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National Lotteries Bill

Volume 448: debated on Wednesday 28 June 2006

Lords amendments considered.

Clause 7

National Lottery Distribution Fund: Apportionment

Lords amendment: No. 1.

With this we may discuss Lords amendment No. 2 and the Government motion to disagree thereto, Lords amendment No. 6, Lords amendment No. 7 and the Government motion to disagree thereto, and amendment (a) in lieu of Lords amendment No. 7.

The Bill has taken a little time to reach this point, but as today’s debate will show, it has come a long way. My Bill manager, Valerie Curtis—whom the hon. Member for Bath (Mr. Foster) has met on a number of occasions—has now gone off on her honeymoon, which was booked for after the Bill was expected to receive Royal Assent. She is now swanning around South America, and I am sure that the whole House—particularly the hon. Member for Bath—will send her best wishes.

The Lords amendments deal with the relationship between Government and the Big Lottery Fund, and the need for all lottery distributors to report annually on the way in which they have interpreted the principle of additionality. Lords amendments Nos. 1 and 2 seek to remove the Secretary of State’s power to prescribe expenditure in relation to the new Big Lottery Fund good cause.

We have discussed this very fully on several occasions, both here and in another place. For reasons that we have already explained at length, we believe that the powers set out in clause 7 are necessary and serve an important purpose, given the exceptionally wide scope and large size of the good cause that the Big Lottery Fund covers. Without the power to prescribe expenditure, the Big Lottery Fund would be given 50 per cent. of all the lottery good cause money to spend on anything that is charitable or connected with health, education or the environment without any further recourse to Parliament. We do not believe that that makes sense.

The large new spending area of health, education and the environment that the Government created in 1998 has proved popular and successful. The new Big Lottery Fund good cause brings those areas together with the area of charitable expenditure distributed by the Community Fund, allowing an enormous range of projects to be encompassed. That is a good thing, and one of the main reasons why we wanted to bring the Community Fund and the New Opportunities Fund together. However, it does create a very different kind of good cause from the existing arts, sport and heritage good causes. Arts, sport and heritage are much narrower areas, and the existing legislation narrows things further by prescribing sums to be distributed by different distributors. That has the effect not only of limiting the definition of who can spend the money, but of restricting what it can be spent on. Parliament took the view in 1993 that such arrangements were necessary to ensure the effective distribution of Lottery money. The powers that we propose in the Bill will have a similar effect, and we believe that they are necessary now as they were in 1993.

Does the Minister recall the view of the then Labour Opposition during the passage of the National Lottery etc. Act 1993? They were adamant that lottery money should not be spent on such matters as health, because they thought that it would be a substitute for money that ought to be found from taxpayers’ resources. Why have they performed such an abrupt volte face?

As the right hon. Gentleman knows, time moves on. The Government do consult from time to time. We have had one of the widest consultations on the lottery and how it should be distributed, and I think that that is absolutely right. Since the lottery was introduced, we have put it on record many times that it is a great institution. Credit must go to Conservative Members: at least they set up the lottery. That is one of the few good things that they did. We have continued to consult, and it is very evident that the direction that we are now moving in is in concert with what the British people think. If the right hon. Gentleman’s party did the same with its policies on the lottery as we have done, it might have a chance of winning the next election.

We need to be able to set out—at the very highest level—the types of expenditure that the Big Lottery Fund should focus on. We are talking about broad areas of expenditure, not projects or programmes, the split between the four parts of the good causes, or the split between the four countries of the UK, and certainly not specific grants. It is absolutely right that that should be done in a transparent and accountable way, and that there should be proper parliamentary scrutiny. That is why we are very clear that it should be done through secondary legislation and be subject to the affirmative resolution procedure.

We have made available an illustrative order demonstrating how the power to prescribe expenditure will be used in practice. The ability to prescribe devolved expenditure is also central to achieving the greater devolution of decision making to Scotland, Wales and Northern Ireland, which is the Bill’s aim. Amendments Nos. 1 and 2 would mean that the Bill’s devolution arrangements would not work: they would retain power for the Secretary of State where the Government wish to devolve it. For the reasons that I have given, we cannot accept those amendments.

I hope that the House will agree with the Lords in respect of Government amendment No. 6. We previously debated additionality at some length, and it is clear that all parts of this House support the principle of additionality. Yet decisions on what to fund remain decisions for lottery distributors to make, and I am sure that all Members would agree with that. So, as we have continually made clear, it is not appropriate for us to try to include in the Bill a definition of additionality.

I think that there is now general agreement on this position, not least in another place. There is also general agreement that it is right that lottery distributors should report annually on the way in which they have interpreted the principles, as I agreed with them and reported to this House. But the Government accept that there is strong feeling that a requirement for such reporting should be included in the Bill. It is very important to get the wording right, and we believe that this amendment provides the appropriate form of words—one that distributors can meet, and that will allow proper transparency. We must remember that this is a reporting requirement; it is not a definition, and it does not attempt to set out what lottery distributors can or cannot fund. If Parliament should have reason to take issue with distributors’ reports, there will be an opportunity to debate that in any section of the House.

As we have pointed out, the fact that lottery funding is additional to Government funding does not mean that it cannot be complementary to such funding. We have also pointed out that agreement on what is appropriate for Government to fund can change over time, as I have just said. Just because something is, or is not, currently funded, does not mean that that will always be the case. For example, some things that the lottery has in the past funded are now funded by central Government, and will probably not be funded by the lottery in future. Moreover, there might be a desire or need now for something that the Government might possibly fund in future. Such cases have certainly arisen in the arts and heritage, where the lottery has provided funding.

