House of Commons Hansard Debates for 28 Apr 1993

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being self-combustible at certain stages of degeneration. If, therefore, films are to be preserved, they have to be transferred to cellulose acetate stock, which is not subject to that degenerating process and is permanent.

The problem is that the transfer process is costly and is being undertaken by the BFI from its existing funds. We hope that the money allocated by the Arts Council to the BFI will be a fixed percentage, if the Minister agrees, so that the BFI can calculate what sort of programme it can undertake and the transfer programme can be undertaken with money which is not part of the BFI's existing grant. That would mean that, if there were any serious deterioration in the nitrate stock, the stock could be transferred much more rapidly. I mention that as an example of what the BFI and other bodies could undertake if there were an allocation of funds from the lottery beyond their grant aid, which would give them more certainty for the future.

I know that it is late ; the Minister should not frown about that, because the Government should have realised that such important legislation would be subject to scrutiny on Report. It is right and proper that the House should spend some time on this examination. My hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) mentioned film production. Some of my amendments would allow for an allocation to an organisation developed for the promotion of British film production and to the BFI, or to the BFI alone. The British Screen Advisory Council sent me a proposal for film production which, in essence, involves the development of a national film corporation. It was only a proposal, so the amendments provide for the creation of a body that could be authorised by the Secretary of State to allocate money. The amendments are highly flexible, which means that the Minister has a number of choices.

Film production is very important. The United States has two major exports. Aerospace items are first on the list and film and television programmes are second. They create revenue but also a cascade effect for a range of products. If British films are selling well abroad, the likelihood is that British aerospace items, British textiles and British engineering will benefit from their success. If the films are seen by millions of people-- they will be if they are successful--they can establish a benchmark of excellence. That is what has happened in the United States because of the success of its manufacturing technology. It is not a question of production for production's sake--it is a matter of our national presence in the rest of the world.

We have the advantage of speaking English. The American market is the biggest English-speaking market in the world. It is worth bearing it in mind that this country has unsurpassed standards of technical excellence. That is why Steven Spielberg produced so many films here before the erosion of the capital allowances reduced the American presence in this country.

Spielberg attended a meeting in the House and I asked him whether it was true that, despite the fact that America has a great history of making classic films which we have all had the pleasure of enjoying, the standards of technical excellence in this country were as good as or, in many cases, better than those in the United States. Spielberg answered that it was true : the standards of technical excellence in this country are better because of our system

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of apprenticeship and the gradation of age. Older, more experienced people can pass on knowledge to younger people in the industry. If we have no British film industry and no British film production--we are already reaching that stage--the reservoir of knowledge and expertise will be eroded.

In 1991 there were 59 feature films, in 1992 there were 42, and as for this year, Screen Finance, produced by the Financial Times on 24 March 1993, said :

"Just four films involving British production companies and intended for a theatrical release are likely to have gone before the cameras by the end of the first quarter of 1993, according to information collected by Screen Finance. The figure, which includes three co-productions, is six fewer than in the comparable period in 1992 and five fewer than in the first three months of 1991". So the prospect is not hopeful.

10.30 pm

The British Screen Advisory Council suggests that, especially in view of an increase in cinema admissions in this country from the low of 53 million in 1984 to more than 100 million in 1992, a national film corporation should be established on the basis of the successful period of the firm EMI, in which it had a pre-selling arrangement with the United States for five successful major feature films--"The Deer hunter", "Death on the Nile", "Convoy", "Warlords of Atlantis" and "The Driver". Only when EMI began to promote its own films in the United States did it pursue a disastrous production course, and it then lost about £90 million.

The company's earlier success was achieved on a basic budget of $9 million, which produced a gross profit of about $24 million for EMI, irrespective of the additional profit for the United States. That is the basis proposed by the British Screen Advisory Council, but that sort of money is needed to start things off.

A criticism of the EMI programme is that it could be argued that, apart from "Death on the Nile", the films involved were much closer to the United States than to indigenous British life and did not reflect our aims, culture and ambitions--which they should have done. However, on the back of successful co-productions, we could have smaller productions that reflected our way of life--films such as "Gregory's Girl", which was made for £350,000 10 years or so ago, and took more than £2 million.

