'After section 25E of the National Lottery etc. Act 1993 (c. 39) (inserted by section 11 of this Act) insert—

"25F Reports by distributing bodies

(1) As soon as possible after the end of every financial year, distributing bodies specified under section 23 shall make a report to the Secretary of State about how decisions on the awards made during that year have been reached.

(2) Matters which may be dealt with in a report under subsection (1) include—

(a) the independence of funding decisions;

(b) the principles applied to maintain the distinction between core government expenditure and lottery funding; and

(c) the proportion of funding that has been allocated to bodies (other than public bodies or local authorities) whose activities are carried on not for profit.

(3) The Secretary of State shall lay a copy of every report received by him under this section before Parliament.".'.—[Mr. Don Foster.]

Brought up, and read the First time.

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

With this it will be convenient to discuss the following:New clause 2—Additionality—

'After section 25E of the National Lottery etc. Act 1993 (c. 39) (inserted by section 11 of this Act) insert—

"25F The additionality principle

(1) A body which distributes money under section 25(1) shall have regard to the principle that funding under that section should not be provided for the provision of services, benefits and capital works which would usually be provided by government, when—

(a) determining the persons to whom, the purposes for which and the conditions subject to which the body distributes any money under section 25(1);

(b) preparing, adopting, reviewing, modifying or replacing a strategic plan under section 25C or 25D.

(2) The Secretary of State shall have regard, where relevant, to the principle that funding under that section should not be provided for the provision of services, benefits, and capital works which would usually be provided by government, when giving any direction under sections 26 or 36E.".'.

I begin by congratulating Mr. Field on his elevation to the shadow Department for Culture, Media and Sport team. I am sure that all who have followed the National Lottery Bill debate will enjoy his contribution today. It is said that a week is a long time in politics, but those who have studied the Bill will know that, unfortunately, it has taken a very long time to reach this stage. It is some 60 weeks since it was given its First Reading, on 25 November 2004, and here we are still working our way through it.

I want to make clear, as I did in Committee, my own position regarding the national lottery. I believe that my party was wrong to oppose establishing the lottery all those years ago. The evidence is very clear that it has been of enormous benefit to many communities throughout the country. Indeed, since it began, some £17 billion to £18 billion has been given to good causes, thereby benefiting people from all walks of life.

Some 200,000 grants have been made and, pleasingly, a very large proportion of them have been relatively small—some £5,000 or less—and have brought real benefit to local communities. There may have been disagreement on the odd lottery grant here and there, but in general everybody acknowledges that those awards have brought real and tangible benefits to such communities. My own community of Bath has received some £50 million in lottery grants over the years, including money for Bath university's new sports training village, a facility that I believe will enable us to capitalise fully on the benefits of the 2012 Olympics.

Yes.

The Minister, from a sedentary position, gives a confidence boost to Bath's bid. I am delighted at that.

Parts of the Bill will be criticised today, but I stress that my party supports much of it. For example, the establishment of a legal framework for the Big Lottery Fund is especially welcome, as that organisation has operated for 18 months before being allowed to come into formal existence. However, our biggest disagreement with the Government has to do with additionality, the subject of new clause 1, as we are concerned about the Government's tendency to try to get their hands on lottery money.

Sir John Major set up the lottery when he was Prime Minister, and made it clear that the money raised would "not replace public expenditure". In 1997, the present Prime Minister used similar words, saying that it would not be right

"to use Lottery money to pay for things that are the Government's responsibilities."

More recently, the Minister responding to this debate said in Standing Committee that lottery money was "special" and that it

"should add to, not substitute for, Government expenditure"—[Official Report, Standing Committee A, 3 November 2005; c. 240.]

Last June, the Minister told the House that additionality was

"an important principle that should be embodied in future legislation."—[Hansard, 14 June 2005; Vol. 434, c. 168.]

That is exactly why we have tabled new clause 1; to put into effect what the Minister said that he wanted. The hon. Member for Cities of London and Westminster will move new clause 2 shortly. Both it and new clause 1 are attempts to give the Minister what he said he wanted and ensure that the Bill deals with the question of additionality. If new clause 2 were to be pressed to a Division, I can assure the hon. Gentleman that my party would support it.

The public also believe that additionality is an important matter. Almost three-quarters of respondents to a 2003 YouGov poll said that it was "vitally important" that lottery distribution remain independent of Government interference. We must ensure that lottery money is not used as a slush fund by the Chancellor of the Exchequer, something that has happened far too often already.

