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Lord McIntosh of Haringey: My Lords, the noble Lord has asked me so directly and with such force that I cannot resist answering now his question on where the interest will go. When the Secretary of State criticised the Camelot directors for their bonuses, one of the results of that criticism was an assurance from Camelot that the interest will go to the good causes.

Lord Annan: My Lords, I am delighted to hear that. But I wonder whether the interest will be given on the same terms. Is there a chance to use revenue for recurrent purposes?

Lord McIntosh of Haringey: My Lords, there is no other way of giving the money except on the same terms as the other money going to the good causes.

Lord Annan: My Lords, I suggest that this will be an admirable opportunity to add an amendment to the Bill.

The new opportunities fund is an interesting idea in that it is time-funded and has an exit strategy. That is necessary, and it is something which the Arts Council should surely often follow. The moral is that you cannot always have funds which go on and on, difficult though that is for many small ventures which in the end find that they cannot continue without a permanent subvention.

I have one question on NESTA. Will the universities benefit from this? The universities have a great opportunity to put in many bids. I wanted to say something on Clause 17. However, I am afraid that the noble Lord, Lord Rothschild, shot my fox on that. I shall not repeat his criticism. So I conclude with those words.

1.34 p.m.

Lord Howell: My Lords, whatever the merits of the Bill, no one can deny that we are having a fascinating debate today. Although I have not agreed with every point, I do not think a single point has been made which does not merit debate. Therefore, I start by saying that

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we are deficient in not insisting on having an annual debate on the merits of the lottery. I hope that we shall. Sharing, as I do, fears about Treasury greed, the only way to deal with that is by calling people to account on the Floor of the House. We need more such debates. I hope that my noble friend on the Front Bench will help us to get them.

Lord McIntosh of Haringey: My Lords, in which capacity? I speak for the Treasury as well.

Lord Howell: My Lords, my noble friend has so many hats that I never know which one he is wearing at any time. I do not mind, provided he enables us to have the debates we want.

I intend to speak mainly from my experience in sport and to make some criticisms and suggestions. I want also fully to support the purposes of the Bill and to try to illustrate why it is necessary to develop strategies and priorities. I am sorry that the noble Lord, Lord Skidelsky, is not in his place. I thought that his speech was a little jaundiced. He did not seem to understand the need for strategies, priorities and direction in sport. I shall return to this theme in a moment, but perhaps I may say in passing that, of all the grants given to sport in schools, only 1.6 per cent. have been in urban areas and areas of priority. We should have a social purpose about the giving of grants. There is something wrong there. We can explore this point more fully in the Grand Committee to which the Bill is to be committed. We are not getting our priorities right. Welcoming, as I do, grants being given to all kinds of organisations, it is vital, bearing in mind the problems in urban areas and other areas of deprivation, to use these opportunities to tackle those problems and to encourage youngsters to participate in sport and the arts in order to live a full life. I congratulate the Government on producing the Bill.

There is a need for a strategy to direct these funds to the areas of highest priority. Clause 8 enables the Sports Council and other authorities to solicit bids. That is very welcome indeed. One of the problems at the moment with many of the bids is the difficulty of raising a share of the money to attract success. That is a serious problem. The Government are being imaginative in trying to bring urgency to the distribution of these lottery funds.

On the subject of developing a strategy, perhaps I may welcome the decision this week of the Sports Council and the Government to nominate Sheffield as the headquarters of the Academy for Sport or Institute for Sport. I led the Birmingham bid and we are disappointed that we did not get on the short list. However, Sheffield and Birmingham have one thing in common. They are the two cities that have spent their own money--not government money--on developing significant sporting facilities for this country. Sheffield did it for the World Student Games and Birmingham has done it with the National Indoor Arena and in other areas. I do not begrudge Sheffield a penny. It has earned the right to have the funds. I wish it well in becoming the headquarters of this new, imaginative centre. There are many questions that I would like to ask about the relationship between the headquarters and the regions

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and the way in which this institute develops, but I shall not trespass on the kindness of the House at this moment to do so. Perhaps we may raise the questions at Committee with appropriate amendments.

Although I want the Government to approve the strategy and I certainly want the Sports Council to be responsible for ensuring that we have one, it cannot succeed if all the decision-making is taken at the centre. The whole point about strategy is that we should decentralise the detail of decision-making after ensuring that such detailed decisions are taken in accordance with an agreed national or regional strategy. That is a very important point.

I certainly agree that if Treasury bureaucracy treats lottery bids as an integral part of government expenditure, that would be disastrous. I hope to table an amendment in order to debate that in Committee. At the moment there is a sort of triple taxation in relation to the bids, which is totally unforgivable. I would like to see our enlightened Ministers--and I believe that they are enlightened--leading the battle. I hope that the Chancellor of the Exchequer himself will try to cut through the bureaucracy. The financial directions under which, for example, the Sports Council operates, need to be reviewed and relaxed. It cannot make any sense for the Treasury to control lottery bids as though they were central government funding. They are not. It is a scandal that the Treasury treats them in that way. All of us have an obligation to come together, wherever we sit in this House, to tackle the problem and to say to Ministers that we are not going to put up with it any longer.

