National Lottery

Prayers – in the House of Commons at 1:30 pm on 12th March 1997.

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Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex 1:30 pm, 12th March 1997

I am delighted to have won the Speaker's lottery and to have secured the debate today on the national lottery. It will be the last Adjournment debate that I have in the House, and I am particularly pleased to have won it, because today is the birthday of my right hon. Friend the Secretary of State for National Heritage, who has done so much to advance the cause of the national lottery.

It was Santayana who said that there is no cure for birth and death save to enjoy the interval. One of the remarkable things about the national lottery legislation is that it has the specific purpose of increasing our enjoyment of life. Playing the lottery, we can all become—for a few seconds—dream millionaires. At that moment just before 8 o'clock when the balls are turning in that great wheel and before the first one comes out, we can all think about swimming pools, jacuzzis and holidays in the Caribbean. Perhaps just a few minutes later, after the bonus ball has come out, we are back to reality again—worrying about supper, the children, the mortgage, and so on—but for those few seconds we have had the thrill of a taste of champagne, perhaps, and that adds to the sparkle of life for most families in Britain today.

As we all know, the lottery has a very serious purpose as well: to raise money for good causes, which previously received little or nothing from the public sector. In that regard, it has been a howling success. There are no other words for it. It has greatly exceeded expectations. When I was Minister for the Arts and first pressed for the lottery, we talked about a possible turnover of £2 billion to £3 billion a year. In fact that has rapidly gone up to £5 billion or £6 billion a year.

It is commonplace to think of ourselves as a nation of grumblers. I often think that the Germans are worriers, that the French are optimists and that we love to carp and grumble, but it is impossible, other than on a few small specifics, to grumble about the lottery. It is transforming the face of Britain. Galleries, museums, libraries, sports tracks, football grounds, forests, churches, village halls are all being rebuilt, renewed, restored. So far, £3 billion has been committed to more than 19,000 projects.

It is fair to say that what the Medicis did for Florence and Napoleon did for Paris, the lottery is doing for Great Britain. I pay particular tribute to my right hon. Friend the Secretary of State for National Heritage and to my right hon. Friend the Member for the City of London and Westminster, South (Mr. Brooke) for their tremendous commitment to getting the lottery on the road and ensuring its success.

It was not my intention today just to follow John Betjeman's words:

  • "Sing on, with hymns uproarious,
  • Ye humble and aloof,
  • Look up! and oh how glorious
  • He has restored the roof!"
It was my intention to talk rather more about the future of the national lottery and what might—and should—happen to it in the next five years, extending through the millennium.

In that time, inevitably, funding will largely move away from buildings and capital projects to current expenditure—particularly, for example, helping with the training and tuition fees of talented individuals: artists, sportsmen, dancers, potential Albert Finneys and Margot Fonteyns. The Arts Council's announcement last week that it would make lottery money available short term for 4,000 students in drama and dance who will start their courses in autumn 1997–98 was clearly part and parcel of that new development, that new dedication of lottery money.

I wholeheartedly applaud all of that. That is the right direction in which grant-giving bodies have to move, but I see dangers in it, the first of which—I am sure that my hon. Friend the Minister will not object to my saying this—is the increasing likelihood, as the lottery gets a little older and we become more accustomed to it, of Ministers tending, subtly and delicately, to try to override the grant-giving bodies and to back their own pet projects. It follows that the principle of additionality may be put at risk.

The House will remember that it was very much on the principle of additionality that the lottery legislation went through the House—that money raised by the lottery should be additional to the Treasury's commitment to public expenditure, for example, to the Arts Council. Preserving that principle is of absolute importance to the lottery, just as it is in the minds of those who buy their tickets every week: it is the basic principle on which the lottery was started.

Let us consider the terrible possibility—the unlikely possibility—of Labour winning the next election. We have already been threatened with a windfall tax, and I gather that there is a possibility that the windfall tax might be required to raise not £3 billion but as much as £10 billion. The first windfall that would be easily available to a Labour Secretary of State for National Heritage would, of course, be the £1.5 billion that goes to good causes: it would be all too easy to try to grab that and push it into a favourite project.

Photo of Mr Bill O'Brien Mr Bill O'Brien , Normanton

When the right hon. Gentleman talks about additionality, will he bear in mind the charities that have suffered a loss of income as a result of the introduction of the national lottery? The additionality to which he refers does not apply to community charities, which are suffering. Will he address that point, as it is a significant factor?

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex

I intend to address that specific point, because it is one area in relation to the grant-giving bodies that worries me, as it does the hon. Gentleman.