For example, £93 million of lottery funds has been spent on magnetic resonance imaging scanners for the NHS, and £42 million on providing fruit in school. That led Sir Clive Booth, the Big Lottery Fund's excellent chairman, to say that the

"days of the government issuing instructions over Lottery cash for schemes such as the distribution of fruit to schoolchildren are gone".

I hope that is true but, to make sure, we must get a guarantee enshrined in the Bill.

The Culture, Media and Sport Committee expressed concern about this matter in its 2003–04 report. It stated:

"The National Lottery has meant that there has been an erosion, in real terms, of the DCMS core funding."

Increasingly, the Department for Culture, Media and Sport is not spending as much money, as a proportion of gross domestic product, as it used to, but that is because it has come to rely increasingly on money from the various lottery distributors.

Another aspect of the problem is that there is increasing confusion about which expenditure comes from the DCMS and which comes from the lottery. I shall give two examples. On the one hand, the Government claim credit for projects that in fact are funded by the lottery; on the other, they try to pass the buck for failure to the lottery. Parliamentary answers last November revealed that one Department incorrectly claimed credit for a supposedly independent project that was successful, whereas a Minister in another Department has blamed the lottery for unwise Government spending.

A report from the Department for Trade and Industry said that the £1.9 million spent on renewable energy research into biomass was funded by "DTI and lottery spend". However, further questions uncovered the fact that none of the money spent on that research came from the DTI. In other words, the Government were claiming credit for research that was funded entirely by the lottery.

On 31 October last year, I asked a parliamentary question about a highly contentious sports questionnaire survey that was criticised by various newspapers. The survey cost £6 million, but the Government answered that the money came from the national lottery. I pursued the matter, and several weeks later the DCMS admitted that the original answer was incorrect and that the vast majority of funding for that controversial project came from the Department. That shows that the Government have tried to confuse the public about what is lottery money and what is departmental money.

Have the Government plundered lottery money? There are many arguments about that, but today's Daily Mail carries an article about a report from the Centre for Policy Studies. That is a Conservative-leaning think tank, but that does not mean that it is always wrong. The newspaper uses the headline "Labour Has 'Plundered Billions out of the Lottery'", and its analysis may go a little far. However, the centre's website carries the preface to the report, which I understand will be published tomorrow, and it makes very interesting reading. In it, Sir John Major—who, as I noted earlier, founded the lottery—states:

"From the outset, I insisted that Lottery money should be used for additional spending on causes or activities that the taxpayer should not be expected to cover . . . When the Lottery Bill was going through Parliament, the Labour Opposition was at pains to stress the importance of Government keeping an arms-length relationship from the Lottery and, in particular, grant distribution. But, since it took power, Labour has diverted Lottery funding into areas that have historically been funded by the Exchequer. Indeed, the "Big Lottery Fund" has a specific remit to fund health, education and environment projects when taxpayers would rightly expect many of these projects to be funded directly by Government. The Labour Government's deliberate muddying of the waters between Exchequer and Lottery revenues is an unwelcome development and which, as its creator, dismays me greatly."

I am often in a position to say to the Daily Mail, "Now, come on", but I rarely say that to the hon. Gentleman, who takes a sensible approach to such matters. If every penny piece that the lottery raised annually for good causes were to be transferred to the Government, it would pay for about a day's worth of public expenditure; £1.5 billion in about £500 billion. It is important to put the issue into context and realise that we are talking about relatively marginal amounts.

While I have some sympathy with those remarks, I made it clear earlier that the grants from the national lottery have been of enormous benefit to many communities. Some 200,000 grants have been made, including to projects in my constituency. The amounts of money may be comparatively small, but the benefit is enormous and the impact on the communities has been tremendous. Let us not belittle the importance of lottery money. We need to get the process for making decisions on how that money is spent right and ensure that it is separate from the Government's decisions. We have to have a clear independence of lottery distribution decisions from Government. That is what the new clause is about.

I am happy to clarify my earlier remarks. I was trying to say that although constituencies, including the hon. Gentleman's and mine, have benefited significantly—especially in economic, social and environmental regeneration projects—the impact on Government expenditure of a wholesale transfer of the lottery money to their coffers would be tiny. Therefore, what would be the incentive for the Government to do that? Is the hon. Gentleman suggesting that the Government are trying to drive down the tax bill to the cost of those buying lottery tickets?

The hon. Gentleman suggests that I am merely suggesting that the Exchequer has got its sticky little mitts on lottery money. I am not suggesting it; I am telling the House that that is what has happened. The New Opportunities Fund was deliberately established to take over responsibility for funding aspects of much needed service delivery from the Exchequer. The evidence is clear. I accept that the Daily Mail report and, possibly, the think-tank report went a bit overboard and, indeed, I said so earlier, but I have already given several other examples.

