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New Clause 2 - DISTRIBUTING BODIES: CRITERIA FOR DISTRIBUTION

National Lottery Bill – in a Public Bill Committee at 1:45 pm on 3rd November 2005.

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‘After section 25(1A) of the National Lottery etc. Act 1993 (application of money by distributing bodies), insert—

“(1B)In determining how to distribute money in accordance with subsection (1) a body shall have regard to maintaining the reputation of the National Lottery and the distributing bodies.”.’.—[Mr. Swire.]

Brought up, and read the First time.

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

The new clause seeks to address the national lottery distributors having some recourse to a reputational impact clause to protect them from making awards that could negatively impact on that distributor as a whole. We have seen that happen in the past. I do not want to rehearse this late on in the Bill all the stories about the fattening of Peruvian guinea pigs and some of the other stories that have come out of national lottery grants over the past seven or eight years, but each and every one in some way undermined the national lottery.

That might not have been evidenced in sales of lottery tickets, but the net result is that Camelot, for instance, was meant to have delivered far more money for good causes than it has. When it won the last licence bid in 2000 it was meant to raise up to £15 billion for good causes; five years into the seven-year licence it has delivered only £7 billion. By the end of its contract in 2008 it is still expected to fall almost £5 billion short. So there was not much expectation management. One therefore has to look at anything that will threaten the health of Camelot; of the game; and of the distributors, which in turn would so affect, potentially adversely, all those good causes that desperately need the money.

I happen to note that a chairman of one distributor whom I spoke to in the past said that they rarely needed a reputational impact clause. In the previous debate on new clause 1 the Minister spent a lot of time talking about a lawyers’ paradise. He also talked about common sense. It is my submission that the new clause is common sense in that it gives the distributors that power.

In terms of it being a lawyers’ paradise, what was happening before, particularly with the New Opportunities Fund, is that some of the awards were being made and the chairman of the distribution body was wholly unable to resist allowing the grants to be made, even if he had thought that they were in some way inappropriate because there was no reputational impact clause.

I remember being told that the problem was that the strange causes that attracted money—the same causes that got into the newspapers—were surrounded by teams of lawyers waiting to challenge the distributor for being prejudiced against the cause for which they were seeking funds. That went on to such an extent that it was almost incumbent on the distributor, and easier, to give in and make those awards rather than face the barrage of lawyers and others with a vested   interest in that politically correct atmosphere. Inappropriate grants were made as a result, as I am sure the Minister would agree.

As we are faced with a new Bill, it is time to introduce something to give more power to stop that happening in the future, a view that is shared on both sides of the House. The hon. Member for Glasgow, South (Mr. Harris) was very keen that the Government should exercise powers of prescription over the Big Lottery Fund to avoid grants that damage the lottery as a whole, and he is absolutely right. If the Government are going to prescribe, why not also prescribe some protection so that the lottery as a whole cannot be damaged by a repeat of those inappropriate grants?

We all want the lottery to prosper; it is probably the only thing that unites the Committee. The Opposition and the Government have not really agreed on anything; the Minister conceded on one amendment, which I withdrew as a result, so we end the Committee stage unable to reach agreement on almost every clause of the Bill and on the simple definition of the principle of additionality, even though the Prime Minister himself defined it clearly. Incidentally, we now hear that the Minister concurs with the definition. It is always nice when a Minister agrees with his own Prime Minister.

It is perfectly clear that we are unable to reach a common agreement on the principles of additionality, so I repeat the words of a letter dated 1 November—it is hot off the press—from Sir John Major to Denis Vaughan, who was very involved in the early days of the lottery, which states:

“It is scandalous how the Government have so emasculated the original purpose of the Lottery and I do take every suitable opportunity to raise this matter publicly. I shall continue to do so until the resources that were intended for the original good causes are returned to them. I am delighted to see that you have the same ambition.”

If someone like that is uneasy, it could have an effect on the lottery because people will be worried that it is being misappropriated and becoming another Government spending Department, without the strictures that apply to other Departments. If 50 per cent. of lottery funds are distributed by a single distributor under tremendous prescriptive powers from the Government, I wonder how long it will be before there is just a single lottery distributor under the Government’s prescriptive powers. Then there will effectively be another Government spending Department.