VAT is paid on, for example, sports facilities. Disabled persons lose their disablement benefits if they receive a revenue grant for their sporting activities. Some of us in this House are very keen to promote sport for the disabled. Grants encourage the imposition of the uniform business rate. That is another way of soaking the lottery bids to enhance Treasury and local government finances. That cannot be right.

The great priority for sport--and it probably applies in other fields too, about which I know less--is to re-establish regional sports councils. That is one of the great arguments for enabling the Secretary of State to give some direction and to get decision-making away from the centre. We used to have regional councils for sport. I set them up when I was the Minister. They were a great success because they brought together not only the local authorities, but in particular the planning officers of those local authorities, those who were working on plans for sport and the governing bodies of sport. They generated plans.

The last government closed them down for very spurious reasons. In answer to a question to the then Minister I was told that they were being closed down because it was wrong for members of local authorities to take decisions which might affect other local authorities. That is not a principle that the Government apply to themselves. We have Ministers taking decisions on matters and not thinking that there is anything amiss about the situation. I am a great believer in local

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government. About 90 per cent. of our local government is of outstanding integrity in this country. There is a tremendous amount of dedication.

It is easy to say that a regional sports council would be given power to make regional grants according to a regional strategy, but that any local authority or planning office involved in such a bid should withdraw, which is the normal procedure now. I therefore very much hope that my noble friend will take back to his colleagues the fact that we must establish regional sports councils as soon as we possibly can.

I certainly approve of the powers in the Bill for the Sports Council, the Arts Council and others, to solicit bids. There is a tremendous gap in provision. I have illustrated that already by reference to schools and sport. The only way to fill that gap is to encourage the Sports Council to carry out a survey and to say, "Look, we desperately need indoor facilities in this part of Liverpool, Birmingham or wherever, and we shall solicit bids that assist people to put in bids to meet the requirement". That should be a prime purpose of this Bill, and I hope that it will follow.

The regional fund distribution powers should be given to regional councils. I envisage that they would be allowed to spend to an agreed limit--perhaps £100,000--provided, as I said earlier, it is in accordance with a regional or national strategy, which the Sports Council or Arts Council has agreed. It makes good sense. It provides local involvement in decision-making.

Under the new opportunities fund I also welcome very much the Government's wish to encourage--although the noble Lord, Lord Skidelsky, is sceptical about it--after-school clubs, homework groups and fitness centres. If we are to provide facilities for sport and the arts, it makes sense that additional money should be added to whatever can be provided now. I would like to see homework clubs, for example, expanded so that in addition to the academic progress that it is hoped youngsters would make, we are helping, by providing facilities in schools, to join in sport and art events, bearing in mind the need for education to provide for the whole man or woman. It is a great step forward to have homework groups, after-school clubs and fitness centres, I would like to see us build on that by the provision of additional money.

I have two final points that I would like to make. I mentioned one of them at the start of my remarks. I was hoping that the noble Lord, Lord Skidelsky, would be back in the Chamber by now so that I could make the point in his presence. Out of a total of 2,827 awards 48 schools in urban priority areas benefited. We should think about that proportion. It is 1.6 per cent. of the total in urban priority areas. That shows, first, our failure to get many of the grants into areas where there is the greatest need and, secondly, it certainly supports the Government's desire to have a strategy on these issues. Facilities should be provided for the schools and for the community. My policy in the 1960s was to put money into schools so that facilities were built that could be used both for the school and the community.

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The caretaker problem was always the greatest problem. It was necessary to ensure that the facilities received maximum use.

I hope that my noble friend will excuse me mentioning my final concern: the position of the United Kingdom or Great Britain in the light of devolution. I am not quite sure where we are going. We do not have a United Kingdom Minister for Sport and we do not have a Great Britain Minister for Sport, although in my time I had that authority and exercised it, sometimes with some difficulty. But most of our teams--excluding cricket, which plays as England and includes Welshmen, for which we can be grateful--going on to the international sporting stage, do so as Great Britain or the United Kingdom.

I ask that question because it must be faced and the point arises with regard to lottery funding. Will the new assemblies for Scotland and for Wales make their proper contribution to the creation of Great Britain's teams? That is a very important question. I am referring not only to a financial contribution, but also to an inspired contribution in terms of creating a cohesive British team. I have heard whispers about Scotland being represented at the Olympic Games. That would be an absolute nonsense. It would be a disaster of the highest order.

I mention this point now only because I think that it really needs to be tackled. I wanted to draw the matter to the attention of Government so that they will understand that some of us are watching them on this. The great strength of British teams has been their Britishness. It has been a great source of pleasure to many of us to support Britain. Those of us who believe in a great degree of devolution, as I do, want to ensure that pride at being British on the sports field is maintained as much in the future as it has been in the past.

1.51 p.m.

Lord Redesdale: My Lords, I was hoping to be able to welcome the Bill because it was obvious that lottery legislation would be needed at some point. However, I have deep reservations about this Bill. One thing for which I can thank the Government is that they managed to avoid putting on the face of the Bill a change of name to the "People's Lottery". I have great reservations whenever the word "people's" is placed in front of anything. At the moment it is taking on the aspect of a political slogan and I had been hoping that the lottery could somehow maintain its independence and not be seen as the plaything of one party or another.

