Mr Major’s Contribution to the National Lottery Debate – 7 April 1998

Below is the text of Mr Major’s contribution to the debate on the National Lottery held in the House of Commons on 7th April 1998.

Mr. Tom Pendry (Stalybridge and Hyde) I am delighted to be called to take part in this important debate on what I consider to be one of the most important Bills that the Government have introduced in this packed Session of Parliament.
I recall vividly during the passage of what was then the National Lottery etc. Bill some three years ago, when I led for the Opposition, pledging on behalf of my party full support for a national lottery, but expressing many doubts about the way in which the legislation had been drafted. Many people within the parliamentary Labour party also had reservations about that Bill. Nevertheless, we set about finding ways to improve it, and we were successful in obtaining several amendments.
For example, we managed to give some kind of level playing field to the pools companies. I say “some kind” of level playing field because it certainly has not been a true level playing field to date, and the pools companies have been hit enormously hard by the national lottery. However, we did obtain for them the ability to roll over prize money, the legalisation of the sale of coupons in shops, and permission to be allowed to sponsor television and radio programmes. Nevertheless, the pools have been significantly affected by the lottery. For example, in 1994, the pools companies paid £350 million in betting duty, but the figure has shrunk to £131 million today.
We also sought and achieved concessions to enable small charities and the lottery to compete, by raising the limit on the size of small lotteries to £1 million, and to prevent the national lottery from selling door to door in order to protect public collections. We also sought certain social safeguards. Whereas we wanted the sale of lottery tickets to be restricted to 18-year-olds and above, in line with the restriction for the pools companies, the then Government brought down the age to 16 in both cases – that was some kind of level playing field, but not the kind that we sought. I could go on about the improvements that we made to the National Lottery etc. Bill, but we did not stop there.
In 1995, my right hon. Friend the Member for Copeland (Dr. Cunningham), the then shadow Secretary of State for National Heritage, set up an advisory committee on which I served along with representatives of business, local government, Churches and charities. Its remit was to examine the lottery and suggest ways to improve the running of it. We consulted, we shared ideas, and we listened; we then published the best ideas in a paper entitled “The National Lottery Initiatives and Recommendations”.
I remind the House of some of the recommendations. They included the creation of new beneficiaries from lottery money, more flexible distribution, the development of a strategic approach to distributors, fast tracking for small grants, giving access to children’s play, and introducing a national endowment scheme, all of which have been included in this Bill, which tells me that the Government are listening to those who are making constructive suggestions.
At the same time, however, I want to put on record a few issues that I trust the Government, in the spirit of openness that they have shown so far, will deal with as the Bill progresses through the House. I have only 10 minutes in which to speak, so I shall confine my remarks to one issue alone – sport and the lottery.
My major concern is quite simply that the Bill represents a watering down of Labour’s previous commitment to sport. Although sport has been one of the great beneficiaries, and sport’s governing bodies have always placed on record their strong support for sport being one of the good causes, I trust that it will remain a permanent good cause after 2001. I am disappointed that the Government have not made such a firm commitment in the Bill.
All I ask is that we adhere to our promise in the manifesto, which I launched with numerous sports stars during the general election. It states:
“Sport will continue to be a permanent good cause for the purpose of Lottery Funding”. All I ask is that when he replies, the Minister for Sport spells that out once and for all.
I welcome the New Opportunities Fund, because it addresses the Government’s and the people’s priorities, but I hope that the Government will recognise that sport and recreation are very much a people’s priority. It is estimated that each week more than 22 million adults and 7 million children participate in sporting activity – that is almost 60 per cent. of the total population. However, I heard what the Secretary of State said today, and I am sure that his words address that point. I want to see those figures increased.
One of my top priorities was to promote sporting opportunities for all areas. Access was the watchword. I am glad that the Government have got off to a pretty good start by accepting some proposals, such as that to protect some playing fields. However, there is more to be done in that connection – for example, I believe that the playing fields of colleges of further education should be included. However, I must chide the Government for removing sport from the list of compulsory subjects on the national curriculum without even consulting the interested sporting groups. That has to be rectified.
