Orders of the Day — National Lottery Bill

House of Commons, 19 January 2006.

New Clause 1 — Reports by distributing bodies

Don Foster (Liberal Democrat, Bath)

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

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this it will be convenient to discuss the following:New clause 2—Additionality—

'After section 25E of the National Lottery etc. Act 1993 (c. 39) (inserted by section 11 of this Act) insert—

"25F The additionality principle

(1) A body which distributes money under section 25(1) shall have regard to the principle that funding under that section should not be provided for the provision of services, benefits and capital works which would usually be provided by government, when—

(a) determining the persons to whom, the purposes for which and the conditions subject to which the body distributes any money under section 25(1);

(b) preparing, adopting, reviewing, modifying or replacing a strategic plan under section 25C or 25D.

(2) The Secretary of State shall have regard, where relevant, to the principle that funding under that section should not be provided for the provision of services, benefits, and capital works which would usually be provided by government, when giving any direction under sections 26 or 36E.".'.

Don Foster (Liberal Democrat, Bath)

I begin by congratulating the hon. Member for Cities of London and Westminster (Mr. Field) on his elevation to the shadow Department for Culture, Media and Sport team. I am sure that all who have followed the National Lottery Bill debate will enjoy his contribution today. It is said that a week is a long time in politics, but those who have studied the Bill will know that, unfortunately, it has taken a very long time to reach this stage. It is some 60 weeks since it was given its First Reading, on 25 November 2004, and here we are still working our way through it.

I want to make clear, as I did in Committee, my own position regarding the national lottery. I believe that my party was wrong to oppose establishing the lottery all those years ago. The evidence is very clear that it has been of enormous benefit to many communities throughout the country. Indeed, since it began, some £17 billion to £18 billion has been given to good causes, thereby benefiting people from all walks of life.

Some 200,000 grants have been made and, pleasingly, a very large proportion of them have been relatively small—some £5,000 or less—and have brought real benefit to local communities. There may have been disagreement on the odd lottery grant here and there, but in general everybody acknowledges that those awards have brought real and tangible benefits to such communities. My own community of Bath has received some £50 million in lottery grants over the years, including money for Bath university's new sports training village, a facility that I believe will enable us to capitalise fully on the benefits of the 2012 Olympics.

Richard Caborn (Labour, Sheffield Central)

Yes.

Don Foster (Liberal Democrat, Bath)

The Minister, from a sedentary position, gives a confidence boost to Bath's bid. I am delighted at that.

Parts of the Bill will be criticised today, but I stress that my party supports much of it. For example, the establishment of a legal framework for the Big Lottery Fund is especially welcome, as that organisation has operated for 18 months before being allowed to come into formal existence. However, our biggest disagreement with the Government has to do with additionality, the subject of new clause 1, as we are concerned about the Government's tendency to try to get their hands on lottery money.

Sir John Major set up the lottery when he was Prime Minister, and made it clear that the money raised would "not replace public expenditure". In 1997, the present Prime Minister used similar words, saying that it would not be right

"to use Lottery money to pay for things that are the Government's responsibilities."

More recently, the Minister responding to this debate said in Standing Committee that lottery money was "special" and that it

"should add to, not substitute for, Government expenditure"—[Official Report, Standing Committee A, 3 November 2005; c. 240.]

Last June, the Minister told the House that additionality was

"an important principle that should be embodied in future legislation."—[Official Report, 14 June 2005; Vol. 434, c. 168.]

That is exactly why we have tabled new clause 1; to put into effect what the Minister said that he wanted. The hon. Member for Cities of London and Westminster will move new clause 2 shortly. Both it and new clause 1 are attempts to give the Minister what he said he wanted and ensure that the Bill deals with the question of additionality. If new clause 2 were to be pressed to a Division, I can assure the hon. Gentleman that my party would support it.

The public also believe that additionality is an important matter. Almost three-quarters of respondents to a 2003 YouGov poll said that it was "vitally important" that lottery distribution remain independent of Government interference. We must ensure that lottery money is not used as a slush fund by the Chancellor of the Exchequer, something that has happened far too often already.

For example, £93 million of lottery funds has been spent on magnetic resonance imaging scanners for the NHS, and £42 million on providing fruit in school. That led Sir Clive Booth, the Big Lottery Fund's excellent chairman, to say that the

"days of the government issuing instructions over Lottery cash for schemes such as the distribution of fruit to schoolchildren are gone".

I hope that is true but, to make sure, we must get a guarantee enshrined in the Bill.

The Culture, Media and Sport Committee expressed concern about this matter in its 2003–04 report. It stated:

"The National Lottery has meant that there has been an erosion, in real terms, of the DCMS core funding."

Increasingly, the Department for Culture, Media and Sport is not spending as much money, as a proportion of gross domestic product, as it used to, but that is because it has come to rely increasingly on money from the various lottery distributors.

Another aspect of the problem is that there is increasing confusion about which expenditure comes from the DCMS and which comes from the lottery. I shall give two examples. On the one hand, the Government claim credit for projects that in fact are funded by the lottery; on the other, they try to pass the buck for failure to the lottery. Parliamentary answers last November revealed that one Department incorrectly claimed credit for a supposedly independent project that was successful, whereas a Minister in another Department has blamed the lottery for unwise Government spending.

A report from the Department for Trade and Industry said that the £1.9 million spent on renewable energy research into biomass was funded by "DTI and lottery spend". However, further questions uncovered the fact that none of the money spent on that research came from the DTI. In other words, the Government were claiming credit for research that was funded entirely by the lottery.

On 31 October last year, I asked a parliamentary question about a highly contentious sports questionnaire survey that was criticised by various newspapers. The survey cost £6 million, but the Government answered that the money came from the national lottery. I pursued the matter, and several weeks later the DCMS admitted that the original answer was incorrect and that the vast majority of funding for that controversial project came from the Department. That shows that the Government have tried to confuse the public about what is lottery money and what is departmental money.

Have the Government plundered lottery money? There are many arguments about that, but today's Daily Mail carries an article about a report from the Centre for Policy Studies. That is a Conservative-leaning think tank, but that does not mean that it is always wrong. The newspaper uses the headline "Labour Has 'Plundered Billions out of the Lottery'", and its analysis may go a little far. However, the centre's website carries the preface to the report, which I understand will be published tomorrow, and it makes very interesting reading. In it, Sir John Major—who, as I noted earlier, founded the lottery—states:

"From the outset, I insisted that Lottery money should be used for additional spending on causes or activities that the taxpayer should not be expected to cover . . . When the Lottery Bill was going through Parliament, the Labour Opposition was at pains to stress the importance of Government keeping an arms-length relationship from the Lottery and, in particular, grant distribution. But, since it took power, Labour has diverted Lottery funding into areas that have historically been funded by the Exchequer. Indeed, the "Big Lottery Fund" has a specific remit to fund health, education and environment projects when taxpayers would rightly expect many of these projects to be funded directly by Government. The Labour Government's deliberate muddying of the waters between Exchequer and Lottery revenues is an unwelcome development and which, as its creator, dismays me greatly."

David Taylor (Labour, North West Leicestershire)

I am often in a position to say to the Daily Mail, "Now, come on", but I rarely say that to the hon. Gentleman, who takes a sensible approach to such matters. If every penny piece that the lottery raised annually for good causes were to be transferred to the Government, it would pay for about a day's worth of public expenditure; £1.5 billion in about £500 billion. It is important to put the issue into context and realise that we are talking about relatively marginal amounts.

Don Foster (Liberal Democrat, Bath)

While I have some sympathy with those remarks, I made it clear earlier that the grants from the national lottery have been of enormous benefit to many communities. Some 200,000 grants have been made, including to projects in my constituency. The amounts of money may be comparatively small, but the benefit is enormous and the impact on the communities has been tremendous. Let us not belittle the importance of lottery money. We need to get the process for making decisions on how that money is spent right and ensure that it is separate from the Government's decisions. We have to have a clear independence of lottery distribution decisions from Government. That is what the new clause is about.

David Taylor (Labour, North West Leicestershire)

I am happy to clarify my earlier remarks. I was trying to say that although constituencies, including the hon. Gentleman's and mine, have benefited significantly—especially in economic, social and environmental regeneration projects—the impact on Government expenditure of a wholesale transfer of the lottery money to their coffers would be tiny. Therefore, what would be the incentive for the Government to do that? Is the hon. Gentleman suggesting that the Government are trying to drive down the tax bill to the cost of those buying lottery tickets?

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman suggests that I am merely suggesting that the Exchequer has got its sticky little mitts on lottery money. I am not suggesting it; I am telling the House that that is what has happened. The New Opportunities Fund was deliberately established to take over responsibility for funding aspects of much needed service delivery from the Exchequer. The evidence is clear. I accept that the Daily Mail report and, possibly, the think-tank report went a bit overboard and, indeed, I said so earlier, but I have already given several other examples.

Hugo Swire (Conservative, East Devon)

If the hon. Gentleman had finished the preface written by Sir John Major, which was not quoted in the Daily Mail, he would have seen that Sir John referred to the millennium fund, which wound up at the end of 2000. He intended that the resources released from that should be used to promote school sports. Instead, he says, the money was siphoned off by the Labour Government. That goes some way to answering the comments by the hon. Member for North-West Leicestershire (David Taylor). It is not necessarily the quantity of money, but the principle.

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman is right to say that there was more to the preface. I was hoping that in the spirit of comradely friendship I would not be tempted into commenting on that aspect of Sir John Major's remarks, but now that the hon. Gentleman has provoked me I should, in fairness to the House, point out that the Conservatives' view of the issue of additionality is somewhat ambiguous. The hon. Gentleman raises the issue of sport, so I must now point out that that ambiguity was demonstrated in their manifesto at the last election, when their much heralded Club2School sport scheme was to have been funded by the national lottery. I have pointed that out to the Conservatives before and they have said, "Oh no, we got it wrong, we won't ever do it again." However, their new leader was at it again more recently, on 5 January. He was asked who would fund his idea for a new school leaver programme policy, and he replied:

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

I accept that he did not say that funding would come from the national lottery, but clearly it was a possible source.

Mark Field (Conservative, Cities of London and Westminster)

The hon. Gentleman will be glad that I am here to protect the honour of my right hon. Friend the Member for Witney (Mr. Cameron). The hon. Gentleman has rightly quoted the transcript, but my right hon. Friend continued his remarks to Mr. Naughtie on the "Today" programme by saying:

"Jim, I can't pre-judge it because I'm having a meeting with the Prince's Trust and the Duke of Edinburgh Award scheme and the National Union of Teachers are coming in".

The lottery was one of a number of options that my right hon. Friend put forward in that interview for funding the national school leaver programme. No commitment has been made that contradicts our proposals in new clause 2.

Don Foster (Liberal Democrat, Bath)

rose—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. Perhaps we have now clarified that point and could now concentrate our remarks on the new clause.

Don Foster (Liberal Democrat, Bath)

I am grateful to you, Madam Deputy Speaker, but I would point out that the hon. Gentleman has just given a lengthier version of the cover that I had already given to the right hon. Member for Witney (Mr. Cameron). However, you rightly chide us to move on from that issue.

Notwithstanding the occasional blemishes on the record of parties on the issue, all the parties have said that they believe that additionality is a crucial issue. All parties have said that they do not wish to see the Government, whoever is in power, interfering in national lottery decisions. Given that occasionally people have strayed from that commitment, would it not be helpful to have legislation that ensured that that does not happen again in the future?

During the passage of the national lottery legislation in 1993, and the changes made to it in 1998, attempts were made to add additionality to it. We have already had attempts by the Conservative party and by me to place something in the Bill. Those were attempts to define additionality, but they fell on stony ground. Indeed, the Minister rejected our proposal for a definition of additionality in Committee because he said that it would result in bureaucracy. I am not sure that that is a good reason, but our attempt was rejected for that and, no doubt, several other reasons.

Today, I am taking a new approach that might find favour with the Government and obtain the support of the House. We do not suggest a definition of additionality but that the Bill should contain a requirement that the distributing bodies report annually on how they had reached their funding decisions. That would include the two crucial questions of additionality; how independence from the Government was maintained and what principles were used to maintain the distinction between core Government funding and the causes that the bodies had supported.

I know that many of the distributing bodies have already committed themselves to annual reports on a variety of issues. For example, the Big Lottery Fund is already committed to reporting specifically on the additionality issue. Under the new clause, we seek to place in the Bill the commitment that we have received from the biggest lottery distributor and perhaps to push the other distributors to follow suit, so that there is no opportunity to backslide in future.

We have support from many quarters for the route that we have chosen. The National Council for Voluntary Organisations said:

"We believe that these commitments must be enshrined on the face of the Bill if they are to be meaningful and lasting."

The National Campaign for the Arts said:

"The New Clause is a modest attempt to ensure that the line between Government and Lottery cash cannot become ever more blurred . . . If inappropriate political pressure is being put on the Lottery distributors, then the public should be made aware of it. If, as is insisted, no such pressure is being exerted, then there can be nothing to fear from the New Clause."

The Minister has given support to the new clause. In Committee, he said:

"Somebody has to define the concept for the purpose of day-to-day operations, but if the concept were tied down to a definition that would be challengeable in law, those funds might be put into all types of litigation."—[Official Report, Standing Committee A, 3 November 2005; c. 244.]

He will not go down the route of placing such a definition in the Bill—although he might be persuaded to do so, given new clause 2—but he has at least made it clear that he wants something similar in the Bill and that he believes that annual reports on such issues should be produced. That is why it is crucial that the Minister should be prepared to support new clause 1, which is a modest attempt to ensure that we get something in the Bill to ensure that there is never again the possibility of blurring the distinction between national lottery money and Government-funded activity.