On health expenditure, to which the Minister referred, if—perhaps for financial reasons—the National Institute for Health and Clinical Excellence decides not to fund a particular treatment, will that not be a green light for the lottery to fund such expenditure in that very way? Our concern about additionality, particularly in relation to health, is that precisely such abuse of the lottery, which occurred in the past through the New Opportunities Fund, will occur in future through the Big Lottery Fund. Our worry is that at some future point, the Big Lottery Fund will look to adapt funding for health, education, the environment and perhaps other areas: that it will be taken out of general Government expenditure, and that, in effect, it will be at the mercy of the lottery. Does the Minister not understand that that is precisely our concern, and that the grey area of complementary or other funding cannot begin to deal with it? Will he give us some—

I thought that the hon. Gentleman was going to make a speech, and that I would have to intervene on him.

We genuinely take on board the picture that the hon. Gentleman is portraying, and we are trying to do two things. First, we are trying to ensure that the arm’s-length nature of the distribution of funds is in place. Secondly, we are now asking each of the distributors to include in their annual reports what they believe was their expenditure and the additionality element. That will enable Members to bring distributors to book in many ways—on the Floor of the House, in Committee, or through interrogation by Select Committees. We are trying to address the additionality issue, which is sometimes very difficult to address. I do not think that hon. Members really want a position whereby the funder would start to be challenged in court. If we got into the legal minefield of providing a definition of additionality that becomes challengeable, we might see a long line of people queuing up at court to argue against it. In trying to respond to the genuine concerns that Members here and in another place have brought before us, we have gone a long way towards making transparent the way in which additionality is dealt with by funders.

As the annual reports unfold in the years to come, we will see how the information is used by Members. I hope that it will be used objectively. If Members are concerned that an area that is being funded is not additional, those who have done the funding can be questioned about it. The amendment will enshrine in the Bill the requirement for lottery distributors to report annually on how they have interpreted additionality in their funding decisions in order to ensure transparency while allowing them the proper freedom and flexibility in their funding decisions. I urge hon. Members to support it.

On amendment No. 7 and amendment (a), I beg to move that this House—

Order. On a procedural point, I should say to the right hon. Gentleman that I will call upon him to move the other motions in the group at the appropriate time.

Thank you for that guidance, Mr. Deputy Speaker.

On amendment (a), we recognise that perceived Government control over the Big Lottery Fund is a fundamental point of concern to Opposition Members, as it was to their counterparts in another place. We still believe that those fears are unfounded, but we acknowledge that they are genuinely felt, and we are therefore prepared to amend the Bill to address them.

Amendment No. 7 would provide that the Big Lottery Fund must “take into account” rather than “comply with” any policy or financial direction given to it by the Secretary of State. We cannot agree to the amendment, as it would put the Big Lottery Fund on a different footing from all the other lottery distributors, who are required to comply with financial directions. However, our amendment (a) delivers the spirit of amendment No. 7. It provides that the Big Lottery Fund must comply with policy directions only as to the matters to be taken into account. It replicates the wording in section 26(1) of the National Lottery etc. Act 1993, which sets out the Secretary of State’s powers to give policy directions to the other lottery distributors. That puts the Big Lottery Fund in exactly the same position as the other lottery distributors, including the Community Fund. I hope that Opposition Members will recognise that we have listened carefully to what has been said here and in another place and have been prepared to make changes where we believe that they are necessary.

There is no disputing the fact that proceedings on the Bill have been a long haul. As the Minister pointed out, it received its First Reading in this House as long ago as 25 November 2004. What a difference 19 months makes! After one election, two Conservative party leaders and three Home Secretaries, we have finally reached the finishing tape.

Let me say at the outset that significant progress has been made, and it would be churlish of us to oppose the Government today. Nevertheless, we remain concerned, despite the sterling work done in another place, that the underlying principles behind the Government’s thinking will prove detrimental to the fundamental principles of the national lottery. We intend to remain vigilant to ensure that worries about vastly increased Government control over the distribution of lottery funds are kept at bay. I will say more about that when we come to the next group of amendments.

In our view, the national lottery was set up by a Conservative Government more than a decade ago with the specific purpose of improving the daily quality of life for all people in Britain by reserving funds for activities that might otherwise be neglected in the everyday distribution of taxation receipts. By contrast, the creation of the Big Lottery Fund—the centrepiece of the Bill—represents a step, if perhaps a small one, away from the exclusive focus on the four original good causes: arts, heritage, sports and charity.

I am, however, happy to recognise that the Government have taken on board many of the specific concerns that we expressed in what the Minister has diplomatically described as “lively” discussions on Report and Third Reading on 19 January. I also welcome the Government’s acceptance of the two important matters of principle in another place. We are pleased that the lottery distributors have now agreed that they will report back annually on how they are adhering to the additionality principle.

On Third Reading in the Lords, the noble Lord Davies, on behalf of the Government, tabled a specific amendment to establish the agreement of the distributors to enshrine in the Bill the duties of those distributors. We entirely agree with the Government that decisions on what to fund should remain strictly for lottery distributors, but we still believe that it would have been helpful had a stricter definition of additionality been placed in the Bill. However, we recognise that a detailed report on the upholding of the distinction between lottery funding and Government funding represents a workable solution and one that we will obviously look at in the years ahead.

We recognise that the noble Lord has given us an assurance that if Parliament has reason to take issue with reports from distributors, there will be opportunities to debate that. Similarly, we appreciate the fact that lottery funding being additional to Government funding does not mean that it should necessarily be complementary to such Government expenditure.

May I at this point place on the record my thanks to my colleagues in another place, Viscount Astor, Lord Brooke of Sutton Mandeville and Lord Luke, for all their sterling efforts?