I hope that the New Opportunities Fund will not neglect the impact that sport can make on the twin priorities of health and education. Academic success is enhanced through physical education. A recent study concluded:
Students who are involved in sport tend to perform as well, or better, academically than less active students, even though academic curriculum time is reduced. I am especially concerned that no urban primary school has yet received sports lottery money. In total, just eight such schools have received that money, but all have been in leafy shire districts – none in deprived urban areas.
I should like to make another practical suggestion to improve sports funding. In our sports manifesto “Labour’s Sporting Nation”, we promised that the National Endowment for Science, Technology and the Arts would offer support for sportspeople. Page 10 of that document states:
The endowment will not focus solely on excellence, it will be inclusive in its approach, encouraging access and partnership across the whole range of earth sciences, humanities, sports and arts. I am highly disappointed therefore that that commitment to sport, which I personally wrote into that document, is being dropped by the Government. If they are intent on doing that, I have a suggestion as to how they can assist sport through NESTA in another way.
If the Government are determined to exclude the development of sporting talent from NESTA’s remit because of the Sports Council’s involvement with existing sports organisations, using lottery funding for such development, I suggest that the Secretary of State can nevertheless find a useful and worthwhile sporting role within NESTA’s remit – it can ensure the development of sports science, which is crucial for the enhancement of world-class sport within the United Kingdom sports institute network. It could also play a key role in the development of sports information technology, providing coaching and advice on nutrition and medicine for our potential world-class performers and, indeed, for our schools.
I mentioned the impact of the lottery on the football pools, and at this point I should like to declare an interest. As the House may know, I have recently been appointed chairman of the Football Trust. In the run-up to the general election, the trust campaigned to secure national lottery distributor status. Having lost some 60 per cent. of its annual income as a result of the lottery, that represented the most straightforward way of ensuring that the trust could continue its essential work for football throughout the United Kingdom.
Labour’s proposal for the development of sport in “Labour’s Sporting Nation” included the following commitment:
“We’ll make the Football Trust the recipient of Lottery money so it may continue its essential work for football at all levels throughout the United Kingdom”. Once in government, rather than extend distributor status, Labour decided that it would be appropriate for the trust to form partnerships with the Sports Councils in order to have access to lottery funding. I am pleased to be able to tell the House that in England the Sports Council and the football authorities have shown a great willingness to enter into partnership. As a result, the trust is able to continue to help the game at all levels in England.
We are also, we hope, in the last stages of putting together a successful partnership in Scotland, and I have opened discussions with the Sports Councils and the football authorities in Wales and Northern Ireland. It is essential that those also result in the formation of successful partnerships.
The trust’s contribution to the game throughout the United Kingdom is vital. It has a huge part to play in maintaining football’s place in the community. We are not only about bricks and mortar, but can handle grant-aid programmes of every sort, including revenue grants for community involvement and player development. If we are to continue our important work, the Sports Councils must play their part, which means that they in turn must continue to receive the resources to enable them to do so. The creation of the six good causes is to be welcomed, but we must ensure that sport continues to benefit from lottery funding to the appropriate degree and that the Sports Councils channel football’s fair share of it through the Football Trust.
I hope that my right hon. Friend the Secretary of State will not think that I have been anything other than constructive, because I welcome the Bill and certainly give it two cheers. I trust that the Government will listen to what I have said and, more particularly, to what sports bodies on the ground have said, and recognise the strength of their case. I hope to come back to the House in a few months’ time and give the Bill three good cheers.
Mr. John Major (Huntingdon) I think that it is common ground among hon. Members on both sides of the House that the lottery has been a stunning success over the past few years. The very fact that the Secretary of State for Culture, Media and Sport is introducing a Bill that re-regulates the lottery in some fashion and that makes other changes shows the extent to which it has become a national institution in a short time.
Let me say at the outset: I am not opposed to any changes to the original Bill that was presented a few years ago. The situation is evolving. It was an evolutionary scheme. It was expected to evolve, and some of the Secretary of State’s changes, subject to more careful examination, I have no qualms about at all. It is sensible for him to look at new regulatory provision in the light of experience, and I am delighted that he has introduced measures for us to examine.
The Secretary of State announced that consultation would take place on policy directives. We have not, of course, seen those directives yet, so I do not intend to give them blanket approval. If I heard him correctly, there is the prospect of moving rather more from capital funding to revenue funding, which was always envisaged at the outset and, again, is perfectly sensible. The only points at issue are the specific details of what is proposed and the timing. It is, I think, a natural evolution.