My amendments cover such a proposal, and I hope that the Minister will respond sympathetically because, as a result of various failures which I do not have the time to enumerate--Goldcrest was a symbol of over-expenditure and financial failure, as subsequently was EMI, as I have just explained-- the film industry now has a proposal for a potential success, but only if it receives help from the Government through the lottery. The Minister may say that that is not the Government's policy, but other nations in the English-speaking world are providing the help that has supplied the basis for export success. We have only to consider Australia to realise that its film production industry has been successful because of a basis of central and state government help.

I hope that the Minister will consider my proposal sympathetically. We must bear in mind the fact that, as he has repeated several times, he is considering the whole period of 12 months over which the lottery will be brought into operation. Proposals such as mine could be incorporated into the legislation so that we could both give the British Film Institute the extra money with which it

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could do so much to preserve our film and cinema heritage and enable British film production to get off the ground again--I must tell the Minister that it is on its knees at the moment.

Sir Anthony Durant (Reading, West) : As the other governor of the British Film Institute, from the Government side, I should like to contribute to this short debate.

There is no doubt that there are concerns in the film industry about the lottery and the way in which it is being handled. When the Government were returned at the general election, the industry welcomed the policy of having one Department to look after it. That was a great step forward, for which the industry had pressed for years. It was fed up with being handled partly by the Department of Trade and Industry, partly by the Education Department and partly by the Home Office. Being looked after by three Departments made it difficult for the industry to get its cause before the Government, so it welcomes as a great step forward the fact that there was to be only one Department.

The film industry has also welcomed the discussions that it is having with the Secretary of State. However, it feels that, because the Minister is suggesting that the money will go through the Arts Council, it will be sidestepped and will not have the opportunity to put its own case and to get its own money. The British Film Institute does not have great confidence that the Arts Council really looks after it. The institute feels that the Arts Council does not entirely understand films. Why not have a specialist committee to distribute money to the film industry? I urge the Minister to consider that point again.

The film industry remains a mixture of an art form, an entertainment medium, an educator and a big business. It is the art form--the cultural form--about which we are talking principally tonight. We need a greater British input to highlight our national heritage and culture. We make very good films when we are given the opportunity, and they do very well. However, the opportunities to make such films are diminishing. Distribution is one of the difficulties we face, although that is a side issue in this debate. We should put more money from the lottery towards the film industry by the methods that the hon. Member for Bradford, South (Mr. Cryer) has mentioned to the BFI. I urge the Department to talk to the Treasury. The classification of film as a capital item some years ago revived the British film industry. It really got going, but then the scheme was stopped. It was a wonderful opportunity. An opportunity was created for people to invest money in the film industry, which is the key to it all, and it got the film industry going again. We could use some of the lottery money on the Children's Film Foundation. It is a tragedy that the television companies do not make films for children, but only children's programmes. The foundation has done a remarkable job over the years in making very suitable films for children, especially for the Saturday morning matinees. That is a positive, educational and constructive area into which we could put some of the lottery money. I urge the Department to look again at the proposals for the film industry and at the way in which the money is distributed.

Mr. Key : I am grateful to my hon. Friend the Member for Reading, West (Sir A. Durant) for his contribution,

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and to the hon. Member for Bradford, South (Mr. Cryer). My hon. Friend raised some important and interesting issues. I shall consider the question of the Children's Film Foundation and learn about its contribution. It is clearly a matter of great concern to my hon. Friend.

My hon. Friend asked why we could not have a sub-committee for film. In a nutshell, the answer is that, if we had a sub-committee for film, we should have to have a sub-committee for every other branch of the arts. That would be wasteful and would not address the problem of how best to provide a fair distribution of resources within the 20 per cent. category for the arts as a whole. I take the point that the world of film feels that the Arts Council does not love it. That notion has been around for a long while. I do not intend to comment on the substance or otherwise of it. Nevertheless, it is a perception that we cannot ignore. I shall explain how we shall seek to address that point.

