National Lottery

HC Deb 11 April 2000 vol 348 cc1-12WH

Motion made, and Question proposed, That the sitting be now adjourned—[Mr. Clelland]

10 am

Mr. Derek Wyatt (Sittingbourne and Sheppey)

I welcome the opportunity to have this topical debate, because we will know the new lottery operators in a couple of months'time. I hope that in due course my right hon. Friend the Secretary of State for Culture, Media and Sport will place both offers in the Library, so that we may judge them. I would like to thank David Price for his research, and Joe Hicks and Bryn Morgan of the Library for their assistance. I strongly commend their research paper, "The National Lottery", to all hon. Members.

It is not my intention to dwell on the respective merits of the two applicants—the holders, Camelot, and the challengers, the People's Lottery—although I will raise some concerns about Microsoft's involvement with the People's Lottery in due course. This is a debate about the future of the lottery, and I will raise the following issues: additionality; revenue-neutral definitions; the development of a national structure for the delivery of lottery terminals; the creation of a new national cause and the creation of a local community cause. I will also speak about sport—a favourite subject of mine.

Since the lottery came into being, there has been an ongoing discussion about additionality versus the arm's-length principle. I now believe that a new lottery Act should dispense with additionality. I will review some aspects of the additionality argument over the past four or five years. In the past two years, the new opportunities fund has brought additionality into question. Some people say that the fund breaches both the principle of additionality and the arm's-length principle.

Central to the debate is the ambiguity about what constitutes core expenditure and what is the Government's responsibility. The funding of cancer care, the provision of after-school facilities and information technology training are particular concerns. My right hon. Friend the Secretary of State argued that the new opportunities fund was in line with the principle of additionality. He said: the money that is going to child care, out-of-hours school activities, information technology training for teachers and healthy living centres is entirely additional to any existing Exchequer expenditure—[Official Report, 19 January 1998; Vol. 304, c. 679.]

In Committee on the National Lottery Bill, Lord Skidelsky, speaking for the Opposition, stated that on-going public services should not depend on variable, voluntary contributions…Lottery money should not be diverted to pay for what is essential at the expense of what is merely desirable. The National Lottery should not come to be seen as a sort of painless extra tax for every spending programme the Government choose—[Official Report, House of Lords, 19 January 1998; Vol. 584, c. 36.] In response, Lord McIntosh, in trying to define the principle of additionality, said: Important as the principle of additionality is, I am afraid that there is no practical way in which it can be enshrined in legislation—[Official Report, House of Lords, 19 January 1998; Vol. 584, c. 43.] That is one of the factors at the core of my argument.

Many people have raised concerns about additionality, and I will deal with one or two of them. Tessa Baring, member of the National Lottery Charities Board's UK committee, argued in Lottery Monitor magazine that many people in the voluntary sector feel dismayed by the creation of the new opportunities fund, which they consider to be breaching the principles of arm's length and additionality. She says: not only can they actually fund Local Authorities, but their policy directions from Government dictate their programmes, some of which are seen to cover areas of Government responsibility like teacher-training and cancer treatment.

The Department for Culture, Media and Sport published a consultation paper in November 1998 outlining three initiatives. One initiative concerned cancer care and focused on four areas: prevention, screening, diagnosis and treatment, and palliative care. The proposed initiative could encompass the provision of equipment, support services, respite care, joint palliative care posts and training, and would be delivered by the voluntary sector and the national health service in partnership. The projects funded by that initiative would be in addition to those currently planned by the Government. In reality, this is a catch-up exercise.

In March 1999, the Government published a summary of the responses, which showed great concerns about breach of the additionality principle. The Secretary of State resisted the key suggestion made by the hon. Member for Southport (Mr. Fearn) in Committee that the cancer prevention, detection, treatment and care programme was a matter of core expenditure. Such issues are at the root of my concern.

This year, it was announced that the new opportunities fund would partner the Department for Education and Employment to fund new information and communication technology centres in such diverse places as football clubs, schools and community buildings. Government money will pay the capital costs of setting up the centres, and the fund will pay for training, outreach, marketing and software. Some consider such an example of the NOF teaming up directly with the Government, wedding together lottery and Treasury money to fund projects, to be inconsistent with additionality, as the term was originally understood.

