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Orders of the Day — National Lottery Bill

– in the House of Commons at 2:30 pm on 14th June 2005.

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Votes in this debate

[Relevant documents: The Fifth Report from the Culture, Media and Sport Committee, Session 2003–04 HC196 on Reform of the National Lottery, and the Government's response thereto, Cm 6232.]

Order for Second Reading read.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport 3:32 pm, 14th June 2005

I beg to move, That the Bill be now read a Second time.

It is 10 years since the national lottery was introduced, and it has grown to be part of our national way of life;
indeed, some would now call it an institution. That is underlined by the fact that 70 per cent. of us play on a regular basis. Last year, just under 5 billion tickets were sold. Over the period of its life, the lottery has raised about £17 billion for good causes. By any standards, it has been a huge success, and I give credit to the Opposition for introducing it when they were in power. In particular, the Prime Minister of the time, John Major, played a major role in introducing the lottery, which has had broad support across the House for that decade or so. That is to the credit of all those on both sides of the House who promoted the original National Lottery Bill back in 1993 and developed it further in 1998.

Tickets do not sell themselves, and the choices between good-cause projects are sometimes hard to make. Success is the result of constant hard work and creativity by Camelot, the lottery distributor, the National Endowment for Science, Technology and the Arts and the National Lottery Commission, all of which should be congratulated on how they have conducted themselves over the past decade or so. They have helped to maintain interest and, importantly, confidence in the lottery.

Last year, we celebrated the 10th anniversary of the first lottery draw, and people all over the country have been marking the 10 years since the first lottery awards went to good causes. Advice centres, leisure centres, cricket clubs, wetlands sites and film theatres from all over the country have joined in and held celebration open days to say, "Thank you" to the people of this country who have played the lottery and who have therefore contributed to good causes. Nowhere celebrated more enthusiastically than the Eden project in Cornwall, which is one of many excellent projects that the Millennium Commission has supported with spectacular success.

When I became a Minister in 1997, I worked on regeneration, setting up the regeneration agencies and planning. I travelled to Mevagissey in Cornwall to examine the site of the Eden project and visited the Cornish clay quarry, as it was then, in a battered old Land Rover. When someone explained the concept of a big bubble on the side of the quarry, I thought, "They must be mad", but the Millennium Commission and others had the vision to back that futuristic project, and they were right to do so. I have visited the Eden project on a number of subsequent occasions—my children have visited it, too, and I hope to take my grandchildren there this year. The project was a good investment in itself, but it has also had a considerable impact on that part of Cornwall's economy, and it is important to acknowledge the contribution of the lottery, the Millennium Commission and others.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

Does the Minister agree that the organisers of the Eden project had a phenomenally good idea when they decided to open up the project for people to view while it was being built? They called their idea, "The big build", which was a great way to get people to take an interest in the Eden project.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

That was an excellent idea, and the specially built greenhouses in which the plants to fill the Eden project were growing also became a visitor attraction. The organisers did a lot of work to ensure that the Eden project was a success when it was eventually launched.

However, such success cannot be taken for granted. The national lottery must stay in close touch with what people are thinking and striving for, and it needs to communicate its achievements, which it has not done as well as it could have done. The lottery must develop to meet new aspirations, and all those involved must work hard, respond to change and deliver the best value for public money.

Some of those changes require a new legal framework to get money to those who are not expert in the system and who need money quickly, to allow good-cause funders to raise awareness of the lottery's successes and use modern techniques to involve the public in decision taking, to get more of the money into the front line rather than into administration and bureaucracy and to improve the powers of the regulator of the lottery games.

Photo of David Drew David Drew Labour, Stroud

I agree with my right hon. Friend that we must get the money to where it will be spent best, but some hon. Members have slight misgivings about clauses 7 and 8, which might allow the redistribution of balances of some elements of the lottery. He has discussed the Eden project; I am working on a project to raise money through the Heritage Lottery Fund to reopen the Cotswold canal, which relies on balances being held over on occasions until all the funding is in place. Does my right hon. Friend recognise the worry that if the Secretary of State could pilfer those funds, he might rob Peter to pay Paul?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I recognise that worry, which I shall address later in my speech. A related concern is the question why more than £4 billion was being held in reserve at one stage. It is a matter of striking a balance, but I hope that I can reassure my hon. Friend that the Secretary of State will not pilfer anything and will act in the best interests of the lottery.

Photo of John Bercow John Bercow Conservative, Buckingham

Like many Members, I am concerned about the transparency of the process. With regard to clause 14(2) and the power to distribute funds under section 36B of the National Lottery etc. Act 1993, can the right hon. Gentleman tell the House whether the order-making power is exercisable by the negative procedure of the House or according to its affirmative counterpart?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

If hon. Members would allow me to get through more than three paragraphs of my speech I will probably answer some of their questions when I come to the relevant points.

These changes will renew the vigour of the lottery and, we hope, sustain it for the next 10 successful years. Some hon. Members may ask me about the Olympics. Let me say that the Bill does not, of course, cover the framework needed for staging the Olympic games in London. Parliament has already approved legislation to make the new Olympic lottery games possible and to set up the distributor for that money.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

Just give me 30 seconds.

I am sure that on 6 July, when we come back from Singapore with the Olympic games, even Pete Wishart will be saying from his place in Scotland how welcome that success is for the United Kingdom.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (International Development)

Absolutely—I wish London great success when it comes to the bid in July. Nevertheless, can the Minister confirm that no funds will be taken from the mainstream lottery and given to the London Olympic lottery game? Is not it right that the commitment and purchases of those who continue to play the mainstream lottery should be honoured?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

The answer is yes. There will be displacement in terms of the Olympic draw. That has already been debated in this House during the passage of the Horserace Betting and Olympic Lottery Act 2004. The situation was clearly explained and the House voted for that legislation.

Let me re-cap on how we got to this Bill. The proposals are based on two rounds of consultation and involvement. The first of those was launched in 2002, with a very open agenda for change. People were asked for views on our emerging thinking and encouraged to make their own suggestions for change. What came through the reading of those reports and the subsequent comments that were made was a resounding vote of confidence in the lottery. We found that people wanted to know more about where the money had been spent and felt that it was right for Camelot and distributors to work together on this.

People also wanted more consultation and more involvement in decision making, while stressing the need for impartiality. They wanted it to be easier to apply for lottery funding and welcomed the idea of a single front door, particularly for smaller grants. There was overwhelming support for the concept of additionality and a strong belief that it was still relevant. There was recognition, too, that lottery funding needed to complement other streams of funding in order to deliver most benefit.

Although most people did not want to move to a single lottery distributor, there was support for a possible merger of the Community Fund and the New Opportunities Fund, as long as a sound case was made for rationalisation.

Photo of Philip Davies Philip Davies Conservative, Shipley

Does the Minister agree that far too often awards given from the national lottery money have been given to politically correct organisations that command very little support from the public, while very small organisations such as Fashion Services for Disabled People in my constituency, which command a great deal of public support, find the whole process so bureaucratic that it is very hard to get money? Will he assure me that we will have a system whereby more money goes to smaller groups that command very local public support and less money goes to politically correct groups?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

My strong advice to the hon. Gentleman is to think very carefully about which Division Lobby he goes through tonight. If he votes for the reasoned amendment tabled by the official Opposition he will continue to have bureaucracy, but if he votes for the Bill, he will streamline the process, make it effective and get money to the very people he wants to have it. [Interruption.] I am entitled to give the hon. Gentleman, who is a new Member, a bit of advice. I simply say that he should not believe everything his Front Benchers tell him.

Photo of Tony Wright Tony Wright Labour, Cannock Chase

People feel that there should be a connection between the amount of money that areas put into the lottery and what they get back from its distribution. There is a feeling that no such strong connection currently exists. I wonder whether my right hon. Friend could ensure that there is a stronger connection when considering the new arrangements.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

Again, if my hon. Friend will allow me to progress through the speech, I shall try to answer the question. There is no perfect solution. There will always be imbalances when deciding whether to base distribution on those who pay into the lottery or deprivation factors. However, we have tried to balance that.

Let us consider the Big Lottery Fund. In consultation, there was considerable support for bringing the Community Fund and New Opportunities Fund together. It made no sense in our view to run two separate bodies with such similar remits. Conversely, it makes sense for the Millennium Commission's residual functions, including any remaining balances of funds, to be transferred to the new lottery distributor. One body, one board, one set of overheads instead of three will mean more money for grants and cut costs and bureaucracy. The new body, the Big Lottery Fund, is at the heart of the important progressive reform that I am presenting to the House. The fund will also be the centre of lottery excellence, for example, in improving the assessment of capital projects for viability and developing cutting-edge ways of involving the public in decisions about grants and programmes.

Although the Department has not conducted any polling, we know that polls have shown evidence that the public regard health, education and the environment as important good causes.

Let me consider the balances. Careful preparatory work and consultation lies behind the provisions that we are introducing to ensure that money gets to the good causes more quickly. The size of the balances that distributors build up has always been a matter of concern in the House and, indeed, outside. We have already made much progress on that. We have developed guidance on managing the balances and we have simplified the financial framework in which they operate. More recently, the National Audit Office recommended more that the Department and distributors could do and we are following that advice vigorously.

All that has helped to get money out more quickly to where it is needed and to reduce the balances by no less than one third.

Photo of Robert Key Robert Key Conservative, Salisbury

The Minister has been generous in giving way but he has reached a crucial point and I hope that we will refer to it in detail in Committee. The point about the Heritage Lottery Fund is vital for cathedrals and ecclesiastical buildings. We all understand the desire to reduce balances and get the money out quickly but that is exactly what should not happen in the case that I mention. For example, the Heritage Lottery Fund estimates that, if it does what the measure suggests, it would reduce the available funds by £15 million in any year. That is almost as much as the entire spending on cathedrals and ecclesiastical buildings in the Church of England. If they are not allowed to have the money ready for the preparatory work—it takes a year to get the application in—heritage buildings could lose out seriously. I hope that we can reconsider the matter.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

With all due respect, there is a difference between £15 million and £3.5 billion. There must be balances in any organisation or business. However, the amount of the balances caused concern in and outside the House. I have rightly had to go on television and defend—or probably not defend—the position. We are holding more than £3 billion in reserves. There is a great difference between £3 billion and the few millions that the hon. Gentleman mentions. Any sensible organisation will have a reserve with which it continues to perform its functions efficiently and effectively. That does not mean holding balances of the amount that the distributors have been holding in the recent past.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

Can the Minister tell the House whether he believes that the current balances are acceptable or too high? Will he not acknowledge that it is bizarre that the Government are going ahead when the Public Accounts Committee, which is due to report on the issue, has still not produced its report?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

When the Public Accounts Committee produces its report, we will examine that. As I have indicated, the National Audit Office has given us further advice, we have tried to introduce a more managed regime in consultation with the Treasury, and we have reduced the balances by a third already. The NAO has indicated that we need to do a lot more to bring the balances down, and if the PAC, which will no doubt reflect on the NAO's report anyway—I cannot see it departing much from that—believes that it is prudent to reduce those balances further, and if that can be managed in a proper way that does not put at risk any of the schemes, it will be in everybody's interest to consider that. That is sensible and common sense.

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

Does the Minister accept that when dealing with large-scale heritage projects, which will amount to major expenditure over a number of years, it is prudent and only right that the Heritage Lottery Fund should set aside the money for those projects as soon as it has been committed? Otherwise, it could find that money has been expended and is not available to put forward to those good causes. Does he not accept that that is prudent for the Heritage Lottery Fund?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

Absolutely, I do not disagree with that at all—what the hon. Lady has said is sensible. A balance must be struck, however, in relation to having money in the bank that could be used for other purposes and it not being there to cover that type of heritage expenditure. We have given assurances, and I will refer later to the undertakings that we have given to one of the distributors, the Heritage Lottery Fund. We have tried to take on board what we believe is a reasonable request to reduce those balances. We have done that in consultation with the Treasury and given new guidelines, and we have also taken on board what the National Audit Office has said. If the hon. Lady believes that she is the sole custodian of wisdom in this area, and far better than the National Audit Office or anyone else, that is fine, and she will table relevant amendments in Committee. I hope that at the end of the process the Opposition will defend keeping public money in accounts when it could be used for good causes—[Interruption.] It is public money, and if the Opposition are not going to use it, that is fine, and they will defend that at another time. Money has been drawn down and spent on good causes, probably in some Opposition Members' constituencies. There is over £1 billion less waiting in the bank now than there was two and a half years ago, and I do not believe that taking out that £1 billion has done any damage to the heritage lottery distributors or to any scheme in the pipeline. That £1 billion is helping many projects up and down the country.

What does the Bill propose? The Bill will make changes to the framework of the lottery to make it more responsive to people's priorities and to maximise the money going to good causes. Clauses 1 to 5 deal with the regulation of the lottery through the National Lottery Commission. The chairman would no longer change annually and it would be possible to have executive board members, putting the commission in the same position as the companies with which it will be dealing. Clause 6 and schedule 1 deal with amendments to the licensing structure of the lottery. As we announced in November last year, the new system is designed to deliver significantly greater competition to the licensing process with a clear presumption that there will be a single licence.

Clause 7 deals with the apportionment of the national lottery fund. The new good cause will be set up for the Big Lottery Fund covering half of lottery funding. This good cause will be very wide so that the Secretary of State will have the power to prescribe expenditure at the highest level. She will also be able to prescribe "devolved expenditure", which will be the responsibility of country committees set up by the Bill and subject to direction from the appropriate devolved administration.

Clause 8 provides for a reserve power to re-allocate excessive unspent balances from one distributor to another in the same good cause. It would be used only as a last resort after consultation and affirmative resolution by Parliament.

Photo of Nigel Dodds Nigel Dodds Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Treasury)

On clause 7, I welcome the fact that devolved Administrations in Scotland, Wales and Northern Ireland will be given a greater say in setting priorities, determining strategy and so on, but what will the quantum be in terms of devolved expenditure? It would be helpful to know the answer to that, if the Minister is in a position to give it.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

Such moneys will be broadly in line with current expenditure, but we are trying to change the way in which that expenditure is administered, so that it is possible to respond much more sensitively to the needs of countries with devolved Administrations.

Photo of Siân James Siân James Labour, Swansea East

Does the Minister agree that the Bill will give Wales and Scotland greater powers to decide where and how lottery moneys are spent, and a greater decision-making voice to communities such as mine? Does he further agree that that is a good thing?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

Absolutely. [Interruption.] As my hon. Friend will learn, unfortunately we get a bit of stupidity from the Opposition from time to time. We are discussing a very important issue: how we can respond to public need, in the light of consultation and opinion polling, and encapsulate it in the Bill. My hon. Friend makes a very valid contribution by pointing out how the Bill will operate, and the way in which her constituents and the people of Scotland will gain from it. We will respond to what they and others have said, but my hon. Friend will doubtless learn that the Opposition do not take this issue as seriously as they should.

Clause 9 provides for a new system of allocating investment income from the national lottery distribution fund, in the same proportions as ticket sales income, to each lottery distributor. So the first step has been taken in the direction to which my hon. Friend Mrs. James referred. Clause 10 will enable lottery distributors to seek, and to take account of, public consultation in making distribution decisions. We want the public to have a say in such matters, and this provision will remove the legal uncertainties that have proved an impediment to greater consultation.

Photo of Ronnie Campbell Ronnie Campbell Labour, Blyth Valley

The Minister is being very generous in giving way. The lifeboat services that protect our coasts received no lottery money under the old legislation. Does this Bill enable them to claim money for the running costs of a lifeboat?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I cannot answer that question, directly but I will take note of it. [Interruption.] I note as I look at my officials that by the time that the Under-Secretary of State for Culture, Media and Sport, my hon. Friend James Purnell, winds up, he will be able to answer it.

Clause 11 will ensure that lottery distributors have powers to publicise the lottery beyond their own funding areas. Clause 12 will allow the Big Lottery Fund to make grants in the Isle of Man, where people do indeed buy tickets. Clauses 13 and 14 and schedule 2 will set up the Big Lottery Fund and allow it to distribute lottery funds. The fund will also be able to distribute non-lottery funds, provided that they are within the good cause, and give advice about the distribution of lottery money and applications for grants. The fund will be required to comply with any directions from the Secretary of State relating to UK and England expenditure, and with directions from the devolved Administrations relating to expenditure in their countries.

Clauses 15 to 18 deal with the dissolution of the old distributors that the Big Lottery Fund will replace: the Community Fund, the New Opportunities Fund and the Millennium Commission.

Photo of John Bercow John Bercow Conservative, Buckingham

The right hon. Gentleman cantered on to clause 15 and I was gravely disappointed, as I have always regarded him as a man of his word. He specifically undertook to answer my question about clause 14(2) of the Bill, proposed new section 36B of the National Lottery etc. Act 1993, and the means by which the order-making power is exercised—the negative procedure of the House or its affirmative counterpart. Perhaps he can now advise me.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I am now looking at the explanatory notes, which I am sure the hon. Gentleman has read, and I believe that the negative procedure applies. If I am wrong, I will get back to him, but that is my understanding. I hope that I can now canter on a little further, if he will allow me, to clause 19.

Clause 19 defines charitable expenditure, in relation to the Big Lottery Fund good causes, as expenditure that is "charitable, benevolent or philanthropic". It amounts to a purpose-based approach, rather than an institution-based approach.

