Clause 4 - Length of licence
National Lottery Bill
12:00 pm
Hugo Swire (Shadow Minister (the Arts), The Family & Culture, Media & Sport; East Devon, Conservative)
We now enter the choppy waters of the licence renewal and the length of licence, and we have just heard who can apply for the licence. I suspect that what is really behind all this is the fact that a sense of panic is beginning to creep into the Government because, given the constraints that they and the Bill impose, there are perhaps not that many people out there who are particularly keen to apply for the next national lottery licence when the present one expires in 2009. No doubt we shall pursue that further during our discussion of this group of amendments.
Amendment No. 21 relates to proposed new subsection (1A), which states:
“The period specified under subsection (1) must—
(a) begin with the date of grant of the licence, and
(b) not exceed 15 years.”
The amendment would limit the length of a licence to operate the national lottery—it is currently held by Camelot—to 10 years instead of the proposed 15 years.
The second amendment in the group, amendment No. 22, inserts a new subsection. It ensures that any extension to an operator licence granted by the commission does not exceed the length of licence as stated in subsection (1A)(b), which, as I said, we seek to amend to 10 rather than 15 years. The third and final amendment, amendment No. 74, is a consequential amendment to schedule 1, which will be necessary if we are to change the length of the licence under section 7 of the 1993 Act.
Taken together, the amendments signal our concern at the Government’s proposals in the clause as a whole. I shall not detain the Committee for long, but I want to find out why the Government want not only to extend the licence period beyond the current seven years to 15 years, but to allow licences to be carried on ad infinitum.
Having seen the national lottery—that great Conservative creation—operate, I think that we all acknowledge that it can be an expensive operation at the outset, given the new machines, the technology that is required and the advertising. There is a need constantly to update networks to take advantage of up-to-date technology, new games and so forth. However, I do not see that that in itself is sufficient argument for granting licences for up to 15 years. Perhaps a near equivalent is the charter given to the BBC—a topical subject, given that Lord Fowler’s interim report was published this morning. That is granted for 10 years, of course.
Now that the national lottery is up and running, I do not believe—I am happy to be corrected by the Minister—that the same huge start-up costs that Camelot faced in 1994 would be faced by anyone who was granted a licence. Indeed, from what we read, Camelot appears to have no problems turning in a profit. I think that £30 million was paid to shareholders last year. If Camelot were to be the successful bidder for the next licence, no doubt it would make huge economies of scale by virtue of being the original operator.
I hope that the Minister can assure the Committee that there will be no pressure on the lottery commissioners unduly to extend operator licences. I hope also that he will assure the Committee that a decision to extend licences would not be based on any fear that there may not be another bidder for an operator licence in 2009. After all, such a fear could explain the power in the clause to extend operator licences and we saw during the last licensing process just how badly the Government got it wrong.
I have described the fear that lies behind the amendments and my thought process in drawing them up. We all hear on the trusty grapevine that the Government are in something of a quandary. We are approaching the end of 2005 and the new licence has to be issued in 2009. The gap is beginning to close. I suspect that when Ministers first turned their attention to the issuing of a new licence, they thought that there would be a clamour of activity and that people such as Sir Richard Branson would be queuing round the block to become the new operators of the national lottery.
I hear that the reverse is the case, and that the Government are now moving into that indefinable area otherwise known as near panic. That is why they are trying to give themselves “flexibility”, which is the Minister’s favourite word—flexibility in allocating a licence to a person or a body corporate; flexibility in giving one licence or multiple licences; and flexibility in extending the period for which the licence can be granted or in allowing it to be extended by the commissioners. Flexibility seems to be the Government’s answer to the looming crisis—I use the term advisedly.
I do not seek to undermine the national lottery. It is an excellent game; when it works, it benefits causes in each of our constituencies. I do not wish to undermine the lottery at a time when new games designed to fund the Olympics are being introduced, particularly as it is being undermined by the Government.
I see that the Minister is writing something and circling it in pink; he is chuckling to himself because he clearly thinks that I have been undermining the lottery. It is not me who has undermined the lottery but the Government. They have been keen to siphon off at least 50 per cent. of lottery spending to make up for the lack of Government expenditure. That is why sales in recent days have not been as good as everyone had hoped.
The Minister’s answer is to extend the licence. The question is who has been getting at the Minister to make him want to do it? He agreed to write to Committee members telling us about his thought processes on the granting of a licence to a body corporate or a person; and he agreed when I intervened on him, saying that he would make correspondence available to the Committee and say whether pressure had been applied on him to change the wording. In much the same way, I hope that he will tell us what representations he has had on extending the period of the next licence.