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New Clause 1 - GUIDANCE TO DISTRIBUTING BODIES

National Lottery Bill – in a Public Bill Committee on 3rd November 2005.

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‘After section 27 of the National Lottery etc. Act (1993) (c. 39), insert—

“27AGuidance to distributing bodies

(1)The Secretary of State shall issue guidance to the distributing bodies on the distribution of lottery funds, including reference to—

(a)the means of ensuring that lottery funding is allocated without political interference;

(b)the distinction between essential and desirable government expenditure;

(c)the distinction between core central government expenditure and lottery funding;

(d)the distinction between local government expenditure and lottery funding;

(e)the means of ensuring transparency in the funding of projects which receive both national lottery and government funding in relation to—

(i)accounting practice, and

(ii)public announcements.

(2)Before issuing guidance under subsection (1), the Secretary of State must consult—

(a)the distributing bodies;

(b)bodies (other than public or local authorities) whose activities are not carried on for profit;

(c)the national Lottery Promotions Unit; and

(d)representatives of local government.

(3)Guidance issued under subsection (1) must have regard to the 1998 Compact between the Government and the Voluntary and Community Sector.

(4)Guidance under subsection (1) shall not be issued unless a draft has been laid before and approved by resolution of each House of Parliament.

(5)The distributing bodies shall report from time to time on how the guidance issued under subsection (1) has been taken into account.”.’.—[Mr. Don Foster.]

Brought up, and read the First time.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport 9:30 am, 3rd November 2005

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

A very good morning to you, Mr. Cook, and to all members of the Committee. Just before Committee began, the hon. Member for East Devon (Mr. Swire) assured me that he has been waiting throughout the entirety of this Committee’s proceedings to hear the debate on this issue. I must say, I think that he is building it up rather more than it deserves, notwithstanding that the issue of additionality—that is what new clause 1 is about—is crucial. It is one of the issues that has caused a great deal of concern to many people ever since the introduction of the national lottery in 1993.

It is worth reflecting that, during the passage of the National Lottery etc. Act 1993, and when revisions were made to it in 1998, a number of attempts were made—unsuccessfully, sadly—to include issues relating to additionality in the Bill. The new clause takes a different approach. Recognising that there would be a possibility of failure if I merely repeated what was done back in 1993 and 1998, I have taken a somewhat different tack. The new clause, rather than seeking to define additionality in the Bill, merely—I stress the word “merely” to the Minister—requires the Secretary of State to issue guidance on additionality. It also makes it clear that the guidance would be prepared by the Secretary of State only after extensive consultation and would be subject to approval by both Houses of Parliament. That would ensure that the definitions and guidance on additionality were not solely those of the Secretary of State. It is a new approach that would allow the issue to be revisited at appropriate times. That way, the definition of additionality could remain relevant, which is good because circumstances may change. However, it would also ensure that the principle was not eroded in future.

Additionality was one of the founding principles of the national lottery. The 1992 White Paper stated that the lottery would fund only projects additional to those that would otherwise be funded by the public through general taxation. The former Prime Minister, John Major, said in 1994, the year of the very first lottery grant, that:

“we will make no case on case reductions on conventional public spending programmes to take account of awards from the Lottery. The money raised by the Lottery will not replace public expenditure.”

Unfortunately, the present Government have repeatedly broken that principle of additionality, despite the fact that the Prime Minister said in 1997:

“We don’t believe it would be right to use Lottery money to pay for things which are the government’s responsibilities”.

The former right hon. Member for Islington, South and Finsbury, then the Secretary of State for Culture, Media and Sport, also spoke of the importance of additionality:

“The principle is clear. Lottery money must not replace Exchequer spending”.—[Official Report, 7 April 1998; Vol. 310, c. 166.]

Many members of the Committee will have their own concerns—as, no doubt, will you, Mr. Cook—about areas of potential or actual Government interference in the lottery with respect to breaches of that principle of additionality. Certainly, the Culture, Media and Sport Committee that looked into the matter expressed concerns. It said:

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

Crucially, it went on to say:

“We believe that the additionality principle is being eroded”.

