My Lords, in moving this amendment, I speak also to Amendment No. 6. These two amendments were grouped with an amendment which was passed by a narrow majority of two votes on Report. Following that, I should have formally moved them on Report. Through the excitement of winning a vote, and oversight, I did not. The Minister has kindly allowed me to move them today and accepts that they were grouped.
However, I understand that, since Report, he has been able to consider the principle of the amendments and may have something to say about their suitability for the Bill. I beg to move.
My Lords, I think that one is in the position of welcoming the Minister's comments in advance, as a result of the Third Reading procedure. It is rather like having private notice that at least half the argument, the significant half, has been accepted. The prescription of those categories will be taken account of, but they will not be absolutely binding. That is a significant amendment to this Bill, and I look forward to what the Minister has to say.
My Lords, I am grateful to both noble Lords who have spoken and anticipated with such enthusiasm the words that I am about to utter. I hope that I do not disappoint them.
We discussed these amendments on Report, when I set out why we could not accept them. Due to a slight slip, the amendments were not formally moved at that stage, but the Government accept that they were effectively carried. That being so, I will explain how we propose to deal with those matters when the Bill returns to the other place. For the reasons that we have given at length, the Secretary of State needs to be able to set out, at the very highest level and in the broadest possible way, the types of expenditure that the Big Lottery Fund should focus on. The Secretary of State is not out to direct the Big Lottery. I want to put to bed the notion that the Government seek directly to interfere in the work and allocation of the Big Lottery Fund. However, without the ability to prescribe devolved expenditure, the devolution arrangements in the Bill would not work. We will, therefore, seek in the other place to retain the powers in Clause 7.
I made clear on Report how important we thought that was. However, the noble Viscount, Lord Astor, and the noble Lord, Lord Clement-Jones, emphasised that it was a fundamental concern that, as they saw it, there was perceived government control over the Big Lottery Fund. They wanted assurances about prescription. As I maintained then, I think their fears are unfounded, but I accept that they are genuinely felt.
We will, therefore, table amendments in another place that deliver the spirit of Amendment No. 6. We accept that the House voted accordingly and that, for procedural reasons, the vote was not recorded. We will act according to the decision of this House. Our amendments in the other place will provide that the Big Lottery Fund must comply with policy directions only as to matters to be taken into account. That will put the Big Lottery Fund in the same position as the Community Fund and all the other lottery distributors.
We accept the noble Lords' arguments, and the fact that the position was established on Report but the amendment was not carried for procedural reasons. I undertake that the Government will fulfil the requirements imposed by this House in the spirit of the previous decision and will table amendments accordingly.
My Lords, I thank the Minister and congratulate him on being able to persuade his colleagues in his department and in another place of the force of our arguments. We are very pleased because he has accepted the main issue. The Government have now agreed that, in the provision on directions, "comply with" is too strong. They will revert to "take account of", which, after all, puts the Big Lottery Fund only in exactly the same position as the other distributing bodies. It makes the process much more sensible.
I understand the noble Lord's concerns about Amendment No. 1, relating to Clause 7. Indeed, he makes a valid argument about its effect on lottery distribution in the regions. We thank the Minister for listening with such care and taking account of our concerns, and look forward to seeing the amendment when it is tabled in another place.
My Lords, the Government's amendments in this group concern the proposed reserve power to reallocate an excessive National Lottery Distribution Fund balance from a lottery distributing body to another body. This power was the subject of extensive debate both in Committee and on Report. On both occasions I assured the House, as have my ministerial colleagues in another place, that the Government would seek to use the proposed new power only as a last resort against a distributor which had failed over an extended period to tackle an excessive balance, and which had refused to take steps to manage that balance down to a reasonable level.
Let me emphasise the point. To get into such a dismal position, a distributor would need to have ignored not just the Government's guidance, but the recommendations of the National Audit Office and of the Public Accounts Committee in another place, both of which have addressed those issues. At present, I see no distributor as being in a position where we would consider exercising the proposed reallocation power against it. They are just not working that way.
As the reallocation power is framed in the Bill, the Secretary of State would not be able to exercise it without first consulting the bodies from which and to which it was proposed that a sum would be reallocated. The Secretary of State would also be obliged to consult the devolved Administrations in Scotland, Wales and Northern Ireland.
My noble friend Lord Borrie was particularly helpful on Report when he emphasised that, as he saw the Bill, there was nothing to prevent the Secretary of State consulting more widely if she so wished. On Report, the right reverend Prelate the Bishop of Sheffield tabled an amendment seeking to create specific provision to require the Secretary of State to consult more widely any other person whom she thought appropriate. That was an amendment that the right reverend Prelate the Bishop of Southwell and Nottingham tabled in Committee.
