National Lottery

HL Deb 12 June 1996 vol 572 cc1718-75

3.11 p.m.

The Earl of Gowrie rose to call attention to the social and economic benefits of the work being undertaken by the distributing bodies of the National Lottery; and to move for Papers.

The noble Earl said: My Lords, I am delighted that my Motion has at least the merit of attracting the maidenly appearance of my noble friend Lord Hindlip. He is an old friend from youth and when I was chairman of Sotheby's he was a fascinating sparring partner. I congratulate him on now assuming the world chairmanship of another great auction house whose name temporarily escapes me.

If we strip the phrase of its sinister, Maoist overtones, nothing less than a cultural revolution is taking place in our country today. Its engine is the National Lottery. In only a year and a half, the National Lottery—an engine so successful that no one surely should carp at the engineers drawing a 1 per cent. reward—has raised no less than £2 billion for the arts, sport, the heritage, caring charities and schemes to celebrate the new millennium. So far, 5,812 awards for nearly 7,000 projects adding up to £1.7 billion have been committed. Through these the lottery is encouraging a sense of community and social cohesion, not least by acting as a springboard for the regeneration of our towns, our cities and our villages.

With both the major political parties acknowledging that public spending as a proportion of GDP is not only unsustainable, but prevents output from rising as fast as it otherwise might, it is surely fantasy to imagine that the work being done in those fields could be fuelled by conventional public expenditure. In my view, that outweighs hostility to gambling in any form. That hostility has a long and honourable history in our culture, but so does the gambling. Be this as it may, I am told that the average weekly spend is £2 and that no less than 65 per cent. of the adult population regularly take part in the games.

I believe that in a consumerist democracy it is if anything rather offensive to take a paternalist stance, and for us to assume, as legislators, that this huge proportion of people do not know what is right for them. If people change their minds, the lottery takings will fall—and so be it. Meanwhile work has already been undertaken which is already bringing good news to good causes and which will deliver even greater results in the early years of the new millennium itself.

I am, therefore, most grateful to my noble friend Lady Young, and the Whips' Office, for allowing me this opportunity, on a Conservative day, to draw attention to the social and economic benefits of the National Lottery. It is generous of them, because on all aspects concerning lottery awards and their effects—and these are very far-reaching aspects—and, indeed, on the arts economy generally, I am in effect a Cross-Bencher. The Arts Council which, with the art councils of Wales, Scotland and Northern Ireland, gets one-fifth of the lottery's distributable proceeds, is an instrument of government, peopled by those who support various political parties, and none. But our hand, so to speak, is at arm's length from government, and that is a long accepted and valued system.

However, it is fair to say that there is at least poetic justice in taking Conservative time. The lottery is very much the personal creation of my right honourable friend the Prime Minister. Others, myself included, tried to get one accepted for legislation a dozen years ago, and we failed. My right honourable friend got the legislation through and, most important of all, he got it through with all-party support. The three shadow Ministers that I have had the pleasure and interest of dealing with since I joined the council two years ago have been generally supportive as have the three Ministers; and so, indeed, has the noble Lord, Lord Donoughue, who I am delighted to see will be speaking for his Front Bench today.

Indeed, the Labour Party in local and regional government, sharply aware of the regenerative possibilities of investing in our culture, has been most supportive. Newcastle and Gateshead, Manchester and Liverpool, Birmingham, Bristol and London, to name only the biggest cities, will soon be transformed in a way not seen since the confident years of Victorian and Edwardian industrial and municipal expansion. Or they will be transformed if we keep our heads and do not mess about with the lottery on any significant scale for five or six years. As the Prime Minister said to me when we discussed my appointment: I want young people in Britain to have the best sporting and cultural facilities in Europe within 10 years".

That is an honourable and useful aim. It is shared by the Leader of the Opposition and, I believe, by the Leader of the Liberal Democrats. It is, if we keep our heads, a perfectly achievable ambition.

So the revolution is under way, fuelled by talent and commitment but also by the sudden, and rather bewildering, availability of new, hard cash. The Sports Council (which I hope the noble Lord, Lord Addington, will tell us something about) has made about 1,750 awards, totalling nearly £300 million, for football, new swimming pools, athletics, tennis—we shall start winning Wimbledon again when tennis moves from Windlesham, so to speak, to Wigan—for cricket and, I am told, for bowls: in the people's lottery those of us who are not so young must also be served.

The caring charities—and I believe that my noble friend Lady Young will have something to say on these—started a year behind the rest of us. But they are catching up fast, and there have been 2,500 awards totalling about £160 million. Well known organisations like Age Concern, Bamados and Cancer Relief have received lottery funds, so have many much smaller charities whose work is no less important.

When he comes to reply for the Government, I hope that my noble friend Lord Inglewood will tell us a little about the activities of the Millennium Fund as that is ministerially chaired. The noble Lord, Lord Rothschild, who chairs the National Heritage Memorial Fund and whose name I am pleased to see on the speaker's list, has made 336 awards totalling £225 million, with the money going to museums, art galleries, libraries and Churches and to the bedrock of our heritage, the land itself. The NHMF and ourselves combine from time to time. Witness the Royal Albert Hall award and the award for the marvellous opera house/art gallery in the Lowry Centre at Salford.

The arts councils, the largest of which, the one for England, I chair, has made 1,200 awards to the tune of £471 million. They include £23.5 million for film: a wholly new and welcome public contribution to a great art form and a great industry. Over 75 per cent. by number of those awards have been less than £100,000 in value, demanding 10 per cent. in matching funds only. Surely this gives the lie to perceptions that all we do is dish out "dough" in fistfuls to large and prestigious organisations. Of course we also do that, and quite right too. Britain has starved her great theatres, opera houses, concert halls, living art galleries and dance centres of investment ever since I entered my teens, which happened to be the year of the Festival of Britain. How well I remember the excitement, the optimism and the post-war revivalist spirit of 1951 which the Royal Festival Hall, the Dome of Discovery and the much missed Skylon and Battersea Fun Fair generated. How fervently I hope that the refurbishment and regeneration inherent in the South Bank's exciting lottery bid is in due course successful.

When you have spent decades trying to keep shows on the road, at the expense of investment in infrastructure, two things happen. Your overseas trade begins to suffer because however much foreign visitors admire your actors, actresses and musicians, they will not indefinitely support uncomfortable, non-air-conditioned and tatty theatres and orchestral halls. In an age of ever more sophisticated electronically packaged entertainment, catering to brows high, middle and low, it is easier to stay comfortably at home with the TV, the CD and the magic carpet of the Internet. These are all wonderful inventions capable of raising awareness and interest in all fields of endeavour. But they miss out surely on the almost erotic and life-changing encounters with living art and artists which only the public and physical arena can deliver. Your audiences for venues—and therefore your revenues—start to fall off if you start to starve the venues of investment. More seriously still, you begin to fail to generate the new encounters, the progeny, which constitute the yeasts, the gene bank of your culture, be these sporting or artistic or scholarly or just—in my view this is no less important—plain participatory. Audiences also serve who only sit and attend to things.

Brought down to earth, what this means is losses in terms of revenues, taxes and jobs. The arts in Britain are big business indeed and they repay a minute public investment a thousand times over. So when you read a snide leader in the Sun or the Daily Mail about lottery grants, or tales of "luvvies lining each other's pockets", please remember that "luvvies" of one kind or another are seeing to it that Britain is boxing above her weight in the world, to borrow a phrase beloved of the Foreign Office. The clever Mr. Murdoch and the clever noble Viscount, Lord Rothermere, are both cultivated, agreeable and talented individuals. Their publications draw a shilling, in the tabloids, from those who supposedly hate the arts, and at least sixpence, in the broadsheets, from those who love them. Remember that these gentlemen are also in the entertainment and leisure businesses. What I would like them to do is to recognise that only perhaps the Sovereign carries as much moral weight beyond our shores as our artists.

In recent years British business has come to recognise this to some degree, and I am proud to have played a small part in that. What is new and exciting is that a city council such as Gateshead believes that too. This was the council which under the visionary scheme established by my predecessor, the noble Lord, Lord Palumbo, submitted and won that brave bid for the Anthony Gormley sculpture, the Angel of the North. As a senior member of the council put it to me, I don't know anything about modem sculpture, though I rather like this one. I do know that our enabling contribution to the Lottery bid is a sensationally cheap way of achieving international standing for Gateshead and that will have positive knock-on effects for our citizens".

For their work on that bid, and for their understanding of one of the key purposes of the lottery, I might be tempted, if I lived in Gateshead, to vote for them. But before I am asked to have a quick word with my noble friend the Chief Whip, let me say that temptations, of course, are designed to be resisted.

The terms of my Motion accentuate the positive. Had I more time I could continue in wholly positive vein, mentioning large awards such as the Cambridge Arts Theatre, the Hall for Cornwall and the Ikon Gallery in Birmingham; middle-scale awards such as the Green Room in Manchester, the Norwich Playhouse and the film adaptation of Thomas Hardy's The Woodlanders; and small awards such as the Warwickshire County Youth Orchestra, the Cheshire Dance Workshop and even Zippo's Academy of Circus Arts. Even more extremely, we have—God bless us—given a little money to a troupe of drum majorettes.

Lord Cledwyn of Penrhos

My Lords, I am enjoying the noble Earl's important speech. However, is he not sad that he cannot include an opera house in Cardiff in that list?

The Earl of Gowrie

My Lords, although I am privileged to be a resident of the Principality of Wales, sadly my writ does not run there. If the noble Lord will suggest that it does, I shall see that he gets his opera house.

I believe that, only 14 months on from our first awards last year, it is right to be thoroughly positive—to be bullish even—because I have no doubt whatever that so long as any modifications we make to the lottery and its mechanisms are made in the light of reality, rather than on the grounds of fleeting public perceptions as interpreted by the commercial press, we shall indeed go further up the slopes of Parnassus than at any time since the war. More important still, more and more people will enjoy the climb and become entranced by the view. However, there is a difference surely between being positive and being bland. Any revolution is fraught with difficulty and controversy, and if it is not it is probably not worth doing.

Let me close with the two most considerable of these difficulties and say what, in our field, we are trying to do about them. There is the confusion in the public mind—expertly exploited by the Treasury—between the rules that govern the lottery awards and the rules that govern the grants we make for the support of the arts with the money Parliament votes to that end. Public confusion on this issue extends to Parliament itself and, in my experience, even to Government. It is felt that the arts are all right, and perhaps even rather spoiled, so what on earth is the council doing moaning about cuts and demanding more money?

The short answer is that we are not allowed to use lottery money, nor even the rapidly compounding interest on sums awarded before they are called down, to look after the arts themselves. We can build shining new palaces of culture, and some very needed and exciting bids such as the new centres at Stoke-on-Trent and Milton Keynes, and Alan Ayckbourn's theatre at Scarborough have been successful. But we cannot fund what goes on inside them. On top of this, the funding consensus, which has always governed the council, has in effect broken down. Successive governments may not have provided the money needed but they broadly maintained the provision. Now it is not only being cut in real terms; it is being cut in cash terms.

Since I became chairman of the Arts Council of England only 26 months ago, the Government have cut our current budget by about £17 million in real terms. A further £3 million cash cut is threatened next year. On an annual budget to England of less than £200 million this is having a devastating effect. In terms of my Motion, it is creating cynicism and dismay about the lottery. The administration which, with the institution of the lottery, has offered so much possibility to the arts, is at the same time making it exceptionally difficult for the arts to take advantage of what they have been offered. One of these days a number of cherished orchestras or theatre companies will go bust. I do not believe for a minute that you can indefinitely protect every cultural institution from market changes, but any collapse will be, to put it politely, puzzling to people. "What happened to the lottery?", they will say.

Things are not only bewildering to the public. How would you feel if you were a second violinist in a London symphony orchestra, had trained hard for 10 years, were paid about the same as a 23 year-old typist, and were now reading about your funding Arts Council having more than one-and-a-half times its annual grant to spend on cultural facilities? "What are they going to put into these buildings?", you would say. I very much welcome the Secretary of State's new directions in respect of new works, new talents and the making of new audiences. But those will take quite a time to work through. Our problem is getting from here to there.

The Secretary of State has sought to address this crisis with new directives. I am very grateful to her. It looks as though there will be a small but welcome shift from capital to content, from buildings to people and audiences, particularly young people. But the same financial regulations, different from those which govern our grants in aid, and the same need for challenge funding, will remain. The English have a genius for surrounding beautiful creations and concepts with rings of regulatory fire. Somewhat to my surprise, I now find myself in the unlikely role of Siegfried, hacking my way through these so that Brunhilde may ride once more to our rescue.

Anxiety has been expressed about the share of grants between the capital and the regions. Of our own awards, the largest share has so far gone to London, as one would expect, London being the national capital of a small country. The figure is £216 million for 136 projects, followed by the North West. But, as the House of Commons All-Party Select Committee concluded, the Lottery grants do not go invariably, or even usually, to such plush recipients as the Royal Opera House … Countless inner city and rural enterprises have benefited, ranging from community centres to amateur sports clubs. But … it is right that national institutions—like Covent Garden in London or Hampden Park in Glasgow—should receive substantial amounts. They ought to be causes of national pride not envy". That view was backed by my right honourable friend the Deputy Prime Minister in a trenchant speech at the Royal Society of Arts last month, and I agree with him. But as more money is raised and more grants are made, we are confident—and we are working with the regional arts boards to ensure it—that the regions can share fully in the spoils that the lottery brings. I can say, hands on heart, that so far no award made in one part of the country has been made at the expense of any award made in another part of the country. To date we have had sufficient money.

To quote the Select Committee in terms which I hope will set some of the agenda for this debate, just for once, let us praise something which has been done well and gone right". My Lords, I beg to move for Papers.

3.32 p.m.

Lord Howie of Troon

My Lords, it is extremely agreeable to see the noble Earl, Lord Gowrie, in his place addressing us again. He has not done so too often in recent years. I remember the elegance and grace with which he discussed with us such unlikely matters as industrial relations in the 1980s. I am glad to see him back. It is good, too, that he is raising this matter with us.

I begin by giving a total welcome to the idea of the lottery. I think that Britain is a nation of gamblers. My own family has spent a lifetime betting on horses—which explains our present poverty. There is no reason to gainsay the lottery. I have no truck with the puritans among us who oppose it.

However, there is one factor to be remembered. That part of the lottery revenue which goes to the various good causes indicated by the noble Earl is a hypothecated tax, and should be considered in those terms. I welcome the lottery. I welcome the fact that a tax is involved which goes to good causes. However, I nevertheless have some unease. In the course of seven minutes, I can only niggle. I cannot express my approval at great length; noble Lords will have to take the approval for granted and take my niggles as peripheral.

Disquiet has been expressed in public about the initial distribution of the funds. I say immediately that I entirely agree with what the noble Earl said: that for the overwhelming part the distribution has been sensible. He would probably agree that the distribution of funds got off to a rather bad start. The situation was not well received and not well understood.

My views are these. Where we deal with the distribution of large sums of public money, the project should preferably be necessary. One high profile early project caused a good deal of harm to the lottery funding arrangements. I refer to what is popularly called the South Bank Crystal Palace. The South Bank is a conglomeration of buildings of a brutalist architectural persuasion. The proposal was that those buildings should be covered over with a large glass and steel canopy. It was an elegant architectural and engineering solution to a problem had a problem existed. There was no problem. Those buildings already had roofs; they did not need another roof. Elegant arguments were put forward that the concept would produce a contained environment of some kind. Of course it would produce a contained environment—but an unnecessarily contained environment. That project came too early. It might have been acceptable had the concept arisen much later in the distribution of funds.

There were two aspects that were wrong: first, the roof was unnecessary, and to some minds it architecturally clashed with the rather severe, brutal concrete buildings which already existed—and which I rather like. But there was another serious problem: the architect concerned in the project was involved in some way in the distribution of funds; he was close to the decision. I know that he left the room while the decision was taken. But even if one leaves a room, in an organisation in which you are concerned and important can you really have left totally? Do you not leave a miasma? Are you really not there? Do your colleagues not recognise your position?

The Earl of Gowrie

My Lords, I am most grateful to the noble Lord for giving way. I believe the answer to this dilemma, at least in the case of the Arts Council, was succinctly put by the previous Secretary of State, Stephen Dowell. He said that, broadly speaking, one could have a system where decisions are made by participants, the people who were highly involved in the arena, or one could have them made by civil servants. If one has decisions made by participants, one has to put up with a certain amount of linkages and trust procedures that are instituted to deal with that.

