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Lord McIntosh of Haringey: My Lords, the noble Lord is simply wrong.

Lord Redesdale: My Lords, as to Camelot I hope that the Minister will keep an open mind when looking

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at the new operator. Camelot has proved to be very effective. It would have to go to the best operator in future.

Lord McIntosh of Haringey: My Lords, I do not want any misunderstanding to continue for the rest of the debate. Of course, Camelot will be able to apply for a continuation of its licence. I believe that it has already indicated that it intends to do so.

Lord Redesdale: My Lords, I thank the Minister for that reply. Perhaps he can provide some clarification when he sums up. I turn to the issue of distribution. I believe that the Bill is vague in one respect. Clause 9 gives the lottery the power to distribute funds through philanthropic and other institutions. This raises a problem. Perhaps my lack of research has led to my failure to find an answer to it. When making a lottery application, one of the major difficulties at the moment is finding matching funds. Someone makes an application to a philanthropic institution to provide matching funds and does not realise that the funds of that philanthropic come from the lottery. If he then goes to the lottery for additional funds will that be viewed as an attempt to try to get 100 per cent. funding directly from the lottery? I hope that the Minister can provide a clear answer to that.

Another area that causes a degree of concern, and which strangely is not on the face of the Bill, is the National Lottery Distribution Fund. When the legislation was first proposed everyone was gazing into a crystal ball as to what profits would be made and how successful the lottery would be. Very stringent targets were set in deciding how the money should be held and distributed. However, there is a major difficulty in that at the moment the NLDF stands at £3.5 billion. That cannot be right. The prediction of the Treasury as of March 1996 was £1.5 billion. There appears to be a massive build up with no significant means of shifting it on. I have heard the argument that that build-up is good for PR. I hope that the Minister will look at the possibility of bringing forward some proposals in this legislation to speed up the process by which earmarked lottery funds can be distributed. I give warning to the Minister that we plan to table amendments to impose a ceiling on the percentage that can be held in the distribution fund. This is dangerous because it implies that money will have to be thrown out. Conversely, the mechanisms for distribution would have to be improved significantly and more money would have to be spent to ensure that this area was carefully looked at. Following the comments of the noble Lord, Lord Annan, on the subject of interest, can the Minister give an indication of the level of interest presently applicable to the NLDF? On what basis is it set? The Government will be the ones to set the level of interest.

I do not believe that this Bill should be a justification for a smash and grab on lottery funds in the way that it has been presented by these Benches, perhaps unfairly, but there is a good deal of concern. While we may be unfair in our assumptions, it does not mean that the Government will not commit a smash and grab. Although lottery money is seen as an easy source of

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funds, the amount that will be available in future due to the lottery can be only an estimate. I believe that it is dangerous to make assumptions about how much will be available when that is not certain.

2.6 p.m.

Lord Hindlip: My Lords, I declare an interest. In my chairmanship of Christie's I have frequent dealings with the National Heritage Lottery Board. I have been less successful in playing the lottery than the noble Viscount, Lord Falkland. The tally of my expenditure to date is £980, with winnings of £10. The Minister has put the case with considerable clarity and conviction. I realise that the Government have a mandate to make changes to the distribution of lottery moneys. We also welcome the introduction of NESTA.

That said--other noble Lords have made a number of points--I have reservations about the Bill. It is less than wholehearted in its support for the arts and heritage. I would have hoped for something slightly better from a party which I would be the first to admit has a much better record as a supporter of the arts than we on this side of the House.

As the noble Baroness, Lady Young, admitted, the Bill is set against the background of the Government's stand to control public expenditure. However, as my noble friend Lord Skidelsky said, it appears to rob Peter to pay Paul.

When the lottery was first introduced, I was under the impression that it would be additional to government funding. It is not a substitute for the proper funding of education and the health service. I should like the Minister to take on board a concern that the noble Lord, Lord Rothschild, raised about Clause 17. It could have serious effects on any long-term projects. I do not want to attack the Government. On matters such as arts funding we should all work together. When I wrote that, I did not realise that the noble Lord, Lord McIntosh, was also representing the common enemy.

I shall say a little about how enormously important the lottery has been in funding the arts and heritage. It was a museum commissioner, Lloyd Grosman, who wrote:

    "The money that the Heritage Lottery Fund is spending on museums and galleries throughout the United Kingdom represents the greatest acts of munificence in the entire history of museums. This colossal investment in our culture and educational infrastructure will benefit not only us but our children for generations to come, who will praise the intelligent commitment to the common good that has informed the policies of the Heritage Lottery Fund".