In responding to the right reverend Prelate the Bishop of Sheffield on Report, I acknowledged that there would indeed be legitimate wider interest in any proposed use of the reallocation power. However, I also pointed out that, as any use of the new power would be subject to affirmative resolution, there would be no question of the Government being able, somehow, to exercise the power in secret or without giving people time to make representations. It is in the nature of the issues that if we had provision that an affirmative resolution would be necessary for this to be carried through, of course people would be fully aware of what was going on, and the Secretary of State's decision would be subject to parliamentary consideration.
Nevertheless, I undertook to consider this issue in the light of the broad consensus across the House on the matter. Today I am saying that the Government can agree to include such a provision to require the Secretary of State to consult any such bodies as she thinks appropriate before she can exercise the reserve power to reallocate balances. Therefore, I hope it will be recognised that the Government have seen the strength of opinion across the House. We thought we had got the position right. We never thought for one moment that this was a hole-in-the-corner exercise, but one that would be subject to the fullest public debate and the affirmation of Parliament through resolutions of both Houses. However, I can accept the position that was advocated on Report, which is why I beg to move.
My Lords, I thank the Minister for tabling the amendment and, in their absence, I express the gratitude of the right reverend Prelates the Bishop of Southwell and Nottingham and the Bishop of Sheffield, who, as the Minister mentioned, spoke at earlier stages of the Bill in favour of such an amendment. I express my satisfaction with the assurances given by the Minister in Committee and on Report that the intention of the Government to consult appropriate bodies widely if and when balances are transferred will be written into law. I assure the Minister and the House that that will be a comfort and assurance to many organisations that are in receipt of lottery funds, not least the Church and its representative bodies, such as the Council for the Care of Churches, the Cathedrals Fabric Commission for England and the Church Heritage Forum.
My Lords, I agree with the right reverend Prelate's remarks and those made in earlier debates by other right reverend Prelates. I am grateful to the Minister. He gracefully backed off from the Government's previous position and bowed to the concerns of the Bishops' Bench and its implacable logic.
moved Amendment No. 4:
Page 7, line 4, leave out "National Lottery in general."" and insert "distribution of money under this Act.""
"encouraging participation in activities relating to the National Lottery in general", might be taken to be giving lottery distributors powers to encourage people to play the lottery. As I pointed out during previous stages of the Bill, there was no such intention on the Government's part. Our reason for including this provision was because we needed to make clear that lottery distributors have the power to encourage participation in activities related to promotion of the lottery good-causes funding, such as National Lottery Day and the National Lottery Awards. We think that is important. Such activities have more success in getting across the message about how lottery money has been used if more people get involved. That was the intention of the Government: to demonstrate the purpose of the National Lottery to people and to encourage appreciation of it among people who contribute so much to the National Lottery. That is different from merely publishing information about how the good-cause money is spent, although still related entirely to the good-cause funding.
As I mentioned on Report, the noble Lord, Lord Phillips of Sudbury, had written to me thanking me for explaining the reason for the new subsection and saying that he was content with the Government's proposals. But I appreciated that there was evidence on Report that other noble Lords still had concerns. Therefore, I am pleased to table this amendment, which makes quite clear that the encouragement activity is restricted to,
"distribution of money under this Act"— that is, to the good-cause funding. I trust that noble Lords will accept that that was always the Government's intention. We have now made it clearer and more explicit and I hope that the House will support the amendment. I beg to move.
My Lords, I thank the Minister for moving Amendment No. 4. I agree with him; I do not think it was ever thought that the Government's intention was otherwise. We were arguing simply about the precise use of the words in Clause 11. We on these Benches very much support the general purpose of the clause, so I am delighted that the Minister has come back with an amendment of this kind. This means that Members on both sides of the House can agree that the implementation of the clause will be greatly to the benefit of the lottery projects.
My Lords, I was absent from Report by virtue of being in Killarney, so was not in a position to hear the noble Lord, Lord Clement-Jones, move the relevant amendment, to which the Minister has in effect responded in speaking to Amendment No. 4. I have no problem with the amendment that the noble Lord moved on Report, nor do I have any problem with this one, but he said then that the clause was designed in essence to ensure that the National Lottery distributors took a greater part in publicising aspects of the National Lottery. Personally, I would have wanted Clause 11 to place stronger obligations on the distributors, because the current wording, which is permissive rather than statutory, does not seem to ensure that action is taken. But we live in an imperfect world, and the Bill will have to go on the statute book without that extra degree of compulsion.
