National Lottery Bill

Public Bill Committee, 1 November 2005.

- Standing Committee A

Clause 11 - Distributing bodies: publicity

Don Foster (Liberal Democrat, Bath)

I beg to move amendment No. 14, in clause 11, page 6, line 8, at end insert ‘or’.

Frank Cook (Labour, Stockton North)

With this it will be convenient to discuss amendment No. 13, in clause 11, page 6, line 11, leave out from ‘Act’ to end of line 13.

Don Foster (Liberal Democrat, Bath)

[Interruption.] Mr. Cook, thank you for giving me this opportunity to try to speak over the various extraneous noises.

This is an important pair of amendments. I begin by saying that I am not opposed to national lottery distributors giving information about how they use the money. [Interruption.] This is very difficult, but I shall continue.

I have no objection to lottery distributors using schemes such as the blue plaque scheme to give members of the public who spend money on the national lottery a good indication of where the money goes. Indeed, I would encourage them to do so. The Committee will recall my hon. Friend the Member for East Dunbartonshire (Jo Swinson), whom I welcome to her place despite the interruptions, pointing out that, sadly, the public are misinformed about how lottery money is used. If, as we shall debate later, there are to be increased opportunities for members of the public to participate in decisions about where lottery good causes money goes, it is clear that there will be a need for high-quality information about how the money is spent.

I do not want anybody to misunderstand what I am saying. I am deeply concerned about lottery distributors encouraging people to play the national lottery.

Hugo Swire (Conservative, East Devon)

Will the hon. Gentleman give way?

Don Foster (Liberal Democrat, Bath)

I give way to the hon. Member for East Devon (Mr. Swire) and I am grateful to him for intervening.

Hugo Swire (Conservative, East Devon)

I totally agree with the hon. Gentleman’s clarion opening to this morning’s deliberations. I agree with him and share his support for promotion by distributors of projects with which they are involved, but does he share my hesitation—indeed, my nervousness—that if the Bill blurs the lines between Government money and lottery money, Government Departments will be able to piggy-back on lottery announcements and claim some of the credit for themselves?

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman is 100 per cent. correct, but, unfortunately, I disagree on one aspect. He said that Governments “could”, implying that they could do that in the future, but it already happens. If, like me, he is an assiduous reader of the annual report of the Department for Culture, Media and Sport, he will be aware that it is extremely difficult in that report to disentangle money that has been provided by the lottery for various projects from that which has been provided by the Government from taxpayers’ money. It is not a case of a problem in the future; there is a serious problem now. I have urged the Government to address that problem by much more clearly separating in the Department’s annual report the two funding streams and the uses to which they are put.

My clear concern in the amendments is to ensure that nothing in the Bill will lead lottery distributors to believe that it is right to promote the playing of the various national lottery games. In a minute, the Minister will tell me that I need not be concerned, but I am deeply concerned. At the weekend I logged on to the website of the Big Lottery Fund. Incidentally, the BLF does not yet formally exist but it has a website. It is promoting national lottery day on its homepage:

“National Lottery Day is a celebration of the amazing things achieved with Lottery funding. Get involved!”

What does “get involved” mean? It means get involved in the national lottery. That is one example of promoting the national lottery.

Adam Afriyie (Conservative, Windsor)

Will the hon. Gentleman give way?

Don Foster (Liberal Democrat, Bath)

In a second. I want to explain to the hon. Gentleman why I think that there is a cause for concern. Playing the national lottery is not the best way of giving money to good causes. The Committee will be well aware that if someone uses the most tax-efficient means of giving, the charity will receive £1.28 for every £1 donated, whereas if they give money via the national lottery, the good cause gets only 28p for every £1 given. If people wish the prime use of their £1—or whatever sum of money they have—to be in a good cause, giving it to the national lottery is not the most effective way of doing that.

Adam Afriyie (Conservative, Windsor)

The hon. Gentleman has cut me off. I was going to mention gift aid, but the hon. Gentleman has already mentioned it.

The Secretary of State is able to direct the staff of the distribution funds and is now seeking to enable those distribution funds to promote the national lottery and other elements. Paragraph (c) of new section 25E is quite broad because it states:

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

That is very vague, and I would describe it as a catch-all. Does the hon. Gentleman share my fear that the Secretary of State will use the distributors’ funds to promote not only the playing of the national lottery but any causes funded by the Government?

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman is very perceptive because he had already been thinking about gift aid; I am sorry I cut him off on that. He raises an entirely appropriate point, which to some extent echoes the point made by the hon. Member for East Devon. As I said, I entirely agree with him.

My concern is shared by many people. The National Council for Voluntary Organisations stated in its briefing last week:

“It is entirely inappropriate for lottery distributors to promote playing the lottery as a way of giving to these causes.”

The National Campaign for the Arts, giving clear support for the amendment in my name and that of my hon. Friend the Member for East Dunbartonshire, said in its briefing:

“publicity relating to “the National Lottery in general” should not be a function of distributors.”

I said that I was a perceptive man because I know what the Minister will tell me. We have already debated this issue on the Floor of the House on Second Reading, where I raised those concerns. The Under-Secretary of State for Culture, Media and Sport, the hon. Member for Stalybridge and Hyde (James Purnell) said—very clearly—in response to my concerns:

“The proposed changes are not intended to promote playing the lottery—they will not promote the sale of tickets—but to promote its benefits, especially support for good causes in general.”

There we have the Under-Secretary, on the Floor of the House, assuring me that I have got it totally wrong—despite the fact that I can point to advertisements—so presumably, my fears should have been allayed. But they were not; I remain deeply concerned about the matter.

Those assurances seem to be somewhat at odds with some of the other things that were said. In that same debate, the Under-Secretary said:

“the greater the trust in the lottery overall, the greater the number of sales”.—[Official Report, 14 June 2005; Vol. 435, c. 213.]

That shows that even talking about good causes, in the Under-Secretary’s eyes at least, is seen as a way of promoting the lottery overall. I began to get a bit worried about what he was saying. Then I thought to myself, “These people are honourable people. They have been clear and put it clearly on the record that it is not a matter of promoting the lottery because, like me, they recognise that it is not the most efficient way of giving money to charity. Perhaps I should not table the amendment.” I then did what all Committee members will have done, and studied in some detail the explanatory notes provided to us. They state that the clause

“will ensure that all the Lottery distributors are able to participate in the National Lottery Promotional Unit which seeks to raise positive awareness of and support for the benefits of the distribution of National Lottery funding across the whole country”—

so there could still be a generous interpretation—

“while contributing to the brand health of the National Lottery”

and, crucially,

“promoting loyalty and participation.”

What is the meaning of the word “participation” in that context? My real fear is that, without much clearer assurances than we have had from the Minister to date, “participation” will be interpreted in the same way I interpreted “Get involved!” in the Big Lottery Fund’s website advertisement. It will mean get involved—participate—by playing the national lottery. That is not what this clause should be about and I want very clear assurances from the Minister that that is not what it is about.

Hugo Swire (Conservative, East Devon)

I am delighted to support the hon. Member for Bath (Mr. Foster), in whose name the amendments have been tabled. I share his concerns. What he says is absolutely right. I share the view that the amendments would remove the ability—we might regard it as a compulsion—of lottery distribution bodies to promote participation in activities relating to the national lottery in general. As we have seen throughout, the Bill often leaves out as much as it says. In all fairness, it is fairly clear in what it is trying to say, but what it does not say is the extent to which the distributors will be limited in what they can spend. Nowhere does the Bill indicate what the financial encouragement or financial constraints would be for any one distributor. It would be up to the distributors, I imagine. They could spend 100 per cent. of any funds that they had in promoting their particular enterprise. If one distributor ends up spending more than another, there is no in-built mechanism to redress that. An awful lot of money could end up going to the national lottery promotional unit, which sounds like a Kafkaesque cover for more Government spin, rather than being used to support the causes for which it is intended. I will return to that in a minute.

We feel that the clause will place too much onus on the distributors to gain publicity for the national lottery as a whole. That function would be more properly carried out by Camelot or the successor to Camelot, if there is to be one. More important, we feel that the clause will encourage the feeling that playing the lottery is a means of giving money to charities. I am conscious of time marching ever onwards so I will not repeat everything that the hon. Member for Bath said, but it is worth making the point again that there is a distinction between playing the lottery and giving money to charity.

At the beginning of our deliberations, the Minister and I—he was in listening mode back then, which he is not at the moment—discussed at some length the reasons why people play the lottery. I think that the Minister thought that I was being rather cynical and jaundiced about it. I said that people played the lottery because they wanted to win money and that it was not an act of altruism, but stemmed from a desire to win a prize. Perhaps there is a feel-good factor in the knowledge that a percentage of the outlay will go to charity, but there is a very different thinking process involved when somebody plays the lottery compared with when they respond to a charitable appeal or give money through gift aid. We have heard that the difference is that, through the lottery, only 28p in the pound reaches good causes, whereas through gift aid it is £1.28. Manifestly, that is completely different. It would be quite wrong for the Government to encourage people to play the lottery under the mistaken impression that it is part of giving to charity, when the adverse effect on charities might be significant.

Richard Caborn (Labour, Sheffield Central)

“Might.”

Hugo Swire (Conservative, East Devon)

Of course. There is no proof. However, I wonder whether the Minister or his Department have received any representations from any charities that are nervous about the clause. If we agree to the clause unamended, in theory any of the distributors could heavily outspend any charity. That is the point, is it not? The distributors could so trumpet their own projects with lottery money that any charity would be left miles behind in trying to attract what could at the end of the day be the same amount of money. That is why I and my hon. Friend the Member for Bath and, I think, many on the Opposition Benches agree.

I do not say that lottery distributors should not publicise their projects as they already do. They should continue to do so, but that is far removed from promoting the lottery as a way of giving to good causes. I urge the Minister to accept our amendment. It has the backing of the charity community, it is a non-partisan point, it makes eminent sense, it would protect the charity sector, which the Minister is so keen to help, and it would signal to the charity sector that we are listening to what it has to say.

I ask the Minister, by accepting our amendment, to give a strong commitment that distributors will not be obliged to act as marketing agencies for the lottery as a whole.

Richard Caborn (Labour, Sheffield Central)

May I, by way of explanation, describe how we have arrived at protecting the lottery as it stands? You probably remember, Mr. Cook, that when we consulted on the Gambling Bill, there was a large discussion, and it included the Budd report “A Safe Bet for Success”. There was a big debate about putting the lottery into the marketplace and not protecting it, and much consultation took place about the protection of the lottery. It is a monopoly, and everyone accepts that, but the trade-off is that money is generated for good causes. Several charities made representations to us that we should consider charitable lotteries, and we did so in the Gambling Bill. I cannot recall the details, and I have no doubt that my officials will get them for me. If I remember right, we gave them roll-overs, an increase in stake prizes and an increase in the prizes themselves. That was welcomed. I think that we met all the charities’ requests.

It would be wrong to say that we did not take on board the charities’ concerns about their fundraising activities through lotteries. We did not, however, allow the national lottery to go into the marketplace as many asked us to. A political decision was taken, and to the best of my knowledge no one challenged it in either the Gambling Bill consultation or the consultation on this Bill, that whether or not people gambled on the lottery for the sake of gambling, it was a good institution for delivering and directing money to good causes. It is one of the most successful in the world to date, and it would be wrong to undermine it.

Andrew Turner (Conservative, Isle of Wight)

The Minister said that the lottery is one of the most successful in the world. He preceded that with a remark that it is one of the best mechanisms for directing money to good causes, but the hon. Member for Bath has made it clear that gift aid is far more effective—indeed, it is five times more effective at directing money to good causes. Does the Minister accept those figures, or is he saying that they are nonsense and that his assertion is built on evidence that overwhelms them?

Richard Caborn (Labour, Sheffield Central)

Very much so. If the hon. Gentleman lived in the real world he would know that, for example, of the 140,000 sports clubs that we now have in this country, 40,000 to 50,000 are entitled to claim community amateur sports club status: after consultation with the Central Council for Physical Recreation and all the governing bodies, there are now tax breaks and 80 per cent. mandatory rate relief, for which sports clubs have been asking for more than 30 years. At the last count, slightly fewer than 3,000 of the 40,000 to 50,000 eligible clubs had applied for that in an 18-month period. They are now receiving tax breaks and mandatory rate relief worth £6 million to £7 million. I give that example only as a comparison for those who think that people will give to charities. Because of representations made to us, we have gone to great lengths to provide community amateur sports clubs status, which gives tax breaks and mandatory rate relief. In the real world, people give to charities and take advantage of gift aid and the other tax breaks, but anyone who believes that people will transfer from playing the lottery to giving direct to charities in the way described by the hon. Member for Isle of Wight (Mr. Turner) is living in cloud cuckoo land.

Don Foster (Liberal Democrat, Bath)

Will the Minister give way?

Richard Caborn (Labour, Sheffield Central)

We may be going a little wide of the amendment, Mr. Cook. I was trying to explain that the real world is slightly different from the world portrayed by the hon. Member for Isle of Wight.

