National Lottery Bill [Lords]

House of Commons, 1 June 1998.

ADDITIONALITY

Richard Spring (Conservative, West Suffolk)

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

Michael Martin (Deputy Speaker, Glasgow Springburn)

With this, it will be convenient to discuss the following: New clause 3—Additionality (No. 2)— `. In Section 25 of the 1993 Act (Application of money by distributing bodies) after subsection (4) there shall be inserted— (5) A body shall not distribute any money paid to it under section 24 where it would substitute for funds that would otherwise have been provided by conventional public expenditure.".'. Amendment No. 7, in clause 7, page 8, line 37, leave out 'such'. Amendment No. 2, in page 8, line 39, leave out from `environment' to end of line 40. Amendment No. 3, in page 9, line 9, at end insert— '(5) The New Opportunities Fund shall be a body for the purposes of sections 24 to 27 and 34 of the 1993 Act.'. Amendment No. 4, in page 9, line 10, leave out from beginning to end of line 30.

Richard Spring (Conservative, West Suffolk)

In Committee, we had the extraordinary experience of seeing Labour Members voting, again and again, against their own manifesto commitment. The irony appeared to be lost on them, which is a reflection of their attitude toward their manifesto. The new clause would bring additionality to the heart of the Bill. Of all the important issues relating to the Bill, it is on additionality that there is a huge gap between what the Government avow and what they are actually doing. The Government claim—no doubt we shall hear it again today—that they remain committed to the arm's-length principle, but, by any objective standard, that is manifestly not true. We shall clearly outline that failure in Government thinking this afternoon. The Government claim to be holding to the principle of additionality, but, again, that is demonstrably not true. The proposals to deprive the original good causes of a share of the proceeds of the lottery are designed to enable the Government to divert money to finance their failing political agenda. That is a shabby piece of opportunism, made worse by the Government's hypocrisy and their determination to maintain that they are not breaking the principle they so vigorously sought to defend when in opposition. In Committee, the Government rejected Opposition amendments that would have clearly enshrined, without a shadow of doubt, the principle of additionality. The Minister rejected them, saying that although the Opposition had made a reasonable attempt to define additionality, we had not been successful in doing so. That argument lies at the heart of the Bill. We remain deeply concerned about the precedent set by the Government's decision to divert money from the good causes for which the lottery was originally set up to matters such as health, education and, eventually, environmental projects. We are trying again to persuade the Government of the virtue of our thinking and the importance of maintaining the integrity of the national lottery. We are trying to persuade them to incorporate a requirement to adhere to the principle of additionality in the Bill, in an effort to prevent the Bill from being a form of voluntary taxation and, indeed, an outpost of the Treasury. I trust that, this time, on further reflection, the Minister will not so airily dismiss the points made by the Opposition. The Prime Minister's commitment to additionality was made clear in the White Paper, "The People's Lottery". The definition in new clause 3 is, apparently, that preferred by the Secretary of State for Culture, Media and Sport. The White Paper clearly stated that the Labour party was not abandoning the additionality principle. The Prime Minister is quoted as committing the Government to additionality when he said: We don't believe it would be right to use Lottery money to pay for things which are the Government's responsibilities". We entirely agree with that. If only the Government could act according to the spirit of the Prime Minister's comments. New clause 2 is based specifically on the point made by the Prime Minister. It would insert in section 25 of the National Lottery etc. Act 1993, which deals with the application of money by distributing bodies, a new provision, subsection (5), which says: A body shall distribute any money paid to it under section 24 only in areas that are not the responsibility of government. I trust that the Minister will recognise that wording, which echoes the words of the Secretary of State, and the integrity of what the Opposition are trying to do to ensure, in turn, the integrity of the national lottery.

Robert Maclennan (Liberal Democrat, Caithness, Sutherland and Easter Ross)

Will the hon. Gentleman clarify whether, in terms of the new clause, he believes that the arts should not be regarded as being within the responsibility of Government?

Richard Spring (Conservative, West Suffolk)

It is perfectly fair for the right hon. Gentleman to refer to the arts. Of course that is an area on which Government money has traditionally been spent. The difficulty with the Bill, as he will be aware, is that it deprives the arts of money and, because lottery money may be substituted for Government money, it thereby deprives the original good causes of an additional sum. That is the danger about which many people in the arts are legitimately concerned. I hope that the Government will not dismiss new clause 2 by claiming that it uses an inadequate definition of additionality. New clause 3 is based on the definition that the Secretary of State says that he prefers. In Committee, the Government rejected an Opposition amendment that would have enshrined in the Bill the principle of additionality and—I make this point very clearly to Government Members—that was identical to an amendment tabled by Labour Front-Bench Members during the passage of the 1993 Act. There we have it. The Minister for Arts dismissed the amendment, claiming that it was a reasonable effort, but an inadequate definition—it was Labour's own definition. That demonstrates that Labour's view of what is additional has been changed to accommodate its new proposal—to grasp money from the existing good causes to put towards its political agenda. On Second Reading, the Secretary of State said: I shall quote …a passage in the reply given to the Select Committee on National Heritage, as it then was, in July 1996 by the then Secretary of State for National Heritage, the right hon. Member for South-West Surrey (Mrs. Bottomley). She said very clearly—this is the precise definition of additionality: `Lottery funds are not intended to substitute for funds which would otherwise have been provided by conventional public expenditure'. We stand firmly by that principle; there is nothing in the Bill that undermines it."—[Official Report, 7 April 1998; Vol. 310, c. 162.] New clause 3 would, therefore, insert in section 25 of the 1993 Act, which deals with the application of money by distributing bodies, a provision that: A body shall not distribute any money paid to it under section 24 where it would substitute for funds that would otherwise have been provided by conventional public expenditure. I trust that the Minister recognises that the wording of the new clause comes directly from that of the Secretary of State. If Government Members reject the new clause, we shall be in the ridiculous situation whereby they reject the Secretary of State's words. We are making it easy for the Secretary of State. How can he seek to reject his own words? I trust that he will have no objection to the inclusion of the new clause in the Bill. The reason why the Opposition object so strongly to the new opportunities fund—this is why we tabled the new clause—is that it flagrantly breaches the additionality principle. The lottery was established to fund initiatives—it was done with cross-party support and true nobility of intent—that are additional to core Government spending programmes funded from taxation. As my right hon. Friend the Member for Huntingdon (Mr. Major) said on a number of occasions, these are areas that have traditionally been under-resourced by Governments of whatever political complexion. 5.45 pm No one can seriously believe that the Government are committed to additionality in practice. The hon. Member for Hove (Mr. Caplin) certainly does not. In an outbreak of candour that must have had his pager humming for at least 48 hours, he said in an "On the Record" interview: I think what we said in Opposition was clear, and it was right at the time that the lottery was introduced. But what we have now is a situation where the Budget spending level is set, and we have said that we are going to stick to that level for two years. I think it's right that a Government can say, 'We have a different view of how the lottery should operate.' That is a view that we've consulted on. We've received the consultations back and we're now developing a Bill to reflect these priorities, so I don't think there's anything wrong with that. I don't think they're compromising the lottery in any way". All I say to the hon. Member for Hove is that if he does not recognise Alice in Wonderland, here it is in black and white. He no doubt now has a bright future behind him. The new opportunities fund represents a significant departure from the original purpose of the national lottery, which was set up to fulfil a Conservative manifesto pledge to restore our heritage and promote projects which will become a source of national pride".

David Prior (Conservative, North Norfolk)

Does my hon. Friend agree that the only safeguard against diverting lottery funds into core Government spending areas is for the money to be distributed by bodies that are genuinely at arm's length from the Government, and that it is the breach of the arm's-length principle which compromises additionality more than any other factor?

Richard Spring (Conservative, West Suffolk)

My hon. Friend is exactly right because the centralising, control-freak tendency that is part and parcel of the way in which the Government seek to do business, and which is manifest in the Bill, is damaging to the future success of the lottery. The Government claim that the Bill is a matter of fine-tuning the national lottery and that it only puts right problems that have arisen since the creation of the lottery. There are, indeed, elements of the Bill to which we have no objection. However, the Government's view that they are remaining true to the original principles on which the lottery was established certainly does not have foundation. The Secretary of State has affected to be mystified that the Opposition have not been lining up to support the Bill. I simply challenge the Minister to explain how the homework clubs, child care and teacher training that he proposes to fund from the lottery accord with its original aims, which were set out in 1992, to restore our heritage and promote projects which will become a source of national pride". They do not—that is the simple truth. The original intention of the national lottery was to focus on areas of expenditure that were traditionally under-resourced by Government. The initiatives that have been put forward under the umbrella of the Bill fall directly under the remit of the Secretaries of State for Education and Employment and for Social Security. Apparently, they were rejected by the Treasury and the Secretary of State's great friend and admirer, the Chancellor of the Exchequer, who was not prepared to spend taxpayers' money on them, so the raid on the lottery has taken place. Of the schemes that the Government propose to fund from the new opportunities fund, teacher training, education and public health programmes have traditionally—there is no escape from this—been funded by general taxation. The Government admitted that in a series of written answers. The proposals are the thin end of the wedge. The legislation will give the Government power to divert money to any of their pet projects, providing an alternative to money from taxation. The Government's response to that accusation is that they have not breached the additionality principle, that the initiatives that they have announced are additional to core spending and that Governments have not previously funded such programmes. That is simply untrue.

Tim Collins (Conservative, Westmorland and Lonsdale)

Does my hon. Friend agree that matters are getting worse? If the lead story in today's issue of The Times is to be believed, the Chancellor has imposed an absolute cap on public spending for the remainder of the Parliament. That will mean that raids on the lottery will increase in frequency and in scale.

Richard Spring (Conservative, West Suffolk)

My hon. Friend makes exactly the right point. There has already been an increase in Government spending, with European Union rebates and a Treasury underspend. More and more will be taken from the lottery because all the early pledges on education and health are manifestly failing, and people clearly know that. It is flagrantly incorrect to say that the Government are somehow separating spending on the proposed new programmes from what has gone before. That is sheer sophistry. Even if the initiatives were genuinely new, they would still fail the additionality test because they relate to areas for which Governments traditionally accept responsibility—health, education and the environment. In Committee, the Minister for Arts amply demonstrated the absurdity of the Government's case when he was challenged by my hon. Friend the Member for Eastbourne (Mr. Waterson) to provide an example of spending that would breach the Government's new definition of additionality. My hon. Friend said: I have repeatedly tried to think of a project that would breach additionality under the new, wholly elastic definition, but have not been able to do so. I hope that the Minister will be able to give one or two examples, and I would be happy to give way to any member of the Committee who can. The fact is that additionality will now mean whatever Ministers want it to mean. Of course it was impossible to find an example; perhaps the Minister can work harder to try to find one today. Under the Government's new, narrower definition, no spending breaches the additionality principle, provided it is additional to existing spending. However, spending from the lottery is, by definition, additional. The fraudulent nature of the Government's case was clearly demonstrated by the Minister's wholly inadequate responses to my hon. Friend the Member for Eastbourne. The Minister employed the traditional Front-Bench trick of trying not to answer questions. He said that there were no examples of breaches of additionality because the Government had not breached the principle. He said: The hon. Member for Eastbourne was incapable of finding an example of expenditure that had replaced Government funding. That holds true throughout the history of the national lottery under the previous Government and during the past year under this Government. When challenged to refute the suggestion that the Government had introduced the Bill specifically to breach the additionality principle, the Minister fell back on the Secretary of State's definition, which is, effectively, "If it is lottery money, it is by definition additional." He said: It is vital to make a distinction between grant and aid, or core Government expenditure, and expenditure by the national lottery. At the third attempt, the Minister at last came up with two examples that would not be eligible for money from the new opportunities fund because they would breach additionality. He said: The hon. Member for Eastbourne asked whether it would support hospital beds or text books. He wanted an example of Government expenditure that would not be eligible for the fund and, inadvertently, gave two such examples. The fund will not fund hospital beds or text books."—[Official Report, Standing Committee A, 30 April 1998; c. 125–32.] However, under the Government's definition, there is no reason on earth for the new opportunities fund not to fund text books and hospital beds in due course. We shall simply wait to see. We already know that it will fund the digitisation of material in public libraries and services that are already offered by general practitioners. It will simply be a short leap to text books and hospital beds, or whatever is politically expedient, to echo the words of my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) about the supposed rigour of the Chancellor's public spending limits. The Government will pay for teacher training from the new opportunities fund although they have already admitted that they currently provide £296.8 million to train serving teachers under the grants for education support and training programme, approximately 5 per cent. of which is spent on information technology training. Money from the budget of the Department for Culture, Media and Sport is spent on training library staff despite the fact that the Government plan to use the lottery for such funding. Tellingly, the Chancellor announced in his pre-Budget statement that the Government intended to set up child care schemes, the cost of which would be met by the Treasury and the new opportunities fund. He did not even seek to disguise that fact. He said: Funds will be available to set up as many as 30,000 new out-of-school clubs, which will provide places for almost 1 million children. The total cost over five years is £300 million, which is now budgeted for in our plans and represents the biggest ever investment in child care. The cost will be shared between the Exchequer and the new opportunities fund …A national child care strategy is no longer the ambition of workless parents; it is now the policy of this country's Government". —[Official Report, 25 November 1997; Vol. 301, c. 777.] There was no attempt to disguise the fact that, according to the Chancellor, Government policy is being paid for by the lottery. Despite the Secretary of State's claim that out-of-school-hours activities are not part of core statutory school provision, which course it is, of course, the Government's responsibility to fund, it is clear that the Government already provide money for out-of-school child care initiatives from the Department for Education and Employment budget. There we have it in black and white; it totally contradicts the spirit of what the national lottery was destined to be when it was set up, and it certainly contradicts the basis on which the lottery has been such a success. Healthy living centres will compete either with NHS services, particularly those of GP fundholders and other primary health care providers, or with private sector health clubs, or both. Almost all the services that the healthy living centres will provide are already provided by GPs through the taxpayer-funded national health service. It is arguable that the whole basis of the NHS has moved further towards the provision of primary care. That was highlighted and emphasised in the White Paper, "Health of the Nation", and it is encouraging that, in the past few years, there has been such a focus on primary care and preventive medicine. The White Paper makes it clear that healthy living centres are to be part of the Government's health care provision. The document states: healthy living centres will play an important role in the Government's public health strategy".

Ivor Caplin (Labour, Hove)

Hear, hear.

Richard Spring (Conservative, West Suffolk)

The hon. Gentleman says, "Hear, hear", but we are debating taxpayer-funded activities within the NHS being paid for by the lottery, at the expense of good causes. If, after sitting for weeks in Committee, he does not understand the importance of that, he understands nothing. The Government's published analysis of the responses to the White Paper makes it clear that many of the responding organisations, such as local government, health, education and voluntary service organisations, were concerned that the new opportunities fund would simply be used to replace rather than add to core Government spending. The document states: A section of respondents from the education sector argued strongly that some of the proposed areas of activity and interest in the New Opportunities Fund, (as well as NESTA), especially the training of teachers and librarians to use and teach information and communications technology, and out of school hours activities are core to the education mission. There were doubts and uncertainties amongst the same groups about whether the principle of additionality could be adhered to. Some education authorities and professional bodies as well as campaign groups were clear that this principle would not continue to be supported over time, and that this should be faced up to openly". 6 pm The respondents to the White Paper who strongly supported the establishment of the new opportunities fund demonstrated, in doing so, how clearly the Government are breaching the additionality principle and how the lottery is destined to become, tragically, the engine of the Government. Many of those respondents were concerned that initiatives funded by the lottery should be co-ordinated with other aspects of Government policy. "Analysis of Responses to the Lottery White Paper Proposals" states: There was a very positive welcome for developing Information and Communications Technology training programmes for teachers and librarians, consistently linked with the proviso that the programme should fit in with other DFEE initiatives. There was a particular concern that the apparent synergy between this White Paper and the Excellence in Schools White Paper should be captured. The Excellence in Schools White Paper proposes to increase levels of literacy, numeracy and information and communications technology skills. It was important that the Lottery initiative neither conflicted with nor repeated these initiatives". Similarly: For example, one local authority said that it hoped that the development of Healthy Living Centres would be firmly placed within the broader public health remit of the White Paper Our Healthier Nation". In Committee, Labour Members not only made it clear that they supported the Government's decision to breach the additionality principle, but unashamedly admitted that they looked forward to taking credit for some of the Government's schemes. I can just imagine, as the next general election approaches, lottery-funded schemes being sold as being somehow a Government initiative, paid for by the taxpayer and of some great benefit, purely for party political reasons. My hon. Friends and I had the clear impression that Labour Members were simply drooling at the prospect of this raid on the lottery providing things that they might find electorally attractive in their constituencies. As the expert in these matters, the Minister for Sport, will know, photo opportunities galore appear to be very much in their mind.

Tony Banks (Labour, West Ham)

I feel a photo opportunity coming on now.