I submit that all of that is relevant because it creates a sense of unease about the national lottery at a time when we need it to exceed expectations, not to under-perform, as Camelot has, in distributing funds as it was intended to do. There is to be a new Olympic lottery game and it is critical that there should be a funding stream or there will be a large shortfall at the end of the Olympics which none of us wants.

The Committee is in agreement that we want the national lottery to prosper, even those who were doubting Thomases when the Conservatives had the original idea of a national lottery have come to realise that it has not impoverished the least well off; indeed   it has nourished aesthetically, artistically and, on occasion, even spiritually, which Government were not in a position to do, or had no desire or capability to do. We accept that the national lottery is a good thing, so, we must look at ways of nourishing it, and making it grow in the way we want it to grow, so that more money can go to the causes that we want it to go to, always bearing in mind that it must not grow at the expense of charities that, as we have heard, are better recipients of direct funding than even the national lottery can give.

If we accept all the arguments that we want to do everything that we can to ensure that the national lottery is a success, let us put to one side our disagreements about the creation of the big lottery fund, the prescriptive powers of the Secretary of State, and the breach of additionality, as we see it. Let us put all that to one side, and look at the clause, which is very simple and non-partisan and shows common sense. It would give the powers to where they are needed, so that proper grants can be made in good faith, and we will see a cessation of attacks on the lottery as a whole in the national press.

Photo of Jo Swinson Jo Swinson Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Whip

The hon. Gentleman has said that there is a degree of agreement on the Committee. Certainly, everybody would agree that the reputation of the national lottery must be preserved. It is important to the continued success of the national lottery, in particular, if people are to keep playing and maximise funding for good causes. In many ways, after reading the amendment, it is difficult to see how one might disagree with the statement that

“a body should have regard to maintaining the reputation of the National Lottery and the distributing bodies.”

Equally, however, I feel some unease with that, partly, for example, because it is not clear why it needs to be enshrined in legislation. Members of the bodies that are appointed must be fit and able to discharge their offices, so one would expect that, in acting professionally, they would in any case have regard to the reputation of the lottery and the body on which they serve.

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 have no doubt that those who have to distribute funds are good people of character. However, the problem is that they have no defence mechanism that will allow them to stop making awards. That is the point. The clause is not in any sense to do with the quality of the people making the distributions, but about giving them the protection. That is what the clause seeks to do.

Photo of Jo Swinson Jo Swinson Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Whip

Indeed. I was intrigued when the hon. Gentleman explained the rationale behind his thinking on the matter. However, I wonder whether the new clause is the best approach to solving the problem. After all, as has already been expressed in Committee, we know that the lottery’s reputation does not necessarily reflect the reality of the lottery funding that is allocated. There are already gross public misconceptions about where lottery money goes. The ICM poll, commissioned last year by the National   Council for Voluntary Organisations, says that the public believe that the same amount of lottery money is going, for example, to help asylum seekers as to support disabled people. In fact, the amount going to disabled people is actually ten times as much as that going to asylum seekers.

There are misconceptions out there, which, in many cases, harm the reputation of the lottery. Several high-profile cases—the guinea pigs have now been mentioned for the fourth time in this debate—may have had an impact on the reputation of the lottery. However, I am not yet convinced that the solution is clause 2. Surely the problem is public understanding of what the lottery does, which is why it is welcome that there are now in place lots of programmes to raise public awareness of the good work that it does.

The Committee had an earlier debate in which we stated the importance of ensuring that the distinction between raising awareness of the good work that the lottery does and encouraging people to play the lottery is clear. We must ensure that the bodies, whose good work we support, are publicised, and schemes such as the blue plaque scheme all help that.

Photo of Tom Harris Tom Harris Labour, Glasgow South 2:00 pm, 3rd November 2005

Does the hon. Lady agree that Conservatives on the Committee began the debate by criticising the Government for being too prescriptive and are ending the debate by complaining that they are not sufficiently prescriptive?

Photo of Jo Swinson Jo Swinson Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Whip

As my hon. Friend the Member for Bath told the Minister during the debate on the preceding clause, there has been disparity as to who is being prescriptive at various points. We address reputation by raising the profile of the lottery’s good awards and good work. Indeed, hon. Members will have received the briefing from the National Council for Voluntary Organisations on this matter. It states:

“We accept that there have been a number of high-profile controversies about some of the projects that the Lottery has funded — whether that is groups supporting asylum seekers or prostitutes — but this, in our view, serves to strengthen the case for improving public awareness of the true destination of Lottery funding.”

