Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Chorley: This is really not the time to get into technical arguments on current cost accounting and historic cost accounting. Perhaps we can have a word outside the Committee on this point.

On Question, amendment agreed to.

Clause 17, as amended, agreed to.

Clause 18 [Other duties]:

Baroness Rawlings moved Amendment No. 41A:

Page 19, line 32, leave out ("shall be under a duty to") and insert ("may").

The noble Baroness said: I beg to move Amendment No. 41A. As my noble friend Lord Skidelsky has argued, we are concerned about the nature of NESTA. We accept that it cannot be a charity because it would be unable, for instance, to grant loans or enter into joint ventures, as proposed by Clause 16(2). As set up, it is more akin to a non-departmental public body on a long lease from the Treasury, as the endowment sets it free from the PESC treadmill.

If it is not to be a charity, it appears inconsistent to make NESTA similar to one by placing it under the obligation to fund-raise. It is extraordinary for a government to set up a body to raise public donations to deliver government policy. We feel strongly that a body with clear government backing, which will fund-raise in direct competition with other charities, is bound to affect the flows of charitable giving.

I accept it is a point of debate whether the lottery is the sole cause--or indeed a cause--of the decline of charitable giving in recent years, but it seems rash, however, to rule out that the lottery has damaged charities, and the impact of NESTA on the charitable sector should be carefully assessed. I would therefore argue that it would be prudent to limit the fund-raising powers of NESTA.

Baroness Ramsay of Cartvale: As the noble Baroness has made clear, this amendment would remove the duty on NESTA to seek sources of income other than the lottery endowment. It would, however, give NESTA a permissive power to do so.

Clause 18 places a specific duty on the trustees of NESTA to raise money, as well as other forms of assistance, from a variety of sources, to supplement its endowment from the lottery. We do not agree with the noble Baroness's amendment to make such fund-raising optional.

I hope the Government have demonstrated their determination to establish a body with considerable freedom of action, clearly at arm's length from the Government. Our consultation process told us that people wanted NESTA to be set up, and set on its way, without any ongoing involvement from government in its policies and priorities. We share that vision of NESTA.

29 Jan 1998 : Column CWH130

Clearly, in establishing such an independent public body, and in granting it a large endowment from the National Lottery--£200 million--Parliament and the Government need to be clear what they expect from NESTA. That is why in Clause 15 we have set out NESTA's objects and the means by which it should seek to achieve those objects.

If NESTA is to succeed in its mission, it must secure the support of the general public, of talented individuals, and of the creative and business communities. In many ways, NESTA is akin to a charity. Its aims are intended to benefit the nation as a whole as well as the individuals it supports. Like a charity, one of its primary activities must be to seek support from wherever it can.

Whether NESTA is or is not a charity is, of course, a matter for the Charity Commission. The Charity Commission has indicated informally that it is unlikely that NESTA's objects are exclusively charitable, and I think even to a non-expert eye that would seem to be rather a reasonable conclusion.

To the question of whether NESTA is fund-raising for government policy--which I think the noble Baroness indicated in her introduction of the amendment--the answer is certainly not. NESTA will raise funds for NESTA's policies. The Government will have no influence once Parliament has passed and set up the objectives for NESTA. It will be NESTA which pursues whatever policies it thinks fit for achieving its objectives.

The endowment from the lottery will allow NESTA to make a significant contribution from the very outset. It will place NESTA in the list of the top 10 grant-making trusts in the UK. But, if its mission is to continue, to develop and to expand, it must widen its resource base and use its income to invest in what--as we have said so often before--we intend it to invest in; British creativity, talent and ideas. I do not believe that this activity can be an optional extra. The Government and Parliament will commit themselves to NESTA through the endowment from the lottery. It is only right in return to expect NESTA to do all it can to build on that public investment by seeking further contributions to its resources.

I hope that that has helped to convince the noble Baroness and to understand why the Government see this duty as wholly appropriate as a duty and not a permissive possibility. I hope she will consider withdrawing her amendment.

5.45 p.m.

