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Orders of the Day — National Lottery Bill

Part of the debate – in the House of Commons at 6:02 pm on 14th June 2005.

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

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.


Posted on 15 Jun 2005 9:21 am (Report this annotation)

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......