If the hon. Gentleman had finished the preface written by Sir John Major, which was not quoted in the Daily Mail, he would have seen that Sir John referred to the millennium fund, which wound up at the end of 2000. He intended that the resources released from that should be used to promote school sports. Instead, he says, the money was siphoned off by the Labour Government. That goes some way to answering the comments by David Taylor. It is not necessarily the quantity of money, but the principle.

The hon. Gentleman is right to say that there was more to the preface. I was hoping that in the spirit of comradely friendship I would not be tempted into commenting on that aspect of Sir John Major's remarks, but now that the hon. Gentleman has provoked me I should, in fairness to the House, point out that the Conservatives' view of the issue of additionality is somewhat ambiguous. The hon. Gentleman raises the issue of sport, so I must now point out that that ambiguity was demonstrated in their manifesto at the last election, when their much heralded Club2School sport scheme was to have been funded by the national lottery. I have pointed that out to the Conservatives before and they have said, "Oh no, we got it wrong, we won't ever do it again." However, their new leader was at it again more recently, on 5 January. He was asked who would fund his idea for a new school leaver programme policy, and he replied:

"Well, we want to look at that, there is the National Lottery, there are all sorts of programmes we can access."

I accept that he did not say that funding would come from the national lottery, but clearly it was a possible source.

The hon. Gentleman will be glad that I am here to protect the honour of my right hon. Friend Mr. Cameron. The hon. Gentleman has rightly quoted the transcript, but my right hon. Friend continued his remarks to Mr. Naughtie on the "Today" programme by saying:

"Jim, I can't pre-judge it because I'm having a meeting with the Prince's Trust and the Duke of Edinburgh Award scheme and the National Union of Teachers are coming in".

The lottery was one of a number of options that my right hon. Friend put forward in that interview for funding the national school leaver programme. No commitment has been made that contradicts our proposals in new clause 2.

rose—

Order. Perhaps we have now clarified that point and could now concentrate our remarks on the new clause.

I am grateful to you, Madam Deputy Speaker, but I would point out that the hon. Gentleman has just given a lengthier version of the cover that I had already given to Mr. Cameron. However, you rightly chide us to move on from that issue.

Notwithstanding the occasional blemishes on the record of parties on the issue, all the parties have said that they believe that additionality is a crucial issue. All parties have said that they do not wish to see the Government, whoever is in power, interfering in national lottery decisions. Given that occasionally people have strayed from that commitment, would it not be helpful to have legislation that ensured that that does not happen again in the future?

During the passage of the national lottery legislation in 1993, and the changes made to it in 1998, attempts were made to add additionality to it. We have already had attempts by the Conservative party and by me to place something in the Bill. Those were attempts to define additionality, but they fell on stony ground. Indeed, the Minister rejected our proposal for a definition of additionality in Committee because he said that it would result in bureaucracy. I am not sure that that is a good reason, but our attempt was rejected for that and, no doubt, several other reasons.

Today, I am taking a new approach that might find favour with the Government and obtain the support of the House. We do not suggest a definition of additionality but that the Bill should contain a requirement that the distributing bodies report annually on how they had reached their funding decisions. That would include the two crucial questions of additionality; how independence from the Government was maintained and what principles were used to maintain the distinction between core Government funding and the causes that the bodies had supported.

I know that many of the distributing bodies have already committed themselves to annual reports on a variety of issues. For example, the Big Lottery Fund is already committed to reporting specifically on the additionality issue. Under the new clause, we seek to place in the Bill the commitment that we have received from the biggest lottery distributor and perhaps to push the other distributors to follow suit, so that there is no opportunity to backslide in future.

We have support from many quarters for the route that we have chosen. The National Council for Voluntary Organisations said:

"We believe that these commitments must be enshrined on the face of the Bill if they are to be meaningful and lasting."

The National Campaign for the Arts said:

"The New Clause is a modest attempt to ensure that the line between Government and Lottery cash cannot become ever more blurred . . . If inappropriate political pressure is being put on the Lottery distributors, then the public should be made aware of it. If, as is insisted, no such pressure is being exerted, then there can be nothing to fear from the New Clause."

The Minister has given support to the new clause. In Committee, he said:

"Somebody has to define the concept for the purpose of day-to-day operations, but if the concept were tied down to a definition that would be challengeable in law, those funds might be put into all types of litigation."—[Official Report, Standing Committee A, 3 November 2005; c. 244.]