I should like to focus on the mechanics of the Bill, and especially on additionality. I apologise for using that word because I know that it sends a shudder down the spine of my noble friend because he particularly dislikes it. I was hoping that we might be able to find another word, but as "additionality" is used so often, I suppose that we must all use it.

The problem is that the Bill goes a long way towards destroying the principle of additionality. We should not fool ourselves about one of the major reasons for the

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setting up of the lottery in the first place. Although it was set up to fund the arts, one reason why the Government of the day were so keen to establish a lottery was that, apart from the prize money, the biggest beneficiary is the Treasury, which gets 12½p out of every £1. We on these Benches opposed that money going to the Treasury in the first place. Indeed, we tabled amendments to say that that should not happen. Although I support many of the underlying principles of the new good cause, I find it problematic that it may be seen as an extra form of taxation, amounting to an extra 4p on every lottery ticket.

That is a problem because establishing the sixth good cause is a new approach. If I was replying to consultation I do not think that I would have anything against the good causes--indeed, I support extra spending on health and education--but some of the things that the Minister said earlier, to which I shall return later, have caused me much anxiety. One problem is that the Government are looking to fund some of their own political commitments through the new fund. We shall have to be careful to ensure that it is made clear in the future that that is not the purpose of the new fund.

I am concerned about some of the good causes because in the areas of health and education we are looking at setting up after-school clubs and health centres. However, they are rolling initiatives and it seemed alien to the debates that took place when the lottery legislation was first passed that such schemes would be initiated. The lottery was supposed to fund causes which would not attract a never-ending price tag. When I first read the Bill I believed that that was the case and that the after-school clubs and the health centres were to be funded on that basis, but the Minister said that they will have a limited time period. If that is the case, who is to fund them after that initial period? Once government funding runs out they will suffer, just as so many other initiatives have suffered in the past. They will be in deep trouble and it is then often a quick descent into extinction.

I support the after-school clubs initiative, but it is unfortunate that no recognition has been given to the work undertaken by the Prince's Trust in this respect. The new after-school clubs will be based on those established by the Prince's Trust some years ago. We should note that those educational projects will be closely aligned to the work undertaken by the Prince's Trust.

I was slightly concerned about what the Minister said on health. I understood that many of the things that he is considering were already provided in GPs' surgeries. I know that the health services are meant to be organic at the moment, but I cannot help feeling that many of the new services will end up being based in GP practices or in health authority grounds. Therefore, are we not talking about matters with which the health authorities were dealing before these provisions on health centres were first considered? Which professionals will man the health centres? Will they come directly from the health service?

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My main worry is that within a short period of time the new provisions will be used for areas that were previously funded by taxation. That was confirmed to me by a press release dated 24th September from the Department for Culture, Media and Sport in which the Secretary of State said:

    "As with all Lottery funding, the New Opportunities Fund will only support initiatives additional to core programmes funded from taxation. The Government has a strong and abiding commitment to the principle of additionality. That means that Lottery funding will not be used for core areas like NHS beds or school buildings but will focus on innovative and desirable initiatives beyond".

I would say that "core areas" go somewhat further than the provision of NHS beds or school buildings.

There is a problem when following that line of debate. It seems clear that to a large degree the money has already been allocated and spent, despite the cautionary words of the noble Lord, Lord Rothschild. In another statement, the Secretary of State said on 1st October:

    "I can announce today that we will do even better than that. I have taken steps to ensure that money from the Lottery will flow into the New Opportunities Fund ahead of the legislation, so that it builds up ready to be used as soon as the Bill is passed. Part of every pound we spend on a Lottery ticket will be paid into the new Fund, earmarked for education and health. And when will this start? Next week--from next Wednesday's draw".

It seems that any debate on this has been overshadowed by the Government's commitment to go ahead without the possibility of the provisions being amended in this House.

I turn now to some of the other areas covered by the Bill. I refer to the provision of financial penalties for breach of licence conditions. The Minister said earlier that we do not wish to lob nuclear handgrenades. I thought that a particularly interesting expression. I have trained with handgrenades and they are dangerous enough as it is; "nuclear handgrenades" sound fairly suicidal. I hope that the Minister will look favourably upon the amendments that we plan to table to limit the scope of the fines in cash terms or to make them commensurate with the breach of licence. Not all breaches of licence are due to fraud; they may be to do with such minor matters as the misuse of the lottery logo. I believe that this is an important point. Although I do not believe that the Government would use it for a smash and grab on excess profits from Camelot's funds, there is a real possibility that those who bid for the new lottery franchise will see it as a direct threat to future operating profit and it may put them off.

I suggest, perhaps cynically, that the Government have changed their position somewhat by setting up an advisory panel. Perhaps I am being paranoid and cynical, but if the Government suffered heavily from the spat between the Secretary of State and Camelot and decided that Camelot might be the best operator for the lottery they would not want to be in a position of directly appointing Camelot again. A lottery advisory board would be able to do that. I see the Minister shaking his head.

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