That report, from the 2003-04 Session, went on:

“This Committee deplores this erosion. Therefore, we shall consider returning to the additionality principle before the end of this Parliament. In the meantime, we call on the Secretary of State to make an annual report to Parliament on how the additionality principle has been applied.”

It is clear that there are concerns about that; there are also concerns that the principle of additionality is being eroded and that we do not have a clear definition of what we mean about it anyway. We need frequent opportunities in the future to consider whether, once defined, the principle of additionality has been eroded. The new clause provides an opportunity to solve all those problems in a nice and gentle way that should be acceptable to the Minister. I look forward to his response.

The matter is important. We know, for example, from a YouGov poll a couple of years ago that three quarters of the population believe that it is vital that lottery funds remain free from Whitehall interference. Yet, they have not been. The creation of the New Opportunities Fund was a classic example—although, sadly, not the only one—of Government interference in the lottery. Since the fund was established in 1998, £3 billion has been awarded to education, environmental and health projects, including the purchase of MRI scanners and the proposal to give a piece of fruit each day to children between the ages of four and six. All the projects are worthy in their own right, but there is a real question whether, by using lottery money to fund them, we are breaching the principle of additionality.

Photo of Andrew Turner Andrew Turner Shadow Minister (Cabinet Office)

What worries me about the Government’s raids on the lottery is how effectively the money is spent and why, for example, it is necessary to set up a national consortium for the purchase of five pieces of fruit for distribution to the whole of the south-east of England when that fruit is not bought from the south-east of England. Should we not think about that when considering how effectively lottery money is spent?

Photo of Frank Cook Frank Cook Labour, Stockton North

Order. I am at a loss to know how that inquiry has anything to do with the debate.

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

What might be in the mind of the hon. Member for Isle of Wight (Mr. Turner) is that, if the Government start interfering in such projects and not do it well, there will be additional anxiety about the breach of additionality. He was not so robust in his criticism of the scheme as he might have been. It is interesting that 90 per cent. of the pears and 50 per cent. of the apples used in the project come from overseas suppliers. The hon. Gentleman could have gone further and said that the fruit used in those schemes has 25 per cent. more pesticides in them than fruit that is bought in local supermarkets.

However, lest it be thought that the hon. Gentleman was straying too far from the issue, let me return to what I was saying. I was using the creation of the New Opportunities Fund as an example of what was perceived by many people as a breach of the principle of additionality.Let me give another example of why there is real cause for concern. Much to the surprise of the Minister, I said the other day in Committee that I had deep worries about how the DCMS annual report blurred the distinction between Government funding and lottery funding. The right hon. Gentleman told me that I should not be bothered about that. I place on record that the most recent DCMS report makes a   better fist of separating the two than was the case in the preceding years. However, unfortunately, the Department continues to confuse the issue. I will give an example from an area that is dear to the Minister’s heart; sport. I looked at what the DCMS’s website said about sport. It states that the Secretary of State wants to start

“a 20 year process of re-establishing this country as a powerhouse in the sporting world”.

We would all welcome that and agree with the Secretary of State, not least because we suspect that the words were actually written by the Minister. However, the same website goes on to talk about how that will be achieved and states:

“To achieve this aim, the Government is investing £2 billion of public and National Lottery money in sport by 2006”.

So, the Government are investing national lottery money in sport. What clearer example could there be of Government interference in lottery funding?

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

The Minister says, “What a load of—” and then pauses, not wishing to offend you, Mr. Cook, and adds, “semantics”. He might think that it is a load of semantics, but a large number of experts outside this place have true concerns about the issue.

Mr. Turnerrose—

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

I will give way in a moment. The Minister is keen to make frequent reference to the National Audit Office. When I have dealt with the inquiry from the hon. Gentleman, we will hear precisely what the NAO, a body held in high regard by the Minister, has said about this issue.

Photo of Andrew Turner Andrew Turner Shadow Minister (Cabinet Office)

The Minister mentioned semantics, but he did not make it clear whether his point about semantics related to the Government’s dishonestly claiming responsibility for lottery money or to their directing lottery money. Does the hon. Gentleman think that the Minister should make it clear which particular issue his objection about semantics relates to?

