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Lord Hoyle: My Lords, the officer to whom the noble Lord referred was unlike some policemen I have

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heard on Merseyside in using a phrase like "Clear off". I thought that he might have used the somewhat stronger language to which we are accustomed in the north-west.

I welcome the support given for the order. Perhaps I may add to what has been said about the need for stop and search powers to be used fairly. The Association of Chief Police Officers has set up a project to develop the effective use of Section 95 data which will inform the development of a good practice guide. The Metropolitan Police Service has reviewed its use of stop and search and has developed a plan to manage the tactic fairly and effectively. It will pilot that on five sites of the Metropolitan Police Service. It will also be tried out at one site in Nottinghamshire.

The HMIC thematic inspection report on police community and race relations and the reinspection of 15 forces which is nearing completion will be used also to assess progress. A new contract providing the police service with training on police, race and community relations began on 1st January 1999. The move is a force-based approach to training because that will allow local needs to be identified and addressed. I hope that that also meets the needs of the noble Lords who spoke tonight.

I trust that the House will approve the draft order which will allow the revised code to come into effect on 1st March.

On Question, Motion agreed to.

Apportionment of Money in the National Lottery Distribution Fund Order 1999

8.20 p.m.

Lord McIntosh of Haringey rose to move, That the draft order laid before the House on 20th January be approved [6th Report from the Joint Committee].

The noble Lord said: My Lords, I beg leave to move the Apportionment of Money in the National Lottery Distribution Fund Order 1999.

The purpose of this order is to adjust temporarily the shares of National Lottery income to good causes so as to provide the New Opportunities Fund with the funding we promised it in September last to deliver three new initiatives.

The Government announced their intention in the 1997 White Paper, The People's Lottery, to establish a New Opportunities Fund. The National Lottery Act 1998 made this a reality. NOF, as it is generally known, will fund initiatives in health, education and the environment. There is no question of the lottery taking over core funding responsibilities for these areas. This expenditure will be additional to core government support. NOF was officially launched last Friday, when it invited applications for its first initiative--healthy living centres.

We were able to create NOF without disadvantaging the existing good causes. It had originally been told to plan on the basis that it would receive 20 per cent. of the £9 billion which it was anticipated would be raised over the course of the operator's licence, which ends in

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September 2001. This amounted to £1.8 billion each. In the event, it became clear that the National Lottery was likely to raise an additional £1 billion, taking income to the good causes to £10 billion. It is this additional £1 billion which made possible the initial NOF programmes.

The National Lottery continues to be a great success. We now estimate that income to the good causes will be at least £10.6 billion over the lifetime of the licence, which is £600 million more than our previous estimate. We announced in September last year that this additional money would be split between NOF, which would get an additional £400 million, and arts, sports, heritage and charities--which would get an additional £50 million each. So rather than £1.8 billion, arts, sports, heritage and charities can now expect £1.85 billion over the life of the licence. The Millennium Commission, about which I will say more later, is not affected.

In deciding how best to allocate the additional £600 million, we kept in mind the pressures on the good causes. But we also needed to balance this against the opportunity to use the additional money for pressing priorities in health, education and environment. We believe that the split proposed strikes the right balance. It gives arts, sports, heritage and charities £50 million more than originally expected. And it allows NOF to launch significant new initiatives.

The original three initiatives were announced in September and will support regular out-of-school activities; training teachers and librarians to use technology; and a core network of healthy living centres. The additional £400 million will allow NOF to develop three further initiatives. We published our proposals for these in November last year, in the consultation document, New Links for the Lottery. The three initiatives are: green spaces and sustainable communities, which will help urban and rural communities across the UK to understand, improve and care for their natural and living environment; cancer prevention, detection, treatment and care, which will build on local fund-raising to address local needs; community access to lifelong learning. We also proposed an expansion to the after schools initiative to find 250,000 new summer school places.

We have received well over 300 responses to our consultation and are currently considering them. The vast majority welcomed our ideas. We hope very soon to bring to the House an order to establish the new initiatives.

The order changes the percentage shares of the affected good causes. If we did not do so, the current percentage split would mean that only £200 million of the additional £600 million would flow through to NOF, rather than £400 million as intended. The purpose of this order, therefore, is to transfer a further £200 million to NOF.