The other main issue on which we crossed swords with the Government was the control of the Big Lottery Fund. As the Minister will recall, the Government were narrowly defeated in the Lords on Report when we sought to remove the Secretary of State’s powers to prescribe by affirmative resolution types of expenditure for the Big Lottery Fund. While taking at face value the assurance from the Government that those powers are needed only to establish a broad theme rather than specific spending intentions, we recognise that the new amendment tabled here today effectively accepts the spirit of that amendment from the official Opposition and the Liberal Democrats in another place.

In that context, I thank the Minister for his assurances that his amendment tabled to clause 14 puts the Big Lottery Fund in the same position as other lottery distributors with regard to policy directions, but in doing so, we recognise that the Big Lottery Fund will need to take account of, rather than simply comply with, financial directions in the same way as other lottery distributors.

We also recognise that, on Third Reading in the Lords, there were several new and uncontentious amendments tabled by the Government to which we will come later, when I shall also say a few words about the ongoing independence of the Big Lottery Fund. It is important that there be independence from Government intervention—or, indeed, any political intervention—in relation to the distribution of lottery funds. It is a great worry that we are moving down a path that will become more apparent as we debate the new lottery operator. It is all the more important that, effectively, we have three very independent organisations, with Parliament overseeing the lottery operator and the distribution of lottery funds. An intermingling of responsibilities would be dangerous, and this is something that we will debate in the months and years ahead.

With those comments and with my thanks for the Minister’s words, I hope that we can move ahead on the Government’s proposals today.

I, too, am delighted that we are coming to the end of this rather long process; the passage of the National Lottery Bill through both Houses. Like the Minister, I congratulate the Bill team on their stamina and I pass on my congratulations to the leader of that team on her marriage. I hope very much that she is having an enjoyable honeymoon.

As the hon. Member for Cities of London and Westminster (Mr. Field) pointed out, the Bill started its passage back on 24 November 2004. It was interrupted because of the general election and Second Reading took place on the Floor of the House on 14 June last year. During that debate, I was able to acknowledge the fantastic work done in each and every one of our communities as a result of the distribution of money raised by the lottery. I also expressed my view that the Liberal Democrats had got it wrong when, at the time of the setting up of the national lottery under the Conservative Government, we opposed it. I still think that we were wrong to have done so, as the lottery has done sterling work.

During the Bill’s passage since 14 June last year, I believe that significant improvements have been made, as others have already said. The briefing from the National Council for Voluntary Organisations states:

“We believe that the Bill has been significantly improved as a result of the amendments and debates around upholding the additionality principle, maintaining the independence of lottery distributors and ensuring that the National Lottery provides sustainable funding streams to the voluntary and community sector.”

I agree with much of that, but I also agree with the hon. Member for Cities of London and Westminster that, in respect of additionality, that is rather over-egging the pudding. I continue to be concerned that we have not achieved as much as we would like in respect of enshrining a definition of additionality in the Bill—the Prime Minister said that that would be a good idea—in order to provide a benchmark against which to judge the decisions of the various lottery distributors.

The Minister is right to be concerned, as he hinted he was, about aspects of health spending. He said that it would not be right for lottery money to be spent on aspects of health that were being funded by the Government, but as the hon. Member for Cities of London and Westminster pointed out, under that definition, whatever aspects of health the Government choose to spend money on at any one time will be sacrosanct and the lottery can come in and fill the gap.

It is interesting to read what it says on the Department of Health’s website. Under the heading, “Why can’t Lottery money be spent on the National Health Service?”—an interesting question—the website states:

“The Government does not believe it would be right to use Lottery money to substitute for NHS services that are paid for through taxation. It is committed to the principle that Lottery funds should be used to support only initiatives that are additional to health services provided through Government expenditure.”

But it then continues:

“Lottery money for projects which support preventative health care and health promotion is available, through the Big Lottery Fund.”

However, those are aspects on which NHS money is currently spent, so there is already confusion on the matter.

Although the hon. Member for Cities of London and Westminster seems to be smiling at me and nodding in agreement with everything I say, we should perhaps remember that the Conservative party has not been absolutely straight on this issue. It is worth reflecting that, before the last general election, the right hon. Member for Witney (Mr. Cameron)—now the Conservative party leader—announced on the “Today” programme his plans for a national school leaver programme. The presenter asked him how it would be funded and he replied, on 4 January last year:

“Well we want to look at that, there is the National Lottery, there are all sorts of programmes we can access.”

He was clearly interested in getting his mitts on lottery money, as confirmed in the Conservative manifesto, which announced that the party’s Club2School sports scheme was to be funded by £750 million of lottery money. The Conservative party has not been quite as clean on this issue as it might have been.

The key issue relates to the Big Lottery Fund, which is a combination of the Community Fund and the New Opportunities Fund. My party was opposed to the establishment of the New Opportunities Fund because it was going to distribute on a basis entirely determined by the Government, thus totally eroding the principle of additionality. As I have said, the New Opportunities Fund is to form part of the Big Lottery Fund and we therefore continue to have concerns about its running. We all know that the Big Lottery Fund has existed for more than a year—indeed, I have a Big Lottery Fund T-shirt and mug—yet we continue to debate the measure that is meant to establish it. However, it already exists and we must accept that.

It was crucial to ensure that the Big Lottery Fund is subject to no greater opportunities for Government interference than any other lottery distributors. Under the original Government proposals, that would not have been the case. The Big Lottery Fund would have had to comply with a string of directions from the Secretary of State. Both Opposition parties wanted to ensure that it had to comply only to the same extent as other lottery distributors.

I am therefore delighted that, after pressure in the House and in another place, the Government have acceded to our request. The amendments would ensure that the Secretary of State had the same ability to instruct the Big Lottery Fund and the other lottery distributors. It is therefore right that the wording of the amendments mirrors that of section 26(1) of the National Lottery etc. Act 1993. We are delighted to support the amendments because they would effect what we wanted to achieve from the outset.

