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Orders Of The Day

Volume 407: debated on Friday 20 June 2003

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National Lottery (Funding Of Endowments) Bill

Not amended in the Standing Committee, considered.

New Clause 1

Commencement

`.—This Act shall come into force on such day as the Secretary of State may by order appoint.'.— [Mr. Chope.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

With this it will be convenient to consider amendment No. 1, in clause 1, page 2, line 10, leave out subsection (9).

In part, new clause 1 is a probing new clause. Paragraph 9 of the explanatory notes to the Bill states:

"The Bill will commence immediately on Royal Assent."
That is relatively unusual for a piece of legislation. The wording is normally in line with that in new clause 1, giving the Secretary of State the discretion to commence the Act as soon as he thinks fit, but normally not within two months of Royal Assent. I hope that my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) will be able to comment on the fact that the wording in the Bill is different from the wording in the National Lottery (Amendment) Bill, which was considered by the House in the 2000–01 Session but which, sadly, had insufficient time to make progress to Royal Assent. I would like to ask my hon. Friend why he wishes to fetter the discretion of the Secretary of State on the issue of commencement, as the present wording does.

My second reason for tabling the new clause is that, when I did so on Wednesday, I feared that the Government might in tend to commence the Act before the regulatory impact assessment had been published. On Wednesday, no such assessment had been published, and I wondered whether this was going to be a re-run of the situation that we had last week, when the regulatory impact assessment for the Fireworks Bill—which received its Second Reading on the same day as this Bill, 28 February 2003—had still not been published at the closing time for the submission of amendments on Report. In the case of the Fireworks Bill, the Minister told us:
"I shall inform the House of the reason that the draft regulatory impact assessment was not published sooner. It had been produced, but the actual publication failed to take place due to an administrative oversight."—[Official Report, 13 June 2003; Vol. 406, c. 967.]

Does my hon. Friend think that this illustrates yet another undesirable trait in the attitude of the Government towards Bills and towards the House? Regulatory impact assessments are supposed to help all of us to assess the impact of a Bill. How can we be expected to do that properly if they do not appear, or if they appear only at the last minute? Is this becoming a habit? If so, is it not time the House put its foot down?

I fear that it is becoming a habit. In legal language, I was adducing what happened last week by way of similar fact evidence. Last week, I quoted from the foreword that the Prime Minister had written in 1998 to the paper on better regulation, in which he insisted—the Minister should listen to this—that the regulatory impact assessment process should be complied with to the letter by his ministerial team. It was not complied with by the Fireworks Bill team, nor has it been complied with in this case. No doubt we will find out whether that is also because of an administrative oversight.

Last week, the Under-Secretary of State for Trade and Industry responsible for that Bill, the hon. Member for Welwyn Hatfield (Miss Johnson), who is to be congratulated on moving to another Department during the reshuffle to become Under-Secretary of State for Health, graciously apologised for Members not having more time to study the regulatory impact assessment. However, I was most surprised to find that there was no RIA for this Bill, as the Minister for Sport had said on Second Reading:
"As the hon. Member for Mid-Norfolk said,"—
I am sure my hon. Friend will bear this out, although, having read the Official Report, I am not sure that he said any such thing—
"my Department has also prepared a regulatory impact assessment for the Bill that I will place in the Libraries of both Houses."—[Official Report, 28 February 2003; Vol. 400, c. 543.]
On Monday, I asked the Library for a copy, only to be told that it had not yet been delivered. After prompting through a parliamentary question, the RIA was placed in the Library yesterday. There was, I am afraid to say, no apology for its being deposited late.

The Minister, who I am pleased to see in his place, has not answered the question that I tabled yesterday as openly as he might. I asked
"when the regulatory impact assessment was (a) prepared and (b) placed in the Library."
He replied:
"DCMS prepared a Regulatory Impact Assessment on the National Lottery (Funding of Endowments) Private Members Bill when it was first tabled. I said at the time of the Bill's Second Reading on 28 February 2003 that copies would be placed in the Libraries of both Houses, and this has now been done."—[Official Report, 19 June 2003; Vol. 407, c. 353W.]
However, the Minister did not say, "This has been done today, almost four months after it was prepared." Nor did he take the opportunity presented by the question to apologise for the RIA being placed in the Library so late. I hope that we get an apology this morning.

Another thing surprised me. When I read the RIA, I found that the Minister had signed it on 27 January.

My right hon. Friend is right to exclaim, because we did not have the benefit of the RIA on Second Reading, which is what the Prime Minister says should be the process, although we now know that it existed at that time. Almost five months later, it has reached the public domain.

This is getting more and more worrying, I must admit. Notwithstanding my hon. Friend's analysis, is there anything in the RIA that is sufficiently damaging for it to be concealed? In other words, is it his assessment that there is either a Government conspiracy or a Government cock-up? There are so many of both that it is difficult to tell one from the other these days.

I was not going to refer in detail to the RIA, but I should summarise my point: if my hon. Friend the Member for Mid-Norfolk and other Members had seen it on Second Reading and in Committee, they might have raised a lot more questions on the Bill's contents and the Government's intentions regarding the powers in it.

The RIA should have been publicly available in time for Second Reading, as required by "Better Policy Making: A Guide To Regulatory Impact Assessment", issued by the Prime Minister in 1998 under his own foreword. There is a flow chart on page 10 of that document, which has 81 pages, so perhaps the Minister may be excused if he has not read it right through.

9.45 am

My right hon. Friend is, as always, rather unforgiving in these matters.

That document was reissued by the regulatory impact unit in January 2003, and it makes it clear that an RIA should be sent to Parliament with the legislation. It is no good saying that this is a private Member's Bill, and that therefore everything is different, because paragraph 1.8 explicitly says:
"In the case of Private Members' Bills which the Government is planning to support, or is not intending to oppose, you"—
that is addressed to the Minister—
"should produce an RIA by the date set down for Second Reading."
That brings me to the question of the new clause: why is there a need for such haste in wanting commencement on the same day as Royal Assent when there has been such manifest tardiness and laxity from the Department in dealing with this matter? That point is reinforced by the situation relating to the issue of draft guidance. On Second Reading, the Minister referred to guidance that he intends to give the lottery distributors:
"I can announce that, should the Bill proceed—I hope that it will"—
as do I—
"my Department will issue guidance to distributors on this matter, and that a draft of the guidance will be made available to peers during the Lords stages of the Bill."—[Official Report, 28 February 2003; Vol. 400, c. 542.]
I requested that such guidance be made available in advance of this debate, but yesterday the Minister replied to a question by saying:
"The guidance is currently in the process of drafting, and we will want to consult distributors before finalising the text and making it available for parliamentary scrutiny."—[Official Report, 19 June 2003; Vol. 407, c. 354W.]
Parliament is to play second fiddle to the distributors, which is thoroughly unsatisfactory, but it is clear from that answer that there has not yet been consultation with the distributors, because the draft has not been produced. However, the Minister said that it would be made available in time for consideration of the Bill in the other place.

As we learned in last Friday's debate, the other place has to consider whether it wishes to amend the Bill pretty quickly, because if there are any amendments they must return to this House no later than 11 July if the Bill is not to be excluded from making further progress. The House will have no opportunity to consider private Members' legislation beyond that date, so time is short, but we are told by the Minister, who is so desperate to get the Bill on the statute book that he wants commencement immediately upon Royal Assent, that he has not even got round to completing the drafting of the guidance, which will be made available for parliamentary scrutiny in the other House, but not in this one.

I asked the Minister and my hon. Friend the Member for Mid-Norfolk why the House cannot see such a draft. Surely we are entitled to that. Is the reason slackness or a cavalier approach on the part of the Minister? Most of all, and in respect of underlining the case for the new clause, what is the urgency behind the immediate commencement on Royal Assent when there has been so much tardiness over this aspect of the Bill?

That brings me to amendment No. 1, which is extremely significant since it would remove the requirement that the Bill be retrospective by leaving out clause 1(9). Why does it need to be retrospective? I looked for guidance in the explanatory notes, which say:
"Clause 1(9) provides for these amendments to have retrospective effect."
That is all they say. They give no reason or further explanation as to why there should be retrospective effect. We as legislators should be nervous about Bills that seek to be retrospective. Retrospection offends against the basic principles of law making, and it should be used only in the most extreme and special circumstances.