Lord Howie of Troon

My Lords, that is a good reply, but I do not like it. The problem still remains. If people are in any way involved in the projects, they should not be in any way involved in the decisions. They must resign totally from these issues. That is my view. I see that the noble Earl shakes his head. His view about people may be different from mine. I have only a minute left, but perhaps I may take an extra one from the noble Earl's intervention.

Projects may be necessary, but do we need a ferris wheel on the South Bank? Great exhibitions are sometimes marked by projects which are not necessary; for example, the Eiffel Tower. It was not necessary but it was at the forefront of the technology of the day. It was a statement of fresh technological fortitude and adventure. A ferris wheel is a nostalgic reference to the Vienna of Johann Strauss. I agree with my noble friend Lord Cledwyn that Cardiff should get its opera house, but I am not sure that it should be the one suggested. However, it should get an opera house of some kind. I am glad that Cardiff has its rugby stadium. Finally, are we sure that we should give the great sporting organisations public funds while they do deals with Sky television and Rupert Murdoch for large sums of money?

I hope that my thoughts will be taken into account. I apologise to the noble Earl for the fact that I am unlikely to be able to hear his reply, although I shall read it in the Official Report. The reason is that I have to chair a meeting in the Moses Room. But if I can neglect my duties there and rush into the Chamber, I shall do so.

3.42 p.m.

The Viscount of Falkland

My Lords, I wish to devote the short time available to me to funding from the lottery for the film industry. It is welcome news to film activity in this country, and I thank the noble Earl for the chance to speak on it. The exact amount which has been earmarked for film production is not known, but let us say that it is £15 million a year. That is generally understood by people in the film community here to be correct. It is perhaps the most important thing to happen in this country in cinema since the introduction of the multiplex cinema. It has completely changed the ethos and enthusiasm of the industry, which has been given a great lift. Not only that, but in a short time, to use a film industry expression, 11 films are on the slate which have been funded out of lottery funds. I wish to examine how that is happening and how it is likely to continue.

I have no direct interest in the film industry these days, but two close members of my family are involved. One now works in the United States as a writer; and my wife works as a senior executive for a prominent British company. I doubt whether either of those close relatives will agree with half of what I say, knowing film people as I do; but if they agree with a quarter, then I shall be happy.

Over the past 12 years, the situation in the country has been dismal, to say the least. Twelve years ago we had the Film Bill which became the Film Act—the first piece of legislation on which I had the opportunity to speak during its passage through your Lordships' House. At that time, cinema audiences were down to about 18 million admissions a year. They have now increased to 130 million—that is a huge turnround. For it, we must thank the introduction of better exhibition. I must claim some credit there because I foretold that if there were to be an improvement, it would come first through better cinemas. Other things would fall into place.

The multiplex cinemas were introduced by American and Canadian companies; then others followed. They changed the pattern of cinema going in this country to the extent that the foretold extinction of cinema screens, to be replaced by video, has not happened.

Most of the people who go to the cinema are young; 70 per cent. are under 26. The reason that people go to the cinema is that many are single, they go out and it is a social occasion. However, audiences are fickle. It is impossible for film makers to forecast what will happen, otherwise they would be rich and there would be just a few of them because they would have more successes than they do. The decision on what subject one takes through the laborious process of making a feature motion picture is subjective. The failure rate is high and there is no formula. One can say that in the United States the problem is overcome by having a massive machine, with economies of scale and with a long tradition of making films from the Hollywood period when a great deal was put into the development and marketing of films for the screen. That continues to this day.

If films in the United States break even, make a small profit or even a small loss, they are likely greatly to improve the position when they move into the rest of the world. In this country over 90 per cent. of all films seen by the cinema-going audiences are of American origin. There is nothing wrong with that; people must enjoy what they enjoy. That is where I somewhat disagree with those who in the first flush of enthusiasm over lottery funding have been stating what cinema is all about. That includes the Minister's right honourable friend in the other place who said that film is all about heritage. I am afraid that it is not, any more than it is about art. It is about people paying at the box office, putting their behinds on seats, coming out and saying they enjoyed what they had seen over one-and-a-half or two hours. It may have something to do with heritage or art, but basically film is about giving people what they want to see.

Over the past 12 years, we have not been good at that, but various people bravely and enthusiastically went ahead with producing intermittent independent productions. Some were moderately successful; some lost a great deal of money. For what we have, we must thank television, Channel 4 and the BBC. We must also thank British Screen for keeping the situation alive. It was given the job of disposing of modest moneys for production.

Perhaps I may concentrate on the lottery money. What worries me is that it is being administered by the Arts Council, for which I have nothing but praise. It has been given a difficult job in a short time. It has got together with various panels of film makers, and so on, and it has a slate of 11 films, if I may use that term. That is an achievement. However, there is uncertainty as to whether the criteria taken into account are right. We will only be able to tell that when we see the films which have been funded, but there will be failures and successes. I hope that the ratio is favourable.

I am concerned that the people who, over the past 12 years, have said to the Government: "We need funding in order to compete with the United States", went quiet purely out of exhaustion because the Government would not listen. I do not blame them for that. However, such people are now coming out of the woodwork saying: "We must now have a British Hollywood". I believe that a report is being published which will show how the seeds for it will be sown. I am sceptical about it and I share the views of Mr. David Aukin, who wrote an interesting article the other day in the Evening Standard. He is the head of drama of Channel 4. If I remember correctly, he said that Channel 4 and the BBC had funded a number of films which had been seen as suitable for both the cinema and the television screen. They created a hybrid. At first, I did not like the concept, but we have developed a great deal of expertise in the area. All the films which have been successful recently in Britain have fallen into that category. For example, "Trainspotting"; "Shallow Grave"; and "Four Weddings and a Funeral". The films were made on modest budgets. Our expertise—that of scriptwriters, actors and technicians—is falling well into the pattern. We now have a success on which we can build.

If the noble Lord has time, I should like him to answer my question. Surely we have now built up if not enough profit out of those activities, enough international regard to continue along those lines before we jump into grandiose ideas, thinking too big and trying to take on the Americans at their own game. That would be extremely unwise. It was tried before by one or two companies, and they are no longer with us. It is not without resonance that the Rank Organisation came out of production a long time ago, and is one of the few major companies that has its money in place. It is much criticised for not backing films, but there it is. I hope that we can build on success. I congratulate the Arts Council and the lottery board for making a brave decision. I hope that they will not be put off by the inevitable passions and the criticisms they receive from a very volatile industry.

3.50 p.m.

The Lord Bishop of Worcester

My Lords, I am grateful to the noble Earl, Lord Gowrie, for initiating this debate. It gives us a chance to look at the massive new feature at the centre of our life. I also look forward to the maiden speech of the noble Lord, Lord Hindlip. I wonder whether his ancestral home was in the diocese of Worcester at Hindlip Hall, which is now the headquarters of the police.

There is no question but that I want to join in the celebration. I am no tight-lipped puritan. I want to accentuate the positive and, so far as possible, eliminate the negative—although I cannot do that entirely. I thank the Arts Council for sending me a splendid list of all those applicants in the diocese of Worcester that have received grants. I am delighted that Bretforton village band has received a grant—as has the City of Birmingham Symphony Orchestra; a primary school in Dudley; the Elgar School of Music in Worcester; and Huntingdon Hall, home of the English String Orchestra. I could go on: £425 million has gone to 701 projects.

However, the noble Earl said that as well as being positive one must avoid being bland. It is equally misguided totally to affirm the lottery and think it wonderful as it is totally wrong to describe it as evil, as some do. We have to live in the real world. Many churches and cathedrals will undoubtedly benefit. It is my own view that in so far as the Government of the day have decided to raise funds in this way, the money raised becomes public money, and I for one will apply for a grant for anything in the diocese of Worcester that is worthy of one. I have no qualms about that.

This is a serious debate. We are not yet clear as to the effect on charitable giving in this country. The Charities Aid Foundation says that there is no problem; but the National Council for Voluntary Organisations is less sure; and the Directory of Social Change is less sure. We have to realise that in this country we have built up a very fine tradition of voluntary giving for charitable and voluntary organisations, choosing those that we want to support rather than having them chosen by a government body. So let us examine that point very carefully. Great work is being done. If people think that millions of pounds in funds are sloshing through the system, they may be less ready to put their hands in their pocket. Furthermore, they may find that there is not much in the pocket if they are busy playing the lottery every week.

There have been more charities applying for grants than good causes under the other four headings. If that is so, will the noble Lord, in winding up, give some reassurance that that aspect will be examined? There were 15,000 applications from charities in the first year—far more than under any of the other headings.

Then there is the question of whether the lottery is taking money from the poor to aid the predilections of the rich. I am told that poorer people spend 30 per cent. of their spending money on lottery tickets or scratch cards, as opposed to 4 per cent. by those who are better off. Are we pursuing those who live on the edge of desperation? That is a serious question.

Scratch cards, which come into the category of instant games, are available to the young, even when we know that fruit machines have become an addiction for young people as much as drugs. Are we going to let scratch cards fall into that category? In the past youngsters have actually committed robbery with violence in order to gain money for gambling. Perhaps we ought to limit playing of the lottery and scratch cards to those who are over 18. I do not know; but I think the issue should be addressed.

In addition, can we possibly be content with the present size of the jackpot and roll-over prizes? I have no desire to say anything in this House which would identify persons. However, I could tell noble Lords of one family I know that has been totally destroyed by suddenly receiving a massive prize. It has ruined both the marriage and their family life.

More prizes could benefit so many more people: £1 million could lift an ailing family business; get a family farm back into business for instance. There is also the matter of the diminution of our municipal culture. Local authorities have found themselves with fewer funds; therefore they point their applicants to the lottery boards, and municipal culture is diminished. We need to discuss the ways in which public amenities are provided. It is no use encouraging a kind of adolescent or childish view that all good causes can be supplied with resources from the lottery. They cannot. It is a matter of partnership between local authorities, the Government, and perhaps with the lottery. Can we not discuss that in an adult way? I believe that core funding for our public amenities should be provided by taxation, thereby indicating a corporate responsibility, and thereby helping to safeguard the coherence of our nation.

Finally, is it good for government to lead the market in state-sponsored gambling? The 1978 Royal Commission on gambling laid down that gambling should not be artificially stimulated. Yet at the moment we see a massive promotional campaign on the part of Camelot. It is one of the biggest advertising exercises of all time. What is more, regulations on other forms of gambling are being relaxed, after much effort has been made during this century to establish an agreed and acceptable discipline in that field.

I want to rejoice with those that rejoice. Yet I want to see independent, rigorous and authoritative research into the overall effect of the lottery. There is much to celebrate. Yet we should also ask in this House whether state power should be used to promote a form of gambling, escapism and greed. In participating in the lottery, there is a lack of realism and a gullibility which we as a nation cannot afford to feed and fuel. As I said, we must live in the real world. The real world is a place where you cannot get rich quick. It is probably part of the superstition of our time. Since a society that believes nothing is very close to one that will believe anything, we should take heed.

However, I rejoice with the noble Earl, Lord Gowrie; yet I rejoice by no means uncritically.

Baroness Trumpington

My Lords, perhaps I might remind your Lordships that when the figure seven appears on the clock, we are in the eighth minute. So far we have had speeches lasting 22 minutes, nine minutes, eight minutes and eight minutes. We are falling behind.

3.59 p.m.

Lord Hindlip

My Lords, first I thank my noble friend, who is my old friend, Lord Gowrie, for his kind words and the right reverend Prelate the Bishop of Worcester for his. Yes, Hindlip was my family home. I entirely sympathise with the right reverend Prelate's view about stopping young people stealing money for scratch cards—I find it very difficult to get a taxi to work on account of it.

I must declare an interest. As my noble friend Lord Gowrie pointed out, I am the chairman of an auction house. Just to refresh my noble friend's normally perfect memory, it is the old English house of Christie's. As such, I have frequent dealings with the National Heritage Memorial Fund and the Heritage Lottery Fund and its chairman, my noble friend Lord Rothschild. It is to their work that I wish to address myself this afternoon.

My noble friend needs no introduction from me. His record speaks for itself. He did wonderful work as chairman of the Trustees of the National Gallery. He was responsible not only for approving great acquisitions but also for providing the framework for the superb addition to the gallery by the family of my noble friend Lord Sainsbury and Paul Getty's equally important gift of cash. No one could have come to the lottery with a better track record and better credentials.

But it would be foolish not to admit that the lottery has been subject to some criticism. There have been missed opportunities. That great masterpiece, "The Finding of Moses" painted for King Charles I by Gentileschi—after Holbein, Van Dyck and Rubens, the most important painter to work in Britain—should have been purchased. It is a masterpiece.

That is the nub of it. Lottery money should be spent not on good things but reserved for the very best—such as, for instance, the Churchill Papers. They should have been purchased. There should have been no argument about it. It does not matter where the money goes so long as what is bought with it is the best and the best is made available to the public. It would be perfect if great works of art and great buildings belonged only to the deserving. They do not. They never have and they never will. What is important is that, however feckless and irresponsible the sellers, the few masterpieces that they sell and the few buildings that they leave in ruins are acquired by the nation for its enrichment in perpetuity.

We must not get sentimental about the lottery money. I buy lottery tickets every week but I do not buy them because I am thinking of Gentileschi or even Covent Garden—again, my noble friend Lord Gowrie deserves a big pat on the back for that. I buy tickets because one day I am going to win, and I am no exception. Until I do so, I must slave away as an auctioneer. It is from that perspective and, incidentally, not one of profit but rather of loss that I want to make one specific point; namely, that the lottery money be made available for the purchase of works of art in situ. Surrender in lieu and surrender in lieu in situ, in the lean years before the lottery, with Hugh Dalton's gesture of the land fund the great exception, have been the means whereby the galleries of Great Britain have been able to enlarge their collections, notwithstanding the sadly low level of government support. That excellent system should now be extended into the realms of private sales in situ. Lottery money should be made available to purchase private collections and leave them in the great houses for which, in so many cases, they were originally intended and where they look best and are best appreciated by the public (when they are not out buying lottery tickets).

There are a few great pictures that should go to Trafalgar Square, Edinburgh and Cardiff. But, leaving works of art in situ appeals not just to the viewing public. It is a system that is inexpensive to administer—the house owner pays for the guides, the security and the fabric of the house. If an owner defaults on his obligations or closes his house, of course the works of art which belong to the nation must leave that house and be shown and enjoyed in a museum or other public place; but, where the owner of a great house is prepared to go on looking after works of art, which he does not own, for the public's benefit—as well as his own; I am not blind to self-interest—he should be encouraged.

In closing, I shall revert to the Heritage Lottery Fund and my noble friend Lord Rothschild, its chairman. I know that there have been mutterings that his powers should be curtailed and possibly handed over to other organisations. But, please, do not seek to curtail the noble Lord, Lord Rothschild; seek rather to give him more support. He and his team have been entrusted with a task that goes far beyond the built heritage. It encompasses the whole of the UK and covers everything from museum acquisitions to wetland marshes. They have been given resources reminiscent of the Medicisor, indeed, the noble Lord's own ancestors. What he needs today for our nation to help him achieve the results that they achieved in the past are trustees. I fear that at the moment he has those who are worthy but possibly too politically correct. He needs men of vision like himself, who can recognise great works of art and take bold and immediate decisions to acquire them. If that happens, we shall all be the winners from the Lottery.

4.6 p.m.

Lord Rothschild

My Lords, the whole of the House will want to join together in congratulating the noble Lord, Lord Hindlip, to whom I shall refer, if I may, as my noble friend, for not only have our families known one another for a very long time, but he and I have been friends, professionally and personally, over many years and we have never had a disagreement. My noble friend's speech was splendid, light-hearted and characteristically generous—incredibly generous—but with a most serious and professional content. Perhaps I may say that the more time he can spare from his new and distinguished duties as chairman of that great institution, Christie's, away from King Street and Villiers House, the happier and better off we shall be for his specialised knowledge of an area of deep interest to this House. He has always conveyed that deep knowledge with skill, verve and humour. I can assure him that his contribution will be welcomed by all. Let me, finally, renew my congratulations on behalf of the House, and perhaps also thank him personally for his most generous words of support.

I should also like to congratulate the noble Earl, Lord Gowrie, my fellow distributor at the Arts Council, for his initiative in calling this debate at a great moment in the very short history of the National Lottery. It was only this week that the landmark figure of £2 billion was raised for the good causes of arts, sports, heritage, charities and the millennium.

The Heritage Lottery Fund, which I have the good fortune to chair, has now awarded some £225 million to more than 330 projects across the United Kingdom, bringing great benefits to many communities. The grants range from £1,500 to help restore St. Mary's Church, Frome, in Somerset, to £23 million toward building the new Wellcome Wing at the Science Museum. Noble Lords may have seen yesterday's announcement about the spectacular, imaginative and generous gift by Mr. Arthur Gilbert of his great collection. That gift, together with a capital grant from the Heritage Lottery Fund of some £15.5 million, to be supplemented in the future by an endowment fund, will ensure at long last the opening up of that hidden architectural masterpiece of Sir William Chambers, Somerset House.

