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New Clause 2 - DISTRIBUTING BODIES: CRITERIA FOR DISTRIBUTION

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

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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 1:45 pm, 3rd November 2005

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.