The hon. Member for Bradford, South made a very helpful contribution, and I am grateful to him for raising what he described as right and proper concerns even at this hour. I take on board what he says about Elstree. I recall my visit to Pinewood not so long ago, when I met a number of the interests there. I was, as ever, impressed by the capability and competence of our production centres. I include in the same breath Shepperton, which still makes a remarkable contribution and is very much part of our heritage. It is well represented by its Member of Parliament, my right hon. Friend the Member for Chertsey and Walton (Sir G. Pattie), who is here tonight. The hon. Member for Bradford, South also drew attention to the interesting ideas in the amendment. We shall think about them. I am grateful for the hon. Gentleman's various suggestions.

I shall disappoint the House by not accepting wholesale-- [Hon. Members :-- "Or retail."] or, indeed, retail--the amendments on offer tonight, and I shall seek to explain why. I shall also seek to explain why I am prepared to listen and to work during the next 12 months to ensure that we get the answers right.

My right hon. Friend the Secretary of State has initiated a new round of discussions with the film industry. We have already had the first session, and we shall have another tomorrow, and a number are planned for the coming weeks. We are very much in listening mode and have specifically asked the film producers--and will ask the industry more widely--to think for themselves and then to share with us thoughts about the ways in which we might legitimately make progress on the issue of the national lottery.

I am well aware of the importance of the United Kingdom film industry ; that goes without saying. I enjoy as much as anyone else taking my family to the cinema, and I know that my right hon. Friend the Secretary of State recently went to a cinema in my constituency to see an excellent British film. I am very proud of what the industry has been able to achieve. Although Oscars do not mean everything, those awarded recently mark the success of the United Kingdom film industry, which has been very significant of late. As the House knows, we support the film industry in a number of ways. In the Bill, we have chosen to use one body--the Arts Council--to distribute lottery money to the arts. We are quite clear that the arts include film and crafts. We decided that it would not be practical to use a specific film sub-committee, because if we did that for film, we would have to do it for every other sector of the arts : there is no

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reason why we should not multiply the number of distribution bodies in other sectors to follow that argument. In effect, we would be opening the floodgates, and I do not think that that would be an effective way to proceed.

Under clause 24, we will direct the Arts Council to take into account the need to fund film and craft applications and we will generally direct the Arts Council and other distribution bodies that, if they do not have specific expertise in a particular area, they should seek it from a relevant expert body--unless, of course, that expert body is the one applying for the funding.

In considering applications for lottery funding, the Arts Council proposes to use a special lottery committee which will have on it at least one member with expertise on film and one with expertise on crafts. Those members will call on the advice of many expert bodies, such as--but not exclusively--the British Film Institute, to help them to make their decisions. We think that that provides a very flexible framework within which film stands to benefit a great deal from lottery proceeds.

I fully accept the spirit of amendments Nos. 102 to 104, although I hope to reassure the House that they are unnecessary. The Arts Council charter makes it clear that the council can fund film. I have said that, under clause 24, we will direct that it should fund applications from the film and craft sectors. In its annual report on how it has distributed the lottery proceeds, the council will have to publish the directions and demonstrate achievement against those directions. If film is not being given a fair share, it will be quite clear to the House.

On a practical level, it is now up to the Arts Council and the interested bodies to work together to find the best way to develop the film element. There is a read-across to other areas : the constructively and with enthusiasm for the task are the key, as is an ability to use imagination and to regard the lottery money as a new source of funding that should be considered in a new way. Organisations, whether in the film world or in other areas, should not look to lottery funds as a means of financing long- cherished grant strategies or as a source of core funding. The intention of the lottery is to develop projects that are developed from the ground, not dictated as part of some grant plan. That is why I was especially grateful for the practical suggestions made by the hon. Member for Bradford, South.

The House should remember that, once the Bill is passed, the Arts Council and film representatives will have a year or so to get things right and to work out a suitable system to enable film to benefit to its maximum potential.

I cannot accept amendments Nos. 119 to 122, as they bring into play two additional bodies, including one which does not at the moment exist. The British Film Institute is very important and that is why we choose to allocate to it £15 million a year. However, it is only one player in the varied world of film and to name a particular body in the world of film in respect of the amendment would, to say the least, be a source of contention.

The BFI has a clear opportunity to work with the Arts Council and to discover the best way to distribute money

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for film within the framework offered by the Bill. The amendments also suggest removing most of the allocation of lottery proceeds from the Millennium Commission and giving them to film outside the arts allocation. I cannot accept that. The Millennium Commission is an intrinsic part of the Bill and film will clearly receive funding from the arts element.

