National Lottery Bill

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Mr. Caborn: It is the phraseology that is used. We say in this Government, “the Secretary of State”. Who defines who the Secretary of State is? The answer to that is that they are the Secretary of State of Government. We are distinguishing between the Executive and the Parliament, and we are giving the powers to the Executive, not to the Parliament. That is different from what we have done in Wales, because in Wales there is no distinction between the Executive and the Parliament.

Mr. Tom Harris (Glasgow, South) (Lab): My right hon. Friend and the hon. Member for East Dunbartonshire (Jo Swinson) might be interested to know that, from my memory of sitting in similar Committees in which there has been a Sewel motion to enable us to legislate for Scotland, the term always used is “the Scottish Ministers”. My understanding is that that phrase is used by civil servants in drafting legislation because it has a specific legal meaning in the context of devolution.

4.30 pm

Mr. Caborn: I have nothing further to add.

Mr. Swire: The Minister will be glad to hear that he is winning me round to his way of thinking. This was just a probing exercise, but I wonder whether you will indulge me for two minutes, Mr. Gale, because this is interesting in the context of our discussion. What body, if any, in the Isle of Man and the Channel Islands would be consulted?

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Mr. Caborn: That is a very good question. I shall write to the hon. Gentleman. I could give him an answer off the cuff, but it is bound to be wrong, so I hear what he says, and I shall make sure that I write.

Mr. Don Foster (Bath) (LD): A Sewel motion?

Mr. Caborn: We do not have the Sewel motion in the Isle of Man or the Channel Islands to the best of my knowledge, but I shall clarify the position.

Mr. Swire: The Minister has done a good job in explaining the differences to those of us who are still coming to terms with the intricacies of devolution, and I am reassured on behalf of the people of the Channel Islands and the Isle of Man that he will write to me. I hope, therefore, that he will not think it poor opposition if I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7, as amended, ordered to stand part of the Bill.

Clause 19

Meaning of “charitable expenditure”

Motion made and Question put, That the clause stand part of the Bill.

The Committee divided: Ayes 9, Noes 6.

[Division No. 5]


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


Afriyie, Adam
Foster, Mr. Don (Bath)
Selous, Andrew
Swinson, Jo
Swire, Mr. Hugo
Walker, Mr. Charles

Question accordingly agreed to.

Clause 19 ordered to stand part of the Bill.

Clause 13


Question proposed, That the clause stand part of the Bill.

Mr. Foster: I take this opportunity to welcome you to the Chair, Mr. Gale, although I made reference to your chairmanship earlier. I shall seek to persuade the Committee to vote against clause 13 standing part of the Bill. I do so with considerable reluctance because, as I said earlier in response to the tirade that the Minister unleashed on the hon. Member for East Devon, I have very high regard for Sir Clive Booth and the team currently working with him on what has become called the Big Lottery Fund. I have no doubt that they will do phenomenally good work.

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However, we are talking not about individuals but about a Government proposal. The first thing that strikes me is how odd it is to be here debating whether we should vote to allow the establishment of the Big Lottery Fund when, as everybody knows, it already exists and has done so for a long time. Indeed, we have received briefings from a body called the Big Lottery Fund, with a nice pink logo. We have noticed that it appears to have a website——and a big advice line, which has been up and running for some time. It even produces a magazine called “The Big Times”. I am sure that you are an avid reader, Mr. Gale. If not, I am sure that it will not be long before it features as one of the publications on “Have I Got News For You”.

The Big Lottery Fund, the body that we are discussing whether to establish under the clause, was formally launched way back on 1 June 2004. That seems extremely odd. That is not to say that I am critical of the work being done by the organisation that has been masquerading as the Big Lottery Fund. Nevertheless we must ask ourselves whether we are entirely happy with the existence of that body.

Had the Minister been more willing to accept some of the amendments that were moved earlier today, I might have taken a different view about whether to support the clause. The Minister told us yesterday during Culture, Media and Sport questions:

    “Through the Bill, we are taking no more powers than existed under NOF or the Community Fund”,—[Official Report, 24 October 2005; Vol. 438, c. 7.]

yet today we have been debating at some length the fact that the Government are taking considerably more powers in respect of the New Opportunities Fund and the Community Fund than before. I will give the Minister some examples in a second, because he is looking puzzled.