My Lords, we certainly live in an imperfect world, although I have no doubt at all that it would have been made more perfect if the noble Lord, Lord Brooke, could have been here rather than in Killarney. I have no doubt at all that he was bent on making that part of the world more perfect while we were wrestling with the Bill. I am sorry that I am presenting Clause 11 in its less than perfect state. It is a poor thing but my own.
moved Amendment No. 5:
After Clause 11, insert the following new clause—
"DISTRIBUTING BODIES: ANNUAL REPORTS
In section 34 of the National Lottery etc. Act 1993 (c. 39) (annual reports) after subsection (2) insert—
"(2A) The report shall set out the body's policy and practice in relation to the principle that proceeds of the National Lottery should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by—
(a) a Government department,
(b) the Scottish Ministers,
(c) a Northern Ireland department, or
(d) the National Assembly for Wales.""
My Lords, scarcely would this important issue of additionality have been grouped with any other because, if anything, this was the one that vexed us the most in Committee and on Report. It is quite clear that there is a general view on both sides of the House about the principle of additionality. There is also general agreement that it is right that lottery distributors should report annually on the way in which they have interpreted the principle. We all regard the lottery as separate from, and additional to, government expenditure used for the good of the community, not a substitution for it. The principle underwrote the 1993 Act, and it underpins the Bill.
On Report, the noble Lord, Lord Clement-Jones, tabled an amendment to include such reporting in the Bill because he was concerned about the issue. We opposed that amendment, but not because we disagreed with the sentiments being expressed. I hope the noble Lord accepted my assurances then. We support the idea of transparency, and we endorsed the voluntary agreement reached by the lottery distributors, but the Government could not accept the amendment as it was worded, particularly the section on funding for not-for-profit organisations, which, as I pointed out, would be very difficult, if not impossible, for distributors to meet.
The noble Lord, Lord Clement-Jones, was kind enough to withdraw his amendment on the ground that the Government would table their own to enshrine additionality reporting, which was the objective of his amendment and his argument, in a way in which the lottery distributors would find acceptable. That is what this amendment does. It is very important to get the wording right and we believe that the terms of the amendment can be met by the distributors and will allow proper transparency of their actions.
It is important to remember that this amendment constitutes a reporting requirement. It is not a definition and does not attempt to set out what lottery distributors can or cannot fund. I think that we have agreed on all sides of the House that it would be wrong to try to define additionality. Decisions on what to fund remain for lottery distributors and I am sure that the whole House will agree with that. If Parliament has reason to take issue with reports from distributors, there will be opportunities to debate that. As I pointed out previously, the fact that lottery funding is additional to government funding does not mean that it may not be complementary to such funding.
We have also pointed out that agreement on what is appropriate for the Government to fund can change over time. Just because something is not funded now does not mean that that will always be the case. For example, some things which the lottery has in the past funded are now funded by government and would probably not even be considered by the lottery as being right to fund in future.
I am sure that noble Lords have thought of many examples, but MRI scanners are the obvious one. Early MRI scanners were first funded through charitable donations and people and hospitals working hard in their localities. Then the lottery funded scanners. It is now recognised that that is an obligation on the health service. It would be a strange Government who would suggest that the funding of MRI scanners should be appropriate for lottery funds.
The funding of MRI scanners demonstrates changing patterns of expenditure, and that something else for which there is a need or desire now may be funded by the Government in the future. There have certainly been cases in the arts and heritage where the lottery has met immediate needs, with much public debate following such decisions. The argument has been that at some stage it ought to be right for the Government to take responsibility for such funding. We are bound to have a constant debate over areas which the lottery appropriately funds to meet needs which the Government are not at the time prepared to meet, but that is not to say that the debate will not change. In due course, it will become a charge on the public purse through public resources, because the argument about the importance of such funding has been won.
To sum up, the amendment will enshrine in legislation the requirement for lottery distributors to report annually on how they have interpreted additionality in their funding decisions so that this guarantees transparency, while allowing—I think that the whole House would recognise this—proper freedom and flexibility in funding decisions.
We have had a substantial debate about additionality, which has brought together all sides of the House on its complexity and on the care that the Government must take in this legislation to ensure that distributors have proper freedom and that we do not pre-empt lottery decisions. I hope that it will be recognised that the Government have tabled an amendment which meets that requirement and that noble Lords will feel able to support it. I beg to move.
My Lords, I thank the Minister for his substantive reply and substantive amendment to the Bill. I also want to thank Members on both Opposition Benches in the other place and indeed in this House who have kept up fairly consistent pressure throughout the Bill's passage on what has turned out to be a satisfactory conclusion of the debate about additionality.