10.45 pm

The amendment specifically mentions film production. The Bill does not rule out the possibility of funding film production. The exact use to which lottery money should be put will be for the distribution body to establish with the expert bodies in the film world. At the Secretary of State's first meeting on film last week, we specifically asked the film producers to work out ideas on how they believe lottery money might reasonably be applied. That will be of great assistance to the Arts Council, which will, in any case, consult widely about how money for film should be distributed.

We have an open mind and believe that the provisions in the Bill provide a wide canvas to create an excellent distribution mechanism that will work to the best advantage of film. I hope that I can persuade hon. Members not to press the amendment. I hope that I have been able to reassure them that we understand the problems of the film industry and that we will understand them better after we have completed our round of consultation.

As the Minister responsible for film, I will of course be paying the usual visit to the Cannes film festival. I expect no tears about that. It will be an extremely hectic and short weekend and I am warned that there will be no time for fun. Later in the year I will visit Paris and Berlin with David Puttnam to learn more about their industries. I will go with him so that I get the proper perspective. I hasten to add that, following the examples of the French and the Germans, who have particular problems in having lesser used languages, does not necessarily mean that we would wish to emulate exactly what they do. Film producers have repeatedly stressed to us that they are not simply coming with a begging bowl looking for subsidy. They have a sophisticated and precise range of requests to which we are listening.

I have described a distribution mechanism that we have constructed which I believe will deliver to film and crafts a fair share of lottery proceeds.

Mr. Corbett : With the leave of the House, I would like to reply. This has been a helpful and useful debate with some extremely informed contributions from my hon. Friend the Member for Bradford, South (Mr. Cryer) and the hon. Member for Reading, West (Sir A. Durant) with their great interest in the film industry.

The Minister's remarks are helpful, as they were designed to be, not least perhaps to the Arts Council, which will know that the film industry expects more than a nodding acquaintance in the distribution of lottery moneys under its auspices. The Minister is right to say that in no sense should the film industry look to lottery funds to take on the bulk of whatever may be decided as a result of the Secretary of State's consultations with the film industry and the propositions that it makes about how the Government may better help the industry. I understand that important distinction.

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On the back of the Oscar awards, it does not help to say that they mark the success of the British film industry. The most that can be claimed is that they mark the success and excellence of a number of individuals in the British film industry which collectively is, and should be, more important than that. I am not knocking the contribution that those individuals and their colleagues made in the winning of Oscars, but that is no substitute for us having a properly based and organised British film industry.

The consultations in which the right hon. Gentleman is engaging with all branches of the industry prompts us all to ask whether we really want a British film industry. As my hon. Friend the Member for Bradford, South demonstrated--I know that he could have said a great deal more--it is not simply a question of what the British film industry can do in terms of our own popular culture, important though that is ; it is a question of our ability to do what we have done so successfully in the past through the medium of film. Those films--many sadly, made in black and white--said so much about the Britain of that period. In a sense, they represent a sort of visual BBC World Service--but we should also see films as many of our European partners do : as a source of revenue for the industry and the country. The debate has been worth while, and I thank the Minister for what he has said. I am sure that he appreciates that this is not the last that we shall hear of the matter, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Pendry : I beg to move amendment No. 14, in clause 20 page 9, line 21, at end insert

of which some proportion shall be allocated for expenditure on or in connection with football'.

Mr. Deputy Speaker : With this we may take amendment No. 15, in clause 21, page 9, line 35, at end insert

who shall distribute such proportion as they think appropriate to the Footbal Trust'.

Mr. Pendry : Rather than speaking to the amendments, I had hoped to be returning from Wembley after cheering on our national side. I had to give the tickets back ; I hope that someone will shout out the score before I finish speaking.

The amendments go to the heart of a vital issue. We must ensure that, in introducing a national lottery, we safeguard the interests of football in this country. I hope that the Minister shares my view that football has particular needs which must be taken into account : it is our national game, and it is an important part of the fabric of many people's lives.

Happily, the game is thriving at all levels, from the very top of the professional game down to junior boys' and--in these enlightened times-- girls' teams. Football has no parallel in terms of the extent and depth of participation ; and, of course, no sport has such spectator appeal. The huge following that the game attracts represents a special dimension when we consider the needs of the sport.