Good causes has been a matter of some concern, and I would like to give an absolute and clear assurance that, although we are making important changes, we are not seeking to change the scope of the good causes, nor opening up the fundamental principle of what lottery money can be spent on. When Parliament last considered the issue in 1998, health, education and the environment were added as things that are as important to people's lives as sport, heritage and the arts. The Bill reaffirms the existing good causes, whose shares we have guaranteed until 2009. We have also said that the same good causes will continue beyond 2009, and this autumn we will consult about the overall priorities to be set under the existing powers for those existing good causes.

Photo of Boris Johnson Boris Johnson Conservative, Henley

Will the Minister explain in more detail how the principle of additionality is supposed to work in respect of health care funding? Will he also confirm whether the spending of £93 million on magnetic resonance angiography cancer scanners is in any way additional to mainstream Government spending?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

During the consultation on what the populace wanted, we discovered that they viewed health, education and the environment as areas already covered by Government expenditure, but in respect of which additional expenditure should be made. I cannot comment on the specific case that the hon. Gentleman mentioned, as I have no evidence, but I can say that when people have been consulted on health, education and the environment, they have expressed overwhelming support for what we are doing. Evidence provided not just by the Government, but by MORI and others, strongly suggests that the public regard education, health and the environment as good causes that should be supported.

Photo of Julie Kirkbride Julie Kirkbride Conservative, Bromsgrove

Does the Minister admit, following what he has just said, that the Government's proposals breach the principle of additionality? He was generous in paying tribute to the last Conservative Government who set up the lottery on the basis of five good causes, one of which—the millennium fund—we can dispense with. The four other good causes—sport, arts, heritage and charity—were then to receive 100 per cent. of the cash. However, the Bill that the Minister now proposes offers 50 per cent. of the money to funding causes, including education, health and the environment, that have traditionally been areas of Government activity paid for by the taxpayer. The Minister may be right in saying that the public support those causes, but the Bill surely breaches the principle of additionality, despite the Minister's claims that it does not.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

The Opposition have their views and will want to canter around the course on the basis of them. Let me be absolutely clear: the results of two consultations—the ICM and YouGov polls—were strongly indicative of public opinion. The Opposition are perfectly entitled to go against public opinion. That is fine, but it is also probably why Conservative Members sit on the Opposition side of the House and Labour Members on the Government side. It is entirely their choice, but life moves on.

It may well be that what happened in the mid-1990s was right and appropriate at the time, so let us examine the history of the lottery. Some mistakes were made over huge amounts of money, but the lottery has been more successful by any standards subsequently, with more money going to good causes. Yes, there were problems with revenue and capital, but we have dealt with them. Yes, there was a problem about geographical disparities throughout the country when judged against need, but we have dealt with that, too. We have tried at least to keep in line with public opinion, which is why we conducted wide consultation in 2002. We have not chucked it in the bin as a result of people's accusations, but used it constructively.

A further consultation has been held and its findings have been incorporated in the Bill, as has the information gleaned from opinion polls. If the custodians of wisdom on the Opposition Benches so choose, they can table amendments in Committee, just as they have done today. However, I believe that the Bill conforms to the wishes of people outside the House and that it will ensure that their money is spent as they want it to be spent.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I should like to try and push my hon. Friend the Minister in a different direction. Will he consider abandoning the idea of additionality? It is nonsense and a complete figment of the imagination. Additionality does not exist except as a way of saying that lottery money can go only to projects that are not getting money already from some other source. In the early years of the lottery, former mining constituencies such as mine found it difficult to get money for arts or sports projects, as they got only a quarter of the funding received by other areas, such as Henley or Bromsgrove. Bringing the priorities of lottery funding more in line with the views of constituents such as mine has been a significant and welcome change.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

There is some truth in what my hon. Friend says, but I repeat that these matters were part of the wide consultation held in 2002. Further consultation has been held since, and it was accepted that additionality was an important principle that should be embodied in future legislation. The Government have a responsibility to respond to that and to manage additionality in the best possible way. I agree with my hon. Friend to the extent that the word "additionality" presents problems because it can be interpreted in a variety of ways—[Interruption.] I hear giggles from Opposition Front-Bench Members, but that difficulty also existed when the Conservative Government were in power.

Another difficulty is that the principle of additionality has prevented the lottery from being as holistic in its approach as it should have been. We are trying to address that problem. I am not saying that projects can always turn to the Big Lottery Fund for money, but they will be able to seek additional funds from other sources, as long as they stay within the terms of the Bill, and give advice to other organisations. That shows that we are trying to adopt a joined-up approach to this problem. We believe that there will be benefits in terms of added value, and that results from the money that is invested will be improved. We want to move the lottery on, with the support of all those who buy tickets every week, and of the good causes that benefit.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I will, but this is the last time, as I have been speaking for more than 30 minutes already.

Photo of Robert Key Robert Key Conservative, Salisbury

I am grateful to the Minister, and want to help him. The most sensible thing that he has said is that the lottery should move on. I was the Minister responsible for taking the original legislation through Parliament, and I remind him that the Labour Opposition of the day fought against additionality mainly because they believed that it would reduce the takings from ticket sales. We agreed, but that is why so many of the Minister's predecessors—notably Lord Pendry—fought so valiantly against the principle of additionality. Experience may have caused minds to be changed, but we must not forget what motivated Labour Members at the time. In those days, all the available evidence—primarily from the Republic of Ireland—suggested that acceding to additionality would cut the number of tickets sold. We have moved on since then, and we must not impugn each other's honesty on this matter.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I disagree with the hon. Gentleman, although my colleagues may well have argued in the way that he describes. Let me offer him an example of how lottery money is used that runs counter to what he has just said. School sports co-ordinators are an integral part of the school sports partnerships, of which there are now 3,000. Under that scheme, teachers are able to devote two or three days a week to that role, and originally they were funded out of the lottery. However, that funding is now part of the core expenditure of the Department for Education and Skills. The amount of money involved is significant, and it contributes towards delivering the sports programme in schools throughout the country. The investment is sustainable, because it has been taken over by the Department for Education and Skills and, through Sport England, the money thus liberated has been put back into sport.

There are a number of other examples of how the problem identified by Mr. Key can be seen to work both ways. In those cases, lottery money has made a significant contribution in the first instance, but has then been taken over by core expenditure in the relevant Department. I have not prepared a balance sheet or conducted a cost-benefit analysis of these matters, but I urge the House to be careful about questioning additionality, as it cuts both ways, in the way that I have set out.

On getting money to causes quickly and balances down, let me say some more about how the Bill responds to concerns in Parliament that lottery money is not always distributed as quickly as it might be. I am hopeful that the advice from the National Audit Office will be followed, but we have made slower progress than I would have liked. I have said that many times at the Dispatch Box and outside the House. We cannot be complacent, because £2.5 billion in reserve is still a great deal of money that should be, at least in part, distributed. We can no longer be relaxed about that until more progress has been made, so the reserve powers are designed to ensure that all distributors act quickly.

Last year, the proposed new powers were misrepresented as an attack on our heritage. That attack has been echoed this afternoon. It was said that our proposals would mean less money for heritage projects. That was simply not true, and I hope that in the discussions and exchanges of letters that we have had since then, we have been able to explain that and put minds at rest. Nothing in the Bill will allow money to be taken from heritage and spent on something else. The Bill has been clarified in that respect.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

If, as the Bill would allow, the Government were to redistribute the interest on balances in a different way from the way it is done presently, the heritage lottery fund would lose £15.7 million in the current year, as was pointed out earlier. That is a redistribution to other good causes.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

What I said was that the allocation laid down in the original Act means that the money goes to the three funds of sports, heritage and the arts. The hon. Gentleman is right in that the interest on the balances—the proceeds on the ticket sales—will be redistributed differently. However, the percentage distribution for heritage, the arts and sport and the Big Lottery Fund will be the same and the terms of reference will remain the same.

Photo of Wayne David Wayne David Labour, Caerphilly

Will my right hon. Friend confirm that at present distributors have a perverse incentive to hold on to funds for as long as possible because they can claim the interest?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

Absolutely. The problem is not new. The distribution of regional structural funds from the European Union has experienced the same problem. Funds have not been drawn down, so the EU has started to put claw-back clauses into the agreements. That is an option that we could have taken, but we have not done so.

In 1998, Parliament approved setting up the New Opportunities Fund to distribute lottery funding to a new, additional good cause of education, health and the environment. The new good cause has been successful and popular. It has enabled lottery money to support activities that go beyond what it is right for taxpayers to fund in health, education and the environment. The charitable good cause, administered by the Community Fund, is also enduringly popular and has helped tens of thousands of voluntary and community sector bodies to carry out their important work.

I acknowledge that some have said that a Big Lottery Fund could lead to voluntary and community sector organisations losing out. I can give a categorical assurance that that will not happen. But there will be change. The alternative, of a repackaged Community Fund running a larger version of the so-called open programme for the voluntary sector, is not the way forward.

As a result of the proposals in the Bill, the voluntary and community sectors will have access to the two thirds of the Big Lottery Fund money that is currently going to the New Opportunities Fund. The Big Lottery Fund has given a clear undertaking that 60 to 70 per cent. of its funding will go directly to the sector—a significantly higher proportion than before.

In future, the Government will not—[Interruption.] I wish that Mrs. May and Mr. Foster would listen to what I am saying. The Government will not decide programmes, budgets or partners, as has been the case with the New Opportunities Fund. Within a framework of broad themes, outcomes and priorities agreed with the Government, the Big Lottery Fund will make all the important decisions about who, what, when and how to fund. Consultation on the emerging themes has shown a good degree of support for them and we will have more to say about that if the Bill is given a Second Reading. I underline that we are responding to what was said in the consultation, which was that people wanted more power to be given to the distributors, but with a clear direction of broad policy. That is exactly what is contained in the Bill, and it has been misrepresented by some on the Opposition Benches.

I should like to say a few words about providing a lottery for what people want and providing capital for communities. The national lottery is different: it is additional to Government expenditure and decisions are taken independent of Ministers. But it is the people's money and decisions cannot be taken in a vacuum by the great and the good. So it will not be politicians taking decisions, but it will not be the great and the good either. If the lottery is to flourish, lottery distributors must keep in touch with popular aspirations and involve people in taking key decisions. The new powers will allow them to do just that. We need a wholehearted commitment not just to consultation, but to true involvement.

Only last week, I was briefed by the acting chairman of the Big Lottery Fund. I am delighted that 3,000 people have written in response, and 2,000 have actively participated in roadshow events throughout the UK about how the fund will work. I want to see this development continue, because that type of ownership is important to the integrity of the lottery.

We consulted on the broad themes for the fund, which were described as community learning and creating opportunity, promoting community safety and cohesion, and promoting well-being. Within the final version of those themes there will be very lightly prescribed programmes, including the responsive and successful "awards for all" scheme, and there will be others in which priorities are set taking full account of ideas emerging from consultation.

At the same time as we consulted on distribution, we launched a consultation on the award of the lottery operating licence. This was prompted by the rise of new challenges to the lottery, especially other forms of ambient gambling and the less-than-smooth award of the last licence that we all remember in 2000–01. We must ensure that the lottery continues to raise as much money as possible for good causes through effective competition for the licence, and that it retains public confidence.

Drawing on the responses that we received and the work of both the Public Accounts Committee and the Select Committee on Culture, Media and Sport, we have concluded that the current system for awarding a single licence has served the lottery well in the past and should do so again. We are determined to see a successful competition for a single licence. There are improvements that the regulator, the National Lottery Commission, could consider making to the bidding process: switching to two stages; reducing information required from bidders at early stages; and possibly contributing to bid costs. Those underline our confidence that we will have a successful competition for a single licence next time. That is what we want to happen, what is best for those who benefit from lottery funding and what the commission is working to make happen.

My clear and firm presumption is that there will be a single licence awarded by competition, and that there is sufficient market interest to give confidence that that will happen. However, even though that is what we want to happen, we cannot absolutely guarantee it; it is a market, probably like any other. In the extreme circumstances—I emphasise the word "extreme"—of an unsuccessful competition, unwelcome as that would be, we would be negligent not to have a fallback, a plan B. We therefore propose to introduce a reserve power that would allow the commission to offer for competition a small number of licences to run different parts of the lottery. The commission, however, will have to be clear from the outset how it would define an unsuccessful competition, and it will take into account the uncertainty that the fallback could create among potential bidders.

We also propose that the commission be retained as a regulator of the lottery, but be strengthened by increasing the term for which its chair is appointed and offering the possibility of executive members. I believe that the prize of running this world-class—it is indeed world-class—lottery should attract credible bidders for a single licence to give us a lottery that changes people's lives, and our national life, for the better.

Here is the story so far: more than £17 billion has been raised for good causes. Sales have rallied in 2004, rising by some 5 per cent., which is a clear vote of confidence in the lottery. Balances in the banks have been reduced even further. The Big Lottery Fund has made an excellent start, working within existing powers. So the House can be proud of the story so far—not just one party has been supportive of the lottery, but all parties in the House. Regulation is working well and good cause money is well spent.

The Bill aims to ensure a fair lottery, yielding good prizes and an excellent return for good causes. We believe that the Bill will address weaknesses that have emerged and underpin the many successes. These practical improvements, built on two rounds of consultation, will further develop the lottery and confirm it as the best of its kind, probably in the world, and it will therefore be fit for purpose for another 10 years.

I commend the Bill to the House.

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport 4:22 pm, 14th June 2005

I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof:

"this House declines to give a Second Reading to the National Lottery Bill because it creates the Big Lottery Fund, which will take the National Lottery further away from its original purpose of providing new resources to charities, sport, heritage and the arts;
because it breaches the principle of additionality and allows the Secretary of State too much interference over the direction of Lottery funds and distributors;
because it fails to restore funding to the original four good causes, which have lost £3 billion in Lottery funding since 1998;
and because it fails to give the public sufficient say in where Lottery funding will go."

I feel that at the beginning of this debate I should almost declare an interest because many good causes and projects in my constituency have benefited from lottery funds—not least the £5 million given to the first class Norden Farm arts centre in Maidenhead. Of course, that could be said for all Members. Equally, I am sure that we all know of causes that have bid for funds and been turned down. Sadly, I fear that as a result of the Bill more good local causes will be deprived of funds—not because they do not have a good case, but because they do not fit the Government's ideas of what money should be spent on.

As the Minister said, the lottery has become part of our way of life. Every week, millions of hopeful Britons buy their lottery ticket, not only convinced in the knowledge that it could be them, but reassured that by taking part they are contributing to a host of good causes—that the money they donate goes to charities, to community groups, to improving the arts and sports and to restoring our heritage sites.

Billions of pounds have been raised as a result of public support for the lottery, and it is a shame that the Government do not hold the lottery in the same esteem. The Bill will lead to the lottery further becoming just another arm of Government. The Government's contempt is evident in the fact that we are only now debating this issue, when in fact the Department for Culture, Media and Sport started the administrative process of establishing the Big Lottery Fund back in October 2003. It was set up by ministerial sleight of hand, without consultation or legislation in the House, and it is extraordinary that, more than 18 months later, we are only now getting down to the nitty-gritty of the Bill—and that the Government intend that the Committee stage of the House should start and finish in October.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

Later tonight, we shall debate a programme motion stating that deliberations in Committee must finish by 20 October. Does the right hon. Lady agree that even if the Committee were to sit on 11 October, the first day back after the summer recess—which is extremely unlikely—we should have only four days to consider the Bill in Committee? Is not that bizarre?

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

Not only is it bizarre, it is unacceptable. It is particularly bizarre because the Minister needs to get the Bill through to establish the legislative backing for the Big Lottery Fund.

"We do not believe it would be right to use lottery money to pay for things which are the Government's responsibility."

We agree wholeheartedly—but those were not my words, they were those of the Prime Minister in 1997, spoken in the heady days of new Labour and cool Britannia—[Interruption.] The Minister says that he agrees with those sentiments.

Let us look at what the Government have actually done with lottery funding: £231 million has been spent on ICT training for teachers and school librarians; £93 million on hospital equipment, as my hon. Friend Mr. Johnson pointed out; £50 million on renewable energy; £42 million on the school fruit project; and, of course, there was the £45 million that the Government snaffled to pay for the Jamie Oliver school dinners project, trumpeted by the Secretary of State for Education and Skills as the Government's solution to the school dinners crisis. How many people bought their weekly lottery ticket thinking that the money would be spent on school dinners?

None of us would argue that those are not worthwhile projects and that they do not deserve support, but we take exception to the Government dipping their hand into the cookie jar to take money from good causes throughout the country. By establishing the Big Lottery Fund, the Government will establish in law the right to fund projects, through the lottery, that the taxpayer would rightly expect to be funded direct from Government. Training for school dinner ladies and the provision of hospital equipment are things that we all expect to be paid for by the taxes that the Chancellor raises, not to come from the coffers of charities and good causes. Every pound that the Government choose to snaffle in that way is a pound that cannot go to help community groups or to preserve our historic buildings.

The Minister claimed that the Bill will turn the lottery into something holistic and joined up. I say that the Government are turning the national lottery into yet another of the Chancellor's stealth taxes. I am surprised that we cannot see a great golden hand pointing down from heaven over No. 11 Downing street, because Members should have no doubt that, increasingly, the Chancellor will be a guaranteed lottery winner without even having to buy a ticket.

