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Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 6, in clause 27, page 22, leave out lines 8 and 9.

Mr. Spring: In the course of the past few days, I have read the Secretary of State's book "Creative Britain".

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In it, he describes the huge increase in our exports of radio and television material, the increase in employment in that area and the massive rise in sponsorship of the arts and in the number of cinema admissions. On behalf of my hon. Friends, I thank the right hon. Gentleman for so generously applauding the Conservative Government's 18 years in office. It was precisely the conditions created by that Government which led to the explosive increases so graphically set out in his 27-page introduction.

As we have made clear in respect of the National Endowment for Science, Technology and the Arts--NESTA--we are not against the setting up of a national fund for talent; there is considerable merit in the idea. Indeed, it is based on a Conservative concept. It builds on the well-established and admirable philanthropic tradition of this country. We entirely support the principle of a fund that supports individual talent.

We are fortunate in having many people of considerable talent who have contributed to our national life and won so many Nobel prizes. Our success compares extremely favourably with that of any other country, especially given our small population.

The sad truth, however, is that the Government have missed an important opportunity. Elements involved in the establishment of NESTA in the form suggested in the Bill put at risk the success of the whole venture. We greatly regret the fact that the Government have chosen to establish it in this form. I appeal to the Minister even at this late stage to persuade the Government that NESTA's objectives are incompatible with the sort of body that we believe could successfully nurture our national talent. We are deeply sceptical of the idea of setting up a quasi-governmental body, some of whose objectives will be overtly commercial.

We know now why the Government have determined not to set up NESTA as an independent charity, despite the clear commitment given before the election to do so. As the Minister explained, the Government have decided to graft a commercial remit on to the original concept for NESTA, which, by definition, loses it the advantages of charitable status. The amendments are designed to remove the commercial elements and turn NESTA into the genuine trust for talent that the entire country would applaud. To set up a national endowment with true nobility of purpose would secure the support not only of the House, across party political lines, but of the whole country, desirous of enabling talented individuals to realise their talents to the full.

We accept the advantages of establishing a body such as NESTA as an independent endowment, but, regrettably, NESTA, as proposed, will not be fully independent of the Government. As a consequence, it risks not being able to attract money from independent sources, which is a crucial element in the long-term success of NESTA. That is the crux of our concern about the establishment of that body.

As I said on Second Reading, people simply do not quickly volunteer to give money to Government bodies--even Bernie Ecclestone, I dare say, might find it difficult to be so persuaded.

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I remind the House of the Labour party's commitment to NESTA:

I stress those last few words. Labour continued:

    "NESTA will invite successful figures in the arts, technology and science to contribute part of the value of their copyrights and patents to help the young talent of tomorrow. These contributions will go into a permanent endowment fund. To give NESTA an initial boost, limited contributions will be set aside from the new Lottery fund to add to this endowment".

That commitment is to be found in the Labour party document of 23 April 1997.

The Prime Minister reiterated those proposals before the election. In a press release on 27 April, he said:

Those words are to be applauded.

The amendments would remove the commercial aspect of the objectives set out for NESTA. They would give it a proper coherence and a real opportunity to acquire the national support that it deserves. In effect, they would make it work. There is a danger that the initial endowment of £200 million will be put at risk because NESTA, as currently constituted, will not attract the additional funding over time.

As I said in Committee, we broadly support the aims of NESTA and would support the idea of just such an independent body dedicated to nurturing talent, especially in the arts. Indeed, the Conservative manifesto of 1997 included the following pledge:

Therefore, there was considerable cross-party support, which the Government have unfortunately now put at risk.

NESTA was in fact the development of an initiative first announced in April 1996 by my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley), to whom I pay tribute.

It was always the view of the Conservative party that the lottery would evolve. That view was reinforced as the popularity of the lottery grew among those playing it and the communities that benefited from lottery grants. As my right hon. Friend the Member for Huntingdon (Mr. Major) said on Second Reading:

I am happy to congratulate the Government on following the path set by the previous Administration, but they are risking the very success and popularity of the lottery by using it to fund areas that it was not originally set up to finance. Potentially, that could damage the image of the lottery and could end in failure.

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In Committee, we learned of the Government's continuing determination to use the lottery to supplement public expenditure on health, education and the environment--I use those definitions in the broadest possible terms. The amendments simply highlight another unexpected and unwelcome departure in lottery funding under Labour.

We debated in Committee the unfortunate decision--which I believe will be regretted--to place NESTA under the control of the Secretary of State rather than to make it a genuinely independent body, as was at least the Government's original stated intention. We debated the disturbing funding arrangements for NESTA, which show that the Government have no faith that it will ever perform as an independent, self-financing body or that it will ever manage to attract significant contributions from independent sources. The evidence, as we shall see, is the scope for the Government to raid the original good causes to pay for NESTA.

We are also concerned about the requirement placed on NESTA not merely to encourage talented individuals in the fields of science, technology and the arts and to contribute to public knowledge and appreciation, but to seek out and sponsor commercial success in those sectors. It is simply the latest incarnation of Labour's long-standing desire to pick winners, as the previous Labour Government sought to do so unsuccessfully. It is a further sign of Labour's inexhaustible faith in Government rather than the private sector.

As we look back on the development of the venture capital industry in Britain, we must recognise that, although we have had many successes, more could be done. There is certainly an argument that many of the most important British inventions have been commercially exploited elsewhere. However, we recognised that when we were in government, in the considerable changes to the tax regime for venture capital. We sought to encourage and secure seedcorn capital, by the tax changes introduced by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). That is the way forward. If the dynamics of the small business sector, particularly the seedcorn, are to be nurtured and encouraged, it is through the tax mechanism and not by the Government picking winners. We have been there before, and I believe that once again it will be a considerable failure.

A similar amendment was proposed and rejected in another place, when my noble Friend Lord Skidelsky said:

The difficulty about establishing that objective for NESTA is that in practice it may well embody the very worst kind of corporatist second-guessing. It is an ominous precedent which I wish to highlight again.

By adding that specific aim to NESTA's remit, the Government are establishing a further call on the lottery in an area that should be the responsibility of the

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Department of Trade and Industry--if the Government have any role, other than via the clear tax incentives that my right hon. and learned Friend the Member for Rushcliffe introduced in the latter years of the previous Government. The Minister should reflect on that. If it is necessary or desirable to amend the tax regime, something should be worked out between the Treasury and the Department of Trade and Industry that would satisfy the integrity of NESTA. We should be happy to support such a policy, which would be separate from the commercial remit being given to NESTA.

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