Mark Field (Conservative, Cities of London and Westminster)

Under new clause 2, we would introduce into the National Lottery Act 1993 a requirement to consider the additionality principle. I was very interested to hear what the hon. Member for Bath (Mr. Foster) had to say—we would very much support new clause 1 in any vote, if one is necessary—but I should like to explore one area with him, and perhaps the Minister will take my observation on board. Are there any circumstances in which certain projects could be paid for partly from the lottery and partly from Government expenditure? It was not entirely clear whether that could be possible with certain projects—for example, large-scale research. Again, we need to have a sense of transparency. We worry that too much in the Bill is entirely opaque.

We propose a definition of additionality in new clause 2, which states that

"funding should not be provided for the provision of services, benefits, and capital works which would usually be provided by government".

New clause 2 goes somewhat further than new clause 1. The first subsection of our new clause would apply that principle to the distributing bodies when distributing money or making or reviewing their strategic plans. The second subsection would apply the same principle to the Secretary of State or his Ministers when making directions to the Big Lottery Fund or other distributing bodies under section 36E of the 1993 Act.

As has become apparent, there is a plethora of new distributing bodies—Sports Council-related bodies, those related to the arts and the Heritage Lottery Fund, and so on. From the national lottery's inception, the Government have stated their commitment to the principle of additionality during the debates that took place when the lottery was being established and in those that have taken place since May 1997.

David Taylor (Labour, North West Leicestershire)

The hon. Gentleman says that new clause 2, which was tabled by the Conservatives, would tighten up the arrangements in some respects, but it suggests that lottery distributors should consider whether the Government "would usually be" the source of the provision. The word "usually" implies that a category of activities and projects would not fall within the proposed definition. How on earth will the lottery bodies make a distinction between the two? Unless we state that the Government will always make such provision—that could be impractical as well—new clause 2 is a dead letter, is it not?

Mark Field (Conservative, Cities of London and Westminster)

The hon. Gentleman makes a fair point. However, in fairness, we were trying to appreciate the fact that there are grey areas at times. We would like to think that the issue was entirely straightforward, but our contention is that that grey area has been greatly abused by the way in which the Government have sought to allow the Big Lottery Fund to make its own distributions.

As the hon. Gentleman rightly says, if we were to use the word "always", the provision could be open to all sorts of abuse. Indeed, the Government might be given an opportunity to walk away very happily from certain obligations. They could rely entirely on funding those obligations from lottery funds. We used the word "usually" to try, as far as possible, to adopt a pragmatic approach, while recognising that grey areas of expenditure may arise sometimes. Such financial provision might be covered generally by lottery funding, but also by Government expenditure—we are trying to get that balance right. Our contention—I think it is also that of the Liberal Democrats—is that we have not got that balance entirely right and that, recently, a coach and horses has been driven through the original idea and the original causes of the 1993 Act.

In the 1992 White Paper, in which the national lottery was initially suggested, it was stated that the lottery would fund only projects additional to those that would otherwise be funded by the public through general taxation. In written evidence to the fifth report of 2003–04 of the Select Committee on Culture, Media and Sport, the Department for Culture, Media and Sport defined the principle of additionality as not allowing lottery funding to

"become a substitute for funding that would normally fall into mainstream Government spending"

and stated that it

"remains firmly committed to that principle."

The Select Committee's report on the reform of the national lottery said:

"Many witnesses told the Committee that the principle of additionality was becoming increasingly eroded."

Obviously, those witnesses are experts in the field. It continued:

"The Lottery Council told us that 'additionality is something we take a strong line on, and we think that that line is getting blurred' and that 'there is a great deal of concern about the erosion of the additionality principle.' The NCVO believed that 'Lottery funding should be independent from Government but accountable to Parliament; that is should be additional to what should be properly spent by Government and not a substitute for it.' It was concerned that that was not happening."

The Select Committee therefore found in its conclusion that the additionality principle was being eroded, and it deplored that erosion in paragraph 165 of the report to which I referred.

We believe that it is necessary to include provisions on additionality in the Bill. New clause 2 would do that in a practical fashion by requiring distributing bodies and the Secretary of State to have regard to the principle when exercising their relevant functions under the Bill.

We contend that the Government have betrayed the lottery's founding principles by using lottery money for spending that should have come from taxes. Only this morning, as the hon. Member for Bath pointed out, the right-of-centre Centre for Policy Studies—[Interruption.] It is Conservative supporting, at least. The centre called for a stop to the Government's "larceny" and "plundering". Perhaps we would not use such emotive terms in this era of modernised Conservative thinking, but none the less there is little doubt that lottery money has been used, and increasingly will be used, to bail out the Government on some of their spending plans.

We fear that if the Bill that is passed does not address additionality, we will simply entrench and extend the use of lottery funds for matters that should be met out of general taxation. As I am sure that the Minister will point out, there are sometimes grey areas regarding lottery expenditure, and it was thus difficult to couch the new clauses in exact terms. However, it is also clear that we have moved significantly away from the founding principles of the lottery.

We believe that the Labour Government are, via the Big Lottery Fund and the Heritage Lottery Fund, imposing on distributing bodies a mandatory policy direction that is in line with Government objectives. For example, a significant proportion of Heritage Lottery Fund grants are awarded to schemes that can show a measurable contribution towards addressing social and economic deprivation. We have no objection to the idea of addressing that problem, but we must question whether lottery money should be expended in such a way.

I was advised only this week by Trevor Watkins of Leonard Cheshire that a concentration on specific areas of the United Kingdom for eligibility has led to unnecessary duplication in bureaucracy for charities that work throughout the UK. The absence of a UK-wide Big Lottery Fund will mean that multiple applications for grants under the lottery will be required, which could be wasteful and create a strong disincentive for small nationwide charities to apply for funds to which they would otherwise be entitled.

I was sorry that the hon. Member for Bath stole my thunder by citing an entire quotation from the former Prime Minister, Sir John Major, during whose premiership the lottery was founded. However, I shall reiterate a few of those words. Sir John Major rightly said:

"When the Lottery Bill was going through Parliament, the Labour Opposition was at pains to stress the importance of government keeping an arms-length relationship from the Lottery and, in particular, grant distribution. But, since it took power, Labour has diverted Lottery funding into areas that have historically been funded by the Exchequer."

We tabled new clause 2 as an attempt to row back from that regrettable tendency, which undermines many of the objectives that are close to the hearts of the many millions of our fellow countrymen who play the national lottery. I hope that the Minister will give serious consideration to not only new clause 2, but new clause 1. We await his views with interest, but unless we are entirely satisfied, I give notice that we will press the matter to a Division.

Charles Walker (Conservative, Broxbourne)

Thank you, Mr. Deputy Speaker, for allowing me to make a small contribution to the debate. It is always nice to speak to a packed House. I am sure that hon. Members are waiting with bated breath for my words of wisdom—[Hon. Members: "Hear, hear."] I thank hon. Members very much.

Health, education and the environment are all hugely important things and they are quite rightly the responsibility of the Government. When the people of this country voted for the Government, they thought that they were voting for a Government who would meet their health, education and environment needs. However, they were not aware that the Government were going to use the national lottery as a means of topping up spending that should be central Government expenditure. If the British public knew what was going on today, they would be a trifle concerned.

We heard from the hon. Member for Bath (Mr. Foster) about the various initiatives that have been funded by lottery money already. Some 529 pieces of cancer scanning equipment have been funded at a cost of £93 million. Of course that equipment is hugely important and much welcomed by those whose lives it saves, but should it be funded by lottery money, or through central taxation? We have set up healthy living centres at a cost of £300 million and information and communications technology training for teachers and school librarians at a cost of £231 million. Out-of-school learning hours have been funded at a cost of £180 million. Those are vast sums of money. The hon. Member for North-West Leicestershire (David Taylor), who is no longer in the Chamber, suggested that we were talking about trifles and mere pennies, but we are not—we are talking about upwards of £1 billion. The Treasury already takes 12 per cent. of all money spent on the national lottery.

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman adds to my list of examples. Does he accept that the ultimate example of funding by the lottery that clearly should have been provided by the Exchequer was the use of £111,000 for a heart failure nurse specialist at one of our hospitals?

Charles Walker (Conservative, Broxbourne)

I accept the hon. Gentleman's excellent intervention. It is a good intervention because it is the first that I have ever taken. In a sense, he has broken my virginity, and I thank him for that. Very pleasurable it was, too—he was very gentle.

Don Foster (Liberal Democrat, Bath)

I was delighted to have had the opportunity to do that, and I am delighted now that I have been able to do it twice.

Charles Walker (Conservative, Broxbourne)

It was as pleasurable the second time.

Things that should have been funded by central Government have, in fact, been funded by the lottery. All those things are hugely important, but the lottery was established to fund the additional things in life: sport, the arts and heritage—those little extras that make life worth living both nationally and as part of communities. I hope that the Minister takes our concerns on board. They were put to him in Committee. I hope that he has heard them again and will reconsider his position.

Richard Caborn (Labour, Sheffield Central)

I welcome the hon. Member for Cities of London and Westminster (Mr. Field) to his new position on the Front Bench team of the Department for Culture, Media and Sports. I hope that we have some good debates.

Additionality is an important part of the lottery. The hon. Member for Bath (Mr. Foster) has been helpful and he reflected what was said in Committee. However, I again want to put things in context. Before we introduced the Bill, there was wide consultation between 2004 and 2005 to discover what the public wanted. Hon. Members know, because it was brought up in Committee and is on the record, that only 6 per cent. of those who responded to the questionnaires as part of the consultation mentioned additionality. Of the themes that we put forward for consultation, nearly 60 per cent. of respondents acknowledged the three themes that the Big Lottery Fund would adopt. They thought that those were in tune with the things on which the lottery moneys should be spent. It is not without some major consultation that we introduced the Bill.

Don Foster (Liberal Democrat, Bath)

Will the Minister acknowledge that there is a huge difference between what he is referring to, which is the Big Lottery Fund engaging in wide-scale public consultation on how the money should be spent, and what happened when the Labour Government introduced the New Opportunities Fund and specified precisely what the money should be spent on? That is the big distinction.

Richard Caborn (Labour, Sheffield Central)

Against that background of the New Opportunities Fund, all I can say is that those were the general opinions of the public. They were reflected in their answers to the consultation. As I said, the themes that emerged from that are in tune with their opinions. They are now embodied in the Bill and the directions, at a high level, to the Big Lottery Fund. We have the evidence.

I must say that that research is far better than the research carried out by the Centre for Policy Studies. Ruth Lea astounds me sometimes. I do not know how, as an economist, she adds the figures up. She should go back to basic arithmetic from time to time. Its research is supposed to be embargoed until tomorrow, but everyone seems to have a copy, including the Daily Mail, and it is on the website. It cannot even get the embargo date right. The research is like a comic opera. Some of the figures do not add up. She just tosses in the odd £6 billion, which is the revenue taken by taxation. Others will make their judgments on that.

New clause 1 seeks to require each lottery distributing body to make an annual report to the Secretary of State on the way in which it makes funding decisions during the year. Although it does not seek to compel distributing bodies to include any particular item, it is clearly expected that they would report on the way in which their decisions were made independent of Government and how, indeed, they have followed the principle of additionality. Where appropriate, they would report on the proportion of funds given to the voluntary and community sector. As I said, they would do so where appropriate, and I assume that the new clause is referring to the undertaking by the Big Lottery Fund that 60 to 70 per cent. of funding will go to voluntary and community sector organisations. The fund will produce an annual report on the way in which the principle of additionality has been followed, and the hon. Member for Bath welcomed that provision.

The Government nevertheless agree with much of what lies behind new clause 1. We agree that the lottery funding decision should be made by distributing bodies independent of Government, although within an overall framework of high-level Government control through policy directions—I do not think that there is any disagreement about that. That is the proposition that we have submitted to the public in our consultation, to which I referred a little earlier, on the future of lottery funding for the good causes of the arts, film, heritage and sport. May I reiterate that we agree with the principle of additionality? We continue to follow the principle that lottery funding should not be allowed to become a substitute for funding that would usually fall to mainstream Government expenditure. When discussing additionality, it is important to clarify the nature of the Government expenditure that we are talking about. Some people call it core Government expenditure, others mainstream Government expenditure, but there is a great deal of Government expenditure, which I shall come on to, that falls outside such expenditure.

That does not mean that the lottery cannot support things that receive strong public support or that lottery grants cannot add to public expenditure. That, too, is the proposition that we are putting to the public in our consultation. As I have noted, the Big Lottery Fund has agreed to produce an annual report to show how the principle has been adhered to. All distributing bodies already produce an annual report, which is placed in the Libraries of both Houses. I am grateful to the hon. Member for Bath for drafting his provision in a way that tries to take account of some of my comments in Committee. In particular, we should not attempt to define additionality, as that would leave every funding decision open to legal challenge, thus preventing many good causes and projects from being funded in future. I am grateful to the hon. Gentleman for his helpful approach, and I am sympathetic to the notion that the other distributing bodies may follow the lead of the Big Lottery Fund and explain how their grants have been made and, indeed, how they have met the principle of additionality.

This morning, I discussed the issue with the chief executives of the distributors who, by chance, had a meeting at the Department for Culture, Media and Sport. In his new clause, the hon. Member for Bath has tried to reflect our debate and discussions, including sentiments expressed in Committee. Indeed, his provision builds on the fact that Stephen Dunmore, the chief executive of the Big Lottery Fund, told the voluntary sector that in his annual report he would report on additionality and the spend of 60 to 70 per cent. I wish to make it clear that the Big Lottery Fund has made a commitment to report on such matters in its annual report, but this morning, the other lottery distributors agreed that they would each determine a policy on additionality and make it publicly available, probably through the annual report. However, they will develop other ways of making that policy available. That goes a long way towards satisfying the demands, which I think are genuine, for the executives of the lottery distributors to be held to account in a way that does not finish up as a lawyers' paradise. If that can be included in the annual report of the distributors and placed in the Library of both Houses, that will allow Members the opportunity for further debate through Select Committees or Adjournment debates or on the Floor of the House. That debate will be informed by the way in which lottery distributors have defined additionality and how they dispense the lottery money. Additionality in an area such as heritage may be defined differently from the way that it is defined by the Big Lottery Fund. It can be applied in a different way, although the objective is the same.

