National Lottery Bill

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Mr. Caborn: Ad nauseum.

Mr. Turner: If so, perhaps the Minister can anticipate my final question. Why are Northern Ireland Ministers not mentioned, but a Department is referred to instead? There is a Secretary of State for Northern Ireland and there would be Ministers who were responsible if Northern Ireland had devolved powers. Is there a difficulty in that Ministers in Northern Ireland are drawn from conflicting political parties, not political parties that generally agree with each other, so that it is a matter of some importance in the devolution settlement which political party holds a particular Ministry? Three or four political parties could be dissatisfied were Sinn Fein to hold the Department of Culture, Arts and Leisure in Northern Ireland. Similarly, three or four political parties could be dissatisfied if the Democratic Unionist party were to hold it.

Adam Afriyie (Windsor) (Con): In any organisation, there are questions of power and control. Much of what we have been debating today, especially on these clauses, is about the power and control that the Secretary of State has over the Big Lottery Fund. The ultimate power is that of appointing someone to a job and the ultimate sanction is that of removing them from it, so the maximum amount of influence is available to the Secretary of State. I ask the Minister to focus on two matters: the powers that the Secretary of State has over the appointment and removal of the
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Big Lottery Fund chairman and members of the board, and the differences in the Secretary of State’s powers over the Big Lottery Fund and over the other funds? If the Secretary of State can control the decision making of the board by the ability to use the ultimate sanction of removing the chairman, that must be examined and explained much more carefully.

Mr. Walker: With the Big Lottery Fund, are we not in danger of creating 12 non-jobs? On page after page of the Bill, it seems that every move the board members make will be second-guessed by the Secretary of State. Indeed, if they were to demonstrate autonomy in their decision making, they could be removed. Surely we want the Big Lottery Fund to have legitimacy in the eyes of the public. As such, the board members must sometimes be able to go against the wishes of the Secretary of State and show that they are thinking primarily of the British taxpayer and those who will benefit from the projects that are funded. The Bill does the Big Lottery Fund a huge disservice. What is the point of having such a fund? Let us just be done with it, give the final powers to the Secretary of State and end this charade.

The Chairman: Before I invite the Minister to respond, the hon. Member for Isle of Wight, for wholly proper parliamentary reasons, was unable to be here at the start of the proceedings and did not hear the debate on Scottish Ministers. Were the Minister to try to reply to his questions on that matter, I would have to rule him out of order, but it is entirely up to him to decide whether to reply on the Northern Ireland Department.

Mr. Caborn: I have no intention at all of replying to those questions, Mr. Gale, but I thank you for your ruling. I shall try to answer the debate effectively, but I preface my remarks by pointing out that all the powers in this Bill were included in the London Olympics Bill—exactly the same powers, exactly the same wording—and were accepted without a vote or any expressions of concern.

Mr. Swire: May I respond to that?

Mr. Caborn: I would like to make some progress. [Interruption.]

The Chairman: Order. The Minister is not giving way.

5.45 pm

Mr. Caborn: Amendment No. 76 would mean that the chairman of the lottery fund was unable also to represent the interests of England, Scotland, Wales or Northern Ireland in the chair of the relevant country committee. Those committees were set up to exercise functions in relation to devolved expenditure in each country. I see no reason why the chairman of the Big Lottery Fund should not be able to chair one of those committees. After all, the committees and the fund work toward the same objective.

Amendment No. 78 would prevent the Secretary of State from varying the number of members of the Big Lottery Fund from 12 following consultation with
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devolved Administrations. That appears short-sighted. Not only would it make the arrangements inflexible, but restricting membership to a set number would make it difficult to cope with future circumstances.

I see no need for amendment No. 75, which specifies that members should be appointed for no longer than five years. That is similar to the standard Nolan procedure, which allows members appointed to public bodies to remain in post for no more than 10 years.

Adam Afriyie: Would the Minister be prepared to have a range of numbers of board members, say between 12 and 15, or 12 and 16? If he leaves it open-ended, he may be liable to the accusation that it would allow gerrymandering.

Mr. Caborn: Anybody would think that we were reinventing the wheel. A lot of non-departmental public bodies have been set up over many years. The procedures in the Bill are no different from those used when setting up the New Opportunities Fund. They can be found in the London Olympics Bill and elsewhere. They have been operating rather successfully for many years. We do not need to reinvent the wheel. I see no need for amendment No. 75.