My hon. Friend the Member for Cities of London and Westminster (Mr. Field) was characteristically generous and kind to the Minister. I understand the background. Many colleagues have been involved in long and extensive debates here and in another place, and I am pleased that the Government have made some movement in the amendments in the direction that we wish them to follow. Given the spirit of consensus that appears to pervade parts of the Chamber this afternoon, it would be churlish to deny that. I therefore welcome the fact that some of the language of the National Lottery etc, Act 1993, is repeated in the amendment in lieu to take account of some of our worries.

However, not all our worries are tackled. Once again, we are in a position that we occupy all too often with the Government—that of considering sketchy and general measures when the things that matter will emerge in orders and subsequent prescriptions on expenditure, which are not laid before the House or included in the statute. It is therefore a pity that the Minister has not been forthcoming about what the Government have in mind by way of proper guidance to guarantee that any health and education expenditure can be genuinely additional. More importantly, how can it be guaranteed that such spending will not crowd out the other expenditure in the 50 per cent. category that has a proper claim on the lottery as originally defined?

I well remember the debates about the 1993 legislation. The then Government were attentive, as they should have been, to the Opposition’s views. The then Opposition were determined that none of the money should find its way into core elements of public spending, such as health and education, because they believed that that constituted a cop-out by the Government of the day, that the contributions would be small compared with the large sums of money spent through main programmes and that the lottery should be steered away from any such proposal. I am sure that the Opposition welcomed the fact that the Government went along with that—although they were not too generous about the matter—and ensured that the right guarantees were built into lottery legislation so that the lottery could concentrate on the arts, heritage, sport and charity and not get involved in small amounts of funding, relative to the large amount of state funding that went directly to health and education.

That is the nub of the argument this afternoon—what is the problem with including health and education? There are two main problems. First, state spending on health and education is already massive, so the lottery contribution would be small in comparison. There might be a temptation to increase the lottery contribution more and more to try to increase its significance when compared with the large amounts that come directly from taxpayers’ money.

Secondly, health and education are dominated by monopoly state provision involving large sums of money. It has been common party policy between the Conservatives and Labour in the past 20 years to make health and education the two utmost priorities for increases in spending. Although Labour has spent much of the past few years trying to deny that, anybody who looks at the figures will see that in the 1980s and 1990s Conservative Governments regularly increased health and education spending by more than the rise in prices and often by more than the rise in wages, and wanted to make substantial real increases in that spending. When the new Government came to power they carried on with that policy and, in the past three years, we have had an even bigger leap in health and education spending, with which we have not disagreed. We are interested to see how that works out, because it has been a shared priority across the Floor of the House that health and education should be the dominant areas that attract extra money from the taxpayer.

Does my right hon. Friend agree that if the public perceive that lottery money is displacing money that should rightly be provided from the public purse for health and education, they will disapprove and that that will reverse the recovery that the lottery has seen in ticket sales and, therefore, its ability to help good causes generally?

That is a possibility, and my hon. Friend makes his case strongly. My case is slightly different. Given that it is still the shared priority of the major parties that health and education should get the lion’s share of increased taxpayers’ resources, and given the large sums involved, it is difficult to see how a bigger additional contribution can be made by lottery funding. It would be difficult to identify the areas that would be genuinely additional and that everybody would agree the state should not provide. The state is the monopoly provider, the provider of last resort and the general provider of health and education services to most of our constituents and, as such, it has the duty to ensure that whatever is new or worthwhile in those areas is properly paid for out of taxation.

My concern is with the traditional areas for the lottery, which will be squeezed by these proposals. We can see that under clause 7 half of the amount will go to the new purposes—health, education and environment, of which the first two are likely to be the dominant ones—and the worry is that arts, heritage, sports and charities will be squeezed. Why were they identified as suitable areas for lottery funding—attracting cross-party agreement—in 1992-93? It was because the state was not dominant in those areas. The state is not the main provider of arts, heritage, charity or sport in our country. There are huge amounts of private money in sports such as soccer, mostly from television companies, huge amounts of voluntary donations to charities, and arts and heritage attract a great deal of private money from rich companies and rich individuals and the many of our constituents who visit them and pay fees for the privilege of doing so. The amounts provided by the state to those areas were not huge and the state did not dominate funding, so it was possible to identify smaller community projects or larger tasks that needed additional money, to which the lottery could make a real difference. We all have examples of the lottery’s success in achieving just that.

The worry is that if we allow Ministers to get away with providing money from the lottery to health and education without proper rules on additionality, there will be backsliding, so that matters that we agree should properly be paid for in the normal way by the taxpayer take money and detract from the amount available for the other good causes for which the lottery has become famous and which it should fund in the future.

I face a conundrum when asked to approve the amendments. My hon. Friend the Member for Cities of London and Westminster says that they are the best that we can do and I am often swayed by him, but it would give me and many others for whom I speak greater comfort if the Minister could give us a better insight into the sort of prescriptions that the Secretary of State will produce if she is entrusted with these powers. It would be helpful if we had before us a clear definition of additionality that made sense and could provide a way to police the operation of these clauses.

The Minister may think that the Big Lottery Fund has the common touch, although people might consider the name to be a tad vulgar for something so well intentioned. It is certainly ambitious and presumptuous, but I hope that people realise that they need to keep on buying tickets if it is to stay big.