I share that view. It is true. From time to time that has enabled the nation to make significant purchases.

With the agreement of the director of the National Gallery, I should like to tell your Lordships that tomorrow he and the noble Lord, Lord Rothschild, will make an announcement of the purchase of one of the great masterpieces of British art. I have been involved in the sale of this picture, both as trustee for the family for whom it was painted in the 18th century--with whom, incidentally, I am meant to be having lunch

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today--and through Christie's, as a broker for the sale. Without the lottery money, that masterpiece--it is a masterpiece--would undoubtedly have gone overseas.

The National Gallery, the Tate, the British Museum and the Victoria and Albert can now compete on the world stage after being for so many years the poor relations of France, Germany and the USA. That has had a crucial effect on the morale of people working in museums. They are men and women of great talent and expertise. They are not rewarded like their counterparts in America. The lottery has given them an incentive to carry on and to make their institutions come alive again, as they should be, and not remain the cobwebbed, covered sleeping beauties that they had become in the 1970s and 1980s.

It would be a cruel blow were the Government to turn from being the fairy godmother who gave us the lottery to the wicked witch who sent them back to sleep again for another 40 years. However huge the lottery moneys may seem to the layman, as the noble Lord, Lord Rothschild, pointed out, they are small beer in terms of overall government funding. They are also fragile. My experience of spending £980 and winning £10 leads one to a certain lottery fatigue which will become more apparent.

I should like to point out the competition our museums face. One museum, the Getty, has a minimum--I know that it has been mentioned previously in your Lordships' House--of 225 million dollars that it has to spend. One picture can today cost £50 million. Funding museums cannot be a stop/go process. It has to be consistent. For our great museums to be the educational establishments that they should be, they have to have comprehensive collections. In the case of the National Gallery they are of European paintings. There must not be huge gaps. That was a point made to me by Neil MacGregor, the director of the National Gallery, because it and the Tate were starved of funds in the 1950s, 1960s, 1970s and 1980s. Those gaps in their collections can never be filled.

There are great pictures in the National Gallery. That brings me to another point which strays slightly from the Bill but it is crucial to arts funding. In Room 45 of the National Gallery there is a painting by Gauguin called "Harvest: Le Pouldu". It was acquired by the Tate in the early 1960s through the acceptance-in-lieu procedure. Here I beg the Minister to give the House an undertaking that that excellent system will not be curtailed, as some of us involved in its operation fear that it may be. The Gauguin was accepted at a cost of £47,000. I asked the Director of the National Gallery what he thought the picture was now worth. He is a cautious man, particularly when talking to me about pictures! He said, "I suppose 200 times what we paid for it". When the nation acquired that picture it was a fantastic investment.

That is not an elitist view. There were 70 people in that one room, Room 45, in the National Gallery in the middle of Tuesday afternoon this week when most people were out Christmas shopping. About one-third were schoolchildren being given an excellent talk by a member of the gallery staff and about half were visitors to this country.

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The people--I use that word advisedly--love these picture and I believe that we get superb value from our museums. I am convinced, too, that we get good value from the lottery distributing bodies.

In conclusion--I must try to make that lunch--in order that I can support the Bill, which I believe has merit, will the Minister give assurances, first, that he will look carefully at Clause 17? Secondly, can he give the House an undertaking that the cuts in percentages going to national heritage will be the last? We cannot have a gradual chipping-away process. Thirdly, will he and his colleagues--I purposely have not mentioned the mystery Dome--examine carefully funding for the millennium project?

2.16 p.m.

Lord Charteris of Amisfield: My Lords, I shall not detain the House long. I wish to say a few words about the new good causes of health, education and the environment. I also wish to comment on the National Heritage Memorial Fund, which does not appear in the Bill and has been mentioned today only by my noble friend Lord Rothschild.

I believe that the new good cause Bill tramples over additionality. In my view, the money that will be used for the causes should not come from the lottery but from the Government. Whoever drafted the Bill has done so skilfully because who could object to spending money on health, education and the environment? The only question is where the money is to come from and I believe that it should not come from the lottery. From taking money away from the lottery one gradually begins to hijack it.

That is where the Treasury comes in. I have the deepest admiration for the Treasury, not only the body but many of the people in it who are my great friends. There is only one thing wrong with the Treasury--it is highly unreliable when it comes to money! Mark my words, it has got its fingers in this pie. I am not sure that I blame it, but that is the way it is.