This amendment makes it clear that the different lottery distributors are not fulfilling the Government's objectives; are not adding to the Government's expenditure on their own projects; and are not simply a pot to be raided by Government. The reporting obligation highlights the strong requirement for lottery distributors to demonstrate how they are using their funds as an additional source of income for projects that are not necessarily part of the Government's agenda. They will retain flexibility in the way that the Minister described and a strong degree of independence in the way that they direct their funds. That is a wholly satisfactory conclusion. We recognise that it would have been extremely difficult—and we would probably still be in Committee—if we had been charged with finding a definition for additionality, so I am glad that we moved off that point. However, the reporting requirement will, over time, probably lead to a satisfactory definition of the Government's proper province and the province of the lottery distributors. That will come to be an extremely useful form of reporting.
Finally, as this is my last opportunity to speak on the Bill, I want to thank the Minister for his courtesy throughout its passage and his willingness to listen to arguments—sometimes to contrary arguments to which at first he was perhaps not particularly willing to listen. After mature reflection in a number of cases, he has accepted the arguments made and on these Benches we are extremely grateful.
My Lords, this has been a joint effort on this subject between the noble Lord, Lord Clement-Jones, and myself. I echo what he said about the Minister and the way that he has steered us through this Bill, which has been extremely helpful. We have been able to come to a sensible conclusion. The Government have always said that they accepted the principle of additionality. The problem is that almost everyone else realised that over time it had been broken in a number of instances. However, the Minister has been helpful because the new clause will help to stop any further abuses. It will give much-needed transparency in this area and the obligation to report is extremely helpful. No doubt all those who think that that principle was coming under pressure will be satisfied.
The Minister said that this is not a definition of additionality, but he may have created one, because his amendment mentions projects for which funds would be unlikely to be made available by a government department. Maybe that is a new definition of additionality. To me it sounds like the normal advice one received when one went to see the Treasury asking for money for a particular department.
My Lords, the remarks I made about Killarney apply to this amendment as much as to the previous one. In particular, in appreciation of the kind words uttered by the Minister about my absence on that occasion, perhaps I should stress that I was there for the meeting of the British-Irish Interparliamentary Body rather than for any other frivolous reasons.
As on the London Olympics Bill, where the Minister was extremely helpful from Second Reading, I concur with the noble Lord, Lord Clement-Jones, that he has been equally understanding on this occasion, although it has taken him a little longer. However, we are extremely appreciative. He will recall that we indicated at Second Reading that the Government in 1993 had thrown down the challenge to the Opposition to produce a better definition of "additionality" than was contained in the original Bill. The Minister threw back that challenge to us late at night in his winding-up speech at Second Reading and said that it was up to the Opposition to meet the challenge. However, he accepted the spirit if not the letter of the various attempts which the Opposition made and has now, with great skill, come up with the final solution. That is much appreciated.
In the 1997 Parliament, there was a Member of Parliament whose election to the House of Commons was challenged on the grounds of their election expenses. I am afraid that the jury found against the Member of Parliament concerned, but the Member of Parliament was reprieved by the noble Baroness, Lady Boothroyd, on the grounds that their dismissal from the House of Commons would effectively have been on a technicality. The Member of Parliament never came to be known in the House by the soubriquet "Technicality Jones", though had they lingered longer, they might have been. However, they left the House. As with Capability Brown, who would have inspired Technicality Jones, there has to be a possibility that, despite the Minister's skill, he will still go down in parliamentary history as Additionality Davies. I hope that he will treat it as the compliment that all of us intend.
My Lords, that challenge was laid down in appropriate fashion. I noticed during the passage of the Bill that the gauntlet was not picked up effectively on the other side, otherwise it would not be a government amendment that we would be considering today. I am grateful for the kind words of the noble Lord, Lord Clement-Jones, and the noble Viscount, Lord Astor, although I am sure that the noble Lord, Lord Brooke, would recognise that I am still part of that old school which says basically: Timeo Danaos et dona ferentes. Therefore, I am not so sure that I accept this as a wholly satisfactory occasion, but suffice it to say that the challenge that was laid down over additionality is exceedingly difficult. That is why noble Lords opposite were not able to respond to the challenge which I laid down. We have, however, recognised the obvious public concern about these issues and that lottery expenditure should be different from, and additional to, government funding. It is exceedingly difficult to define in law. We have given it our best shot. It is not a definition of additionality. I do not therefore deserve the epithet or soubriquet which the noble Lord, Lord Brooke, suggested, but I welcome him back from the haunts of Killarney. Lest he thought for one moment that I thought he was there for anything other than a deeply serious purpose, I assure him that that was not the case.
moved Amendment No. 6:
Page 9, line 13, leave out "comply with" and insert "take account of"
On Question, amendment agreed to.
My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Davies of Oldham.)
On Question, Bill passed, and returned to the Commons with amendments.