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

I hear what the hon. Gentleman says and I look forward to the Minister, having made a note of the question, giving us an answer to that very fair point later. The Minister accuses me of semantics. That is fine; we can all take it. However, he will not accuse the NAO of making semantics, because he has prayed it in aid on a large number of occasions during the passage of the Bill. Let us hear the words that the NAO uses. Referring to the opacity and the lack of accountability and clarity that exist because of the way in which the Department mixes up two issues—as I said, sport is an example—it states:

“Where government initiatives are receiving funds from a number of different distributors and other sources, there are inconsistent practices in reporting these transactions. This has led to a loss of ... accountability. We will continue to work with the Treasury and the Department to identify the most appropriate ways for managing these projects to ensure transparency and accountability for these initiatives.”

We need absolute clarity. The Government must not announce lottery funding for their own projects before the distributors themselves declare the grants, otherwise it suggests that it is the Government’s decision that such projects are funded.

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

What relevance does this have to new clause 1 on additionality? I have not seen the whole of the NAO report, but it is about accountancy practices. It is about making it clear where the resources are coming from and what they are being used for. However, to the best of my knowledge, that does not constitute a challenge on the question of additionality.

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

On a point of order, Mr. Cook, I seek clarification on who is chairing the proceedings and who will pronounce on what is or is not within the remit of the debate.

Photo of Frank Cook Frank Cook Labour, Stockton North

If there are any more points of order like that from the hon. Gentleman, he will learn very quickly who is chairing the Committee.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport 9:45 am, 3rd November 2005

I ask, Mr. Cook, that you in no way associate me with the hon. Gentleman’s remarks, particularly when I am trying to deal with this important issue.

The Minister asked about the relevance of the new clause. The answer is simple. When I gave him the example from the website, he accused me of semantics. He believes that it is correct for the Government to say that they will invest £2 billion of public and national lottery money in sport by 2006. Does he believe that such a statement will lead to a clear understanding among the public of the separation between the national lottery, in which the Government should not interfere, and Government funding? I would hope that the Minister can see that there is real cause for concern if the Government are saying on their website that they are investing national lottery money in something. That concern is the very one being addressed by the NAO when it discusses the lack of clarity and opacity. It states clearly that the Government should not be announcing such projects.

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

Fine, the hon. Gentleman may have a point about the words on the website, but I still ask him to tell us what additionality has to do with new clause 1, which is what we are debating. Neither the website nor the NAO is challenging on additionality, and whether the description on the website is correct is debatable. I ask the hon. Gentleman where additionality comes in new clause 1.

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

I am in some difficulty. The answer is so clear that I have difficulty understanding the Minister’s difficulty. I was not intending to use this letter, but let me do so to elucidate the matter for the Minister. He is a generous man. During the passage of   this Bill, he has provided us with so many bits of paper that I have difficulty keeping up with them. He sends us notes on all sorts of things to clear up misunderstandings that, frankly, he has created during the debates. I am grateful to him for providing clarification.

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

Not at all, as the Minister is about to discover. On 30 October, along with a note from the Minister—

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

There are that many. The reference is CMS27106/DC, if that helps the Minister. It is the note that included a letter from Sir Clive Booth, who, as the Minister knows, is the chairman of the Big Lottery Fund, which does not yet exist formally as a body corporate but nevertheless is doing an extremely good job in putting out its hands to keep the Government at bay. I shall read a brief extract from the letter, which the Minister circulated to us. Sir Clive states:

“What would precipitate a very real crisis here at the Fund (and indeed among many stakeholders outside who would see this as a breach of faith on the government’s part) is any specific reference to a pre-determined sum being earmarked from the Big Lottery Fund or indeed any statement that pre-empts the Fund’s decision on this initiative. There is a serious danger of reputational risk in all this both for the Fund but even more so for the government.”

If the head of the biggest lottery distributor is writing a letter such as that, it is clear that he is concerned about the possibility of the Government’s blurring the distinction between Government-funded initiatives, and national lottery initiatives, in this case funded by the Big Lottery Fund. He is making it clear that he wants to lay down a marker, that up with that he will not put, and rightly so.