Don Foster (Liberal Democrat, Bath)

The Minister makes a fair point. Some people who will not give money to charity might give money to the lottery for reasons not related to giving to good causes and some of it might end up going to charity. I accept that entirely. However, our debate is simple. Is the intention that the Bill will lead to national lottery distributors promoting the playing of the national lottery? The Under-Secretary of State, the hon. Member for Stalybridge and Hyde (James Purnell), said on Second Reading that it was not, so I do not see the point of the comments that the Minister for Tourism and Sport has just made. Either the right hon. Gentleman is in favour of encouraging participation in the national lottery for the reasons that he has just given, or he is not. We need to know which it is.

Richard Caborn (Labour, Sheffield Central)

If the hon. Gentleman will bear with me, I shall explain, but I was trying to make a wider point first. The argument has been advanced this morning that if people do not play the national lottery they will give to charities. I challenge that assumption.

It is not for the national lottery to do that. It is for Camelot to promote the lottery and for the distributors to get people involved in the good causes. The Big Lottery Fund said of national lottery day, “Get involved!” It said that because there are many activities are taking place throughout the country that we can all celebrate and we can all get involved in those activities, which have been provided by the distributors through investment in all sorts of institutions, activities and projects. I was recently at the Eden project, which will figure in national lottery day. What is better than getting involved in the Eden project?

Hugo Swire (Conservative, East Devon)

I am glad to hear that the Minister has visited the Eden project. If he had been there yesterday, he would have been there with the next leader of the Conservative party.

Richard Caborn (Labour, Sheffield Central)

Who is that—David Davis?

Hugo Swire (Conservative, East Devon)

I should have said possibly the next leader of the Conservative party.

The explanatory notes describe the purpose of national lottery promotional unit as being

“to raise positive awareness of and support for the benefits of the distribution of National Lottery funding across the whole country,”

which is quite in accord with what the Minister has just said. However, they add that the unit will do so

“while contributing to the brand health of the National Lottery and promoting loyalty and participation.”

That is precisely what the Minister is not saying, although the hon. Member for Bath is saying it. Of course the unit will promote the distributors, but the notes clearly state that it will also promote the national lottery as a whole.

Richard Caborn (Labour, Sheffield Central)

As you know, Mr. Cook, the explanatory notes are merely a broad explanation of clauses. I shall give the definitive interpretation of the clause. I can see you getting quite angry this morning, Mr. Cook.

Amendments Nos. 13 and 14 would prevent lottery distributors from encouraging participation in activities involving the lottery in general. I understand why they have been tabled. Concern has been expressed by the National Council for Voluntary Organisations—I think the hon. Member for Bath asked who had made representations—that such activity would entail promotion of the lottery games and might imply that playing the lottery is an alternative to giving money to charity. There is no such intention.

Distributors are not in the business of promoting national lottery games. As I said earlier, that is Camelot’s responsibility under the terms of its licence. However, there is a connection between money that is spent playing the game and money that goes to good causes. It is important to recognise that and to ensure that distributors have the power to let the public see that link when they publicise where lottery players’ money has been spent. That has been an important element of the consultation on ways to involve the people who play the lottery, or at least to make the connection with what the investment and expenditure is spent on. We have been aiming for that during the consultation on moving the lottery forward.

Hugo Swire (Conservative, East Devon)

On that point, will the Minister give way?

Richard Caborn (Labour, Sheffield Central)

No. In particular, the power in question will ensure that all lottery distributors can take part fully in the activities of the national lottery promotional unit, which is intended to raise positive awareness of, and support for, the benefits of national lottery funding across the country.

As for who distributes the money and how they do that, I think that it was on your watch, Mr. Cook, that I accused the hon. Member for East Devon of at least questioning—

Andrew Turner (Conservative, Isle of Wight)

The Minister said impugning.

Richard Caborn (Labour, Sheffield Central)

The hon. Gentleman can read Hansard. His hon. Friend the Member for East Devon said in the Committee’s first sitting:

“Honeyed words indeed, but unfortunately clause 36E(1) of the Government’s own Bill states:

‘In exercising any of its functions the Big Lottery Fund shall comply with any direction given to it by the Secretary of State’.

We shall debate later just what the Big Lottery Fund is and just who is responsible for appointing it. I think that we shall find—lo and behold—that it will be the Secretary of State, so we are not reassured by that. This is another example of the Government’s raid on the lottery.—[Official Report, Standing Committee A, 25 October 2005; c. 32.]

So it goes on. People will read that in Hansard.

Hugo Swire (Conservative, East Devon)

That is a damp squib.

Richard Caborn (Labour, Sheffield Central)

It is no damp squib.

Frank Cook (Labour, Stockton North)

Order. I was being very tolerant there in an attempt to discover the point that was being made. I advise the Committee that we have had sufficient discussion on that point, and we have had ample opportunity to check Hansard. May we return to discussion of amendments Nos. 14 and 13?

Hugo Swire (Conservative, East Devon)

On a point of order, Mr. Cook. I think that you will agree that I cannot just let what the Minister said pass. He has several times accused me of impugning the Secretary of State or his officials. The occasion, apparently, was the one he just quoted, but I think that he would agree that that was a bit of a damp squib that said nothing about anyone.

Frank Cook (Labour, Stockton North)

That is not a point of order. The difference between impugning and accusing and the other semantics that certain hon. Members like to engage in have nothing to do with amendment No. 14.

Richard Caborn (Labour, Sheffield Central)

I could not agree more.

For the reasons that I have given, I ask the hon. Gentleman to withdraw the amendment.

Don Foster (Liberal Democrat, Bath)

Thank you, Mr. Cook. An American president once claimed that he could not walk and chew gum at the same time; I confess that I have had difficulty discussing the amendments and listening to the frequent announcements about the fire that was or was not burning in this building. As I did not hear what was being said, I confess that I have no idea about whether we are about to go up in flames. It seemed slightly unfair that other hon. Gentlemen were able to make their contributions in a quieter environment.

None the less, I listened carefully to the Minister. He seems to be trying to convince us that explanatory notes are a sort of broad-brush document, that they are not intended to explain the Bill and that we should not be concerned even if they are slightly misleading. I did not think that explanatory notes were intended to be like that, but so be it. If that is the case, do we not need an absolutely clear assurance from the Minister that a national lottery distributor will not engage in activities that by any stretch of the imagination could be interpreted as promoting the playing of national lottery games? That is a clear question, and we want a clear assurance.

Hugo Swire (Conservative, East Devon)

The hon. Gentleman will have better luck than I if he gets an answer from the Minister. Does he share my concern that the Minister has not addressed two other points? The hon. Gentleman may be coming to them. The first is the direct question that I asked about the financial mechanism governing how much distributors can spend on promoting activities; the second was whether the Minister had had any representations from charities that were concerned about the ability of distributors to outspend them in promoting so-called charitable causes.

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman and I worked together effectively and, I hope, efficiently, but on this occasion he is 100 per cent. correct on only one of two points. In fairness to the Minister—I am always keen to support and defend the Minister when it is appropriate—he did answer the second question by making specific reference to NCVO having been in touch with him, although it would be interesting to know whether any other bodies have been in touch. For example, I suspect that the Minister, like the rest of the Committee, has received the briefing from the National Campaign for the Arts, which is also concerned.

The hon. Member for East Devon is 100 per cent. correct that we have not heard anything from the Minister about his fair point on the proportion of money that a lottery distributor can spend on promotional activities. One would hope that such activities would promote the good causes to which the money will be put, rather than the playing of national lottery games.

One thing that we often do in these sittings is raise points, perhaps through probing amendments, and the Minister responds. If we think that we have a fairly clear answer from him, we agree to withdraw the amendment. I am willing to do that on this occasion, but I need an opportunity to study the Minister’s words carefully. I am not convinced that I have been given anything definitive enough to persuade me that the Minister is making it clear that national lottery distributors will not promote the playing of national lottery games, but I am prepared at least to examine the record.

The problem is that we are sometimes even more confused if we read the record. To illustrate what I am saying, during our deliberations last week, the Minister stated, in response to the hon. Member for East Devon,

“In any case, the amendment is unnecessary as the reallocation powers apply only to balances and not to commitments made by a lottery distributor.”

I then voiced concern about what he was saying, and the Minister in response to that stated:

“I am talking about the expenditure and the commitments that go with it.”—[Official Report, Standing Committee A, 27 October 2005; c. 147.]

Even when we read the record, we find ourselves confused. On this occasion, I would like the opportunity to read carefully what the Minister has said. If I and other Committee members are not reassured, I hope that we will have the opportunity to probe the Minister further at a later stage.

Perhaps in the interim the Minister will reflect on the words he has used to see if he can bring himself to say, “National lottery distributors shall not be allowed to promote the playing of the national lottery and national lottery games.” If the Minister persuaded himself to say that now, it would be even easier. Since he is not prepared to do that, and with a clear hope that we shall return to the matter if the words do not satisfy me, I beg to ask leave to withdraw the amendment.

Clause 12 - Isle of Man

Dissolution

Richard Caborn (Labour, Sheffield Central)

I beg to move amendment No. 10, in clause 15, page 9, leave out lines 23 and 24 and insert—

‘(1)The Secretary of State may by order provide that one or more of the following shall cease to exist—’.

Frank Cook (Labour, Stockton North)

With this it will be convenient to discuss the following amendments: No. 66, in clause 15, page 9, line 27, at end insert—

‘(1A)The Secretary of State may make different orders for different bodies or appoint different days under subsection (1).’.

No. 67, in clause 15, page 9, line 27, at end insert—

‘(1A)An order under subsection (1) shall maintain funding for commitments made by the bodies referred to in subsection (1) prior to their ceasing to exist.’.

No. 68, in clause 15, page 9, line 33, at end insert ‘and’.

No. 69, in clause 15, page 9, line 34, leave out

‘if it contains provision amending an enactment,’.

No. 70, in clause 15, page 9, line 36, leave out from ‘Parliament’ to end of line 38.

No. 102, in clause 16, page 9, line 42, leave out second ‘the’ and insert

‘, in relation to any old lottery distributor, a’.

Richard Caborn (Labour, Sheffield Central)

The amendments relate to clause 15, which deals with the dissolution of the old lottery distributors and the transfer of property. Clause 15 allows the Secretary of State by order to appoint a day on which the Community Fund, the Millennium Commission and the New Opportunities Fund will cease to exist. Such an order may include consequential, incidental or transitional provisions and unless it amends other primary legislation, it is subject to the negative procedure. Government amendment No. 10 clarifies that the Secretary of State will be able under clause 15 to appoint different dates on which the three Lottery distributors will cease to exist if required. The amendment will allow a greater degree of flexibility in deciding when to dissolve the existing distributors, allowing a seamless operational transition to the establishment of the Big Lottery Fund.

I commend the hon. Member for East Devon on amendment No. 66, which would serve much the same purpose as the Government amendment. Amendment No. 102, tabled by the hon. Member for Isle of Wight, would also make it clear that the existing distributors can be dissolved on separate days. I assure them that Government amendment No. 10 adequately deals with that point and makes amendments Nos. 66 and 102 unnecessary.

Amendment No. 67 would insert new words into subsection (1) of clause 15 to maintain funding for commitments made by the three named distributors prior to their dissolution. The amendment is unnecessary as provision is already made for that. Clause 16 provides that all the existing liabilities of the three distributors, including any funding commitments made prior to dissolution, are transferred to the Big Lottery Fund.

Amendment No. 69 would amend clause 15(3) so that the dissolution order would be subject to the affirmative resolution procedure and would therefore have to be debated in both Houses. We believe that this is completely unnecessary and would risk delaying the transition unnecessary and would risk delaying the transition Big Lottery Fund. The merits of whether these bodies should be dissolved and replaced by the Big Lottery Fund aside, the dissolution order is simply a necessary technical requirement to ensure a seamless transition.

The affirmative procedure will apply if the order contains consequential provision that amends other primary legislation in line with the recommendations of the Delegated Powers and Regulatory Reform Committee. I hope that, in the light of what I have said, hon. Members will not press their amendments.

Hugo Swire (Conservative, East Devon)

I think that we may at last have found some common ground in relation to Government amendment No. 10 and our amendment No. 66. It seemed to us odd that the Secretary of State would decide to dissolve three large non-departmental public bodies on a single day—that would be a sort of nuclear explosion. Both amendments would allow for a variation in timing, which is probably right.

That is less important than our desire to amend the process by which the distributors are changed. Our amendments Nos. 68 to 70 require that the order to dissolve lottery distributors be made under the affirmative, rather than the negative, procedure. Given the delays in the Bill, the number of statutory instruments that have been needed to keep the New Opportunities Fund and the Community Fund going, the fact that we still have no date for Third Reading and Report, and the absence of a properly established Big Lottery Fund, we felt it appropriate to ensure that the House would be satisfied that it was the correct time to dissolve a lottery distributor. After all, the current distributors were established after much discussion, debate and examination in the House and it seems only proper for them to be dissolved in that way.

Our amendment No. 67 is intended to ensure that all existing commitments have security of funding in the event of lottery distributors being dissolved. The hon. Member for Bath has already referred to his rather strange exchange with the Minister last Thursday afternoon. In the debate about the ongoing commitments of the distributors when the funding was transferred, the Minister contradicted himself. Referring to the amendment we had tabled, he said:

“In any case, the amendment is unnecessary as the reallocation powers apply only to balances and not to commitments made by a lottery distributor.”