I welcome the undertaking by the chief executives of the lottery distributors this morning to try to ensure through their annual reports that the Members of both Houses have that information and can use it for informed debates. However, we must be conscious of the need to avoid additional bureaucracy, which would go against the important principle in the Bill that more lottery money should go more quickly to good causes.

I am sure that my parliamentary colleague the Under-Secretary of State for the Cabinet Office, not to mention the Prime Minister, would be less than pleased if I considered new clause 1 without acknowledging the Legislative and Regulatory Reform Bill. That was introduced earlier this month, supported by a number of stakeholders in the public and private sector. Members on the Opposition Front Benches would acknowledge that they have been at the forefront of the argument against red tape and additional bureaucracy. The Better Regulation Executive has made great efforts to tackle unnecessary or overcomplicated regulation and disproportionate bureaucratic requirements.

Mark Field (Conservative, Cities of London and Westminster)

In that context, will the Minister answer the point that I made in my initial comments in relation to the Leonard Cheshire homes? Because the charity is a UK-wide body, it would have a single template and thus avoid multiple applications for Big Lottery Fund distribution, but the nature of the distribution and the other giving is such that there are many small, quite regionalised award-giving bodies, which makes it necessary for such a charity to duplicate its paperwork many times over for the various applications, instead of making a single UK-wide application. Is there any proposal to do away with such wasteful duplication?

Richard Caborn (Labour, Sheffield Central)

If the hon. Gentleman writes to me, I will take the matter up with the Big Lottery Fund. We will do anything that we can to streamline applications. That is covered on the website. Measures that the Big Lottery Fund has put in place should make it more sensitive at national, regional and sub-regional level to organisations such as the one that the hon. Gentleman described.

The undertaking by the Big Lottery Fund that 60 to 70 per cent. of its funding will go to voluntary and community sector organisations is a commitment by the Big Lottery Fund alone and is not applicable more widely. We shall have a full discussion of that undertaking when we come to amendment No. 4. For now, I say again that the undertaking has been given by the boards of the Community Fund and the New Opportunities Fund, operating as the Big Lottery Fund, and not by the Government. We fully support the undertaking, but we do not need to repeat it or write it into the Bill. I want to make it clear that it does not apply to other distributing bodies.

We do not support new clause 1 in the form in which it has been tabled, for the reasons that I have given, but we will have the co-operation of the chief executives of the other distributors, which will probably take the same position as the Big Lottery Fund. It will be possible to debate additionality in the House in an informed way, against the background of the annual report.

Don Foster (Liberal Democrat, Bath)

First, before the Minister was intervened on by the hon. Member for Cities of London and Westminster (Mr. Field), he began a set of remarks about regulatory reform legislation. I could not see where he was going with those remarks, so perhaps he will explain precisely what he means. Secondly, he has said that the chief executives of the various distributors have assured him that they will produce a report, which he has told the House will enable hon. Members to debate the matter. Without a mechanism to place the report formally before the House, however, he is not going very far in meeting the issues raised by new clause 1.

Richard Caborn (Labour, Sheffield Central)

The hon. Gentleman has been a Member of Parliament for many years, and he knows that Ministers do not organise the House's time from the Dispatch Box. The information on additionality that the hon. Gentleman wants will be available in the annual reports of the distributors, which will be placed in both Houses of Parliament. Those reports can be used to inform a debate, whenever hon. Members want to hold it.

The hon. Gentleman should make a commitment from his Front Bench that the Liberal party will give up one Supply day—half a Supply day will do—every year to debate additionality. If he were to make such a commitment, it would advance new clause 1. He should give up a Supply day to debate the information that the chief executives of the various distributing bodies will put in their annual reports. I wonder whether he wants me to give way so that he can say yes to that proposal.

Don Foster (Liberal Democrat, Bath)

I am not rising to give the Minister the assurance that he seeks. From the Dispatch Box, he has told us that additionality is so important that he interrupted a meeting in his Department today to discuss new clause 1. However, he expects Opposition parties to give up their limited time on the Floor of the House to debate it, when it is the Government's responsibility. It should be debated in Government time, not Opposition time.

Richard Caborn (Labour, Sheffield Central)

People reading Hansard will make their own judgment. The Liberal party tabled new clause 1, and I have delivered all the information required from the Dispatch Box. The information will be there for Parliament to debate, but the hon. Gentleman will not make a commitment from the Front Bench to give up a Supply day to use that information to inform the nation. I think that the nation will make a judgment on how he can be so hypocritical.

New clause 2 seeks to define additionality by reference to what Governments do not usually fund and to hold both distributing bodies and the Secretary of State to such a definition. The Government entirely reject new clause 2 for reasons that I explained at some length in Committee. Strictly speaking, additionality is a matter between the Department for Culture, Media and Sport and the Treasury. If my Department were ever to seek to replace its funding with lottery funding, the Treasury would rightly reduce our funding by the same amount. Additionality will never be constant, so we cannot define what Governments usually provide. The Government provide money—[Interruption.] I wish that the hon. Member for Bath would listen—he has tabled new clause 1 but he is not even listening to what I am saying. I am trying to explain to him and to the hon. Member for Cities of London and Westminster why we reject new clause 2.

The Government provide money to some charities, which is not core Government spending. Does that mean that the lottery should not give more to charities? The Government provide money to arts, sports and heritage in many areas—that is not core, or mainstream, Government spending. Does that mean that lottery funding cannot be used as well? We can follow the principle of additionality, but if we try to define it, or what the Government should "usually" fund, we will be restricted in some way from funding genuine good cause projects in the future. We cannot predict what those projects will be, but it is likely that those who will be most upset when we do not continue to fund them are those calling on us to set a definition.

It might help if I highlight some examples of good projects that have been funded from just one lottery programme—"New Opportunities for PE and Sport"—in the constituencies of hon. Members who tabled the new clause. In the constituency of the hon. Member for Cities of London and Westminster, Westminster city council awarded almost £80,000 for improvements to the sports hall at Millbank primary school. Does he want us to withdraw that money because it is part of mainstream Government funding?

In the constituency of the hon. Member for North-East Cambridgeshire (Mr. Moss), Cambridgeshire county council received more than £1.1 million for sporting facilities to provide young people and the community generally with high-quality tennis courts, a floodlit multi-use games area and a wide range of after-school sports activities. Should we withdraw those areas of funding because they are additional to Government spending?

Charles Walker (Conservative, Broxbourne)

I hope that the Minister has some good news for Broxbourne on his list, because I recall that in Committee I was sometimes disappointed when he managed to gloss over my beautiful constituency.

Richard Caborn (Labour, Sheffield Central)

Unfortunately, I do not have an example, but I will find one. I will refer to the hon. Gentleman's constituency before the end of the debate. I am looking to my officials to ensure that they dig out all the stats.

As the hon. Member for Bath noted, there is a difference of opinion between Conservative Front Benchers. At the last election, the Conservatives proposed a scheme called Club2School, whereby every child would have the right to two hours of free after-school sports coaching. There is nothing wrong with that—we completely agree with it—but where was the £750 million with which they proposed to pay for it going to come from? The new Leader of the Opposition has told us that it would come out of the lottery.

As the hon. Member for East Devon (Mr. Swire) has just returned to his seat, let me tell him that he was wrong on two counts: the Bill winds up the Millennium Commission, and the residue of the money will go towards the development of the Olympics. The money was not spent in 2000, because it is still there. The final decision will be taken by the board.

To sum up, we support the independence of lottery distributing bodies and the principle of additionality. All distributors are aware of the need to follow that principle. They have responded positively and practically to the demands that were made in Committee. I hope that, given that explanation and the positive moves made by the chief executives of the funding bodies, new clause 1 will be withdrawn.

Don Foster (Liberal Democrat, Bath)

I begin by thanking the Minister for his conduct of the debate on the important subject of additionality. I also thank him for the praise that he heaped on me—for my helpfulness and consideration and the way in which I took account of all the discussions in Committee and other places. I thank him, too, for the meeting that he held today with the chief executives of the lottery distributors.

However, on 14 June last year on the Floor of the House, the Minister—nobody else—said that

"additionality was an important principle that should be embodied in future legislation."—[Official Report, 14 June 2005; Vol. 435, c.168.]

He did not say that we should get assurances from all sorts of people outside and include nothing about it in the measure. I welcome the fact that he has got those assurances—that constitutes huge progress—but I believe that what he said in June last year was right. We need the principle to be embodied in the legislation.

Richard Caborn (Labour, Sheffield Central)

Not to put too fine a point on it, every lottery distributor has to report to the House, through a report to both Houses of Parliament which is placed in the Library. A report on additionality by each lottery distributor will appear in the annual report, which is put in the Library. The report has to be produced by statute.

Don Foster (Liberal Democrat, Bath)

The Minister still refuses to accept that we need the principle to be on the face of the Bill, but we have experienced problems with previous lottery Bills. In discussions on them, hon. Members referred to concern about additionality. Prime Ministers and Leaders of the Opposition assured us that they would not raid lottery funds, yet they did so. It is therefore crucial to include the principle on the face of the Bill.

We have made enormous progress towards what I want to achieve. However, the Minister said that additionality issues "may" be reported in the annual report, not that they would be. More important, he has not acceded to his desire to include something about the matter on the face of the Bill.

It is therefore with deep regret, given our progress, that I press new clause 1 to a vote.

New Clause 3 — Duty to consider ease of applications for money

Don Foster (Liberal Democrat, Bath)

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

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this it will be convenient to discuss amendment No. 13, in clause 11, page 7, leave out lines 4 and 5 and insert—

'(c) promotion of the benefits of the distribution of money under this Act.'.

Don Foster (Liberal Democrat, Bath)

New clause 3 deals with the important issue of the ease of applying for lottery grants. Many Members are well aware that in the early days of the national lottery, applying for a grant from any of the then distributors was quite a cumbersome affair. Things have become much better since then, year on year, but the purpose of the new clause is to insert in the Bill a mechanism to ensure that ease of application remains at the forefront of the thinking of all distributors.

I said that the arrangements had been problematic in the past. Only two or three years ago, Sport England had to employ highly paid consultants to help people fill in forms that had been drawn up by Sport England itself. Not only did sports clubs express concern, but David McNeil of the Arts Council, reflecting on the early days, said that the difficulty in applying for grants

"tended to benefit established organisations and those who had access to professional help and contacts."

As I said, things have improved. In the days when Lord Smith of Finsbury was Secretary of State for Culture, Media and Sport, he made it almost a requirement for all lottery distributors and those responsible for creating the forms to attend a presentation by the Plain English Campaign. That clearly was helpful. There are other tangible examples of progress. For example, the Heritage Lottery Fund has undoubtedly simplified its procedures and speeded up the way in which lottery money reaches projects, especially small grants to bodies that do not have easy access to professional help in filling in the forms. It is worth quoting figures showing how much progress has been made. Of those people who applied for grants in 2002–03, 71 per cent. felt that the amount of documentation required was "about right". That was a significant improvement on the previous year, when only 56 per cent. of grantees supported that statement.

Since then, there has been further progress. That has been particularly the case since the Government's review of lottery funding, which I welcomed and that was published in January 2003. We should all place on the record our praise to the relevant Ministers and their staff for their work on that. The report acknowledged that progress was made, but went on to say that more needed to be done. It said:

"Some respondents felt that it could still be difficult to apply for funding, especially for smaller organisations, but thought that it had become easier over the years since the Lottery began."

As I say, progress has continued to be made since that time. However, it is worth reflecting on how problematic it can still be. I could choose many examples, but shall give just one. The chairman of the Aln Valley Railway Society, Mr. Stuart Manley, pointed out that it had to spend £100,000 on putting together its bid for funding from one of the lottery distributors. It got £6 million as a result of the success of that investment of £100,000, but that was a huge amount.

We should praise the distributors, who are making progress. I welcome that and recognise that they acknowledge that more work still needs to be done. The HLF is consulting on its strategic plan, which will run from 2008. Included in that consultation is the issue of simplification and accessibility. The Big Lottery Fund has said that it has made enormous progress, but intends to continue to make progress. During the passage of the Bill in Committee, the Minister talked about the way in which the Big Lottery Fund will become a one-stop shop, or, as some people want to call it, one front door, for all lottery applications. I think that that will be an enormous help.

I am delighted that there has been support for the new clause from a number of organisations, including the Central Council of Physical Recreation, all of which have acknowledged that, while progress has been made, there is a need for more to be done. Therefore, new clause 3 requires that the issue of accessibility, of ease of application, be placed in the Bill so that we continue to be reminded of its importance.

Amendment No. 13 raises a different issue: whether it is right for lottery distributors to be promoting the playing of the national lottery. I said in Committee that it was right that the lottery distributors should promote the work that is done with the money that they distribute. They should be engaging in debate with the public about how that money should be spent. During the Committee stage, I tabled an amendment that basically had a similar effect, but in a different way. At the end of the consideration of the amendment I said:

"Perhaps in the interim"—

that is, between Committee and Report stages, although I did not anticipate that the interim would be so long—

"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."

I gave the Minister a chance to say those words then—today, I am giving him another chance to make it absolutely clear that the lottery distributors will not be able to promote the playing of the national lottery or national lottery games.

The Minister went halfway when he told me:

"Distributors are not in the business of promoting national lottery games . . . that is Camelot's responsibility under the terms of its licence."—[Official Report, Standing Committee A, 1 November 2005; c. 174, 171.]

I know that it is not the distributors' business to be doing that, but I am anxious to ensure that they do not actually do it. Greater clarity is needed.

I also want to put on the record how important it is for the distributors to promote the uses to which they put the moneys that they distribute. There is huge confusion in the mind of the public about the various projects. I referred in Committee to the ICM poll that found that people believed that the same amount of money went to help asylum seekers as to supporting disabled people—although the ratio is really 10:1 in favour of disabled people. I make no comment on whether that is right or wrong; I am merely pointing out that there is a huge misconception in the mind of the public.

