National Lottery Bill

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Mr. Swire: There is a simple way around the problem that would avoid lawyers and everything else. The Minister should echo the words of his own Prime Minister about additionality. The Prime Minister summed it up clearly. All the Minister and the Secretary of State need do is tell all those involved in the national lottery—whatever distributor it is—that they must adhere to what the Prime Minister said. There would then be no recourse to law, because there would be no question of additionality being breached as far as we were concerned.

Mr. Caborn: I hear what the hon. Gentleman says—he has laboured the point very hard. All I am saying is that we have accepted the principle of additionality and will continue to do so. We do not want to go down the cul-de-sac which could well lead us—or if not us, the funds themselves—into all types of legal actions. We are putting on the statute book provision for broad directions to distributors agreed by Parliament. The distributors are accountable to Parliament in a number of ways and we are trying to ensure that the information coming back is fuller and sounder. That is why Stephen Dunmore helpfully offered to quantify where the Big Lottery Fund distributors believed their monies would be additional.

Adam Afriyie: I am not entirely clear. Does the Minister agree with his Prime Minister’s words on the definition of additionality?

Mr. Caborn: Yes.

The matter is one for distributors and their approach illustrates the extent to which they are willing to take comments on board and deal with them in a pragmatic manner. We do not need to legislate to acknowledge the contribution that the voluntary community sector makes to the social, cultural, economic and political life of the nation—a contribution which we value and indeed support.

Mr. Walker: We in Hertfordshire have a number of charities that perform an extremely useful role for many underprivileged people and people who suffer from addictions. At the moment, they get grants from local authorities. They are concerned that local authorities will start to remove those funds if they see the charities getting more lottery money—particularly as local authorities are under some financial pressure. The authorities might well say, “They’ve just got ten grand from the national lottery, which relieves us of that responsibility”. Will the Minister use his platform in this Committee to send a message to local authorities that that will not be tolerated?

Mr. Caborn: I put it clearly on the record that it would be totally unacceptable. We have seen the potential for that to happen, but a displacement of that
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nature is not what the lottery is for. That is not the intention and local authorities should not act in that way. I can put it no more strongly than that.

Mr. Turner: The Minister’s last statement was at least a partial definition of additionality as far as his Department is concerned, but earlier he referred to the guidance and draft directions that tell the Big Lottery Fund about the principle of additionality. Perhaps the Minister cannot remember exactly what he said, but I got the impression that he was saying the Big Lottery Fund was being asked to have regard to the principles of additionality.

Mr. Swire indicated assent.

Mr. Turner: My hon. Friend nods his head. If the Big Lottery Fund is being asked to have regard to those principles, then additionality must mean something in the Minister’s mind. To what is the Big Lottery Fund being asked to have regard and is it in the direction?

Mr. Caborn: It means additional to public expenditure. I will not be drawn for the simple reason that I do not want to have a definition in the Bill or a provision such as new clause 1. Rightly or wrongly, we believe as previous Administrations have believed. We do not want to create a minefield for the distributors that would lead into unhelpful litigation actions.

What we believe is necessary is that we reassure the public out there. They ask for additionality. We broadly agree with that. The Prime Minister’s statement is accepted by the public and every survey done says that, yes, they want additionality. In the last survey, which was on the Big Lottery Fund, their concerns were down at 6 per cent. I know of no other major survey that has shown a concern that additionality is not being observed by the distributors.

I am fairly content. No Administration has been tied down into defining additionality and on the other side of the balance sheet is the fact that the general public believe that Administrations of both political persuasions have tried broadly to adhere to the question of additionality.

1.30 pm

I am going one step further. To ensure that the House can have a sound and informed debate on the subject, which it probably could not do before, the annual report of the chief executive of the Big Lottery Fund, Stephen Dunmore, will attempt to show when additionality has been used. That is a move in the right direction, as it will lead to an informed debate, by Select Committees and the like, and it will give the reassurance that I think is necessary.

