengths of British society has been its generosity to those in need. Now that may decline. We could be moving away from giving

415
something for nothing in favour of hoping to gain something for nothing, or at least for very little. That would be a serious loss to the national psyche.
Therefore, at the very least, I hope that the Government will be assiduous in checking the impact of the lottery on charitable giving. It would be a tragedy for us all if the work of children's charities, the overseas aid agencies and groups which help homeless, elderly or mentally ill people were to suffer as a result, either because the funds were diverted elsewhere or because the will was no longer there in quite the same way as at present. If the cry goes up, "Leave it to the lottery", where will the charities be?
Finally, I am uneasy about the whole idea of the state formally endorsing gambling. That has not happened before in living memory. Premium bonds were opposed because they appeared to be the thin end of a wedge. Many would say that this is the wedge coming. But premium bonds were different in that the capital sum was never at risk. But in this case there is no return for the giver. Although the decision to take part in the lottery will be an individual one, we are all frail human beings. Some will be tempted above their means with all the consequences that that may entail for their lives and those of their families. We know only too well that it is often among the less moneyed classes that the greatest amount of gambling takes place.
The point about a national lottery is that in order for it to work effectively, there will have to be massive advertising and encouragement to take part. I wonder whether it will be as harmless as the Government suppose. Could they not even consider attaching to every advertisement a government health warning: "Too much of this will damage your soul"?
I must give notice that many in the Churches, like myself, will be saying to their congregations, "Do not put your money in the lottery basket. Do not be seduced either by the siren voices which tell you that it is all for a good cause when you know that only £1 out of £4 is going to that good cause. And do not be seduced by the greedy voice inside you", which the noble Earl recognised within himself, as we all do, "which says that you may be one of the lucky ones and strike it rich". For years now the Churches have tried to discourage that particular temptation and have deplored raising money through the typical church raffle or tombola stall. Our teaching is that you must give. The Churches insist and demand that people give. It is the teaching of Christ to give. Giving is good for you. But this is a poor second best which it is wise to avoid.
After those negative remarks, which I hope that your Lordships will take in good part, especially the noble Earl, Lord Ferrers, I express the hope that at the very least the Government will monitor very closely the progress of the lottery as regards the uses to which the money is put and its effect on charitable giving and individuals. I hope that the Government will be prepared, if necessary—as I suspect it may be necessary—to revise their policy and to do what was done in 1826 and say, "Let's not do it again".
1 p.m.
Lord St. John of Fawsley: My Lords, perhaps I may join in the congratulations which have been offered to my noble friend Lord Ferrers on his introduction to the Bill and on the brio with which he did it. I very much regret that I must disagree with the contribution of the right reverend Prelate the Bishop of St. Albans. Queen Victoria said that she did not like bishops. I in fact do; I have often thought that I would make a good bishop. The right reverend Prelate put his case with such charm and persuasion that it was difficult not to be convinced by it. Nevertheless, I believe that the moral basis of what he said was wrong and I wish to refer to that later.
There are very few government measures—and I refer to any government—which one can welcome with total enthusiastic and unqualified support. But in my opinion the lottery Bill is one of them. It not only rights a long-standing anomaly —that we are the only country in Europe without such a means of raising funds—but it benefits good causes. In the mellifluous, if somewhat gnomic, phrase of my noble friend Lord Ferrers, one flutter kills two birds. It benefits good causes, which is a justification for the Bill. It is also carefully and well drafted. It is well thought through and is based on sound principles.
I shall not go into the details of the Bill since that is a matter for the Committee. However, at its Second Reading I wish to deal with the principles that underlie it. First, I shall deal with the moral issue which was addressed by the right reverend Prelate; that is, the fear that the Bill will encourage gambling. With great respect to the right reverend Prelate that presupposes that gambling is an absolute evil. I do not believe that it is. We are not here in the realm of the absolute, we are in the realm of the contingent and the relevant. In other words, it is a question of degree.
Virtually everyone enjoys a little flutter. It is part of our culture and there is no harm in it. After all, let us look at our great political institutions. What is our British general election but a combination of a crusade and a sporting event on which everyone places a bet? Why not allow the Government to take advantage of this human propensity? In the words of General Booth, why should the devil have all the good tunes? It is nonsense to believe that the moral fibre of the nation will be destroyed by a Bill such as this. But those who hold such fears speak with great conviction and it is right that we should accord those convictions the respect which all strongly held convictions deserve.
My experience has been largely in the arts. I have the unique distinction of twice having been the Arts Minister; first once under my right honourable friend Sir Edward Heath and, secondly, under the noble Baroness, Lady Thatcher. That, if I may say to the right reverend Prelate, is a true example of ecumenism. If there is a reshuffle perhaps I may apply for the position of Minister for the Crafts.
I welcome most strongly the comprehensive nature of the causes covered by the Bill; that both sports and heritage are covered. My sporting qualifications are not immediately obvious. But I am president of the Emmanuel Boat Club. Recently an honour was thrust upon me which I never expected; I was made a

417
member of the Hawks at Cambridge. It goes to show your Lordships that if you wait long enough everything will come to you. But the important issue here is the underlying principle; that the Bill covers all leisure and cultural activities. It is recognised that leisure activities and their right use are as important for human happiness and fulfilment as good health or a good education.
The next principle which I welcome is the arm's length principle that the money should be administered by independent impartial bodies; for example, the National Heritage Memorial Fund in whose setting up I was privileged to play a small part in 1980. I see that the noble Lord, Lord Charteris of Amisfield, is here. My part in his appointment as the fund's first chairman is perhaps the only act in my life about which I have no regrets.
It is not right to give the money to English Heritage because it is too close to government—it has nothing to do with its present trials and troubles. But I wish to pay a tribute to English Heritage and to its former chairman, my noble friend Lord Montagu of Beaulieu, because of the wonderful work that it has done. We at the Royal Fine Art Commission appreciate that work having seen, year after year, week after week, the experts coming before us to give helpful advice. I further welcome the principle that the money is in addition to and not in lieu of present funds. I hope that the Opposition will accept the assurances of the Secretary of State and my noble friend.
When I launched the business sponsorship scheme more than 20 years ago a crucial factor in its success was that it provided money in addition to government funding and not in place of it. The noble Lord, Lord Palumbo, still happily reigns at the Arts Council and I hope that that reign will continue for many years. When he took up office he made it clear that although he strongly supported business sponsorship it was an extra and not a substitution. The Government have made their position very clear on that crucial issue.
The final and major point upon which I welcome the Bill is precisely because of the Millennium Fund, to which the noble Lord, Lord Donoughue, rather took exception. We have two duties; we must preserve our heritage and our inheritance —that which comes to us from other generations—and we must see that our own age adds worthily to it. Certainly we must preserve the past; let us get the Albert Memorial out from under wraps while we are all still alive to see it. But as regards new projects we in this country run into a cultural difficulty. The French do not have that. We do not like to commit ourselves to great cultural enterprises but when we do we do them well—I think of the Crystal Palace and the Royal Festival Hall.
Why should not we achieve the equivalent today? We could build a great new opera house on the South Bank, bringing together ENO and Covent Garden, with the opera house being used as a national dance theatre. We could build a new gallery of contemporary art outside London—and I quite agree with noble Lords who made that point. People in Birmingham have eyes as well as people in London. We could build a new bridge across the Thames. We missed the great
418
opportunity of having the Calatrava Bridge. Why not make up for that? Why not restore the river to a place of enjoyment and a great thoroughfare through the capital. We could have a revolution too in Park Lane and Hyde Park Corner, which are great spaces and thoroughfares in the capital. Why not put the cars underground and let the people, instead of being treated as troglodytes, come to the surface where they belong and enjoy one of the most beautiful parts of the capital? That would be a very worthy commemoration of the millennium.
I have been talking about grands projets, but let us also remember petits projets; for example, good street furniture, village halls, and learned societies which depend for their continuance on a few thousand pounds. There are also amateur dramatic societies and small theatres. Let them all have their share.
We have a very exciting project ahead of us with the Bill. We must seize the opportunity with enthusiasm. Power has gone from us never to return in the 19th century sense, but influence remains. The English language has become the language of the whole world in a time of communication. We lead the world in the arts, especially in architecture. Machiavelli is not always a person to be followed but if you read The Prince you will find that he puts one very pertinent question: what good is power without glory? The Bill creates the opportunity for new glories for the nation. I hope that noble Lords will give it their warm, enthusiastic and cordial support.
1.11 p.m.
Lord Charteris of Amisfield: My Lords, I am very pleased to be able to make my contribution to today's debate on the Second Reading of the lottery Bill. I believe that a great deal of good will come from it. I listened with great respect to the doubts expressed by the noble Lord, Lord Holme of Cheltenham, and by the right reverend Prelate the Bishop of St. Albans about the moral question of whether it is right for the Government to support betting. I fear that my view is rather more pragmatic: I think that the British are a race of inveterate gamblers and that we might as well accept that fact. We might as well give them decent and honourable things to gamble on which will lead to an improvement in our way of life.
I am indeed most grateful to the noble Lord, Lord St. John of Fawsley, for what he said about me. I should like to restrict my remarks today to Part II of the Bill and, in particular, to the National Heritage Memorial Fund which has been chosen by the Government as the distributor of 20 per cent of the money which will be available for the heritage. But before I do so I must declare an interest. As I believe many noble Lords know, I was chairman of the National Heritage Memorial Fund for 12 years and I am still intensely interested in it. However, having been away from it for a year now, I think that I am capable of looking at it objectively. I should like to congratulate the Government on the choice that they have made.
The National Heritage Memorial Fund has a highly competent chairman in the noble Lord, Lord Rothschild, who was present in the Chamber earlier

419
but unfortunately has now had to leave. It has an admirable body of trustees and a competent and absolutely devoted staff. More importantly, it knows its way around the heritage world and it is well regarded. I believe that it starts from a very good basis.
In the new dispensation, the National Heritage Memorial Fund will have even more opportunities than it has had in the past to help conserve, maintain and acquire our heritage. But inevitably its character will change, and that is something which I regret. But there you are; you cannot help it. It will have to increase its staff to a considerable extent and inevitably it will have to become rather more bureaucratic. However, with all my heart I hope that it will be able to retain the speed and flexibility with which it has been able to take actions in the past. I want it to retain the spirit of adventure and excitement that it has always had.
When I think about quangos—which is what it is —in my imagination I inevitably think of four-legged animals. I have always looked upon the National Heritage Memorial Fund as being like the wild oryx of the desert. Please do not let it become a stalled, castrated ox.
I assume that the Government think well of the National Heritage Memorial Fund, otherwise they would not have chosen it to be the distributor. I also listened with great interest to what has been said about additionality. I hope that I may be forgiven if I strike a slightly discordant note by saying that, with those two assumptions—that is, first, that the Government approve of the NHMF and, secondly, that they will stick to the policy of additionality-I am amazed that they decided to cut down the resources of the fund in respect of 1994–95. At that time, the funds provided for the organisation will be reduced from £12 million to £7.8 million. I simply cannot believe that when that decision was made the fact that the fund was going to receive money from the lottery was not an influence. Otherwise, I think that it was very careless of the Government to do it. I cannot believe that they really thought about it.
The year 1994–95 is still quite a way ahead. I very much hope that the Secretary of State for National Heritage will persuade the Treasury to restore what was originally promised for the National Heritage Memorial Fund. If the fund is to be short of money, not only will the heritage suffer but, I fear, so will the Government. My reason for saying so is as follows. Your Lordships will remember that the reason why the NHMF was brought into existence was that there was an absolutely flaming row over the sale of Mentmore and its contents. Due to that fact it was decided that a fund should be set up with adequate resources to deal with that sort of problem and thereby keep it out of the political arena.
Since the fund was set up in 1980, I believe that I am safe in saying that there has been remarkably little heritage hassle, except for the flurry over Cork Abbey which noble Lords may remember. If the National Heritage Memorial Fund is cut down, I am afraid that there will be a great deal more political trouble. The
420
NHMF should have, and be seen to have, adequate funds to deal with such questions as what house is to be saved and what picture is to be retained so as to keep the whole thing out of the political arena. The action of the Government in cutting down the resources of the fund is equivalent in a sense, as regards error size, to not restoring the Albert Memorial, which will stick out in the park like a sore thumb as a reproach to the failure to support the heritage.
There will be a difficult period ahead as regards working out exactly how the lottery money is to be spent by the National Heritage Memorial Fund. I beg everyone to go for the maximum flexibility. There is considerable apprehension about whether the Treasury has the same conviction as regards additionality as government Ministers express. For example, if lottery money is applied to a building which is already receiving government aid from another source, everyone is quite sure that that government aid will be withdrawn. I beg the Government not to allow that to happen. We must maintain flexibility in this matter.
I have heard it said that the National Heritage Memorial Fund will not be able to spend lottery money and its own money on the same project. I do not know whether that is true, but if it is that is crazy. There may be a great house that needs £1 million to save it but money can be taken only from one pocket.
I have only one more point. The draconian powers of the Secretary of State have already been mentioned. I completely understand why the Secretary of State wants to be able to control these matters but I hope that he exercises that power with restraint. I speak from 12 years' experience of the National Heritage Memorial Fund. One of the great aspects of that fund was that, with one small exception whom I shall not name, neither Ministers nor officials ever tried to interfere in how we spent the fund's money. The National Heritage Memorial Fund has proved itself to be a great success. It has been a success simply because it has always received complete support from the Government and the Government have never interfered in how it spent its money. That is the way to deal with this matter.
1.22 p.m.
Lord Aberdare: My Lords, I begin my declaring an interest as I have been the Chairman of the Football Trust since it was first formed by the pools companies, Littlewoods, Vernons and Zetters, in 1979. Our income, as I shall explain in a minute, is almost entirely dependent on the success of the pools' companies. I must ask your Lordships' forgiveness if I have to leave before the end of the debate. I do that reluctantly as I have never done it before. I have arranged to attend a memorial service for Lord Edmund-Davies, who was an old friend of mine and a close colleague in the London Welsh Association. Therefore, I hope I may be forgiven if I have to leave the debate before the end. However, bearing in mind the number of speakers on the list, I may even be back in time to hear the reply from my noble friend the Minister.

421
Let me make it clear straight away that the Football Trust fully supports the idea of a national lottery, especially the possibilities that it brings for producing more money for investment in sports facilities and particularly in football. The national lottery is a matter of crucial significance to football and to the Football Trust. We must ensure that the position of our national game and the position of the trust which plays such an important part in the well being of the game is safeguarded. We rely on two sources of income. When we were first formed, our only income came from the Spot-the-Ball competition run by the pools companies. We continue to receive 21 per cent of the turnover of that competition which amounts to something like £13 million a year.
Since the 1990 Budget, we have had a second and more important source of income that has come indirectly from the Government. In the Budget of that year the Government reduced the rate of pool betting duty by 2.5 per cent and that has brought us in, for the five years that it was agreed it should last, something like £23 million a year. The proceeds of that £23 million are given to my trust. Under our agreement with the Government, these funds must be used on capital works for the safety and comfort of spectators at football grounds in accordance with the recommendations of the Taylor Report on the Hillsborough stadium disaster in 1989.
The trust has provided over £150 million in grant aid to football at all levels since it started life as the Football Grounds Improvement Trust in 1975. Our priority task now is to help clubs to implement the recommendations of the Taylor Report. The conversion of grounds in the Football Association's Premier League and in the first division of the Football League to all seated accommodation, and the work required to ensure that any retained standing terraces in the second and third divisions are safe, is both necessary and hugely expensive. So far we have offered over £71 million in grant aid for development work which in total has cost some £259 million. These figures take no account of the support we offer for vital safety work costing many millions of pounds more which local certifying authorities require league clubs to undertake. Nor does it include the £3 million which the trust provides every year to support the non-professional game.
We have a small staff who perform an excellent job. Proven procedures are in place which involve our professional advisers and they are designed to ensure full and proper scrutiny of clubs' development plans and ability to put together the necessary financial packages to pay for the work. Our annual budget is presently running at over £36 million and our administration overheads are currently less than 2 per cent of our income. That is a performance in which my fellow trustees can take pride. We hope to be able to continue this vital work in the years ahead but if we are to do so we have two needs. First, we hope that the Government will extend the life of the reduction in pool betting duty to match the timetable for the implementation of the Taylor recommendations.
Clubs in the FA Premier League and the first division of the Football League have until the end of
422
the 1994–95 season to complete the conversion of their grounds to all-seated accommodation. Clubs in the second and third divisions of the Football League have until the end of the 1999–2000 season to complete the work required at their grounds. In their case the Government have agreed that areas of standing terracing may be retained provided they are safe. But in many cases such work could prove to be every bit as expensive an undertaking as converting the ground to all seated accommodation. Implementing Taylor is a huge job and we are not yet at half-time in completing it. The final bill will be something like £400 million, and in the second half we will see many clubs which are only financially strong enough to meet a modest proportion of that cost.
Clubs in the FA Premier League and the First Division of the Football League have in broad terms met about 75 per cent of the cost of development work from their own resources and have relied on the trust for grant support of the remaining 25 per cent In the lower divisions we can expect, again in broad terms, that this ratio will be reversed. The need for the extension of our funding is therefore clear. It would give great satisfaction to football and to the trust to hear from the Government that the life of the reduction in pool betting duty is to be extended.
Our second anxiety is that our income should not be reduced by the advent of the lottery. That is why I warmly welcome the amendments that were mentioned by my noble friend which were accepted in another place or have been promised which will help to ensure that the pools are allowed to compete on fair terms with the lottery. That certainly brings comfort to the pools companies, the Football Trust and football as a whole. We believe that further amendments in this House designed to give the pools companies a full and fair opportunity to compete should be supported.
Football owes a debt of gratitude to the pools companies. They have put much needed millions of pounds into the game. It would be a tragedy if that source of funds were to be drastically reduced as a result of the national lottery. The needs of the game are great and football requires the continued support of the trust and the new help which the lottery can bring. I look forward to a continuing close working relationship between the trust and the Sports Council in that context, and we have already had constructive discussions.
We are also discussing with the Sports Council and the Football Association how to deal with the very real needs of grass-roots football. That is an area where funds from the lottery could have a useful part to play, and we look forward to working with both the Sports Council and the Football Association for the benefit of the game at grass-roots level.
I hope that the Government will acknowledge the vital role of the Football Trust in the future well-being of our national game and keep it in mind as the National Lottery Bill completes its stages in this House. I hope that, like me, they wish to see the Football Trust prosper and, once the lottery is in place, will work closely with other interested parties for the benefit of football as a whole.
1.31 p.m.
Lord Montagu of Beaulieu: My Lords, I have long looked forward to welcoming this Bill in your Lordships' House. I have always believed that a national lottery could be an important additional source of revenue for good causes. In general terms I am much in favour of the Bill.
I recently became a more active supporter as a consultant to the Lottery Promotions Company, which in many ways inspired the Bill, because I was becoming increasingly incensed by the unholy alliance between the Treasury and the pools promoters, who were determined to delay the Bill and thwart its intentions for as long as possible. The reasons are obvious. The Treasury hates losing control of any public expenditure and the pools companies do not want to lose their monopoly. In spite of the deluge of lobbying recently, I am far from convinced that the lottery will have any damaging effect on the pools, betting on horse or dog racing or on other charities. I do not believe their predictions, but I do believe in the inherent love of gambling of the British people and above all in their generosity. Fortunately, thanks to the inclusion of a proposal for a lottery in the manifestos of both main parties we now have the Bill before us.
My interest in museums and heritage matters is well known and it is to those areas I wish to direct my comments. The considerable euphoria which surrounded the publication of the Bill has evaporated to a considerable degree as various potential beneficiaries have read the small print of the Bill and sought advice from the heritage agencies.
Over the past 30 years historic houses and museums have faced deeper and deeper financial crises despite government funding schemes such as the National Heritage Memorial Fund, English Heritage and the Museums and Galleries Commission. The amounts of money available are simply inadequate to deal with the serious problems which exist. Even Grade I listed buildings and structures such as Brighton West Pier are unable to find the sums in excess of 10 million that they need to safeguard their future. There is no doubt that the public perception of the lottery is that substantial proceeds would be directed towards funding such projects. Unfortunately, it seems to many of us that the Bill contains a number of serious flaws which appear to make that impossible.
The Government have rightly emphasised repeatedly that lottery money will not be used to replace state funding and that the proceeds will be available in addition to government grant aid. I should like to develop the point made by the noble Lord, Lord Charteris, a few moments ago. It seems that Treasury advice on that issue has been that no proceeds from the national lottery should be given to projects that could attract government funding. That precludes the multi-source funding on which so many of our heritage projects depend. That is nonsense. The spending proposals of almost every museum and historic house for repair or development could in theory receive grant aid. In reality, very few will. It is
424
clearly not right that all museums should be denied access to lottery proceeds on the grounds that some of their spending proposals may receive grant aid.
Lottery money allocated to our heritage should be targeted on the areas of greatest need—our cathedrals, museums and historic buildings, both great and small. If it is difficult for money to be spent on those buildings we may well find that it is easier to obtain lottery money to build a brand new visitor's centre at Buxton Crescent, for example, rather than to repair the crumbling fabric of that beautiful Grade I building.
Therefore, it is possible that much-needed funds will have to be directed towards second-rate projects which do not currently receive grants. Unless that issue is resolved we could find ourselves in the position of seeing someone sitting at a cathedral organ, restored at great expense by lottery funds, while water drips on the head of the organist because English Heritage has insufficient funds to renovate the roof. Therefore, I look forward to some explanation, as I am sure will the whole House.
There is another anxiety which I hope my noble friend can dispel when he winds up the debate. On reading the Bill I was concerned That the National Heritage Memorial Fund would not be able to give money for the conservation of buildings but only for refurbishment. I now understand that that may not be the case, but I should be grateful for clarification.
I believe that before the Bill leaves this House it is essential to define more precisely what constitutes an eligible recipient for lottery money and which projects should be more appropriately funded through existing mechanisms.
I now turn briefly to the question of recurring revenue funding. I believe that the Government are right to resist suggestions that funds should be available for revenue funding. They should maintain their policy that lottery funds should be directed only to capital projects. Nevertheless, it is a basic truth that almost all capital expenditure has on-going revenue implications. For example, an extension to a museum will incur extra overheads and staff requirements as well as having implications for the conservation of the collection. A new concert hall will have to employ a director and staff and pay its gas and electricity bills. A sports field will need somebody to mow it and paint the white lines. Millenium projects, whatever they may be, will have on-going costs for which someone will have to pay.
I suggest that capital projects funded by the lottery should, where necessary, include an endowment fund to ensure their continuation. Otherwise there is a possibility of capital lottery projects facing severe financial problems and even receivership within a few years of their completion. That might be an even more serious problem in deprived areas where neither the local authorities nor local people can afford to subsidise the on-going costs themselves. We do not want to see any neglected lottery white elephants in years to come closed because no one pays the running costs or because they were built in the wrong place.

425
Another exception to the no revenue funding rule must he the use of lottery funds for one-off events such as the European Arts Festival, the Olympic Games or future jubilee celebrations.
Despite being so ably promoted by my noble friend Lord Palumbo, and after so many grand and imaginative ideas have been put forward, it is far from clear at present what the purpose of the Millenium Fund will be. That will no doubt become clear when the commission is set up. We shall then find out what projects will be developed which are not already covered by other areas of lottery largesse. It is essential that all the millenium projects should be new ones with an on-going benefit to the community at large. The imaginative list of projects of the noble Lord, Lord St. John of Fawsley, was absolutely splendid. I should like to add to it new open green spaces in cities, nature reserves in the country, new forests and buildings of great architectural quality, not necessarily all large or grand. But perhaps most important of all, in order to ensure the future of our heritage, we must teach the skills of conservation and administrative expertise to those who will look after the heritage in the future. I should therefore like to see a substantial part of the Millenium Fund going towards education, perhaps by establishing a college or a faculty in more than one university to teach our future conservators and administrators to care for and develop Britain's heritage in the future.
I was somewhat disappointed at the attitude of the Labour Party and the Liberal Democrats towards the Millenium Fund. Theirs is almost a spoil-sport attitude. Perhaps it is sour grapes because they did not think of the scheme themselves. Surely as a nation we should greet and celebrate the dawn of the millenium with some style. I am sure that future manifestos will not suggest that the Millenium Fund should be closed down.
There are other matters in the Bill which will be better discussed at Committee stage. For instance, I do not believe that the Secretary of State should have any responsibility for individual spending decisions. Each distributing body will have to justify its spending decisions to Parliament, Of lot and the public, and not necessarily to the Secretary of State, whose role should be less important. I must confess that I believe that there is considerable merit in the suggestion that the whole national lottery should be set up as a charitable foundation, and if an amendment were tabled to that effect it would receive my full support.
I very much welcome the Government's agreement to allow smaller lotteries to become more attractive, with larger prizes. There are a couple of important areas which need to be ironed out at Committee stage. I should not like my criticisms of the Bill in any way to dampen the warmth of my welcome for it. However, I believe that unless certain matters are clarified and the allocation criteria are better defined, we shall find that in a few years' time there will be vast sums of money swishing around unspent in the national lottery pot while the historic houses, museums and galleries crumble and important works of art disappear overseas.
426
I am sure that that is neither the will of the Government or the people nor the intention underlying the Bill. I am sure that it is not the will of the Prime Minister. He said that,
"With the lottery will come a better Britain".
I am sure that with all the expertise in this House we have a great opportunity to make the Bill even better too.
1.42 p.m.
Lord Houghton of Sowerby: My Lords, I must dissent from the Bill. It is not the way to achieve a national lottery; and it is not the time to do it. It is not the way to do it because the means are open to strong social and moral objections. It is not the time to do it because Britain is in peril and we do not want the Bill to distract the Government from their task of getting Britain on the go again.
Having listened to the speeches, I believe that the Bill is a subtle stratagem to obtain more money for the heritage of the aristocracy from the pockets of the working people. That is what it is all about. The idea that the Bill enables people to do something which they otherwise could not do, or could not find the means to do, or did not know where to go to achieve it, is a lot of rubbish. The advertisements are full of opportunities to give money to good causes, heritages and otherwise. Moreover, those in charge of heritages and those who own them charge admission money —and good luck to them. That is the way in which they can maintain some treasured artifacts intact.
But let us be honest, my Lords. Not a word has been said about the big prizes. Not a word has been said about the propaganda underlying the Bill that the prizes must be big. We know that such prizes are part of the mythology of chance in such games of luck. The extraordinary aspect is people's ignorance about the length of the odds in such an enterprise. They have no conception of the length of the odds. So many people seem to believe that the odds are 50:50. The attitude is, "If it's him, it might be me. I have as much chance as he has, and he has just won the prize". That is the underlying mythology. What are the chances? What are the odds? Are they 1,000,000:1; are they 6,000,000:1? If it were in order, and if there were more people to respond to my request, I would ask noble Lords on the other side to put up their hands if they would go in for the lottery themselves with anything but a token desire to support the national heritage.
How many thousands of pounds a week, a month or even a year would noble Lords opposite put in the state lottery? I believe that now is not the time, nor is it appropriate for your Lordships' House, to be laying the foundations of the lottery state. The state lottery will be the foundation of a lottery state. Let us consider the propaganda and the information, with consultants and directors of this and that involved. We have received such material recently. We can see that an industry is about to emerge. We have seen the Friendly Society Movement go. We have seen the Co-operative Society Movement go. Almost everything is turned into a business in the present circumstances.

427
Underlying the Bill lies inducement. Inducement is stronger than the cause which we are asked to support. The football pools have shown that one does not need good causes and the National Heritage Memorial Fund to encourage people to go in for the pools. They believe that their judgment of what football teams will do is as good as anyone else's and that they will have a go. There are big prizes with regard to football pools. It is the inducement to gain a big prize out of the lottery that is the inspiration behind the appeal of the lottery.
Who wants the lottery anyway? Where is the public demand? Where are the demonstrations, with people saying, "Give us our state lottery. We are not satisfied with those we have. We want them to be run properly so that no one has their hands in the till". But—my goodness me, my Lords—the Government have their hands in this till before it has been filled. The provisions are in the Bill and they, of course, are taking their cut before anyone else has a chance. It is an affront to the intelligence of your Lordships' House.
We shall have references to good causes. I warrant that if we took the good causes out of the Bill the Government would have to drop it. They want the embroidery of good causes in the Bill, however little they might get out of them. What are the good causes? I believe that if good causes have to go to the national lottery for support, their cause is not as good as it ought to be. Many good causes are able to receive from existing sources not only support and money, but help too. The fact that we have these good causes all over Europe, all over the world, is nothing to go by. Noble Lords should tell me where a voluntary sector exists in Europe comparable with that in Britain. Bear in mind that after the Reformation, the Church charitable work was transferred to the Poor Law. We secularised our charitable work in that way. None of the European countries has secular charities at all, they are all Church affairs. That is where charity started and in many cases it is where it has stuck.
Moreover, we find lottery tickets on sale in countries where there is considerable poverty, and people are induced to part with money which they cannot afford. How long will it be before there has to be a little tear-off part of the ticket that we buy in the lottery which we have to send to the Inland Revenue in order to obtain tax relief? Not very long, I guess. How long will it be before there is a claim for improved social benefits in order that people can enjoy their share of the "entry in chance" to the national lottery? After all, we have to take account of television licences, motor car licences and all the other amenities of life. Why are we being shut out of the state lottery? Give us the money to have a go, let us make it fair all round. No, this Bill is a lot of rubbish.
A moment ago I asked: who is behind this? Where does it come from? Is it the trade unions? There is only one political party in Britain today which would introduce this Bill and that is the one opposite. It would not be introduced from these Benches, whatever people may say. It would not be introduced from here unless the Labour Party had lost its senses.
428
No, I shall not give way, I have had nine minutes and I shall finish in 10. There is a lack of support from these Benches.
As for the Liberal Democrats, I am not at all surprised that they have given the only speech this morning that added any warmth to this chilly Chamber. The right honourable Alan Beith, the Deputy Leader of the Liberal Democrats, is, I see, on the Council of Reference of the Jubilee Policy Group. It so happens that the document of the Jubilee Policy Group is the one to which I most subscribe and which applies most to the debate. It gives the case against the Bill, covering the grounds which I have mentioned and many more.
Finally, I come to timing. Clause 60 provides for the Secretary of State to say when the balloon goes up. He can decide when the lottery is launched, and when it catches fire and comes down again. All that, he can decide. I do not believe that this revolutionary change in the voluntary sector in Britain should take place without the positive vote of Parliament at the time when the Government think it should begin. It is not enough to leave it to the Secretary of State.
In conclusion, I resent the intellectual, elitist, aristocratic way—pardon those words, but I have been listening to them this morning—in which this is being turned into a class problem of how to get the poorer working people to subscribe to the national heritage. There is a lot of money behind the national heritage and I believe that it should be drawn upon first.
Another point about foreign countries is that they do not have the taxation system that we have. We have the most efficient taxation system in the world and we do not need lotteries to make good the holes in our taxation system. It is only a matter of using that system.
In 1994 we shall have the first wallop of the energy tax, under the existing bodies which will come into operation. The following year we shall have the remainder of it, a 17.5 per cent increase in tax on energy is on its way. What state of mind will the country be in when we subscribe to the national lottery in order to promote good causes? If I had responsibility for a charity of any standing, I should urge it to keep out of this and let my good cause speak for itself. There is far more money in some of the charities helping good causes than they will ever get out of this. What is more, some will be animal charities which are excluded from Children in Need, red nose telethons and all the other money-makers for charitable purposes. Those charities are excluded; it is only for human beings and mostly children.
That is it, I feel warmer now. What I have said will make no difference—I know that—but I feel immeasurably better for having said it.
1.56 p.m.
Lord Brabazon of Tara: My Lords, I am sure that the whole House feels better for having heard the noble Lord's speech, although I for one cannot agree with much of what he said. I have no objection to

429
gambling and in particular to the type of long-odds gambling which the lottery will comprise. What I say in my speech will confirm that.
I can say to the noble Lord, Lord Houghton, who issued the challenge as to who on this side of the House might buy a lottery ticket, that I might well do so; not just, as he said, because the lottery will benefit the aristocracy. Whether I should include myself among them, I do not know. I am sure that my noble friend will be able to confirm that that will not be the case. I am also well aware of the type of odds which are involved in this kind of lottery. If one buys a ticket for £1, one knows that half the proceeds from the ticket will go in prize money. If one is hoping to win a prize of £1 million, then in round terms the odds are about one million to one. However, many people will enjoy the chance to have a soft flutter in that way.
The reason I speak today is because, as some of your Lordships know, it is one of my most pleasant duties to serve as the Deputy Chairman of the Foundation for Sport and the Arts. It is in that role that I wish to say a few words about the impact of the national lottery on existing sources of funding for sport and the arts, and in particular for the Foundation for Sport and the Arts itself.
The foundation has become one of the most important sources of funding for sport and arts organisations across the United Kingdom since its creation in July 1991. In the space of no more than 20 months, it has distributed well over £100 million to thousands of deserving causes, the size of its grants varying from a few hundred pounds to over £2 million.
Our aim is to target as much of our £60 million annual income towards projects which reach all sections of the community, much of it to grass-roots projects. We also have special concerns for the young and the disadvantaged. It is of course impossible to detail all those organisations which have benefited from the foundation's work; but that information is included in the foundation's annual report.
Let me give your Lordships a small flavour of the diversity and range of grants that the foundation makes, and note a number of its most recent awards. A quick glance at the latest list shows that there have been some worth several hundreds of thousands of pounds. A quarter of a million pounds to the Magic Circle, for example, will help to establish an international centre for the magic arts in this country. A quarter of a million pounds to Oxford University will pay for the construction of a swimming pool for the benefit of all its students. At the other end of the scale, there are hundreds of small grants to grass-roots sport and arts organisations. However, small as they are, they often make a critical difference and ensure the continued success and development of organisations that would otherwise have foundered. The Liverpool Elite Majorettes Troupe, for example, has been awarded £250 to cover its annual running costs, while the Churchtown Cricket Club in Southport has been given £226 to enable one of their players—with size 16 feet—to purchase a pair of hand-made boots. My Lords, that really is getting to the grass roots of sport.
430
All over the country sporting and arts venues now bear the foundation plaque. The range of sports to have benefited from the foundation is immense—from basketball to volleyball, from rugby union to rugby league, from wrestling to gymnastics, from table tennis to real tennis, from bowls to boxing and from weight lifting to athletics. Arts festivals in towns all across the country—Belfast, Edinburgh, Thaxted, Chester, Truro and Lichfield, to name but a few—have all flourished with awards from the foundation. I believe those are the very sort of things that were referred to by my noble friend Lord St. John of Fawsley, in his excellent speech.
It is also important to mention the contribution that the foundation makes to sport and art for the disabled. A grant of £50,000 was made towards training costs for the 1992 Paralympics. This year an award of £200,000 will build a riding centre for the disabled. I am sure therefore that noble Lords will agree with me that the Foundation for Sport and the Arts is something clearly well worth preserving. There are many hundreds of thousands of people across the United Kingdom who would, I know, be glad to echo those sentiments. That is why my fellow trustees and I are so concerned that the introduction of the national lottery does not lead to the demise of the foundation. The Government have stated repeatedly that the lottery will provide additional funds for sport and the arts, and we wish to see that pledge honoured, as so many noble Lords have said today. It would be a disgrace if the lottery were introduced on the pretext of providing extra funds for sport and the arts when, in reality, it simply acted as an elaborate mechanism to transfer resources from one funding body to another.
Many noble Lords will have received a letter from the Secretary to the trustees of the foundation setting out in detail some of our anxieties. Let me remind noble Lords of some of them.
The foundation's £60 million a year is funded from two sources: £40 million from a contributory element in the remittances of the clients of Littlewoods, Vernons and Zetters Pools, and £20 million from a reduction in pool betting duty from 40 per cent to 37.5 per cent announced in the 1991 Budget. It is clear that all the foundation's funds depend directly or indirectly on the future viability of the pools companies. Therefore, it is very important that they are given the fullest opportunity to compete effectively and fairly with the national lottery. Without a successful pools industry, sport and the arts would stand to lose one of their most important sources of funding.
The pools industry has sought, throughout the Bill's progress in another place, amendments to ensure that it be given the same freedoms to operate in the market-place as will be accorded to the national lottery. The reasons for that are clear. The pools and the lottery are directly equivalent, soft forms of gambling which will be competing for very similar, if not identical, markets. That point was acknowledged at Report stage in another place by my honourable friend the Home Office Minister, Mr. Peter Lloyd.
If the lottery is given additional market freedoms which are denied to the pools, such as the ability to

