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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.

Question proposed [this day], That the clause be read a Second time.

Question again proposed.

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

Before lunch I was trying to explain to the Committee that the new clause is very reasonable. I shall resist it because it has one or two flaws, and it was badly argued by the Opposition. They did not do the clause any justice at all.

Our approach is very much in line with the thinking out there from the general public as reflected in the consultation. During all the consultations, it was true that people wanted additionality. It was part of the intention in the mid-1990s when the lottery was set up   and broadly speaking, all Administrations have adhered to it. The protection regarding sports, the arts and heritage exists now and will do so in future.

As an aside, several hon. Members argued about Government direction. That has to be considered carefully. Let us consider the amount of money that the constituents of the hon. Member for Bath (Mr. Foster) received from the New Opportunities Fund. I do not know whether he wants us to withdraw it because it is politically incorrect, but we will do if he desires that. The project was for Bath and North East Somerset council to provide school pupils and local partners with secure and accessible flood lighting and hard court surfaces. The facilities have increased participation in a wide range of sports including soccer, hockey, basketball, tennis and netball.

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

Will the Minister confirm that I heard him absolutely correctly when he said that if I wanted those projects withdrawn, “we will do if he desires that”? Is that not the clearest indication we have ever had of the Government’s willingness to interfere in lottery decisions?

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

If the hon. Gentleman allows me to complete my explanation I was going to say “after consulting NOF”, but I was only half way through the explanation. The hon. Gentleman is a true Liberal Democrat because he wants to shoot from the hip all the time. That is the problem with the Liberal Democrats; they never think things through. I shall continue to show what this politically incorrect Government have done for the hon. Gentleman’s constituents. The facilities have benefited 1,400 students, and through partnership will benefit 3,500 community visitors in the first year. I shall consult NOF and see whether it is achieving its target. If not, the hon. Gentleman can write to me and I will get the funds withdrawn. Obviously, as a Liberal Democrat he wants to be purer than pure.

There is also a long list of the—politically incorrect—investments in East Devon; Littleham primary school parent teachers and friends association, Maytree pre-school, Bassets farm pre-school and so on.

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

The awards to enable pupils to sit in a range of extra-curricular outdoor activity come to £5,000. The cost of pre-school activities and play areas is £5,000. The group providing preschool education costs £1,200. [Interruption.] I shall continue with this politically incorrect list of investments so that everyone can hear it.

In the Isle of Wight, £279,000 has been provided for sports facilities, which will affect 1,500 pupils in the first year and 1,000 community users. If what was said this morning was anything to go by, anyone would think that investments, which were supposed to be politically correct, were made only in Labour constituencies in inner-city areas. I suggest that all hon. Members have gained advantage from the community programmes provided by the New Opportunities Fund.

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

This is confusing because the Minister, typically, is trying to sell these sums as if they were Government largesse when they come from lottery funding, which is exactly the problem. As the Minister has got his civil servants to crawl over all these grants—rather limited grants in the case of East Devon—would he share with the Committee how many of a similar nature his own constituency received?

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

I do not have that information. I shall write to the hon. Gentleman and put it on the public record.

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

Since the Minister is being so generous, perhaps he could write to me with details of what largesse my constituency has received from the lottery fund. I would be truly grateful for that information.

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

The information will be winging its way to the hon. Gentleman over the next couple of days and I think that he will be quite shocked at the results. May I now get down to the serious matter of discussing the new clause?

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

Since the Minister has mentioned my constituency, will he make it clear—as far as I can tell, it was not clear even to those who arrived on time; I apologise for arriving a moment or two late—exactly what point he was trying to make? It did not seem to counter any of the points made by the Opposition during the debate.

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

That does not surprise me at all. Anything that I have said during the Committee will not have countered anything that the hon. Gentleman has said. This morning’s discussion on additionality highlighted the idea that there seems to be a draconian attitude and that investment—through the New Opportunities Fund—had a political direction and seemingly never went anywhere else apart from Labour constituencies. The debate could be interpreted like that. I am entitled to put that interpretation on it. I just thought that it would be interesting for the Committee to know the spread of the benefits that many constituencies, including those of the hon. Members on the Committee, have received for their constituents. I hope that they are grateful to NOF for that type of direction.