Mr. Swire: I am partially reassured. By signing up to the Prime Minister’s statement, the Minister has gone some way to reassuring us, because the Prime Minister was specific about additionality meaning in addition to Government spend. However, the Minister’s refusal to include such a provision in the Bill leads me to ask whether his echoing of that statement is a wish, a commitment, an undertaking, a pledge or a ministerial aspiration.

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Mr. Caborn: All of them; and, as a lawyer would say, I will hold to that interpretation as well. I will not be drawn down that road, as I said earlier, so the hon. Gentleman can make whatever interpretation of it he likes. I assure him that it ain’t going on the face of the Bill. That will ensure that the lawyers cannot drag it through the courts, should they want to. However, we will try to assist the House by ensuring that hon. Members can have an informed debate on the annual report; and the chief executive will attempt to explain to Parliament how he and the board have complied with the directions given.

Mr. Turner: Will the Minister give way?

Mr. Caborn: I will not give way again on that point.

I am recorded as saying on Second Reading—it has been prayed in aid many times—that it is important that additionality be embodied in future legislation. What I meant, of course, was that consultation showed that the public regard the principle as important and that we should continue to follow that policy when preparing future legislation. That is not the same as including a requirement in the Bill for secondary legislation. I cannot expect legally to be able to differentiate lottery and taxpayer funding. Even if I tried, it would not, for example, stop a local authority seeking to withdraw or reduce its funding once a lottery grant had been made—the point made by the hon. Member for Broxbourne (Mr. Walker). It is for the Treasury to police additionality. If my Department were ever to seek to replace its funding with lottery funding, the Treasury would rightly reduce its funding by the same amount.

I have tried to explain why we are doing what we are doing. People might not agree, but we have at least tried to explain what we want to achieve. We believe that it will be in the best interests of those who distribute lottery funds, and it will also allow Parliament to debate the matter in an informed way. When all is said and done, the general public seem to be content with the principle of additionality and its operation. For those reasons, I ask the hon. Member for Bath to withdraw the new clause.

Mr. Foster: I find myself in some difficulty. The Minister said that in consultation the public say that they want additionality; then he told us that the principle had been broadly adhered to by past and present Administrations. I do not know how the Minister can come to that conclusion if we do not have some understanding of what we are talking about.

I accept that including a precise and tightly worded definition in the Bill could lead to problems—the Minister spoke of a lawyers’ paradise. I made it clear that the new clause would not place a definition of additionality in the Bill, because doing so would cause a variety of difficulties. The Minister told us that he assiduously studies the amendments that he wishes to resist, so he will know that the word additionality does not appear in the new clause. However, he has spent a lot of time talking about additionality and the problems that would arise if a precise definition were given. I suspect many members of the Committee
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would be sympathetic to his views. My difficulty is that the Minister has not given any reasons why the new clause should be resisted.

I am very confused by the right hon. Gentleman’s response. When I was referring to the National Audit Office’s report I could hear the Minister berating me. When I quoted a section that talked about the issues of accounting practice and who would make announcements, he demanded from a sedentary position, “What’s this got to with additionality?” As the record will show he later said, “But this is about accounting practice.” Yes it was, because that is what the new clause was about. New clause 1 talks about the need for guidance from the Secretary of State including reference to

    “the means of insuring transparency in the funding of projects which receive both national lottery and government funding in relation to accounting practice, and public announcements.”

I made the point that the NAO is deeply concerned that the Government do not have it right and so there is a need for guidance on this matter. The Minister has not told me why it would be a bad idea for the Secretary of State, after consultation, to give guidance on those matters.

Mr. Caborn: The hon. Gentleman answers his own question. The report he referred to was the Department for Culture, Media and Sport annual report. It stated that we had responded to the NAO report and that the difference between public and lottery funding was somewhat clearer than before. Therefore we did respond to the NAO report.