431
advertise itself on television and radio, it will be able to attract existing customers away from the pools. By all means, the lottery should be able to compete for existing pools customers—that is, after all, the essence of the free-market system—but only on the basis of fair and equal competition.
The Government have acknowledged the similarities between the pools and the lottery—not only that they are similar forms of soft gambling but also in the contributions that each makes to good causes, including tax. Indeed, the pools industry currently makes a greater contribution to good causes and tax than will the lottery: 47.5 per cent of the pools' turnover goes in tax and good causes—37.5 per cent in pool betting duty, and 10 per cent to the Foundation for Sport and the Arts and the Football Trust, to which my friend Lord Aberdare has already referred—while the lottery's contribution to good causes and in tax will be around 35 per cent (12 per cent tax and 23 per cent good causes).
It is fair to say that the Government have made or promised a number of changes to the Bill which go a long way towards ensuring fair competition between the pools and the lottery. They have, in particular, promised that the pools will be allowed to operate limited roll-overs similar to the national lottery. I was grateful for the confirmation from my noble friend Lord Ferrers in his opening speech. They have also promised that the pools will be able to sell their coupons in shops, as well as sponsor television and radio programmes unrelated to football results. I would be grateful if my noble friend who is to reply to the debate can confirm that amendments will be brought forward in this House to cover those points.
However, the Bill still allows a number of unfair competitive advantages for the lottery over the pools. It will, for example, be allowed to advertise itself on television and radio, while the pools are not. There will also be a significant differential between the two in the level of tax and contributions to good causes, with the pools being taxed at a much higher rate and thus denied the opportunity to offer a comparable percentage of turnover to prize winners.
If we are to be confident in the future of the pools industry, and consequently in the future of the foundation, it is vital that the Government take further steps to ensure free and equal competition with the lottery. Having come so far in recognising, and indeed accommodating, the similarities between the two, I find it difficult to understand the basis on which the Government can sustain the remaining inequalities in treatment. I therefore urge noble Lords to press the Government to recognise the need for these remaining changes to the competitive framework between pools and the lottery. Without free and equal competition, the pools industry, its millions of customers and its employees, along with all the beneficiaries of the Foundation for Sport and the Arts, stand to lose a great deal.
I welcome this Bill, not least because it notes the recognition on the Government's part that sport and the arts deserve higher spending priorities than they have previously enjoyed. But I do so on the
432
understanding that the Bill is amended in Committee in ways that ensure that competition between the pools and the lottery is on fair and equal terms.
2.7 p.m.
Lord Palumbo: My Lords, I rise to support the Bill and the establishment of the national lottery. I speak today as the chairman of the Arts Council of Great Britain. I should like to say, first, how grateful I am to my noble friend Lord St. John of Fawsley for his kind remarks about my chairmanship.
Noble Lords will know that the Arts Council of Great Britain has been nominated by government as one of the distributing bodies. The Arts Council of Great Britain emerged and evolved in a peculiarly pragmatic fashion during the long, dark days of the Second World War, when it offered solace and comfort of a spiritual nature, principally through music and the performing arts, to a population that was bent on survival. In the almost 50 years since that time it has built up a bank of expertise, art form by art form, that is second to none.
I do not wish to leave noble Lords with the impression that the Arts Council is infallible or that we never make a mistake. We do. However, I suggest that the Arts Council of Great Britain is on the whole respected and admired both at home and abroad. It is impartial, objective and independent, and is therefore the ideal vehicle for the distribution of lottery moneys.
There will be those who say that there should be a single distributing body to allocate money to the various classes of beneficiary under the national lottery and that that single distributing body should have charitable status and be tax exempt; and that, moreover, it could be serviced with a very small number of staff.
With the greatest respect, I beg to differ. If the commitment of the Government is to openness of operation, transparency of decision and accountability, in my view that body needs a staff adequate to fulfil those criteria. Your Lordships will readily appreciate that shoals of applications will come through the post every day. They will all have to be sifted, analysed and responded to, each one first having had applied to it the specialist knowledge of the art form involved. I do not wish to recommend the establishment of some bulbous bureaucratic machine, but a machine that is appropriate for the task, no more, no less.
I have been encouraged by the assurance of the Government that funds generated by the national lottery will supplement —be additional to and not a substitute for—existing public funding. In an ideal world such an assurance would have been better in binding legal form. But I wholly understand the political reality that makes that an impossibility. I should like to emphasise and endorse the point made by my noble friend Lord Charteris when he invited the Government to give the distributing bodies the maximum flexibility so that they are able to carry out their work as effectively and efficiently as possible and take decisions quickly and decisively, without the

433
imposition of a plethora of rules and regulations which would run counter to what they are trying to achieve.
Today there is a pressing need to embark upon a capital enterprise for the refurbishment of the cultural fabric of our nation, which has suffered from years —in some cases decades—of neglect and is now in an appalling state. In addition, we need to commission for the heritage new buildings that will fill the gaps in present provision as we approach the dawn of a new millennium. Your Lordships will be aware that the buildings and structures that help to constitute the heritage of this country are an unparalleled national resource.
I should like to think that an enterprise of this kind will take effect as soon as the lottery moneys come on stream. The sums of money involved will run into several billion pounds. They will be spread over a period of perhaps 25 or 30 years, subject to availability. Because of the controlled programme of construction, refurbishment, restoration and rebuilding, there will be no inflationary consequences. There will be the substantial creation of new jobs, which will be jobs for life, as joiners, plasterers and stonemasons are taught new skills.
At the end of the day there will be huge increases in productivity, interest and audiences, in box office receipts and, by way of return to the Exchequer, in receipts from value added tax and invisible earnings. Of those who come to this country as tourists, 40 per cent come for a specific cultural reason. I believe that if this project goes ahead the gross annual turnover of the arts industry, which is currently running at over £13 billion a year, will be increased, and so will invisible earnings, which are running in excess of £6 billion.
There is one other matter which is more difficult to quantify but no less important. By embarking upon a capital enterprise of this kind which has a sound economic basis, we shall also be embarking upon an act of celebration which will raise people's expectations, increase levels of confidence and generate optimism, hope and civic pride for the future. I can foresee not long hence a time when our craftsmen, the best in the world, having dealt with the problems at home, travel around the Continent in a thoroughly peripatetic fashion with complete freedom of movement, turning their attention to the restoration and revitalisation of the heritage of other countries. That is why I say that they will have jobs for life, and not simply by way of the single market but perhaps the Eastern bloc countries as well.
It has been said that a single volunteer is worth more than 10 pressed men and that a man of passion is worth more than 10 men of consensus. The Arts Council of Great Britain and the other distributing bodies have that passion and the skills to go with it. We now need the political will of the Government to make that vision a reality. I know that that political will will not be withheld. I commend the Bill to the House.
2.16 p.m.
Baroness Seear: My Lords, I must first apologise to your Lordships' House because I was not in my place when this debate started. I was chairing a meeting elsewhere and it went on for a little time. However, I am glad to have the opportunity to speak in this debate.
I am a reluctant supporter of the national lottery. I agree with the people who say that in this country we gamble a great deal too much already and do not need any further encouragement to do so. However, I suppose that there is something to be said for the view of the taxi-driver who drove me to the House. He remarked that life was a lottery anyway and that one more would not make much difference. He was probably quite right.
But much as I dislike the idea of further encouragement of gambling, I take the view that the Bill will pass through Parliament. If so—I am sure that other speakers have already mentioned this point but I missed the opportunity to hear them—it is important that the best possible use should be made of the money available. I can be absolutely certain that other noble Lords have said that they do not believe that the best possible use will be made of the money available if the Treasury gets its sticky fingers into it. Therefore my primary purpose is to join with all the other people who say that they want that money to be genuine additional money and that its distribution should be free from government control.
I expect that we are asking for something that would be regarded as quite impossible. Perhaps I may tell the House the reason that I feel so strongly about this matter. I understand that the money is to go to sports and the arts. But also some of it will go to charities and voluntary organisations. In this country we have reason to be very proud of our long tradition of independent voluntary organisations. But increasingly they are becoming dependent on being able to obtain money from government departments. If they can get their money only from government departments, they are tied and unable to do their quintessential job, which is to initiate and take lines which the Government do not like and to introduce new things which the Government have not thought of and might well wish not to see introduced.
If that function goes, the most important part of the voluntary tradition goes with it. Some of us are determined to defend that freedom and see the opportunity coming from the national lottery as a means of defending it. If voluntary organisations and charities are 80 per cent to 90 per cent dependent on money that they receive from government departments, it is nonsense to pretend that they are independent in the way that they operate. That cannot be so. They have to go back to those government departments to ask for funding and therefore they will not do or say things that government departments will not wish to hear. But doing and saying things that government departments do not wish to hear lies at the very heart of the voluntary movement in this country. If that disappears a very great deal that is of value will also disappear.

435
Therefore, having first been biased towards the idea of a national lottery, I then saw it as a chance to do something which I have long thought we needed in this country; that is, to have large foundations—not just innumerable small charities to which we all write letters over and over again —with specialist people distributing the money. We need people who understand about the real needs of the different sections and organisations that are applying to them. They need to bring forward their independent informed judgment as to the way in which the additional money can be distributed.
When I speak to other people about the matter, they say that I am crying to the moon; it is not possible. But I suspect that, were opinions to be polled, it would be found that there was wide support for it. How can it be done? I do not know in detail. The important point is: who will control it and who will appoint the people who decide on the distribution of the money?
If those people are appointed by the Government, even indirectly, there is a danger that they will have in mind what it is that the Government would like them to do. It is important that the people who are giving out the money should not in any way be answerable to the Government. They must be free to make the best decisions based on their well-informed judgment in regard to what is needed.
It may be possible to set up something like an all-party group in the House of Commons or, indeed, in both Houses, which could concern itself with the people being appointed, provided they were not members of the Government. That is one possibility as regards the way in which the problem might be approached. Surely there must be others. If there were real determination to have money distributed by people who are not in any way dependent on the Government, perhaps we could see a way of enabling the proud voluntary tradition in this country, with all its skills, courage and innovation, to continue. If we do not provide something of that kind, little by little that tradition will be undermined until the voluntary organisations are little more than a limb of government, in the same way as local authorities are being turned into little more than a limb of government.
I attach great importance to the successful accumulation of money through the national lottery, taking account of all the caveats put forward in regard to what it does to local lotteries and football pools —though I am not so worried about the pools. I believe that we may be able to give a new lease of life to the long established, proud tradition of voluntary organisations in this country. They need it.
2.23 p.m.
Lord Crathorne: My Lords, it is a great pleasure to welcome the Bill. I should like to talk specifically about the role of the National Heritage Memorial Fund. I am a trustee of that body. At this point I should mention that our chairman, the noble Lord, Lord Rothschild, was present earlier. He felt that it was inappropriate for him to make his maiden speech
436
when previous commitments meant that he could not stay until the end of the debate. However, when he was in the Chamber he sat next to his predecessor, the noble Lord, Lord Charteris of Amisfield, who made an excellent and helpful speech earlier today. It is surely the success of the noble Lord's leadership of the National Heritage Memorial Fund which prompted the Government to choose the fund to be one of the distributors.
We are delighted by the confidence shown in us by the Department of National Heritage. We look forward to the challenge. To give the House an idea of the scale of difference that it will make to us, at the moment we deal with around 250 cases each year and around one-third of those receive grants. As the noble Lord, Lord Palumbo, mentioned, the number of people who contact the distributing bodies will rise dramatically. That depends to some extent on the cut-off point for applications. It is not something that we have considered but will clearly have to do so carefully in the future.
The present NHMF staff is seven, with 10 trustees. That has meant that the fund has been able to act with great speed, and that has been of great benefit in saving parts of the heritage. As far as possible we want to try to maintain the speed and flexibility. The noble Lord, Lord Charteris, put it much more dramatically when he said that the NHMF reminded him of the wild oryx of the desert; "do not let it become a stalled, castrated ox". That is a wonderful phrase.
In the 1980 heritage Act there was no definition of "heritage". As the noble Lord, Lord Charteris, has often said, the heritage will define itself. That is what has happened during the fund's existence, with satisfactory and often inspired results. Another aspect of the 1980 Act is that the trustees were left to get on with things quite independently of government. I am sure that we all feel that to be important. That is why I raise the matter of the Secretary of State's power that he wishes to reserve for himself in Clause 24 of the Bill. The trustees are a little perplexed by that. Those powers seem greater than are traditionally required. If the DNH believes in the trustee system, which has certainly worked well up to now in the fund, cannot the trustees be trusted to do a good job in the future?
In that context I was interested and pleased to read what the Permanent Secretary at the DNH, Hayden Phillips, said in the Sunday Times. He stated:
"The bi-partisan tradition is that government should step back from decisions about which particular arts institutions to support. There is strength in the British tradition which says that government mustn't get into that kind of detail".
That is a statement that I am sure we all support.
The other point which has been discussed at length by the trustees is in relation to what we can spend the lottery money on. The noble Lord, Lord Charteris, and my noble friend Lord Montagu mentioned that point. Schedule 4 widens our powers, principally by enabling us to finance buildings which either house or advance public knowledge of heritage objects. The Government have made it clear that lottery money is additional money, and they will not reduce government spending because of the lottery money. That is a welcome commitment.

437
However, we are warned by the DNH that the beady eye of the Treasury may be upon us if we use lottery money to save objects of the same kind as we currently use NHMF money for. For example, if two costly paintings which should be saved for the nation appear for sale at the same moment and the NHMF exhausts its grant on the purchase of the first, it cannot buy the second with lottery money without running the risk of its grant being reduced.
We should be flexible and at times new NHMF lottery money should be allowed to support a heritage item which old fund money would have gone towards had the funds not been exhausted. That is of specific concern to us at this time when, as the noble Lord, Lord Charteris, discussed in some detail, we are suffering a reduction of grant from £12 million to £7.8 million in the year 1994–95.
Another warning we have had from the DNH is that we cannot combine lottery money with government money. Many items saved for the nation are funded from various sources. I am sure that we would all agree it is highly desirable that that should be so. For example, if we take the case of the Holbein "Lady with a Squirrel", the £10 million purchase price was made up by the National Gallery purchase grant and the National Heritage Memorial Fund as public money and then the NACF and the Getty Endowment Fund as basically private money. As we understand it, lottery money could not have been used to help because of the use of government money. This makes it impossible for lottery money to combine with museum money when it originates from the government. That cannot be the right way to go. I look forward to hearing a little more about this from my noble friend on the Front Bench at the end of the debate.
Having made these points, I should say that the National Heritage Memorial Fund is excited about the possibilities that the lottery money will open up in the funding of new projects. We want to ensure maximum flexibility so that we can use lottery money as widely as possible for the benefit of our heritage. We have started holding informal talks with other interested and distributing bodies about how we can all work well together. I can report that there is a great deal of enthusiasm and there is no doubt that co-operation among the various bodies will be good. Although the lottery can never be a panacea for all heritage and arts needs, we greatly welcome it.
2.31 p.m.
Lord Wyatt of Weeford: My Lords, we have heard a great deal about the wonderful things that will be done with the marvellous amount of money that will be collected. So far I have heard any possible proceeds there can be from a national lottery spent about three times over. We have to consider how much it is likely to raise and how we can arrange for it to raise the largest amount possible.
The experience all over the world is that no lottery works unless at least 50 per cent of the take from the lottery ticket buyers is returned in prizes. Any lottery which seeks to make a profit, on a large scale, below that 50 per cent return to the ticket buyers fails
438
because in the end people know what good value is and will not wear it. In France, for example, the take is 55 per cent; in Spain it is 55 per cent; in Germany it is 50 per cent Noble Lords may say: what does that matter to us, because we cannot bet into other people's lotteries? That is quite untrue. A case is now going through the European Court of Justice which is almost certain to establish the fact that it will become legal for anyone in Britain to bet in a European lottery. At the moment if you bet from here into a German lottery or a French lottery you are breaking the law. But that will not last within the European Community. It is absurd to think of setting up a lottery with prizes which are not commensurate with those available just across the water.
It is also ridiculous to talk so much of these super prizes —£1 million, £2 million or whatever it may be —that one or two people will win. That does not sustain anything like a pool or a lottery. I do not deny that you have to have the super prizes, but you have to have lots of little prizes as well; otherwise people will never meet anyone, or hardly ever meet anyone, who has won anything out of a lottery. It is like the premium bonds, which rather sank in esteem because no one ever met anyone who had won anything sizeable. You have to have lots of small prizes as well. Therefore, a great deal has to be arranged in that respect.
At the moment, as I understand it, the Government are thinking of taking 12 per cent out of the lottery. If my formula is agreed there will be another 50 per cent going for the prizes. Thirty-eight per cent will then be left to divide between the lottery promoters and the good causes that will be the recipients of the profits. I should like to see the Government taking only 10 per cent, which would leave a little more for the good causes. It is said that the lottery promoters will take 15 per cent in administration. I shall explain in a moment why I think that amount could be reduced slightly.
At this point I had better declare an interest. I am the chairman of the Horserace Totalisator Board and we intend to apply to have a licence to run or operate part of, or the whole of, a lottery, either by ourselves or in conjunction with others. The research which we and others have done shows that any interested consortium must spend £150 million initially in order to set up the lottery. It would expect to lose around £200 million in the first two years of operation. It would certainly lose a great deal more than that if the prize take were less than I have suggested. It would be hoped that any serious contenders would be able to reach break-even point by the end of the first two years with a take nationally of around £1.5 billion. But if we stick to the larger percentage take in prizes I believe that over the next three or four years we could achieve a much higher figure. It could rise to £2 billion, £3 billion or perhaps even to £4 billion. The promoters will expect to make a profit or begin to make a profit only in the third year.
One point to which the Government must pay attention is that the promoters will have invested a great deal of money in equipment, and so forth, in the operation and that therefore the renewal of a licence

439
should be almost assured for a successful operator. He should not have his licence taken away before seven years. No one will seriously spend all that money if he has to give the licence to someone else at the end of five years, or even seven years, even though he has been successful.
We know that the lottery will have a serious effect on the horse-race levy. When the French national lottery was introduced the PMU take dropped by about 10 per cent initially, which was quite a lot of money. It went on like that for three, four or five years and only now is the PMU —the tote monopolistic betting organisation on horses—catching up with the lottery take. It is about even now.
I believe that quite a lot of new money will go into the lottery. Some people have the idea that the amount of money that people are prepared to spend on gambling is finite. It is not. If there is a horse-race meeting with seven races instead of six, the seventh race will do just as well as the others because there will still be those people who are trying to maximise their winnings or having a last desperate bet to recoup their losses. The amount is not finite. The amount of money that most people might spend on a lottery would probably be £1 a week or a figure of that kind. That would be an enormous amount of money in total over the nation.
I should like to see lottery tickets being sold in betting shops. Those are natural places because it is a bet. It would also help in terms of the loss of horse-race betting turnover, or at least the betting turnover to the bookmakers. I shall come back to the levy board in a moment. It would help the bookmakers because they would have new money coming into modern betting shops, which are now mostly extremely attractive places. People would realise that these pokey holes that they have heard about, in Dickens and so forth—with gin and God knows what—are now highly respectable except that the Government, in their quaint adherence to the Beatrice Webb doctrine, and so forth, still think that it is wicked for working class people to go to betting shops. You are not allowed to say on the outside what the wares are on the inside. You are not even allowed to look through the window. You cannot say, "We are betting so-and-so on the Grand National next week"; you would be arrested. You cannot even advertise the name and address or the telephone number of the premises from which you are operating. One or two changes like that would have to be made in any case to attract people to come to betting shops. Once they come in to buy their lottery tickets they will say, "Oh, this is not so bad". I have noticed very much in my rounds of our betting shops—and other people's by the way—that more and more women are now going into betting shops because they have become civilised places. You can have coffee and there are comfortable seats. They are not just tough beery places with a lot of people swearing at each other.
Although I know that it is the hope of the Jockey Club and other racing interests, it is unlikely that they will get any further tax advantage from the Government at the moment. On the whole, I believe
440
that racing must admit that under the last Chancellor they have had a very good deal out of the authorities. Even though the previous Home Secretary—now the new Chancellor, appointed today—is very sympathetic to racing, I cannot see him being able to cut the betting duties.
However, to gain some compensation I believe that the energies of racing should be directed towards supporting the application of the Horserace Totalisator Board to run part or the whole of a lottery. As should be well known, all our profits go back into racing. Therefore, that could be some compensation for the initial drop which there must be in the horse-racing levy.
We regard ourselves as being very well suited to running a lottery. We have a machine called the Tote Fast Terminal. It was designed by the Tote and made in Britain. It now has half of its development costs paid for, as well as by ourselves, by Bass, which owns Coral, in a new joint firm called Tote Direct. All these machines are now going into Coral and Tote shops. They will be completely installed by August.
The latest version is linked by secure radio, which is extraordinarily important. One has to avoid fraud which is very open to lottery ticket selling and assembly. These secure radio links are provided by another British firm called Paknet. The machine is used for transmitting from all Coral and Tote betting shops, of which there are nearly 900, through our great computer complex at Wigan, instantly into the racecourse pools.
Soon we expect thousands of other bookmakers to join our service, which they are already greatly interested in doing. In that terminal we have the software to take all the popular lotteries in the world. If later additions are required in years to come, that can easily be carried out. The response time for the acceptance and verification of a bet by our terminal for a lottery ticket is less than a second. That is better than anyone else has achieved anywhere in the world. As the betting slip or lottery entry goes into one side of the machine, up comes the detailed receipt for the customer. He has a valid ticket on which to apply for his winnings.
The communication costs, with the aid of this British firm, Paknet, and all the other British manufacturers of this device, are less than a penny per transaction. That is far below anything achieved anywhere else in the world, even in America. We have an all-British designed and made terminal. It costs less than one-third of any comparable machine in the world and it can do the job faster and more efficiently.
I hope that in this particular enterprise the Government are going to back Britain and British made goods rather than, as they often do, go for something more expensive and less efficient from abroad. This simple, small terminal is easily operated by anyone. Even I can understand it, and I am far from being technically minded.
The machine is ideal for putting into the 19,000 sub-post offices and 1,000 main post offices. I am authorised by the Post Office to say that it will be very happy to use our machine in all its outlets if we succeed in our application to be a lottery operator,

441
either alone or with others. I have heard that the Government have been in some trouble lately—they have been accused of getting rid of sub-post offices and doing desperate things to them to drive them out of business. This is one way in which one can keep every sub-post office in the country in business. On the nights before a big draw is made, I am sure that all sub-post masters and post mistresses will be happy to keep their offices open until 10 o'clock at night, or even later, as they are legally allowed to do. The use of sub-post offices is also ideal because everyone in the country can get to one. The footprint covers the entire nation. There may be difficulties with other forms of retail outlet. I am not saying that we should not have other forms of retail outlet, but as we have something ready made and which has long been trusted—namely, the sub-post offices and post offices—they should be able to make a little more money for themselves through having that trade. I do not see why it is necessary to think of vast and expensive retailing chains doing this work when one has all the machinery that one needs. However, I would not object to that being added if it is thought necessary, or having special arrangements made for big conurbations.
The use of our machine and the complete communications network, would significantly reduce the 15 per cent administration cost which the Government are allowing for in their plan. I agree with the noble Lord, Lord Donoughue, that it is necessary to do that. The return to winning ticket holders or to the distributors of lottery profits, or both, should be able to be increased handsomely.
Finally, perhaps I may conclude my advertising address. We all know that there is nothing wrong with truthful advertising; it is the untruthful advertising which we dislike. I hope that those interested in supporting British designed and made equipment, and in helping racing with the obvious difficulties which face them following the introduction of the lottery, will support our application. That would be the best help that racing could get. It would also be the best and cheapest way for the Government to run the lottery and to get the most money from it.
2.48 p.m.
Earl De La Warr: My Lords, I should like to make a provisional apology to your Lordships because I have an unavoidable commitment at a quarter-to six. Therefore, I apologise if I have to leave the Chamber at that time. As an irregular speaker in this House, I realise that that is most discourteous, but I hope that noble Lords will forgive me.
We have already heard from my noble friend Lord Aberdare of the tangible dangers of the introduction of a national lottery to football. I should like to speak of similar tangible dangers to another sport. My subject is one which I suspect that the noble Lord, Lord Donoughue, will approve. Having frequently sighted the noble Lord in the vicinity of Newmarket, Ascot, Epsom and other such places, I suspect that your Lordships will guess what my subject may be. I apologise if I repeat some of the points which the noble Lord, Lord Wyatt, has just made. I hope to elaborate on them.
442
I declare a personal interest in this subject as the part-owner of a very slow horse and as a steward at two race courses. In wishing to protect the best interests of the racing industry I am naturally apprehensive of the effect which a national lottery may have on the level of betting turnover. Nobody can be sure what that effect may be. Indeed the noble Lord, Lord Charteris, said that this country is comprised of inveterate gamblers. He may be right and it is therefore possible that the average British punter may continue to spend the same amount on betting on horse-racing as he has always done. However, surely the potential turnover of the lottery can only emanate from two sources—from either savings or disposable income. I suggest that the lottery will not be viewed as a viable alternative to savings and therefore its turnover must come from disposable income. In a period when disposable incomes have generally been falling, it would seem likely that the average betting man will have to find his lottery stake from a proportion of what he might otherwise have spent on betting on horse-racing.
It is undoubtedly dangerous to make forecasts based on what has happened in other countries after the introduction of a national lottery. The Government have, I believe, estimated a first-year lottery turnover of £1.5 billion—or £27 per capita. However, an independent forecasting body has suggested that £4.5 billion may be nearer the mark, which equates to £79 per capita. Indeed, that happens to be close to the per capita spend in Ireland of £77. It is also true to say that the turnover in Denmark's recently launched lottery was five times underestimated. The most recent study in America concluded that lotteries reduce betting turnover by almost 14 per cent The Jockey Club and the Horseracing Advisory Council have estimated a 15 per cent decline in betting turnover in this country as a result of the introduction of the lottery. That consequently means a £9 million decline in the levy which is paid to racing. The forecast made by BOLA, which represents the bookmaking industry, which was given to us in a recent presentation to the all-party racing committee, estimates that next year there will be a normal turnover decline of almost £600 million before taking the lottery into account. It also suggests that as a result of the lottery there will be a £540 million reduction in turnover. Adding to that, the (I hope) beneficial effect of the opening of betting shops in the evening, the forecast is a net decrease in betting turnover of almost £850 million. If that were to happen, it would equate to an £18.5 million decrease in the levy paid to racing. As your Lordships know, the racing industry relies to a great extent on the levy.
It goes without saying that there must be consequent risks to the numbers employed in the racing industry. There are currently 900 trainers in this country, employing 6,000 stable employees—and that is before one takes into account those employed in the ancillary services such as hauliers, vets, farriers, forage merchants, saddlers, builders, stable suppliers and many others. Therefore, if the estimates of lottery turnover to which I have referred prove to be correct and the possible reduction in betting turnover is as

443
forecast—although obviously at this stage what will happen is anybody's guess—the racing industry will need reimbursement for the projected loss of income in order to ensure the viability of what some of us believe to be one of Britain's most traditional sports.
In order that racing can compete equally with the national lottery, I would urge your Lordships to press the Government to consider the following points: that there should be either a direct payment by the national lottery to racing or —if the Government do not consider racing to be a suitable cause—a further reduction in betting duty together with a corresponding adjustment to the levy. Furthermore, consideration should be given to a relaxation of the restrictions which the bookmaking industry suggests have severely hampered its ability to compete effectively in the United Kingdom leisure market. In particular, consideration should be given to a relaxation of restrictions on advertising and on shop design and to the possibility of allowing bookmakers to offer additional services in their shops. In essence, there need to be further changes in what seems to me to be—I know that the right reverend Prelate the Bishop of St. Albans would not agree—the somewhat archaic provisions of the Betting, Gaming and Lotteries Act. Consideration should also be given to the abolition of the tax-on-tax effect which, if my mathematics is correct, makes betting duty work out at 8.5 per cent as opposed to 7.75 per cent.
In an ideal world, therefore, I would suggest that the framework for any potential reimbursement to racing should be determined before or at the time of the launch of the lottery in order that racing has the ability to carry out longer-term financial planning. In the context, a further cut in betting duty would be most welcome before the launch of the lottery. Obviously, both the bookmaking industry and the racing authorities are grateful to the Government for the most recent cut in betting duty and for the relaxation of the laws governing the evening opening of betting offices. I was personally much encouraged by the appearance of the Home Secretary—I am not sure whether it was the present or a previous Home Secretary—at a recent meeting of the all-party racing committee at which he gave every impression of being sympathetic to racing's cause. I would urge that the Government give serious consideration to the proposals that I have outlined.
2.58 p.m.
Lord Allen of Abbeydale: My Lords, I am not to be numbered among those who welcome the Bill and the idea of a national state-run lottery. I recognise that gambling has an appeal. Indeed, I spent some rather active years as chairman of the Gaming Board trying to regulate gambling within the area covered by the board, but on the clear doctrine that facilities could be made available to meet an unstimulated demand. We may be the only country in Europe without a national lottery, but somehow or other we manage to spend more on gambling than any other European country and there is certainly very wide scope for gambling in this country.
444
I view with disquiet the prospect of a large lottery with enormous prizes, and in particular an Act of Parliament which puts a specific statutory duty on the Secretary of State to do his best, within the bounds of due propriety,
"to secure that the … proceeds of the … Lottery are as great as possible".
That is to be found in Clause 4 of the Bill.
It seems to me to be a sad day when we are considering a Bill which imposes an obligation on the Government to add, I very much fear, to the gambling culture of this country, to the dream of easy wealth and to the promotion of a chance ideology in opposition to the work ethic to which the noble Lord, Lord Donoughue, referred. But all that is a personal view and, having said my piece, I shall not pursue that point further.
However, there are some comments that I should like to make on the content of the Bill. I pass lightly over my distaste for having the word "etc." in the title of an Act of Parliament, although I know that I am not entirely alone in finding that particularly awful. However, for interest I should like to ask a question about the Millennium Fund. The Bill keeps referring to the year 2000 and the beginning of the third millennium. I wonder what that means. Does it mean that, although people are obviously going to get very excited when the year 2000 arrives, the Government take the view that that year is the year of the second millennium and that the year 2001 is the first year of the third millennium? I believe that that must be so. There was no year nought, so it seems to me that we must reach 100 or 1,000 before we complete a century or a millenium. I know that midnight services to welcome the arrival of the 20th century were held on the last day of 1900 and not 1899. Even The Times, which since then seems to have been unable to count, marked the arrival of the new century by a leader on 1st January 1901. I am rather against the Millennium Fund, but if we are to have one it would be rather nice to know what it is that we are celebrating.
The important topic that I wish to discuss relates to the impact of the Bill on charities. I recognise that here I am echoing some of the comments which have been made earlier in the debate. I should perhaps say also that I speak as vice-president of the NCVO and as president of MENCAP. There has been a good deal of discussion about the arithmetic, and it seems to me extraordinary that we should have reached this stage of the Bill without anyone being able to tell us how the sums work out.
On any estimate that one can make it looks as though the share of the proceeds which will go to charities, as to the others, will work out at not much more than 5 per cent That is markedly less than was envisaged in the original White Paper. I have heard it said on behalf of the Government that that is 5 per cent that the charities would not otherwise receive. But while it is obviously impossible to work out accurate figures at this stage, there is a distinct possibility that charity income, which is already less healthy than one would wish, could be reduced to a point at which the cut from the lottery, if kept at 5 per cent, would not make up the difference. Overall, the

445
results of the lottery could be that charities would be worse off. At best, it is difficult to see that for them there is very much in it. And since, as in Ireland, the larger charities devoting considerable resources to well-organised appeals may be able to fend for themselves, if there is a loss it is likely to fall in the main on the smaller charities.
I say that charity income may fall for the following reasons. The Government have promised that the lottery will not be heavily publicised as a scheme to benefit good causes. However, they assume, quite properly, that the good causes element will be a factor which will encourage the punter to buy tickets. Research which has been carried out —more up to date than that carried out for the Rothschild Royal Commission—confirms that some people will shy away from responding to an appeal by a local charity or taking part in a local charity's lottery on the grounds that they have already made their contribution to good causes by buying tickets in a national lottery. Even a 4 per cent diversion of expenditure —and that is putting it at the lower end of probability —would lose the charities some £120 million per year. A 7 per cent diversion would take the loss to well over £200 million.
Although we have heard a good deal about the Treasury assurances that the lottery money will be regarded as additional (I hope that Mr. Portillo's full concurrence has been obtained), that has not been written on the face of the Bill. I agree with the noble Lord, Lord Holme of Cheltenham, that it may be difficult to do that. But if we must depend on assurances, I wonder how far we can go in resting on those assurances, not only during the lifetime of this Government but during the lifetime of the governments who are to follow.
Worse than that, I simply do not see how the Government can prevent local authorities, which are under financial pressures, cutting down on the discretionary grants which they presently give to the voluntary sector. Those sums amount to about £600 million and some of that money must be at risk. I understand that the Government have undertaken that the impact on charity income will be watched and are thinking about how that might best be carried out. I hope that if our fears turn out to be justified, a remedy will be quickly found. It is hardly for Members of this House to suggest changes in taxation, although I have noticed that previous speakers have not been so restrained. But I should perhaps put on record that relief from some of the VAT charges has been put forward as one suggestion.
A considerable number of points of comparative detail must be considered at later stages. I content myself with mentioning only two. First—and this point has already been taken—there is still ground for unease about the drafting of the clauses, which on the face of them give extensive power to the Secretary of State to intervene in the distribution of funds. It would be most undesirable for political control of funds to become possible. In any event, I do not envy the new Charity Fund having to decide between applicants for help, with or without ministerial intervention. I say en passant that I hope that it will be left with sufficient
446
discretion to help occasionally the offbeat experimental charities and not just be limited to the traditional ones.
Secondly, although the Government rather brush aside the possibility of addiction, wrongly, in my view, with prizes of the kind which are envisaged, it has been recognised that for some reason which I do not understand those instant-win scratch cards seem to encourage addictive play. I was slightly alarmed during the admirable opening speech of the noble Earl, Lord Ferrers, to hear him speak on the assumption that they would form part of the national lottery. I should rather like to see the operators of the national lottery being banned from using those games, in spite of the doubts expressed by the noble Lord, Lord Holme of Cheltenham, and unpopular though that might be with the operators.
In the same context I remain uneasy about the Government's decision to limit rollover to three games, since even less could mean maximum prizes of between £4 million and £8 million. The NCVO believes that those prize levels are excessive and that it will be best not to allow an accumulation of prize money.
I cannot end by saying that I welcome the Bill, but I can say that I too hope that it will be less objectionable by the time it leaves this House. I am afraid that I cannot altogether dismiss from my mind the botch-up which was made when casinos were first made legitimate in 1960—I fear by a Conservative Government. It was done in such a way that it was not long before there were signs of the Mafia moving in —until we were able to correct the position in 1968. A great deal of money is involved and it is important that the Bill should do all that it can to see that the enterprise is conducted fairly and equitably, under adequate control and reducing as far as possible the risks involved in excessive play.
3.11 p.m.
Lord Cavendish of Furness: My Lords, in rising to speak in this Second Reading debate, unlike the previous speaker, the distinguished noble Lord, Lord Allen of Abbeydale, I wish to express my unequivocal support for the principles behind the Bill. I should like to congratulate the Government on their vision in bringing it forward. I should like to congratulate in particular my noble friend Lord Ferrers on the simple, eloquent and, if I may say so, debonair manner in which he introduced it.
For a nation which aspires to underwrite so comprehensively the health, welfare, education and security of its citizens there is a dilemma inevitably when judgments have to be made in respect of what I might call the second-line demands, such as the arts, sport and our national heritage. There is quite literally no limit to the calls that are made on front-line services backed by a tremendous volume of political pressure. Those who ask how a government can contemplate spending public money on, say, saving a work of art for the nation in preference to further funding for the health service—even if some may think that they are misguided—are sincere.