That is not helped by some newspaper stories about applications being turned down for politically correct reasons, which often turn out to be a load of nonsense. For example, in October The Times ran an article about the Severn Area Rescue Association's application being turned down because it could not provide details of the social background of the people whom it rescued. That turned out to be totally untrue. The Times published the story on 18 October and had to correct it on 27 October.

The worry is that the problem continues to this day. Only today, in the Daily Mail, we are told yet again that St. Paul's Cathedral was turned down for funding because it did not appeal to a diverse audience. Again, that story is not true. The Daily Mail says:

"the heritage fund has forced St. Paul's Cathedral to withdraw an application for £8.9 million for restoration work because it allegedly fails to appeal to a 'wider audience' among minority groups."

I talked today to the people from the HLF and they assured me categorically that that story is untrue. St. Paul's voluntarily withdrew its application, which largely related to cleaning the outside of the building. It is worth reading out exactly what the HLF said in its briefing to me today, to put it clearly on the record:

"It's not true that the application was rejected because it didn't have wide enough appeal—clearly not the case at such a popular attraction and important cathedral. HLF has funded more than 2,000 places of worship and is committed to supporting this important expression of our heritage".

Indeed, I understand that discussions are ongoing between St. Paul's and the HLF about possible future funding.

It is important that the lottery distributors should engage with the public about the way in which money is used. I welcome the "Restoration" and "The People's Millions" programmes, and many other examples, but I worry about distributors promoting the playing of the lottery itself. The reason for that is simple. The best way to give money to a charity or other good cause is not by playing the national lottery. If someone plays the national lottery and spends £1 on their ticket, only 28p goes to the good cause, but if someone gives £1 directly to a good cause, using the benefit of Gift Aid, £1.28 goes to the good cause. If we want to give money to a charity, it is much more efficient to give it directly, preferably using Gift Aid, than through the national lottery. However, people play the national lottery not just to give money to good causes, but to have a chance of winning one of the prizes. That is understandable and I make no criticism of that, but that does not mean that playing the lottery is the best way of giving money to a charity.

We must ensure that lottery distributors do not promote playing the lottery or lottery games, but I am very keen for them to promote the activities that they engage in, using the money that they have raised. That is the purpose of amendment No. 13.

Richard Caborn (Labour, Sheffield Central)

As drafted, new clause 3 would require a distributing body to have regard to the ease of application for its grants if it solicits applications for grants. However, I wonder whether the intention behind the new clause was the more general one of requiring distributing bodies to have constant regard to the ease of applications, whether or not they have been sought. I agree with the sentiments behind the new clause, which was tabled jointly by the hon. Members for Bath (Mr. Foster) and for East Dunbartonshire (Jo Swinson). It is very important that it be made easier for people to access lottery funding; indeed, that is one of the Bill's aims. As the hon. Member for Bath said, we have made steady progress in that regard and, hopefully, we will continue to do so. As I said to the hon. Member for Cities of London and Westminster (Mr. Field) earlier, that is what we want to achieve.

We are encouraging all lottery distributing bodies to make their application processes easier, and that is already happening. Where we need to legislate, we have already done so. Clause 14 inserts a new section 36D into the National Lottery etc. Act 1993 that will enable the Big Lottery Fund to give wider lottery advice, particularly on the inviting, making or considering of applications for grants. That will, in turn, enable the BLF to develop common application forms, and to take a lead on the sharing of best practice and on the developing of pre-application support and common standards of service.

A good example of the sort of thing that new section 36D will enable is the lottery funding website, which will be launched soon. It will provide a single front door and give up-to-date detailed advice and guidance on how and where to apply for lottery grants. That will be particularly helpful to organisations and people who find it difficult to apply for lottery funding under the current system. One such example is village halls, as the hon. Member for Truro and St. Austell (Matthew Taylor) pointed out in an Adjournment debate last October. However, we see no case for introducing a specific requirement in that regard. As I said earlier, we are keen to reduce bureaucratic and administrative burdens, not to add to them. We see no reason to link such a requirement specifically to the soliciting of applications.

We gave lottery distributing bodies the power to solicit applications back in 1998, and doing so has proved very successful indeed. Before 1998, distributing bodies had to wait for an application to arrive, often from the great and good. That change has had a considerable impact. The lottery forum, which represents lottery distributing bodies, told us that introducing the enabling power to solicit applications was key to widening access to the lottery; it enabled distributing bodies actively to seek applications from certain communities. We do not want distributing bodies to be restricted in any way in their ability to solicit applications.

Amendment No. 13 takes us back to a debate in Committee. I appreciate that in tabling it, the hon. Members for Bath and for East Dunbartonshire were to some extent prompted by the National Council for Voluntary Organisations. They are concerned that, as drafted, clause 11 will encourage people to play the lottery and to regard it as a good way to give money to charity. As I tried to explain in Committee, it will do no such thing. Promotion of the lottery games is entirely a matter for Camelot, the lottery licence holder. Clause 11 will remove the doubt that exists in some minds about whether the lottery distributing bodies have the proper powers to publicise the national lottery beyond the grants that they award and the purpose behind them. It will allow them to publish more general information about the work of all lottery distributing bodies, so that the public can be better informed about where the money was awarded.

I agree with what the hon. Member for Bath said so succinctly in respect of today's national newspaper reports about the Heritage Lottery Fund and St. Paul's. The reports are unacceptable, and the newspapers involved should read Hansard and make amends by clarifying what actually happened. However, that case underlines why we believe that it is necessary for the lottery to promote the good causes that it supports.

Mark Field (Conservative, Cities of London and Westminster)

May I say that I agree with the Minister? St. Paul's is in my constituency and I have had dealings with people there. I have also worked with people at St. Martin in the Fields, which in recent years received a very large grant. There were parallels between those cases, but it was accepted that St. Paul's would need to reassess its application.

The Minister has described the process of giving information, but will he confirm that it will involve more than simply rubbishing press reports? The process should not be merely reactive—information should be made available regularly and proactively, to ensure that the spirit of new clause 3 and amendment No. 13 is retained.

Richard Caborn (Labour, Sheffield Central)

I agree with the hon. Gentleman's sentiments, but I emphasise that we do not believe that it will be enough to restrict the power to the sole benefit of the distributing bodies. Our definition is wide because there is such a wide range of publicity activities for those bodies to get involved in. Public awareness of the lottery can take many forms and we would not want to limit how the distributing bodies can convey awareness of what the lottery has funded.

The distributing bodies must be able to tell all the good news stories about the good causes and about how people are benefiting from lottery funding. To that end, we want to ensure that they can participate fully in the work of the national lottery promotions unit, which seeks to raise positive awareness of, and support for, the benefits of national lottery good cause funding across the whole country.

Specific examples of that wider promotion are the hugely successful national lottery day and the national lottery awards. Those innovations are designed to raise public awareness of how lottery money is used for good causes, and both are held under the auspices of the national lottery promotions unit. We want to ensure that they and other promotions of the lottery good causes can continue, and retain the full engagement of the distributing bodies.

I realise that some unintentional confusion was generated in Standing Committee when the hon. Member for Bath picked up a typographical error in the explanatory notes. I have served on many Committees with him and know that he always goes through such notes very carefully. With his eagle eye, he spotted that the notes said that the process would contribute to the "brand" health of the lottery. They should have said that the process will contribute to the "broad" health of the lottery, and that is what will appear in the revised version that I hope will come out tomorrow.

At the time, I did not recognise the significance of what the hon. Member for Bath was saying. I hope that he will accept my apologies and assurances in respect of this matter.

To sum up, new clause 3 is intended to be helpful, but it would put another bureaucratic obstacle in the way of getting lottery money more quickly to good causes. I am sure that the House would not want that to happen. Amendment No. 13 is similarly well intentioned, but it would place unreasonable restrictions on the ability of distributing bodies to be fully involved in work to promote the lottery good causes and would therefore undermine the good work of the national lottery promotions unit. The fact that the lottery can be undermined by inaccurate reporting shows that lottery promoters need the powers in the Bill so that they can give a positive and proactive account of what is happening with the good causes, and in that way retain public support. I therefore hope that new clause 3 and amendment No. 13 be withdrawn.

Don Foster (Liberal Democrat, Bath)

I shall begin as I began when I summed up the last debate, namely, by thanking the Minister. He has been extraordinarily generous in his remarks to me and to my hon. Friend the Member for East Dunbartonshire (Jo Swinson) on the new clause that we tabled. I am also grateful for his kind comments about the diligence with which I study explanatory notes. I hope that he noticed that I did not even refer to that episode in my opening remarks, having decided to reserve mention until this point, had the Minister failed to mention it. However, he has admitted that he made an error and confirmed that it will be changed, and I welcome that, as I welcome the spirit of his remarks.

In relation to new clause 3, I understand, just about, the Minister's point about it adding bureaucracy to the system, but the example he gave suggested that by making it easier to fill in an application form, it would somehow lengthen the time it takes for someone to access the funds. I have difficulty in coming to terms with that, but perhaps in a subsequent private conversation he will explain to me how that could be the case.

I am grateful to the Minister for confirming what I said earlier about the St. Paul's issue and he is 100 per cent. right to say that the newspaper concerned owes its readers and all the bodies concerned an early correction of the error. I acknowledge what he said about the need to ensure that lottery distributors do not promote the playing of the lottery and lottery games, but it is important that they should promote the good causes. I genuinely believe that the lottery distributors are doing that already and they are doing a good job.

I hear from Sir Clive Booth, the excellent chairman of the Big Lottery Fund, that every time I mention his name and call him excellent, one of his relatives goes—well, the expression he used is one that I probably should not use in the Chamber. Let us say that his relative is delighted when I make the connection between Sir Clive and excellence. In any case, I very much welcome the good work that the BLF and other distributors are doing.

Given the assurances that the Minister has given, it would be sensible to acknowledge that the work that I want to happen will happen and I shall therefore not press the issue to a vote. I welcome the Minister's assurances and I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 4 — Length of licence

Richard Caborn (Labour, Sheffield Central)

I beg to move amendment No. 1, in page 4, line 1, after 'may', insert

'(subject to the restriction in subsection (1A)(b))'.

This amendment refers to the provision in clause 4 of the Bill to allow the National Lottery Commission to include provision in the licences it issues under sections 5 and 6 of the National Lottery Act 1993 to grant an extension of such a licence. It is our intention that any such extension is subject to the maximum total licence length of 15 years imposed by new section 7(1A)(b) inserted by clause 4. Although we consider that clause 4, as originally worded, would achieve that end, it became clear in Committee that the issue of the impact of an extension was subject to doubt. The amendment will therefore provide unambiguous clarification that the maximum length of a licence would be 15 years, inclusive of any extension. I hope that that clears up some of the misunderstanding that we had in Committee.

Mark Field (Conservative, Cities of London and Westminster)

I must confess that, not having served on the Standing Committee, it seems somewhat superfluous to refer to what happened 15 years ago. I am sure that the hon. Member for Bath (Mr. Foster) and the other hon. Members who served on the Standing Committee will tell me otherwise, but I am sure that this is an entirely uncontroversial Government amendment. Perhaps I speak for myself on that matter, and perhaps we shall hear a longer speech from the hon. Gentleman before too long. The Government amendment obviously seems sensible. Their draftsmen no doubt have in mind a belt-and-braces approach. I do not think any great concern has been raised, and I therefore hope that we shall move swiftly on to the next group of amendments.

Don Foster (Liberal Democrat, Bath)

I had not intended to speak, but perhaps I can give the Minister an opportunity to reflect on the words uttered by the hon. Member for Cities of London and Westminster (Mr. Field). He said that the Government amendment is not controversial. It is not controversial in the sense that it merely confirms what most hon. Members knew was the Government's intention, but it is controversial in the sense that many people argue that a different licence length should be given to the lottery. Some people argue that the licence should last a short period, while others argue that it should last a long time.

Given that we are about to enter into a new phase of deliberation about who will provide the lottery in future, it is crucial that the Government are clear about issue, because it has a huge impact on who will bid to run the lottery and on the terms and conditions under which people would expect to run it. It is vital to make such matters clear, although, as I said in Committee, I believe that the Government have got the balance between the arguments about very short and very long time scales 100 per cent. right. Indeed, they have included the flexibility to extend the fixed period. So it is important to make that vital issue clear.

Richard Caborn (Labour, Sheffield Central)

It is absolutely right that this is one of the tools that we will use to maximise the lottery, by setting the conditions for those who will negotiate. I am sure that we will not finish up, as we did last time with the new licence, in something of a mess, which created a few problems. We have looked at that carefully and reflected on it, and as the hon. Member for Bath (Mr. Foster) says, we have just about got it right, so that we can maximise the marketplace. I am pretty sure that we will attract a good number of bidders, thus serving the health of the lottery.

Don Foster (Liberal Democrat, Bath)

The Minister says that he is optimistic that there will be a large number of bids. Since the proceedings in Committee finished, a lot of work has been going on to talk to various people. Perhaps the Minister can briefly bring the House up to date on how successfully that issue has been handled.

Richard Caborn (Labour, Sheffield Central)

I shall write to the hon. Gentleman about that, because I do not know exactly how many people are involved. I have not been briefed about that in recent weeks, so I would not want to say at the Dispatch Box something that is wrong. However, I will write to him and place a copy of the letter in the Library.

Amendment agreed to.

Clause 7 — Distribution of lottery funds

Mark Field (Conservative, Cities of London and Westminster)

I beg to move amendment No. 2, in page 5, line 14, leave out 'prescribed'.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this it will be convenient to discuss the following amendments:

No. 4, in page 5, line 19, at end insert—

'(2A) After subsection (3) insert—

"(3A) Not less than 70 per cent. of the sum allocated under subsection (3) (d) shall be allocated to bodies (other than public bodies or local authorities) whose activities are carried on not for profit.".'.