Mr. Foster: With respect, the Minister is confusing two different reports. The DCMS report said that the Minister expressed the view that Administrations past and present have broadly adhered to the principle of additionality. That is not the view of the DCMS Committee, which said:

    “We believe that the additionality principle is being eroded”.

But I was not referring to that. I was referring to the NAO report which said that there was a need to ensure clear separation between the two, to ensure that the Government were not announcing initiatives that were lottery distributor initiatives and that the accounting stream should be cleared. I gave an example, not from two years, one year or six months ago, but from the current DCMS website, which shows a continuing confusion between the two.

I am in great difficulty because I have heard a diatribe from the Minister opposing an amendment that has not been tabled. There is no amendment seeking to define additionality. I do not know what the Minister’s diatribe was about, although I have some sympathy with what he was saying. I also have some sympathy with those who have been arguing that we cannot possibly have a report on whether additionality has been adhered to unless we have at least some degree of understanding of what we are talking about. That is why it is suggested that guidelines be issued in relation to the various matters that are referred to in the new clause and have been touched on by other hon. Members.

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Mr. Turner: The hon. Gentleman will have heard the Minister’s response to my most recent intervention. He said that additionality refers to expenditure in addition to public expenditure. I hope that I have got those words right. I tried to intervene again, but the Minister did not take my intervention. It seems to me that those words are self-defining. We all know that money spent that is not public expenditure is additional to public expenditure, but that does not explain what the Prime Minister, or the Minister in agreeing with him, meant by additionality in the terms that we have been debating it, which is whether expenditure should or would be covered by public expenditure.

Mr. Foster: I hear the hon. Gentleman’s comment, but attempting to agree or disagree with him, even agreeing or disagreeing with the Prime Minister, is dangerous when debating new clause 1. It is clear that there is some confusion—people’s views and understanding differ. The new clause proposes wide consultation with a range of bodies to see whether we can come to some broad understanding under the themes and headings provided. It does not give a precise legalistic definition, but it provides an approach to test additionality.

I do not want to answer the hon. Gentleman’s question and give my own definition. What worries me is that the Minister does not want to give a definition, yet prays in aid the view of Mr. Stephen Dunmore, whom I hold in high regard. The Minister tells us that Mr. Dunmore will present a report that quantifies and describes how additionality has been delivered, and that presumably defines additionality. Mr. Dunmore is apparently capable of doing that, so it seems odd that we cannot work on a definition collectively, taking in the views of Mr. Dunmore, the Prime Minister, previous Prime Ministers, the Minister and anyone else who wants to have a go, so that we reach a common understanding.

Mr. Caborn: Will the hon. Gentleman give way?

Mr. Foster: I shall give way to the Minister, who has at long last read the new clause and will now tell me what it says.

Mr. Caborn: I have read the new clause. I rise merely to ask the hon. Gentleman to clarify and to interpret it, because although it does not mention the word “additionality”, it tries to define it. The new clause provides that the Secretary of State—not Stephen Dunmore—should

    “issue guidance to the distributing bodies on the distribution of lottery funds, including reference to . . . the distinction between essential and desirable government expenditure . . . the distinction between core central government expenditure and lottery funding . . . the distinction between local government expenditure and lottery funding”.

I have no disagreement with the hon. Gentleman. That is an interpretation. It asks the Secretary of State to give guidance to the distributing bodies on the definition of additionality. However, that is a million miles away from the chief executive of the Big Lottery Fund saying that he accepts in good faith what Parliament has asked us to do on additionality.

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The hon. Gentleman knows that we are putting legislation on to the statute book. We are not writing an annual report, important though that may be to informing the debate. I am not against trying to define additionality. Subsection (1)(b)(c) and (d) of the new clause tries to do that honourably, but I am not prepared to go down that road because I do not think that it is in the interests of the distributors or the lottery in the long term.

Mr. Foster: In all fairness to the Minister, I think that he lost most of us with that argument. The new clause does not say that there has to be a definition. It refers to areas in which a discussion should take place.

