NATIONAL LOTTERY BILL
[HL]
Memorandum by the
Department for Culture Media and Sport
Part I - Amendments
of the National Lottery etc. Act 1993
1. Clause 2(1)
1.1 Clause 2(1) inserts
new section 10A in the National Lottery etc. Act 1993 (the Act).
New section 10A provides that if the Director General of the
National Lottery (the Director General) is satisfied that a person
has contravened a condition in a licence under section 5 or 6
of the Act, he may impose a financial penalty on that person in
respect of that contravention. New section 10A(6) enables the
Secretary of State to make regulations as to the procedure to
be followed where a person has notified the Director General of
the intention to make oral representations following receipt of
a notice from the Director General that he proposes to impose
a financial penalty on that person. New section 10A(7) provides
that the regulations may in particular provide for the financial
penalty to become payable if the person fails to comply with any
requirements imposed by or under the regulations and as to the
hearing by the Director General of oral representations. The
Council on Tribunals has been consulted on this proposal and new
section 10A in broad terms gives effect to the Council's comments.
1.2 The level of detail
required for procedural rules is thought inappropriate for primary
legislation and the making of rules by delegated legislation follows
precedent - see for example paragraph 8 of Schedule 3 to the Act
itself. Furthermore by reason of section 8(1) of the Tribunals
and Inquiries Act 1992 and clause 2(4) of the Bill the Secretary
of State may only make regulations under new section 10A(6) after
consultation with the Council on Tribunals.
1.3 By reason of section
60(3) of the Act (amended by clause 13(4)) the statutory instrument
containing the regulations is subject to annulment in pursuance
of a resolution of either House of Parliament. This is the well
established procedure for the making of such procedural regulations.
2. Clause 6(2) and (3)
2.1.1 Clause 6(2) (and clause
6(3)) insert a new Schedule 6A into the Act and that Schedule
makes provision for the New Opportunities Fund (the Fund). Paragraph
1(1) of new Schedule 6A provides that the Fund shall consist of
a chairman and not less than 8 nor more than 12 other members.
Paragraph 1(3) enables the Secretary of State by order to vary
any number for the time being specified in paragraph 1(1).
2.1.2 It is thought that
the Fund comprised of a chairman and between 8 and 12 members
is the appropriate size to enable the Fund to perform its functions.
It is however thought desirable to have the power either to increase
or decrease the membership of the Fund should that prove expedient
in the light of experience.
2.1.3 By reason of section
60(3) of the Act (amended by clause 13(4)) a statutory instrument
containing any order made under paragraph 1 will be subject to
annulment in pursuance of a resolution of either House of Parliament.
This procedure is thought appropriate in view of the substance
of any order that might be made and follows as to its procedure
the precedent at paragraph 1(2) of Schedule 5 to the Act as regards
the National Lottery Charities Board.
2.2.1 Clause 6(2) also inserts,
inter alia, new section 43B(1) in the Act. New section 43B(1)
provides that the Secretary of State may by order specify initiatives
to the Fund which are concerned or connected with health, education
and the environment and to which the Fund is to give effect by
means of its funding powers. By reason of new section 43C(4),
the Secretary of State shall consult such persons as appear to
him to be appropriate before making an order specifying an initiative.
Initiatives may be framed as applying throughout the whole of
the United Kingdom or to one or more areas of the United Kingdom
- see new section 43C(3).
2.2.2 Initiatives to be specified
by the Secretary of State to the Fund are likely to be limited
both by time and by the sum to be spent, using his powers of Direction
under new section 43C(1). The Secretary of State will therefore
need to specify new initiatives to the Fund from time to time.
The use of delegated legislation supplies the requisite flexibility
to do this within a framework which will require initiatives to
be concerned with or connected to health, education and the environment
as defined.
2.2.3 By reason of clause
13(2) which amends section 60(2) of the Act an order under new
section 43B may not be made unless a draft of the statutory instrument
containing the order has been laid before and approved by a resolution
of each House of Parliament. However by reason of clause 13(3)
inserting new subsection (2A) in section 60, new section 60(2)
does not apply to an order which contains only provision revoking
an order under new section 43B and such an order is subject to
the negative procedure in accordance with the section 60(3) as
amended by clause 13(4). It is thought that the affirmative procedure
is appropriate for the specification of initiatives in view of
the importance of such initiatives, the likely amounts of lottery
derived funds and so the level of Parliamentary scrutiny to which
this should be subject. The negative resolution procedure is
appropriate for the revocation of an initiative as the initiative
is effectively brought to an end on the basis of the Secretary
of State's directions. It is therefore essentially a matter of
removing redundant provisions and that no such order may be made
unless the Secretary of State has consulted the Fund, for which
see new section 43C(5).