When we discuss the future of the lottery, we should drop additionality from the political agenda. The Government should be allowed to bid for lottery money. Of course, if the requirement for additionality ended, the Treasury might try to hold on to all the receipts. I doubt whether that would be a good idea. Rather than being allowed free access, the Government should be able to apply for moneys within the current regulations. Perhaps we could consider a maximum percentage that they could receive.

I think that additionality ought to go, at least partly because of research that I have read on how lottery money is spent in other countries. Let me give a few examples. In Pennsylvania, 40 per cent. is used to help elderly citizens. The Wisconsin state lottery helps to fund property tax relief. The Delaware lottery goes towards funding a full range of state services. In Nebraska, 49.5 per cent. goes to the education innovation fund, 49.5 per cent. goes to the environmental trust fund, and 1 per cent. helps compulsive gamblers.

Florida's 1987 legislature ensured that 38 per cent. of state lottery proceeds went towards education, to support schools, community colleges, state universities, pre-school programmes and so on. In New York state, 38 per cent. funds school aid. In California, 34 per cent. goes towards special schools, higher education and kindergartens. That describes the situation only in the United States. State hospitals in New South Wales receive critical funding from the lottery. In Western Australia, money goes to public hospitals and public health services. Funds in British Columbia are earmarked for urgent health care priorities. The end of additionality would not mean huge changes; people would like the results.

The term "revenue-neutral" has confused me, although I have tried hard to find a definition of it. Perhaps it is an oxymoron. The Library's national lottery paper says: Lottery Duty has been set at 12 per cent. Lottery Duty is intended to be revenue-neutral, making up for lost VAT on other retail sales. If spending is diverted to lottery tickets from products attracting high levels of duty (alcohol, tobacco etc.) then the Exchequer loses out. Conversely if spending is diverted from low-taxed items (confectionery, newspapers) or from planned savings, the Exchequer gains. As ticket sales have been higher than forecast, so has the amount raised from Lottery Duty. I have tried to find out the amount of duty paid. For 1994–95, the figure was £143 million; for 1995–96, £626 million; for 1996–97, £567 million; for 1997–98, £662 million; and for 1998–99, £625 million. I have also tried to work out what those figures mean, and sought advice from consultants and librarians who were struggling, like me, to understand the situation better. I understand that the Government have taken tax not of 12 per cent. but—I take the figures from page 9 of the lottery paper—of 14.2 per cent., 13 per cent., 12.9 per cent., 12.9 per cent. and 12.8 per cent. in the past five years.

At a crude estimate, an extra £195 million has gone to the Treasury.

Perhaps the National Audit Office could define what revenue-neutral means with respect to lottery duties so that we can ensure that more money is put into causes. For instance, NESTA—the national endowment for science, technology and the arts—has a small trust at £15 million a year, and giving that cause another £195 million would be of great help to those fields. My gut feeling is that the figure is much higher than £195 million, and I would like a definition of the formula to be agreed so that ordinary mortals such as myself can understand and make a judgment about the matter. I think that that is probably enough about oxymorons.

There are currently 24,300 lottery terminals, but we should have a terminal in every community across the United Kingdom. We need to rethink the way in which the lottery is delivered, and we must hope that even Camelot, given its partnership with the Post Office, has sussed that out. As the Barclays bank debacle and the various debates in the House and in our communities have shown, post offices are the essential service wherever we live. Margaret Burke runs my local post office in Rodmersham Green; she also runs a store, helps the village in many ways in addition to providing a service, and rarely has a day off. She is what I would call the salt of the earth and a pillar of the community. She is concerned, however, about the mooted changes to the post offices as we progress towards modernising the service. If we gave her a terminal, it could become the e-mail centre for the village, and the post office could combine with the local county primary school to be a little hub.

The lottery could be the beginning of the first national trunk road for digital services, if we approached it with a bit of imagination; and if we have not included that proposal in the tender document, we should retender. The lottery could transform our rural areas so that they become part of the smart economy, and I urge the Secretary of State to make plans to do that. If lottery terminals were used as hubs and sub-hubs for digital services as well as for the lottery, our economy would be transformed. I should add the cautious note that if that system was developed, Microsoft, a partner in the People's Lottery bid, should not be given an inbuilt advantage in providing the software packages.