The Minister should think through some of the things that he has been saying during the passage of the Bill. When it suits his purpose he tells us that we should not have definitions; at other times he says that we must have precise definitions of words that some of us do not think need to be defined. To use an example picked at random schedule 1 deals with licensing procedures. We had a debate the other day about whether a licence should be issued to a person who is “suitable. The words used in the schedule are that the commission must be

    “satisfied that the applicant is a suitable person to promote the lottery or lotteries”.

We have only to read down a few lines to see that it is crucial to define the word suitable; we cannot run the risk of a lawyer’s nightmare there, so we have to have a definition. “Suitable” is clearly defined in terms of the integrity, competence and financial circumstances of the applicant. In one set of circumstances the Minister thinks that it is important to have a definition to avoid the lawyers’ paradise, but in other circumstances we should avoid having a definition because having one will create a lawyer’s paradise. The argument does not work both ways.

1.45 pm

My problem is simple: I have not had a response from the Minister to new clause 1. I have had a response to an amendment that he thought was tabled, but it is not the amendment that I proposed. It strikes me that rather than delay the Committee now, because this is clearly an issue to which the House will want to return, we would do well to accept that so far the Minister has not marshalled his arguments well. He accused me of not presenting the case for the new clause particularly effectively, so perhaps both of us should go back to the drawing board and find another way of approaching the issue. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

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New Clause 2


    ‘After section 25(1A) of the National Lottery etc. Act 1993 (application of money by distributing bodies), insert—

    “(1B)   In determining how to distribute money in accordance with subsection (1) a body shall have regard to maintaining the reputation of the National Lottery and the distributing bodies.”.’.—[Mr. Swire.]

Brought up, and read the First time.

Mr. Swire: I beg to move, That the clause be read a Second time.

The new clause seeks to address the national lottery distributors having some recourse to a reputational impact clause to protect them from making awards that could negatively impact on that distributor as a whole. We have seen that happen in the past. I do not want to rehearse this late on in the Bill all the stories about the fattening of Peruvian guinea pigs and some of the other stories that have come out of national lottery grants over the past seven or eight years, but each and every one in some way undermined the national lottery.

That might not have been evidenced in sales of lottery tickets, but the net result is that Camelot, for instance, was meant to have delivered far more money for good causes than it has. When it won the last licence bid in 2000 it was meant to raise up to £15 billion for good causes; five years into the seven-year licence it has delivered only £7 billion. By the end of its contract in 2008 it is still expected to fall almost £5 billion short. So there was not much expectation management. One therefore has to look at anything that will threaten the health of Camelot; of the game; and of the distributors, which in turn would so affect, potentially adversely, all those good causes that desperately need the money.

I happen to note that a chairman of one distributor whom I spoke to in the past said that they rarely needed a reputational impact clause. In the previous debate on new clause 1 the Minister spent a lot of time talking about a lawyers’ paradise. He also talked about common sense. It is my submission that the new clause is common sense in that it gives the distributors that power.

In terms of it being a lawyers’ paradise, what was happening before, particularly with the New Opportunities Fund, is that some of the awards were being made and the chairman of the distribution body was wholly unable to resist allowing the grants to be made, even if he had thought that they were in some way inappropriate because there was no reputational impact clause.

I remember being told that the problem was that the strange causes that attracted money—the same causes that got into the newspapers—were surrounded by teams of lawyers waiting to challenge the distributor for being prejudiced against the cause for which they were seeking funds. That went on to such an extent that it was almost incumbent on the distributor, and easier, to give in and make those awards rather than face the barrage of lawyers and others with a vested
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interest in that politically correct atmosphere. Inappropriate grants were made as a result, as I am sure the Minister would agree.