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

The hon. Gentleman would do well to draw the Minister’s attention to proposed new section 27A(1)(c) of the National Lottery etc. Act 1993, which is contained in his new clause. It refers to:

“the distinction between core central government expenditure and lottery funding”.

Is that not precisely what we are now debating?

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

Very much so. That is why I have trouble understanding the Minister’s difficulty. None the less, even if he does not perceive there to be a difficulty, a large number of other people do. They believe that this Government have blurred the distinction between national lottery funding and Government funding.

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

I am at a loss to find where this is on the question of additionality, but I will listen to the continued argument that hon. Members have employed.

I will put into context the comments made by Sir Clive Booth, the chairman of the shadow Big Lottery Fund. It is right to put that on the record. He put them   in terms of the high level that the Bill has been about and how we have brought forward what the general public want from the consultation.

Sir Clive said:

“I was delighted to hear that there would be an announcement on Thursday launching a campaign to promote healthier eating. The approach of bringing together a wide range of interested parties and setting an eye catching strategy which would capture the imagination of the public and especially families and children is very welcome and reflects some of the key messages of the public health White Paper ... This is a topic which falls firmly under one of the three high level themes on which the Big Lottery Fund has been consulting following the announcement in August”

Sir Clive then rightly sets out some of the caveats of his concern on the question of additionality. It is only right to put the statement that has been read out into context.

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

Absolutely right. I am grateful to the Minister for providing a wider context. None of that alters the fact that Sir Clive Booth felt it necessary to put in his letter the words that I read out. Earlier, when he first took up the appointment, he said words to the effect of, “The days of Government dictating the five pieces of fruit in schools are over”. I admired him for doing that.

The Minister can say that it is all right, that he applauds it and that he can understand why Sir Clive wrote what he did. The reality is that the Government’s track record is not good in this regard. The current website indicates that they are still not good in this regard. The letter from Sir Clive Booth indicates that there are still concerns. Many other bodies have deep concerns about this matter. The National Council for Voluntary Organisations has made it clear that it strongly supports the amendment and feels that there is a need for it. The National Campaign for the Arts has also supported the new clause, stating that it

“is firmly convinced of the need to create a clear distinction between government and Lottery expenditure ... the Bill desperately needs a clause of this sort to halt the slide into using Lottery money to pay for schools and hospitals, which have for decades been the responsibility of government.”

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Does the hon. Gentleman not agree that ensuring that our children get proper nutrition at school should probably be the responsibility of the Department for Education and skills?

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

I would, but I hope the hon. Gentleman will understand why I am reticent to get into giving my own definition of “additionality”. The purpose of new clause 1 is to say that we need to have such a definition and to be clear what the principles are, but we should come to a conclusion only after wide scale consultation on that issue. There should also be agreement in both Houses in Parliament. That is what the new clause is about. While I have views on his comments, I am not going to be tempted down the track of seeking to define “additionality”. That will be quite difficult to achieve and there needs to be wide scale consultation, which I should not pre-empt.

What I am seeking to achieve should be fairly clear by now. I will end with a point to the Minister, which I hope he will take on board. I want to help the Minister to achieve what he says he is keen to achieve. He said on Second Reading[Interruption.] He obviously has something exciting to say against me and I look forward to hearing it. The Minister said on Second Reading[Interruption.] I have lost the quote. I am grateful to my hon. Friend the Member for East Dunbartonshire (Jo Swinson) for drawing my attention to it. I should stick to the brief then I would know where I was.

The Minister said on Second Reading:

“these matters were part of the wide consultation held in 2002. Further consultation has been held since, and”— the Minister believes in consultation—

“it was accepted that additionality was an important principle that should be embodied in future legislation.”—[Official Report, 14 June 2005; Vol. 435, c. 168.]

There is nothing in the Bill about additionality, but the Minister said clearly that it should be embodied in future legislation. I have done exactly what he wanted, but what he forgot to do it himself, and I look forward to him accepting my proposal, which is modest in its scope and scale.