In 1781 Edmund Burke exclaimed that, Somerset House did honour to the present age and would render the Metropolis of Great Britain famous throughout Europe". Now, 200 years later, Mr. Gilbert's generosity and the catalyst of lottery funds have given us that opportunity.

We need a vision for Somerset House, as we do in all things, and must capitalise on our good fortune to achieve it: by banishing the cars from the Great Quadrangle, which could become the greatest urban open space in London where concerts and music could be enjoyed by all; by opening up the Seamans Hall; and by welcoming the public on to the South Terrace. Indeed, I wonder how many noble Lords have ever walked there? Charles Weld in his History of the Royal Society wrote in 1848: the view from the Terrace is by far the finest on the banks of metropolitan Thames". As we approach the year 2000 the view is going to be just as remarkable. We will be able to see an unprecedented range of projects—Bankside, the Globe and Battersea Power Station, which are all being prepared for the Millennium.

Somerset House will be a truly memorable national project made possible by lottery funds. But let us consider a very different example of our heritage which, with the benefit of lottery moneys, could change dramatically—urban parks, the Heritage Lottery Fund's first special theme for which £50 million has been set aside. Many of our public parks have been disgracefully neglected over the past two decades and yet more than 8 million people visit a park every day. At Tollcross Park, in the east end of Glasgow, we have just awarded a grant of £1.95 million to restore and rejuvenate it. When the works are complete it will once again be a place that the people living around that park can take delight in; they will be proud of living where they do and it will help them to feel, as nothing else can, part of a community.

The fund is deeply conscious of the need to be flexible over the issue of partnership funding. Thus, grant applications for more than £100,000 will require around 25 per cent. partnership funds and for £100,000 or less the threshold has been set at 10 per cent. We have pitched the figure at a level which we hope will encourage applications for small but vital projects such as village halls, churchyards, ponds and small museum acquisitions. Furthermore, we are already prepared to be flexible in accepting how this partnership funding is presented—it may include contributions in kind such as voluntary labour or materials—but our overriding objectives are not to allow imaginative schemes to become silted up and to encourage a spread and a balance of projects large and small across the United Kingdom.

The "Additionality" and its interpretation will be ever-increasingly important. The directions from DNH to the lottery distributors make it clear that lottery funding should be strictly "additional" to government funding. A year on and we are asked to interpret that instruction liberally. But while the lottery is and will remain a substantial addition to funding within the heritage sector, it must not be allowed to threaten or substitute for core funding. It will of course take time to smooth over the distortions between lottery and government funding. Noble Lords may ask: why favour the new rather than the old when many organisations are facing a backlog of essential repair and maintenance works? If we are to help with the "black holes" of our heritage, we should do so on a one-off basis and not accept responsibility for recurring maintenance.

We welcome the Government's green paper on the heritage and the proposals to amend the present restrictive clauses under our Act to give us the freedom which the Arts and Sports Councils already enjoy. That will enable us to broaden the definition of eligible projects and recipients; for example, funding projects to improve access through new technology and educational initiatives. We would like to be able to include private individuals as well as charitable and not-for-profit bodies where there is a clear public benefit.

The lottery distributors are not, nor were they ever intended to be, primarily social regeneration agencies, although many of the projects we fund happily combine restoration and repair works with broader social benefits. Repairing run-down or derelict buildings or open spaces while at the same time finding alternative uses such as providing facilities for local communities may result in a welcome "double dividend". But there are many government departments with far greater funds at their disposal set up to oversee those issues. For example, the Department of Social Security's annual expenditure is 300 times greater than ours. Our focus is, and should remain, the heritage.

We were proud, for example, to have funded Chetham's Library in Manchester, one of the oldest public libraries in the country. Built in 1421, it includes some of the finest examples of medieval collegiate architecture in the world. I will not pretend that thousands of people should go to visit that remarkable library—that would spoil it—to which we awarded £1.8 million; but occasionally we feel that something is of such outstanding quality, such a jewel in our heritage, that we should simply help it.

Equally, we are just as proud to have awarded £250,000 to help restore the River Skerne where it flows through Darlington and to open up the river banks to the public; £400,000 to help restore Polokshields Burgh Hall in central Glasgow for use by more than 20 local communities; and £91,000 to refurbish the galleries and improve disabled access at Brecknock Museum in Wales.

As I have said, the lottery offers a once-in-a-lifetime opportunity to change our national mood and raise the quality of life in this country. To achieve that we will sometimes need to take a deep breath, take risks and fund projects which will add to our pride in this country. It is indeed an odd situation that the arts and heritage should find themselves lottery rich and public expenditure poor. The responsibility of the lottery distributors therefore becomes all the greater to ensure that, with courage, we break the mould of mediocrity of the past decade and find ourselves in a new era to which we may proudly refer in the future as the "Lottery Age".

4.17 p.m.

Baroness Young

My Lords, I too thank my noble friend Lord Gowrie for introducing this debate this afternoon and congratulate him on his speech. I congratulate also my noble friend Lord Hindlip on his maiden speech. I am sure that we all look forward to hearing from him on many occasions in the future.

It is an appropriate time—18 months after the start of the lottery—to debate this issue. Like all other speakers I should like to say that I believe that the lottery is a great success story. We have an extraordinary national habit, when something is successful, of finding opportunities to run it down. But in this case it is encouraging that all those who have taken part in the debate so far have pointed to its success.

First, I should declare an interest as I am a member of the council of the Royal Albert Hall, which received a substantial grant from the lottery. But that illustrates in a real way the value of the lottery. A national institution which we like to describe as "the nation's village hall" will be improved with vastly better facilities for those who go to concerts or other entertainments and not least for those who perform there. It is a magnificent building which will be preserved and enhanced, and all that at no cost to public funds. I believe that the original critics of the lottery have been confounded by its success.

I do not believe that anyone taking part in today's debate is unaware from personal experience of the large number of small projects which have been helped. We listened with great interest to what the noble Lord, Lord Rothschild, said regarding our enormously important national buildings being preserved and helped, which we all support. But the smaller organisations, perhaps with as little as £5,000 or £10,000 are also being helped and, as a result of that activity, being saved. They too are adding to the quality of life of people throughout the country. Indeed, research has shown that the majority of recipients of lottery money consider that the grant not only was essential to their organisation but also to its long-term viability.

As regards the lottery, it is extremely easy to lose one's way in a welter of statistics which have come out about it. I should like to make two points in particular. First, I should like to confirm that, like so many of your Lordships, I think it is remarkable that lottery funding has gone to some of our great national institutions which are not only enjoyed by people here but by people abroad. Sometimes the criticism indicates a very patronising attitude to these matters. After all, there are lots of people who may not go to the opera every week but also like to save up and go somewhat infrequently. If it does not survive, they will not be able to go at all. We have to recognise that our national institutions are there for everyone to use.

Secondly, I should like to turn to what has been done to help charities. We heard only yesterday that £159 million was distributed to 2,229 charities. Altogether—this is the second round of grants—some £320 million has been distributed to more than 4,800 organisations. That is only the beginning. We often talk in your Lordships' House about the need for social services and helping those who are the poorest in the community, but the aim of the first round of these grants was to help those disadvantaged by poverty, and the aim of the second was to support youth issues and those on low incomes. Two-thirds of the funds from the board have gone to meet the revenue costs of charities and community organisations, particularly for the salaries of those running them.

Anyone involved in charitable organisations knows that volunteers need to be underpinned by some professionals. Forty-eight per cent. of the funds have gone to organisations describing themselves as social welfare services, a high proportion to housing and a high proportion to charities involving children. Every part of the United Kingdom has benefited. As a result, the lottery funding has played an important economic role in helping to provide employment, training and education to a large number of people, and it is a benefit in addition to public expenditure.

Perhaps I may comment briefly on some of the points raised by the right reverend Prelate the Bishop of Worcester. If we did not have the lottery money, the funds would have to come from general taxation. I do not believe that any political party is contemplating raising taxes to cover these kinds of sums of money and to go on covering them well past the Millennium. This expenditure has an enormous knock-on effect not only on employment but on, to use that indefinable term, the quality of life, which is difficult to measure though we know what we mean when we use it, and it goes to all parts of the country.

Have charities suffered? They are facing competition and all charities have to become more efficient. Everyone knows that money raising is very difficult. As I understand it, the Henderson Top 2000 shows that charitable donations were up last year, the first year of the National Lottery, by 6.6 per cent., an increase of £166 million over the previous year. The study of the Charities Aid Foundation showed that the total income from the 500 biggest fundraising charities rose to a record £3.5 billion. I am pleased that the Home Office is to monitor the effects of lottery giving on charity income, but at this early stage I do not think we need feel depressed. I think that probably after an initial dip the amount of charity giving will continue to increase. The Family Expenditure Survey has also shown that charitable giving has remained unchanged.

My time has come to an end. I shall conclude by saying that the lottery has been a great success. If we had a similar debate in two years' time, we would all be saying the same thing, with ever more objectives of arts, the heritage and charity to support.

4.25 p.m.

Lord Jenkins of Putney

My Lords, I shall reserve my thanks and congratulations to the end of what I have to say in the hope that that will encourage me to get there quickly.

When I thought that I was going to make a long and relaxed speech, I headed down here to say that Oscar Wilde said, "Life follows art". As usual, they all laughed. But, equally as usual, after a while some of them began to think it might not be just a joke. Similarly, housey-housey was just a game which became bingo, and now we have the lottery which is due to become an essential method of wealth redistribution. People love it as much as they hate taxation.

I am not sure whether it was George V who praised the Order of the Garter because, as he said, "There's no damn merit about it". It is only when you introduce an element of merit into it, when you try to decide which of the many deserving causes shall benefit, and by how much, from the consequences, the fruits, of turning the nation into a vast collection of gamblers, that you run into trouble. For what you have to do is to graft rational decisions onto irrationality, to show the mass that they have not been entirely daft without some benefit coming to someone other than the lucky few new millionaires. They know gambling is wrong and they need to be reassured that some good is coming out of it.

As to what is good—here comes the trouble—for as we have seen here this afternoon, one man's good is another's bête noire. I would be hypocritical if I praised over-much the maiden speech we have just heard, though it is the tradition of the House from which I shall not shrink, a speech with which I found myself in very considerable disagreement. Nevertheless, I conform to the tradition and heartily praise the noble Lord.

I am told that the Prime Minister's more sentient friends wish he had not chosen to reveal the Pooterish side of his personality at the Dispatch Box. The P.M. might have reminded himself that Mr. Gladstone did not find helping women out of prostitution something to be condemned. Personally, what I found reprehensible was the other decision to pay a huge sum of money for papers which most of us thought were already state property. Here, once again, I find myself committing the offence of disagreeing with a maiden speech.

The Earl of Gowrie

My Lords, since the noble Lord has mentioned me, I do not speak for the NHMF but the fact was that, like it or not, the Churchill papers did not belong to the nation.

Lord Jenkins of Putney

Exactly, my Lords, but that was the public impression. I did not say that it was the noble Earl's impression, and now he has lost me a minute of my time so I shall have to put one minute on at the end.

I venture to suggest to the House that the overall conclusion of the House of Commons All-Party National Heritage Committee, after prolonged consideration including the examination of witnesses, should be respected. Personally, with my Puritan background, I do not really like the idea that we now live in a society in which a national lottery is acceptable. But we do live in such a society. I know from my connection with the Theatres Trust that there is reason to commend the committee's summary to the House. It is quite brief and reads as follows: The National Lottery could be better, and, if our recommendations are accepted, will be better. But, just for once, let us praise something which has been done well and has gone right. I associate myself with the full sense of that recommendation.

I must now approach the end of my remarks as there is not much time left. I commend that report from the Select Committee. It makes impressive reading and its two pages of recommendations at the end are especially worthy of attention. I shall mention only two. First, I share the view that, with suitable safeguards, it is time to move cautiously into revenue funding in non-profit areas. I hope that, if he has the time, the noble Earl will comment on that point when he replies. I also support the proposal which was made on 4th June by the shadow national heritage secretary, Jack Cunningham, that Camelot shall be replaced by a non-profit-seeking body.

Although I appear to have a minute of my time left, another noble Lord may have it as, finally, I warmly congratulate the noble Earl on initiating this debate. I am sincere in saying that he has done the House a great service on which he is to be warmly congratulated. If there is anybody else I should congratulate whom I have not yet congratulated, I now proceed to congratulate him and sit down.

4.31 p.m.

Lord Palumbo

My Lords, first, I must add my congratulations to those paid by previous noble Lords to the noble Lord, Lord Hindlip, on a truly admirable maiden speech. I share the hope of the noble Lord, Lord Rothschild, that the noble Lord will make frequent appearances in this Chamber, even if he should win the National Lottery. Secondly, I must express my gratitude to my noble friend Lord Gowrie for initiating this debate. Thirdly, I must declare an interest. As chairman of the Serpentine Gallery, I represent a beneficiary of National Lottery moneys for the much-needed refurbishment of that Grade II listed building in Kensington Gardens, which attracts almost 400,000 visitors through its doors every year.

It is important that we should recognise that the definition of "heritage" is what has been, or will be, built. Therefore, it is not so much upon capital improvements to the existing fabric on which I wish to focus attention this afternoon, but rather upon commissions for new buildings to improve and enhance the environment. A good building, one that is well designed and combines beauty with function, is of incalculable civic benefit. Architecture, after all, is the most visible of all the arts. It is a subject upon which every person feels, rightly, that he or she is competent and qualified to hold a view. There are thus no experts—or perhaps everyone is an expert. The point is surely that a good building does not depend solely upon money, but upon talent and the enlightened use of that talent.

We are particularly fortunate in this country to have available to us creative talent of the highest order—as good as, if not better than, any in the world—talent that is able to celebrate, to raise expectations and to lift up the spirits. God—or at any rate your Lordships—knows only too well how much we need that uplift in these uncertain times.

I cannot help feeling that the Georgians and the Victorians were, above all, confident societies; and that that confidence expressed itself tangibly and in large measure in the architecture of those times. The 19th century, for example, saw the construction from lottery moneys of the British Museum, the finest museum of its kind in the world. I cannot help feeling also that the greatest cultural glory of these islands, the cathedrals, were an expression of spiritual confidence. The spiritual confidence that eludes us today is a response—at any rate, in part—to the turmoil that we are currently experiencing as we approach the dawn of a new millennium. No wonder people are reaching out for certainty, order, stability, permanent values and some sort of return to a spiritual safeground as a counter-balancing force to the apparent chaos that surrounds them. That is precisely what the arts—and the first of the arts, architecture—can provide at its highest level. Which of us has not stood transfixed at one time or another before the wonders of Durham Cathedral or Chartres or the Parthenon or Ronchamps or the great Temple of Karnak? Of course, the secular is able to evoke as equally powerful a response as the religious—the common denominator being God-given talent that has the ability to spawn a great statement of the human spirit.

The application of lottery funds to existing buildings seeks to redress the neglect through woeful lack of funding in the past. Already a good start has been made with the designs of the architect Richard Rogers for the re-ordering of the South Bank Centre; with those of Norman Foster for the British Museum; with those of Michael and Patty Hopkins for the Royal Academy, and with those of Hertzog de Meuron for the Tate Gallery at Bankside.

In my opinion, it is nothing short of a tragedy that the coruscating brilliance of the design for a new opera house at Cardiff by the architect Zaha Hadid was rejected through loss of nerve and lack of confidence. I hope very much that the same fate will not befall the proposed extension to the Victoria and Albert Museum by the architect Daniel Liebeskind. Had the opera house at Cardiff been constructed, I am in no doubt that it would have done for that city what the Sydney Opera House, itself the recipient of lottery money, has done for Sydney; and it would have created the same image and perception both at home and in countries around the world of a society that was sufficiently confident and forward-looking to commission a masterpiece to withstand the test of time.

Against that background, what do we find at home? We find that the Arts Council of England, one of the five distributing bodies, and itself the recipient of £5 million per week, has received only two major applications for lottery funding for new buildings, the larger of the two from the City of Salford for a new opera house and performing arts complex by Michael Wilford and Partners—a complex incidentally which will be the very reverse of élitist, conferring as it will wide-ranging benefits upon the community as a whole. That is just the sort of exemplary project application that the Arts Council of England should be considering on a regular basis. We must hope that where the City of Salford leads, others will follow.

My time is—

Baroness Trumpington

Up!