He will not go down the route of placing such a definition in the Bill—although he might be persuaded to do so, given new clause 2—but he has at least made it clear that he wants something similar in the Bill and that he believes that annual reports on such issues should be produced. That is why it is crucial that the Minister should be prepared to support new clause 1, which is a modest attempt to ensure that we get something in the Bill to ensure that there is never again the possibility of blurring the distinction between national lottery money and Government-funded activity.

Under new clause 2, we would introduce into the National Lottery Act 1993 a requirement to consider the additionality principle. I was very interested to hear what Mr. Foster had to say—we would very much support new clause 1 in any vote, if one is necessary—but I should like to explore one area with him, and perhaps the Minister will take my observation on board. Are there any circumstances in which certain projects could be paid for partly from the lottery and partly from Government expenditure? It was not entirely clear whether that could be possible with certain projects—for example, large-scale research. Again, we need to have a sense of transparency. We worry that too much in the Bill is entirely opaque.

We propose a definition of additionality in new clause 2, which states that

"funding should not be provided for the provision of services, benefits, and capital works which would usually be provided by government".

New clause 2 goes somewhat further than new clause 1. The first subsection of our new clause would apply that principle to the distributing bodies when distributing money or making or reviewing their strategic plans. The second subsection would apply the same principle to the Secretary of State or his Ministers when making directions to the Big Lottery Fund or other distributing bodies under section 36E of the 1993 Act.

As has become apparent, there is a plethora of new distributing bodies—Sports Council-related bodies, those related to the arts and the Heritage Lottery Fund, and so on. From the national lottery's inception, the Government have stated their commitment to the principle of additionality during the debates that took place when the lottery was being established and in those that have taken place since May 1997.

The hon. Gentleman says that new clause 2, which was tabled by the Conservatives, would tighten up the arrangements in some respects, but it suggests that lottery distributors should consider whether the Government "would usually be" the source of the provision. The word "usually" implies that a category of activities and projects would not fall within the proposed definition. How on earth will the lottery bodies make a distinction between the two? Unless we state that the Government will always make such provision—that could be impractical as well—new clause 2 is a dead letter, is it not?

The hon. Gentleman makes a fair point. However, in fairness, we were trying to appreciate the fact that there are grey areas at times. We would like to think that the issue was entirely straightforward, but our contention is that that grey area has been greatly abused by the way in which the Government have sought to allow the Big Lottery Fund to make its own distributions.

As the hon. Gentleman rightly says, if we were to use the word "always", the provision could be open to all sorts of abuse. Indeed, the Government might be given an opportunity to walk away very happily from certain obligations. They could rely entirely on funding those obligations from lottery funds. We used the word "usually" to try, as far as possible, to adopt a pragmatic approach, while recognising that grey areas of expenditure may arise sometimes. Such financial provision might be covered generally by lottery funding, but also by Government expenditure—we are trying to get that balance right. Our contention—I think it is also that of the Liberal Democrats—is that we have not got that balance entirely right and that, recently, a coach and horses has been driven through the original idea and the original causes of the 1993 Act.

In the 1992 White Paper, in which the national lottery was initially suggested, it was stated that the lottery would fund only projects additional to those that would otherwise be funded by the public through general taxation. In written evidence to the fifth report of 2003–04 of the Select Committee on Culture, Media and Sport, the Department for Culture, Media and Sport defined the principle of additionality as not allowing lottery funding to

"become a substitute for funding that would normally fall into mainstream Government spending" and stated that it

"remains firmly committed to that principle."

The Select Committee's report on the reform of the national lottery said:

"Many witnesses told the Committee that the principle of additionality was becoming increasingly eroded."

Obviously, those witnesses are experts in the field. It continued:

"The Lottery Council told us that 'additionality is something we take a strong line on, and we think that that line is getting blurred' and that 'there is a great deal of concern about the erosion of the additionality principle.' The NCVO believed that 'Lottery funding should be independent from Government but accountable to Parliament; that is should be additional to what should be properly spent by Government and not a substitute for it.' It was concerned that that was not happening."

The Select Committee therefore found in its conclusion that the additionality principle was being eroded, and it deplored that erosion in paragraph 165 of the report to which I referred.

We believe that it is necessary to include provisions on additionality in the Bill. New clause 2 would do that in a practical fashion by requiring distributing bodies and the Secretary of State to have regard to the principle when exercising their relevant functions under the Bill.

We contend that the Government have betrayed the lottery's founding principles by using lottery money for spending that should have come from taxes. Only this morning, as the hon. Member for Bath pointed out, the right-of-centre Centre for Policy Studies—[Interruption.] It is Conservative supporting, at least. The centre called for a stop to the Government's "larceny" and "plundering". Perhaps we would not use such emotive terms in this era of modernised Conservative thinking, but none the less there is little doubt that lottery money has been used, and increasingly will be used, to bail out the Government on some of their spending plans.