When pressed by the hon. Member for Bath, he continued:

“I am talking about the expenditure and the commitments that go with it.”—[Official Report, Standing Committee A, 27 October 2005; c. 147.]

That was a fascinating diversion from what we had originally debated and what the Opposition understood to be the case. When the Big Lottery Fund is finally up and running and is not just operating in the shadows, we must ensure that no charities that are receiving money from the Community Fund suddenly find that their funds are being diverted elsewhere. I am sure that will not happen and that it is not intended to happen, but I am equally sure that the Minister will agree that the amendment will ensure that it does not happen. In any event, I hope that he will give an assurance in his reply that all existing commitments will be met either by the distributors that are about to be dissolved or by the Big Lottery Fund.

Richard Caborn (Labour, Sheffield Central)

By way of explanation, I wrote to the hon. Gentleman on 30 October. I have no doubt that he has a copy of the letter, which states:

“Most commitments are legally binding agreements between the distributor and the grant recipient and the new section 29A inserted by the Bill would not allow us to transfer those commitments which would still have to be legally honoured by the distributor. That is why I have underlined the need to ensure that commitments are fully taken into account when deciding if and how to exercise the transfer power.”

That is the explanation. If there is any dubiety about this, we will try to clear it up. This is not a question of semantics—we are not trying to be smart. The provision is about trying to bring some discipline to the ordering of the lottery and about using the funds properly so that they are there for the good causes. If hon. Members want to make that a debating point, fine—I can debate as well as the next person. However, I am trying to make things clear for people up and down the country who are running schemes. If there is any difference, I will try to clear it up. We can have debating points, but the people out there who are running such schemes need that assurance. We will bring some discipline to the expenditure and to the balances.

Don Foster (Liberal Democrat, Bath)

I am grateful to the Minister for what he just said. I hope that he accepts that there is a need to clarify the point. He has now said on the record that the balances will transfer without the commitments, he has also said on the record that the balances will transfer with the commitments and now he has just told us that we could have a situation in which the balances will transfer with some of the commitments, but not all of them. We have three different scenarios. I accept that the Minister says all that in good faith, but, as he just acknowledged, the issue needs to be sorted out. I hope that we can get together and find a solution with which everybody is happy, and raise the issue at a later stage of the Bill.

Richard Caborn (Labour, Sheffield Central)

I am prepared to do that, and I shall try to ensure that a definitive position is provided on that point. Even though there may be grey areas, I shall ensure that it is done not just for the Committee—which is important—but for those people who could be affected by the provision. I hope that they will not, because I hope that the balances will come down due to the disciplining of the distributors. If they act in that way, there will be no need to take action. I shall ensure that we respond to the hon. Member for Bath, and that a definitive position is taken.

Mr. Swirerose—

Frank Cook (Labour, Stockton North)

Order. Can I be clear? Is this an intervention or a speech?

Hugo Swire (Conservative, East Devon)

It is an intervention, Mr. Cook.

I am most grateful to the Minister. I have not received his letter—again, I am afraid. This point requires clarification, as it is seminal. The Minister has given three different answers, as the hon. Member for Bath said. It is absolutely critical that not only the Committee but those people outside this place who could be affected know what is being discussed and whether the Minister’s word is as good as what he says in Hansard. I welcome his attempts finally to clarify what he was attempting to say. It caused great anxiety to his civil servants at the time.

Clause 16 - Transfer of property, &c.

Andrew Turner (Conservative, Isle of Wight)

I beg to move amendment No. 103, in clause 16, page 10, line 27, after ‘section’, insert

‘or section 36E of the principal Act’.

This is a simple amendment, and I shall make a short speech. Subsection (8) refers to the Transfer of Undertakings (Protection of Employment) Regulations 1981, and says that

“nothing in this section shall affect the operation”

of those regulations, which are important to the employees of the funds that are to be dissolved.

Section 36E, which we have agreed to add to the principal Act, gives the power to the Secretary of State to make directions on the employment of staff in particular. The directions may also have consequences on their terms and conditions of employment. I am looking for an assurance from the Minister that nothing in that new section will affect the operation of the Transfer of Undertakings (Protection of Employment) Regulations 1981.

Richard Caborn (Labour, Sheffield Central)

It seems to me that amendment No. 103 seeks to ensure that any directions given under new section 36E do not affect the Transfer of Undertakings (Protection of Employment) Regulations 1981—more commonly referred to as TUPE. Presumably, the concern is that the financial directions under section 36E(3) relating to the employment of staff may affect the application of TUPE. If that is correct, I am happy to tell the hon. Gentleman that the amendment is unnecessary, as directions cannot affect the operation of any legislation including TUPE.

Whether TUPE applies to a particular transfer is a matter of law depending on the precise circumstances. However, whether it applies or not, Government policy on transfers within the public sector is that all employee rights will transfer to the new body. That is set out in the Cabinet Office’s statement of practice on staff transfers in the public sector. I hope that this explanation provides the hon. Gentleman with the assurance that he seeks, and that he will withdraw the amendment.

Andrew Turner (Conservative, Isle of Wight)

It does, and I beg to ask leave to withdraw the amendment.

Clause 17 - Outstanding balances

Hugo Swire (Conservative, East Devon)

I beg to move amendment No. 71, in clause 17, page 10, line 42, leave out ‘an old lottery distributor’ and insert

‘the Community Fund and the New Opportunities Fund’.

Frank Cook (Labour, Stockton North)

With this it will be convenient to discuss amendment No. 72, in clause 17, page 11, line 3, at end insert—

‘(1A)Money that immediately before the appointed day is held in the National Lottery Distribution Fund for distribution by the Millennium Commission shall on that day be allocated under section 22(3) of the National Lottery etc. Act 1993 (as substituted by section 7 above).’.

Hugo Swire (Conservative, East Devon)

The clause deals with the outstanding balances of the bodies that are to be wound up. We have already debated whether that should be done by affirmative or negative resolution. The amendments seek to separate the Millennium Commission’s balances from those of the New Opportunities Fund and the Community Fund before they all merge into the Big Lottery Fund. We have debated what the Millennium Commission’s balances should be, and I refer to a written answer that the Minister gave to me last month:

“The Millennium Commission’s current balance held in the National Lottery Distribution Fund is £83 million, of which £67 million has been committed to existing grant programmes and for operating costs. The Millennium Commission remains in operation, and Commissioners retain discretion to offer further grants where they believe this to be appropriate. Under the provisions of the National Lottery Bill, the Big Lottery Fund as successor body, would take on any remaining balance and funding commitments.”—[Official Report, 21 October 2005; Vol. 438, c. 1244W.]

So there we have it in black and white.

The amendments are partially a response to that. We are not wholly convinced of the rationale behind the Millennium Commission’s uncommitted expenditure—which is probably about £16 million, perhaps a little less by now. Nor are we convinced that any balance remaining after all existing commitments are paid out should be swallowed up by the Big Lottery Fund. We have already heard that the Big Lottery Fund will benefit from the proposed rule changes on interest and the National Lottery Distribution Fund. Why should the Big Lottery Fund need even more money when it stands to get more than £600 million a year, or is that just an easy way for the Minister and his officials to do things?

I suggest that we put the remainder of the Millennium Commission’s balance, whatever it might be, back into the National Lottery Distribution Fund pot for distribution among all the distributors. After all, the Millennium Commission originally gave money for projects that were related to sport, the arts and heritage. There is no reason why only one sector should benefit from any unspent balances. I know that the Minister will seek to tell the Committee that the Big Lottery Fund will be responsible for monitoring Millennium Commission projects, but I question whether that will cost £16 million. In addition, why should not all the lottery good causes benefit from future receipts from the Millennium Commission, such as the potential sale of the dome, to which the Minister referred earlier? It will be interesting to know how far the Minister has got in trying to arrange the sale of the dome, what money that might yield and why it could not be fairly redistributed rather than, as is proposed, being put into the one big pot of the Big Lottery Fund. I cannot see why that money should go to the Big Lottery Fund alone, and I ask the Minister to reconsider.

Richard Caborn (Labour, Sheffield Central)

As the hon. Member for East Devon says, the amendments would require the remaining balance of the Millennium Commission fund to be distributed to all good causes. Amendment No. 71 would prevent the Millennium Commission’s remaining balances from being transferred to the Big Lottery Fund. Amendment No. 72 would require the balances to be distributed proportionately to all good causes according to their normal percentage share, as provided in section 22(3) of the National Lottery etc. Act 1993.

The current balance of the Commission is £83 million, of which £67million is committed. As successor body to the Millennium Commission, the Big Lottery Fund will be obliged to take on the funding commitments for the Commission’s existing projects. The combined effect of the amendments would therefore be to prevent the remaining balances from meeting those commitments. Indeed, it would be to rob those concerned of the promised funding. It would not be right to transfer the liabilities of the Commission to the Big Lottery Fund without also transferring its assets.

Amendment No. 72 would prevent the use of any uncommitted element of the balance by the Big Lottery Fund for its own projects, including big transformational projects of national significance similar to those funded by the Millennium Commission.

We have tried to bring the three funds together financially, but we have also brought the staff together. I am pleased that we have gradually been transferring staff from work on the millennium project at the Millennium Commission and integrating them with what will be the Big Lottery Fund. They are working well together, so some of the big projects can still be carried out, with the expertise of the personnel who are carried over to the Big Lottery Fund.

Adam Afriyie (Conservative, Windsor)

We all accept that if the Millennium Commission has liabilities the funds should be available to meet them. I assume that there are audited accounts. However, it is still not quite clear to me what the justification is for putting the remaining balance in the Big Lottery Fund rather than distributing it to all the good causes via the main distribution mechanism.

Richard Caborn (Labour, Sheffield Central)

I do not know, although I could find out for the hon. Gentleman. I guess that probably 20 schemes, or slightly more than that, are still running. Some, by their very nature, are overspending, so the Millennium Commission has to take a view on whether to continue to give support. I think that the hon. Member for Bath knows that in his constituency the spa area has cost a few bob. Some major schemes of that kind have still not come to fruition. I visited a fantastic one on Thursday night in Leicester, which will still be developing for another 12 or 18 months. There are liabilities that could come back to the Millennium Commission—and then to the Big Lottery Fund.

Don Foster (Liberal Democrat, Bath)

Without stretching your patience, Mr. Cook, by making reference to a constituency issue, may I suggest that the Minister might want to go further in his response to the hon. Gentleman? My understanding would be that the total amount of money, after commitments, that would be left with the Millennium Commission, is of the order of £15 million, and that a large number of projects are currently making bids to the commission to use that money. Therefore, any assurances made now that the money will not be available would be deeply distressing to projects around the country—and I do not refer to any one in particular.

Richard Caborn (Labour, Sheffield Central)

The hon. Gentleman is right about transferring the funds. The Millennium Commission has been involved in some major capital projects, some of which have not yet come to fruition. Some have come back to it, like the Eden project, which in just the past few months has received an extra £7 million for the education project. That is continuing, and I hope that the fact that we have transferred many of the staff to the Big Lottery Fund will mean that there will be continued development of some of the schemes in question. They will continue for a good many years to come and will be a big asset to the nation. We are trying to manage those factors, through finance and personnel, to ensure that a seamless transfer and, I hope, continued development take place.

I hope on those grounds that the hon. Gentleman will withdraw the amendment.

Hugo Swire (Conservative, East Devon)

Yes and no. I am extremely glad that the staff who are moving over are working well together. That is clearly a good thing and to be encouraged. I take on board the Minister’s points, not least about the ongoing commitments of the Millennium Fund. I enjoyed the almost subliminal plea from the hon. Member for Bath. I cannot possibly think to what overspend or need for more money he could be referring, but we will let that one go.

The Minister talks about the principle, but I think that that is clear. What he did not address in his answer to the point raised by my hon. Friend the Member for Windsor was the potential gain to the Big Lottery Fund through the sale of any assets originally funded by the Millennium Fund—an issue that I also raised, citing the dome. The Minister argues that 20-odd existing projects are still under way, and I accept that. Clearly, other projects such as the dome, which are worth a lot of money will—

Mr. Cabornindicated dissent.

Hugo Swire (Conservative, East Devon)

Well, I hope that they are worth a lot of money, or else the situation is even worse than we in the Opposition and the majority of people in the country ever deemed it to be. For the fiasco that it has turned out to be, I hope that the Minister will get some money for it at the end of the day.

Everyone is talking about principle, on which we are keen in the Conservative party. What is the principle of allowing all the finance and money realised by the sale of assets owned by or previously operated by the Millennium Commission to go automatically to the Big Lottery Fund and not to be shared among the other good causes? This is another occasion on which I will not be able to withdraw the amendment.

Richard Caborn (Labour, Sheffield Central)

If we were to take that to its logical conclusion, would the other distributors also accept the liabilities? A proportion of any liabilities for Millennium Commission projects should be accepted as well as the assets. Is that what the hon. Gentleman is arguing?

Hugo Swire (Conservative, East Devon)

I believe that the Minister is to write to the Committee to clarify whether a commitment follows the money. Again, we alluded to that earlier and you would not allow us to go back over that ground, Mr. Cook. We have had two or three different answers.