I turn to the National Heritage Memorial Fund of which I had the honour to be chairman from April Fool's Day 1980 until I handed over to my noble friend Lord Rothschild. During 10 years the fund dominated the scene in the arts. It continued to do so until it was absorbed by the huge amount of money coming from the lottery. I remind your Lordships of some of the things it did during those 10 years. It saved, established and endowed 12 great country houses. It bought for the nation many famous pictures; Poussin, Altdorfer and Rembrandt. I remember that my last hour as chairman was spent with Lord Hindlipp, in his office at Christie's arguing with Lord Cholmondeley about whether the nation would be allowed to buy the marvellous picture of the old woman with the cat. I had to leave before we knew the answer but I was very relieved to be told later in the evening that he had accepted.

We have also done lots for the countryside--for bogs, fens and flats. We have done lots for the animal kingdom--for birds, bees, and even, I may say, the greater horseshoe bat, which was one of our great triumphs in the early days.

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We did all that and lots more in 10 years. We spent £130 million. We started off with £12.4 million which was all that was left from the ravished land fund. We were promised by the Government that they would give us £3 million each year, which they did, but they also, according to the Bill, were allowed to give us lumps of money when they felt like it. Therefore, I spent my time sucking up to them and we got quite a lot of money that way. We were able to spend £130 million in 10 years and have some left over.

We were able to do that because the Government trusted us and did not try to fiddle about and do it themselves. The National Heritage Memorial Fund has really disappeared under all the money that my noble friend has, but it is still there. The money from the lottery may fade away. People may not want to go on with it. I never buy a ticket. We may find that the National Heritage Memorial Fund is left once again to dominate the scene. Therefore, I ask the Minister to please give it money. In a few days we shall hear what it is to receive this year. I hope that it will be a sizeable sum which will not grow less in years to come.

2.22 p.m.

Lord Rowallan: My Lords, many noble Lords have declared an interest and I should as well because it is my intention to win the £25 million in Saturday's roll-over.

One of the problems in speaking late in any debate is that often what you want to say has already been said. In my case, the noble Lord, Lord Howell, on the Labour Benches and the noble Lord, Lord Redesdale, on the Liberal Democrat Benches, have said a lot of what I wanted to say. But I believe that if a point is right, it is worth while making it again and again.

The lottery has been the most fantastic success, a far greater success, I am sure, than my government thought it would ever produce. But the distribution of the funds is extremely inefficient and cumbersome. We have heard the figures bandied about several times and I shall not bore your Lordships with them too much. But to have £3.3 billion in a reserve fund, which means that 30 per cent. of the funds have actually been used while 70 per cent. are unused, is not good enough.

We have a situation where not one of the distributing bodies has issued much more than about 50 per cent. and some have distributed only 17 per cent. That must be looked at. Is not the answer that we need more of a one-stop shop for lottery funding? My sport in particular is show jumping and it is extremely difficult for anybody involved in it to know where to go for a grant. They do not know whether to go to the Scottish or English Sports Councils or one of the distributing funds. Then, as the noble Lord, Lord Redesdale, said, an equal amount of money must be found to make up the sum that is required. That often makes the whole project, however worthy, totally impossible to accomplish. Therefore, can we not consider grants instead of loans?

The noble Lord, Lord Howell, said that we must help the urban primary schools. I could not agree with him more. However, the big problem for those schools is that they cannot find any land to build upon; indeed, it

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has all been built over. Therefore, we must do something to enable them to build and create an environment to keep children off the streets.

The Treasury receives 12p in the pound from every lottery ticket sold. It also receives 17.5 per cent. VAT on all capital projects, so it does very well. Lottery funding was ring fenced, but I rather believe that the Bill will be taking us down a slippery slope whereby that ring-fencing will be breached. We must watch the situation most carefully. Lottery funding should not be used for government business; that should come from normal taxation. Funding from the lottery should be for the benefit of specific causes--the good causes. That was a good name, so let us keep it. It is very important that we do not use such funding as an extra layer of taxation and thus avoid government responsibilities.

NESTA will provide assistance for artists, musicians and architects. However, I suggest that it should also help sports people because sport is a terribly important part of our upbringing. But let us turn now to the nitty-gritty. In the Bill we see, retrospectively "with effect from 14th October", that four good causes will now receive only 16 2/3 per cent. as opposed to 20 per cent. The millennium good cause will continue to receive 20 per cent. and the new health, education and environment cause will receive 13 1/3 per cent.