What was said about this aspect of the Bill on Second Reading? My hon. Friend the Member for Mid-Norfolk, who is the promoter of the Bill, said:
"The Department for Culture, Media and Sport previously advised that distributors other than the Community Fund could fund endowments, and some distributing bodies have made such grants. The Bill would have retrospective effects, which are in clause 1(9)."
I am not sure whether that answered the question that I have asked. I was none the wiser after reading my hon. Friend's statement. Was the Department for Culture, Media and Sport wrong to advise that distributors, other than the Community Fund, could fund endowments? Have endowments been made that are, unless validated retrospectively, ultra vires?

On Second Reading, my hon. Friend said:
"At the moment, all lottery distributors are able to make grants to endowments but the Community Fund is not."—[Official Report, 28 February 2003; Vol. 400, c. 528–29.]
If that is the situation, what is the problem? Why is there any need for the Bill to be retrospective? It is apparent from this Bill and its predecessor Bill that the people of Norfolk, and indeed the people of Dorset, are concerned to ensure that they can raise money to help carers, and they want to do that by means of an endowment. There has never been any suggestion that they have received an endowment that was ultra vires and that they now need to validate it retrospectively.

On Second Reading, several references were made to endowments, such as the £200 million endowment to the National Endowment for Science, Technology and the Arts. I want to ask the Minister a direct question. Was that endowment ultra vires? Is clause 1(9) designed to validate that expenditure retrospectively? Was the New Opportunities Fund's £50 million payment to a 10-year endowment as part of the fair share initiative ultra vires? Was the £16 million Millennium Commission 10-year expendable endowment to the millennium seed bank ultra vires? What about the £100 million endowment fund of the Millennium Commission to ensure a permanent future for millennium awards? Is that ultra vires?

On Second Reading, the Minister implied that nothing ultra vires had gone on. He said that the Bill
"will ensure that charitable bodies are not put at a disadvantage in gaining access to lottery funding."—[Official Report, 28 February 2003; Vol. 400, c. 541.]
That is fine. In my submission, there is no need for the Bill to be retrospective. The Minister used the expression "tidy up the legislation". That is the precedent that the Government have used on the latest draft of the proposed European constitution, which they say is a tidying-up exercise. We now find its origins in the Minister's comments on Second Reading of this Bill.

I thought that all might be revealed by reading what was said about this issue in Committee. I must say that I was extremely disappointed to see that the Standing Committee on the Bill sat for only 22 minutes. With the greatest respect to my hon. Friend, I do not think that during those 22 minutes the key questions were asked and they were certainly not resolved.

On Second Reading of the previous Bill, the hon. Member for Norwich, North (Dr. Gibson) said that
"out of eight national lottery distributing bodies, only the charities board is prevented outright from granting endowments".—[Official Report, 23 March 2001; Vol. 365, c. 584.]
The then Under-Secretary of State for Culture, Media and Sport, the hon. Member for Vauxhall (Kate Hoey), said that that Bill
"would help to put the NLCB on the same footing as the other lottery distributors, enabling it to make grants towards endowments when it wished to do so."
She went on to say:
"Anyone who is against the Bill must say why the National Lottery Charities Board should be treated differently from the other lottery distributors under the current law."—[Official Report, 23 March 2001; Vol. 365, c. 619–20]
We must consider whether the Government are using this Bill as a device retrospectively to validate that which is at the moment ultra vires. If not, what is the purpose of clause 1(9)? I hope that the Minister will address these serious concerns.

I welcome my hon. Friend's gimlet eye over the proceedings. I am sorry that he was unable to be with us for Second Reading. If I had known of his enthusiasm, I would certainly have asked him to serve on the Committee, but I understand that he has wider parliamentary duties. I hope that he will accept that there was no attempt on my part to ensure that the regulatory impact assessment was not available or hidden from hon. Members on Second Reading or in Committee. Like him, I believe that there should be transparency and openness, and that such documents should always be put in the public domain and preferably made available to colleagues before a debate.

I note that new clause 1 has been tabled in a probing spirit. It would delay the commencement of the Bill following Royal Assent. As I understand it, although this is a common provision for which preparatory work may be needed, such as the drafting of any underpinning statutory instruments, it is not necessary in this Bill. No statutory instruments need to be prepared, and there is no other reason for delaying commencement when it is enacted.

The Bill makes the proposed changes retrospective, because they are liable to throw doubt on powers that have already been exercised in good faith by distributors. My hon. Friend questioned that. Delaying commencement would lead to an unsatisfactory period of limbo, in which distributors who had reasonably believed they had the power to fund endowments might feel constrained no longer to exercise those powers until after commencement.

I am intrigued by what my hon. Friend says. How does he square that with what is contained in paragraph 1 of the regulatory impact assessment, which says:

"The stated view of the Department is that all Lottery distributors, with the exception of the Community Fund (the operating name of the National Lottery Charities Board, which gives grants to charities and the voluntary and community sector), are able to make grants to fund endowments."

That is an opinion. I shall link this issue with the points that my hon. Friend made about amendment No. 1, which would remove the retrospectivity provision. As he knows, in its current form the National Lottery etc. Act 1993 gives distributing bodies the power to distribute lottery money for meeting expenditure such as that covered by section 22 of that Act.

The relevant provisions of the 1993 Act do not make explicit whether that power includes the power to fund endowments. It became obvious on Second Reading and in Committee—the Minister has also made it clear—that distributors other than the Community Fund have the power to fund endowments, and advice to that effect has been issued by the Department in the past, both under the present Government and when we were in office. However, the position is by no means clear in the legislation. The intention of the Bill is to clarify the position for distributors generally, as well as ensuring that the Community Fund has the power to fund endowments.

That said, it would be wrong in clarifying the position to cast doubt on the legality of previous grants made by other distributors to fund endowments, especially when that has been done in the light of advice by the Department and when no one has ever sought to challenge the lawfulness of doing so. That is the key point

Surely the mere fact of making such provisions retrospective raises the spectre that existing endowments are indeed ultra vires. I take my hon. Friend's point, but if there is a need to clarify matters, why cannot that clarification apply in future, instead of being a retrospective validation?

10 am

We are perhaps debating on the margins. There is no conspiracy at all. We want to clarify the position, and in no way are we raising the spectre that something was done illegally. I hope that my hon. Friend will accept that we are acting in good faith and not attempting to set a precedent, and that he will consider that and listen carefully to what I say. Obviously, I hope that he will also take into account what the Minister says, and I have no doubt that he will ask the Minister some probing questions.

Having dealt with the original Bill for the Opposition two years ago, I am very glad to contribute today to what I hope will be a satisfactory conclusion of the Bill's consideration in the House and to congratulate my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) on it.

I listened with interest to what my hon. Friend the Member for Christchurch (Mr. Chope) had to say, and he has served a very useful purpose in reminding hon. Members who introduce private Members' Bills that we need to pay regard to regulatory impact assessments. As I am promoting the Ragwort Control Bill, which is due to be considered on Third Reading on 11 July, I have made a note to ensure that the regulatory impact assessment is published forthwith. My hon. Friend is exactly right to suggest that, even if the advice is that there is no reason to be concerned, it is still worth having.

I agree totally with my hon. Friend the Member for Christchurch on the point about Royal Assent. We had hoped to put such a measure on the statute book two years ago, so I cannot see the point of any further delay. As my hon. Friend the Member for Mid-Norfolk says, there is no requirement for statutory instruments, so let us press on with the Bill and hope that it is dealt with expeditiously in the other place.

My impression is that the very fact that we are making this change at all calls into question the legality of the advice, so retrospectivity is probably essential. Governments of all colours introduce Bills and the House scrutinises them, but sometimes not with all the time available that we would like. That is a growing concern, but when it becomes clear something that has been done may not be absolutely correct, we have to take the advice of parliamentary counsel and make the change.

I would simply say to my hon. Friend the Member for Christchurch that the original legislation was introduced by a Conservative Government, and if a small change needs to be made to put right what may have been an oversight by that Government, all Conservative Members have a duty to support my hon. Friend the Member for Mid-Norfolk and to reject the new clause.

I support the Bill as drafted. It was dealt with in Committee in 22 minutes, with cross-party support. I sincerely hope that the long debate that we have already had will not prevent the Bill from proceeding. It could and perhaps should have been passed two or three years ago. I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on introducing the Bill and the Eastern Daily Press on supporting it, so I hope that the new clause will be rejected.

