New Clause 1 - Hypothecation of tax receipts from Lottery to Olympic Lottery Distribution Fund
Horserace Betting and Olympic Lottery Bill
10:30 am
Mr Richard Caborn (Minister of State (Sport and Tourism), Department for Culture, Media & Sport; Sheffield Central, Labour)
The hon. Gentleman knows the answer that I shall give: lottery duty is a matter for my right hon. Friend the Chancellor of the Exchequer.
It has been a serious exercise, and we have learned from the problems that arose with the Commonwealth games. My right hon. Friend the Secretary of State and I came into this job at a point when those games were in difficulties, and we had to pump about another £100 million into them to make them the success that they were. Therefore, when we started to consider the budget for an Olympics, we were mindful that we had to include major contingencies, so our calculations have been based on a 12 per cent. betting tax on the lottery. It would have been naive of us if they had not been. All the budget figures that went out at the start and were subsequently put to the Cabinet, and indeed to Parliament, included a contingency of about £1 billion. I do not believe that any bid for the Olympic games in recent years has gone in with that amount of contingency planning built into it, but we believe that it is sensible.
My right hon. Friend the Secretary of State and I talked to many people who had been deeply involved with bidding for and delivering Olympic games, and they said consistently that they wished that they had not undersold the project at the start. The advice from almost every one of them was ''Put more into it at the beginning. If you have to pay it back at the end, that is fine, but put the contingency in, because, in the public's mind, the day you go back for more money is the day that 'failure' is attached to the project.'' If a budget can be projected that is sensible and robust, as I believe ours is, that will hold good for the Olympics bid.
To some extent, that is why the IOC has commended us on the sensible way in which we have approached the financial packaging of the bid, which, as I said, is well worked out, transparent and robust. The calculation included a 12 per cent. betting tax, because we did not take the naive decision that we could turn the Chancellor round. Why do I say that? The hon. Gentleman takes great pride in the fact that the Conservative Government introduced the lottery in the mid-1990s. They put a 12 per cent. tax on it, and that is the level at which Chancellors have kept it. Therefore, to believe that we could change that on a relatively small part of the lottery would not be wise.
All the calculations have been based on 12 per cent., and we have included the contingency. The final decision is not for the Department for Culture, Media and Sport, but for my right hon. Friend the Chancellor. If the hon. Gentleman wants to challenge that, he will have every opportunity to do so on a future Finance Bill. That would be the appropriate place to do it, rather than on this Bill. We do not want to detract from our unity of purpose.