I hesitate to ask the Minister the following question, but I believe it to be one that really needs to be asked. What is the money for the millennium good cause being spent on? Is it a sacred cow or a lasting monument? What will it be filled with? Moreover, how are we to get there? It is becoming more and more apparent every day that the Jubilee Line will not get us there. What is the point in having the site at Greenwich if no one can gain access to it except by way of taxi? That will be a very expensive form of transport, although taxi-drivers will no doubt love it.

I see again that Scotland is to be used as a guinea-pig, as it was for the poll tax and as it will be in terms of devolution to a large extent. However, as this will be testing the water as regards co-operation between distributors, I hope that it will work and that it will be proved to work. I commend the Government for at least experimenting with this and letting the Scots, who have always been known as canny folk, have a crack at the whip.

I have three areas of concern. If we want the lottery to be the people's lottery, which is what the Government seem to want, perhaps I may point out that the distributor at present seems to be interested only in new ideas and new concepts. Laudable though the latter is, I should like to suggest that the time has now come for us to reconsider the position. During Question Time today, the noble Baroness, Lady Hayman, said that she was keen for brownfield sites to be looked at in this connection. But should we not be updating some of our existing facilities rather than building new ones? Is it not strange that London does not have a national exhibition centre of excellence? Would it not be sensible to update something like Wembley Arena and make it into an exhibition centre of excellence? Why do

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Birmingham and Glasgow have one when London, our capital city, has not? If we want to hold a special exhibition for the sporting world, or anything of that nature, it is difficult to generate any sort of interest and persuade people to come to London. That has to be a great shame.

My second point concerns charities. I know that the lottery was not designed to help charities, but time has moved on. Charities have lost an enormous amount of money; indeed, they have taken a terrible hammering as the result of the lottery. The people still think that lottery money is going to charities in enormous sums. Only 32 per cent. of available funds have been distributed in this area. Donations are not made directly to many mainstream charities. Some have received funds. The Mental Health Foundation and the Samaritans both received over £500,000. The Red Cross received £190,000, but Cancer Research only £100,000. However, the lifeboats have received nothing. This is a slightly different point from what we are discussing, but I have always thought it was rather peculiar that the Lifeboat Association should be run entirely by charity as it performs a fantastic service.

Many charities could save the taxpayer an enormous sum of money, for example if they found a cure for cancer or produced a useful industry to make a third world country more self-sufficient. Charities also help the community by providing healthcare and advice for the ill and infirm. We need to look again at funding for charities. We must give them more if they are to survive. We have taken with one hand and now the time has come when we must give with the other. Surely we could use some of the reserves, or even the interest on those reserves, which have not been distributed.

We must put more money into sport. Let us have an academy of excellence. Let us encourage the youth of today by keeping them off the streets, keeping them away from drugs and creating a team spirit. Sport is the hub of a new beginning. It provides a focal point for pride in one's country, whether that be England, Scotland, Wales, Ireland or anywhere else in the world. There is something attractive in doing something for one's country. One of the proudest moments of my life was when my daughter entered a major show jumping competition for Britain, won the competition and the National Anthem played. That was the most moving moment of my whole life.

How many people never discover what their true vocation is? I wonder how many noble Lords here today have discovered their true vocation in life. How many of us could have been great footballers but have not played football or great golfers but have not played golf? If we had an academy of excellence we could give people a chance to find that out. Let us give tomorrow's youth a chance today. We have the opportunity to do so through the lottery; please let us use it.

2.32 p.m.

Lord Bassam of Brighton: My Lords, I rise to speak with some reluctance this afternoon, caught, like many noble Lords no doubt, between a headache and a lunch. However, a few comments and observations may be

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appropriate. I greatly welcome this Bill because not only does it give effect to our Government's manifesto commitment to establish a genuine people's lottery, but I think it is also virtuous legislation. I never thought there would be a time when I would say in a House such as this that I welcomed virtuous legislation. However, I believe that this is virtuous legislation. It attempts genuinely both to improve and to reform something which has been established with good, sound foundations.