Richard Caborn (Labour, Sheffield Central)

I was very clear. The remaining assets of the Millennium Commission will transfer to the Big Lottery Fund with liabilities, which it will take on board. Is the hon. Gentleman saying that the cash would be transferred—something in the order of £15 million to £20 million—and that those to whom it is transferred would also take on their proportion of the liabilities? Somebody somewhere has to pick up the liabilities. We have, in law, to accommodate for that. Is it fair that those who receive the remaining assets also stand to pay for the liabilities? That is what we have to understand; there are assets and liabilities. He is saying, “Let us distribute the assets, but do not bother about the liabilities.” Is it fair that whoever receives the assets also receives a proportion of the liabilities?

Hugo Swire (Conservative, East Devon)

The point is that the Minister has an advantage over the Committee as, presumably, he knows what the net assets, if there are any, are. We must assume that there are, and if there are then the situation presumably does not arise.

Adam Afriyie (Conservative, Windsor)

There is a simple concept in accounting called net assets, which is the difference between assets and liability. It is not complicated. Whatever net assets remain after calculating liability minus assets need to be transferred somewhere. The question is whether those net assets should go to the Big Lottery Fund or be shared between all the funds?

Richard Caborn (Labour, Sheffield Central)

I see.

Hugo Swire (Conservative, East Devon)

I am glad that the Minister sees.

Don Foster (Liberal Democrat, Bath)

Before the last fascinating exchanges took place, the hon. Gentleman was about to complete a sentence which began something like, “This is another occasion on which I have not yet been convinced by the Minister and I will not be prepared to withdraw the amendment.” If that is how the hon. Gentleman was planning to finish the sentence, it may be helpful to tell him that the Liberal Democrats will not support him if he presses the amendment to a Division, for the simple reason that the amendment does not refer to net assets at all—will he please confirm that?—and, were it accepted by the Committee, it would mean handing over to different distributors money that had already been committed. We are not dealing with net assets, even if that were a good idea, and I am not convinced that it would be a good idea.

Hugo Swire (Conservative, East Devon)

I am grateful to the hon. Gentleman. I am sad that he would not support me if I were to press the amendment to a Division. I have enjoyed his support during the past few days, but the Conservative party has survived without Liberal support since 1912 and will do so again. However, I take his point.

Andrew Turner (Conservative, Isle of Wight)

Twenty-two.

Hugo Swire (Conservative, East Devon)

I stand corrected—1922. By extending the debate on this point, with your indulgence, Mr. Cook, I have tried to tease out what the Minister is getting at. Until the confusion about distributors and the reallocation of funds and what goes with that is cleared up by the Minister, we should not divide.

Andrew Turner (Conservative, Isle of Wight)

As the clause refers to money, I am beginning to wonder whether the Minister, who has suddenly become interested in liabilities, believes that the funds will be in debt. He shakes his head. He does not believe that the funds will be in debt. Does he therefore believe that, apart from the money—apart from the bank account, as it were—the funds will have some other net liability when they are wound up, or does he believe that there will in fact be a net asset as described by my hon. Friend the Member for Windsor when the funds are wound up?

Hugo Swire (Conservative, East Devon)

The question is directed to me, but I am unable to answer on behalf of the Minister. It is clear that the Minister does not know the position of the Millennium Fund. That is strange, given that he seeks to wind it up and to transfer assets and liabilities, whichever they may be, to the Big Lottery Fund. It is strange that the Minister cannot give us even a guesstimate as to what the situation is. It is extremely difficult to enshrine in legislation and take into account what we do not know.

I am happy to let the Minister answer on the bigger question and then seek to return to this matter on the Floor of the House. At that time, we may have had greater clarification from the Minister as to the net position of the Millennium Commission. Therefore, I do not wish to prolong this debate any further. I have succeeded in my aims and I beg to ask leave to withdraw the amendment.

Clause 18 - Consequential amendments

Richard Caborn (Labour, Sheffield Central)

I beg to move amendment No. 11, in clause 18, page 11, line 32, leave out ‘, 30’.

This minor technical amendment completes several consequential amendments that fall out of the Horserace Betting And Olympic Lottery Act 2004.

Clause 1 - Constitution

Hugo Swire (Conservative, East Devon)

I beg to move amendment No. 18, in clause 1, page 1, line 6, after ‘members’, insert

‘but not more than seven’.

Frank Cook (Labour, Stockton North)

With this it will be convenient to discuss the following amendments: No. 19, in clause 1, page 1, line 8, leave out subsection (3).

No. 20, in clause 1, page 1, line 19, leave out subsection (4).

Hugo Swire (Conservative, East Devon)

What a cracking pace we are going at.

Richard Caborn (Labour, Sheffield Central)

A canter.

Hugo Swire (Conservative, East Devon)

A canter, says the Minister, great aficionado of the turf that he is.

Clause 1 and amendments Nos. 18 to 20 deal with the make-up of the National Lottery Commission. Amendment No. 18 would insert the words

“but not more than seven”

after “members”. Amendment No. 19 would remove the Secretary of State’s ability to appoint the commission’s chairman. Amendment No. 20 would remove her ability to appoint the chief executive or any other employee of the commission. Most such organisations maintain a split between commission members and staff, and the amendment would maintain the status quo. Taken together, the amendments would leave the commission’s structure as it presently is.

We are not convinced of the need for more than seven commissioners. Again, we debated that on earlier clauses. In any case, the commissioners are presumably paid out of lottery funds, although we have established that we do not know how much.

We also do not believe that the commissioners’ current practice of selecting their own chairman needs to be changed. In an earlier exchange, the Minister suggested that the arrangement had not worked well and that it had not been a happy one. Perhaps he will tell us exactly why he thinks that that is the case. I suspect that he will again say that he is merely doing what he has been asked to do; this time by members of the National Lottery Commission. Although I understand that the practice of electing a chairman every 12 months might have its drawbacks, I am not convinced that that justifies the new powers in the clause. In any case, the issue is worth debating.

If the timing is the problem, why not allow the members of the commission to elect their own chairman for two, three or four years? I do not see why the power has yet again to be vested in the Secretary of State, which, as the Minister will have discovered by now, makes me uneasy. Can he point to any members of the commission who are saying, “Please take this democratic power away from us. We are completely incapable of selecting our own chairman”? It is interesting that schedule 2A to the 1993 Act, as amended in the document that the Minister has so kindly provided, shows just how the Secretary of State proposes to extend her powers in this regard.

Why is the issue of who selects the chairman so important? The commission has wide-ranging powers over the lottery licence and holds the key, in effect, to a multimillion pound commercial operation. A decision on a new licence is just around the corner, and we shall come to it in 2009; well, we in the Committee are not coming to it in 2009, although at this rate we might do. We are coming to it later in our proceedings. Given that that is about to happen, we should adopt the arm’s-length principle and keep the selection of the chairman as far out of ministerial hands as possible. The issue should be managed by the impartial commissioners. It is also possible that the Minister might not be in place in 2009, at which point someone else may have different ideas about it.

The amendments pursue the theme that we have followed throughout the Bill whereby, at every turn, we seek to resist the move towards a concentration of power with the Secretary of State. Where better to resist that move than in the composition of the commission, who should chair it and for how long. I hope that the Minister considers the amendments reasonable. I look forward to his response.

Adam Afriyie (Conservative, Windsor)

First, it seems to me that, whether organisations are public or private, the power lies in the hands of whoever is able to appoint the chairman of the board of directors or of the body corporate and the chief executive who takes the day-to-day executive decisions. Without the amendments, the Secretary of State can appoint as many members as he sees fit. Who is to say that if five members did not agree with the Secretary of State, he could not water down the board by adding another 20 or 30 members? I do not mean the present Secretary of State, of course, but a future holder of the office.

Secondly, if the members have been appointed in the correct fashion, what is the problem with them selecting the chairman of the board? They have to work with him. It seems to be standard procedure for many public and private bodies.

My third observation is that having the power to appoint the chief executive officer—the person who makes the day-to-day decisions—means that the Secretary of State would have complete control of the day-to-day operation of the organisation and not simply of the overall direction or strategy that needs to be implemented by that organisation.

I hope that the Minister has some clear answers, and that he has some concessions in mind.

Richard Caborn (Labour, Sheffield Central)

I can assure the hon. Gentlemen that 97 per cent. of my Department’s expenditure goes to non-departmental public bodies. The Secretary of State does not spend her time micro-managing all those quangos. It is the last thing on her mind. We live in the real world. There is no micro-management of NDPBs. We have broad policy statements, and act on the Nolan principles, within the civil service code and with all the other constraints put on the Secretary of State. The real world is not as the hon. Gentleman describes.

The amendments seek to change the composition of the board of the National Lottery Commission. Amendment No. 18 seeks to limit the number of commissioners to seven. The purpose of clause 1(2) is to remove the current limit of five commissioners and to allow, when it can be shown to be desirable, for extra commissioners to be appointed. That will allow flexibility for the commission to be strengthened if required; for example, when undertaking the competition for a new operating licence, which is a significant undertaking. The amendment would remove some of that flexibility and prevent the appointment of more than seven commissioners, even if those additional people could contribute expertise and experience to the successful regulation and licensing of the national lottery.

Amendment No. 19 would prevent the Secretary of State from appointing the chair of the commission, which would return us to the current system under which the members appoint their own chair and the chair changes every year. That was identified as a significant weakness of the current arrangements during our review in 2003. It significantly hinders the commission’s ability to maintain direction and the ability to acquire persons of the highest calibre. There was considerable support from respondents to the review for a permanent chair, to be appointed by the Secretary of State, consistent with the normal arrangements for non-departmental public bodies. That will allow the commission to acquire a chair with the skills and abilities to take it through the next licensing competition and, I hope, beyond.

Amendment No. 20 will prevent the Secretary of State from appointing a chief executive and possibly another member of the commission staff as commissioners. It will provide increased flexibility to enable the commission to carry out its functions effectively. It will also bring the commission in line with arrangements such as those in the gambling commission, and those that are common among the commercial companies with which it deals.

Don Foster (Liberal Democrat, Bath)

Will those new powers to appoint the chief executive as a member of the commission be exercised on the basis of a recommendation from the commission? I note further that in relation to another member of staff being appointed to the board by the Secretary of State, the Bill makes specific reference to

“on the recommendation of the Commission”.

Will the Minister provide an assurance that in both cases the appointment will take place only if there is a recommendation from the commission to the Secretary of State that that person be appointed to the commission?

Richard Caborn (Labour, Sheffield Central)

The answer is yes, on both counts. The provision will apply to the chief executive and to other members. I am glad that the hon. Gentleman made it clear, because there has been a misunderstanding. The Secretary of State will not appoint the chief executive. That will be done in the normal way. It is only the appointment to the commission that the chief executive is concerned with. There is a clear distinction. The chief executive is appointed by the operation, not by the Secretary of State.

Don Foster (Liberal Democrat, Bath)

In view of those clear assurances, will the Minister explain why in relation to another member being appointed to the commission, there is specific reference in the Bill to

“on the recommendation of the Commission”,

but in relation to the chief executive being appointed, there is no reference to that recommendation? Will the Minister, for example, be willing to table his own amendment to make matters clear?

Richard Caborn (Labour, Sheffield Central)

Yes, I shall consider the point that the hon. Gentleman has raised so there is no misinterpretation of the provision. I have given him a clear assurance, and I shall ask my officials to revisit the provision. For those reasons I hope that the hon. Member for East Devon will withdraw the amendment.

Hugo Swire (Conservative, East Devon)

My fear is that we may be deserted again by our new comrades in arms, the Liberal Democrats. The hon. Member for Bath is clearly satisfied that the Minister will tidy up the Bill by bringing clarity to it, and by clarifying in particular the point about whether the Secretary of State will appoint a member of the commission on the recommendation of the other commissioners, rather than pluck a name out of a hat. That point made us nervous.

The Minister again calls for flexibility, and he cites the gambling commission. It makes me nervous, but in the scheme of things, other aspects of the Bill make me more nervous. Therefore without further ado, I beg to ask leave to withdraw the amendment.

Clause 2 - Disclosure of information

Richard Caborn (Labour, Sheffield Central)

I beg to move amendment No. 2, in clause 2, page 2, line 19, leave out ‘of Customs and Excise’ and insert

‘for Her Majesty’s Revenue and Customs’.

Frank Cook (Labour, Stockton North)

With this it will be convenient to discuss Government amendments Nos. 3, 100 and 101.

Richard Caborn (Labour, Sheffield Central)

Government amendments Nos. 2 and 3 replace references to the commissioners of Customs and Excise in new section 4B, which is inserted by clause 2, with ones to the commissioners for Her Majesty’s Revenue and Customs. The merger of Customs and Excise and the Inland Revenue under the Commissioners for Revenue and Customs Act 2005 took place after the introduction of this Bill. The hon. Member for Bath and others had to address the same issues when considering the London Olympics Bill. Hence the need to update the reference in clause 2.

Government amendments Nos. 100 and 101 need a little more explanation. Clause 2 provides for a gateway to allow for information to be exchanged between the National Lottery Commission and Her Majesty’s Revenue and Customs. The main purpose of the gateway is to allow the commission to seek information from HMRC in order to vet applicants for lottery licences to ensure that they are fit and proper persons, and to allow HMRC to obtain information to allow it to administer lottery duty. A similar gateway exists under the Finance Act 1993, but the clause updates the gateway to allow the onward disclosure of information to the National Audit Office in response to requests from the Public Accounts Committee.

