HL Deb 06 June 1996 vol 572 cc1355-6

3.14 p.m.

Lord Donoughue asked Her Majesty's Government:

Whether they consider that the profits achieved by Camelot through its monopoly contract to run the National Lottery have been appropriate.

The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood)

Yes, my Lords.

Lord Donoughue

My Lords, we on this side of the House fully supported the lottery legislation and welcomed the efficient launch and the benefits to good causes. But is the Minister aware that the pre-tax profits in only 18 months are heading for £100 million, which is more than the total capital invested in this operation and represents a return on capital far higher than in most of British industry, which operates in a competitive climate and does not run a monopoly licence to print money? Is he further aware that only three weeks ago the National Heritage Select Committee concluded that, in the light of the additional and unanticipated profits, Camelot should hand over a proportion to charity? Does the Minister agree with that? Would it not at least be elegant if it handed over £50 million to good causes?

Lord Inglewood

My Lords, Camelot has been an extremely efficient organisation. The main beneficiaries of that efficiency have been the Exchequer and the British people. We believe that charitable giving is an entirely desirable activity. We also believe that it should be for the individual who has the money to decide what to do with it.

Lord Wyatt of Weeford

My Lords, is the Minister aware that it is a very easy and simple thing to run a lottery? By this time, should we not have reverted to the original concept of two or more lotteries throughout the country so that there was real competition between them, more efficiency and greater amounts for good causes? Is the Minister aware that that is exactly what happened in the United States, where the state lotteries in various parts of the country rival each other? Does he not agree that that is the surest way of getting good competition, greater efficiency and more money for good causes?

Lord Inglewood

My Lords, it is glib to say that running a lottery is easy. Recently in the state of Arizona the newly-appointed lottery organisation had its licence withdrawn after six months because the operation was a shambles and the participants in Camelot, who made such a great success of the lottery in this country, have been called in to deal with the mess.

Lord Boardman

My Lords, can my noble friend confirm that the contract was awarded to Camelot in competition with many other firms and by an independent source? Can he also confirm that the risk-reward ratio at the time the contract was awarded was very much less favourable than it is in the light of the experience we have had to date?

Lord Inglewood

My Lords, my noble friend is right. The decision to award the lottery to Camelot was strongly underscored by the National Audit Office.

Lord Jenkins of Putney

My Lords, if the Minister believes, as he says, that the scale of profit is appropriate, does he agree that the word "appropriate" acquires a new meaning; namely, "grossly excessive"?

Lord Inglewood

No, my Lords, I do not accept that.

The Viscount of Falkland

My Lords, does the Minister agree that one should be wary of too much outrage over profit in this area because there is no doubt that the lottery has been run efficiently so far, no matter what one's moral position may be? Does he further agree that you run the risk, if only the profit of this operation is considered and if you say that someone else should run it, that the new organisation may not run it so efficiently, may not make such profits and may be unable to give bonuses to its directors, but it may nevertheless take more out of the lottery than the 1 per cent. taken by Camelot to achieve all those profits and bonuses?

Lord Inglewood

My Lords, the noble Viscount is absolutely right. Efficiency is a very good quality, and that applies in running a lottery, as in almost everything else.

Baroness O'Cathain

My Lords, can my noble friend confirm that of all the lotteries in the world, Camelot contributes more to good causes and to government than any other single lottery?

Lord Inglewood

My Lords, that is right. As the recently published La Fleur research pointed out, the British lottery, Camelot, contributes more to good causes and government than any other lottery in the world and also contributes a higher proportion of its total sales.