We fear that if the Bill that is passed does not address additionality, we will simply entrench and extend the use of lottery funds for matters that should be met out of general taxation. As I am sure that the Minister will point out, there are sometimes grey areas regarding lottery expenditure, and it was thus difficult to couch the new clauses in exact terms. However, it is also clear that we have moved significantly away from the founding principles of the lottery.

We believe that the Labour Government are, via the Big Lottery Fund and the Heritage Lottery Fund, imposing on distributing bodies a mandatory policy direction that is in line with Government objectives. For example, a significant proportion of Heritage Lottery Fund grants are awarded to schemes that can show a measurable contribution towards addressing social and economic deprivation. We have no objection to the idea of addressing that problem, but we must question whether lottery money should be expended in such a way.

I was advised only this week by Trevor Watkins of Leonard Cheshire that a concentration on specific areas of the United Kingdom for eligibility has led to unnecessary duplication in bureaucracy for charities that work throughout the UK. The absence of a UK-wide Big Lottery Fund will mean that multiple applications for grants under the lottery will be required, which could be wasteful and create a strong disincentive for small nationwide charities to apply for funds to which they would otherwise be entitled.

I was sorry that the hon. Member for Bath stole my thunder by citing an entire quotation from the former Prime Minister, Sir John Major, during whose premiership the lottery was founded. However, I shall reiterate a few of those words. Sir John Major rightly said:

"When the Lottery Bill was going through Parliament, the Labour Opposition was at pains to stress the importance of government keeping an arms-length relationship from the Lottery and, in particular, grant distribution. But, since it took power, Labour has diverted Lottery funding into areas that have historically been funded by the Exchequer."

We tabled new clause 2 as an attempt to row back from that regrettable tendency, which undermines many of the objectives that are close to the hearts of the many millions of our fellow countrymen who play the national lottery. I hope that the Minister will give serious consideration to not only new clause 2, but new clause 1. We await his views with interest, but unless we are entirely satisfied, I give notice that we will press the matter to a Division.

Thank you, Mr. Deputy Speaker, for allowing me to make a small contribution to the debate. It is always nice to speak to a packed House. I am sure that hon. Members are waiting with bated breath for my words of wisdom—[Hon. Members: "Hear, hear."] I thank hon. Members very much.

Health, education and the environment are all hugely important things and they are quite rightly the responsibility of the Government. When the people of this country voted for the Government, they thought that they were voting for a Government who would meet their health, education and environment needs. However, they were not aware that the Government were going to use the national lottery as a means of topping up spending that should be central Government expenditure. If the British public knew what was going on today, they would be a trifle concerned.

We heard from Mr. Foster about the various initiatives that have been funded by lottery money already. Some 529 pieces of cancer scanning equipment have been funded at a cost of £93 million. Of course that equipment is hugely important and much welcomed by those whose lives it saves, but should it be funded by lottery money, or through central taxation? We have set up healthy living centres at a cost of £300 million and information and communications technology training for teachers and school librarians at a cost of £231 million. Out-of-school learning hours have been funded at a cost of £180 million. Those are vast sums of money. David Taylor, who is no longer in the Chamber, suggested that we were talking about trifles and mere pennies, but we are not—we are talking about upwards of £1 billion. The Treasury already takes 12 per cent. of all money spent on the national lottery.

The hon. Gentleman adds to my list of examples. Does he accept that the ultimate example of funding by the lottery that clearly should have been provided by the Exchequer was the use of £111,000 for a heart failure nurse specialist at one of our hospitals?

I accept the hon. Gentleman's excellent intervention. It is a good intervention because it is the first that I have ever taken. In a sense, he has broken my virginity, and I thank him for that. Very pleasurable it was, too—he was very gentle.

I was delighted to have had the opportunity to do that, and I am delighted now that I have been able to do it twice.

It was as pleasurable the second time.

Things that should have been funded by central Government have, in fact, been funded by the lottery. All those things are hugely important, but the lottery was established to fund the additional things in life: sport, the arts and heritage—those little extras that make life worth living both nationally and as part of communities. I hope that the Minister takes our concerns on board. They were put to him in Committee. I hope that he has heard them again and will reconsider his position.

I welcome Mr. Field to his new position on the Front Bench team of the Department for Culture, Media and Sports. I hope that we have some good debates.