Lord Palumbo

Yes, my Lords, my time is up. Perhaps I may close by saying that the objectives are worthy of your Lordships' consideration; that the creative process should be allowed to have its head and be allowed to flourish and that risks should be taken to ensure that 100 years hence our great-great-grandchildren, standing in the sunlight of other days, can smile benignly upon us for initiating in these times a series of commissions that not only transformed the environment, but set the agenda, the standards and the tone for the third millennium.

4.40 p.m.

Lord Boyd-Carpenter

My Lords, as has been demonstrated, it is extraordinarily difficult to debate this vast, complicated and enormously important subject with a seven-minute time limit. I begin by expressing the hope that there will be further opportunities for your Lordships' House, given its enormous assemblage of knowledge and talent, to debate the matter more fully. For my part, in the circumstances I shall simply put one or two questions to my noble friend in the hope that he will be able to deal with them in the time available to him. Does my noble friend believe that sometimes lottery awards are on the large size? Would it not be better if awards were sometimes less spectacular and grand and therefore there were more of them? It seems to me that part of the difficulty in working the system is that some of the awards have been very large and therefore limited in number. The development has been remarkable, but the prizes are very big and give rise to problems.

A separate issue was raised in yesterday's and today's press. Awards have been made to homosexual organisations. I do not wish to introduce prejudice, but a good many of your Lordships will feel that where one is concerned with distributing very large funds to help finance activities in this sphere it is a pity that in four cases (according to yesterday's press) awards have been made directly to organisations which believe in and advocate activities which are repulsive at any rate to a great majority of the population. Can my noble friend give an indication as to the Government's view of the future treatment of such applications?

A very big question was raised by the right reverend Prelate the Bishop of Worcester. He asked about the effect of this system on ordinary charitable giving. Is it the fact that to some extent the existence of these awards has diminished the amount available from other sources, or is it the case—which would be very cheering—that these activities have produced a net increase in the level of charitable giving? This is an extremely important aspect of the matter. If the new system, which one wishes well, detracts from the size of other charitable activities, the enthusiasm which one has for it will tend to be diminished. I would be grateful if my noble friend could give an indication of the tendency in respect of other charitable giving. Has there or has there not been an increase in the totality of charitable gifts since the system came into being? I believe that the view that many people take on this question will be very much affected by that.

Finally, I put in a plea, as I have done more than once, that funds raised in this way, as in others, shall be made available for the repair of old churches. Churches, particularly small, old country ones, are supported by limited congregations with limited means. If this system can be adapted to help to repair these treasures of architecture and wonderful aspects of our civilisation, the enthusiasm for the system will be accentuated.

I would be most grateful if my noble friend would reply to those questions. Perhaps he would also comment on whether the size of some of the individual awards under this system is excessive and whether it may be more productive to have more awards of slightly lower amounts. I hope that those questions are clear and that my noble friend will give his habitually clear answer to them.

4.46 p.m.

Lord Gibson

My Lords, I supported the introduction of the National Lottery for exactly the reason given by the noble Baroness, Lady Young, in her observations on the speech of the right reverend Prelate the Bishop of Worcester. It has always seemed to me that no government we can possibly elect in this country can ever give the arts, sports and cultural institutions the support that they deserve.

As the noble Earl, Lord Gowrie, said in his powerfully persuasive speech, the lottery has transformed the outlook for the arts and heritage world, as well as for sport. I believe that that is a matter for great congratulation. But in spite of the unexpectedly large sums now available to these causes, government support for them remains essential. Cultural institutions need stable and reliable core funding, and lotteries by their nature cannot be relied upon. As the noble Earl said, if people decide not to commit themselves to gambling, so be it. To a greater or lesser degree, that may well happen. That is why, in my view, lottery proceeds should never be used, as some commentators urge that they should be, to supplement public purposes like healthcare or education. Basically, these are government responsibilities.

The Government have recognised their essential, though not exclusive, role in funding the arts and heritage by promising to protect "additionality" (if I may use that ugly but rather useful shorthand). They have done so by limiting the lottery to supporting capital projects. But in the light of the large sums involved, serious anomalies are being created in various contexts. In mentioning these anomalies I do not wish to appear in any way to underestimate the marvellous work which the lottery has done and is doing through the distributing bodies. These anomalies are especially great where funding is badly needed and difficult to obtain for core purposes.

I make the same point made by the noble Earl, Lord Gowrie, in relation to an orchestra's running costs: one may give it a hall but not help with its running costs. I make that point in relation to the National Trust. My noble friend Lord Chorley, the present chairman of the trust, has asked me to apologise to your Lordships for his absence this afternoon. Unusually among institutions, the trust is eligible to make application to all five lottery distributing bodies and has received offers of seven grants from the Heritage Lottery Fund. The trust is deeply appreciative of the helpful service that it has received in making its bids.

As an ex-chairman of the trust, I am familiar with its problems, but since my day they have intensified financially as the backlog of necessary repairs to historic properties has grown ever larger through lack of necessary funds. One may say that there was a miscalculation 20 or 30 years ago when many of these properties were taken on. The degree to which inflation has taken place was not then envisaged. However, many people besides the National Trust made that mistake.

The many millions now needed for each of three famous properties—I mention only three because they are probably the most important ones in serious need of funds—Petworth, Knowle and Hardwicke, are the source of deep concern to the trust. What is needed for such properties is a rolling, say 10-year, programme of work where the trust's funds and, I would hope, heritage lottery funds could work together in planned partnership. What more important work for the heritage can possibly be envisaged for heritage lottery funds to be applied to?

Yet under present guidelines it is easier to find money for a new project, such as an interpretation centre, than it is for the maintenance of the building itself. I am not speaking for the trust when I say that my enthusiasm for interpretation centres is strictly limited, but, even assuming their value, it is anomalous, to say the least, to spend money on interpreting buildings and collections which we cannot afford properly to maintain.

I understand that the Heritage Lottery Fund is acutely aware of the problem. I know that it uses what flexibility is allowed it and can in some cases fund endowment for certain purposes. What I want to urge upon the Government is that the anomaly to which I have referred be recognised, and it should be accepted that endowment is essential if heritage lottery money is to be put to the best use. The alternative of course is to contribute to core funding on an annual basis. If endowment is considered a wasteful way of applying money, annual funding is the only alternative, but it must be annual funding on a planned basis. If that endangers additionality, I would hope that the National Heritage Committee in another place would keep its eagle eye on it. Additionality can only be protected in the long run by public debate and constant public pressure.

Finally, a plea for the private owners of historic property: it is not right to exclude them as potential recipients of grant aid from lottery sources if proper access is provided for and proper standards of care are ensured. The private owner is an indispensable part of the process of preserving historic buildings for public enjoyment. There are of course difficulties in ensuring the permanence of such arrangements, but those difficulties are not insuperable.

I should like to add my own words to those of the noble Lord, Lord Boyd-Carpenter, and say that money should be made available to the historic churches of our country. There are over 9,000 pre-Reformation churches. They are badly in need of more help.

If these variations or extensions to the process of distributing lottery funds can be agreed upon, the lottery will have an even greater impact upon our national treasures than the important contribution it has already made.

4.53 p.m.

Lord Sainsbury of Preston Candover

My Lords, first, I should like to congratulate my noble friend Lord Hindlip on his most interesting speech, and say how much I, as others do, look forward to his contributions to your Lordships' debates in the future.

Perhaps I may declare an interest as chairman of Britain's oldest public art gallery (the Dulwich Picture Gallery) which is looking forward one day to receiving substantial sums from the lottery. I declare also my interest as chairman of the Royal Ballet governors, and therefore a particular interest in the development of Covent Garden and the benefits that that will bring to the Royal Ballet. Perhaps I may apologise in advance to the House for being unable to remain until the end of the debate owing, unfortunately, to a longstanding commitment in Oxford.

I shall start by thanking my noble friend Lord Gowrie for initiating today's debate. I support all he said with great enthusiasm, and I should like to pay tribute to the Arts Council and the National Heritage Memorial Fund for the imaginative and wise use of lottery funds that they are making, particularly in terms of the spread, size—both large and small—and geography throughout the country.

Noble Lords might feel that such an opinion and enthusiasm are somewhat predictable, given the interests that I have declared, but I should like to justify my opinion and enthusiasm by putting the lottery grants now being made to the arts in some sort of historic and European context.

Looking back over the past 50 years, one sees that the record of post-war governments' investment in the nation's art is abysmal. Let us consider for a moment how few of the nation's great museums, art galleries, theatres, concert halls, stadiums, and sports complexes, have enjoyed government-funded improvements on any significant scale.

Leaving aside the disastrous British Library project, I believe that there have been only two major new London arts buildings financed by government in the post-war period—the Festival Hall, which has already been referred to, in 1951, and the National Theatre which opened in 1976. An example of reluctance to invest in the arts is the story of the National Gallery. Having left the space beside that great institution empty for 40 years, the Government of the day then only favoured an extension that was half office and half gallery. The only criterion that seemed to matter was that it did not cost the Government a penny.

Such a mean-minded attitude towards investment in the arts is, I fear, typical of all governments over the past five decades. That is why my noble friend Lord Gowrie is right to be optimistic, for what we are seeing is, indeed, a cultural revolution—a complete and desperately needed change from the Philistine past, an escape from the dead hands of the Treasury.

Instead of Whitehall deciding, the distribution of these capital lottery funds is being decided by the heritage, arts, and sports bodies—committed, independent, knowledgeable, non-political, and practical people, giving their nation their valuable time and, in my humble opinion, doing a great job.

No doubt mistakes have been or will be made, but I feel sure that the quality of their decision making will be of a higher standard than had it been left to the Whitehall machine. Of course these are still early days, and time is needed for distributors to adjust fully to their huge tasks. Time is also needed for the public and the media to recognise the great benefits for the whole country that the lottery will create and which are on the way.

I shall turn for a moment to how we compare to Europe. The starting point so far as concerns London is that if we want our capital city to be one of Europe's greatest financial and business centres, then surely it should follow that London should aim to be one of Europe's greatest artistic centres of excellence, bringing also benefit to the rest of the country by raising artistic standards nationally. That is one measure of the importance of lottery funding.

We all know that we spend less on the arts as a proportion of total public expenditure than any European country except Ireland, with France and Germany currently spending approximately three times what we do. One should also recall the mega arts investments in both France and Germany. A recent example is of course the Bastille Opera House in Paris which cost the state £350 million. That compares with the generous lottery grant to the Royal Opera House of £78 million.

However critical one may be of the failure of governments in the past to recognise the capital needs of the arts, it is surely right to praise my right honourable friend the Prime Minister for bringing in the lottery, about which so much enthusiasm has been generated in our debate. The Prime Minister's wish that the young people of this country should have the finest sporting and cultural facilities is now attainable. It will take time because we have to catch up on decades of under-investment, but now we can do it, and it will be done. The problem today is no longer capital needs, but, as my noble friend Lord Gowrie so clearly showed, it is revenue cuts.

As I said in this House in April last year, lottery funds should be used to increase public accessibility—reducing seat prices, aiding art education and so on—and it is good news that that is now accepted. But such help is insignificant compared to the huge cuts that the Arts Council has suffered.

My final point is my most important. The future health of the arts in this country now depends on not allowing the lottery to absolve the Government of their long-standing responsibility to maintain their support for the Arts Council and on not allowing the principle of additionality to prevent extra funds from the lottery being allowed for revenue needs in the arts.

5 p.m.

Lord Addington

My Lords, with six minutes and 59 seconds available it is difficult to give a résumé of the lottery funding. I intend to confine my remarks to sports. Sports, and especially the Sports Council, have benefited greatly from the vast wedge of new money which they now receive. Most of that money has been spent on a variety of small community-based projects. I believe that 720 projects have received less than £100,000 in funding. Funding small projects is probably the way forward, with a few prestige projects at the higher end of the scale being in the forefront but becoming a diminishing part of the funding procedure.

There is a finite number of new buildings that we can use. If we continue to build using lottery money we will eventually have a sports hall on every corner. We must use the lottery funding for the maintenance of buildings and the repair of infrastructure and equipment. As was said by the noble Earl, Lord Gowrie and the noble Lord, Lord Sainsbury, such funding is more difficult than creating enthusiasm for new projects. Anyone who has anything to do with charitable and sporting projects knows that. If someone is given a fundraising target they will achieve it. Everyone in fundraising departments knows that that is comparatively easy. It is not unusual that one-third of the cost of any project is required to maintain it on an annual basis. That is often the case as regards an old project which has a crumbling infrastructure. More lottery money must be used to fund existing projects because eventually we shall have sufficient facilities and only a limited need for new ones.

Furthermore, if we are to improve our sporting facilities we must consider the people involved and provide good training facilities and good advice on diet and medical issues. That requires people to meet other people and to give them advice, training, encouragement and a supportive background. We must also invest in the sportsmen themselves. Depending on the sport, international sportsmen in this country receive funding from a variety of sources. Professionals receive money from those who watch them play. Those in the amateur bracket—or, as is more common in many sports, the "shamateur" bracket—who receive only some funding. In addition, there are sportsmen who fall between those two categories; for instance, those who play professional sports to a limited audience, as is increasingly the case. All those people, while they are on their way up need support, but once at the top a professional can be supported by his sport.

It is not sufficient to build an academy for sport and to staff it. Scholarships and bursaries must be given to the athletes who take part. The current lottery set-up does not take that on board; it does not concentrate on individuals. The same is undoubtedly true as regards the arts. There is a pool of talent in the performing arts but if that is to be improved there must be investment in people.

Furthermore, one must be prepared to accept failure in some investments. For a sportsman or a dancer one trip or stumble can mean the end of a career and there is no use in complaining about that. We must be prepared to accept a degree of wastage in order to obtain the best. I suggest that that should be taken on board by all those involved. If not, we shall have wonderful theatres and sports halls with only about three people in them. It will be a total waste of time.

As regards the funding of individual projects, it is important to remember that if one appoints quangos one should listen to them. Unfortunately, we have heard a series of comments to the effect that certain projects were not liked. Using a sporting analogy, that is the same as a child playing in the street and saying, "It's my ball. I don't like the game anymore because I am losing. I am going to pick up my ball and go home". If we are not prepared to listen to such ruling bodies we should give the authority either to Parliament or to local authorities which are democratically elected. We must give the bodies a free hand because, just as we must be prepared to accept a degree of failure in the preparation of individuals, so we must be prepared to accept that people will make decisions that we do not like.

What is politically unacceptable to one group of people is not always politically unacceptable to another. In the future someone may not approve of contact sports—for instance, judo or rugby—and decide to stop them. Can your Lordships imagine the outcry? I suggest that we leave well enough alone and allow those who are appointed to run a project to do so. I shall conclude my remarks because I believe that we can retrieve some of the time that has been lost in the debate.

5.6 p.m.

Lord Aberdare

My Lords, I too am grateful to my noble friend Lord Gowrie for initiating this interesting and important debate. As I believe most of your Lordships know, I am the chairman of the Football Trust. I wish to highlight the important relationship that exists between it and the Sports Council, which is one of the lottery's distributing bodies with which we have worked closely for many years.

Your Lordships may also know that the Football Trust derives its funds from two different sources. The primary source is the reduction in pool betting duty, which was announced in the 1990 Budget and restricted to the professional side of football. Its object is to implement the recommendations of the Taylor Report, in particular the need for all-seater stadia. Sadly, the National Lottery has affected that part of our income very badly and has resulted in a significant reduction in receipts from that source.

That part of our funds and the way in which we use it is not relevant to today's debate because the Sports Council is specifically excluded from providing grants to professional clubs; that is left to the Football Trust. However, I wish to stress one important point for the future. Should the needs of spectator safety and comfort in sport in general in the country become eligible for lottery support, I hope that the Sports Council will wish to draw on the expertise and experience of the Football Trust and the Sports Grounds Initiative which it administers.

The trust's second source of income comes historically from what was once the Pool Promoters Association's spotting the ball competition. In the past the trust received approximately £14 million annually from that source of income. It allocated that partly to safety requirements at professional clubs which were not eligible for reduction in pool betting duty grants and, most importantly in my opinion, to helping the grassroots of the game. Unfortunately, the result of the National Lottery is that income from that source, which now comes from Littlewood's spot the ball competition, has been reduced from £14 million to £4.5 million. That is a serious reduction. Of what we have available, three-quarters must be allocated to safety and improvement work at professional clubs, because in 1990 we agreed with the Government to devote that amount to that purpose. That leaves us with just over £1 million in our budget for the 1996–97 financial year, for the many worthwhile and important projects which we have hitherto been supporting at grass-roots level. We have had to withdraw funding from many worthwhile schemes which were often run in collaboration with the Sports Council. Those include, for example, funding for local authorities, dual use of educational facilities, football in the community projects, boys clubs, YMCAs, the Divert Trust and other admirable amateur bodies which would normally be worthy of our support. We are now in a position of having to advise those bodies which received grants from us in the past to look for their assistance in the future to lottery money from the Sports Council.