When the lottery was established in 1993 by the then Prime Minister, John Major, he was clear that its proceeds should be spent on the then five good causes: sport, the arts, charities, heritage and the millennium fund, which by definition was to be wound up by the end of the last decade. He was clear from the outset that lottery money should be used for additional spending on causes and activities that the taxpayer had not been able to cover. He said:

"By 'additional', I meant in addition to those existing resources already provided by the taxpayer through the Treasury."

This afternoon, the Minister told us that the additionality principle would not be eroded. In typical Labour sleight of hand, the Government have a new definition of additionality:

"Additionality has never meant that Lottery projects should be completely divorced from public services and existing Government initiatives. They must be additional and they can be additional in many different ways."

In the words of Stephen Bubb, who heads the Association of Chief Executives of Voluntary Organisations—ACEVO:

"Good cause money mustn't be there to plug gaps in departmental budgets at the expense of charities."

The Government have carried out a smash-and-grab raid on lottery funds and the Bill will enable them to commit that crime again and again, without so much as an ASBO against them.

Photo of Angela Smith Angela Smith Labour, Sheffield, Hillsborough

Will the right hon. Lady tell me the difference between lottery money given to charitable groups providing sports facilities for children and lottery money given to charitable groups providing sports facilities for children in schools as part of an extended school facility? Does that not mean that the additionality principle is not breached?

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

If the money is given to charitable causes that choose to use it for sports facilities, whether or not on a school site, the additionality principle is not breached. However, I suggest that the hon. Lady read the Bill to discover the Government's precise intentions, because the Secretary of State will be able to direct funds in a way that was not intended when the lottery was set up.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I give a guarantee that between 60 and 70 per cent. of the Big Lottery Fund's income will go to communities or charities. The fund will be bigger because we will have removed bureaucracy: between £6 million and £12 million will be available to the distributor because bureaucracy and administration will have been reduced by bringing three schemes together into one. I repeat, there will be a bigger pot and between 60 and 70 per cent. of the money will go to communities or charities. Whoever made the statement to which the right hon. Lady has referred is wrong about the amount of money going to charities and communities.

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

It is no good the Minister saying that a great benefit of the Bill is that it will reduce bureaucracy, when it was the Government who created that bureaucracy when they introduced the New Opportunities Fund. The Minister claimed on the radio this morning and in the House this afternoon, both in his speech and his intervention, that one of the great benefits of the Bill is that it will reduce administrative costs and bureaucracy—but why were they there in the first place? They were there because the Government set up the New Opportunities Fund, a body that was to direct how lottery money was spent. I listened carefully to the Minister's statement about the percentage of Big Lottery Fund money that will go to charities and I am grateful to him for having made it, but we know that the Big Lottery Fund will be subject to far greater direction from the Government and the Secretary of State because that is stated in the Bill.

The Conservatives have grave concerns about the intentions expressed in the Bill. That is why we, with Liberal Democrat Front Benchers, have tabled a reasonable amendment

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

I am grateful to the hon. Gentleman. I consider the amendment to be both reasoned and reasonable. We are not playing party politics. Our aim is to protect the good work of a body that has had a lasting impact in communities throughout the country. It has restored historic buildings to their former glory, helped young people to achieve sporting greatness, supported local charities and funded arts projects. We must not allow it to become the Government's milch cow, to be milked by Ministers at will.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I understand the right hon. Lady's argument, but from the viewpoint of a constituency that is very different from hers, the Bill looks different. The original aims of the lottery were framed very much around a middle-class understanding of charity. The aims introduced in more recent times have made access to the funding much more possible for constituencies such as mine. Rhondda does not have many great historic buildings, or an opera house, or even a rowing museum. For some constituencies, especially former mining constituencies, it is extremely important that the lottery has been rejigged so that it meets the needs of the whole country, not just the needs of constituencies such as hers.

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

The hon. Gentleman refers to the big architectural and heritage projects, and of course not every constituency has one of those, but every constituency can benefit from money going to local arts projects, sports and charities. It is interesting that he comments on the amounts going to different constituencies, because it is my understanding that the top 100 constituency beneficiaries of national lottery distribution contains a significant—indeed, overwhelming—number of Labour seats.

I am not making any claims about the political distribution. It is an interesting reflection that the hon. Gentleman is claiming that seats such as his do not have the ability to benefit from the lottery. My argument is that they have that ability, as set out in the clauses of what became the 1993 Act. Local sports clubs and arts projects can benefit, and should be benefiting, as well as local charities. That was the point of the lottery. Under the terms of the Bill, the Government are abandoning the idea that was crucial when the lottery was first established, namely, that distribution should be at arm's length from the Government.

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

The Minister keeps saying that things have moved on. His argument is that the Government can now take the lottery money and spend it for themselves, and that that is all right because we are 10 years on and things have moved on. That is not what the issue is about—it is about how the money that people think goes towards good causes should be distributed and whether the Government should be able to direct that money.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I remind the hon. Lady that there have been two consultations. A number of opinion polls have been conducted, not by the DCMS or the Government, but by others. All the polls have indicated that people want health, education and the environment to benefit, and that has been happening since 1998. Full support has been given to what is in the Bill. I am talking about people who have been consulted. Does the hon. Lady reject the consultations? That information has come out following the two opinion polls to which I referred in my speech.

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

I doubt whether the consultations gave full support to exactly what is in the Bill. As for the Big Lottery Fund, we have seen what has happened over the past few years given the Government's stealthy encroachment on the lottery. The percentage of the lottery over which Government have potential control has risen from an original 13 per cent. to 33 per cent. and now to 50 per cent. That is what the Bill does. In establishing the Big Lottery Fund, the fund will take 50 per cent. of the lottery proceeds to be allocated for prescribed expenditure, that being

"expenditure of a description prescribed" by order of the Secretary of State.

On the maths that I have just set out, one does not have to be Carol Vorderman to see where the Government are taking us, which is to a single lottery distributor that is doing the bidding of Ministers. We believe that the lottery should be independent of Government but accountable to Parliament. It should not become a tool of Government.

I shall give some more specific examples. The Bill will change the meaning of charitable expenditure in relation to lottery funding from expenditure by charitable, benevolent or philanthropic organisations to expenditure for a benevolent or philanthropic purpose. We realise that the Prime Minister sees himself as a benevolent ruler, but as a party we are not prepared to hand over the purse strings of the lottery for the benevolent use of his Ministers.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (International Development)

Opinion polls are being cited by the Front Benches, but we have found that 77 per cent. of respondents would like a say in decisions on which of the causes lottery money should be spent. Does the right hon. Lady think that that view should be taken seriously?

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

I was going to mention that. During the election, we put forward a proposal to give people a much greater say in how lottery money should be spent. I think that there is value in trying to find ways of doing that.

We are concerned that the Big Lottery Fund will be required to comply with policy directions issued by the Secretary of State, whereas the previous rules only required the community fund to take account of the policy directions given to it.

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

If the hon. Gentleman will let me make a little more progress, I will give way to him.

The Big Lottery Fund will have to comply with directions from the Secretary of State rather than taking account of them, as happened previously. In one stroke of the pen, the Secretary of State is scooping up powers to dictate the direction of lottery funds.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

Does the hon. Lady remember that the clause that her party put into the 1993 Act provided that:

"A body shall comply with any directions given to it by the Secretary of State"?

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

Indeed; there has been such a power throughout the lottery's existence. At the beginning, it was thought necessary to have a provision to ensure that lottery funds were not spent improperly or inappropriately. However, the Secretary of State will now prescribe expenditure by the Big Lottery Fund. He will set out ways in which it should channel its funds, and the purposes on which those moneys should be spent. Bit by bit, the Government have put their hand into the lottery pot. That change fundamentally undermines the independence and integrity of the grant-making system, along with, sadly, the esteem in which the lottery is held by the vast majority of the public. That undermines the independence of the Big Lottery Fund to determine its own strategic direction and to make decisions free from interference. We must not allow the Secretary of State to manipulate charitable works and good causes for political motives.

I am concerned that the legislation enables the Secretary of State to make orders specifying amounts and periods of lottery expenditure. I freely acknowledge the improvements in drafting that resulted in the draconian powers of the first National Lottery Bill being consigned to the wastepaper bin, but there is little doubt that the level of prescription is still too great. The Minister will know that many charities and organisations have expressed concern about the Secretary of State's new powers to move funds between lottery distributors. Ministers have said that that power would be used only as a last resort, but the sad truth is that those assurances only confirm that those powers are there for a reason. They can be used against good causes that do not please the Minister. If they are not used, they can be held as a big stick above charities' heads. The director of the National Council for Voluntary Organisations said:

"NCVO remains concerned that the lottery Bill still gives the Government too great a degree of control over lottery funding. There also remains no requirement on the Secretary of State to consult anyone outside of Government before making orders, issuing directions or defining expenditure".

Charities are deeply worried about the implications of the Bill, and we should listen to them.

It is not only the charities that are worried. Earlier, a number of hon. Members, including Mr. Drew and my hon. Friend Robert Key, expressed concern about the redistribution of balances, and there was an exchange with the Minister.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

May I make clear what is actually in the Bill? Balances will not be moved from one good cause to another, but the interest accrued on those balances can be moved. The right hon. Lady, however, is talking about balances, which cannot be moved from one good cause to another.

Photo of Theresa May Theresa May Shadow Secretary of State for the Family, Culture, Media and Sport

The point that I was making was a simple one. If the Minister would listen to the whole argument, he might understand it better.

The Bill does two things—it allows for the redistribution of interest, as the Minister said, but it also allows for the movement of balances from one distributor to another. The Government could therefore require that money held by the Heritage Lottery Fund for works on a heritage site be assigned to the Big Lottery Fund to distribute. The Minister has suggested that the money could be distributed for heritage purposes, but it can be moved to a different distributor for allocation. As I said in my intervention on the Minister, the whole point of the Heritage Lottery Fund is that it has been set aside for particular projects, so there is little point in moving funds from one distributor to another unless the intention is that the balances should be spent differently. If that is the case, who will tell the heritage project that comes to ask for its money that it cannot have it because the Government have decided that someone else should distribute it?

It is evident from the Bill that the Government have failed to understand what is needed to breathe new life into the lottery and to secure the resources for good causes into the future. The spin from the Government is that the public will have a greater say in where the money goes. Indeed, as I said in response to an intervention, that is something for which we argued in our manifesto at the general election. In recent weeks, we have seen the new "big idea" to restore support for the lottery. The people's millions project will give the public a chance to vote for good causes that they see on "Coronation Street" or "GMTV". The Secretary of State said it was

"a big say in how lottery money is spent".

Since its inception, the national lottery has donated more than £16 billion to good causes. The people's millions project totalled £66.5 million. That equates to little more than 1 per cent. of lottery grants in any one year. This is not a big say; it is a big con.

We want to restore the public's faith in the lottery by giving them a greater say in how money is spent. Public confidence has been undermined by the Government's misuse of lottery funds and by the politically correct awarding of grants. It is time to take the Chancellor's hand out of the lottery till. If the Bill becomes law, we will be establishing not the people's lottery, but the Secretary of State's lottery. That is why we tabled the reasoned amendment. I urge my colleagues and all those in the House who want lottery funding to continue to go to good causes to support it.

Photo of Wayne David Wayne David Labour, Caerphilly 4:45 pm, 14th June 2005

When the national lottery was established by Act of Parliament in October 1993 and then brought into existence in November 1994, there was, it has to be said, a great deal of concern. People thought it a wrong-headed idea that would not generate the resources that were anticipated or claimed by some. There was concern, too, that it would undermine the morality of the country.

I am pleased to say that that has not been the case. The lottery has been very successful—so successful that it is estimated that some 70 per cent. of the people of this country regularly play one game or more. Although some people have pointed to a gradual decline in participation since 1997–98, that modest decline has been reversed, and in 2004–05 we saw an increase in the income generated and in the number of people participating. That has happened to such an extent that we are able to say that, to date, some £16.8 billion has been raised by the national lottery; 50 per cent. of that has been allocated to prizes and 28 per cent. to good causes. In other words, the lottery has been a success; indeed, it is one of the most successful lotteries of its kind, if not the most successful, in the world.

The lottery was established under a Conservative Government, and in its early days, as has already been said, there was some suspicion that grants were being allocated disproportionately, to the benefit of villages and towns in the Tory shires. That may or may not have been the case, but it was certainly the perception. Since 1997, however, the allocation of grants has certainly been scrupulously fair, to the extent that every constituency in the country has benefited from at least 50 lottery grants, most having had a great deal more, irrespective of their political complexion.

At the risk of being parochial, I must say that I think my constituency is a good example of how the national lottery has brought real benefit to grass-roots organisations. It has already been suggested in this debate that small groups are not able to access funds effectively. The reality is somewhat different, and the case of Caerphilly proves my point. A few examples will suffice. In July 2004, the Bargoed YMCA in the top half of the Rhymney valley received a £4,600 grant to fund a summer activity scheme for young people. It was enormously successful. The grant helped to pay for workshop costs, materials and outdoor activities for the young people of the community. Another example, from further down the valley, is that of Ystrad Mynach old-age pensioners. In October 2003, they received a grant for £1,960 to pay for such things as bingo machines, a projector screen, catering and amplification equipment for their pensioners' hall. They also had resources to pay for the trips that they enjoy during the summer.

In another part of my constituency, the Nelson and Llancaiach civil and historical society received in January 2003 a grant of £2,040 to help pay for educational projects in the area and for historical visits. Last but not least in the category of small grants is the Aber Valley YMCA, which received in September 2003 a grant of £5,000 to help with the cost of refurbishments. With the help of the local authority and money from the European regional development fund through objective 1, that YMCA has been one of the most successful ventures of its kind anywhere in the south Wales valleys. In fact, it has been so successful that it has received numerous awards. The national lottery has made a significant contribution to the success of that regenerated YMCA. Indeed, I was there only this Saturday to hold one of my advice surgeries, and I saw at first hand the excellent work that was being done for the community generally and for disadvantaged young people in particular.

One of the finest examples in my constituency of effective use of lottery money is at St. Cenydd comprehensive school. Some £1.6 million has been provided from the New Opportunities Fund to pay for a four-court sports hall, a dance studio, a multi-gym and changing rooms. St. Cenydd is a large comprehensive school with some 1,150 students, and although the facility has been open only a few months, the school has already derived tremendous benefit from it. Moreover, it has been made open to the local community as well.

Those are practical examples of how the national lottery is benefiting people on the ground. If things are going so well, it might be asked why we need to change them by introducing the Bill. I suggest that there are three overwhelming reasons why. First, the legislation will give formal status to the Big Lottery Fund, bringing together what is already happening in practice in respect of the Community Fund, the New Opportunities Fund and the Millennium Commission. As the Minister said, it will provide simpler rules, making it much easier for applicants to make submissions and receive the funding that they need. Things will be much more straightforward and easier to understand, and it will be easier to access the money.

The second point is fairly obvious, but it is important none the less: efficiency savings will be achieved because of the merger. The fund will significantly reduce administration and bureaucracy, which will mean more money for the desirous causes that we all want to receive the necessary support.

Thirdly, the merger advocated in the Bill will enhance the involvement of the citizens of this country. It will bring about greater public involvement in the national lottery by helping ordinary people in a variety of different ways not only to set lottery priorities, but to determine which awards are allocated to different projects. As I understand it, a range of options are being considered. One is the introduction of citizens juries, and telephone surveys are another possibility. Award panels could also be established, and we could have voting for individual projects.

Significantly, the Bill specifically advocates greater co-operation with the devolved Welsh Assembly and Scottish Parliament, which I welcome as a Welsh Member. There is already effective co-operation between the national lottery and the Welsh Assembly, and I am sure that it will increase significantly if the Bill is passed. The Bill strikes the right balance between reinforcing the fact that this is a UK or national lottery and recognising the scope for greater participation by the devolved Administrations. Striking the right balance is difficult, but the Bill achieves it.

We are discussing large sums of money that belong not to the distributors or to the Government, but to the people who play the national lottery week in, week out. Earlier this month, the Big Lottery Fund announced a new partnership with ITV to create a series of programmes called, "The people's millions", in which ITV will encourage regional and national competition and the winners will get money to support transformation projects. Some 50 grants of £50,000 will be available, and I anticipate that at least three of them will be made available in Wales.

I welcome that initiative, which builds on the excellent example set by the recent BBC2 programme, "Restoration", which was an extremely popular programme that mobilised people in local communities to get together, to make submissions and to take pride in participating in a viable bid. In my area, one project in particular, the so-called "Memo" or Memorial hall in Newbridge, has been extremely successful in getting people together to support its strong bid, which was the runner-up in the final of "Restoration". The hall is in the Islwyn parliamentary constituency, but it falls within the Caerphilly County borough council area. Although the bid was unsuccessful on the last lap, it successfully pulled together the community, and a number of other initiatives have taken place. I hope that the new programme is as successful as "Restoration", that it helps to open a new chapter in the history of the national lottery and that it shows that people can get involved in the revitalisation of their communities, given sufficient political will and imagination.

I support the Bill for a number of other reasons, of which I shall briefly touch on two. Excessive balances are not a problem if they are reduced quickly, but if balances are held on to and significant interest accrues, it is right to take action. Distributors currently have a perverse incentive to hold on to balances for as long as possible in order to benefit from the interest, which is a ridiculous situation that undermines the positive ethos behind the national lottery. I am pleased that the Government are taking a reserved power to reallocate such money as and when it is necessary to do so.