It is right for the Government, and all of us, to take every possible step to ensure that our football grounds are safe. Clubs must meet the requirements laid down by Lord Justice Taylor in his report following the Hillsborough disaster of 1989, and ensure that spectators enjoy the standards of safety and comfort that they have every right to expect. I have no quarrel with any of that, but we must recognise that football faces a huge task in converting

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grounds to all-seated accommodation, and-- in the lower divisions of the Football League and in Scotland--ensuring that any retained standing terracing is safe.

A great deal of ground development work has still to be done, and football faces an enormous bill in completing it--probably as much as £400 million in the years ahead. The traditional source of funds for football-- indeed, until the recent television agreements, virtually the only source-- has been the football pools. That is one of the main reasons why all my hon. Friends--and, I suggest, many Conservative Members as well--are so insistent that there must be fair competition between the pools and the national lottery. The lottery gives us the chance to do more for football, and that is the purpose of these amendments.

How can the funds best be channelled into the game? That is no easy task, as the Minister recognises. The needs and resources of clubs vary enormously. Clubs at the grass roots need basic facilities like pitches and changing rooms ; as we move up the leagues, the requirements become greater. Certifying authorities are rightly concerned about safety and crowd control ; that concern is reflected at the lower levels of the league as well as at the top. Many conference and feeder league clubs need to undertake major ground redevelopment work for safety reasons and to meet league requirements.

Fortunately, we have the Football Trust, a body vastly experienced in the complex matter of grant aid in football. I am sure that we are all aware of the crucially important work carried out by the trust. It provides essential help to football clubs from the top level to the grass roots of the game throughout the country. It has provided more than £150 million in grant aid to football at all levels since it started life as the Football Grounds Improvement Trust in 1975. In 1990, the Government reduced pool betting duty by 2.5 per cent. on the understanding that the funds produced--some £20 million a year for each of the five years for which the agreement with the Government runs--would be used to help clubs to meet the requirements of the Taylor report.

The Government chose the trust as the vehicle for channelling much-needed support into the game. The Opposition fully understood why that decision was made. The trust has a long history of distributing grant aid money. It has tackled its priority task of helping clubs to implement Taylor. It has particularly helped clubs in the premier league and first division of the Football League to convert their grounds to all-seated accommodation. That has been a great success.

Grants totalling more than £63 million have been made to major ground redevelopment works, costing some £235 million. All that has been achieved with the interests of efficiency, cost-effectiveness and accountability firmly in mind. The trust has proven procedures in place involving professional surveyors and accountants designed to ensure the proper appraisal of clubs' plans. It has an annual budget of more than £36 million and a staff of only nine. Its administration overheads account for less than 2 per cent. of its income. I have seen a letter, as I am sure the Minister has, from Sir Peter Yarranton, the chairman of the Sports Council, to Lord Aberdare, the chairman of the Football Trust, in which he acknowledges the position of the trust in channelling funds to football clubs. He says in his letter :

"the Football Trust is clearly the appropriate organisation to continue its excellent and highly regarded work in this sector.

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I envisage that the Sports Council for England, Scotland, Wales and Northern Ireland would each wish to devote a significant share of their lottery revenues to annual allocation of the Football Trust, taking full advantage of your well tested methods of appraisal and allocation."

I quote that letter because it describes perfectly the sensible position that the Opposition wish to reach. I look forward to the Minister's commendation of it.

The Government have said that once they are satisfied that the football leagues and clubs are playing their full part in meeting the cost of ground redevelopment work from their own resources, they will extend the life of the reduction in pool betting duty for a further five years from 1995, to match the Taylor timetable. Football has already demonstrated that it is taking its responsibilities seriously and providing a reasonable part of the cost of redeveloping grounds from its own resources. I hope that football and the trust will not have to wait much longer for confirmation that the life of the betting duty concession is to be extended.

The point of the amendment is to say to the Minister that the Sports Council does not have a relationship with professional football and needs the assistance of a football trust and people with expertise to channel the moneys into the proper quarter.