The starter for 10 in all of this is whether we are happy with the continuation of one part of what is to be the Big Lottery Fund, namely the New Opportunities Fund. I am sure that you will be well aware of this, Mr. Gale, because you were a critic of the NOF’s establishment, as were all your colleagues and mine. We are carrying through into the Big Lottery Fund something about which we had deep concerns.

The Minister had an opportunity to allay manyof those concerns with new definitions of “charity” and the removal of certain powers of direction by the Secretary of State, but he chose not to do that. He said that our concerns about the NOF will continue into the Big Lottery Fund. Indeed, he will go further. He said yesterday that no additional powers were being taken on. Yet, although we are not debating clause 14I fully appreciate that—it describes the function of the body that is to be set up by clause 13 and the directions given by the Secretary of State.

We will have an opportunity to discuss this in more detail later, but I remind the Committee of the precise powers of the Secretary of State over the body. Section 36E in clause 14 states:

    “In exercising any of its functions the Big Lottery Fund shall comply with any direction given to it by the Secretary of State (subject to subsection (4)).”

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It goes on to say that a direction under this section may

      “(a)   specify persons to whom the Fund may or may not make grants or loans;

      (b)   specify purposes for which the Fund may or may not make grants or loans;

      (c)   relate to the process used to determine what payments to make;

      (d)   relate to the terms and conditions on which the Fund makes grants or loans.”

Mr. Charles Walker (Broxbourne) (Con): Can the hon. Gentleman envisage a situation in which every decision taken by the Big Lottery Fund has to be passed across the Secretary of State’s desk for approval?

Mr. Foster: I can indeed. To worry the hon. Gentleman even more, I point out that nobody, particularly the Minister, has yet been able to explain why this is a matter for the other distributors. Of course the Secretary of State can have a role in this; we would not want her not to have a role. We respect her—except for what she did on licensing yesterday—and we believe that it is right and proper for her to be involved. That is why we have no difficulty with a situation where the Secretary of State can say what she thinks to the other distributors and they have to take account of it. That is a long way away from a requirement that the Big Lottery Fund has to comply with directions that, as I said, cover absolutely everything: to whom, by what means and for what purposes the Big Lottery Fund can give money.

Earlier we had a discussion in which we sought to persuade the Minister that if we were going to accept that idea, it would be a good idea to have in the Bill some key assurances about 60 or 70 per cent. of the money, or thereabouts, going to the community and voluntary sector. Despite the compliance, that would have given us some sort of comfort blanket specifying that that proportion of funds would go to the area we are keen to see benefit. However, the Minister would not even give us that.

I hope that the Minister will understand that although I am in no way impugning the integrity, hard work or brilliance of Sir Clive Booth and his staff, I have grave concerns about the body that the Minister wants us to agree to set up, which has actually already been set up but not as a body corporate.

Mr. Swire: This morning, the hon. Gentleman touched on something that has taken up a lot of our time: the question of including in the Bill the 70 per cent. figure for which the Conservatives and Liberal Democrats have argued. The Minister rejected that, saying that it would be restrictive and he wanted flexibility. I am somewhat confused. This morning he said that he would give his verbal support to such an idea because it was not to be enshrined in law. Before that he said that it was a commitment. However, on Second Reading, he said in response to a question from the shadow Secretary of State:

    “I give a guarantee that between 60 and 70 per cent. of the Big Lottery Fund’s income will go to communities or charities.”—[Official Report, 14 June 2005; Vol. 435, c. 175.]

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Therefore, we have had everything: a guarantee, a commitment and now support. I wonder when we will get to a wish.

Mr. Foster: We will get a full answer in a moment when the Minister replies, but I hope before that the hon. Gentleman will make a further contribution. I am sure that he would wish to draw attention to the concerns of the NCVO and other organisations about the depth of consultation, an issue he picked up on just before lunch and about which he has now been more thoroughly briefed. If not, I have a briefing on the matter, but I thought that the hon. Gentleman might want to tell us why he is concerned, as I am, about the way the Government consulted on the creation of the new body.