447
Against that background of such perceptions it is hardly surprising that the arts and sport enjoy such a low priority and that so much of our heritage is neglected for want of resources. The Bill not only goes a very long way to addressing that dilemma, but it does so in style and promises to provide for millions of people some much needed enjoyment and fun.
But having rediscovered a touch of style, I hope that the Government will be more stylish still and allow your Lordships' House to transform a good Bill into an excellent Bill and to make it an enduring instrument of enhancement to our national life. For the truth of the matter is that the Bill remains flawed, perhaps seriously so, and much work remains to be done on it.
I wish to confine my remarks to those aspects of the measure that affect heritage. I must declare an interest as a commissioner of English Heritage. I need hardly say that English Heritage welcomes the Bill. Before turning to essentially heritage matters I wish to touch briefly on one aspect which affects equally all potential beneficiaries as well as the lottery ticket buyers; it is the question of taxation. If I understand the position correctly, the Chancellor of the Exchequer intends to levy tax on lottery tickets at a rate of 12 per cent People who make a habit of calculating these things tell me that a rate of 7 per cent would achieve fiscal neutrality. I should be grateful to hear from my noble friend Lord Astor whether neutrality is intended and, if so, how a rate of 12 per cent is justified.
The scale of the work of English Heritage and the extent of its responsibilities is known to many of your Lordships. It manages some 400 historic properties and monuments. It operates grant systems for half a million listed buildings, for repairs to churches and cathedrals and for buildings in the 7,500 conservation areas in England. It is the nation's largest source of funding for archaeology and it does much else besides.
The detailed policy framework for all this is agreed with Ministers. The objectives set for English Heritage and the National Heritage Memorial Fund must be regarded from the viewpoint of Ministers as the most effective means of giving strategic direction to heritage policy. This year's grant in aid to English Heritage for all the work is £100 million. We are grateful for that, although it is nowhere near enough to cover the cost of rescuing and maintaining the long list of priority projects which are in need of attention. That is why the designation of the national heritage as a beneficiary from the lottery is both right and necessary.
However, if English Heritage believes that those areas will benefit from the introduction of the lottery it may just be disappointed. Noble Lords who thought that the lottery would allow key, but current under-funded projects, to be given a chance for successful completion may also be in for a surprise. They may not have considered the principle of additionality. Ministers have made some reassuring comments about additionality and it is difficult not to be convinced by their sincerity in making additionality a genuine issue. But it will mean that grant in aid and lottery projects will have to be separated. If English Heritage is presented with a project to which it could
448
give some money but not enough to allow the work to proceed, the lottery would not be able to make a contribution. There are projects within English Heritage's policy remit which it could not hope to fund. It is arguable that even if no public money can be found for them the very fact that they fall within its programme could debar it from applying to the lottery. That point was well made by the noble Lord, Lord Charteris of Amisfield, and by my noble friend Lord Crathorne.
It is not difficult to see the many anomalies which could arise as a result of this byzantine rule. The projects regarded by Ministers as the most important and the hardest for sources other than government to fund—those within the programmes of English Heritage and NHMF—could find themselves no better off than they are now. The lottery will have to be reserved for those applicants next down the list. Of course, those applicants may be also be well deserving, but a distribution system which disallows any co-ordination with public policy objectives cannot be the best or the most cost-effective way of using the valuable asset which this lottery Bill will create. Furthermore, if the Treasury believes that heritage projects funded by the lottery are not truly "additional" to—separate from—those funded by grant in aid, it will cut the English Heritage/NHMF grant accordingly. The message to us is simple; if it is within our programme, the lottery cannot touch it regardless of whether we have the money for it or not.
But there is more. Ministers have stated that lottery distributions should favour capital projects. This is understandable in order that the public may see tangible evidence of the value of its contributions. However, far too many semantic distinctions are already beginning to hedge about the ability of NHMF to make good use of the £70 million-plus of new money likely to be generated for the heritage sector. We were told that the restoration funding would be acceptable, but that conservation funding would not. NHMF could give money to a library but possibly not to an archive. During the course of the debate I have heard that questioned. It would be helpful to have some reassurances on the matter.
The National Heritage Memorial Fund is a well run body. Presumably that is why it has been chosen as a distributor of lottery money. For heaven's sake, let us trust to its good judgment and to its public accountability under the Bill. That point was strongly made by my noble friend Lord Montagu. The same should apply, of course, to other distributor bodies.
Finally, I should like to point out the dangers implicit in allowing Clause 24 to stand part of the Bill in its present form. It is most welcome that Ministers amended the Bill in another place to require them to consult affected parties before directing them as to the matters they must take into account in making distributions. However, noble Lords may have noticed that Ministers are not required to provide affected bodies with detailed reasons for the making either of a direction under Clause 24 or of an order which may limit or eliminate the role of a particular distributor. That is cunning: it means that the body

449
cannot challenge the Secretary of State's decision. But 1 wonder whether that is fair. I ask Ministers to look again at that issue.
All that may sound like a catalogue of dissatisfaction. Yes, I believe that there are some concerns. However, they do not outweigh the Government's great achievement in promoting a measure which could provide the heritage sector with its greatest yet force for renewal. I have no reservations that cannot, I believe, be quite easily overcome. I wish the Bill safe passage through your Lordships' House.
3.20 p.m.
Lord Howell: My Lords, I have no hesitation in supporting the Bill in principle. I have done so for a long time, having been a former member of the lottery promotion company. However, I do so now with some increasing concern as to the detail which in my view causes me to believe that the Government are about to kill the golden goose that they wish to provide. No doubt we shall be able to look in greater detail at some of the matters involved in Committee; but not, I gather, at the 12 per cent tax to which I shall return later.
I should like, first, to mention my noble friend Lord Houghton who made such an entertaining and delightful speech. He asked who was behind the Bill. The answer is that I am, together with my colleagues who form the lottery promotion company, including the noble Lord, Lord Birkett, who will speak later. My noble friend said that the Labour Party would never dream of introducing such a Bill. However, I must remind him that the Labour Party did in fact introduce such a Bill under the Government of which he was a member. It happened after consultation with the noble Lord, Lord Jenkins of Hillhead, who was then Chancellor of the Exchequer. We announced in a Budget, and put in a Finance Bill, a proposal to establish a national lottery which I assume my noble friend would have supported at that time. The difficulty that we had was that we put forward the noble Lord, Lord Lever, to defend it in the other place. He made it sound like a Treasury collection exercise—and that is the warning I give to the Government—so all the Members voted against it, supported by large numbers of football and cricket supporters' clubs who managed to whip up a tremendous lobby. I think that that was most unfounded.
I was a Minister for Sport for 11 years. The reason I believe in a national lottery above everything else, along with my colleagues and the noble Lord, Lord St. John of Fawsley, who spoke earlier, is that I do not know a Minister for Sport or a Minister for the Arts since such posts were established by my noble friend Lord Wilson (when he was Prime Minister) who has ever been able to get anywhere near financing the needs of the country which he or she has decided have to be met. That is particularly the case at present.
I am sure that we shall return again and again to discuss the type of things that can be financed by millennium funds or by such other means. I believe that the greatest overriding need in the country at
450
present is to put money into community sports and arts activities in the local communities, especially inner cities and also in some of our village communities. So many of the problems in our society are created by boredom, associated with increased unemployment which many of us cannot see being arrested for some time. It seems to me that we have an overwhelming duty to do what we can to promote community activity.
I should like to make a further point. I understand that the Minister for National Heritage has said that the Government would like most of the money to be spent on capital projects. I hope that the Government will think again about that decision. It is not the building of capital projects which is desperately needed at present; it is the funding to keep them going. Wherever one looks, it is the revenue consequences that have to be considered. As a Minister, I was brought up by my officials to believe that every capital project has a revenue consequence. We must consider carefully what are the revenue consequences of the facilities that we are providing.
I should also like to mention the four noble Lords who have made speeches of special pleading in the debate. I happen to agree with the causes about which they are all making special pleadings, including horse-racing and putting money into the Football Trust. However, they must be careful how far they go down that road, otherwise they will alienate many people. Quite apart from the need to keep horse-racing and football in a healthy state, there is a mass of other sporting and artistic activities that do not enjoy those special levies and opportunities. I hope that noble Lords will think most carefully about that aspect. The merit of the Bill, and of the proposed lottery, is that it will help other sports and other activities to have some share of the available funds.
I turn now to my principal concerns. First, there is the 12 per cent tax. Like the noble Lord, Lord Wyatt of Weeford, I very much welcome the appointment today of Mr. Kenneth Clarke as Chancellor of the Exchequer. He has an impressive mind, although he sometimes does things of which I do not approve. However, he looks at everything afresh and anew. In my experience, and I know him quite well, he approaches matters from a fundamental point of view. Therefore, as I know he supports the lottery, I hope that he will start by looking at the ridiculous suggestion that a 12 per cent tax should be paid on it. I shall not go into detail to analyse what the take will be because other speakers have done so. I agree that the prizes must be at least 50 per cent But, if we start with 50 per cent, and then look at the capital cost of setting it up and the administrative cost of paying for the agents and everything else—and this is my great concern—I believe that the Government will be in grave danger of undermining their own purpose. I certainly do not want to see them do so in this area of activity.
I turn now to the question of the competition with the pools. I listened to the noble Lord, Lord Aberdare, with great interest; indeed, I think that he will concede that when I was a Minister we set up the Football Trust, together with the Football League's Alan

451
Hardacre and, of course, the companies that he mentioned. It has been a godsend to football. In recent years I have been concerned that the football pools should not be treated unfairly. However my worry has turned around now. The Government have made concessions to the football pools. For some of the reasons that I have stated, I am now very anxious that the national lottery might be treated unfairly. I am especially concerned over the question of roll-over prizes which could take them to something in the region of £3 million, £4 million or £5 million. In introducing the Bill, the Minister said:
"The roll-over will be provided so that the pools can match the lottery".
I took a note of what the noble Earl said and I believe that I have got it right. That statement astonished me. It seems to me that with £3 million, £4 million or £5 million prizes on a roll-over, the lottery would have no hope at all of competing. I ask Ministers to look again at that point. In my view, the pools are a national lottery but they are restricted in their purpose to specific objectives. We must be sure that they can compete on fair terms with each other. That includes the question of advertising, especially on television, and also the question of the large prizes. I agreed with the point made by the noble Lord, Lord Wyatt, that we have to have a sufficiently wide base to this operation to make it worthwhile for people to opt in.
I now wish to say a few words about the importance of keeping the administrative costs under control. I believe that that is absolutely essential. Notwithstanding the typically modest speech of the noble Lord, Lord Wyatt, I have some sympathy with his view that the Tote has much to commend it in this respect. I have tried to find out the administrative deductions for various forms of gambling to try to ascertain what might be the best course to adopt for the lottery. I have discovered that the administrative deduction from the Tote is 13.2 per cent I understand that that administrative deduction is lower than for almost any other form of gambling.
As the noble Lord, Lord Wyatt, said, the Tote already has much capital equipment in place. I do not wish to press the case of the Tote on the Home Office —I am sure that will be rationally assessed when the time comes to do so—but the extent of its deductions in administrative costs and the costs involved in its large capital projects should be considered.
We need to consider the case for allowing existing agencies to spend the money raised through the national lottery. Other noble Lords today have said that the Arts Council, the Sports Council and the Department of National Heritage should be the agencies who decide how the money is spent. They must be unfettered in that duty. The Arts Council and the Sports Council have Royal Charters. I understand that the purpose of Royal Charters is to protect the integrity of those bodies against the Executive. In recent days I have often thought about the fact that the Government appoint all the members of those bodies. That seems to me to militate against the purpose of Royal Charters. I hope that the Government will agree that, as far as is practicable,
452
those agencies should propose schemes for the Millennium Fund to enable the greatest degree of objectivity to be realised.
I wish to refer to Clause 24 which I have no doubt we shall spend much time on at a later date. I understand that the Government wish to give directions in this matter. I am not naÏve enough to consider that the Government will not wish to give general directions. Nevertheless I believe that the Government have a duty to give reasons for any directions that they give, particularly if the Government wish to restrict the help that is available to some applicants to the fund.
I end as I began by saying that in my judgment there is every reason to support this measure. The right reverend Prelate the Bishop of St. Albans rightly referred to ethical matters which may arise in this issue. I suppose that ethical matters may arise, but I can only inform the right reverend Prelate that the Anglican Church I attend depends heavily on the lottery that is run within it. Therefore I am a little doubtful about any ethical implications in this matter.
I believe that it would be helpful to consider the effect of some of the large-scale stockbroking gambling which goes on in this country and the way in which industry and commerce have in many ways fallen into disrepute in some areas. I believe there are much greater ethical problems in that area as that kind of gambling affects the livelihoods of many people in this country. Basically I believe that having a flutter on the national lottery will be a harmless pastime. It will be enjoyed by millions of people. If we get the financing of it right, it will be of enormous benefit to causes and bodies which most of us support.
3.35 p.m.
The Marquess of Zetland: My Lords, I, too, wish to associate myself with noble Lords on all sides of this House who have supported, or will support, this Bill today. For far too long, in my view, consumers in this country have been denied the opportunity of having what can only be described as a modest flutter in their normal High Street environment. For far too long also such good causes as the arts, sport, heritage and others, none of which are exactly flush with funds, have been denied the substantial financial benefits which can be made available through the introduction of a national lottery. I am 100 per cent behind this Bill.
As is so often the case in this country, we seem finally to be catching up with what has been happening so successfully for decades in the rest of the world. But that in itself gives us a unique opportunity to benefit from the experiences of others, and I hope that we will not make the disastrous mistake which some countries have made of allowing our national lottery in any way to replace government funding or taxation. In that respect I agree entirely with the remarks of the noble Lords, Lord Donoughue and Lord Holme of Cheltenham, and many other noble Lords.
The revenue and distribution functions of our national lottery must surely be placed firmly under the control of a truly independent body, or bodies, and

453
must be kept that way. I hope that this principle can be firmly adhered to because, if it is not, our national lottery may not be the great success that I know most of us hope and believe it will be.
In this context I rather like Sir Adam Ridley's advice, given in his 1991 Arnold Goodman lecture. He said:
"It is impossible to see why any rational Government should tax its own public good—creating activities to generate resources needed to sustain those very activities. It is scarcely more sensible than asking anaemic people to give blood for their own transfusions. In fact the very idea is absurd".
There will, of course, be casualties—there always are—and the one which most particularly concerns me relates to the annual betting levy on which horse-racing depends so heavily for its existence. I speak here as a steward of the Jockey Club and also as one of the four Jockey Club nominees to the newly-formed British Horse Racing Board. The noble Lord, Lord Donoughue, and others have already touched briefly on this subject, but it is worth repeating that British racing continues to operate under a severe lack of funding. This is not the whingeing of wealthy men—this is a genuine desire that the most noble and glorious of British sports should remain in the international front lane and should not be allowed to slide into second best, as it most surely will do over the next decade unless the state of its finances can be substantially improved.
To their eternal credit, this Government have come to appreciate the problem and, as we have already heard, have been most supportive over the past couple of years, notably in the 1992 Budget when they agreed to knock a quarter of 1 per cent off betting duty and to return the resulting sum of approximately El 1 million back to racing. That was extremely helpful and brought racing's total revenue from the off-course betting market up to some £50 million a year, or about half of what I believe is needed if the industry is to remain viable and able to compete effectively with the rest of the world.
I remind your Lordships that that figure of £50 million a year still contrasts most unfavourably with the bookmaker's take of approaching £200 million a year and still less with the Government's take in the form of betting tax of £450 million a year.
Estimates as to how much horse-race betting turnover will be lost to the lottery vary from nothing to 15 per cent Clearly, as has already been said today, there is only so much disposable income to go round. The racing industry is worried that the lottery may take as much as 15 per cent of betting turnover. I believe that that estimate is a little high and that perhaps the figure may be 10 per cent However, let us suppose that the figure is 10 per cent That would result in a direct loss to racing of more than £5 million a year. Racing simply cannot afford such a loss at this time. After all the ground that has been made up recently, and with the direct help of Government, that would be nothing less than a tragedy.
At this stage we can only guess how matters will turn out. However, it is not unreasonable to ask at the very least that the Government should commit themselves here and now to reviewing the rate of
454
betting duty on a regular basis in the light of the actual effects of the national lottery and agree to reduce the rate of duty to enable any revenue lost to racing to be offset.
Finally, it seems likely that the Government will draw a strict dividing line in the public domain between the selling of lottery tickets, on the one hand, and the very strict regulations which relate to all other forms of gambling on the other. That is all very fine and even understandable during the introductory period of the lottery. The lottery must be launched with maximum effect; no doubt with a fanfare of trumpets and with the help of many millions of pounds of promotional activity. But there will be no level playing field and I very much hope that, when all the excitement is over and the national lottery is firmly established as a wild success with the public, the Government will turn their attention to other forms of gambling; notably, perhaps, the Tote which is the only national pool betting system we have in this country and on which I believe the very survival of racing in its present form may depend.
We have heard a great deal about the Tote this afternoon from its chairman, the noble Lord, Lord Wyatt of Weeford. In fact, he treated us to a 10 minute commercial on the Tote. Nevertheless, and whether or not the Tote obtains the contract to operate the lottery, I hope that the Government will allow it to compete on an equal basis and in the same sort of high street outlets as the lottery. To my mind, anything else would make a mockery of British justice and of fair play.
3.43 p.m.
Lord Gibson: My Lords, I greatly respect the convictions of those few noble Lords who have spoken against the concept of a national lottery this afternoon. For myself I support it unequivocally, for pragmatic reasons, believing that the benefit which it will bring to the good causes it is intended to benefit will far outweigh any damage it may do, which I do not envisage. I do not foresee any disadvantages.
I played a very small part in bringing about the lottery because I was a director of the Lottery Promotion Company, together with the noble Lord, Lord Howell, and the noble Lord, Lord Birkett. I believe that the company has completed its main mission, and I have left the company. I am not entirely at one with those who are still directors of the company as regards the shape which they want to give to the distribution process for the proceeds. But that in no way diminishes my admiration for their achievements. I should like to pay a special tribute to the noble Lord, Lord Birkett, and to Mr. Denis Vaughan, the chief executive of the company. Between them those two have done more than any other individuals to bring us to the point we have now reached.
I am especially heartened by the prospects for the environment in general and the heritage in particular. The noble Lord, Lord Chorley, who is chairman of the National Trust but unfortunately could not be present

455
this afternoon, has asked me to say a word on behalf of the National Trust. I do so with great pleasure as I am an ex-chairman of the trust.
The trust welcomes the Bill. It finds the equal five-way split of the proceeds sensible, and enthusiastically supports the appointment of the National Heritage Memorial Fund to deal with the heritage dividend. It is saddened, as many of us are and as many noble Lords have indicated this afternoon, by the proposed size of the Treasury take. I very much hope that the Chancellor will take the advice of the noble Lord, Lord Howell, in that respect.
I want to deal with two aspects of the Bill and one matter which will follow from the Bill. The first is the role of the Secretary of State. Other noble Lords have dealt with the issue. Despite setbacks, I still believe in the need to keep the Government at arm's length from the Arts Council—of which I was once chairman—the Sports Council and the National Heritage Memorial Fund. Why do the Government propose to involve the Secretary of State so heavily in the control of the bodies that they have chosen to distribute the funds? As the arrangements for the lottery are set up, we ought to establish that the Arts Council, the Sports Council and the heritage fund have the same autonomy in handling the new money as in theory, and in my experience in practice, they now enjoy in relation to their present grant. Clause 24, which lays down rules for control by the Secretary of State, needs to be, and I hope will be, amended to ensure that, while the broad principle of accountability of the distributing bodies to the Secretary of State is observed, they have a proper degree of autonomy in the distribution of the funds entrusted to them.
Why has the National Heritage Memorial Fund been such a roaring success? No doubt there are many reasons, but in my judgment it is primarily because its first chairman, the noble Lord, Lord Charteris, refused to accept or draw up guidelines to define its policy but applied common sense case by case and built up a system of case law. If he had been subject to guidance and interference from the Government, the standing of that fund would be nothing like as high as it is today.
The other aspect of the Bill which I want to mention is the proposed nature of the top distributing body. Here I believe that the Government have got it right. They want to set up a National Lottery Distribution Fund, the money initially being under the management and control of the Secretary of State. They lay down the percentages of the fund which must go to the five distributing bodies, and I believe that they have chosen the right ones. Then they give the Secretary of State the power to vary those percentages in case circumstances change. I am a little unhappy about the degree of variation allowed, but that is not a point of first importance and can be dealt with at Committee stage.
There are those—and the Lottery Promotion Company is among them; and this is where I differ from the company—who believe that there should be a charitable foundation to distribute all the funds and that that is a better way of protecting the principle of
456
additionality (that curious but useful word which has perhaps just been invented, but we all understand what it means).
I gather that under such a scheme a place would be found for representatives of the Arts Council, the Sports Council and the heritage fund on the charitable foundation's board. The hope is that their presence would ensure co-ordination between the foundation and the bodies they would represent. I am opposed to the idea of an overall charitable foundation, and I very much hope that the Government will resist it. It simply is not realistic to think that large sums can be distributed and their application and use by the recipients monitored other than by highly experienced staff. Such staff already exist in the Arts Council, the Sports Council and the National Heritage Memorial Fund. They do not need to be duplicated. In my judgment it would not only be wasteful but confusing to have two sets of people handing out public money for the same objectives. Furthermore, to put, for example, the chairman of the Arts Council on the charitable foundation board would be purely a token move, with little practical effect in preventing overlap and confusion.
Finally, I turn to a matter that is not dealt with in the Bill but follows upon it. It is the idea, now being widely canvassed, that lottery money should be spent only on new projects. I understand that the Department of National Heritage is already suggesting it in discussion with the bodies concerned. The department appears to consider that that is the best way of protecting the present level of grants, which appear, as the noble Lord, Lord Charteris, pointed out, already to have been eroded in the case of the heritage fund in anticipation of the lottery. I believe that that might be said too of the Arts Council.
Quite rightly, the departments wish to secure that the new money is additional and does not replace existing government grants or the growth that might be expected in them if there were no lottery. But while defences against the erosion of additionality are important, they are not as important as seeing that the money is spent where it is most needed. I should be sorry to see principles devised for the distribution of lottery funds more with a view to protecting the level of present funding than to achieving the wisest way of spending the money itself.
The Bill does not specify that lottery funds shall be limited to new or additional projects; and I very much hope that no such limitation will be enforced in practice. Of course, I hope that new projects will be started. A number of noble Lords have declared their own interests today. I have been closely associated with the Royal Opera House Development Fund. I strongly hope that it will receive some of the money that it needs to become an opera house worthy of the 21st century. But to limit the use of lottery money to new projects could lead to ridiculous and anomalous situations. To concentrate on new projects which will generate new revenue needs while neglecting the revenue needs of existing institutions seems to me a quite misguided sense of priorities. The fact is that

457
existing grants are nothing like enough to do all the things that are already overdue. Our first commitment ought surely to be to discharge our existing liabilities.
Let me give your Lordships one example. To fund a new visitor centre, an interpretation centre or something of that kind which would qualify as new work at an historic property at which funds are still urgently needed to complete the restoration of the building itself would be absurd. In that connection, the National Trust has a backlog of £160 million of capital repair work to attend to over the next five years. If it does not manage that repair work, the repairs will become more expensive later. I should like to believe that the lottery money could help the trust to find some of it. To disqualify those essential works, while inessential new work would qualify, is not sensible.
I should also like to believe that historic buildings belonging to private owners at which adequate public access is guaranteed would also benefit from the lottery. If some of that money is not available to the private sector, it will be a tremendous opportunity missed. It is a question of finding a suitable way of ensuring that public money from the lottery can be spent on the private sector to public advantage. I am sure that that can be done.
Therefore 1 hope that the need to protect additionality will not take absolute priority. What we want from the National Heritage Memorial Fund is more of what it does already. There must be other ways of protecting the existing level of funding than directing the funds exclusively to new projects. A simple requirement would be that the lottery money should be ring-fenced and separately accounted for. That is a start.
To recapitulate, I hope that the control to be exercised by the Secretary of State will have become more restrained by the time the Bill leaves this House. I hope that the Government will leave the distribution agencies as now proposed. On that basis, I am more than happy to support the principle of the Bill.
3.54 p.m.
Lord Swinfen: My Lords, I make an apology to the House because, due to another commitment, I must leave by 5.30 at the latest. I should also declare an interest as I work for a charity that would very definitely hope to benefit from the proceeds generated by the national lottery.
A few years ago no one in this country would have dreamt that we would have a national lottery. I can see the point of it. I can see the purpose of it. I can understand reasons why people would not approve. However, my own feeling is that it is an idea that has come to the fore, not in the Home Office but in the Treasury. It is seen as another vehicle from which to obtain taxation.
In my view the proposed taxation rate of 12 per cent is much too high. Secondly, it is being placed on the wrong part of the proceeds. The lottery promotion companies will already be liable to pay corporation tax. They ought not to pay a tax on the money raised from the lottery.
458
The winners should pay a tax which would bring them more into line, as I understand it, with the taxation on racing betting. That would help to make it fairer between the two systems.
The Government will say that it is much easier and cheaper to collect tax from one body, one person. But a small invention that is becoming more popular in use these days is the computer. There is no reason why a computer could not be programmed quite easily to calculate the money to be collected from the winnings and pass it on to the Treasury.
The proposed taxation rate of 12 per cent, together with what I believe are rather high administration costs, and the amount to be set aside for prizes (with which I have no real argument because without good prizes people will not invest in the lottery) will allow a top rate of 26 per cent, of the proceeds available for distribution to the good causes named in the Bill. If I recall correctly, the White Paper promised 33 per cent We have a difference. I believe that we should be aiming for about 35 per cent that is a little more than the figure referred to in the White Paper.
The Government have said that they will monitor the impact on small charities. That is very difficult to do. Small charities are those which do not submit their accounts to the Charity Commission because they do not have the staff. They sometimes do not have the expertise. The people who run them are busy and do not get round to submitting them. How will the Government propose to monitor the effect of the national lottery on small charities?
In order to remedy in some degree the effect that the national lottery is likely to have on charities in general, and small charities in particular, the Government can go down two routes. One is to remove the liability for value added tax. The other is to make all donations to charity free before taxation in a similar manner to the position in the United States of America. I appreciate that the Bill may not be the vehicle to do that, and that it is a matter that we may have to leave to the Chancellor of the Exchequer in his autumn Budget. I appreciate that my noble friend on the Front Bench will feel that he can give no clue as to whether or not that is likely to occur. However, there is no reason why we ourselves should not amend the Bill to give effect to one of those channels, fully realising that such an amendment is likely to be disagreed to in the other place. It would concentrate the Treasury's consideration of the Bill and the idea.
Turning for a moment to the Millennium Fund, I wonder what is the point of it when most of the objectives can be undertaken by the other recipients of the funds to be raised by the lottery. Possibly one or two monuments will be put up; I do not recall any being put up in the year 1000, and I do not see the need for physical monuments. However, to do something for the arts, for the heritage or for charity is a worthy cause and it would live much longer than bricks and mortar.
Again, when will the Millennium Fund come to an end? Will it be on 31st December of the year 2000? What will happen to the balance of funds left in it?