I was somewhat concerned when I heard the noble Lord, Lord Skidelsky, speak earlier, as I thought he was being unduly churlish. He said in effect that a good idea could not be improved upon. We have a good idea with the lottery and no doubt it will be improved upon. I am sorry that the noble Lord is not here to hear the question, but I ask what is wrong with populism? I thought that the lottery was a fine instrument of populism when it was introduced some three or four years ago. I have no problem with that. Building on populism is no bad thing. To ignore the criticism that people have made of the lottery is churlish in the extreme. After all, it should shape our perceptions as to how the lottery should develop. I could not quite understand why the noble Lord, Lord Skidelsky, was so contentious in his remarks on the people's criticism. This afternoon we have the opportunity to put some of that right.

I also welcome the sixth good cause. There have been complaints in this debate that the sixth good cause is all about undermining the principle of additionality. Perhaps it brings something new to the lottery. Perhaps it is entering the field of hypothecation, trying to set aside specific sums of money for a series of good causes through NESTA, which is surely long overdue as part of our urgent consideration.

My primary concern today is to make a few observations about the valuable impact of the lottery on the sports world. I have been much impressed by the impact of the Lottery Sports Fund. I declare an interest. In my own local authority we have already begun to see the benefit of lottery sports funding. Our sports pavilions, sports clubs, and so on, have begun to benefit from its contribution. Next summer no doubt I shall have the pleasure and privilege of playing at one of the finest little local cricket grounds at Firle. It has benefited from the fund with a new pavilion entirely in keeping with the rustic retreat that the cricket ground surely is.

The Lottery Sports Fund has had a profound impact on investment in sporting organisations at grass roots level. Some 823 football organisations have benefited from it. Awards total in the region of £70 million. Of those awards, 345 were for projects of under £1 million; 202 were to voluntary clubs; and 256 were awards for additional, new provision. That is a fantastic achievement in the period of time that the lottery has been with us.

In considering the way in which funding has been applied, I have been impressed by the efforts and endeavours to reward those clubs and organisations in some of our inner city and deprived areas. I commend the strategy adopted by the Lottery Sports Fund in that regard. It gives us a pointer to the future.

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The Government have made it clear that they wish to encourage a more strategic approach to the legislation. That, I believe, is most welcome.

I come to an aspect which is most important from my perspective: the role of the local authorities. It may not be well appreciated that local government is the major investor in the country's sports infrastructure with £1.5 billion of revenue funding on sport and recreation. That covers not only leisure centres, swimming pools and athletics tracks but also the cricket, football, hockey and rugby pitches vital to the existence of local sports clubs. There has been much comment about the demise of our open spaces for sport. The local government sector has done its best to try to protect those open spaces. Working in partnership with voluntary organisations through the careful funding by the Lottery Sports Fund, it has managed to do much good in stimulating and reinvigorating sport at grass roots levels.

I believe that a more strategic approach for the delivery of funds to the good causes is long overdue. I worry when I hear noble Lords on the Benches opposite complaining of the need for a strategy, seeing it as some ghastly form of state intervention. I do not see it in that way. I see it as a positive benefit and gain to us all. Through adopting a strategy, money can be put in the right place to benefit those organisations which can target their resources at those most in need.

I liked the statement of the noble Lord, Lord McIntosh, and his commitment towards new initiatives, in particular the out-of-school clubs, homework clubs and healthy living centres. With a strategic approach, I believe that the funding available through the lottery can be given greater effect by bringing together those funds in a corporate way. I believe that we shall benefit from the strategic approach over time.

I say this to noble Lords. Put your doubts about this legislation to one side. There is much to be gained from it. I like the new approach. I think that we shall begin to deliver a genuine people's lottery, with aspirations which are shared by the wider populace. On that basis, I believe that this legislation should be commended.

2.39 p.m.

The Earl of Gowrie: My Lords, if I could detain the House for only a minute by chanting a mantra, that mantra would be: "Lords Rothschild, Inglewood, Annan, Howell, Hindlip, Charteris, and indeed, Bassam". I was informed by the Whips' Office a fortnight ago that I should be addressing the House following the Government and Opposition speakers. As I represent by far the largest grant distributing body of those asked to distribute lottery funds, I shall have to set out my stall. So fasten your seatbelts, my Lords, as I am about to exceed the 70 m.p.h. limit. I shall confine my contribution to the effects of the National Lottery Bill on the Arts Council of England, which I chair until 1st May next year.

I am often criticised, not least by myself, for concentrating on the material side of the arts: their value to our economy; the jobs they generate; their power to remake cities and restore individual and collective self-respect. As Sir Cameron Mackintosh has said, there

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is also an immense cross-fertilisation between a small subsidy and the huge commercial earnings for this country from the arts. Just think what the show, "Cats", has delivered, among many other things, to poets--traditionally and continually the poorest and purest of arts practitioners. But when a work of art gets to work on you as an individual, in whatever form you find or choose, the only comparable experience is neither material nor intellectual. It is love.