The Secretary of State will forgive me if, having said that, I make the point that to issue more directives of this sort flatly contradicts what the Government said in opposition, when they remarked repeatedly and powerfully that decisions of this sort should be left to the distributing bodies. That was their position in opposition. They wanted the then Government to be at arm’s length from the money.
I had much sympathy with that view and did not dispute it when the Opposition made it a particular cause of theirs during the passage of the first Bill, but we now know that what they meant was that they wanted the Conservative Government to be at arm’s length from the money, while the incoming Labour Government should get their sticky fingers on it, either by directives or directly, as speedily as they could. No wonder the Secretary of State had his tongue so far in his cheek during his speech. I was surprised from time to time that he did not choke.
I shall refer to some of the background, and then I have a couple of specific questions to ask, which are pertinent to lottery fund distributors and beneficiaries. When we decided to establish the lottery, there was much opposition to it. I should like to explain briefly why I thought that it was the right thing to do; this Bill illustrates why we thought that it was important, although we oppose some tiny elements of the Bill.
I believed, and still believe, that the arts, sport and the built heritage enhance the quality of life for everyone. They are part of a rounded life, yet the opportunity for everyone to enjoy them was clearly not there. Some people were more capable than others of viewing or taking part in sports and the arts.
I was concerned to ensure that a child who lived in a tower block had the same opportunity in arts and sport as the child who was the heir to rolling acres. It was part, if I may return to an old phrase, of what I thought of as a classless society. That intention was always implicit in our Bill.
We wanted to help small charities, particularly unfashionable small charities, which do tremendous work and have such dedicated supporters, but find it difficult to raise money. We also wanted to prepare for something that we shall never see again in our lifetime – the millennium – and ensure that it could be properly celebrated, as it should be. That is how the five good causes were born in the original Bill, which my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) piloted superbly through the House; my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley) carried forward its ideas during her tenure as Secretary of State.
Why those causes? Why those of all the other good causes, some of which every hon. Member could name? It was largely because they were under-resourced and would always be under-resourced by any Government. For any Government – Conservative, Labour or mishmash – the competing demands of health, education, pensions and defence will always come first, because that is where the pressure and the need have always traditionally been. The purpose of the lottery was to raise funds without taxation for those essential components of our national life. British talent in the arts is immense. Much of it is tapped; much of it is still untapped. The lottery is helping to tap it, and the British affection for sport is not doubted by anyone in the House.
I believed that the lottery and the funding flow that would follow, were it to be successful – and it has been stunningly successful – would revolutionise both sport and the arts and preserve for future generations much of the built heritage that would otherwise disappear. That is what the lottery has achieved and will go on achieving if the flow of funds continues, as I expect that it will.
For those reasons, the lottery was underpinned by two objectives: first, that resources should be additional to existing public expenditure; and, secondly, that other areas of expenditure – very important, but legitimate taxpayer-borne expenditure – should be specifically excluded. Despite what the Secretary of State has said, in some aspects – not all, but in some aspects – of the New Opportunities Fund, he has strayed across the line into new areas of funding.
The argument about additionality is being conducted on the wrong basis. The point is: are the Government now using money for areas that are beyond the remit of the original five good causes? In one or two restricted areas, they are, and I shall try to set out later what those areas are.
This new money – this lottery money – was never expected to be just for professional arts or professional sport; indeed, the contrary is true. Some of it was, of course, but it was mainly for schools, clubs and local arts groups. I am delighted that the vast majority of the awards have been made to local groups and have been for under £100,000, which is small in the context of Government expenditure, but massive in the context of what those small groups and clubs were doing to provide a cricket pitch, a swimming pool or a new arts club. Throughout the country, there was a revolution in facilities for people to enjoy, through either participation or watching.
Lottery money was intended as capital provision in the first instance, for sound reasons that the House well understands. The aim was to build the facilities, but the implication was always there, that we would move beyond capital funding to revenue funding in due course. I thoroughly agreed with that, in certain cases with individual sponsorship as well. I have no objection to that in certain cases.
No greater pleasure is given to people than when a great athlete or artist thrills the world with their particular abilities. I remember how the House practically came to a stop when Torvill and Dean mopped up, winning gold medals all over the place. I have no objection to individual sponsorship to produce more Torvills and more Deans and, if we could find a few fast bowlers as well, I should be even happier.
