National Lottery Bill


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Mr. Caborn: There is no more prescription than there was in relation to the New Opportunities Fund in the National Lottery Act 1998. As I have just explained, we have devolved matters to Scotland, Wales and Northern Ireland. A wide consultation has been carried out by the Government and the Big Lottery Fund. We have consulted not just individuals, but organisations. That is on the record. Only 5 per cent. disagreed with the way in which the consultation was going.

I want to continue because otherwise we will not get through the business before us. I know that Members want to challenge other areas of the Bill, as well. I will move on to the Government amendments on the Channel Islands. I will then deal with the amendments that have been tabled about the Isle of Man. The Bill already makes provision for people on the Isle of Man to benefit from the national lottery by allowing the distribution of proceeds from the lottery on that island. Representatives from the Jersey and Guernsey Governments have sought similar provisions to allow—eventually—proceeds from the national lottery to be distributed to their islands once they have established the appropriate licensing and regulatory framework.

Through the Government amendments, we hope to increase the scope of the national lottery to include not
 
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just the Isle of Man, but the Channel Islands. National lottery tickets are not currently sold on the Channel Islands, but the island authorities, the Department and the National Lottery Commission are working together to establish the appropriate licensing and regulatory framework to allow tickets to be sold there. Once that has been achieved, we want to be able to ensure that proceeds from the national lottery can benefit the people of the Channel Islands. The amendments will achieve that in the same as that the Bill achieves it for the Isle of Man: by allowing the Big Lottery Fund to withdraw money from the national lottery distribution fund to fund projects in the Channel Islands.

Mr. Swire: Given that there is a tax take on the lottery, how would selling lottery tickets on the Isle of Man and the Channel Islands affect the fiscal and taxation arrangements? I understand that the arrangements are very different.

Mr. Caborn: I cannot answer that question straight away, but I will either write to the hon. Gentleman or give him an answer later in our consideration of the Bill.

Government amendment No. 4 will allow the prescribed expenditure under new section 22(3), which will define the Big Lottery Fund's good causes, to include expenditure in any of the Channel Islands, thereby allowing the fund to make grants to bodies on those islands. Government amendments Nos. 7 and 8 provide that money held in the national lottery distribution fund may be used by the Big Lottery Fund for the benefit of the Channel Islands. Clearly, Government amendments Nos. 4, 7 and 8 are dependent on each other.

Government amendment No. 9 allows the Big Lottery Fund to delegate any of its funding functions to another body established on the Channel Islands. That would enable a body with local experience of the Channel Islands to make decisions on behalf of the Big Lottery Fund. By enabling the distribution of lottery money on the Channel Islands, the amendments would allow the people on the islands to join in a much larger lottery. That would bring them larger amounts of lottery funding and the opportunity to win large prizes. However, we in the UK would also benefit from the Channel Islands joining. We would experience a small but positive increase to the national lottery distribution fund—a view that is strengthened by figures suggesting that the islanders would be above-average ticket buyers. The Channel Islands would have access only to the new good causes of charitable expenditure, health, education and the environment, meaning that they would have access to only half the good cause money. In spite of that limitation, there remains considerable interest in being involved in the national lottery.

Amendments Nos. 55 to 58 would amend clause 14, but they are related to the matters that we are debating. I see the point of the amendments. On the face of it the Isle of Man is treated differently from, say, Scotland; but there are legal and practical reasons for that. The Isle of Man is not a part of the United Kingdom, and the constitutional relationship between
 
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Parliament and the Tynwald and the Isle of Man Government is complex. It is not normal practice for the UK Parliament to confer functions on the Tynwald, a legislative body, or on the Isle of Man Government.

Similarly, it is not normal practice to give a non-UK Government powers to be exercised in the UK covering a UK public body. A further difficulty lies in the fact that the Isle of Man authorities are not subject to UK law. It would be impossible to enforce the various requirements of devolved Administrations such as the Scottish Executive in relation to the issuing of directions—the requirement to consult the Big Lottery Fund and to obtain the consent of the Secretary of State before giving the directions.