The Secretary of State and officials have been in discussion with the distribution bodies about how they would prefer this to be done. They decided that they would prefer a quick reduction as early as possible, followed by a return to their current percentage shares.

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This is what the order before you does. It reduces the percentage income shares to arts, sports, heritage and charities from 16 2/3 per cent. to 5 per cent. for 13 weeks from 15th February until 16th May. At the end of this period, their share of lottery income reverts to 16 2/3 per cent. During the same period, NOF's share increases to 60 per cent. before reverting to 13 1/3 per cent. All the good causes have substantial reserves sitting in the National Lottery distribution fund and can meet all of their commitments during this period and afterwards.

We appreciate that these changes can make it more difficult for the distributing bodies to plan ahead. And we are very grateful to them for the constructive way in which they have approached this issue. The Secretary of State was able to announce yesterday for the first time that we will not change again the percentage shares to arts, sports, heritage and charities for the remainder of the licence period. This is in addition to the undertaking already given that these good causes are each guaranteed 16 2/3 per cent. of lottery proceeds after the current licence expires.

This order does not directly affect the Millennium Commission, but it may be helpful if I set out how we anticipate its future funding stream developing. As we have previously announced, the Millennium Commission is assured £2.017 billion over its lifetime. At present the Millennium Commission gets 20 per cent. of money going to the good causes. It was originally planned, however, that at the end of September 1999 the percentage shares for the Millennium Commission and NOF would switch so that the Millennium Commission would receive 13 1/3 per cent. (rather than 20 per cent. as at present) and NOF 20 per cent. (rather than 13 1/3 per cent. as at present).

We have now decided that the Millennium Commission's share of lottery income should remain unchanged at 20 per cent. until it reaches its target of £2.017 billion. Once that figure has been reached, all of the Millennium Commission's 20 per cent. will go to NOF.

I would stress that these are our best estimates. Accurately predicting future lottery income is almost as difficult as predicting an individual draw. That is why our plans are made on the basis of cautious forecasts. if, as we all hope, more money comes through, then all the good causes will share in it. We are clear that the continued success of the National Lottery is very good news indeed for all the good causes. It is changing the face of the United Kingdom for the better and bringing benefits, direct and indirect, to all of us.

I must stress that this order does not change policy. it gives effect to policies announced last September. We have gone beyond that announcement, however, by giving the distributing bodies an undertaking that there will be no further change to their percentage shares during the rest of this licence. And this, as I have said, is in addition to the undertaking already given that these good causes are each guaranteed 16 2/3 per cent. of lottery proceeds after the current licence expires. I am sure that the good causes welcome the greater certainty which this will give them now and into the future. I commend the order to the House.

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Moved, That the draft order laid before the House on 20th January be approved [6th Report from the Joint Committee].--(Lord McIntosh of Haringey.)

8.28 p.m.

Baroness Anelay of St. Johns: My Lords, I thank the Minister for his explanation of the order. However, I must make it clear that when the Motion is put to the House I cannot give the Government any assistance in its passage. The convention of this House is that the Opposition Front Bench does not oppose the making of an order, and I shall indeed abide by that convention. Let me make it clear, too, that I am of course in general favour of the projects which will benefit from this order in so far as at this stage we know anything much about them.

My objection is simple. It is that the Government are raiding the arts, sports and good causes lottery fund to provide for them. I was intrigued to note that the Minister said that yesterday it was possible for the Secretary of State to announce that he would not change the system of funding again. When one reads the report of the Standing Committee, the words read rather differently. What actually happened was that the Secretary of State said:

    "There will be no further raid on that money".
The Secretary of State for the first time admitted that the Government are carrying out a raid on lottery funds. His admission is now on the record.

When the National Lottery was established in 1994 that was done in order to:

    "restore our heritage and promote projects which will become a source of national pride".
It became a massive success story. Lottery money brought about a renaissance in the arts of Britain. It revolutionised sport. Hundreds of amateur dramatic societies, small sports clubs and local museums benefited from it. The lottery boosted the work of our charities.

The Labour Party's main source of opposition to the National Lottery at the time of its inception was that, given time, the Conservative Party would use its proceeds as a surrogate for government expenditure. Time and again it accused us of that--and it was untrue. Throughout the three years that the Conservative government presided over the lottery, no such action was taken. Today that action is being taken by a Labour Government.