Richard Spring (Conservative, West Suffolk)

I fear that the Minister may be disappointed. There is another, more practical test of additionality. I confidently look forward to seeing queues of anxious Labour Members lining up to try to take credit for initiatives that have been funded from the lottery via the new opportunities fund even if, in the words of the Prime Minister, they are not the responsibility of Government. I hope only that they will have the decency—although I doubt it—to own up to the fact that these things will have come about at a certain cost, and that that will be faced by the good causes and the arts, heritage, charity and sports projects that should have received the money that has been diverted into the new opportunities fund to suit the Government's political agenda. We all know what is going on here. Peter Riddell was correct when he wrote in The Times on 6 April of the proposal to create the new opportunities fund: a Treasury raid it still is, to evade tight limits on public spending and to find new sources of revenue without having to raise taxes. There we have it. The Government have not lost the itch to spend. They happen just to be spending money from the national lottery at the expense of the arts, sport, the heritage and the caring charities. It gives new meaning to the seven-year itch. Amendments Nos. 7, 2, 3 and 4 seek to re-establish the arm's-length principle in the distribution of lottery money, which, again, is under threat from the Bill. It is not only my hon. Friends and I who are concerned about that. For example, the Sports Council said in a letter: We believe that the arms length principle between government and the Lottery distributing bodies should be maintained, and that the new power given to the Secretary of State to instruct us to `comply' with directions to delegate to specific organisations is too prescriptive. We are also concerned that the powers on the Secretary of State to issue directions to us in relation to our distributing strategies should not be too prescriptive. Delegate bodies must demonstrate that they can effectively account for expenditure of lottery funds. Here again we come to what is at the heart of our objections to the Bill. The Government claim, as they have on additionality, that they are adhering to the arm's-length principle, but, if that is true, why are they introducing in the Bill many powers that will enable them clearly to breach that principle by controlling how lottery money is spent? Obviously, I accept that the Secretary of State has the existing power under the National Lottery etc. Act 1993 to give directions to the distributing bodies. That is not in dispute, but the Government recently published new directions that will, in effect, reduce the lottery's efficiency and its overall impact by allowing the distribution bodies to dispense with the requirements for matching funds to enable them to carry out the Government's political objectives. That unwelcome development will, yet again, reduce the lottery's effectiveness and ultimately the public's faith in the national lottery, which stands at a high level at present. It will reduce the overall purchasing power of lottery funds; it represents a drift from encouraging initiative to fostering dependence. As ever, the Labour party is filled with rhetoric, but entirely misses the critical point that so endangers the success of the national lottery. The powers proposed for the Secretary of State in the Bill represent a wholly new departure from arrangements for the good causes in the 1993 Act. We object in principle to the idea of the lottery being used to fund areas that are the absolute responsibility of Government, but we also strongly object to the introduction of the order-making power in the Bill, which effectively gives the Secretary of State control of the new opportunities fund. We have a flavour of what is to come in the draft directions for the new opportunities fund. We see, for example, that the Secretary of State has already given a direction that healthy living centres should cover 20 per cent. of the country. One can argue, "Why not 15 or 25 per cent?" It is an arbitrary decision, made on a political basis. The new opportunities fund has, in a sense, had its instructions made in advance. If the Government planned to respect the arm's-length principle, they would have set up the new opportunities fund in the same way as the other good causes were set up. There is no need to have done it in this way. They would not have proposed an order-making power for the Secretary of State to specify on an ad hoc basis how the money in the fund should be spent. To enable them to get their hands on the proceeds of the lottery to supplement general public expenditure, the Government have dramatically increased the Secretary of State's control over the lottery. That order-making power does not exist in respect of any of the other good causes and was simply not envisaged when the lottery was first conceived, when both sides rigorously defended the arm's-length principle. It is a great tribute to those who introduced the Bill in 1993 that that principle being enshrined in legislation was approved by all hon. Members. It was achieved with true nobility of purpose. Why, therefore, is it being changed? The Government are incapable of providing a satisfactory answer. The Bill contains deliberately vague definitions of health, education and the environment. It enables the Secretary of State to make ad hoc decisions. Can the Government offer any other explanation or justification for including this order-making power, which is a great departure from previous legislation, other than that it will enable the Secretary of State flagrantly to use the lottery to pursue the Government's political agenda? It is extremely unfortunate for the long-term health and success of the lottery that the new opportunities fund will, unlike the other good causes, be under direct ministerial control. That is directly in conflict with the arm's-length principle supported by both parties when the original Bill was enacted, and it was much prized by the lottery industry. The Secretary of State and his successors will be able to specify new causes that will benefit from lottery money without further reference to Parliament. There is no point the Minister telling us that new initiatives will have to be approved by affirmative resolution. In Committee, he said: I want to make one further point clear, which I hope the hon. Gentleman will consider before, I hope, deciding to withdraw his amendment. He raises the spectre of the Secretary of State extending matters further: any further initiatives, over and above those in which the New Opportunities Fund will get involved, will—as he will appreciate from his close reading of the Bill—require affirmative resolution of the House. So, the powers remain with the House, rather than the Secretary of State."—[Official Report, Standing Committee A, 28 April 1998; c. 70.] How can the Minister sit there with a straight face believing that that in any way justifies the centralisation of power to the Secretary of State? That is utterly absurd. It was not the crowning parliamentary explanation of the Minister's life. He knows perfectly well that affirmative resolution is not the same as primary legislation: it will not require any measure of public support. Was the Minister really suggesting that an order-making power receives anything like the same scrutiny as a Bill during its passage? Of course it does not. Is he suggesting that the Secretary of State would have difficulty getting such measures approved by Parliament? The Government will not even have a proper debate on their proposals. Parliamentary scrutiny of something as important to the life of the nation as the lottery is crucial for its continued acceptance by the public and for its continued success, but the Government reject such a provision. By contrast, as the Minister knows full well, the 1993 Act required primary legislation to divert money from the original five good causes. This Bill gives the Secretary of State a mechanism to pay for any new scheme he chooses to fund. In Committee in the other place, the Minister admitted that the new opportunities fund was fundamentally different from the other distributing bodies in the way in which it was being set up and would operate. Lord McIntosh of Haringey said: Of course, the relationship between the Secretary of State and the new opportunities fund, as proposed in the Bill, is different from that which exists between the Secretary of State and the other lottery distributors. There is no pretence otherwise. We are grateful for the candour of one Minister at least. Lord McIntosh went further when he made it clear that the activities of the new opportunities fund had deliberately not been clearly defined. The Bill has been drafted to give the Government maximum room for manoeuvre. Lord McIntosh said: The relationship is different because the new good cause is different. The existing good causes are pretty well defined and the distributors are in the main well established as expert bodies within their fields. In the case of sport and the arts, the distributors are the key sectoral bodies; the Heritage Lottery Fund was not the biggest player but was well placed to understand the whole sector, and the National Lottery Charities board has quickly established itself as a respected and knowledgeable body in the charitable field. He added: By contrast, the new good cause ranges over a vast area. It encompasses health, education and the environment, each of which in itself is broader than any of the other good causes."—[Official Report, House of Lords, Grand Committee, 22 January 1998; Vol. 584, c. 71–72.]

David Prior (Conservative, North Norfolk)

May I draw to my hon. Friend's attention the definitions in clause 6, which states: 'education' includes training and the provision of activities for children; `the environment' includes the living and social environment Those definitions could hardly be wider.

Richard Spring (Conservative, West Suffolk)

My hon. Friend is absolutely right; that is the danger of the Bill. It includes an order-making power and centralisation measures, but it lacks provisions for parliamentary scrutiny. It could result in an increase in activities under the umbrella of the new fund without proper scrutiny, to the great cost of the original good causes, which need most support and financial backing.

Christopher Fraser (Conservative, Mid Dorset and North Poole)

I concur with the point made by my hon. Friend the Member for North Norfolk (Mr. Prior). Does my hon. Friend agree that "environment" in this context also means the political environment? The Government may seek later to develop the political environment, and that is increasingly worrying.

Richard Spring (Conservative, West Suffolk)

My hon. Friend is absolutely right. At the airport the other day, I saw an advertisement for a cosmetic called "Control Freak"—this may be of interest to the Minister for Sport; I mean that in the nicest possible way. The advertisement talked about taking the oil out of the system and replacing it with something better. It reminded me of the way in which the Bill is being orchestrated by the Secretary of State of a Government who are the most incredible bunch of control freaks in the history of government in this country. The Minister in the other place admitted that the order-making powers in the Bill were different from what had gone on before. We are not in agreement with the establishment of the new opportunities fund, as the Minister for Arts implied in Committee, although none of us understood what he was on about. The Minister seemed unable to grasp the fact that we were fundamentally opposed in principle to the establishment of the new opportunities fund. As some Labour Members pointed out, although it may be desirable to spend money in some of these areas, it should not be pinched and raided from the national lottery. We want to make it absolutely clear by our amendments that we are opposed to the establishment of the new opportunities fund, and to the way in which the principle of additionality and the arm's-length principle are being flouted. We believe that the removal of those two key elements will gravely damage the long-term success and viability of the national lottery.

Christopher Fraser (Conservative, Mid Dorset and North Poole)

Before I speak—

Mark Fisher (Labour, Stoke-on-Trent Central)

Before you speak?

Christopher Fraser (Conservative, Mid Dorset and North Poole)

Before I come to the main thrust of my speech, I should like to allude to some of the work that Labour Members did or, rather, did not do in Committee. The hon. Member for High Peak (Mr. Levitt) came top of the list, with nine interventions and two speeches. I should like to continue down the list as an illustration of how the Bill should have been more fully debated by Labour Members—

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. This is all very interesting, but the hon. Gentleman must deal with the terms of the amendments.

Christopher Fraser (Conservative, Mid Dorset and North Poole)

I will indeed, Mr. Deputy Speaker. It is, however, sad to note how the Government ignored what we had to say about additionality. The Hansard reports of the Committee would make interesting reading in that respect. The purpose and heart of the Bill are to allow the Government to get their hands on money from the lottery. The Government have tried to dress up the legislation in nonsensical talk about the evolution of the lottery and the need to restore public confidence in it. However, the Government's approach to the Bill in Committee was a sure-fire way of destroying that public confidence. The fact is that, after so many years of whining in opposition, the Labour party now, in government, has to make decisions, circumscribed by the difficulty of being bound by the previous Government's spending limits. In Committee, Labour implied—although not in so many words—that power has come its way, and it will be used to raid the lottery for health, education and the environment. The Government argue that they must look to the lottery for funding. Of course they must: the Chancellor has presented his case to the country over the past year, and that has left the Government with no alternatives. That means ditching the additionality principle straight away. Labour Members failed to recognise that in Committee; they also failed to speak up in defence of what the Government are doing. Governments can always make up new definitions of good causes, thereby moving the additionality goalposts. That is precisely what the Government are doing. They have introduced a range of devices allowing the Secretary of State to control how lottery money is spent. The fact that Labour Members seem to believe that that is fine is extremely worrying, given that the Bill will have profound effects well beyond those that the lottery was set up to achieve. The arm's-length principle has been ditched, too—and the Government appear equally unconcerned about that. The silence from the Government Back Benches has been deafening, and it has been left to the Opposition to table amendments designed to preserve the original intentions behind the lottery. No one in the Labour party seems to care about the fact that, when in opposition, Labour stood four square behind the principles of additionality and arm's length and sought to enshrine them in the original Bill. Now we are told, "That was then." Labour's former principles appear to count for nothing, and it would seem that the Government have changed their priorities. Their view is: if the lottery has to be used to fund these new priorities, so be it. Put simply, the Government intend to use the national lottery to subsidise public spending without raising taxes. The Treasury is seeking an additional £1 billion by the back door, and the Bill paves the way for that. By setting up a new lottery distributing body under the direct control of the Secretary of State, the Government are giving themselves the chance to do as they please with the money. Writing in The Times, Peter Riddell made the point very clearly: The new fund also violates the basic principle, reaffirmed by Tony Blair last summer, that it would 'not be right to use the lottery to pay for things which are the Government's responsibilities'". The Government are breaking the additionality principle that was so vehemently supported when the lottery was set up in 1993; and they are doing so to finance mainstream health, education and environment programmes. "Environment" is a generic word, covering a multitude of projects that we cannot anticipate at present. It is open to this or a future Government to misuse the term, which is why I would argue against its inclusion in the Bill. The idea of an information-rich and an information-poor society has been debated at some length elsewhere, and the Government have stated that they want everyone to join in the information-rich society. In Committee, I told the Minister that schools should therefore offer all pupils an equal chance to participate in that society—hence the teaching of technology must be part of core Government spending. I was not wholly convinced by the response that I was given by the Minister. Public spending programmes continually evolve. Some hon. Members, including me, made the point on Second Reading that the Government cannot justify transferring to the national lottery the costs of such evolution. I should like to know how any of the planned projects fall within the remit of the Department for Culture, Media and Sport—on current evidence, they do not. They all fall into areas for which Governments have traditionally accepted responsibility. The projects in question have been mooted by the Secretaries of State for Education and Employment and for Social Security; but they were rejected by the Treasury, so now they have to be paid for by the lottery. As has been said, the Bill brings in an order-making power allowing the Secretary of State to determine how lottery money is spent, thereby at a stroke overturning the arm's-length principle. It is the Secretary of State who will specify initiatives. Other distributing bodies set up by the National Lottery etc. Act 1993 are truly independent of Government, and all involved in that arrangement have witnessed the benefits of such independence. Now the Secretary of State will exercise enormous control over the new opportunities fund. That runs against the whole spirit of the establishment of the lottery, which thus far has been a remarkable success. Evolving Government spending programmes should not be paid for by plundering the lottery. Because of the initiatives that the new opportunities fund will carry, the Secretary of State will become a distributing body. I concur with the view of my hon. Friend the Member for West Suffolk (Mr. Spring), that the whole idea is Treasury-led and means abandoning the hands-off principle. The independence of the good causes will be put in jeopardy. Had the Government wanted to respect the arm's-length principle, they would have set up the new fund along the lines of the other distributing bodies: they chose not to do so. Furthermore, they would not have proposed for the Secretary of State a power to specify, on an ad hoc basis, how the money in the fund is to be spent. The fact that the Secretary of State can involve himself fully justifies the concern expressed by my hon. Friends that he will decide on the scope and direction of his involvement on a whim or fancy. The Minister may recall that I put it to him in Committee that the arm's-length principle and the additionality principle go together. If the Secretary of State did not have the power vested in him, he would not be able to breach those principles. The power vested in him means that anything he spends has to count as Government spending because he is part of the Government. He has given himself the mandate that he needs. 6.30 pm The truth is that the Labour party is changing the purpose of the national lottery. I am sure that the Secretary of State and the Minister for Arts will agree that the Secretary of State is intervening in the way in which lottery money is distributed, as the Labour party manifesto promised he would. Labour stated: There has been no overall strategy for the allocation of monies and no co-ordination among the five distributor bodies about the projects deserving to benefit from the National Lottery. That quotation comes from a document entitled "New Labour: Because Britain Deserves Better", published in April 1997. Policy directions by the Secretary of State will be introduced with the passage of the Bill. On Second Reading, the Secretary of State referred in detail to some directions when he said without any intended irony that they were important to ensure that lottery money is going where it counts."—[Official Report, 7 April 1998; Vol. 310, c. 170.] I wondered at the time whether that was not a Freudian slip and whether the Secretary of State had unconsciously decided to reveal that the money would be spent where Labour votes counted. That has been my suspicion since that comment was made. The Government want to establish a new direction for the lottery, one that fits with the broader sweep of Government policy and which will serve as a means for redistributing wealth by funding a range of social programmes. To make matters worse, the activities of the new opportunities fund have not been clearly defined. Why have the Government drawn up such vague definitions of health, education and the environment? As I said, "environment" is a generic term, and I should be interested to hear the Minister explain his precise understanding of the environment—social, economic or political—in this context. We have had few clues from the Government, so we cannot be clear what their intentions are. The Government will not even have a debate in the House on what they propose. The 1993 Act would have required primary legislation to divert money from the original five good causes, yet these proposals come from a party that professes to support open government. I support the new clause.

Laura Moffatt (Labour, Crawley)

I am a little confused about why the hon. Member for Mid-Dorset and North Poole (Mr. Fraser) should be amazed that in Committee Labour Members found it difficult to take an active part, when all that we have heard today from Conservative Members is a rehearsal of what we heard then. Given the uninspired new clause, I am beginning to wonder whether there is truly any real opposition to the Bill. It was very difficult to sit and listen to the arguments about additionality and the wonderful contribution to the debate made by Mr. Riddell in the newspaper. I am sure that he is a terribly interesting writer, but I listen much more to the people I meet in the street who are in favour of the proposals.

Richard Spring (Conservative, West Suffolk)

I am interested to hear the hon. Lady use the word "contribution". Will she confirm that she made no speech in Committee and that her sole contribution was a single intervention?