It would have been good if the hon. Member for Christchurch (Mr. Chope) had attended the debate on Second Reading and raised his concerns then, because the general approach to the Bill has been one of all-party support, as the hon. Member for Colchester (Bob Russell) said, and there was simply an oversight when the National Lottery etc. Act 1993 was originally put on the statute book. A general consensus has emerged to try to rectify that anomaly in the 1993 Act, so it is unfortunate that such a new clause, which throws doubt on that, has been tabled during the later stages of the Bill's consideration.

May I say straight away that I apologise to the House for the fact that the regulatory impact assessment was not placed in the Library immediately after the debate on Second Reading? That was an administrative oversight. It is interesting that the right hon. Member for Bromley and Chislehurst (Mr. Forth) always finds a conspiracy or something similar when there has been an administrative oversight, but I will nevertheless ensure that my Department lives up to what the Prime Minister said about regulatory impact assessments in the future. We will try to hit those time targets because it is very important for the fullness of debate, whether on this or any other Bill, that those assessments are in the public domain, so that objective judgments and debate can take place on the Bills to which they refer.

I am grateful to the right hon. Gentleman for that fulsome apology. Will he explain further why, considering that he signed the regulatory impact assessment on 27 January, it was not even available before the debate on Second Reading? Does he accept that it would have been much better if it had been available even before the debate on Second Reading?

The answer is yes. As I say, there was an administrative oversight. I do not think that the Bill was probed to a great extent in terms of its regulatory impact assessment, but I acknowledge what the hon. Gentleman is saying. I reiterate that the regulatory impact assessments ought to be made available, and I shall try to ensure that my Department puts them in the public domain, so that they can inform the debates on Bills with cross-party support, such as this one, or on any other Bill. I give that assurance, and my Department will try to live up to that.

I wish now to refer to new clause 1. I agree with the hon. Member for Mid-Norfolk (Mr. Simpson) that it is not necessary. As we said on Second Reading, there is a need to make progress with the Bill—it needs to be implemented as quickly as possible. New clause 1 would add nothing to it.

On amendment No. 1 and retrospectivity, I wish to say that, on the basis of the Department's legal advice, the current legislation allows distributors other than the Community Fund to fund endowments. However, the Bill seeks to clarify the position of distributors generally. Distributors' existing powers could be called into question, so we believe it is right to confirm the legality of past grants to fund endowments. It is important to take this opportunity to reassure people and to ensure that things are watertight in that sense, as that produces good legislation. It would be wrong to allow the opportunity to bring surety to the situation to pass. We have taken that opportunity, but there is no doubt that all the legal advice obtained by my Department says that the actions taken to date are indeed proper.

Will the Minister therefore speculate on what the situation would be if such retrospectivity were not included in the Bill? Is he saying that its inclusion makes no difference, or that it would put in jeopardy endowments that have already been set up? If so, which existing endowments would be questioned?

I am not going to speculate; it would be very foolish to start to do so. We are only trying to take advantage of the opportunity, which all parties want to take, to reassure people that all those decisions that have been made on endowments are indeed legal. We have no doubt that they are legal, but we want to take the opportunity to give that reassurance, and in my opinion it would be stupid not to take it.

Perhaps we could give the assurance in a slightly different way. Can the Minister confirm that to his knowledge there has never been any suggestion of a challenge as to the legality of the endowments that have been created? That is my understanding.

The hon. Gentleman is correct. There has been no challenge. Indeed, there has been no inference of a challenge. However, I reiterate that it would be foolish if we did not take the opportunity to reinforce the provision and reassure those who are distributing those funds.

We have had a useful debate, as I think everyone who has participated in it has accepted. It is important to get on the record the reasoning of the Government and of my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) in introducing a retrospective element. As I said earlier, to have a retrospective element in a Bill is exceptional; it should be included only in exceptional circumstances. As the Minister has assured us that there have not been any challenges on the matter and we are not seeking to prevent someone from making a challenge, for example, in the courts, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

Funding Of Endowments

I beg to move amendment No. 3, in page 1, line 6, after "expenditure', insert

"as long as the value of funds spent on such endowments does not exceed 5 per cent of the value of total funds given to the Distribution Fund'.

With this it will be convenient to take the following amendments: No. 5, in page 2, line 6, at end insert—

"(7A) After section 43D there is inserted the following section—
"43E. The Comptroller and Auditor General may, with respect to any person in receipt of money under section 25, 25B, 41 or 43B where that money is paid for the purpose of establishing or contributing to an endowment, examine—
  • (a) the accounts of that person so far as relating to the endowment,
  • (b) any records relating to those accounts, and
  • (c) any report of an auditor on those accounts.'.
  • No. 4, in page 2, line 11, at end insert

    "Any endowment, or contribution to endowments, established by this bill is liable to be reclaimed by the Distribution Fund in the event that,
  • (a) the recipient body of such funds ceases to exist, or
  • (b) the function of the recipient body changes substantively.'.
  • May I start with amendment No. 5, which gives powers to the Comptroller and Auditor General to look at the accounts of endowments and any records relating to those accounts? I think that it is the most important amendment in the group. The House may remember that I am Chairman of the relevant parliamentary Committee, the Public Accounts Committee, and this amendment has been drafted with the help of the National Audit Office. I do not believe that it is contentious, and I hope that the promoter of the Bill, my hon. Friend the Member for Mid-Norfolk (Mr. Simpson), will accept it.

    I will to speak to my other amendments, Nos. 3 and 4, later. They are more probing, particularly amendment No. 3. Although it may be difficult to set any particular figure on the amount of cash to be distributed to endowment funds, it will provide a useful opportunity for my hon. Friend to give some reassurance on those matters.

    As I say, I do not think that amendment No. 5 is contentious. The Bill is only seeking to clarify something anyway—that lottery funding can be provided for endowments as well as to fund expenditure. All that I seek to do with amendment No. 5 is to ensure that adequate accountability arrangements are in place to match the new provisions.

    My hon. Friend may know that the National Audit Office and the Public Accounts Committee continuously drive to ensure that more and more items of public expenditure—effectively, this is public expenditure—are brought under the purview of the NAO. As we seek to clarify matters and to put the Bill into statute, it is important that the NAO's powers should be clearly stated.

    I recognise that the Bill has cross-party support, but it is true to say that concerns have been raised during its passage about the value for money and accountability aspects of funding endowments. That is important territory for my Committee. It is what my Committee is all about: ensuring that we get value for money and accountability.

    It is true—I think that my hon. Friend the Member for Christchurch (Mr. Chope) referred to this—that some distributors have already made grants to fund endowments. The Millennium Commission has made a grant of £100 million, which is quite a large grant, to the Foundation for Social Entrepreneurs, which operates under the trading name UnLtd.

    The governance arrangements for the Millennium Commission endowment are complicated. Let me try to explain them briefly. For example, the millennium award trust deed requires the appointment of an independent protector of the endowment, whose fiduciary duty is to ensure the integrity of the administration of the trust and the propriety of its procedures. If necessary, his duty is to report matters of serious concern to the Millennium Commission, the Charity Commission and, where appropriate, the Secretary of State for Culture, Media and Sport.

    10.15 am

    Under the terms of the Millennium Commission's grant to UnLtd, the CAG has access to all documents that are necessary for his audit of the Millennium Commission, or its successor body. While his rights of access concerning grants have recently been put on a statutory basis with the coming into force of the order made under the Government Resources and Accounts Act 2000, which we took a lot of interest in and helped to push through the House of Commons, it is necessary to clarify statutory access to lottery endowments to ensure that all forms of funding are covered. We are trying to ensure that there is absolutely no doubt about the rights of access of the CAG, who operates on behalf of Parliament.

    I have taken advice on the matter, and the Minister can deal with the point when he sums up the debate, but I understand that the Bill's omission of accountability arrangements is not deliberate. I am confident that distributors of lottery money will apply to applications for endowments considerations similar to those that they would apply to grants of expenditure. I also understand that the Government will produce guidance for distributors on the factors to take into account when considering applications for endowment funding. However, the amendment ensures—this is why I believe that it is necessary—that all types of lottery funding are subject to the same scrutiny arrangements. Essentially, the aim is that the CAG's rights of access in relation to lottery grants should be extended to cover endowments. The money is raised from lottery players in the same

    way, and the public surely will have an equal interest in knowing that it is spent properly and well. The CAG's access will provide that assurance.