459
Will they be divided between the other causes, or will they be used to set up a trust to be expended in a good way in the future?
Other noble Lords have mentioned Clause 24, particularly subsection (2). I believe that it behaves my noble friend, when he replies, to give good reasons for the clause. I quite understand that there will be need for some control and guidance, but as I read Clause 24(2) it could be used for political direction which I think no one would want.
How will the Government satisfy both Houses of Parliament and the public that there will not be a reduction in government or local authority support of the voluntary sector when balancing charitable income from the national lottery fund? The question of additionality must be made plain and how it will be monitored and covered, so that it can be seen quite clearly that the money from the fund will be over and above what the Government and local authorities would normally supply.
As regards lotteries run by charities, Part III of the Bill amends existing legislation. The charities believe that the £½ million limit for a single society's lottery should be increased to £1.25 million, to allow the charities to overcome some of the difficulties that the Bill will raise. They believe that prizes should be increased from 10 per cent to 20 per cent of the income from the lotteries, with an overall annual limit of £5 million regarding the funds to be raised.
The Government seem to be under the impression that charities can run lottery after lottery, week in week out. One can run small lotteries at a dance or a special event quite easily. But to run a major lottery requires considerable organisation, a great deal of hard work and many months of planning. Most large lotteries start with much footwork being done well beforehand, to find interesting and worthwhile prizes to give. That is difficult in this day and age when most of the commercial organisations asked do not have the money to supply the kind of prizes that charities need in order to run major lotteries.
I have spoken for quite long enough; there are plenty of others to follow me. But other matters will need to be looked at when we reach the Committee stage and I am sure that we shall then have a busy time.
4.5 p.m.
Baroness O'Cathain: My Lords, I greatly welcome the Bill which has caused so much interest and no small amount of paper. Not all the lobbying that we have received has been from supporters of the Bill and although I am unable to support the anti-lobby, it has been extremely useful to read their submissions because it helps to understand the other points of view and get one's own arguments in order.
It will come as no surprise to your Lordships who are aware of my job at the Barbican Centre to hear that I welcome the provision of the Bill for the arts. It is that aspect of the Bill that I wish to concentrate on for the major part of my speech. I do not believe that it is necessary for me to declare an interest as, probably contrary to some of your Lordships'
460
perceptions, the Barbican Centre does not receive any government funding nor is it to be likely to be the recipient of the money from the lottery.
Like every other facet of our economic and social life in this country, there is never enough money available to satisfy demand. I have to say that what never fails to amaze me is the belief that money is available, but it is the Treasury which will not hand it out. The arts world, I fear, sometimes falls into that trap too, thinking that money should be made available, not giving too much thought as to where it would or should come from. I believe passionately that more money should be available for the arts in this country, for the preservation of our national heritage and for adding to that heritage so that future generations will look back and say that the latter part of the 20th century left a marvellous legacy.
The problem, of course, is that there is nothing like enough government money available to meet the needs of the arts, and government could only meet such needs by depriving some other areas such as the National Health Service and education. None of us would subscribe to that solution.
I was looking at some figures recently and, with expenditure on health and social security taking an ever increasing proportion of total government expenditure (it took 29.5 per cent in 1970, rising through 35.5 per cent in 1980 to 42.2 per cent in 1990) it does not require great powers of deduction to realise that other areas of government expenditure which are sadly not universally regarded as essential—though of course I would take issue with that assertion—are unlikely to fare very well in an era when expenditure cuts rather than increases in government expenditure are likely. This, I believe, is why we need the lottery now. At least, that is an answer to the right reverend Prelate the Bishop of St. Albans.
Similarly, another area of finance for the arts is likely to be constrained; namely, local authority support. Very few art centres are in the happy position of the Barbican, which has a local authority whose commitment to the arts is greater than that of any other authority; the City of London Corporation is the third largest sponsor of the arts in this country, after the Government through the Arts Council of Great Britain and the BBC. Pressures on local authorities are very severe. When something has to give, unfortunately the arts can and do suffer.
With the introduction of the national lottery the additional funds generated, and specifically earmarked for the arts, would and will go a very long way towards meeting the needs of the arts. But, like everyone else, I believe that the funds emanating from the lottery must be additional, and not substitutional for existing government or local authority funding. Indeed, I was very heartened that the noble Earl the Minister stated that the lottery money would be additional and is not intended to supplant it.
I have studied the Bill closely, and I am bound to say that I am nothing like as suspicious as other speakers or as the various bodies that have been lobbying us. I believe that the intentions of the Government have been made clear. I am sure that if there appears to be some loose drafting it will be

461
amended to give further consolation concerning the Government's intent that the lottery money will be given to the five good causes listed.
Of course many people will say that 4.6 per cent of the total moneys raised is nothing like enough for the arts—nor for that matter for sport, charities, the national heritage and the Millennium Fund. It depends on how much is raised. If the so-called conservative estimate (conservative with a small "c") of £3 billion per annum is realised the amount of additional funding for the arts will be very significant indeed. No great mathematical brain is required to deduce that it would give an additional £138 million per annum. Putting that sum into context, it would equate to approximately 50 per cent of current government funding for the arts. By any stretch of the imagination that is a huge increase in resources—and very welcome it would be too.
At the Committee stage of the Bill I am sure that we shall have many arguments about whether 4.6 per cent is too little or indeed even too much. We shall have many arguments as to whether it is fair that the "good causes"; namely, the five beneficiaries, should get only 26 per cent At this stage, however, it behaves someone to say that anything approaching the sum that I have just mentioned would be as manna from heaven for the arts. But heaven help the Arts Council of Great Britain in its task of allocating such funds. That is not a job that I would wish to have. Solomon had a problem about deciding between two people. The noble Lord, Lord Palumbo, the chairman of the Arts Council to whom I was delighted to listen today, would wish that he had as simple a job as that of Solomon. He has already referred to the shoals of applications.
I have two concerns about the Bill as currently presented. First, the provision in Clause 25 that the proportion of the available moneys which will go to the category of beneficiary as detailed in Clause 20 may be changed by order of the Secretary of State. That does not fill me with joy. I am particularly worried that there is a built-in safeguard that not less than 5 per cent should go to a particular category. That may need some more thought. There is a very big difference between receiving 4.6 per cent of the total lottery receipts and 1.15 per cent.
Secondly, I am concerned by the lack of precise definition about the category on which the Millennium Fund moneys would be spent—particularly when I read one of the many submissions I received which suggested that the Millennium Fund moneys should be split in turn between the other four categories; namely, art, sport, the national heritage and charities. That suggestion has also been made today by the noble Lord, Lord Holme of Cheltenham.
At this early stage in the consideration of the Bill I wish to make a strong plea that the Millennium Fund moneys be allocated to the arts. This is not special pleading. As I have said, although I am involved in the arts I am not in receipt of government moneys. But I speak as a citizen, and as a citizen of London. Sadly, I believe that this country has badly fallen behind
462
other developed countries in the provision of grand projects which will stand the test of time and be memorials of our day for future generations.
One has only to visit Paris and consider just what changes have been made to that city during the past 20 years or so. Some of the grand projects may not be to everyone's taste, but grand, imaginative projects they certainly are, all instilling a well deserved sense of pride in the Parisians.
What have we to show in London for 40 years of comparative prosperity? The last major additions to the capital were undertaken in 1951 during the Festival of Britain. Before that we would probably have to go back as far as the imaginative developments in Kensington stimulated by Prince Albert.
Even Dublin, not the wealthiest capital city in the world, has changed beyond recognition. In its own particular millennium—the millennium of the founding of the city a few years ago—the city undertook an imaginative and interesting project sitting sculptures in many areas, thereby considerably brightening the city.
We must do something to create a legacy for the future along the lines of Paris, and even to a lesser extent Dublin. The Millennium Fund would give us that opportunity. I say to noble Lords: please do not allow us to miss out on this opportunity. The Millennium Fund must not be watered down. Having said that, I welcome the Bill.
4.14 p.m.
Lord Trevethin and Oaksey: My Lords, I support the principle of this Bill. However, I must first declare an interest and make at least two apologies to your Lordships. I am glad to see that the noble Lord, Lord Howell, has temporarily left the Chamber because I am afraid that he would have blown his whistle on me. This speech is another piece of special pleading. My other apology is for the fact that I may have to leave the Chamber before the end of the debate. I earn my living as a correspondent with the Daily Telegraph writing about racing and leathering away about it on television. That is the interest I wish to declare. I have been described in the tabloid press as a titled tipster. One dissatisfied customer wrote that I could not tip more rubbish if Channel 4 bought me a fork-lift truck. Probably for that reason I have been for nearly 60 years an unsuccessful punter.
I am a devoted member of NAPP (the National Association for the Protection of Punters). For all those members of NAPP and indeed all the punters of Britain—and there are over 3 million men and women who make at least one bet on a horse each week and in most cases a great deal more than one bet —I believe that the introduction of a national lottery may be good news. I emphasise the word "may" because it is far from certain.
Since 1961, when the Levy Board was set up and betting shops and casinos were legalised, the attitude of the Government towards gambling has been that of a disapproving, rather bad tempered nanny, probably from a Presbyterian background and suffering from indigestion. That has been the Government's attitude towards gambling. On that legal activity they have

463
imposed all kinds of regulations designed to make it unattractive and not so nice as many people believe it to be.
Some regulations are damaging handicaps to trade, such as the total prohibition on advertisement which my noble friend Lord Wyatt of Weeford so gloriously disregarded in his eloquent speech (I shall come to that in a moment). There is also the total prohibition so far on Sunday opening. A little evening opening has just been allowed. But Sunday opening is a vexed question and it is a matter of opinion whether or not it is desirable. For racing it is certainly desirable because without it there would be no Sunday racing, which every other major racing nation of the world enjoys. Those are two of the regulations under which the punter labours.
There are also some stupid ones. For instance, there is the regulation that the window of a betting shop must be opaque —blocked up—like windows of those shops where people go to buy dirty books, though I do not suppose that your Lordships would do that sort of thing. But one is not allowed to see through the window to the inside of a betting shop. Inside the shop, attempts are made to make it a rather uncomfortable and unwelcoming place.
Regulations are made about the kind of food that can be served. One can serve potato crisps but not sandwiches. That is nannyism, is it not? It is no business of the Government or anybody else what the proprietor of a betting shop does to make his premises attractive.
As the noble Lord, Lord Charteris, said, we are a nation of gamblers. We always will be. I respect those who have spoken from conscience against the introduction of a lottery. Their consciences are to be respected. But I believe that they are also to be disagreed with. We are a nation of gamblers and we should be allowed to pursue that legal activity in perfectly comfortable surroundings without the imposition of regulations by the nanny state.
That is why I believe that this measure may be good for punters. Now, apparently, nanny has seen the light and is becoming a gambler herself. Let us have no hedging about this matter. A lottery may be different from backing horses but it is unquestionably gambling.
I hear that a significant degree of promotion will be undertaken in order to guarantee the success of the lottery, and quite right too. There will also be a fairly relaxed regime of control. I like the sound of that. But, as my noble friend Lord Zetland said, let us have a level playing field. Let us have fair play for the various forms of gambling in this country. Let us allow the betting shops to use the same kind of advertising, publicity and comfort as the purveyors of the lottery.
If those regulations are taken away, that will be good news. But, as has been said by several noble Lords today, there is also bad news. Racing depends, rightly, on the levy and the levy depends on betting turnover. Whichever guesstimate one chooses to adopt, the one certainty—as big a certainty as Arkle used to be—is that betting turnover will fall. The money must come from somewhere. It is money which
464
people use for gambling or games of chance. Betting turnover is sure to drop, though perhaps not so much as the worst Jeremiahs fear. But, as my noble friend Lord Zetland said, racing cannot afford it.
What is the solution? I do not believe that any noble Lord would willingly suggest that racing should compete with other sports for the revenue of the lottery. That would not be desirable. My noble friend Lord Zetland and several other noble Lords do not believe that the Government will take the best action; that is, take another 0.25 per cent off the general betting duty. They have already subtracted one quarter; if they took off another quarter it would solve the problem at a stroke. However, that may be whistling in the wind.
It may be that the solution of the noble Lord, Lord Wyatt, —the Tote—will work. It may be that the Tote will obtain the right to run the lottery. I should like to see that happen. As he says, the revenue of the Tote comes back into racing. I do not know which solution is the best one or which is the most likely to be adopted. However, I hope that, as the Bill passes through its various stages, your Lordships will remember that the thoroughbred is also part of our heritage. I refer to the beautiful thoroughbred that we invented—or, to be more exact, we stole from the Arabs and they are now stealing back again. But that is neither here nor there. It is beautiful and part of our heritage.
Racing is in dire straits. There is already unemployment in stable yards. Hard-working stable lads are unable to find jobs. There is increasing unemployment in betting shops. The big three bookmakers say that the smallest 1,000 betting shops are in grave danger of not breaking even. If the betting turnover continues to fall, as it will if the lottery is allowed to go unchecked, there will be severe suffering and unemployment. I believe that the British way of life will be damaged. Nevertheless, I approve of the lottery. I hope that your Lordships will find a way of mitigating its effect on the sport of horse racing.
4.23 p.m.
Lord Beaumont of Whitley: My Lords, as my noble friend Lord Holme said, in his admirable speech at the beginning of the debate, speakers from these Benches in both Houses have ranged from the suspicious to the outright opposed. He was suspicious; I am outright opposed.
If I oppose the Bill, as I solidly do root and branch, it is not because I am a puritan. That is one of the few adjectives which I have never heard levelled at me. In my time I have won the Tote jackpot at Ascot. As the noble Lord, Lord Trevethin, may remember, I was a devotee of an appallingly heavy gambling game called "Esmeralda", introduced into Oxford by the noble Duke, the Duke of Atholl.
More seriously, none of us can be against gambling. It is at the heart of Christian belief. A recent much applauded book on Christian theodicy concludes a summary of essential belief with the statement,
"I accept that I could be wrong about all the [Christian creed] but I am ready to stake my life on the 'if that I am right. I can not do more".

465
If gambling is the essence of religion, it is also, now that Popperian philosophy has been almost universally accepted, the heart of scientific belief. And in politics, the greatest national lottery of all is occurring in Downing Street as we speak.
There is a difference between gambling and a national lottery. The noble Lord, Lord Howell, if he will forgive me for saying so, cannot really have been listening very carefully to the right reverend Prelate, who made very clearly the distinction between the kind of fund-raising affairs at church events which he was talking about and the whole principle of the national lottery. They are very different.
I oppose the Bill because I do not believe that the Government should be putting forward the lottery. This Government, above all, should be aware of this, with their strong belief in the limits of the role of government. At least, that is what they say. Indeed, over the past few years I have been less and less able to find a Bill introduced by the Government which does not run against what had always been thought to be basic Conservative beliefs, starting with their role, stigmatised yesterday by the noble Viscount, Lord Tenby, as the most centralising government on record.
The objections to the Government establishing a lottery were put fully before your Lordships in the admirable speech of the right reverend Prelate the Bishop of St. Albans. I have no intention of taking up your Lordships' time by repeating them. Suffice it to say that it is not a function of government to encourage gambling. It is not a function of government to blur the distinctions of what their contract with society is in the provision and support of arts and sport so that they can no longer be held accountable for what happens because it all happens in a blur on the edges.
It is for these reasons, and not those of puritanism, that I intend to raise my voice against the Second Reading of the Bill which intends so inappropriately to celebrate what will not be the third millennium of the human race, as seems to be assumed sometimes, or even of Western civilisation, but actually is the third millennium of the Christian era.
4.27 p.m.
Lord Birkett: My Lords, I must begin by declaring an interest in that I am and have been since its inception the co-chairman of the Lottery Promotion Company. Since that company has had no other purpose in life at all except to persuade the nation in general, and the Government in particular, that a national lottery for the good of arts, sports and the heritage was a good thing, your Lordships can imagine that I am not merely happy but absolutely delighted that the Bill should have reached your Lordships' House today.
What is more, it does indeed support all the very causes that we originally advocated: arts, sports and what we started by calling the environment and is now called heritage—I do not believe there is a difference. But one small result of the phrase being changed from environment to heritage is that people—not, I may say, those concerned with heritage—tend to think of heritage only in terms of the built environment and of
466
buildings. Our heritage is not only our buildings; it is our landscape and our countryside. I know that the National Heritage Memorial Fund, the National Trust, English Heritage and other bodies are well aware of that and need no lecture from me on the subject. But it is important that this Bill should remember that our heritage is landscape as well as townscape; that it is green as well as built.
However, it is obviously the quality of life which is the basis of this Bill and of all the endeavours which so many people have made over the years. I do not particularly like the phrase "quality of life" either. The noble Earl said that he did not much like it, but he liked the idea of it. I share his view on that. But whether one calls it the quality of life or anything else, it is one of the factors that not merely makes us all happier but on which we shall be, and are, judged. In a Europe where neighbourliness is on the increase, inquisitiveness is naturally on the increase as well. I suspect that the quality of life and the improvements to it which I foresee from this lottery will redound to our credit as our curious neighbours look more curiously at us.
In the course of the passage of the Bill in another place and in the run-up to it, including the vast amount of campaigning which has been undertaken by all kinds of bodies —and also in your Lordships' House this afternoon—it has been suggested that there are three potentially damaging features about it. The first is that it might damage us socially; and that it might damage us morally. The noble Lord, Lord Beaumont, who has just spoken, and the right reverend Prelate the Bishop of St. Albans made the point very strongly and most powerfully. I cannot say that I agree with them. I do not believe that this Bill will have the smallest effect on the social and moral behaviour of the country.
Lord Beaumont of Whitley: My Lords, I did not say anything of the sort and I do not think that the right reverend Prelate did. I said that it was inappropriate for a government to encourage it and not that it would have those effects, because I do not believe that it will.
Lord Birkett: My Lords, I am delighted to be corrected. I withdraw what I said about the effects predicted by the noble Lord, Lord Beaumont, because he plainly did not do so, neither did the right reverend Prelate. However, there is still in my mind the notion that it is social and moral issues which we are debating this afternoon. That the Government should promote something is obviously a different case. It should be said in fairness that although the Government have produced this Bill, and therefore may be said to be promoting it, if the lottery were to happen at all the law had to be changed by somebody. A Bill has to go through your Lordships' House and another place if a lottery of any real consequence is to take place simply because of the existing limitations on the size of prizes, and so on. If the Government have promoted that then at this point I disagree with the noble Lord because I believe that not only is it appropriate, but I congratulate them on it.
However, the issues that might damage it have been slightly misconstrued in some ways. For example,

467
everybody said that this is gambling and that it might well appeal to greed and cause people to look for the quick buck and the easy way of earning money without any effort. That is a delusion because however large the prizes are, equally large are the chances against winning them. Nobody in his right mind would commit money to the lottery as an investment. He would commit a pound or two—as the noble Earl said in opening the debate—as a flutter. Which of us would not? Which of us would not be delighted if the flutter—the million-to-one chance—came off?
The difference is that if it does not come off the money is to a very large extent going to causes which one might well have promoted by putting the same pound into a collection box or be sent as a charitable donation. The money would be going to things which increase the quality of life and of which we can all be proud. As was once said in America years ago, it is a tax paid only by the willing.
The other damage which has been predicted from the Bill is to existing sporting organisations, particularly to the pools and the good work which they do, to football and to horse-racing. Both those scenarios depend upon the notion that somehow any money that goes into the national lottery must needs be taken from somewhere else. Everybody believes that the pound that buys the first lottery ticket will be a pound that would have been spent otherwise. The pools believe that it will be a pound that would have been spent on the pools. The horse-racing fraternity believes that it would have been spent on horse-racing. There are plenty of other people who might have equally good cause to suppose that it might have been spent on chocolate bars or soft drinks. Indeed, the latter is more likely.
I do not believe that any of those sporting organisations will suffer significantly—nor that charities in general will suffer. Evidence from around the world relating to the introduction of other successful lotteries shows quite the contrary, especially about the pools. It is plain that in countries that care nothing for football the football pools are at serious risk following the introduction of a lottery. However, in countries with a passion for football, such as in this country, the football pools are at almost no risk. Italy is the only country that I can think of with an almost more passionate devotion to football than ourselves, and lotteries and the pools have existed very well side by side there. Indeed, the pools are still in the lead. Therefore, I do not believe that the introduction of a national lottery would damage any particular part of society.
Perhaps I may give an arts illustration which may not seem terribly relevant to lotteries, but it is. When we opened the new National Theatre down the road which has 2,700 seats, everybody said to us, "You have only 900 seats at the Old Vic where you are now but as you will have three times that number of seats at the National, you will be taking money from the other theatres in London". They said that the other theatres in London would suffer from the creation of the National Theatre. We said, "No, we shall make a new audience. It will be new money coming into the
468
box office" —and we were right. It was new money and the rest of the theatres did not suffer as a result. A new audience did arrive and we filled those 2,700 seats. So I do not believe in the principle that there is a limited amount of money in circulation and that the introduction of a national lottery will cause damage. I believe that a lottery can exist happily and successfully without damaging other forms of gambling or charitable giving.
The other question which has worried many of your Lordships this afternoon and many people in the debate leading up to this relates to additionality. If I am not particularly fond of the phrase "quality of life" I am even less fond of the word "additionality" and I wish that it had never been coined. The noble Lord, Lord Gibson, wondered how long that word had existed. I actually went down to the Library to find out and the earliest reference that I could find was in 1972. I have a feeling that Europe is responsible for it.
Additionality is certainly a worry. Everybody has expressed that worry and the Government have reassured everybody that they do not intend to use the lottery funds—or to see them used—as a substitute for government funding. Although those reassurances have been very welcome, everybody would like to see them somehow immortalised and included in the Bill, but I think that that will be almost impossible to do. I have tried to find a phrase that would achieve the ring-fencing principle, and I cannot find one.
There is, however, one way in which one could achieve that objective—although I am not sure that I recommend it. It has been much talked about this afternoon. Quite simply, it is to make the rule that lottery money can be used only for capital projects. That would ring-fence it well enough because at the moment there is no capital funding for the arts and sports. However, immediately one does that it becomes so constricting that I would not recommend your Lordships to consider it. And already exceptions would have to be made. As the noble Lord, Lord Montagu, sensibly said, a new capital project costing, say, £50 million will generate a revenue need. Unless you know that the revenue need will be met, you are in serious danger of creating a white elephant. Therefore, an endowment fund is necessary. I agree entirely with the noble Lord. I have worked out that on average an endowment fund needs about 15 times the annual income that you require to be effective if it is to be proof against inflation, however good the present news on inflation is. Therefore, that exception would have to be made.
I certainly do not believe that you could confine the capital projects to new projects. The very word "heritage" is the clue to that. It must be the sustenance of what you have as well as the creation of what you have not. I do not believe that that would do the trick.
One can only take in good faith the assurances that have been given that the money will not be used instead of existing funds; rather that it will be used as well as existing funds. We must make sure that the accounts of the national lottery are looked at separately from the accounts of the Department of National Heritage, when it receives its grant-in-aid,

469
and all other bodies which do the same. That should be sufficient to enable us to know whether the funds are going up or down.
Having said how much I welcome the Bill and how sensible I believe it is, like all other Bills it can be improved. I must declare that I believe in something that some of your Lordships this afternoon have welcomed and of which some have expressed a particular distrust; in particular, my noble friend Lord Gibson. I believe that the lottery should be run by a charitable trust. In opening the debate the noble Earl said that the Government had considered a single entity to run the lottery and had decided that there were three functions which were necessary to be separated: the operation of the lottery; its control; and the distribution of its funds. I agree that the functions are separate. I believe that there could be an overall charitable trust to perform all three functions, albeit with totally different organisations performing all of those three functions. I can see no reason why that would not work.
There are several reasons for my belief that a charitable trust would be a good idea. First, as many of your Lordships have said, in this Bill there is too much of the Secretary of State. That is nothing to do with the present incumbent of the post—if he still is the present incumbent because the news does not seem to have filtered through yet—or this Government. I am sure that the matter would be handled as responsibly as possible. Future governments may not command the same respect. There is too much potential for interference by the Secretary of State.
Just over two years ago, when we first had a debate in this House on a Motion which I moved to draw attention to the potential of a lottery, the noble Earl said that it was absolutely certain that the Government did not want a state lottery. That indeed is the case today, but it is beginning to look a bit more like a state lottery than I had quite envisaged. I believe that a charitable trust distanced from government at arm's length—that famous phrase which everybody still believes in although I believe that the arm has grown slightly longer over the years—would be valuable to the lottery, to the nation and to the Government.
Behind that there is a terrible fear that creating such a new body would create that most dreaded of all things: a new quango and a new bureaucracy. I know that the noble Lord, Lord Palumbo, does not hold with my views on this issue, but even he admitted that there will be a need for a large and expert staff to look after that enormous sum of money and to see that it is spent well. Of course the Arts Council has an expert staff, as have the Sports Council and the National Heritage Fund and as, no doubt, the charity fund and the Millennium Commission will have when they con-le into existence. But I cannot believe that the existing staff of any of them will be sufficient to cope with the very complicated demands which this amount of work will make on them.
Of course I believe that all those bodies should be represented not merely as tokens, as was suggested by the noble Lord, Lord Gibson, but as absolutely essential and that their staffs should be available to it.
470
However, I believe that other bodies, in addition to the five, should control the eventual distribution of funds. It would be a check on having the organisation in too few hands, however good those hands may be.
Then there is the reason that if the trust were a charitable trust it would sit well with other charities. That might reassure some of the charities which fear the effects of a lottery. I put forward a tentative suggestion that perhaps the charitable funds which the pools now contribute—the funds of which the noble Lord, Lord Brabazon, spoke so eloquently today—would be part of the same kind of funds. I do not suggest a merger; simply a merger of good intentions towards the good causes involved.
Furthermore, it would be easier to avoid the making of excessive profits. I believe that in the operation of a lottery there should be good profits to be made from the trade involved in countless operations; for instance, the ticket printing, the computerisation and the vast financial services, let alone the small operations of selling the tickets around the country and the publicity. An enormous amount of trade is involved which should generate a great deal of work and profit. However, I do not believe that before the money reaches the good causes it should be subject to a large syphoning off for a percentage of profit. A charitable foundation would make that easier to achieve. It would make it much easier to choose those operatives and consortia which saw the good causes as the natural beneficiaries rather than themselves.
Finally, there is the famous question of tax. I cannot believe that merely because the trust is a charitable trust the Treasury will immediately remove the tax. Many of your Lordships have said that the rate is too high and many have said, as I say, that there should be no tax at all. For a start, it is not government money. It is said that the tax will be levied in order to offset the loss of revenue from other sources. At the same time all the money going into the good causes would have been applied for from the Government and the Government should have supplied it. Therefore, at the same time as removing a small amount of revenue the Government will have been saved an enormous amount of capital demand from other sources.
For all those reasons I warn your Lordships that I shall table an amendment to ensure that the whole operation is run by a charitable trust. That will not damage the Bill nor its effects and intentions. I believe that it will improve the Bill. Let me not end on a note of complaint and say that as a result of the lottery I foresee a gold or at least a silver age for the environment of this country. I welcome the Bill and I commend it to your Lordships. I hope that the House gives it a benevolent Second Reading.
4.45 p.m.
Lord Mancroft: My Lords, one of the advantages of speaking towards the end of a long debate is that other noble Lords have made the points which one intended to make and have done so better than one would have

471
done oneself. Your Lordships will be delighted to hear that throughout the afternoon I have been striking out whole paragraphs and pages from my speech.
I welcome the Bill and appreciate its arrival in this House. It is time that we had a national lottery in this country and I welcome it. I believe that it is a good idea and that we should give it our support. The Bill was not perfect when it entered another place and it had been much improved when it left. I hope that there is much that we can do in this House to improve the Bill still further.
I intend this afternoon—or this evening, as it is rapidly becoming—to confine my remarks to charities, in particular to the smaller charities. A national lottery will be good for sport, for our national heritage and for art galleries. I welcome too the arrival of the Millennium Fund, which I hope will be exciting and innovative. All that is good and I hope that all noble Lords will welcome it. However, we must not do so unless we are convinced that the charities which lurk not fashionably or prettily underneath are well protected. They need to be well protected. The national lottery must not succeed at the expense of loss of income to charities. I say that for a variety of reasons. However, if charities fail, I suppose that, ultimately, the Government will have to pick up the tab for that failure. That would not be in the Government's interest.
In another place the Government accepted the arguments of the pools operators that they may need assistance so that their employees do not risk unemployment. That is fine. However, we must equally be aware of the people who work for charities, who earn considerably less. Their employment is no less important. I believe that they too need to be protected.
The Government have said that charities will be all right under the Bill. Nevertheless, I have to say that I, and many other noble Lords, doubt that considerably. They will need to work hard to convince us that that is true. We have been told that the national lottery could have an income of £1.5 billion a year. Other people have said that the income could be about £4 billion a year. We do know that 25 per cent of that income, whatever it will be, will go to what are now called the "good causes"—that is, the various different bodies that will distribute the money.
The noble Lord who has just spoken said that the £1.5 billion or the £4 billion of income that will come into the lottery will have to come from somewhere. The noble Lord thinks that it will come from spending that would have been made on chocolate bars or items bought in corner shops. That may be true. Indeed, the pools operators may think that it will come from money that would have been spent on the pools or betting on horse races. However, it may also come from donations that would have gone into flag day boxes in street collections. Moreover, it may come from money that would have been given by way of the ordinary donations that people in the country make with enormous generosity every year. It may also come from the money that would have gone to the
472
existing charities' lotteries. Therefore, we need to be aware that, wherever the money is coming from, it is part of expenditure that already exists.
The National Council for Voluntary Organisations, which I know will be making many presentations to your Lordships during the passage of the Bill, estimates that the loss of charity income will be something in the region of £200 million a year. That is a lot of money to be made up elsewhere. My particular interest is in the smaller charities. Any loss of income that arises will affect them rather than the larger charities. The lotteries run by the smaller charities at present bring in an income of about £250 million a year. The 1976 Act does not make that very easy at the moment. Moreover, the way that the Act is monitored makes it even less easy. We need to ensure that the new big brother of lotteries—that is, the national lottery—does not in any way harm those smaller, existing charity lotteries. In another place, the Government used Ireland as an example to show that that will not happen. I suspect that the report was read rather selectively. When I read it, and looked at it in detail it seemed to show that, in the two years since the national lottery in Ireland was established, the charity lottery income has fallen by about 60 per cent from £250 million to £100 million. That is a big drop.
The Government have recognised that there are some problems. They made promises during the passage of the Bill in another place that they would amend the Bill; for example, I believe that they are to table amendments to prevent restrictive practices. Under the Bill as it stands, charities are allowed lotteries with a total annual sale of some £5 million a year, but not more than £500,000 per lottery. That means that they would have to run 10 lotteries each year. That is not physically possible. In other words, to reach the £5 million threshold, they would need 10 lotteries of £500,000 each. That cannot be done. In making that suggestion in another place, I believe that my honourable friend the Minister had not quite calculated it correctly. He had not seen that that would happen.
We have suggested previously that the prize money, which currently stands at £50,000 per lottery or £500,000 per year, should be raised and doubled to £100,000 per lottery or a turnover of £ 1 million a year if there were 10 lotteries. However, we know that cannot be the case. The Minister has made a slip. He has suggested something that could not happen. The other suggestion he made—this is the most extraordinary suggestion—is that charities could run two lotteries simultaneously with £50,000 prizes. But what on earth can be the point in doing that? It would involve double the paperwork, double the administrative costs and double the auditing. Surely he must realise that it would be simpler to run one lottery at twice the size. As I have said, I am convinced that was a mistake the Minister made. I am sure that he will wish to correct that at some stage either by tabling an amendment of his own or by allowing us to table an amendment.
It is important to realise what is at stake here. Unlike the pools, charities are not profit-making organisations. I wish to protect the smaller and less

473
fashionable charities from collapse. That is what they will face if they lose the income that they currently receive. Although the Government suggest that charities would benefit from the national lottery—we have heard the reasons for that this afternoon and no doubt we shall hear them again—closer examination shows, as I have said, that charities could lose between £100 million a year from general donations and £150 million a year from their own lotteries. That is a great deal of money. If the national lottery has an income of £1.5 billion, as has been suggested, charities will receive from that £75 million a year at best as against a potential loss of £350 million. I do not believe any noble Lord would suggest that is anything other than a bad deal.
I am particularly worried about this matter as for four years I have been the chairman of a small charity called the Addiction Recovery Foundation. That charity has survived solely on the benefits of existing charity lotteries. Recently I received, with a happy smile on my face, a cheque on behalf of that charity from the charity lottery with which we are involved. On that occasion I met many other smiling chairmen of small charities. I am not talking about glamorous charities. These are not the big charities one reads about in the newspapers. I am talking about small charities which have four or five underpaid members of staff. Those charities constitute the backbone of small charitable giving and of the independent sector that the noble Baroness, Lady Seear, so carefully described to your Lordships a little earlier.
It is those charities which need to be protected. Without the protection that the existing small charity lotteries give them, I do not believe they will survive. If there is no charity lottery income, there will be no small charities. The Government need to take that message on board. I greatly welcome the Bill but the Government must convince your Lordships that the smaller charities will not suffer as a result of the national lottery and that they will continue to be able to benefit from their lotteries as they have in the past. At the moment I am not convinced that that will be the case but I hope that the Government can correct that impression during the passage of the Bill.
4.58 p.m.
Lord St. John of Bletso: My Lords, as the 28th speaker in this evening's Second Reading debate I, like the noble Lord, Lord Mancroft, feel it is difficult to produce some original remarks. However, I simply wish to add my support to the Bill. I wish to focus primarily on the contributions that will be made from the national lottery to the enhancement of sport and sporting facilities in Britain.
As a keen sporting enthusiast and one who has participated in several debates in your Lordships' House on the need for better sporting facilities and training, I warmly welcome the boost that the lottery will give to the development of sporting facilities and programmes at all levels from Olympic programmes to community projects. The Sports Council's recently published document on its vision for sport in the 1990s covers the proposed construction and upgrading of national facilities, specialist facilities and community
474
facilities. It also covers the provision of specialist support services such as training programmes. That provision could to a large degree be implemented with the funds provided by the lottery added to the existing government and sponsorship funding of such organisations as the Foundation for Sports and the Arts and of course the football pools.
It was heartening to hear the Minister's reassurance in his opening speech that government funding of the arts, sport and heritage will not be cut in consequence of the increased funding of national lottery contributions. However, I wish to add my voice to those of noble Lords who are concerned about the distribution of the net proceeds of the national lottery and the extent to which the Treasury may inhibit the efficient distribution of lottery moneys.
Like many noble Lords who have spoken, I feel that there needs to be a clearer definition in Clause 24 of those situations in which the Secretary of State may be empowered to give directions to the distributors as to the distribution of lottery moneys. I agree with the noble Lord, Lord Howell, that reasons should be given when the Secretary of State invokes that power.
I should also like the Minister to clarify the ruling on joint funding of grants in aid and lottery proceeds of certain projects. As I understand the situation, lottery moneys could not be used to ensure that a project, for example a sporting project, could proceed when some but not enough Sports Council money was available. That would mean that many key projects within the Sports Council's programme which have already been agreed with the Secretary of State might never be completed due to insufficient funds being available. As the distributors of national lottery funds are required to publish their accounts and submit annual reports on their activities surely the Government can be a little more flexible on this issue of joint funding.
I also have sympathy with those who have called for more adequate provision in the Bill to ensure fair competition with the major pools operators. It appears to be unfair that there is no equality between the pools operators and the national lottery operators on the methods of advertising. I can only presuppose that the logic is that if pools operators are also provided with concessions to advertise on television that may have a major detrimental impact on the success of the national lottery operators. As the Foundation for Sports and the Arts receives a major contribution from the pools operators I feel that it is only fair that the pools operators are also given the fullest opportunity to compete effectively and fairly with the national lottery operatives.
An anxiety expressed by the British Olympic Association is that lottery proceeds will mostly be devoted to capital projects, again a point made by the noble Lord, Lord Howell. Can the Minister advise me as to whether lottery proceeds will also be given to Olympic projects?
I should also like to add my support to the calls from many noble Lords, particularly the noble Lords, Lord Donoughue and Lord Holme of Cheltenham,

475
for the Government to fix a minimum allocation, arguably in excess of 35 per cent of lottery proceeds, to good causes.
I also have sympathy with the criticism which most of your Lordships have raised today that the Treasury is getting far too large a slice of the cake. As the noble Lord, Lord Wyatt, mentioned, after the Cabinet reshuffle today perhaps the new Chancellor will take a more sympathetic view of those calls.
Several noble Lords mentioned the need to distribute net lottery funds equitably to areas where there are few or totally inadequate facilities. I was pleased to read in the Sports Council's report Sport in the Nineties—New Horizons that considerable emphasis has been placed on funding to upgrade, build and refurbish community facilities and to promote participation initiatives in areas where those facilities are totally inadequate. Clearly, the provision of proper sporting and recreational facilities in the inner cities can only help to play a major role in improving the community spirit and well-being of all, both old and young.
I shall not detain your Lordships any longer. I join in welcoming the Bill. I hope that the Minister can give us some assurance as to the concerns that have been raised today. It is reassuring that we shall soon no longer be the only black sheep in Europe with no national lottery.
5.5 p.m.
Lord Lucas: My Lords, I, too, welcome this Bill. There has been much discussion today on its possible effects on various enterprises and employment. Who will win or lose must, for now, be a matter for speculation, except that it will be great fun for the participants and beneficial to many good causes and to the Treasury.
Most of the points that I wish to make have been well covered by others. I will limit myself to three. First, I join those who question whether the national lottery should include instant lotteries. These are already well established as charity fundraisers. They are potentially addictive; and statements in another place that they would extend the social range of lottery participants, raise more for charities (net of charities shut out by the national lottery) and be essential for the viability of the national lottery are to my mind questionable. I hope that the Government will prove open to argument in Committee.
Secondly, I would like to congratulate the Government on the concept of the Millennium Fund, and in particular on the fund's combination of support for both large and small ideas, but in each case with the Millennium Fund as a crucial and major contributor.
I urge them to apply this concept to the lottery's other beneficiaries so that we can say, "We did these things with our lottery", whereas, if the money is spread evenly around, with fair shares for each good cause, parcelled out per capita, per community, by some manic extension of the Goschen-Barnett formula, it will do nothing and mean nothing.
Thirdly, I hope that we will find a way in
476
Committee to discourage the recent rush of undesirable, facile "games of skill" such as the telephone games run by commercial radio, ITV and now even the BBC. These are characterised by large prizes in relation to the price of a chance and an undisclosed or unlimited number of chances sold, leading to a derisory average percentage return to the punter.
My noble friends will immediately recognise these as the characteristics of the frequent Conservative Party raffles. But my strictures are directed only against those games run for commercial gain as opposed to worthy causes.
5.7 p.m.
Lord Armstrong of Ilminster: My Lords, first, I must apologise for having to miss the earlier stages of the debate because of an unavoidable and longstanding engagement. I shall not speak for long on this occasion. However, I wish to add my voice to those who unreservedly welcome and support the Bill as an overdue measure to introduce a national lottery to this country.
Some of your Lordships have regretted that the Treasury's tax take was to be as high as 12 per cent I, of course, share that regret, but long years of experience of the Treasury, inside and outside, had led me to fear worse. When the figure of 12 per cent was announced, I stood aghast at the Treasury's moderation.
The only other point to which I wish to advert is that of additionality. I believe the principle of additionality to be exceedingly important in relation to the proceeds of the national lottery, and I need not underline the reasons for that after the debate today. I share the view of the noble Lord, Lord Gibson, that it is not possible to see any satisfactory way whereby an assurance of additionality can be written into the provisions of the Bill. For the reasons stated by the noble Lord, Lord Birkett, I do not believe that we should insert a provision that the proceeds should be spent only on capital projects. It would be unduly restricting, although I hope that the national lottery proceeds will make possible the carrying out of many capital projects which could not otherwise take place. Nor do I see other ways in which we could sensibly and practicably introduce a statutory reinforcement of additionality into the Bill. I think that we shall have to rely upon the good sense, good faith and steadfastness of the funding bodies and the good faith of the Government in giving effect to the assurances that they have offered. I hope that, in his response to the debate, the Minister will repeat those assurances this afternoon and that the accounting provisions will enable us to reinforce that.
When we come to the Committee stage, I wonder whether we should consider reinforcing the Government's willingness to carry out those intentions by a small change in the supplementary part of the Bill which would make any power of the Secretary of State to give directions, as well as to make orders or regulations exercisable by statutory instrument. That would make the issue of directions, particularly under