There is no firm, foolproof solution to the dangers, but if I may offer advice to those who are on the Front Bench after the election, when I shall have left the House, I would strongly counsel my right hon. Friend, who I very much hope will be in her post as Secretary of State for National Heritage, to agree a firm budget with the Treasury for a full five-year period, covering museums, galleries, the national heritage memorial fund, the Sports Council and the Arts Council, and to announce publicly the amount of Treasury funding. The Treasury should be tied to those figures. Then, if lottery money goes into an area where there is an overlap with grant in aid, such as tuition fees and training for students, that will not be able to reduce the Treasury element of funding, because the Treasury will be committed to firm figures that were publicly announced.

It is worth remembering that a 12 per cent. tax on the total lottery turnover goes to the Treasury—£600 million per year on a turnover of £5 billion. It is a voluntary tax, so if the lottery became unpopular for any reason, or were seen as a substitute for public expenditure which people properly expect the Government to provide, sales could fall off and that £600 million might disappear overnight.

My other advice is to the grant-giving bodies. They should form themselves into a consortium or an informal council at chairman and chief executive level, so as to work together and develop a common approach to the sponsoring Minister and to the Chief Secretary to the Treasury, which would prevent their being picked off one by one by the Treasury in tight public expenditure rounds.

I agree with the hon. Member for Normanton (Mr. O'Brien) that the position of charities should be reconsidered. Although the work of the Charities Aid Foundation shows that the income of the 500 largest charities continues to grow, albeit at a much slower pace than before, it is clear that smaller, community charities are suffering. They depend not on planned giving and covenants, but on raffles and on rattling boxes outside supermarkets on Saturday mornings.

Figures given to me by the National Council for Voluntary Organisations suggest that the total loss to charities was about £350 million in 1995, which is rather more than the £300 million that they received from the lottery. One possibility is that, as the millennium fund expires, some of that share of the lottery should be diverted to the National Lottery Charities Board. I am sure that the Minister will agree that that aspect requires further thought.

I am opposed to the mid-week draw, because it detracts from the Saturday draw. I regret the position of some newsagents and tobacconists. There may be two of them in a village, one with a national lottery machine and the other without. The one that does not have a machine can stand his turnover falling by 20 per cent. on Friday or Saturday because of the lottery, but if it were also to fall by 20 per cent. on Tuesday or Wednesday, he would be driven out of business. I have raised such cases with Camelot, which says that it has sufficient outlets and does not require any more. That is one of the dangers of the second lottery draw. There is also the danger of Camelot appearing too greedy, and it should be wary of that.

There is talk of keno—a sort of electronic perpetual bingo—being introduced. I played it at the Taj Mahal casino in Atlantic City and it is horribly addictive: all the dollars in my wallet were removed very quickly. I hope that Camelot will not introduce it in the United Kingdom.

On the other side of the coin is the 49s, which is being introduced by bookies and betting shops. At fixed odds, one can bet on three up, five up or the bonus ball. It presents a serious threat to the lottery as the bookies do not pay anything to good causes and do not give anything to charities. There is talk of £1 billion being knocked off the national lottery turnover if the 49s is not examined and perhaps stopped. The legislation needs clarification. No skill is required to play the 49s: it is clearly a lottery and seems to fall foul of the gaming legislation. I hope that the confusion between lottery and gaming legislation will be clarified.

Finally, I come appropriately to the millennium, which is now just over 1,000 days away. It should be a time for celebration, change and a new start. It is easy to carp about it and to ask why money is being spent on redoing the Greenwich peninsula, but that is the wrong approach. It is much more important for us and our constituents to have a positive attitude with a view to participating in local planning and enjoying the national celebrations.

I salute my right hon. Friend the Secretary of State for her work in this area. In a recent lecture, she referred to the 11th century monk who wrote that the period immediately after the year 1000 saw the world clothing itself in a mantle of white churches. What a lovely epigram. What a lovely thought. I hope that out of the millennium celebrations Britain will clothe itself in a mantle of new and exciting buildings that will reflect this century and, like the museums at South Kensington, will be admired and used throughout the next century. If that happens, all of us who have been involved in the lottery—as I have been since I was Minister responsible for the arts—may remember with some justification Sir Christopher Wren's epitaph in St. Paul's cathedral: "If you seek his monument, look around you."

Photo of Mr Iain Sproat Mr Iain Sproat , Harwich 1:45 pm, 12th March 1997

I am grateful to my right hon. Friend the Member for Mid-Sussex (Mr. Renton) for initiating this debate on a subject that the House seems particularly and rightly fond of discussing. I know that he has a great interest in the lottery, having been involved in its introduction at an early stage.

The lottery has been enormously or, as my right hon. Friend would say, howlingly successful in its own terms, with sales far greater than anyone predicted when its licence was awarded, and awards more widespread and larger than anyone could have dreamed of. Total sales are fast approaching £11 billion, and an independent study by Terri la Fleur, a leading world lottery expert, has shown that the United Kingdom lottery is the most successful and efficient in the world. The mid-week draw, which was launched on 5 February, is building on that success.