    Let me sum up my argument by putting it in terms of questions and answers. It may be asked in summing up the debate: does not the CAG already audit lottery grants? It is true that he has rights of access in relation to lottery grants, but the Bill will expressly allow funding for endowments and my amendment seeks to clarify that the CAG has similar rights of access in relation to grants that are extended to endowments, so it is a tidying-up process.

    Why is the amendment necessary? We are on Report. When better for the whole House to take a view on the matter? Hon. Members raised value for money and accountability issues on Second Reading. Obviously, we followed those debates. This is important territory for the Public Accounts Committee and we are keen to take advantage of the opportunity afforded by Report to ensure that the right provisions are in place, rather than discover problems later.

    Another question might be: does not the CAG already have these powers? The amendment simply mirrors the clarity that the Bill seeks to provide, so as to ensure that adequate access provisions match new forms of funding. Just as the Bill is in effect a clarifying Bill, so my amendment is a clarifying amendment. Lastly, do the NAO and Public Accounts Committee have anything against funding endowments? In principle, we have no objection to funding endowments. There are both advantages and disadvantages, and those have been aired in the debates we have already had. The purpose of the amendment is simply to give the same clarity to both the funding and review arrangements, so that we can be assured that those issues have been adequately addressed.

    I hope that that fairly sums up amendment No. 5. I hope that the promoter of the Bill and the Minister can accept it. If the Minister does not accept it, I hope that he will give a good reason why.

    Amendment No. 3 would amend clause 1 by adding the phrase

    "as long as the value of funds spent on such endowments does not exceed 5 per cent of the value of total funds given to the Distribution Fund."

    As I said, this is really a probing amendment. I accept that it is very difficult to establish a figure—should it be 1 per cent., 2 per cent., 5 per cent., 10 per cent. or 20 per cent.? We simply do not know, but the amendment provides an opportunity for a short discussion of the safeguards in the Bill and of how such matters will be administered.

    On Second Reading, certain Members raised concerns about "technical matters", even though everybody supported the Bill; indeed, I support it and I am confident that it will soon pass into law. Those Members seemed confident that such technical matters would be thrashed out in Committee. My hon. Friend the Member for North-East Cambridgeshire (Mr. Moss) said:

    "On this side of the House, we will need reassurance on the technical issues that the Bill raises. However, we are confident that those can be teased out in Committee."—[Official Report, 28 February 2003; Vol. 400, c. 534.]

    But as we heard from my hon. Friend the Member for Christchurch, the Committee lasted only 22 minutes, and no amendments were made. So this is another opportunity to tease out these technical matters and to receive reassurance.

    I have tabled such an amendment because putting some form of cap on the amount of money used for endowments provides a safeguard against future developments. I do not know how that could be achieved; if it cannot be done through the Bill, perhaps some form of policy guideline could be laid down. We have tried to obtain firm figures but it is difficult to do so. If the Community Fund is any indication, the evidence suggests that the number of charities applying for endowments is indeed small. An estimated 20 to 30 of 100,000 applications to the Community Fund were for endowments. However, although the total number may be small, the figures can be very large indeed. The same is true of the exposure for the future.

    The promoter of the Bill needs to explain to the House how he will provide for a safeguard to be put in place against possible future developments. We must be careful that the law does not allow any such endowments to get out of hand and be unavailable for scrutiny. As we know, there are of course risks involved in giving out endowments. They require large sums of money in advance to provide reasonable revenue for applicants in the longer term, as the Bill's promoter, my hon. Friend the Member for Mid-Norfolk, pointed out on Second Reading. Indeed, he was very fair about this issue. Hence a set amount of money is tied up or committed to a fund. If this got out of hand, less money could be available for other lottery grants in need of immediate funds. Setting some form of cap, or explaining how matters might develop in future, is a reasonable way, therefore, of providing a safeguard against that problem.

    Another problem associated with endowments is that they are vulnerable to interest rate fluctuations—a point made by my hon. Friend the Member for North-East Cambridgeshire on Second Reading. The National Endowment for Science, Technology and the Arts was cited in a previous debate as a good example for possible national lottery endowment funds to follow, given the similarity between it and various charities. NESTA was praised not only for its method of funding, but because of the freedom given to NESTA trustees from central Government interference.

    However, NESTA, which was in receipt of an endowment of some £200 million, found that the income that it was expecting—and probably spending—had declined because of low interest rates. It appealed to the Government for more money to put into the endowment fund. Given what subsequently transpired, perhaps it was not such a good example to cite. The nature of the stock market and the free market makes it hard to predict how interest rates will perform, and potentially puts limits on long-term planning for charities. Although there is no doubt that the Bill should become law—it is essentially a tidying-up process—it is certainly worth putting on the record the risks associated with endowments. It is therefore perhaps advisable to limit the amount going into them.

    There is another important point: endowment funding could increase the perception gap between buyers of lottery tickets and good causes. Lottery sales are falling. In February, Camelot announced that sales for the weekend lotto game were the lowest ever. Last November, it announced that sales had fallen by 5 per cent. during the previous six months. Lotteries across the world often show initial signs of great success that soon trails off, so to a certain extent such a decline is to be expected. But as the hon. Member for Twickenham (Dr. Cable) said on Second Reading, another explanation might be that people do not see a clear link between the purchasing of tickets and the good causes that the lottery is supposed to help.

    That is why we have some concern about endowments; they break that clear link. Creating too many endowment funds could increase this tendency, so it would be sensible to cap them in some form. Whether that should be done through the Bill or through some other administrative procedure, I do not know; perhaps the Bill's promoter could explain that point. The hon. Member for Twickenham said on Second Reading that the perceived lack of a link

    "is a psychological danger and it should be addressed, although it is not a fundamental argument against the proposals."—[Official Report, 28 February 2003; Vol. 400, c. 535.]

    Like my hon. Friend the Member for North-East Cambridgeshire, the hon. Member for Twickenham raised an issue that, although not fundamental to the Bill, was important and should have been addressed. As we know, consideration in Committee was rather short, so today provides an opportunity to seek the reassurance that we need and desire.

    Several damning recent media reports have discussed how lottery money is given out. For example, in 2002 the national lottery gave £336,000 to the National Coalition of Anti-Deportation Campaigns, which is trying to prevent the deportation of asylum seekers after their applications have been processed by the Home Office. One can agree with that highly controversial decision, or not. I shall not comment on whether it was a good thing, but there was an immediate and massive outcry. That outcry was able to produce a change in policy, because there was no endowment and the matter was not tied up for a long time. If we have endowments, with no limit on how much can be put in, we will lose the immediate link between what is said in the press and how grants are distributed. Another notorious decision was that to give £295,000 to a Worcestershire charity for the breeding of guinea pigs in Peru.

    All such grants were given through conventional funding methods under current law. One advantage of non-endowment funding is that the lottery can respond to the public mood quickly. However many endowment policies there are, they will involve very large sums of money and it will not be possible to respond quickly. These policies are supposed to serve the public. For something that the public took issue with, it would be more embarrassing and awkward to terminate an endowment fund than to terminate short-term giving. Non-endowment funding is easier to withdraw, if the public express dissatisfaction with it.

    I am sure that my hon. Friend the Member for Mid-Norfolk can address all those points, reassure the House that it will not be necessary to set a cap through the Bill, confirm that there will be a limited number of endowments, and confirm that the entire process will be handled with great care.

    Amendment No. 4 would insert the following provision:

    "Any endowment, or contribution to endowments, established by this bill is liable to be reclaimed by the Distribution Fund in the event that,
  • (a) the recipient body of such funds ceases to exist, or
  • (b) the function of the recipient body changes substantively."
  • On Second Reading, my hon. Friend the Member for North-East Cambridgeshire asked what would happen to endowed lottery funds if the recipient body ceased to exist. In my own constituency, a charity did indeed go under—it was an ordinary charity that had nothing to do with the national lottery. Charities, and endowment funds, do get into difficulties. We therefore need an exit policy. It would be best to provide legal clarification so that the lottery distribution fund can claim back the money disbursed.