I suggest that that represents a good way forward. I stress the potential negative impact of adding the proposed new clause to the Bill. Reputation can be a subjective concept; one person’s view of what improves the lottery’s reputation may be quite different from another’s. It would be a dull world if we all shared precisely the same views about which projects were most valuable. That is why I hope that the television programme that will allow the public to vote on the people’s millions is going to be a success. The public will differ on which projects should be funded according to their views. Therefore, we should be careful not to impose the restriction that everything must be decided solely on the basis of reputation. That is subjective and might lead to risks not being taken. Sometimes, risks have to be taken with projects; that is nature of some arts and culture lottery distributors.

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. Lady is, of course, right. However, if she re-examines the clause, she will see that it seeks only to give powers to bodies to require them to have regard to maintaining the reputation of the national lottery and the distributing bodies. That does not mean that they cannot make awards to avant-garde art projects, which are subsequently criticised in the press. That will happen from time to time. The hon. Lady would agree that the bodies should be given the power to avoid that problem.

Photo of Jo Swinson Jo Swinson Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Whip

I hear what the hon. Gentleman says, but some funded projects are indeed criticised. I have often listened to Conservative Members criticising lottery awards on the radio; that could be said to be damaging the reputation of the lottery. That interpretation could have a negative impact on whether bodies feel that they are able to take risks in supporting projects that may not be a success, but which we would not wish to debar them from being able to support. I understand the sentiments behind the proposed new clause, and we all agree that the reputation of the lottery should be preserved, but I suspect that there might be another way forward on this matter.

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

It would not be a bad idea to have the reputation of the national lottery written into every hon. Member’s terms of reference. That might curtail some of the more extreme and sometimes misleading statements that have been made about the lottery. The hon. Member for East Dunbartonshire made a very good case as to why we should not support proposed new clause 2. I wish to be clear about inappropriate grants; the distributors can simply decide not to make a grant, and that is wholly for them to decide. They have the powers to do that, and that is not affected in any way, nor would it be affected by the proposed new clause.

The purpose of proposed new clause 2 is to require lottery distributors to have regard to their own reputation and that of the national lottery when making grants. None of us wishes to see the reputation of the national lottery or distributors adversely affected. We all agree that it is important that the national lottery’s reputation be maintained. Lottery distributors will want to ensure that their reputations are maintained, too.

It is because we want to maintain the national lottery’s reputation that we are making considerable efforts, not least through provisions in the Bill, to enable the public to know more about what lottery good causes are achieving. The hon. Member for East Dunbartonshire (Jo Swinson) indicated that, through people’s millions, we shall engage people in ways in which we have probably not done before. We hope that that will give the lottery credibility.

The proposed new clause is an attempt to prevent lottery distributors giving grants that the media might deem controversial. What could be considered controversial?I suspect that the hon. Member for East Devon is thinking of a grant that the former Community Fund made a few years ago, to which the hon. Lady also referred. It is important to remember   that, since 1995, only around 1.6 per cent. of the money that has been awarded to the Big Lottery Fund and its predecessors—the Community Fund and the New Opportunities Fund—has gone to projects to help asylum seekers and/or refugees.

Ambulance services, mountain rescue groups, and rescue groups for missing and injured people have been awarded £1.8 million of lottery money. The Big Lottery Fund has given grants of £4.1 million to the Samaritans in the UK. The hon. Lady gave figures for the amount of money that has gone to disabled people that were a factor of 10 greater than that that has gone to asylum seekers. If one had believed the perceptions of the press from stories that they had printed, lottery distributors would not have given that type of indication and definition. The media totally distorted the figures.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Does the Minister have any words of encouragement for the Bowland Pennine mountain rescue team in Lancashire, which was denied £200,000 funding because its client group was not deemed to be diverse enough? I am not sure what that means, but I have an idea.

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

As the hon. Gentleman knows, I do not get involved with the distribution of funds in individual cases. However, if the hon. Gentleman wishes to write to me, I shall draw the matter to the attention of the appropriate body.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Does the Minister not agree that statements from the national lottery, such as “Your client group is not diverse enough”, could also damage its reputation? It is not only the awards that it gives that may damage its reputation but the awards that it does not give, and the reasons that are given for not making those awards.