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

I know that the recipients of many of the projects in my constituency to which the Minister referred are indeed grateful. However, since he earlier accused us of concerns about pedantry, will he explain, in pedantic language if necessary, what in anything that I or the hon. Member for East Devon (Mr. Swire) said led him to infer—to imply, to imagine, to think—that we had somehow referred to the issue of Labour constituencies?

Photo of Roger Gale Roger Gale Conservative, North Thanet

Order. The hon. Gentleman invites the Minister to rehearse discussions that have already taken place. He may wish to do that; I do not.

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

As always, I shall comply with your sound and perceptive directions, Mr. Gale. As we know, this is what we have had to deal with throughout the Committee. I will now revert to the discussion of new clause 1.

New clause 1 seeks to insert a requirement for the Government to provide legislative guidance to distributors on the extent of their independence from the Government, what constitutes additional funding and how that should be reported. It seeks to ensure that the guidance should be drafted only after further consultation with a number of bodies, including as provided for in the 1998 compact between the Government and the voluntary and community sector. The new clause seeks to ensure that the guidance should be subject to approval by a resolution of both Houses of Parliament.

I think that I understand what is behind the new clause. Lottery money is special and should add to, not substitute for, Government expenditure. That bears out what we know from wide consultation: people see lottery money as public money and as different from money raised through taxation. They see it as money that should be spent on different things—things that taxes cannot fund. That makes it even more important that lottery funds be used effectively, reflect public priorities and enhance spending in key areas, whether the source is the private or public sector.

There was an implication that quite a lot of the investment in sport had gone through local education authorities or local authorities. I do not think that there is anything wrong with that. It does not mean that the investment cannot be additional. Many local authorities are incredibly creative, not only in providing facilities themselves but in getting into key partnerships with the private sector. I want to encourage that. That was borne out by the results of the consultation.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor

During our proceedings, the Minister has been careful to give specific and detailed definitions of the new powers taken on by the Secretary of State. I do not understand why he refuses to define the principle of additionality in the Bill or to accept new clause 1. It would simply clarify a matter about which there is uncertainty and put it to rest.

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

To be honest, that would not be true. Instead, we would have a bank of lawyers discussing the matter. I agree that, wherever possible, we can be helpful in ensuring that the reality and the public perception is that additionality is working. I hope that what I will say later will help with that. However, what the hon. Gentleman described would be the wrong way of doing things because we would finish up in the courts and the interpretation would be a lawyers’ paradise. That is always the difficulty. It was the difficulty with previous Administrations, as it has been with this one. The question is how we can get the best out of lottery funds; ultimately, a judgment is required.   We believe that that judgment has been consistent through all Administrations, but I shall come to that in a moment.

We as a Government are strongly committed to ensuring that lottery grants are additional, so new clause 1 is not necessary. The Government are responsible for establishing a framework for the national lottery. Such a framework has already been achieved through legislation and policy directions that stipulate that lottery distributors should operate at arm’s length from the Government, empower distributors to establish programmes and make decisions on individual applications without Government interference or intervention, and require distributors to ensure that they target awards at the areas and the people who are most in need of them. Distributors are well aware that lottery money should not substitute for money that should be raised through taxation.

By seeking to define “essential” and “desirable” Government expenditure—I assume on the basis that only the latter would be eligible for lottery funding—new clause 1 risks burying lottery distributors and their lawyers in a mire of bureaucracy.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

My hon. Friend the Member for East Devon (Mr. Swire) mentioned cancer services funded by the New Opportunities Fund. Is the Minister suggesting that if the fund had not come up with £90 million—I believe that was the figure my hon. Friend gave—that community would not have received services to prevent and treat cancer? Surely, cancer treatment is a core responsibility of the national health service and should not be funded from any form of lottery money whatsoever.