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

The hon. Member for Bath (Mr. Foster) quoted the former Secretary of State for Culture, Media and Sport, now Lord Smith. On Second reading of the National Lottery Act 1998, when we touched briefly on additionality, I quoted what Lord Smith had said to the then hon. Member for Surrey Heath about the principle of additionality:

“I should have run a sweepstake on when that question”— the question of additionality—

“would first arise in the debate because, of course, it is the common and rather tired theme of Conservative Members.”—[Official Report, 7 April 1998; Vol. 310, c. 162.]

It is the theme of Conservative Members, but it is not only Conservative Members who consistently argue about the principle of additionality, the continuing breach of additionality and what we see in the Bill as being an attempt to blur completely the lines of additionality. That is our theme and it is not a tired theme because it is a common view among all sorts of other bodies and the public at large.

The hon. Member for Bath seeks to tighten up this excellent clause on the definition of additionality. We support the amendment in general, but the Minister will argue that it is unnecessary and I go some way towards agreeing with him because all that is necessary is that the Government should stick by the Prime Minister’s own rule on additionality in 1997 when he said

“We do not believe it would be right to use lottery money to pay for things which are the Government’s responsibility.”

Hear, hear to that. If only the Secretary of State, the Minister and others in the Government would stick to what the Prime Minister says—that is asking a bit much nowadays—that would dramatically reduce the need for this new clause.

What the Prime Minister said in 1997 has not been borne out in practice. The principle is contradicted by almost all New Opportunities Fund funding since its creation in 1998. How, for instance, does Cancer Equipment England, funded by the NOF at a cost of £93 million, not come under the Government’s responsibilities? The same question applies to healthy living centres at a cost of £300 million and diagnostic equipment at £89 million. The school fruit pilot, about which we have heard so much—too much, some would argue—this morning and which costs £42 million, is now funded by the Department for Education and Skills. As my hon. Friend the Member for Broxbourne (Mr. Walker) said, that is unquestionably where it should have been funded from in the first place. The same question can be asked about £50 million in funding for renewable energy, £231 million for computer training for teachers, and more recently £45 million for the school dinners fiasco, which so excited Jamie Oliver. Of the 172 grants of more than £100,000 made to out-of-school hours child care programmes in England, 76 per cent. went to local authorities and councils. Of the new opportunities for PE and sport, almost 100 per cent. of all grants went to local councils. Those are all examples of clear breaches of any definition of additionality, and I urge all Committee members to bear them in mind. I fear that that will continue under the Big Lottery Fund.

As I mentioned the Minister, let us consider his interpretation of the additionality rule:

“Additionality has never meant that Lottery projects should be completely divorced from public services and existing Government initiatives. They must be additional and they can be additional in many different ways.”—[Official Report, 14 June 2005; Vol. 435, c. 174.]

The Minister’s favourite phrase—flexibility—springs to mind. The Committee should note how different that is from the Prime Minister’s rule. In 1997, he said:

“We don’t believe it would be right to use Lottery money to pay for things which are the Government’s responsibilities.”

There are no semantics there. I make no apology for repeating the Prime Minister’s words. I think that they should be written in stone on the entrance to the Department for Culture, Media and Sport. Only then might his dictum be obeyed.

May I give the Committee a brief history of exactly how the Government have excused their raid on lottery funds? In 1996, Virginia Bottomley, then Secretary of State for National Heritage, outlined the Conservative view on additionality, saying:

“Lottery funds are not intended to substitute for funds which would have otherwise been provided by conventional public expenditure.”

Those words were repeated by Chris Smith when he was Secretary of State for Culture, Media and Sport in the 1998 debate on Labour’s first National Lottery Bill. However, the new Secretary of State rested on his predecessor’s use of tense—he said “would have” allowed for anything new to be funded by the national lottery. Therefore, healthy living centres could be funded by the lottery because they did not previously   exist and therefore they could not previously have been funded by the Department of Health. I suggest that that pure sophistry—but there it is.