Laura Moffatt (Labour, Crawley)

I am glad to say that that intervention left the hon. Gentleman speechless for few moments, which pleased me immensely. I hope that we shall shortly finish this debate and see the Bill in place, so that it can reach the people who are interested in what the new opportunities fund will bring. It is sometimes galling to have to listen to the same trite old nonsense, when people want lottery money to be spent as the Government propose. I was recently lucky enough to attend a session organised by my local health authority to deal with healthy living centres. They are the reason why I was inspired to contribute to debates on the Bill. I am a nurse of 25 years' standing, and the proposals seemed to me to be a new way to bring good health to our communities and to inspire people to take their health into their own hands.

David Prior (Conservative, North Norfolk)

Will the hon. Lady explain what is wrong with raising taxes to fund health?

Laura Moffatt (Labour, Crawley)

This is a new way, a way to involve communities. We get caught up in the nonsense about additionality, but people on the street are asking when they can contribute and how they can work with their general practitioners. It has been said that the proposals would do terrible damage to private health clubs, but if private health clubs had any sense, they would be entering into partnerships with the local groups that are setting up the healthy living centres. The Opposition have completely missed the boat.

Christopher Fraser (Conservative, Mid Dorset and North Poole)

The hon. Lady is ranging rather wide, so perhaps I can ask her to clarify whether she agrees that the money going to healthy living centres will undermine the good work currently being done by GP fund holding practices.

Laura Moffatt (Labour, Crawley)

I do not believe for one moment that it will undermine the work being done by GP fundholders. In fact, I shall carry on talking about the meeting that I attended with many GPs in West Sussex. They were very keen to take part in the programme and were asking whether it would be only for inner cities or whether rural areas could contribute. They wanted to know how they could show that they knew people who suffered poor health and whom they could help to adopt a healthy way of living, so I do not think for one moment that GPs will be threatened. In fact, they will welcome the proposals with open arms, as will others in our communities and our children. The new opportunities fund involves new initiatives, things that have not been done before and on which we shall be able to expand. Indeed, 20 per cent. of our communities will be able to take part. That is very exciting. I understand that the areas where the health action zones are located will naturally have priority, but I shall be very excited when the first centre is set up. I listened to the hon. Member for West Suffolk (Mr. Spring), who is currently involved in a conversation, saying that we must have a sense of national pride in our arts and treasures. Of course we must, but, as a nurse of many years' standing, my national pride means making sure that we have a healthy nation that can be proactive in achieving good health and which can live longer. I shall be very proud when the first healthy living centre is set up.

Tim Collins (Conservative, Westmorland and Lonsdale)

The hon. Member for Crawley (Laura Moffatt) made an interesting speech. Although I agreed with her on one point, I shall start with another, with which I disagreed. The hon. Lady said that as people want the proposals in the Bill, we should jolly well get on with them. No doubt some people want them, but it is equally clear that others do not. It is the duty of the House properly to debate matters on which there is division in the country and not simply to sweep aside debate on the ground that because the Government want something, they should have it without debate or discussion. I agree with the hon. Lady about the importance of health, education and the environment. If I had a limited sum of money, I would always prefer to spend it on schools or hospitals rather than on skating rinks or opera houses. For precisely that reason, some of those facilities are clearly intended to be funded by the taxpayer, under a system whereby one can go to prison for failing to contribute to the national health service or state education. Other things that are less important but still valuable are funded in another way. That is why the lottery was set up. As long as those good causes were reliant on taxpayer funding, politicians of any party would always sideline, exclude and reduce them. The lottery was set up on a principle of additionality, which not only had bipartisan support at the time, but arguably enjoyed stronger support from Labour than from the Conservatives. I pay tribute to the role played by my right hon. Friend the Member for Huntingdon (Mr. Major) as Prime Minister in bringing about a national lottery. Had it not been for his drive in overcoming the bureaucratic and political obstacles to the creation of a national lottery, we would have nothing to discuss today. The principle of additionality is extremely important and so is new clause 2, in the names of my right hon. and hon. Friends. The principle of additionality that it sets out is defined in exactly the language employed by the Prime Minister, not in an off-the-cuff speech in a Sedgefield pub, but in his foreword to the White Paper "The People's Lottery", on which the Bill is based. Therefore, it falls to the Government and the Labour party to explain precisely why they are not happy with the wording in new clause 2, which seeks carefully to include in the Bill the words used by the Prime Minister in a declaration of Government policy after the general election and in an official White Paper. Some Opposition Members believe that the Government are not happy about the principle of additionality being written so clearly on the face of the Bill, precisely because the story in The Times this morning is right. The Chancellor of the Exchequer, in his own campaign—which has rather less to do with the progress of the British economy and rather more to do with his ambition to become the next leader of the Labour party—is seeking to prove his own toughness by establishing tough public spending limits for as far ahead as we can foresee. That means that the Government can fulfil their early election pledges—such as those on class sizes and hospital waiting lists, which they have failed to fulfil in their first 13 months in office, that they have little prospect of meeting in the next 13 months in office and which they may or may not meet in the lifetime of this Parliament—only by raiding national lottery moneys to fund education and health spending, which, in the normal course of events, should be funded by the taxpayer. That is one agenda pursued by the Bill, and it would be limited by new clause 2. There is another agenda, however, which is addressed by amendment No. 4, in the name of my right hon. and hon. Friends. Clause 7, as drafted, would allow the Secretary of State to set out initiatives that would apply throughout the United Kingdom or in one or more areas. The Minister for Sport is listening carefully to one of his hon. Friends, but I believe that he has a direct and personal interest in the possible use of the new opportunities fund in one particular part of the United Kingdom. He represents a London constituency, and London is doing extremely well out of the national lottery. As we all know, the Minister for Sport may have another rather more personal political agenda relating to a certain political post in London. If the new opportunities fund could be used to benefit London, perhaps to the disbenefit of other parts of the United Kingdom, but to the great joy and happiness of the citizenry of the metropolis, the Minister for Sport might feel that the citizenry of London would reward him for his part in that, by electing him to the post of lord mayor. The Minister knows that he has tough opposition. Lord Archer has made it clear that were he to be elected lord mayor of London, he would never write another book, and that makes it a tough electoral platform for the Minister for Sport. He will find it extremely difficult to come up with a platform policy to beat that.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. We really cannot have a diversion about what may happen in the future election of the mayor of London.

Tim Collins (Conservative, Westmorland and Lonsdale)

I apologise for that, but it relates to why the new opportunities fund and the provisions that amendment No. 4 would strike out—enabling the new opportunities fund to benefit one particular area of the United Kingdom—are so important. There should not be even a suspicion of doubt that the Government or any Minister within it might seek to use lottery funds to benefit a particular geographical area within the United Kingdom. If I cannot refer to London, for reasons that you rightly pointed out, Mr. Deputy Speaker, perhaps I may touch on the prospect of the provisions that would be struck out by amendment No. 4 being used to benefit areas that happen to be represented by members of the governing party. It is worrying that the Bill grants such enormous discretion to the Secretary of State to direct moneys to enormously popular projects relating to education and health, wherever and for whatever reason he or she deems fit. My hon. Friends who served on the Committee tell me that, throughout the discussions on the Bill, Labour Members were enormously excited by the prospect of lottery money being spent on projects in their constituencies, having been directed there by the Government.

Christopher Fraser (Conservative, Mid Dorset and North Poole)

I am sure that my hon. Friend will agree that in Committee the high aspirations of Labour Members resulted from the knowledge that the Government could deliver on those aspirations.

Tim Collins (Conservative, Westmorland and Lonsdale)

My hon. Friend makes his point extremely clearly. If amendment No. 4 were not accepted, we would risk the Government being able to use lottery funds in the pursuit of pure party political advantage.

Tony Banks (Labour, West Ham)

I am grateful to the hon. Gentleman for giving way. First, may I remind the hon. Member for Mid-Dorset and North Poole (Mr. Fraser) that he should not get up to make a point while clutching a brown envelope? I remind the hon. Member for Westmorland and Lonsdale (Mr. Collins) that I receive letters from hon. Members of all parties asking, "Why hasn't scheme X in my constituency received more money?" It is perfectly valid for hon. Members to lobby on behalf of organisations. Hon. Members of all parties have been present when large cheques have been handed over from the lottery or the Millennium Commission in the presence of the press. No one ever claims that the hon. Member managed to get the funding or that the Government provided it. It is a form of publicity in which all hon. Members have indulged.

Tim Collins (Conservative, Westmorland and Lonsdale)

I bow to the Minister's expertise on public relations initiatives and stunts, but his analogies relate to the Millennium Commission, which is an arm's-length body. There is no question of any Secretary of State being in a position to instruct the Millennium Commission as to how it spends its money. Amendment No. 4 would strike out the provision that the New Opportunities Fund shall comply with any directions given to them by the Secretary of State. That is what causes concern, not just among Opposition Members, but among bodies that supported the principle of arm's-length responsibility in respect of the distribution of lottery funds and which are extremely worried by the way in which the legislation is moving towards hands-on control by Secretaries of State who currently serve under a Labour Government. In future, they may be of a different political party, but, in any event, they should not be directly involved in such decisions. That is why our new clauses and amendments would return the national lottery to the principles that led to its creation, its great success and its widespread public support.

Damian Green (Conservative, Ashford)

I support the new clauses and amendments, which would save the Government from themselves. The Government believe that their policies will give them short-term popularity, but they will lead to long-term opprobrium when people realise the damage that is done to the national lottery, which has for several years supported many good causes which are valued throughout the country. Once the lottery is damaged and has lost the trust of the people, it will have great difficulty regaining that trust and will no longer be able to provide as much support for good causes as it has during its first four years. The Government's warm words disguise their ill-intentions. The new clauses and amendments would restore the two principles that the Bill badly breaches: additionality and the arm's-length principle. All fair-minded people—certainly all those who have followed every kick of the ball in this match—agree that additionality has always been difficult to define, but the Government are clearly trying to sweep the principle away. Under the Bill, any spending could legitimately be funded by the lottery, and the current division between spending on what is essential, which should be funded from taxation, and spending on what is desirable, which the lottery has always funded, could not be maintained, unless the Government accept the new clauses and amendments—which I do not expect them to do. There is nothing that would not be covered by the principles set out by the Government. The lottery could fund anything under the new system. Conventional public spending has always covered a wide range of activities. The level of public spending that society regards it as sensible to fund has gone up and down over the decades, but there has always been a clear core of services that are best provided from collective endeavour through taxation. That covers spending on defence, the police and, under the welfare system that we have had for most of this century, health and education. Items of expenditure that would be funded by the new opportunities fund, such as information technology training for teachers and the healthy living centres on which the hon. Member for Crawley (Laura Moffatt) is so keen, would normally fall within those broad boundaries of conventional public spending without anyone blinking. If the Government announced that they proposed to spend public money on extra IT training for teachers, nobody would consider it remotely remarkable; it would be a reasonable use of conventional public spending. However, saying that this year's priority was a new set of opera houses or sports stadiums would be bizarre, particularly for a Government who claim to want to put pressure on public spending. Although the theoretical boundary for what should fall under the additionality principle may be difficult to define, in practice the distinction between the essential and the desirable is clear. If the Bill is not amended, it will drive a coach and horses through that division and allow almost any expenditure to be funded by the lottery. We all know that the Government are doing that so that they can spend more money without appearing to raise taxes. The people will see through that attempted dishonesty. The White Paper was predictably and drearily called "The People's Lottery". The Government seem to forget that the people are not dim and notice political dishonesty. We are witnessing such political dishonesty. The people will see that items that they expect to be funded from taxation are to be funded by the lottery. They will regard the Government as dishonest and cease to trust them. [Laughter.] Labour Members may laugh, but I look forward to seeing them in two or three years when their popularity has fallen. I am not greatly concerned about the Government's popularity. I shall not lose sleep when they sink into unpopularity. However, I shall lose sleep over the fact that they will drag down with them the reputation of the national lottery, which is doing a lot of good for this country. When the lottery is seen to be a plaything for politicians who want to spend money while pretending not to raise taxes, people will be turned off and will stop playing the lottery, resulting in less money being available for good causes. Labour Members should regret that. The most ridiculous defence that we heard in Committee was that anything that had not been funded before could legitimately be funded from the lottery. That argument supposes that the world stands still and technology never changes, particularly in health and education. Twenty years ago, IT training for teachers would have been meaningless because IT had not been developed. It is now essential for education, and should be funded from education spending. The Government have decided to fund it from money that should not be used for essential spending. Additionality is not the only principle to be badly breached. The Government profess to support the arm's-length principle, but their actions belie their words. I am delighted that the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) has returned to his seat, because I am about to say something nice about a Liberal Democrat—admittedly a long-dead one, who once famously said that in the long run we are all dead. Lord Keynes was a Liberal who invented the arm's-length principle when he set up the Arts Council. The Government are doing their best to destroy that principle. The new opportunities fund destroys the arm's-length principle in many ways. We have already heard about the problems with geographical distribution. I assure my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) that Labour Back Benchers eager to persuade Ministers to divert money their way for political reasons were heard not just in Committee: every Labour contribution on Second Reading was designed to elicit extra money. As the Minister for Sport has said, that is entirely legitimate, and we all do it. However, it is not legitimate to give the power of distribution directly to Ministers, because that will result in their indulging in straightforward pork-barrel politics. That will damage public confidence in the lottery and reduce people's willingness to play it, cutting the money available to good causes. We have heard about healthy living centres. Again, short-term popularity will contrast with long-term political opprobrium for the Government, because they will be available only in the 20 per cent. of the country regarded as most deprived. The general practitioners in West Sussex who are desperately hoping for such centres will not get any. They will be hugely disappointed and the hon. Member for Crawley will have a lot of explaining to do to her GPs in the coming years. With their budgets permanently under pressure, health authorities will decide not to spend money on such centres because they will know that lottery money is going to them. The existing health service budget will be diverted away from such desirable spending. The new opportunities fund will also have an incredibly elastic definition of the environment. It can mean absolutely anything. The Department of the Environment has grown beyond all recognition in the past 10 years. Over the next 10 years, the definition of the environment in the Bill will also grow greatly and will be seen as another piece of straightforward pork-barrel politics. My overall reason for supporting the new clauses and amendments is that, without them, the sum of the mass of detail in the Bill will bring the lottery into severe disrepute and greatly concern hon. Members on both sides of the House. In its four or five years, the national lottery has done enormous good for the country. The Bill that damages it will harm the country enormously. Without the amendments and new clauses, that is what the Bill will do.

Andrew Tyrie (Conservative, Chichester)

I well remember discussion about a national lottery first arising when I was in the Treasury in the late 1980s. We thought about whether we should make a serious proposal and worked quite hard on it. As everyone knows, in the end, Mrs. Thatcher ditched the idea. The crucial problem with which we grappled was exactly the subject of this debate—additionality. The problem was how to get money to causes that could be seen to be quite distinct from core Government responsibilities that were funded from general taxation. Whatever we hear from Ministers tonight, I am absolutely confident that everyone in the country understands the fundamental distinction between spending on, for example, capital infrastructure for the arts, sports and heritage, and core funding in, for example, education and health. People will grasp over a run of years that the creation of the sixth good cause has blurred that distinction. They will realise that, in a world in which some things are clearly black and others clearly white, this area is grey, and that that greyness is enabling the Government to use lottery funding slowly but steadily to substitute spending from general taxation. The national lottery has been a great success, partly because the Conservatives succeeded in finding a way of creating a lottery in which there was such a clear distinction. People want to participate in something that is not just a ramp for the Government to get hold of extra tax revenue but has a sense of excitement that is derived partly from knowledge of where the money will go. That will be eroded by the Government's proposals, but it will be put right if the amendments and new clauses are accepted. The Prime Minister has made it perfectly clear that he agrees with the principle of additionality. I shall not bother to quote his words, because they have been cited on many occasions. It is clear that one of Labour's manifesto pledges will be partly funded by the sixth good cause, even though anyone who read the manifesto when it was published would have understood that the pledge would be funded from general taxation. There has clearly been a breach of principle, and people will gradually grasp that. The sixth good cause represents not only additionality but—to coin an even worse term—subtractionality. It will subtract money from the other five causes. It is no good people saying that the five causes will continue to receive exactly the same funding. It is absolutely clear that they will receive less money than they otherwise would have done. The creation of the shadow account almost certainly breaches the law. When I asked the Minister for Arts about that in February, he said that the statutory authority for setting up the shadow account was the National Lottery Bill. If that is not a clear case of retrospection, I do not know what is. It must be a retrospective action to pass a law to justify an act that has already been executed. If the Minister wants to explain why that is not retrospection, I shall gladly give way. I see that he does not. The Government have browbeaten the five good causes into accepting the proposal. They know that such retrospective action is challengeable in the courts, but they will not embark on a legal challenge because they need a relationship with the Government. The Government have escaped what should be, and easily could have been, an extremely embarrassing event. The Minister for Arts is looking at the clock as I speak, so I shall conclude by asking him a few questions. What will he do when lottery fatigue sets in? Will he allow receipts that go to the sixth good cause to fall to protect existing funding of the five good causes? What will happen when people become accustomed to the flow of funds to core activities in education and health but lottery fatigue sets in and resources fall?