Additionality is an important part of the lottery. Mr. Foster has been helpful and he reflected what was said in Committee. However, I again want to put things in context. Before we introduced the Bill, there was wide consultation between 2004 and 2005 to discover what the public wanted. Hon. Members know, because it was brought up in Committee and is on the record, that only 6 per cent. of those who responded to the questionnaires as part of the consultation mentioned additionality. Of the themes that we put forward for consultation, nearly 60 per cent. of respondents acknowledged the three themes that the Big Lottery Fund would adopt. They thought that those were in tune with the things on which the lottery moneys should be spent. It is not without some major consultation that we introduced the Bill.

Will the Minister acknowledge that there is a huge difference between what he is referring to, which is the Big Lottery Fund engaging in wide-scale public consultation on how the money should be spent, and what happened when the Labour Government introduced the New Opportunities Fund and specified precisely what the money should be spent on? That is the big distinction.

Against that background of the New Opportunities Fund, all I can say is that those were the general opinions of the public. They were reflected in their answers to the consultation. As I said, the themes that emerged from that are in tune with their opinions. They are now embodied in the Bill and the directions, at a high level, to the Big Lottery Fund. We have the evidence.

I must say that that research is far better than the research carried out by the Centre for Policy Studies. Ruth Lea astounds me sometimes. I do not know how, as an economist, she adds the figures up. She should go back to basic arithmetic from time to time. Its research is supposed to be embargoed until tomorrow, but everyone seems to have a copy, including the Daily Mail, and it is on the website. It cannot even get the embargo date right. The research is like a comic opera. Some of the figures do not add up. She just tosses in the odd £6 billion, which is the revenue taken by taxation. Others will make their judgments on that.

New clause 1 seeks to require each lottery distributing body to make an annual report to the Secretary of State on the way in which it makes funding decisions during the year. Although it does not seek to compel distributing bodies to include any particular item, it is clearly expected that they would report on the way in which their decisions were made independent of Government and how, indeed, they have followed the principle of additionality. Where appropriate, they would report on the proportion of funds given to the voluntary and community sector. As I said, they would do so where appropriate, and I assume that the new clause is referring to the undertaking by the Big Lottery Fund that 60 to 70 per cent. of funding will go to voluntary and community sector organisations. The fund will produce an annual report on the way in which the principle of additionality has been followed, and the hon. Member for Bath welcomed that provision.

The Government nevertheless agree with much of what lies behind new clause 1. We agree that the lottery funding decision should be made by distributing bodies independent of Government, although within an overall framework of high-level Government control through policy directions—I do not think that there is any disagreement about that. That is the proposition that we have submitted to the public in our consultation, to which I referred a little earlier, on the future of lottery funding for the good causes of the arts, film, heritage and sport. May I reiterate that we agree with the principle of additionality? We continue to follow the principle that lottery funding should not be allowed to become a substitute for funding that would usually fall to mainstream Government expenditure. When discussing additionality, it is important to clarify the nature of the Government expenditure that we are talking about. Some people call it core Government expenditure, others mainstream Government expenditure, but there is a great deal of Government expenditure, which I shall come on to, that falls outside such expenditure.

That does not mean that the lottery cannot support things that receive strong public support or that lottery grants cannot add to public expenditure. That, too, is the proposition that we are putting to the public in our consultation. As I have noted, the Big Lottery Fund has agreed to produce an annual report to show how the principle has been adhered to. All distributing bodies already produce an annual report, which is placed in the Libraries of both Houses. I am grateful to the hon. Member for Bath for drafting his provision in a way that tries to take account of some of my comments in Committee. In particular, we should not attempt to define additionality, as that would leave every funding decision open to legal challenge, thus preventing many good causes and projects from being funded in future. I am grateful to the hon. Gentleman for his helpful approach, and I am sympathetic to the notion that the other distributing bodies may follow the lead of the Big Lottery Fund and explain how their grants have been made and, indeed, how they have met the principle of additionality.

This morning, I discussed the issue with the chief executives of the distributors who, by chance, had a meeting at the Department for Culture, Media and Sport. In his new clause, the hon. Member for Bath has tried to reflect our debate and discussions, including sentiments expressed in Committee. Indeed, his provision builds on the fact that Stephen Dunmore, the chief executive of the Big Lottery Fund, told the voluntary sector that in his annual report he would report on additionality and the spend of 60 to 70 per cent. I wish to make it clear that the Big Lottery Fund has made a commitment to report on such matters in its annual report, but this morning, the other lottery distributors agreed that they would each determine a policy on additionality and make it publicly available, probably through the annual report. However, they will develop other ways of making that policy available. That goes a long way towards satisfying the demands, which I think are genuine, for the executives of the lottery distributors to be held to account in a way that does not finish up as a lawyers' paradise. If that can be included in the annual report of the distributors and placed in the Library of both Houses, that will allow Members the opportunity for further debate through Select Committees or Adjournment debates or on the Floor of the House. That debate will be informed by the way in which lottery distributors have defined additionality and how they dispense the lottery money. Additionality in an area such as heritage may be defined differently from the way that it is defined by the Big Lottery Fund. It can be applied in a different way, although the objective is the same.