477
Clause 24, subject to statutory instrument and therefore liable to run the gauntlet of the vigilance of your Lordships and another place.
I hope that it will be possible to make some such change in the Bill as it passes through the Committee stage in this House.
5.11 p.m.
Lord McIntosh of Haringey: My Lords, in introducing the debate, the noble Earl, Lord Ferrers —whose absence I entirely understand—referred to 1066 And All That and the phrase "a Bad Thing". It is obviously tempting for a number of noble Lords to think of gambling as being a Good Thing or a Bad Thing. For myself, I would not dare to do that. I do not happen to be a gambler but I am always conscious of Arthur Hugh Clough's verse:
"Condoning sins that you're inclined to,
By damning those that you've no mind to".
I should not care to run that risk.
The reference to 1066 And All That brings out the differences between myself and my noble friend Lord Donoughue. He described himself as a cavalier, whereas I have been a roundhead since elementary school. I remind him that, although he is described by Sellar and Yeatman as being "wrong but romantic", I am described as being "right but repulsive". I propose to continue being right but repulsive.
We have heard in this debate an extraordinary amount of special pleading for good causes. I do not say that in any pejorative sense. I think it is entirely proper that the House should bring together so many people who have knowledge of the objects from which they hope to obtain money through the National Lottery etc. Bill. If I cast my eye down the list of speakers, I see the noble Lord, Lord St. John of Fawsley, whose interest is the Royal Fine Arts Commission; the noble Lord, Lord Charteris of Amisfield, for the National Heritage Memorial Fund; the noble Lord, Lord Aberdare, the Football Trust; the noble Lord, Lord Montagu, English Heritage; the noble Lord, Lord Houghton of Sowerby, no special interest, but I shall come back to his magnificent speech later. The noble Lord, Lord Brabazon, spoke for the Foundation for Sport and the Arts; the noble Lord, Lord Palumbo, the Arts Council; the noble Baroness, Lady Seear, again no special interest but an interesting suggestion in her speech that the national lottery might provide greater independence from government for the charities. I wish to come back to that as well because I am not entirely convinced by her ingenious arguments.
We see the noble Lord, Lord Crathorne, whose interest is the National Heritage Memorial Fund; the noble Lord, Lord Wyatt of Weeford, the Tote; the noble Earl, Lord De La Warr, horse-racing; the noble Lord, Lord Allen, the National Council for Voluntary Organisations; the noble Lord, Lord Cavendish, English Heritage; my noble friend Lord Howell is the vice-president of Warwickshire County Cricket Club —as good an interest as anyone would wish to declare. The noble Marquess, Lord Zetland, is the third of the speakers today who own racecourses. I understand that he owns Redcar; the noble Lord, Lord
478
Cavendish, owns or is interested in Cartmel, and my noble friend Lord Donoughue in Towcester. So there we have it.
Lord Donoughue: I do not own it.
Lord McIntosh of Haringey: My Lords, I said that my noble friend was interested in it. There we have another considerable and worthwhile interest. The noble Lord, Lord Gibson, spoke for the Royal Opera House; the noble Lord, Lord Swinfen, charities, particularly those for the disabled, on which he is expert; the noble Baroness, Lady O'Cathain, for the Barbican; the noble Lord, Lord Trevethin and Oaksey, is a distinguished racing commentator; the noble Lord, Lord Beaumont, had no interest, but again I think his views deserve further attention. The interest of the noble Lord, Lord Birkett, is in the Lottery Promotion Company and the London Philharmonic Orchestra, and he is a former colleague on the GLC on the arts side. The noble Lord, Lord Mancroft, is involved in many charities; and the noble Lord, Lord St. John, is concerned very much with sport. I could not identify any interests for the noble Lord, Lord Lucas, but I shall try again. The noble Lord, Lord Armstrong, is of course the distinguished chairman of the Victoria and Albert Museum and a director of the Royal Opera House. This is the House of Lords at its best. These are not financial interests; or very rarely are they financial interests—and if they are they have not been expressed in any improper way. These are the interests of people who are deeply concerned with the way in which the proceeds from the national lottery (or should I call it the national lottery et cetera?) are to be distributed.
We must look at the question of distribution. It has concerned a number of noble Lords and it is a matter that still concerns the Opposition. In the way that the Bill is presented the good causes turn out to be the residual beneficiaries. The fixed amount of money goes to the Treasury and to the operators. There is presumably a minimum amount that can be risked for prizes. Below a certain level (and nobody quite knows what level that is) the lottery risks failure.
I should like to suggest an alternative solution to the distribution problem. I put it forward not as a fixed element of party policy but as an opening stake, as it were, in the debate in Committee. I should like to suggest that what should be fixed is the amount for prizes (let us say 50 per cent) and the amount for good causes (let us say 35 per cent); that the Treasury should appoint the operators and that the Treasury and the operators should fight it out for the remaining 15 per cent.
Noble Lords: Hear, hear!
Lord McIntosh of Haringey: And every single per cent which goes in operating expenses should be taken away from the Treasury's share. I am sure that the Government Front Bench will agree that that is an entirely Thatcherite and politically correct point of view. I hope that they will agree to amendments, if I can frame them, to give effect to that idea. If they do not like that, I have an alternative. It is that the profit for the operators should be a fixed proportion of the

479
amount which goes to the good causes so that they have a strong incentive to get more money going to the good causes.
There are severe threats to the smooth operation of this Bill. They have been referred to at length and I need do no more than summarise the issues. The first is the loss to charities. Charities are different from sports and the arts in the extent to which they depend, not so much on other lotteries—of course sports and the arts depend on lotteries as well—but in the extent to which, by definition, they depend on giving. It is the whole range of giving with which we must be concerned. It is there that the risk for charities of losing money to the national lottery is at its greatest. The NCVO has estimated (I do not think one can say "calculated") that they would lose something over £200 million—a point to which the noble Lord, Lord Mancroft, referred—from their existing revenue. The basis for that estimate is a survey of people who at present give to charities.
The problem cannot be underestimated. We have to find, in Committee and in the later stages of the Bill, some way of dealing with it. The answer may, as the NCVO suggests, lie in a VAT refund. I am quite certain that, whether or not that is correct, there must be a review by the Secretary of State at regular and fairly frequent intervals of the effect of the national lottery on charity receipts from all sources.
The NCVO also suggests, and a number of noble Lords have referred to this, that there should be some relaxation of the rules about what are called small lotteries. In particular, I was impressed by the argument of the Royal Society for the Protection of Birds, which runs a lottery four times a year in its magazine—it is very cheap to run because there are no mailing costs—that the restriction on both the amount of prizes and the amount to be taken in an individual lottery is not fair on those who can run only a limited number of lotteries a year compared with those who can run 10 lotteries a year. Again, I believe that that point needs to be looked at.
We also need to consider the issue of the top limit on prizes, which it is suggested—I believe that there is some sense in the suggestion—should be treated as a percentage of the sales rather than the fixed figure quoted in the Bill. There are also suggestions which deserve discussion about whether there should be something kept special for charities' lotteries; for example, instant lottery facilities. So there are threats of loss of income to the charities. When we consider Part III of the Bill, which I might describe as the Home Office part of the Bill, there will be significant amendments on those points from these Benches.
The second major threat, which has been rehearsed on a number of occasions, is the question of additionality. My noble friend Lord Donoughue said that, if it were a choice between the Treasury's word or its bond, he would rather have the bond. Most people have agreed with that. However difficult it may be, we must be suspicious that the Treasury will take the opportunity of the availability of a national lottery to reduce its own expenditure. That way the Treasury has it coming and going. It is "heads I win", in the
480
sense that it gets the 12 per cent from the national lottery, and "tails you lose", in the sense that it has to authorise less expenditure by the spending departments on the objects of the national lottery.
We have to try very seriously to ring-fence Treasury expenditure in some way. I do not feel that the right solution would be to restrict it to capital. A number of noble Lords pointed out that, first of all, that would lead to some sub-optimisation. We might get poorer projects funded when better and more deserving projects were not funded. It is also true, as has been pointed out, that all capital involves expenditure and unless the capital includes an endowment for the upkeep of the building (or whatever it is that is being paid for), that could be extremely damaging.
Those are all relatively detailed matters. In closing I want to turn to the remarks made by my noble friend Lord Houghton of Sowerby. Although I do not agree with everything that he said, his view of the matter is very profound. I remind the House that he said that we must not get into a situation in which having a state lottery turns us into a lottery state. We are already some way along that road. We have started over a number of years with relatively inoffensive lotteries in our public services. Nobody can object very much to having a lottery for school trips or new equipment for a ward in a hospital. But when we reach the stage—as we have—that substantial parts of our education budget, health budget and many other budgets which ought to be the responsibility of Government become the responsibility of either charities or users of those services in the form of lottery tickets, collecting boxes or whatever, I suggest that we have gone too far.
I am not certain in my mind what the effect of the national lottery as proposed will be in that respect. But I am certain that if we allow lottery thinking to take over from social responsibility we shall have done a disservice to ourselves and to our descendants.
5.25 p.m.
Viscount Astor: My Lords, we have had an interesting debate, as I knew we would. Your Lordships always have an astonishing repertoire of expertise on almost any subject. The number of noble Lords who have taken part in today's debate shows how many are knowledgeable about, have an interest in, or are hooked on gambling in all its different aspects, and some are especially concerned with what happens to the proceeds.
We have witnessed the predictable, but not particularly edifying, spectacle of many noble Lords —in the most elegant of ways—holding out their hands in supplication that the proceeds of the lottery should go in the direction of their interests. Their views and interests have been noted. At the other end of the spectrum we had the right reverend Prelate the Bishop of St. Albans supported by the noble Lord, Lord Beaumont of Whitley. I am sure that we all respect their views, even though we may not hold to them. It is right that their views should be expressed in your Lordships' House in this debate.
The idea of a national lottery is not a trivial one. We are launching an enterprise which has the potential to make a significant impact on the life of

481
this country through the way in which the lottery is sold and through the effect of the additional resources which will be made available to the good causes.
The noble Lord, Lord Donoughue, was broadly positive about the lottery. He spoke of the Protestant work ethic. We are all in favour of that. The noble Lord, Lord Holme of Cheltenham, was more reserved about the prospect of a lottery, as was his noble friend Lady Seear who gave it what she called a "reluctant" welcome. The noble Lord, Lord Howell, with his wide experience in the sporting world and as a sporting Minister, reminded your Lordships that in the past the Labour Party supported the idea of a national lottery.
However, many noble Lords were concerned about additionality and spending, including the noble Lord, Lord Charteris, with his experience of the National Heritage Memorial Fund, my noble friend Lord Montagu of Beaulieu, a former chairman of English Heritage, the noble Lord, Lord Palumbo, chairman of the Arts Council, and my noble friend Lord Crathorne, a member of the National Heritage Memorial Fund. I was delighted also to see that my noble friend Lord Rothschild was able to be here during the earlier part of the debate.
The Government have always made clear that funds provided by the national lottery would be additional to public expenditure. Transparency of accounts and the presumption in favour of capital projects will assist in that. The distribution bodies, in distributing funds, will wish to bear in mind the advantages of minimising the overlap of their programmes funded from Government expenditure.
I must remind the House that the distributing bodies will be independent of government but will remain answerable to Parliament. In making grants the distribution bodies, with the exception of the National Lottery Charities Board, will be expected to give priority to capital grants. That is a practical approach; otherwise the lottery money would be silted up with running costs. We expect the distributors to give capital grants normally when running costs from another source are assured. The other source may be private sector or indeed the local authority. However, the Government have accepted that the running costs may be paid in exceptional circumstances, either through endowment or revenue grant.
It should be remembered that a capital project may not mean only a new building; it may mean an extension, a major refurbishment, a new roof or perhaps a total rewiring. I shall study some of the detailed points in regard to conservation that were made by my noble friend Lord Cavendish, who is a commissioner of English Heritage.
Your Lordships would expect me to say that taxation is a matter for the Chancellor. Indeed, that is exactly what I do say. It is a matter for the new Chancellor of the Exchequer.
Lord McIntosh of Haringey: My Lords, without making any reference to personalities, the noble Viscount is responding to the debate on behalf of the Government and not on behalf of any specific Minister or Secretary of State.
Viscount Astor: My Lords, I realise that too. But we believe that the Chancellor's modest portion should be seen as a reasonable share of the total. I was glad to see the noble Lord, Lord Armstrong of Ilminster, who understands the working of the Treasury better than most, took the same view.
We have no intention of taxing winnings in the national lottery. In this country winnings in other lotteries are not taxed and, indeed, the top prize in the football pools which has been more than £2 million in the past, is not taxed. Research shows that a tax on winnings is a great disincentive to players, particularly when one considers that the rate of tax on winnings would have to be perhaps twice that on stakes, given the proportion of turnover which is paid out in prizes. Indeed, in Holland there is a flourishing black market in winning lottery tickets in order to avoid taxation.
The rate of this taxation was established by my right honourable friend the Chancellor. The Government always made it clear that the national lottery would have to be taxed in order to compensate for taxation forgone from the general consumer expenditure from which lottery spending is likely to be drawn. While I understand the desire which noble Lords have expressed to establish on the face of the Bill a guaranteed percentage for good causes—for example, 35 per cent—that would inevitably have the adverse effect of reducing the money which would be available for those good causes. A fixed percentage of 35 per cent would necessarily squeeze the percentage available for prizes. There is no doubt that that would reduce the turnover of the lottery. I am sure your Lordships will appreciate that 25 per cent of £2 billion is more than 35 per cent of £1 billion. The important thing is to maximise the actual return for good causes, which is a statutory duty for the Secretary of State and the director general made under Clause 4 of the Bill.
We are also quite clear that material should be available at the point of sale which makes clear how the net proceeds of the lottery are going to be divided in terms of good causes. The model we have proposed for managing the net proceeds of the lottery which will go to form the national lottery distribution fund gives the distributing bodies considerable flexibility. When they need funds to pay to beneficiaries they draw it down. Until then it will be invested by the National Investment and Loans Office, earning a very reasonable and risk-averse rate of return. The noble Lord, Lord McIntosh, and I are not far apart in our view about the national lottery. The noble Lord referred to competition. The operators of the lottery will be bidding against each other with precisely the object of maximising the proceeds to good causes.
Concern was expressed by the right reverend Prelate the Bishop of St. Albans, the noble Lord, Lord Allen of Abbeydale and my noble friend Lord Lucas about the effect of the lottery on charitable income. My noble friend Lord Mancroft mentioned particularly the effect on small charities. There were also suggestions about a charitable foundation, something on which I know the noble Lord, Lord Birkett, is keen. The noble Lord has worked perhaps harder than anyone else for a national lottery in this country.

483
As I said, a number of concerns have been expressed about the effect of the introduction of the national lottery on charitable incomes. I can fully understand the natural concern of charities in the face of change. It is a major development which is bound to have an effect on charities. We must remember that some changes are for the good. Charities are a major beneficiary from the proceeds of the national lottery and these are new funds. We have benefited those charities which run their own lotteries by changing the rules which govern them and increasing various limits to allow them to run bigger and more profitable lotteries. The National Lottery Charities Board will be a unique body in British life; an independent body with access to an enormous store of funds with which to fund the voluntary sector in whatever way it wishes.
There are those who are worried about the introduction of a national lottery and who suggest that the Irish charity scene is similar to the one in this country. Some will tell you that charities have suffered as a result of the introduction of a national lottery in Ireland. But there are some suggestions that the national lottery has stimulated a new and sophisticated market for charity scratch cards. The motivation for participating in a national lottery and in charitable lotteries is quite different. Therefore, I believe that with the change in the rules we have prepared in this country charitable lotteries will continue to thrive long after the introduction of the national lottery. I hope, therefore, that noble Lords will see that the national lottery is an opportunity for establishing something that is uniquely beneficial to charities.
My noble friend Lord Lucas asked about scratch cards. Some have called for the national lottery not to be allowed to use scratch cards. That is not realistic. In other countries scratch cards account for 40 per cent of the sales of state lotteries and form an important part of the lottery income.
Of course we shall monitor the effect on charities. Regular, permanent and comprehensive monitoring would be bureaucratic and expensive. It will not produce conclusive evidence since changes would be hard to measure and their specific causes hard to prove. However, we are considering how best to assess, in general terms, the effect of the lottery and changes in charitable income once the lottery is established. But I can assure your Lordships that we will be taking this forward in consultation with the voluntary sector.
There have also been concerns expressed about raising the limits of small lotteries. We have done so, but to increase the limits on small lotteries further would significantly alter the character of those lotteries. They would cease being small lotteries but would clearly become large lotteries. It is a matter of judgment as to when a small lottery becomes large. I suspect that the kinds of figures which my noble friend Lord Mancroft mentioned are far too high. However, I believe that we shall be able to look forward to further discussion on this matter at Committee stage of the Bill.
It has been argued that the national lottery would be better if it were established as a charitable
484
foundation which would run the operation of a lottery as well as overseeing the distribution of the proceeds. That approach would fly in the face of the results of the consultation which was categorical in suggesting that it was essential that operation was separate from distribution since different skills are required for each.
There has been some suggestion that such a model could be run as a non-profit making venture. Let us explore that for a moment. Even the proponents of that option accept that the suppliers of lottery services such as the ticket printers, the computer companies, advertising agencies, retail outlets, and so on, will expect to make a profit if they are to undertake the business. The shareholders who put up the large amounts of capital required for the systems would also rightly expect a return on their capital. Therefore, the costs are unavoidable. The issue is not whether the profit element can be avoided in order to liberate more money for good causes—it cannot—but whether the oversight of a charitable board will be run more professionally and successfully by the private sector.
I believe that it has been proven time and time again, when it comes to ensuring the bottom line, that private sector disciplines are paramount. The model we have chosen under which private sector operators will bid against each other for a licence to run the lottery has competition built in which will ensure that costs are kept low and the returns to good causes are as high as possible.
The model which we have chosen for distribution has the virtues of economy, allowing separate and appropriate expertise to be applied in that distribution. It has full accountability to Parliament enshrined within. I am sure that noble Lords will agree that that accountability must be preserved at all costs. Were the national lottery to be a charitable foundation that would have no bearing on the Chancellor's ability to raise tax on it. It offers no apparent advantage.
We believe that a lottery is a respectable venture. We should be proud of our future national lottery. We do not need to disguise it under the unnecessary cloak of charitable respectability. The proceeds of the lottery are for good causes and that is its purpose.
Some concern has been expressed about Clause 24 and its effect, particularly by the noble Lord, Lord Donoughue, and my noble friend Lord Crathorne. Concern has also been expressed about the distributing bodies.
The noble Lord, Lord Palumbo, is chairman of one of the most important distributing bodies. I believe that he was quite right to say that the proceeds will generate work, wealth, civic pride and encourage the arts. A national lottery will also encourage tourism in this country.
We have also heard questions about the Millennium Fund. I must give a certain amount of credit to the noble Lord, Lord Palumbo, who has always pushed the idea of the Millennium Fund. He must be pleased with what is happening. Perhaps I may turn specifically to—
Lord Allen of Abbeydale: My Lords, before the Minister leaves the Millennium Fund, may I have an answer to my question about what is meant by "the millennium"?
Viscount Astor: My Lords, if the noble Lord will curb his enthusiasm for a moment, I shall come to that.
Much concern has been expressed about the provisions of Clause 24 which will allow the Secretary of State to specify bodies which should not receive money. We are clear that that provision is intended to be used where there may be a conflict of interest and where a distributing body might be tempted to fund a body in which it had a controlling interest. I have noted your Lordships' concern and undertake to take this provision away to see whether anything can be done to improve the clause.
I turn now to the Millennium Fund about which I have been asked various questions. Clause 27 provides that no further sums shall be paid to the Millennium Commission after 31st December 2000. Unless the Secretary of State returns to Parliament with further proposals, the money would then be equally divided among the remaining four categories. Of course, the end of the second millennium is not strictly until the end of the year 2000, but it is likely that people will not wait until then before they celebrate the millennium. As a result, the Bill is drafted to cover both so that the Millennium Commission can fund long-term projects.
The noble Lord, Lord Donoughue, put forward questions about the Millennium Commission. I found his comments about it rather surprising. There is no question of the Millennium Commission funding, for example, pre-election jamborees. On the contrary, the commissioners are independent of government and, indeed, one member will be nominated by the Leader of the Opposition in another place. The commission will pursue high-minded ideals and will enable projects to take place which will be of pride to generations to come.
I turn now to the National Heritage Memorial Fund. It was chosen primarily for the range of its coverage, which includes the natural as well as the built heritage. It covers also the acquisition of objects as well as of buildings. No other body in the heritage field covers such a large range.
The noble Lord, Lord Gibson, asked about money being separately accounted for in the funds. Clause 32 allows for separate accounts for lottery funds to be kept by distributor bodies. They will be presented to Parliament annually. The money which the National Heritage Memorial Fund distributes from the lottery will clearly be different from its money for programmed expenditure. It will not be subject to annuality. The National Heritage Memorial Fund itself will not be able to invest the money from the lottery. As I have said previously, that money will be held on its behalf by the National Debt Commissioners and, of course, it will be treated separately. The trustees of the fund and the other distributor bodies, such as the Sports Council, must work effectively and properly within their powers to undertake all the projects that they fund.
The purpose of Clause 24 is to provide a framework within which the bodies can continue to operate. It is not intended that the Government will interfere with the individual decisions of those bodies, but there will be a need to set the rules on, for example, financial
486
systems and controls and to ensure that there is a fair coverage across the countries of the United Kingdom in relation to the broad policy. That is what Clause 24 is about.
I have been asked about the owners of private houses. The National Heritage Memorial Fund does not fund private individuals. That practice will be followed and applied to lottery funds. In order to qualify, a private individual will need to form the property in question into a charitable trust.
The noble Baroness, Lady O'Cathain, asked about Clause 25. Any change in the percentages going to each of the five sectors may be made only on an affirmative resolution of both Houses of Parliament. That will necessitate a full debate on the relative needs and priorities of the arts, sport, heritage, charities and the Millennium Commission. My right honourable friend the Secretary of State has said that he envisages that kind of debate perhaps once in each Parliament.
I turn now to the wider issues as regards gambling and the issues raised by the right reverend Prelate, the noble Lord, Lord Houghton of Sowerby, and my noble friend Lord St. John of Fawsley. I am sorry that my noble friend is no longer in his place. I welcome his support. I am sure that he would have made as equally as good a bishop as many of the right reverend Prelates who sit on the Bishops' Bench. We are lucky because instead he is the distinguished chairman of the Royal Fine Arts Commission. I am sure that those who apply for funds from the Millennium Commission will welcome the advice that they can obtain from my noble friend's organisation.
Lord Howell: My Lords, he is in the wrong church, too.
Viscount Astor: My Lords, I noted the reservations expressed by the right reverend Prelate the Bishop of Saint Albans but I must disagree with some of his remarks. I do not believe that the national lottery will be any more disreputable than existing lotteries which sell tickets to mend the church roof, as the noble Lord, Lord Howell, reminded us. The right reverend Prelate ended on a slightly more positive note and I accept his genuine concerns.
The Government's policy on gambling is based on the principle that the state should interfere as little as possible in the individual's liberty to take part in various forms of gambling but that controls are necessary to prevent crime, to ensure that punters are aware what they are letting themselves in for and to protect the vulnerable, in particular young people. It is no part of government policy to prevent people gambling.
I turn now to deal with issues as regards the pools, roll-over, the Football Trust chaired by my noble friend Lord Aberdare which does such a valuable job for football grounds, and the Foundation for Sport and the Arts, of which my noble friend Lord Brabazon is vice-chairman. As regards roll-over, the Government are committed to introducing in Committee a provision which will ensure that the pools are allowed to roll over in equal measure to the national lottery. That measure will take account of the fact that the pools companies are unregulated and can

487
alter their rules at will—a situation which is the reverse of that of the national lottery. Under the proposals which the pools companies caused to be put before another place they would have been able to roll over up to 25 times a year. I believe that moderation as regards the rolling over of prizes is to be encouraged warmly. Our proposals will be fair and moderate in their outlook.
In any event, both the pools and the national lottery will be restricted in their roll over to not more than three consecutive occasions. That will protect against scams although the possibility of three roll overs is extremely unlikely.
My noble friend Lord Aberdare expressed concern about the income to football as a result of the introduction of the national lottery. There is an assumption that income from the Football Trust and the pools companies will fall because of the national lottery. There is no evidence that the income of the pools companies will fall and that, therefore, the contribution by the Treasury in pools betting duty foregone will diminish.
The Government make no secret of their appreciation of the work of the Foundation for Sport and the Arts. During this year it is expected that it will make grants in excess of £60 million, helping tens of thousands of projects often, as my noble friend pointed out, at the grass roots of those activities. That body performs a welcome function in the world of the arts and sport.
My noble friend also asked me about advertising. I can confirm that the relevant ITC and radio authority codes will be amended to allow the pools and other gambling companies to sponsor TV and radio programmes other than those programmes directly related to those forms of gambling.
The noble Lord, Lord Wyatt of Weeford, as chairman of the Tote, sold it extremely well to your Lordships, as he always does. He was anxious about betting turnover, as were my noble friends Lord Trevethin and Oaksey, Lord De La Warr and Lord Zetland, who is a member of the new British Horse Racing Board.
The national lottery, as is the case with state lotteries throughout the world, will divert expenditure largely from general consumption and not necessarily from gambling. In Ireland, for example, there is no evidence that betting declined as a result of the national lottery. Indeed, it increased following the introduction of the lottery. Therefore it does not follow that the levy will reduce here. Indeed, lotteries are not viewed as gambling by those who participate. As someone who will be using the facilities of the noble Lord, Lord Wyatt, at Epsom and Ascot I assure the noble Lord that I shall continue to do so when the national lottery is introduced.
The noble Lord, Lord Wyatt, put in a bid for the Tote to run the lottery. That would depend on the Tote's powers being altered. We have no preconceived ideas as to who should run the lottery. It will be up to the director general to decide which is the best organisation to run the lottery with propriety and to achieve the best return for good causes. I look forward
488
to the noble Lord, Lord Wyatt, producing an amendment when we shall be able to discuss the matter further. He was right in saying that Post Office Counters Limited has made clear that it will be interested in the retailing opportunities offered by the lottery. In order for any sub-post office, the counters network or any small business to sell lottery tickets all that will be needed is a contract with the operator.
For something as new and fundamentally far-reaching for our nation as the national lottery it is important that it is approached in a careful, constructive and non-partisan way. Your Lordships have done so today. I realise that there have been anxieties and I hope that I have been able to reassure your Lordships on a number of those. We shall be able further to clarify the issues in Committee and I shall study carefully in Hansard what has been said today.
The noble Lord, Lord Houghton of Sowerby, asked your Lordships to put up their hands if they intended to buy a lottery ticket. I shall not go as far as that; I merely ask your Lordships that the Bill be now read a second time.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Royal Assent
5.52 p.m.
The Deputy Speaker (Lord Lyell): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Charities Act,

Clean Air Act,

Radioactive Substances Act,

Carrying of Knives, etc (Scotland) Act,

Disability (Grants) Act,

Protection of Animals (Scotland) Act,

Foreign Compensation (Amendment) Act, Non-Domestic Rating Act,

Reinsurance (Acts of Terrorism) Act,

Midland Metro Act,

Midland Metro (No. 2) Act,

London Docklands Railway (Lewisham) Act,

London Docklands Railway (Lewisham) (No. 2) Act.

Railways Bill
5.54 p.m.
Brought from the Commons; read a first time, and to be printed.

Osteopaths Bill
5.55 p.m.
Lord Walton of Detchant: My Lords, I beg to move that this Bill be now read a second time.
A little over a year ago I had the privilege of opening the Second Reading debate on a similar Bill standing in my name on the Order Paper. As the House will know, that Bill fell when Parliament was dissolved on the calling of a general election last year. I am, therefore, delighted today to open the Second

489
Reading debate on the new Osteopaths Bill. I am also very pleased that events over the past year have moved ahead considerably and that the osteopathic profession is now closer than ever to achieving the goal of statutory regulation which it has been actively pursuing for the past 60 years.
Osteopathy is a system of diagnosis and treatment which emphasises methods of recognising and alleviating structural and mechanical problems of the body. Within recent years, osteopathic treatment and training have become increasingly scientific and comprehensive and the discipline has become increasingly popular; indeed, it is now the most widely used of the so-called "complementary" therapies. Moreover, in recent years the medical profession has come to recognise osteopathy as a discipline which complements conventional medical treatment and which enhances the range of possible therapeutic options available to patients.
Given the increasingly common instances of cross-referral between general practitioners and osteopaths, it is not now unusual for an osteopath to be treating a patient who is concurrently receiving medication from his or her doctor. That is in stark contrast to the position that prevailed some 20 to 25 years ago when it was regarded as improper for a doctor to associate with complementary practitioners. At that time, a doctor referring a patient to a non-medically qualified osteopath would have fallen foul of the recommendations of the General Medical Council on professional conduct and discipline.
Osteopathic treatment involves the use of predominantly gentle manual methods of manipulation. It utilises a diagnostic procedure similar to conventional medical examination and pays particular attention to obtaining a detailed assessment of the patient's musculoskeletal system. However, as the law currently stands, anyone may call him or herself an osteopath and may then begin practice in the United Kingdom. There is no obligation under law to undergo formal training of any kind, or to comply with standards of professional competence or ethical practice. Thus, a patient has no guarantee that a person claiming to be an osteopath is competent or fit to practise as one.
However a system of voluntary registration operated by several independent registering bodies currently exists. The largest is the General Council and Register of Osteopaths. It has approximately 1,700 members which is about three-quarters of all professionally registered osteopaths. But, by its very nature, a voluntary system is unable to enforce registration or to compel practitioners to comply with standards of competence or conduct.
The central object of the Osteopaths Bill now before your Lordships is to replace those voluntary schemes with a system of statutory registration for osteopaths, similar to those which already exist for many other professional groups, including the key health professions. That would be achieved through the establishment of the General Osteopathic Council which would be responsible for developing, promoting and regulating the education and practice of the profession of osteopathy through the UK. A statutory register of osteopaths would form the core of the
490
proposed scheme. Practitioners wishing to use the professional title of "osteopath" would be required to be on that register which would be maintained by a registrar appointed by the General Osteopathic Council. Copies of the register would be published annually and a master copy would be available for public inspection at any reasonable time.
Entry to the register would be based on prescribed standards of training, good character and good health. An important provision in the Bill would place practitioners under an obligation to declare any previous criminal convictions—including spent convictions—if asked, when applying for registration, thus helping to provide members of the public with an additional assurance as to a registered practitioner's character and bona fides. That is of particular significance given both the contact nature of osteopathic treatment and recognition that most practitioners will continue to practise in the private sector following the introduction of statutory registration.
The Bill also makes provision to ensure that as many osteopaths in current practice as possible, who might not hold a qualification entitling them to automatic registration, may be admitted on to the register and brought within the scope of the statutory scheme on the basis of lawful, safe and competent practice. The Bill would also establish four statutory committees of the General Osteopathic Council—the Education Committee, the Investigating Committee, the Professional Conduct Committee and the Health Committee.
The Education Committee would have the responsibility of promoting high standards of education in osteopathy and of providing the general council with advice on all matters concerning education, training and examinations in osteopathy. The Education Committee would also be empowered to appoint visitors to visit educational institutions providing courses of study, examinations or tests of competence in osteopathy, and to report back to the committee on the nature and quality of the instruction provided.
The Investigating Committee, the Professional Conduct Committee and the Health Committee would collectively provide the "fitness to practise" machinery to ensure that an allegation made against an osteopath concerning his or her professional conduct, competence or fitness to practise osteopathy would be properly investigated and effectively dealt with.
The Bill will therefore provide clear assurances to the public that in future all osteopaths will be appropriately trained, properly qualified and fully competent in all aspects of clinical osteopathic practice and that their professional conduct and continuing competence will be effectively regulated by a statutory council.
This latest Osteopaths Bill—like the one I introduced last Session—is modelled on the recommendations for statutory regulation presented in the report of the Kings Fund Working Party on Osteopathy. This working party was set up in the autumn of 1989 under the very able and distinguished

491
chairmanship of the right honourable Sir Thomas Bingham (then a Lord Justice of Appeal and now Master of the Rolls).
The working party's terms of reference were,
"Having regard to the growing public demand for osteopathic treatment and increasing support, both professional and political, for early legislation to establish a statutory register to regulate the education, training and practice of osteopathy for the benefit and protection of patients, to consider the scope and content of such legislation and to make recommendations and report".
I was pleased to serve as a member of the working party, and I am convinced that its report, published after two years of careful deliberation and very widespread consultation, marked a significant milestone on the osteopathic profession's road to statutory regulation.
Many noble Lords will know that following the publication of the report of the working party on osteopathy, the Kings Fund set up a working party on chiropractic. The report of this working party was published on 5th May this year and similarly recommends the introduction of statutory regulation for that profession. I know that the chiropractors are eagerly hoping to be able to sponsor a similar Bill in the next Session and are following the passage of this Bill with keen interest. Some noble Lords may inquire as to why both professions are not included in this Bill. Quite simply the two professions, though clearly allied, are sufficiently different in several respects to warrant separate consideration. A Bill designed to embrace both would be too detailed and complex to be handled as a private Member's measure.
At the beginning of my speech I referred to a number of very significant developments that have occurred since I last stood here to speak on an Osteopaths Bill. If noble Lords will pardon the metaphor, I should now like to put some flesh on these bones. Following the general election, the osteopathic profession—personified in the form of its dedicated foremost protagonist, Simon Fielding—successfully persuaded the honourable Member for Cambridgeshire North-East to take this Bill through all its stages in another place. As I have said, it was modelled on the recommendations of the working party but has been drafted afresh, taking account of views expressed by about 10 other government departments and the experiences of other statutory bodies, especially the General Medical Council.
It has been scrutinised in the finest detail in another place and is now, I suggest, a formidable and robust piece of legislation embodying the most up-to-date thinking on professional self-regulation. It is a Bill of which the profession and all those who have contributed to its formulation can feel greatly and justly proud.
In moving its Second Reading today I should like to commend the Bill to your Lordships—in the words of the honourable Member the Parliamentary Under-Secretary of State for Health —as "a finished product".
Noble Lords will know that the Bill is a Private Member's Bill and as such has a very fragile existence. Without seeking to dramatise the situation, perhaps I
492
may say that any amendment made to the Bill at this stage could mean gambling on its future success and endangering its chance of returning to another place by 2nd July. If it missed that date, regardless of the reason, or if insufficient time were found to be available for one or more amendments to be debated, the Bill could be lost, even at that late stage.
I do not suggest in any way that we should give this Bill anything less than the same careful consideration that this House gives to all legislation. Neither I, the osteopathic profession nor anyone else involved with the Bill would wish to see a defective or deficient piece of legislation appear on the statute book. However, many people are of the opinion that this particular piece of legislation is long overdue. The statutory scheme proposed in the Bill enjoys all-party support and has been warmly welcomed by many other professional groups, including the medical profession, the allied professions and consumer organisations. Indeed, the BMA has said:
"The BMA supports this legislation seeking to regulate the education and training of osteopaths in the United Kingdom. We believe it is entirely appropriate that those wishing to practise osteopathy should have to register to do so, and we would welcome such a register as a guarantee of professional conduct and integrity.
"Regulation of osteopaths by statute should offer greater protection to patients from the potential harm of treatment by unskilled and unauthorised practitioners. The objective of greater safeguards for the public health remains the overriding goal of the Association in all policy matters".
Those views are shared by the Conference of Medical Royal Colleges and Faculties and by the senior bodies representing, for example, the nursing profession.
I hope that it would not be out of place for me to say that this House has already indicated its approval of and support for the principles underpinning the scheme when it gave a Second Reading and approved amendments in Committee to the Bill which I introduced in the last Session.
I have mentioned that this latest Bill has been meticulously scrutinised by all relevant government departments and in another place. I should perhaps add that that scrutiny took place outside the strictures of traditional party influences and with the express purpose of providing the profession with the finest possible piece of legislation. I believe that that aim has been achieved and it is on that basis that I urge noble Lords to give this Bill a fair wind and a safe and speedy passage. I beg to move.
Moved, that the Bill be now read a second time. —(Lord Walton of Detchant.)
6.8 p.m.
Lord Ennals: My Lords, I shall be brief, but I want to congratulate once again the noble Lord, Lord Walton, on bringing in this slightly different and improved version of the Bill which he presented to your Lordships' House on 31st January 1992. On that occasion several of us said that it was appropriate that the noble Lord, Lord Walton, as a former president of the BMA with distinguished medical experience should introduce a Bill of this nature and that that showed the extent to which the medical profession and osteopaths had come together. I congratulate the noble Lord on sustaining the Bill with enthusiasm.