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

That is true. I do not know the specific circumstances of that case, but there is no reason why additional money cannot be provided for a service. There may well be a requirement to deliver, and that can be delivered, but there may also be additional funds. Take the example of sports facilities. There are general sports facilities, but value can be added through additional spending, whether from the lottery or the private sector. Sainsbury has done a fantastic job in helping with school playgrounds. Fine, the playgrounds were already there, but the additional use of them as a result of the additional investment put into them is very welcome. That is not to say that without that investment the kids could not play and kick a ball around. They could, but they can do it in a better environment than they had previously. That is additional. I do not know the exact circumstances of the case to which the hon. referred—I can look into it—but that is the argument about additional.

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, either advertently or inadvertently, stumbled across his definition of “additionality”, and it is very different from ours. Apparently, additionality means using lottery money to top up Government spend. We would argue that that invites blurring of the lines. We define additionality as spend that is completely different from   the Government spend. It should not replace core Government expenditure. A clear difference is opening up, and the Minister has summed it up well.

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

And the hon. Gentleman has summed up why we are not prepared to start defining additionality. He and I can disagree about it, but what will happen in the law courts? As I said, a definition would create a lawyer’s paradise. All sorts of actions will be taken about all sorts of distributors and we will get nowhere at all. That is why we have taken the common-sense approach in the Bill. I accept that we must give Parliament a base on which to have an informed debate, and I shall come to that, but the past few minutes have showed exactly why we are not prepared to put in the Bill or any other place a definition that would allow lawyers to start taking everybody to court.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor

There seems to be doubt. Proposed new subsection (1) would provide guidance on

“(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”.

If £1 was given by the Government for a core Government expenditure such a new NHS hospital and £999 was given by a lottery fund, would that be an acceptable breakdown?

Photo of Richard Caborn Richard Caborn Minister of State (Sport), Department for Culture, Media & Sport 1:15 pm, 3rd November 2005

I am not prepared to go down that road for the reasons that I gave. I can just imagine the hon. Gentleman and I arguing the matter in court. If there was a definition, the result would be one constituent versus one lottery fund in a lawyers’ paradise. The discussion this afternoon shows the reasons why we do not want to define the term in any way.

Let me proceed, because what I say should be genuinely helpful to the Committee and the House and will make sure that debates about additionality can be taken in the round, and not focus on the specific. If we get down to specific cases, such as cancer services or a school playground, there is a danger of litigation. We politicians are setting out a broad framework, which it is for distributors, not politicians, to operate. The distributors are arm’s length bodies whose members are appointed because of their knowledge, skills and wisdom to distribute funds in the way that our consultation on the lottery demands.

A definition would result in bureaucracy, which would require distributors to fund only projects that fell within a strict and necessarily narrow definition and would negate the many improvements that have allowed distributors to offer excellent joint schemes such as awards for all, which offers simplified applications and quicker decision-making processes designed to encourage those who are most in need to apply and to benefit. I firmly believe that distributors must have the flexibility to support innovative projects and the opportunity to get involved in something to which they can really add value. Trying to anticipate   what sort of projects might be supported necessarily results in the imposition of restrictions limiting the extent to which they can add value.

The new clause proposes that the Government be required to consult specific bodies, including not-for-profit organisations—a very general term. It also requires the Government to have regard to the 1998 compact on relations between the Government and the voluntary and community sector in England. By so doing, the new clause proposes legislation in an area in which we believe it is simply not necessary. Distributors and the Government already consult widely—even more widely than is anticipated under proposed new subsection (2) of the new clause, which I see does not include members of the public. As I have said previously, our aim is to adhere fully to the 1998 compact. That is why I recently met representatives from the voluntary and community sector to explain how the new arrangements will work and, in particular, how we will preserve additionality.