I do not want to go into detail and steal the hon. Gentleman’s thunder, but I hope that the Minister will acknowledge that, notwithstanding what he told us before lunch, many voluntary and community organisations are deeply concerned about how that consultation took place. They are particularly concerned that in 2004, while consultation was still going on about the key purposes of the Big Lottery Fund, the Secretary of State announced what they were to be, before that consultation had been completed.

I end on a more conciliatory note. We are told that the bringing together of the New Opportunities Fund and the Communities Fund will bring economies of scale of between 10 and 20 per cent. That, I am sure, is likely to be the case; I have been assured by the Big Lottery Fund that it is. However, during the deliberations that led to the decision to go ahead with it, there was quite a lot of talk about some of the additional functions that the Big Lottery Fund might take on: being a centre for excellence, giving advice to anyone applying for a grant and so on.

4.45 pm

I can find no reference to any of that additional activity in the Bill, nor can I find that in the explanatory notes. I may have missed it, but I hope that when the Minister responds, in addition to saying why we should go ahead and do exactly what he wants by accepting the Big Lottery Fund, despite all my misgivings and concerns about it, he will explain in a little more detail the fund’s area of activity. I particularly ask him to do that because there is concern that if it takes on the additional functions, that may reduce expertise among other distributors and the availability of funding for good causes.

Mr. Swire: It would be amusing indeed if the clause were pressed to a Division and the Committee decided to vote against it. As the explanatory notes state:

    “This clause inserts provision into the 1993 Act establishing the Big Lottery Fund as a corporate body and inserting a new Schedule 4A (Schedule 2 to this Bill), which sets out detailed provisions on the Big Lottery Fund’s constitution, proceedings and money.”

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If the Committee comes to its senses and votes against the clause, we could drive a coach and horses through the whole sorry enterprise.

We have made it clear where we are coming from and we articulated that in our pre-election manifesto. We were very clear that we wanted to return the national lottery to the four original pillars. We were unable on Second Reading and again in our deliberations today to be more compliant with the Minister’s point of view than he would have liked because there is so little that we can agree with in what is driving the Bill. I believe that the Liberal Democrats share that view.

As the hon. Member for Bath said clearly, we provided ample opportunity this morning for the Minister to take on board our concerns. Had he done so, he might have found us more willing to withdraw some of the amendments that we pressed to a vote.

Mr. Foster: Will the hon. Gentleman say that I said that not only clearly, but eloquently?

Mr. Swire: Indeed, the hon. Gentleman was extremely eloquent and has made up for any deficit he may allegedly have suffered from on Second Reading. He is also making up for an unfamiliar and unwelcome period of self-denying ordinance in not contributing to our proceedings as much as he could. No doubt that was the result of aftershock, having served so valiantly with the hon. Member for East Dunbartonshire on the Standing Committee that considered the London Olympics Bill.

The hon. Member for Bath was, I think, not quite with us at the beginning of our deliberations this afternoon and missed my points about consultation. I am happy to repeat them, or make slightly different ones, because they are seminal to the argument.

I was certainly not being personal about the current Secretary of State, and Hansard will bear me out when we read it tonight with our candles, night lights and cups of cocoa or Bovril. I was not any sense suggesting that the present Secretary of State would be involved in misappropriation of funds by using them to shore up a lack of Treasury dividends—perish the thought. However, I pointed out that when we legislate in this place, it is incumbent on us to do so regardless not only of who the Minister may be on a given day, but of who the Government may be on a given day. This is the fundamental point about the whole sorry enterprise: we are talking about the people’s money. The lottery is about individuals going out and spending their money in order to win prizes, to enrich themselves and to better their lives—a good Conservative philosophy—and to help out worthy and justifiable causes along the way.

That is what the late Prime Minister, Sir John Major—[Hon. Members: “Late?”] He was on occasion late. He is a certainly a former Prime Minister and a very great man, too. Where was I? In mid-flow, I think. Why did the former and not often late Prime Minister, Sir John Major, set up the national lottery? He set it up because, having been a Treasury Minister and then First Lord of the Treasury, he was acutely aware that the Government would be unwilling or unable to fund
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in the way that he envisaged charities, sports, the arts and all the other areas that were covered by the original national lottery.