As my hon. Friend the Member for Castle Point (Bob Spink) said, many people will want reassurance that the lottery will not become a cheap trick for a Government who have run out of money. They have spent a very great deal on the core purposes of health and education without achieving all that they wanted. The proper purposes of the lottery were defined on a cross-party basis when it started, but those purposes may be put under pressure and begin to wither. We must not get into the sort of vicious circle that my hon. Friend described, with people’s lack of enthusiasm causing contributions to fall.

Moreover, I should be reluctant to get into a pincer movement, with health and education taking more and more, as my hon. Friend the Member for Cities of London and Westminster implied could happen. All too often, the National Institute for Health and Clinical Excellence makes judgments about remedies that doctors and patients in my area think could be valuable, and then says that they will not be available on the NHS. If the lottery were to begin making up for NICE’s meanness, it could be very expensive. It might be popular, but it would not be in the spirit of additionality, and the Government have given no reassurance on the matter.

At the risk of damaging the wonderful spirit of consensus evident in the debate, I urge the Government to think more clearly about additionality, and to offer more reassurance in that regard. The Bill is another example of Henry VIII legislation, and a lot remains to happen after it has gone through the House.

I am grateful to be able to say a few words in this debate, and to follow the interesting remarks made by the right hon. Member for Wokingham (Mr. Redwood). I share some of his concerns about the general drift of matters to do with the national lottery. There is an acceptance in the House that the Government are moving in the right direction with the lottery, certainly compared with their original plans. However, many people outside the House are very worried about funding for the arts and heritage, which over the decades have tended to be underfunded by Governments of all parties.

The lottery was originally intended to bolster the funding for heritage and the arts, and very good work was done in the early days, specifically in connection with the acquisition of objects and works of art for museums and galleries. There was a time when the Department responsible for the arts—it used to be the Department of National Heritage but is now the Department for Culture, Media and Sport—earmarked money for our national galleries so that they could acquire objects and works of art. That has been frozen or even eliminated in some cases, so that now even the British Museum and the National Gallery have almost no money at all.

We are approaching the Olympics, when the eyes of the world will be on us. I hope that Ministers will take pride in the fact that this country has some of the greatest museums, galleries and arts organisations in the world, and that they will use the opportunity to talk up, praise and value our extraordinary cultural riches and heritage. However, that approach is slightly undermined by the fact that the Government have almost ceased to help our museums and galleries to make acquisitions. The two organisations that were preventing museums and galleries from being simply unable to acquire new objects and works of art were the National Heritage Memorial Fund and the Heritage Lottery Fund.

I fear that a terrible drift has taken place in recent years, and that it is embodied in the Bill and in the attitude of the DCMS. Guidance has been given to the Heritage Lottery Fund that it should turn its attention away from the arts and heritage in general, and away from acquisitions in particular, and towards the Olympics, sport and socially desirable programmes. Nobody disputes that those things are valuable and desirable. Everybody wants the Olympics to be a success, but the idea that they can be a success only at the expense of our cultural life and of our major museums and galleries being able to make acquisitions is very regrettable. The Bill does not, in itself, further that trend, but it does nothing to balk a trend that is extremely undesirable. Anyone who has paid any attention to these matters will have heard the articulate pleas of Mr. Neil MacGregor, the director of the British Museum, and Mr. Charles Saumarez Smith, the director of the National Gallery, that important acquisitions that they ought to be making on our behalf cannot be made.

The hon. Gentleman makes a powerful case and I have a lot of sympathy with what he saying about the arts and heritage. There is a problem with the Bill. We all accept that the Olympics are an important one-off event and that a case can be made for more money going into sport in the run-up to them, to give sport a better chance and so that we can all be proud of our athletes as well as our facilities. However, it is a one-off event and it will end. The problem with introducing health and education is that they could prove to be a permanent addition, and they may grow and grow because their appetites are so large. They could be far worse at squeezing what the hon. Gentleman values than sport, in its temporary phase of ascendancy, will be.

I absolutely agree. This whole area of concern puts the finger on something that has always bedevilled politicians and Governments in their support for the arts and for heritage. The public are asked the perfectly understandable rhetorical populist question of whether they would prefer to help people who are dying and have huge “help” problems, or to help our young get a good education, or to buy works of art for a gallery, works of archaeology or objects. Almost everybody, of course—no matter how passionate a supporter of the arts and our cultural heritage—would ask how one could possibly resist supporting people in severe ill health or who need better education. But it is not a proper question—it is a fake question, and one that should not be asked.

In any civilised society, we need both: of course we need good health care and education, but we need great art galleries to express what this generation cares about and to pass that on to our children and grandchildren. The danger of the Bill—and to the lottery, which has been, in our lifetime, the one bulwark against that populist question—is that undermining that bulwark by general drift will leave us all poorer. The lottery may, as a result of the Bill and the Government’s action, do very good work in health and social inclusion programmes, and in the Olympics and sport. However, our children and our grandchildren will ask what it was that this generation cared about in our cultural life and how they can see it when they go to our major galleries and museums. They will ask what we collected and what we wanted to do, and there will be a terrible, gaping hole.

Virtually no contemporary fine art is being collected in this country. One of the few bodies that supports it—the Contemporary Art Society—has minuscule programmes and a tiny handful of money every year. In 50 years’ time, we shall be in danger of their looking back at our generation and saying that we cared so little for our arts and heritage and cultural life that nothing remains that there is a gaping hole in our museums and galleries. [Interruption.] Does the hon. Member for Chatham and Aylesford (Jonathan Shaw) want to intervene?

Interestingly, I thought that someone on the Treasury Bench wanted to intervene. I would willingly have given way if the hon. Gentleman had wanted to contribute to the debate.