Amendment No. 80 seeks to change the provision on tenure in paragraph 4(1)(b). It would allow the Secretary of State to remove the chairman or members if they were deemed to be unfit or unable to discharge the functions of the office. If the member or chairman were unwilling to perform the functions they were employed to undertake, regardless of whether they were unable or unfit, the Secretary of State should have the power to remove them.

When reappointing a member, the Secretary of State would normally seek feedback from the chairman. This is the real world that we live in—I hope—and such provisions have successfully been in operation for many years. The Secretary of State would get feedback from the chairman on a member’s performance; it would be done informally, but it is normal practice nevertheless. If a member were deemed not to be performing as required, the Secretary of State would follow the procedures in paragraph 4.

Amendment No. 81 would reduce the Secretary of State’s power to remove a member from office, as it would mean that his decision would need to be ratified by two-thirds of the members. That seems unnecessary, as I am certain that the Secretary of State would have consulted the chairman of the board before using the power, and one would expect—again, it happens in the real world—the chairman to have consulted fellow members of the board on such issues.

Amendment No. 83 is about the country committees, which have an important role to play in the delivery of the fund. They represent a significant devolution of power from the devolved Administrations, and they are established to exercise the fund’s function in relation to each country’s expenditure. It is vital that those committees function
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effectively and that they have the right membership. It is right that the Big Lottery Fund should select and propose their membership, but the Secretary of State or the relevant devolved Minister should have the final say over who is appointed. A requirement only to consult under amendment No. 83 would not be sufficient.

Mr. Walker: What would happen if the Secretary of State or someone from the Scottish Parliament or the Welsh Assembly had a fundamental disagreement about an appointee to the board? Is that likely to happen, and what procedures would be in place to break that deadlock if it did?

Mr. Caborn: There is one step before that: broadly speaking, people tend to be vetted by the public appointments panel, and the Nolan procedures are followed. Normally, people put their names forward as a result of an advertisement. That process usually results in boards finding fit and proper people to serve on them. It is not a process that allows a person to say, “You can sit on that board.” It is not like that in the real world. That is not allowed because of what happened under previous Administrations. We now have the Nolan procedures and a central list, and there is transparency. People are appointed through those normal procedures, and I do not believe that anyone could get over those hurdles who was not a fit and proper person. The Big Lottery Fund is quite happy with the arrangement, and we do not believe that it would hinder the fund’s ability to recruit a good executive committee.

Amendment No. 86 seeks to prescribe a quorum. That is totally unnecessary. There is no reason that the fund cannot decide that matter for itself, as do other public bodies.

Amendment No. 87 seeks to provide that the validity of the proceedings of the fund or a committee would be affected by a defect in the appointment of a person as chairman. Such a provision would be unusual and potentially awkward if the board’s proceedings were affected because of unforeseen problems in the appointment of a chairman.

Mr. Turner: I take the Minister back to my comments on amendment No. 83. You, Mr. Gale, said that the Minister was allowed to answer my point on Northern Ireland, but he has not done so.

Mr. Caborn: I will come to that.

Mr. Turner: I apologise.

Mr. Caborn: Apology accepted. I shall now answer the Northern Ireland question.

The Department of Culture, Arts and Leisure works under the direction of the Secretary of State for Northern Ireland during suspension or the direction of the First Minister once the suspension is over, so there is no need to change the reference to the Department.

Adam Afriyie: May I be clear about one of the Minister’s earlier answers? Is there no constitutional difference between the appointment procedure for the chairman of the Big Lottery Fund board and those for
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the chairmen of the Heritage Lottery Fund and the other funds? Is it exactly the same procedure with the same powers?

Mr. Caborn: Yes, it is the same procedure, but obviously the powers are different because one is a bigger fund. The procedures, including the Nolan procedures, are exactly the same as for any other non-departmental public body.

Mr. Swire: Goodness me. I do not know where to start. I thought that the amendments were helpful; I thought that they would reinforce the fact that there is clear water between the Secretary of State and the board, which would help the Minister to show those outside this Room that he is committed to the Big Lottery Fund board having genuine independence from the Secretary of State. By rejecting all the amendments, he has yet again shown that that is not the case.