We are being asked to agree to an extra £200 million being taken away from the original good causes, which are already being hit by the cuts in their allocations from 20 per cent. to 16 2/3 per cent. However much the Government try to argue that the arts and good causes will still have funding, they cannot escape the fact that the lottery funds have been raided by this order--the Secretary of State himself said so.

This order also makes a mockery of the additionality principle under which it was established, despite the Minister's valiant attempt to argue that this money will

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not go to core funding. The Prime Minister himself originally supported the principle of additionality. He said:

    "We don't believe it would be right for lottery money to pay for things which are the Government's responsibilities".
That must be right. The National Lottery was not intended to be used to fund projects which are the Government's responsibilities, such as cancer care. The Government state that the New Opportunities Fund initiatives must be:

    "additional to government expenditure and not a substitute for it".
The reality of the matter is that the initiatives will indeed be a substitute for government expenditure. Again, I do not for one moment say that the projects which will be funded by moneys diverted from the arts and good causes will be misspent as such. I anticipate that all the projects will be most useful and most welcome. But I argue that they should not rely upon the lottery for their funds. At the moment, of course, we do not have the details of these projects and I would not expect that we would. I appreciate that many of them are likely to be popular, but the public has not yet grasped what these raids on the lottery funds really mean for them, for the arts and for good causes. We shall do our best over the coming months to lift that veil.

In the meantime, I would be grateful on a technical matter if the Minister could explain to the House how it is possible for the New Opportunities Fund--the Minister conveniently refers to it as NOF and, in the context of the last order before this House we were told the police in Liverpool told people to "clear off"; so I wonder whether NOF will not now become something of a rude acronym in this House--to draw down 86 per cent. of its funds (£244 million) without publishing the causes to which it goes, while the rest of the five original good causes have drawn down an average of 35 per cent. because they have to wait for a private matching first.

Also, I do not believe that the Government have thought through the full implications of the New Opportunities Fund and the way in which it sits within the funding structure of central and local government departments. What happens if the Government raid the lottery to provide funds for excellent schemes which depend for their very existence--their core funding, as well as the Government's--on services funded by local governments who cannot sustain those services? To turn from the abstract to a practical example, I refer briefly to the issue of libraries.

On 1st December the Government announced that it would use part of the NOF for grants for library ICT projects. The press release of the Department for Culture, Media and Sport stated that the public library network is to become a key means of giving the information have-nots access to the benefits of education and training initiatives--welcome initiatives. But the situation in our public libraries is critical. At least 50 libraries are at risk of being shut. Barnsley plans to close 23 branch libraries. My own county of Surrey is reported to be closing 16 branch libraries, and Haringey, the Minister may note, may close two or three. Islington may cut its library service so that only

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five open at the weekends. Librarians say that the impending closures threaten to undermine the National Year of Reading and the drive to raise literacy levels among the young.

A spokesperson of the Library Association, Sherry Jespersen, said that,

    "There is a huge gap between the government's vision for libraries and the reality of closures, reduced opening hours and cutbacks".
It is not much use a central government raiding the New Opportunities Fund of arts' and charities' money to put into grants for library projects if the libraries are being closed down by local government at a fast rate of knots.

I began by saying that there was one small crumb of comfort in the Secretary of State's speech yesterday; he did pledge that the Government would not raid the lottery again. But even if that pledge is kept, there are still manifest dangers in the passage of this order. The London firm of Farrer and Co. described those dangers graphically in its response to the Secretary of State's comprehensive spending review last year. It stated:

    "We fear that there is a danger in the boundary between lottery funding and Grant-in-Aid becoming so blurred as to remove any tangible difference between the two".
It concluded that:

    "the loss of any practical distinction between lottery funding and Grant-in-Aid and the tying of the process of lottery distribution more closely to the strategic priorities of the department will inevitably lead to the adoption of lottery funding as an adjunct to public spending. This may result in a consequential loss of public support for the lottery, which until now has been a highly successful means of raising funds for cultural initiatives".
The danger has been identified. The warning has been given. The passage of this order is a threat to the long-term health of the lottery.

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