The Bill provides the new Big Lottery Fund with greater strategic power. Many people are cautious when they apply for lottery funding and ask, "It is all well and good if we receive a reward and put it to good use, but what will happen afterwards?" They are often concerned about their project's sustainability, and it would be a huge step forward if the national lottery were to provide strategic advice and support to allow projects to become truly sustainable. That would be good in itself, but it would also boost confidence and help projects to make a long-term commitment to benefit particular communities.

Match funding is often a difficult issue for applicants, and the Big Lottery Fund should be able to provide more effective advice about it. The Big Lottery Fund could also manage funds to ensure that the community gets the best possible rewards from applications and funding.

I am truly delighted that this important piece of legislation is having its Second Reading today, early in the life of this Parliament. It is important that we consider the issues before us calmly and rationally. If the Bill passes its Second Reading, it will make the national lottery even more of a success story than it has been so far. I am a firm supporter of the national lottery, as are many of my constituents. We want to recognise the success that has been achieved but also to recognise that we can go a lot further with this Bill.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport 5:00 pm, 14th June 2005

I am delighted to follow Mr. David. The House owes him a great debt for raising several issues that are not covered in the Bill but which perhaps should be. I particularly welcome his comments on sustainability and support for organisations looking for match funding.

As the House will have noted, my hon. Friends and I are joint signatories to the reasoned—and, indeed, reasonable—amendment.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

Notwithstanding the heckling that I am getting from the Minister, I echo many of the points made by Mrs. May.

The Minister was not as brave as I am about to be in pointing out that when the national lottery, which he now champions so vigorously from the Front Bench, was first mooted and debated in this House in 1993, my Liberal Democrat colleagues and I, and indeed the Minister and his colleagues, voted against it. I am at least prepared to say, in view of all the very good work that has subsequently been done by the national lottery, that we may have made a mistake.

Hon. Members have already referred to the significant amount of good work that has been done with the nearly £17 billion expended since the national lottery came into operation in 1994. I noted with considerable interest the large number of projects mentioned by the hon. Member for Caerphilly that have benefited his constituency. The House need merely surmise what are the differences between his constituency, where a large number of small organisations have benefited, and that of Chris Bryant, who tells us that organisations in his constituency are having huge difficulties.

In my constituency, we have reaped enormous benefit from the national lottery. More than £50 million has been spent on projects as diverse as the new sports training village at Bath university—a facility that I am convinced will assist us in attracting visiting teams for the 2010 Olympics and Paralympics if we are, as I hope, successful in winning in the bid on 6 July. Money has gone to the Michael Tippett centre at Bath Spa university college, as has funding for what will, in due course, be our fantastic Bath spa project.

The national lottery remains enormously popular, and despite a dip in sales over the past couple of years, sales are again rising, with even more money going to good causes. However, that is not to say that everything is right with the lottery. The current Government's record is frankly disturbing. Time and again, they have breached the additionality principle set out by John Major when he first proposed the national lottery back in 1993. It is worth putting it on the record that the Prime Minister said:

"We don't believe it would be right to use Lottery money to pay for things which are the Government's responsibilities."

Despite that, that is just what they have been doing.

The Minister, who is still with us, albeit at a distance, referred throughout his contribution to opinion polling. I remind him of the YouGov poll in The Guardian a couple of years ago, which showed that almost three quarters of the population believe that it is "vitally important" for lottery funds to remain independent of Whitehall interference. Yet we have witnessed Government interference. In my view, it is not surprising that the Select Committee on Culture, Media and Sport report of 2003–04 states:

"We believe that the additionality principle is being eroded."

That is what a Committee with a majority of Labour Members said about the issue.

The prime example of that breach of additionality was the establishment of the New Opportunities Fund in 1998. As we have heard, since that time, some £3 billion has been awarded to education, environment and health projects, including MRI scanners, and, as the right hon. Member for Maidenhead said, giving a piece of fruit a day to children aged four to six. Although no one doubts that those are worthy causes, do they breach the additionality agreement? I believe that they do. It was interesting that, when the Minister intervened on the right hon. Lady, he made it clear that that extent of Government interference would never happen again. That is a clear admission that the Government are guilty as charged.

Several debates could be held about the definition of additionality. The hon. Member for Rhondda rightly said that we need to tackle what we mean by additionality—even Labour Members are uncertain and unhappy. I remind the Minister of the words of the former arts Minister, Estelle Morris. In an article in the New Statesman on 8 October last year, she said:

"I'm going to be a bit contradictory about my own government now . . . it isn't an issue of whether the government . . . does fund it, it's whether it would fund it."

I therefore hope that the Bill will give us the opportunity to resolve once and for all what we mean by the additionality principle. I hope that we get a consensus and will perhaps consider doing exactly what the Minister said only a few minutes ago. He said from the Dispatch Box that future legislation should embody additionality. Those are his words, not mine. Let us hope that he will agree to include in the Bill something, which we can all support, about additionality. We can then expect the Government and future Governments to stick to it.

I hope that, if we formulate a new definition of additionality, we shall take account of the suggestion of the National Council for Voluntary Organisations. It stated:

"Funding from lottery distributors must be additional to that which is properly funded by government and not a substitute for it. It should not be used to fund essential services or government-inspired programmes."

The last point is crucial and could form the new part of the definition. Such a definition of additionality, which implies that it is not for the Government to dictate on what lottery money is spent, would go a long way towards reassuring all parties and, more important, the people of the country who have said that they do not want Whitehall interference.

I hope that we will agree to do more about a recommendation from the Culture, Media and Sport Committee. It suggested that there should be an annual report to Parliament about the application of the additionality principle. I hope that we will accept that. I also hope that the Minister, or the Under-Secretary who replies to the debate, will assure us that, if the Government are so keen on separating Government funding and lottery funding, they might agree to produce their annual reports rather differently. The annual report currently conflates lottery money and Government money and makes it hard to understand which is which. It leaves open the opportunity for the Government to claim credit for projects that were funded by the lottery. That happens all too often. The school dinners project was one example of that.

Having said that the Labour Government have been guilty of dipping their fingers into lottery money and claiming the credit, we at least ought to put it on the record that the Conservative party is not as innocent as it would have us believe. I am sure, Madam Deputy Speaker, that you read, as all Members will have read in great detail, the Conservative party's manifesto at the last election. You will therefore have seen that that manifesto introduced a school sports scheme to be called "Club to School", with funding of £750 million. Where was that money to come from? The House has guessed it—from the lottery.

We have already had debates about some good and bad aspects of the Bill. Of course, the Bill has some good points: it provides a legal framework for the creation of the Big Lottery Fund, which has already been created, but is a proper legal framework. While we opposed the creation of the New Opportunities Fund, continue to oppose it and believe that activities should no longer take place under the Big Lottery Fund, if the Government are to force the proposal through against our wishes, there will at least, as the hon. Member for Caerphilly pointed out, be benefits in terms of savings on administration and economies of scale amounting to between 10 and 20 per cent. of expenses a year, which would release £6 million to £12 million a year for good causes. We would prefer the NOF activities not to go ahead at all, but if they are to do so, at least that makes sense.

I have one particular concern, and I should be grateful if the Minister would intervene to clarify the point. He, the acting chairman of the Big Lottery Fund and the Secretary of State have all said that they will make sure that 60 to 70 per cent. of BLF funding will go to the voluntary and community sector. I am grateful for those assurances, and I hope that the Minister will be prepared to include that in the Bill. What exactly does he mean, however? As the right hon. Member for Maidenhead pointed out, the Bill changes the definition in relation to areas of funding. It changes the definition of charitable expenditure in relation to lottery funding from expenditure by charitable, benevolent or philanthropic organisations to expenditure for a charitable, benevolent or philanthropic purpose—there is a big difference between the two. The House will be aware that the provision of education is defined as a charitable purpose, which could mean that rather than going to charitable organisations, money could go to the local education authority sector for the provision of education. Will he therefore intervene and tell me whether or not that commitment of 60 to 70 per cent. is to be given to organisations? I am waiting, and he is not replying. We will get an answer at the end, and I look forward to it.

Photo of Hugo Swire Hugo Swire Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

Is the hon. Gentleman as intrigued as I am that 60 or 70 per cent. of the BLF funds are going to that category? By our calculation, that leaves about £270 million. What does he think that the Government might do with that?

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

Well, the House will have heard absolute assurances from the Minister that he will do nothing. Whether or not the Government get their sticky little mitts out remains to be seen. Notwithstanding his assurances, the problem, as the hon. Gentleman knows only too well, is that there is so much in the Bill that allows the Government to get their sticky little mitts on lottery funding.

To return to some of the positives, I genuinely welcome the fact that if the Bill is passed the Big Lottery Fund will have the power to distribute some non-lottery money, although I hope that we can have absolute assurances that the person or body giving that money to the BLF will not be able to subvert the way in which BLF money will be used. I also hope that this will not result in the Big Lottery Fund's becoming increasingly like a Government agency. However, we welcome the broad principle.

We also welcome the fact that the Big Lottery Fund will be able to give out loans as well as grants. That will enable greater flexibility in the activities that it conducts and, more importantly, supports. We look forward to receiving in Committee more detail on how those loans will work in practice. We further genuinely welcome the move towards the public's greater involvement in deciding how lottery money is distributed—a mandate that is clearly implied in clause 10. However, like the right hon. Member for Maidenhead, we would argue that we need to go further, subject to a number of clear caveats. If my hon. Friend Mr. Horwood, who is expert in these matters, manages to catch your eye, Madam Deputy Speaker, he hopes to develop some of these points in more detail. The House would do well to listen to his views.

It is worth remembering the research carried out by the Big Lottery Fund, which found that nine out of 10 lottery players believe it important that the general public are involved in deciding where lottery funding should go. Reference has already been made to the best example so far—the two wonderful series of the BBC's "Restoration" programme. Some £5.5 million of lottery money was distributed to the winners of those two projects. More recently, the "People's Million" scheme was announced, and as the Minister rightly pointed out, this is only the start. We know that there are a number of projects to follow, in conjunction with GMTV and others, through which the money, and the percentage of money, will increase.

I should point out that we need to be careful when we talk about public involvement in decisions. I certainly welcome the Big Lottery Fund's statement, in which it pointed out that when the public are involved, they will not be

"asked to choose between projects where there is a large imbalance in their levels of popularity."

Rather, they will be asked to choose between similar projects that are perhaps in different locations or run by different organisations. That is right and proper, but I hope that in Committee we will debate the need for the decisions and involvement of the public to be based on their ability to make informed choices. That means more education.

Last year, ICM conducted a poll that showed that the majority of members of the public believe that as much money is given to asylum seeker organisations as is given to organisations supporting disabled people. The reality, of course, is that almost 10 times the amount of money that is given to asylum seeker organisations is given to those supporting disabled people. I will happily place on the record that I am delighted that asylum seeker organisations get lottery grants, and I hope that they continue to do so. Alongside increased public involvement in decision making, there is also an important need, therefore, to improve public awareness of where the money is going.

I turn from some of the welcome aspects of the Bill to those that give us real cause for concern. There has already been a debate about the rather bizarre difference, whereby the Big Lottery Fund has to comply with directions issued by the Secretary of State when allocating funds, whereas others need only take such directions into account. My hon. Friend the Member for Cheltenham has rightly pointed out that the 1993 legislation already effectively empowers the Secretary of State to instruct the various lottery distributors in these matters, so why is there this strange difference?

If the intention is to put much greater pressure on the Big Lottery Fund than on other distributors, it will be rather difficult for Sir Clive Booth, who is doing a tremendous job as acting chairman of the Big Lottery Fund, to stick to the commitment that he gave when he said that the days of the Government issuing instructions over lottery cash for schemes such as the distribution of fruit to schoolchildren were gone. Organisations such as the National Council for Voluntary Organisations have raised real concerns about the clause. As that body points out:

"The new distributor must be free to set its own strategic direction and make decisions without interference".

I entirely agree.

One particularly bizarre point about the clause is why it contains no reference whatever to the need for the Secretary of State to consult before making any direction. The Minister is well aware that only last year the Government entered into a compact with voluntary organisations, which made it absolutely clear that consultation between the respective bodies of the Government and the voluntary organisation was paramount. If it is paramount in the compact, why is the requirement for consultation not built into the Bill?

Clauses 8 and 9 have already been touched on. Clause 8 gives the Secretary of State a new power to reallocate funds from one distributor to another—amazingly, without having to consult the National Audit Office before doing so. In view of the Minister's reliance on the NAO's report thus far, one would have thought that a requirement to consult that body before any action is taken would be part of the Bill. I have already pointed out that the clause is bizarre in any case, given that the Public Accounts Committee has not yet reported on the matter.

The Minister has said—the briefing and explanatory notes also make it clear—that the power in the clause will be used only as a last resort if the distributors, according to the explanatory notes, have

"failed . . . to reduce balances to a reasonable level and there were serious concerns about the ability of a distributor to act economically and effectively."

If that is the case, I hope that the Minister will be prepared to consider putting that commitment expressly in the Bill.

I acknowledge that the clause represents a change from the previous Bill and I am grateful for that. At least we now have an assurance that the same good causes will continue to receive the money, irrespective of whether a different distributor provides it. I welcome that move, which followed huge opposition by the Liberal Democrats and many others to the initial proposals. Despite that change, however, the clause still hangs like a sword of Damocles over the heads of trustees. It seems to encourage them to get money out of the door at a faster rate than they would otherwise view as appropriate. That has happened because the Government seem genuinely to have misunderstood the way in which balances are managed and the requirements of project funding. We have already heard examples of the impact on the Heritage Lottery Fund.

It is worth recalling what the NAO, to which the Minister has so frequently referred, actually said in its report of July last year. It argued that

"large projects can take a long time to complete and involve the payment of grants over a number of years".

As a result, it continued,

"there can be considerable time lags between distributors making commitments to pay grants and grants actually being paid."

The NAO acknowledged that that would happen, so balances should not be reduced just for the sake of it.

Why are these additional powers necessary in any case? After all, the Department already has significant powers over lottery distributors, whose annual business plans have to be approved. If there is such concern about the level of balances, it is bizarre that the Department did nothing about it during its annual discussion of business plans. As we have already heard, the 1993 Act gives the Secretary of State the power to deal with such problems. Ultimately, the Government can abolish any non-departmental public body deemed not to be doing its job effectively. I therefore want the Minister to explain why clause 8 is necessary.

Will the Minister reaffirm one assurance that he may already have given, albeit obliquely? If these powers are employed and a different distributor is used to distribute money in one good cause area, will he assure us that that will not endanger any commitments to existing projects?

Clause 9 is an additional way of discouraging balances from being held in the national lottery distribution fund, and it introduces a new way of calculating the interest on such balances. I do not need to go into the matter, because the Minister has admitted that the implication is that the Government will be altering the allocation of money among good causes. He has acknowledged what the NAO said—that the clause will leave the heritage lottery fund nearly £16 million a year worse off. If that is what the Government want, that is fine: they can go ahead and implement the provision, but they will not have the support of Liberal Democrat Members.

The Bill contains a reserve power in respect of the ability to break up the licence. We accept that the Government's aim is the same as ours, and that they want to ensure good competition in the next round of licence applications. The Government appear to acknowledge what they rejected a few months ago—that a single licence is much preferable to one that is broken up. I hope that the Minister can assure the House that the licence will be broken up only as a last resort, as that is the approach that we support. We believe that a single licence with good competition is the best way forward. Breaking up the licence could reduce the amount of funding available and the potential for economies of scale, while raising overheads.

I know that other hon. Members want to contribute to the debate, so I shall not touch on the many other matters worthy of comment. However, I have a real problem with clause 11, about which I hope that the Under-Secretary will speak when he winds up. It looks pretty innocuous. It enables distributors to encourage participation

"in activities relating to the National Lottery in general."

In other words, it seems to imply that distributors can get involved in promoting the playing of the national lottery. Yet we already have a national lottery promotion unit, and promotion of the lottery is also Camelot's job. I am surprised that the Government now suggest that individual distributors should also engage in that activity. The best way to give a pound to charity is to donate that pound directly. Donating through the national lottery means that only 28p in the pound is made available.

We have various concerns about the Bill and some of its underlying principles, but our main worry is that the principle of additionality will be eroded further and that the independence of lottery funds will remain in jeopardy. As I said in an intervention earlier, it is bizarre that the programme motion suggests that there will be only four days in Committee—and possibly even fewer—for consideration of the Bill. That is why my party will vote against Second Reading and the programme motion later on this evening.

Photo of Angela Smith Angela Smith Labour, Sheffield, Hillsborough 5:28 pm, 14th June 2005

As previous speakers have noted, this debate is taking place in the context of rising lottery sales—an increase that bucks the global trend. Moreover, the overall volume of lottery grants since 1994 now totals nearly £17 billion. This is a necessary debate on a Bill that will extend the reach of lottery funding even further, thus building on this Labour Government's previous efforts to spread the sums available more fairly. The Tories may have created the lottery, but Labour has taken action to distribute funds more equitably.

I welcome the measures in this Bill, which are designed to bring the funds created by the lottery closer to the people who spend their money on tickets every week, year in and year out. I am especially pleased that the Bill contains a new strategic emphasis for the distribution of funds. That three-part emphasis focuses attention on promoting well-being, on community learning and creating opportunities, and on community safety and cohesion. That emphasis is important, because it recognises not only the principal motivating factors that propel people to work on behalf of their community, but the crucial preconditions for creating successful neighbourhoods—the feeling on the part of those who live, work and play in any given community that they belong and have a valuable contribution to make to that community and its well-being.