    The point of the Bill as a whole relates to legal uncertainty. Current legislation does not define what meeting expenditure means in respect of the powers of the distributing bodies. It is therefore reasonable to clarify the law as the Bill proposes. In the same way, including a right of the distribution fund to reclaim its money if a charity ceases to exist would provide greater legal transparency and clarity. That would seem to make sense, and I see no reason why anyone should argue with that point of view.

    10.30 am

    Section 28 of the Charities Act 1993 allows relevant bodies to investigate dormant charitable accounts, which might be some sort of safeguard. However, in view of the long-term nature of endowment funds, it is reasonable to imagine that a charity's function might change over time. It is important to ensure that the money is being used for exactly the purpose for which it was intended. Recent revelations that lottery funding is going to unpopular causes should not be repeated. An appeals panel reinstated two Surrey schoolboys who had been expelled after threatening to kill their teacher. The lottery gave £200,000 to the organisation giving the expelled boys advocacy—the community education network. My hon. Friend the shadow Secretary of State for Culture, Media and Sport called it

    "another blow to the credibility of the lottery".

    In another example, £350,000 was given to the Runnymede Trust—the think—tank that described the word "British" as racist.

    Those are controversial examples and I am sure that we are not going to get involved in providing endowments for such things. However, if something goes wrong with an endowment—if it is either unpopular or badly managed—surely we need some device to ensure that the moneys can return to the distribution fund. That is what my amendment is about.

    Those are my three amendments. The first would provide reassurance that the Comptroller and Auditor General could become involved; the second would provide an opportunity to debate at what level the moneys distributed should be capped; and the third would ensure that moneys could, if there were a problem, be returned to the distribution fund.

    My hon. Friend the Member for Gainsborough (Mr. Leigh), from his formidable position as Chairman of the Public Accounts Committee, has outlined his amendments with clarity. I recall during my time as special adviser at the Ministry of Defence that the only Select Committee that truly alarmed the policy-making civil servants was the PAC. That body, together with the National Audit Office, is quite rightly regarded as the guardian of public expenditure. Given that my hon. Friend generally supports the Bill, I hope that we can view his amendments as probing amendments, and that we can answer some of his questions.

    I begin with amendment No. 5. As my hon. Friend pointed out, it would enable the Comptroller and Auditor General—and therefore the National Audit Office—to examine the accounts of any person in receipt of lottery moneys
    "for the purposes of establishing or contributing to an endowment".
    I note that it does not impose any restrictions on the circumstances in which such an examination could take place; nor does it expressly provide for the CAG's power to report to Parliament in respect of any examination that he undertakes.

    That is unnecessary, because the Comptroller and Auditor General always reports to Parliament through the Public Accounts Committee. There is therefore no need to build that into statute.

    I accept my hon. Friend's intervention.

    It is worth mentioning that the CAG is already the external auditor of distributing bodies, with wide-ranging powers to examine their books, documents or papers and to
    "carry out such examinations into the economy, efficiency or effectiveness with which the body has used its resources in discharging its Lottery distribution functions as he"
    the Comptroller and Auditor General "sees fit".

    In addition, I understand that the financial directions for lottery distributors require them to include as a mandatory condition of any lottery grant—whether to an endowment or not—a requirement that the recipient of grant provides regular progress reports and any further financial or other information that the distributor may require. That is right and proper. I believe that those two conditions provide the CAG with adequate scope to obtain information about the control and management of funds from lottery grant recipients. I also understand that the Minister is prepared to reflect further on the issue in respect of future lottery legislation and there is a forthcoming White Paper on lottery distribution. We are all in favour of that.

    I hope that, when he has heard my hon. Friend the Member for Ryedale (Mr. Greenway) and the Minister, my hon. Friend the Member for Gainsborough will be convinced that the safeguards are adequate. I fully support my hon. Friend's intention and I certainly do not want to open up in respect of the Bill any area of doubt or vulnerability.

    First, I welcome the intervention of my hon. Friend the Member for Gainsborough (Mr. Leigh), who has rightly reminded us in timely fashion that we need carefully to examine issues of accountability and transparency in respect of the distribution of lottery funds and the value for money that they achieve. As my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) says, that matter has far wider ramifications than the changes that his Bill will introduce. We believe—it is the view of the official Opposition—that the matter should be addressed in detail in the forthcoming White Paper on proposed changes to the lottery.

    It is now time, some 10 years after its introduction, to review the standing of the lottery. On considered reflection of the findings, we should then introduce and implement the necessary changes. The issues should be examined across the board for the lottery as a whole. We need to examine whether further powers of accountability are necessary and how to implement them. I have no doubt that the Comptroller and Auditor General and the Public Accounts Committee will have important roles to play. However, I do not want to jeopardise the Bill today by introducing the changes in the amendments. As I said, the issues are more wide-ranging than the matters in the Bill.

    On amendment No. 3, my hon. Friend the Member for Gainsborough is right to draw attention to the fact that lottery funds are in much shorter supply than when the lottery first started. Indeed, in the charities sector more than others, more applicants are disappointed at being unable to secure the money that they want. However, the Bill does not fetter the discretion or flexibility of the funding body. If it transpires that endowments are not the best way of distributing the bulk of lottery funds made available to the distributor, endowments do not have to be made.

    Does my hon. Friend share my concern that we have not seen the draft guidance that the Minister intends to give to the distributing bodies? If we had that guidance before us today, it would give us a much clearer idea of the Government's intentions.

    My hon. Friend makes a good point. Yes, he is right up to a point, but that does not mean that we should not approve the Bill. I am sure that the Minister and his officials will want to consult funding bodies, particularly the charities board, on that guidance. We are moving into a new area for the charities board, which has not previously been able to give money to endowments. My hon. Friend the Member for Gainsborough touched on another relevant issue: if people can see that their money is contributing to good causes, they are more likely to buy lottery tickets.

    Is the hon. Gentleman seriously suggesting that people buy lottery tickets because a few pence go to good causes? My understanding has always been that people buy lottery tickets in the hope of becoming millionaires

    Undoubtedly some people play the lottery in the hope of becoming a millionaire, but others are more realistic and recognise that their chances are around 14 million to one. They care where the money goes, and I am sure one of the reasons why lottery ticket sales have been falling is that people can see that too many of the proceeds are going to causes that the Government should fund out of public expenditure. People want the money to go to good causes.

    I can see the point that my hon. Friend the Member for Gainsborough is making. If money is given to an endowment, how can one ensure that it ends up with a good cause? The answer lies in the response that my hon. Friend the Member for Mid-Norfolk has had to his Bill. In Norfolk, it is hugely popular and that is because of the good causes that the endowments promise to support—small, local charities that, on their own, do not have the capacity or the ability to apply for a lottery grant individually. The endowments will be able to support them, and that is very pertinent, especially for projects that require revenue rather than capital expenditure. While my hon. Friend the Member for Gainsborough is right to remind us that we do not want too much of the Community Fund's money to go into endowments, I hope that those endowments that are funded will—through the charities that they support—encourage ticket purchases and increase sales.

    My hon. Friend referred to a comment made by my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss) on Second Reading, when he asked what would happen if an endowment ceased to exist. From my experience of supporting lottery applications in my constituency, it is usual for the distributor to ensure, in the funding agreement, that any moneys that are not put to the purpose for which they were given are returned. Indeed, I have a problem in my constituency at the moment because the sports fund gave money to the Huntington stadium to build an athletics track that will have to be ripped up if it becomes the home of York City football club—of which I am the president—and if that happens, the money has to be repaid or a track has to be built somewhere else. The key is to ensure that the agreement deals with the problem that my hon. Friend raised. As my hon. Friend the Member for Christchurch pointed out, that means that the guidance to the funding bodies has to be right to ensure that that point is covered.

    The amendments that my hon. Friend the Member for Gainsborough has tabled raise three issues pertinent to the general management of the lottery. I hope that he will accept that those issues are not for the Bill before us today, which should proceed, without the amendments. I assure my hon. Friends who have raised concerns today that if I am involved in the scrutiny process of the changes in the lottery that the Government bring forward—as I hope to be—I will consider carefully the points that they have raised and ensure that they are properly debated. We need to strengthen the management of the lottery, because that will give it greater credibility and encourage confidence in it. That is the best way to increase ticket sales and therefore the support for good causes.