My officials and representatives of the lottery distributors already meet and consult widely with the voluntary and community sector. That is not a sham; it is real consultation. Recently, as well as holding one-to-one consultations we have tried to make sure that the consultation is as wide and as informed as possible. We are indebted to a number of voluntary and community sector representatives for assisting the Big Lottery Fund-led project team by commenting on and testing an improved website and helpline facilities for potential lottery grant applicants. We are trying to ensure that there is a one-stop shop and that the process is much more user-friendly. Their input will help to ensure that the new facilities, which are to be launched early next year, meet the needs of those whom they are intended to benefit.

The new clause would also require distributors to report from time to time on how they are taking such matters into account. We are already working with distributors to ensure that failed applicants get the feedback they want on their applications and that the criteria for successful grant applications are made clear when programmes are launched.

At the meeting between the voluntary and community sector and myself to which I referred earlier, the chief executive of the Big Lottery Fund, Stephen Dunmore, agreed to produce an annual report showing how the additionality principle had been observed. We had an extensive discussion around the table in my office. Concerns were expressed then, and have been again in our debate today. Stephen Dunmore said that he would produce an annual report, which I have agreed will go before both Houses of Parliament and which will be a well-founded source of information that can be used by individuals, by Select Committees and by hon. Members for scrutiny.

Having the matter quantified in the broad annual report is a step in the right direction. One swallow does not make a summer; we have to be careful not to predicate the whole of a policy on one isolated case. We are trying to produce an annual report that, in the round, shows how funds have been used for good causes and how they are additional to other   expenditure. Stephen Dunmore is keen to ensure that that happens and it is important to the lottery’s integrity.

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 do not follow the logic of placing an annual report on additionality in the Library of the House of Commons when the Minister and the Opposition cannot decide what they mean by additionality. We are fundamentally in disagreement, so what on earth is the purpose of that report? What will it report on? We do not know how the Minister is going to define additionality.

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

Let me spell it out in words of one syllable: we are going to produce a report of which additionality will be a part. We are always in danger of focusing on one area of this issue without looking at it in the round.

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

I know what we are debating under new clause 1. I am just trying to inform the Committee of how we came to our position. I had a discussion in my office with the voluntary sector and the chief executive of the Big Lottery Fund. He was trying to be helpful by saying that in his annual report he will try to make sure that, from his point of view, the principles of additionality are quantified.

It is not good not to have additionality. The chief executive and the board are the custodians of the money and how it is distributed, and the board is responsible to Parliament through the chief executive, who is the accounting officer. In his report, he will try to quantify and describe how the board believes it has delivered what we in Parliament have asked of it.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor

Will the Minister explain how anybody can report on something that is undefined?

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

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. [Interruption.] Let me explain this very serious point. We believe that if we took certain courses of action, we would create a lawyers’ paradise. As previous Administrations have done, we believe that the best way forward is to put the fund at arm’s length from Government, which we have done, and to make it accountable back to Parliament, which it is. The broad direction given to the independent people working at arm’s length from Government is to receive applications and apply the principles that Parliament has asked them to apply. They report back to the Government in an annual report. The accounting officers are also responsible to Parliament through the Public Accounts Committee.

There are a number of checks and balances. How those people apply the principle of additionality or deliver on the rest of their remit’s broad themes—in the case of the Big Lottery Fund, those are health, education and the environment—is always open to scrutiny by Parliament. That scrutiny should continue to be carried out by Parliament rather than the courts   of law, where we believe the whole thing would get bogged down and could be very expensive and time-consuming.

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

There is a simple way around the problem that would avoid lawyers and everything else. The Minister should echo the words of his own Prime Minister about additionality. The Prime Minister summed it up clearly. All the Minister and the Secretary of State need do is tell all those involved in the national lottery—whatever distributor it is—that they must adhere to what the Prime Minister said. There would then be no recourse to law, because there would be no question of additionality being breached as far as we were concerned.