When considering additionality, I invite the Committee not only to believe my assertions but to take on board the views of other, less partisan, figures. Let us consider the statements of two Labour Members of Parliament, for example. In 2004 in the Culture, Media and Sport Committee, the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) accused the Government of paying “lip service to additionality.” The hon. Member for Sittingbourne and Sheppey (Derek Wyatt), when referring in that Committee to a £600,000 grant in his constituency for a children’s hospice—a cause that I care about passionately—said that

“this is something the health service should do.”

What then of other views of the Government’s interpretation of additionality? The Museums Association commented that the “principle remains under threat” before the Big Lottery Fund was announced; afterward, it noted:

“The government seems to favour the New Opportunities Fund, with its explicit link to government policy objectives.”

The Culture, Media and Sport Committee itself said that

“the additionality principle is being eroded”.

Finally, what about the New Opportunities Fund’s admission that it broke the principle of additionality? When trumpeting a Government-directed initiative that funnelled lottery money straight into the NHS, the fund said:

“Our grants are enabling patients to get seen faster, reducing the time spent waiting for diagnosis, and helping people receive first class treatment.”

Those were the very words uttered in the Culture, Media and Sport Committee. The objectives are all worthy, as no one doubts; but that is not the role of the national lottery. Health care should not be dependent on gambling nor luck.

Given those clear examples of Government misuse of lottery funding, I hope that it is clear to the Committee why the Government refused several of our amendments and in particular why they refused to specify that 70 per cent. of Big Lottery Fund money should go to the voluntary and community sector: the Government will be unable to resist getting their hands on the money themselves. We can also clearly see why they have broadened the definition of charitable expenditure. All the examples that I have given could conceivably be described as charitable or benevolent expenditure under the new definition in the Bill.

I want to discuss several points that John Major, the former Prime Minister and father of the national lottery, made about the principle and his concerns about additionality. I have no doubt that he would support the motion if he could. When he wrote an article in the house journal of the Labour party, the New Statesman, in 1999, he reflected on the opposition that he had encountered from Labour Members, Liberal Democrat Members, the Churches and so forth when the national lottery was set up. Indeed, he said that some Conservatives disliked the idea of state-sanctioned gambling full stop. We have come a long   way since then and this Committee is not the place to debate again how the national lottery has enriched the lives of our constituents. That was not the only reason behind setting up the national lottery. I quote the former Prime Minister, John Major:

“The other reason I was an enthusiastic supporter of the Lottery was more prosaic. I knew it was the only way we could fund a rebirth of cultural and sporting life in Britain. Government has always passed scraps to the arts at the end of the spending round, but never more than scraps. The Treasury’s thinking on the matter was drummed into me when I was chief secretary and later chancellor. The competing demands of health, education, pensions and defence would always come first. I knew there was no chance of funding the long-term development of sports and the arts from general government revenue. A lottery could do just that.”

He added:

“It’s the reason I set up safeguards to protect Lottery money from Whitehall spending limits and one reason I created a new department, with cabinet status, to oversee our national heritage.”

In that comment, he clearly addresses the need to maintain the principle of additionality, which has been so eroded.

In the same 1999 article, John Major wrote:

“Under new Labour, the Treasury is beginning to ransack the Lottery. The Millennium Fund expires at the end of the year. The government plans to replace it with a New Opportunities Fund, cutting as it does so the percentage of Lottery money going to good causes.”

He went on:

“After the millennium, I had hoped to find funds from the Lottery to put sports teachers into schools. I want us to win the World Cup, the Six Nations trophy, the Test matches, the Davis Cup. Rooting a love of sport and the arts in schools would have been the right thing to do. I do hope it might yet be possible. It won’t be unless the Treasury is kept at bay. Will Tony Blair and Chris Smith stand up to Gordon Brown?”

The former Prime Minister later answered his own question. In October 2004, speaking on the 10th anniversary of the national lottery, he said that

“the lottery is now being used as a substitute for Government spending, which it was not intended for.”

He also said that the lottery was a

“way to raise additional funding ... free from the grasping hand of any Government ... that could be used to improve the enjoyment—and the lifestyle—of many millions of people.”