    My hon. Friend the Member for Gainsborough (Mr. Leigh) has made some excellent points in support of his amendments, so I do not wish to speak at length. However, I wish to press the Minister to give us some more information about the likely policy for the distributing bodies, in the light of what has been said. If we do not hear about that until after the Bill goes to the other place, or reaches the statute book, we will be in the dark. The debate on the amendments gives the Minister a clear opportunity to explain exactly what the Government's policy is.

    I am conscious that many of my hon. Friends will not have had a chance to digest the import of the regulatory impact assessment, but paragraph 2 states:
    "The Community Fund has been unable to fund endowments under current statute and so the biggest potential impact is on this body. Whilst firm figures are difficult to ascertain, anecdotal evidence suggests that, to date, only a tiny proportion of charities have applied to the Community Fund for endowment funding (an estimated 20–30 out around 100,000 applications), and there is little evidence that this level of demand would increase if the Fund was given this power."

    10.45 am

    The limit in the amendment on the amount that could be given to endowments may fit in well with the guidance that the Government intend to give, but it would be helpful to have some assurance of that. The regulatory impact assessment continues:

    "In addition, at a time when Lottery income is falling, it is unlikely that applications for endowment funding would be considered a high priority for funding, compared to applications for revenue funding, for the reason highlighted above."

    A slight touch of Big Brother there. How does the Minister know that the independent distributing bodies will take such a view? How does he know that they will take that view in relation to non-charitable endowments? That is a legitimate area for concern, because more and more money from the lottery goes to non-charitable causes under the Government's so-called New Opportunities Fund. It would be ironic if, at a time when the Government are telling schools that they will have to forgo their capital expenditure programmes for the sake of revenue funding, the Government were encouraging the New Opportunities Fund to give capital endowments to educational establishments. Those policies would appear to be incompatible.

    I share the views expressed by my hon. Friends that the lottery is declining in popularity partly because it is a rip-off and a form of regressive taxation—as I have said in the past—and because people can see that their money is going to causes that they would not think of funding if a tin was shaken in front of them, even if they had just won on the premium bonds. That is probably why more people are turning to premium bonds.

    Can the hon. Gentleman tell the House what is the minimum stake for a premium bond?

    I am sure that the hon. Gentleman knows that it is about £100. The average weekly spend on the lottery each week is more than £2, so people could save that money for a year. I must say that I have never bought a lottery ticket and have no present intention of doing so.

    I agree that premium bonds are a much better investment. Does my hon. Friend know that a statistician has worked out that unless a person buys their lottery ticket in the last few seconds before the draw closes, they are more likely to die before the result is announced than they actually are to win? The chances of winning are infinitesimal.

    I agree; that is why, on the whole, few people with more intelligence—such as my hon. Friend, those who work alongside the Public Accounts Committee, the Comptroller and Auditor General's staff and people learned in mathematics and statistics—enter the lottery in the hope that they might win. Those who do take part may do so because they think the money is going to good causes. When they find that it is not, they may prefer to spend the money on local good causes.

    That is why our proposals to change the distribution system—another new fair deal that will be part of the Conservative manifesto at the next general election—will capture the public's imagination and will win support for our cause. That is the view in my constituency, which pays disproportionately into the lottery and gets very little benefit in terms of the funding of good causes.

    The figures show that money is increasingly being spent on the New Opportunities Fund—a substitute for Government expenditure—with less going to the Community Fund and to proper charitable causes. That is the main reason why the lottery is on the wane. However, I understand from the Government that there may yet be hope, as lottery tickets might be made available on the continent. We might be able to benefit from the regressive taxation of our continental neighbours going into the Government's coffers.

    Perhaps the Government have given up on using the New Opportunities Fund as a substitute for public expenditure and are going straight for the option presented by the new part-time Chancellor of the Exchequer and part-time Leader of the House, that of hiking up income tax.

    I hope that the Minister will respond to our serious concerns about the guidance to be given to the distributing bodies.

    I am glad that the British public are more charitable than the two hon. Gentlemen who have just spoken. I am sure that many people play the lottery because of its charitable nature. In addition, ours is probably the most successful lottery in the world. The Conservative Government brought the lottery legislation on to the statute book in 1993. The Conservatives ought to be proud of that, and not seek to undermine the lottery as the two hon. Members have tried to do this morning. The vast majority of British people think that the lottery is a good institution that encapsulates a British spirit, and I think the two Members are somewhat out of kilter with the general public.

    It is unfortunate that amendment No. 5 has come a little late in the day, like our regulatory impact assessment. However, the amendment is important and merits consideration.The hon. Member for Mid-Norfolk (Mr. Simpson) has outlined the existing powers of the Comptroller and Auditor General over lottery distributing bodies, as well as the relevant mandatory terms and conditions for all lottery grant recipients. I share his view; there are many controls in place to ensure that the finances are used in the right way.

    Nevertheless, we should reflect upon the amendment and I assure him that we will discuss the proposals further with the NAO in relation to any legislation that might emerge from my Department's White Paper on Lottery distribution. We take the amendment seriously and while I would take some convincing that we needed further controls, I assure him that we will consult the NAO before we publish the White Paper.

    Amendment No. 3 refers to a limit of 5 per cent. There is a danger with imposing such limits; we have done a quick calculation and nowhere near 5 per cent. is made up of endowments. I fear that putting such a ceiling in place gives something for people to aim for.

    We will be issuing the guidance notes to distributors, and these will be available in draft in advance of Second Reading in the Lords. They will be in the public domain and will form part of the public debate, while reflecting our debates as well. Some important points have been made on Second Reading, in Committee and now.

    The hon. Member for Gainsborough (Mr. Leigh) has concerns about how setting an arbitrary ceiling on the proportion of grants to endowments would work in practice. However, I hope that with the existing responsibilities of the distributors' accounting officers and the guidance that I have mentioned, he will be satisfied on this matter and will withdraw the amendment. I hope that what we put in the guidance notes will satisfy him.

    Amendment No. 4 concerns the recovery of funds. The amendment refers to an endowment being reclaimed "by the Distribution Fund", but that would go against charity law—which will govern all the endowments—in that the money should go back to the purpose for which it was originally given. However, the distributing body funds all good causes; therefore it would work against a particular good case if the money went back to the fund. In Committee, I said that I believed that there were sufficient controls through charity law and the lottery statute to enable the recovery of funds to endowments should the charity cease to operate or change its functions subsequently.

    Grants for permanent endowments can be made only to a registered charity. Ultimate responsibility for the conduct of a charity rests with the Charity Commission—which is tough by any standards—and the Attorney-General. Existing legislation governing charities requires them to use funds only for charitable purposes. If they fail to do that, or if funds are misappropriated or mishandled, not only will the lottery distributor need to consider what action to take as a result of the breach of the terms and conditions of the grant, the actions of the charity may, depending on the circumstances, amount to a criminal offence. That would almost certainly involve the Charity Commission, where the matter affected a charity in England and Wales, or the Inland Revenue in Scotland and Northern Ireland.

    Some draconian actions can be taken if people step out of line. If a charity ceased to exist, charity law would require that, after all debts and liabilities were settled, any remaining assets were applied to a similar charitable purpose to that of the organisation. That would be at variance to the amendment. The Charity Commission, the lottery distributor and, in certain circumstances, the Attorney-General, would be involved in this instance. I believe that we have sufficient controls in place to ensure that money is used for the purposes for which it was given.

    11 am

    I am grateful to the Minister for the way in which he has summed up the debate, particularly on amendment No. 5, which would give a right of access and control to the Comptroller and Auditor General. He intimated that, if I may read between the lines, it was too early for him to put that on the statute book and that he would need more advice. He said that he was happy for his officials to discuss with the National Audit Office how to obtain some such provision in statute, if not in this Bill, then in a future one. That is very positive.

    On amendment No. 3, the Minister repeated my point that we cannot really put a figure for a capping limit in the Bill. He accepted that there was a legitimate debate about that, however, and he will issue guidance. I am very happy with that.

    On amendment No. 4, the Minister took care to deal with the wide-ranging existing safeguards that ensure that if there is a problem with an endowment fund, the money could, apparently, return to the distribution funds.

    The Minister's summing up was very satisfactory. We have teased out some important elements of how the moneys will be protected in this important debate, and there will be accountability to Parliament. In the spirit of good will, I beg to ask leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Order for Third Reading read.