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

I hear what the hon. Gentleman says—he has laboured the point very hard. All I am saying is that we have accepted the principle of additionality and will continue to do so. We do not want to go down the cul-de-sac which could well lead us—or if not us, the funds themselves—into all types of legal actions. We are putting on the statute book provision for broad directions to distributors agreed by Parliament. The distributors are accountable to Parliament in a number of ways and we are trying to ensure that the information coming back is fuller and sounder. That is why Stephen Dunmore helpfully offered to quantify where the Big Lottery Fund distributors believed their monies would be additional.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor

I am not entirely clear. Does the Minister agree with his Prime Minister’s words on the definition of additionality?

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

Yes.

The matter is one for distributors and their approach illustrates the extent to which they are willing to take comments on board and deal with them in a pragmatic manner. We do not need to legislate to acknowledge the contribution that the voluntary community sector makes to the social, cultural, economic and political life of the nation—a contribution which we value and indeed support.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

We in Hertfordshire have a number of charities that perform an extremely useful role for many underprivileged people and people who suffer from addictions. At the moment, they get grants from local authorities. They are concerned that local authorities will start to remove those funds if they see the charities getting more lottery money—particularly as local authorities are under some financial pressure. The authorities might well say, “They’ve just got ten grand from the national lottery, which relieves us of that responsibility”. Will the Minister use his platform in this Committee to send a message to local authorities that that will not be tolerated?

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

I put it clearly on the record that it would be totally unacceptable. We have seen the potential for that to happen, but a displacement of that   nature is not what the lottery is for. That is not the intention and local authorities should not act in that way. I can put it no more strongly than that.

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

The Minister’s last statement was at least a partial definition of additionality as far as his Department is concerned, but earlier he referred to the guidance and draft directions that tell the Big Lottery Fund about the principle of additionality. Perhaps the Minister cannot remember exactly what he said, but I got the impression that he was saying the Big Lottery Fund was being asked to have regard to the principles of additionality.

Mr. Swireindicated assent.

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

My hon. Friend nods his head. If the Big Lottery Fund is being asked to have regard to those principles, then additionality must mean something in the Minister’s mind. To what is the Big Lottery Fund being asked to have regard and is it in the direction?

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

It means additional to public expenditure. I will not be drawn for the simple reason that I do not want to have a definition in the Bill or a provision such as new clause 1. Rightly or wrongly, we believe as previous Administrations have believed. We do not want to create a minefield for the distributors that would lead into unhelpful litigation actions.

What we believe is necessary is that we reassure the public out there. They ask for additionality. We broadly agree with that. The Prime Minister’s statement is accepted by the public and every survey done says that, yes, they want additionality. In the last survey, which was on the Big Lottery Fund, their concerns were down at 6 per cent. I know of no other major survey that has shown a concern that additionality is not being observed by the distributors.

I am fairly content. No Administration has been tied down into defining additionality and on the other side of the balance sheet is the fact that the general public believe that Administrations of both political persuasions have tried broadly to adhere to the question of additionality.

I am going one step further. To ensure that the House can have a sound and informed debate on the subject, which it probably could not do before, the annual report of the chief executive of the Big Lottery Fund, Stephen Dunmore, will attempt to show when additionality has been used. That is a move in the right direction, as it will lead to an informed debate, by Select Committees and the like, and it will give the reassurance that I think is necessary.

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 1:30 pm, 3rd November 2005

I am partially reassured. By signing up to the Prime Minister’s statement, the Minister has gone some way to reassuring us, because the Prime Minister was specific about additionality meaning in addition to Government spend. However, the Minister’s refusal to include such a provision in the Bill leads me to ask whether his echoing of that statement is a wish, a commitment, an undertaking, a pledge or a ministerial aspiration.

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

All of them; and, as a lawyer would say, I will hold to that interpretation as well. I will not be drawn down that road, as I said earlier, so the hon. Gentleman can make whatever interpretation of it he likes. I assure him that it ain’t going on the face of the Bill. That will ensure that the lawyers cannot drag it through the courts, should they want to. However, we will try to assist the House by ensuring that hon. Members can have an informed debate on the annual report; and the chief executive will attempt to explain to Parliament how he and the board have complied with the directions given.

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

I will not give way again on that point.