I am happy to see that the Sports Council has so far awarded £220 million in grants and I understand that of that amount, some £25 million has been given to football projects in the United Kingdom. I am sure that that is good news. If we are to find the good players, which we know we need so desperately, at the top of the tree, it is essential that we nurture the roots.

5.11 p.m.

Lord Grantchester

My Lords, I start by declaring my interest as a shareholder in the Littlewoods organisation and as a director of Everton Football Club, the relevance of which will become apparent.

I am grateful to the noble Earl, Lord Gowrie, for initiating this debate. I agree with the noble Baroness, Lady Young, that it is impossible not to be impressed by the benefits brought by the National Lottery. I do not dispute that the National Lottery has brought many economic and social benefits, but in the euphoria that its supporters have managed to generate, we tend to lose sight of a number of detrimental consequences which I believe we ignore at our peril which I shall highlight briefly in my allotted time. It is clear, for example, that the effect on charities and voluntary organisations has been mixed: some may have gained, but a great many others, particularly those which depended for a large part of their income on small lotteries, have been hit hard.

We do not yet know what will be the social consequences of unleashing a dramatic stimulation of gambling demand. Fifty years of consensus, in which all parties agreed that the gambling industry should be tightly regulated, and people were not encouraged to gamble more than they could afford, have been swept away, with no proper regulatory machinery put in its place.

The rÔle of Mr. Peter Davis as director of Oflot has been much discussed. Apart from the reservations about his fitness for office which have been widely talked about, it is obvious that there is an inherent contradiction in Oflot's terms of reference. On the one hand the director general is supposed to consider the national interest and only license games which do not encourage excessive play; but on the other hand, his job is to encourage Camelot to make as much money as possible, under the guise of maximising the return to "good causes". This has meant that he has the strongest interest in stifling competition, and we have the extraordinary situation whereby the operator, Camelot, effectively has a veto over the licensing of fresh games by competitors. Consequently no Section 6 licence for instant games has been granted to any organisation other than Camelot.

Now that the British lottery has established itself as the largest in the world, and is making profits of over £1 million a week, he has clearly met the second objective, but perhaps he has fallen down in his protection of the public interest. All that needs to be looked at urgently.

In that regard, I warmly welcome the assurance given by the Secretary of State for National Heritage that there will be no question of agreement being given to Camelot for running a second on-line midweek game. Mrs. Bottomley told the National Heritage Select Committee inquiry into the national lottery on 2nd April: there is no need at present to further encourage new games and initiatives. I turn now to two particular good causes, which far from benefiting from the National Lottery, have been hit extremely hard by it. I refer to the Football Trust and to the Foundation for Sport and the Arts to which the noble Lord, Lord Aberdare, alluded. The Football Trust has been around for more than 20 years. It was originally set up by the pools companies, Littlewoods, Vernons and Zetters, to help British football with the implementation of the Safety of Sports Grounds Act.

As your Lordships will be aware, we are now half way through the first week of the EURO 96 football championships—the greatest sporting event to come to this country since the World Cup 30 years ago. Had it not been for the Football Trust, this tournament would never have been awarded to England. The trust has been responsible for massive ground improvements at all eight stadia which are staging the matches. Perhaps the best compliment to the work of the Football Trust was paid by the chairman of the UEFA Stadia Committee, Mr. Ernie Walker, who said: It is quite clear to me that city for city England has the best football stadia in the world". And speaking specifically about EURO 96, Mr. Walker added: The clubs with major help from the Football Trust have transformed these grounds in recent years. There will be eight splendid venues for what will be the biggest and potentially the best ever European Finals. In addition to transforming the football grounds, the trust has made a huge contribution to providing the funds to tackle social disorder associated with football. For example, for the EURO' 96 tournament, the Football Trust paid £150,000 for the provision of eight new photophone stations for use by the police to catch known football hooligans and prevent them from gaining access to our football grounds, and a similar sum towards new closed circuit television cameras at Wembley. Both are measures for which the Home Secretary has been quick to claim the credit. It was indeed the trust—under the inspired chairmanship of the noble Lord, Lord Aberdare—that pioneered the introduction of CCTV at British football grounds. That is the measure regarded as the most important by far in the war against hooliganism.

Its main responsibility, however, is to provide the finance to enable smaller clubs to fulfil the requirements of the Taylor Report, notably new grounds, new stands, seating and roofing. None of that expenditure is eligible for assistance from the lottery.

Half way through the Taylor implementation timetable, grants totalling more than £140 million have been made to new stands and new grounds costing more than £437 million. Those completed included the award-winning new stadium in Huddersfield, and a host of other new grounds in places as far apart as Millwall and Middlesbrough, Northampton and Livingston. New stadia are now going up in Oxford, Sunderland, Bolton, Derby and Stoke-on-Trent.

In 1990, when work on implementing the Taylor Report began, the minimum cost over the agreed 10 year timescale was estimated at £600 million—£60 million a year. The trust would have met about a third of this bill, around £20 million a year. Since the lottery started in November 1994, the trust's income from the 1990 betting duty reduction has fallen by 45 per cent. and it looks as though it will be short of around £33 million from the sum needed to see the Taylor implementation completed, particularly in the lower divisions where the need is greatest. It is essential that the life of the betting duty reduction, which was introduced by the present Prime Minister when Chancellor of the Exchequer, is extended for at least another three years after the year 2000, if the job of implementing the Taylor Report is to be completed properly.

The Football Trust is therefore one extremely good cause which has not only received no benefit whatever from the lottery, but has suffered a huge drop in its income as a direct consequence of it.

The same applies to that second great good cause funded by the pools companies—the Foundation for Sport and the Arts. This phenomenally successful body, chaired by Sir Tim Rice, and graced by two distinguished members of your Lordships' House—the noble Lord, Lord Brabazon, and my noble friend Lord Attenborough—has in the first five years of its life awarded 12,335 grants to sport and 433 grants to physical recreation, totalling £188,848,078 and 7,271 grants to the arts, totalling £91,964,140. The foundation was established by the Pool Promoters Association in July 1991 and funds from the foundation have gone to such good causes as the Liverpool Social Partnership in Drugs Prevention, the Drumblade Junior Band and the Aylesford Rugby Football Club.

I suggest that these are compelling reasons why steps need to be taken now to remove the many inequalities in the competitive regime governing the operation of the pools and the lottery. It is not a question of loading the dice in favour of the pools, but of ensuring that the two can compete on fair terms, and each contribute to the welfare of our country.

5.20 p.m.

Viscount Astor

My Lords, I regret that I am unable to declare any interest today because, despite being a regular buyer of lottery tickets, I have failed miserably to gain one prize. My noble friend Lord Gowrie has given us the opportunity today to consider the lottery. The debate is extremely well timed, coming so soon after the publication of the National Heritage Select Committee report. Perhaps I may also congratulate my noble friend on his excellent maiden speech.

The National Lottery is a resounding success. We must be proud of its achievements, and ensure that it is as successful as it is now for the remainder of its licence period. Four out of five of its shareholders are British public companies and Camelot must be congratulated on its achievement. The lottery is the most efficient in the world and provides more to good causes than any other lottery in the world.

Perhaps I may start by looking at one of the issues which has concerned your Lordships' House—additionality. We have had a number of debates on the subject. The concern was always that the lottery money would allow the Treasury or, indeed, local authorities to cut their funding commitments. In fact what has happened, instead of a rather general principle of additionality, defined simply by saying that lottery funds should not support projects that were already in the planned budget—for example, money had been earmarked either by the Government or by government bodies—the distributing bodies seem to have been bound up by trying to define every possible scenario. I am afraid that there is rather a log jam of applications and certainly a bit of a muddle.

Additionality is a concept that protects the heritage from cuts in government spending; that is all. It is not a concept to do the opposite—to cut lottery spending. You do not have to define every scenario; that is not necessary. Even the Permanent Secretary at the Department of National Heritage, the guardian of the concept of additionality as departmental accounting officer, pleaded at the Select Committee hearing for simplicity and urged distributors and recipients alike not to try to complicate the issue.

My plea is for flexibility, and that also goes for endowment funding and partnership funding. There was never any intention that endowment funding should only be used in rare cases. What is needed is some funding to be raised by the applicant, because it does show that the project has backing, but again I believe that it is a mistake to be too prescriptive. Sometimes 50 per cent. would be right, sometimes only 25 per cent. or 10 per cent. and, perhaps in some cases, as little as 2 per cent. Without proper endowment funding some projects will fail. We must ensure that they do not. The huge amount of money now coming through has simply put too much pressure on private funds that are able to back lottery applications. As the sums increase there will have to be more endowment funding, not less.

I would like to see the distributing bodies encouraging more projects. I know that they are barred by the Secretary of State from "soliciting", and I am not asking my two noble friends to stand on street corners—although, if they did, that might make them eligible for a grant from the charities board. However, I urge them to ensure that they get their message across, particularly to smaller bodies.

Those of us who were involved in bringing the lottery Act into being always recognised that we were gazing into a crystal ball. None of us knew what would happen once the money started rolling in. Who would put in applications for funding? Would there be enough applications or, indeed, enough funding? What types of people or organisations would apply, and what kind of projects would they be for? As a result, flexibility was built into the Act, so that changes can be made by secondary legislation.

The National Heritage Memorial Fund was appointed, as a distributor, to support the heritage. But I am afraid that the majority of the built heritage is missing out. As the noble Lord, Lord Gibson, said, the private owner is not being helped. The reason for this is not the fault of the National Heritage Memorial Fund. It is prevented by the National Heritage Act 1980 from funding private owners. In its early days, the fund had about £10 million a year to distribute.

I believe that one of the main ambitions of the lottery grants must be to restore and upgrade our inner cities and town centres. They are currently often excluded as, for example, many of our historic squares and streets are owned partly by local authorities, partly by the private sector and partly by heritage organisations. The resulting mix of ownership excludes them from funding. Now that the NHMF has nearer £300 million a year, it is clearly wrong that two-thirds of our built heritage is being denied funding by an outdated clause in an Act that was designed for another purpose.

What can we do about it? I believe that there is a simple solution. The Secretary of State could by order appoint English Heritage as a distributor alongside the fund. English Heritage is already its adviser on built heritage applications. It has the expertise and the staff to do the job. The issue, then, that must be addressed is how that can help the private owner while, importantly, protecting the public interest. The principle is that public money should not be used to support private gain.

English Heritage currently assists private owners through Section 3a grants under the Historic Buildings and Ancient Monuments Act 1953. Those conditions have protected the taxpayer since English Heritage was formed in 1984, and can be used in exactly the same way to protect lottery funds. So no charge of the use of public funds for private gain can be made. Of course, the principal conditions include means testing, there also has to be public access and, indeed, owners have to maintain their properties. But, most important of all, English Heritage assesses what would be the risk to Britain's heritage if the building were to be put on the market.

Grants in the past have enabled buildings, their surrounding land and often their contents—that is to say, the historic estate—to remain in private ownership, so that future maintenance is no charge on the state and the public can enjoy them. We must remember that the majority of the built heritage also includes very modest buildings—for example, terraced houses, cottages and often offices—but all of importance.

Lottery funds must relate to the needs of all the people, not just to museums and the arts elite. While on elitism, I must say how very depressed I am by some of the large applications from our major museums. I am, I am afraid, going to distress the noble Lord, Lord Palumbo, whom I admire enormously, but I appalled by the idea of covering the British Museum with something that can only be described as an inflatable condom. I am equally appalled by an attempt by the V&A to ruin the last vestiges of symmetry of the Kensington museums by wanting to erect a building which one can only describe, I suppose, as cartoon-type geometry—a sort of "Bent Bugs Bunny Building Blocks". Faced with those applications, the case for the restoration of our existing glorious heritage becomes, I believe, unarguable.

I recognise that my proposal may be considered disruptive by the National Heritage Memorial Fund so ably run by the noble Lord, Lord Rothschild. I must assure the noble Lord that I have nothing but respect and admiration for the way that he has operated the fund within the difficult constraints of the National Heritage Act 1980. I want to make his life easier, not curtail his ambitions. But what matters most is that the money, at the moment, is not going to support all the built heritage.

English Heritage was, of course, once considered as a distributor but, because it was thought that it was more likely to be an applicant, it was ruled out. In fact, English Heritage has not received very much lottery money because it has problems of additionality. The reason that I should like to emphasise my suggestion—and I realise that I am coming to the end of my time—is that the change can be made by order rather than the Act of Parliament which would be required to change the articles of the National Heritage Memorial Fund. When she comes to publish her paper, I hope that the Secretary of State will consider these issues very carefully.

5.28 p.m.

Viscount Chandos

My Lords, in thanking the noble Earl, Lord Gowrie, for his initiative and prescience in introducing today's debate, I should also say that I enthusiastically agree with almost every word that he said. His few words in the area of economic theory momentarily tempted me to revive our debates of past years. But, even if there were time to pursue that, I should not want it to dilute my admiration for the noble Earl's other remarks.

I shall try to help your Lordships' House to catch up time by making a few very brief and, hence, disjointed points. I should, first, declare a number of pertinent interests as a director of English National Opera, a governor of the National Film and Television School and an adviser, director or shareholder of various film and cinema companies.

The funds available for distribution are as high as they are because of the success with which Camelot has implemented its franchise. With the benefit of hindsight perhaps a harder bargain could have been driven, but with the benefit of hindsight another franchise awarded by the Government—that for the Channel Tunnel—would perhaps never have been financed and completed.

The noble Earl, Lord Gowrie, paid tribute to the Prime Minister for his success in setting up the lottery. I suspect that he may regret as much as I do that his right honourable friend (in abeyance), in the words of that politically correct and left-wing newspaper, the Evening Standard, has jerked the wrong knee in his intolerant and misguided remarks yesterday. I can understand why the previous Conservative director of communications-but-one resigned, citing the Government's ability to snatch defeat from the jaws of its few victories such as the lottery.

I wish to support the noble Lord, Lord Palumbo—and perhaps oppose the noble Viscount, Lord Astor—in his advocacy of ambitious, imaginative but always well controlled new buildings with which to go into the next millennium, in London as much as in Salford or Cardiff. I hope that, along with the proposed renovations such as those of the Royal Opera House, the Gallery on Bankside and even the South Bank Centre, London will see at least one significant and exciting new public building on a landmark site.

I also welcomed the remarks of the noble Earl, Lord Gowrie, about the issue of widening eligibility for lottery funds to current, not just, capital expenditure. So long as the principle of additionality can be enforced—the noble Earl's figures on the reduction in the Arts Council's grant-in-aid shows that this is a big "if"—it is clearly eccentric to draw this rigid distinction between capital and current items, particularly in the light of Her Majesty's Treasury's well known reluctance to do so in its own national accounts.

In passing I also wish to make one observation based on my experience as a director of English National Opera, which last year received a significant award from the Arts Council for a feasibility study in relation to its future needs and home. Even from a partisan point of view it was not immediately easy to feel comfortable with a seven-figure sum being devoted from the lottery to such an intangible purpose. One year on, with the study nearing completion, I am absolutely convinced that this expenditure will be paid back many times over in informing subsequent decisions. I hope it will be an encouragement to distributing bodies to continue such awards where appropriate.

Finally, I wish to add my support to the funding that the Arts Council lottery fund has been able to give the film industry. The wording of today's debate highlights the economic benefits of the work undertaken by the distributing bodies. I believe that there can be no area in which the direct economic benefits can be greater than in the film industry, if the support is wisely applied. I believe that the Arts Council is now considering proposals to move from financing single films to funding ongoing film business to help create mini studios. Although I suspect that this presents the council and its assessors with a smaller number of testing judgments rather than a larger number of merely difficult ones, I have no doubt that the economic and cultural prize of successfully implementing such a proposal could be substantial.

5.33 p.m.

Lord Crathorne

My Lords, first I wish to congratulate my noble friend on his maiden speech. We have been friends for many years and have been involved in the art world together in London and New York. I hope that now that he has "opened the bidding", as it were, he will speak frequently in this House.

The National Heritage Committee's second report on the National Lottery is a commendable and heartening document which states: All kinds of worthwhile and socially valuable projects have been encouraged and assisted when, without the lottery, they would have been ideas stifled at birth or never even born". That puts the case succinctly and accurately. I was involved with the Heritage Lottery Fund in the first months of its life as I was a trustee of the National Heritage Memorial Fund until last August. Having seen the fund from both inside and out, as it were, it seems to me that NHMF was a good choice to manage the Heritage Lottery Fund. The complexities are enormous. For example, the fund deals with over 30 quangos—of which English Heritage is one—and covers the whole vast heritage field. Both enormous sums of money and small sums of money are involved, as are extraordinarily varied projects throughout the United Kingdom. I would not like to see that altered.