The strategic direction outlined in the Bill should therefore result in a grant distribution system that is fairer and more effective than it has ever been before. Indeed, the evidence that that will be the case is already there, with the first wave of funding programmes already announced, including £155 million for children's play, £354 million for environmental programmes—including a welcome £90 million for parks—£165 million for well-being programmes, and £155 million for investment in the infrastructure of the voluntary sector. The latter programme is especially pleasing because it recognises and underlines the importance of the voluntary sector in the Bill in building and maintaining cohesive and successful neighbourhoods, as my right hon. Friend the Minister pointed out. It recognises that not everything can be done by the state and that in some instances the job is best done by those who are most knowledgeable about what it is that actually needs to be done.

The services I am talking about, which provide the glue that holds many of our communities together, are familiar to all of us. We have services, for instance, that play a huge role in providing things to do and places to go for young people. In my constituency, the lottery has already made grants available to the High Green scouts, the Stocksbridge scouts and the Ecclesfield guides. Those groups, like many others that deliver services for young people, do great work, helping young people engage in purposeful activities and negotiate their way through the sometimes difficult transition to adulthood.

In my area, the lottery has also funded several self-help voluntary groups, such as the Appletree after-school club in Grenoside, the Busy Bees toddler group in High Green and the Hillsborough one-parent group, all of which provide either pre-school or after-school activities. Some £750,000 has been allocated to the Hillsborough community development trust for the refurbishment of a sports pavilion, a project that will not only play a key part in the regeneration of Hillsborough park, but help to sustain the availability of high quality sports facilities for local people. That is a particularly important investment, given the recognised need to increase the level of, and participation in, sporting activities on the part of most people if we are to reduce levels of heart disease and diabetes. It is a very appropriate investment for lottery funding.

On a more modest scale, the Grenoside Young at Heart and Agewell group has been given small sums, year on year, to fund dance and exercise sessions, as well as day trips and Christmas dinners. That is a valuable grant that recognises the importance of exercise and social interaction in maintaining good health as one grows older. Last, but not least, we have Action for Stannington, which has been awarded nearly £15,000 to establish a recycling culture in the village.

All those services are delivered to a significant degree by the people living in those communities, and that is why they are successful. The activities are shaped and delivered by local people who understand best the needs and aspirations of the communities they serve. They are essential services, but delivered voluntarily and at highest quality. It is therefore pleasing to find that the Bill will follow that principle and take the funding of facilities closer to the communities that need and use the services eligible for lottery funding. It will maximise the social return on the investment that is made week after week by those who buy tickets in the national lottery.

I am also pleased that the Bill will simplify the process for applying for lottery funds, with a suggested extra yield from that measure of between £6 million and £12 million. That will result from a reduction in bureaucracy and administration costs, which will surely be welcomed by all hon. Members, given the nature of the debate in the recent general election. Even if the lower figure applies, it will still be excellent news for voluntary groups, as is the measure to prevent the excessive accumulation of balances by lottery fund distributors, which will also contribute to the maximisation of the return on the lottery to those very communities who create the fund in the first place. I wholeheartedly support the Bill, because it will bring lottery funding closer to the people and the communities who need it the most.

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire 5:35 pm, 14th June 2005

The Government claim that the proposals outlined in the Bill will simplify the rules and procedures relating to lottery funding. I am afraid that my experiences in my constituency in the past eight years do not inspire me with confidence. The National Lottery Bill's stated aim is:

"to make the Lottery more responsive to people's priorities and to ensure that Lottery money goes efficiently to good causes."

Well, in Mid-Bedfordshire a good cause is apparently a primary care trust. I know that I am a new Member and could be forgiven for making incorrect assumptions, but is a PCT a good cause or something that should be funded by general taxation?

In May 2004, £237,000 was awarded to Bedfordshire county council to modernise school changing rooms. I quote from the report by the National Council for Voluntary OrganisationsMr. Foster also mentioned this—which said:

"Lottery funding should be additional to what should be properly spent by government and not a substitute for it."

School changing rooms and primary care trusts should be funded by the Government; they should not be additional to Government spending.

This may be a good point at which to remind ourselves of the Prime Minister's words. He said that funding should be used for good causes and not for things that should normally be paid for by the Government. The merging of the New Opportunities Fund and the Community Fund has given Ministers control of 50 per cent. of the funding. Mid-Bedfordshire is bordered by Luton, South and Bedford and Kempston. In the past eight years £8 million of lottery funding has gone into my constituency. Luton, South has received a staggering £23.4 million. Bedford and Kempston have received an equally staggering £15 million. That undermines the political process. Many people in my constituency have applied for grants over the years and have been refused without being told why or how the money has been spent.

The Minister said earlier that when the public were asked where they wanted funding to go they said that they wanted it to go into health and education. I want to know how that question was asked. If the public were asked, "Would you like money to be spent on health and education via the lottery fund?", I think that they would have said no. The public want money to be spent on health and education out of general taxation. Inequitable funding serves only to undermine the political process. Such funding is by stealth, by the back door; it is inequitable and disingenuous. It makes a mockery of the original aims and objectives of the lottery, which were to support the arts and culture.

In 1997, my constituency received £50,000 for the arts and culture. In 2004, it received £12,000. In 1998, charities received £79,000 and so far this year they have received £6,000. I think that charities could be classed as good causes. In my constituency, spending on health and education has increased at the same rate as spending on the arts and culture, charities and traditional good causes has decreased. I have no wish to denigrate the many worthy schemes that money may go to in my constituency, in Luton, South and in Bedford and Kempston, but I should like the Minister to know that some worthy schemes have applied for funding. I have been contacted in the past few days by 12 of those schemes that have been refused. They could have been counted as very good causes.

Photo of Philip Davies Philip Davies Conservative, Shipley

I agree wholeheartedly with what my hon. Friend is saying. I come back to the point that I made earlier. Many worthwhile schemes in her constituency and mine—Shipley—seem to be overruled and yet money is given to national deportation groups and other politically correct groups, like that which Mr. Foster was praising earlier. Members of the public, at least in the Shipley constituency, do not want national lottery funding to go to such things. They want it to go to things that do a worthwhile job, such as the ones that my hon. Friend has mentioned in her constituency. Does she agree that there is nothing in the Bill that will stop these politically correct national deportation groups and the like, getting huge grants from national lottery funding at the expense of more worthwhile groups in her constituency and mine?

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire

I thank my hon. Friend. There are many bizarre examples, which none of us would want to waste time quoting today. We have heard of Peruvian farmers being given a grant to make guinea pigs fatter for human consumption; we could all throw in many such examples. Those are the examples that irritate my constituents.

There is a home nursing group, not in my constituency, but which serves as a model throughout the country. That home nursing group provides care for people who are terminally ill, in their own home. It was refused lottery funding, even though it saves the NHS a great deal of money by looking after people at home and is a model for the nation to copy; and yet we have bizarre examples such as the one that I just quoted.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

Surely the independence proposed by the hon. Lady's Front-Bench team would allow more of these grants to be made—not less?

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire

We would be adhering to the initial principles of lottery funding, which were arts, culture, heritage and good causes.

Photo of Hugo Swire Hugo Swire Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

I am most grateful to my hon. Friend for giving way. No doubt she was going to reply to that intervention by reminding the hon. Gentleman that if he had read our election manifesto, which is well worth reading, he would have seen that we were proposing to allow for a reputational impact, so that a body could refuse to make one of these controversial grants if it would impact on that body in future.

Photo of Nadine Dorries Nadine Dorries Conservative, Mid Bedfordshire

I shall conclude by saying that the way in which lottery funding is allocated should at the very least be fair, and it should be equitable, across all constituencies. It should be above party politics. The reality is that the Big Lottery Fund is just another way for big Government to interfere in the running of the lottery fund.

Photo of Philip Dunne Philip Dunne Conservative, Ludlow 5:42 pm, 14th June 2005

I am pleased to contribute to the debate on this important issue. It is important because in my constituency and neighbouring constituencies that I am aware of, the lottery has been the main facilitator of numerous community-based projects that have been completed since it was so successfully introduced by the last Conservative Government. Other Members have mentioned multi-million pound projects that have been funded. I feel rather envious of those projects because since the lottery began, my constituency has had only one, to my knowledge, although we have had a large number of much smaller distributions. In the seven years since the beginning of 1998 we have had 374 individual projects funded by the lottery for a total of £14.4 million, and in many cases it was the core funding that enabled entire projects to be completed.

I should like to see three specific aspects of the lottery's operation confirmed in Committee. I share the concerns of Mr. Foster, who is not in his seat, that only four days have been allotted to the Committee stage.

The first issue that I should like to raise is the impact of allocations for heritage projects. Admittedly, the Ludlow constituency is blessed by a particularly rich cultural and historic heritage, and consequently more of our projects have tended to be allocated in that direction. In fact, since the beginning of 1998 the Heritage Lottery Fund has made 54 awards, accounting for 14 per cent. of the awards that I have mentioned. Their combined value is £4.7 million, so 33 per cent. of the money granted by the lottery distributors has been given to heritage in my constituency. That is probably one of the highest percentages in the country.

If I heard the Minister's opening remarks correctly, he said that despite the establishment of the Big Lottery Fund, the proposals will not alter the allocation of funding by distributors, including for heritage and the arts. From my reading of the Bill and the explanatory notes, that is a surprise; but if true, it is welcome. He also said that between 60 and 70 per cent. of the Big Lottery Fund will go to communities and charities. Does that mean that there could be an overlap between distributors? To maintain allocations, will projects have to apply to two distributors to achieve equivalence of allocation, or are the Minister's remarks relevant only on a national average basis, rather than on a local area basis? I do not understand that point—

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

I thank the Minister. In that case, it seems more likely that applications will have to be made to two distributors to achieve the same level of funding for the projects to which I have referred.

I am especially concerned about the lottery's impact on major restorations of heritage monuments and features, for example, the Teme Weirs trust in Ludlow and the pending restoration of Ludlow's town walls, to which I have already referred in this place. Without equivalence of allocation to the Heritage Lottery Fund, it is unlikely that such projects will be completed. The trustees of the new Big Lottery Fund are unlikely to give much priority to heritage projects, as they will consider that they are already well provided for due to the continuance of the Heritage Lottery Fund.

My second concern is the key question of trust, a subject that my party raised during the general election. Ms Smith referred to the increased participation in the lottery over the past couple of years. Continued strength of revenue and funding for good causes obviously relies to a considerable degree on public confidence in the lottery and in the awards made by its distributing bodies. By introducing the potential for Government influence on the Big Lottery Fund, the Bill could undermine that confidence, which in turn will undermine revenues.

To give a local example, it is, regrettably, well known in my constituency that the Shropshire hospitals NHS trust is sitting on a colossal deficit, rumoured in the press to be close to £20 million. I am delighted to say, however, that on 24 February 2005 a brand new MRI scanner was delivered to the Royal Shrewsbury hospital, funded in part by voluntary donation and the lottery, but I regret to tell the House that the machine has yet to be turned on. It is well known in Shropshire that the MRI scanner is sitting in a purpose-built facility in the hospital, but that the trust does not have enough funding to use it. People in Shropshire suspect that if lottery funding can be used to supply equipment to the NHS, welcome though that equipment is, it may be used to help run the equipment in the future, which will undermine confidence in the lottery and participation in the game.

As I am from a rural constituency, I should like to endorse the remarks of my hon. Friend Mrs. Dorries, who said that confidence would also be undermined if funding were awarded to causes that bear no relevance, or seem to bear no relevance, to people in the UK. If, as my hon. Friend said, we are funding guinea pig producers in Peru, that will not inspire confidence in the lottery distribution system.

My third point may relate to the Freedom of Information Act 2000. I am concerned about access to information about lottery funding. After awards have been made and projects completed, it is possible to obtain full access to information about where allocations were made, but sometimes such information is not made readily available on projects where, although a decision has been made to allocate funding, it has not yet all been supplied. I am thinking of a case brought to my attention by a fellow councillor on South Shropshire district council: a substantial sum has allegedly been given to a local voluntary organisation, but he has had difficulty securing information on the project. The organisation in question is the Ludlow youth forum, which does some very useful work, especially in drug rehabilitation. My concern is that we have had great difficulty finding out how much money has been provided to that organisation by lottery and other bodies. To raise that matter in this debate might be to stray somewhat from the Bill, but I should be grateful if the Minister would write to me on the subject, or mention it in his winding-up speech. I hope to speak in Committee about the three concerns that I have raised in this debate.

Photo of James Brokenshire James Brokenshire Conservative, Hornchurch 5:50 pm, 14th June 2005

There is a great deal of consensus across the House on the benefits that the lottery has offered to so many of our communities and constituents. The Bill and today's debate, however, relate to the future.

I heard what the Minister said about the intentions behind the Bill, but the Bill itself gives the impression that the Government's aim is to centralise and assume much greater control over the way in which lottery funds are allocated and distributed. The Conservatives advocate giving power back to the people, giving them a greater say, and ensuring that we help charities and arts, sports and heritage projects. Unfortunately, my understanding of the Bill is that it will enable a greater politicisation of awards and the hand of Government to be seen to a greater extent. The Bill entrenches an approach that we have witnessed in the past few years.

Rightly or wrongly, there is growing resentment as a result of a number of awards given to apparently fringe organisations. Mr. Foster alluded to public perception of the number of awards given and their actual value, but the public are experiencing a creeping sense of disquiet. To see that, I need only look at my local newspaper, which in the past fortnight has run the headline, "Fury over Lotto handout." There is a feeling that awards are not being fairly given to organisations in my constituency. Chris Bryant highlighted the question of whether awards are distributed fairly across the country. My constituency falls within the London borough of Havering, which has received about £13 million in awards to good causes since the lottery was established, whereas the London borough of Greenwich has received £702 million in awards. Given such disparities, it is understandable that people are asking questions about awards and why they are given. The Bill does not address those concerns.

Those concerns are given greater emphasis when we see worthy and valuable organisations in our constituencies not being given awards. I can think of two cases in my area: St. Francis hospice applied for funding but was turned down, as did a local charity, First Step. Against that backdrop, people want to know where funding is going—they want transparency. Unfortunately, the Bill does not provide that transparency; if anything, it muddies the waters even more. My right hon. Friend Mrs. May has already quoted the Government response to the Culture, Media and Sport Committee's report on the national lottery, but I shall do so as well. In response to criticisms in relation to the principle of additionality, the Government said:

"Additionality has never meant that Lottery projects should be completely divorced from public services and existing Government initiatives."

The Minister endorsed that statement, but it shows the clear link between the distribution of lottery funding and the views of the Government. That link is betrayed throughout the Bill.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

I repeat my question to Mrs. Dorries. Hon. Members cannot have it both ways: either they must list the projects that they support and, presumably, be willing to intervene to influence lottery funding, or they must guarantee the lottery's independence.

Photo of James Brokenshire James Brokenshire Conservative, Hornchurch

I think that we should concentrate on the lottery's independence and give people back the power to decide how lottery funding should be given. That is entirely consistent with the arguments that Conservative Members have advanced about giving power back and passing power down.

I have several specific concerns about the Bill's provisions, particularly the power given to the Secretary of State. Ministers have said that they are not trying to take power from the people and give it to the Government—that, in many ways, they are trying to maintain the lottery's independence—but that argument is not supported by the Bill. The House need only look at the swingeing powers taken under proposed new section 36E of the National Lottery etc. Act 1993, which would require the Big Lottery Fund to comply with directions given by the Secretary of State in almost every case, even if those directions are about who is to run the fund. The fact that such powers are being taken makes one question the independence of the organisation. Further restrictions are built into proposed new section 36B, which enables the Secretary of State to limit the monetary value of awards given to certain organisations.

It is hardly surprising that voluntary and charitable groups have voiced considerable concern about such provisions. Luke FitzHerbert, a senior researcher at the Directory of Social Change, has described the proposals as

"a naked seizure of control", and Stephen Bubb, of the Association of Chief Executives of Voluntary Organisations, says that the Bill

"undermines the independence and the integrity of the grant-making system."

The Bill clearly takes power back into the Government's hands, so such expressions of concern are not surprising.

The Secretary of State is away, and I understand why she could not be present for Second Reading, but it is interesting to read a letter that she kindly sent to me and other new Members in which she set out the reasons to support the Bill. Referring to the New Opportunities Fund, she wrote:

"The Fund was also different in that it has been directed to distribute money in support of initiatives specified by Government, but still taking individual grant decisions at arm's length from Government as the other distributors do."

The point I take from that is that the initiatives are "specified by Government"—in other words, the fund is directed by the Government. Although Ministers might argue that individual grants are determined by the fund, if the overall framework and certain decisions are specified by the Government, what we see is direction by the Government.

I congratulate the Bill draftsmen on trying to set out the fund's independence by creating, in effect, a corporate body for the Big Lottery Fund and stating in schedule 2:

"The Fund shall not be regarded as the servant or agent of the Crown".

However, given all the powers reserved under the Bill and the clear prescription of the fund's terms of reference, the Big Lottery Fund looks very much like a servant or agent of the Government. The more closely one examines the legislation and the powers reserved for the Secretary of State, the more one thinks that it might have been clearer to state that the Secretary of State shall have control over 50 per cent. of the funds from the lottery and she will specify as she sees fit in relation to that money.