The lottery has been a huge success throughout the country. Look, for example, at the Derby dance centre, the Cambridge Arts theatre, which I know extremely well, or the arts for everyone express scheme. Look – this lies within the responsibility of the Minister for Sport – at the national stadium or the UK sports institute. It is unthinkable that they could have been established without the lottery over recent years.
Everyone in this debate wishes that to continue, but, for it to do so, two conditions are necessary: first, lottery funding should continue to be additional and, secondly, it should not be reduced and siphoned off to some other sector. The Secretary of State has re-endorsed the additionality principle. I shall not go through the debate between my right hon. Friend the Member for Horsham (Mr. Maude) and the Secretary of State and others. The Secretary of State has re-endorsed the additionality principle, and I welcome that. When he says it, I hope that the Treasury means it and will not come back to him later to change his mind directly, by pager or in any other fashion. I hope that he will stick to the additionality principle. If there are arguments to be had, they should be at the margins.
A small part – or perhaps not so small; we do not yet know – of the New Opportunities Fund will use lottery money for what I envisaged would always be tax-based expenditure. I have no problems with some elements of the New Opportunities Fund, but expenditure on children’s play, coaching in literacy and numeracy and science and technology – all of which are worthy areas for expenditure – should properly be tax-borne.
The lottery is substituting for what we all, including the Secretary of State, know should be tax-borne expenditure. That is a source of grievance to us and to the distributing bodies. Although they have had their hands twisted up their back to agree with what they know that the Government, with their tame majority, will do, they feel strongly that the money has been taken from them for other purposes. Those areas of expenditure are not, not, not in the original spirit of the lottery. They infringe the principles that Labour demanded of the previous Government when the original Bill went through the House. Demanding something in opposition and ignoring it in government is not the way to receive support and inspire confidence in those who are distributing lottery money.
The Government are raiding the lottery, raising the fear that they will do it again – and possibly again and again. The danger of that is self-evident. One virtue of the lottery was that people could see continued funding that would enable the distributing authorities to think big, to think long and to be ambitious in their spread of spending over several years. The Bill and the New Opportunities Fund – I ask the Secretary of State to reflect on this and not to react immediately – have created uncertainty where there was confidence. I hope that the distributors have said that privately to the Secretary of State. They are saying it privately to us. They are uncertain where once they were certain. It is in the Secretary of State’s power to remove that uncertainty. I hope that he or the Minister for Sport, who will wind up the debate, will do so.
Many of the fears of the distributing bodies and much of the controversy of the Bill would be removed by assurances on two questions, which I shall spell out for the Secretary of State. As a result of the New Opportunities Fund, the share of lottery funds for the other good causes will fall from 20 per cent. to 16.75 per cent. The Government have always said that that does not matter because the good causes will still receive the £1.8 billion each that was originally envisaged. The Government claim that they are merely redistributing the funds raised by the extra success of the lottery. It has raised £10 billion instead of £9 billion and the Government claim to be taking only the extra £1 billion.
I shall not repeat the excellent arguments of my right hon. Friend the Member for Horsham on that, but the Secretary of State must know that his argument is pure sophistry. It is spurious. When the 20 per cent. level was agreed, no one knew what the cash figure would be. The percentages were always at the heart of the proposals, because nobody knew what future revenue would be. Suppose that the economy begins to contract and the excellent growth rate that the Government were fortunate enough to inherit begins to slip away. That would have many effects on the economy, including a reduction in lottery resources, resulting in a smaller pot from which to distribute to the five good causes – now to be six. The reduced percentage would then really begin to bite and resentment would grow. The Secretary of State should reflect and instruct his colleague to remove that apprehension this evening.
I do not think that the new estimate of £10 billion will be an underestimate. If more than £10 billion is raised, where will the extra go? Will it go to the original good causes, to the New Opportunities Fund or to both? That is highly relevant to the fears of the arts and sports distributors. The Government know that it is more than likely that the £10 billion estimate will be exceeded. The Minister for Sport nodded when I said that, so the Government are clearly aware of the issue and have considered it. They must know what they plan to do with any excess. I waited for the Secretary of State to tell us, but he did not mention the subject. I hope that he will have decided before the end of the debate. Who gets any money over – 10 billion and in what proportions?