The information provided by HMRC under that gateway is sensitive. Information that is held by HMRC is subject to a statutory duty of confidentiality, and is protected against wrongful disclosure by a criminal offence, such is the importance placed by the Government and Parliament on the confidentiality of such information. The Commissioners for Revenue and Customs Act 2005 reflects the fact that there was clear cross-party support for the principle of ensuring that appropriate safeguards are in place to protect HMRC’s information. Having considered the strength of feeling shown on the issue in all parts of the House during the passage of that Act, I would not wish to weaken those safeguards. Therefore Government amendments 100 and 101 insert into the Bill a criminal offence of the wrongful disclosure of information received from HMRC. The terms of the offence mirror the offence that applies to HMRC staff. Information provided by HMRC to the National Lottery Commission will be afforded the same protection that it would have had had it been received by HMRC. That will reassure taxpayers that their information is appropriately protected within the NLC.

The amendment delivers the protection for customers’ confidentiality that is needed to ensure that the public have confidence in the way in which HMRC handles information that it obtains, and I have equal confidence in the management and staff of the NLC, who remain committed to the principle of confidentiality.

Andrew Turner (Conservative, Isle of Wight)

The first two amendments appear sensible, but I am concerned about the subsequent ones, which seem to allow a considerable amount of information to be disclosed. Although the purposes set out in the amendments seem to be sensible, I am not clear whether subsection (ac) in amendment No. 100 applies to any information that is disclosed by the NLC or whether information may be disclosed without the consent of the commissioners of HMRC. Can the Minister give some more information about the purposes for which the information might be disclosed without the consent of the commissioners and why that information might not have been sought from the commissioners in the first place? Chinese whispers are never an effective means of communication, and information that has been obtained from HMRC must surely be better communicated by that body in the first place.

Moving on to proposed new section 4C of the 1993 Act, I am not clear whether it applies to the disclosure of information by an individual or by the commission in general. Is it an offence for the commission to disclose information that it is not entitled to disclose or to require an individual who is an employee of the commission to pass on information that he is not entitled to disclose? Alternatively, if an allegation were made that an employee of the commission had wrongfully disclosed information, would it be a defence for him to say he had been instructed so to do by the commission?

Richard Caborn (Labour, Sheffield Central)

To be honest, I did not follow the whole of the hon. Gentleman’s argument, but I shall try to explain what we aim to achieve through the amendments. There is no dispute about the first two amendments. Their purpose is to protect the confidentiality of the information that the Revenue holds. If that information is passed to a third party, the same standards on confidentiality that apply to the Revenue must apply to the receiving organisation. That is what the amendments would achieve. The staff would have the same responsibility.

The other amendments would also apply that to the NAO and introduce consistency throughout the organisations—there is no dispute about that—and maintain confidentiality in the disclosure of information to the Revenue. Any third party, whether the NLC or the NAO, would under the same constraints as the Revenue. That is what the amendments would achieve. If there were a transgression by a member of staff, the same would apply whether they were Revenue staff, NLC staff or NAO staff.

Procedures will be put in place to deal with any transgression by an individual who has received information and the same procedures will carry through. That is the object of the exercise and that is what the amendments would do. We want consistency and protection of confidentiality for people who deposit information with the Revenue.

Hugo Swire (Conservative, East Devon)

Have there been any cases of criminality within the national lottery to date that have prompted the change?

Richard Caborn (Labour, Sheffield Central)

No.

Clause 3 - Licensees

Don Foster (Liberal Democrat, Bath)

I rise to try to persuade the Minister to explain precisely why clause 3 is before us. It changes the description of whoever might receive the new licence to run the national lottery when the current licence expires. As we know, there will be a competition and the Government’s desire, which I and my colleagues share, is that it will be a single licence, although there will be a reserve power to break it up. We expect that one entity will win the new licence, whether it is Camelot or a replacement.

The clause changes references to “body corporate” to “person” because the recipient of the licence could be a person. I suspect that the Minister will say that that is to enable the choice of operators to be widened to allow an individual or person to come forward for the great honour of running the lottery. However, it would be helpful if the Minister could give us at least a short explanation of why there should be a change in the wording.

Richard Caborn (Labour, Sheffield Central)

The hon. Gentleman nearly got it right, but not quite. The explanation is slightly wider than he suggested. The clause amends the 1993 Act to allow the National Lottery Commission to award a licence to run the national lottery or a game that forms part of the national lottery to any person instead of only to a body corporate. I am introducing this change so that national lottery legislation will mirror the recent Gambling Act 2005, which introduced personal licences. The National Lottery Commission should be able to award a licence to an individual if it wishes to do so. The change will not alter the commission’s ability to award a licence to a company or other corporate body.

Don Foster (Liberal Democrat, Bath)

I am grateful to the Minister for reminding me—I should have known about that because I served on the Committee that considered the Gambling Bill with him for many long weeks. I want to clarify this issue. Is the Minister saying that a person who holds a personal licence that was awarded under the Gambling Act might receive the great honour of running the national lottery at the end of the current licence? If so, were a body corporate to win it, presumably there would be a nominated person within that body who would hold the personal licence. Given all the issues that we debated on the problems that can occur if the nominated person within a body corporate drops dead, might there be a problem about who holds the licence? I remember the riddle and conundrum on that—will the Minister clarify that issue?

Richard Caborn (Labour, Sheffield Central)

I, too, remember that very well. The body corporate is its own entity. No, there will not be an individual licence holder: the body corporate will hold the licence. We are extending the Act to allow the National Lottery Commission to award the licence to a person who has a personal licence from the Gambling Commission, and who, therefore, will be a fit and proper person, because the Gambling Commission will make sure of it. However, the National Lottery Commission will want many more assurances than just a licence from the Gambling Commission before awarding the licence. We do not think that individuals who have gone through the licensing procedure should be debarred. The clause is an extension. We are trying to ensure that we do not close off any avenues. All the issues that the hon. Gentleman raises will have to be part of the procedure to grant the licence.

Don Foster (Liberal Democrat, Bath)

I apologise, Mr. Cook, for stretching your patience, that of the Committee and, no doubt, the Minister’s. I may be the bearer of a small brain, but I am genuinely confused. The Minister says that the clause extends the options. If he had said, “We are now saying ‘body corporate or person’”, I would be perfectly happy, but the clause does not add “or person” to the 1993 Act; it deletes “body corporate” and inserts “person”. I have before me what I am led to believe is called the Keeling version of the Bill, which has been referred to frequently, and which deletes the words “body” or “body corporate” and inserts “person” several times. Therefore, it does not say “body corporate or person”. If I am right to say that the term “body corporate” will go, who is the person in a body corporate to whom the Minister refers?

Richard Caborn (Labour, Sheffield Central)

I can give the hon. Gentleman only the legal interpretation—I admit that I am sometimes bemused by legal interpretations. I am advised that “person” includes “body corporate”. I am probably as bemused as the hon. Gentleman, but that is the legal advice. Just to make sure that he and I are absolutely clear—

Hugo Swire (Conservative, East Devon)

And everyone else.

Richard Caborn (Labour, Sheffield Central)

And everyone else, including the hon. Member for East Devon, if I may say so—he will probably disagree with that, but at least I have tried my best. I will get the wording clearly defined. The common-sense approach is that the clause extends the Act to include a person as well as a body corporate. I will write to the hon. Gentleman on that.

Don Foster (Liberal Democrat, Bath)

I promise that I will not intervene on the Minister on this point again, Mr. Cook, but I ask that in the explanation that the Minister makes available to me and, I am sure, members of the Committee and you, he should make something absolutely clear. He says that “person” includes a body corporate. Earlier, he said that if that person was a single, individual human being, they would have to have a personal licence under the Gambling Act. However, he also said that a body corporate did not have to have a licence. That needs to be sorted out, because we cannot have a person who is defined one way needing a licence, but a person who is defined another way not needing one. I am confused and I look forward to the explanation.

Richard Caborn (Labour, Sheffield Central)

I shall try to give that explanation in writing to members of the Committee.

Andrew Turner (Conservative, Isle of Wight)

I am grateful to the hon. Member for Bath for repeating what he thought the Minister had said, because that is what I thought he had said, too. I was not clear, however, on what basis he was saying it. He asserted that a person who was a human being, rather than a body corporate, had to have a licence under the Gambling Act, but I can see no reference to the Keeling version in sections 5, 6 or 7 of the Act, even as amended. Was that assertion correct?

Richard Caborn (Labour, Sheffield Central)

This is a completely separate licensing regime from the one in the Gambling Act. The purpose is to allow a person or body corporate to hold a lottery licence. From a common-sense point of view, the legal interpretation can create some confusion, and I shall try to get that interpretation put into lay person’s words to explain the object of the exercise.

I say again that a body corporate licence, which is not an individual licence, can be awarded in the same way as in the past. We are now extending such provisions to individuals. I shall make sure that what the lawyers are trying achieve is fully explained to the Committee—probably in words of one syllable and definitely in common-sense terms. I am assured that what they are trying to achieve is the right way forward.

Hugo Swire (Conservative, East Devon)

I am grateful to the Minister and I hope that he will include Conservative Members when he informs the Committee how he arrived at his position. However, there is clearly something behind the drafting, because it applies to the licensing of bodies in sections 5 and 6. When the Minister gives us the legalistic, definite interpretation of what he seeks to do, will he also tell us what representations, or even protests, made him want to change the wording, so that we can see how that thought process evolved?

Richard Caborn (Labour, Sheffield Central)

I will.

Clause 4 - Length of licence

Hugo Swire (Conservative, East Devon)

I beg to move amendment No. 21, in clause 4, page 3, line 7, leave out ‘15’ and insert ‘10’.

Frank Cook (Labour, Stockton North)

With this it will be convenient to discuss the following amendments: No. 22, in clause 4, page 3, line 13, at end insert—

‘(1C)Any provision included under subsection (1B) may not enable the licence period to be extended for a longer period in total than that allowed by subsection (1A)(b).’.

No. 74, in schedule 1, page 15, line 26, leave out ‘15’ and insert ‘10’.

Hugo Swire (Conservative, East Devon)

We now enter the choppy waters of the licence renewal and the length of licence, and we have just heard who can apply for the licence. I suspect that what is really behind all this is the fact that a sense of panic is beginning to creep into the Government because, given the constraints that they and the Bill impose, there are perhaps not that many people out there who are particularly keen to apply for the next national lottery licence when the present one expires in 2009. No doubt we shall pursue that further during our discussion of this group of amendments.

Amendment No. 21 relates to proposed new subsection (1A), which states:

“The period specified under subsection (1) must—

(a) begin with the date of grant of the licence, and

(b) not exceed 15 years.”

The amendment would limit the length of a licence to operate the national lottery—it is currently held by Camelot—to 10 years instead of the proposed 15 years.

The second amendment in the group, amendment No. 22, inserts a new subsection. It ensures that any extension to an operator licence granted by the commission does not exceed the length of licence as stated in subsection (1A)(b), which, as I said, we seek to amend to 10 rather than 15 years. The third and final amendment, amendment No. 74, is a consequential amendment to schedule 1, which will be necessary if we are to change the length of the licence under section 7 of the 1993 Act.

Taken together, the amendments signal our concern at the Government’s proposals in the clause as a whole. I shall not detain the Committee for long, but I want to find out why the Government want not only to extend the licence period beyond the current seven years to 15 years, but to allow licences to be carried on ad infinitum.

Having seen the national lottery—that great Conservative creation—operate, I think that we all acknowledge that it can be an expensive operation at the outset, given the new machines, the technology that is required and the advertising. There is a need constantly to update networks to take advantage of up-to-date technology, new games and so forth. However, I do not see that that in itself is sufficient argument for granting licences for up to 15 years. Perhaps a near equivalent is the charter given to the BBC—a topical subject, given that Lord Fowler’s interim report was published this morning. That is granted for 10 years, of course.

Now that the national lottery is up and running, I do not believe—I am happy to be corrected by the Minister—that the same huge start-up costs that Camelot faced in 1994 would be faced by anyone who was granted a licence. Indeed, from what we read, Camelot appears to have no problems turning in a profit. I think that £30 million was paid to shareholders last year. If Camelot were to be the successful bidder for the next licence, no doubt it would make huge economies of scale by virtue of being the original operator.

I hope that the Minister can assure the Committee that there will be no pressure on the lottery commissioners unduly to extend operator licences. I hope also that he will assure the Committee that a decision to extend licences would not be based on any fear that there may not be another bidder for an operator licence in 2009. After all, such a fear could explain the power in the clause to extend operator licences and we saw during the last licensing process just how badly the Government got it wrong.

I have described the fear that lies behind the amendments and my thought process in drawing them up. We all hear on the trusty grapevine that the Government are in something of a quandary. We are approaching the end of 2005 and the new licence has to be issued in 2009. The gap is beginning to close. I suspect that when Ministers first turned their attention to the issuing of a new licence, they thought that there would be a clamour of activity and that people such as Sir Richard Branson would be queuing round the block to become the new operators of the national lottery.