Tony Banks (Labour, West Ham)

rose—

Andrew Tyrie (Conservative, Chichester)

If the Secretary of State wants to say something, he is welcome to do so.

Tony Banks (Labour, West Ham)

I am not the Secretary of State; I am a humble sports Minister. Does the hon. Gentleman play the national lottery?

Andrew Tyrie (Conservative, Chichester)

Yes, I have played the national lottery. In fact, not long ago, I won about £80, so I am feeling particularly happy about the lottery. Perhaps the Minister will tell me how he is doing. Perhaps I am collecting some of his losses. If it becomes clear that the funds for the sixth cause to which bodies initially became accustomed are no longer available, will the Minister for Arts be prepared eventually to use general taxation to plug the gap, or will he allow funding for the sixth good cause to fall? I support the amendments and would very much like to hear answers to my questions.

David Prior (Conservative, North Norfolk)

My hon. Friend the Member for Chichester (Mr. Tyrie) spoke of lottery fatigue. Looking at the face of the Minister of Sport, I know exactly what he means: there is a distinct sign of fatigue on the Labour Benches. We must remember that the lottery has been a huge success and has raised a huge amount of money for the good causes because of the two key principles that underlie it: the good causes identified are in addition to normal public spending and the funds are distributed at arm's length from the Government. The new opportunities fund will have an extremely broad remit. From the preliminary guidance provided by the Department, it seems that the fund will also be highly prescriptive. We are told: The Fund shall, by September 2002, commit funds to projects that, between them, should establish or develop healthy living centres accessible to around 20 per cent. of the population". We are told: The Fund shall commit funds to out of school hours education projects which taken together should provide regular activities involving at least half of all secondary schools". Proposed section 43C of the National Lottery etc. Act 1993 makes it clear that the new opportunities fund shall comply with the Secretary of State's wishes. Let us compare that with a brochure that came through the post this morning from the National Lottery Charities Board, which has just distributed £133 million to 1,306 organisations to help the homeless, animal projects, village and community centres and projects to develop the voluntary sector. Most of us know that additionality is a difficult concept to define, but we all know when it is breached. If you cast your eye down the list of projects in your constituencies, you will know exactly what is—

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. I am sorry to interrupt the hon. Gentleman, but I remind him that he is addressing the Chair and must use the third person.

David Prior (Conservative, North Norfolk)

I apologise. It is clear to most of us when the concept of additionality is being broken. I wish to refer to a point made by the hon. Member for Crawley (Laura Moffatt). I agree with what she said about healthy living centres, and we are not opposed to them. However, we believe that they should be funded through normal, general taxation. The problem with the Bill is that clause 13 erodes the arm's-length principle for all the other good causes, and makes it clear that all other distributing bodies must produce a strategic plan that must comply with the wishes of the Secretary of State. That extension of Government control is over not only the new opportunities fund, but all other funds. That goes to the heart of our objections to the Bill. It is no longer a people's lottery, any more than the former Governments of eastern European countries were people's Governments. It is now a Government lottery. It is in danger of losing the support of the people, and the ultimate losers will be the good causes.

Peter Brooke (Conservative, Cities of London and Westminster)

First, I declare an interest. Within the past month, I have won two £10 prizes, which have encouraged me to continue; it was some time prior to last month that I last won. Secondly, as the Minister for Sport has been accusing the whole House of writing him begging letters, I am sure that he would acknowledge that I have never written him one—not least because I pay him the compliment of assuming that he would have nothing to do with the decision. Therefore, I might as well save my ink. The hon. Member for Crawley (Laura Moffatt) said that she had been listening to a repetition of the Committee debates on Report. That is not true in my case—partly because I was not on the Committee and partly because I want to allude to remarks made earlier today. The hon. Lady did not speak in Committee apart from one intervention—which I have checked—of which she was proud. I cannot tell whether, in her remarks about additionality today, she was implying that she did not believe in the principle of additionality—contrary to her party's previous position—or whether she did not believe in its relevance to the Government's proposals. I mention the matter because it is of some importance to the debate. I wish to refer to an exchange I had earlier today with the Minister for Film and Tourism at Question Time. I am sorry that he is the only one of the Secretary of State's ministerial team who is not present. I will not say anything hostile about him; I shall just describe what he said. The Ministers present will recall a remarkable definition of additionality given by the Minister on 21 July 1997, which I quoted on Second Reading. The issue of additionality arose this afternoon when I asked the Minister—as a supplementary question, following a question from the hon. Member for Burnley (Mr. Pike) about local authority initiatives in tourism—whether the lottery would be paying for English tourism in the future. I do not have access to the Minister's precise reply and we will have to wait for tomorrow's Hansard. However, he said that it was not possible for him to say anything about that matter because, as I would understand, a comprehensive spending review was going on and he could not say who would pay for English tourism in future. The Minister did say that the issue of whether the lottery should pay for English tourism or not had been discussed. The Minister for Arts shakes his head—

Mark Fisher (Labour, Stoke-on-Trent Central)

indicated dissent.

Peter Brooke (Conservative, Cities of London and Westminster)

When we look at Hansard tomorrow, we will see what the Minister for Film and Tourism said. My hon. Friend the Member for Mid-Dorset and North Poole (Mr. Fraser) was sitting next to me—

Christopher Fraser (Conservative, Mid Dorset and North Poole)

indicated assent.

Peter Brooke (Conservative, Cities of London and Westminster)

My hon. Friend nods his head in terms of his recollection of the reply. The implication is that a policy or a principle amounts to a prefabricated decision—a standing fact of Government affairs. If the lottery will not be substituted for spending on English tourism, the Minister for Film and Tourism did not need to make any allusion to it, or to the comprehensive spending review. He could simply have said that lottery funds will not be used on English tourism. He did not say that. I said that I would not be derogatory about him, but a reasonable description—and not an evaluation—would be that his answer rambled a bit. We will see tomorrow precisely what he said, but he certainly did not rule out specifically the lottery paying for English tourism. Against that background, I am left with concern that the principle of additionality is further eroded by the Government. The Secretary of State corrected me on certain things I said about the consultation when the hon. Member for Forest of Dean (Mrs. Organ) spoke on Second Reading; it was a helpful intervention. All of us are agreed that fewer than 100 individuals contributed to the consultation. The Secretary of State knows that most of the 600 responses came from organisations. It can be no surprise to anyone that organisations would have said that they were in favour of lottery money being spent on what they do. It would be odd if they had not done so, for the very reason that the Minister for Sport gave when referring to begging letters. I am left distinctly uneasy about where the principle of additionality stands this afternoon. I wish to refer briefly to the arm's-length principle. The hon. Member for Crawley said, effectively, "All power to the Government's elbow. We hope that they spend any money they wish on things of which we approve." I do not want to sound like Nestor. I have said previously that I was not the architect of the national lottery legislation; one could produce a decent-sized architectural practice from those who said that they were that. I simply had a subordinate job in the master mason's department. The hon. Member for Stalybridge and Hyde (Mr. Pendry), to his credit, has sat through the debate today, and he will recall our debates in the Chamber, in Committee and elsewhere when the legislation was forged. As my hon. Friend the Member for Ashford (Mr. Green) said, one of the principal reasons why this is the best lottery in the world is that the money does not go to the Treasury, and we have avoided it doing so. The hon. Member for Stalybridge and Hyde will recall our debate about charities, and their fears that they would be disadvantaged by the fact that they would get only 20 per cent. of the money going to good causes. The only evidence we had to engage in that debate was the experience of Irish charities. It was clear that the problem in Ireland, in effect, had been that the money was going back to the Government for the Government to decide which charities should do better. Some said that they had done very well out of the Irish lottery, while others said that they had done badly; it had depended totally on the Government's whim. Au fond, that is why the Opposition are uneasy about what the Government are about.

Mark Fisher (Labour, Stoke-on-Trent Central)

For these remaining stages of the Bill, it has been good to have the right hon. Member for Cities of London and Westminster (Mr. Brooke)—the former Secretary of State for National Heritage, who introduced the original legislation in the House—here to contribute to our deliberations. All hon. Members recognise that we have had enormous benefits from the national lottery, and that is in no small part—despite his modest denial of any role in the architecture of the legislation—due to the right hon. Gentleman. His seeing it through in the first place has given great pleasure and benefit to the people of this country. His speech was, by a long way, the shortest, most intelligent and most interesting contribution from the Opposition Benches. Before he gets too carried away by my compliments, however, I should add that, given the quality of some of the contributions of his colleagues, that remark is modest. The right hon. Gentleman asked for clarification on what my right hon. Friend the Minister for Film and Tourism said. My right hon. Friend did not mean to imply that the lottery would ever provide a substitute for Government expenditure on and support for tourism through the English tourist board or the British Tourism Authority. He was referring to the fact that, as the right hon. Gentleman will appreciate, tourism-related matters, such as the arts and heritage—piers at our great seaside resorts, for example—have benefited from the lottery, which has been for the good of tourism and of communities. As my right hon. Friend the Secretary of State said, we are examining arts and heritage as part of the comprehensive spending review.

Peter Brooke (Conservative, Cities of London and Westminster)

As the answer of the Minister for Film and Tourism to my question was long, it is a little surprising that he did not enter the same grace notes as the hon. Gentleman has, with which I have no problem—they were part of the discussions that we had on Second Reading of the original Bill.

Mark Fisher (Labour, Stoke-on-Trent Central)

I have explained the position of my right hon. Friend and the Government, so perhaps we can move on. I welcome the hon. Member for East Surrey (Mr. Ainsworth) to his role as shadow Secretary of State. It is good that he is listening to our debate—I hope that he will contribute to discussions later this evening. However, I hope that he has to wait a long time before he succeeds the right hon. Member for Cities of London and Westminster in introducing legislation—he will do well if he introduces legislation that is as constructive and well respected. We shall do our best to ensure that he has a long, patient wait. It struck me that, the longer the hon. Member for West Suffolk (Mr. Spring)—who led for the Opposition—spoke, the less he had to say. Despite the fact that, amazingly, he spoke for 44 minutes, he did not seem to add much to the interesting speeches that he had made before—strangely, he seems to be taking a long time to grasp that the Government support the principle of additionality every bit as much as the Opposition do. He is obviously yearning to oppose us, but he cannot find much to oppose, as we all agree on additionality. We have supported the principle, which the previous Government introduced, both in our manifesto and in everything that my right hon. Friends the Prime Minister and the Secretary of State have said for extremely good reasons of clarity and, as Mr. Peter Riddell said—he has been much quoted in our deliberations—to prevent the Treasury and other Departments from raiding the funds. It is important that we maintain additionality and arm's-length principles—I make it clear that the Government are committed to the principle and practice of additionality. Our manifesto said that lottery funds should remain strictly additional to Government expenditure, and the Prime Minister said: We don't believe it would be right to use Lottery money to pay for things which are the Government's responsibilities. That could hardly be clearer, but, despite the fact that we said it time and again in opposition and say it again tonight, the Opposition are slow to recognise it. In our deliberations on the 1993 Act, on the White Paper and on the Bill, we have all agreed that it is extremely hard to define additionality. That is why both this Government and the previous Government decided that it would be sensible not to attempt to define it, but to create a principle to which we could all subscribe and which could be kept in practice. We can argue the toss—we did so in opposition, as some hon. Members have said—but we learned over the years in which the previous Government ran the lottery that that was the most pragmatic way in which to proceed. It is very difficult to find a definition in law that would stand up and bear the necessary test of pragmatic implementation, so, like the previous Government, we believe that the common-sense test is the best. I can say little more on the subject. We have clearly failed—the failure is mine—to persuade the Opposition that we believe in additionality. I believe that our actions, and the actions of the arm's-length bodies that distribute lottery funds, demonstrate that belief. I do not think that the people are in any doubt that the sums are in addition to, and do not replace, Government expenditure—the people are under no misapprehensions; they know that, even if the Opposition do not. The hon. Member for Chichester (Mr. Tyrie), who is no longer in the Chamber, asked what would happen if there were lottery fatigue and the flow of funds dried up. I think that he misunderstands how the lottery funds work—they are project funds for short-term, specific initiatives; not core funding for any of the activities. If he understood that, he would understand why his question was inappropriate. We have clearly not succeeded in convincing the Opposition, although I believe that we shall persuade the House, as we have persuaded the people. The Government believe in additionality and in the arm's-length principle; we ask the House to reject the proposed measures.

Richard Spring (Conservative, West Suffolk)

I agree entirely with the Minister on one thing: he has totally failed to convince the Opposition or to respond to our points. It is a great disappointment that, instead of dealing in general terms with the arm's-length principle or with additionality in practice, the Government are failing the national lottery and the people's confidence in it.

WINDING UP OF FUNDS ALLOCATED UNDER SECTION 22(3)(c)

Robert Maclennan (Liberal Democrat, Caithness, Sutherland and Easter Ross)

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

Robert Maclennan (Liberal Democrat, Caithness, Sutherland and Easter Ross)

I have pleasure in moving the new clause and I shall be brief. It is designed to enable the Minister to give some indication of what the Government propose following the winding-up of the Millennium Commission in respect of the substantial expenditure involved. There is anxiety, particularly in the voluntary sector, that the money is in a sense floating money, which could be diverted from good causes to other, no doubt desirable, public spending objectives—I can candidly declare that the new clause was suggested by the National Council for Voluntary Organisations. There is also concern that the very fact that that shift will take place might impact on the ability of voluntary organisations to attract funding and it is certainly appropriate to raise those fears well in advance. The Government should be able to give undertakings that they will consult widely with the voluntary organisations and the other good causes about how best to utilise the money, bearing in mind the Government's expressed commitment to the additionality principle, which was underlined in the previous debate and which I do not call into question in general. The new clause also suggests an appraisal of the work that has been done by the existing distributing bodies, which must be appropriate and sensible when considering how best to deal with moneys that will not be spent in the future. Of course, it is difficult to predict what the volume will be by that time and whether it will have peaked and be on a downturn, but that would only make that course of action more urgent. I hope that the Government will find the new clause helpful and that it will enable them to give us some glimmerings into their thinking.

Richard Spring (Conservative, West Suffolk)