I fear that an intervention from the Opposition Front Bench will be second best, but I thank the hon. Gentleman for giving way to me instead. He is making a powerful contribution. We, too, have expressed the concern that the more we have to justify expenditure on the arts and heritage in relation to extraneous elements such as education, law and order and the like, the more dangerous the path. As he rightly points out, in times of difficult financial straits for the country—whether or not they actually come to pass—if we have to justify expenditure on the arts and heritage in relation to money and goods for health and education there will be something of a disaster. Inevitably, money will go to health and education, not to the all-important artistic heritage that he rightly promotes and praises.

I am grateful to the hon. Gentleman. As he says, the Opposition Front Bench is second best and I would have preferred to take an intervention from the Treasury Bench, but his observations were interesting and helpful.

I am simply making a plea to my right hon. Friend the Minister. He is a civilised man who comes from an extremely civilised city, which, ironically, embodies the best of the trend and its dangers. Sheffield has some of the finest regional galleries and museums—Weston Park and the Graves have wonderful collections—which have benefited hugely from lottery money and are the better for it. There is a fine director, Mr. Nicholas Dodd. However, the danger is that there will be no acquisition money. A small amount is available through the renaissance fund—indeed, Sheffield is a hub for that—but the money has to be disbursed around the region.

The galleries and museums of Sheffield, the Minister’s own city, will be in fine physical condition, but we shall not be refreshing and renewing their collections. I hope that my right hon. Friend shares my concern that such a wonderful city could be left in that position. Will he make sure that he does not increase pressure on the Heritage Lottery Fund by encouraging it to move too far away from help for the arts or heritage, especially for acquisitions for our museums and galleries? We need that help, and if the Bill is to do the good work that it should it must not move away from it.

The hon. Gentleman’s comments are music to the ears of many of us on the Opposition Benches. He is aware of Sir Nicholas Goodison’s report and its recommendations, although sadly few of them have been implemented by the Government. Does he share my concern that if the Government move towards an acquisition fund they should not raid existing funds or divert money from the Heritage Lottery Fund or the National Heritage Memorial Fund, but should find new sources of funding, if they can, to solve the acute acquisitions problem?

That would be the ideal solution; there should not be raids on other areas. I am going slightly wide of the debate, Mr. Deputy Speaker, but I hope that the Minister heard what the hon. Gentleman said about Sir Nicholas Goodison’s report. The whole world outside this place has been waiting for a positive response to at least some of its very practical recommendations. That is one way—other than the lottery—in which we can help those causes that does not involve general taxpayers’ money. I hope that the Treasury, through the Minister, will hear those points and will recognise that tax forgone works extremely well in the acceptance in lieu scheme, whereby about £30 million goes to our galleries and museums every year. A general approach, such as Sir Nicholas Goodison recommended, would be an ideal addition to money through the lottery, which we are considering today. I hope that I am still in order when making that point, linking—

I hope that I was pushing my luck with great gentleness, Mr. Deputy Speaker, and that I was teetering on the borderlines of being in order, because there is a relationship between tax forgone and the concerns that are directly being debated today about heritage. Those things need to be considered together. One of the ways in which we could strengthen the Bill would be through tax forgone. I trust that the Chancellor—particularly if he has wider ambitions in the future—will realise the good and sensible ways in which he can assist without putting a further strain on the taxpayer.

To return to the heart of today’s considerations, I hope that the Minister has taken on board some of the concerns from both sides. Although I welcome the general drift and direction that the Government are taking with the Bill, I hope that we are not going to fall into the trap of ignoring the needs of the culture of this country and that we will not sell future generations short.

That was a tour de force of special pleading. There was some slight straying from the amendments—[Interruption.] I will answer the questions. The hon. Members for Cities of London and Westminster (Mr. Field) and for Bath (Mr. Foster) have been involved in the passage of the Bill over many months and I welcome what they have said. We have responded to and rightly addressed some of the concerns that have been expressed here and in another place, and the amendments before the House reflect that. I do not say this disrespectfully, but some hon. Members who were not on the Committee may not quite appreciate how we have evolved the Bill. It was against the background of a wide consultation that we came to bring in the Big Lottery Fund and to give a clear indication to heritage, the arts and sport regarding their proportions and a clear ongoing commitment in relation to licensing and the proportions thereon.

I should tell my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher) that, interestingly, there was strong support for heritage in that consultation. That is reflected in what we have said in the Bill about the arts, heritage, sport and the Big Lottery Fund. However, I am also bound to say that there was a tremendous amount of support for education and health. Sometimes we get those in a narrow band.

One of the areas in which the lottery has been hugely successful relates to sport, education and health. We have 3,000 or so school sports co-ordinators who are operating effectively in the 400 or so school sports partnerships. They were funded by the lottery, but because they became so important to that project and the development of the two hours of quality physical activity and sport for every child every week from the age of five to 16, that aspect has been taken away from the lottery and put into mainstream spending—into Exchequer expenditure. Sometimes we can experiment and put pilot schemes in place to develop ideas and concepts, and the lottery can be a useful financial mechanism to do that. Eventually, the projects can transfer to mainstream spending.

It was clear from the consultations that people thought that it was useful to use lottery money—we are talking about people who play the lottery—for health and education and to have part of the funding from the lottery. That would be additional. I repeat that through the annual reports that will be presented to Parliament, the lottery distributors will have to show how they believe that that additionality has been used. Indeed, if it is the desire of hon. Members, that can be scrutinised. The measures in the Bill on additionality respond to many concerns that Members of both Houses have expressed.