493
I wish to endorse the noble Lord's plea—although he said that it was not a plea—that the Bill should not be amended so that the Bill does not have to return to another place. We know what they always do to legislation which we send back from this House. Let us send back a clean piece of paper.
As the noble Lord said, since January 1992 there have been very significant developments. First, there is the progress by the osteopaths themselves. They are far more ready and prepared for the application of the Bill. As has also been said, since 1992 the chiropractics are ready.
I am grateful, as I am sure we all are, to the King's Fund for having sponsored the working party and the Bill which has now been presented; and for the fact that the Prince of Wales lent his support to the Bill now before us. I believe that Her Royal Highness the Princess of Wales is giving her support to the chiropractic Bill, which I hope will come before us in the next Session.
As I said on the last occasion, I believe that if the Government support the Bill it should be introduced by the Government. It is a pity that the chiropractic Bill should depend upon the vagaries—the good luck or otherwise—of those whose names are in the ballot for Private Members' Bills.
Finally, I wish to quote what I believe to be the very important statement that was quoted in the previous debate. It indicates the way in which treatments carried out by osteopaths may come within the scope of the National Health Service. One presumes that it will apply to other complementary therapies when they receive the same treatment in both Houses of Parliament. The statement was made on 3rd December in a letter sent by the then Parliamentary Under-Secretary of State at the Department of Health to the then chairman of the all-party parliamentary group on alternative and complementary therapies. Incidentally, I had intended to state at the beginning of my speech that it is in my capacity as joint president of the all-party parliamentary group with the noble Lord, Lord Colwyn, that I welcome the Bill. The statement reads:
"Any GP therefore may employ a complementary therapist to offer NHS treatment within his practice … The critical point in the case of both fundholding and nonfundholding GPs, is that the GP remains clinically accountable for the care offered by the complementary therapist. It is not a 'referral' system whereby one registered practitioner refers a patient for treatment to another. It is a 'delegation' system where the GP asks another professional to provide care for which he remains clinically accountable. It is therefore for the individual GP to decide in the case of each individual patient whether the alternative therapist offers the most appropriate care to treat that patient's condition".— [Official Report, 31/1/92; col. 1599.]
When that statement was made, it was an important step forward for alternative and complementary therapists, provided that they receive the approval which I hope the Bill will provide. When the Minister replies I hope that she will confirm that what was said by the Parliamentary Under-Secretary at that time still stands today. I hope that the Bill has every possible success.
6.12 p.m.
Lord Beaumont of Whitley: My Lords, I am empowered to say that, although this is a Private Member's Bill, my party is wholly behind it. I also convey the good wishes of the noble Lord, Lord Winstanley. He too would have spoken in favour of it if he had been able to be present. We are sorry that he cannot be present.
It is absolutely right that the osteopathic profession, which has proved itself over a long period of time, should be recognised in this way. It is right in principle. I have a long history of being looked after by a qualified osteopath, as has my family, and she has kept us in good health. I speak therefore with gratitude today.
I shall not venture to go through all the matters that I raised on the previous Second Reading in your Lordships' House. If any noble Lords should be so curious that they wish to know, they can read my speech in Hansard. I wish the Bill a good wind. I hope that no one delays it in any way. I hope that it is speedily followed by the chiropractors' Bill.
6.15 p.m.
Earl Baldwin of Bewdley: My Lords, I warmly welcome this Bill as it reappears in altered form in your Lordships' House after an interval of 16 months. I congratulate the King's Fund for taking on the task of surveying the field of osteopathy and, under Sir Thomas Bingham, producing an admirable report which has led to the Bill which is now before us; and I congratulate my noble friend Lord Walton of Detchant on all his hard work and on the clarity and skill with which he has once again introduced this Bill. I should also like to join in paying a special tribute to Simon Fielding, who has worked so tirelessly on behalf of his fellow osteopaths to get and keep this whole show on the road.
I speak, like many of your Lordships, as a satisfied customer of this most orthodox of the unorthodox professions, and also as joint chairman of the Parliamentary Group for Alternative and Complementary Medicine. As Chairman of the British Acupuncture Accreditation Board, I have a particular interest in seeing how complementary health care professions can regulate their affairs, unite their members, and gain acceptance from society and government. In saying this I should like to repeat what I said on the last occasion about the dangers of public acceptability. In welcoming osteopathy to its place in the sun, with all its attendant benefits, we should do nothing that could lead it to lose its soul or, to put it another way, to abandon its unique therapeutic flavour. In the drive for respectability this can all too easily happen.
It is interesting to note how new ideas and techniques gain acceptance, particularly in the world of medicine. At first the newcomer is ignored. If he does not go away, he is rubbished—"dangerous quackery", "no scientific basis", and so on. If he still does not go away, after a period of time there are small pockets of acceptance: "some usefulness in a limited range of conditions". Eventually, with the passage of

495
time and the retirement of the old guard, acceptance becomes general. It is not scientific logic that drives this process. Nothing significant has changed in the technique or therapy itself. It is the climate surrounding it that changes.
I believe this has lessons for the future. Osteopathy began in the last century, in the days of Lister and Pasteur. Less than 20 years ago, sections of the medical profession were still refusing to have anything to do with it. If patients are to be well served—and this, after all, is what the whole business is about—we must see a drastic shortening of this timescale. As I said, this has to do with attitudes of mind. The chiropractors (as we have heard, another 100 year-old profession) will soon be coming forward with their own Bill, thanks again to the support of the King's Fund. Acupuncture, homoeopathy and others may come after. But they will not do so unless from the side of medical science there is a real willingness to engage with hitherto unfamiliar concepts. There are signs in the air of a new openness, and this is encouraging. Without it, it is patients in the end who will suffer.
This Bill is a landmark. The fact that it might have come a generation or two ago should not prevent us from rejoicing today. It could be said to have broken the back of the resistance to non-mainstream methods of healing, if that is not the wrong metaphor to use in an osteopathic context. I am sure that we will all wish it a speedy passage through its remaining stages on to the statute book.
6.18 p.m.
The Earl of Kintore: My Lords, I should like, as another grateful patient, to welcome this Bill. In November last year I had a very painful back. The banqueting manager of my club, noticing my problem, told me that when he put his back out carrying cases of champagne about, he went to the British School of Osteopathy in Suffolk Street to be put right. Before treatment I could barely sit in the Chamber without pain for more than 15 minutes at a time. After two treatments, I was able to sit in my place for the entire Second Reading proceedings of the Bankruptcy (Scotland) Bill.
During those treatments by a senior tutor and female student from New Zealand, there was discussion on the Bill previous to this one, also piloted through this House by my noble friend Lord Walton of Detchant. It became clear to me that osteopaths are proud of the recognition that this Bill will give them as members of a disciplined and caring profession. I hope, therefore, that the Bill will complete its parliamentary passage quickly.
6.20 p.m.
Lord Cullen of Ashbourne: My Lords, as many noble Lords know, I have an interest to declare in that I have been for many years associated with the Osteopathic Educational Foundation. That has brought me into close contact with the work and organisation of the profession. I should like to thank
496
the noble Lord, Lord Walton, for all his very hard work on behalf of osteopathy and for bringing back to this House this new and improved version of the Bill.
It goes without saying that I wholeheartedly support this impressive piece of legislation. I am sure that noble Lords will agree with the noble Lord, Lord Walton, that it is long overdue. I extend my thanks not only to the King's Fund, and in particular to the chief executive, Robert Maxwell, but also to Her Majesty's Government and the Department of Health for all their support and hard work which will, I believe, ensure that this Bill safely reaches the statute book. We should also acknowledge the central role played by His Royal Highness the Prince of Wales, in the establishment of the original King's Fund Working Party on Osteopathy, which was so ably chaired by Lord Justice Bingham. I should also like to say that had it not been for the virtually single-handed efforts over the past seven years of Simon Fielding, we should not be debating this Bill today.
Perhaps I may return for a moment to the work of the Osteopathic Educational Foundation, which I mentioned a moment ago. I am proud to have been its chairman for some 25 years. The foundation was originally established 46 years ago to help support and develop the educational infrastructure of the osteopathic profession.
In recent years, however, it has become increasingly necessary for it to divert considerable amounts of money to support students enrolled upon full-time courses, who, through no fault of their own, suddenly find themselves unable to pay their fees and support themselves. That situation has been greatly exacerbated following the Government's decision three years ago to introduce a scheme which has now become known as the "switch to fees" policy. This policy aimed to reduce the degree of centralised funding for public sector higher education institutions while increasing the level of grant for individual students. Thus it was hoped to reward those institutions which could attract higher numbers of students.
However, in practice the policy penalises severely those students who attend full-time degree courses in osteopathy at the major private teaching institutions. Students at these schools receive only a fraction of the grant awarded to students attending public sector institutions. For example, students embarking upon a four-year full-time degree course in osteopathy receive only £695 towards fees which are currently in the region of £5,000 a year. It is worth noting that students who undertake a clinical course at a public sector institution receive grants well in excess of £4,000. I should add that the costs of training and the level of fees charged by private institutions compare very favourably with the cost of training comparable health care professionals in the public sector.
The other side of this coin is the difficulty that private osteopathic schools face in attracting a steady flow of students who have not only the necessary qualifications but also the financial resources that are required. It seems to me inconsistent for the Government on the one hand to support the establishment of osteopathy as a recognised profession regulated by statute and, on the other hand, to

497
deny an appropriate level of student funding to allow young men and women to train for this most worthwhile profession.
I therefore ask my noble friend whether she would take up this important matter with her colleagues in the Department for Education. I sincerely hope that after enactment of the Bill, students wishing to study for a career in osteopathy will be eligible for the same amount of grant funding as clinical students attending public sector institutions. I am sure that your Lordships will agree that it would be a tragedy if, at the moment of its coming of age, osteopathy were to be starved of new graduates, who are the very life-blood of any profession.
6.25 p.m.
The Earl of Clanwilliam: My Lords, I hope that your Lordships will allow a second intervention. I congratulate the noble Lord, Lord Walton of Detchant, on the skilful preparation of this Bill and the simple way in which a complex problem has been resolved. I was particularly gratified to hear the noble Lord confess the gradual conversion of the medical profession to some of the complementary systems. Long may it continue.
There are many other disciplines of complementary medicine which have formal training, general councils, rules of conduct and professional qualifications of university standard. I look forward to the day when they, too, are all brought forward to professional status and recognition by the BMA.
The many users of complementary medicine are already converted but I fear that the BMA still has a few miles to go along that particular damascene road. The noble Lord is assured of my greatest support in helping it along that road. I wish the Bill well.
6.26 p.m.
Lord Williams of Mostyn: My Lords, we support this measure without reservation. I ought to say how grateful we are to the noble Lord, Lord Walton of Detchant, for his masterly exposition, which was clear, precise and short—which is not always our experience. Apart from that, he has laboured mightily and long in this particular vineyard and I hope that he now sees the fruits within his grasp. In particular we ought to recognise the contribution of Sir Thomas Bingham, who is now Master of the Rolls. He offers another example of the enormous service that the senior judiciary give to the public in this country quite apart from their judicial duties. He is only the last of a series which includes the noble and learned Lord, Lord Taylor, on Hillsborough; Lord Justice Butler-Sloss on Cleveland; and Mr. Justice Popplewell on Bradford, to pick just a few examples at random.
This is legislation which follows the earlier models in respect of doctors, pharmacists and veterinary surgeons, among others. It seems to us that the principle which underlies it and which we support is that there cannot be an unrestricted free market in the provision of services without regulation in the field of health care and medicine. It is very good for us therefore, after this long day that we have shared
498
together, to see that all sides of your Lordships' House recognise and endorse that fundamental socialist principle. It is a comfort at this time of the evening.
There is only one question. It will not be the subject of amendment for the reasons indicated by the noble Lord, Lord Walton of Detchant. There is a possible source of injustice. In Clause 30(14) there is a specific power for an appeal tribunal to award costs; that is, for or against the appellant. There is no such specific provision earlier. It is capable of bringing about injustice. On occasions I have professionally represented veterinary surgeons, doctors and pharmacists in front of the equivalents of the professional conduct committees. Needless to say those people were all acquitted. But on their acquittal there was a gap which did not allow them to recover their costs at that stage before going to the appeal tribunal.
By way of seeking to be helpful, I respectfully suggest that in the rule giving opportunities and powers in Clause 26, some thought should be given to the provision of a power either from the health committee or the professional conduct committee—it should be both—to award costs in circumstances where the charges are dismissed. Other than that, we hope that the Bill will have a safe passage and we repeat our gratitude to the noble Lord, Lord Walton of Detchant, and his colleagues on the working party.
6.30 p.m.
Baroness Cumberlege: My Lords, I should like to begin my remarks by echoing the words of congratulation and support to the noble Lord, Lord Walton of Detchant, on bringing this excellent Bill to your Lordships' House. His tenacity and determination are to be admired. He has lived by the adage of, "If at first you don't succeed, try, try and try again". I share the view of the noble Lord, Lord Ennals, that it is most fitting that a physician of the distinction and eminence of the noble Lord, Lord Walton, should be guiding this specific Bill through your Lordships' House.
The Osteopaths Bill is a first-class piece of legislation which the Government not only wholly support, but are keen to see take its place on the statute book. The current Bill builds on the solid foundations laid by the Kings Fund Working Party on Osteopathy—of which the noble Lord, Lord Walton, was a member—to become the most modern Bill of its kind, and possibly, too, the envy of other professional groups.
The noble Lord, Lord Walton, has already described how osteopathy is a system of diagnosis and treatment which lays its main emphasis on the structural and mechanical problems of the body. Given that anthropologists believe the human frame has still not adapted to the upright position, despite nearly a million years of practice, it is surprising to learn that osteopathy was developed only a century or so ago in the United States of America. As a word of encouragement to the osteopathic profession, I understand that the same anthropologists believe that it will take a further million years before we finally

499
master the art of standing properly: we shall therefore be calling on the services of osteopaths for a good many years to come.
I listened with interest to noble Lords who have benefited from osteopathic treatment, including the noble Earl, Lord Kintore. The need for such treatment is perhaps not altogether surprising given the "semi-recumbent posture" many of us are forced to adopt in a vain effort to get comfortable on seats described by one osteopath as "an ergonomist's nightmare". Since the earliest days of its development, osteopathic treatment has been popular with the public. As the noble Lord, Lord Walton, said, it is the most widely used of the treatments many refer to as "complementary therapies".
The Bill is designed not only to protect the public, but to encourage the General Osteopathic Council to develop and promote the profession still further. That is a much broader remit than the statutory bodies of other comparable schemes and signals a new and exciting model for self-regulation for the future. The General Osteopathic Council would, if the Bill were enacted, be the flag-ship of the profession. Unlike, say, doctors, who have the General Medical Council and the British Medical Association, registered osteopaths cannot hope or be expected to support a large professional infrastructure. The profession's limited resources will therefore need to be concentrated within the General Osteopathic Council to ensure that the new and innovative statutory scheme starts life on a firm footing.
All that points to the prospect of great change for the profession. However, I should like to urge the profession not to jeopardise its current stability through premature action. The existing registering and professional bodies need to retain their current standards and identity, and individual practitioners to continue to support their current registering bodies. Not to do so could undermine all that has been achieved so far. It could also call into question the professional integrity and character of those who abandon their voluntary schemes.
I should also like to encourage the profession to exercise patience. If the Bill is successful, it could be well into 1994 before the General Osteopathic Council meets for the first time, and possibly two years or more before the statutory register opens.
Statutory regulation will also bring a set of new and quite different challenges. A brand new council will replace the current systems of voluntary registration. As the transition takes place, the council will be in need of encouragement and support, both practical and moral. Such support would not only need to come from individual members of the profession but also from the existing registering bodies. It might also need to be of a sacrificial nature to ensure that the statutory scheme gets off to a sound start. This might mean, for example, sharing manpower resources and expertise with the General Osteopathic Council until it finds a permanent home and its own staff. Those appointed to serve on the new council, and especially the osteopathic members, will need to be prepared to dedicate a considerable amount of time to their
500
council duties. In the early stages of the scheme, some may have the additional burden of continuing to serve on one of the voluntary registration bodies.
Financial challenges would also need to be met, such as the initial setting up and running costs and any research and educational initiatives. Osteopathy is an energetic and fast developing profession. I am sure that many members of the public as well as commerce and industry would wish to be associated with, and help to support financially, the establishment of the new General Osteopathic Council.
I should perhaps mention that the passage of the Bill is not in any way related to the availability or otherwise of osteopathy in the NHS. But to put the mind of the noble Lord, Lord Ennals, at rest I endorse the views contained in the letter of my ministerial colleague and would also add that we are aware that a growing number of general practitioners who are fund holders are employing the services of osteopaths. But as with all other services, the purchase of osteopathy is a matter for local 'decision based on the assessed health needs of the local population, competing priorities and available resources.
I have mentioned already that osteopathy is still a relatively young profession. In the United Kingdom, over half the profession has been qualified for less than 10 years. There is, therefore, much to be said for encouraging the development of group osteopathic practices which combine a spread of experience and expertise. This would provide younger members of the profession with contact with peers and senior colleagues and give them the opportunity to enhance their professional development. Such local practices could also provide a single central resource both for the public and local GPs.
It is hoped that statutory regulation will stimulate the continued growth of the profession and encourage more people to consider osteopathy as a career. We also anticipate that statutory regulation will help to foster closer working relationships between doctors and the osteopathic profession.
I know that the passage of the Bill has sparked off discussions on the wider subject of alternative and complementary therapies which have been mentioned in the debates. Your Lordships are no doubt aware of the recent report Complementary Therapies in the NHS published by the National Association of Health Authorities and Trusts. This shows that the NHS is prepared to purchase more complementary therapies but also reveals that NHS authorities want a more thorough review of all the available evidence to assess the effectiveness of those treatments.
I am pleased to announce today that the department is planning to fund a research project that will look at the impact complementary therapists—such as osteopaths, chiropractors, acupuncturists and homoeopathy—have on prescribing patterns, cost of drugs, hospital referral practices, patient satisfaction and repeat attendances, by surveying a representative sample of GP practices. The study will be carried out by the Medical Care Research Unit in Sheffield. It will cost £80,000 and take two years to complete.
Lord Ennals: My Lords, I congratulate the noble Baroness on the announcement that she has just made. It is very good news indeed.
Baroness Cumberlege: My Lords, I am grateful to the noble Lord. My noble friend Lord Cullen of Ashbourne, who has worked so tirelessly for the osteopathic profession for nearly a quarter of a century, raised the question of the switch of fees and the policy that was introduced by the Department of Education in 1990–91. The purpose of the switch was to promote effectiveness of institutions of higher education and to encourage them to exploit spare capacity. In principle the policy is neutral in financial terms although I sympathise with the situation of the students affected, as mentioned by my noble friend, since this mechanism cannot be applied to private colleges as the colleges do not receive any direct government funding. But I am prepared to accede to the request made by my noble friend and to take it up with my noble friend the Minister for Education.
The noble Lord, Lord Williams of Mostyn, mentioned the right of appeal and attendant costs. Although I can appreciate that there is an issue here, I am very pleased that he has given us an assurance that he will not press it because, as is very apparent this afternoon in your Lordships' House, we are all very anxious that this Bill should be passed and enacted.
Finally, I should like to underscore what the noble Lord, Lord Walton of Detchant, said about your Lordships' consideration of this Bill. The Bill has been exhaustively considered during its passage in another place. It is based on the same principles as the noble Lord's Bill in the last Session to which your Lordships gave considerable encouragement and support. On behalf of the Government, and in the knowledge that the Bill has all-party support, I commend it to the House as a finished product.
Perhaps I may just add that many of your Lordships—it was also mentioned this evening—will be aware of the personal commitment Simon Fielding has put into securing statutory regulation for the osteopathic profession. Last Christmas he sent me a Christmas card. On it was depicted a cartoon drawing of the Palace of Westminster in silhouette, with two voices coming from the inside. The first said "What about the Osteopaths Bill?" to which the second replied, "Pay it! Pay it!" In asking the same question, "What about the Osteopaths Bill?" to your Lordships this evening, I would urge the reply to be "Pass it! Pass it!".
6.41 p.m.
Lord Walton of Detchant: My Lords, I do not propose to detain your Lordships for very much longer. I simply thank those of your Lordships who felt able to support this Bill in tonight's debate. I wish also to reiterate the thanks and the gratitude which I feel not only to Simon Fielding, Robert Maxwell of the King's Fund and Sir Thomas Bingham for initiating the process which has finally led to this piece of legislation getting this far. I shall also be grateful if the Minister will convey my personal thanks to the
502
staff of her department who have worked so hard on this Bill in preparing it and in seeing that it was acceptable to so many government departments.
I want only to respond to the points made by the noble Earl, Lord Baldwin, by saying that I personally hope, as a member of the medical profession, to do what I can to collaborate with, and to see the furtherance of the ambitions of, the complementary therapists to whose work he has referred. This is subject only to our being satisfied, as we are now with the osteopaths and the chiropractors, that these therapies are of demonstrable effectiveness and that they will contribute, as we all wish to see, to the future improvement of human health. I am sure that that is something which I would wish to promote to the best of my ability.
I also say to the noble Lord, Lord Williams, that I appreciate the point he has made about the potential injustice which might arise. My belief is that that issue is one which, if it were passed on to the osteopathic council, when established, could be met by a modification in the rules that the council may make. I do not believe that it would require any amendment on the face of the Bill.
I again thank all noble Lords for the work which has gone into this Bill. I very much hope that your Lordships will agree that the Bill should now be read a second time.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Humanitarian Needs and the UN System
6.43 p.m.
Lord Judd Lord Judd rose to ask Her Majesty's Government whether they consider that the UN system is adequate to meet the humanitarian demands increasingly being placed on it in Bosnia, Cambodia, The Horn, Mozambique, Angola and elsewhere, and whether they consider that the balance between preventive and relief operations is appropriate.
The noble Lord said: My Lords, perhaps I may say at the outset how much I—together with, I am sure, noble Lords on all sides of the House—am looking forward to and anticipating the maiden speech of the noble Baroness, Lady Williams of Crosby. She brings to this House a very special mixture of ability, experience and compassion—the last quality much needed in our materialist age. Whatever the differences which I am sad may have arisen tactically between us from time to time, I greatly look forward to working with her on some of the most important issues for humanity in the years ahead.
I tremble to think how history will judge us. Amidst our introspective preoccupation with domestic and Western European affairs, we have just about managed to find a few brief minutes, as everybody goes home for the Spring Bank Holiday, to debate the wider issues of humanity.
Millions in the world have died prematurely in recent years; millions more are currently at risk and many millions more will die in the years ahead unnecessarily and preventably because of the failure of

503
will—of political will—to take effective action in time. Over and over again, not least in the priorities of Westminster and Whitehall, we see that, historically, tactics have become the enemy of strategy.
As the Secretary General of International Alert, with which I am glad to do some work, has recently argued in a challenging paper, even a cursory glance at the list of countries currently affected by massive refugee flows, developmental destruction or stagnation, and social and political instability, reveals that the vast majority of those states are victims of violent internal conflicts. It is also self-evident that even the "cleanest" of high technology wars is destructive of civilian lives, infrastructure, services, homes, crops and industrial plant —in fact, of all the basic elements of a decent society. In countries and regions where the high-tech revolution has not yet brought the benefits of Stealth bombers or laser-guided munitions, old-fashioned mortars, rocket-propelled grenades, landmines, Kalashnikovs and other derivations from the arsenals built up during the Cold War are wreaking immeasurable horrors on people, property, the environment and hopes for the future.
The Secretary General of International Alert has rightly underlined that no humanitarian aid worker in the former Yugoslavia, Somalia, Sudan, Afghanistan, Liberia, Angola, Mozambique, Cambodia or dozens of other countries needs any lessons on the myriad of ways in which war cripples the delivery of humanitarian assistance or dilutes its impact, compounding and multiplying human suffering. Fieldworkers, he argues, are painfully aware that there are obvious lacunae between humanitarian action, human rights protection and promotion, development goals and conflict resolution. What has emerged most clearly from the horrors of recent and current conflicts is that a strategic concept is needed to unite humanitarian action, human rights promotion, development and conflict resolution in co-operation towards a single form of action—war prevention.
In 1991, the last year for which I have comprehensive statistics, the total number of major armed conflicts in which battle-related deaths exceeded 1,000 people was 35—God knows the number of consequential deaths. The indications are that this year there are more than 40 such conflicts, with new outbreaks in the former Soviet Union, Eastern Europe and the South. The great paradox is that, while the international community has developed elaborate and extensive mechanisms for preventing or mitigating inter-state wars, it is internal conflicts which have become the predominant global security problem.
In the early 1960s, the UN proclaimed that there were no more refugees in Europe: the massive displacements caused by the Second World War had been absorbed. By contrast, this year, the UNHCR reports that there are 1 million refugees in Europe produced by war in the former Yugoslavia alone, and the number of people seeking asylum in Europe has risen from 70,000 in 1983 to 750,000 last year. But the grim reality is that the European figures represent only a fraction of the 18 million refugees worldwide and the
504
further 15 million internally displaced people without even the status of refugee. Some well placed experts estimate that by the end of the next decade that total could more than triple. The relationship between internal conflict and refugees is starkly evident: Afghanistan, more than 6 million; Palestinians, 2.6 million; Mozambique, 1.5 million; Ethiopia/Eritrea, about half a million; Somalia close to 1 million—and so, disturbingly, on.
Those huge movements of people are not surprising when research shows that civilian populations make up the vast majority of the victims of these wars—more than 80 per cent of the casualties in most cases —and that women, children and the elderly are the principal victims. It is rare to find a conflict that does not involve a complex matrix of causes; for example, race, ethnicity, identity, ideology, governance and authority and competition for resources.
What acutely aggravates the nightmare is that increasingly lethal small arms are now readily available worldwide. Arms control agreements have focused on weapons of mass' destruction and on sophisticated weapons systems, but most of the casualties of current dirty, so-called little wars are coming from small arms, land-mines and mortars. In Cambodia alone there are believed to be 7 million land-mines, one for every inhabitant. An estimated 700 amputations per month are currently being performed on Cambodian land-mine victims.
The need effectively to curb the arms trade is arguably every bit as high a humanitarian priority, central to the task facing the noble Baroness opposite, as any mobilisation of relief supplies. I say that with passion because earlier this year one of my old dear colleagues at Oxfam, Llidio Candieiro, was killed by a mine in Mozambique while exploring a new route to deliver urgently needed relief.
The UN arms register, which first reported on 30th April, covers seven types of conventional weapons but none of the comparatively low-tech ones which cause most of that human suffering. Perhaps more than any other weapon type, land-mines have an indiscriminate effect upon civilians. They obstruct the return of refugees, block the delivery of relief supplies and hinder the rehabilitation of land for agriculture.
Why is it that the Government's record is so slow as regards effective action? During the past seven months the US and France have both announced moratoria on the export of land-mines. Why has Britain not done so? As I understand it, we have not yet even ratified the 1980 convention on inhumane weapons, the relevant international accord which at least seeks to restrict the use of mines against civilians. Why can the Government not see that that is directly relevant to the humanitarian endeavours of the noble Baroness, Lady Chalker?
The UN faces an unprecedented challenge in the scale of suffering caused by conflict. If it is not meeting that challenge with the effectiveness which the victims deserve and global security demands, the responsibility for failure lies inescapably with its member governments, not least our own. The UN has no existence other than the governments which comprise it.
This autumn the General Assembly of the UN will debate the future of the Security Council. The UK Government are determined to retain for the UK the privilege of permanent membership of the Security Council with the power of veto. Only five nations in the world enjoy that status. It places immense responsibilities for leadership on the UK Government. They must demonstrate by their commitment, vision and action that the UK justifies that status. We should be in the lead in rebuilding a UN which is both more effective and more clearly driven by universal humanitarian principles. We should be the first to recognise that the cost of humanitarian programmes would be nowhere near as great if the world community invested more energy and time in preventing conflict in the first place. Pre-emptive diplomacy and conflict resolution should constantly be at the top of its agenda.
In Bosnia we were too late to be proactive a long time ago. In other parts of the Balkans we may not be. The UN's first example of the preventive deployment of peace-keepers in Macedonia is most welcome and should be urgently expanded. In Somalia active UN diplomacy did not begin until 1992, whereas preventive diplomacy much earlier could well have prevented the scale of the conflict and famine which resulted.
Yet even before preventive diplomacy for deployment of peace-keepers can be pursued, any response depends upon timely and accurate early warning. Current resources devoted to early warning and prevention are minute in comparison with those allocated to the reactive measure of peacemaking or peace-keeping at the end of a conflict.
The United Kingdom Government should pursue vigorously the objective of enabling the United Nations to integrate all its early warning activities and to establish effective channels for the rapid communication of information on human rights and humanitarian crises. The vast knowledge of nongovernmental organisations and the UN specialised agencies should be effectively used by those responsible within the UN for political affairs, security and conflict prevention.
I said that resources for prevention are small compared with those for peacekeeping. That is glaringly true. But resources for peacekeeping expenditure are now 1.4 billion US dollars compared with the world's military expenditure of 922 billion US dollars. Despite the massive increase in UN peacekeeping since the beginning of 1992 the world chooses to spend 1.4 US dollars on peacekeeping for every 1,000 US dollars of military expenditure. And still in the foreign ministries of the world they rub their eyes and ask, "Why is there a world of increasing disorder?".
The beginning of the answer is depressing. Governments do not care enough to provide the resources to prevent it. I regret to say that the United Kingdom's unbalanced priorities are worse than the world average. For every one US dollar we spend on peacekeeping our military expenditure is 1,441 US dollars. This year for the first time the United States Congress has set aside a reserve fund for unexpected
506
peacekeeping needs during 1993. Perhaps it would be helpful for the United Kingdom to do the same. All experts predict that the demands for peacekeeping will increase. Yet money is not enough, and it is true that it has not always been effectively used by the United Nations in the past. The current restructuring of the UN is therefore extremely welcome and must achieve a well-managed, cost-effective and accountable system which can inspire donor confidence. Too many UN relief operations have been plagued by lack of co-ordination between different parts of the UN system. As the operations have also taken on peacekeeping and political roles, more UN departments have become involved without always adequate integrated direction.
The people at risk, the innocent, deserve better. They need improvements in co-ordination between different agencies in New York and Geneva. In particular, one specifically appointed person accountable to the Secretary-General should be given personal responsibility for co-ordinating UN humanitarian, diplomatic and peacekeeping activities in each crisis. Without that, bureaucratic complexities between different parts of the system will inevitably undermine the operation.
The United Kingdom has an ideal opportunity to argue for this when the new UN Department of Humanitarian Affairs, established in April 1992, is reviewed by the UN's Economic and Social Council in a few weeks' time and by the General Assembly in the autumn. Another opportunity for the UK will be at the UN world conference on human rights in Vienna next month. It is time the world recognised unequivocally that human beings in distress have a right to relief. That is not clear in current international human rights law. The conference should affirm that and propose moves for it to become incorporated into international law.
The right to relief, like all human rights, needs mechanisms to enforce it. Moving towards that, it is now rightly recognised that international conflicts, and the humanitarian needs arising from them, can be a basis for the UN Security Council to authorise military intervention to protect relief and civilians if all other means have failed. It is vital that so-called humanitarian interventions should be implemented consistently and transparently, based upon clear humanitarian criteria alone and never upon the arbitrary priorities of key individual member states. At present this is not the reality. The United Kingdom could play a major role by helping to codify and establish such criteria to ensure that intervention takes place where and when needs arise.
The number of internal armed conflicts, their economic and social consequences, the death, bereavement and suffering which they cause, the floods of refugees and the proliferation of weapons of all kinds leave no room for illusions. Traditional methods of global governance are in chaos. They have failed. A new strategic vision is imperative if the world community is to learn how to prevent war. War machines within individual states and international crime syndicates have the capacity to generate violence on an exponential scale. By contrast,

507
attempts at war prevention have been piecemeal, tardy and inadequate. They have proved impotent in the face of spiralling violence.
The optimism generated by the end of the cold war has withered painfully. George Bush was wrong. Our new world is in disorder, not order. But the much quoted Francis Fukuyama was also wrong. History has not come to an end; it has accelerated rapidly, seemingly out of control. We are locked together in a highly interdependent world. We cannot get off. Maastricht will quickly be seen as an irresponsible diversion unless, with it under our belt, we can focus on the major realities which threaten the future of humanity.
If the United Kingdom aspires to the world status implicit in permanent membership of the Security Council, we must be seen and felt to lead in building a system of global governance geared to the needs of the 21st century. We must be second to none in providing, and ensuring that others play their part in providing, the resources without which all the Foreign Secretary's Chatham House speeches will evaporate in the heat of conflict. Time is not on our side. We must speedily learn the lessons of the past four years and apply them without delay.
7 p.m.
Baroness Williams of Crosby: My Lords, perhaps I may, first, thank your Lordships for the very warm welcome that I have received since I have been here. I have begun to learn that, if I can walk a little more slowly and think a little more deeply, I should be able to adapt myself reasonably well from another place.
I am very grateful to the noble Lord, Lord Judd, for tabling the Motion and for having spoken with such eloquence and knowledge about it. As he said, it is a matter of extreme seriousness and there are few people in this House or in the other place who bring to it the same knowledge and experience as he does. Indeed, I am proud this evening to be sandwiched between two colleagues from the other place whom I respect as much as I do the noble Lord, Lord Judd and the noble Lord, Lord Ennals. Both of them are peculiarly well qualified to speak this evening.
I am also very fortunate this evening in having drawn the noble Baroness, Lady Chalker, as the Minister who is to respond to the debate. There are few people on the Government Front Bench who I respect more. I know of her concern for the matters that we are discussing; I know how hard she has worked in attempting to give a greater British contribution in all these matters; and I could not have chosen or asked for a Minister who I would be more pleased to have respond to the debate than the noble Baroness.
Perhaps I may begin my speech by saying that I echo much of what the noble Lord, Lord Judd, said. The United Nations High Commission for Refugees is the agency of the United Nations about which I intend mainly to speak this evening in a short maiden speech. It could be said, as it is said in Handel's "Messiah" that the UNHCR has borne our griefs and carried our sorrows. As the noble Lord, Lord Judd, pointed out,
508
every month that passes, that particular agency of the United Nations is called upon to do yet more than it has done before as one area after another in the world slides into chaos and the break-up of such order as it had. It is the UNHCR that is so frequently called upon to pick up the pieces.
Yet, in its humanitarian work—work, as the noble Lord said, which now extends to 18 million refugees worldwide and to 15 million displaced people; a figure that grows every day by many hundreds like a ratchet, for it moves always upwards and rarely downwards —the United Nations High Commission for Refugees finds itself increasingly without the resources to do its job. I have here the current estimate for 1993 for the one area to which I wish to address most of my remarks; namely, the former Yugoslavia. I refer to the most recent report last week of the UNHCR which shows a need for 420 million dollars to meet its estimated requirements for 1993 alone of which, so far at the end of May, it had 130 million dollars; that is to say, little more than one-third of the amount actually required. Of course a number of countries have contributed substantially to that figure. In the whole period since the UNHCR began working in the former Yugoslavia it has received 767 million dollars in all. The United Kingdom has contributed 43 million dollars, the Federal Republic of Germany 50 million dollars, the United States 73 million dollars and, true to their long tradition of distinguished international service, the relatively sparsely populated Scandinavian countries have contributed no less than 60 million dollars, and that is much the largest proportional contribution of any country.
Nevertheless the United Nations High Commission for Refugees is literally living from hand to mouth. In some cases it is unable to pay those who render it dedicated service. When I was recently in Bosnia and Croatia I came across some people who had not been paid for a couple of months because there appeared to be no money with which to pay them. Your Lordships will know, because there are harrowing stories in the newspapers, how desperate the situation is in some parts of Bosnia today. At the end of last month and early this month when I was in Sarajevo people could still obtain fresh bread every day. I read that last week the bakery stopped work because there was no fuel to feed it as the fuel had been stopped outside Sarajevo. It is difficult to describe what it is like to see children dodging down the streets—many of them marked by snipers from the hills surrounding Sarajevo—in a desperate attempt to get water, bread and other supplies for their families.
We know that the United Nations' allies are now moving towards a fresh policy for the former Yugoslavia and specifically for Bosnia. It is to that matter that I wish to address a few remarks, with your Lordships' indulgence, this evening. We have now heard of what are called safe havens. That is a strange term, for its reality is not what its name implies. It sounds as if it should result in a calm and soothing outcome but there are many questions about the safe havens policy and I wish to raise three of them this evening.