No. 3, in page 5, line 20, leave out subsection (3).

No. 5, in page 5, line 38, at end insert—

'(da) persons that the Secretary of State considers to be representative of bodies (other than public or local authorities) whose activities are not carried on for profit,'.

No. 11, in clause 14, page 9, line 13, leave out 'comply with' and insert 'take account of'.

No. 10, in page 13, line 2, leave out clause 19.

Mark Field (Conservative, Cities of London and Westminster)

[Interruption.] And people say that there is no bugging in the House.

May I take this opportunity to thank the Minister for his earlier kind words about my new Front-Bench role? We have a number of things in common. We are both keen football fans—a rarity, perhaps, among Opposition Members, but less so among Labour Members. The Minister might not recall that I first met him some years before I was elected to the House at the erstwhile ground of Reading football club—my home town—at Elm Park. Unfortunately, Reading have remained a thorn in the side of Sheffield United, and I suspect that they will remain so for much of this season, as they both try to get into the premiership next year. Good luck to the Blades and good luck obviously to the Royals as well.

The Minister and I also have another thing in common: we share a birthday. It may be obvious that he is a few years older than me. Suffice it to say that he came of age on the day that I was born, and of course coming of age in 1964—the year that I was born—was a somewhat different proposition to what it may be today. There is one other Member of the House with whom we share a birthday, although he does not attend regularly: the hon. Member for Belfast, West (Mr. Adams). Suffice it to say that if I grow a beard, we will be almost indistinguishable as a trio of people born on 6 October. However, enough of this frivolity, Mr. Deputy Speaker, let me turn to amendments Nos. 2 and 3.

A major theme of the Bill is the way in which the Secretary of State is taking more power over lottery expenditure than she has at present. Worry about that was expressed on Second Reading and in Committee, and it is one of the reasons why we have tabled the amendments. Section 22 of the National Lottery etc. Act 1993 sets out the division of funds among good clauses. Clause 7(2)(b) of the Bill will merge the charitable, health, education and environmental pots for the purposes of creating the Big Lottery Fund. However, that sum is allocated for "prescribed expenditure", rather than expenditure that falls simply within the specific categories set out in section 22 of the 1993 Act. The expenditure is, of course, prescribed by the Secretary of State by order.

Amendments Nos. 2 and 3 would remove the Secretary of State's ability to prescribe expenditure in such a way. The Big Lottery Fund should be able to spend on any matter that its objects allow, rather than be limited to the pet projects of any Secretary of State. We have in mind a situation in which there is discretion in the hands of the distributor, instead of a mandatory stick of compliance that is wielded by the Secretary of State.

The Bill sets out clearly and transparently the purposes of Big Lottery Fund expenditure, but we do not think that that should be narrowed down by the Secretary of State's orders. We will run the risk of that happening unless the amendments are accepted. While the Secretary of State has powers over spending due to sections 25 and 26 of the 1993 Act, the prescribed expenditure is a new and further way of directing funds. We find the proposal objectionable and think that we need some means of overturning it. In summary, amendments Nos. 2 and 3 would put the Big Lottery Fund in the same position as other distributing bodies and remove the prospect of the Secretary of State being able to override it. We may return to that matter later in the debate.

Amendment No. 4 would apply to charitable and voluntary groups that are not charities. It would put in the Bill the assurance that the Minister gave on Second Reading that some 60 to 70 per cent. of Big Lottery Fund expenditure would go to voluntary or community groups. We decided that as the Minister is a generous man and he intended to provide reassurance to those groups, we would pitch for the higher figure of 70 per cent. in amendment No. 4.

On Second Reading, the Minister said:

"I acknowledge that some have said that a Big Lottery Fund could lead to voluntary and community sector organisations losing out. I can give a categorical assurance that that will not happen . . . The Big Lottery Fund has given a clear undertaking that 60 to 70 per cent. of its funding will go directly to the sector."—[Official Report, 14 June 2005; Vol. 435, c. 170.]

It was thus somewhat disappointing that the Minister resisted such an amendment in Committee, when he said:

"As that undertaking has been given by the boards of the Community Fund and the New Opportunity Fund, not the Government, it would not be appropriate to enshrine it in the Bill"

and

"It is not for the Government to decide whether it is 60 or 70 per cent.; it is a decision for the Big Lottery Fund."—[Official Report, Standing Committee A, 25 October 2005; c. 40.]

As I pointed out when I spoke to amendments Nos. 2 and 3, we want to ensure that the Big Lottery Fund has proper discretion. Given the assurances that were made on Second Reading, I hope that the Minister will accept amendment No. 4.

Indeed, on Second Reading, the Minister said:

"I give a guarantee that between 60 and 70 per cent. of the Big Lottery Fund's income will go to communities or charities."

In case there was any mistake, his ministerial colleague, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Stalybridge and Hyde (James Purnell), said in the same debate:

"We guarantee that between 60 and 70 per cent. of Big Lottery Fund grants will go to the voluntary sector"—[Official Report, 14 June 2005; Vol. 435, c. 175, 218.]

A Government guarantee was given to the House on Second Reading. Both Ministers who spoke in the debate made it clear that the matter was for the Government to decide, which is why amendment No. 4 should be accepted.

Amendment No. 5 is designed to add to the persons—bodies representing the voluntary sector—who need to be consulted before the Secretary of State prescribes expenditure. It is based on proposals by the National Council for Voluntary Organisations, which helped the Conservatives and Liberal Democrats to prepare for our discussion on Report. I shall also give it credit where credit is due at a later point. I understand that the hon. Members for East Dunbartonshire (Jo Swinson) and for Bath (Mr. Foster) put their names to the amendment in Committee.

Whether particular voluntary organisations or their projects will be able to obtain grants from the Big Lottery Fund will depend on whether their activities are within the expenditure prescribed by the Secretary of State. She should therefore identify representative bodies and ensure that she consults them before making such important decisions.

There has been concern about consultation on lottery issues. The NCVO concludes:

"the Department for Culture, Media and Sport . . . and its affiliates have frequently ignored or overlooked"

a range of bodies that perhaps should have been consulted. I appreciate that the charitable and voluntary sector in particular is in a constant state of flux, with bodies starting up, closing down or amalgamating at any one time. It will be difficult to keep a rigorous list of those groups that should be consulted, but concern has been reiterated by a number of bodies about whether there has been sufficient consultation. On that basis, I hope that considerable thought will be given to what we are trying to do to ensure that a proper and comprehensive consultation process takes place.

We want agreement on the consultation between the DCMS and the voluntary and community sectors. The NCVO gave a specific example. It felt that there was

"A series of failures over an 18 month period by the DCMS to consult with the voluntary sector in a meaningful or clear way in regards to the proposed merger of the Community Fund and NOF."

On multiple occasions during that period there were also breaches of its consultation code. Many of us, as constituency Members, will have anecdotal evidence of that. Many of my residents and local groups are concerned about another aspect of the DCMS—the royal parks. They think that they should be consulted from time to time and feel outside the consultation loop. As I said, I appreciate that rigorous consultation is difficult when a large number of groups is set up and amalgamated, but it should be given proper consideration.

I again thank the NCVO for its assistance in helping us to propose amendment No. 11.

Clause 14 covers the functions of the Big Lottery Fund, including the power to distribute funds and to give advice, and the policy and financial direction of the fund. The amendment would ensure that the statutory framework for the new distributor more accurately reflected the statutory framework of the former distributors. The Community Fund was required only to take account of such policy directions while the New Opportunities Fund was required to comply. Since its creation in 1993, the Community Fund has been required to take account of matters concerning grant making and the conditions under which the money is distributed by the Secretary of State. That should continue with the amalgamation of the funds into the Big Lottery Fund. We are suggesting that we have continuity in the manner in which the issues are debated.

There was concern among voluntary and community sector organisations at the time of the merger that the new distributor would more closely resemble the New Opportunities Fund than the Community Fund, representing a significant increase in Government control of funding for the charitable good cause. In Committee, the Minister said:

"We are combining NOF with the Community Fund and the Millennium Commission in the Big Lottery Fund, and we are taking no more powers than already exist under NOF."—[Official Report, Standing Committee A, 27 October 2005; c. 112.]

In oral questions as recently as 24 October last year and elsewhere, assurances were given that the Big Lottery Fund would not be subject to any greater powers of direction than its former distributors. It now transpires, however, that that means no greater powers of direction than were given to the New Opportunities Fund. Had that been mooted at the time of the merger, it would probably not have received such overwhelming backing from the voluntary and community sector, and certainly not from the NCVO.

In its submission to DCMS in June 2003, the NCVO stated:

"The Secretary of State currently has the power to specify the initiatives to which NOF will give effect (i.e. the programmes which it is required to run) . . . To strengthen the independence of the new body and the additionality of its funding"—

I will not reopen our earlier debates on that subject, but the submission refers to the additionality of funding "both actual and perceived". Perception is important, as we discussed in relation to the last amendment. The submission said that, to strengthen the independence of the new body and the additionality of its funding

"there should be no comparable powers in the legislation setting up the new body."

Concerns about the New Opportunities Fund will multiply unless we use the words "take account of" instead of "comply with".

I hope that the Minister accepts that perception is important. The lowest common denominator—perhaps, from the Government's point of view, it is the highest common factor—means that there will be more Government control, which is not healthy. The NCVO submission to DCMS in June 2003 said:

"NOF only has the scope to consult on the way in which initiatives will be administered, not on what those initiatives will be. This is in contrast to the Community Fund which has the freedom to set its own strategic direction, priorities and programmes, following consultation with stakeholders, including the Secretary of State, albeit within broad Policy Directions.

The new body should be given the freedom and independence, in particular from government, to set its own strategic direction, priorities and programmes after consultation, within a broad framework set by the legislation and Policy Directions."

The control afforded to the Secretary of State in clause 14 as currently drafted threatens to undermine the independence of the Big Lottery Fund. It is vital that lottery distributors remain free from Government interference but accountable to Parliament. Research shows that the public are strongly in favour of the national lottery, particularly if it remains independent of the Government. Some 73 per cent. of respondents to an ICM opinion poll commissioned only last year said that an independent public body should decide how lottery money is spent. In Committee, hon. Members were provided with illustrative policy directions, and the Minister gave us the assurance that the Government have no intention of using those powers to intervene in individual grant decisions. Nevertheless, the future independence of lottery distributors cannot be guaranteed if those powers remain in the Bill. I hope that the Minister will consider our arguments carefully, as they are at the heart of several of our amendments and we intend to divide the House if we do not receive a satisfactory response.

Finally, with your consent, Mr. Deputy Speaker, I do not wish to press amendment No. 10. We have expressed concern that there is little reason to change the definition of charitable expenditure in section 44 of the National Lottery etc. Act 1993. There is certainly a good case for updating the guidance to ensure that it enables the new distributor to fund all the relevant organisations. However, my party takes seriously the work of organisations such as the Social Enterprise Coalition, whose representatives we have met on many occasions. The coalition's opinion is that the new definition proposed by clause 19 will give the lottery much greater scope for funding social enterprises that would otherwise fall short of the definition and be outside the scope of a lottery award. We appreciate that the issue should be subject to further consultation so that we get it right, and I hope that the Minister can initiate such consultation before the Bill goes to another place. On that basis, although we do not seek to press amendment No. 10, we trust that the other amendments that my colleagues and I have tabled will receive further consideration.

Jo Swinson (Liberal Democrat, East Dunbartonshire)

I take this opportunity to welcome the hon. Member for Cities of London and Westminster (Mr. Field) to his new role on the Front Bench. I am sure he will find it a very fulfilling one. He mentioned that he did not have the enjoyable experience of serving on the Standing Committee, which I certainly found interesting, but no doubt there are many future Committees for him to look forward to.

As has been outlined, amendments Nos. 2 and 3 remove the prescriptive powers of the Secretary of State which would otherwise be introduced. We support that. The view has emerged through Second Reading, Committee and Report that it is much better to ensure that lottery distribution is kept as independent of the Government as possible. That view is supported by the public. A poll for the National Council for Voluntary Organisations found that 73 per cent. of people wanted lottery funds to be distributed by an independent body. As the Bill is drafted, the Big Lottery Fund is not such a body, as the Secretary of State has the power to prescribe to whom it gives money and what it does. We support amendments Nos. 2 and 3.

Amendment No. 4 also revisits ground that was covered in earlier stages of the Bill regarding the percentage of the Big Lottery Fund's funding that will go towards communities and charities. On Second Reading, as has been mentioned, the Minister pointed out that that would be between 60 and 70 per cent., but in Committee he was unwilling for that figure to be written into the Bill, as called for by amendment No. 27, which both Opposition parties supported. We still believe it is important for that assurance to be enshrined in the Bill.

In Committee my hon. Friend the Member for Bath (Mr. Foster) argued that the Big Lottery Fund had come to the figure of 60 to 70 per cent., but without any assurances, there was no guarantee that it would not change its mind at some later date. After all, the members of the Big Lottery Fund would no doubt change, and Ministers have even been known to change. Writing the figure into the Bill would give communities and charitable organisations the assurance that they seek.

The Minister's argument was that it would not be helpful to have that set in stone. We must remember that the original National Lottery etc. Act 1993 set in stone the percentages of good causes money that had to be distributed by each distributor. The National Lottery Act 1998 adjusted those figures, but set them in stone. The Horserace Betting and Olympic Lottery Act 2004 adjusted the figures again, and once more they were set in stone.

The Bill itself proposes changes to the proportion of funding going to various bodies. The Act as amended will contain such specifics as the fact that 2.6 per cent. of the 16 per cent. of lottery money going to sport should go to the Sports Council for Northern Ireland, and that 1.16 per cent. of the 16 per cent. spent on arts should go to Scottish Screen, so I am a little confused about how the Minister can argue for all that prescription—all those powers to tell the Big Lottery Fund what it should be doing—and then say that it would be a problem to set in stone the percentage of the money that should go to voluntary organisations. That does not seem to fit. As we know, things change, and an assurance in the Bill would be a welcome guarantee for those involved.