It would be wrong to say that the Olympics will be a distraction. I know that my hon. Friend the Member for Stoke-on-Trent, Central is an expert on the history of art and heritage. Gold, silver and bronze medals were awarded in the ancient Olympics for works of art and culture. As we come up to 2012, I hope that we will see in this country the important cultural aspect of the Olympics that makes them successful. With the London organising committee for the Olympic games and other bodies, such as the nations and regions committee, the Government intend to ensure that the Olympics are not London-centric and that we use the vehicle of the Olympics to bring art and culture, as well as sport, to all parts of the kingdom. It is pleasing that the trust that we are setting up with lottery money from not only the Millennium Commission and the Big Lottery Fund, but the arts lottery, is seen as a good way of using the platform of the Olympic games to get out to the British people. Money is being used in many and varied ways, so there are dangers in trying to departmentalise through legislation, as hon. Members sometimes try to push Ministers to do. The Olympics will be used for not only sport, but art and heritage as we move towards 2012.

I do not know whether the right hon. Member for Wokingham (Mr. Redwood) has read the draft statutory instrument that we have published alongside the Bill. Hon. Members said that they wanted to read such a document, so we have produced a draft order on national lottery prescribed expenditure. I will not read it out, but I hope that it gives the House a guide to the measures that we would expect to be in such affirmative statutory instruments. I think that right hon. Gentleman shakes his head, but the draft is a good guide to what we are trying to do. We are trying to be as transparent and open as possible. I hope that the House will support the motion.

Lords amendment disagreed to.

Lords amendment No. 2 disagreed to.

Lords amendment No. 6 agreed to.

Lords amendment No. 7 disagreed to.

Government amendment (a) in lieu of Lords amendment No. 7 agreed to.

Clause 8

Reallocation of funds

Lords amendment: No. 3.

The Government’s amendments concern the proposed reserve power to reallocate an excessive national lottery distribution fund balance from a lottery distributing body to another body. The proposed new power has been the subject of extensive debate at all stages of the Bill both in this House and in another place.

Ministers have given repeated assurances that the Government would seek to use the proposed new power only as a last resort against a distributor that had failed over an extended period to tackle an excessive NLDF balance and had refused to take steps to manage that balance down to a reasonable level. Those assurances were not accepted by some Members, particularly those in another place, which is disappointing to me as it feels like an attack on my integrity, and I am deeply hurt. To get into such a dismal position a distributor would need to have ignored not just the Government’s guidance, but, as I have said on a number of occasions, the recommendations of the National Audit Office and the very powerful Public Accounts Committee.

I emphasise again that at the moment I am very pleased with the progress that distributors have made to get lottery money out of the bank to where people need it to do good. As things stand there is no question of our exercising the reallocation power in relation to any of the distributors.

The Heritage Lottery Fund has often been mentioned in our debates. I want to pay tribute to the trustees of the Heritage Lottery Fund and their chair, Liz Forgan, for their wisdom in choosing the best projects to support. They have balanced care in the selection process with a higher rate of spend, and they have reduced the balance from a high point of over £1 billion in early 2003 to just under the target of £800 million by the end of the 2005-06 financial year. In the two months to the end of May the balance came down by a further 4 per cent. to around £764 million. That is a significant achievement by the HLF, and I understand that it plans a further significant reduction in the balance over the next three years or so. That is genuinely to be welcomed.

No distributor that manages its balance down in a sensible way has anything to fear from the proposed reallocation power. I should also remind hon. Members that the power is framed so that it cannot be used to transfer lottery proceeds away from any one good cause, whether it is the arts, sport, heritage or causes supported by the Big Lottery Fund. It can be used only to transfer a balance from one body to another within the same good cause.

In the reallocation power as framed in the Bill as it left this House, the Secretary of State would not have been able to exercise the power without first consulting the body from which the NLDF balance, or part of it, was to be transferred, and the body to which it was proposed to reallocate that money. The Secretary of State would also have been obliged to consult the devolved Administrations in Scotland, Wales and Northern Ireland. Neither of these requirements has changed. Nor was there anything in the Bill as it left this House to prevent the Secretary of State from consulting more widely if she so wished. The Government fully recognise that there would be legitimate wider interest in any proposed use of the new reallocation power.

Any use of the new power would be subject to affirmative resolution. There would be no question of the Government being able, somehow, to exercise the power in secret or without giving people time to make representations. However, there was no provision specifically enabling the Secretary of State to consult more widely. The desirability of clarifying that point was pressed on the Government at various stages of the Bill’s passage in another place, and, indeed, in Committee in this place. In response, the Government agreed to table appropriate amendments to require the Secretary of State to consult more widely before she can exercise the reserve power to reallocate balances. I trust that hon. Members will agree to amendments Nos. 3 and 4.

On amendment No. 5, I think that there is now general agreement about the benefits of wider promotion by lottery distributors of the benefits of the lottery good causes funding. Our research tells us that people are much more supportive of the lottery and its benefits when they know how the money has been spent and why. But concerns have been expressed both in this House, notably by the hon. Member for Bath (Mr. Foster), and in another place about the original drafting of new section 25E(c) of the National Lottery etc. Act 1993, inserted by clause 11, which refers to

“encouraging participation in activities relating to the National Lottery in general”.

There was concern that that could give lottery distributors the power to encourage people to play the lottery, but we have repeatedly pointed out that there was no such intention on the Government’s part. We included that provision because we wanted to make it clear that lottery distributors have the power to encourage participation in activities related to the promotion of the lottery good causes funding, such as national lottery day and the national lottery awards. Those activities are more successful in conveying the way in which lottery money has been used if more people become involved. That is different from merely publishing information about the way in which the good causes money is spent, although it is still related entirely to the good causes funding. Hence the amendment, which makes it clear that the encouragement activity is restricted to

“distribution of money under this Act”.

That money, of course, is good causes funding. With that explanation, I trust that hon. Members will support the Lords amendments.