I accidentally found the constituency spends of one or two hon. Members who are present. In Rossendale and Darwen, the spend on lottery tickets so far has been £28.5 million, yet that constituency has won only £2.5 million in awards. I notice that the hon. Member for East Surrey (Mr. Ainsworth) is here; his constituents have spent £33.5 million on tickets, but his constituency has won only £4.7 million. In my constituency, we have spent £43.6 million, which is more than those constituencies have spent, but we have received only £1.3 million in return. People in two of my communities—one on the island and one close to Sittingbourne—may drop their cereal bowls when they hear of the new awards early on Thursday morning. Those three constituencies are not untypical, and the system is plainly unfair. I would urge the Minister to introduce a community fund whereby 20 per cent. of local receipts automatically goes back to the community.

If it is accepted that additionality has gone by the board, could we add infrastructure to the causes? Wherever I look, the infrastructure in our communities is lacking. In the community I take as my example, more than 1,850 houses are under construction, but when planning is given for a school building, it is never built, and instead we push in an extra classroom here and there. That is bad enough—but there is also the matter of the village field. For two years, the owners of the properties cater for that field, and then it is given over to the local authority and it very quickly becomes hard rock and impossible to play on. Within that planning infrastructure, there is no doctor's surgery and none is planned. We must examine our communities' infrastructure to see whether we can add something at a local level that might make a real difference.

At present, the United Kingdom sports cabinet comprises my right hon. Friend the Secretary of State for Culture, Media and Sport, my hon. Friend the Minister for Sport, Tom Middlehurst on behalf of the Welsh Assembly, my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) on behalf of the Scottish Parliament, and my hon. Friend the Under-Secretary of State for Northern Ireland. It wants to reduce Sport England's proportion of the lottery and redistribute it to Wales, Scotland and Northern Ireland.

I checked the figures—courtesy of the Central Council of Physical Recreation—and currently the Exchequer's spend on sport in our four countries is £2.25 per head in Wales, £1.91 per head in Scotland, £1.66 per head in Northern Ireland and a mere 67p per head in England. Further changes to the current Sport England budget would severely embarrass the population of England. Sport has already lost because of the sixth cause of the new opportunities fund and if more funds are taken, England will lose again. I hope that my hon. Friend can dispel such rumours.

I urge my hon. Friend the Minister to think again about additionality in a new lottery Act. It should be removed once and for all. Will she consider the revenue-neutral system and a definition of such from the National Audit Office, in case the Treasury has taken more money than it should? Lottery terminals are the key to my argument. If they could be placed in each community throughout the country, a national e-mail system could be in place for everyone, including the digitally disadvantaged. Finally, will my hon. Friend consider infrastructure and the community cause and end the uncertainty about Sport England? I do not ask for much.

10.16 am

Mr. Peter Ainsworth (East Surrey)

I congratulate the hon. Member for Sittingbourne and Sheppey (Mr. Wyatt) on securing the debate, which he introduced in a considered way. It is timely and useful. As someone who was on the Back Benches when the National Lottery etc. Bill was introduced and who also served on the Standing Committee that considered it, I do not share the hon. Gentleman's view on additionality. At the time, I was working with the National Campaign for the Arts and tabling amendments to secure the principle of additionality. The hon. Gentleman says that it is impossible to enshrine that in legislation. Well, with the support of the Government, we made a determined effort to do that with separate lines of accounting and clear statements that lottery money was to be additional to usual Government spending.

Members of the Labour party were especially vociferous in wishing the lottery money to be over and above the on-going Exchequer funding for Government responsibilities. I do not agree with the hon. Gentleman's argument that additionality should be kicked off the political agenda. I do not suppose that that view is shared by his friends in the sporting world or in charities, the arts or heritage activities. The lottery was set up to fund those areas of life that would always be at the back of the Exchequer queue at the time of funding rounds. It would be difficult for activities such as the arts, sports and heritage to cut a convincing argument if they were in competition with health, education and other important social services.