Amendment No. 5 deals with a related issue—involving the voluntary sector in consultation. As was mentioned in Committee, the Department for Culture, Media and Sport is not usually judged to have a good record on consulting the voluntary sector. [Interruption.] It was mentioned in Committee on various occasions that there were concerns about how that was done. Including the new wording in the Bill would help to enshrine the best practice. If the Minister feels that the Department has a good record of which it can be proud, he will have no difficulty including those lines in the Bill to ensure best practice. If the Secretary of State is to have the power to prescribe expenditure that is likely to go to not-for-profit organisations, those organisations have a specific interest in the new power and should be consulted when it is used. That should be included in the Bill.

Amendment No. 11, too, would restrict the powers of the Secretary of State. The current wording would force the Big Lottery Fund to comply with decisions by the Secretary of State, rather than taking account of them. I have no problem with the Secretary of State advising, giving counsel or putting points to the Big Lottery Fund. That is fair enough, but the power to make it comply is a step too far. In Committee, the Minister said:

"I have already announced that we have adopted a light touch on the direction of the Big Lottery Fund."—[Official Report, Standing Committee A, 27 October 2005; c. 110.]

In my view, a light touch involves cajoling, encouraging or putting forward points, not making an organisation comply. How would the Government respond if, for example, unwelcome stories appeared in the press? Would they encourage the Big Lottery Fund to change its awards? I think that an advisory role is much more appropriate, and many hon. Members on both sides of the House share that view.

In a letter dated 1 November to Denis Vaughan, president of the Council for the Advancement of Arts, Recreation and Education, Sir John Major, who, as has been said many times in the course of this Bill, was the architect of the lottery, said:

"It is scandalous how the Government have so emasculated the original purpose of the Lottery and I do take every suitable opportunity to raise this matter publicly. I shall continue to do so until the resources that were intended for the original good causes are returned to them."

It is important to ensure that the lottery's independence is preserved, and the Secretary of State's powers should therefore be restricted.

I was interested to hear the hon. Member for Cities of London and Westminster withdraw amendment No. 10. We voted against clause 19 in Committee, but we understand its impact in allowing social enterprises to receive funding—social enterprises can often deliver projects effectively, and I know that hon. Members on both sides of the House support them. Clause 19 also raises some concerns about additionality, which we have already debated today. I hope that those concerns are addressed and that clause 19 is not used to put lottery funding into Government projects, which is not what the lottery was set up for.

Charles Walker (Conservative, Broxbourne)

It is always a pleasure to follow the hon. Member for East Dunbartonshire (Jo Swinson). One so young, but so brilliant; she is an example to us all.

I want to focus on amendment No. 11, because the national lottery should be independent of Government interference. Whatever the Government of the day, the lottery should be free from the political whims and imperatives of the moment. For example—God forbid—the Big Lottery Fund could find itself being directed towards marginal seats in the run-up to a general election. I am sure that the Minister does not want that to happen, but there is no point in having power unless one uses it.

The hon. Member for East Dunbartonshire has pointed out that 73 per cent. of people interviewed by ICM in 2004 wanted the lottery to remain independent of the Government, and their voices should be heard. The lottery should be free to decide who receives money. There will always be high profile worthy causes that attract the national lottery's attention and money, but we are a diverse country, so there will always be minority cases, too.

In giving the national lottery the power to award grants, we must remember that mistakes will be made. Such mistakes might not go down well in the national media, and the tabloid press might make a stink; guinea pig farms was one such example cited in Committee. We hear a great deal about asylum seekers and single mothers, but I feel that we, as politicians, are too often led by the tabloid press. Metaphorically speaking, I sometimes think that we should give two fingers to the tabloids and focus on running the country and doing what we think is right, as opposed to chasing headlines and trying to appease people who make a big stink about issues of little importance. If we give the national lottery independence, it will sometimes make unpopular decisions, but that is a price worth paying, and as a politician, I would support it in making such decisions.

Independence does not mean this thing called "The People's Millions", whereby the Big Lottery Fund will team up with ITV to have a sort of people's panel that will vote on which communities get what awards. Those awards will account for £50,000, and perhaps £5 million or £6 million will be given away each year. We are not too short a step away from moving on from that to ITV taking us to a geriatric ward and a children's ward, and asking voters to decide who gets the money—"Do the kids get to stay in hospital or do we throw the old people out on the street? You, the viewers, decide." That is pretty obscene. I have deep problems with the idea of a TV show deciding which communities get what money.

As I have said before—I am getting a little repetitive—I do not believe that it should be up to the Minister to direct the Big Lottery Fund on where it should be spending money. That should be a matter entirely for its board. Amendment No. 11 would require the Big Lottery Fund to take account of the Minister's view but not to comply with it. That would be a step in the right direction.

The Big Lottery Fund is in danger of being seen as a body of placemen. After all, the Secretary of State will appoint the chair and all the members and direct them. One could say, "Let's just get rid of the Big Lottery Fund and the charade of independence and put all the decisions in the hands of the Secretary of State and her colleagues."

Richard Caborn (Labour, Sheffield Central)

Let me my preface my remarks by responding to the hon. Members for Broxbourne (Mr. Walker) and for East Dunbartonshire (Jo Swinson). They should bear in mind that the Bill was drafted after very wide consultation. Out of that consultation came the broad themes that we should advance through the Big Lottery Fund; creating opportunities, and promoting community learning, safety, cohesion and well-being. That is the high-level direction that is given by Government to the Big Lottery Fund.

We are talking about one of the most successful lotteries in the world. Over the past year or so, the take has gone up as more people have participated. It has been hugely successful in terms of the Olympics. Well over £4 million has already been banked, and we only won the Olympics on 6 July last year. The general public have responded to that.

The hon. Member for East Dunbartonshire said that we have a bad record on consulting the voluntary sector. In fact, when we consulted it on the terms of reference, we were accused of consultation fatigue. The accusations swing from one extreme to the other. Nevertheless, we will continue to have these positive consultations. The proposal to include a statement about additionality in the annual report to Parliament was made by Stephen Dunmore, the chief executive of the Big Lottery Fund, in consultation with the voluntary sector. That was a significant move.

This group of amendments is concerned with the Big Lottery Fund and what it will spend its money on. We discussed identical proposals in Committee at some length.I have set out clearly our reasons for resisting the amendments. No new evidence has been produced to support the amendments since our Committee proceedings, so my comments today will mirror what I said then.

Amendment No. 2 would remove the Secretary of State's power to prescribe expenditure for the new Big Lottery Fund good cause. Amendment No. 3 would remove the related order-making power. Those amendments would mean that the Big Lottery Fund was given 50 per cent. of all the lottery good cause money to spend on anything that was charitable or connected with health, education or the environment, without further recourse to Parliament. That is simply not sensible. The new lottery good cause is both broad in scope and large in terms of the percentage of lottery money allocated to it. The other good causes of arts, sport and heritage are relatively narrowly prescribed areas.

Within those relatively narrowly prescribed areas, existing legislation further prescribes sums to be distributed by different distributors, as has already been shown. That has the effect not only of limiting who can spend the money but restricting what it can be spent on. For example, prescribing the percentage to be distributed by the Film Council in effect prescribes the percentage of money from the arts good causes that must be spent on film. Parliament took the view in 1993 that such arrangements were necessary to ensure the effective distribution of lottery money. The powers in the Bill are not so different in effect, and it is our view that they are as necessary now as they were in 1993.

Creating a large and responsive good cause was one of the main reasons why we wanted to bring the Community Fund and the New Opportunities Fund together. However, given the breadth of the new good cause, we need to be able to set out at the highest level the types of expenditure on which the Big Lottery Fund should focus. It is right that that should be done in a transparent and accountable way, and that there should be proper parliamentary scrutiny of the process. That is why we are clear that that should be done by secondary legislation and subject to the affirmative resolution procedure.

The order-making powers in clause 7 will allow us to prescribe the three high-level themes of community learning and creating opportunity; promoting community safety and cohesion; and promoting well-being. I explained in Committee that the Big Lottery Fund has consulted widely on the three themes. Some hon. Members unfortunately sought to belittle this consultation, saying that the 850 responses was hardly a representative sample. However, the respondents included 429 voluntary and community sector organisations, 178 local authorities, 43 health authorities or primary care trusts and 30 local education authorities or schools. Between them, those bodies represent millions of people.

Fifty-eight per cent. of the respondents agreed that the themes provide a sensible and flexible strategic framework for future funding. Only 5 per cent. disagreed. The order-making powers also allow us to prescribe devolved expenditure, which will be the responsibility of new country committees, subject to directions issued by the relevant devolved Administrations.

The Bill represents a significant devolution of power to Scotland, Wales and Northern Ireland, and the ability to prescribe devolved expenditure is central to achieving that. Without those powers, devolved arrangements in the Bill will not work. For the reasons I have given, we cannot accept amendments Nos. 2 and 3, and I ask the hon. Member for Cities of London and Westminster to withdraw them.

Amendment No. 4 would require the Big Lottery Fund to allocate 70 per cent. of its funding to bodies other than public bodies or local authorities whose activities are carried out not for profit. I well know the desire for reassurance on that matter. It has wrongly been suggested that the loss of the separate charitable good cause will cause voluntary and community sector organisations to lose out.

We fully recognise the vital role played by voluntary and community sector organisations in our society. Such organisations have benefited enormously from the success of the national lottery and we are determined that that should continue. The Big Lottery Fund has given an undertaking that 60 to 70 per cent. of its funding will go directly to voluntary and community sector organisations. That is a significantly higher proportion than has been the case under the New Opportunities Fund and the Community Fund combined.

At the moment, only the Community Fund's share of the money—16.6 per cent. overall or 33.3 per cent. of the Big Lottery Fund half—is allocated to charitable expenditure. The Big Lottery Fund's undertaking will ensure that, in future, voluntary and community sector organisations can count on twice as much—I repeat, twice as much—money as before.

Much has been made of the nature and ownership of the undertaking. Let us be clear about that now. The "Oxford English Dictionary" defines an undertaking as

"a formal pledge or promise to do something".

That is exactly what the undertaking amounts to; a formal pledge or promise that 60 to 70 per cent. of Big Lottery Fund money will go directly to voluntary and community sector organisations. By any standard, that is a huge increase compared with the moneys going to those organisations now. The undertaking has been given by the boards of the Community Fund and the New Opportunities Fund—now operating as the Big Lottery Fund—not the Government. We fully support the undertaking but we do not need to repeat it or to enshrine it in the Bill.

We have heard much during this debate about the need for less prescription and less Government control. It has been said that lottery distributors should be independent and make their own decisions, free from Government interference. But when it suits the Opposition for something to be prescribed by the Government, their fears about compromised independence seem to evaporate. They are happy for the Big Lottery Fund to spend 50 per cent. of all lottery good cause money without further recourse to Parliament, but they do not trust the fund to deliver on a formal pledge to the voluntary and community sector.

I believe that the Big Lottery Fund has done everything possible to show that it intends to deliver on its undertaking and to do so in a transparent and accountable way. The fund has worked closely with key voluntary and community sector stakeholders to develop the definition of voluntary and community sector organisations for the purposes of dispensing the 60 to 70 per cent. undertaking. It has invited key stakeholders to a lunch on 16 February to review the progress that has been made and to discuss further guidance on what will be funded under the definition. The Big Lottery Fund has already said that it will ask independent auditors to monitor where its funding has been going, and that the results will be published in the fund's annual report, which will be laid before Parliament.

The undertaking to the voluntary and community sector is unique. No other type of organisation is guaranteed a percentage of lottery funding. The undertaking will ensure that voluntary and community sector organisations benefit as much, if not more, from the lottery in future as they do now. There is no question but that the Big Lottery Fund will deliver on its formal pledge. I am not persuaded of the need to include provisions on this matter in the Bill, and I hope that amendment No. 4 will not be pressed to a vote.

Amendment No. 5 would add to the list of people whom the Secretary of State must consult before making a prescribed expenditure order

"bodies (other than public or local authorities) whose activities are not carried on for profit",

—that is, the voluntary and community sector. We would certainly expect to consult widely with representatives of the voluntary and community sector before making any orders. Although the amendment seems to assume that representatives of the voluntary and community sector are the only people with a legitimate interest, we would also want to consult other groups, for example local authorities and, importantly now, social enterprises. So we require a degree of flexibility in our approach.

There is a statutory requirement to consult the Big Lottery Fund and the devolved Administrations because, unlike representatives of the voluntary and community sector, they are directly affected. I am aware that precedents of a sort exist in certain other legislation requiring consultation with particular groups of people. However, each piece of legislation is considered on its own merits, and what is right in one case is not necessarily right for what will become the National Lottery Act 2006.

Instead of focusing on what is not in this Bill, I think we should look at the bigger picture. The Government are of course already obliged to comply with Cabinet Office guidance on consultations, and with the requirements of the compact. I explained this point in great detail in Committee. We have shown our good faith in consulting recently on the interim order and directions for the New Opportunities Fund. Indeed, we made a change directly as a result of the helpful comments we received from the National Council for Voluntary Organisations.

The Big Lottery Fund itself is consulting closely with voluntary sector and other stakeholders on, among other things, the 60 to 70 per cent. undertaking, additionality reporting proposals, and general programme development. The Government will continue to consult widely, not because a statutory requirement says that we must, but because we think that that is a good way of doing business. That is the real safeguard, and I therefore hope that amendment No. 5 will not be pressed to a vote.

Finally we come to amendment No. 11, which would provide that the Big Lottery Fund must "take account of" rather than "comply with" directions given to it by the Secretary of State under new section 36E, inserted by clause 14 of the Bill. As I explained in Committee, all Lottery distributors are required to comply with directions about financial and operational matters; the points set out in new section 36E(3). I can see no good reason why the Big Lottery Fund should be treated any differently.