As I have already mentioned, the lottery has been a huge success measured by the amount that it has raised for good causes. To date, a total of £3.1 billion has been raised for sport, the arts, charities, heritage and the millennium, with the distributing bodies making awards to more than 19,000 projects. The availability of such money for those sectors in such a short time is nothing short of a revolution, and it has been instrumental in many of the great advances made in the Department of National Heritage's areas of responsibility in the past almost five years.

It is also worth commenting on the way in which the lottery has already become a part of everyday national life. Camelot estimates that 65 per cent. of the adult population regularly play the lottery, and that around 90 per cent. have played at some time.

I am grateful to my right hon. Friend for his comments about the relationship between lottery money and existing public expenditure. The Government have made it clear that the money raised by the lottery for good causes was— and is—intended to be additional to public expenditure. The Government will not reduce public spending programmes to take account of awards from the lottery.

That commitment does not mean that the Government can or will give automatic protection to programmes that are able to benefit from lottery funds: what we can afford to spend on such programmes will be decided in exactly the same way as we decide on other programmes not eligible for lottery funding. It would be absurd to give automatic protection to lottery-supported programmes when that protection is not available for other programmes.

No deal with the Treasury of the type interestingly proposed by my right hon. Friend is likely to be appropriate, even if it were possible to commit future Governments in advance. Whatever the affordable level of any given public expenditure programme, lottery funds are available to add to it—including projects similar to those which might once have fallen within that programme.

That approach is a sensible means of ensuring that with the public funds available—of which the lottery is a part—the real objectives for supporting the heritage, the arts, sport and charities are met. It follows that areas such as the national health service and education, which are clearly major continuing responsibilities of the Government, should be funded from public expenditure voted each year by Parliament, and should not rely on the public's propensity or otherwise to buy lottery tickets.

My right hon. Friend the Member for Mid-Sussex is also worried that Ministers might try to ensure that lottery funding goes to projects that they favour. It was precisely to prevent such interference that the Government appointed the 11 lottery distributing bodies to take all specific funding decisions independently of the Government. My Department has also issued guidance to other Ministers and Departments explaining the part that they may or may not play in supporting lottery applications. I can assure my right hon. Friend that both we and the distributing bodies maintain a close watch to ensure that those rules are not broken.

My right hon. Friend the Member for Mid-Sussex is also concerned about the introduction of the mid-week draw. Under the terms of the National Lottery etc. Act 1993, the licensing of the draw was a matter for the Director General of the National Lottery, not the Government. My right hon. Friend the Secretary of State emphasised, however, that the director general must ensure that the decision is compatible with the provisions set out in section 4 of the National Lottery etc. Act, which require the director general to exercise his functions in the manner that he considers most likely to ensure that the national lottery is run with all due propriety, that the interests of participants in the lottery are protected and, subject to those overriding considerations, that the revenue to the good causes is maximised.

The director general judged that the introduction of a mid-week draw was consistent with those duties, and allowed the licence to be changed accordingly. However, I take the point made by my right hon. Friend the Member for Mid—Sussex about the two newsagents: it is a very difficult point to deal with and one that the Government should be aware of. The director general, especially, might consider it again with some rigour.

I cannot emphasise enough that the protection of players is the uppermost requirement in the mind of my right hon. Friend the Secretary of State. My Department and the director general will monitor carefully the effect of the mid-week lottery to ensure that the interests of participants are not being undermined and that the players continue to receive the level of protection which Parliament intended when the Act was passed.

Perhaps the most important aspect of the new mid-week game, and one which has not been considered sufficiently—not by my right hon. Friend the Member for Mid-Sussex, but by others less well informed outside the House—is the effect that it will have on the amount raised for good causes. Hon Members may be aware that sales of lottery tickets have been decreasing slightly in recent months. Experience in other countries suggests that the introduction of a mid-week draw is likely to halt that decline and increase the turnover of the draw game by about 20 to 30 per cent.—from about £70 million to between £85 million and £90 million per week—and is therefore likely to push the lottery's turnover back to its peak level of about £5.5 billion per year.

Sales to date have borne out that prediction with an overall increase in sales for the on-line game of 30 per cent, representing an increase of 30 per cent. in the amount raised for good causes. It should be remembered, however, that Camelot held super-draws with an increased jackpot for the first four of the five mid-week draws to date, and that the mid-week draws' true impact on overall sales will not be clear for some weeks.