    11.1 am

    I beg to move, That the Bill be now read the Third time.

    As a number of Members have said, the Bill received all-party support on Second Reading on 28 February and in Committee on 6 May. I thank, in particular, my parliamentary colleagues from Norfolk, the hon. Member for Great Yarmouth (Mr. Wright), who is present, my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard), my hon. Friends the Members for South Norfolk (Mr. Bacon) and for North-West Norfolk (Mr. Bellingham), the hon. Member for Norwich, North (Dr. Gibson), and the Secretary of State for Education and Skills, who represents Norwich, South. Their assistance has been positive and has undoubtedly helped the Bill's progress. I thank, too, my hon. Friends the Members for Gainsborough (Mr. Leigh) and for Christchurch (Mr. Chope) for pressing probing amendments constructively on Report. Both have given the Bill a fair wind, but they rightly teased out some points about the Bill itself and the national lottery in general.

    The Bill's purpose is to amend current lottery statute, as already amended by the National Lottery Act 1998. It is intended expressly to provide all distributors with the power to make grants to endowment funds, should they choose to do so. Current statute gives lottery distributing bodies power to distribute lottery money for meeting expenditure of the types covered by sections 22 and 23 of the National Lottery etc. Act 1993. It does not, however, define what is meant by "for meeting expenditure" or contain any explicit reference to funding endowment funds. The Minister has confirmed that the wording was not the result of any deliberate intention to prevent distributors from giving grants to endowment funds.

    The Bill's content is straightforward. It amends those sections of the 1993 Act that refer to "for meeting expenditure" to make it clear that the terms include funding of endowments in each case. It also provides for the change to have retrospective effect. Some distributing bodies have made grants to endowments, and the Bill will ensure, as debated on Report, that those payments cannot be called into question.

    I shall speak briefly about the origins of the Bill. As a number of Members have said, it came directly from the fair county of Norfolk, and was born from the "We Care" 2000 appeal begun by our regional newspaper, the Eastern Daily Press. It is appropriate to be holding the Report stages and Third Reading of the Bill in the week after UK carers week. We all know the role that hundreds of thousands of carers undertake in our constituencies. Without their caring for their families and friends, there would be an enormous additional burden on our social services and the national health service. I pay tribute to the work of the 130,000 carers in Norfolk.

    The EDP's appeal had a target of £1 million, and it has reached £750,000., thanks to a £100,000 lottery grant. Efforts to secure that grant took about 18 months. The first bid was rejected because of an anomaly in wording, but the second was successful. That is great news, and the money will make a real impact. The money from the Community Fund will be used to help another 80 carers a year who support loved ones who are unable to look after themselves. It is a huge boost to the EDP appeal, which was set up nearly five years ago, with its ambitious target of raising £1 million, as a partnership between the newspaper and health professionals. One of the purposes behind the Bill is to enable the appeal to raise more money for carers. The money just received will be spread over two years. It becomes available at the end of July and will enable the purchase of domestic appliances, power packs for wheelchairs, swivel seats and computers to loan to carers in Norfolk. We are very grateful for that.

    I hope that the Bill will help many similar charitable bodies that want to establish a secure funding base for their work. The benefits of the Bill are that it will clarify the powers of all distributors, put the Community Fund on the same legal footing as other distributors in being able to fund endowments should it choose to do so, and, perhaps most importantly, benefit charities such as "We Care" that want to apply for lottery funding, enabling them to manage their resources more strategically and with more secure future funding.

    We have debated the benefits of endowment funds. There is no doubt that there is both an upside and a downside. The crucial point is that the Bill provides permissive, not mandatory, power for distributors. It will ultimately be up to distributors to determine how to treat applications for grants to endowment funds against other calls for lottery funding. As was rightly said on Report, we must make certain that that is not abused. The Minister has assured us that his Department intends to assist distributors by issuing guidance on that, should the Bill be enacted. Draft guidance will be placed in the Libraries of both Houses shortly, in time for the Bill's introduction in the House of Lords.

    As the Bill provides a permissive power for lottery distributors, it will have no impact on central or local government expenditure or manpower. Nor will there be any regulatory cost to business or the voluntary sector. The measure is intended to assist charities and other good causes by helping them to manage their funding more effectively.

    Legislation relating to the national lottery is reserved to the UK Parliament, but I understand that the Bill has attracted the support of the devolved Administrations.

    Finally, it was remiss of me earlier not to thank my hon. Friend the Member for Ryedale (Mr. Greenway) for his positive and enthusiastic support this morning from the Front Bench.

    I commend the Bill to the House.

    11.8 am

    I will speak for only a couple of minutes because I am aware that other Members have equally important Bills to discuss this morning. I want only to congratulate the hon. Member for Mid-Norfolk (Mr. Simpson), and to offer congratulations, too, to my hon. Friend the Member for Norwich, North (Dr. Gibson), who tried to promote the Bill two or three years ago. We all know the history of why it did not pass then. It is pleasing that the Bill has support on both sides of the House. The project has certainly united political parties in Norfolk.

    The probing amendments that were tabled today needed discussion, and I hope that the Bill will proceed with all speed so that charities such as the "We Care" appeal in Norfolk, which has already helped many hundreds of my constituents as well as many other people across Norfolk, can gain more money through endowments and achieve much more throughout the country.

    Once again, I congratulate the hon. Member for Mid-Norfolk and hope that the Bill proceeds with all haste.

    11.10 am

    I want only to congratulate my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) on the progress of the Bill and to express the hope that it will be well received in the other place. I thank him for his kind remarks.

    I genuinely believe that the way that lottery funds are distributed and the good causes that they are seen to support are vital ingredients in managing a successful national lottery. My hon. Friend's Bill contributes to that process, especially in the county of Norfolk.

    May I ask the House to be kind enough to excuse me so that I can return to my constituency, where, this afternoon, I am visiting a project that has just received funding from—believe it or not—the national lottery and the Foundation for Sport and the Arts? I am going to see the new sporty pavilion in all its glory and shall leave the Opposition Front Bench in the capable hands of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), who, in fact, originally came from Norfolk.

    Once again, my congratulations to my hon. Friend the Member for Mid-Norfolk, and I hope that all right hon. and hon. Members have a happy weekend.

    11.11 am

    I wish my hon. Friend the Member for Ryedale (Mr. Greenway) Godspeed and a safe journey to his destination. My constituents will look at his constituents with some envy and ask, "Why can't we get a decent share of the money that is being distributed from the lottery?"

    I, too, congratulate my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) on having steered the Bill to Third Reading. Although I was slightly critical of him for not having asked more questions in Committee, I understand the reason and forgive him. I think that he wanted to curtail the Committee stage so that he could ensure that his Bill was heard first today. Strategist that he is, he has succeeded in doing that, although the tactics were not necessarily to all our liking. However, we have had a chance today to examine some of the issues that would have been considered in Committee and the Bill is none the worse for that.

    This is the second Friday running when it would appear that Standing Committees have not done a satisfactory job of examining Bills and that responsibility has fallen to the House on Report. Although that is perfectly acceptable in procedural terms, does my hon. Friend agree that it is time that members of Standing Committees, especially those for private Members' Bills, bucked up their ideas and did a rather better job?

    I agree. One of the problems is that the members of such Standing Committees are often closely associated with the promoter of the Bill and their motivation is solidarity with the promoter rather than the desire to scrutinise the Bill. Indeed, often Members who might want to scrutinise the Bill are not invited to serve on the Standing Committee—although I am not sure whether that happened in this case. As long as we are able to consider matters properly on Report, however, we shall hold debates such as today's.

    I expressed concern about the use of lottery funds for non-charitable causes. Although I do not object to the Bill, and indeed I warmly congratulate my hon. Friend the Member for Mid-Norfolk on getting it to this stage, in my view it would have been better if it did not contain the power for endowments to be made to non-charitable causes.

    Charities can be controlled. If they fall into desuetude and are no longer able to fulfil their charitable objects or the trustees resign, the Charity Commission can intervene to put matters right and any remaining funds can be properly distributed. The situation is not the same for some other bodies, which may be solely dependent on grant funding direct from the Government. In addition, they may also receive funding from the New Opportunities Fund. My hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale), who is an Opposition spokesman on such issues, has expressed grave concern about the abuse of such funding.