At the beginning of his speech, the Minister implied that the Opposition were once again being opportunistic or over-zealous by tabling amendments to the schedule because the London Olympics Bill had been virtually nodded through. I cannot say much about that Bill—I was not a member of the Committee that considered it—but that may be because the Conservative party and the Liberal Democrats largely agreed with what the Bill was trying to do.

My party is reassured that the Olympics has a greater chance of success due to the fact that two Tory peers—Lords Moynihan and Coe—are pretty much in charge of it. We are supportive because we know that the Olympics and everything around it will probably be run pretty well. [Interruption.] I say “pretty well” because of a legitimate concern about lottery overspend. The creation of the Big Lottery Fund and the potential for lottery overspend at the Olympics may not be unrelated.

Mr. Caborn: Is the hon. Gentleman saying that only members of the Conservative party will have any credibility as chairmen of those organisations?

Mr. Swire: That is certainly not what I said. I was saying that, in that case, we are reassured that two people with sound business experience, who happen to be Conservative peers, are in charge. I would say that the Olympics had a better chance of success than other enterprises being run, with rather less experience, by the present Government—I cite the example of the great success of the dome.

The Chairman: Order. We have done the dome today. I can find many things in schedule 2, but I can find nothing relating to qualifications. The hon. Gentleman is possibly out of order.

Mr. Swire: I stand corrected, Mr. Gale.

The real problem here, if we do not press the amendment to a Division, is what we will allow to slip through under the net. We would effectively give the Secretary of State total control over the appointment of the board and the ability to remove people as and when she saw fit. We would give her the power to expand the board if those left were still unwilling. If she
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had sacked so many of them that they had be given a vestige of independence, she could pack it full with placemen. According to the Minister, the Secretary of State will rely on feedback. If the chairman is not up to standard, the board will rely on feedback and the Secretary of State will presumably deliberate and pronounce sentence on the wretched chairman.

I am not a lawyer, but I do not know that the highest court of appeal in the land can be the Secretary of State who has originally nodded through the appointment and then made a decision based on feedback. What rights will this poor fed-back chairman have? No doubt, like most of my constituents who reach the end of the road in their cases, he would scoot off to the European Court of Human Rights. Undoubtedly his rights would have been infringed. I hope that the Minister will answer those 10 points. That was a joke. That is what we will be nodding through. The Secretary of State will be the highest appeal for this poor fed-back chairman and so it goes on.

Mr. Foster: In view of the time and the Minister’s intransigence on this important matter, does the hon. Gentleman agree that there may be some merit in seeking permission to withdraw the amendment now in order to regroup and find an alternative method of addressing the issue at a later stage?

Mr. Swire: That was extremely elegantly put by the hon. Member for Bath. It is almost bath time so perhaps we should not delay proceedings any further. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Swire: I beg to move amendment No. 91, in schedule 2, page 21, leave out line 22.

The Chairman: With this it will be convenient to discuss the following amendments: No. 88, in schedule 2, page 21, line 22, leave out ‘the Secretary of State’ and insert ‘Parliament’.

No. 89, in schedule 2, page 21, line 23, leave out ‘the Secretary of State’ and insert ‘Parliament’.

No. 92, in schedule 2, page 21, leave out lines 25 to 27.

No. 90, in schedule 2, page 21, line 26, leave out ‘the Secretary of State’ and insert ‘Parliament’.

No. 93, in schedule 2, page 21, leave out lines 28 to 31.

Mr. Swire: I will try to speed up on this group of amendments as I suspect that we will not get much agreement from the Minister on any of them. They are designed to flag up our concerns about the financial management of BLF staff. I will go quite quickly, but my hon. Friend the Member for Windsor (Adam Afriyie), who has a distinguished business career involving hiring and firing and has accumulated mammoth wealth such as the BLF members will be in charge of distributing, may have his own views about the way the board has been set up and its members are being financially rewarded.

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We are concerned about the Secretary of State’s ability to become involved in levels of remuneration and compensation. She will be responsible for hiring, firing, paying and compensating them. She will be almighty in these matters. I suspect that the Government will find themselves with a rather compliant board because these people will doubtless want to be hired, remunerated and compensated should it all go horribly wrong. This is really a series of probing amendments.