I welcome the undertaking by the chief executives of the lottery distributors this morning to try to ensure through their annual reports that the Members of both Houses have that information and can use it for informed debates. However, we must be conscious of the need to avoid additional bureaucracy, which would go against the important principle in the Bill that more lottery money should go more quickly to good causes.

I am sure that my parliamentary colleague the Under-Secretary of State for the Cabinet Office, not to mention the Prime Minister, would be less than pleased if I considered new clause 1 without acknowledging the Legislative and Regulatory Reform Bill. That was introduced earlier this month, supported by a number of stakeholders in the public and private sector. Members on the Opposition Front Benches would acknowledge that they have been at the forefront of the argument against red tape and additional bureaucracy. The Better Regulation Executive has made great efforts to tackle unnecessary or overcomplicated regulation and disproportionate bureaucratic requirements.

In that context, will the Minister answer the point that I made in my initial comments in relation to the Leonard Cheshire homes? Because the charity is a UK-wide body, it would have a single template and thus avoid multiple applications for Big Lottery Fund distribution, but the nature of the distribution and the other giving is such that there are many small, quite regionalised award-giving bodies, which makes it necessary for such a charity to duplicate its paperwork many times over for the various applications, instead of making a single UK-wide application. Is there any proposal to do away with such wasteful duplication?

If the hon. Gentleman writes to me, I will take the matter up with the Big Lottery Fund. We will do anything that we can to streamline applications. That is covered on the website. Measures that the Big Lottery Fund has put in place should make it more sensitive at national, regional and sub-regional level to organisations such as the one that the hon. Gentleman described.

The undertaking by the Big Lottery Fund that 60 to 70 per cent. of its funding will go to voluntary and community sector organisations is a commitment by the Big Lottery Fund alone and is not applicable more widely. We shall have a full discussion of that undertaking when we come to amendment No. 4. For now, I say again that the undertaking has been given by the boards of the Community Fund and the New Opportunities Fund, operating as the Big Lottery Fund, and not by the Government. We fully support the undertaking, but we do not need to repeat it or write it into the Bill. I want to make it clear that it does not apply to other distributing bodies.

We do not support new clause 1 in the form in which it has been tabled, for the reasons that I have given, but we will have the co-operation of the chief executives of the other distributors, which will probably take the same position as the Big Lottery Fund. It will be possible to debate additionality in the House in an informed way, against the background of the annual report.

First, before the Minister was intervened on by Mr. Field, he began a set of remarks about regulatory reform legislation. I could not see where he was going with those remarks, so perhaps he will explain precisely what he means. Secondly, he has said that the chief executives of the various distributors have assured him that they will produce a report, which he has told the House will enable hon. Members to debate the matter. Without a mechanism to place the report formally before the House, however, he is not going very far in meeting the issues raised by new clause 1.

The hon. Gentleman has been a Member of Parliament for many years, and he knows that Ministers do not organise the House's time from the Dispatch Box. The information on additionality that the hon. Gentleman wants will be available in the annual reports of the distributors, which will be placed in both Houses of Parliament. Those reports can be used to inform a debate, whenever hon. Members want to hold it.

The hon. Gentleman should make a commitment from his Front Bench that the Liberal party will give up one Supply day—half a Supply day will do—every year to debate additionality. If he were to make such a commitment, it would advance new clause 1. He should give up a Supply day to debate the information that the chief executives of the various distributing bodies will put in their annual reports. I wonder whether he wants me to give way so that he can say yes to that proposal.

I am not rising to give the Minister the assurance that he seeks. From the Dispatch Box, he has told us that additionality is so important that he interrupted a meeting in his Department today to discuss new clause 1. However, he expects Opposition parties to give up their limited time on the Floor of the House to debate it, when it is the Government's responsibility. It should be debated in Government time, not Opposition time.

People reading Hansard will make their own judgment. The Liberal party tabled new clause 1, and I have delivered all the information required from the Dispatch Box. The information will be there for Parliament to debate, but the hon. Gentleman will not make a commitment from the Front Bench to give up a Supply day to use that information to inform the nation. I think that the nation will make a judgment on how he can be so hypocritical.