I am recorded as saying on Second Reading—it has been prayed in aid many times—that it is important that additionality be embodied in future legislation. What I meant, of course, was that consultation showed that the public regard the principle as important and that we should continue to follow that policy when preparing future legislation. That is not the same as including a requirement in the Bill for secondary legislation. I cannot expect legally to be able to differentiate lottery and taxpayer funding. Even if I tried, it would not, for example, stop a local authority seeking to withdraw or reduce its funding once a lottery grant had been made—the point made by the hon. Member for Broxbourne (Mr. Walker). It is for the Treasury to police additionality. If my Department were ever to seek to replace its funding with lottery funding, the Treasury would rightly reduce its funding by the same amount.

I have tried to explain why we are doing what we are doing. People might not agree, but we have at least tried to explain what we want to achieve. We believe that it will be in the best interests of those who distribute lottery funds, and it will also allow Parliament to debate the matter in an informed way. When all is said and done, the general public seem to be content with the principle of additionality and its operation. For those reasons, I ask the hon. Member for Bath to withdraw the new clause.

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

I find myself in some difficulty. The Minister said that in consultation the public say that they want additionality; then he told us that the principle had been broadly adhered to by past and present Administrations. I do not know how the Minister can come to that conclusion if we do not have some understanding of what we are talking about.

I accept that including a precise and tightly worded definition in the Bill could lead to problems—the Minister spoke of a lawyers’ paradise. I made it clear that the new clause would not place a definition of additionality in the Bill, because doing so would cause a variety of difficulties. The Minister told us that he assiduously studies the amendments that he wishes to resist, so he will know that the word additionality does not appear in the new clause. However, he has spent a lot of time talking about additionality and the problems that would arise if a precise definition were given. I suspect many members of the Committee   would be sympathetic to his views. My difficulty is that the Minister has not given any reasons why the new clause should be resisted.

I am very confused by the right hon. Gentleman’s response. When I was referring to the National Audit Office’s report I could hear the Minister berating me. When I quoted a section that talked about the issues of accounting practice and who would make announcements, he demanded from a sedentary position, “What’s this got to with additionality?” As the record will show he later said, “But this is about accounting practice.” Yes it was, because that is what the new clause was about. New clause 1 talks about the need for guidance from the Secretary of State including reference to

“the means of insuring transparency in the funding of projects which receive both national lottery and government funding in relation to accounting practice, and public announcements.”

I made the point that the NAO is deeply concerned that the Government do not have it right and so there is a need for guidance on this matter. The Minister has not told me why it would be a bad idea for the Secretary of State, after consultation, to give guidance on those matters.

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

The hon. Gentleman answers his own question. The report he referred to was the Department for Culture, Media and Sport annual report. It stated that we had responded to the NAO report and that the difference between public and lottery funding was somewhat clearer than before. Therefore we did respond to the NAO report.

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

With respect, the Minister is confusing two different reports. The DCMS report said that the Minister expressed the view that Administrations past and present have broadly adhered to the principle of additionality. That is not the view of the DCMS Committee, which said:

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

But I was not referring to that. I was referring to the NAO report which said that there was a need to ensure clear separation between the two, to ensure that the Government were not announcing initiatives that were lottery distributor initiatives and that the accounting stream should be cleared. I gave an example, not from two years, one year or six months ago, but from the current DCMS website, which shows a continuing confusion between the two.

I am in great difficulty because I have heard a diatribe from the Minister opposing an amendment that has not been tabled. There is no amendment seeking to define additionality. I do not know what the Minister’s diatribe was about, although I have some sympathy with what he was saying. I also have some sympathy with those who have been arguing that we cannot possibly have a report on whether additionality has been adhered to unless we have at least some degree of understanding of what we are talking about. That is why it is suggested that guidelines be issued in relation to the various matters that are referred to in the new clause and have been touched on by other hon. Members.