That was the idea. It was a simple philosophy that did not enjoy universal support at the time of its launch. It was much criticised. There was a tremendous and justifiable worry about families going into debt. However, here we are, years later, looking at a situation in which millions of pounds have reinvigorated parts of the country that Government money would not have reached because that would not have been provided for by the Treasury.

Cut to the early days of an incoming Labour Government and what do we have? There was a scratching of heads and people were saying, “Well, Treasury dividends are falling. There are worthy causes that follow our social and political agenda which we would like to fund. How are we going to do that? We are constricted by the 1993 Act and subsequent Acts. There is far too much scrutiny.” It was a brilliant idea to then say, “I know what we’ll do. As phase 1”—this is hypothetical—“we will merge these different funds and create a big lottery fund.”

Mr. Walker: I hope that my hon. Friend agrees that one of the problems is that the Big Lottery Fund lacks legitimacy. It will lack legitimacy in the eyes of the public because basically its executive relies on the patronage of the Secretary of State. Legitimacy is important; otherwise it may well be known as the big ministerial slush fund. That, I think, is what my hon. Friend is driving at.

Mr. Swire: We must always be careful about casting aspersions on parentage. We know that the Government are the father and the mother of the Big Lottery Fund. My hon. Friend is entirely right: perhaps inadvertently, but, I would suggest, deliberately, the Government are blurring the lines between Government expenditure and national lottery revenue. As we proceed through the Bill over the next few days, we will see evidence on every page that that is precisely what they seek to do. Do the checks and balances exist? I suggest not. When the Opposition try to introduce them, we are ridiculed for being obstructive and for insisting that too much should be included in the Bill, thereby reducing the Secretary of State’s “flexibility”.

Andrew Selous (South-West Bedfordshire) (Con): My hon. Friend mentions checks and balances, which the Minister mentioned in his remarks this morning. Does he agree that, although the decisions of the Big Lottery Fund can be challenged, if the Big Lottery Fund does not agree, it does not have to do anything about it, which is why including many of these points in the Bill is so important?

Mr. Swire: I bet my bottom dollar that when the Big Lottery Fund is officially set up it will be responsible only to itself and the Secretary of State. This is the last time that mere Members of Parliament will have a say in how the money is spent and where it goes.

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Mr. Caborn: The hon. Gentleman underplays the assurances of the chief executive of the New Opportunities Fund, who I hope will be the new chief executive of the Big Lottery Fund. He is acting in that capacity at the moment, although, for the record, the New Opportunities Fund and the Community Fund are currently legal entities in their own right. I said this morning that they would produce an annual report for both Houses of Parliament, which would be open to scrutiny by any Member of Parliament, any Opposition party that wanted it debated on the Floor of the House for debate, or any Select Committee.

Mr. Swire: I am interested to hear that. Returning to the Big Lottery Fund and its shadow creation, the Minister talked about Sir Clive Booth, who is, in effect, up and running. The Minister then gave another undertaking, and I should like to tease out of him whether it was a commitment or, as we suggested in our amendments, a guarantee that the documentation will be available, or whether he was merely expressing support for the idea. [Interruption.] Perhaps he is getting an answer through quickly. As to whether that information will be available to Members of Parliament in the Library, this morning I pressed him on that, and the hon. Member for Bath said that I had got it wrong. What the Minister said was not in the Bill; it was yet another wishy-washy wish. Will he respond directly to that, as we need to know what he is saying—whether it is a guarantee, an aspiration, a wish, a hope or whatever? Will he please tell the Committee what it is?

Mr. Caborn: It is an undertaking—that is a different word—given by the chief executive to the voluntary service who work round my table in the Ministry that he would produce a report to put before Parliament, to which they would also have access. On additionality, the chief executive said that he was being pressed, and that he would ensure that there was some public accountability on additionality in the report. I agreed with him that it would be put before both Houses of Parliament and would then be open to the type of scrutiny that such reports receive. That is not new: it happens with a lot of non-departmental public bodies. Not only that, but I went on to say that it would not be the normal fall-back position, but would be extremely user friendly, so that many organisations that do not have lawyers and accountants working for them could, I hope, understand it. That is how far we are prepared to go with the voluntary sector.

