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3.34 pm

The Minister for Sport (Mr. Richard Caborn): I beg to move, That this House disagrees with the Lords in the said amendment.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this we may discuss Lords amendment No. 2 and the Government motion to disagree thereto, Lords amendment No. 6, Lords amendment No. 7 and the Government motion to disagree thereto, and amendment (a) in lieu of Lords amendment No. 7.

Mr. Caborn: The Bill has taken a little time to reach this point, but as today’s debate will show, it has come a long way. My Bill manager, Valerie Curtis—whom the hon. Member for Bath (Mr. Foster) has met on a number of occasions—has now gone off on her honeymoon, which was booked for after the Bill was expected to receive Royal Assent. She is now swanning around South America, and I am sure that the whole House—particularly the hon. Member for Bath—will send her best wishes.

The Lords amendments deal with the relationship between Government and the Big Lottery Fund, and the need for all lottery distributors to report annually on the way in which they have interpreted the principle of additionality. Lords amendments Nos. 1 and 2 seek to remove the Secretary of State’s power to prescribe expenditure in relation to the new Big Lottery Fund good cause.

We have discussed this very fully on several occasions, both here and in another place. For reasons that we have already explained at length, we believe that the powers set out in clause 7 are necessary and
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serve an important purpose, given the exceptionally wide scope and large size of the good cause that the Big Lottery Fund covers. Without the power to prescribe expenditure, the Big Lottery Fund would be given 50 per cent. of all the lottery good cause money to spend on anything that is charitable or connected with health, education or the environment without any further recourse to Parliament. We do not believe that that makes sense.

The large new spending area of health, education and the environment that the Government created in 1998 has proved popular and successful. The new Big Lottery Fund good cause brings those areas together with the area of charitable expenditure distributed by the Community Fund, allowing an enormous range of projects to be encompassed. That is a good thing, and one of the main reasons why we wanted to bring the Community Fund and the New Opportunities Fund together. However, it does create a very different kind of good cause from the existing arts, sport and heritage good causes. Arts, sport and heritage are much narrower areas, and the existing legislation narrows things further by prescribing sums to be distributed by different distributors. That has the effect not only of limiting the definition of who can spend the money, but of restricting what it can be spent on. Parliament took the view in 1993 that such arrangements were necessary to ensure the effective distribution of Lottery money. The powers that we propose in the Bill will have a similar effect, and we believe that they are necessary now as they were in 1993.

Mr. John Redwood (Wokingham) (Con): Does the Minister recall the view of the then Labour Opposition during the passage of the National Lottery etc. Act 1993? They were adamant that lottery money should not be spent on such matters as health, because they thought that it would be a substitute for money that ought to be found from taxpayers’ resources. Why have they performed such an abrupt volte face?

Mr. Caborn: As the right hon. Gentleman knows, time moves on. The Government do consult from time to time. We have had one of the widest consultations on the lottery and how it should be distributed, and I think that that is absolutely right. Since the lottery was introduced, we have put it on record many times that it is a great institution. Credit must go to Conservative Members: at least they set up the lottery. That is one of the few good things that they did. We have continued to consult, and it is very evident that the direction that we are now moving in is in concert with what the British people think. If the right hon. Gentleman’s party did the same with its policies on the lottery as we have done, it might have a chance of winning the next election.

We need to be able to set out—at the very highest level—the types of expenditure that the Big Lottery Fund should focus on. We are talking about broad areas of expenditure, not projects or programmes, the split between the four parts of the good causes, or the split between the four countries of the UK, and certainly not specific grants. It is absolutely right that that should be done in a transparent and accountable way, and that there should be proper parliamentary scrutiny. That is why we are very clear that it should be
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done through secondary legislation and be subject to the affirmative resolution procedure.

We have made available an illustrative order demonstrating how the power to prescribe expenditure will be used in practice. The ability to prescribe devolved expenditure is also central to achieving the greater devolution of decision making to Scotland, Wales and Northern Ireland, which is the Bill’s aim. Amendments Nos. 1 and 2 would mean that the Bill’s devolution arrangements would not work: they would retain power for the Secretary of State where the Government wish to devolve it. For the reasons that I have given, we cannot accept those amendments.

I hope that the House will agree with the Lords in respect of Government amendment No. 6. We previously debated additionality at some length, and it is clear that all parts of this House support the principle of additionality. Yet decisions on what to fund remain decisions for lottery distributors to make, and I am sure that all Members would agree with that. So, as we have continually made clear, it is not appropriate for us to try to include in the Bill a definition of additionality.

I think that there is now general agreement on this position, not least in another place. There is also general agreement that it is right that lottery distributors should report annually on the way in which they have interpreted the principles, as I agreed with them and reported to this House. But the Government accept that there is strong feeling that a requirement for such reporting should be included in the Bill. It is very important to get the wording right, and we believe that this amendment provides the appropriate form of words—one that distributors can meet, and that will allow proper transparency. We must remember that this is a reporting requirement; it is not a definition, and it does not attempt to set out what lottery distributors can or cannot fund. If Parliament should have reason to take issue with distributors’ reports, there will be an opportunity to debate that in any section of the House.