I have a couple of specific questions about the Bill. I note that clause 8, on the reallocation of funds, says that in relation to the allocation between individual distributors, for example, Sport England, if we feel that that organisation is not performing correctly, the fund would be ring-fenced for the same beneficiary, so funds could be allocated to another sports body. Is there any provision that would prevent that going to the Big Lottery Fund? It seems that the 50 per cent. threshold is being increased. I wonder whether the Minister could answer that specific point when he replies.

A point that emerged from the Secretary of State's interesting letter was the funding that would come from the Big Lottery Fund—she referred to £60 million being made available for international grants. My understanding is that lottery funding has been ring-fenced for applications within the UK. There may be a misunderstanding on my part, but I am sure that it is not the public's understanding of how the money would be allocated. Perhaps the Minister would follow up this point when he replies to the debate.

I am left with the impression that the Government seek to extend control over the way in which lottery money is to be allocated. I shall refer to another poll, as I know that the Minister was keen to emphasise the importance of consulting the public. An ICM poll published last year showed that 73 per cent. of the public supported an independent public body deciding how lottery money was to be spent. From what I see in the Bill, that is not what we have on offer. The purpose behind the Bill is to take greater control, greater power and greater authority into the hands of the Secretary of State. Unfortunately, that is taking control further away from the people who buy the tickets and voluntarily spend their money on the lottery in good faith. I cannot support the Bill because of the powers that it is designed to put, to a much greater extent, in the Government's hands.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham 6:02 pm, 14th June 2005

My background is in charity fundraising. I was the director of fundraising for the Alzheimer's Society. At times, I have spent days, nights and what seemed years of my life completing applications to various national lottery distributor bodies. At times, I have found them irritating, bureaucratic and arbitrary in their rule change—but still, in the end, overwhelmingly a good thing.

Quite a lot of irritation and bureaucracy will be suffered for the several millions of pounds that the Alzheimer's Society raises for carers and people with dementia from the national lottery, but it is worth doing. It seems that in this place it is not always easy to pay compliments to our opponents, but I should pay a compliment to the Conservative Government of John Major. Despite the irritations and the bureaucracy of the system, the national lottery distributors that were established were overwhelmingly a good thing. They were cheap to apply to and they were thoughtful in that they spent a great deal of time talking through, with applicants, exactly who would benefit from projects and how those projects would work. They were supportive of applicants, especially those with inexperience; they considered difficult and unpopular causes; and they had a good track record in supporting those causes.

Many of the fears that were attached to the National Lottery etc. Act 1993 were that it would cannibalise existing fundraising. Those fears turned out to be unfounded. At the time, some charities were dependent on scratch card income. There was a great deal of publicity that they would lose money, but so much publicity was raised that their funds increased. Even they did well out of the Act.

The issue of additionality was mentioned during consideration of the 1993 legislation. As I rather unkindly mentioned to Mrs. May, there were provisions in that Act to give the Secretary of State powers of direction. In practice, the Millennium Commission, the National Lottery Charities Board and the other distributors have acted independently for most of their history. That was much appreciated by those of us who were working in the sector. We appreciated the independence from Government that they were able to exercise.

Since the Labour party has come into Government we have watched with increasing concern the progress of the so-called reforms of the national lottery distribution. First, there was the establishment of the New Opportunities Fund, which seemed to us to be established purely to meet Government priorities—health, education and the environment. Those are worthy things but they have been used, as Mrs. Dorries said, to support state-run and state-funded institutions, which was never the idea of the national lottery. The lottery was there to support new causes with new money and new projects with new money.

When the earliest funding priorities of the New Opportunities Fund were announced at a Labour party conference, it was clear that political control was starting to play a major role in the way in which the funds were distributed. Then we noted, with even more concern, that when the Millennium Commission was wound up it was merged with the New Opportunities Fund. We have seen a gradual increase in the percentage of lottery funds under the more direct control of the Secretary of State. It has grown from 0 per cent. in 1993 to 13.5 per cent. in 1998, to 32 per cent. today and to 50 per cent. in the proposals that are before us. Earlier, the Minister was talking about moving forward, but it is clear in which direction the Government are moving—eventually, presumably, it is towards 100 per cent. control by the Secretary of State. Our fears have been realised by many recent announcements. For instance, there was the decision to fund the school dinners programme. That is worthy, but money will be stolen from lottery funds.

I was reassured by what the Minister said, namely, that there would be a departure from practice in the New Opportunities Fund, and from now on—I think that I am quoting him correctly—all important decisions would be taken by the Big Lottery Fund. That would be desirable, but we do not see that provision in the Bill. Given the Government's record, we need that provision in the Bill. Otherwise, that lottery funding becomes a tax-supporting Government policy. It may be voluntary, but it will still be a tax. That will gradually undermine ticket sales.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

I wonder whether you would agree with me that the New Opportunities Fund was an act of opportunism by the Government to direct spending from lottery funds, and that the Bill is a sign of desperation for a Government who see a black hole opening up in their spending plans. They are looking around desperately for anywhere to grab the money to make up for their failures to find funding for core aspects of government for which they should be paying. It is that black hole that is at the heart of the drive today. It will be charitable causes and the heritage of this country that will pay the price for a Government who are losing control of government finance.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. Before Mr. Horwood responds, I say to Mr. Stuart that he should remember that when he uses the second person he is referring to the Chair. He should be referring to the third person. I might add that interventions are always better if they are brief.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

I fear that the hon. Gentleman is correct and the basis of the lottery might be undermined. It was supposed to find new money for new projects. Clause 7 contains a sweeping description of the powers of the Secretary of State. The Government took our advice soon after they came to power by allowing more independence to the Bank of England. The Chancellor has found it useful to have that political file between him and the decision makers of the Monetary Policy Committee. We should have sympathy with Ministers and want them to have similar protection. Otherwise, with these sweeping powers, they may find that they have an irresistible urge to intervene in the lottery's distribution of funds, especially when they are under pressure from the tabloid press or from rather ill-informed comments from people such as Philip Davies in talking about politically correct funding decisions.

Why would Ministers want to put themselves in such a situation? Surely they would do far better to stick to the well-established and well-respected system of allowing much more independence to the national lottery funding bodies. In Committee, we must find a mechanism to make that happen. I support what was said in the Select Committee, in its Fifth report in March 2004. It stated:

"whilst the national lottery and the benefits it gives to good causes should be publicised, it should not be promoted as an effective way of giving to charity. The percentage of the amount spent on a Lottery ticket that actually goes to good causes should be made clear to players."

If the promotion of lottery spending is related to charitable giving, that undermines the lottery's purpose. The lottery brought in new money because most of its marketing was based on people's desire to win millions of pounds—it was not in competition with existing charity fundraising. Again, that is a good principle.

We need to step back and look at the context in which charities work. The situation is difficult as there are 162,000 charities on the Charity Commission's register worth £32 billion a year in income, representing a 92 per cent. growth in 10 years. Those of us with a background in the sector would accept that it has become increasingly lopsided. Of that £32 billion, £8.6 billion is raised just by the top 500 fundraising charities. The top 10 charities raise £1.6 billion or 20 per cent. of the total. The top five charities—Cancer Research UK, the National Trust, Oxfam, the British Heart Foundation and the Royal National Lifeboat Institution—fundraise almost £1 billion a year. Those are efficient, well-run charities, which I respect enormously. The Charities Aid Foundation, however, is right to point out that the gap between the largest and smallest charities in the UK continues to widen.

Only 6 per cent. of the income of the top 500 charities comes from lottery sources, with the rest coming from public participation. The CAF's latest figures show that 43 per cent. of that income comes from individual giving, including standing orders and donations made as a result of direct marketing, telephone fundraising, community events and so on. They show that that 9 per cent. comes from legacies promoted in the same way, and that 4 per cent. comes from the trading of Christmas cards and gifts. In total, 56 per cent. of the income of the top 500 is effectively driven by appeals for popular causes to the general public. Another 13 per cent. comes from grant-making trusts and corporate donors, who are driven by popular opinion about the best causes. In many cases, companies try to find the best fit with their own customers or hold polls among their staff to decide which charities to support. I remember conducting a survey during my professional career which found that, overwhelmingly, cancer and children were the causes that received the most support.

The CAF's latest figures underline the fact that the most popular causes dominate the sector. International charities receive £654 million a year; cancer charities £417 million a year; while children's charities are sixth in the list and receive £321 million. However, we should be concerned about the less popular causes at the other end of the spectrum. The HIV/AIDS charities receive £13 million; charities for the deaf £33 million; and mental health charities only £56 million. One might expect the elderly to be a popular cause, but only £92 million was raised by such charities, a sum dwarfed by the sums raised by the most popular causes.

m

I am horrified, yet not totally surprised that yet again Mental Health is lagging behind in the funding department. Considering there is not enough money via the Government, but to realise that this is nowhere near matched by the Mental Health charities no wonder we remain a cinderella service......
We make up a quarter of the population in this country, it has no boundaries everyone is touched by this epedemic of lack of care and love, for our fellow man, no matter what colour, age, religion you can be affected by and become one of this countries statistics......

Submitted by molijana

Photo of Emily Thornberry Emily Thornberry Labour, Islington South and Finsbury

I am concerned about allegations about the lack of public confidence in the new management of the lottery fund. You have just made reference to money available for the elderly, but I should like to give the example of a pot of money available for elderly carers in Islington who are in their 80s and 90s and look after their 50-year-old children. That money is not available from local authorities because the needs of those elderly people and their children are not great enough for them to receive social security assistance. Money is therefore available from the lottery. If people in Islington were asked whether that is an appropriate use of lottery money, I can assure the hon. Gentleman that they would be fully in favour in it.

A 93-year-old woman who cared for her 57-old child—the daughter was suffering from early onset Alzheimer's because she had Down's syndrome—fell down the stairs and was offered two hour' help by social services. Lottery funding, however, paid for people from a voluntary organisation called Centre 404 to provide her with proper support. Without the lottery or imaginative funding, that money would simply not be available. That is why we need the lottery and why we need changes to it.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. If the hon. Gentleman would bear with me for a moment, I do not think that Ms Thornberry heard the advice that I gave Mr. Stuart. First, references to other hon. Members should be in the third person, and secondly, the hon. Lady's intervention was far too long and I shall not be as tolerant next time.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

I beg forgiveness from Ms Thornberry, who may have misunderstood me. I was listing the popular causes with other means of fundraising that are overwhelmingly the most important part of their income. Only 6 per cent. of the income of the top 500 charities comes from the lottery. For the precise reasons that the hon. Lady gave, the lottery is extremely important. However, there is substantial concern in the voluntary sector, particularly among the smaller and less popular causes, about the proposals for more popular involvement or, more significantly, more political involvement.

The National Lottery Charities Board stood apart from the popular concentration on a few major causes, along with a few other funders such as Comic Relief and the Lloyds TSB Foundation, which have done very good work. It encouraged applications from much smaller charities and fundraising teams, as well as from people with much less experience of fundraising.

Photo of Philip Davies Philip Davies Conservative, Shipley

I respect both the hard work that the hon. Gentleman has done to raise money for charity and his expertise in the field. However, will he flesh out the point that he is making? Does he accept that the bureaucracy of the lottery favours bigger charities over smaller ones because they can afford to pay people to fill in the plethora of forms? Worthwhile smaller charities, however, such as those in my constituency, lose out because they do not have the time or enough people to fill in all those forms.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

There is an element of truth in that. However, the amount of money that goes to the top 500 charities from the lottery is proportionately less than the amount from other sources. If anything, lottery funding has traditionally favoured smaller charities. The hon. Gentleman is right that such charities have struggled. Having tried to fill in the forms myself, I know that it is a great burden, especially for charities without any professional staff who depend on the work of volunteers, so I am sympathetic to the point that he made. However, the causes that receive support from the lottery are small organisations that tackle difficult issues. In my constituency, for example, £136,000 was given to the Gloucestershire Aids Trust for carers' support and respite care, and £5,000—a small but significant sum—was given to Cheltenham Open Door for the refurbishment of a drop-in centre for homeless people. People think of Cheltenham as posh and well off, but that is not the truth. The NLCB saw through the image and funded important work with the most deprived people in my constituency. Cheltenham Housing Aid Centre received £90,000 to back deposit funds for privately rented accommodation, and £178,000 was provided for an outreach service on domestic violence—a service which the hon. Member for Shipley would probably regard as politically correct.

Mr. Dunne made an important point about esoteric heritage projects, for which it is equally difficult to find popular support. The independence of the NLCB and the other distributors means that they were prepared to fund that difficult work, and the Government should be proud of presiding over such grants. Many of those charities would never have been able to afford to use other kinds of fundraising that dominate the sector such as large-scale direct marketing campaigns, telephone fundraising or big pitches to corporate donors. The lottery has been a lifeline for them and it has done them proud. However, larger charities are worried about the proposal.

As I have said, the cause of elderly people is one of the least popular. I used to fundraise for Help the Aged, which wrote to me today:

"I think the real issue is not that the idea of public involvement in itself is bad"—

I agree—

"but that we don't really have confidence that you would ever be able to devise a system in which members of the public would really have all the information they needed to properly weigh up the different options.

There is a real risk that any system like this would end in some kind of glamour/popularity contest between charities, which would mean that charities would have to focus huge amounts of effort on presentation and on courting public favour, and that ultimately charities tackling some very worthwhile but complex or difficult issues would lose out."

Those are the fears in the voluntary sector.

I am sure that we all agree that public consultation is, in principle, a good thing, but the challenge for all parties working together, I hope, in Committee is to try to prove those fears wrong and to have a mechanism in the Bill that does not harm the smaller and less popular causes. The lottery has been a unique lifeline for many such organisations, and I hope that it will stay that way.

Photo of Madeleine Moon Madeleine Moon Labour, Bridgend 6:20 pm, 14th June 2005

I share with Mr. Horwood a background of working in Alzheimer's disease societies and with people with dementia. Like him, I recognise the problems in accessing money faced by that Cinderella sector. Equally, however, as I have sat here today and listened to the various speakers, I have been aware that my experience in Bridgend is not the same as that of Mrs. May; it is much more like that of my hon. Friend Chris Bryant.

Bridgend, it is acknowledged on the lottery webpage, has not received its fair share of lottery funding, with lower than average funding coming to projects in my constituency. Indeed, I am informed that we have the third lowest lottery funding. I can assure Members that Bridgend is eager to get its sticky little mitts on lottery money. Over the past couple of days, I have sought to examine why Bridgend is so far down the funding stream and how the proposals before us today will help my constituency to begin the fight back and climb the league of successful applicants.

I can assure the House that Bridgend is a community in need of that investment. It is in need of the lottery money that is available to it. Bridgend is not readily recognised as a deprived area, but we have pockets of severe social deprivation. Although there is inward growth in housing and new business, some of our leisure and community services have lacked investment for a number of years and are, to say the least, down at heel and frayed at the collar. The one thing that we are rich in is our commitment to our communities and our willingness to fight and work for them.

In preparation for today's debate I have spoken to a number of the people in my constituency for whom lottery money makes the difference, determining the growth, change and survival of services. There have been great successes, and I include here the Kenfig Pyle community youth project and the Bethlem Church projects, which work with young people in communities with few opportunities for leisure and social activities. I made reference to their excellent work in my maiden speech, as those projects have grown out of the communities in which they are based. Their management committees are local people and their commitment to the young people whom they serve is total. They offer alternatives to going to the pub, hanging round street corners and using drugs, which would be the only alternatives without those projects.

The projects were established by local people, not professionals. I urge the Minister to ensure that we do not develop a culture within the Big Lottery Fund that means that the large organisations—the professionals—and not the local communities access the funding and are seen as the experts in what is good for communities and in tackling local problems. I am hopeful that the Bill will be positive for my community.

What we need in Bridgend is continued development of small, sustainable community-led projects that are managed or delivered by local people. Funding must be ongoing. I reiterate the comments of my hon. Friend Mr. David that projects must not be left high and dry, having to jump through yet more hoops to access additional funding.

Will the Big Lottery Fund help my constituency? I feel that it will. I welcome the initiatives to restructure the lottery and to make the application process simpler. I welcome especially the plans to ensure that the level of unspent funds is reduced. I welcome the new capacity for the fund to handle non-lottery money to enable spending streams to be joined up. I especially welcome, too, the opportunity to reallocate balances that have not been reduced to other grant-making organisations in the same sector, so that good causes are not left without access to funds.

I think in particular of sports clubs in my constituency that are desperate to do drainage work on their pitches, but are told that there is no money for them to access. An opportunity such as this, to move balances, would ensure that that work could go ahead, so that organisations that, in a week, have 250 people working with Kenfig rugby and football clubs, would have the facilities that they need to offer those youngsters opportunities. We have been debating in the House opportunities for youngsters to engage in sport, and we should remember that the lottery funds opened up opportunities for many youngsters in my community that would not otherwise have been available.

I would like to share with the House some of the concerns and questions discussed with me by those in my constituency who co-ordinate many of our lottery bids. In particular, I thank Ty Jay Dekretser from the Bridgend Association of Voluntary Organisations—with whom I am sure I will have further discussions on the Bill as it proceeds through the House—and various officers from Bridgend county borough council who have shared their expertise and experience. They tell me that in Bridgend we have a particular problem with providing match funding. For example, the Kenfig Pocket Park committee has submitted an application for funding. We have a small dedicated group who have worked for two years putting together the application, but match funding is very limited.