I hear that the reverse is the case, and that the Government are now moving into that indefinable area otherwise known as near panic. That is why they are trying to give themselves “flexibility”, which is the Minister’s favourite word—flexibility in allocating a licence to a person or a body corporate; flexibility in giving one licence or multiple licences; and flexibility in extending the period for which the licence can be granted or in allowing it to be extended by the commissioners. Flexibility seems to be the Government’s answer to the looming crisis—I use the term advisedly.

I do not seek to undermine the national lottery. It is an excellent game; when it works, it benefits causes in each of our constituencies. I do not wish to undermine the lottery at a time when new games designed to fund the Olympics are being introduced, particularly as it is being undermined by the Government.

I see that the Minister is writing something and circling it in pink; he is chuckling to himself because he clearly thinks that I have been undermining the lottery. It is not me who has undermined the lottery but the Government. They have been keen to siphon off at least 50 per cent. of lottery spending to make up for the lack of Government expenditure. That is why sales in recent days have not been as good as everyone had hoped.

The Minister’s answer is to extend the licence. The question is who has been getting at the Minister to make him want to do it? He agreed to write to Committee members telling us about his thought processes on the granting of a licence to a body corporate or a person; and he agreed when I intervened on him, saying that he would make correspondence available to the Committee and say whether pressure had been applied on him to change the wording. In much the same way, I hope that he will tell us what representations he has had on extending the period of the next licence.

Adam Afriyie (Conservative, Windsor)

I am glad that my hon. Friend has raised that point. It would seem shocking that the Minister should respond to pressure from an incumbent in whose interests it would be to make such changes.

Hugo Swire (Conservative, East Devon)

My hon. Friend goes further than I would dare in suggesting that it might be the incumbent—but it could be. We will not know if it is the incumbent unless the Minister shares that information with us. He may say that it is privileged information, and that it could be prejudicial to the incumbent. One never knows what kind of information one will be given by Ministers.

My hon. Friend the Member for Windsor makes a good point. If it is the incumbent and the Minister is willing to act under pressure, whether from the incumbent or from anyone else, will that be done for reasons of logic—because the Minister and the Secretary of State believe that the previous licence was too short—or in response to the fact that there is only one bidder, and that the bidder is calling the shots? I suspect that my hon. Friend is hot on the trail of something, and it would be good if the Minister allowed the Committee to share whatever information he has.

Adam Afriyie (Conservative, Windsor)

I have an extensive background in technology, and I recognise that the situation with regard to the technology that delivers the national lottery service has changed. In 1995, the internet was pretty much embryonic, whereas nowadays it is ubiquitous. I suspect that technology cannot really be the justification for extending the licence, and that there must be some other reason for doing so.

Hugo Swire (Conservative, East Devon)

As I said, I agree with my hon. Friend, particularly if Camelot is, in effect, the only bidder and is granted this new long licence. I cannot believe that it will have to replace all the technology in year one. I presume that some of the technology could continue and that Camelot could phase it in and out, as could any corporation turning in profits of £30 million a year. All of us who still hold shares—declared or otherwise—in companies and are not obliged to sell them would be very happy to hold shares in a company that already had a licence of this sort, that was already returning profits of £30 million and that was, in effect, being given the opportunity to bid for a longer licence and that would not have to spend huge amounts of money in start-up costs, which it had to do right at the beginning. My hon. Friend makes an extremely good and valid point.

I hope that I am wrong. I hope that the Minister and the Government have created such a thirst and hunger for the licence that there are bidders, who might listen to the debate or read the record of it, who would be pleased to bid for the next licence because there is such faith in the Government’s handling of the national lottery, despite all the things that they have got wrong—from the dome to the creation of the Big Lottery Fund, from the merging of Government spend with lottery spend. We return, however, to the question of the length of the licence. I still do not believe that a licence should be granted for this long. The fact that the licence should not exceed 15 years means that it could be for 15 years, which could well be the duration of three Parliaments, thereby binding three Parliaments to using the same operator.

Three Parliaments hence the Minister will no doubt be ennobled and might even be the chairman, with expenses, of a lottery distributor. He might even be a lottery licensee, or be involved in one of the gambling areas. He will be entitled to do all that, provided that he notifies the civil servants and complies with all the forms.

Richard Caborn (Labour, Sheffield Central)

In a Labour Government.

Hugo Swire (Conservative, East Devon)

Perhaps by then, after 15 years of another Conservative Government, it will be Labour’s turn again. We could waste a lot of time looking towards those far-off days, Mr. Cook, and you, for one, would not allow me to do so.

Three Parliaments is a long time to grant a profitable licence of this sort. It is profitable, because if the company is turning in £30 million now, what will it be turning in once it gets its act together in 15 or 20 years? This is, in effect, a licence to print money.

Adam Afriyie (Conservative, Windsor)

My hon. Friend makes the key point that the operation of the lottery is, in effect, a private monopoly and a licence to print money. Perhaps the Minister is simply proposing that we extend that licence to print money, but I am not sure that we all want that to happen when technology is not driving the decision.

Hugo Swire (Conservative, East Devon)

Indeed. We return to the basic problem; if the national lottery were given a DNA test, the test would show that the Conservatives were the mother and the father.

Frank Cook (Labour, Stockton North)

Order. May we return to the basic problem in a less repetitive way?

Hugo Swire (Conservative, East Devon)

I am grateful for your protection, Mr. Cook. I was about to return to the question of the length of the licence, and to say again that this represents a move away from what the Conservative party had in mind when the licence was introduced. Unless the Minister is prepared to give us the information we seek, he should accept our amendment.

Andrew Turner (Conservative, Isle of Wight)

One of the things that concerns me about a lengthy licence is that with the guarantee of the business the lottery operator may become complacent, distribute more of his profits than perhaps he should and invest less in the development of the lottery. Let me take an example referred to by my hon. Friend the Member for Windsor. If, at the beginning of a 15-year licence, one invests in a lot of technology, there will be no great incentive to invest in new technology in seven or eight years time, despite the fact that it may have changed over that time as much as it has over the past 10 years.

Hugo Swire (Conservative, East Devon)

My hon. Friend is of course entirely right. The Minister will almost certainly argue that we have to provide that length of time to allow any operator to make the worthwhile investment needed. That does not add up, because technology will change and will constantly need to be renewed as the years roll by. Clearly, that is not a sufficient argument, particularly if Camelot is given the new licence, as it will not have to phase in new terminals and technology in year one anyway and will write that off in the same way that any company in the corporate sector would.

Somebody or some group has got to the Minister or his officials at some point to argue that the length of the licence needs to be extended. All we seek to do is to establish who they are and why they did that.

Don Foster (Liberal Democrat, Bath)

I congratulate the hon. Member for East Devon, who has brought to the Committee a whole new approach to probing amendments. For example, if the hon. Gentleman desperately wanted to ensure that more people rode bicycles, he would no doubt table a probing amendment to change taxation law, introduce huge additional taxes on bikes, add a bicycle road tax, and extend congestion charging and even the end-of-life EU regulations to bikes. It seems to me that he has done exactly the same with this series of amendments.

The hon. Gentleman, quite rightly, told us that it was a probing amendment that sought to ascertain why the proposed length of the new licence was what it was in the Bill. He said that he had concerns about what was going to happen, and I share those concerns. He will be aware that during the last round of bidding for the lottery licence, there were only two compliant bidders. There is cause for concern that next time around not many competitors will enter the field. I share wholeheartedly the hon. Gentleman’s belief that competition is crucial. It is the only way we will ensure that the process is not a licence to print money, as he and his hon. Friend the Member for Windsor put it, but is rather a means to ensure that the maximum amount of money is given to good causes. We are at one in believing that.

We are not at one on all the remarks made by the hon. Member for East Devon. He referred to the fact that sales are not as good as was hoped for. The whole Committee ought to express pleasure at the way in which the sale of lottery tickets continues to rise in marked contrast to what is happening in a number of other countries. I think that we can say, notwithstanding the inevitable blip that happened a few years into the operation, that we have, overall, the most successful lottery in the world. We should praise that and not be critical of it. That does not stop the hon. Gentleman and me from taking exactly the same approach, in our belief that competition is crucial if we are to ensure the maximum income for good causes. Where we fundamentally disagree is over the belief, implied in the amendment, that reducing the length of the licence will improve the chance of decent competition. The reality is in my view the exact opposite. Only with a new licence that lasts for a realistic, sensible length of time will we guarantee reasonable competition.

Three years ago, when the Public Accounts Committee reviewed competition for lottery licences, it concluded that there was a real risk that there would be no effective competition for future licences to run the National Lottery. The Committee was concerned three years ago, just as the hon. Member for East Devon and I are concerned now. The question, then, is how to generate competition. Is it, as the amendments suggest, by reducing the length of the licence, or is it, as the Government propose, by accepting a longer period? In this instance, we agree with the Government’s line.

It is worth reflecting that the Department consulted extensively on the issue, as the Minister will no doubt remind us in a second. After that wide consultation, the decision document stated, in November 2004, that it was considered

“that a longer licence length would allow the operator to better manage capital outlays.”

The implication is that it would encourage more applications.

The hon. Member for Windsor and the hon. Member for East Devon made several references to what they called “the incumbent”, by which I assume they meant Camelot. They implied that it would be wrong for Camelot to put any pressure on the Government. I agree, but it would be wrong if Camelot, which is the body with experience of running the national lottery in this country, did not at least share its views on the matter with the Government. It has, indeed, done that, and deserves at least a hearing. In a briefing to all members of the Committee last week, Camelot stated:

“The longer licence period is a key driver for a robust competition process as it gives potential operators more time to recoup their investments.”

I am not an experienced business person, but that seems like common sense to me, and it is borne out by all the consultation that the Department did. Camelot went on to say that it did not

“support a scenario where a licence plus extension would be capped at ten years”

such as seven years with a three-year extension, or eight plus two. That also makes sense to me. That requirement, set out in the amendments, would reduce competition.

The Government and previous Governments have become involved in many competitions. It is worth reflecting on what was done in those instances. Did the Governments in question decide on shorter and shorter periods? In the case of digital terrestrial TV multiplexes the period decided on was 12 years. It was chosen to maximise competition. For national savings and investment 10 years with a possible five-year extension was decided on. For 3G GSM mobile licences the period was an even longer one of 20 years. The wisdom appears to be that licences as short as those that the amendments would impose would probably achieve the opposite of what the hon. Member for East Devon wants. They would reduce the likelihood of decent competition, rather than increasing it.

It appears that the lottery licence is likely to be as set out in the Bill, and there are already far more than two potential bidders showing an interest. Lehman Brothers, Gala, Sportech, the People’s Lottery and of course Camelot are already indicating an interest in bidding. With the length of licence that is in the Bill and not the one proposed in the amendments, it is more likely that those five and possibly others will put in bids that will ensure the maximum return for good causes.

I accept that the amendment was a probing amendment, and I look forward to what the Minister has to say. However, if such an amendment were pressed to a vote, the Liberal Democrats would not be able to support it.

Richard Caborn (Labour, Sheffield Central)

By way of an introduction to my comments on the amendments, let me say that it is good that the Government are in crisis. If it is a crisis when the company that is operating the licence, which we are again putting up for bidding, makes a £30 million profit, I like crises. I can manage such crises any day of the week. The hon. Member for Windsor said that technology had advanced over the period of the licence. It certainly has, but is he suggesting that technology will stand still from now on? That does not make a great deal of sense. He may be an expert on technology, but not on logic.

Adam Afriyie (Conservative, Windsor)

Will the Minister give way?

Richard Caborn (Labour, Sheffield Central)

No, it was only a joke.

Clause 4 will amend existing legislation to place a limit of 15 years on the length of licences issued by the National Lottery Commission to run the national lottery and to promote individual lottery games. I make it absolutely clear that the commission will remain free to decide the precise length of each licence, subject to that maximum limit. I emphasise “maximum limit”, as the debate has focused on an automatic length of 15 years.

Amendment No. 21 would reduce the limit to 10 years, and amendment No. 74 would make a consequential change. We do not believe that it should be possible to issue a licence for an indefinite period without further competition. We consider competition healthy and necessary to maximise operator innovation, investment and motivation to benefit good causes. It is therefore right that a maximum term is specified.

There is no precise science in selecting the maximum period, but we consider that 15 years gives the National Lottery Commission the greatest flexibility to fulfil its statutory duty of maximising returns to good causes. It provides sufficient time to incentivise bidders to propose the necessary investment and for the selected operator to gain a return on such investment. The previous licences to run the National Lottery were for seven years. The 15-year period was chosen on the basis of experience worldwide and in the UK, with a view to allowing room for extensions in certain circumstances.

Moving on to licence extensions, I want the hon. Member for East Devon to listen carefully to what I am about to say. He might be shocked by it. As the Government’s policy is that the new power to extend the licence must be subject to a maximum total licence length of 15 years, there will never be more than 15 years between competitions. For instance, if the NLC chose to grant a 10 year licence, the maximum extension possible would be five years. We believe that the Bill as drafted provides for that but that amendment No. 22 would allow a licence to be extended by up to 15 years. I suspect that the hon. Gentleman’s intention is the same as ours. Subject to his confirmation of that, I am happy to assure him that we will double-check that the Bill achieves what we both want, and, if it does not, to table an amendment on Report to remove any doubt about the intention. On that basis, I ask the hon. Gentleman to withdraw the amendment.