In amendment No. 91, we suggest leaving out line 22, which is bad news for those who thought that they were going to get rich on the board of the Big Lottery Fund, because we suggest that we do not remunerate any of its members. In that way, we will get people who genuinely want to serve their communities. The Minister keeps referring to the public appointments board and the Nolan rules, but I thought that Nolan was more to do with standards affecting public life than with appointments, although the two no doubt cross over.

6 pm

In amendment No. 88, we suggest leaving out “Secretary of State” and inserting “Parliament”, because Parliament, not the Secretary of State, should decide on the terms and conditions of employment for the chairman and members. The provision in the Bill is another example of the concentration of power in the hands of the Secretary of State, to which we are philosophically opposed. Amendment No. 89 would also leave out “Secretary of State” and vest power in “Parliament”—that often overlooked body, which is meant to be in charge of matters in this country.

In amendment No. 92, we suggest leaving out lines 25 to 27. The schedule gives the Secretary of State total discretion over BLF board members’ pensions, pay and so on. The Minister prayed in aid the public appointments board and Nolan, so, logically, he would probably agree that such things should be determined by an independent body to avoid any question of the arrangement being too cosy.

For the sake of argument, we have paired amendment No. 92 with amendment No. 90—in fact, we did not pair them, because it is up to you to do so, Mr. Gale. Amendment No. 90 would also leave out “the Secretary of State” and insert “Parliament”, so Parliament would, again, decide who to pay.

Amendment No. 93 would leave out lines 28 to 31, removing the Secretary of State’s right to set compensation for members removed from the BLF board. The schedule is extraordinary. It states:

    “If the Secretary of State thinks that there are special circumstances that make it right for a person ceasing to hold office as Chairman or member to receive compensation, the Fund may pay him such compensation as the Secretary of State may determine.”

That is quite extraordinary, because it basically allows the Secretary of State, having received feedback that the chairman is unwilling to pursue the policy that the Secretary of State wants pursued, to say, “Right, we’ve had the feedback, and you’re not performing, so we’re
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going to sack you. But don’t worry, because before you go rushing off to the News of the World, The Sun or the Daily Mail, here is your compensation package.” Presumably, that will be paid for out of lottery funds, rather than Government funds—it will perhaps be a little more PFI off-balance-sheet accounting—and the Secretary of State will say, “Don’t worry; we’ll just shift the money around. Here’s a nice little package.” Having received that, no one would, I am sure, go to the News of the World, The Sun or the Daily Mail.

That is completely unacceptable. Why on earth should the Secretary of State have the power in “special circumstances”—those are undefined, but we will no doubt be told that the usual form applies—to compensate someone

    “ceasing to hold office as Chairman or member”?

The Bill does not say what the criteria are—perhaps that person will have been asked to stop being a member or the chairman—so things are very open. There is no suggestion as to the amount of compensation, which could be anything from £1 to £100 million, but we will no doubt be told that we are opposing for opposition’s sake and that the Bill reflects the normal way of doing things.

I suggest, however, that a new Bill that so radically changes everything else gives us a good opportunity to say, “Hang on a minute, let’s try to make the legislation better.” After all, that is why we are going through this charade of a Committee, and we hope that the Minister will realise that although we fundamentally disagree with the Bill, we are trying to make it better in the event that we must have it. So let us not always say, “We’ve always done things this way,” because that is not always the best way—not for a progressive Conservative such as I, at any rate.

Mr. Walker: My hon. Friend makes an important point. If we set a five-year fixed term, but the Secretary of State decides after one year that a person is not suitable for the job, we could find ourselves having to fork out taxpayers’ or lottery money for the remaining four years of that fixed contract.

Mr. Swire: Indeed, but I strongly suspect that it will not be taxpayers’ money. I am glad that my hon. Friend makes the distinction between lottery money and taxpayers’ money because that is the very line that the Government seek to blur in the Bill. We can be sure that if somebody is deemed not to be performing or not to fit in, for whatever reason, he will be able to be compensated by the Secretary of State for an unspecified reason for an unspecified sum from an unspecified source. That process has no place in legislation. Nobody in the private sector would take on anybody on such terms. We do not know what the Government are proposing to pay the members of the board—no doubt the Minister will say “the usual amount”, whatever that is—but I do know that the clause is very unusual. It is to be resisted, and would certainly not hold water in any private organisation in which I have ever been involved. I doubt that anybody in this Room could agree with it.