The lottery was set up to fund those activities that would not otherwise have received funding. It has been phenomenally successful in bringing new money and new life to a range of activities that were previously short of funds. Recognition of that fact was missing from the hon. Gentleman's speech.

The hon. Gentleman cited the cases of Nebraska, Delaware and Florida. What is the tax rate in those places? I suspect that it is much lower than it is here. The situation as regards the provision of public services is, therefore, not the same. If the tax rate is much lower, the temptation to dig into the lottery to fund activities that would normally be considered the staple diet of Exchequer funding will be that much stronger.

I also suspect that if all the money that goes into the sport lottery fund—I know that the hon. Gentleman is keen on sport—were diverted to the national health service, it would be consumed in a matter of hours. It would make precious little difference to the NHS, but an immense difference to sport, which is a prime beneficiary of the national lottery.

I am not saying that the lottery is perfect; it is not, and there have been problems. There have been high-profile cases of lottery beneficiaries running into financial difficulties. There are the revenue requirements that have been stoked up by the substantial capital grants that have been awarded in some cases. I need not go into examples, although one well-known case that probably merits a mention is down the river at Greenwich. However, there are others. It is important that the lottery has regard to the revenue implications of capital grants.

There are continuing complaints about the bureaucracy and complexity of the application process. The Government have moved to simplify the situation a bit, but there is a long way to go before the procedure is made as user-friendly as we would like. It is a pity to see people in local communities who want to bid for lottery grants spending large sums on accountants and consultants. They do not like doing that, especially if their bids are unsuccessful.

The chances of making an unsuccessful bid have, of course, increased since the establishment of the new opportunities fund. However much we all support extra funding for health care, education and environmental projects, I must question whether the fund is the right way to provide that money. There is no escaping the fact that there have been winners and losers as a result of the establishment of the fund. The losers are the original good causes: charities, sport, the arts and heritage. They have noticed that, from the end of the year, when the Millennium Commission winds up, one third of lottery money will go to support projects that many people believe should be the responsibility of core Government funding.

Concerns have arisen recently as a result of the National Audit Office inquiry into the handling of some National Lottery Charities Board projects. There is a heavy responsibility on those who discharge lottery money to ensure that they do so in a clear, accountable and responsible way. I have no doubt that the board will have read the NAO report with great care and will take note of its recommendations.

It would be wrong to end without mentioning the campaign being waged for the lottery promotion company, with which the Minister will be familiar. That poses the issue of the alleged £3.7 billion in the national lottery distribution fund that is idle at any one time. It would be helpful if the Minister would restate the Government's position on that matter. As far as I can determine, the majority of funds are earmarked for existing projects, and therefore committed. Every week, a substantial cash flow enters the lottery system, and the amount sitting in the distribution fund has grown over time.

Once again, I emphasise that the national lottery has been an enormous success. Although the big projects such as the dome and the earth centre have grabbed the headlines, the lottery has had its greatest impact on society through thousands of small grants up and down the country, which have responded to local needs.

Another criticism of the Government would be their tendency to centralise the lottery and adopt a top-down approach, whereas the original vision of the Conservative Government was for a community-based approach, under which local communities proposed ideas and put in bids for lottery cash. I am concerned about the Government's dirigiste approach under which they—rather than local communities—decide where the money goes.

Anything helping to establish and support a cause as good as the Orpheus centre in my constituency—an arts centre set up by Richard Stilgoe, which is proving immensely beneficial to young people with disabilities and is becoming a national resource, revitalising and enlivening the arts in a therapeutic contextߞcan be no bad thing. Whoever wins the bid to run the lottery later this year, the key requirement is that the lottery continues to act as a power for good in our society.

10.27 am

The Minister for Tourism, Film and Broadcasting (Janet Anderson)

I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Mr. Wyatt) on securing this timely debate. The lottery is now more than five years old and has had a tremendous impact on our national life. The hon. Member for East Surrey (Mr. Ainsworth) described it as an enormous success and I agree. For the first time, someone I know well won £500,000 on the lottery recently, and it has transformed his family's life. Our lottery has been one of the most successful in the world, with £7.4 billion already awarded to nearly 57,000 projects across the UK.