Adam Afriyie (Conservative, Windsor)

Technology is changing all the time. My point was that it becomes less expensive to change the technology.

Considering that the Bill allows flexibility in the length of licence issued, will people who are bidding for a licence be able to make a bid in terms of margins? Could they bid for a lower margin on a longer term contract, rather than the margin that is currently available? Is that degree of flexibility available in the bidding process?

Richard Caborn (Labour, Sheffield Central)

I think it is. The process is about maximising the take for good causes. We are giving them negotiation tools to use in what I hope will be a wide field. The hon. Member for Bath says that four or five companies have already expressed an interest. That is far from a crisis, and I think that there will be a good number in the field this time for the very reason that he gave. New technologies have come on stream and they will be a factor.

The Bill will give the NLC the tools to maximise the commercial gain for good causes. If the NLC believes that that is part of the negotiations, it will be factored in. The maximum licence is 15 years, but that is not to say that bidders will be granted a 15-year licence; some bidders may obtain a 10-year licence, which they will be able to maximise, rather than obtain a 15-year licence initially. The NLC will make the judgment when awarding the licence. It is a sensible approach.

As I have said, I shall consider amendment No. 22. I hope that the hon. Gentleman and I come together at least on that amendment.

Hugo Swire (Conservative, East Devon)

Others may be in need of nourishment; I am in need of medication, such is my dumbfoundedness that late in the day the Minister has gone some way towards accepting one of our reasonable and carefully thought out amendments.

At the outset the Minister laughed at my saying that the Government were in crisis. He misrepresented me. I said that the Government are in crisis, but I did not suggest that Camelot is in crisis. We could all live with £30 million a year, although some of us would find it more difficult than others. The Government are in crisis because I do not believe that the number of companies or individuals he quoted is interested in bidding for the licence, regardless of its length.

The Minister did not enlighten the Committee about the representations that he had or had not received about the licence, or about whom they were from. Perhaps he will reflect on that and share it with the Committee at a later stage.

I am so amazed by the Minister’s friendliness and compliance that, bearing in mind the reassurance he has given to you, Mr. Cook, and to the Committee, I beg to ask leave to withdraw the amendment.

Don Foster (Liberal Democrat, Bath)

I apologise to the Minister, but I wish to speak briefly on clause stand part. I understand that the NLC is preparing the documentation that will go out to potential bidders and that it has been consulting widely on the contents of the documentation. Will the Minister assure the Committee that as soon as the document is available it will be made available to those Members of both Houses who have an interest in the matter?

I accept that the NLC is responsible for my next point, but will the Minister also confirm that it will be possible for the NLC to include in the requirements a facility for players of the lotto game to provide an identifier such as their postcode, their name and address or whatever, so that if they win and do not come forward, it will be possible to identify them? I accept that, for various reasons, some people will not want to have their name, address or other identification on the ticket, but there should be a facility to provide such information. What is the Minister’s view about that suggestion? Can he at least confirm that it would be possible to put that in the bid document?

Richard Caborn (Labour, Sheffield Central)

The statement of principle will be published in the next few days and I will ensure that it is circulated.

On the second point, the hon. Gentleman’s suggestion seems sensible. I do not how practical it is, but I take on board what he said. Being unable to identify winners is always a problem and if there is a way of addressing that, fine. We will consider it.

Don Foster (Liberal Democrat, Bath)

Will the Minister undertake to write to the NLC within the next few days drawing its attention to the exchange that we have just had and his comments on how sensible the proposal is?

Richard Caborn (Labour, Sheffield Central)

I will write. I have no doubt that representatives from NLC will read the record. They may be listening and if they are, will they please take the suggestion on board, which would save me writing? However, I will write.

Standing Committee A

National Lottery Bill

Roger Gale (Conservative, North Thanet)

Good afternoon, ladies and gentlemen. I should have made it plain at the outset, and did not, that if I give permission once for Members to remove their jackets that permission is granted while I am in the chair for the entire sitting. I cannot speak for Mr. Cook.

Clause 5 - Fees

Hugo Swire (Conservative, East Devon)

I beg to move amendment No. 23, in clause 5, page 3, line 29, at end insert—

'(2A) The level of fee prescribed shall be the Secretary of State's estimate of the cost to the Secretary of State and the National Lottery Commission of performing their duties under this Act.'.

Clause 5 deals with the annual fee payable by the licence holder. The amendment would say exactly what level of fee should be paid by the operator. I am grateful to the Minister for telling me in a written answer the level of fee previously paid into the Consolidated Fund.

I make what I hope is a helpful suggestion; the Minister should place in the Bill a precise definition of what the fee should be so as to avoid confusion. That would guard against the possibility of fee being used as a revenue-raising operation, and would reassure those bidding for the operator licence. It would also ensure that a less fair-minded successor to the Minister could not rack up the licence fee, rather as the Chancellor did with the 3G mobile phone network. It is a straightforward amendment, seeking clarification and it invites the Minister to define precisely what it is to which he is alluding.

Richard Caborn (Labour, Sheffield Central)

The holders of operating licences under clause 5 and gaming licences under clause 6 pay fees relating to the cost of issuing or renewing licences. That has proved to be a somewhat inflexible arrangement, as it requires frequent changes to be made through secondary legislation in order to set fees. It risks becoming a barrier to innovation, particularly in the development of new games, and it takes time to amend the regulations.

Clause 5 therefore provides a simplified arrangement, more akin to the arrangements for the application and annual continuation fees payable by holders of licences issued by the Gambling Commission under the Gambling Act 2005. It is our intention to set the fees at levels that are broadly revenue-neutral, allowing for inflation, over the lifetime of the licence. The fees will reflect the commission's expenses in exercising its functions of granting licences, considering new games and monitoring the licences, which is important, rather than reflecting its expenses in issuing the licence as at present.

Amendment No. 23 would allow us to go further and set the fee at a level to reflect all the commission's and my Department's costs in performing their functions under national lottery legislation. We do not think it appropriate for the fee to be set at such a high level nor for such costs to be met by the annual fee, as suggested by the amendment. Costs should continue to be met out of the national lottery distribution fund, as should part of the commission's costs. I hope that the hon. Gentleman will withdraw the amendment.

Hugo Swire (Conservative, East Devon)

I am grateful to the Minister. He clearly is not going to mention any figures; I appreciate that it would be difficult for him do so. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 ordered to stand part of the Bill.

Clause 6 - Licensing structure

Hugo Swire (Conservative, East Devon)

Clause 6 makes some alterations to the licensing structure. An order made under subsection (1) may

''make transitional or incidental provision . . . bring all or part of Schedule 1 into force . . . make different provision for different purposes''

and so forth. On the face of it, it seems straightforward.

I am sure, Mr. Gale, that you will correct me if I go wide of the mark, but that raises the question of the licence and the licensing structure surrounding it. This morning, under a different Chairman, we alluded to the granting of the licence, what form the structure would take and how the licence would be arrived at.

It was interesting to read—in The Mail on Sunday, I think—an article on Camelot, how the Government are now proceeding with the licence, the licensing structure and the disappointment of some of the contenders, who had hoped that the rules would be changed to give some of the potential new entrants financial assistance with the multimillion pound cost of bidding. I do not think that that has happened.

There is the question of Camelot's inbuilt advantage; its instant access to information on lottery playing trends when its competitors have to start from scratch. The issue is about whether the licensing structure favours any one applicant and whether the Minister will sell it as a piece of internal housekeeping once the licence has been granted.

At this stage, anything that prevents potential bidders from bidding—whether that be the costs involved, the duration of the licence or the whole licensing structure set out in clause 6—should be discouraged. We remember the last lottery selection process; it was described by Richard Branson, who we learn is not going to bid again, as a sham. I hope that we are not left with a position in which the licence application and structure are to the liking of one bidder, but a deterrent to the others. Camelot won the last licence bid in 2000. This morning, the hon. Member for Bath (Mr. Foster) was keen to say how well the lottery was doing—

Roger Gale (Conservative, North Thanet)

Order. I shall offer the hon. Gentleman some guidance. Strictly speaking, this debate is about an order providing for the introduction of schedule 1. The hon. Gentleman is entitled to oppose that if he wishes, but he is beginning to move into a debate on schedule 1. I do not mind, but he will not be able to do that twice. He can either have the debate now, or when we arrive at schedule 1.

Hugo Swire (Conservative, East Devon)

I was coming to the end of my remarks, Mr. Gale, and do not seek to detain anyone. My concluding remark impacts on this issue; it is about what I said this morning about the slightly less optimistic sales of lottery tickets. I was corrected on that by the hon. Member for Bath and the Minister.

However, when Camelot was granted the licence in 2000, it said that it would raise up to £15 billion for good causes. Five years into the seven-year licence, it has delivered only £7 billion, so is expected to fall almost £5 billion short by the end of its contract in 2008. That is the salutary lesson; before we all pat ourselves on the back and talk about the tremendous success of Camelot and the last round of bidding, the facts need to be examined more closely. That is why the schedule and licensing structure need to be considered again carefully; to encourage, on a level playing field, as many potential bidders as possible.

Adam Afriyie (Conservative, Windsor)

Is my hon. Friend concerned, as I am, about clause 6(3)(c):

''An order under subsection (1) . . . may make different provision for different purposes''?

That seems incredibly broad. However, as I am fairly new to the House, perhaps I am misreading it.

Hugo Swire (Conservative, East Devon)

It is fairly broad, and perhaps the Minister will explain that to the Committee. Any clause that uses the formula

''may make different provision for different purposes''

is pretty open, and, on the face of it, would allow the Government to do pretty well what they wanted. I have tested your patience as much as I dare, Mr. Gale, and shall conclude my remarks.

Andrew Selous (Conservative, South West Bedfordshire)

I want to clarify a small point. I should probably know the answer, not being an entirely new Member, and I ask the Committee for its indulgence, but clause 6(3)(e) states that an order under subsection (1)

''shall be subject to annulment in pursuance of a resolution of either House of Parliament.''

Does that mean that the House of Lords could, on its own, make a resolution, separate from the will of the House of Commons?

Richard Caborn (Labour, Sheffield Central)

Yes.

We have had wide consultation on the licence, as hon. Members acknowledged. We are, in the clause, attempting to avoid what happened previously, when effectively there was one bidder. We want the National Lottery Commission to have as many tools as possible to do what all members of the Committee would want; to get the best for the good causes out of a well run and effective lottery, and to ensure that no particular bidder, whether the incumbent or any other, is favoured. We have, with some difficulty, tried to bring that about, in a transparent way, through consultation on our November 2004 national lottery licensing and regulation review decision document. Clause 6 and schedule 1 are part of that approach.

The Government's clear and firm presumption is that there will be a single licence to run the national lottery, awarded by competition. Even though we want that to happen, we cannot guarantee it, so we have decided that in the extreme and, indeed, unwelcome circumstance of an unsuccessful competition, and mindful of the concern expressed by the Public Accounts Committee in its report on the second licensing competition, we should have a fall-back position.

The clause therefore would provide the Secretary of State with the reserve powers to introduce the new licensing structure set out, as you said, Mr. Gale, in schedule 1. That would enable more than one licence to be issued, to promote lotteries forming part of the national lottery. We believe that that would offer the greatest alternative scope and the combination of innovation and efficiency that the lottery would require to remain successful.

If the Secretary of State did not need to take such action, she would make an order, but only after consulting the National Lottery Commission. The statutory instrument could bring in schedule 1 in whole or in part, and would be subject to a negative resolution procedure.

Adam Afriyie (Conservative, Windsor)

I may, as I said before, be a bit naïve, as I am quite new to the House, but will the Minister explain how clause 6(3) is restrained with respect to the power to

''make different provision for different purposes''?

I suspect that there is a mechanism, but how is the provision restrained from giving a Secretary of State licence to do whatever they like, in any way they like?

Richard Caborn (Labour, Sheffield Central)

But it is not the Secretary of State who will do it; the National Lottery Commission will conduct the negotiations and report back to the Secretary of State. We are trying to create conditions under which the National Lottery Commission, from as large a field as possible, can extract what is, in its view, the best possible outcome for good causes in an efficiently-run lottery, probably the best run lottery in the world. That is the object of the exercise. We believe that clause 6 and schedule 1 will, as happened with previous provisions, give the National Lottery Commission that maximum negotiating capability.

That comes off the back of two past experiences with lottery licensing which were not particularly good; I accept that. There has also been wide consultation, in terms of the review decision document on national lottery licensing and regulation. We have distilled all that. We believe that we are giving the National Lottery Commission a good framework. Then it will have to report back to us. It will not be the Secretary of State who carries out the negotiations; it will be the National Lottery Commission.

Adam Afriyie (Conservative, Windsor)

I understand the Minister's answer, but I was being fairly specific. Subsection (3)(c) concerns me. It states:

''may make different provision for different purposes''.

I just wonder what the restraint is. Could provision be made for allocating money to something that was not a good a cause? Where is the restraint in paragraph (c)? It seems very open. The other provisions are constrained by other parts of the legislation, but I cannot see how paragraph (c) is constrained in any way.