As the noble Viscount, Lord Astor, mentioned, there is the question of private owners. However, there will surely be other ways of getting round that matter. Indeed, one of the recommendations of the National Heritage Committee report was that private owners should be helped, subject of course to there being proper public benefit from that.

The workload that the fund copes with is amazing. The chairman, the noble Lord, Lord Rothschild, deserves all our thanks for the skill, energy and enthusiasm which inspire those who work with him.

A recent initiative mentioned by the noble Lord is the urban parks theme for which £50 million is being earmarked. This is a wonderful initiative. It is the first time that the fund has, in a sense, sought applications in any way. Sadly, in this country public parks have a low priority in many town halls and government offices. But experience abroad has demonstrated that fine parks can help to create flourishing cities. Let us hope that this initiative will restore civic pride in our parks.

I shall try to give a sense of what is involved in that sort of distribution of money. It is not simply a question of signing a cheque. Such restorations take a great deal of time and work, including researching the parks' history, design, topography, hydrology, vegetation, wildlife, ecology, archaeology, current and potential use, management and, last but not least, security. These things will not happen overnight. However, it is exciting that the lottery will make all this possible over the next few years.

I wish to refer to one case which is soon to come before the Heritage Lottery Board. I hope this case will be followed in other parts of the country. One of the great benefits of the lottery is that people can think not only big but on a broad scale. The example to which I refer is the cathedral city of Ripon, sited close to where I live in the north east. The Ripon Improvement Trust, under the chairmanship of Michael Abrahams, worked out ways in which the city could be restored and re-invigorated. It looked critically at the river and its environs, the approaches to the city, the main city square, the disused and dilapidated buildings and the museums. This involved discussions with the county council, the borough council, the city council, a large public company, several private companies, museum trusts, charities, voluntary organisations and private individuals.

To create the will and the unity of purpose for a themed townscape application to the Heritage Lottery Fund is a remarkable achievement. As I said, the bid is just about to be submitted. The whole complicated package involving all these organisations will be presented as one bid, prepared by the borough council helped by a steering committee. Initially the Ripon Improvement Trust went to the Heritage Lottery Fund simply to have the ground rules explained and to discover what was and was not eligible to enable it to put together a bid that made sense.

The next task was to look carefully at the planning issues, as the members of the trust felt that it was not enough simply to restore streets and houses and to make things attractive but that there should also be quite substantial economic benefits from the scheme. Once that was shown to be the case, the local politicians put aside political differences; and everyone involved has worked together to produce a scheme which, if implemented, will have great social and economic benefits for the area. It is an imaginative approach that I hope others will follow.

I conclude by mentioning two points made in the Select Committee report. The report calls for a more flexible attitude to partnership funding. In particular it makes a plea to respond to local conditions and needs. That is a very real point. It is easier to raise partnership funding in some areas than in others. The other point, which I mentioned earlier, concerns private individuals being able to benefit so long as there is some public good; and this must be a good idea.

The lottery has been going for only 18 months and we have heard about the enormous sums raised and distributed. Each year will generate more money for distribution. There is no question but that the social and economic benefits of the lottery are, happily, here to stay.

5.41 p.m.

Baroness Wharton

My Lords, I talked to the late Lord Houghton many times about animal charities being excluded from lottery funds. Were he still with us, I suspect that he would be on his feet telling us that it was about time these charities should now be included, and I would have to say that I agree with him.

I am delighted that the lottery is such a success. So many good causes have benefited. Funding has also been expanded to include revenue expenditure, for example the film industry, which is very welcome. Even the Treasury, I suspect, has done rather well.

One group of charities has not benefited. The public believes that 20p in the pound is given to charity, but in reality the amount is only about 5.6p. Since the introduction of the lottery, fund-raising for many charities has dropped. For example, at the Riverdale Shopping Centre in Lewisham, money collected in July 1994 for the RSPCA came to just over £1,000 but in July 1995, at the same centre, the amount came only to £424. That is quite a drop. Since November 1994, the number of people buying animal charity raffle tickets has fallen from about 30 per cent. to 20 per cent. and street collections are down too. I do not think there is any doubt that the lottery has had quite an impact on the traditional methods of raising money for charity for this group. However, charities other than animal charities can benefit directly from the lottery and in many cases are more than able to make up any shortfall that they may have.

Animals play an enormous part in our lives. Most of us have grown up with them. There is no national health for animals. For those who are unable to pay for treatment from a veterinarian, charities like the Blue Cross, RSPCA and PDSA, to name but three, come to the rescue. They keep their doors open for 24 hours a day. No one is ever turned away and in many ways they act as a community centre too, particularly for the elderly. I certainly saw this when I visited the Blue Cross Hospital in Victoria a few weeks ago. The National Canine Defence League spent around £300,000 last year on neutering campaigns alone to reduce the number of unwanted dogs. All that has to come from charitable funds which, of course, have to be raised from the public in the first place. If the public were to continue to cut down the amount they donate for the foreseeable future, then many of the smaller animal charities will disappear altogether. They also produce educational literature to promote the care and welfare of animals, often going to schools and talking to children. There is a great deal of inter-activity, and all of it on a voluntary basis. If these organisations were not around, who could do this invaluable work? As I have said, there is no NHS for this group.

While some charities are able to benefit from our lottery, it seems unfair that there should be discrimination between one group and another. After all, both kinds fill an enormous need and relieve pressure on the public purse. Can I appeal to the Minister today in the hope that at some time in the near future our animal charities will also be able to benefit from what so far has been an extremely successful lottery?

5.45 p.m.

Lord Soulsby of Swaffham Prior

My Lords, it is likely that the noble Baroness, Lady Wharton, and I, will be the only two speakers in the debate today to deal with the question of animals and animal charities; and I thank her for cajoling me to speak in this debate.

We have heard today that by any measure of performance the National Lottery must be considered an outstanding success, helping a range of institutions, large and small, in the media, the arts, sports and so on, all of which can be said to benefit the economic and spiritual aspects of life in this country.

However, as the noble Baroness, Lady Wharton, said, one area which has a direct relationship to the social and economic issues of the country has failed to convince the distributing body—the National Lottery Charities Board—that it is indeed of national importance, in particular in the social aspects of life. I refer to animal welfare, and the societies and charities which do such sterling work in supporting the animal welfare side of life in this country.

Indeed, I understand that the distribution board has previously resolved to give animal welfare a low priority. Animal welfare appears to have been linked with animal protection and this may well be why it is given such a low priority. But to categorise it under the rubric of "animal protection" would be wrong. Animal welfare embraces the companion animals, welfare of stray animals, supporting medical aid to animals owned by people who cannot afford veterinary fees, and so on. It also covers farm animals, horses, and wildlife.

With respect to companion animals, your Lordships may be aware that there are some 11 million dogs and cats in this country in about half of the 22 million households. They play an important role in the social life of the country.

I do not make the claim or the complaint that the animal charities have suffered unduly as a result of the lottery although there are claims that their income has decreased. Nor do I make the claim that because many people who contribute to the lottery are also owners of companion animals they therefore should have the right to have their animals considered on some preferential basis by the lottery board. No, I do not make that claim. The plea is simply that applications from animal charities should be examined alongside others on their relative merit and should not be positively discriminated against or set aside because of any specific categorisation.

The needs addressed by the animal welfare societies have been mentioned by the noble Baroness, Lady Wharton. Therefore I shall not go over them again. But although animals play an important role in our lives, there are obviously major problems with companion animals and others in our society which need attention. Those charities give attention to such problems.

I hope that the Minister will give some consideration to these issues. I repeat: it is not that those bodies should be given any priority. My plea is that their applications may be considered on the same basis as any other application. My plea is for an overall widening of the basis of consideration.

5.49 p.m.

The Earl of Sandwich

My Lords, fond as I am of animals, I wish to return to the built heritage and in particular the significant group who, I believe, have drawn the short straw in lottery heritage funding. I refer to the owners and managers of the privately owned historic houses and tourist attractions. My wife and I are among them. After 15 years in the front line of opening a house and garden to the public, I feel quite strongly that the Government need to pay more attention to that sector and to the smaller owner in particular.

The smaller attraction receives fewer than 10,000 visitors a year, which in our case works out as an average of about 40 or 50 on a sunny day and only three in the thick West Dorset sea mist. There is, of course, a Fawlty Towers element in this which provides constant amusement to others and rather less to those immediately involved. Small owners are quite literally running between the front-door to let one group into the house and the back-door to help another group find the nearest WC. They are struggling, often with diminishing energy and small amounts of capital to match public with private benefit.

But there is a more serious aspect. Fundamentally, the public enjoys the smaller attractions simply because they are on a human scale and they prefer the owners to be visible. They find a remarkable tranquillity there which is not always present in the well-known stately piles. And yet the irony is that the smaller owners are bound to be disadvantaged because, while in most cases they cannot command the same visitor numbers, they do not have the administration to obtain regular access to funds and their human and social costs are proportionately higher.

We know from the Historic Houses Association that about half (44 per cent.) of all the 2,000 or so historic buildings open to the public are in private ownership. The figures we do not have are the number of attractions which are heavily subsidised by private owners for reasons that only they can explain or the number of attractions which change hands fairly frequently because their owners cannot afford to maintain them. That includes my own family home in Huntingdon, rescued by the local authority to become a comprehensive school. It is, of course, hard to estimate the proportion of public and private benefit. But what I do know is that private enjoyment can and does diminish in proportion to the responsibility which the owner has to the public.

It is an acknowledged fact that many houses have suffered because their owners are not wealthy; they are people who may have inherited them and have put a lot of their energy and time into them. The question is not, can the nation afford country houses and gardens? But, can the nation afford to lose any more of those owners who are preserving the heritage by putting in their own free time and spare money, and often selling their possessions, to do so? Without the good will of private owners, how would the Government be able to support the other part of the heritage which is in private hands? The noble Lord, Lord Hindlip, in an excellent maiden speech, mentioned the in lieu arrangements, and I hope that they will be strengthened.

As other noble Lords have pointed out, there is a concern that the Government have not fully appreciated the position of the private owners. It is high time the rules were changed in their favour. It is no good Ministers saying that houses can be turned into charities. That is simply not feasible for the majority of owners. I know that the National Heritage Select Committee has made a very welcome start, as the noble Viscount, Lord Astor, and other noble Lords have mentioned. That is thanks largely to the efforts of the Historic Houses Association. In supporting its recommendation to the Secretary of State—which is that the National Heritage Act 1980 be amended—I would be interested to hear the Minister's comments. I also submit that the case of the private owners deserves closer examination when the lottery bodies come to look at the matter.

I wish to make one final remark on charities. As the right reverend Prelate said, not all charities are enthusiastic about the lottery because of its adverse social effects. I can understand that and I hope that the Minister will give a full reply to the right reverend Prelate. However, there is a positive side, and as one concerned about awareness of world development issues, I was delighted to hear that the Development Education Association received a grant yesterday for its youth work. That is welcome compensation for a neglected area of education suffering from cuts in both the public and the private sector. I congratulate the Charities Board on its decision.

5.55 p.m.

Baroness Rawlings

My Lords, it is illegal to promote a large lottery; that was under the Lotteries and Amusements Act 1976. Under laws dating back to 1898, all lottery notices, correspondence, offers or tickets are judged as illegal imports and must be destroyed. That was the law in Britain until November 1994. It was clear that Britain was in danger of being swamped by lottery tickets from abroad and foreign lotteries making huge amounts of money by exploiting Britain's untapped market—and what a huge market that proved to be. As 1992 approached, it would become more critical, with the removal of restrictions brought in by the Single European Act.

The noble Lord, Lord Birkett, proposed in your Lordships' House on 28th November 1990 that there should be a national lottery. There were fierce arguments for and against. We have heard a few of them again today. The history of national state lotteries goes back as far as Ancient Rome. In Britain, the first national lottery was run in 1569 and it became an annual event from the mid-18th century. Funds for the building of the British Museum were raised that way. It ceased in 1826 because there was widespread illegal betting on its outcome.

There can be no doubt now that the lottery figures have exceeded people's expectations and wildest dreams. It is the most successful lottery in the world. Great credit must be given to the Government and to the Prime Minister not only for having set it up but for having set it up so carefully and diligently. There were possible land-mines wherever they walked.

What were those possible land-mines? I detect two: first, the independent framework set up for choosing the company to run the lottery. The decision to award the lottery to Camelot was strongly underscored by the National Audit Office. What a huge success Camelot has made! It is not an easy job—lotteries are not always success stories. As we heard from my noble friend Lord Inglewood last week, the lottery organisation in Arizona had its licence withdrawn after six months, as the operation was in shambles. Camelot is still in competition with other forms of gambling so it is still at risk. No one is obliged to buy a lottery ticket. The driving force behind the lottery is the jackpot itself. Because of its great success, millions have benefited. Imagine a voluntary sum of money paid out, of which over 28 per cent. is given to good causes. That means £1,400 million, a vast sum that is not even distributed by the Government. I find it difficult to understand why people are still whingeing.

A second possible land-mine is that in the framework set up for distribution, there are five bodies. I shall mention only two in my short time: the National Heritage Memorial Fund and the National Lottery Charities Board. Sadly, we often make the mistake in this country of criticising success or quality or something that is superbly run. We hear murmurs of elitism. But, to quote the noble Lord, Lord Donaldson of Kingsbridge, twice as many people went to the opera as watched the Football League Cup. More people go to the ballet than go to Rugby Union football. I am a tremendous supporter of sport and am pleased that one of the five bodies is the Sports Council Lottery Panel, described so ably by the noble Lord, Lord Addington. However, more people go to museums and art galleries than watch sport.

If he will forgive me, I wish to add my tribute to the noble Lord, Lord Rothschild, as my noble friend Lord Hindlip said so eloquently in his maiden speech. We hear today so many stories of sleaze and new restrictions from the noble and learned Lord, Lord Nolan. But he would not have needed to produce any report if there were more people like the chairman of the National Heritage Memorial Fund. The noble Lord, a Cross-Bencher, unpaid, chairs a voluntary distinguished body spending hours of dedicated time. I recommend that noble Lords study the list of grants to see how many varied causes have received help all over Britain, not just in England, large and small, built heritage and open spaces, and parks, which the noble Lord mentioned in his speech. It is done with firmness, fairness, courage and great style. There are always criticisms and people wanting to encroach on other people's competencies. But here we have an example of pure professionalism with a human face and with no ulterior motive. That is true service. It was an inspired choice on the part of our Prime Minister. He should be given credit, too.

There are few areas that I should like to mention. One is a booklet that was produced by the National Heritage Memorial Fund, and which has not been mentioned, on advice on how to apply for funds. This was always the hardest information to obtain in the European Parliament. I am afraid that the EU is a maze of dreadful, complicated bureaucracy. I even agree with the noble Lord, Lord Bruce of Donington, on the subject.

Sadly, in the short time available, I cannot go into detail on different projects: the Royal Naval College at Greenwich; Somerset House, which was mentioned; and the lighting of outstanding buildings, which not only brings new beauty to so many but has an important social side in that it greatly reduces crime. Another aspect is computerisation for museums. This has an exciting future.

The National Lottery Charities Board, with another outstanding, dedicated chairman, Mr. David Sieff, announced its awards yesterday. There has been some criticism. I have to declare an interest, having been a member for many years of the British Red Cross Society. Over the past two years the society has raised more money than ever before. It is not alone among the charities.

At this late stage in the debate many points have been covered. However, I repeat one or two because I feel it necessary to emphasise them. The first is the possibility of diminishing Government responsibility, the dreaded additionality so clearly mentioned by my noble friend Lord Astor. Secondly, we must not forget the importance of people—a source of great wealth. And thirdly, I support the noble Lord, Lord Gibson, and the noble Earl, Lord Sandwich, regarding historic houses and churches. I am grateful for the positive debate initiated by my noble friend Lord Gowrie.

I mentioned the terrible dangers, a few of which did not occur. Most well-organised charities have not suffered. People have not become addicted or insane. Why should people not be allowed to indulge in a harmless dream that is even doing good? We do not need less of it, as some noble Lords said, but a good deal more in this troubled world. Art, heritage, charity and sports are perhaps all that we have between us and barbarism. You do not need a degree in fine arts or to come from a privileged background to enjoy Mozart. All you need is a soul.

6.3 p.m.

