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Viscount Falkland: My Lords, we on these Benches believe that the draft report and order are excellent documents if one believes the underlying philosophy, which we do not. There is no point rehearsing the arguments; we have done that on numerous occasions and the Government will have their way. The Government have drawn away from the basic philosophy of the original lottery legislation and whether or not it is "raiding"--the noble Baroness used that word very effectively--

Baroness Anelay of St. Johns: My Lords, I was merely quoting the Secretary of State.

Viscount Falkland: My Lords, then the Secretary of State used the word "effectively". I shall not use it myself but there is no doubt that sports and the arts are underfunded in relation to those areas in many other countries and have suffered with this shift away by the Government from that which was generally agreed when the original lottery Bill went through both Houses of Parliament. But that is the way things have happened and there is nothing we can do with this order either.

My friends are now very interested in what is going on in this place for other reasons, and I tell them that our business here is amending and revising. But a lot of

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good it is amending and revising 60 per cent. of the time when more and more legislation comes through in this form. I understand from the White Paper that has been published on reform of the House that there is an intention that this House, however it is composed, will have even less say on legislation of this kind.

However, the original five causes have suffered. There is no getting away from that. Assuming the same input to the lottery during the first months of this year as was taken in the same period last year, each of the original five causes will lose around £47 million and receive only £20 million instead of the roughly £67 million that they should have received. On the other hand, the New Opportunities Fund will receive around £188 million more of the £244 million, instead of the £53.76 million it expected to receive.

Most of the beneficiaries of the fund--health, education and the environment--as we have argued before, should be government funded. We still hold to that view. They should not be funded from the lottery. That is an unsatisfactory state of affairs particularly when the party of government so fully supported the original philosophy of the lottery--to support activities and areas of our national life that could not expect the right level of funding from normal government sources. The shift away from that philosophy has done no good. I am sorry to disagree with the noble Lord, Lord McIntosh of Haringey, but I think that the country is the poorer as a result of the legislation and the draft order.

As to the millennium fund, the millennium dome has received in the region of £450 million. That amount does not appear to be included in any figures published by the Lottery Board or the Government, which is curious.

I shall not go further because that would be pointless. The order will happen, and sport and the arts will struggle as they have always struggled. The noble Lord who is answering the debate will do his best in those areas, as he always does. It is just a great pity that we could not have organised ourselves in such a way that the lottery would be dealt with by another department of state and we could have a proper champion for the arts. If only the great skill and eloquence of the noble Lord, Lord McIntosh, could be used to champion the arts against another department that is trying to impose changes upon us, the country would be the richer.

8.40 p.m.

Lord Cocks of Hartcliffe: I thank the Minister for introducing the order, and I will concentrate on one point. Basically, the lottery is a tax on the working class for the benefit of the middle class. The people who administer the lottery are becoming increasingly self-conscious about that fact. My honourable friends in the other place are vociferous in raising that issue and I welcome growing awareness by the Government of what is actually happening.

I became aware of the situation when, as vice-chairman of the BBC, I used to visit the regions and talk to staff in the news departments--particularly the people producing local news. They used to tell me about applications and failures, and it soon became clear

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that there was a dearth of money going into working-class areas. One might argue that that was anecdotal evidence, so today I approached Camelot to ascertain the facts. They were able to identify participants by social groups. They were groups A and B, 21 per cent.; group C1, 27 per cent.; group C2 24 per cent.; and groups D and E, 28 per cent. Note the nice, even balance, with the lowest figure being 21 per cent. and the highest 28 per cent. All groups seem to be doing well and are much the same. However, those percentages do not mean anything unless one knows the number in each group and the spend per head.

When I asked Camelot they said, "We no longer track the amounts spent on the lottery by different social groups. We did once but we stopped 12 to 18 months after the lottery began". I wonder why. I have a naturally suspicious mind, so I believe that one reason that those calculations slipped out of sight was that they blew the gaff and showed that some of the poorest people in the country were coughing up to improve the conditions of the extremely well off.

I have in the past raised in the House the question of how we have been bounced by the chattering classes into constitutional reform in which virtually no one has any interest. The Prime Minister said recently that we are all becoming middle class. That is a jolly good thing because the middle class know how to work the system. The need to provide matching funds makes it much easier for middle-class areas to raise matching funds and get lottery money. There is even the new profession of consultants who will advise groups on how to milk the lottery.