I am sorry if the hon. Member for East Surrey believes that we have been too dirigiste in our approach. I can assure him that that is not our intention. The Government set the framework for regulation of the lottery and distribution of the net proceeds, but we do not choose the operator or distribute lottery funds ourselves. Irrespective of whether there is a change of operator, we have done much to ensure that lottery funding is more effective, equitable and accessible.

My hon. Friend the Member for Sittingbourne and Sheppey has a deep interest in the future of the lottery and has had some interesting ideas. I shall deal with each of them in turn, and with wider concerns. He referred to the new opportunities fund and said that the principle of additionality should be dropped and the Government should be allowed to bid for lottery money. He gave examples of what money is spent on around the world through other lotteries, and of what people would like money to be spent on. He is right. If we went into the street, stopped the first person that we saw and asked him what lottery funding should be spent on, I bet that he would say health and education first.

We remain committed to the principle that lottery money should add to, not substitute for, Government expenditure. We do not believe that the Government should reduce public spending programmes to take account of awards from the lottery, or use lottery funds to substitute for obligations into which they have entered. The lottery will add value, allowing for projects that would otherwise not be possible. It funds specific time-limited projects. As with all lottery funding, the new opportunities fund supports only initiatives additional to those funded from taxation. It supports activities in health, education and environment beyond those funded by the taxpayer, in the same way as it does for arts, heritage and sport.

Mr. Robert Maclennan (Caithness, Sutherland and Easter Ross)

If the projects of the new opportunities fund prove workable, sensible and desirable and take root, will the Government be willing to see them funded from taxation in future?

Janet Anderson

That is interesting, but it is a matter for my right hon. Friend the Chancellor of the Exchequer. I note what the right hon. Gentleman says, and it may be helpful if I speak about the new opportunities fund.

We have made changes to lottery distribution. Lottery money is public money, freely given. The National Lottery Act 1998 reflects the public's view that lottery money should support what they feel is important. Before it, lottery proceeds were divided between arts, charities, heritage, the millennium and sport. The 1998 Act created a sixth good cause, the new opportunities fund, which has made great progress in channelling money to important and popular health, education and environmental initiatives.

From early next year—the date depends on the rate at which lottery money flows in—we expect the fund to receive one third of lottery proceeds, as it will receive the share formerly paid to the Millennium Commission.

Mr. Gareth R. Thomas (Harrow, West)

Will my hon. Friend the Minister cheer on a bid led by Wealdstone football club—it is based in the constituency of my hon. Friend the Member for Harrow, East (Mr. McNulty), but many of its supporters live in mine—to regenerate the Prince Edward playing fields in the Stanmore area? The bid would facilitate a stadium with a capacity of 3,000, 14 artificial football pitches, and a range of other sporting facilities.

Janet Anderson

I note what my hon. Friend says. He knows that decisions on lottery applications are not for me, and I am sure that he and his neighbouring Members of Parliament are able to speak for themselves and for the project, which sounds worthy of serious consideration.

The other good causes will continue to receive their one-sixth share beyond 2001. Careful consideration is given to the views of the public in the allocation of money from the fund. There has been, and will continue to be, consultation on possible new initiatives. The Government remain committed to the principle of additionality, and lottery funds must be used to enhance current core spending, not replace it.

My hon. Friend the Member for Sittingbourne and Sheppey also asked whether national lottery duty was revenue-neutral, and mentioned oxymorons, an interesting point which he first mentioned yesterday. He will know that the intention was always that the duty would be designed to be revenue-neutral, on the basis that it would replace revenue lost from other sources as a result of displaced expenditure. In other words, if people spend money on the lottery, they may be less likely to spend it on other things, and we did not want the Exchequer to suffer as a result. My hon. Friend makes an interesting point about what should be done with revenue accrued to the Exchequer. I shall examine that point and write to him, and I thank him for making it.

My hon. Friend also mentioned post offices, and referred to a lady who runs a local post office in his constituency, Margaret Burke, whom he described as the salt of the earth. I represent a relatively rural constituency that contains many similar post offices, and my hon. Friend is right—they are an invaluable resource for local communities. Making the right decisions on this matter could mean the salvation of our rural post offices, because they can do so much.