As the Minister pointed out, Lords amendments Nos. 3 and 4 require the Secretary of State to consult other persons as she thinks appropriate in the extreme circumstance that she decides to exercise the balance relocation power in clause 8, which is a common-sense safeguard. Similarly, the Government proposal in Lords amendment No. 5 to make it clear that the powers in clause 11 cannot be used by lottery distributors simply to promote their own lottery games makes sense, especially if there is to be more effective competition in the lottery in the next decade. We welcome those minor amendments, and we will not press them to a vote this afternoon.

As we are debating national lottery issues, I wish to put two of the Opposition’s longer-term concerns on the record. Like the Secretary of State, I am a London Member of Parliament. Our capital city has every reason to be proud of securing the Olympic games for 2012, but I agree with a number of concerns expressed by the hon. Member for Stoke-on-Trent, Central (Mark Fisher). Serious questions remain about the means of funding the Olympic games. Given the track record of all recent Olympiads, with the exception of the two held in the United States—Los Angeles in 1984 and Atlanta 12 years later—there is a significant likelihood of a substantial cost overrun. One need only look at the experience of the hapless council tax payers of Montreal who, 30 years on, are still paying the price of their Olympic games, to understand that risk. Even the much admired Sydney Olympics six years ago cost almost three times as much as the initial budget. As the Minister will be aware, the current arrangements place the burden of any cost entirely in the hands of London council tax payers. Realistically, for political as well as economic reasons, that is unlikely to come to pass. There is little doubt that a cost overrun will partly be met by the national lottery—

Order. I have an uneasy feeling that the hon. Gentleman is moving on to a quasi-fourth reading speech, and I cannot allow that on this group of amendments.

You are right to upbraid me, Mr. Deputy Speaker. It may even be a fifth reading speech, given the length of my contribution. As I have just used the words, “national lottery”, you can be assured that I shall address one or two issues to do with the lottery.

While welcoming the capping of liabilities for many central London constituents, I am deeply concerned that countless millions of pounds of lottery money earmarked for arts, heritage, charities and general sporting expenditure may be transferred to an avaricious London Olympic monster. The Opposition are concerned about plans for the hypothecation—

Order. I have been generous in allowing the hon. Gentleman to express one concern, but we must maintain the general rules on keeping the debate in order. The hon. Gentleman would be out of order if he proceeded to make more general comments than this group of amendments will stand. I therefore suggest that he wind up his remarks quickly.

Thank you, Mr. Deputy Speaker, for your comments. I understand what you are saying, but I simply wanted to say that there is a strange paradox. We have discussed the tick-box culture and the hypothecation of the national lottery, so it is important that the Government accept the Lords amendments and the independence of the operation of the Big Lottery Fund. Distributors should be free from political interference, otherwise I fear that many initiatives would be open to hypothecation.

As the Minister is aware, the bidding process for the third franchise, which now involves a 10-year term rather than a seven-year term, is already under way. The decision will have been made by this time next year, with the new lottery term beginning in February 2009. I hope that in the next six months we can debate in Government time the broader national lottery issues that I have tried to touch on in this brief contribution.

As I have said, the Opposition have no objections to this group of amendments. I suspect that the hon. Member for Bath (Mr. Foster) has a few more words to say, although I do not want to steal his thunder.

I will try to ensure that there is no thunder, Mr. Deputy Speaker, and I shall also seek to be brief.

Depending on the decisions in another place, it seems likely that this will be the last occasion when the Bill is debated on the Floor of the House. The Minister has been robust throughout our deliberations and seemed to be fearless, so I was surprised when he became over-sensitive at the last minute because he thought that Opposition Members were impugning his integrity in connection with the Secretary of State’s powers to redistribute lottery distributors’ balances.

Lest the Minister become too over-sensitive, I should explain that I wanted to ensure that the Secretary of State’s powers were limited and that consultation took place before the Secretary of State made any such decision. That seemed reasonable at the time, and I am delighted that the Minister now says that it is reasonable; if that were not the case he would not have tabled amendments that do exactly the same thing as our proposal many months ago. I am delighted that the right hon. Gentleman has had a change of heart, and it was unnecessary for him to be over-sensitive.

I welcome the Minister’s comments about the Heritage Lottery Fund. This is the first time that we have heard praise for the work of the HLF during the passage of the Bill. I am delighted that the Minister has praised its work, and he is right to say that it also deserves praise for its work to reduce balances. However, he must know that it operates in a different environment from other lottery distributors, so it is not surprising that its balances are different from theirs.

Finally, I thank the Minister for at long last accepting the amendment, which I initially introduced, that would restrict lottery distributors from promoting the playing of the lottery. He is right to say that it is critical that the public should know how their lottery money is being spent, which is why I welcome the work of all the distributors on the blue plaque scheme, on informing Members of Parliament about their work, and on promotional advertisements to make sure that lottery players know where their money is being spent.

My key concern is that we should never get into a situation in which members of the public believe that if they want to give money to a good cause, the most efficient way to do so is by playing the national lottery, because playing the national lottery is, in fact, an inefficient way to give money to a good cause. If a person wants to be inefficient, they can give £1 to the national lottery, of which 28p will go to a good cause, but if they want to be efficient, they can give £1 directly to a good cause, which can use gift aid to pick up £1.28. Distributors should not therefore promote playing the national lottery. At long last, the Minister has seen the need to address that matter in the Bill. I am delighted that he has done so, and I support the amendment.

Lords amendment agreed to.

Lords amendments Nos. 4 and 5 agreed to.

Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their amendments to the Bill: Mr. Richard Caborn, Mr. Mark Field, Mr. Don Foster, Nia Griffith and Huw Irranca-Davies to be members of the Committee; Mr. Richard Caborn to be the Chairman of the Committee; Three to be the quorum of the Committee.—[Huw Irranca-Davies.]

To withdraw immediately.

Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.