Financial directions are designed to protect public money and incorporate controls similar to those applying to all non-departmental public bodies through their financial memorandums. The requirements in section 26 of the 1993 Act are exactly the same as those placed on the Big Lottery Fund by proposed new section 36E(3).

Concern is perhaps centred more on the power in proposed new section 36E(2) to issue policy directions. The powers have been drafted as they have in order to bring together the different regimes of control that existed over the Big Lottery Fund's predecessor bodies in a coherent way. A child can be expected to demonstrate the characteristics of both its parents, not just one. The Big Lottery Fund will therefore have characteristics, both in terms of control and framework, of both the Community Fund, which makes up one third of the money, and the New Opportunities Fund, which makes up two thirds of the money.

I should perhaps comment on proposed new section 36E(2)(a), which I know is a source of concern, albeit misplaced. The provision allows the Secretary of State to specify persons to whom the Big Lottery Fund may or may not make grants. I can give the House a categorical assurance that the purpose of the provision is not to intervene in individual grants or to choose between voluntary organisations. Its purpose is to enable Ministers to specify particular outcomes and priorities for the Big Lottery Fund related to specific groups of people, such as young people, as we have done in the interim and illustrative directions. We have given repeated commitments that we will adopt a light touch on the direction of the Big Lottery Fund.

We have put our money where our mouth is on the issue of new interim policy directions for the New Opportunities Fund and Community Fund. We have also made available illustrative directions, using the powers set out in the Bill. Both the interim and illustrative directions are very different from the type of directions issued in the past to the New Opportunities Fund. They neither prescribe how the funding outcomes agreed with Government should be delivered nor preclude the funding of other worthwhile priorities. They will allow the fund full scope to make decisions on programmes, choose delivery mechanisms, identify partners and select projects.

I cannot, of course, guarantee that if one of the Opposition parties were in power it would not seek to exercise the powers in a different way. This Government, however, have shown by their words and actions that we intend to direct the Big Lottery Fund with a very light touch. I therefore hope that my comments will reassure hon. Members, and that the amendment will be withdrawn.

Mark Field (Conservative, Cities of London and Westminster)

I am afraid that that is wishful thinking on the part of the Minister.

First, I want to thank the hon. Member for East Dunbartonshire (Jo Swinson) for her kind words of welcome. Clearly, I am far too gallant to continue the conversation that I had with the Minister about ages. Suffice it to say, however, that the hon. Member for East Dunbartonshire is the youngest Member of the House, and the only one to have been born in the 1980s. At some point in the future, a Member who was born in the 1980s will be seen as an old Member; perhaps she will be in that position in several decades' time.

In relation to the amendments, I must confess that I am not terribly satisfied by the Minister's responses. He made a robust case—as robust as he was in Committee—but we remain concerned about the excessive prescription and emphasis on compliance. Subject to your guidance, Mr. Deputy Speaker, we want to press amendments Nos. 2 and 11, about which we feel strongly, to the vote. We will not press the other amendments in the group to the vote.

Clause 8 — Reallocation of funds

Mark Field (Conservative, Cities of London and Westminster)

I beg to move amendment No. 8, in page 5, line 41, leave out clause 8.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to discuss the following amendments: No. 6, in page 6, line 7, leave out 'order' and insert

'appropriate subsection of section 23.'.

No. 7, in page 6, line 8, at end insert—

'(2A) An order under this section may not prevent a body from meeting commitments it has made to provide funds in accordance with any agreed timescale.'.

No. 9, in page 6, line 21, leave out clause 9.

Mark Field (Conservative, Cities of London and Westminster)

Amendments Nos. 7 and 8 are designed to prevent a reallocation of funds that would result in current commitments not being kept or being delayed by force. The impact on projects of breaking commitments or delaying funding could be catastrophic. Problems with lottery funding could also lead to a loss of matched funding, which would be disastrous for the distributors concerned.

We were delighted to receive backing from the National Campaign for the Arts in tabling these amendments. It recognises that the intention behind providing the power to transfer money between distributors is to encourage a reduction in balances, and we accept that there is no intention that this power be misused. It also recognises that there are powerful reasons both for and against providing the imperative drastically to reduce distributors' balances. On the one hand, it is important that organisations receive money as quickly as possible; on the other, we should be wary of creating a situation in which distributors cannot be fully responsible for their financial planning. The uncertainty that that would create would be felt at the level of individual organisations, which could have the money allocated to their projects removed due to a transfer of money to another distributor.

In Committee, the Minister said that the Government had said that they would not exercise the power in a way that would threaten, or put into doubt, any commitment on the part of a distributor from which they proposed transferring a fund balance, and that he was happy to repeat that undertaking. We believe, however, that no convincing reason has been given as to why such a provision cannot be included in the Bill. We recognise that not all aspects of policy can, need or should be included in legislation. However, as the Minister is aware and as we said several times in Committee, the lottery is intended to promote and enable the good work carried out by thousands of organisations. They deserve no less than an absolute guarantee from the Government that promised funds will be delivered. We believe that Amendment No. 7 would secure that undertaking, and we ask all parts of the House to support it.

I appreciate that time is tight and that the hon. Member for East Dunbartonshire (Jo Swinson) would like to say a few words, so if I may I shall canter through our amendments Nos. 6 and 8. The former seeks to change clause 8 by replacing the word "order" with

"appropriate subsection of section 23."

Clause 8 enables the Secretary of State to reallocate funds to different bodies without changing the purpose of funding. For example, the Big Lottery Fund could be authorised to spend some of the money allocated for arts or national heritage, instead of Arts Council England or the National Heritage Memorial Fund doing so. Section 23 of the National Lottery etc. Act 1993 sets out the various distributing bodies. The Bill as originally drafted provided for distribution by a different body, as specified in section 23. Amendment No. 6 confines the ability to reallocate funds between distribution bodies to those that are in the same category, so reallocation could take place between Arts Council England and the Scottish Arts Council, for example, as both are included under section 23(1) of the 1993 Act. However, the amendment would not allow a reallocation from Arts Council England to, for example, the Big Lottery Fund.

We believe that there is no good reason why the BLF, which, as the Minister said only minutes ago, will have some 50 per cent. of the moneys in any event, should be able to redistribute the remaining arts, sports or heritage moneys. In practice, our amendment provides that the funds of the Heritage Lottery Fund and the national lottery charity fund cannot be reallocated. That is the right way forward, particularly given that the BLF will account for some 50 per cent. of all allocatable funds.

Amendment No. 9 would delete clause 9, which makes a change that, although apparently technical, will have a substantial impact on the good causes. Currently, the national debt commissioners invest moneys that are not immediately needed by distributing bodies, under section 32 of the 1993 Act. The interest received is paid back to the distributing body whose money it is.

Clause 9 will put that interest into a general lottery pot to be distributed among all the distributing bodies on the original proportionate basis. Those bodies funding projects with long lead-in times, such as major arts or heritage projects—like some of the projects in my constituency, which the Minister may have been too polite to mention earlier—will lose more interest on their funds than they will get back in the redistribution.

Clause 9 is an important mechanism for transferring money from heritage and lottery causes to the Big Lottery Fund, and imperils existing funding commitments. That was made clear in the Culture, Media and Sport Committee report on the reform of the national lottery. The Committee received significant evidence from the Heritage Lottery Fund that all the money currently held in the lottery national distribution fund, and £188 million extra, was not being badly managed but had already been allocated.

I hope that the Minister will give some thought to these amendments, as we are concerned about the reallocation proposals. I appreciate that time is tight, and that he might not be able to deal with all the points in full. If that is the case, he may prefer to do so in writing at some point. However, these are important issues and they go to the heart of the concern that the Secretary of State is gaining ever more power to prescribe. We believe that that is the wrong way to go.

Jo Swinson (Liberal Democrat, East Dunbartonshire)

I, too, am aware of the pressure of time, so I shall be brief. First, I want to place it on record that my party supports amendments Nos. 6, 7 and 8, but I have one question for the Minister in respect of amendment No. 9, which would delete clause 9 from the Bill. We believe that clause 9 would be to the detriment of the Heritage Lottery Fund and cause it to lose an estimated £15 million a year. On Second Reading, the Minister said that nothing in the Bill would allow money to be taken from heritage and spent on something else. In Committee, however, he said that my hon. Friend the Member for Bath (Mr. Foster) was right to think that heritage would lose out from interest accrued on large balances, as that interest would be distributed. Will the Minister clarify those apparently conflicting statements?

Richard Caborn (Labour, Sheffield Central)

I am sure that the House will be aware of all the pubic concern over the past five years about the high level of national lottery funds' balances. On television one night, I even had to defend those massive balances to Jeremy Paxman. The National Audit Office concluded in July 2004 that money held in the distribution fund was

"not delivering the intended public benefit".

The Public Accounts Committee concluded last October that

"the public benefit was delivered only when the money was spent in the community".

However, I can tell the House that the Government began to discuss the problems in earnest in 2001.

With these amendments, the Conservatives and the Liberal Democrats want to defend the status quo, and to keep money idle when it should be out in the community. As early as 2002, my right hon. Friend the Secretary of State took the initiative and set the specific objective that the overall balances of the distributing bodies should be halved. Under our watch, those balances have since fallen by more than one third, from more than £3.5 billion to £2.25 billion. That is a significant achievement.

However, the overall balance has not fallen as far as we would have liked, as Opposition Members have not been reluctant to point out. The PAC report also suggested that progress in that regard should be faster.

Clause 8 gives the Government another tool in the armoury for reducing the balances. The Opposition should not criticise our progress in reducing the balances when amendment No. 8 would deny us further powers to speed up that reduction.

Mark Field (Conservative, Cities of London and Westminster)

We are asking only that the Minister ensure that the balances are reduced. That is what we want to happen, but we also want the interest balance to go to projects to which money has already been allocated, rather than into the Big Lottery Fund. That is the purpose behind the amendments.

Richard Caborn (Labour, Sheffield Central)

I will come to that point, because it was covered in a letter that I sent to the hon. Member for Bath.

Clause 8 will insert a new section 29A into the National Lottery etc. Act 1993, creating a reserve power—

It being Five o'clock, Mr. Deputy Speaker put the Question already proposed from the Chair, pursuant to Order [14 June 2005].

Amendment negatived.

Mr. Deputy Speaker then proceeded to put the Questions necessary to dispose of the business to be concluded at that hour.

Clause 14 — Functions

Richard Caborn (Labour, Sheffield Central)

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

I suppose that this would be a good time to thank all those who have been involved in the passage of the Bill, so I start by thanking the members of the Committee and all hon. Members who contributed on Report and, indeed, on Second Reading back in the summer. I especially thank the hon. Members for East Devon (Mr. Swire) and for Bath (Mr. Foster), who led for the Opposition in Committee and, in the latter case, on Report. Both hon. Members were nothing but dogged in their determination to test me on certain points. Hawkeye, as the hon. Member for Bath is now called, must undertake midnight reading of explanatory memorandums to ensure that everything is right with that as well. Of course, the doggedness of the hon. Member for East Devon actually paid off, and I would seriously like to congratulate him on his promotion to shadow Secretary of State. As I said earlier, I welcome the hon. Member for Cities of London and Westminster (Mr. Field) to his post and have no doubt that we will clash over the Dispatch Box in the future.

The National Lottery Bill has been debated for a long time, as the hon. Member for Bath said. When we look at legislation in great detail, it is easy to lose sight—as we sometimes do in Committee—of the overarching principles. The Bill will allow money to go to the good causes that are funded by the lottery. The formal creation of the Big Lottery Fund out of the merger of the Community Fund and the New Opportunities Fund, and the dissolution of the Millennium Commission, will yield a predicted £6 million to £7 million a year more. That money will be available to be spent across a range of good causes. It is good to be able to say to our constituents that more money will be available. We all know of many examples in our constituencies whereby lottery funding has made a difference to the lives of individuals and, on many occasions, to communities as a well. Once the Bill is passed, we can look forward to our constituencies receiving even more money from lottery funding and to the lottery as a whole becoming more open and responsive to those who play it.

By enabling the public to have a say on lottery awards and the awards made in their communities, we will build on their confidence in the lottery. I can only reiterate that people vote with their feet—or their pockets—and if that can be taken as a sign, then the lottery is in good health. I said in Committee that the lottery came on to the statute book under a Conservative Administration. We have modernised it, and it is something of which we can all be proud. The lottery is now an institution. It is well respected, which is why people continue to play it. All the indications that we got from the consultation are that it is well respected and is doing a good job.

There have even been lottery funds for the constituency of the hon. Member for Broxbourne (Mr. Walker). The heroes return programme allows people who saw active service during world war two to fund commemorative visits. Of his constituents, it enabled six veterans, one widow, three spouses and seven carers to travel to France. That is what the lottery is all about. It can make all the difference to such brave people. Although the programme received a small amount, it probably changed, or at least enriched, their lives in a way that nothing else could.

The Bill exemplifies what we always say: that the lottery has been, and will continue to be, independent of the Government. It also paves the way for a streamlined and easier application process for lottery grants with the one-entrance approach. Stephen Dunmore and the staff at the Big Lottery Fund are working hard to ensure that once an application is made, it gets to the right department in an efficient way.

Under the Bill, the Government will take a lighter touch at the highest level on directing the way in which lottery money is spent. In addition, through the Bill, we will underline our commitment to ensuring that lottery money gets out of the door and into communities where it can do good as fast as possible.

Peter Bone (Conservative, Wellingborough)

When I was canvassing a few years ago, I knocked on a door that was opened by someone who said, "You Tories are wonderful", which was not the usual response at the time. He continued, "You brought in the national lottery and we won £50,000."

However, my serious point is that two villages in my constituency, Wollaston and Irchester, want to build a community hall. They have been turned down by the lottery, and I do not understand why. Does the Minister think that the Bill will make it easier for them?

