National Lottery Bill

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Mr. Foster: I have a great deal of sympathy with the contribution just made by the hon. Member for East Devon and entirely share his concerns. In my brief contribution, I hope to suggest to the Minister a way in which he may assuage all the concerns but still accommodate some of the aspects that he wants to keep—in other words, how he can have his cake and eat it too.

A concern that has been expressed by many people is that the Bill would make it extremely difficult to guarantee that the voluntary and community sector would continue to be the prime beneficiary of funding from the soon-to-be-established Big Lottery Fund. The hon. Gentleman rightly says that in later amendments we will debate putting in the Bill a requirement that a significant proportion of BLF funding should go to the voluntary and community sector. Were the Minister to indicate that he would be minded to accept amendment No. 27, perhaps there
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would be less concern about the definition of charity, which we are presently debating.

Amendment No. 26 would ensure that all BLF money went to charity, and voting against clause 19 stand part would clearly define a charity as an organisation rather than, as the Bill proposes, as a purpose. However, were the Minister to accept a clear requirement that voluntary and community organisations received money from the BLF—60 or 70 per cent., or whatever might be decided at a later stage—with the remaining 30 per cent., let us say, going to charitable purposes, I suspect that that would be acceptable to the Committee. Therefore, he may wish to reflect on the compromise that I am suggesting. He will have an opportunity to do so when we come to amendment No. 27.

However, if the Minister is not prepared to indicate at this stage that he will accept later amendments, particularly amendment No. 27, we will strongly support amendment No. 26 and will vote against clause 19.

Mr. Turner: I shall concentrate on clause 19, which is grouped with the amendment tabled by my hon. Friend the Member for East Devon. Before I go any further, I would like to ask the Minister for a definition of the words ''benevolent'' and ''philanthropic'' for the purposes of the Bill. I see no definition in the Bill and I know of no definitions elsewhere in law. Perhaps other definitions exist. Perhaps the Minister will state whether he intends to apply definitions found elsewhere in law, but he is not applying any definition of ''charitable'' found elsewhere in law.

My hon. Friend the Member for East Devon has spoken of the danger of diverting money from charitable organisations to organs of the state, such as local education authorities. That is one of my concerns. Money may be abused if it is put under government control at a local rather than national level. I should like to examine the consequence of substituting a different definition for that of ''charitable expenditure'' in section 44(1) of the 1993 Act.

I understand that we were doing so badly in the Boer war that training men in the use of arms was defined as a charitable purpose. A number of gun clubs up and down the country were established with the function of training men in the bearing of arms. Recently, the Charity Commission decided that that was no longer a charitable purpose and those gun clubs have lost their charitable status. Under the definition in this Bill, it appears to me that although the clubs are no longer charities, they could apply for money from the lottery.

They could say that although they were not charitable institutions, the purpose to which they wished to put the money was charitable—not if it involved training men in the use of arms, but if it involved, for example, educating men in the habits of small furry animals, so that the men might more successfully pursue and kill them. That would be a charitable purpose, because education is defined as such a purpose. In case the Minister thinks that a far-
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fetched example, let me substitute another. At the moment, the Conservative party is not a charitable organisation.

Mr. Harris: It should be.

Mr. Turner: I am grateful for that suggestion, because charities are allowed to undertake political activities as long as they do so in pursuit of their principal objective. However, that means that an organisation has to be a charity before it can obtain money from the lottery fund to undertake a political activity.

As some of my hon. Friends have commented, the Conservative party takes a great interest in the issue of human rights in Zimbabwe. At least, some of my hon. Friends do, although other right hon. and hon. Friends have suggested that the interest is unhealthy. I do not take that view, but the protection of human rights is subject to the Charities Bill passing through this House in the same form as it has almost passed through another place. The protection of human rights is a charitable purpose, so the Conservative party could apply to the national lottery for money to promote human rights in Zimbabwe and there would be nothing to prevent the lottery from granting it. As far as I know, the Minister has still not proscribed or prescribed the Conservative party, although it is still open to him to do so—but I am not allowed to go back down that track.

Perhaps, as Ministers have a habit of doing, the Minister would indicate to the lottery distribution organisations that he was not happy for money to go to organisations that were registered under the Political Parties, Elections and Referendums Act 2000.

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Let us think of another example. The anti-war coalition believes—and a number of Members on both sides of the House agree—that it is promoting human rights in Iraq: the right not to be bombed by the United States. The promotion of human rights is a charitable purpose. Although the anti-war coalition is not a charitable purpose, the promotion of human rights is and the Minister is saying through the Bill that he is happy—or at least not unhappy—for the anti-war coalition to apply for and perhaps receive lottery funding to promote human rights in Iraq. That is the consequence. Will the Minister say whether it is an intended consequence?

Mr. Caborn: Amendment No. 26 would amend the definition of a good cause so that all the Big Lottery Fund expenditure must be charitable and connected with health, education or the environment. Let me explain why we have so drafted the new good cause. The national lottery funding decision document that we published in July 2003 was clear that the new lottery distributors would continue to fund charities, the voluntary sector, health, education and the environment.

In drafting the Bill, our aim has been to combine the existing Community Fund and the New Opportunities Fund good causes in a straightforward
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way, while preserving the distinction between charitable expenditure and expenditure connected with health, education and the environment. It is likely in practice that most, if not all, expenditure on health, education and the environment will also be charitable. However, we need to retain flexibility to allow projects in areas that may not fall within the definition of charitable expenditure to continue to be funded when the Big Lottery Fund judges it to be right. That decision will be taken at arm's length, not by the Government. For those reasons, I ask the hon. Gentleman to withdraw the amendment.

Adam Afriyie: Will the Minister give a couple of examples of when the definition would have been used in previous allocations of funds? I am not aware of a situation in which funding was withheld on the basis of the definition of a charity.

Mr. Caborn: A number of organisations are not charitable, such as social enterprises, mutuals and residents' associations. They were all turned down because they did not have the right constitution to be charitable. I am sure that the hon. Gentleman will agree that several organisations in his constituency fall within the definition, but that, if they had had access to the funds, they would have added real value to his constituents. We want to broaden the definition of ''charitable'' to the areas that I have just described for non-profit organisations and residents' associations. It is the purpose of the organisation and not its organisational aspect that we believe it is right to consider. The hon. Gentleman may want to give chapter and verse, but I wanted to explain the overall principle of making funding available to organisations that were debarred from receiving moneys but were well within the broad meaning of good causes.

Clause 19 defines ''charitable expenditure'' in respect of the Big Lottery Fund good causes as

    ''expenditure for a charitable, benevolent or philanthropic purpose.''

The new definition used to decide whether expenditure is charitable is based on its purpose. The existing definition of ''charitable expenditure'' in relation to the Community Fund was based on the institution. The new definition will ensure that in future the focus is on projects rather than the institution, as I have just explained to the hon. Member for Windsor.

In the past, the Community Fund has been unable to fund some deserving projects simply because the organisation applying for funding had the wrong sort of constitution. A swathe of good causes were missed out that could have been aided by such lottery funding.

Andrew Selous (South-West Bedfordshire) (Con): The Minister mentioned residents' associations, mutuals and social enterprises—all excellent organisations that we want to prosper in our constituencies. Would they not be covered by section 44(i)(b) of the 1993 Act, which states:

    '' '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;''

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My question to the Minister is straightforward. Are not residents associations, mutuals and social enterprises covered by that provision?

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