Perhaps the most interesting day of so many interesting ones--I have often pleaded for a boring one--of my chairmanship of the Arts Council of England was when Chief Superintendent Keith Hellawell, since then appointed as the Government's "anti-drugs czar", came to me under the previous Administration with his beliefs about what participation in the arts could do for an under-class in our society disproportionately attracted to drugs through boredom and a lack of self-worth.

We are a fascinating multi-cultural island now. The demands on the Arts Council involve, as they should, reggae as well as "Rigoletto". I accept, and love, multi-culturalism. I find relatively little of our work "trendy", in the expression of the noble Lord, Lord Annan; I agreed with virtually everything else that the noble Lord said.

The National Lottery was a visionary creation by the previous Parliament--vision translated into action. Great work was done for artists and audiences. I defend that work vigorously. But there was a flaw in the vision. Here I depart from the noble Lord, Lord Skidelsky, although I agree with much else of what the noble Lord so wittily said, especially his "thin edge of the wedge" argument.

The flaw in the vision was that the lottery created a crisis, as well as curing one, where the arts are concerned. We all know that from medicine. You are given something that cures your condition or arrests it; but there can often be bad side-effects. Huge capital inflows led the Treasury to cut our small revenues. As a result, we are suffering the worst arts revenue crisis in my adult lifetime. We were forbidden by law to treat the two streams synergistically. Those faults should be laid at the door of the previous Administration. Additionality was thrown out of the window with the first cash cut that we received.

I therefore intend to concentrate on what went well and what went badly during the first stage of the lottery in order to show that it is right that there should be changes. The National Lottery is an organism, not a monument. I shall then focus on the second state of the lottery, which will be the creation of the Bill before the House.

I pay passionate tribute to the former Prime Minister, John Major, for having had the courage and foresight to launch the lottery on a rare tide of all-party support. It is right to review its successes. It is the task of the new administration to make the improvements. The present Prime Minister granted me generous time before the election. I am hopeful that the arts will remain as they should, ecumenical. My successor must see to it that

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they do. He or she will also need to keep a sharp eye on what, on the face of it, seems to be an unprecedented increase through this Bill in the powers of the Secretary of State, a withering of the arm's length principle.

Of the loss in previous expectation under the Bill to the five distributing bodies, some £1 billion has already been revealed. If Parliament gets it right--and I am confident that it will--then in spite of that we could have before us a unique and golden opportunity to achieve over time a rational arts funding system for an exceptionally creative small country at long last.

The good news for the Chancellor is that we could achieve it without additional cap-in-hand begging bowl visits to the Treasury by our sponsoring ministry. But for his part he has to do two things. He has to make it uncompromisingly clear, backed by the Secretary of State and the entire Government, that following the loss of money to the sixth good cause, including NESTA and the new opportunities fund, he will continue to protect the existing good causes through the lottery in the next Parliament, always assuming his party wins it. He must also put a plug in the bath where our grant-in-aid is concerned. Not more money, I suspect, but at very least no more cash withdrawals.

Let me come to the success of the lottery so far. Contrary to impressions created by some tabloids, unsupported by virtually all the regional media, the council's lottery grants have been hugely popular and of benefit to all sections of society. That is where I agree with the noble Lord, Lord Bassam. Nearly 50 per cent. of lottery capital grants have gone to community or amateur groups. So much for the myth that the council only looks after the high arts, arts for "toffs", whoever such people may be. One example of this is Multi-Asian Arts in Rochdale which has received £40,000 for refurbishments, the purchase of a vehicle and musical instruments. Indeed, our Arts for Everyone Express Scheme was aimed at community and amateur groups, providing over 5,000 grants of under £5,000. We are creating the audiences as well as the buildings and artists for the next millennium.

Another popular misconception is that lottery money only goes on big projects. In fact, 70 per cent. of the total number of our capital grants are for under £100,000. A special favourite of mine was £30,000 for the purchase of a Steinway concert piano for the Great Grimsby auditorium--one of the first awards we made. A vast range of people have gained from the people's lottery. Eighty per cent. of our Arts for Everyone lottery programme has been aimed at children and young people. In short: education, education, education. For example, there is an educational project--Hi8us--in Birmingham. Here young people from six regions can learn professional television and drama skills with on-the-job training also provided for disadvantaged young people. The lottery contributed nearly half-a-million pounds to that.