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

The hon. Gentleman will have heard the Minister’s response to my most recent intervention. He said that additionality refers to expenditure in addition to public expenditure. I hope that I have got those words right. I tried to intervene again, but the Minister did not take my intervention. It seems to me that those words are self-defining. We all know that money spent that is not public expenditure is additional to public expenditure, but that does not explain what the Prime Minister, or the Minister in agreeing with him, meant by additionality in the terms that we have been debating it, which is whether expenditure should or would be covered by public expenditure.

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

I hear the hon. Gentleman’s comment, but attempting to agree or disagree with him, even agreeing or disagreeing with the Prime Minister, is dangerous when debating new clause 1. It is clear that there is some confusion—people’s views and understanding differ. The new clause proposes wide consultation with a range of bodies to see whether we can come to some broad understanding under the themes and headings provided. It does not give a precise legalistic definition, but it provides an approach to test additionality.

I do not want to answer the hon. Gentleman’s question and give my own definition. What worries me is that the Minister does not want to give a definition, yet prays in aid the view of Mr. Stephen Dunmore, whom I hold in high regard. The Minister tells us that Mr. Dunmore will present a report that quantifies and describes how additionality has been delivered, and that presumably defines additionality. Mr. Dunmore is apparently capable of doing that, so it seems odd that we cannot work on a definition collectively, taking in the views of Mr. Dunmore, the Prime Minister, previous Prime Ministers, the Minister and anyone else who wants to have a go, so that we reach a common understanding.

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

I shall give way to the Minister, who has at long last read the new clause and will now tell me what it says.

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

I have read the new clause. I rise merely to ask the hon. Gentleman to clarify and to interpret it, because although it does not mention the word “additionality”, it tries to define it. The new clause provides that the Secretary of State—not Stephen Dunmore—should

“issue guidance to the distributing bodies on the distribution of lottery funds, including reference to ... the distinction between essential and desirable government expenditure ... the distinction between core central government expenditure and lottery funding ... the distinction between local government expenditure and lottery funding”.

I have no disagreement with the hon. Gentleman. That is an interpretation. It asks the Secretary of State to give guidance to the distributing bodies on the definition of additionality. However, that is a million miles away from the chief executive of the Big Lottery Fund saying that he accepts in good faith what Parliament has asked us to do on additionality.

The hon. Gentleman knows that we are putting legislation on to the statute book. We are not writing an annual report, important though that may be to informing the debate. I am not against trying to define additionality. Subsection (1)(b)(c) and (d) of the new clause tries to do that honourably, but I am not prepared to go down that road because I do not think that it is in the interests of the distributors or the lottery in the long term.

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

In all fairness to the Minister, I think that he lost most of us with that argument. The new clause does not say that there has to be a definition. It refers to areas in which a discussion should take place.

The Minister should think through some of the things that he has been saying during the passage of the Bill. When it suits his purpose he tells us that we should not have definitions; at other times he says that we must have precise definitions of words that some of us do not think need to be defined. To use an example picked at random schedule 1 deals with licensing procedures. We had a debate the other day about whether a licence should be issued to a person who is “suitable. The words used in the schedule are that the commission must be

“satisfied that the applicant is a suitable person to promote the lottery or lotteries”.

We have only to read down a few lines to see that it is crucial to define the word suitable; we cannot run the risk of a lawyer’s nightmare there, so we have to have a definition. “Suitable” is clearly defined in terms of the integrity, competence and financial circumstances of the applicant. In one set of circumstances the Minister thinks that it is important to have a definition to avoid the lawyers’ paradise, but in other circumstances we should avoid having a definition because having one will create a lawyer’s paradise. The argument does not work both ways.

My problem is simple: I have not had a response from the Minister to new clause 1. I have had a response to an amendment that he thought was tabled, but it is not the amendment that I proposed. It strikes me that rather than delay the Committee now, because this is clearly an issue to which the House will want to return, we would do well to accept that so far the Minister has not marshalled his arguments well. He accused me of not presenting the case for the new clause particularly effectively, so perhaps both of us should go back to the drawing board and find another way of approaching the issue. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.