We have listened with interest to the comments of the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan). I was not clear whether he would press the new clause to a Division. I hope to secure your permission, Mr. Deputy Speaker, to separate amendments Nos. 8 and 1, which we have tabled, from the new clause if necessary. The amendments in this group deal with the Government's raid on the original good causes and the need to protect those causes. The reason for the raid is simple. The Government made a series of promises in opposition that were incompatible with the tight control of public expenditure. Indeed, once a week we have had the sight of the Prime Minister having to defend the fact that those early pledges, particularly on health and education, have not been borne out in practice and that, in fact, the reverse has happened. That is part and parcel of the problem. Given the Chancellor's views on public expenditure, Ministers are scratching around for alternative sources of cash to pursue the political agenda that is inherent in the new opportunities fund. As a result, the lottery, which was set up as a fund to pay for projects that would, in the words of the 1992 Conservative manifesto, restore our heritage and promote projects which will become a source of national pride", is, if Royal Assent is obtained, to turn into the milch cow for Ministers to supplement their departmental budgets by raiding it for that express purpose, through the generosity of the Secretary of State. 7.45 pm Even under the Government's original plans, the good causes would have lost out. The National Lottery etc. Act 1993, which was enacted under the former Conservative Government, provided for the Millennium Commission, which finances projects to mark the millennium, to be wound up once the celebrations are over and the projects all paid for. That money would have been re-allocated to the other good causes. However in 1996, the Labour party in opposition decided that it would not reallocate the money to the original good causes but would set up its own fund to subsidise the budgets of other Departments. Let us be clear. Under a Labour Government, the original good causes were always destined to lose out; it was only a question of when. None of the amendments would prevent the Government from setting up the new opportunities fund. They deal with the fundamental problem of the Government's smash-and-grab raid on the lottery. Amendment No. 8 deals with whether the new opportunities fund should replace the Millennium Commission, as was promised in Labour's manifesto, or whether it should simply elbow its way to the front of the queue as a sixth good cause. In view of the threat to the lottery, we also want to establish a minimum percentage below which the share of the proceeds of the lottery allocated to the original good causes will not fall. We are concerned that the Government will try to take an increasing percentage of the proceeds of the lottery for their own new good cause and we were not at all assured by the so-called assurances of the Minister for Sport in Committee. I hope that this evening he will give us further assurances, as they have not thus far been satisfactorily forthcoming. In respect of making the new opportunities fund a replacement for the millennium fund, amendment No. 8 would give the Government the opportunity to honour their manifesto commitment on the lottery. I remind members of the Standing Committee that we had the truly appalling sight on a number of occasions of Labour Members voting against their manifesto commitment—a ludicrous situation. Accepting the amendment would restore to the original good causes some of the money that they will lose under the Government's plans. In its manifesto, the Labour party gave a commitment to create a new millennium fund—what is now called the new opportunities fund—to replace the existing fund. Indeed, the 1997 manifesto, "New Labour, because Britain deserves better", stated: Labour has already proposed a new millennium commission to commence after the closure of the Millennium Exhibition, to provide direct support for a range of education, environment and public health projects, including those directed at children's play, currently excluded from the lottery". The Opposition's amendments would give effect to that commitment. Perhaps the House would care to reflect here on the irony of the Government, barely a year in office, facing the embarrassment of being held to implementing their manifesto commitments by the Opposition. I accept that this may be small beer compared with the appalling travesty as regards the early pledges, which have simply not been carried out—the growth in waiting lists and the difficulties in education—but it is a principle of considerable importance for the continuation and success of the national lottery. We are giving the Government another opportunity to consider their over-hasty raid on the lottery and the damage that the Bill will do to the original good causes by depriving them of money that they had expected. We ask the Government to think about the damage that they are doing to the lottery by turning it into a form of voluntary taxation from which to subsidise general public expenditure on health, education and the environment. The Government have brought forward the creation of the new opportunities fund to let them get their hands on the lottery as soon as possible. The Bill will mean that the arts, charities, sport and the heritage will lose one sixth of the proceeds of the lottery until the Millennium Commission is closed, and a fifth of the proceeds thereafter. That results from the Government's decision to introduce their own good cause before the Millennium Commission is wound up. The new opportunities fund, to which we object in principle, was conceived as a replacement for the millennium Fund, not as an additional sixth good cause. The Government are so hemmed in by the embarrassment arising from their failed pledges and their performance on health and education, and by their self-imposed public spending constraints on the Chancellor, that they are desperate for cash. The lottery is the ready source. As has been said, the real lottery winner will be the Chancellor, at the expense of good causes up and down the country. Labour announced its decision to set up the new opportunities fund before the closure of the Millennium Commission only during the general election campaign. There was no mention of the effects that it would have on the good causes, or on the lottery. It was not made clear then, and the Government have persistently failed to admit it since, that the original good causes are losing as a result of the switch. Sums in the region of £140 million to £150 million will be taken from the good causes and put into the so-called shadow account for distribution after Royal Assent. The good causes would, of course, have lost out anyway. They had previously expected the Millennium Commission's share to be divided among them when it was wound up. When the decision to bring forward the new opportunities fund was announced, Labour claimed that it had been made possible only by the Wednesday draw. That was complete nonsense, and they knew it. The only reason why the original estimates of about £9 billion rose to about £10 billion was the spectacular success of the first year of the operation, which far exceeded expectations. A midweek draw was always planned, as well as scratch cards and the other games that have been introduced. The Wednesday draw was not an unexpected windfall, and it is nonsense to suggest that it generates a finite sum. The fact is that the Government wanted to get their hands on the lottery money as soon as possible and were prepared to set up a new good cause to do so, even if it meant taking from existing good causes. In Committee, the Minister acknowledged for the first time that the Government had brought forward their raid on the arts, charities, heritage and sport by saying: when we first proposed the new good cause in our manifesto and in the lottery documents published before the election, we anticipated that it should follow the running down of the Millennium fund. We have had second thoughts, however, which is perfectly reasonable. We were surprised and pleased at the strength of support for the new good cause. As it was so widely welcomed, it seemed perverse and unnecessary to delay it for several years. As it was supported by the public… we feel that if the content is right we should go ahead now, be decisive and get on with it. The Minister could offer no credible justification for why the Government should have brought forward the date of their raid, except political expediency. He was not prepared to admit that they simply wanted to get their hands on the money. He claimed, unconvincingly, that the proposals were popular—though he presumably did not mean popular with the new causes, which do not share his view. The Minister refused to make public the details of consultation with existing good causes. I asked him to do so, and he talked about some sort of seamless flow. I fear to say that that was not a particularly satisfactory answer. The Minister has claimed that the distributing bodies agreed. However, he was not so definite in Committee. There was no suggestion then of agreement. He said: We have running discussions and consultations with all the distributing bodies. They are fully aware of the plans and happy with them. Consultation is not an exercise, but a continuous process …It has always been made clear that the other distributing bodies will receive £1.8 billion each, and they have accepted that. That was the understanding on which they planned …The distribution bodies have always accepted that figure; it is the basis on which they have been able to plan. The important thing was the amount of money that they were to receive—£l.8 billion. They will still receive precisely that sum."—[Official Report, Standing Committee A, 28 April 1998; c. 45–46.] What a contrast those assertions make with the responses to the Bill made by the original good causes. Many people who have an interest in this subject because of their involvement in the distributing bodies—for example, Lord Gowrie and Lord Rothschild—make a very different interpretation. It is absurd to suggest, as the Minister does, that they are delighted and pleased that traditionally under-resourced parts of our economy that are always put at the back of the Treasury queue will once again be hit severely by this raid. Labour Members should be grateful to have the opportunity to make sure that the Government keep at least one of their promises. The amendment will let them clear their consciences by doing that. By accepting the amendment, the Minister would ensure that the original good causes continued to get the percentage of lottery proceeds that they were originally promised, rather than the reduced percentage that will result from the premature creation of the new opportunities fund. Amendment No. 1 deals with the setting of a minimum percentage share for the good causes. The great fear of the original distributing bodies is that the Bill is the beginning of a remorseless chipping away at their resources. They are concerned that the Government plan to take a growing percentage of the proceeds of the lottery to pay for their own new good cause. The bodies fear that this is the beginning of a series of raids. The Bill is specifically designed to ensure that that happens. Despite being pressed on Second Reading by a number of my hon. Friends—including my right hon. Friend the Member for Huntingdon (Mr. Major)—and being pressed again in Committee, the Government have failed to undertake to adhere even to the reduced new percentage allocations contained in the Bill. I extend to the Minister, once again, the opportunity to give that assurance, and I should be delighted if he did. In Committee, the Minister claimed that it was absurd of the Opposition to want to amend our own National Lottery etc. Act 1993. He was being somewhat disingenuous; he knows that no Government would have had any incentive under the 1993 Act to divert money from one distributor to another. It is different now. The Secretary of State is, in effect, setting up a political fund under his own direct control. He is introducing sweeping powers that will enable him to gerrymander the distribution of lottery money. He is changing the very basis on which the lottery operates and on which it has been such an enormous success. The Government now have an incentive to vary the percentages even further to favour their own good causes, and that is why existing good causes are worried. I have repeatedly said that it is dangerous to set a precedent for future Parliaments by entrenching in legislation the opportunity for some future Secretary of State to abuse the lottery for political reasons and to change the balance of the lottery in a way that is deeply destructive to the lottery and the under-resourced good causes. The Government are not prepared to offer genuine reassurance to the good causes, and that is why we are resisting the Bill. As so often with this Bill, it is not the introduction of a single power but the combination of powers, a sort of block building of centralisation of control, that puts a dangerous amount of control in the hands of the Secretary of State. The apparently harmless power to vary the percentage allocation to each good cause in the original Act can be combined with the creation of the new opportunities fund to allow, in theory, the diversion of up to 75 per cent. of money for good causes, and eventually 80 per cent. to the Government's own good cause. The Government repeatedly resisted this amendment, which was tabled perfectly reasonably by Conservatives and Liberal Democrats in Committee. They combine lukewarm assurance of their good intentions to the good causes with an abject failure to give them statutory effect. They have failed to commit to a percentage for the good causes but say only that the good causes would get £9 billion if the proceeds reached £10 billion. They will not commit even to the reduced percentage share in the event of proceeds exceeding £10 billion, as Camelot confidently predicts that they will. Will they commit to percentages in the Bill today? We await an answer. 8 pm The Government also made it clear that, in the event of a shortfall, the original good causes will lose out, meaning that there is a possibility of a further fall for them. As Conservative Members have noted, there is always the risk of lottery fatigue, which has been seen in other countries. What assurances can the Minister give against the possibility of revenue shortfall for the good causes, including sport, that are so genuinely concerned about the matter? The Government will not even give a commitment that the original good causes will continue to receive any money at all after the current licence expires in 2001. Will they give clear assurances today? This is an opportunity for the Government to show good faith and to set a percentage floor below which the good causes will not fall. The minimum share that we propose would not have been necessary without the creation of a new good cause under the direct control of the Secretary of State. The Bill centralises far too much power in his hands. The new good cause is radically different from the previous ones. The 1993 Act sets out the five areas to be supported by the national lottery on an equal percentage basis: the arts, sport, national heritage, charity and the millennium. The money was to be drawn on by distributing bodies to make grants to such projects as they chose to support, within their terms of reference. The Secretary of State had no power to tell them what projects to support. The new opportunities fund is to have no such freedom. As the Government's note on clauses 6 puts it: rather than providing general support to its sectors as the other distributors do, it will support a rolling programme of specific initiatives. These will be determined by the Secretary of State. The first three initiatives are to be IT training for teachers and librarians, out-of-school-hours activities and healthy living centres. The Government claim that such initiatives are consistent with the arm's-length principle. They are not. The new opportunities fund will simply be a Government agency with limited operational autonomy. What is to stop the Secretary of State diverting more and more lottery money to the new opportunities fund at the expense of other good causes? We have not had a satisfactory answer. We have already been told that the new cause's share will rise to 20 per cent. in 1999 as millennium spending tails off. Why not 25 or 50 per cent? There is nothing in the Bill to stop it. The existing percentages can be varied by ministerial order, and it would be tempting to do so. To set a precedent and give a future Secretary of State the opportunity to do that in an unscrupulous way would be a terrible legacy of our consideration of the Bill. The sums involved are not negligible. The distributors have so far had about £5 billion. The good causes can expect another £5 billion over the next three years. The Secretary of State is at liberty to channel up to £3.75 billion out of the expected £5 billion to the new opportunities fund. He does not have to give the five other distributors more than 5 per cent. each of the total. That minimum of 5 per cent. was put into the 1993 Act before this voracious new cause made its appearance. That is at the heart of the difficulty. In view of the changed nature of the national lottery and of the composition of the good causes, we believe that the percentage is too low. It does not sufficiently curb the Secretary of State's political appetite, now or in future. To put it simply, we wish to raise the minimum percentage for all the causes to 13.33, the present percentage allocated for the new opportunities fund. The effect would be to ring fence £3.3 billion of the £5 billion for the five original good causes, as opposed to only £1.25 billion under existing legislation. The Secretary of State would still have the flexibility to give the new opportunities fund more than the others, but not nearly as much flexibility, with all its inherent dangers, as now. I ask again whether the Minister will give a binding undertaking that in this Parliament, he will not reduce the level below 16.67 per cent. The arts, sport, heritage, the charities and even the millennium fund should have such protection. It is with that protection that the distributing bodies have carried out their work effectively and won the confidence of so many recipients of lottery money. The Bill, with its centralising powers and the ability given to the Secretary of State to interfere in the smooth working of the lottery, demands that if the lottery is to continue to be the success that it has been in the past and should be in future, the good causes need proper protection. The Bill as it stands makes that more unlikely. The minima required to make it work are something that we urgently wish to raise once again for the Government's consideration, in the hope that, even at this late stage, they will think again.

Christopher Fraser (Conservative, Mid Dorset and North Poole)

I wish to confine my comments to the protection of the good causes, as mentioned by my hon. Friend the Member for West Suffolk (Mr. Spring). We all accept that the national lottery has so far exceeded expectations. The original good causes had expected to benefit from public enthusiasm and support and to receive their fair share of the £1 billion excess projected over the first seven years of the lottery's operation. Not least, they expected the Government to keep their general election promise that the new opportunities fund would be introduced to replace the millennium fund. There is now a sixth good cause, as well as the National Endowment for Science, Technology and the Arts. Everyone's relative share can only fall. That means that the original good causes will inevitably lose out. The White Paper is worth quoting. It says: Although the existing good causes will be receiving a smaller share of Lottery revenue, the success of the Lottery means that they can still plan on receiving the same amount in total as was envisaged when the Lottery was set up". The Secretary of State is telling the good causes that they will get less in future. They will get the same amount as was predicted when the lottery was set up as a paper concept. They are being told to forget the years of success and not to worry that the Government will not establish a minimum percentage below which their share of the proceeds will not fall. They must press on and be grateful for what they can get. Our amendments give the Government the opportunity to honour their manifesto promise that the new opportunities fund should replace the millennium fund. As the Bill stands, the Government have brought forward the creation of the new opportunities fund so that they can get their hands on the lottery money as soon as possible. The Treasury is, after all, desperate for cash that only the lottery can provide. Public awareness of that grab-for-cash policy is growing. Hon. Members may have seen newspaper reports that the Treasury will take 20p on every lottery ticket when the sixth good cause is introduced. Independent research was carried out by David Wornham, senior lecturer at Bristol business school, and quoted in The Daily Telegraph on Monday25 May. The article stated: Mr. Wornham said: 'One of the most disturbing findings is people's assumptions of where the money goes. The public believes that between 15p and 20p in the pound finds its way to charities. In reality, the figure is less than 6p—and that doesn't take into account how much charities have lost from a drop in charitable contributions since the lottery began. To find out where the money is going,' he said, 'you need look no further than the Exchequer. Once direct and indirect taxation is taken into account, together with the use of lottery money to replace public expenditure, the Government's "cut" upon realisation of the new sixth cause will turn out to be over 20p in the pound, not the published figure of 12p.' I could go on, but that illustrates my point and provides confirmation, if confirmation is needed, that the real lottery winner is the Chancellor of the Exchequer. To rub salt in the wound, the Government continue to dispute that the existing good causes will lose out, which is quite incredible when one considers the evidence. If public confidence in the lottery starts to fall, not least because of newspaper reports such as the one I have just quoted, they will really start to feel the pinch. The fact that the Secretary of State can involve himself completely justifies the concern expressed by my hon. Friends. The Secretary of State will involve himself and decide on the scope and direction of his involvement at a whim and a fancy. Having recognised that as a dead certainty, we seek through our amendments to limit the powers of the Secretary of State and to limit the amount of money he can divert into the Government's new opportunities fund at the expense of the original good causes. To guarantee them an allocation of 13.33 per cent. offers them a future, albeit a lean one; at the moment, they fear for the future and face the prospect that the Government plan to take an ever-increasing percentage of the proceeds for their own salvation. The current model of awards is transparent and free from accusations of political gerrymandering. Ministers cannot tell us how that positive characteristic will be safeguarded in future—I hope that the Minister will answer that question this evening. If they believe that there should be safeguards, the Government should be happy to give an undertaking to the original good causes, which they currently cannot and will not do. Instead, the Government have every good reason to vary the percentages even further in future to the benefit of the new opportunities fund as the economic situation inevitably worsens and the calls for health, education and environment spending increase. The Government have made it clear that, in the event of a shortfall, the original good causes will lose out. The Government's apparent lack of support for the good causes increases the concern felt by those good causes and poses the question: what does the future hold for the good causes? I suspect that their future is not particularly rosy, given the wide range of opportunities for Government interference offered by the Bill. They do not even have the comfort of an assurance that they will continue to receive money after the current licence expires in 2001. I should like the Minister to give an assurance today on the future of the good causes.