Similarly, I am proud that the council has been able to give grants to hundreds of projects which have helped improve life for people with disabilities.

The council has often been accused of a London bias in its distribution. We cannot overlook the fact that London is the national capital of a small country.

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It therefore has a high proportion of our cultural institutions--including this very Palace of Westminster--within it, as well as a huge concentration of our population within or in easy reach of it. The balance is nonetheless shifting towards the regions. Spending per head has been £24.34 pence in London; it has now reached £23.81 in the region covered by the Northern Arts Board. If initially the council seemed to be tilting the balance in favour of London, the lottery legislation expressly forbade us to solicit applications and London was quick on the draw. The Bill proposes to give us greater freedom for the distributors to act strategically. This will help us to achieve a more equitable spread and I welcome it unconditionally.

Yet I cannot emphasise too strongly that while London as a national capital and great world city attracts millions of visitors, London as a region is considered on all current definitions to be a deprived region. We are seeking more small bids here. With the wisdom of hindsight, the abolition of the GLC was, at least from the point of view of the arts, a bad thing. I look forward to a mayor with muscle.

Partnership funding is a key element in lottery distribution. In the period of less than three years since the council started making awards, lottery money has acted as a magnet to attract investments for the arts from many other sources. Local authorities, obviously; but that is public money, European funds certainly; but we are net payers-out. But private individuals, rich and infinitely less well off, have, if anything, oversubscribed to our partnership funding requirements, large and small.

In the case of film, private sector investment has risen significantly since the lottery and the council is now an investment partner and enabler. Whether film sits easily within the purlieus of the Arts Council is for the council and my successor to discuss with the Secretary of State. But we will not be able to see the outcome of the major new capital construction awards I mentioned above ground for the next two or three years, and then the scale of the achievement will become transparent.

Artists and audiences alike benefit from new and refurbished facilities both backstage and front of house. It stands to reason that a welcoming environment will attract more people away from television towards the life-enhancing moments which only encounters with living art can provide. These too improve box office returns.

Newcastle and Gateshead, Manchester and Liverpool, Birmingham, Bristol, London and Sheffield--to mention only the biggest cities--will soon be transformed in a way not seen since the confident years of Victorian and Edwardian industrial and municipal expansion. Much of that has been brought about by Arts Council lottery investment. Our partners in arts funding as well as sports funding, the leaders of the city councils, acknowledge the achievement trenchantly. I know that the noble Lord, Lord Bassam, will welcome that. I can tell him that great plans are astir for Brighton.

A £22 million lottery award contributed to the reinstatement of Manchester's admirable Royal Exchange Theatre, following the devastating effects of

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the terrorist bomb last year. In Gateshead, the huge Baltic Flour Mills site has been transformed into an international centre for the contemporary visual arts, creating over 1,000 jobs in a deprived area and likely to attract thousands of continental mainland Europeans to it. Arts Council investment is £33 million.

The Salford Quays at the head of the Manchester Ship Canal will become a multi-arts complex creating 6,000 jobs locally from a total lottery investment from the council, the Heritage Memorial Fund lottery and the Millennium Commission of £60 million. The lottery as a whole--not least our share of it--is achieving and ameliorating the effects of a major cultural and social shift; from cities as places founded on manual labour to cities able to compete in the contemporary economy nationally, internationally and globally.

But the bad news is that we have suffered capital feast and revenue famine. We see great theatres like the Liverpool Playhouse put into administration and the Royal Shakespeare Company in debt. Great opera and ballet companies, whose creativity puts into perspective some undoubted managerial deficiencies, have been trading from day to day and month to month. Our orchestras face severe problems. That leaves the council little scope to do part of its job, which is to respond to new creativity and innovation. I do not say this lightly. Again, we are suffering the worst revenue crisis in my grown-up lifetime.

We have seen a grant-in-aid from the Treasury at best held at standstill in cash terms and we have twice sustained cash cuts. I am looking forward--if that is the phrase--to hearing about a third cut this afternoon. I should like to apologise in advance to my noble friend Lord Puttnam. I shall not be here to hear his maiden speech because I have been summoned to the headmaster's study at the conclusion of the debate. So far we have suffered a loss in excess of £25 million in real terms over the past five years out of approximately £200 million. The Bill gives us an opportunity to redress damaging imbalances and to achieve stability by employing our two streams of income. It can be done, though not very quickly because real capital needs remain. Yet it must be done because the entire credibility of a government generally welcomed by the arts world depends on it.