Baroness Seear

My Lords, I am one of the few people who voted against the lottery when the Bill came before this House. As an unreconstructed old Puritan, I still feel that it is a pity that we are encouraging more and more gambling, which is what we are doing. Seeing what the British people, untempted, will do in the way of gambling, there is no occasion to encourage them—they can do it very well without any further encouragement.

However, that said, when a charity with which I was connected received over £300,000, it did not even occur to me that we ought to send the money back. We are making extremely good use of it in terms of doing something about rural crime. Noble Lords will be the first to recognise that the needs of rural areas are frequently overlooked, and such areas are likely to benefit very considerably from the lottery. It is very difficult to get money for them from other sources and so money from the lottery is very welcome indeed.

I agree with the right reverend Prelate that we have to live in the real world. People are prepared to put up money to buy lottery tickets in the futile expectation that they will receive several million pounds. The odds against it are such that you would think that, even given the present state of arithmetical ability, most people would be able to work out that their chances are, to put it mildly, rather low. That being so, the money is coming in, and that I welcome.

I join with those who said that it is of the highest importance to guard against additionality. We all say that. But I want to ask the noble Lord, Lord Inglewood, who will reply, what safeguards there are, if any, against additionality. Frankly, on the subject of additionality, those of us who have had dealings with the Treasury and the European Union do not trust the Government. I should like to know how we can be sure that the Government are not going to give less because the lottery gives more. That was not what was intended. It would be disastrous, and indeed a betrayal of the country, if that were to be so.

I also echo the remarks of my noble friend Lord Addington about leaving the lottery boards to get on with the job, not telling them from outside what they ought or ought not to do. Anybody in the country, from the highest to the lowest (if one is still allowed to use that shorthand term) is free and entitled to criticise what the lottery boards do and how they distribute money. In relation to a recent outburst from Downing Street, I say only that I was very glad to see David Sieff's temperate but firm rejection of the criticism made. The money is not there for the Government to decide what should be done with it. It is handed over to separate boards to deal with it, and they should be left so to do. People can criticise as much as they like, but there must be no suggestion whatever that the Government will have any say in how the money is used. Inevitably, in the distribution of so much money there will on every occasion be ways in which it is used which will upset somebody. Let people complain as much as they like, but let them not interfere.

As I said, the moneys are extremely welcome. I very much support a remark that I believe was made by the noble Earl, Lord Gowrie. With so many speeches, it is not always easy to remember who said what, especially as some noble Lords repeated what others said—which I am also certainly doing. It is most welcome that money is going into sports grounds. I very successfully avoided organised games at school. I have always hated them. But if I had the power to do so I would pour money, for both social and economic reasons, into sports facilities in state schools. So many people of our age, and even those younger than some of us, forget how much aggression young males have to get rid of. If they cannot get rid of it in an organised and legal way, they will and do get rid of it in an unorganised and illegal way. It is just as simple as that. If young people cannot have proper training and proper opportunity to be violent in a limited fashion, they will be violent in a very unlimited fashion. There are those who are more knowledgeable about sport than I am, but I imagine that we shall never get a successful team in anything in this country until we spend more money on training youngsters in state schools. More money going in that direction would be very, very welcome.

For the time that remains I shall talk about money going to charities. They have taken the lion's share so far, and quite rightly. As the noble Baroness, Lady Wharton, pointed out, charities receive only 5.6 per cent. of the money which goes to good causes; some 28 per cent. overall goes to good causes. It has been a theme this afternoon to praise—I do not say excessively, but without any undue control—what Camelot has done. Camelot has run a very successful lottery and we agree that, in a way, that is a good thing. But Camelot is getting a great deal of money from the lottery and surely more than 5.6 per cent. of the total money could go into charities. We ought to be pressing to look again at the amount of money going to Camelot and see whether more money cannot be siphoned to the charities which need it so badly.

There has been much discussion as to whether the charities are better or worse off as a result of the introduction of the lottery. According to the National Council for Voluntary Organisations—I am sure that almost every Member of your Lordships' House will have had its briefing and so I need only remind the House of what it says—the verdict seems to be that the big, well-known charities are not losing out. That has been confirmed by other speakers this evening. They are the kind of charities which benefit from planned giving and receive money from well-known trusts of companies. I gather that they are just as well off as ever they were. Those which are not so well off are the very small charities—the struggling little groups which are run locally and which depend on those eternal jumble sales and raffles and the odd garden party. But, those are a very important part of the charities and the social life of this country. They are particularly important because they are local community efforts in a world in which local communities are often threatened and being weakened. We do not want to see those small organisations lose out because of the success of the lottery grants.

When one looks at the way in which the National Lottery Charities Board has been distributing its money, I am grateful and glad to see that it has in fact distributed a great deal of it to just that kind of group. Some of the money has gone to charities which have income as low as £1,000 a year. Much of the money has gone to small community groups, trying to develop good schemes in local areas. That must be good. We must all he grateful for the sensitivity and perceptiveness with which the National Lottery Charities Board has identified particular unromantic, unspectacular and not well-known causes that have been able to benefit. It will undoubtedly make a great deal of difference to their survival in many cases. I hope that it can not only continue but can be intensified with an even higher proportion going to charities of that order.

I wish to make just one other point in relation to the National Lottery Charities Board. Every charitable organisation of which I have ever heard or with which I have been connected has always been in trouble about core funding. It is often not too difficult to raise money for a particular project. But nearly every charity finds it extraordinarily difficult to obtain the limited amount of core funding which is essential to keep the charity alive and not force it to spend all its time trying to raise the moneys without which it cannot have some kind of central administration, however modest, and therefore cannot exist. Those charities cannot spend all their time raising money for that purpose rather than getting on with the work for which they were brought into being.

I wonder whether the National Lottery Charities Board would give its mind to thinking how that very real problem of core funding for the smaller charities might be dealt with. There are a number of ways in which that might be helped. It is a central problem for all charities but in particular for the smaller ones. I very much wish that particular thought could be given to that very real problem. It would make a great deal of difference to the continuation and competence of a very important social and economic element in our society.

6.14 p.m.

Lord Donoughue

My Lords, I also begin by congratulating the noble Lord, Lord Hindlip, on his excellent maiden speech and thanking the noble Earl, Lord Gowrie, for initiating this excellent debate.

We on this side of the House support the lottery legislation and its rapid progress. We welcome its efficient and successful introduction—though to some of us it seems rather generously rewarded—and the impressive list of beneficiaries that the noble Earl recited. But before this mutual appreciation debate becomes too triumphal, I must point out that in fact over 90 per cent. of the awarded money has still not reached the successful applicants and is therefore still unspent. So, much of what noble Lords are speaking about and praising is still almost hypothetical. I must ask the Minister whether that reflects bottlenecks in the distribution mechanism and how long those blockages will continue. Again, I stress that our basic position is supportive. If the emphasis of what I shall say concerns reservations and proposed reforms, it is because we want the lottery to work better.

My first and central critical comment relates to the lack of any strategic vision at all for the arts or sports expenditure. We know that that is specifically excluded by the legislation, which presumably is a relief to the Department of National Heritage, since in fact there is little evidence that it has any strategic vision for the fields under its supervision. But the danger is that without strategic priorities the lottery may be spread thinly and piecemeal and be dissipated. I should like to see strategic priorities for the arts and for sport—emphasising, for instance, though others will have different views, new arts and sports, especially for the young; amateur rather than professional activities; access, especially for the disabled; and promoting music in schools by providing instruments, say; or promoting popular dance.

I turn from that general point to more specific issues, and I must immediately raise the question of matching funds. It is becoming very clear that the matching ratios—they differ for each distributary body—are probably too severe. It means that the applicants in most need have the least chance. Even some of the big flagship schemes may stumble when attempting to raise enormous matching money.

It is a particular problem for local authorities which play a very valuable role in co-ordinating local projects and where it is forecast that after the first flush of applications, many of which were already prepared, over half of all future projects will look to their local authority for matching funds. Yet those local authorities do not have the money to match. Specifically, their sources for lottery funding are the basic credit approvals—yet the Treasury this year stipulated and fixed that at zero; so there is nothing there—or usable capital receipts. But many, and especially the poorest areas, have no such capital receipts or potential for them. With others, there is a totally erratic distribution of resources. A striking example is the Scilly Isles, which, with £155,000 of available capital receipts, in fact has more than Newcastle, Sheffield, Birmingham, Gateshead and Bradford combined. So unless local authority funding in that area is alleviated—for instance, through supplementary credit approvals—many lottery projects will fail through lack of matching funding. I ask the Minister to comment on that central problem.

On the local dimension, I believe that we need to look for more devolution of some of the decision-making. I suggest the introduction of a network of local community chests under local community control to handle small grants, so that they do not go through the massive national bureaucracy.

On the delicate subject of additionality, the principle has already been severely breached and all the promises broken. Real expenditure on the arts has been declining since the lottery and nominal expenditure in the heritage area has been savagely cut.

Linking that to the question of grants from the revenue, I must warn the noble Earl, Lord Gowrie, and my noble friend Lord Chandos (who made a brilliant speech) that the revenue grants will further breach the additionality problem and lead to substitution. Block revenue grants will inevitably become part of the permanent structure of the established institutions receiving them. It will not be possible to withdraw them because of the threat that that may bring disaster, and flexibility and novelty will be lost. The Treasury will then take the opportunity further to cut the normal sources of funding. We should never lose sight of the fact that the original target of improving the capital infrastructure was right.

The distribution bodies were set up in a great hurry—"on the hoof'—and we need to ask whether in practice they are sufficiently representative and accountable. There are bound to be controversial awards, such as today's from the Charities Board, and it is always better if those distributary bodies are seen to act transparently and accountably. Such decisions can then more easily be defended.

In relation to the National Heritage Memorial Fund, like others I particularly enjoyed the speech of the noble Lord, Lord Rothschild, and agree with everything he said. Despite the Churchill hiccup, which was one of presentation and not of substance, the NHMF is doing a good job. The plans he mentioned for Somerset House are particularly exciting and among the best to appear from any distributary body. I hope that after that the fund can tackle making Whitehall a heritage precinct and pedestrianising Trafalgar Square and Parliament Square. It will have our support for that. It is clear that the heritage remit is too narrow and we on this side support its widening.

We have already stated that we support the suggestion that private houses should benefit, provided they are subject to the public benefit tests.

We are sympathetic with what the noble Lord, Lord Rothschild, said in regard to new technology. The question of intellectual property needs re-examining, and we must make sure that the fund can do whatever it wishes to do in that area. For instance, it is particularly sad that the Victoria County Histories, which was one of the marvellous products of a previous anniversary, cannot be helped. It falls in the gaps in between. I am unofficially informed that that is the case. I hope that it is not, but I fear that it is.

Turning to sport, I should like to praise the effective way in which the Sports Council administered the lottery funds. However, we still have some anxieties. It is clear that the richer and better organised sports are dominating application procedures. It would help if funds were allocated to the weaker governing bodies to help them in their applications.

In a similar vein, the smaller sports clubs suffer from the minimum size restrictions and we would advocate what we would call a small grants fast-track system. We need clarification—perhaps the Minister can help—on the distributary role, if any, of the new United Kingdom Sports Council. It could take a strategic overview and we should like to see it encouraged to do that. There is also the problem of children's play, which is excluded from the lottery remit; it does not come in anywhere. We believe that children's play, which was extremely important when I was on the Sports Council, should be brought back into the net.

In relation to sport, I am also particularly concerned, as have been other noble Lords, with the losers. The lottery money is not extra magic money; it is taken from elsewhere. Among the losers is the Football Trust. I agree with everything said by the noble Lord, Lord Aberdare, and my noble friend Lord Grantchester. Its income has been savaged by the lottery, as has that of the Foundation for Sports and Arts. And the Horserace Betting Levy Board's income was greatly damaged by the fall in betting, yet racing cannot apply for lottery funds. For reasons that escape me, the Sports Council does not recognise racing—one of the greatest of all sports—as a sport. That must be wrong. It means that racing cannot apply for funds to provide access for the disabled, as can any theatre. That is ludicrous. It is important to take drastic steps to repair the damage, especially to the pools groups and the levy board to make up for the damage done by the lottery.

The Millennium Commission appears to be in a mess. I hope it recovers. We may not have an exhibition for the millennium—perhaps the Government would like to delay its timing. Above all, it is important that the festival should provide a lasting monument of distinction and not some temporary and tacky theme park. Perhaps the Minister can say also what the Government are thinking of doing with that money when the Millennium Commission is no longer needed.

In conclusion, we welcome the lottery. We have comments to make on it. We should like to see more strategy, more public accountability, true additionality and visibility. The sustainability of the projects is very important. Finally, we must remember that it is the people's money and not the Exchequer's money. It should be seen to benefit the majority of people and respond to their issues of concern. I hope that the various refinements we have suggested will contribute to the even greater success of the lottery.

6.27 p.m.

Lord Inglewood

My Lords, my noble friend Lord Gowrie triggered a stimulating and worthwhile debate on the achievements of the National Lottery. We have heard a large number of distinguished contributions, not least that of my noble friend Lord Hindlip, who made a memorable maiden speech. I have no doubt that we shall hear more from him in the future on topics about which he clearly has considerable experience and expertise.

What is clear from the debate is what a resounding success the National Lottery is. When the Government took the decision to set up a lottery nobody could have or did anticipate the scale of that success or how it would become such a central part of our national life within such a short period. This debate is about success and some of the welcome problems, if that is not tautologist, that success can pose.

The National Lottery—in an initiative strongly supported by my right honourable friend the Prime Minister—was set up to provide money for good causes and has raised an amount significantly in excess of our and others' predictions. As the noble Lord, Lord Rothschild, said, last Monday, only about a year-and-a-half after the start of the lottery, the amount contributed by Camelot to the National Lottery distribution fund passed £2 billion. That money will be spent on arts, sport, heritage, charities, and on projects to mark the year 2000 and the beginning of the third millennium. Those are areas that are important for the quality of life for everyone in Britain but which have never had a priority call on government expenditure—a point emphasised by a number of noble Lords and illustrated by my noble friend Lord Sainsbury.

As a social phenomenon, the lottery has captured the interest and enthusiasm of almost every household in the land. Camelot, the lottery operator, estimates that 30 million adults in the UK regularly play the lottery; and on double rollover weeks, 86 per cent. of adults take part in the jackpot game. That is a somewhat higher proportion of adults than voted in the last general election. Of course, your Lordships can participate in this exercise of personal decision-making, although I know of none of your Lordships who has won a significant prize. I look forward to the headlines in the tabloid newspapers if and when one does.

An innovation as successful as the National Lottery is bound to attract public and media attention and comment. In recent months, much of that comment has focused on the prize structure of the weekly draw game; and on the way in which Camelot works and the profits it makes.

The Government's objective in appointing a closely regulated private sector operator of the game was to ensure that the lottery was run efficiently and thus maximise the return to the good causes fund, subject of course to Oflot ensuring that the lottery is run with due propriety and that the interests of participants are protected. We believe that the profit motive is the most effective way of achieving this and our view has been borne out by Camelot's success to date. Indeed, I think some would say that if a similar approach had at the outset been adopted in respect of the British Library, it might have been a different story, and I might have answered a different Question from the noble Lord, Lord Donoughue, earlier this afternoon.

The prize structure of the game was part of Camelot's winning bid to be the operator and was designed to produce the maximum possible level of public participation. It clearly meets the public's view of these matters. I would use this as evidence to my noble friend Lord Boyd-Carpenter as part of my response to some of the comments he made about the prizes. Camelot has been conspicuously successful. There has been some criticism of the size of the jackpot prizes, but it is worth remarking that most of the jackpot prizes are shared between syndicates or between more than one winning ticket, and anyway there is nothing wrong or immoral about scooping the jackpot.

The lottery has on occasions mistakenly been portrayed as a regressive tax. That view is incorrect on at least two counts. First, recent research by the Office of National Statistics shows that spending on the lottery rises with household income—in other words, it is not regressive. Secondly, the lottery is not a tax. The decision to play the lottery is entirely one for the individual. It is a game which is carried on under a strictly defined regime, controlled by Act of Parliament and by Oflot. It is right at the safest end of the gambling spectrum. I understand that real gamblers look for shorter odds than the lottery offers. The fact that such a high number of people choose to participate suggests that much of the criticism of the lottery is not based on the reality of what is actually happening but how they feel about it.

The right reverend Prelate the Bishop of Worcester raised the important question of scratch cards and under age play. Section 12 of the National Lottery etc. Act 1993 makes it unlawful for retailers to sell lottery tickets to children under the age of 16, and the director general has a duty to ensure that Camelot puts sufficient controls in place to comply with this regulation. Of course, children should be protected. We believe that sufficient controls are in place. My right honourable friend the Secretary of State has directed the Director General of the National Lottery not to license any game which does not allow for sufficient controls to prevent those who have not attained the age of 16 from participating in the National Lottery. I hope that provides some reassurance.