I wonder whether it is possible to consider using some of the underspend and interest money from the lottery funds to help communities where there are good ideas, good projects and people willing and eager to work, but where there are problems in raising match funding, perhaps in some of our more deprived communities. For my local authority that problem has been exacerbated by the fact that European development money has also been available, and much of its match funding has gone to objective 1 projects. We have been accessing some money, but smaller local projects have not gone ahead, which is one reason for our success rate being low.

I welcome the opening of the new fund to take into account the views of the public, but we must not lose the opportunity that the lottery has given us, as a country, to tackle ideas and areas of work that were experimental or contentious. Sometimes that has related to people's perceptions of morality and what they perceive to be wrong. As one person commented to me, awards for lesbian and gay groups became more acceptable, but when those groups related to parenting, public opinion was often split.

Some practices, such as advocacy and mentoring, now mainstream in local authority provision and in the public sector generally, were initiated and mainstreamed by the voluntary and community sector, often with no funding but with great determination and conviction. Lottery funding helped those projects to expand. Now, we generally recognise their worth and they are moving into mainstream local authority policy. At their inception those practices were deemed radical; now we are willing to support them.

We must ensure that the Big Lottery Fund, like the Community Fund, which has been a tremendous success, will be prepared to fund new and radical ideas, to take risks and to recognise that one of the most effective ways of supporting communities, either geographically or interest-based, is to fund those new ideas. I have seen nothing in the Bill that suggests that that is not possible; I have merely heard it here today. I would therefore welcome reassurance when the Minister winds up the debate.

From the voluntary sector, I have heard fears that rigid, stifling and directed priorities will damage the voluntary and community sectors and, in doing so, reduce diversity and vibrancy. Those concerns were mentioned by the hon. Member for Cheltenham. I cite as an example the fact that, until three years ago, the United Kingdom had an established, though poorly funded, rape crisis centre network. Across the UK many victims of sexual abuse and rape were supported by volunteers who provided a free professional support and counselling service.

During the past three years, that network has been lost in many areas as statutory provision has moved into the field and we have recognised the need for mainstream funding in such work. To allay some of the concerns that have been laid before the House today, we perhaps need to ensure that voluntary sector organisations in such fields continue to have access to some lottery funding so that they can continue to take new initiatives and tackle radical new ideas. We could use that work almost as a testing ground for new and innovative ideas and marry the flexibility of the voluntary sector with the funding streams available to the statutory sector.

Some 30 per cent. of the Big Lottery Fund money will be used for public services. As a local Member, I feel a bit like a piggy in the middle between my local authority, which is desperate to access the money, and the voluntary sector. Lottery funding has been vital in Bridgend in enabling our very underfunded leisure services department to make a number of successful bids, benefiting my constituency and that of my hon. Friend Huw Irranca-Davies. Money has been accessed to develop sports facilities, with new sports barns at Cynffig, Ogmore and Ynysawdre comprehensives, as well as a new climbing wall at Pencoed and new pitches in Bryntirion. Our constituents will share use of the new Ynysawdre swimming pool, and my hon. Friend and I hope that money will be found to provide a sauna facility at the new pool.

At the same time, I know that the voluntary sector fears that there will be a reduction in the provision of community-led services and the wider opportunities that they provide to communities. For example, I have discussed with the leader of Wildmill playgroup and with other community playgroups how development of nursery provision in schools has seriously affected voluntary pre-school groups. While the increase in free provision has an economic benefit for families, we must ensure that we do not lose the vital support structures that the voluntary sector brings to parents. I know how vital my own local playgroup and "Meet a mum" association were for me when I stopped working and my son and I found ourselves alone, with all my friends in work and my family miles away, as well as a lack of support and companionship and others from whom to learn the skills of parenting. The playgroup, the "Meet a mum" association and the nursery that my son attended provided me with lasting network support and provided my son with a plethora of social aunties and uncles, as well friends that he has had from birth. We must be careful that, in professionalising services, we do not lose that human dimension that makes so many of the voluntary services work so effectively. I hope that the Big Lottery Fund will help us to ensure that that dimension remains an active part of the funding that will be available.

Considering the reasons for the lack of applications for funding in my constituency has led me to look again at the responsibilities that we place on the voluntary sector. In earlier debates on the Licensing Bill, one of the concerns raised was responsibilities for making and managing applications for licences for village halls. I heard the same concerns expressed when church groups that provide sitting and befriending services were required to register as domiciliary care agencies when I worked for the care standards inspectorate in Wales. I stress that we must use the Big Lottery Fund to consider how we can sustain and support the small voluntary groups that are afraid of some of the project management and legislative implications in respect of employment, health and safety; are concerned about preparing accounts; and worried about child and adult protection issues.

For example, the Shaw Trust provided support services for those with disabilities who took advantage of direct payments to manage their own care packages. The task of bearing the huge responsibility placed on those with no experience in such a field was made possible by sharing the burden through the professional support of Shaw Trust officers, who managed the payroll, contracts of employment, health and safety and training issues. The Bridgend Association of Voluntary Organisations provides that work locally, but it is a single organisation. If we are to expand voluntary groups, especially the small ones, that can access lottery funding, more and more such umbrella bodies that support a network of smaller organisations must be able to access the funding. That could allow almost exponential growth among the smaller voluntary organisations.

I hope that we will be able to provide that support work and not leave the smaller groups without the network of support that they need. Without such support, I fear that we may lose good ideas and initiatives, as well as the essential community link that makes projects work. Public policy may also lose that testing ground in respect of the voluntary and charity sector, which often provides initiatives and new thinking and drives services forward.

In conclusion, I welcome the Big Lottery Fund and the proposed change. It is essential that we ensure the survival of the lottery, but I am eager to ensure that Bridgend finally moves on to the ladder of funded schemes that are successful. The need to build in capacity with my local communities to fund and manage lottery bids will be essential if we are to access the funds.

I pay tribute to the hard work of those who spend hours, as the hon. Member for Cheltenham described, preparing and writing lottery applications and managing funds and projects that benefit their local communities. I hope that the Big Lottery Fund will ensure, through its streamlined application process, that new, creative, innovative and controversial ways of working remain a key part of the lottery role and function, and that yet more will be coming from Bridgend.

Photo of Colin Breed Colin Breed Shadow Minister, Environment, Food & Rural Affairs 6:36 pm, 14th June 2005

I wish to make a fairly brief contribution on behalf of a number of my constituents who are in what I suppose is a growing band of the disappointed. It is not that they expect to wander down to the results every week to find that they have won a huge amount; they have simply become part of a growing number of people who have become disappointed by being involved in one way or another with rejected applications for funding.

The group to which I refer consists of village halls and community centres. It is not surprising that a growing number of people have become disappointed when we bear in mind the role of such buildings in community work and the huge number of people who become involved in them. Almost from first thing in the morning to last thing at night, those buildings are used for a variety of activities. In the mornings, they are used for children's playgroups, nurseries and early-years education. Later on, there are coffee mornings and fundraising activities. At lunchtime, there are old and lonely people's luncheon clubs, and in the afternoons, there are forums where people meet as part of community groups. Some places have tea dances, and moving on to the late afternoon, there are after-school clubs and meetings for Beavers, Cubs and St. John Ambulance cadets. In the evenings, there are sports such as badminton, meetings of Scouts and Guides, committee meetings, fundraising activities and community events. It is not surprising that in many communities, especially in rural areas, a vast number of people have become interactive with what happens in their village hall or community centre.

When the lottery was introduced, a fairly significant number of capital grants were available for refurbishments, replacements and even brand new facilities. I am pleased to say that some such developments occurred in my constituency, but that happened a long time ago. There have been very few, if any, such awards in more recent times. The Countryside Agency had a vital villages initiative to enable some more funding to be available for projects, but it was quickly curtailed. Many of those involved are now being asked to raise their contribution to a refurbishment or even replacement in the hope—most of the time, it is a forlorn hope—that a lottery grant will be awarded to them.

At the same time, in recent years, significant costs have been imposed on village hall committees. There have been enhanced and additional health and safety regulations and developments in the disability access situation. Licensing has been mentioned, and the standards required for playschools and nurseries have changed, including standards for toilets and so on. All those factors have produced significantly greater costs for village hall committees—even insurance costs contribute to that huge burden—but those committees cannot access additional funding to make their facilities compatible with today's standards.

For some reason, applications are almost inevitably refused, which causes huge concern and disappointment among a large section of the rural community, particularly in Cornwall and in my constituency. Mrs. Moon mentioned many of the problems with match funding in an objective 1 area that we have experienced, and match funding is becoming less and less feasible.

People often use village halls and community centres to raise funds, but if they try to raise funds for those buildings, they encounter an ever-decreasing circle.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

I assure my hon. Friend that that problem affects not only those areas that are lucky enough to have obtained objective 1 status, but other areas. Voluntary groups in rural areas are increasingly defeated by the amount of paperwork, by the cost of providing the required information and by match funding fatigue, which stops people finding the funds to enable bids to go ahead.

Photo of Colin Breed Colin Breed Shadow Minister, Environment, Food & Rural Affairs

My hon. Friend is right. I suspect that not only objective 1 areas but all rural areas and some other areas find it difficult to secure additional funding. Community centres and village halls can probably lay claim to meeting most funding objectives, because health services and education for the elderly and the young are provided in them. They also provide a base for all sorts of community projects and are sometimes used as sports changing rooms for nearby playing fields. Those much-needed facilities seem to hit all the right buttons, but whether the application is from the village hall committee, the Scouts, the Guides or a group for elderly people, funding cannot be obtained.

Facilities are becoming older, and those that need to be replaced are 60, 70, 80 or even 100 years old and are no longer capable of hosting vital community projects. Some playgroups and nurseries will have to close because Ofsted says that the facilities are not up to standard and because the village hall committees do not have access to the necessary capital.

I hope that the Big Lottery Fund will specifically consider umbrella funding for village halls, because it is unnecessary for every single village hall committee to go through a plethora of applications, and a simplified approach would allow two, three, four, five or even 10 village halls and community centres to join together in one application for funds for improvement, refurbishment or even replacement. A combined approach would allow small areas to improve facilities for all who use them. I urge the Minister to recognise that people who buy lottery tickets will become disillusioned if they experience too many setbacks on applications for reasonable projects which are in no way esoteric or difficult to understand, but which are vital to the life of communities and villages.

Photo of Hugo Swire Hugo Swire Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport 6:44 pm, 14th June 2005

I am pleased to wind up the debate for the Opposition this evening.

I welcome the new Under-Secretary of State for Culture, Media and Sport, James Purnell, to the Dispatch Box. We were initially confused about which Minister has responsibility for which part of the Department. At one point I thought that I would face the Minister whom I am meant to shadow, the Under-Secretary of State for Culture, Media and Sport, Mr. Lammy, but he is not here tonight.

I hope that the Prime Minister will reconsider having two Under-Secretaries at the Department for Culture, Media and Sport and promote them to Ministers, because the subjects addressed by the DCMS need that recognition. In an odd article in the Museums Journal, a DCMS spokeswoman stated that the decision to make the hon. Member for Stalybridge and Hyde an Under-Secretary

"was merely a reflection of the Minister's relatively young age and the length of time he had spent in Parliament".

Given that he is two years younger than the hon. Member for Tottenham, I imagine that they both suffer from what Pitt the Elder once called

"the atrocious crime of being a young man."

The arts, sports, heritage and charities need their champions in Government as much now as has ever been the case, which means Ministers capable of independent thought who will bat for them, regardless of age or experience. I am certain that the Minister will not disappoint, but I wish that I could say the same about the Bill.

I do not believe in the synthetic rage or righteous indignation that is often generated on these occasions, but I must confess to feeling genuine anger not only about this Bill, but about the Government's handling of it. I have read it a number of times and tried to put myself in the Minister's position to ascertain what he is trying to achieve, but the Bill is so far away from the original intention of the national lottery, and so opposite to what my party would do in power, that I cannot find any common ground.

Through their refusal to listen to constructive criticism, the Government have managed to unite the Opposition, the Liberal Democrat party and a good number of free thinkers on the Government Back Benches and in the wider community. In a spirit of constructive criticism and co-operation, I have a proposal for the Minister: abandon the Bill and we will all work together to ensure that a better Bill, which reflects the founding ideals of the national lottery and which genuinely gives the lottery back to the people, is presented to Parliament in the fullness of time. The Minister would be able to show that he has listened and that he is capable of independent thought, which will certainly make his name in the world of sport, the arts and charities.

However, that will not happen, because since 1997 the Government have been embarked on a course that gives more and more control to Ministers over what lottery funding goes where. Interestingly, the former Secretary of State, who is now headed for the upper House, in answer to a question from the then Member for Surrey Heath about the principle of additionality during the Second Reading of the National Lottery Act 1998, said:

"I should have run a sweepstake on when that question would first arise in the debate because, of course, it is the common and rather tired theme of Conservative Members."—[Hansard, 7 April 1998; Vol. 310, c. 162.]

I hope that the Minister is listening.

Photo of Hugo Swire Hugo Swire Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

I am glad to hear it. Well, I must say that seven years later that is still our theme. We are not tired—we have been reinvigorated by the 56 new Conservative Members who have recently joined us, some of whom spoke excellently this afternoon—but we are consistent, and we are tired of this Labour Government constantly raiding the lottery.

When people pay their taxes—they pay too much under this Government—they do so, perhaps with some reluctance, as part of an understood contract with the state. As part of that contract, they receive public services, public security and, among other things, the Minister. But when people pay for a lottery ticket, they do so to enjoy themselves in the hope perhaps of winning, but in the knowledge that even if they do not win some of their money will be going to good causes. Sir John Major, the father of the national lottery, saw its instigation as a

"way to raise additional funding—free from the grasping hand of any Government—that could be used to improve the enjoyment—and the lifestyle—of many millions of people."

In the same speech, Sir John went on to point out that the national lottery had created 1,700 millionaires—even more, I dare say, than are to be found at a Labour fundraising dinner—raising £16 billion, the equivalent of Luxembourg's entire gross domestic product, in the process since 1994. That is partly his legacy. It would be a tragedy for this Prime Minister, who must be looking towards his own legacy, if the lottery began to falter because of his Government's actions.

Let us consider what comes next if this Bill becomes law. As my hon. Friend Mrs. Dorries reminded us, the Prime Minister said in 1997:

"We don't believe it would be right to use Lottery money to pay for things which are the Government's responsibilities."

We have heard much tonight from Government Members about their definition of the additionality principle. They interpret it as meaning that the lottery can be used to pay for things that are new and which, because of their novelty, have not been paid for before by Government. The school fruit pilot scheme is a classic example: paid for by the lottery because it was new, but now paid for by central Government. Does that mean that if the Army orders a new type of tank, Ministers could use the lottery to pay for that because Government could not have paid for it before? Despite the Prime Minister's assurance, his Government soon began to dismantle the lottery and to use it to fund health and education. In 1998, Ministers placed 13 per cent. of lottery funds under their direct control; in 2001, they increased that to 33 per cent.; and now they are proposing to take 50 per cent.

The Government have turned the lottery into another stealth tax. We have heard during this debate just a few examples of where lottery funds have been used in place of Government funds: £93 million, as my hon. Friend Mr. Johnson pointed out, for MRI scanners in NHS hospitals; £285 million for child care; and £42 million for fruit in schools. As my right hon. Friend the shadow Secretary of State said, Jamie Oliver worked a miracle in persuading Ministers, with the magic wand of publicity, to improve school food, but I doubt that he would want it to be paid for with lottery funds that would otherwise be going to charities and sports clubs.

The rather unconvincing line peddled by the Minister of State on this morning's "Today" programme was that the Bill will take powers away from Ministers. That is a clear case of double-think. Clause 14 clearly states:

"In exercising any of its functions the Big Lottery Fund shall comply with any direction given to it by the Secretary of State".

Perhaps that is why Luke Fitzherbert at the Directory of Social Change said that the Government's plans were

"a naked seizure of control".

The Government say that charities will do better from the Bill. They say that between 60 and 70 per cent. of the Big Lottery Fund's money will be spent on the voluntary and community sector. That is a very vague definition of charity. "Community" can mean many areas of Government expenditure, such as local schools and hospitals. This, by our calculations, still leaves up to £280 million a year unaccounted for, and which we can be sure will be spent on plugging the gaps in Government funding—a huge slush fund ready for the Government to call on when confronted by the next Jamie Oliver. If, as the Government maintain, charities are going to be so much better off, why did Stephen Bubb from the Association of Chief Executives of Voluntary Organisations say that the Bill

"undermines the independence and integrity of the grant-making system" and call aspects of the Bill "very, very dodgy"? Why did the National Council for Voluntary Organisations say that it is still concerned, despite the assurance of Ministers, that

"the Lottery Bill still gives the Government too great a degree of control over Lottery funding"?

Why do not the Government place in the Bill a definite percentage that will go to charities?

My hon. Friends the Members for Hornchurch (James Brokenshire) and for Mid-Bedfordshire asked about some of the more controversial awards handed out by the New Opportunities Fund and, in all fairness, subsequently the Community Fund. Those ranged from the millennium dome—the cost of which, at about £700 million, was almost the equivalent of £25 for every household in the United Kingdom—to the Cusichaca trust, which received a grant of £440,000 to help Peruvian farmers breed fatter guinea pigs for human consumption. The list goes on and on. Such ludicrous grants serve only to undermine people's confidence in the very fabric of the lottery. That is why our election document "Action on Arts and Heritage" advocated a reputational impact clause saying that

"we will ensure that distributors take the Lottery's reputation into account when dispensing grants."