2.2.4 Clause 7(5) provides
that any consultation undertaken before the commencement of clause
6 (which inserts, inter alia, new sections 43A, 43B and 43C) in
connection with an initiative proposed to be specified in an order
made under new section 43B shall be effective in relation to that
initiative as if clause 6 had been in force at the time. Clause
7(6) provides that where clause 7(5) applies and a statutory instrument
containing an order which specifies only that or those initiatives
shall, notwithstanding provisions of section 60(2) of the Act
(as amended by clause 13), be subject to annulment in pursuance
of a resolution by either House of Parliament.
2.2.5 The White Paper, "The
People's Lottery" (Cm 3709) presented to Parliament in July
1997 sets out the Government's plans for the Fund and the first
three initiatives to be funded by the Fund, namely out of school
hours activities, training for teachers and librarians in information
and communications technology and healthy living centres. The
White Paper invited comments on the proposals to be contained
in the Bill by 12 September 1997 and on the White Paper more widely
by 10 October 1997. Wide public consultation has therefore already
taken place. It is thought that the Fund itself and the three
initiatives identified will be the subject of extensive debate
during the Parliamentary passage of the Bill. It is also considered
highly desirable that the Fund gives effect to the initiatives
as soon as possible. In the circumstances it is thought appropriate
to provide at clause 7(6) that these three initiatives may be
specified by an order subject to the negative procedure thus avoiding
the need for both Houses to spend further time on matters which
will have already been thoroughly considered and enabling the
three initiatives to start being given effect at the earliest
possible opportunity.
3. Clause 10(1) and (3)
3.1 Clause 10(1) inserts
new section 25B in the Act making provision for joint schemes
for distribution of money by lottery distributing bodies. By
reason of new section 25B(5), new Schedule 3A makes supplementary
provision in relation to joint schemes and is inserted in the
Act by clause 10(3).
3.2.1 Paragraph 2(1) of new
Schedule 3A provides that where the maximum amount of money in
any one year which may be distributed under a particular joint
scheme exceeds £5 million, the joint scheme shall not have
effect unless the Secretary of State makes an order authorising
the scheme. Paragraph 3 makes provision as to the contents of
such an order and paragraph 6(1) makes provision as to any order
modifying a joint scheme. Paragraph 7(1) makes provision as to
the termination of a joint scheme, whether by the Secretary of
State of his own motion or on the application of one or more of
the bodies participating in the joint scheme.
3.2.2 Paragraph 8 of new
Schedule 3A is relevant where an order is made under section 29(1)
of the Act and a body affected by the order under section 29(1)
is participating in a joint scheme. Section 29 taken with paragraph
8 of new Schedule 3A will enable the Secretary of State in making
an order under section 29 either to make provision for joint schemes
in which an affected body is participating or to revoke any joint
scheme in which such a body is participating.
3.2.3 Joint schemes can only
come about on the application to the Secretary of State of the
lottery distributor bodies proposing to participate - see paragraph
2(4) of new Schedule 3A. The effect of a joint scheme is that
there will be less certainty that lottery money is distributed
between "good causes" in the precise proportions for
which Parliament has provided at section 22(3) of the Act (and
for which also see clause 5). In view of this and the voluntary
nature of joint schemes on the part of participating distributors
it is thought appropriate to require the authorisation of such
schemes by delegated legislation where the maximum amount of money
which may be distributed in any one year exceeds a threshold -
£5 million. Paragraph 8 of new Schedule 3A concerns certain
consequences for joint schemes of orders made under section 29(1)
of the Act and it is thought appropriate to address such matters
in the order made under section 29(1) itself.
3.2.4 A statutory instrument
containing an order made under paragraph 2(1) of new Schedule
3A is in accordance with section 60(3) of the Act (as amended
by clause 13(4)) subject to annulment in pursuance of resolution
of either House of Parliament. The same is true of an order made
under section 29(1) of the Act, the procedure for which is unchanged
by the Bill. In both cases the negative procedure is thought
to supply the appropriate degree of Parliamentary scrutiny. The
exception to this is a statutory instrument which contains only
provision revoking an order made under paragraph 2(1) of new Schedule
3A. In such a case the statutory instrument shall be laid before
each House of Parliament - see clause 13(5) inserting new subsections
(3A) and (3B) into section 60 of the Act. It is thought this
procedure is appropriate for orders concerned only with the revocation
of a joint scheme.