My second question is equally straightforward. The distributing bodies need security to plan ahead. That is not a wicked point from the previous Government, but one of the points that were implicit in the White Paper, “A People’s Lottery”. I hope that the Secretary of State will forgive me if I digress for a moment, but I hope that the Government will grow out of their silly sloganising. We have long known that any country that is called a democratic republic is notably undemocratic. Anything called the people’s something gives the people a good deal less say than they had before. We have a people’s lottery, a people’s money and cool Britannia.
I am sure that the Secretary of State is ambitious – although I am not sure whether it is to be Prime Minister or mayor of London. Does he think that Mr. Attlee would have used such sloganising? I hope that he will decide that it is undignified and will drop it. It is not doing the country or the Government any good. When I hear Ministers producing such claptrap, I blush for them. When the Secretary of State came to the part of his speech about the people’s lottery, he buried his head in his script. I am short-sighted – an accusation that was also levelled at my right hon. Friend the Member for Horsham – but I thought that even the Secretary of State’s ears went pink.
Will the Government guarantee the percentage for the good causes beyond 2001 – for 10 years or some other period? If not, why not? The White Paper said that the distributing bodies needed to be able to take a long-term view and that they needed certainty. There is only one reason why the Secretary of State is not prepared to give that guarantee – the Treasury will not let him. The Treasury must be keeping open the option of a further smash-and-grab raid on the existing good causes.
Given the Government’s substantial majority, the Secretary of State will get the Bill through the House. However, a failure to answer my question will cause disruption and concern for those who make the lottery live by distributing the money to the good causes, severely damaging their confidence in their future and what they can do with the long, continuing flow of lottery resources.
I have asked the Secretary of State two clear questions. If he is not clear about them, I shall speak to him or his officials outside, so that he can be absolutely clear about what I seek. I am going to a significant arts event elsewhere this evening, but I shall miss most of it because I want to come back for the winding-up speeches to hear answers to my questions. I hope that the Government put at rest the minds of those who distribute money throughout the country. [Interruption.] I did not hear what the Minister for Sport just said.
Mr. Banks Trust us.
Mr. Major Where have I heard that before? “No new taxes – trust me,” said the Minister for Sport’s boss. The Government have broken promise after promise. We shall soon find out about the Minister for Sport. I know that he will be here at 9.30 this evening because Chelsea are not playing. I shall be here to hear him answer my two questions.
If the Minister is in answering mode, perhaps he can answer one or two other questions. Who will bear the cost of setting up the New Opportunities Fund? I hope that it will not be the other good causes, for that would rub salt into an already open wound. Will the Minister answer that at 9.30? Will he also confirm whether there will be further endowments to NESTA at the expense of the other good causes? He must know the answer to that. He cannot ignore the question: either he answers it, or everybody will make the only assumption that they can, that the Government will take more money away. I hope that, in the interests of arts, sports and other fund distributors, the Minister will give us unequivocal answers this evening.
I shall reiterate one point. I am not, in Luddite fashion, opposing any changes, because I was particularly in favour of the National Lottery etc. Bill, which was introduced when I was Prime Minister. Times change; we learn from experience. There are changes are to be made, and I shall support them, but some of the Secretary of State’s changes are wrong. I would have made other changes – he mentioned one of them. He was right; I would, for example, post millennium, have devoted the sums that are going to the millennium fund to the provision of sports coaching and arts teaching, across – as far as the money would stretch – our mainstream education system. I want us to win the World cup, the five nations trophy, the test matches, the Davis cup. Rooting a love of sport and the arts in schools would have been the right thing to do. Even though the Secretary of State used that suggestion to make a false point, it is absolutely consistent with the sport and arts element of the existing good causes. I was proposing to use money after the millennium fund ended, in order to extend the principles. However, in advance of it ending, the Government have got their sticky fingers on the cash.
Despite the Government’s astonishing honeymoon, we are coming to know them and how they manoeuvre whenever they are under any pressure at all. They are never too scrupulous in pursuit of their own interests. I hope that, this evening, they will redeem themselves just a little by giving clear-cut answers that show that they will not further pervert the original intention of the lottery, which has so far proceeded with outstanding success.