The right reverend Prelate also raised the question of the effect of the lottery on charitable giving, a matter raised by a number of other Members of your Lordships' House. On the evidence available, which is not conclusive, it appears that in general the amount of income collected by charities and foundations shows that the voluntary giving that they have received is holding up. A number of particular aspects of the overall picture have been alluded to, but it is certainly not the case that the catastrophic decline in voluntary contributions to charities which was anticipated in some quarters because of the advent of the lottery has materialised.

My noble friend Lord Aberdare and the noble Lord, Lord Grantchester, raised concerns about the Football Trust and the Foundation for Sport and the Arts suffering from the lottery's impact on the pools. As I am sure your Lordships will be aware, the Government have introduced a number of deregulatory measures to assist the pools industry, including the lifting of a ban on television and radio advertising and a reduction by 10 per cent. in pool betting duty. In addition, a further 0.5 per cent. cut in pool betting duty, worth of the order of £3 million a year to the Foundation for Sport and the Arts, was agreed with the pools companies in the 1995 Budget.

The focus on Camelot and its profits, and on the direct economic effects of the lottery game, have perhaps overshadowed the great impact of the lottery in the wider world on the arts, sport, heritage and charity sectors, as my noble friend Lady Rawlings pointed out. The 11 lottery distributing bodies have, in just over a year, awarded more than £1.8 billion to more than 9,000 projects. As my noble friend Lady Young pointed out, many of these are small-scale, and they are no less valuable for that. If I may make a further comment to my noble friend Lord Boyd-Carpenter about large awards, it is right, we believe, that large awards are made to national institutions and to Millennium landmark projects which will benefit the entire population of the community. In simple terms, if we are going to have a national opera house in London, we have to do it properly and well. We want to have a good opera house. There is no point in doing these national flagship projects other than up to the highest standard. What has been happening is an extraordinary achievement by any standard and one on which all those who are involved should be congratulated. The impact of these lottery awards will be felt in every community and hence by everyone throughout the country.

More than 7,700 awards of lottery funds—some 85 per cent. of the total number—have been to charitable and voluntary bodies spread right across the country. A number of speakers have referred to the amount of the total disbursements that have gone to charities. What in this context it is important to remember is that a very high proportion of the disbursements in all the categories have gone to charities. The benefit that the charitable sector as a whole has received from the lottery is far wider than simply those who may receive money from the good causes distribution body. What we are seeing is the lottery providing a massive new source of support for charities.

This success also shows just how much hard work so many people in the public, private and voluntary sectors have put in to the preparation of applications for lottery funds. They do this to enable things to happen which they care about strongly and which otherwise might never happen at all.

One of the Government's aims in setting up the lottery was, as has already been mentioned, to transform the capital infrastructure of our arts, sports and heritage sectors—using those words in a general sense. Thus far, the distributing bodies have made almost 4,500 awards to capital projects for a value of 1.5 billion. The benefit to the recipients, when the partnership funding is taken into account, will exceed £2 billion. It is not only the value of the investment which matters; so far as new buildings are concerned, we want them to be well designed so that in themselves the structures created have a stimulating and positive impact as well as having sound functional characteristics. As the noble Lord, Lord Palumbo, pointed out, we have in this country today some of the world's most distinguished architects who are in a position to be able to contribute to this process.

To deliver the amount of money that is involved in these sectors in the space of just over a year is little short of revolution, stimulating both economic regeneration and investment in the environment.

The noble Lord, Lord Donoughue, emphasised his New Labour credentials by pointing out that the money could not be spent until it was received. The position in respect of what he described as bottlenecks is that many of the projects we are talking about are long-term and will receive funds only as they spend the money that they need. Many also have been given awards on condition that they raise partnership funds. Since that is sometimes easier to do with lottery funds than without them, it is necessary to get the guarantee in advance, if the noble Lord understands me.

Lord Donoughue

My Lords, as the Minister defined my political position and it goes on record, I think I should make it clear that I am very old New Labour.

Lord Inglewood

My Lords, I always understood that the old ones were the best ones.

The noble Lord raised a number of other points. For example, he said that distributors should have strategic award plans. One of the characteristics of the lottery is that distributors cannot solicit applications. After all, this then ensures that the projects which might be funded will have the support of their local communities. However, the lottery distribution bodies are free to encourage certain types of application, such as the National Heritage Memorial Fund's urban parks programme, of which mention was made earlier, or the Sports Council's efforts to encourage applications from deprived areas and from schools—to go to a point raised by the noble Baroness, Lady Seear.

Perhaps I may respond to another point raised by the noble Lord, Lord Donoughue, about the United Kingdom Sports Council. Initially, the United Kingdom Sports Council will not be a lottery distributor. Its role will be in advising the home country councils on projects which have United Kingdom significance, for example, the British Academy of Sport. At present we see no need to have a fifth lottery distributor for sport although my right honourable friend the Secretary of State will want to look again at that once the United Kingdom Sports Council is formally established.

The aim of the Department of National Heritage (set out most recently in the departmental report) is to enrich people's lives, through encouraging high quality and diversity in creative activities; to safeguard existing creative achievements and promote understanding of the past; to extend opportunities to enjoy and appreciate rewarding leisure activities; and to promote the contribution which all of the department's sponsored sectors make to national prosperity and prestige.

The introduction of the National Lottery has effortlessly fitted into those objectives. In the areas of sport, arts and heritage, the lottery is building on work which has traditionally been done by our non-departmental public bodies. It is also providing us with the opportunity to celebrate the new millennium in a number of different ways and, following the transfer of responsibility for charities and the voluntary sector from the Home Office, is supporting and focusing our thoughts on what can be achieved in these areas. In the coming months, my department will be seeking discussions with a wide range of voluntary groups and organisations to listen to their perspective on the system of making applications and awards. In this way we hope to ensure that the maximum benefit possible will accrue to these areas.

The lottery has had direct effects on local communities across the country. As my noble friend Lord Gowrie pointed out, in many respects it is doing what was done in the Victorian and Edwardian eras by private philanthropy. Perhaps I may return to a point made by the right reverend Prelate the Bishop of Worcester and say that although this may be a change in the way in which things are done, it is part of a longer evolution. For example, in Scotland, in Clackmannanshire, lottery money has been used to repair an early 19th century iron bridge which had fallen into disrepair; and in Wales, in South Glamorgan, conservation work is to be carried out on Llandaff Cathedral to help to preserve it for future generations.

Perhaps I may respond to a point that was raised initially by my noble friend Lord Boyd-Carpenter and later by others and say that funds can be made available for churches.

I have a personal anecdote to tell. I am personally familiar with a project in Keswick, where the Cumbria Theatre Trust Ltd. has been awarded a grant of up to £3.1 million to build a new theatre. Before the advent of the lottery, those running the old theatre which these funds will help to replace dreamt of a scheme such as this. More than a decade ago, I recall going to meetings in the backroom of a pub called "The Packhorse" to try to help bring forward a scheme and feeling very daunted and depressed by the financial problems it posed. Now it is going to happen. It is an excellent example of the way that the lottery has provided an opportunity for people to use their imagination to come up with worthwhile and innovative projects and see them realised.

Lord Annan

My Lords, is there any money for endowment in that Cumbrian project? The great Victorian philanthropists, and even Lord Nuffield in our time, always saw to it that there was an endowment as well as a building.

Lord Inglewood

My Lords, no endowment comes with that project, which involves a new theatre building for an existing organisation.

The lottery is also helping the disadvantaged and the less well off through the National Lottery Charities Board, the programmes of which have so far focused on poverty, health, disability and care. Future grant programmes will focus on improving opportunities, the living environment and community involvement.

In thinking about those distributions, it is important (for the long term well-being of the lottery) to ensure that particular disbursements command a wide degree of support. The noble Baroness, Lady Wharton, and my noble friend Lord Soulsby raised the question of animal charities and whether they can benefit from the lottery. Although animal charities have not been eligible for grants under the first two grant rounds of the National Lottery Charities Board, the board has had discussions with a number of such charities. I understand that they will be able to apply for funds in the grants round covering the physical environment and the social fabric of communities which will be launched later this year.

Lottery money has also been used to help the disabled—not only in ensuring that buildings built with lottery money must provide access for disabled people and be accessible to them, but also in helping them to participate in activities such as sport and the arts.

The lottery is helping urban regeneration. For example, the Tate Gallery of Modern Art will help to regenerate Bankside in this city; and the Lowry Centre in Salford will bring huge benefits to the surrounding area. The Millennium Earth Centre in South Yorkshire will provide a world-class educational, research and business centre for sustainable development.

The lottery is also bringing benefits to rural communities. Many awards from the distributing bodies have gone to rural areas and the Millennium Commission has set up a scheme designed specifically to help to preserve and build village halls which, as those who live in the country like me will know, are very important.

The noble Viscount, Lord Falkland, underlined the importance of the lottery to film. That point was echoed by the noble Viscount, Lord Chandos. Their comments entirely accord with what I have been told by those in the film industry whom I have met.

As I have already said, sport is important. In addition to the lottery, Sportsmatch is doing what it can to try to provide improved sporting facilities for the very people to whom the noble Baroness, Lady Seear, referred.

The lottery is creating jobs. It is estimated that the Tate Gallery of Modern Art will create 650 permanent jobs in its immediate locality, and perhaps 2,500 throughout London. The Millennium Commission award of £46 million to the new National Stadium in Cardiff should also provide more than 700 permanent jobs. In addition, it is likely that that redevelopment will have a substantial and durable wider economic effect. Another Millennium Commission award, to create an international maritime arena at Portsmouth Harbour, will generate temporary employment for around 5,000 architects, designers, construction workers, electricians and people in associated industries; and when completed is expected to provide 2,100 new jobs.

Less directly, the lottery has also provided an important boost for shopkeeepers. Retailers received a total of £265 million in commission in 1995–96, an average of just under £9,000 each. Many will also have employed extra staff to cope with the public's great demand for lottery tickets.

Tourism is now one of this country's most important industries. The lottery is enabling us to improve the attractions and infrastructure needed to attract visitors in an increasingly competitive marketplace. Grants such as those to national theatres and museums will, in addition to making this country a better place for us to live in, also attract more visitors from other countries and thus trigger additional money entering the economy. In East Anglia, for example, £6.5 million of lottery money is being used by the Imperial War Museum to create a major attraction to be designed by Sir Norman Foster which will commemorate war-time links with the United States Air Force.

The lottery is also providing money for projects which will enhance the environment. For example, the RSPB has been awarded £675,000 of lottery money to recreate fenland feeding habitat of reedbeds and meres in Suffolk. This sort of award can bring tourism benefits as well as meeting a recognised need to preserve our natural environment.

The lottery is a means of encouraging national pride—for example, through flagship projects such as the Welsh National Stadium, Hampden Park, and the Tate Gallery. All these projects have an impact on the entire population of the country, not just in the locality where the new facilities are built. In addition, the lottery is also having a similar but perhaps more narrowly focused impact on local communities, through awards to smaller organisations such as local sports clubs and play groups.

My department is not resting on its laurels. It had always been anticipated that the lottery would evolve over time—and it will. The framework for the distribution of lottery funds is kept under continuous review. We very much value the kind of constructive comments and suggestions that we have heard this afternoon, and I am grateful for all that has been said—

Baroness Seear

My Lords, before the noble Lord sits down, I may be wrong, but I do not think that I heard him use the dreaded word "additionality". I thought that he was going to explain to us how we could be sure that there would be no additionality.

Lord Inglewood

My Lords, the noble Baroness has just beaten me to it by a whisker. My next paragraph addresses that very point. Both the noble Baroness and the noble Lord, Lord Donoughue, raised the question of additionality and said that the principle of additionality should be maintained. The Government have repeatedly made it clear that money raised by the lottery should be a new and independent stream of money for good causes. We are committed to this principle and, along with the distributing bodies, will monitor developments to ensure that it is maintained.

On 1st April of this year my right honourable friend the Secretary of State announced the introduction of new directions allowing revenue-only funding in the arts and sports to sit alongside the existing capital directions. The new directions allow a particular focus on developing the creative abilities and sporting talents of young people and on encouraging access and participation in the arts for all people. The distributing bodies are now coming forward with specific proposals under these new directions. This investment in people as well as buildings will help to transform the quality of life for everyone in the country.

The lottery is also helping us to preserve the past as well as invest in the future. For example, the Secretary of State has also announced changes that will allow building preservation trusts to benefit from lottery funding, widening the range of projects and initiatives that can benefit from what the lottery can offer. The National Heritage Memorial Fund is currently finalising the details of this scheme.

A number of noble Lords raised the question of whether the National Heritage Memorial Fund should be able to provide revenue funding and to fund private owners. In answering these questions, I declare an interest as the owner of a Grade I listed building. The National Heritage Act 1980 prevents us from making changes to allow the National Heritage Memorial Fund to make revenue awards under the themes of helping talent, or increasing access or to allow funds to go to private owners. The Government are considering amendments to the Act which would, if brought forward, provide the National Heritage Memorial Fund with more flexibility. We shall be considering whether the applications and award system is easy for people to use and understand so it is open to people everywhere in the community to take advantage of these new changes. A related aim is to ensure that as many good applications as possible come forward for schemes which will help young people who represent our future. The lottery provides an unprecedented opportunity to improve the social, economic and cultural fabric of the country. The framework that the Government have set for the distributing bodies has let organisations across the length and breadth of the land grasp this opportunity and to do things they want to do where they want to do them.

Perhaps the most fitting remark with which I can end my speech this afternoon is that with which my noble friend Lord Gowrie concluded his opening remarks. They are the words of the National Heritage Committee of another place, who concluded the foreword to their recently published report on the National Lottery with the words: let us praise something which has been done well and has gone right.

6.53 p.m.

The Earl of Gowrie

My Lords, I am gratified that the Motion has attracted such a pertinent and interesting debate. Your Lordships' new and unprecedented succinctness gives me some time in which to sum up the debate, but I think that that might be to tax the patience of the House. The Minister has done it very well. Where matters are of direct concern to the Arts Council I will ensure that I write to noble Lords.

I should like to make three short points in as few a minutes. I begin by endorsing, now that I have actually heard it, all that has been said about the special and authoritative maiden speech by my noble friend Lord Hindlip. Most of your Lordships have expressed the wish that my noble friend will spend more time helping us here. I believe that I have good commercial grounds for hoping that the noble Lord will be more or less constantly in his seat. I certainly look forward to hearing him again.

There may be a need to clarify the effectiveness and propriety with which the Arts Council operates, given the benefits of having experts on the council and its advisory panels and that most of us, either directly or indirectly, are or have been involved in publicly funded arts all over the country both at professional level and as unpaid trustees. As I said in my intervention to the remarks of a former fellow arts Minister, the noble Lord, Lord Jenkins of Putney—which I followed most closely—if one wants to people one's quangi with those who live and work in the cultural or sporting arena, as distinct from wholly disinterested or detached mandarins, one faces a difficult issue. I can assure your Lordships that those among us on the Arts Council who are, or who have recently been, involved in organisations making lottery bids always absent themselves from discussions relating to those bids, not simply the discussions when the matter is finally voted upon.

The noble Lord, Lord Donoughue, with whose remarks I was in general agreement, said that he would like to see the Arts Council devote more attention to new and amateur projects—we already fund an enormous number of amateur activities—new talent, new audiences and accessibility. I wholly agree with him. We urged an addition to the Secretary of State's directives. She responded magnificently. The noble Lord will find that his wish will come true late this year or early next year.

I believe that the noble Lord, Lord Donoughue, may have slightly misinterpreted one remark that I made. I am wholly opposed to the lottery providing core funding. Here one refers to the issue of additionality or substitution, as it is sometimes called. What I sought to demonstrate was that the Exchequer was not merely failing to maintain our grant but that it was cutting it in real terms, and that this caused widespread cynicism, muddle and dismay. I know that my noble friend the Minister will be a trenchant fighter in getting that corrected, not least because it was my right honourable friend the Prime Minister who said in a public speech, "Treasury, please note". I hope that that point will be underscored.

With reference to delays in money reaching the coal face, all bodies have asked us to commit money where we are able to do so in advance as a method of helping them raise their matching funds. Although I agree with what has been said about the need for greater flexibility in matching funds, so far in toto we are coming out with more than we require in aggregate in matching funds. We must treat that issue quite cautiously.

Finally, I extend my gratitude to all noble Lords who have taken part in the debate and to the Minister for his robust reply. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.