3.3.1 Paragraph 2(5) of new
Schedule 3A enables the Secretary of State by order to increase
the amount for the time being specified in paragraph 2(1). Paragraph
2(1) provides an order authorising a joint scheme is required
where the maximum amount which may be distributed in any one year
under the scheme exceeds £5 million.
3.3.2 It is thought that
in the light of experience it may prove desirable to increase
the amount which may be distributed in any one year under a joint
scheme without requiring authorisation by an order and the order
making power at paragraph 2(5) confers on the Secretary of State
the power to increase the amount.
3.3.3 An order may not be
made under paragraph 2(5) of new Schedule 3A unless a draft of
the statutory instrument has been laid before and approved by
a resolution of each House of Parliament - see clause 13(2) amending
section 60(2) of the Act. It is thought that the consequences
of any increase to the limit, and in particular the need for Parliament
to be assured that the new limit is acceptable, are such that
the affirmative procedure is appropriate.
Part
II - The National Endowment for Science, Technology and the Arts
4. Clause 14(2) and paragraph
1(3) of Schedule 4
4.1 Clause 14(2) provides
that Schedule 4 makes provision in relation to the National Endowment
for Science, Technology and the Arts (NESTA). Paragraph 1(1)
of Schedule 4 provides that NESTA shall consist of not more than
15 members to be known as trustees one of whom shall be appointed
as chairman. Paragraph 1(3) enables the Secretary of State by
order to increase the number of trustees for the time being specified
in paragraph 1(1).
4.2 NESTA is intended
to be a small strategic body and it is thought that a body of
up to 15 members is appropriate. It may be that in the light
of experience it will be thought desirable to have a greater number
of trustees. The order making power confers the requisite flexibility
should such an increase be thought desirable.
4.3 By reason of paragraph
1(4) of Schedule 4 an order under paragraph 1 is to be made by
a statutory instrument which is subject to annulment in pursuance
of a resolution of either House of Parliament. This follows the
precedent as to the procedure at paragraph 1(2) of Schedule 5
to the Act in relation to the National Lottery Charities Board
and is thought appropriate for a change which is not fundamental
to the structure of NESTA.
5. Clause 15(3)
5.1 Clause 15(3) enables
the Secretary of State to make an order adding to, removing or
varying the means set out at clause 15(2) by which NESTA is to
achieve its objects as set out at clause 15(1). Such an order
may only be made at the request of NESTA.
5.2 It is thought desirable
that if in the light of experience NESTA finds that the means
by which it is to achieve its objects could be enhanced by some
modification of the means specified, NESTA should be able to request
the Secretary of State to make an order making the appropriate
modification. It is to be noted that NESTA's objects require
it to be involved in areas of innovation and changing technology
so it is appropriate to have flexibility in this area.
5.3 Clause 15(4) provides
that an order made under clause 15 shall be made by a statutory
instrument a draft of which has been laid before and approved
by a resolution of each House of Parliament. It is thought that
any change to the means by which NESTA is to achieve it objects
should be at the request of NESTA but that any such change is
sufficiently fundamental to require the affirmative procedure.
6. Clause 17(2)
6.1 Clause 17(2) enables
the Secretary of State to make an order permitting him to pay
to NESTA out of the National Lottery Distribution Fund (NLDF)
a sum specified in the order thereby increasing NESTA's endowment.
The order may be made any time after the first anniversary of
the Act being passed. The order will specify from which "good
cause" or "good causes" in section 22(3) of the
Act the sum to increase the endowment will be taken and where
the sum is taken from more than one good cause it may be taken
in unequal amounts. Before making any such order the Secretary
of State shall consult each of the distributor bodies mentioned
in section 23 of the Act for the time being:- see clause 17(3).
6.2 Clause 17(1) enables
the Secretary of State to provide NESTA with an initial endowment
by making one or more payments out of the NLDF from money allocated
for expenditure on or connected with health, education and the
environment. The initial endowment must be made within the period
ending with the first anniversary of the passing of the Act.
Clause 17(2) provides an order making power for any subsequent
endowment or endowments. Any decision on a subsequent endowment
will be made in the light of NESTA's developing role, its effectiveness
and the needs of lottery distributors at that time. This makes
delegated legislation the appropriate vehicle for making any subsequent
endowment.
6.3 By reason of clause
17(8) any order under clause 17 is made by statutory instrument
a draft of which has been laid before and approved by resolution
of each House of Parliament. It is thought that this is the appropriate
procedure for reallocating funds in the NLDF to NESTA and therefore
away from lottery distributors.
December 1997
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