Damian Green (Conservative, Ashford)

I shall speak mainly to amendments Nos. 8 and 1, but I shall first briefly address new clause 4. I regret the absence of the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) in more than the usual formal sense in which those words are used in the House, because I am genuinely unsure about whether I have completely understood what he wants to achieve with his new clause. As I understand it, he wants to constrain the behaviour of the Secretary of State after the millennium fund has been wound up. That seems perfectly sensible and there is much to be said in favour of such a course of action, but, in a form of argument that will be familiar to those of my right hon. and hon. Friends who have attended debates at the Conservative party conference, I disapprove of the new clause because it does not go far enough. 8.15 pm If it is sensible to restrain the behaviour of the Secretary of State after the winding up of the millennium fund, it would be equally sensible to do so now, especially in the context of the Bill which brings so much power over distribution under the Secretary of State's purview. One of the principal objections to the Bill has always been that it involves the nationalisation of large parts of the lottery distribution mechanism, turning it from a national lottery into a nationalised lottery. That lies at the root of many of the Opposition's objections to the Bill. One of the purposes of amendments Nos. 8 and 1 is to retain some independence for those bodies distributing to the good causes that have done so well over the past four years. I am sure that the Minister will advance once again the specious argument that we heard several times in Committee; that the cake has got bigger, so it does not matter that the percentage of the cake that the existing good causes are to get is being reduced, as they were planning to receive only that amount of cake anyway. There are two reasons why that is an invalid and specious argument. First, if it can be done once, it can be done again. All the good causes will rightly realise that they have become a target for Ministers of this and future Governments—that they are seen as a convenient way of relieving public spending pressures in almost any circumstances. That will have a direct effect on the way they act from now on. The danger is not merely a theoretical possibility for the future, as many of the things the good causes do involve long-term planning; if they are less sure of the level of funding they are to receive for many years ahead and if they are to act prudently, as most do, they will not commit themselves to large projects or long-term revenue funding. That in itself will be damaging. Secondly, the good causes are being cheated out of money. They recognised that the cake was growing faster than was originally forecast and planned accordingly. It is undeniable that the demand for bids has improved both in quantity and in quality over the years, as more bodies have got used to the methodology of bidding and worked out how to put together a successful bid. All the distributing bodies say that they would like to pass a higher proportion of bids now than they did two or three years ago, simply because they are generally of better quality, but the result of the Bill is that they will be able to pass only a lower percentage than before, which will be extremely damaging. The ability to plan ahead will be particularly affected, and that will be increasingly harmful. In the past, large capital projects have been funded, but we all accept that, in future, lottery funding will move towards revenue funding. If the good causes feel that they have to cut off revenue funding after two or three years, future artists and athletes may not be given the opportunities that they deserve and that they could be given under the lottery as currently constituted. Existing good causes will know that the new opportunities fund is open ended and can be expanded to almost any extent. The Bill would allow expansion to continue, so the good causes would be right to be even more fearful about the future as the opportunities for political manipulation introduced by the Bill become ever more attractive to future Secretaries of State. The present division is crude but fair. Nobody would argue that there is any great science in deciding that five good causes should each receive 20 per cent. of the money. We could have had endless arguments about whether charities were more worthy than the arts and whether sport was more worthy than heritage. The simple method—which has, as far as I know, received barely a murmur of protest—of dividing the cake five ways by giving 20 per cent. to each cause is seen to be perfectly fair. In this case, complication is the enemy of trust in the long term. By introducing complication into the distribution mechanism, the Government are eroding the trust that exists between them and the distributing bodies. That is likely to damage the bodies' morale and the amount of good that they can do. I urge the Government to accept the amendments, which are in no way wrecking amendments. They would not stop the Government setting up the new opportunities fund or taking any of the significant measures in the Bill. If the House has a surprising burst of sanity and accepts the amendments, it will enshrine protection for the existing good causes so that although the Government could set up the new opportunities fund, that would not cause the collateral damage to the good causes that the Bill will inflict. I urge the Minister to have a last minute change of heart and accept the amendments.

David Prior (Conservative, North Norfolk)

It is rather sad that we have to debate amendment No. 1, which would increase the minimum allocation from 5 to 13.33 per cent. We should not feel obliged to do so. We are debating it because Conservative Members are genuinely concerned about protecting the good causes. The lottery has been a tremendous success, as has the distribution of lottery funds, but, over the past few months, in Committee and in debates in the House, many Conservative Members have come to feel that we can no longer trust the Government to ensure that the money is spent properly. We do not trust the Government because we are not convinced by their defence of the additionality principle. We are convinced by the Bill's wording that the lottery can no longer be described as being at arm's length from the Government. The combination of those two aspects of the Bill makes us feel the need to increase the minimum percentage allocation to protect the good causes. What leads me to distrust the Government is the fact that they are legislating retrospectively and have been fiddling around with shadow accounts. There was no need to do that. If they had been honest, they could have increased the percentage to the new opportunities fund later, but they did not want to. They deliberately made the Bill retrospective to make it appear as if the percentage was less. That was a deeply unnecessary and reprehensible act. The Government will grab as much money as they possibly can to use for their own purposes. That was not the intention behind the lottery; it was not even the intention of the Government when they were in opposition, when they fought strongly for the additionality principle. It is vital to protect the interests of good causes, first, for the sake of the lottery. As long as people see that the lottery is independent and that the money goes to good causes, not mainstream public spending, they will continue to play it. The danger of lottery fatigue setting in will be greater if the Bill is implemented. We are anxious to protect good causes, secondly, for the sake of good government. It is important that taxation is transparent. The taxpayer and the electorate should know where the money comes from to finance public spending. This is sleight of hand—the Government are taking money from good causes to fund their pet projects. I do not necessarily disagree with the projects that they are spending the money on, but it is wrong that the money is being taken from the lottery. The third reason why it is important to protect good causes is for the sake of the causes themselves. If lottery fatigue sets in and, over time, the causes that are supported by the distributing funds spend the money on revenue rather than capital, it is essential that they have a longer and longer time horizon. If there is in the background the permanent threat that the Government may take more money away from the good causes, that will undermine the causes in the long run. For those three reasons I support, with some sadness, the proposed increase in the minimum allocation from 5 per cent. to 13.33 per cent.

Peter Brooke (Conservative, Cities of London and Westminster)

I declare an interest as the chairman of a trust involved in archaeology and ecology in the Andes, primarily in Peru, which has made an application to the National Lottery Charities Board. I see concern written on the face of the Minister for Sport; I give him a categorical assurance that I shall not communicate or correspond with him about it. I mention that body because, as the hon. Member for Stalybridge and Hyde (Mr. Pendry) will recall, it was the charities' concern about their allocation in the original Act that occasioned a fair amount of debate between us. There was a recognition that, as the Millennium Commission money ran out with the coming of the millennium, there would be an opportunity to consider the reallocation of the money and whether the charities should receive more. At that stage, we would know how they had spent the money so far. In that respect, I agree with new clause 4, which has been tabled by the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) as it relates to the purpose of a review. I have not had a briefing by the National Lottery Charities Board, which is my constituent. In the fourth sitting of the Standing Committee, on 30 April, my hon. Friend the Member for Eastbourne (Mr. Waterson) referred to such a briefing. I am not in any way acting on behalf of the board. I apologise for some unfamiliarity with the narrative. When I was a child, my mother taught me at her knee what I always believed to be a verse from the Old Testament: man look not back at the furrow ploughed by thee. I have never been able to find it in holy writ, but I have not given up hope. I do not spend much time revisiting my past and, if I am unfamiliar with any detail, I apologise. My recollection is that the Home Office was originally responsible for the National Lottery Charities Board. I was conscious that my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley), who was then Secretary of State for National Heritage, received into her Department the voluntary activity that had previously been looked after by the Home Office. I do not know whether she took responsibility for the charities fund at the same time, but I am conscious that the Government have moved the voluntary activities back into the Home Office. If the Government are creating a new good cause, it is a little illogical to spend money on issues that have nothing to do with the Department for Culture, Media and Sport when they criticised the earlier movement of voluntary activity to the Department of National Heritage. I say, as a bystander, that there has been a lack of coherence in the development of the Government's thinking. There was a Stephen Leacock character who jumped on his horse and rode off in four directions at once. There has been an element of that in the transmogrification of the Government's policy, which has been curious in view of the emphasis that they have placed on strategy and their criticism that there was a lack of strategy in the previous thinking. I believe that the Minister for Sport will reply to the debate, and I welcome the opportunity to hear from him more precisely what the Government's intentions are. I do not know whether, in his responsibility for heritage buildings, he has been high over the nave in Wells cathedral, but if he has he will have seen etched on the floor the design work of the masons in the middle ages, which is still visible 500 or 600 years later. We shall see the Minister for Sport set out such markings, and we shall have an opportunity to verify them over the next five years. I had profound sympathy with the observation by my hon. Friend the Member for Ashford (Mr. Green) that complication is the enemy of trust in these matters. The simpler the Government can make what they intend to do, the better it will be for the lottery.

Julian Lewis (Conservative, New Forest East)

I should like to add to my considerable reputation for parliamentary eccentricity by saying that I was always doubtful about the whole concept of the lottery. I felt that it would damage existing charities and drain from them funds that would otherwise go directly to them. My outlook was probably soured by the brilliance of George Orwell's description in "Nineteen Eighty-Four" of the effects of a lottery in a totalitarian society. He said: The Lottery, with its weekly pay-out of enormous prizes, was the one public event to which the proles paid serious attention. It was probable that there were some millions of proles for whom the Lottery was the principal if not the only reason for remaining alive. It was their delight, their folly, their anodyne and their intellectual stimulant. I thought that, with such a start, the lottery could only be a somewhat corrupting force in society. The Bill shows that it is also corrupting the Government. Effectively, the Bill is the second stage in the Government's attempt to make good their promise to try to keep their spending and tax-raising targets at Conservative levels. The first stage of that attempt was the raid on the pension funds and the second stage—

Michael Martin (Deputy Speaker, Glasgow Springburn)

Order. We are debating the new clause and the amendments. We are not worried about possible inequities of the lottery. Perhaps the hon. Gentleman could hang his jacket on that peg.

Julian Lewis (Conservative, New Forest East)

The amendments seek to ring fence the amount that will be available for good causes. Good causes were nominated to enable money that formerly went to charities to continue to be spent on such activities. There is an attempt to get away from the safeguards that were provided for the lottery. That is part of a general, corrupting strategy to enable the Government to get their hands on money that, had the lottery not been created, would have gone to charity. That charitable money will be used for Government expenditure. I predict that this is not the last time that such an unethical sleight of hand will be employed.

Tony Banks (Labour, West Ham)

The hon. Member for New Forest, East (Dr. Lewis) described himself as eccentric. That is a middle-class word for loony, and he adequately proved his case. The lottery has been a great success and the hon. Gentleman was wrong to oppose it. People go in for the lottery because they want to win oodles of cash. I do not wish to strip away all the talk about good causes, but that is why I go in for it. So far, I have been unsuccessful, apart from a few tenners here and there, but I dream about the big one coming along, as do many people. As I fail, week after week, to win the biggie, I have the consolation of knowing that money is going to good causes. It is clear that people do the lottery to try to win prizes. The right hon. Member for Cities of London and Westminster (Mr. Brooke) spoke about Wells cathedral. I have never been high in the nave of that cathedral—I have never been high anywhere—but I was interested to hear that the right hon. Gentleman will not spend much time revisiting his past. According to the interests that he declared, he will spend some time in Peru. The Opposition amendments demonstrate two matters. First, they show the Opposition's inability to decide their position on the new good cause. As my hon. Friend the Minister for Arts said, in Committee and on Second Reading, the Opposition argued that there was something intrinsically wrong about spending lottery money on health, education and the environment. However, amendment No. 8 accepts the idea in principle, merely postponing it for a few years. Secondly, the amendments demonstrate the Opposition's failure to recognise that we are not harming the existing good causes. They are receiving the £9 billion that everyone expected them to receive when the lottery started. Perhaps it is rather odd to say in this place that there comes a point when we ought to try to trust each other. [Interruption.] I knew that Opposition cynics would not accept that. They have described my right hon. Friend the Secretary of State as if he were Josef Goebbels. Somehow, there was an evil manifestation sitting next to me and planning all sorts of dire happenings to the existing good causes. My right hon. Friend is a perfectly sweet, decent honourable gent who does not have a vicious thought in his mind. The House should trust him. The Liberal Democrat new clause 4 gives us a chance to explain our approach to the reallocation of the millennium stream, which seems to have worried people.

Peter Brooke (Conservative, Cities of London and Westminster)

I greatly enjoyed the Minister's reference to his right hon. Friend. In his capacity as Chairman of the Select Committee on National Heritage, the right hon. Member for Manchester, Gorton (Mr. Kaufman) once said to me, "Of course I trust you Secretary of State: it is the ones who come after you about whom I am worried."

Tony Banks (Labour, West Ham)

I do not know anything about impending reshuffles. There has been one in the Opposition and we constantly read about them in the Government. Whoever is Secretary of State—and I know that it will be the present incumbent for many years—can be accorded the same trust as my right hon. Friend. Why should we want to destroy the existing good causes? It offends me somewhat that Opposition Members should feel that we have ulterior motives—that we are somehow intent on destroying the existing good causes and the national lottery. On Sunday, the front page of The Observer stated that the Chancellor of the Exchequer had squirrelled away £50 billion. That is a great deal to squirrel away, but I think that we can rely on our Chancellor to manage the economy in good order and to make sure that there are sufficient funds for our spending priorities. The right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) apologised to me for the fact that he would not be here for the winding-up speeches. I thank him for that and for his short speech. I assure him that when the time comes for us to decide how to reallocate the millennium share, we shall carefully consider what the lottery distribution bodies have achieved and the case for giving each a higher share. There is no assumption that it should go to the new opportunities fund. If that happens, it will be because we have concluded, after looking at all the good causes, that it is the right thing to do. We shall obviously take account of the representations by hon. Members and others on the merits of each good cause and, to address one of the issues in the amendments, we shall explain the basis on which we have decided the allocation. When deciding what to do with the millennium share, we must try to ensure that each body has the potential to achieve at least as much as it has already achieved. We have adequate arrangements in place to ensure that we can evaluate the effectiveness and performance of each body. As the right hon. Gentleman will know from his membership of the Public Accounts Committee, the Department is accountable to Parliament for the effective use of national lottery distribution funds. As part of its normal sponsorship activities for the lottery overall and for individual distributing bodies, the Department is continually engaged in reviewing the performance of those distributing bodies. We will look very carefully at what has been done by each of the bodies and what can be achieved in future. That is the way in which we shall assess the performance of those lottery bodies, but, before reaching any final decision, we shall, of course, listen to what the lottery distributors and others have to say about the case for increasing the share of each good cause. The hon. Member for West Suffolk (Mr. Spring) effectively said that the Bill goes beyond the manifesto. The manifesto, covering as it did the whole range of Government's responsibilities, dealt with the lottery only briefly. We did publish, as he acknowledged, during the election campaign a policy document, "The People's Money", which set out in more detail our plans for widening the benefits of the lottery. It fleshed out our plans for the new good cause and made it clear that the lottery's success enabled the new good cause to be established while the millennium stream was still continuing. Who could object to that? If having such a new good cause is a good idea, why not do so as soon as it can be afforded without damaging the other good causes? "The People's Money" received wide and favourable media coverage, and we all know the result of the election that followed a week after its publication. The ideas in "The People's Money" are, in all essentials, the same as those that were put forward in our White Paper last July, which nine out of 10 respondents supported. I fail to see why it is not perfectly legitimate for us to base the Bill on ideas that we put forward so clearly before the election and which were so comprehensively endorsed by the British people. The hon. Member for West Suffolk is completely wrong to imply that there is some fundamental difference between the new good cause and the existing good causes. Is he saying that arts, sport and heritage are not core Government responsibilities? That may be his view, but it is certainly not mine. I turn to the matter of damaging existing good causes, which was raised by the hon. Members for Ashford (Mr. Green) and for West Suffolk. The Opposition have returned to the most tired argument that has been used throughout the passage of the Bill—that we are taking money away from the existing good causes. That is simply not true. The Bill reduces the percentages that the arts, sport, heritage and charities will receive, but the greater than expected success of the lottery means that those are smaller percentages of a bigger total—in terms of hard cash, which is surely what matters to everyone, particularly the lottery distributing bodies, the existing good causes will receive £1.8 billion each during the current licence period, exactly the same as was forecast when the lottery started. The other point that was made was that the good causes were counting on the extra income. The Opposition, when in power, never guaranteed that there would be no changes in the good cause percentage. They must have envisaged the possibility because they included in the 1993 Act provision to change the percentages by order. They never made it clear how they might use that power.

Peter Brooke (Conservative, Cities of London and Westminster)

rose—

Tony Banks (Labour, West Ham)

I will give way to the right hon. Gentleman, who knows a great deal about the 1993 Act. He can explain why no guarantee was given in that Act that there would be no changes in the good cause percentages, and why a 5 per cent. minimum was put in. That meant effectively that, for the five good causes, the amount could have been reduced to 5 per cent. and that could have been done by order in the House, if the present Opposition had been in government. Seventy-five per cent. could have gone somewhere else. We are giving far more of a guarantee to the existing good causes than the previous Government ever gave during their period in office.

Peter Brooke (Conservative, Cities of London and Westminster)

I was seeking to intervene to make a point that flows out of the exchange between us. Given that the original intention was that we should ideally have a debate in each Parliament, with the ability to change the percentages by order thereafter, having listened to the opinions of the House, would the Minister, when the time comes, be prepared to recommend to the business managers the possibility of having just such a debate at that stage, so that the House can contribute to the discussion of the allocation?

Tony Banks (Labour, West Ham)

The chief business manager—my right hon. Friend the Chief Whip—is sitting next to me whispering sweet nothings in my ear. I am sure that he heard what the right hon. Gentleman said and will be seized of the good sense of his suggestion. Let me finish on the commitment to the existing good causes. This is very important and it is where the trust element must come in. Time and again throughout the passage of the Bill, here and in another place, the Secretary of State, my hon. Friend the Minister for Arts and my noble Friend the Deputy Chief Whip in the other place have made our position on future changes on allocations abundantly clear and I am happy to repeat them. First, barring the extremely unlikely circumstances in which lottery income for good causes is less than £10 billion in total, we will ensure that each of the existing good causes receives by 2001, when the present licence expires, the £1.8 billion expected at the time that the lottery started. Secondly, the Government have taken no decision on how any returns beyond £10 billion might be allocated—there is no assumption that they automatically fall to the new good cause or any other. Thirdly, the Government have no plans beyond those that they have announced already—the reduction in the millennium share to 13 per cent. and the increase in the new good cause to 20 per cent. in autumn 1999—to alter the funding of the existing good causes. That applies both to 2001 and beyond. That is fairly clear; one cannot be more explicit about that. There is no way that the Department for Culture, Media and Sport is setting out to ensure that culture and sport do not receive money beyond 2001. I cannot make it any clearer than that and I hope that the hon. Member for West Suffolk will accept that point. I reject both the amendments.