As we have pointed out, the fact that lottery funding is additional to Government funding does not mean that it cannot be complementary to such funding. We have also pointed out that agreement on what is appropriate for Government to fund can change over time, as I have just said. Just because something is, or is not, currently funded, does not mean that that will always be the case. For example, some things that the lottery has in the past funded are now funded by central Government, and will probably not be funded by the lottery in future. Moreover, there might be a desire or need now for something that the Government might possibly fund in future. Such cases have certainly arisen in the arts and heritage, where the lottery has provided funding.

Mr. Mark Field (Cities of London and Westminster) (Con): On health expenditure, to which the Minister referred, if—perhaps for financial reasons—the National Institute for Health and Clinical Excellence decides not to fund a particular treatment, will that not be a green light for the lottery to fund such expenditure in that very way? Our concern about additionality, particularly in relation to health, is that precisely such abuse of the lottery, which occurred in the past through the New Opportunities Fund, will occur in future through the Big Lottery Fund. Our worry is that at some future
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point, the Big Lottery Fund will look to adapt funding for health, education, the environment and perhaps other areas: that it will be taken out of general Government expenditure, and that, in effect, it will be at the mercy of the lottery. Does the Minister not understand that that is precisely our concern, and that the grey area of complementary or other funding cannot begin to deal with it? Will he give us some—

Mr. Deputy Speaker: Order. That is enough for an intervention.

Mr. Caborn: I thought that the hon. Gentleman was going to make a speech, and that I would have to intervene on him.

We genuinely take on board the picture that the hon. Gentleman is portraying, and we are trying to do two things. First, we are trying to ensure that the arm’s-length nature of the distribution of funds is in place. Secondly, we are now asking each of the distributors to include in their annual reports what they believe was their expenditure and the additionality element. That will enable Members to bring distributors to book in many ways—on the Floor of the House, in Committee, or through interrogation by Select Committees. We are trying to address the additionality issue, which is sometimes very difficult to address. I do not think that hon. Members really want a position whereby the funder would start to be challenged in court. If we got into the legal minefield of providing a definition of additionality that becomes challengeable, we might see a long line of people queuing up at court to argue against it. In trying to respond to the genuine concerns that Members here and in another place have brought before us, we have gone a long way towards making transparent the way in which additionality is dealt with by funders.

3.45 pm

As the annual reports unfold in the years to come, we will see how the information is used by Members. I hope that it will be used objectively. If Members are concerned that an area that is being funded is not additional, those who have done the funding can be questioned about it. The amendment will enshrine in the Bill the requirement for lottery distributors to report annually on how they have interpreted additionality in their funding decisions in order to ensure transparency while allowing them the proper freedom and flexibility in their funding decisions. I urge hon. Members to support it.

On amendment No. 7 and amendment (a), I beg to move that this House—

Mr. Deputy Speaker: Order. On a procedural point, I should say to the right hon. Gentleman that I will call upon him to move the other motions in the group at the appropriate time.

Mr. Caborn: Thank you for that guidance, Mr. Deputy Speaker.

On amendment (a), we recognise that perceived Government control over the Big Lottery Fund is a fundamental point of concern to Opposition Members, as it was to their counterparts in another place. We still believe that those fears are unfounded, but we
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acknowledge that they are genuinely felt, and we are therefore prepared to amend the Bill to address them.

Amendment No. 7 would provide that the Big Lottery Fund must “take into account” rather than “comply with” any policy or financial direction given to it by the Secretary of State. We cannot agree to the amendment, as it would put the Big Lottery Fund on a different footing from all the other lottery distributors, who are required to comply with financial directions. However, our amendment (a) delivers the spirit of amendment No. 7. It provides that the Big Lottery Fund must comply with policy directions only as to the matters to be taken into account. It replicates the wording in section 26(1) of the National Lottery etc. Act 1993, which sets out the Secretary of State’s powers to give policy directions to the other lottery distributors. That puts the Big Lottery Fund in exactly the same position as the other lottery distributors, including the Community Fund. I hope that Opposition Members will recognise that we have listened carefully to what has been said here and in another place and have been prepared to make changes where we believe that they are necessary.

Mr. Mark Field: There is no disputing the fact that proceedings on the Bill have been a long haul. As the Minister pointed out, it received its First Reading in this House as long ago as 25 November 2004. What a difference 19 months makes! After one election, two Conservative party leaders and three Home Secretaries, we have finally reached the finishing tape.

Let me say at the outset that significant progress has been made, and it would be churlish of us to oppose the Government today. Nevertheless, we remain concerned, despite the sterling work done in another place, that the underlying principles behind the Government’s thinking will prove detrimental to the fundamental principles of the national lottery. We intend to remain vigilant to ensure that worries about vastly increased Government control over the distribution of lottery funds are kept at bay. I will say more about that when we come to the next group of amendments.