Perhaps the Minister will say whether he finds merit in that idea and whether it will be taken up by the Government.

We also published detailed and widely acclaimed proposals to restore the lottery to its original purpose—to give the Community Fund back its independence and guarantee that lottery money would be spent only on sport, charities, the arts and heritage. I regret that we are not able to implement those proposals, but I urge the House to consider supporting our amendment so that the lottery is not turned into another stealth tax and remains the treasured national institution that it is.

My hon. Friends the Members for Salisbury (Robert Key) and for Ludlow (Mr. Dunne) raised the subject of our national heritage, which is certainly dear to my heart. My hon. Friend the Member for Salisbury was particularly concerned about clauses 7 and 8 and their possible effect on our cathedrals and ecclesiastical buildings. As I know from my correspondence, that view is shared by many of our bishops. It should be pointed out—and will be, by us at any rate, in Committee—that the Heritage Lottery Fund does not have any unspent money. That is a myth—every single penny held by the Heritage Lottery Fund in its account has been committed to projects. The heritage sector has lost out under Labour, so let us be absolutely certain of the facts before we penalise it further.

How can we be sure that when remaining licences expire in 2009, the Big Lottery Fund will not become a single lottery distributor under the control of the Government? We have heard much tonight about efficiency exercises and the future of the Big Lottery Fund, but little about the renewal of licences for the other good causes—for sport, heritage and the arts. My party guaranteed at the last election that we would continue to receive a quarter of lottery funds after 2009; can the Minister give the same assurance tonight? Will he rule out the Big Lottery Fund taking an even greater share of lottery funds? I doubt that he will do so, because the Government simply cannot resist taking control of such a large amount of money.

In a reply to my hon. Friend Miss Kirkbride, the former Minister, Estelle Morris, said:

"Establishing the new body"— that is, the Big Lottery Fund—

"will require primary legislation. We are encouraging NOF and the Community Fund to work as closely together as possible in the meantime to begin to exploit the synergies between the two bodies and to ensure that full merger can happen quickly when the legislation is in place."—[Hansard, 5 January 2004; Vol. 416, c. 136W.]

Quickly? That reply was in January 2004.

This Bill is much delayed. Indeed, the Big Lottery Fund has been making allocations even though it does not officially exist until this Bill is passed—or, I stress, if this Bill is passed. The Bill is not due to go into Committee until the autumn. It will then go to the upper House, where there is no DCMS Minister, and it will very likely not return to this House until 2006—some two years after the reply that I just read out. That is, of course, assuming that the Bill passes through all its stages uninterrupted. I wonder what consideration the Government have given to the major difficulties that would result from the Bill failing. That just about sums up the mess into which the Government have got themselves. The Bill is unwanted and will herald the end of the national lottery as we know it. I therefore urge hon. Members of all parties to join us in rejecting the Bill, supporting the amendment and voting against the unsatisfactory programme motion, which will allow us only about four days in Committee when we return in October.

If the Bill proceeds, we can be sure that the Big Lottery Fund will get bigger, that Ministers will administer more lottery funds and that the national lottery, charities, sport, heritage and the arts will consequently suffer. The Bill will merely turn the people's lottery into the Secretary of State's lottery. Labour will have nationalised the national lottery.

Photo of James Purnell James Purnell Parliamentary Under-Secretary (Media and Tourism), Department for Culture, Media & Sport 7:00 pm, 14th June 2005

I thank Mr. Swire for his kind remarks at the beginning of his speech. It is a genuine pleasure to make my first speech from the Dispatch Box in such an interesting debate. There have been many excellent contributions from all parties, including from several new Members.

My hon. Friends the Members for Sheffield, Hillsborough (Ms Smith) and for Bridgend (Mrs. Moon) showed their passion for their constituencies and their genuine understanding of the issues. I was impressed by the speech of Mr. Horwood, and James Brokenshire made some strong points. Debate on and scrutiny of the Bill as it proceeds will benefit greatly from the knowledge of people who have clearly had experience before entering the House of matters that are highly relevant to it.

We start with some common ground between the parties. We all believe that grants should be made independently of Government and that the money should be spent as efficiently as possible and with as little as possible used on administration. There is also common ground on the reforms that need to be made to the competition for the next licence.

Mr. Foster made some points about the licence. I hope that I can reassure him by saying that it is, indeed, our intention to have one major licence. The powers in the Bill are only back-stop powers should we fail to obtain the right outcome. It is worth saying that the signs are encouraging at this stage. Several organisations have shown an interest in the next licence, and we therefore hope to get a good level of competition. The powers to break up the contract into smaller contracts exist to be used only if there are problems with getting one major contract. We hope that those powers, including the changes that we are making to the National Lottery Commission, will enable a smoother and more effective process than that which took place last time.

I hope that I can reassure the hon. Member for Bath about promoting the lottery. The proposed changes are not intended to promote playing the lottery—they will not promote the sale of tickets—but to promote its benefits, especially support for good causes in general. There was previously a constraint and a concern that lottery distributors could promote only their good causes. The proposals will give them more freedom to promote the lottery overall. The idea behind that is that the greater the trust in the lottery overall, the greater the number of sales and thus the greater the amount for good causes. I hope that those two points will reassure the Liberal Democrat Opposition.

Several points were raised and I shall try to answer as many as I can. [Interruption.] I shall try not to take three hours—I do not think that I would make it back on to the Terrace alive if I did that. Several detailed points were made but it is worth starting with those that are of genuine concern to voters. My hon. Friends the Members for Caerphilly (Mr. David) and for Rhondda (Chris Bryant) made important points on anxieties about access to lottery funds by constituencies that are away from the metropolitan centres and that had experienced genuine problems with access to grants under the old regime, before the changes that we introduced in 1998. That should concern hon. Members of all parties because, without support from constituencies throughout the country, it would not be a genuinely national lottery, there would be no genuine support and the amount of money raised through ticket sales would fall.

My hon. Friend the Member for Caerphilly made a crucial point about the need to integrate lottery spending into local strategies and to give distributors more flexibility to ensure that lottery money is spent in tune with local priorities. That is one of the Bill's key objectives.

Several hon. Members, including Mrs. Dorries, mentioned additionality. The subject has clearly worried people, and we have been accused of breaching additionality and thus reneging on the principle laid down either by John Major or the Prime Minister. I want to make it clear that we are doing no such thing. We are putting in place the same framework on additionality that existed in 1993 when the original Act came into force. The only difference is that we have taken account of what the public tell us are their priorities.

We do not decide that the Government should spend money on one cause and not another. We do not claim that the Government should spend money on education but not on the arts or sport. The logic of the Opposition's position is that the arts, sports, heritage and charities are not Government priorities. I presume that they do not claim that, owing to the changes that they advocate, they would reduce the amount of money in grant in aid for the arts and sport, heritage and charities. The arts and sport are Government priorities in the same way as education and health. We should decide on the basis not of the causes but the projects.

Photo of Wayne David Wayne David Labour, Caerphilly

Will my hon. Friend confirm that additionality has never been defined as something that is in contradistinction to Government policy? It has always been viewed as something that can legitimately enhance Government initiatives.

Photo of James Purnell James Purnell Parliamentary Under-Secretary (Media and Tourism), Department for Culture, Media & Sport

That is a good point. It we took the argument to its logical conclusion, we would never grant money to anything on which the Government might conceivably spend. That would lead to a bad allocation of public funds. The Opposition may remember that our manifesto in 1997 was widely supported. We made a commitment to spend money on health and education because that was what the public wanted. That was confirmed in 2000 by a MORI poll. The hon. Member for Hornchurch asked earlier about the question in that poll. It asked what were the two or three things that people most wanted the lottery to fund. Fifty-five per cent. of people said education, and I believe that, for 69 per cent., the top priority was health. The top priorities were clearly health and education. YouGov repeated the question, asking people which existing good causes they most favoured. Charities were well supported—I believe that the figure was 30 per cent.—but, again, the most popular replies were health, education and the environment. If people who play the lottery tell us that, we must reflect their priorities.

We must reflect the public's priorities and continue to spend money on the arts, sport and heritage because they are Government priorities, but we must also spend on the other priorities of health, education, the environment and community well-being. Do the Opposition genuinely claim that the public are wrong? Will they issue press releases tomorrow, condemning spending on MRI scanners? Will any Opposition Member volunteer to do that? Will they issue press releases condemning spending on Macmillan nurses, physical education for young people or letting young people in schools learn from veterans about history? If any Opposition Member wants to volunteer to issue such a press release, I should be happy to see the coverage in the local paper.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

I am grateful to the Under-Secretary for giving way because it gives me an opportunity to put the record straight. The people whom he claims might protest about not having MRI scanners have already paid for them through national taxation. Indeed, they have paid for them through record taxation, which the Government have imposed on them. The money that the Under-Secretary claims should go into the national health service should go to smaller charities, voluntary groups, organisations and those people who are in the community trying to do great work. It is not a case of one or the other but a matter of the Government diverting the funds where taxpayers' money should be spent—for example, on such scanners.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. The hon. Gentleman must not make a speech on an intervention.

Photo of James Purnell James Purnell Parliamentary Under-Secretary (Media and Tourism), Department for Culture, Media & Sport

I notice that the hon. Gentleman is not putting out a press release, but if he does do so, I shall look forward to receiving it and to him opposing the money for what are, in fact, MRI scanners. I suspect that we have all been involved in raising money for cancer charities, and the point is that that can dovetail with the money raised by Government. This Government have spent more money on health than ever before. Therefore, the MRI scanners are in addition to what the Government are putting in and they benefit people's health. His constituents, I believe, would widely welcome them. If he changes his mind about putting out a press release, I shall look forward to it.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

I, too, congratulate the Minister on his appointment. He has been given a pretty bad hand and is making quite a good fist of it. Ultimately, does not he acknowledge that there is huge confusion in the country at large about what we mean by additionality? Does he agree with his right hon. Friend the Minister for Sport and Tourism who said earlier today that it is important that an understanding of additionality is enshrined in new legislation? Would he be prepared to work with all parties to get an agreed definition to include in the Bill?

Photo of James Purnell James Purnell Parliamentary Under-Secretary (Media and Tourism), Department for Culture, Media & Sport

Obviously, that can be examined in Committee. Our concern would be whether such a definition would reduce the flexibility of all distributors to make worthwhile grants.

Photo of Hugo Swire Hugo Swire Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

A number of confusing statements are coming out surrounding the Bill. As far as I am aware, Macmillan nurses are a charity, so I would be happy to put out a press statement tomorrow saying that they would get more money under the Conservatives' proposals. Given the confusion about additionality in particular, will the Minister undertake to speak with his Whips to ensure that we get more than the prescribed four days in Committee?

Photo of James Purnell James Purnell Parliamentary Under-Secretary (Media and Tourism), Department for Culture, Media & Sport

Clearly, that is a matter for the usual channels, but the Whips have been perfectly clear that the amount of time necessary for scrutiny will be granted. The delay until October is because of the link with the Olympics decision and to ensure proper scheduling of debates. We agree that the Bill must have proper scrutiny.

On Macmillan nurses, the hon. Gentleman and his colleagues opposed New Opportunities Fund money going on health and yet I have three examples of Macmillan nurses benefiting from NOF, with money spent on nursing care, on the Borders general hospital in Melrose and on a hospice in Moray. I presume that he agrees with such activities and that he therefore supports the idea of lottery money going on health.

Photo of Hugo Swire Hugo Swire Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

I am not allowing the Minister to get away with this. The fact is that Macmillan nurses are a charity—charities are one of our original four pillars—and as such will be entitled to receive money.

Photo of James Purnell James Purnell Parliamentary Under-Secretary (Media and Tourism), Department for Culture, Media & Sport

It is a health charity that spends money on cancer, which clearly confirms that the Opposition's whole case has been blown apart as the hon. Gentleman thinks that money should be spent on health.

Photo of Martin Horwood Martin Horwood Liberal Democrat, Cheltenham

I have worked with Macmillan Cancer Relief, which is a charity. The percentage reserved for charities under this Government has gone down from 20 per cent. to less than 20 per cent. and is now proposed to be abolished altogether. Under the current system, help would be given according to the charity's priorities, whereas under his system it would be given according to the Secretary of State's priorities.

Photo of James Purnell James Purnell Parliamentary Under-Secretary (Media and Tourism), Department for Culture, Media & Sport

No, the priorities would be those for which the charity had applied and which the distributors decided that they wanted to fund. [Interruption.] I will return to the matter later in my speech.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (International Development)

I accept the Minister's point that a significant proportion of the population would like to see lottery money spent on education and health. Can he tell me, however, what percentage of the UK population supports spending £1.5 billion of lottery money on infrastructure for the London Olympics bid?

Photo of James Purnell James Purnell Parliamentary Under-Secretary (Media and Tourism), Department for Culture, Media & Sport

The hon. Gentleman started off by wishing us all the best with the Olympics decision on 6 July, and the Government are united in support of our bid. I know that both main Opposition parties support us and that he does, too. If he wills the ends, he must will the means to have a fantastic Olympics as well.

On additionality, it is clear that the distinction should not be between the causes that we fund, but the projects. The attention of distributors should be focused on funding projects that are innovative, that pilot new developments, that do things that Government could not otherwise do, and that could bring organisations together in a way that Government might otherwise find difficult. I hope that I can reassure my hon. Friend the Member for Bridgend that that will continue under the Bill.

Let me deal with the issue of Government control, which was raised by the hon. Members for Cheltenham and for Hornchurch. It was claimed that the Government were seeking to control grants. That is the opposite of the fact. What happened was that people raised concerns about NOF having prescribed programmes set by the Secretary of State. We have listened to those concerns and, therefore, under the Big Lottery Fund, those decisions will be much further away from Government. The Government will set some high-level priorities and then it will be up to the Big Lottery Fund to formulate the programmes, as set out in the Bill. If we consider the new programmes put forward by the Big Lottery Fund, such as children's play, parks, support for the voluntary sector infrastructure, we will recognise that those are clearly additional and clearly welcome. I assume that the hon. Member for Hornchurch supports them. The whole thrust of the proposals is to put distributors further away from Government and closer to the public, and to give the public a much greater say in how these funds are spent. That is exactly right—it should be the public, not politicians, who have the keenest influence on how the money is spent.

I thought that Mrs. May was slightly churlish to say that the £65 million being spent through the People's Millions was a small amount of money. Most people would say that having £65 million allocated by the public is a very good initiative, and it is just the start of what we want to see—we want widespread consultation through citizens juries, through the telephone service and through whatever ways that distributors think are appropriate to ensure that they can properly reflect what people want. Therefore, the Bill puts distributors further from Government, much closer to the public and much further away from some Conservative Members' views, which we have established today.

Photo of Wayne David Wayne David Labour, Caerphilly

On the critical issue of members of the public being more involved in the decision-making process, will the Minister join me in expressing some reservations about whether the internet can be effectively used in that respect given that socially excluded people do not have good access to the internet?

Photo of James Purnell James Purnell Parliamentary Under-Secretary (Media and Tourism), Department for Culture, Media & Sport

Clearly, we must ensure that we consult the whole range of people and must not repeat the mistakes made at the beginning of the lottery, when only a subsection of the population was involved. My hon. Friend makes a good point.

On charities, I hope that my hon. Friend the Member for Bridgend has been reassured by what was said about the reserved amount for charities. We guarantee that between 60 and 70 per cent. of Big Lottery Fund grants will go to the voluntary sector, which is an increase. On lifeboats, I reassure my hon. Friend Mr. Campbell that lifeboats can apply for grants. They have already received £2 million, and if he wants to write to me, I will be happy to examine the issue that he raised.

Finally, Mr. Dunne showed his keen interest in heritage, and he will clearly be campaigning on that during his time in the House. We have made it clear that the Heritage Lottery Fund will not lose any money under this Bill. I hope that he will be reassured that the power concerned would not remove any money from the Heritage Lottery Fund—it is merely there as a backstop if people are failing to spend their balances.

We should give credit where credit is due. Many people have paid tribute to John Major and the previous Conservative Government for creating and launching the lottery. Clearly, we should repeat that tribute. The Major Government will be remembered for three things: the national lottery, Black Wednesday and the cones hotline. One out of three is not bad. I pay tribute to Chris Smith for bringing the lottery much more into line with the people's priorities. When we came to power, nearly half the value of lottery grants was going to London and the south-east even though they contain only a quarter of the population of this country. Clearly, that was a scandal. The Tories were on their way to ruining the national lottery. They were turning it into a lottery run by the great and the good, for the great and the good. Chris Smith put that right, and the Labour Government changed that, so that lottery priorities are now much more in line with those of the people. The amount of money going to London and the south-east is now in line with the number of people in London and the south-east.

This Bill will put the distributors at a much greater distance from the Government. It will give the public much more power. It merges three distributors into one, and it will save money to put back into good causes. It will raise confidence in the national lottery, and I commend it to the House.

Question put, That the amendment be made:—

The House divided: Ayes 197, Noes 290.

Division number 12 National Lottery Bill (Reasoned amendment on second reading)

Aye: 197 MPs

No: 290 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Absent: 153 MPs

Absents: A-Z by last name

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading), and agreed to.