Richard Spring (Conservative, West Suffolk)

With the leave of the House. The reassurances that the Minister has sought to give are wholly unsatisfactory because, as he knows, the new opportunities fund is a creation which involves a massive centralisation of power in the hands of a Secretary of State, which makes this completely different from the other good causes. Therefore, to protect the good causes, we seek to ensure that the minima are changed. As Lord McIntosh accepted, this is a radically different situation. Therefore, we will concentrate on amendment No. 1 to put down a clear marker to those who are concerned—the recipients of the lottery and those in the distributing bodies. We want to ensure as best we can that the smash-and-grab raid on the lottery does not continue and worsen.

THE NEW GOOD CAUSE AND THE RE-ALLOCATION OF LOTTERY MONEY

OBJECTS

Richard Spring (Conservative, West Suffolk)

I beg to move amemdment No. 5, in page 17, line 36, out from 'potential' to 'and' in line 40.

Richard Spring (Conservative, West Suffolk)

In the course of the past few days, I have read the Secretary of State's book "Creative Britain". In it, he describes the huge increase in our exports of radio and television material, the increase in employment in that area and the massive rise in sponsorship of the arts and in the number of cinema admissions. On behalf of my hon. Friends, I thank the right hon. Gentleman for so generously applauding the Conservative Government's 18 years in office. It was precisely the conditions created by that Government which led to the explosive increases so graphically set out in his 27-page introduction. As we have made clear in respect of the National Endowment for Science, Technology and the Arts—NESTA—we are not against the setting up of a national fund for talent; there is considerable merit in the idea. Indeed, it is based on a Conservative concept. It builds on the well-established and admirable philanthropic tradition of this country. We entirely support the principle of a fund that supports individual talent. We are fortunate in having many people of considerable talent who have contributed to our national life and won so many Nobel prizes. Our success compares extremely favourably with that of any other country, especially given our small population. The sad truth, however, is that the Government have missed an important opportunity. Elements involved in the establishment of NESTA in the form suggested in the Bill put at risk the success of the whole venture. We greatly regret the fact that the Government have chosen to establish it in this form. I appeal to the Minister even at this late stage to persuade the Government that NESTA' s objectives are incompatible with the sort of body that we believe could successfully nurture our national talent. We are deeply sceptical of the idea of setting up a quasi-governmental body, some of whose objectives will be overtly commercial. We know now why the Government have determined not to set up NESTA as an independent charity, despite the clear commitment given before the election to do so. As the Minister explained, the Government have decided to graft a commercial remit on to the original concept for NESTA, which, by definition, loses it the advantages of charitable status. The amendments are designed to remove the commercial elements and turn NESTA into the genuine trust for talent that the entire country would applaud. To set up a national endowment with true nobility of purpose would secure the support not only of the House, across party political lines, but of the whole country, desirous of enabling talented individuals to realise their talents to the full. We accept the advantages of establishing a body such as NESTA as an independent endowment, but, regrettably, NESTA, as proposed, will not be fully independent of the Government. As a consequence, it risks not being able to attract money from independent sources, which is a crucial element in the long-term success of NESTA. That is the crux of our concern about the establishment of that body. As I said on Second Reading, people simply do not quickly volunteer to give money to Government bodies—even Bernie Ecclestone, I dare say, might find it difficult to be so persuaded. I remind the House of the Labour party's commitment to NESTA: Our immediate objective would be to have NESTA-supported ideas earning copyright revenues by 2001. The National Endowment for Science, Technology and the Arts would be a national trust for talent, helping to turn bright ideas into successful and innovative businesses. It will be constituted as an independent charity. I stress those last few words. Labour continued: NESTA will invite successful figures in the arts, technology and science to contribute part of the value of their copyrights and patents to help the young talent of tomorrow. These contributions will go into a permanent endowment fund. To give NESTA an initial boost, limited contributions will be set aside from the new Lottery fund to add to this endowment". That commitment is to be found in the Labour party document of 23 April 1997. The Prime Minister reiterated those proposals before the election. In a press release on 27 April, he said: We propose to give a Lottery-aided launch to our proposal for a national talent fund—a National Endowment for Science, Technology and the Arts. NESTA will be an independent charity which will encourage successful people in the arts and sciences to donate part of the proceeds of their talent to an endowment fund which will foster new talent for the future". Those words are to be applauded. The amendments would remove the commercial aspect of the objectives set out for NESTA. They would give it a proper coherence and a real opportunity to acquire the national support that it deserves. In effect, they would make it work. There is a danger that the initial endowment of £200 million will be put at risk because NESTA, as currently constituted, will not attract the additional funding over time. As I said in Committee, we broadly support the aims of NESTA and would support the idea of just such an independent body dedicated to nurturing talent, especially in the arts. Indeed, the Conservative manifesto of 1997 included the following pledge: We will encourage the use of Lottery money to train young athletes and artists, with revenue funding for bursaries, concessionary tickets to professional performances and support for young people's organisations and productions. Therefore, there was considerable cross-party support, which the Government have unfortunately now put at risk. NESTA was in fact the development of an initiative first announced in April 1996 by my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley), to whom I pay tribute. It was always the view of the Conservative party that the lottery would evolve. That view was reinforced as the popularity of the lottery grew among those playing it and the communities that benefited from lottery grants. As my right hon. Friend the Member for Huntingdon (Mr. Major) said on Second Reading: there is the prospect of moving rather more from capital funding to revenue funding, which was always envisaged at the outset and, again, is perfectly sensible. The only points at issue are the specific details of what is proposed and the timing."—[Official Report, 7 April 1998; Vol. 310, c. 187.] I am happy to congratulate the Government on following the path set by the previous Administration, but they are risking the very success and popularity of the lottery by using it to fund areas that it was not originally set up to finance. Potentially, that could damage the image of the lottery and could end in failure. In Committee, we learned of the Government's continuing determination to use the lottery to supplement public expenditure on health, education and the environment—I use those definitions in the broadest possible terms. The amendments simply highlight another unexpected and unwelcome departure in lottery funding under Labour. We debated in Committee the unfortunate decision—which I believe will be regretted—to place NESTA under the control of the Secretary of State rather than to make it a genuinely independent body, as was at least the Government's original stated intention. We debated the disturbing funding arrangements for NESTA, which show that the Government have no faith that it will ever perform as an independent, self-financing body or that it will ever manage to attract significant contributions from independent sources. The evidence, as we shall see, is the scope for the Government to raid the original good causes to pay for NESTA. We are also concerned about the requirement placed on NESTA not merely to encourage talented individuals in the fields of science, technology and the arts and to contribute to public knowledge and appreciation, but to seek out and sponsor commercial success in those sectors. It is simply the latest incarnation of Labour's long-standing desire to pick winners, as the previous Labour Government sought to do so unsuccessfully. It is a further sign of Labour's inexhaustible faith in Government rather than the private sector. As we look back on the development of the venture capital industry in Britain, we must recognise that, although we have had many successes, more could be done. There is certainly an argument that many of the most important British inventions have been commercially exploited elsewhere. However, we recognised that when we were in government, in the considerable changes to the tax regime for venture capital. We sought to encourage and secure seedcorn capital, by the tax changes introduced by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). That is the way forward. If the dynamics of the small business sector, particularly the seedcorn, are to be nurtured and encouraged, it is through the tax mechanism and not by the Government picking winners. We have been there before, and I believe that once again it will be a considerable failure. A similar amendment was proposed and rejected in another place, when my noble Friend Lord Skidelsky said: The contention seems to be that we are very good at inventions but banks or others are reluctant to back them, so they end up being exploited overseas. The argument that our innovators have suffered from lack of venture capital is an old one, but it is very hard to prove. Surely, whatever the case, NESTA should not seek to become a venture capitalist or business angel in its own right. We should have learned by now that government agencies should not try to second guess the private sector. In the end it is the taxpayer, or in this case other National Lottery initiatives, who suffers the losses of bad decisions."—[Official Report, House of Lords, Grand Committee, 29 January 1998; Vol. 585, c. 108.] The difficulty about establishing that objective for NESTA is that in practice it may well embody the very worst kind of corporatist second-guessing. It is an ominous precedent which I wish to highlight again. By adding that specific aim to NESTA's remit, the Government are establishing a further call on the lottery in an area that should be the responsibility of the Department of Trade and Industry—if the Government have any role, other than via the clear tax incentives that my right hon. and learned Friend the Member for Rushcliffe introduced in the latter years of the previous Government. The Minister should reflect on that. If it is necessary or desirable to amend the tax regime, something should be worked out between the Treasury and the Department of Trade and Industry that would satisfy the integrity of NESTA. We should be happy to support such a policy, which would be separate from the commercial remit being given to NESTA. 9.15 pm The conventional new Labour wisdom is that the British economy is blighted by short-termism that prevents the British people from fulfilling our true potential; that we do not have a sufficiently vigorous or flexible enterprise culture to take advantage of all our talent for innovation. It was clear from the comments of Labour Members in Committee that the private sector was an alien and mysterious world to them, because so few had any practical experience of it. The aim of the clause is return to the state-sponsored enterprise for which there is no evidence of success in this country over a long period. If a market for an idea or project cannot be found in the private sector, it is folly for the Government to imagine that they know better. It is regrettable that the Government have chosen to saddle NESTA with that objective. We urgently ask them to reconsider, even at this late stage. If they were prepared to do so, we should happily support the establishment of NESTA. We discussed all the issues comprehensively in Committee, but the Government rejected outright any amendment that we proposed. At no stage did they even consider looking again on Report at any of the points that we had raised. That is unprecedented in the experience of many and shows the insecurity of Ministers. How much better it would be if NESTA were set up as a charitable trust—as the Government originally intended—along the lines of the National Trust, which was established by a series of Acts of Parliament and commands the support of millions throughout the country, or the Prince's Trust, which makes grants to businesses, but does not take on commercial risks. The Government are proposing a beast that is neither fish nor fowl. It is not charitable in its aims, so it cannot benefit from charitable status and will not attract the general public support that a charity enjoys, but it will not make any money either. Instead of attempting to be a venture capital arm of the Government, NESTA should act as a real endowment for talented individuals. Governments have a miserable record of picking winners in this country. There is no reason to suppose that that will change. I ask the Minister once again to consider the great potential that NESTA has. A clear message of bipartisan support could be sent out from the House. Creating a widely appreciated national endowment for talent is within the Minister's gift, but he must accept that the commercial element contains the seeds of NESTA's destruction and its lack of public acceptance. I hope that the Minister will reflect on what I have said today and what my hon. Friends said so often in Committee. He should return to the assurances given when the Prime Minister, then Leader of the Opposition, set out the original concept. If the Government returned NESTA to what was originally envisaged, even at this late stage, real hope would be offered to those talented and successful individuals who would enjoy the benefits of the endowment from the national lottery that NESTA offers.

Tom Pendry (Labour, Stalybridge and Hyde)

I had intended to make a lengthy speech on Third Reading, but as my hon. Friends on the Front Bench have been so forthright and clear in their answers on Report, I am left with just one narrow point that relates to amendment No. 5. It follows a point that I made on Second Reading which does not appear to have been acted on in Committee. My hon. Friend the Member for Eastwood (Mr. Murphy) made a similar point. It relates to NESTA and our promise—which I wrote—in the sports election manifesto. Page 10 of that document states: The endowment will not focus solely on excellence. It will be inclusive in its approach, encouraging access and partnership across the whole range of sciences, humanities, sports and the arts. On Second Reading, I suggested that the Government might see a way in which to develop a useful sporting role for NESTA in, for instance, sports science or sports information technology—both of which are crucial to developing world-class sport in the UK. Unfortunately, the Government seemed unable to move on that point in Committee. They appeared reluctant even to acknowledge the omission. I am sure that it was merely an omission and that the Minister for Arts was right at the time. Perhaps he is saving his best card until tonight, and will give sport—and me—some encouragement in the concept of NESTA at this very late stage. I congratulate my right hon. and hon. Friends on the Front Bench on their handling of the Bill.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful for the opportunity briefly to add to the excellent remarks of my hon. Friend the Member for West Suffolk (Mr. Spring) in pursuit of acceptance of amendments Nos. 5 and 6. I want to add to his remarks, not least because his reference to the Labour party's desire to pick winners struck a great chord. When I entered the civil service way back in 1979, one of our tasks in what was then called the industrial planning division—it seems a rather archaic title now—was to start to dismantle some of the measures that the previous Government had implemented precisely to pick winners. The National Enterprise Board, which was very like what the Labour party proposes, went about the task of trying to put public money into industrial and commercial enterprises with the objective of making money for the country and the taxpayer. Of course, it failed to do either. I say that as somebody who was once responsible for the science and technology budget in the Department of Trade and Industry. I disposed of £440 million. I shall elaborate briefly on the interesting debate on which my hon. Friend the Member for West Suffolk briefly touched. He criticised the Labour party's desire to move towards the market in proposing that NESTA should provide resources, take stakes in companies and acquire property to pursue commercial exploitation of an invention, new product or process. In moving towards the marketplace, one must realise that one is not behaving in the same way as one would in a genuine market. There is a conjunction of two principles—one of exploitation close to the marketplace and one of additionality. I found when working on the science and technology budget that, when one moves public money for the purposes of subsidy closer to the marketplace and at the same time applies the principle of additionality—I shall be interested to hear whether the Minister says that that is not to be applied in this context, although I suspect that it will be—one ends up with projects right at the margin of commercial exploitation. The market itself is quick to leap on those products, processes and inventions that have readily exploitable commercial potential. It leaves to the publicly funded or publicly subsidised body those projects that are not obviously commercial or will not obtain a full return. The net result is that the market says that the publicly funded operator can have all the projects that are right at the margins where the returns are doubtful. To reinforce what my hon. Friend the Member for West Suffolk was saying, Ministers should not be sanguine about the possibility of the project bringing forward returns to the taxpayer or NESTA for subsequent reinvestment. On the contrary, my hon. Friend was right to emphasise the value of the endowment in relation to talented individuals. That is precisely where the public sector—at some distance from the marketplace—does not necessarily exploit the potential. I hope that we have learnt not to seek to direct subsidy close to the marketplace in substitution for commercial judgments. I hope that we have learnt that there is a role for the public sector through the subsidy of research that is essentially some distance from the marketplace. There are significant externalities to the United Kingdom economy from subsidising that research because not all the benefits of that research can be appropriated to a particular project or the promoter. That is why the public sector puts funding and subsidy into projects further from the marketplace. Interestingly, there are precisely the same potential externalities available if one subsidises individuals who have talent—and I say that with a constituency interest. It is highly probable that many individuals in the area around Cambridge are precisely those who have the talent to bring their projects, products, processes and inventions to the marketplace. What they do not lack is the commercial exploitation around Cambridge. What is important to them is the process of bringing them out of some of the world-class research institutes in Cambridge university and giving them a start. That start will often be focused on their talents as individuals, demonstrated in the research environment. It will not necessarily be in relation to a particular project, but it will be in relation to their broader talent. In just the same way as public subsidy should be directed towards blue-skies research, the endowment should be directed toward people who can look to the blue skies but who are not necessarily close to the marketplace. On that basis, I support the new clause.

David Prior (Conservative, North Norfolk)

I wish to make two points in support of my hon. Friend the Member for West Suffolk (Mr. Spring). First, NESTA is mixing its drinks—mixing thoroughly laudable charitable aims and commercial aims. The great risk is that the almost inevitable failure of its commercial objectives will ultimately overwhelm its sensible charitable ones. I entirely agree with my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) that the history of Government organisations in terms of picking winners is a bad one. When they pick losers, it casts a shadow over the worthwhile charitable objectives. I am glad to see the Minister for Small Firms, Trade and Industry in the Chamber, as I wish to refer to the myth that there is a shortage of capital in the United Kingdom for decent ventures. I agree with my hon. Friend the Member for South Cambridgeshire that, at an early stage, potential entrepreneurs, scientists and artists need help, encouragement, training and education. However, a lot of capital is available in the commercial market and, in Cambridge, there are venture capital groups that specialise in science and high-tech firms. I ask the Government not to delude themselves into thinking that there is a shortage of capital.