Mr. Swire: I am grateful that the Minister has given an undertaking; I was increasingly suggesting that what this Bill needs is an undertaker. Clearly, again, in some smoke-filled room, the Minister has obtained an assurance from Sir Clive, who is not directly accountable to this House.

I want to reflect on the mess that the Government have got themselves into, because the point about the Big Lottery Fund, the establishment of which is dealt with in clause 13—is that it is long overdue. On reason for the large balances—the Minister has been going on and on about drawing down balances, and some of the distributors holding far too large balances—is
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arguably the uncertainty created by the lack of a Bill. Nobody has known what is going on. The Government may have created the Big Lottery Fund, which is not at present accountable to Parliament because it exists in some sort of shadow organisation, but it is long overdue, to the extent that about three or four days ago, there arrived on my desk advance warning of a statutory instrument about the New Opportunities Fund because there is no other way of spending the money at present.

The Minister should not tell me that it is all a plan; it is not planned. The Bill is overdue. Third Reading and Report might not come until next year and meanwhile there is tremendous disagreement, particularly in the voluntary sector, and considerable disquiet about what is behind the measure. There are even some—although I am not sure that I include myself in their number—who are so cynical about the Government’s motivation in creating the Big Lottery Fund that they are asking whether it would not be easier, having created this Frankenstein’s monster, to move towards having one distributor. If one is already responsible for distributing 50 per cent. of lottery take, why not award oneself the other 50 per cent.? After all, there is no principle involved; what is the difference in distributing the whole lot?

5 pm

No doubt, the Minister, or his successor, would come to a Committee, if that were required, and argue convincingly that there would be further economies of scale and tremendous savings, all of which would be passed on to the end user. After another consultation—800 hits on his website representing hundreds of local authorities and other vested interests across the country—we will be told that that is what the people in the street who play the game want. I do not think so. That is not what people want; they want to maintain the difference between Government spend and lottery spend.

The Minister said something quite extraordinary about his cosy little chat with Sir Clive in his smoke-filled room—they had discussed the question of additionality, which is to feature in the report that is to come to the House of Commons Library every year. Well, I have news for the Minister: he may have discussed what he means by additionality with Sir Clive, but he has not discussed it with Her Majesty’s Opposition or the Liberal Democrats, and I have a sneaking feeling that the hon. Member for Bath has some pretty interesting things to say about additionality. The Minister may find that he has to ring Sir Clive and summon him back for another cosy little chat because he has suddenly realised that his view of additionality is not shared by any of us.

Before I have a seizure, I shall conclude by referring back to the clause that we are debating, which is about establishment. This is not a cheap, opportunistic piece of opposition. [Laughter.] Well, how interesting; I gave the Minister greater credit. In all seriousness, my party feels strongly about this issue. I suspect that others in the Room, who were Members when the
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national lottery was set up—long before I became a Member of the House—feel pretty irritated and nervous about how it has been hijacked since Labour came to power.

We feel strongly about the national lottery because it is a Conservative idea that was designed to enliven the lives of people across the country who were beyond Government reach. That is not just the view of the Opposition. If it were, the Minister might be able to put his hands behind his back and give a knowing look, but he cannot. The Government cannot hide behind the excuse that we are opportunistic every time we oppose them. We are not opportunistic; we are the Opposition. There is a difference.

It is not only the Conservative party and the Liberal Democrats who oppose the clause and the Bill so vehemently. I refer again to the concerns of the voluntary sector about the 2002 merging of the New Opportunities Fund and the Community Fund. The announcement came as a surprise to the voluntary and community sector; it did not believe that the consultation had addressed the question whether those distributors in particular should merge. The sector felt very strongly that no business case had been made for the merger and that the DCMS was acting in a way that was totally at odds with the compact.

I would argue that no business case has been made for either the merger or the creation, in this clause, of the Big Lottery Fund. The simple reason for no business case being made is that the proposed changes are not driven by business, economies of scale or a desire to get more money to the end user more quickly. Nothing in the Bill suggests that that would be the case if it were passed. The changes are driven by naked politics—a desire to create a lottery fund that controls 50 per cent. of all lottery takings to make up a shortfall in Government spend. That is a disgrace, and we should resist the clause in its entirety.

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