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Session 2008 - 09
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Public Bill Committee Debates

The Committee consisted of the following Members:

Chairman: Mr. Martin Caton
Armstrong, Hilary (North-West Durham) (Lab)
Creagh, Mary (Wakefield) (Lab)
Davidson, Mr. Ian (Glasgow, South-West) (Lab/Co-op)
Ellwood, Mr. Tobias (Bournemouth, East) (Con)
Fabricant, Michael (Lichfield) (Con)
Foster, Mr. Don (Bath) (LD)
Hewitt, Ms Patricia (Leicester, West) (Lab)
Jenkin, Mr. Bernard (North Essex) (Con)
Main, Anne (St. Albans) (Con)
Robinson, Mr. Geoffrey (Coventry, North-West) (Lab)
Stringer, Graham (Manchester, Blackley) (Lab)
Sutcliffe, Mr. Gerry (Parliamentary Under-Secretary of State for Culture, Media and Sport)
Walter, Mr. Robert (North Dorset) (Con)
Ward, Claire (Vice-Chamberlain of Her Majesty's Household)
Wicks, Malcolm (Croydon, North) (Lab)
Younger-Ross, Richard (Teignbridge) (LD)
Mick Hillyard, Committee Clerk
† attended the Committee

Second Delegated Legislation Committee

Monday 19 January 2009

[Mr. Martin Caton in the Chair]