Baroness Rawlings: I thank the noble Baroness for that explanation. I still find phrases like "akin to a charity" rather enigmatic. This duplicates the roles of many charities, which is a great shame. When the noble Baroness also mentions that NESTA will be totally independent, we must not forget that its chairman and the board will be appointed by the Secretary of State, so it is not an elected body like the National Trust. The National Trust chairman is elected from within the body.

29 Jan 1998 : Column CWH131

I beg leave to withdraw the amendment for the moment, with the right perhaps to come back to it at a later date.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 42:

Page 20, line 1, leave out subsection (5) and insert--

("(5) In this section "endowment" has the meaning given by section 17(6) above.").

The noble Lord said: I beg to move.

On Question, amendment agreed to.

Clause 18, as amended, agreed to.

Clause 19 [Directions etc]:

Lord Skidelsky moved Amendment No 42A:

Page 20, line 13, leave out subsections (2) to (5) and insert--

("( ) If NESTA fails to comply with any directions given to them under this section, the Secretary of State may after taking into account any representations made by NESTA, act pursuant to paragraph 3(4) of Schedule 4.").

The noble Lord said: The purpose of this amendment is to white out one of the Secretary of State's fingerprints. Schedule 4 gives the Secretary of State power to appoint all NESTA's trustees and remove any or all of them if they are unable or unfit to discharge their duties. These are very ample powers, as my noble friend has just pointed out. We feel that they should not be supplemented by the further power to fine NESTA for not carrying out the Secretary of State's directions. The principle we propose is very simple--appoint people to do a job and sack them if they do not do it, but do not whittle down their financial resources while they are trying to do it.

We also see practical difficulties about fining. Suppose the Secretary of State were to remove the whole or part of NESTA's endowment, as he is entitled to do. What would happen to the projects in the pipeline--applications for grant which had already been approved? Would they just be cancelled? Both on grounds of principle and on practical grounds, there is a good case for our amendment. I beg to move.

Baroness Ramsay of Cartvale: I hope that in a reasonably simple and straightforward way I can clear up what is perhaps a misunderstanding about the situation. The powers which the Bill would enable the Secretary of State to exercise over NESTA are actually very limited. They are chiefly concerned with safeguarding the public investment in NESTA through the endowment from the National Lottery. Clause 19(1) allows the Secretary of State to issue NESTA with directions concerning its financial arrangements.

It is clearly important that the public's investment in NESTA is secure at all times. The financial directions will provide the proper level of accountability and control to allow the Secretary of State to ensure that this achieved. There clearly also needs to be some backstop provision to allow for the unlikely event of NESTA failing to comply with any such direction. The Bill as drafted provides the sensible and responsible solution that in those very unlikely circumstances the Secretary

29 Jan 1998 : Column CWH132

of State will be able to require NESTA to pay back to him all or any part of the endowment. This will enable him to continue to safeguard the lottery endowment.

The amendment of the noble Lord, Lord Skidelsky, as I understand it, suggests an alternative approach. He suggests that the Secretary of State should be given the power in these circumstances to remove the chairman or trustees of NESTA. We can certainly see the point of the amendment. It is both to act as a deterrent to activity outside the terms of the financial directions, and to enable the Secretary of State to change the board so as to address the perceived shortcoming.

However, this amendment does not provide a quick and direct means by which the Secretary of State can assure himself that the lottery endowment is safeguarded. That, I believe, is the main drawback of the amendment. It is high on deterrent value, but low on practical financial protection.

In practice, none of us expects either of these provisions ever to come into play. We do not need a deterrent to reckless behaviour by the trustees. After all, we are placing them in a position of trust, which is why we are calling them "trustees" in the first place, and we are sure they will do their utmost to live up to that trust. All we need is a longstop provision to safeguard the public's money. That is provided by the Bill as drafted, and I hope that the noble Lord, Lord Skidelsky, will accept the point. The point is to secure the endowment, not to sack the trustees.

We are very serious about trusting the trustees, but we are equally serious about securing the endowment, and that is why we have drafted this provision as we have. I hope that puts the noble Lord's mind at rest as to the motivation behind it, and that he will withdraw his amendment.

Next Section Back to Table of Contents Lords Hansard Home Page