    At a time when the national lottery is under pressure, fewer tickets are being sold and there is less income, it is ironic that a greater proportion of its profits are being steered towards substituting for Government funding rather than to hard-pressed charities. The best thing that the Government could do for the lottery would be to insist that it concentrate on helping charities; it should not prop up Government programmes as it has done in the past.

    My hon. Friend the Member for Gainsborough (Mr. Leigh) gave some examples of the abuse of lottery funds, so I shall not repeat them, but I am sure that there will be further examples, not just in the Daily Mail but in other newspapers. Every time one of those cases arises, it reduces people's interest in buying lottery tickets.

    We are reaching the stage where, in desperation, the lottery body is encouraging sales of instant tickets, such as scratchcards, especially to young people, where they can see immediately whether they have won. That is in breach of all the principles that underpin gambling controls. Furthermore, it is well established that the narrower the time gap between gambling one's money and getting the result, the more likely it is to lead to compulsive gambling. Buying a lottery ticket in advance or buying a premium bond gives people longer anticipation of winning and more excitement, but if one buys a scratchcard at the tobacconist, one can see whether one has won within seconds and the temptation is then to buy another ticket. Addictive gamblers will go on and on buying, trying to cover their losses. The lottery raises an increasing proportion of its income from that type of sale rather than the traditional sales that were envisaged by John Major.

    Does my hon. Friend agree that the whole concept of instant gratification is very much a new Labour one? It is very much in line with the Government's whole philosophy, whereas long-term solid investment is a Conservative concept.

    I wholly agree with my right hon. Friend. He puts the point succinctly, powerfully and persuasively. It is a good way to distinguish the approach of the Opposition from that of the Government. Instant gratification and compulsive gambling go together—they are the hallmarks of new Labour. The Conservatives take a longer view, which is why we are such supporters of charities. That is why we want to encourage the distribution of lottery funds to local charities, to get more local involvement. That is why the idea in Norfolk, of a local charitable endowment fund, is so excellent, although it would be easier to raise money for that charitable endowment if people who bought lottery tickets in Norfolk knew that their money would go directly to good causes in their county rather than being diluted among good and not-so-good causes in other parts of the country.

    I have reservations about the fact that the endowment powers will extend beyond charities, but I am pleased about their extension to charities. Once again, I congratulate my hon. Friend the Member for Mid-Norfolk on what he has achieved.

    11.19 am

    I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on piloting the Bill through the House so effectively. However, I am disappointed that the hon. Member for Christchurch (Mr. Chope) used what I consider to be an extremely good Bill as a platform from which to launch an anti-lottery tirade. Some of the drivel that he brought out about addiction, gambling, and the uses to which the lottery is put was totally unfounded. He should reflect on the speech that he has just made and see what damage he has done to the lottery, which I believe has been accepted across all parties in the House and across the country as a good institution. The vast majority of its expenditure enhances the quality of life of communities throughout this country, and to that extent the lottery—which, after all, was brought into being by a Conservative Government—is to be commended and deserves all-party support. The theme of the hon. Gentleman's contribution, and of others like it, is not well founded and does tremendous damage to the good causes that the lottery supports.

    Does the Minister dispute the fact that a higher proportion of lottery income is now coming from scratchcards; that scratchcards are sold principally to young people; and that scratchcard sales have been condemned by experts, who are of the opinion that the purchase of such cards is more likely to lead to compulsive gambling than the traditional lottery ticket?

    This morning's debate is not a discussion on the lottery. However, if the hon. Gentleman wants a debate about the lottery, let me point out that any lottery, wherever it is in the world, eventually has to branch out from the lotto. Our national lottery derives about 80 per cent. of its income from lotto—the highest percentage of any lottery in the world. Sales for the lotto part of any lottery—such as the lotto that was launched here by the 1993 legislation—initially rise, then plateau out and start to decline. It is necessary to refresh lotteries continually, by changing the portfolio of games, and that may include the introduction of scratchcards. The hon. Gentleman spoke disparagingly about selling tickets for our lottery throughout Europe. That is another means of refreshing a lottery. As he knows, we are looking at the question of funding part of our Olympic bid through the lottery, and we intend to seek the House's permission to support the Olympic bid in that way.

    The structure of lotteries must change. If they do not change, they die. Ticket sales in this country have been declining. Unfortunately, the trend has been accelerated by speeches of the type that the hon. Gentleman made this morning. Lotteries must change or die. He may sit there smirking, but a lot of people who are enjoying a better quality of life now because of the lottery would not subscribe to his comments this morning.

    The Government endorse the principles behind the Bill and welcome the cross-party support that has been evident during its passage to date. I can confirm that I do not believe it was the deliberate intention, when the National Lottery etc. Act 1993 was originally drafted, to prevent distributors from awarding grants to establish or augment endowment funds. This is an unfortunate state of affairs, which the Bill is intended to rectify.

    The Bill is modest and—it says in my notes—uncontroversial. It has been slightly more controversial than we expected first thing this morning, but it is overall an uncontroversial Bill, as befits a private Member's Bill, and I believe its provisions will be helpful not only in clarifying the legal position of all distributing bodies to fund endowments, but in assisting charitable bodies to manage their funds more effectively. I emphasise again to the hon. Members who have been probing this morning that endowments can be dispensed to charitable organisations only.

    The lottery brings enormous benefits to charitable and community groups throughout the country and overseas. The Bill will enhance the impact of the lottery on the voluntary sector in this country.

    It is entirely appropriate that the debate takes place in the week after UK carers week. The Community Fund has played a key role in supporting the work of carers and carers week, contrary to some extent to what has been said this morning. [Interruption.] I hope that the right hon. Member for Bromley and Chislehurst (Mr. Forth) and the hon. Member for Christchurch will listen. They have been criticising the lottery, but I hope they will have the courtesy to listen—but obviously not.

    Last week, the Community Fund announced that since 1995, it has given nearly 3,000—[Interruption.] I thank the hon. Gentlemen very much for their attention. I am trying to put the record straight on the work of the Community Fund. Since 1995, it has given nearly 3,000 grants, worth more than £200 million, to enable carers to provide sustained health and social care to more than 16 million disabled, frail, long-term ill and socially isolated children and adults. Those impressive figures demonstrate the central role played by the lottery in transforming communities throughout the United Kingdom, countering some of the myths that have been created and perpetrated today and all too frequently in some of the newspapers, which the hon. Member for Gainsborough (Mr. Leigh) referred to, and other negative media attention.

    The Bill also fits in well with a key theme emerging from my Department's review of lottery distribution: that distributors should strive to be more responsive to the needs and priorities of local communities and others. Giving distributors express powers to fund endowments will give them more flexibility in responding to the needs of applicants and will help give charitable organisations more flexibility to manage their resources. I hope we shall be in a position to publish a White Paper outlining our proposals for the future of lottery distribution next month. I urge all hon. Members present, together with charities and the voluntary sector, to play a full part in the consultation on our proposals, because it is our intention to ensure that the lottery is responding to the needs of their communities, and that more ownership is taken of the decisions made.

    To conclude, I welcome the Bill as a useful piece of legislation and I am grateful to the hon. Member for Mid-Norfolk for piloting it through the House. It will clarify the powers of all distributors to fund endowments, should they choose to do so, and put charities on an equal footing with other grant applicants in accessing lottery funding for endowments. I am therefore happy to offer the Government's support for the Bill.

    11.28 am

    With the leave of the House, Mr. Deputy Speaker.

    I shall be very brief. I thank the Minister for his very positive approach, and that of his Department and his officials, throughout every stage of the Bill's passage so far. I am very grateful. I know that it is in the interests of his Department, but it is also of wider interest. This private Member's Bill, with all-party support, helps to change an anomaly in the 1993 Act. It will be of benefit to tens of thousands of people throughout the country. It will have no impact on public expenditure.

    I think that, to address the line of argument advanced by my hon. Friend the Member for Christchurch (Mr. Chope), the Bill may not provide instant gratification, but as a former Whip, I believe in anticipatory gratification, because that is the way to persuade people to do something or not to do something. I therefore commend the Bill to the House and hope that it has a trouble-free passage in the other place.

    Question put and agreed to.

    Bill accordingly read the Third time, and passed.