Draft Gambling Act 2005 (Variation of Monetary Limit) Order 2008
4.30 pm
The Chairman: Is it the wish of the Committee that the orders be taken together?
Hon. Members: No.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Gerry Sutcliffe): I beg to move,
That the Committee has considered the draft Gambling Act 2005 (Variation of Monetary Limit) Order 2008.
I welcome you to the Chair, Mr. Caton, and hon. Members to the Committee. Hon. Members will be aware that society lotteries are lotteries run by charities and sport and leisure clubs to raise money for good causes. Few societies reach the current limits on the maximum proceeds and prizes for individual draws, which are set at £2 million and £200,000 respectively. However, the Lotteries Council and the Hospice Lotteries Association have argued that those limits hold them back from raising significantly higher sums for good causes, in particular by preventing several societies coming together to promote a larger, one-off annual draw, such as a Christmas bumper draw, and those arguments have been echoed in Parliament.
The Government have always been willing to consider representations made on behalf of the charities and other bodies that benefit from society lotteries. In response to those arguments, I announced in July last year my intention to raise to £4 million the maximum proceeds for individual society lottery draws. That will allow a top prize of up to £400,000 for each draw. I would like to reassure hon. Members that we do not intend to increase the limit on annual maximum proceeds for society lotteries, which remains at £10 million. The maximum £25,000 prize for society lotteries whose proceeds run below £250,000 will also remain unaltered.
I believe that the increase from £2 million to £4 million is wholly consistent with the licensing objectives of the Gambling Act 2005. It achieved a statutory balance between providing a valuable boost to hospices and other bodies that raise funds through lottery draws and retaining the character of society lotteries. That view is supported by the Gambling Commission, which has advised that there is no evidence that such an increase will give rise to irresponsible gambling concerns.
I also recognise the unique position of the national lottery and its enormous contribution to the public good. I would like to reassure hon. Members that the Government have considered the impact that the proposed increase in proceeds might have on the national lottery and believe that it does not threaten income for good causes. Society lotteries operate at a scale that is quite different from that of the national lottery. For example, the total proceeds from all society lotteries in 2005-06 amounted to £138 million, which is low when compared with the £5 billion generated by the national lottery in the same year.
Moreover, both types of lottery target different markets: people generally play society lotteries to support a cause, rather than to win a prize, whereas playing the national lottery is about the possibility of winning a life-changing amount, so the good cause is a secondary consideration. I remain of the view that the suggested increase in the limit on society lotteries will not affect that difference, but to ensure that it does not, I will ask the National Lottery Commission to monitor the impact of the revised limit on the national lottery and for a report to be made three years after implementation. I refer the order to the Committee.
4.33 pm
Mr. Tobias Ellwood (Bournemouth, East) (Con): It is pleasure to work under your tutelage today, Mr. Caton. I am grateful that we are able to take the two orders separately, because it is important that we separate the needs and requirements of the national lottery from those of slot machines and the bingo and arcade industry. It is worth reminding ourselves that it was a Conservative Government who introduced the national lottery, and the idea was to provide money for good causes. Unfortunately, we have seen an erosion of that original pledge and successive raids on the national lottery, most notably that to prop up the spiralling costs of the Olympic games.
The Minister differentiated the two audiences: those who might participate in the national lottery to win a life-changing amount; and those who might want to support their church. However, there is a national threshold of goodwill whereby any individual will be willing to give only so much to charity. It is right that the national lottery has its attractions, but churches and other organisations will now be able to team up and offer a substantial, possibly life-changing, prize amount. Will he comment on whether there will be an impact on the amount raised by the national lottery if churches and charities choose to take advantage of the increase in the amount that can be raised?
I do not wish to delay the Committee any longer than necessary because the next statutory instrument is more controversial. I hope that the Minister can reassure me that the national lottery will not lose out, and that there will be an opportunity to take stock of the impact of the changes in a year’s time. Will the Gambling Commission or the National Lottery Commission look after the legislation? Perhaps the National Lottery Commission is expected solely to look after the national lottery per se. If those concerns are answered, my party will support the statutory instrument.
4.36 pm
Mr. Don Foster (Bath) (LD): I, too, am delighted to serve under your chairmanship, Mr. Caton.
The Minister knows only too well my concern over the urgent need for research into the impact of the fixed-odds betting terminals in betting shops up and down the country. There is a confusion in some people’s minds when playing lottery-style games in betting shops, which is relevant to the order. We hope that people will join society lotteries because they support good causes. People often think that they are helping a charity by playing lottery-style games in betting shops. Of course, they are not.
On a number of occasions, I have urged the Minister and his predecessors to clamp down on lottery-style games. According to Camelot, if that is done properly an additional £45 million a year could go to good causes. Alternatively, it might persuade more people to play society lotteries. As the Minister and others have said, society lotteries are crucial for many charities. For example, the hospice movement does a fantastic job in this country with little or no direct support from Government. It relies on fundraising activities to continue its important work.
I am therefore delighted that the Government have put forward measures that will help society lotteries, although they do not go as far as some who have promoted changes to the limits had hoped. As the hon. Member for Bournemouth, East said, a number of charities will be allowed to group together for a higher prize draw, which will reduce their costs and, hopefully, attract more people. There has been pressure on the Minister from the national lottery operators not to enable such reductions because doing so could harm their work in supporting good causes.
I am delighted that the Minister stated clearly the magnitude of the figures involved. His figure was £135 million a year, but I understand that it will be slightly higher at about £170 million a year. Whichever is right, it is small beer compared with the £5 billion suggested by Camelot. Camelot’s argument that this measure will be damaging does not stack up. It is also important to provide additional support to society lotteries because when people play them they give a much greater proportion of their £1 directly to the charity: 59p, compared with 28p or 29p with the national lottery.
Michael Fabricant (Lichfield) (Con): Does the hon. Gentleman also recognise that many people would not dream of entering the national lottery, but in Lichfield, for example, they would enter a lottery for the St. Giles hospice, believing it to be a good local cause. Rightly or wrongly, they do not consider that as gambling. In many cases this is not either/or; it is true additionality.
Mr. Foster: The hon. Gentleman is right, but perhaps we should constantly remind our constituents that if they truly want to give direct support to a charity, by giving £1 using gift aid they give £1.28. If they use a society lottery, 58p or 59p goes to the charity, whereas through the national lottery only 28p goes to the good cause. So, the best way to support the kind of constituency-based causes that the hon. Gentleman describes is undoubtedly direct giving. However, we all love a bit of a flutter and a bit of excitement and that brings in a new cohort of potential supporters for the charity.
I end as I began, by saying that this is the soft end of gambling. I too have communicated directly with the Gambling Commission and have asked it to assure me that the measures proposed today will have no impact on the three licensing objectives. I have received that assurance. The order is a measured response to what is requested and it has my full support.
4.42 pm
Malcolm Wicks (Croydon, North) (Lab): I support the point raised about the need to be on the watch against serious gambling addiction. This is not directly related to the measure, but I wish to prompt the Minister to comment on how his Department is tackling that issue. A flutter on the lottery is fine, but at a time of economic recession, when sadly we will see rising unemployment and all the dangers of debt, the last thing we want is to encourage that kind of gambling, which, like drug addiction, can destroy individuals and their families.
Mr. Ellwood: On a point of clarity, is the right hon. Gentleman able to contain some of his remarks until we discuss the second statutory instrument, when they will fit in nicely? I hope that the Minister will then be willing to expand on the strategy. This is the only opportunity—as the right hon. Gentleman suggests—to debate the issues. The lottery is seen as a soft form of gambling; slot machines are another issue. They will be considered in the next debate, and, if he can hang on, it will provide us with a great opportunity to look in detail at these important issues.
Malcolm Wicks: These days, without a civil servant’s note to guide me, my timing is all over the place. I hope that the hon. Gentleman will regard my remarks as prescient. I have now had my say, and that is all that I wanted to say.
4.44 pm
Mr. Sutcliffe: I thank hon. Members for their contributions. I heartily agree with the points raised by the hon. Members for Bournemouth, East and for Bath and my right hon. Friend the Member for Croydon, North. There is clear support for the order and I will therefore not speak at length.
The hon. Member for Bath was right to distinguish between soft and hard gambling. We will have to deal with that problem when we consider the next order, and we also have to look at the current context of gambling, what gambling means to different people and how we deal with problem gambling.
The order is about right; it will not impact on the national lottery. To again reassure the hon. Member for Bournemouth, East, we will ask the National Lottery Commission to look at the effect of the order in due course to ensure that it does not have an impact on the lottery. The Gambling Commission has clearly done what the hon. Member for Bath mentioned: it has assured us that it does not see any impact regarding problem gambling. With those assurances—[Interruption.] What did I forget?
Mr. Foster: The Minister is clearly about to conclude his speech, but he might care to say something about a number of points that have been raised. For example, will he tell us what action the Department has in mind for tackling the problem of lottery-style games? While he is at it, will he tell us whether any progress has been made to move towards a new taxation system for the national lottery, such as a gross profits tax, which I have been urging him to do for two years?
Mr. Sutcliffe: I apologise to the hon. Gentleman. He raised a number of issues, but I thought that some of them might come up in the next debate. He raised the issue of FOBTs. I am concerned about that, and I referred the issue to the Gambling Commission for consideration of the impact that they have, particularly on problem gambling. Perhaps we will be able to discuss the matter further. Taxation is a matter for the Treasury and, as the hon. Gentleman knows, I have given the Treasury my view.
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