HL Deb 03 July 1997 vol 581 cc304-6

3.31 p.m.

Lord Inglewood

asked Her Majesty's Government:

Why they have condemned the performance-related bonuses paid by Camelot to its directors while they have approved a scheme of performance-related payments contained in Millennium Central's contract with the International Management Group.

Lord McIntosh of Haringey

My Lords, the Government believe that pay levels should be closely related to performance. International Management Group will be paid a commercial fee for raising funds from private sector companies. If they raise nothing, they will receive nothing. The Government expressed the public's concern over the scale of Camelot directors' bonuses. Subsequently, Camelot agreed to pay the interest on undistributed prize money, worth around £24 million over four years, to the good causes and the directors will pay some of their future bonuses to charity.

Lord Inglewood

My Lords, I am most grateful to the Minister for his reply. Can he confirm that the Government will place pressure on IMG similar to that placed on the Camelot directors to give at least some of its performance related payments to charity?

Lord McIntosh of Haringey

My Lords, all the IMG receipts will be performance related. There is a legal contract with IMG, originally drawn up by the Millennium Commission under the previous government, and that contract will be adhered to.

Lord Dean of Beswick

My Lords, will the Minister confirm that at the time of the agreement with Camelot, Mr. Richard Branson described it as "a licence to print money"? Is it not the case that that has yet to be proved by the people who are to carry out the Millennium project? Is it not right that the Government should review the agreement in view of the money that is floating about in Camelot?

Lord McIntosh of Haringey

My Lords, my noble friend is correct to say that the Camelot agreement is subject to review. We shall publish a White Paper later this month about the National Lottery and legislation will be introduced later this year. Camelot's contract will expire in due course. In our manifesto we expressed the view that the National Lottery should be conducted on a not-for-profit basis.

Lord Burnham

My Lords, have the Government any intention, in the light of what the Minister has just said, of initiating legislation which will enable them to interfere with contracts freely entered into?

Lord McIntosh of Haringey

My Lords, I have explained the kind of legislation that is to be introduced. It will be concerned with the direction of funds for the National Lottery. In due course, the contract of Camelot will come up for renewal and will be reconsidered at that time. We have no other legislative intention.

Lord Boardman

My Lords, by his reply does the noble Lord mean that only profit related bonuses which are first approved by the Government will not be attacked by them?

Lord McIntosh of Haringey

No, my Lords, I did not say that and I did not imply it in any of my answers.

Baroness Rawlings

My Lords, the Government state that when Camelot's franchise expires they will replace it with a non-profit lottery operator. Will they forbid it from paying performance related bonuses?

Lord McIntosh of Haringey

My Lords, the purpose of a not-for-profit contract will be to provide the highest possible quality service and to receive a reasonable management fee. The details of that and how it will be paid have not yet been worked out; nor could they be. I am very familiar with the difference between a not-for-profit and a for-profit organisation, having run a for-profit company for 30 years—not that we always made a profit.

Lord Inglewood

My Lords, we are told that new Labour's policy is influenced by a series of great gurus.

Can the Minister confirm that in this area of policy its guru is Pontius Pilate, who was flaccid, populist and inconsistent?

Lord Monson

My Lords, can the noble Lord say whether individuals are under any legal obligation to go to see Ministers of the Crown if those Ministers request their attendance?

Lord McIntosh of Haringey

I do not suppose they are, my Lords. But the directors of Camelot are directors of a company which benefits from an agreement with the Government and are collecting money from the people of this country. It seems to me the very minimum of courtesy that they should respond to a request by the Government who wish to put to them concerns which have been publicly expressed.

Lord Sefton of Garston

My Lords, now that the Government have addressed the iniquities of low pay, will they look at the obscenities of high pay, as featured in the financial pages every day?

Lord McIntosh of Haringey

My Lords, the specific Question relates to the pay of the directors of Camelot. As I said in my first Answer, we are pleased to recognise that, in response to pressure from the Government following public concern, the directors of Camelot agreed, first, to allocate £24 million more to good causes and, secondly, to give some part of their future bonuses to charities. That seems to me a thoroughly satisfactory outcome in this particular case.

Back to