Richard Caborn (Labour, Sheffield Central)

The decision will have to be justified against the criteria. The acid test is whether good causes get the maximum amount of money. Everyone will be looking at that. This will not take place in isolation. We hope that there will be a series of bidders. The expressions of interest to date look quite healthy. There will be a serious competition. My personal view is that we will not be in a position where we will have to depart from having one licence. I hope that that is the case because that will be the best way to extract the maximum that we can. We have all the conditions, including the 15-year maximum licence. There will be one criterion that will be used to make a judgment; what is best for good causes? The National Lottery Commission will have to report back. Like every other non-departmental public body, it has restraints on it. However, it also has enough flexibility to maximise the take.

Andrew Turner (Conservative, Isle of Wight)

The Minister is trying to be helpful, and is succeeding. None the less, my hon. Friend the Member for Windsor (Adam Afriyie) has raised an important point because the Minister appears to be explaining that there are things that are contained in neither the clause nor the schedule that do in fact restrain, or which he thinks will restrain, the actions of the Secretary of State under subsection (1). However, there is nothing written down, until Hansard is produced as a result of today's debate, that encapsulates the objective of raising the maximum amount for good causes. Is that the case?

Richard Caborn (Labour, Sheffield Central)

I do not quite follow the hon. Gentleman's logic. We have a system under which the Secretary of State is responsible, in the end, to Parliament. She has delegated to the National Lottery Commission, within certain parameters, the responsibility to negotiate a new licence for the lottery. What we are debating in relation to clause 6 and schedule 1 relates to the conditions under which it will carry out that negotiation. The endgame is to extract, from, we hope, a good field of applicants, the best outcome for the good causes. We are not talking about a constraint on the Secretary of State. It is the National Lottery Commission that will carry out the negotiation and report back to the Secretary of State, and, by that means, to Parliament.

The provisions give powers and flexibility to enable the National Lottery Commission, first, not to get into the situation in which it was previously; secondly, to have a structure that will engage many bidders; and, thirdly, to ensure that we can extract the maximum amount from those bidders for good causes. That is the sole object and therefore the constraint. I do not follow the rationale of the point that was being made. I might be being a bit thick about that. That is the object and I believe that it is contained in the Bill. That is why I want the clause and schedule 1 to stand part of the Bill.

Andrew Turner (Conservative, Isle of Wight)

So, the Minister is saying that, on the application of the National Lottery Commission, the Secretary of State would consider making an order and would then make such an order, subject to parliamentary annulment? Is he saying that it is not that the Secretary of State who is taking the initiative, but the National Lottery Commission?

Mr. Caborn indicated assent.

Andrew Turner (Conservative, Isle of Wight)

I have got it.

Richard Caborn (Labour, Sheffield Central)

I have nothing to add.

Question put and agreed to.

Clause 6 ordered to stand part of the Bill.

Schedule 1 - National lottery licensing

Don Foster (Liberal Democrat, Bath)

Welcome back, Mr. Gale. You will be pleased to note that we are making rather more rapid progress than we did the last time you occupied the Chair.

Schedule 1 deals with national lottery licensing. It makes several changes to the National Lottery Act etc. 1993, including in respect of licensing persons to promote lotteries. I do not disagree with any particular aspect of the schedule, but I suggest to the Minister that the changes he wants to make to the 1993 Act do not go far enough.

I do not deny that I am slightly confused by some of the paperwork before us. The Minister has helpfully provided us with a copy of the now infamous Keeling document, which incorporates all the proposed changes to the 1993 Act, as amended by later legislation. I have struggled to make some sense of how schedule 1 has been incorporated in that document. On the assumption that I have got it wrong and the document is absolutely correct, no change is planned to section 6(5) of the 1993 Act, in particular paragraph (a). According to the Keeling document, after the Bill is passed, section 6(4) of that Act will state:

''The Commission shall not grant such a licence''—

to promote lotteries—

''unless it is satisfied that the applicant is a fit and proper person to promote lotteries under the licence.''

Subsection (4) is very clear, stating that the commission shall not grant a licence unless it is satisfied that the person is fit and proper. However, immediately afterwards, subsection (5) states:

''In determining whether to grant such a licence, the Commission may consider—

(a) whether any person who appears to it to be likely to manage the business or any part of the business of promoting lotteries under the licence is a fit and proper and person to do so''.

The first of two successive subsections in section 6 states that the commission must ensure that a person is fit and proper, but the second says that it may consider whether the person is fit and proper. I am totally confused about what it is meant to do and why both provisions are necessary. I would be grateful for an explanation from the Minister.

Richard Caborn (Labour, Sheffield Central)

I shall try to explain. The hon. Gentleman has omitted to say that, before the changes we propose, the 1993 Act states:

''The Commission shall not grant such a licence unless it is satisfied that the applicant is a fit and proper body to promote lotteries under the licence.''

The Bill will delete ''body'' and insert ''person''. We had a debate this morning about the definition of ''person'', and I told the hon. Gentleman that I shall write to him because the legal interpretation of that term is not as clear to the layperson as we want. We shall go to the lawyers and get the proper interpretation of whether the term includes the corporate body as well as persons. We were informed that ''persons'' includes the corporate body.

Section 6(5) of the 1993 Act states:

''In determining whether to grant such a licence, the Commission may consider—

(a) whether any person who appears to it to be likely to manage the business or any part of the business of promoting lotteries under the licence is a fit and proper person to do so''.

That is clear in the sense that the term ''body'' has been deleted and ''person'' inserted. I shall give the explanation of ''persons'', as we discussed this morning. I do not see any conflict at all.

Don Foster (Liberal Democrat, Bath)

I shall read my copy again—I apologise for putting it on the record twice and to anybody who may be given the task of recording what we are saying. I accept the change from ''body'' to ''person'', so I am incorporating that in what I say. Section 6(4) clearly states:

''The Commission shall not grant such a licence unless it is satisfied that the applicant is a fit and proper person to promote lotteries under the licence.''

Subsection (5) states:

''In determining whether to grant such a licence, the Commission may consider—

(a) whether any person who appears to it to be likely to manage the business or any part of the business of promoting lotteries under the licence is a fit and proper and person to do so''.

It seems to be saying the same thing, with the exception that one says that the person must do it and in the other it says that they may. Surely it has to be one or the other. I assume that it has to be that they will do it.

Richard Caborn (Labour, Sheffield Central)

There are two different persons involved. Section 6(4) applies to the licensee while section 6(5)(a) applies to managers of the business and to key employees or directors.

Don Foster (Liberal Democrat, Bath)

That brings us back to the debate that we had this morning about the change to ''person''. The Minister is telling us that a person, who could be a body, gets the licence while a person, who is not a body, will be the manager of the operation. We come back to the issue of which of those ''persons'' needs a personal licence. Can the Minister tell us whether the manager will be required to have a personal licence? A yes or no answer would be helpful.

Richard Caborn (Labour, Sheffield Central)

I am not going to give a yes or no answer. I think that subsection (5)(a) defines that person. Let us go back to section 6(4):

''The Commission shall not grant such a licence unless it is satisfied that the applicant is a fit and proper person to promote lotteries under the licence'',

while subsection (5) reads:

''In determining whether to grant such a licence, the Commission may consider—

(a) whether any person who appears to it to be likely to manage the business or any part of the business of promoting lotteries under the licence is a fit and proper and person to do so''.

We are using ''person'' to encompass two different categories of people. The first is, as we said, the person and the body corporate. This is what the lawyers say. I acknowledge what members of the Committee are saying; it is a little confusing. We will try to give an explanation in layperson's language and I have given a commitment to do that. In the second case, ''person'' is given definition by the reference to the fact that it means the person who will

''manage the business or any part of the business of promoting lotteries under the licence''.

It also stresses the importance of their being

''a fit and proper person to do so''.

That is clear to me. Following the discussion on the body corporate that we had this morning, the change from ''body'' to ''person'' in section 6(4) needs clarification. I will communicate that clarification to the Committee by letter or by a different form of explanation.

Roger Gale (Conservative, North Thanet)

Order. Before we proceed any further, I have to point out that the past five or six minutes of the debate have, strictly speaking, been out of order. I let it run because I think that it is important that matters are placed on the record and members have the opportunity to ask questions. However, we are debating a document that is not before the Committee, which is improper. The Keeling schedule is not, strictly speaking, before the Committee. We are actually debating schedule 1, and I fear that I must now ask the Committee to return to it.

Don Foster (Liberal Democrat, Bath)

I may be in some difficulty. I do not want to try your patience, Mr. Gale, and you can tell me whether I am in order. I believe that it is legitimate to raise this matter because schedule 1 changes the 1993 Act and, in particular, makes small changes to section 6 of that Act, which deals with the licensing of persons to promote lotteries.

I am arguing that the amendments made by the Bill do not go far enough and that a further change should have been incorporated in the schedule. I am asking the Minister to help me with that. If I have understood him correctly, when determining the licence the commission will look at the person—which might be a body corporate—who will be the licence holder and is required to determine whether that person is fit and proper. It is, however, possible that the body or the person who has the licence will leave the task of delivering promotion of the lottery to some other person, who is a manager. I fail to understand why it is deemed appropriate to insist that there be a check on whether the person who receives the licence is fit and proper, but there is no similar requirement to insist on a check to ensure that the manager is a fit and proper person. If the licence is to be run by someone as a manager, I am sure that we would all be much happier if we knew that there was a requirement on the commission to check that the person who will do all the work and conduct the day-to-day operation is fit and proper to do so. The word ''may'' should be changed to ''shall''.

Hugo Swire (Conservative, East Devon)

I think I understand where the hon. Gentleman is coming from, but is not the point that whereas the person or body to whom the licence is granted will be the licence holder for the duration of the licence period—10 or 15 years—the manager might change, and that whereas one can deal with the expectation of one, it is difficult to see how to deal with the expectation of the other?

Don Foster (Liberal Democrat, Bath)

I understand where the hon. Gentleman is coming from. However, if I were giving a contract to someone to do work for me—perhaps a builder or a plumber—I would want to be confident that the person to whom I let that contract would not employ to carry out the work people who I was not confident were fit and proper to do the job. I would seek some assurances and would certainly want to check that the staff carrying out the work were fit and proper to do the job. I am merely saying that the same should apply to the lottery.

The Minister, more than most members of the Committee, will be aware of why I pursue the matter with such vigour. We had similar debates about other aspects of gambling outwith lotteries during the passage of the Gambling Act 2005, when matters of great concern were raised about family arcades and so on. One person may own a family arcade but what matters in ensuring that the laws of the land are upheld, young people are protected and so on is that the people who manage that arcade are fit and proper to do the job. The Minister will be aware that we have debated the issue in the past.

Adam Afriyie (Conservative, Windsor)

Again, I apologise to the Committee if I am being naive. I have scanned through the papers and I wonder whether the hon. Gentleman agrees that the schedule reveals major changes to the 1993 Act. The schedule refers to three subsections, but section 6 of the 1993 Act has six subsections. I know that the marked-up document is not part of our proceedings but that is definitely not reflected in that document, which is why I have only just spotted it. I hope that the Minister will respond.

Don Foster (Liberal Democrat, Bath)

I alluded in my opening remarks to a similar confusion, although I did not express it as clearly as the hon. Gentleman. As you rightly pointed out, Mr. Gale, the Keeling document is not before us, so it is not to be commented on; but if the Minister were considering making available to members of the Committee any subsequent paperwork, it would be helpful if he checked that it reflects the changes in schedule 1.

Richard Caborn (Labour, Sheffield Central)

Your guidance is, of course, correct, Mr. Gale. The Keeling document does not include schedule 1, because it is an amendment to the 1993 Act. We are in danger of misleading one another. This is the last time we issue a Keeling document, I can assure you, Mr. Gale. It was issued to try to be helpful—as guidance. As you rightly say, Mr. Gale, we are debating some of the amendments to section 6 of the 1993 Act. Schedule 1 is an amendment to the 1993 Act and it will, I hope, become part of the new National Lottery Act. Schedule 1 has to be brought into play, and that is where one can easily be misled by the Keeling document.

Don Foster (Liberal Democrat, Bath)

I shall leave it there. I have raised the issue. I still believe that someone who is going to manage a licence ought to have been checked out and declared fit and proper. I hope that we get the opportunity—perhaps by my moving an amendment—to discuss the issue at a later stage of the Bill.

Question put and agreed to.

Schedule 1 agreed to.

Roger Gale (Conservative, North Thanet)

Before we proceed, the Minister has made reference to the Keeling document and he has endeavoured to be helpful. There would have been nothing wrong with that document being placed on the Table, with the permission of the Chair; it could then have been included in debate. By seeking to be helpful but surreptitiously so, the Minister has fallen into the trap of not making the document available of the Clerk and the Chairman, which means that it is not technically admissible. Should the Minister ever want to do that again, he should do it properly.

Don Foster (Liberal Democrat, Bath)

On a point of order, Mr. Gale. Is there a mechanism in order to pass a message to the Minister saying that everyone on the Opposition Benches in the Committee has found the document to which you refer, Mr. Gale, to be extraordinarily helpful? We hope that nothing said by any of us will prevent the Minister from wishing in the future to do something similar.

Roger Gale (Conservative, North Thanet)

I know of no such mechanism.

Further consideration adjourned.—[Claire Ward.]

Adjourned accordingly at twenty-two minutes to Five o'clock till Thursday 3 November at half-past Nine o'clock.