509
First, we do not yet know whether supplies of necessary food and other materials will get through to the safe havens because it is not yet clear what mandate the United Nations' forces will have in Bosnia to get them through. As one British soldier said to me at Sarajevo airport, "Any cowboy with a kalashnikov can turn back UN convoys of many lorries carrying necessary supplies". We still do not have the mandate that will enable us to get those convoys through.
My second question concerns the largest of the enclaves in terms of population. Some 700,000 men, women and children, many but not all of whom are Bosnian Moslems, are entrapped today in the enclave o Tuzla. There is a large military airport in Tuzla. It. has still not been opened and as of yesterday when I rang up the UNHCR for the latest information, I was told that there were still grave difficulties in getting Bosnian Serb agreement to opening Tuzla airport. I might point out that the Bosnian Serbs have no recognised sovereign country which would confer upon them legitimacy. But Tuzla Airport might constitute the one safe way to get supplies through.
The third question that I need to ask stems from the words of the right honourable gentleman the Foreign Secretary who said in another place last month:
"The political process is not dead and sooner or later, for the reasons I have put before the House, the parties must, and will, come back to it ".—[Official Report, Commons, 29/4/93; col. 1172.]
The right honourable gentleman, the Foreign Secretary, clearly views the safe enclaves policy as a way to negotiate for some return to a more sound and lasting political settlement. The right honourable gentleman also said in a letter that he sent me on 6th May:
"It is particularly important to contain the fighting and not precipitate its spread into other parts of the Balkans".
The third question, therefore, concerns the placing of monitors on the Bosnian-Serb border, rejected by the president of the rump Yugoslavia, Mr. Costić, and questioned by Mr. Karadzic, the leader of the Bosnian Serbs, at a time when many reports indicate that arms supplies are still getting through Serbia towards the Bosnian Serbs. When the right honourable gentleman gave that very sound warning he did not know what we have learnt in the past days. The latest article which appeared in the International Herald Tribune by Mr. Butoski regarding the situation in Kosovo indicates that daily the number of artillery points, troop mobilisations and supplies are increasing, indicating the possibility of an attack once the present business in Bosnia is concluded.
I want to mention one other point before I end with a few questions for the noble Baroness, Lady Chalker. These relate to a wider issue raised by my colleague, the noble Lord, Lord Judd. He mentioned that we are looking for a new form of order in the world following the end of the cold war and following the creation of a new enemy. The enemy is not the Soviet Union but the chaos and disorder which are beginning increasingly to sweep through the world. It is much harder to deal with chaos than with a certain and concrete enemy.
510
So far we have no answers, as the noble Lord, Lord Judd, implied. We have the beginnings of a few answers: the work of the CSCE in the area of conflict resolution; the work done by some voluntary agencies on conciliation and arbitration and other answers to the conflicts in the world; and the gradual transformation of NATO, so powerfully underlined last week when Manfred Wormer, the Secretary-General, echoed the words of the noble Lord, Lord Judd, saying that what is needed is political will, not military force.
We have one great asset in that respect, for the distinguished conduct of British forces in the former Bosnia indicates that, more than perhaps any other country in the world, not least because of the long drawn out and sometimes miserable experience of British troops in Northern Ireland, this country has almost a unique experience of police action in attempting to protect the lives of civilians in the face of brutal behaviour by terrorists, guerrillas and others.
What we need, therefore, are new departures in a number of areas. I shall refer to just one such departure. Looking back on the history of the Bosnian conflict many of us now recognise that it began with too precipitate a recognition first of Slovenia and then of Croatia. Given the history of Croatia, we should at least have insisted on safeguards for the minorities in that country and recognition of their rights.
I was pleased the other day to receive a letter from the Commissioner for External Affairs of the European Commission, Mr. Hans van den Broek, dated 10th May, stating:
"The failure to act in a timely fashion and to react energetically has disappointed American opinion and - even worse - European opinion.
I agree with you on the importance for the EC to establish clear links between membership and treatment of minorities".
I believe that that is an encouraging route down which to go.
I end, therefore, by asking the noble Baroness to comment on three questions which I wish to put to her. The first is whether Her Majesty's Government will be seeking the stronger mandate necessary to get convoys of humanitarian aid through to the pathetic enclaves now suffering from a lack of water, power and food and all the other necessary means of life. Have we at last the willingness to get those supplies through?
I ask, secondly, whether air strikes will only protect soldiers. For, important as that is, are we really going to say that, if the snipers' aim is good enough to pick out children but not soldiers, air strikes will never be called down upon those responsible for those snipers' bullets and those mortar shells?
I ask, finally, whether Her Majesty's Government will insist upon United Nations monitors being placed on the Serbia-Bosnia border to ensure that Serbia's word is kept and that, when she says "We are doing nothing to supply the Bosnian Serbs in the business of ethnic cleansing", it will have clear evidence that her words and her deeds are identical.
7.15 p.m.
Lord Ennals: My Lords, it is my particular pleasure to congratulate the noble Baroness, Lady Williams of Crosby—I find the title difficult to say—on a very thoughtful, compassionate and challenging maiden speech. I was glad that she concentrated on UNHCR because I believe that it has one of the most difficult tasks at the present time.
For those of us who have known the noble Baroness for many years—and there are many in this Chamber who have—it is an enormous pleasure to have her in this House with us. I shall never forget the first occasion on which I met her. She was only 21 —not long ago. I was then secretary of the Council for Education in World Citizenship. She applied for a job; and I would not appoint her because she was too good. I said, "I want someone who will stay for two years, and I know that within nine months someone else will pick her up, and quickly". I lost her to someone else's advantage.
Having worked with her in the Cabinet of the noble Lord, Lord Callaghan, she will be an enormous asset to the House. I shall not go into any subsequent political difficulties. She is the heart and soul of any group she joins; and if she leaves a group she takes away a hunk of heart and soul too. To have the noble Baroness in the Chamber means that all of us will be enriched. Her speech today demonstrated that.
I want to thank, too, the noble Lord, Lord Judd, for his very challenging, constructive, moving and passionate opening speech as regards this short debate. It is a short debate but it is concerned with two questions which certainly are not simple. Many problems arise within those questions. I shall not say anything about Bosnia. I agreed with everything said by the noble Baroness whom I have already congratulated. I cannot even refer to her as my noble friend, can I? I shall not refer to the Horn of Africa, Mozambique or Angola.
The UN system was set up in 1945. In that same year I was appointed to the staff of the United Nations Association. That was an exciting challenge. However, for most of the years in which we have worked with the UN it has been unable, because of a divided world or because of a veto, to accept the challenges that came before it. Now it is accepting those challenges, and all of a sudden they plunge upon us, huge and powerful. The noble Lord, Lord Judd, is right to ask the question: is the UN able to accept them? Is the structure right? We cannot answer those questions quickly.
Our commitment is very important. In a debate in another place on 23rd February, I was delighted that Dr. Jack Cunningham reminded that House that Clause 4 of the Labour Party constitution—often debated—includes in Clause 4(7) the Labour Party's commitment to support for the United Nations. It is in our very constitution.
We had many bad years. We now see demands brought upon the United Nations which are so huge that in a sense it cannot cope because, as the noble Baroness and my noble friend have said, there is not the money. The bills are not being paid to allow the job to be done.
512
At the time of the debate on 23rd February, there were 13 operations up and running; 259 peacekeepers in Jerusalem, 1,120 deployed between Israel and Syria; 5,643 in the Lebanon; 353 in Kuwait, including 18 Britons; in the Western Sahara, 332 peacekeepers, including 15 Britons; in Angola, 221. In Somalia at that stage—though it is different now—a 28,000-strong unified task force was led by the Americans with their own 18,000 troops. In Cambodia, about which I shall say more in a moment, there are 15,549 peacekeepers, including 122 Britons. In Latin America, there are 227 peacekeepers in El Salvador; in Europe—in Cyprus—a force of 2,159, including 612 Britons. Then there are the two different forces in the former Yugoslavia with nearly 21,000 people, including 2,804 Britons. That is an enormous task, at a time when the UN must expect that it will get many other demands upon its services. I shall come back to that in a moment.
We may think that some of the tasks are being carried out without all that much success. We see the great tragedies in the former. Yugoslavia, tragedies which are not the fault of the United Nations, certainly not the fault of David Owen and not the fault of the negotiators. They are the fault of aggressive nationalists determined to hang on to their own territory.
As regards Cambodia, I find it exciting that what many of us might have thought three or four weeks ago would be in a sense another failure for the UN, looks as though it may turn out as a triumph. It is the biggest UN operation that there has ever been. I was delighted to see Cambodia set aside two decades of conflict and widespread fears of violence, when enthusiastic crowds turned out for the first day of voting in elections, disturbed more by rain than guerrillas or gunfire. That was the first day and it looks as though by the time the voting ends, which I believe is today, a higher proportion of the people of Cambodia will have voted under the care of the UN than voted in the United States in the last presidential election, and certainly far more than voted in our elections.
I believe that this is a triumph for the United Nations. I also saw a heading in the Guardian of 25th May:
"Unarmed Khmer Rouge soldiers turn out to vote",
and when the soldiers went to cast their vote in free elections, it was the first time they had ever had that opportunity in their lives. That is the good news and I am one of the Martyn Lewis brigade who think that every now and again we should applaud the good news and tell the world about it.
I believe that there will be many more calls upon the United Nations in all kinds of ways and all parts of the world. There are conflicts in the former Soviet Union: in Azerbaijan, Tadjikistan, Abhazia, where I was recently. I think that there, as well as in places like Burma, to which I have no doubt my noble friend Lord Bottomley will refer, democracy seems to have disappeared. Opposition leaders elected to power are now restrained, restricted and unable to carry out their work. East Timor; Kurdistan, which I shall visit

513
soon; and Tibet are all areas where it is quite legitimate to expect that there will be demands for UN assistance in one form or another in the days to come.
We have to ask, as my noble friend Lord Judd did: are we equipped? Have we got the money? Do we have the troops set aside and trained? It may be that our own British contingents will not be able to play their fair part if they are not properly trained and if they are tied down with other matters.
As the noble Baroness, Lady Williams of Crosby —I shall always have trouble with her name—as Shirley said, for 20 years the UNHCR has been helping more than 28 million refugees. I have seen the work that it has done in many parts of the world, with great sympathy, understanding and often now in great danger. Between 1981 and 1992 the number of refugees—now, as the noble Lord, Lord Judd, said, nearly 20 million—more than doubled, from 8 million to 18 million: another 20 million are displaced in their own lands.
The UNHCR has an enormous task to face. It is doing it well. I mentioned Cambodia. One of the good bits of news from Cambodia last month was that the United Nations High Commissioner, visited and officially closed the last camp for Cambodian refugees in Thailand, one year after it began a voluntary repatriation programme for some 375,000 Cambodians. More than 236,000 Cambodians have been resettled in the United States, Canada and Australia, from camps in Thailand and elsewhere.
But, when we look at the appalling financial situation, not just for UNHCR but for the whole of the UN, we see that it is heading for a time when it will simply have to say no to demands for further help. The latest figures, published a couple of months ago, show that contributions outstanding from the member states to the United Nations totalled 1,250,390,098 dollars. That is a huge sum, a very high proportion of which was due from the United States. The country that can afford to pay most is the most indebted. Britain's record is not bad. We pay on the dot. Let us give credit where credit is due. There is not much credit around, but let us give it when it is due.
The American situation is an appalling one. Will the UN be forced at some stage to say: "No, we cannot send in forces, observers and supplies; we simply do not have the money to pay for them?" I believe that we all have to take part in a great campaign to get the people to recognise that it is their organisation.
I was recently looking at an article by Erskine Childers. He was reminding us that the current cost of the totality of the UN systems—worldwide emergency, peace-keeping and humanitarian relief—is estimated at about 4 billion dollars, which is equal to the combined budgets of the police and fire departments of New York City. It is quite comparable to the budget of the city of Birmingham. Yet that is the entire budget of the UN for the whole of the world, giving service for 180 countries. There are now huge numbers of people working for the UN: 51,000 serving in some 180 countries. The demands are enormous. So I believe we have to tell the public where their responsibility lies.
514
I end by congratulating my friends in the United Nations Association who have put together a set of proposals on An Agenda for Peace to the Select Committee on Foreign Affairs in another place with a whole series of proposals which are very constructive and which emphasise, in the mood of the speech given by my noble friend in opening the debate, that priority must always be given to the prevention of conflict. Criteria to allow UN fact-finding and humanitarian assistance without state consent should be elaborated and agreed. I could continue if I had the time.
We must see that the UN has an opportunity of doing a great deal of preventive diplomacy; of stopping wars rather than having to deal with them when they occur. I am delighted that the Select Committee in another place is having a look at the sort of proposals that can go to Her Majesty's Government and I hope that Her Majesty's Government are studying this very important responsibility.
7.30 p.m.
Lord Bottomley: My Lords, I am pleased to follow my noble friend Lord Ennals, and in particular to join him in the tributes that he paid to the noble Baroness, Lady Williams of Crosby. I recall with pleasure that I spoke for her on her first adoption meeting as a candidate for Parliament. How worthily she performed those duties.
It was my privilege to be a member of the United Kingdom delegation to the United Nations in 1946, 1947 and 1949. The leader of the delegation was Ernest Bevin, then the Foreign Secretary. My responsibility was to represent Britain on the Trusteeship Committee, which was concerned with the colonies of the European Powers and the dependent territories in different parts of the world. Other members of the committee were Field Marshal Smuts, Foster Dulles of the United States and Gromyko of the Soviet Union. After the 1946 committee meeting, Field Marshal Smuts prevailed upon Clement Attlee, the Prime Minister, to send me on an official visit to South Africa.
Field Marshal Smuts was one of the most outstanding men I have ever met. He once told me that there could be no peace or security in southern Africa except on the basis of equality of the races. He said to me, "I know what you are going to say to me: 'Why don't you do something about it?' Well, I have, and that is why I want the help of my young revolutionary friend. I have provided for Indians to be represented in the South African Parliament." He said that it would not have been possible to have direct representation. But the Indians rejected the proposal and rioted. If they had accepted the principle of representation, it would eventually have led to the Africans making equal demands and in due course by evolutionary means it would have brought about a non-racial establishment. That in turn would have brought the Indians and the South Africans together. "But," he said, "I failed and following that I lost my parliamentary seats." In due course he lost power, the Afrikaners took over and apartheid followed. It is still

515
in being, but fortunately it looks as though things are moving in such a direction that we shall soon see an end to it.
As my noble friend Lord Judd said, we must today meet the world's increasing humanitarian needs. Humanitarian agencies, such as Oxfam, face a major increase in human suffering as a result of conflicts within states. Fifty-four per cent of Oxfam expenditure is now devoted to the victims of those conflicts.
The United Nations, in its Charter written in July 1945, has traditionally seen threats to international peace as the only criterion for military intervention. From those conflicts there are 80 million refugees, including one million in Europe and 15 million persons displaced in their own countries. They represent an enormous humanitarian need and, while conflict prevents their return, a continuing demand on the resources of the donor countries.
Most of the casualties of the world's internal conflicts arise from small arms, landmines and mortars. Yet traditionally the United Nations has concentrated its disarmament efforts upon sophisticated weapons of mass destruction. Perhaps more than any other weapon type, landmines are having a disastrous effect on communities. The United States and France announced moratoria on the export of landmines in 1992. The United Kingdom has not yet ratified the current international legislation on the use of landmines contained in the 1980 United Nations Inhuman Weapons Convention.
In conclusion, I congratulate my noble friend Lord Judd on bringing this matter forward for debate, and compliment him enormously on the way in which he opened the discussion.
7.35 p.m.
Lord St. John of Bletso: My Lords, I join in congratulating the noble Baroness, Lady Williams of Crosby, on her fascinating and fluent maiden speech. Unlike those who have spoken before me, I think I am one of the only hereditary Peers present this evening and it was a great pleasure indeed to hear her. I hope that we shall have many more valuable contributions from the noble Baroness in the foreseeable future.
When I decided to put my name down to speak in this evening's debate, I did so with the objective of expressing my reservations about the efficacy of the United Nations system in meeting the humanitarian demands placed upon it. However, that naturally begs the question as to why the United Nations is not able to cope adequately with meeting the humanitarian demands in such countries as Bosnia, Cambodia, The Horn, Mozambique, Angola and elsewhere. So what can be done to remedy the situation?
As I understand it, the United Nations charter's stated aims are to maintain international peace and security; to develop friendly relations among nations; and to help solve international problems, which includes humanitarian relief. However, the charter appears to be a document in the main about inter-state
516
conflicts. The situation, as other noble Lords have mentioned today, has changed dramatically since the end of the cold war.
If one spans the problem areas of the world from the former Republics of Yugoslavia to China, from El Salvador to Somalia, communal violence and civil war are posing a major serious threat to world security. Clearly there has been more recognition of late of the role and powers of the United Nations in the debate over what action should be taken by the international community in endeavouring to subdue and quell the tragic wars in Bosnia and Somalia, and the consequential demands for humanitarian relief.
A running theme in the discussion of the role and efficacy of the United Nations is that member states are not giving the United Nations the resources, either financially or in terms of personnel, to do the job required of it. That point was elaborated by the noble Baroness, Lady Williams of Crosby.
Since the Secretary General, Mr. Boutros Ghali, took over the reins at the United Nations just over a year ago, he has endeavoured to restructure and consolidate many of the activities in the larger departments. To that end he has focused UN resources in three main operational activities: Mr. Jan Eliasson, a Swedish diplomat, is responsible for humanitarian affairs; Mr. Marrack Goulding is responsible for the peacekeeping portfolio; and preventive diplomacy and peacemaking are shared on a regional basis between Mr. James Jonah of Sierra Leone, who deals with Africa and the Middle East, and Vladimar Petrovsky, who deals with Europe, Asia and the Americas.
In spite, however, of the Secretary General's endeavours to meet with greater efficacy the objectives of the United Nations, the humanitarian peacekeeping operations have of late endured fierce criticism in many of the problem areas as a result of their lack of visible success. Clearly, the adequacy of the United Nations system to meet the humanitarian demands placed on it, in such areas as Bosnia, Cambodia, The Horn, Mozambique, Angola and elsewhere is, as the Question today implies, to a large degree dependent on the efficacy of the peacekeeping role of the United Nations forces in those areas. If we look at the United Nations peacekeeping operations in Angola, Cambodia, Somalia and Bosnia, these have in the main failed or are in serious trouble not necessarily because of the technical failures of the peacekeepers but because of unresolved political problems in those countries.
A criticism which has been regularly levied against the United Nations is the lack of effective liaison between the main departments. In Bosnia and Somalia the United Nations objective has predominantly been defined as humanitarian, but as a result of the peacekeeping forces being involved in those countries, the main organisational load appears to have fallen on the shoulders of Mr. Goulding's department.
It is worth mentioning, however, that the introduction of peacekeeping forces to Somalia has to a certain degree assisted in ending the famine emergency in that country and the United Nations aid agencies have had to concentrate their activities on the

517
daunting task of resettling 2.5 million Somalis displaced by the civil war. Of these, 1 million are sitting in refugee camps outside Somalia. Neither the military nor the humanitarian agencies of the United Nations have ever undertaken a logistical task of this size. The noble Lord, Lord Judd, has already elaborated on the disturbing and tragic numbers of refugees escaping civil war worldwide and the noble Lord, Lord Ennals, has spoken of the work and challenges facing the UNHCR.
The recent events in Bosnia and Somalia have blurred the distinction between peacekeeping and enforcement and between humanitarian assistance arid military confrontation. The Secretary General has been overtly critical of the bureaucracy and, at times, the inefficacy of the United Nations. In his Agenda for Peace report, published in June last year, he recognised that there are many situations where traditional peacekeeping is not enough and suggested the creation of peace enforcement units more heavily armed than traditional peacekeepers and authorised in certain cases to use force.
Turning to the question whether a balance between preventive and relief agencies is appropriate, it would appear that with 13 United Nations relief operations currently in place, at an annual cost, as the noble Lord, Lord Ennals, mentioned, of more than 4 billion dollars, there is scope for more energy to be directed at preventive action. A trend that appears to have established itself recently in developing countries has been a massive increase in urbanisation from the rural areas to the main cities, placing an enormous burden on the urban infrastructures, not just in the provision of adequate education, health care and housing needs but also resulting in massive unemployment and a rise in civil unrest and crime.
I fully support Her Majesty's Government's policy of not providing development aid to countries which do not practice "good governance". But surely we ought to be focusing our attentions not just upon providing aid and encouraging the objectives and endeavours of the United Nations but also upon encouraging such issues as agricultural reform in developing countries and ensuring that funds allocated by such organisations as the World Bank to worthwhile developments in developing countries are spent on such projects rather than in many places being channelled in part to corrupt politicians' offshore banking accounts! The noble Lord, Lord Callaghan, called for more international support in encouraging agricultural reform in Africa, following his recent visit there and quoted the success of agricultural reform in India.
So, in conclusion, clearly Mr. Boutros Ghali has an uphill battle on his hands. As he acknowledged in a recent interview;
"My role is becoming more difficult not because of the absence of co-operation between the five permanent members of the Security Council or the absence of political will, but because of the multiplication of problems in Yugoslavia, El Salvador, Cambodia, Somalia, Angola, South Africa and Mozambique. The UN have never before had to deal with six or seven problems at the same time".
This reminds me of Napoleon's remark that all empires die of indigestion and poses the question
518
whether the United Nations, like so many other empires before it, will die of indigestion as a result of its inadequacies in coping with the increasing humanitarian and peacekeeping burdens facing the world today.
Clearly the United Nations is overstretched in much that it does and does not do, in many of the crises of the post cold-war world. As I am sure your Lordships are aware, more UN peacekeeping operations have been set up in the past five years than in the preceding 42 years. If the United Nations system is to have a chance of more adequately meeting the humanitarian demands on it in Bosnia, Cambodia, The Horn, Mozambique, Angola and elsewhere, it will need not just greater and more reliable resources, more specifically regular contributions from all—I stress all—member states, but also a more radically restructured organisation and a clearer definition of its various tasks and how they relate to each other. I am grateful that the noble Lord, Lord Judd, has raised this important debate this evening and for having had the opportunity to discuss this important matter. I certainly look forward to hearing what the Minister has to say.
7.46 p.m.
Baroness Jay of Paddington: My Lords, I should like to join in offering my thanks to my noble friend Lord Judd for introducing this debate and indeed to echo his concern that it is placed as an epilogue at the end of a very important parliamentary Session. It seems to me regrettable that such an immensely important subject is not given more time.
I also join in the congratulations of other speakers to the noble Baroness, Lady Williams, and, in this evening of pleasant reminiscence, to recall that some years ago she personally introduced me to some important humanitarian aid work in Latin America. It is in that area of the world that I focus some special attention this evening.
I wish first to reinforce some of the points which my noble friend Lord Judd made in general terms. There has been a great deal of emphasis, both in this debate this evening and in response to the Question he asked about UN humanitarian aid earlier today, on the importance of financial resources and the concern about the fact that everybody is either a debtor to the UN or in some way relaxed in their attitude towards financial constraints on UN activity.
As well as financial resources, we must also concern ourselves and think about the resources of leadership, political morality and those of ethical authority. Perhaps they are old-fashioned and somewhat unfashionable concepts, but nonetheless they are extremely important in the context in which we speak tonight.
My noble friend referred to the fact that the UK has not yet ratified the convention on inhumane weapons. As I understand it, neither have we ratified the 1977 additional protocols to the Geneva convention which include protocols relating to the victims of civil war and outrages on personal dignity. I believe that, in particular, they include humiliating and degrading

519
treatment such as rape, which we have seen so unfortunately in the former Yugoslavia and has been referred to by previous speakers.
It seems to me that it would not cost us anything in financial resources to ratify these international agreements, but it would give us much more credibility and authority in speaking out against the kind of outrages which we have heard described. I feel that it is very sad that we have not done that.
My noble friend also referred to the forthcoming UN conference in Vienna on human rights and also to the revision of the UN department of humanitarian affairs. I hope that the UK can take a leading role in both of those fora because it seems to me that if we establish moral authority and leadership in such areas we have just as much justification for remaining in our permanent membership of the Security Council as would be derived from any contribution of forces or, ultimately, any financial contribution that we could make. We could make, in the Secretary General's terms, a real contribution to his so-called "agenda for peace" which was mentioned by my noble friend Lord Ennals. As I said, we can give leadership and moral authority where financial resources are perhaps more lacking.
I know that we can all be cynical about the UN's ability to deliver practical help in particular areas but, as has often been said, when we criticise the UN, all that we really do is criticise ourselves. In that spirit, I should like to spend a few minutes on Latin America and to speak particularly about Guatemala, which I think falls into the category of "elsewhere" in my noble friend's Unstarred Question. It certainly is not one of the main countries to which he draws our special attention. I am afraid that Latin America and Central America are often "elsewhere" in this country's debates on such issues. In rereading the debate in another place on the UN's peacekeeping role, which has already been referred to, I was surprised to note that Latin America and Central America were not mentioned at all.
However, as noble Lords will have seen, there was a coup in Guatemala this Tuesday. The constitution has been suspended; Congress has been dissolved; the President of the Supreme Court and the national prosecutor on human rights have been put under house arrest. That has dealt a cruel blow to the struggles of the Guatemalan people which have been going on for many decades—struggles in which they have tried to achieve internal peace and democracy and to end decades of what has been a massive and systematic violation of their human rights. I see today that some commentators have described the present situation in Guatemala as a real threat to the whole system of fragile democracy throughout Latin America—and I do not feel that that is an exaggeration. Many government leaders—President Clinton among them—and international organisations have already spoken out strongly about the coup, but obviously considerable international pressure is required to put Guatemala back on any sort of path to genuine democracy and rule of law.
520
The UN is already working there on a humanitarian basis. It is supervising camps for displaced persons of the type that have been described. I urge the Government, through the UN, to take the strongest possible line that it can on Guatemala. I understand that tonight in the European Parliament one Member is tabling a resolution to ask the EC to withdraw co-operation with the Guatemalan Government until some change is made in the present very difficult situation there. It would be appropriate for the Government now to reconsider their recent decision about our troops in Belize.
The people of Guatemala do not get on to the front pages. They are not included in the news bulletins. Even the coup has been little reported. But they are precisely in the category of people who have suffered terrible repression and internal displacement. They are the victims of land-mines and torture and of many of the horrors to which many noble Lords have referred. It is interesting that the UN has a presence there because in a way things have been seen to be getting better. In a way, the UN presence there is one of the chinks of light that has appeared recently in Guatemala's really terrible political history.
The UNHCR is there, supervising returning political refugees who were expelled a decade ago during the high point of the civil war. It is supervising them in camps established by the government, albeit in rather unsatisfactory and depressingly unattractive parts of the jungle, as I saw on a recent visit. We should be trying to exploit that international presence there by trying to exert some kind of moral suasion over President Serano.
One of the reasons why I have focused attention tonight on Guatemala and Latin America, in the sense that Guatemala represents the general problem there, is because of a very personal interest which I hope your Lordships will not regard as sentimental. I have a daughter working as a human rights monitor in one of those refugee settlements in the Ixtlahuacan Province on the Guatemalan-Mexican border. My daughter and her colleagues who work there with her are similar to the many hundreds of people from the UK who work for humanitarian purposes and human rights in many parts of the world. They expect our Government—their Government —to be at the forefront of international efforts to extend humanitarian aid and to develop peacekeeping. I believe that we owe it to them and to the tradition of British international public service which they represent, as well as to all the people whom they are trying to help, to do everything we can to strengthen and expand the UN's role so that the agenda for peace, about which the Secretary General has spoken, becomes a practical global strategy and not just a pious hope.
7.56 p.m.
Lord Plant of Highfield: My Lords, like other noble Lords, I thank my noble friend Lord Judd for tabling this Question and for the very telling speech which he made to kick off the debate. Perhaps as a relative newcomer to the House, I may also extend my congratulations to the noble Baroness, Lady

521
Williams, on an extremely important speech. I am sure that she will be listened to in the House with very great attention.
I shall take a slightly different tack from most noble Lords who have contributed to the debate. Many people here are much better equipped than I am to produce facts and figures about the UN's activities in various parts of the world, the costs involved and so on. I wish to concentrate on the issue which a number of noble Lords have pointed to but have not made their main focus; that is, what is the moral authority of the UN in acting. That is crucial for mobilising the consent both of governments and ordinary citizens for the activities of the UN.
As a number of noble Lords have said, the UN is. composed of individual states and governments. The political will of those governments to support UN initiatives cannot be conjured out of thin air. It must be drawn from and strengthened by the attitudes and beliefs of ordinary citizens. The crucial question is: what kind of moral basis and rationale can be given for what are a large number of thorough-going initiatives by the United Nations? How can we mobilise consent, agreement and support for those initiatives within the countries which are members of the United Nations?
That is extremely important when we are talking about monetary resources and cash for the UN, whether it is material in terms of food and so on or whether it is calling upon our soldiers to risk their lives. In undertaking humanitarian efforts, we must be clear on what basis people are being asked to make such contributions to the UN effort.
We are heir to two radically different approaches to this which we have not worked through ourselves in our own minds in this country, never mind elsewhere. The first is what I might call the interest approach to international politics. That is probably best summed up by my noble friend Lord Healey some 40 years ago in his contribution to New Fabian Essays in which he said:
"Nation states are political entities, not moral entities—with interests and desires, not rights and duties".
Therefore, for someone who takes that rather interest-based, realistic approach, the question of intervention is to be justified not by an appeal to what my noble friend Lord Judd spoke of as general, universal moral principles or human rights' ideals and so on but by what kind of interest we have at stake when we are called upon to contribute to a UN effort.
That idea, well articulated by my noble friend Lord Healey 40 years ago, has not disappeared. It was raised in another place quite recently by Nicholas Budgen in a question to the Foreign Secretary. He asked what is our interest in Bosnia. He asked what British interest is at stake in Bosnia as a justification for being involved there.
Of course, there is the argument that we can be involved and call upon people to make sacrifices whether financial, tax-based or in terms of the commitment to troops. We can call on the interest-based view only if it can be demonstrated that there is that kind of interest at stake. On this view it is redundant to invade the large-scale moral principles
522
on the grounds that ordinary people will not be motivated by such concerns. In a sense, that is both the strength and the weakness of the interest view. It links in with the perceptions of ordinary people about politics. Most people are not driven by abstract and universal ethical conceptions whereas they have some sense of their own state, its interest and so forth.
On the other hand, my noble friend Lord Judd was right to say that if one takes that interest-based approach in a sense it runs against the necessity that we have for collective action on a world stage. The states which are contributing to that collective activity will fiddle around with it in order to ensure that their own interests are well protected. I believe he said that they would act in arbitrary manners in the context of collective action in order to protect their own interests. Therefore, it is difficult to see how collective action could be properly based on the interest-based approach. It seems that collective action is fundamentally necessary and yet that moral base—if that is what it is—cannot do justice to it.
The alternative view is that ideas about rights and universal human rights run directly contrary to the argument of my noble friend Lord Healey; that states have interests and not rights and duties. After all, if there are universal human rights they are not the concern just of the governments under which the right-holders happen to live; those rights are the concern of everyone. As was said by my noble friend Lord Ennals, rights without the means of enforcement are pretty feeble rights. Other states have to be concerned not only with the protection of rights in other societies, but with the means of the enforcement of those rights. In those circumstances, the kind-of-rights argument provides a contrary position to that of my noble friend Lord Healey: that states have desires and interests and not rights and duties—
Lord Ennals: My Lord, my noble friend's argument is so interesting that I wish to probe it a little furtner. The article to which he referred by my noble friend Lord Healey was written 40 years ago. It was written before many international legal obligations and legally-binding covenants which have been accepted by member states. Does my noble friend agree, therefore, that now some states have legal obligations as well as interests?
Lord Plant of Highfield: My Lords, I am sure that my noble friend Lord Healey now would. I did not mean to imply that he would now hold these views but I believe that in his essay he was putting what one might call Left-wing international Utopianism under a very cold shower on the grounds that he thought that it was rather sentimental.
I believe that the alternative view—the rights-based approach—gives one state a sense of duty towards individuals in other states. That is the basis of much of the present intervention, in particular when it occurs without the consent of the state in which the intervention takes place. The difficulty with that is the mirror image of the interest approach.
As I said earlier, ordinary people are not much motivated by abstract political conceptions such as