The provision to allow the Big Lottery Fund to distribute lottery money in the Isle of Man has been developed in consultation with the Isle of Man authorities. We can be confident that it will not cause any difficulties when it comes to distributing money from the Big Lottery Fund to good causes in the Isle of Man. It was not raised as a problem in our discussions with the Isle of Man authorities, and the powers of direction will be used broadly to define community priorities that accommodate most schemes that the Isle of Man people might want to see funded. We shall consult them about that. That last point in particular should give the hon. Member for East Devon some real assurance. In light of it I ask that the amendment is not pressed to a vote.

Mr. Swire: I wish that I could agree to the Minister's plea in his last sentence and not press the clause or the amendment to a vote, because that would mean that he had gone some way to reassuring us about them. However, I would be unpopular with the Opposition were I not to take the contrary view.

We had an interesting contribution from the hon. Member for East Dunbartonshire, whom I welcome. I think that this is the first Committee on which she has served. It is the first on which we have served together, and she said nothing with which I would disagree.

The Minister referred to the integrity of the lottery. He is keen on that, and we are certainly keen on it. He referred to it as an institution of which we can be proud. Of course it is. It is a wonderful institution, which was thought up by the Conservative party. It was very much the baby of the then Prime Minister, Sir John Major.

Those of us on the Committee who watch Andrew Marr on Sunday will have seen the ex-Prime Minister in a pair of smart pink socks telling Mr. Marr, who was not wearing a smart pair of pink socks—indeed, he may not have been wearing any socks at all—why he thought that this Bill went contrary to the spirit of the founding fathers. Sir John feels very strongly about that, but I shall not digress onto the principle of additionality about which he is so concerned.

The Minister says that we must keep in touch with what people out there believe the lottery is for. Most people, particularly in the Channel Islands, buy lottery tickets to acquire a good win; it is only human nature so to do. People have an interest in what lottery money should go to, not least if they happen to be associated
 
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with some local endeavour seeking to attract lottery funding, but beyond that I am rather doubtful of their interest. We will return to the consultations that his Department has had with the people out there, as he refers to the great British public.

My hon. Friend the Member for Isle of Wight (Mr. Turner) said that there are 50 million people in this country, although I think that there are rather more than that. Perhaps he is confused by the number of people holidaying on the Isle of Wight. Of 50 million people, 800 responded to the consultation and we have heard of all the vested interests that many of those 800 people represent, from voluntary bodies to local authorities. My hon. Friend said that 5 per cent. disagreed, but 5 per cent. of 800 according to my limited mathematical ability is 40, so 40 people disagreed. That gives some indication of the ridiculousness of quoting that sample as meaning anything to anyone. It just does not stack up.

The provision vests tremendous power in the Secretary of State. Under the law of unintended consequences, a Secretary of State less scrupulous than the present one could direct 50 per cent. of what amounts to hundreds of millions of pound per annum to anything that he or she deemed fit, with the compliance of other Cabinet Members. That is unacceptable and the Minister's attempts to reassure us do not go far enough, which is why I shall press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 9.

Division No. 1]

AYES
Afriyie, Adam Foster, Mr. Don Selous, Andrew Swinson, Jo
Swire, Mr. Hugo Turner, Mr. Andrew Walker, Mr. Charles

NOES
Bailey, Mr. Adrian Caborn, Mr. Richard Devine, Mr. Jim Engel, Mrs. Natascha Gwynne, Andrew
Harris, Mr. Tom Mann, John Reed, Mr. Jamie Ward, Claire

Question accordingly negatived.

Mr. Swire: I beg to move amendment No. 26, in clause 7, page 4, line 23, leave out from 'charitable' to end of line 26 and insert

    'and may be connected with health, education or the environment'.

The Chairman: With this it will be convenient to discuss clause 19 stand part.

Mr. Swire: That very narrow vote was perhaps a stronger indication of trouble ahead for the Minister than any consultation that the Minister's Department had with 800 people. We may be small in number, but 7:9 is pretty close and if that is not indicative nothing is. Incidentally, although we cannot defeat the Government on this field of battle, there is always the other place, where even Labour peers view the provision with considerable disquiet, as we will see when the Bill goes there.
 
