Lotteries: Limits on Prize Values

(Limited Text - Ministerial Extracts only)

Tuesday 12th December 2017 Westminster Hall

[Jim Shannon]

My hon. Friend makes a very important point in this debate today and the Minister will obviously take note of it—

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Tracey Crouch)]

indicated assent.

[Jim Shannon]

So we look to the Minister, as we always do, for a comprehensive response to the debate. It is always good to see her in her place and we deeply appreciate her interest in this matter.

Businesses should not reap the benefit of charitable rates and tax exemptions if the charitable project itself is not reaping the benefit of people’s charitable endeavours. For that reason, I am supportive of greater regulation to ensure that the most money possible goes to the charity. For example, when people make the decision to buy a Health lottery ticket over a national lottery ticket, it suggests that they want to help the health service, as the hon. Member for Eastbourne suggested in his intervention, and people who are ill. As much money as possible should go to health provision, as that is what people are trying to achieve.

I am not sure whether this issue is really within the remit of the Minister, but I must put something on the record. Whenever we watch TV—I only watch on very rare occasions—the Health lottery comes up. In the small print at the bottom of the screen, it says that the Health lottery is available in England, Wales and Scotland, but not in Northern Ireland. That might be because of our legislation, but I will put it on the record that many of my constituents wish to contribute to the Health lottery but cannot do so for whatever the reasons may be. So, I again look to the Minister, to give us some thoughts on how we can perhaps ensure that the good charitable giving of people in Northern Ireland can benefit the Health lottery, so that we can also contribute to good causes through that route.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Tracey Crouch)]

It is a pleasure, as always, to serve under your chairmanship, Sir Edward.

I am grateful to my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) for calling what has been a stimulating and wide-ranging debate on an important issue, and I thank all Members who have taken part. Many of the issues that have been raised are complex, and are exactly the ones my Department has been grappling with for a while now, so it has been timely and invaluable to hear everyone’s considered views.

I will start with some specific comments. The hon. Member for Ceredigion (Ben Lake) asked whether I recognised the value of society lotteries. Of course I do. I certainly do. Like those of many colleagues, my constituency has benefited from society lottery funding, including for Kent search and rescue and the Luton Millennium Green community nature park. So naturally, like many people, I understand the value of both society lotteries and national lotteries.

I want to deal up front with the issue of the advice from the Gambling Commission, which has been raised by many colleagues. I have received the commission’s advice and have been considering it carefully. The commission will publish the advice in due course, and I hope to update Members soon. One particular piece of the advice, on transparency, was published just this afternoon. Many Members will know that the Gambling Commission recently consulted on introducing new licence codes to improve the transparency of society lotteries, and its proposals include requiring lotteries to publish the various proportions of their proceeds. I want first to deal with those issues—I will come back to the timetable later in my speech.

It is clear that the society lottery sector plays an important and growing role in supporting a diverse and wide range of good causes in the UK. We have seen sustained growth in the sector since 2008, when the per draw sales limit was doubled from £2 million to £4 million. Indeed, sales have increased by more than 100% in the last five years. Last year, a record £255 million was raised for good causes, which was an increase of more than 20% on the previous year. Not only are society lotteries raising more funds for good causes, they are giving a greater proportion of their sales back to good causes, with a sector average of just less than 44%.

Each year, more charities and good causes start their own lotteries to raise funds to support their important work. I recognise that, for charities, money raised through society lotteries has become an important source of funding, which allows their work to continue and grow. Colleagues will appreciate that I am the Minister with responsibility not only for gambling but for civil society so, whatever we do on the issue, I recognise the contribution the lotteries make to charities that I support in another part of my brief.

In 2015, I was a member of the Culture, Media and Sport Committee, the report of which many colleagues have cited today. We looked at society lotteries in some detail. The guiding principle then, as now, was that the regulatory regime which governs society lotteries should encourage the maximum return to good causes. The licensing regime should be light, protecting players without placing unnecessary burdens on operators. In some bizarre twist, I, in my role as the Minister responsible for lotteries, and the former Secretary of State for Culture, Media and Sport, the right hon. Member for Maldon (Mr Whittingdale), who had previously been the Chairman of the Committee, agreed either to accept the report’s recommendations, or to explore them with expert advice from the Gambling Commission. The issues are important and complex, and it has been prudent to take our time over them and to consider a number of options.