In our view, the national lottery was set up by a Conservative Government more than a decade ago with the specific purpose of improving the daily quality of life for all people in Britain by reserving funds for activities that might otherwise be neglected in the everyday distribution of taxation receipts. By contrast, the creation of the Big Lottery Fund—the centrepiece of the Bill—represents a step, if perhaps a small one, away from the exclusive focus on the four original good causes: arts, heritage, sports and charity.

I am, however, happy to recognise that the Government have taken on board many of the specific concerns that we expressed in what the Minister has diplomatically described as “lively” discussions on Report and Third Reading on 19 January. I also welcome the Government’s acceptance of the two important matters of principle in another place. We are pleased that the lottery distributors have now agreed that they will report back annually on how they are adhering to the additionality principle.

On Third Reading in the Lords, the noble Lord Davies, on behalf of the Government, tabled a specific
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amendment to establish the agreement of the distributors to enshrine in the Bill the duties of those distributors. We entirely agree with the Government that decisions on what to fund should remain strictly for lottery distributors, but we still believe that it would have been helpful had a stricter definition of additionality been placed in the Bill. However, we recognise that a detailed report on the upholding of the distinction between lottery funding and Government funding represents a workable solution and one that we will obviously look at in the years ahead.

We recognise that the noble Lord has given us an assurance that if Parliament has reason to take issue with reports from distributors, there will be opportunities to debate that. Similarly, we appreciate the fact that lottery funding being additional to Government funding does not mean that it should necessarily be complementary to such Government expenditure.

May I at this point place on the record my thanks to my colleagues in another place, Viscount Astor, Lord Brooke of Sutton Mandeville and Lord Luke, for all their sterling efforts?

The other main issue on which we crossed swords with the Government was the control of the Big Lottery Fund. As the Minister will recall, the Government were narrowly defeated in the Lords on Report when we sought to remove the Secretary of State’s powers to prescribe by affirmative resolution types of expenditure for the Big Lottery Fund. While taking at face value the assurance from the Government that those powers are needed only to establish a broad theme rather than specific spending intentions, we recognise that the new amendment tabled here today effectively accepts the spirit of that amendment from the official Opposition and the Liberal Democrats in another place.

In that context, I thank the Minister for his assurances that his amendment tabled to clause 14 puts the Big Lottery Fund in the same position as other lottery distributors with regard to policy directions, but in doing so, we recognise that the Big Lottery Fund will need to take account of, rather than simply comply with, financial directions in the same way as other lottery distributors.

We also recognise that, on Third Reading in the Lords, there were several new and uncontentious amendments tabled by the Government to which we will come later, when I shall also say a few words about the ongoing independence of the Big Lottery Fund. It is important that there be independence from Government intervention—or, indeed, any political intervention—in relation to the distribution of lottery funds. It is a great worry that we are moving down a path that will become more apparent as we debate the new lottery operator. It is all the more important that, effectively, we have three very independent organisations, with Parliament overseeing the lottery operator and the distribution of lottery funds. An intermingling of responsibilities would be dangerous, and this is something that we will debate in the months and years ahead.

With those comments and with my thanks for the Minister’s words, I hope that we can move ahead on the Government’s proposals today.

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Mr. Don Foster (Bath) (LD): I, too, am delighted that we are coming to the end of this rather long process; the passage of the National Lottery Bill through both Houses. Like the Minister, I congratulate the Bill team on their stamina and I pass on my congratulations to the leader of that team on her marriage. I hope very much that she is having an enjoyable honeymoon.

As the hon. Member for Cities of London and Westminster (Mr. Field) pointed out, the Bill started its passage back on 24 November 2004. It was interrupted because of the general election and Second Reading took place on the Floor of the House on 14 June last year. During that debate, I was able to acknowledge the fantastic work done in each and every one of our communities as a result of the distribution of money raised by the lottery. I also expressed my view that the Liberal Democrats had got it wrong when, at the time of the setting up of the national lottery under the Conservative Government, we opposed it. I still think that we were wrong to have done so, as the lottery has done sterling work.

During the Bill’s passage since 14 June last year, I believe that significant improvements have been made, as others have already said. The briefing from the National Council for Voluntary Organisations states:

I agree with much of that, but I also agree with the hon. Member for Cities of London and Westminster that, in respect of additionality, that is rather over-egging the pudding. I continue to be concerned that we have not achieved as much as we would like in respect of enshrining a definition of additionality in the Bill—the Prime Minister said that that would be a good idea—in order to provide a benchmark against which to judge the decisions of the various lottery distributors.

The Minister is right to be concerned, as he hinted he was, about aspects of health spending. He said that it would not be right for lottery money to be spent on aspects of health that were being funded by the Government, but as the hon. Member for Cities of London and Westminster pointed out, under that definition, whatever aspects of health the Government choose to spend money on at any one time will be sacrosanct and the lottery can come in and fill the gap.

It is interesting to read what it says on the Department of Health’s website. Under the heading, “Why can’t Lottery money be spent on the National Health Service?”—an interesting question—the website states:

But it then continues:

However, those are aspects on which NHS money is currently spent, so there is already confusion on the matter.

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