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Amendment No. 26 and clause 19 deal with an important part of the Bill: the definition of charitable expenditure. The amendment would make a subtle but crucial change to clause 7 by ensuring that all Big Lottery Fund expenditure is charitable. At the moment, clause 7 refers to

    ''charitable, or . . . connected with health, or . . . connected with education, or . . . connected with the environment.''

That is the purpose of amendment No. 26.

11.45 am

The argument about what proportion of Big Lottery Fund expenditure—if not all of it—should go to charities is the subject of another amendment in a different group, which we will not address now. However, I say to the Minister that the easiest—and most popular—escape route out of the difficulties he faces in relation to the proportion of BLF resources that should go to charities is to accept amendment No. 26 and to make all BLF spending charitable. If he did that, there would be no further need for any kind of disagreement. I look forward to hearing the Minister's arguments against the amendment—if he makes them, because he might acquiesce—and to hearing why he does not want to increase funding to charities. I hope that he will give me some examples of what non-charitable grants the BLF will make in the health and education sectors.

That brings us to the definition of charitable expenditure. The Government seek to broaden that definition by changing it from an institution-based definition to a purpose-based definition. That is not merely a semantic change; it is fundamental. It changes the meaning of charitable expenditure from expenditure by institutions that are charitable, benevolent or philanthropic to expenditure on charitable, benevolent or philanthropic activities. However, the voluntary sector strongly opposes changing the definition of charitable expenditure. It is clear to it, and to us, that the definition given in section 44(1) of the National Lottery etc. Act 1993 is the correct one:

    '' 'charitable expenditure' means expenditure—

    (a) by charities, or

    (b) by institutions, other than charities, that are established for charitable purposes (whether or not those purposes are charitable within the meaning of any rule of law), benevolent purposes or philanthropic purposes''.

That is scratched out by the Bill, and the new definition means that there is no guarantee that charitable expenditure will mean expenditure by voluntary and community sector organisations.

The new definition is contrary to the original definition of a charitable good cause. Under the Bill, any institution, be it statutory, voluntary, or even in the private sector can undertake charitable, benevolent or philanthropic activities. Our fear—which is entirely reasonable given the Government's track record in respect of the misuse of lottery funds—is that spending by public or local authority bodies', be they primary care trusts or primary schools, will be classed under the definition in this clause as charitable expenditure. The new definition of charitable expenditure also has implications for the Big Lottery Fund and the
 
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Secretary of State's declared commitment to allocate 60 to 70 per cent. of expenditure to voluntary and community organisations, which we will debate later. I know that the hon. Member for Bath and I agree that we would like that to be included in the Bill. The definition in the Bill might be intended to be a commitment to charitable expenditure, but it provides no reassurance for the voluntary and community sector.

The Minister, arguing on behalf of his Department and the Secretary of State, will no doubt argue that their reason for changing the definition of charitable expenditure is that in the past the Community Fund was unable to fund some organisations that had the wrong legal constitution. However, I would argue that the arguments about what the Community Fund could or could not fund are no longer relevant, because the Community Fund is being rolled up into the Big Lottery Fund, whose good causes go beyond charitable expenditure and which has the power to fund bodies outside the voluntary and community sector in any case. That was most recently evidenced by the people's millions shortlist, which includes schools and local authorities among those competing for lottery grants, and which I am sure the Minister will refer to as an indication of the Government's response to what people think and want from the lottery. The Big Lottery Fund therefore is not subject to the same restrictions as the Community Fund. I have no objection to the BLF supporting organisations outside the sector, but that support should not be classified under the charitable expenditure good cause.

To recap, removing clause 19 would mean returning to the original meaning of charitable expenditure. Given section 44(1) of the 1993 Act, to which I referred earlier, it would ensure that charitable expenditure continues to mean expenditure to voluntary and community sector organisations, rather than particular activities undertaken by any institution and perhaps registered for a particular fundraising round as a charitable endeavour. Finally, it would provide important guarantees about future lottery funding to the voluntary and community sector.

 
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Prepared 25 October 2005