Photo of Richard Caborn Richard Caborn Minister of State (Sport), Department for Culture, Media & Sport 10:00 am, 3rd November 2005

The hon. Gentleman makes some good points. Investment has been made. I acknowledge his point about the lottery fund. The former Prime Minister, John Major, said that he wanted us to win the rugby World cup, and we have done that. We have won the test series and taken the Ashes back. We have won medals in the Olympics. Much credit for all that can be given to the lottery and the way in which money has been invested under past and present Administrations.

I remind the hon. Gentleman about the commitment on investment in sport that the Conservative party gave at the last election. Its manifesto said:

“We will invest £750 million of lottery money in new Club 2 School sports programmes, giving every child the opportunity to access two extra hours of after-school sports and the supervision of local sports. This will be in addition to sports offered as part of the curriculum.”

That is a continuation of the policy that the Labour Government have put in place.

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

The Minister is right to press me on our club 2 school policy. Given the extreme legislative load that would have been placed on Parliament to undo the mess created by eight years of Labour Government, we did not want to reintroduce a lottery Bill. We have seen how much time and effort this one has taken up already. Rather than legislate to abolish the New Opportunities Fund, we would have used existing powers to reduce its share of lottery income and to increase the share of other good causes, charities, sport, arts and heritage. Before the election, we decided that, following completion of all existing its commitments, NOF would operate club 2 school programmes. There can be no doubt that club 2 school was within the rules of additionality, as it was funding sports training, which is one of the original four good causes, and was separate from any Government responsibility. I shall apply the Prime Minister’s original test of additionality, which was a continuation of Conservative policy, to club 2 school. He said:

“We do not believe it would be right to use lottery money to pay for things which are the Government’s responsibility.”

Sports training by sports clubs and children is not the Government’s responsibility.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Is my hon. Friend aware that, if the amendment is not adopted, when the Bill becomes law the Treasury will get its hands on about £1.25 billion of lottery money a year, comprising the 12 per cent. tax plus half of the 28 per cent. that goes towards funding education and health, both of which should be funded out of central taxation, not lottery money? Is not that a cause for concern?

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 hon. Friend is right to point out the national lottery’s taxation position. It is also worth pointing out that the national lottery remains the highest taxed of any lottery in the world. The Exchequer already benefits.

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

Mr. Cook, you will have noticed that I was generous in not referring to the Conservative party manifesto. However, now that the issue has been raised, I have a problem with which the hon. Gentleman may be able to help me. I understand what he says about whether the Conservative proposal would have been funded by the Government; none the less the Government would have been dictating to a lottery distributor how to spend the money. Does he not believe that one purpose of the new clause is to make sure that Government cannot direct lottery distributors in the way that, sadly, his own manifesto proposal would have done?

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 10:15 am, 3rd November 2005

That is not entirely true. The hon. Member for Bath should read his own amendment, which asks the Secretary of State to issue guidance to the distributing bodies on all these things, so the hon. Gentleman is not quite right. I repeat: the point is that we did not want to introduce a lottery Bill at the time. We could not stop all the existing commitments of the New Opportunities Fund. It seemed to us a way of getting funding into sports training—one of the original good causes—which was entirely separate   from Government responsibility. We were not in any sense breaching the principle of additionality. We were merely, in an expedient way, taking advantage of the period needed to ensure that the existing commitments of the New Opportunities Fund were met to introduce that measure.

If the Minister is still the Sports Minister—if a Government reshuffle has occurred he might be in the Cabinet now, or he might have resigned from it; one never knows this these days—it would be interesting to hear his reasoning on why club 2 school was not extremely popular in the world of sports. I do not know whether he would like to come back to me on that issue. It may be wise not to.

We have established that we would not need the new clause if the Prime Minister’s words were heeded by others in his Government. I know that it is now unfashionable amongst parts of his Government to listen to anything this lame duck Prime Minister says, but if the Minister agreed that what the Prime Minister said about the principle of additionality holds true and told his civil servants and Treasury colleagues that that is what will happen, we would not need the clause. However, we know that will not happen, because this whole Bill has been about blurring the lines between Government spend and lottery spend. It is about blurring the lines between Government commitment and responsibility, and something else which the Government wants to pay for by finding a slush fund which does not register in the Treasury books—a sort of lottery PFI.