New clause 2 seeks to define additionality by reference to what Governments do not usually fund and to hold both distributing bodies and the Secretary of State to such a definition. The Government entirely reject new clause 2 for reasons that I explained at some length in Committee. Strictly speaking, additionality is a matter between the Department for Culture, Media and Sport and the Treasury. If my Department were ever to seek to replace its funding with lottery funding, the Treasury would rightly reduce our funding by the same amount. Additionality will never be constant, so we cannot define what Governments usually provide. The Government provide money—[Interruption.] I wish that the hon. Member for Bath would listen—he has tabled new clause 1 but he is not even listening to what I am saying. I am trying to explain to him and to the hon. Member for Cities of London and Westminster why we reject new clause 2.

The Government provide money to some charities, which is not core Government spending. Does that mean that the lottery should not give more to charities? The Government provide money to arts, sports and heritage in many areas—that is not core, or mainstream, Government spending. Does that mean that lottery funding cannot be used as well? We can follow the principle of additionality, but if we try to define it, or what the Government should "usually" fund, we will be restricted in some way from funding genuine good cause projects in the future. We cannot predict what those projects will be, but it is likely that those who will be most upset when we do not continue to fund them are those calling on us to set a definition.

It might help if I highlight some examples of good projects that have been funded from just one lottery programme—"New Opportunities for PE and Sport"—in the constituencies of hon. Members who tabled the new clause. In the constituency of the hon. Member for Cities of London and Westminster, Westminster city council awarded almost £80,000 for improvements to the sports hall at Millbank primary school. Does he want us to withdraw that money because it is part of mainstream Government funding?

In the constituency of Mr. Moss, Cambridgeshire county council received more than £1.1 million for sporting facilities to provide young people and the community generally with high-quality tennis courts, a floodlit multi-use games area and a wide range of after-school sports activities. Should we withdraw those areas of funding because they are additional to Government spending?

I hope that the Minister has some good news for Broxbourne on his list, because I recall that in Committee I was sometimes disappointed when he managed to gloss over my beautiful constituency.

Unfortunately, I do not have an example, but I will find one. I will refer to the hon. Gentleman's constituency before the end of the debate. I am looking to my officials to ensure that they dig out all the stats.

As the hon. Member for Bath noted, there is a difference of opinion between Conservative Front Benchers. At the last election, the Conservatives proposed a scheme called Club2School, whereby every child would have the right to two hours of free after-school sports coaching. There is nothing wrong with that—we completely agree with it—but where was the £750 million with which they proposed to pay for it going to come from? The new Leader of the Opposition has told us that it would come out of the lottery.

As Mr. Swire has just returned to his seat, let me tell him that he was wrong on two counts: the Bill winds up the Millennium Commission, and the residue of the money will go towards the development of the Olympics. The money was not spent in 2000, because it is still there. The final decision will be taken by the board.

To sum up, we support the independence of lottery distributing bodies and the principle of additionality. All distributors are aware of the need to follow that principle. They have responded positively and practically to the demands that were made in Committee. I hope that, given that explanation and the positive moves made by the chief executives of the funding bodies, new clause 1 will be withdrawn.

I begin by thanking the Minister for his conduct of the debate on the important subject of additionality. I also thank him for the praise that he heaped on me—for my helpfulness and consideration and the way in which I took account of all the discussions in Committee and other places. I thank him, too, for the meeting that he held today with the chief executives of the lottery distributors.

However, on 14 June last year on the Floor of the House, the Minister—nobody else—said that

"additionality was an important principle that should be embodied in future legislation."—[Hansard, 14 June 2005; Vol. 435, c.168.]

He did not say that we should get assurances from all sorts of people outside and include nothing about it in the measure. I welcome the fact that he has got those assurances—that constitutes huge progress—but I believe that what he said in June last year was right. We need the principle to be embodied in the legislation.

Not to put too fine a point on it, every lottery distributor has to report to the House, through a report to both Houses of Parliament which is placed in the Library. A report on additionality by each lottery distributor will appear in the annual report, which is put in the Library. The report has to be produced by statute.

The Minister still refuses to accept that we need the principle to be on the face of the Bill, but we have experienced problems with previous lottery Bills. In discussions on them, hon. Members referred to concern about additionality. Prime Ministers and Leaders of the Opposition assured us that they would not raid lottery funds, yet they did so. It is therefore crucial to include the principle on the face of the Bill.

We have made enormous progress towards what I want to achieve. However, the Minister said that additionality issues "may" be reported in the annual report, not that they would be. More important, he has not acceded to his desire to include something about the matter on the face of the Bill.

It is therefore with deep regret, given our progress, that I press new clause 1 to a vote.

Question put, That the clause be read a Second time:—

The House divided: Ayes 179, Noes 271.

Question accordingly negatived.