Retail selection and where terminals are located is a matter not for the Government but for Camelot, under the terms of the licence granted by the former Director General of the National Lottery. Camelot's licence requires a minimum of 35,100 lottery terminals nationally, including both on-line and Instants only. Camelot is also required to employ clear minimum criteria for selection and deselection. Beyond that, responsibility for selecting and deselecting retail outlets lies with Camelot. As in the case of the Post Office, that may involve agents. I am not clear whether the Post Office imposes any additional or different conditions on its outlets, but I shall examine the matter and write to my hon. Friend. I agree that if we make the right decisions about the lottery and its role in the future of local post offices, that could transform our rural areas.

My hon. Friend also referred to disparities between spending and awards in some constituencies, referring to his, mine and that of the hon. Member for East Surrey. It was always intended that lottery funding should be distributed according to need. Nevertheless, anxieties have been expressed that some areas have not benefited as much as we would have liked from lottery funding. As my hon. Friend will know, my right hon. Friend the Secretary of State recently commissioned some research into what had happened to former coalfield communities, because many hon. Members representing such areas felt that their communities had not been treated as favourably as they should have been. We hope to publish the results of that research shortly. I hope that that shows that we are always willing to reconsider such matters. My hon. Friend's idea of a community fund is good. The Government will be consulting on possible new initiatives in due course, and I invite him to submit that idea to us formally.

I note what my hon. Friend said about sport funding. I should point out that I am standing in for my hon. Friend the Minister for Sport, who has a long-standing engagement in Lancaster this morning, and who is responsible for the lottery. I hope that hon. Members will forgive me if I am not as knowledgeable on this matter as they expected. A direct comparison of expenditure on sport by country is difficult, as sport is structured differently from country to country. Comparisons of expenditure per capita are not necessarily meaningful.

As we start to plan for the next comprehensive spending review, it will be important for all sectors of sport to speak with one voice. Sport must be effective in articulating its needs, make the case for additional Exchequer funding in the future, and focus on how it can address the Government's priorities and objectives and provide added value. My hon. Friend the Minister for Sport and my right hon. Friend the Secretary of State recently published the Government's sport strategy, which I hope will make clear the challenge faced by sport and recreation in this country, with Government support, and the important part that they play in the education and health of the nation.

Mr. Gareth R. Thomas

A key part of that strategy was the requirement for an audit of sporting facilities. Will my hon. Friend urge my hon. Friend the Minister for Sport to encourage Sport England to take special note of the lack of modern athletics facilities, modern tennis facilities or access to artificial turf pitches for football in my constituency?

Janet Anderson

My hon. Friend makes an important point. An audit is long overdue, and I am pleased that it was part of the strategy. Funding was recently secured for two small all-weather pitches in my constituency, which has made a huge difference to the local community by providing kids with somewhere to play. We must press ahead with the audit; I know that my hon. Friend the Minister for Sport will persuade Sport England to do that.

My hon. Friend the Member for Sittingbourne and Sheppey referred to the wider availability of lottery terminals, which relates to the point that he made about post offices. As a member of the Select Committee on Culture, Media and Sport, he will be anxious, as the Government are, that the digital revolution should not result in a society of information-rich and information-poor. That is one of the biggest challenges facing the Government, which I hope will be dealt with by the forthcoming White Paper.

On the new licence, the National Lottery Commission is responsible for ensuring that the lottery is run with due propriety and that the interests of players are protected. It is also responsible for choosing the next licence holder. The current operator, Camelot, was awarded a seven-year licence in 1994, which runs out in September 2001. The commission received two bids for the next licence, from Camelot and from the People's Lottery. Provided that the commission judges that bidders will protect players'interests and run the lottery properly, the licence will be awarded to the bidder most likely to raise the most money for the good causes. Possible additional contributions to the good causes from profits will be taken into account. The name of the preferred bidder will be announced by the end of June. I noted my hon. Friend's comments about one participant in one of those bids. However, we are pleased that there are two strong bidders, as healthy competition is in the interests of both players and the good causes.

The commission took measures to ensure a level playing field for those applying. Bidders are required to install new terminals from day one of the new licence. Yesterday, my hon. Friend and I had an interesting discussion about what might happen to the old terminals. Camelot has been asked to make available information on its retail outlets to other bidders, and has agreed to co-operate with the new operator if there is a handover.