Richard Caborn (Labour, Sheffield Central)

Very much so. I hope that the one-door approach to the Big Lottery Fund will help those villages. It will be able to solicit applications and give advice, which will also help such applications. The lottery has evolved over the decade or so in which it has been in operation, and it is now sensitive to such needs. I am not saying that it is perfect, because it will not be, but we will continue to review it against the background of the consultation. The Big Lottery Fund fits in with the public mood. It is important that it is transparent and has credibility and integrity, because then people will continue to play it. That is why it is the great institution that it is. All in all, the Bill creates a framework that will allow the lottery to continue to be modern, dynamic and successful, so I am delighted to commend it to the House.

Mark Field (Conservative, Cities of London and Westminster)

It is a great pleasure to make my Front Bench debut speaking on the culture and arts brief. I noticed with horror, however, that in my previous incarnation as the shadow Minister for London and the shadow Financial Secretary to the Treasury I confessed on my website to a cultural expertise that extended only to a passion for rock and pop music. I will have to do better in future.

Hugo Swire (Conservative, East Devon)

It is a start.

Mark Field (Conservative, Cities of London and Westminster)

Indeed, but I will have to do better in future, not least because the Royal Opera house and the Royal Albert hall are both in my constituency. As the hon. Member for Bath (Mr. Foster) and the Minister pointed out, the Bill's passage has been long and drawn out. Second Reading took place as long ago as June, and the Committee stage meandered through October and November. As a conscientious Opposition, we have endeavoured to table reasonable amendments, and I thank my hon. Friends the Members for Windsor (Adam Afriyie), for Isle of Wight (Mr. Turner) and for Broxbourne (Mr. Walker) for their sterling efforts in Committee.

While some progress has been made, we remain concerned about a number of provisions in the Bill that undermine the fundamental principles of the national lottery. We shall continue to oppose in the strongest terms the vastly increased Government control and direction over the distribution of lottery funds. It is unacceptable that money should be withheld from the original deserving causes to be channelled into areas for which state funding should be preserved. Furthermore, the lottery was set up to improve the daily quality of life for all people in Britain by earmarking funds for activities that might otherwise be neglected in the everyday distribution of tax receipts.

In short, the flagrant breach of the additionality principle has fuelled the public's faltering confidence in the lottery. Controversial awards are always meat and drink to an ever more voracious press, but a strict focus on directing lottery receipts to the arts, heritage, sport and charity would doubtless minimise such criticism. Additionality is a principle that has been widely recognised, and political concern about it took up a significant part of our debates both on Report and in Committee. There is no doubt in our mind that the Big Lottery Fund has been used and, we presume, will continue to be used to replace core Government expenditure. We therefore sought to introduce a new clause that would provide a double lock in an effort to apply the principle that lottery money should not be spent on the services and works that are usually provided by Government. That applies not only to the Secretary of State in her activities but to the distributing bodies in their strategic plans. The additionality principle is central to all that is best about the national lottery, and it is highly regrettable that the Government have sought to flout it.

It was understood by Members on both sides of the House when the original lottery legislation proceeded through Parliament that Governments of whatever party should maintain an arm's length relationship with lottery operations and, perhaps more important, all aspects of grant distribution. Since 1997, however, there has been a systematic and presumably focus group-led strategy to allocate lottery money to projects whose funding should be the responsibility of the Government. When the Millennium Commission was wound up in 2001, its one-fifth share of lottery funds was transferred to the New Opportunities Fund, thus accounting for one third of good causes money in health, education and the environment. Inevitably, the strain on the public purse has resulted at the very least in the emergence of a grey area, with health and education funding for projects divided between departmental budgets and New Opportunities Fund expenditure. Expenditure on healthy living centres and a programme to provide cancer equipment in England has taken up almost £400 million of lottery resources, which has been spent on projects that, arguably, should be regarded as mainstream NHS responsibilities. The same applies to the information and communications technology training for teachers and the school librarians initiative and the out-of-school-hours learning programme, which account for a similar aggregate sum in education.

The Conservatives would like a more transparent system. The Big Lottery Fund has been charged over the past 18 months with the distribution of half the good causes money from the amalgamation of the New Opportunities Fund and the Community Fund. We believe that the latter should be restored, and that by scrapping the Big Lottery Fund we would save some £450 million, which would be released annually for charities, sport, arts and heritage.

We appreciate the need for a special London Olympic lottery initiative before 2012, but otherwise we favour a system granting 25 per cent. of lottery funding to each of the four pillars of the lottery that I just mentioned. That would help restore confidence in a distribution process that has increasingly become discredited in the eyes of the general public. Indeed, the Conservatives estimate that the four original causes have missed out to the tune of £1.29 billion in the five years to 2004.

We remain doubtful of the Government's wisdom in inserting clause 19 to widen the definition of charitable expenditure. We hope that a full debate will take place on the matter before the Bill goes to another place.

Where does the national lottery go from here? I have a small confession to make. I am one of the small minority of people who have never played the national lottery. [Hon. Members: "Shame!"] That is not because of my technical inexpertise, but I have always regarded it with a somewhat puritanical eye.

Richard Caborn (Labour, Sheffield Central)

I will take the hon. Gentleman to the nearest newsagent and help him fill in one of the lottery forms.

Mark Field (Conservative, Cities of London and Westminster)

I will accept that kind offer only if the Minister will also pay the £1 fee that is required for the purchase of such a ticket.

It has always struck me as somewhat perverse that the tabloid press pillories those who have earned large sums of money in business activity, in contrast to the tabloids' championing of multimillion-pound lottery winners. Only last week in the national newspapers it was reported with distaste that thousands of workers in my City of London constituency were awaiting bonuses of £1 million or more, yet to earn similar sums or multiples of such sums by guessing six numbers on a national lottery ticket is regarded as legitimate and a desirable outcome.

Although I am not a supporter of what has become a highly progressive tax on lottery players, I believe that the House owes it to those who do play the game to promote transparency in what has become a national institution. Too much control over lottery distribution in the hands of the Secretary of State cannot be a sensible approach to a national lottery that is designed to serve all the people of this country. We shall take urgent steps to restore public confidence in our lottery by reducing both governmental and ministerial interference.

Don Foster (Liberal Democrat, Bath)

I begin by thanking the Minister yet again. All my speeches this afternoon have begun by thanking the Minister. I have been pondering whether to reproduce and include in the next edition of "Focus" to go round the Bath constituency the Minister's praise in the form of my new nickname, "Hawkeye", and his comments a few minutes ago. I am grateful for his praise and for the fact that he began by thanking a large number of people for their contributions during the lengthy passage of the Bill—we have had almost 60 weeks of opportunity for consideration since its First Reading on 25 November 2004. I hope that the right hon. Gentleman will pass on my thanks to his officials, who have been extremely helpful in discussing the Bill with me and with members of the Conservative Front-Bench team.

We have had a useful debate today. Unfortunately, however, in view of a range of other things that have been going on in and near the Palace of Westminster today, it will get limited coverage. In the House we had reference to sex, we had a statement on drugs, and we have just heard from the hon. Member for Cities of London and Westminster (Mr. Field) a revelation about rock 'n' roll. Other things have been going on in the various campaigns for the leadership of my party. I suspect, therefore, that our deliberation on the lottery will not get a great deal of coverage, although I note with interest that the lottery more generally is likely to arouse a great deal of interest, bearing in mind the £85 million jackpot on offer, following nine roll-overs. I understand that tickets are currently selling at the rate of about 100,000 an hour, so whatever our deliberations about good causes, we know that they will get more money in the near future.

Notwithstanding the limited publicity the debate has been important, and we have made good progress. Hon. Members on both sides of the House have praised the distributors' work on the lottery and pointed out that nearly 200,000 causes, many of which are universally popular, have benefited from lottery funding. We have discussed how lottery distributors are making it easier to apply for lottery grants, although I have argued that more progress is needed. Work remains to be done to persuade the public about some of the grants and not to believe everything that they read in their newspapers. Earlier, I referred to the claim in today's Daily Mail that St. Paul's cathedral has had to pull out of lottery funding for certain reasons, which have turned out to be entirely incorrect.

The distributors still have a lot of work to do publicising their good work. Although we did not persuade the Minister on this point, we have discussed the importance of ensuring that the lottery distributors, while promoting the good causes in which they are involved, do not promote playing the lottery, for the very good reason that that is not the most effective way to give money to good causes. As I have said, if someone buys a lottery ticket for £1, only 28p goes to a good cause. If someone gives £1 directly to a good cause, however, that good cause will receive £1.28 with gift aid. If one wants to give money to good causes, it is more efficient to give directly.

We have made progress on a number of issues, and the Minister has made a number of welcome further assurances today. That said, unfortunately we have not made sufficient progress in a number of areas, the most important of which is additionality—ensuring that the Government do not interfere in the use of lottery funding—to which the hon. Member for Cities of London and Westminster rightly referred. When the national lottery was initiated, the then Prime Minister, Sir John Major, made it clear that he did not want to see the Government getting their sticky little fingers on lottery money, and the current Prime Minister, the Secretary of State for Culture, Media and Sport and the Minister have repeated that assurance. On Second Reading, the Minister said that a provision on additionality should be enshrined on the face of the Bill, but the Government have refused to include such a provision, which is one key reason why we will not support the Bill on Third Reading. We think that the distinction between Government spending and lottery spending is crucial.

We are equally concerned about some other aspects of the Bill, not least the powers of the Secretary of State. Line after line of the Bill refers to giving powers to the Secretary of State, which concerns us deeply. The Secretary of State's powers should be reduced, not increased, and that is particularly true of the powers on the redistribution of funds, which we discussed on Report.

My hon. Friend the Member for East Dunbartonshire (Jo Swinson) made an excellent 47-second speech in which she asked the Minister a question that he still has not answered. On Second Reading, he said:

"Nothing in the Bill will allow money to be taken from heritage and spent on something else."—[Official Report, 14 June 2005; Vol. 434, c. 169.]

whereas, in Committee, he said:

"if the hon. Member for Bath is asking me whether it"—

heritage—

"will lose out on interest accrued from large balances, the answer is yes, because that will be distributed."—[Official Report, Standing Committee A, 27 October 2005; c. 150.]

The Minister cannot have it both ways—either heritage is protected or it is not. The reality is that heritage is not protected because the Government will be held to interfere in the way in which interest and balances are used.

Richard Caborn (Labour, Sheffield Central)

The question was this: do we allow those who have large balances to profit by them? Good causes profit because the interest that is accrued is then redistributed, as in the case of distributions to sport and the arts. I gave two reassurances. Money that had been allocated from the lottery to the various distributors would be received, and no scheme would be stopped; it was simply that the balances would be reduced. There was a guarantee that once that expenditure had been confirmed it would continue, and they would not lose one penny piece of the money that had been allocated to the distributors from the lottery, that would have been accrued by interest. We believed that it was wrong to profit by that, which is why we distributed it in that way.

Don Foster (Liberal Democrat, Bath)

I am grateful to the Minister for repeating what he said earlier—

Richard Caborn (Labour, Sheffield Central)

I wrote to the hon. Gentleman.

Don Foster (Liberal Democrat, Bath)

Indeed. What the Minister said in that letter, what he said in a previous speech and what he has said today is that it is important that as far as possible we ensure that lottery distributors are getting the money that they bring in out to good causes as quickly as possible and that we keep the balances as low as possible. Nobody disagrees with the Minister about that. However, it does not deal with the point that my hon. Friend the Member for East Dunbartonshire and I put to him: either there is something in the Bill that will allow money to be taken from heritage or there is not. He cannot have it both ways. [Interruption.] The reality is that the mechanism that he just described means that the money will be taken away—[Interruption.]

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. We cannot have a series of sedentary comments.

Don Foster (Liberal Democrat, Bath)

Thank you, Mr. Deputy Speaker, for that protection from the Minister, who has until now been exceedingly courteous and kind to me. I do not know why I have suddenly riled him.

During our deliberations about this issue, it was pointed out that there are differences in the way in which distributors operate because of the significant differences in the nature of the projects that they are engaged in. That is why some of us are concerned about the Secretary of State's power to redistribute those funds.

I continue to worry about an issue on which we have had no significant debate—the structure of the board that will oversee all this work. It is possible that it could be chaired by somebody who is there to represent a particular country, which could lead to a conflict of interest. I am also worried that the new definition of charitable expenditure potentially blurs the boundaries between public services and third sector good causes.

For those reasons, we cannot support the Bill on Third Reading. None of that should detract from the fact that we have made good progress during its passage. I hope that if we are not successful in defeating the Bill at this stage, progress will continue to be made in another place. There are some good things in the Bill; unfortunately, there are sufficient bad things to cause us to vote against it.

Charles Walker (Conservative, Broxbourne)

When the lottery was introduced, it was a great, noble and aspirational idea. It was a little like a marvellous African bull elephant in its prime. However, the Bill has brought it low. Introducing the measure is a little like shooting that beautiful bull elephant in the leg. It will not kill it—the bull elephant will run off into the undergrowth, settle for a few months and then return. It will have recovered but it will have a limp and not be quite as wonderful as it was.

The Minister claims that the lottery is a great national institution. It was, but I fear that the Bill makes it simply another institution. That is a great shame. The measure gives central Government far too much control over the destination of lottery money. The Minister claims that the Big Lottery Fund will be kept at arm's length but it will be the hand at the end of the Government's arm. In essence, it will be a dead hand. The Bill dissipates so many of the aspects that make the lottery a great national institution.

Too much money is being siphoned off to fund central Government expenditure on health, education and the environment. Again, that is a great shame. The Minister gave a wonderful, uplifting example of what the national lottery has done in Broxbourne, where it was used to take second world war veterans overseas to France, to places that they had perhaps not visited for 60 years. That is what the national lottery is for. It is for special things—village greens, community halls, the arts and museums. It is not for cancer and heart scanners—the national health service is for that. The lottery is for those people in Broxbourne to whom the Minister referred. I sincerely hope that he and the Government remember that.