We therefore need the new clause very badly, and I congratulate the hon. Member for Bath. He had one intellectual lapse, in failing to grasp the rationale behind our club 2 school policy, but has otherwise done a sterling job. We need the clause. The distributors need guidance and the principle of additionality needs to be stated in the Bill to satisfy all those out there who share our concerns.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor

I understand that semantics is the science of the meaning of words. In my hon. Friend’s mind, was the meaning of the Prime Minister’s definition of additionality absolutely clear in semantic terms?

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

The Prime Minister’s words were absolutely clear in every sense, semantic or otherwise. The Prime Minister said:

“We do not believe it would be right to use lottery money to pay for things which are the Government’s responsibility”.

It is clear as anything. One does not even need to speak particularly good English to understand that. English need not be one’s first language to understand

“We do not believe it would be right to use lottery money”.

My four-year-old would have little difficulty in understanding what the Prime Minister was actually saying.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

For the avoidance of doubt, would my hon. Friend write to the Prime Minister and ask him to explain whether that is really what he meant? Perhaps he meant something totally different and we are just too stupid to understand it.

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 hon. Friend might like to write to the Prime Minister. No doubt, he will get a letter back from an official at No. 10 which will not give him much of an answer.

Photo of Claire Ward Claire Ward Assistant Whip

He is too stupid to understand it.

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

I thought that the hon. Lady said from a sedentary position that the Prime Minister is too stupid to understand it. I hope that she did not say that; otherwise, her career might be going nowhere. Honestly, nobody is too stupid to understand this. What the Prime Minister and his predecessor, John Major, said is quite straightforward. Alas, what the Government are seeking to do is also clear.

Photo of Andrew Turner Andrew Turner Shadow Minister (Cabinet Office)

As I thought he might, my hon. Friend has come to an important point: the Prime Minister is saying one thing and the Government are doing something different. Is my hon. Friend saying that that is a unique occurrence?

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

If only that were the case. Increasingly, the Prime Minister seems to be a Government of one, with everyone else positioning for the eventual succession. However, mere questions of Labour party internal dispute should not affect something as profoundly important as the national lottery.

If the Conservatives were in power and the Committee were discussing this Bill, I would be arguing as I am now. This is about principle—not a fashionable word in Government circles. This is about the founding principle of the national lottery, which has been eroded again and again. Unless the new clause is agreed to, I for one will not be reassured that this slide—this raid, this putting of hands in the till—will not continue apace.

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

The new clause is well drafted. The hon. Member for Bath has tried in an innovatory way to bring to the Bill something that is clearly of concern to hon. Members and Select Committees—although probably of slightly less concern to the populace outside. However, the argument today has not done the new clause justice. I could have argued a far better case for it than the hon. Members who have spoken to it so far. They have gone so wide of the mark that they have missed the substance of new clause 1, which is unfortunate. They have been making too many party political points. Despite their failure to do justice to their cause and the clause, I shall resist new clause 1.

As the consultations that have taken place recently and a couple of years ago show, the question of additionality is not in the public mind as it is in politicians’ minds. About 6 per cent. of people responding to one of the polls said that there ought to be additionality. However, that additionality is not happening is not in the public’s mind at all and no evidence has been quoted to show that the general   public believe that. In the consultation—it is there, on the record—we asked people what they wanted the lottery to be involved in besides the protection of sport, arts and heritage. Those things are protected, and not only now: we have committed to taking such protection into the new licence as well and I repeat that commitment.

We are talking about the Big Lottery Fund. The consultation was about the NOF, the Community Fund and the Millennium Commission, and bringing those three into one body. That is what we consulted on. From that consultation emerged the three broad   themes to which Clive Booth refers in his letter: health, education and the environment. Our aim was also to make sure that a system was in place whereby the lottery money could be used more effectively to add real value to such projects. That meant bringing different funding streams, both from the public sector—

It being twenty-five minutes past Ten o’clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at One o’clock.