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

A note has been passed to me that is interesting. I hope that the Bill will ensure that people can apply to the right fund to deal with their case. The Bowland Pennine mountain rescue team’s application for lottery funding in 2002 was unsuccessful because mountain rescue did not meet the criteria of the particular funding programme to which it applied; the Community Fund’s large grants.

That programme’s aim was to address deep-seated, long-term problems that caused poverty, joblessness and low quality of life. I hope that what we discussed in earlier sittings will rectify the problems that groups such as the Bowland Pennine mountain rescue team have experienced by being directed to apply to a fund that dealt with poverty, joblessness and low quality of life. The Bowland Pennine mountain rescue team will now be directed to the appropriate part of the lottery fund.

That illustrates the frustration that the hon. Gentleman and I feel when applicants approach us after they have been refused funding because they have not gone to the right part of the lottery to have their application considered.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Perhaps the mistake came about because someone who is lying on a mountain with a broken leg does have a low quality of life. That might be where the mistake was made.

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

That is one explanation. I could tell the hon. Gentleman that I once did a bit of climbing and mountaineering. I have some good stories, but I shall not be drawn on them.

Some media interests that support other good causes might find grants made to ambulance services, rescue groups and the Samaritans, as well as other community and charity projects, to be controversial. They might consider them to affect the lottery’s reputation. It will be impossible to decide, and that is why the people appointed to the distributing bodies have been given sufficient direction from Parliament to ensure that they maintain the lottery’s integrity.

The hon. Member for East Dunbartonshire indicated that we live in a pluralist society, and the range and nature of projects funded by the lottery should reflect the condition of our society. We need to respond to people’s priorities, but we do not want to sink to the bottom and go to the lowest common denominator. We always need to drive for the highest common factor. The lottery must be inclusive while keeping the confidence of lottery players elsewhere. We do not believe that the proposed new clause would achieve that; it would merely create legal uncertainty and prevent good projects being funded. For that reason, I ask that the proposed new clause be withdrawn.

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—in his words, not mine—said that distributors can simply decide not to make a grant. Of course they can decide not to make the grants, but they must give reasons for not doing so. The problem is that because of the politically correct world that we now inhabit, at times they have found themselves having to make those grants rather than fighting their case, because they have no reputation or impact clause on which to fall back. The Minister has not quite grasped the point.

The Minister was quick to say what the Government were doing to get more publicity for the lottery so that more people are aware of what the lottery does. I suppose that that is manifestly a good thing. However, it still does not address the problem of giving distributors the ability to fall back on a reputational impact clause. I know that some of them would like to have such a clause, and it would have avoided some of the grants that have undermined the lottery.

We live in a plural society, and there is no absolute failsafe method of preventing adverse comments made by the press about grants that a particular paper with a particular agenda might consider inappropriate. That will always happen. However, that does not mean that we should not try to stop that by including the provisions of the proposed new clause in the Bill. If that was our argument for legislation, we would not have much legislation on anything.

I was disappointed in the hon. Member for East Dunbartonshire who spoke on behalf of the Liberal Democrats, because I hold her in high regard. She made a motherhood and apple pie Liberal Democrat speech, saying “on the one hand” and “on the other hand”. Although the hon. Lady did not agree with me, she did not say what she thought could replace the provisions. This may be one of those occasions when we end the Committee divided, with the Opposition seeking to vote against the Government but without the support of the Liberal Democrats, who have been such supporters of ours during most of the Committee’s deliberations.

I am not satisfied that the proposed new clause should not be included in the Bill; in fact, I am convinced that it should be included. The hon. Member for Glasgow, South is also keen for it to be included in the Bill; his criticism seems to be that we are being contradictory by prescribing. It is not really a prescription: a reputational impact clause is empowering the distributors to take decisions based on their own judgment rather than being forced to do so for reasons of political correctness or other agendas. It is therefore with some delight and anticipation, Mr. Gale, that I seek to attract your eye in order to press this final amendment to a vote.

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

The Committee divided: Ayes 3, Noes 11.

Division number 14 Nimrod Review — Statement — New Clause 2 - DISTRIBUTING BODIES: CRITERIA FOR DISTRIBUTION

Aye: 2 MPs

No: 10 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

NOES

Question accordingly negatived.

Bill, as amended, to be reported.

Committee rose at fifteen minutes past Two o’clock.