I note the concerns of my right hon. Friend about the introduction of a keno game and his interesting anecdote about it stripping his pockets of his money. The Government and the director general have already made their views clear about keno. Although it would be for the director general to consider any application to run keno-style games, no such application has been made. I should make it clear that we view keno as at the harder end of the gambling spectrum and therefore not appropriate as part of the national lottery.

My right hon. Friend the Member for Mid-Sussex also expressed concerns about betting shops taking bets on lotteries. I am sure that he is aware that the National Lottery etc. Act specifically prohibited bookmakers from taking bets on the national lottery, and despite some pressure from the industry the Government have not changed their view. Bookmakers are, however, taking bets on the Irish national lottery and their own new 49s game. Although we are keen to ensure that the national lottery is not associated with what we view as a harder form of gambling, regulation of the bookmaking industry is a matter for my right hon. and learned Friend the Home Secretary, who I understand is content with the developments. I shall, however, draw his attention to the concerns of my right hon. Friend the Member for Mid—Sussex.

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex

I think that it is right to say that the matter of the 49s is up for judicial review at the moment and therefore being actively considered. There clearly seems to be some confusion, some overlap, between gaming and betting law.

Photo of Mr Iain Sproat Mr Iain Sproat , Harwich

That is certainly an argument.

The primary aim of the lottery is of course to raise money for good causes. A successful lottery bid brings a number of benefits for communities, including, for example, regeneration, job creation, new opportunities for businesses and tourism, and new and improved cultural and sporting facilities. We want to ensure that everyone derives reasonable benefits from the opportunities that the lottery has brought about.

Alongside the flagship projects, smaller awards are the quiet lottery success story, as the reader of any local newspaper can testify. More than 74 per cent. of awards announced to date have been for less than £100,000. Lottery funds are having a real impact on the lives of everyone right across the country. However, the Government are aware that some areas of the country are still not doing well enough from the lottery, and to that end shall shortly be launching a new information leaflet to guide those interested in making an application for lottery funding. We shall also be encouraging local business men and those from the professions to offer their services to groups who are not familiar with grant systems.

Photo of Mr Bill O'Brien Mr Bill O'Brien , Normanton

I am grateful for the Minister's comment, because my constituency is one of the few that have received very little lottery funding. I believe that we are third or fourth from the bottom of the list. I hope that it will not be too long before the information is circulated so that my constituents and organisations in my constituency—I referred to the problems with smaller charities—will be able to take up the offer of improved distribution of lottery resources.

Photo of Mr Iain Sproat Mr Iain Sproat , Harwich

The hon. Gentleman has taken a long and admirable interest in the matter and, indeed, in the effect on charities. I will try to remember to send him a special copy of the leaflet. If he wishes, we could discuss how best to ensure that those who can benefit from the advice therein can be helped by him to make their applications so that his area gets its fair share of lottery awards.

In its first two and a half years of operation, the lottery has already made a remarkable difference to the capital infrastructure of good cause areas. Nevertheless, my Department is continuously reviewing the way in which the lottery works so as to achieve the best effect. After only approximately two years since the first awards were made, my right hon. Friend the Secretary of State has issued new policy directions to allow sports councils, arts councils and the heritage lottery fund greater flexibility in what they fund.

The sports councils have already launched revenue schemes under those new directions, which will provide support for our most talented athletes and attract and stage major international events in the United Kingdom. Further programmes to be announced later this year will provide community sports coaches and assist in identifying and developing talent in schools and sports clubs.

The arts councils have also launched revenue programmes under the new directions. The Arts Council of England has launched a two-stream revenue programme, "Arts For Everyone", aimed at established arts organisations—professional and amateur, youth or voluntary groups—putting together their first creative project, and at small professional arts organisations.

My right hon. Friend the Member for Mid-Sussex will be interested to know that the first arts revenue awards under the new directions were announced today by the Arts Council of Wales. They include grants of £5,000 to the Abergavenny arts festival towards the running costs of a small literature festival and workshops for teenagers and £1,758 to Llandysul primary school—I apologise to the Welsh for not, I dare say, pronouncing that properly—to stage the musical show "Joseph and His Amazing Technicolor Dreamcoat" in Welsh.

On 8 August 1996, my right hon. Friend the Secretary of State issued another new direction to the Arts Council of England, allowing it to fund a stabilisation programme for arts organisations. The purpose of the programme is to help arts organisations to gain long-term financial viability and to improve and secure management skills in those organisations. The programme will help organisations to consider and perhaps change their mission and the markets in which they operate, to inject new skills to help to achieve that mission, to provide balance sheet stability, and to deliver better value for money. The first successful applicants under the pilot stabilisation programme were announced in January.

The National Heritage Act 1997 will enable the heritage lottery fund to support a wider range of projects to provide greater public access to our heritage, support for education and youth-oriented projects and for information technology initiatives, and to preserve—

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.