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Clause 1 - Constitution

National Lottery Bill – in a Public Bill Committee at 11:30 am on 1st November 2005.

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Photo of Frank Cook Frank Cook Labour, Stockton North

With this it will be convenient to discuss the following amendments: No. 19, in clause 1, page 1, line 8, leave out subsection (3).

No. 20, in clause 1, page 1, line 19, leave out subsection (4).

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

A canter, says the Minister, great aficionado of the turf that he is.

Clause 1 and amendments Nos. 18 to 20 deal with the make-up of the National Lottery Commission. Amendment No. 18 would insert the words

“but not more than seven” after “members”. Amendment No. 19 would remove the Secretary of State’s ability to appoint the commission’s chairman. Amendment No. 20 would remove her ability to appoint the chief executive or any other employee of the commission. Most such organisations maintain a split between commission members and staff, and the amendment would   maintain the status quo. Taken together, the amendments would leave the commission’s structure as it presently is.

We are not convinced of the need for more than seven commissioners. Again, we debated that on earlier clauses. In any case, the commissioners are presumably paid out of lottery funds, although we have established that we do not know how much.

We also do not believe that the commissioners’ current practice of selecting their own chairman needs to be changed. In an earlier exchange, the Minister suggested that the arrangement had not worked well and that it had not been a happy one. Perhaps he will tell us exactly why he thinks that that is the case. I suspect that he will again say that he is merely doing what he has been asked to do; this time by members of the National Lottery Commission. Although I understand that the practice of electing a chairman every 12 months might have its drawbacks, I am not convinced that that justifies the new powers in the clause. In any case, the issue is worth debating.

If the timing is the problem, why not allow the members of the commission to elect their own chairman for two, three or four years? I do not see why the power has yet again to be vested in the Secretary of State, which, as the Minister will have discovered by now, makes me uneasy. Can he point to any members of the commission who are saying, “Please take this democratic power away from us. We are completely incapable of selecting our own chairman”? It is interesting that schedule 2A to the 1993 Act, as amended in the document that the Minister has so kindly provided, shows just how the Secretary of State proposes to extend her powers in this regard.

Why is the issue of who selects the chairman so important? The commission has wide-ranging powers over the lottery licence and holds the key, in effect, to a multimillion pound commercial operation. A decision on a new licence is just around the corner, and we shall come to it in 2009; well, we in the Committee are not coming to it in 2009, although at this rate we might do. We are coming to it later in our proceedings. Given that that is about to happen, we should adopt the arm’s-length principle and keep the selection of the chairman as far out of ministerial hands as possible. The issue should be managed by the impartial commissioners. It is also possible that the Minister might not be in place in 2009, at which point someone else may have different ideas about it.

The amendments pursue the theme that we have followed throughout the Bill whereby, at every turn, we seek to resist the move towards a concentration of power with the Secretary of State. Where better to resist that move than in the composition of the commission, who should chair it and for how long. I hope that the Minister considers the amendments reasonable. I look forward to his response.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor 11:45 am, 1st November 2005

First, it seems to me that, whether organisations are public or private, the power lies in the hands of whoever is able to appoint the chairman of the board of directors or of the body corporate and the chief executive who takes the day-to-day executive decisions. Without the amendments, the Secretary of State can appoint as many members as he sees fit. Who is to say that if five members did not agree with the Secretary of State, he could not water down the board by adding another 20 or 30 members? I do not mean the present Secretary of State, of course, but a future holder of the office.

Secondly, if the members have been appointed in the correct fashion, what is the problem with them selecting the chairman of the board? They have to work with him. It seems to be standard procedure for many public and private bodies.

My third observation is that having the power to appoint the chief executive officer—the person who makes the day-to-day decisions—means that the Secretary of State would have complete control of the day-to-day operation of the organisation and not simply of the overall direction or strategy that needs to be implemented by that organisation.

I hope that the Minister has some clear answers, and that he has some concessions in mind.

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

I can assure the hon. Gentlemen that 97 per cent. of my Department’s expenditure goes to non-departmental public bodies. The Secretary of State does not spend her time micro-managing all those quangos. It is the last thing on her mind. We live in the real world. There is no micro-management of NDPBs. We have broad policy statements, and act on the Nolan principles, within the civil service code and with all the other constraints put on the Secretary of State. The real world is not as the hon. Gentleman describes.

The amendments seek to change the composition of the board of the National Lottery Commission. Amendment No. 18 seeks to limit the number of commissioners to seven. The purpose of clause 1(2) is to remove the current limit of five commissioners and to allow, when it can be shown to be desirable, for extra commissioners to be appointed. That will allow flexibility for the commission to be strengthened if required; for example, when undertaking the competition for a new operating licence, which is a significant undertaking. The amendment would remove some of that flexibility and prevent the appointment of more than seven commissioners, even if those additional people could contribute expertise and experience to the successful regulation and licensing of the national lottery.

Amendment No. 19 would prevent the Secretary of State from appointing the chair of the commission, which would return us to the current system under which the members appoint their own chair and the chair changes every year. That was identified as a significant weakness of the current arrangements during our review in 2003. It significantly hinders the commission’s ability to maintain direction and the ability to acquire persons of the highest calibre. There was considerable support from respondents to the review for a permanent chair, to be appointed by the   Secretary of State, consistent with the normal arrangements for non-departmental public bodies. That will allow the commission to acquire a chair with the skills and abilities to take it through the next licensing competition and, I hope, beyond.

Amendment No. 20 will prevent the Secretary of State from appointing a chief executive and possibly another member of the commission staff as commissioners. It will provide increased flexibility to enable the commission to carry out its functions effectively. It will also bring the commission in line with arrangements such as those in the gambling commission, and those that are common among the commercial companies with which it deals.

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

Will those new powers to appoint the chief executive as a member of the commission be exercised on the basis of a recommendation from the commission? I note further that in relation to another member of staff being appointed to the board by the Secretary of State, the Bill makes specific reference to

“on the recommendation of the Commission”.

Will the Minister provide an assurance that in both cases the appointment will take place only if there is a recommendation from the commission to the Secretary of State that that person be appointed to the commission?

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

The answer is yes, on both counts. The provision will apply to the chief executive and to other members. I am glad that the hon. Gentleman made it clear, because there has been a misunderstanding. The Secretary of State will not appoint the chief executive. That will be done in the normal way. It is only the appointment to the commission that the chief executive is concerned with. There is a clear distinction. The chief executive is appointed by the operation, not by the Secretary of State.

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

In view of those clear assurances, will the Minister explain why in relation to another member being appointed to the commission, there is specific reference in the Bill to

“on the recommendation of the Commission”,

but in relation to the chief executive being appointed, there is no reference to that recommendation? Will the Minister, for example, be willing to table his own amendment to make matters clear?

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

Yes, I shall consider the point that the hon. Gentleman has raised so there is no misinterpretation of the provision. I have given him a clear assurance, and I shall ask my officials to revisit the provision. For those reasons I hope that the hon. Member for East Devon will withdraw the amendment.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

My fear is that we may be deserted again by our new comrades in arms, the Liberal Democrats. The hon. Member for Bath is clearly satisfied that the Minister will tidy up the Bill by bringing clarity to it, and by clarifying in particular the point about whether the Secretary of State will appoint a member of the   commission on the recommendation of the other commissioners, rather than pluck a name out of a hat. That point made us nervous.

The Minister again calls for flexibility, and he cites the gambling commission. It makes me nervous, but in the scheme of things, other aspects of the Bill make me more nervous. Therefore without further ado, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 ordered to stand part of the Bill.