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Orders of the Day — National Lottery Bill

Part of the debate – in the House of Commons at 5:00 pm on 14th June 2005.

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

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.