523
ideas of rights and so forth. Therefore, putting such ideas to people as the basis for intervention may well not have the kind of power that the appeal to a specific real interest in a particular form of intervention might have on the Healey arguments of 40 years ago.
The other danger of the human rights argument is twofold. First, we have to recognise that it actually constrains the idea of sovereignty, as many of the intervention actions that have gone forward in recent years clearly show. There is no point in beating about the bush about that: if we want to follow, as I do, the route taken by my noble friend Lord Judd, we must squarely face up to it and not try to get around it with all kinds of attempts to hedge the position.
The second danger is that there is the possibility —and I put it no higher than that—that we actually extend in a rather dramatic and, possibly, irrational way the sphere of our moral responsibility to other people. As John Stuart Mill once argued: we can be as responsible for our inaction which causes harm, as for our action. Trying to work out what the consequences of our inactions are in terms of the harm that they may do to other people, given that we think that we have duties to other people, is very difficult. I believe that that idea may lie behind the view of the noble Baroness, Lady Thatcher, that the West was an accomplice to murder in Bosnia. If we have that kind of duty to protect people in Bosnia because they have a right to protection, then the failure to act was a kind of collusion with the position that they finally found themselves in.
Therefore, there is the danger that, if it is thought that we have a strict duty as regards aid and that people have a right to relief, as argued by my noble friend Lord Judd, then I believe that we extend enormously the sphere of human responsibility. While I think that that view is morally defensible, it is also one that requires a huge programme of education before it becomes a plausible basis for the moral under-pinning that I believe a much extended and more interventionist United Nations would actually need to ensure that the resources within member states are forthcoming to support that degree of intervention.
8.8 p.m.
Lord Desai: My Lords, one of the great pleasures of being in your Lordships' House is the delight of hearing some speeches which are so profound that one is left almost reeling at the end. Of course, I should like to thank my noble friend Lord Judd for giving us the opportunity to discuss this matter. Indeed, we have heard some very good speeches, among which was the maiden speech of the noble Baroness, Lady Williams. She too will find that the pleasure to which I referred is one of the best aspects of the House. It is as great a pleasure to listen as it is to speak. I was in fact referring especially to the contribution made by my noble friend Lord Plant. I did not expect him to make such a speech, so I am not quite able to work out the consequences that he mentioned. However, what I have to say somehow follows in the same vein. As fellow academics, my noble friend and I can indulge in
524
abstract thinking—partly because we are no good at anything else and partly because that is, perhaps, what gives us great pleasure.
I wish to concentrate on an aspect mentioned by my noble friend Lord Judd; namely, whether the UN system is adequate to meet the humanitarian demands increasingly being placed upon it. In my view, we should ask ourselves what we think of the system as such. I should like to follow my noble friend Lord Plant in the way I approach the matter. In fact, it is a pity that I cannot call him "noble and learned" because, although he is not a lawyer, he happens to be a very learned man. The problem with the UN system is that it does not actually comprise united nations; it is a union of nation states. There is a great conflict between the interests of nation states and the interests of nations as people.
We are finding out increasingly, especially in the field of humanitarian assistance, that the conflict between nation states and the people who inhabit the nation states is very often a great obstacle for the United Nations. I say that because, enshrined in Article 2 Section 7 of the UN charter is the principle of sovereignty. Unless the world actually rethinks the role and importance of sovereignty in the UN system, especially in the post-end of history of the world in which we live, there will be continual problems for the UN system as regards effectiveness in intervention. We are increasingly asking the UN to behave like a world government without the powers or resources that such a government needs, to say nothing of the moral authority that some governments have.
In many of the countries mentioned in the Unstarred Question crises have arisen because of the breakdown of the original sovereign state. Either civil war has then broken out—that is, the legitimacy of the nation state has been challenged—or there is statelessness. Somalia is a classic case of statelessness. In the case of Somalia, the UN could for the first time enter a country without an invitation, as there was no one to invite the UN to intervene, there being no state. I believe that this situation will occur more and more frequently in the future. Liberia came close to such a condition and there will be other instances of statelessness.
If there is enshrined in the United Nations a principle that the constituent members of the system are nation states rather than the people of those nation states, we shall have to redefine the terms of UN intervention. It may intervene if it considers that no state exists that has sufficient legitimacy to ensure the safety of those bodies who visit the state concerned to provide assistance. Those bodies could be nongovernmental organisations or UN bodies. When a condition of statelessness prevails and the UN intervenes, it not only has to provide humanitarian assistance but also military force.
The UN does not have its own army and has to rely on voluntary participants from its member states. As my noble friend Lord Plant said, only those nations who have vested interests in a particular conflict may wish to contribute personnel. The noble Baroness, Lady Williams, covered the topic of Bosnia well. In Bosnia there is a lack of sufficient interest on the part

525
of the great powers to intervene in the way many people believe they should. While all the legal niceties are being preserved, we are not solving the problem of Bosnia.
Intervention by the UN can often be held up because of an election in one country or a referendum in another. The UN has to seek a window of opportunity when no major power is disturbed by internal elections so leaders can concentrate on matters outside their own backyard. I believe the issue of sovereignty will continue to pose problems and that we shall have to reconsider the conditions under which the UN can intervene. The UN has intervened, especially in the case of Iraq, where it took the view that certain minorities within that state were suffering because the sovereign power was not guaranteeing the rights of its own citizens.
This is a rather touchy subject because many countries, especially those who have recently achieved sovereignty in what used to be called the third world, are jealous of their sovereignty and they are resentful of the argument that intervention can take place on the ground of human rights. They criticise human rights as being Eurocentric. My answer to that is, if they do not like what is Eurocentric, why do they buy Eurocentric guns and bombs? After all, guns and bombs too are Eurocentric. What those people really object to is the concept of human rights.
As I have said, the issue of sovereignty will cause conflict. That leads me to my next point, which concerns the provision of international public goods. One view is that a nation state provides certain public goods such as law and order. If the international system is to be a properly governed system it will have to provide certain international public goods. To do that, it will need money. As many noble Lords have pointed out, the way in which the UN system is financed is far too ad hoc and too much based on chance and local political jealousies to be reliable.
I do not know whether there will ever be a time when the UN system will be able to collect taxes on its own behalf, as many people have proposed. But we are far from that because nation states may not permit it. I should love to pay some of my taxes directly to the United Nations because they might be put to better use, but I am sure that that will not be allowed.
I now move slightly closer to the question of humanitarian assistance. I hope that noble Lords will permit me to mention some ideas from an excellent speech which the UN High Commissioner for Refugees, Mrs. Sadako Ogata, made at a public lecture which she gave at the London School of Economics earlier this month. She pointed out that there are three major issues which any future system that is set up for humanitarian assistance has to face.
First, she pointed out that in addition to refugees there is also the problem of people who are displaced within a country and that in evolving the mandate for interaction we had to do something about the protection of displaced and other populations. Many of the problems are caused by civil wars in which people do not cross borders and do not technically
526
become refugees. We may have to do something about that problem, and that is clearly in conflict with the doctrine of sovereignty.
The second problem which Mrs. Ogata mentioned was the fact that there are times when the mere presence of international bodies, especially international non-governmental organisations, can of itself help to protect the rights of minorities within countries. That is again a rather touchy issue for many governments, but the fact that Amnesty International or Oxfam may be present is a powerful force in protecting the rights of people within those countries. That is a matter on which we may have to evolve certain rules in the UN system in order to achieve a systematic presence of international bodies to help displaced persons.
Mrs. Ogata's third point, which I consider an important point, concerned the use of military force in the context of humanitarian assistance. That is a particular problem where there is statelessness and the local state has broken down or is challenged by rival powers. In providing humanitarian assistance in those circumstances we are asking people to risk their lives. It is difficult to ask people who are already doing tremendous voluntary work to give their lives merely because the local state cannot protect them. In that respect rules have to be evolved within the UN system for providing military assistance. Someone has to ride shotgun when food is being distributed because if they do not the food distributor will be shot. That raises its own important problem.
I believe that the present UN system is inadequate. That is not because of other problems which have rightly been pointed out by other noble Lords but because there are problems at the heart of the UN system. Those problems will have to be tackled very soon, either by an agglomeration of best practice or by a revision of the UN charter itself. Unless we face head on the problem of international governance, and local governance, we shall not be able to make the UN system as satisfactory as we should like it to be in providing the humanitarian assistance which is much needed.
8.20 p.m.
Lord Rea: My Lords, despite the number of conflicts all over the world, which have accelerated since the end of the cold war, as has been pointed out by many noble Lords, I should like to feel that there are hopeful signs. United Nations involvement, the increase of United Nations international peace keeping forces around the world, with forces coming from former cold war adversaries and now co-operating, is very gratifying. It is perhaps too early to crow as loudly as my noble friend did about the success in Cambodia, but at least it looks as though it may be a major triumph for the United Nations. Clearly problems are so great that, as many noble Lords have pointed out, the resources of the United Nations are grossly overstretched.
As my noble friend has clearly argued, prevention is better than cure. As in medicine, conflict prevention can be both primary, stopping the disease before it even starts, or secondary, snuffing it out when early

527
signs first appear. Unfortunately, now we are mainly dealing with tertiary prevention. That means making the patient, or country, feel a bit less miserable in the face of established disease or disaster. Obviously primary prevention is the ideal aim, but that is still a somewhat Utopian hope—Left-wing universal Utopianism, to use the words of my noble friend Lord Plant. That all causes of conflict and disaster are foreseen before they occur is perhaps too much to hope for. Secondary prevention in all cases should be our aim. For that the United Nations would need a much better information, or early warning, system than it has at present, as my noble friend pointed out.
Nations would need to become more open and call for United Nations assistance at early stages of trouble. The principle of non-interference in the internal affairs of nations—it has been a cornerstone of international relations ever since the Peace of Westphalia in 1648—needs to be modified, although—accept the cautionary words of my noble friends.
However, that concept has been suggested by such worthy people as Sr. Perez de Cuellar, the former Secretary-General of the United Nations. In his 1991 report he stated:
"The case for not impinging on the sovereignty, territorial integrity and political independence of States…would only be weakened if it were to carry the implication that sovereignty…includes the right of mass slaughter or of launching systematic campaigns of decimation or forced exodus of civilian populations in the name of controlling civil strife or insurrection".
Our own Foreign Secretary, Douglas Hurd, stated:
"Recent international law recognises the right to intervene in the affairs of another state in cases of extreme humanitarian need".
A long discourse on international law would be inappropriate at this stage. I agree with those two quotations. (This is to state the obvious—otherwise I would not have used them.) It is very important that any such interventions must have full United Nations backing and, if possible, United Nations Assembly backing, if possible not relying solely on the Security Council. I believe that the launching of a major military offensive is almost certainly in every case the wrong way to intervene, even though the alternative methods of sanctions and international political pressure may take an agonisingly long time to work.
The civilian population always loses out in a war, as has been pointed out by many noble Lords today. A particular example of that is the plight of the people of Iraq. I refer not only to the Kurds and the Shiites of the south, including the Marsh Arabs, but to almost the entire civilian population apart from a few wealthy people.
I talked yesterday to a recent visitor to Iraq, a young film producer who is the daughter of an old friend. She tells me that the population is in desperate straits, confirming the reports of Oxfam in 1991 and the Harvard studies which are ongoing, of 1992 and 1993. The government rations provide only two-thirds of the calorie requirements of the population and many thousands of people cannot make up the deficit. UNICEF estimates that between 80,000 and 100,000 children under the age of five will die this year unless sanctions are lifted. Those deaths will be from
528
malnutrition and from illnesses which are normally self-limiting or easily treated but are far worse in malnourished subjects.
There is some evidence that there is a sharp increase in childhood leukaemias. That may be due to the spent cartridges or spent cores of armour-piercing shells which contain spent uranium. I am sure that the Pentagon has denied that the radioactivity reaches toxic levels, but a case has been mentioned to me of a German investigator who arrived back in his country and was immediately arrested because he was carrying the fragments of one of the shells. It was tested for radioactivity and was found to be a dangerous substance. He was taken into custody because of it.
Basic medical supplies are lacking. Even insulin for diabetics is hard to obtain. The £1 billion equivalent of oil exports that is allowed now by Iraq in order to purchase essential food and medical supplies is not enough to maintain even a subsistence standard of living for a large part of the population. There has been 1,000 per cent inflation and wage rates have hardly risen from their level two or three years ago. Many water purification and sewage treatment plants are still out of action following the war. That war has, therefore, created far more suffering than Saddam did when he annexed Kuwait. Is it right that Iraq's population should be held to ransom in that way?
I very much hope that the noble Baroness will ask her right honourable friend the Foreign Secretary to try to find a way of allowing Iraq to sell more of its oil to alleviate the suffering. Creative diplomacy, I suggest, is urgently required.
Finally, I wish to join other noble Lords who have mentioned the particularly nasty problem of low intensity warfare with low-tech weapons such as anti-personnel land-mines. We are all familiar with the television pictures of rural people with amputated limbs. My noble friend mentioned the tragic case of his friend who was killed while distributing aid in Mozambique.
Perhaps I may add my voice to those asking whether this country is still exporting those weapons. The United States and France have ceased doing so and have agreed to a moratorium. Can we do the same? Also, there is the signing of the treaty known as "The Inhuman Weapons Convention", Protocol II, which places certain restrictions on the use of mines, booby traps and other devices. I wonder why we have not signed it. Surely because we have not signed it other countries must have been encouraged to ignore the convention, as they have done. I gather that it is being improved and reviewed. Can we participate in the process if we have not even signed it?
Before leaving this topic, perhaps I may ask the noble Baroness what is being done to speed up de-mining operations in countries where they are still scattered profusely. Is the only way that the mines will be cleared to be by people stepping on them and getting killed?
In conclusion, I say how much I admire the way that the United Nations is attempting, with its scant resources, to tackle some of the worst problems in the world. We should support it fully, as well as the CSCE, which was mentioned by the noble Baroness,

529
Lady Williams, as a peace-keeping, conflict resolution body. We should help the United Nations to improve its structures so that it becomes more efficient in tackling, or pre-empting, conflicts and disasters so that they become fewer and less severe.
8.31 p.m.
Lord Cocks of Hartcliffe: My Lords, I apologise to the House for speaking in the gap. Colleagues may enjoy the irony that, as a keen student of the work of the Procedure Committee, I am probably the first person to be caught by the change of timing which it recently announced for giving in one's name to speak when the House was sitting at 11 o'clock. I will be extremely brief, as is the convention, but I should like to say how much I enjoyed the speech of the noble Baroness, Lady Williams. I often reflect happily on the days (like my noble friend Lord Ennals) when we worked together in another place. I am sure that she will be extremely useful in her contributions and I look forward to hearing her frequently.
I do not think that it is useful at the moment to criticise the United States as my noble friend Lord Ennals did. When one looks back over this century, the way in which the United States with its huge area, population and resources has resisted the temptation to go into an isolationist stance is quite remarkable. I think that its international effort should be recognised and that we should be very restrained in our remarks about that country, particularly at the moment, when its domestic situation is such that there is a reassessment of its attitude towards foreign and domestic balance in its output.
In the past I have spoken in this House about the Horn of Africa. That is mentioned in the Motion, so I shall say few words about it. I have also mentioned in particular the question of the problems in the Sudan.
This House has many advantages over the other place. But the other place has a procedural system of Early Day Motions, which are tabled by Members to register opinions about various events, which other Members sign if they support them. There are two Motions currently running in the other place regarding the Sudan. I mention that country particularly, not only because of my own interest, but because Dr. John Garang last week addressed an all-party meeting in the other place, which some noble Lords attended.
One of the Early Day Motions refers to human rights violations in Sudan. It attracted 92 signatures. I shall not weary noble Lords with the detail, as I have to he very brief. The second one refers to the United Nations and the Sudan, and to the appalling persecution against Christians and other religious and racial minorities there. It mentions the widespread suffering caused by its long-running civil war in the south, the famine and the indiscriminate bombings of civilians by government forces. It goes on to urge the United Nations Secretary-General to co-ordinate an international effort to bring peace to that country. It calls upon the British Government to raise these issues at the UN Security Council as a matter of priority and to encourage the Security Council to play a key role in
530
ending Sudan's civil war and safeguarding the human rights of its religious and racial minorities. That has attracted 91 signatures. That is a very great number of signatures, and I am sure that it will go on collecting signatures. It is an expression of concern by ordinary Back-Bench Members of the other place which we should welcome. I am sure that if we had a similar procedural system here, noble Lords would contribute to it in just the same measure. So I say to my noble friend Lord Judd that there is very widespread concern in this House.
The fact that debates like this one take place later on in the day is not a bad thing. Basically, it is being held at this time because the subject is not contentious. When a matter is contentious, the Whips on both sides who keep our operations running like to hold the debate fairly early on in the day for reasons which will be obvious to noble Lords. Therefore I ask my noble friend Lord Judd to take heart. I thank him for initiating this debate, and say to him that there is far more concern over this matter than in his blacker moments he may feel that there is. I thank noble Lords for their indulgence for my oversight regarding the list. But I am sure that there will be a secret satisfaction among some noble Lords that the procedural pundit has slipped up.
8.35 p.m.
Baroness Chalker of Wallasey: My Lords, perhaps I may say how very pleased I am that we have this debate just before my departure for New York to talk with the United Nations about many of the issues that noble Lords have raised tonight. I shall add to my baggage and take some extra copies of Hansard with me.
Secondly—but it is first in importance—perhaps I may say how much I enjoyed the speech of the noble Baroness, Lady Williams of Crosby. I thank her for the very kind things she said about me—quite unnecessary I assure her. It is a very long time since she made me feel very welcome in another place. Over the years we have certainly worked together on many issues. This will be no exception. She will bring to this House, as she showed tonight in an admirable maiden speech, that incisiveness, clear thinking and forward-looking mind for which she is so well known, not only in another place but also now on Merseyside.
The establishment of the Department of Humanitarian Affairs, headed by Jan Eliasson, has meant that the UN is getting better at providing relief than in the past. But the demands for that humanitarian relief just grow and grow, particularly in the areas of civil strife. It is vital that member states should provide the resources necessary to enable the United Nations to meet those needs.
As Britain is a permanent member of the Security Council and a major contributor to the UN relief operations, I could not agree more that the UN must be equipped to respond rapidly and effectively to humanitarian emergencies.
I looked up something I said in a speech to the Oxford Union some time ago. It was in 1990, when I went to the refugee camps in Jordan in the no-man's land between Jordan and Iraq that I realised just how

531
urgent it was to have some department within the UN which could bring together its different agencies. That was in September 1990. It was very difficult at that time to prompt the UN into action which was co-ordinated and which would allow those persons from Sri Lanka, India, Pakistan and Bangladesh who had been working for good wages in Kuwait and Iraq to get out after Saddam Hussein had invaded Kuwait.
That was the experience which led us, with our German colleagues and our EC partners, to take to the United Nations General Assembly in the following autumn the proposal which eventually led in April 1992 to the establishment of the UN Department of Humanitarian Affairs. We continue to support fully Under-Secretary-General Eliasson in his very challenging role.
Perhaps I may point out to your Lordships that Britain was the first to contribute, with an initial 5 million US dollars, to the UN's new disaster relief fund. But we have kept up our record of contributions and in the past few months I have been able to second a senior British diplomat to Jan Eliasson's team to advise and help to sort out some of the problems of trying to co-ordinate humanitarian assistance in so many different areas of conflict simultaneously when there are enormous pressures on the UN.
We have contributed specifically to the running costs of that department's Geneva office. It is a revised version of the old UNDRO, but it has not been able to run as effectively as I know Under-Secretary-General Eliasson wishes.
We have been able to help them in the work of their special units in The Horn of Africa. We have helped them too with southern African drought, in Iraq and in the inter-agency working group which is based in Geneva, to try to knit together the disparate UN agencies which have not found it easy to work together, as I think your Lordships know only too well.
As the noble Lord, Lord Judd, said in opening the debate—which we so much welcome—the review of humanitarian assistance now going on will be a major focus at this year's ECOSOC session in Geneva in July, as will the further review at the autumn's General Assembly. I can assure the noble Lord, Lord Judd, and others of your Lordships who raised the issue, that we have every intention of giving as much support as possible to sensible ideas of reform for better operations between the agencies, with the Department of Humanitarian Affairs having a co-ordinating, but not a dictating, role in trying to alleviate some of the most awful situations we have ever seen. The past three years of my life have been the most harrowing that I can remember.
When the noble Lord, Lord Judd, opened the debate he spoke of preventive diplomacy. I was much engaged by the line that the noble Lord, Lord Rea, took a few moments ago when he referred to primary prevention, secondary and now tertiary. I agree. There is too much tertiary prevention. We cannot inoculate against man's inhumanity to man, so inevitably there will be a majority of secondary prevention. But at least
532
it should be that and not left to ameliorating a situation as the patient dies after many years of bad experience.
Prevention is better than relief. That is why the United Nations Secretary-General's report Agenda for Peace, published last June, is so important. Peacekeeping and peacemaking, where that can be done, are totally preferable to picking up the pieces afterwards. We need better early warning mechanisms, crisis monitoring, and preventive troop deployment. I am delighted that the United Kingdom had a lot to do with the UN deploying for the first time in the new Macedonia. These are all-important measures being developed, all too slowly. I understand the frustration. We face not only the difficulty of bringing together all those nation states, as the noble Lord, Lord Desai, mentioned, but we also have the cost of doing it. I refer not only to cash but also to manpower.
As I have said to your Lordships before, I am amazed and delighted by the magnificent work that British troops and civilian aid workers carry out all over the world, sometimes at the cost of their own lives, and certainly at cost to their health. It is not just in Bosnia, marvellous though they are there, but also in Somalia, Cambodia and many other places through our first-class non-governmental organisations. Britain is at least doing its share to support the United Nations in preventing crises turning into disasters. But to succeed the UN also needs others to play their part. We are working on that steadily and firmly with other governments and, wherever we can, with each agency.
Many questions have been asked this evening and I cannot possibly answer all of them. I will do my best to respond to the questions of the noble Baroness, Lady Williams of Crosby, and others of importance. Because I believe so much in the whole question of prevention, perhaps I can say a few words in relation to the question raised by the noble Lords, Lord Judd and Lord Rea, and others, regarding limitations on small arms sales. All defence equipment, including small arms, has to be export licensed in this country. The total embargo on arms sales to the former Yugoslavia is complete so far as we can see, but I very much agree that when we have an embargo on small arms, which create so much destruction in a civil war, it has to be complete. I shall look further to see that we are doing all that we possibly can in this regard. I believe that we are and that the questions raised tonight, while rightly raised, have a positive answer.
The noble Lords, Lord Judd, Lord Plant of Highfield and Lord Desai, spoke about the right of humanitarian intervention. The need for humanitarian assistance is greater now than it has ever been before. I do not need to list the many countries mainly mentioned in the debate and even some that have not been mentioned, like Rwanda. I could give a longer list if time allowed. Each emergency has unique causes and characteristics. Therefore, we have to examine each individually. Sometimes this is not done as fast as we would like. The decision as to whether the UN should intervene must be made after careful consideration of the particular circumstances. We would do no good in the world at large to rush in

533
without that consideration. Obviously it is preferable that the UN agencies operate in countries with the agreement of the authorities in those countries. But in Somalia and other places it has not been possible. Where authorities deliberately deny relief to their people, as in Iraq, to which I shall return in a moment, the Security Council must act.
In cases of extreme humanitarian need, intervention without the consent of the government concerned can be justified. The principle of relief by the UN in these cases is becoming well established now but had hardly started four years ago. The UK has demonstrated its support for the principle by giving practical support to the UN operations not only by providing troops for protection duties, notably in Iraq and the former Yugoslavia, but by providing logistics experts to help make things happen. Many of those people are seconded to agencies like the United Nations High Commission for Refugees, as mentioned by the noble Lord, Lord Ennals, and the noble Baroness, Lady Williams of Crosby. Where there is a need I think that I am almost the first person that some of the agency heads ring up to ask from where they can get a certain expert. We have never known a year like the last year and I am very grateful to all those who volunteered to go to work in those countries.
Having talked about needing to intervene sometimes by force, I do not think it would be right to have a set of rules, as the noble Lord, Lord Judd, implied in his remarks. I do not think that it is possible to do it in that way. Indeed, if we set fixed parameters for international response there would always be some group within that country which would say that that was not the situation and that the assessment against which we had applied our fixed rules was the wrong assessment. I believe that that has dangers of its own.
The second aspect is that I do not want to see a situation where we inhibit decision making and limit the flexibility for action. If we had rules under which we intervened we would probably end up having rules on what we could do when we intervened. That is a very real danger. Instead, the response should match the problem. That is why in the former Yugoslavia and in Somalia the deployment of troops to protect relief operations was the right way to go about it. However, we very much hope that in Mozambique the UN agencies will continue to operate without military protection and be able to get the food through and get on with many of the other aspects of the work that they need to carry out to bring peace and improvement to the people.
So, in answer to the noble Baroness, Lady Williams of Crosby, I do believe that, whether it be in Bosnia or anywhere else, if we need a stronger mandate to get humanitarian aid through, that will have to be considered by the Security Council. I shall come to her point on Tuzla in a moment. I do not believe that we can easily fight that aid through, although with the establishment of safe areas, which are going to be somewhat different from the safe havens of Northern Iraq, I believe that we shall then have an easier manner of deciding how we operate in order to facilitate the passage of the humanitarian aid past those who
534
sometimes, as I believe the noble Lord, Lord Judd, said, will with a single Kalashnikov impede a whole aid convoy. I believe that we saw one such situation on television earlier this week.
We are indeed proceeding to find out how we can best deploy UN monitors in relative safety on the Serbian-Bosnian border, but those discussions have not yet been concluded. As regards Tuzla, when I was in the area in January, we looked at the possibility of opening the airport there and then. The runway was in a bad state then and it is in an even worse state now. But it is a matter which is very much under consideration. If the establishment of the safe areas can go ahead with Tuzla being the one which is most likely to be protected by British UNPROFOR troops, then that would be a real possibility and one that we have sincerely examined before. We did not find it possible then and I hope that the UN will find it possible in the near future.
A number of your Lordships asked me about the resources of the UN. That of course is at the heart of the problem which we face. At the end of March 1993, 30 countries out of 178 that pay to the regular budget had paid their contributions in full. A total of 1.2 billion dollars was outstanding. The UK and other European partners and Canada all have a good track record in making payments on time and in full. We urge others to do the same. There has been a series of EC demarches to the United States, which over recent years has been catching up on arrears and is now making its new payments on time. But there is still some way to go in that.
The UK will always endeavour to pay its assessed contributions promptly and that is one of the matters we have been concentrating on in looking at the flow of financial resources for UN operations of late. In the financial year to 31st March last, the United Kingdom contributed over £250 million to the total budgets of the United Nations. I sincerely hope that the Americans will be able to meet their stated objective of clearing a number of their debts by the end of this year. If they do so, Russia will become the largest single debtor to the organisation. I am interested, as I am sure your Lordships will be, in the recent Ford Foundation study which is suggesting various ways to improve the financing of the United Nations. I sincerely hope that a number of the recommendations in that study will be approved at the forthcoming General Assembly.
There are many aspects of UN reform which need to be achieved to give us the better ability to respond. The UK has been a major proponent of the reform and the Secretary-General has made some good progress in his tenure so far in restructuring and rationalising the Secretariat to make it reflect modern realities. But there is a real problem, which I discuss frequently, about how to get the agencies to work together and to co-ordinate—and to co-ordinate between Geneva and New York, let alone in the country of operation. I can assure your Lordships that I shall leave no stone unturned to help to ensure that that co-ordination will happen in the future. It is certainly something that the UN Under-Secretary-General Eliasson is determined to do too.

535
The noble Lord, Lord Cocks of Hartcliffe, put the spotlight on Sudan. Our efforts are intensifying all the time in this respect. I had a very good discussion with the new Sudanese ambassador at the beginning of April, and our officials met Dr. Garang last week. We have made clear our deep concern about the situation between the Sudan People's Liberation Army (SPLA) and different factions. Two Members of Parliament, Tony Worthington and Robert Banks, made a successful visit there last month and more visits are planned but, above all, we are seeking to get action on the ground to the people who are dying of starvation and because of lack of medicine and who have been denied access to it for so long. We are helping the UN and other agencies, particularly the NGOs, to get on with the job which they are courageously determined to undertake.
To discuss Somalia only at the end of this short debate would not do it justice, but it might interest your Lordships to know that in the UNOSOM II organisation, Admiral Howe, who is leading it on behalf of the UN, specifically asked us for a member of staff who knew the situation there to assist him. A middle-ranking officer of my department is with him in Mogadishu. We have also recently sent out a specialist assessment team to Hargeisa up in the north-west. We shall be doing our best to ensure that we bring that programme together because one of the problems in Somalia has been to co-ordinate the many different needs since the United States forces, accompanied by Australians, Belgians and many others, did such an excellent job there.
One of the hardest things to get started when one of these terrible civil conflicts finishes is the de-mining about which the noble Lord, Lord Rea, spoke, as have many others in recent weeks. We recognise the urgent need for the expansion of mine clearance programmes. We have made sure that the UN office for the co-ordination of humanitarian assistance in Afghanistan has a major role in this regard in that country, but we have not stopped there. We have sought to help with mine clearance in Cambodia, Angola, Mozambique and many other countries. There are numerous ways of doing this. We have recommended to the UN many of the mine clearing teams which we have used successfully from ODA funds because, frankly, unless mines can be cleared at the cessation of these conflicts, no proper agricultural planting can take place and people cannot return to the land and their former lives. It is almost one of the most important actions at the end of a conflict. So we are well aware of it and are seeking to help. Indeed, where we can go, we shall do such work.
One place where we cannot go is Iraq, to which the noble Lord, Lord Rea, referred. There are many things that one could say about that country and its poor people, but there is absolutely no doubt that the humanitarian relief that is so urgently needed not only by the Kurds, the Shi'as and the Marsh Arabs, but by the population as a whole, can and should be funded by the Iraqi Government. They may sell their oil through UN Security Council Resolutions 706 and 712. The imposition of sanctions on Iraq, renewed
536
only this week by the UN Secretary-General, is the direct result of Iraq's refusal to comply with the Security Council resolutions.
Perhaps I may say that those resolutions which cover sanctions have never applied to food and medicine. That cannot be repeated too loudly, because many people seem to be unaware of that basic fact. From the very beginning we sought to make sure that the sanctions would not apply to food and medicine. Therefore, I can only say that those who abandon their own citizens, as the Iraqi Government have done, cause the rest of us enormous additional problems. I do not believe that the rest of the world will be as willing to respond to the UN's new appeal for Iraq unless the Iraqi Government too respond to the needs of their own people, which, indeed, they can do.
Lord Ennals: My Lords, will the Minister say a few words about the way in which Kurds are not able to exploit their own oil within Iraq for Kurdish purposes?
Baroness Chalker of Wallasey: My Lords, I am well aware of the great difficulty for the Kurdish people. They do not have the right equipment within the Kurdish area to exploit their oil. That matter is being looked at by the United Nations at this very moment, because there is no way in which one can properly supply what is needed to exploit that oil without breaking present sanctions. However, that is being studied and Mr. Barzani and Mr. Talabani have talked to me recently about that because it would help the Kurdish people at least to become self-sufficient so that they could create their own cement to rebuild their own places. I am well aware of the problem which that causes.
This has been an interesting debate—
Lord Judd: My Lords, just before the noble Baroness leaves that point, perhaps I may say that she has put us in a very difficult position because I believe that all noble Lords on this side of the House recognise her sincerity in all that she has said about the hazards which mines present. Therefore, we address our strictures not to her but to the Government as a whole. Will she make representations to her colleagues that we wish to see some specific action taken to curb the traffic in the weaponry to which she has referred and that a lead could be given if we were to accede to the international measures which are being introduced in that respect?
Baroness Chalker of Wallasey: My Lords, I assure your Lordships and the noble Lord, Lord Judd, that the Prime Minister has been the first to say that we should take all action possible to stop that arms trade. I remind the noble Lord, Lord Judd, that the Prime Minister proposed the UN register of arms. It is he who has said so often that if the whole world were to stop supplying arms, we should not have so much hurt to cure.
Sometimes in this House and in other places the UN has received undeserved bad press but sometimes it has been well deserved. When it is well deserved, I am, and I shall continue to be, critical. There are

537
several disappointments in what has taken place in the UN over the past year but we must not forget the extreme difficulty of the conditions under which we ask the UN and its people to act.
Secondly, there is a growing burden of expectation. Every time there is fighting and trouble the cry goes up, "Something must be done". In this country that is directed at the Government but when it is worldwide, it is usually directed at the UN. In humanitarian situations, there is simply no room to say no. If an emergency arises, however stretched the UN may be, it must respond.
Fourthly, the majority of UN work goes unnoticed. I have mentioned examples of cases where the UN has intervened successfully to save hundreds of thousands of lives over a long period of time. It rarely makes the newspapers. When we do something preventive it is usually seen by newspapers—such as the Daily Express today—as unnecessary and therefore they criticise what one does. I intend to continue to seek to help the UN in facing a humanitarian challenge which seems ever to be of greater size and complexity.
538
As the noble Lord, Lord Desai, said tonight, we need the UN perhaps now more than ever. It is up to us, the member states, to continue to push it in the right direction, to encourage it and occasionally to criticise it. We must encourage the Secretary-General in his efforts to improve the efficiency of the way in which the UN system operates. I must say that the jobs being done by those in both the UNHCR and the Department of Humanitarian Affairs are absolutely crucial. We seek to help them as the people really at the forefront. But not just them—we want to help all those in the UN agencies who deliver well the job that needs to be done to relieve humanitarian suffering. All donors and developing countries should be working with these agencies. All donors should be paying up on time. If that were done I believe that we should see over time a much better situation. I can assure your Lordships that the British Government will continue to support the United Nations efforts and to make them as successful as we possibly can.
House adjourned for the Whitsun Recess at six minutes past nine o'clock until Monday, 7th June.