I support many of the aims of the Bill. The Bill wants the people's lottery resources to be used for the people. We have been highly ingenious under the present legislative handcuffs in starting the process, with Arts for Everyone and Arts for Everyone Express singled out for praise by the Secretary of State. But what we have done cannot be at the expense of the high and costly traditional art forms. People want access to these as well.

A move towards a more strategic approach to the distribution of lottery funds is proposed in the Bill. I welcome that. We have worked very closely with the National Heritage Memorial Fund in my four years. I welcome the opportunities for greater delegation of funding to the regional arts boards so long as there remains a strategic authority--which I feel I legitimised personally by campaigning successfully for all

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10 chairmen of the regional arts boards to have full voting rights in the council. I welcome the relaxing of the current rules which inhibit lottery distributors from soliciting--a curious use of language as in other spheres soliciting tends to be discouraged.

We support many of the objectives of NESTA and the new opportunities fund, which are in line with the work we already do. Concerning NESTA, whether we do it, they do it, or we both do it in tandem is a lot less important than getting the work done. In my view, the council and NESTA should work alongside each other to achieve the Government's objectives for young people and for education as well as important work in the field of intellectual copyright. This is only the arts stream of the work.

Similarly, much of the work of the new opportunities fund is in part carried out by the current lottery distributors. The Arts Council already funds projects which benefit children, including their out-of-school activities, and senior citizens. Support has gone to healthcare projects involving the arts such as Action for Health, in Newcastle. But lottery revenue support is what artists need most. We have done what we can to achieve it. We will surrender lottery money as, by electoral mandate, we must. We will not surrender easily on behalf of the arts in England, all the jobs they create, all the international acclaim they attract, the principle of lottery funds for the arts.

A last word about an issue which, as well as the legislation before us, is an acid test of the Government's intentions towards the arts in the future. As I have said, arts lottery funding revived Britain's creative economy. It has enhanced people's quality of life and sense of worth. We must continue this work. We have taken our mandated and mandatory medicine through the creation of the new good cause. We have even welcomed it--subject to the provisos I have given. But that, my Lords, is it.

Like the noble Lord, Lord Rothschild, we have not yet finished the job we were asked to do. All over the country, good and necessary projects are queuing up. Not all can or will be done; but we cannot address those that must be done within the period covered by our current agreement with government which ends in 2001. We have four or five projects left of major international, as well as national, importance. We wish to allocate around £200 million for planning purposes for them over the next few years. One is the South Bank Centre; the others are located in the regions.

But we cannot commit ourselves to any of these at the expense of the new and necessarily modest, revenue demands likely to be imposed by this legislation. Nor can we ignore good and necessary capital projects which are less expensive, both in the pipeline and likely to be forthcoming. We need therefore an orderly transition from lottery one to lottery two. If allocations are limited to the year 2001 there will be a crash landing, not a soft landing.

To plan for the future in a responsible and strategic way, as suggested by the noble Baroness, Lady O'Cathain, we need confirmation that there will be arts

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lottery funding following the passage of this Bill until, say 2005 or 2006: at least until the middle of the next Parliament. Given the diminished expectations now before us, we need more time, not more money. The political parties seeking office at the next election must declare their hands now, the party of government especially. Without such commitment, it will be very difficult for us to respond to any of the needs of which I have been speaking.

The South Bank Centre is the test case. Europe's largest and potentially finest arts complex, which includes the Royal National Theatre and the National Film Theatre, is public property. It is, in effect, under government control. Its largest component, the centre itself, is by the admission of its own board, in a disgraceful state. There is even a case, following the Prime Minister's recent statement, that the Government should make major improvements to public property under its control without recourse to the lottery at all. A visionary scheme whose main architectural component is likely to receive almost sufficient support from a single great philanthropist, was overwhelmingly endorsed by the Arts Council last week in principle. We cannot have a situation where the great borough of Gateshead receives, as in the end it is likely to receive, nearly £100 million, and an artistic, multi-form complex, central to London the capital, London the region and London the magnet for artists and audiences from all over the world, is not served properly. If it is also done quickly, there will be huge cost savings to the public: many, many millions of pounds. Many millions of pounds will have to be spent on it in any case.

In sum, the lottery will continue, and profitably, so new money is not required.

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