The middle class are familiar with lobbying and pressurising, so it is a natural extension to use consultants to get even more money. The working class, because of their traditions and so on, are not so familiar with such methods and are therefore suffering.

I hope that the Government will continue their efforts to improve the distribution of lottery funds between social groups. It is quite wrong to have a system that plays on the hopes of one class who are hoping for a material improvement in their conditions--and for whom the lottery is a major source of secondary poverty--but which actually benefits another class, who are already comfortably off and are just looking around for subsidised entertainment to enjoy in their leisure time. I hope that my noble friend will carry on with his efforts to make lottery fund distribution much more equitable.

8.45 p.m.

Lord Mancroft: My Lords, I have no desire to detain the House too long as we approach the unusually civilised hour at which the House is to rise this evening.

I listened carefully to the noble Lord, Lord McIntosh, who comes to the House as well briefed as always. I also read the exchanges in Standing Committee in the other place last night, when the Secretary of State made the remarks to which my noble friend alluded and which persuaded me to speak this evening. Those remarks rather horrified me.

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I have no desire to enter the debate about the manner in which lottery funds are allocated or will be in future, and I do not want to score points on the theology behind the principle of additionality--which I had never heard of before reading the Standing Committee report. Nor do I question the desirability of specific projects on which the new opportunities fund will spend its money in the areas of health, education and the environment. On the face of it, those seem to be perfectly reasonable areas of expenditure for the Government to embark upon.

The nub of the matter is that however Ministers choose to portray them, those areas should, without a shadow of a doubt, benefit from mainstream government expenditure. In 1993--which seems a lifetime ago--when we started to talk in this House, in the other place and around the country about a national lottery, there were numerous debates about how and where the money should be spent. Everyone took a different view, undoubtedly slanted by their particular areas of interest. The one view that everyone had in common--none more resolutely than the then Labour Opposition--was that the fund should not be controlled by the Government and on no account should it be spent as a substitute for normal government expenditure.

Even those of us who did not like the lottery very much agreed that its purpose was to fund those things that, while worthy and desirable--such as sports, the arts, charities, national heritage and other areas--are difficult for government to fund directly for reasons we all know. What we have today is very different from that envisaged.

I have always been unhappy about the level of duty paid by the lottery to the Treasury. Few state or national lotteries that I know of pay tax to their governments--certainly not at the level imposed in the United Kingdom. I have always felt that the millennium fund is more a tool for inflating the egos of the politicians most closely involved with it and is of limited worth. However, the millennium fund was agreed by Parliament and I was personally comforted by the knowledge that it would not continue indefinitely. That comfort has evaporated with the advent of the new opportunities fund and the inflated amount that it has received at the expense of the original good causes.

The result, which no amount of clever accounting and persuasive debate can change, is that the Government now extract more money from the national lottery than any other state or national lottery in the world. The Government will have their order tonight because governments always do, but the Government should be in no doubt that their policy will widely and correctly be seen as extremely shabby and their conduct as dishonourable--both of which are to the detriment of the original and real good causes.

8.50 p.m.

Lord McIntosh of Haringey: My Lords, Chris Smith and I learned a lesson yesterday and today that irony goes down very badly in either House of Parliament, particularly when what has been said is read in cold print after the event. Anybody who knows what

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happened yesterday knows perfectly well that the Secretary of State made a speech that had a text lasting perhaps 10 or 12 minutes, but which actually took three-quarters of an hour to deliver. The reason was that he was constantly attacked by a large number of Conservative Back-Benchers, not members of the committee, who went along to make and enjoy a show. Ironically, he said that there would be no further raid on that money. That is fine. The noble Baroness and the noble Viscount can make as much of a meal of it as they like. I do not begrudge them that.

However, that does not mean that any change in government policy is implied by the order. We are bringing into force something that we announced very early on. Perhaps I may advise the noble Lord, Lord Mancroft, who accused us of shabby and dishonourable conduct--those are the very words that he used--that the announcement being brought into effect by the order was made not only in the White Paper of July 1997, but also in a Labour Party document before the election when we made it absolutely clear to the electorate that we were going to do what we are doing now. We said that we were going to extend the provisions--the good causes of the lottery--from the arts, sport, heritage and charities to include initiatives in health, education and the environment.

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