Someone has told me that the score is England 2 Holland 2. I say that for the benefit of the Minister, but he knows already. I hope that the Minister accepts that we need a professional body linked with the Sports Council which can channel the money effectively to ensure that our football grounds are safe in line with Lord Justice Taylor's report. [Interruption.] I hope that the hon. Member for Derbyshire, West (Mr. McLoughlin), who is a Derby County supporter, agrees with me.

Mr. Key : I believe that we all agree about the importance of football as our national sport. In the past week, the saga of Gazza's knee has been a source of great concern to many people in England. The capacity crowd at Wembley has carried the burden of anxiety for many people tonight as England played Holland and drew, 2-2. Other national teams of the countries of the United Kingdom were facing similar challenges tonight. Scottish hearts were turned to Portugal ; Scotland, I fear, went down 5-0 ; the hopes of Wales were set on the Czech Republic, where the team drew ; 1- 1 while Northern Irish eyes were directed to Spain, where, unfortunately, their team went down 3-1.

Mr. David Hinchliffe (Wakefield) : Can we have the rugby league results as well?

11 pm

Mr. Key : Later.

The prospect of all four nations being represented at the world cup in the United States next year is rather a faint one at the moment. I understand the intention behind the amendment, but I am reluctant to agree to it. It would have many undesirable consequences. For example, to single out

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professional football for special treatment might be highly contentious--some hon. Members in the Chamber might agree-- and could be detrimental to other sports.

The argument against singling out one potential beneficiary in the Bill was put when we discussed the film industry. I do not accept that, as a result of the lottery, the pools will suffer and so the income of the Football Trust will fall. I do not accept that, given competent management, the pools should suffer as a result of the national lottery. The changes already made to the pools regime places it in a far better competitive position than it has ever occupied. It would not be surprising if the pools increased its current turnover. The income for the Football Trust comes partly from the 2.5 per cent. pools betting duty, contributed by the Treasury, and a contribution from the spot-the-ball competition organised by that happy band of Littlewoods, Vernons and Zetters. That is a proper contribution to the game, without which that band's competition could not exist.

It would not be right to name the Football Trust as a beneficiary in the Bill, but we are determined that football should be able to benefit from the lottery. It has been suggested that, as the Sports Council has not funded football hitherto, it will not do so in the future. That is not so.

How football clubs use their programme money is dictated by a set of priorities according to the level of resources available. Those clubs will, of course, be able to apply for funds from the lottery and it will give them far greater sums to use, according to applications received. Applications by that sport will be judged, genuinely, on their merits. The Football Trust will also continue to carry out its valuable work. That means that the sport will be in an extremely good position.

The amendment is unnecessary. We have no doubt that those connected with football will be able to apply for funds and that the Sports Council will do its duty. I hope, therefore, that the hon. Member for Stalybridge and Hyde (Mr. Pendry) will not press his amendment to a vote.

Mr. Pendry : With the leave of the House, I wish to reply. The Minister has missed the point completely. In Committee, I asked him if he would endeavour to build a bridge between football and the Sports Council and he said that he would. I had expected him to give a much more positive response tonight.

I support the Sports Council, but its staff do not have the necessary expertise to do the jobs that football requires to be done as a result of Government legislation, no less. The sport therefore needs a much more positive response from the Minister. I hope that he will reflect on the matter.

I shall not press the amendment to a vote, but I should like to visit the Minister, if he will receive me, to put the case more clearly, if I did not do so tonight, because he has missed the point. I shall then try to offer him a better explanation of our argument. At this stage, however, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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National Lottery etc, Bill

Clause 21

The distributing bodies

Amendments made : No. 30, in page 9, line 27, leave out in' and insert paid into'.

No. 31, in page 9, line 28, at end insert in the Distribution Fund'.

No. 32, in page 9, line 33, leave out in' and insert paid into'. No. 33, in page 9, line 34, at end insert in the Distribution Fund'.

No. 34, in page 9, line 42, leave out in' and insert paid into'. No. 35, in page 9, line 43, after held' insert in the Distribution Fund'.

No. 36, in page 10, line 1, leave out in' and insert paid into'. No. 37, in page 10, line 2, after held' insert in the Distribution Fund'.

No. 38, in page 10, line 4, leave out in' and insert paid into'. No. 39, in page 10, line 6, after held' insert in the Distribution Fund'.-- [Mr. Brooke.]