Mr. Peter Ainsworth

What happened to the Government's commitment to introduce a not-for-profit lottery operator?

Janet Anderson

That has always been the Government's intention; if the hon. Gentleman will be patient, his question will be answered. He asked about the application and decision process.

Mr. Ainsworth

Is it still the Government's intention to introduce a not-for-profit lottery operator?

Janet Anderson

The Government always have been, and still are, committed to a not-for-profit lottery. I hope that that answers the hon. Gentleman's question.

I turn to the application and decision process. Application processes can be discouragingly long and complicated for some applicants, especially small, voluntary organisations without access to professional, legal and business advice. The introduction of simpler application procedures is another way of ensuring an equitable spread of lottery money.

Our wish for the people's lottery was for changes by distributors to make application processes user-friendly. That was followed by changes in the National Lottery Act 1998, which included establishing the principle of cross-distributor working to make the application process more accessible. However, distributors agree that there is still more to be done; they are working with my Department to identify scope in application processes for further improvement and simplification. I hope soon to be able to report progress in that respect.

Our quality, efficiency and standards team—QUEST—is considering how the cost of making applications can be contained without compromising the demands of proper accountability in decisions on how to spend public money. QUEST will soon publish phase 1 of its report, which considers applications for grants up to £100,000.

The hon. Member for East Surrey mentioned the national lottery distribution fund, which was the subject of recent press reports. To consider its balance in isolation makes no sense; it is rather like looking at one's bank balance without taking into account the cheques that have been written. Of the £3.5 billion currently in the fund, 94 per cent.—all but £200 million—has already been committed by distributing bodies; in other words, there has either been a firm agreement or an agreement in principle that the money will be handed over to a project. For example, my constituency was lucky enough to be allocated £2.7 million from the heritage lottery fund for the Ilex Mill project. The money has not yet been handed over because planning for the project has not been completed. However, it has been committed. The money will, rightly, be paid only if work is completed; it obviously cannot be spent twice.

Mr. Gareth R. Thomas

I am an enthusiastic supporter of a London bid for the Olympic games in 2012 or 2016, whether it is through the NLDF, Sport England or another form of lottery funding. I ask my hon. Friend not to rule out the possibility of lottery funding being used to support such a bid.

Janet Anderson

My hon. Friend knows that the Government want lottery funding to be spent in the best way possible to enhance the quality of life of all our communities. He can take it from me that that will continue to be our policy.

While money remains in the NLDF, it earns tax-free interest, which goes to the good causes and not to Government. So far, that has produced an extra £800 million for the good causes; we receive regular details from distributing bodies on their future commitments. We are well aware of the true picture.

Distributing bodies expect to commit more than £2 billion in the next 12 months and the cash balance in the NLDF should fall in the medium term as more grant payments are made. I hope that the current and planned changes to the lottery, when taken together, will help to ensure at least four things. More money will be spent on people and activities, shifting the focus away from bricks and buildings. It will be easier for smaller and less wealthy organisations to benefit. Distributors will continue to contribute to reducing social and economic deprivation. All regions of the country, whether urban or rural, will have equal and easy access to funds.

The lottery has undoubtedly been enormously successful over the past five years and, as I have tried to illustrate this morning, it has played and will continue to play an ever increasing role in our cultural and sporting lives. Most importantly, the Government believe that through many of the reforms following the 1998 Act and through increased co-operation between the distributors, the lottery will continue to have a direct impact on some of the problems caused by social and economic inequality in the UK. I conclude by thanking my hon. Friend for introducing the debate this morning. It is timely to discuss the future of the lottery and I thank him for giving us that opportunity.

Mr. Peter Ainsworth

rose—

Mr. Maclennan

rose—

Mr. Deputy Speaker (Mr. Nicholas Winterton)

Order. The Minister has concluded her speech. I must tell right hon. and hon. Members that there is a structure to Adjournment debates and it is not the practice to continue a debate after the Minister has replied to it. As the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) was not present for the earlier part of the proceedings, I trust that he will not now try to continue the debate after the Minister has spoken.

10.52 am

Sitting suspended.