As we are faced with a new Bill, it is time to introduce something to give more power to stop that happening in the future, a view that is shared on both sides of the House. The hon. Member for Glasgow, South (Mr. Harris) was very keen that the Government should exercise powers of prescription over the Big Lottery Fund to avoid grants that damage the lottery as a whole, and he is absolutely right. If the Government are going to prescribe, why not also prescribe some protection so that the lottery as a whole cannot be damaged by a repeat of those inappropriate grants?

We all want the lottery to prosper; it is probably the only thing that unites the Committee. The Opposition and the Government have not really agreed on anything; the Minister conceded on one amendment, which I withdrew as a result, so we end the Committee stage unable to reach agreement on almost every clause of the Bill and on the simple definition of the principle of additionality, even though the Prime Minister himself defined it clearly. Incidentally, we now hear that the Minister concurs with the definition. It is always nice when a Minister agrees with his own Prime Minister.

It is perfectly clear that we are unable to reach a common agreement on the principles of additionality, so I repeat the words of a letter dated 1 November—it is hot off the press—from Sir John Major to Denis Vaughan, who was very involved in the early days of the lottery, which states:

    “It is scandalous how the Government have so emasculated the original purpose of the Lottery and I do take every suitable opportunity to raise this matter publicly. I shall continue to do so until the resources that were intended for the original good causes are returned to them. I am delighted to see that you have the same ambition.”

If someone like that is uneasy, it could have an effect on the lottery because people will be worried that it is being misappropriated and becoming another Government spending Department, without the strictures that apply to other Departments. If 50 per cent. of lottery funds are distributed by a single distributor under tremendous prescriptive powers from the Government, I wonder how long it will be before there is just a single lottery distributor under the Government’s prescriptive powers. Then there will effectively be another Government spending Department.

I submit that all of that is relevant because it creates a sense of unease about the national lottery at a time when we need it to exceed expectations, not to under-perform, as Camelot has, in distributing funds as it was intended to do. There is to be a new Olympic lottery game and it is critical that there should be a funding stream or there will be a large shortfall at the end of the Olympics which none of us wants.

The Committee is in agreement that we want the national lottery to prosper, even those who were doubting Thomases when the Conservatives had the original idea of a national lottery have come to realise that it has not impoverished the least well off; indeed
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it has nourished aesthetically, artistically and, on occasion, even spiritually, which Government were not in a position to do, or had no desire or capability to do. We accept that the national lottery is a good thing, so, we must look at ways of nourishing it, and making it grow in the way we want it to grow, so that more money can go to the causes that we want it to go to, always bearing in mind that it must not grow at the expense of charities that, as we have heard, are better recipients of direct funding than even the national lottery can give.

If we accept all the arguments that we want to do everything that we can to ensure that the national lottery is a success, let us put to one side our disagreements about the creation of the big lottery fund, the prescriptive powers of the Secretary of State, and the breach of additionality, as we see it. Let us put all that to one side, and look at the clause, which is very simple and non-partisan and shows common sense. It would give the powers to where they are needed, so that proper grants can be made in good faith, and we will see a cessation of attacks on the lottery as a whole in the national press.

Jo Swinson (East Dunbartonshire) (LD): The hon. Gentleman has said that there is a degree of agreement on the Committee. Certainly, everybody would agree that the reputation of the national lottery must be preserved. It is important to the continued success of the national lottery, in particular, if people are to keep playing and maximise funding for good causes. In many ways, after reading the amendment, it is difficult to see how one might disagree with the statement that

    “a body should have regard to maintaining the reputation of the National Lottery and the distributing bodies.”

Equally, however, I feel some unease with that, partly, for example, because it is not clear why it needs to be enshrined in legislation. Members of the bodies that are appointed must be fit and able to discharge their offices, so one would expect that, in acting professionally, they would in any case have regard to the reputation of the lottery and the body on which they serve.

Mr. Swire: I have no doubt that those who have to distribute funds are good people of character. However, the problem is that they have no defence mechanism that will allow them to stop making awards. That is the point. The clause is not in any sense to do with the quality of the people making the distributions, but about giving them the protection. That is what the clause seeks to do.

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