Mark Fisher (Labour, Stoke-on-Trent Central)

I am glad that there is a measure of agreement that NESTA is fundamentally a good idea and that the United Kingdom is good at invention, design, engineering, science and medical and artistic innovation. Despite one or two comments from Opposition Members, I think that there is also general agreement that we are not so good at developing ideas in the private sector or at developing ideas and bringing them to the market. In framing NESTA, the Government have been guided by three important reports: the 1997 Confederation of British Industry report "Breaking the Growth Barriers for Technology-Based Small and Medium Sized Enterprises"—a snappily named document—which identified the need for early-stage finance and seedcorn investment; the 1997 House of Lords Select Committee on Science and Technology report "The Innovation-Exploitation Barrier", which identified the need for management of innovation, highlighting the importance of intellectual property; and the 1996 Bank of England report "The Financing of Technology-Based Small Firms", which called for partnership between the public and private sectors. All three reports identified a weakness, which is not to say that there is no good work. It was encouraging to hear from the hon. Member for South Cambridgeshire (Mr. Lansley) that there is, perhaps inevitably, a clustering in and around a great university such as Cambridge, which means that many good ideas will be produced and brought to market. However, Cambridge is perhaps better placed than some other areas to benefit from seedcorn investment; it will not be alone, but success there may not be reflected throughout the country. The belief that we are failing in some respects has led the Government—with, I think, the general support of the Opposition—to press forward with the idea that, good though we are at innovation, we are less good at developing ideas and bringing them to fruition; it will often be for the private sector to take on those ideas, products and services. There is some confusion about what NESTA will do. It will not be a rerun of the Industrial Reorganisation Corporation—it will not be a Government company sponsoring new ideas. It will do specific things: it will provide limited seed capital; it will provide guidance on the protection of intellectual property rights; it will raise awareness among banks about technological entrepreneurship; it will support networks for creative individuals; and it will provide a one-stop source of information. Those are practical ideas, which cluster around the problem—we do not intend that NESTA will replace the market. In his short but helpful speech, my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) asked whether NESTA would also support sport. He will appreciate that the projects that NESTA backs will be a matter for its chairman and board, who will be appointed very soon. However, there is no reason why sports products and services should not be supported, particularly where new technologies can help to improve performances, training or the medical understanding of sport, for example—it is easy to see where there may be interesting and fruitful conjunctions between technology, innovation and sport. I am sure that my hon. Friend will work with those organisations that will present interesting new ideas to NESTA. There is some confusion about whether NESTA will operate on the margins and whether it will duplicate the private sector. Although we appreciate that there are some dangers that it could do so, it is not our intention that it should. The hon. Member for North Norfolk (Mr. Prior) said that there was plenty of venture capital; I agree that there is plenty for some good ideas, but we should not ignore the 1995 report of the European Venture Capital Association, which identified the fact that, in that year, only £23 million was available for small and early-stage businesses, amounting to only 1 per cent. of the venture capital activity in this country. That suggests that there is not the scale of capital that there might be—which probably accounts for why we have been losing the benefit of the development of some of the innovations and techniques with which we have benefited other countries. Labour Members consider this a good, constructive, practical idea, and we commend it to the House. We think that amendments Nos. 5 and 6 would knock out the core of the development of products and services, the importance of intellectual property and the economic realisation of what NESTA is intended to foster and nurture, and we therefore hope that the House will reject the amendments if they are pressed to a vote.

Richard Spring (Conservative, West Suffolk)

The Minister made a point about the possible lack of venture capital in this country. The subject is debatable and arguable, but let me make another point to him again. The Minister fails to understand that if the Government indeed believe that there is a shortage of venture capital as seedcorn investment potential in this country, this is not the way to address the problem. It should be addressed by means of tax and other incentives. We should not put at risk an endowment, thereby depriving it of its charitable status. The Government are responsible for a total confusion of opportunities, which I very much regret. I cannot for the life of me understand why the Government are adopting such a means of dealing with a problem that they think exists.

Mark Fisher (Labour, Stoke-on-Trent Central)

The hon. Gentleman is being unusually doctrinaire. We are not talking about alternatives. Of course there is room for the tax system and the private sector, which perform their task very well and will continue to do so. They are not alternatives: we need them both. We believe, however, that there are gaps and weaknesses, and that our proposed system can work along with the existing tax incentives and seedcorn capital from the private sector and strengthen this important area.

Richard Spring (Conservative, West Suffolk)

I am afraid that that does not answer my point. The simple truth is that the system will not work. It has never worked in this form before, and it certainly will not work now. The most important aim of the national endowment was to secure a charitable status. It was an endowment which all of us could have been happy to support. It is a great shame that the Government are so determined to affix this particular commercial remit to the whole concept of NESTA. The House could have sent out the clear message that NESTA has an important role to play, across party divisions, as a national endowment body. Adhering to the old-fashioned and long-past idea that Governments can pick winners and impose a commercial remit destroys the value of NESTA in its entirety. I do not want to press the matter further, but we want to put on record our fear that NESTA—which has so much potential—is put at risk by the way in which it has been constructed in the Bill. I think it a great shame that the Government have moved away from their original commitments, which we would have been happy to support.

Chris Smith (Labour, Islington South and Finsbury)

I beg to move, That the Bill be now read the Third time. Let me first give a warm welcome to the hon. Member for East Surrey (Mr. Ainsworth) in his new capacity as shadow Secretary of State. In my dealings with him here over a number of years, I have always found his approach both courteous and constructive, and I look forward to fruitful and robust debate with him across the Floor of the House. He seemed to spend most of this afternoon and this evening reading my book. I recommend it to him as a somewhat more productive exercise than reading the fulminations of Mr. George Walden on the subject. The Bill has been the subject of much interest both inside and outside the House. It has also been subject to thorough scrutiny by the House. I place on record my thanks to members of the Standing Committee and especially the hon. Member for North Thanet (Mr. Gale) and my hon. Friend the Member for Bootle (Mr. Benton) for their excellent chairmanship. The Committee was thorough in its scrutiny, and all the issues were debated thoroughly—indeed, so thoroughly that reading the proceedings of the Committee it seemed to me that the same speech was made on different occasions by several Committee Members. On some occasions, it appeared to be repeated several times within the same speech. I must also thank my colleagues the Ministers for the Arts and for Sport for their sterling work both in Committee and on Report. Nor should I neglect to mention my noble Friend the Deputy Chief Whip in another place and my noble Friend Baroness Ramsay of Cartvale for their careful stewardship of the Bill in that place. We have never sought to argue that the lottery as introduced by the right hon. Member for Huntingdon (Mr. Major) and his colleagues was anything other than a basically good idea. I appreciate the sincerity with which the right hon. Member for Horsham (Mr. Maude), the hon. Member for West Suffolk (Mr. Spring) and their colleagues sought in discussions on the Bill to preserve what they see as fundamental aspects of their vision of the lottery. My only regret is that we have not been able to persuade them that we agree with them on more than they realise and, where we disagree, we are improving on what is there already, not spoiling it. I also thank the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) and the hon. Member for Southport (Mr. Fearn) for their contributions from the Liberal Democrat Benches. I am grateful for their support on many issues and their intelligent probing on others. Last, but definitely not least, I should thank all my colleagues on the Labour Benches who played a part in the discussions on Second Reading, in Committee and today. Their constructive and well-informed support, based on their knowledge of their constituents' needs, has been most welcome and has reminded us constantly of the rightness of what the Bill seeks to achieve. The Bill delivers our clear commitments in our manifesto and pre-election documents to making something good even better. If the amendments agreed by the House find favour in another place, as I very much hope, this Bill will pass into law playing a significant part in achieving the four aims that we set out in our White Paper: first, widening the benefits of the lottery to health, education and in due course the environment; secondly, reforming the way in which lottery distribution works throughout all the existing good causes; thirdly, setting up the National Endowment for Science, Technology and the Arts; and, fourthly, securing confidence in the way in which the lottery is regulated and operated. In connection with the last of those aims, I am particularly grateful that the House has agreed to important amendments to set up a National Lottery Commission and to open up National Audit Office access to the operator. The Bill is delivering our commitments, but it is only part of a wider picture. I ask the House to note, in particular, that today I am issuing new policy directions, under my existing powers, to the Arts Council of England, the English Sports Council, the National Lottery Charities Board and the National Heritage Memorial Fund. On Second Reading, I told the House that I was starting consultations on those new directions and it is particularly pleasing that they have been strongly welcomed by the distributary bodies and that they are being issued in final form with very little change. The new policy directions for existing distributors will, among other things, shift the focus away from big spending on bricks and buildings towards ensuring that more lottery money goes to people and activities. They will acknowledge the developmental needs of children and young people. They will remove the requirement for significant levels of partnership funding, which will make it easier for less wealthy organisations and areas to benefit. They will, for the first time, encourage distributors to consider how their strategies will contribute to sustainable development, and will invite them to consider the contribution that they can make through the good causes to reducing economic and social deprivation. They will ensure that all regions and parts of society can benefit from the lottery. I want everyone to have confidence that the money for good causes is allocated fairly and goes where it is needed. That is a central strand in our reform of the lottery, and our new directions will help us achieve it. I am particularly pleased that our proposals have been strongly welcomed by the bodies concerned. The Bill will help lottery distributors to be more strategic and proactive in their use of lottery money. We are streamlining the distribution system and helping applicants to cut through bureaucracy to make it easier for small community groups to find out about the lottery and receive grants. In many cases, decision making can be pushed closer to the grass roots. Taken together, the Bill and the associated directions open an exciting new phase in the lottery's existence. I commend the Bill to the House.

Peter Ainsworth (Conservative, East Surrey)

I thank the Secretary of State for his kind words on my appointment. Our paths have crossed several times in recent years, and I hold the Secretary of State in considerable respect. One afternoon, I even had charge of his dog; we need not go into that now, but I can assure the House that the dog came to no harm. It is a great honour for me to have slipped out of my stage management role of the past two years into playing a small speaking part at the end of deliberations on the Bill. I am well aware that the real stars were those who slogged through Committee. I pay tribute to them all, particularly to my hon. Friend the Member for West Suffolk (Mr. Spring) who guided the Opposition clearly and well. There were valiant contributions from my hon. Friends the Members for Mid-Dorset and North Poole (Mr. Fraser), for Ashford (Mr. Green), for Mid-Norfolk (Mr. Simpson) and for Eastbourne (Mr. Waterson). I pay tribute, too, to my immediate predecessor, my right hon. Friend the Member for Horsham (Mr. Maude), who brought his unique blend of elan and intelligence to his role in opposition. He is committed to listening to and speaking up for people whose lives are affected by the Secretary of State's Department. I have considerable respect for the Secretary of State. It is a pity, therefore, that he has been crunched so early by pressure from the Chancellor of the Exchequer. On the back of his finely decorated book, there is a picture by Damian Green—[HON. MEMBERS: "Damien Hirst."] I mean Damien Hirst; I apologise to my hon. Friend the Member for Ashford (Mr. Green). The painting is titled, "Beautiful snail crunching under the boot painting", and it reminded me of the Secretary of State crunching under the boot of the Chancellor. The previous Government set up and handed on the most successful lottery in the world. I hope that all hon. Members agree that that is some achievement, but we would never have claimed that the lottery was perfect. There are ways in which it can be improved. There are some welcome measures in the Bill. We have, for example, no fundamental objection to the clarification of the regulator's powers. We would support any sensible measure to improve the workings of the lottery, such as the introduction of better ways of handling smaller grants or removing bureaucratic impediments. As my hon. Friend the Member for West Suffolk said, we support the principle of the creation of the National Endowment for Science, Technology and the Arts, but we do not support it as a quasi-venture capital outfit controlled by the Secretary of State. Conservative Members warned of the dangers of a Government trying to pick winners. In particular, we will continue to support measures that would increase the funds available to the arts, sport, heritage and charities. Our first objection to the Bill is that far from assisting those good causes, it damages them. In answering that charge, the Government have sought to claim that the changes that they are making will benefit other good causes, such as out-of-hours activities in schools, health, the environment, science and technology. Those are indeed good causes, but that is not the point. If such causes are to be funded, they should be funded from central Government receipts, not by a raid on the arts, sport, heritage and charities. The Government also tried to argue that the good causes will not suffer because the lottery is so successful that it is providing more money than originally expected. This is utterly bogus. The extra money may or may not be forthcoming. My hon. Friend the Member for West Suffolk mentioned lottery fatigue, which has occurred in other countries. I am glad that the Minister for Sport is not suffering from lottery fatigue and that his lust for the lottery remains unabated, even if the bills are getting onerous. In any case, expectations have been built up by both the recipients and distributors of lottery proceeds. The Bill puts those expectations at risk. The distributing bodies know that and the Secretary of State knows it, too, as he acknowledges in his book. I have not read it all the way through, but I have read some of the reviews; it is a cruel world. He says: the distributing bodies have adjusted their expectations upwards to reflect the success of the lottery. The Bill is a semi-veiled attack on the arts, sports, charities and heritage. Unease about the Government's ability to deliver their pre-election nods and winks is turning into real concern and anger. Our second objection to the Bill involves a fundamental breach of the principle of additionality. We have heard much about that today and throughout the course of the Bill. I was on the Standing Committee in 1993 that considered the Bill that introduced the national lottery. My two clearest memories are first, that if the Liberal Democrat spokesman had had his way, we would not have had a national lottery at all; and secondly, I recall the immense pressure brought to bear on the Committee, especially by the arts world and the sports world, to ensure that money from the lottery was safeguarded against any attempt by the Chancellor of the Exchequer to pilfer it to support central Government funding in other fields. Labour members of the Committee voiced their vociferous support for the principle of additionality. The undertaking on additionality was given, and adhered to, by the previous Government. Despite the promises made by the Prime Minister and others at the general election, that undertaking has been broken by the Bill. Those lottery promises are due to join the mounting heaps of broken promises that the Government seem determined to leave behind. Our third objection is that the Bill ignores the clearly established principle that lottery money should be distributed by bodies that operate at arm's length from the Government. As the sorry story of the Bill has unfolded, it has become increasingly clear that the Government intend to use the new opportunities fund to divert money to its own favoured projects. The new opportunities fund and NESTA will be directly under ministerial control. We do not and cannot accept such a massive increase in political control over lottery players' money. The reason for that, once again, is contained in the Secretary of State's colourful book, although there is a sad lapse from his normal eloquence, so I shall torture the House only briefly with his grammar. He says: In a very real way, lottery players think of lottery money as `their' funds far more determinedly than they do with taxation. That is exactly the point—it may not be well expressed, but it is perfectly reasonable. Finally, the original national lottery was based on an understanding that it would be used to support local initiatives by local people with local support. The Bill undermines the principle of local support by introducing an unwelcome and subversive centralisation of power. The distributing bodies will, for the first time, be given explicit powers to solicit bids for money, and who is it has the power to appoint members of the distributing bodies? It is none other than the Secretary of State, who can also give them directions as to how they should distribute the proceeds. For the last time—

Chris Smith (Labour, Islington South and Finsbury)

Will the hon. Gentleman give way?

Peter Ainsworth (Conservative, East Surrey)

I was just about to quote again from the Secretary of State's book, but I give way.

Chris Smith (Labour, Islington South and Finsbury)

I am grateful to the hon. Gentleman for giving way. I am tempted to observe that the face may have changed, but the speech has not. He must accept that all the existing distributors in arts, sport, heritage and charities fall under exactly the same qualification of appointment by the Secretary of State and being subject to directions from the Secretary of State to which he has just referred.

Peter Ainsworth (Conservative, East Surrey)

Will the Secretary of State deny that the Bill contains new powers that he can exercise in that direction? No, he will not deny it.

Chris Smith (Labour, Islington South and Finsbury)

Let me make it perfectly clear: the new opportunities fund will operate in exactly the same way and under exactly the same rules as the other distributors. Parliament will have the power to introduce new initiatives from time to time, but the independence of the new opportunities fund as a body will be exactly the same as that of the other distributors.

Peter Ainsworth (Conservative, East Surrey)

The fact is that the Bill and the measure to which I have referred, which the Secretary of State appears not to affirm, is a wholesale attack on the existing good causes and represents a major extension of the Government's control over the national lottery and those who are likely to benefit from it. For the last time, I shall refer to the Secretary of State's book. [HON. MEMBERS: "More."] I have already referred to it almost as many times as the Secretary of State referred to it in his recent article in The Spectator and I do not want to give it any more publicity. In a sinister example of new Labour-speak, the right hon. Gentleman says: We now have the chance to reorient"— I like that— the lottery so that it reflects more closely the people's priorities. We know that, in new Labour-speak, the "people's priorities" are in fact the Government's priorities. The Government always think that they know best. The Bill takes away control from the distributing bodies and gives it to the Government; it takes money away from the arts, sports, heritage and charities and gives it to the Government; it breaks the principle of the arm's-length management and extends the dead hand of Government control to lottery procedures. That is the way to create, not a people's lottery, but a Government's lottery and a lottery for bureaucrats. That is a way to expand political patronage at the expense of the original good causes. Throughout the debates on the Bill, the Government have failed to acknowledge those concerns and have resorted to the evasion and sophistry that are becoming their hallmark. The Bill betrays not only the promises made by Ministers before the general election—we are used to that, although that would be bad enough—but the national lottery that we created. On those grounds, I urge my hon. Friends to oppose the Third Reading of the Bill.