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The hon. Member for Bath is trying to speed me up. I know that he wants to leap in because he has a lot to say on this group of amendments, which is a mixture of probing amendments about the powers of remuneration and expressions of concern about the ability of the Secretary of State to have hiring, firing and compensating powers with no checks.

Jo Swinson: I am conscious of the time, whether bath time or otherwise. I support many of the sentiments expressed by the hon. Member for East Devon about the general desirability of removing the Secretary of State’s sweeping powers and ensuring that there is more accountability in decision making; for example to Parliament. However, I question whether the amendment would achieve that in the best possible way. Would it not be better to require the Secretary of State to put to Parliament the decisions being made by order, so that there was accountability? Perhaps the Minister could comment on that.

I want to take issue with the suggestion that if we reward board members, we will not get people who are genuinely interested, because such people would do it for no remuneration. I have worries about that, because not everybody is in the fortunate position of the hon. Member for Windsor of being able to give up time to volunteer for a public body without remuneration. There is a growing acceptance that when people give up their time to be councillors or to serve the public in other ways we should recognise that and ensure that they are paid. If we do not, there will be grave consequences for the diversity of the people who can serve on public bodies—not everybody can do so unpaid.

I also feel that there may be better ways to express concern about the overreaching powers of the Secretary of State.

Mr. Caborn: All the amendments concern the remuneration of the chairman or other members of the board or a committee of the Big Lottery Fund, as set out in schedule 2. The hon. Member for East Devon is right; the amendments seek to change standard provision for representation on public bodies. Equal provisions apply to the Community Fund and the New Opportunities Fund. Parliament has also approved such provisions for the Olympic distributor and the Horserace Betting and Olympic Lottery Act 2004. I can assure the Committee that the format that we propose in the Bill is tried and trusted. I see no reason why the Big Lottery Fund should be different.

Amendment No. 88 would remove the power of the Secretary of State to determine the remuneration of the chairman or other members of the board or a committee of the Big Lottery Fund, transferring it instead to Parliament. I am sure that, if this set a precedent, Parliament would be delighted to have to determine the pay and remuneration of all such committees. The Secretary of State is normally responsible for approving remuneration. Transferring that responsibility to Parliament seems most unnecessary. Remunerations change only in line with inflation, so there would be little need for the matter to go through Parliament.

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Amendments Nos. 89 and 90 are not dissimilar, in that they would remove the Secretary of State’s power to determine travel and other allowances, and pensions, allowances or gratuities to be paid by the fund.

Mr. Turner: I am not sure whether that was another guarantee, promise, offer or aspiration, but the Minister said that the remuneration would change only in line with inflation. Is he saying that at no stage in the lifetime of any of the public bodies set up under the Government has there been any alteration to the terms of remuneration other than changes in line with inflation? Or is he merely making a promise for the future?

Mr. Caborn: As to the past, I shall repeat the advice that has been given to me that remuneration changes only in line with inflation, so that there would be little need to discuss that in Parliament. If that is wrong, or if the hon. Gentleman challenges it, I shall check it, or get my officials to check it, and put my findings in writing.

Mr. Walker: Will they be full or part-time positions?

Mr. Caborn: Part-time.

Amendments Nos. 89 and 90 would give to Parliament the Secretary of State’s power to determine allowances, pensions and gratuities. As with amendment No. 88, it seems unnecessary for Parliament to determine payments such as travel allowances and pensions, as those change only in line with inflation and it would not be a good use of Parliament’s valuable time.

Amendment No. 91 would remove the power to pay remuneration to the chairman or members of the board or a committee. We need the power to pay board members when appropriate. If we assumed that members would be content to serve on the board or committees of the Big Lottery Fund without any possibility of remuneration our ability to recruit high-calibre candidates would be limited. It is important for board members to come from a wide and diverse field, and the amendment would restrict the field of candidates. If the hon. Member for East Devon is what he calls a progressive Conservative he should revisit what he said earlier.

Amendment No. 92 would prevent the fund from paying pensions, allowances or gratuities where appropriate. Not being able to do so would restrict our ability to choose the strongest candidates to serve as board members. For similar reasons we resist amendment No. 93, which, like the other amendments, would change standard provision. We cannot expect the chairman or members to serve on the board without the possibility of compensation should special circumstances require them to cease to hold office.

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Prepared 27 October 2005