Clause 23

Application of money by distributing bodies

Mr. Key : I beg to move amendment No. 40, in page 10, line 12, leave out from body' to for' in line 13 and insert

shall distribute any money paid to it under section 22'.

Mr. Deputy Speaker (Mr. Michael Morris) : With this it will be convenient to discuss the following : Government amendments Nos. 41 and 42.

Amendment No. 11, inclause 24, page 10, leave out lines 33 to 35. Government amendments Nos. 43 to 47.

Amendment No. 22, in clause 24, page 10, line 45, at end insert-- (4A) The Secretary of State shall, before making directions under subsection (1) and (3), consult the parties concerned and publish reasons for the making of such directions.'.

Mr. Key : I understand that my hon. Friend the Member for Stratford -on-Avon may wish to speak to his amendments Nos. 11 and 22, which are grouped with amendment No. 40. That is certainly acceptable to me, if, Mr. Deputy Speaker, it is acceptable to you.

On Second Reading my right hon. Friend made it clear that we were considering how the drafting of parts of clause 24 might be changed. In Committee I undertook to table amendments which would take account of some of the concerns expressed to us. The first change that we propose-- amendment No. 42--would change the contents of directions which I might give to the distributing bodies. The original draft of the Bill would give the Secretary of State the power to direct bodies as to the purposes for which the money might be distributed or applied and adds the conditions which must be satisfied before money is distributed or applied.

We have listened carefully to the concerns of potential beneficiaries and of disinterested parties that, under these powers, a Secretary of State might be unnecessarily

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prescriptive. It is certainly not the intention to be so, but I understand that the original drafting gave cause for concern and that the distributing bodies might be presented with either a shopping list which they would be required to fund or with a long list of proscribed projects.

We propose, therefore, to replace the current subsection (1) of the clause with the one now on the amendment paper. This new subsection will enable the Secretary of State only to direct the bodies on matters which must be taken into account in distribution decisions. With this amendment there is no scope for the Secretary of State effectively to take the distribution decision himself. However, he will be able to set broad criteria for applications, for example, that capital projects should be favoured where possible--this might not be appropriate in the case of the Charities Board- -or that partnership funding arrangements are to be preferred.

Amendment No. 45 specifically extends the scope of directions to the National Heritage Memorial Fund so that the NHMF must comply with them when applying money. This takes account of the fact that the NHMF has the power to apply money on its own behalf, to purchase objects or buildings of importance to the national heritage and to hold these for a transitional period.

Amendment No. 47 requires the Secretary of State to consult a distributing body before giving any direction to it. This is to ensure that directions cannot be made which are unworkable or without the views of the body concerned being taken into consideration and it reflects the undertaking that I gave to the Standing Committee. In amendment No. 47 we accept the principle behind the first part of amendment No. 22. It is desirable that the issuing of directions should be informed by the experience and opinions of the distributors. I cannot, however, accept the second part of amendment No. 22 because the Secretary of State may not refuse to account for decisions taken in the fulfilment of his duties. But to require the reasons for every decision to be published would place on the Department the duty to produce documents which, to a great extent, would not be of interest to anyone save the distributors themselves. During the consultation process, before a direction is issued, the distributors will be made aware of the intentions behind each direction. If a direction appears to be based on unreasonable grounds, the Secretary of State can be asked by Parliament to account for his decision. I hope, therefore, that hon. Members will agree that amendment No. 22 is not necessary.

I cannot accept amendment No. 11. Our purpose in drafting subsection (2) was to ensure that the distributing bodies did not act in a way that might give rise to conflicts of interest. A conflict of interest would arise if a distributor made grants to a body which it owned or wholly sponsored, or whose members were all appointed by the distributor, or whose membership was conterminous with that of the distributor. It is vital that the Secretary of State should be able to make it clear that certain categories of potential beneficiary should not receive money. This power is exercisable only by order, so Parliament would have the opportunity to scrutinise and the Secretary of State could be required to account for decisions taken on the use of the power.

In drafting the clause we considered whether it might be possible to state this aim explicitly in the Bill, and amendment No. 10 attempts to do just that. However, there would be problems in reaching a statutory definition

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