My hon. Friend the Member for North West Norfolk and other colleagues mentioned limits, which was a recommendation for review in the Select Committee report. However, before making any changes to the current rules, it is important that all options are looked at and consideration is given to the wider picture. We do not want any unintended consequences.

The key consideration in the reforms has been how to strike the right balance between society lotteries and the national lottery. The sectors grew in tandem for many years, and it is important that any reforms enable them both to flourish. I want to pause here to acknowledge the importance of the national lottery. This year marks its 23rd anniversary and, since 1994, more than £37 billion of national lottery funding has been raised—an average of more than £30 million each week—for more than half a million projects all over the UK. The national lottery has had an unparalleled impact on 21st century Britain, making a valuable contribution to funding our many Olympians and Paralympians, our historical buildings and monuments, and even our Oscar winners, one of whom I was fortunate enough to meet a fortnight ago, alongside some of our future stars who are benefiting from film clubs run with lottery funding. It is, of course, our communities who benefit most of all from the lottery. The majority of national lottery money goes straight to the heart of our communities. Last year, most of the grants made were for £10,000 or less—small amounts going to community-led projects that make a huge impact.

I was sorry to hear that my right hon. Friend the Member for Witham (Priti Patel) is unaware of some of the national lottery funding in her constituency. We are working with all distributors to ensure that people are made more aware of the local as well as the national good causes that the lottery supports. Just as a headline, in my right hon. Friend’s constituency the national lottery has funded the Museum of Power—somewhere we should all visit—Tollesbury sailing club and the local rifle club. I know that Braintree District Council covers more than her constituency, but it has had more than £18 million of Sport England funding. I do not know the details of all the other national lottery distributors, but I will ensure that we write to her with them.

[Priti Patel]

I know very well the distribution of national lottery funds and support in my constituency and I thank the Minister’s officials for giving her the chance to tell the House today where the money has gone. But there is a point of principle here, which is that of competition and choice in communities—also the purpose of the debate—ensuring that society lotteries are able to compete with the national lottery and that a wider pool of funds goes to a much wider range of local charities and communities.

[Tracey Crouch]

I am grateful for my right hon. Friend’s point, which—she is right—the whole debate has addressed. It is important, however, and other colleagues have made this point, that we have a strong national lottery. It has become a part of our national fabric, but that does not mean that we cannot also have strong society lotteries. The Secretary of State made that point recently.

[Sir Michael Fallon]

No one doubts the success of the national lottery. It is an enormous achievement and we should be very proud of it, but how do we know whether a quarter of a century further on it will continue to be as successful as it could be?

[Tracey Crouch]

We are constantly reviewing matters. The Gambling Commission constantly keeps the national lottery under review, and I am sure that colleagues are aware that discussions are already beginning about the next licence procedure. We have to have a healthy mix of lotteries. I recognise, as my right hon. Friend the Member for Witham pointed out, that not everyone is aware of the local good causes. There has been an issue that the national lottery money that goes to those good causes has not necessarily been promoted as well as it could be. Society lotteries have done that much better, and we want to ensure that we have a vibrant mix of national and society lotteries.

I am the Minister with responsibility for charities, so I have heard from many charities that benefit from society lottery funding, whether that is their own or a grant from such lotteries as the People’s Postcode lottery or the Health lottery, both of which support a multitude of good causes throughout the country. We have heard about some of those good causes today.

I have spent a long time looking at the evidence on the relationship between the national lottery and society lotteries. We know that the two sectors offer different and distinct propositions to players. The national lottery enables players to support a wealth of good causes in the hope of winning a life-changing prize, while society lotteries focus for the most part on affinity with a specific cause and are subject to limits on their annual and per draw sales and their maximum prize. For that reason, I do not believe there has been significant competition between the two sectors up to now, but reforms must be considered through that lens.

It has been interesting to hear the arguments regarding the prize limits on offer through various lotteries. It is no coincidence that when the national lottery draws have big rollovers, there is an increase in ticket sales—bigger prizes attract more players—but I do not think people are attracted to society lotteries in the same way. Many large society lotteries offer relatively low prizes but are still thriving, which speaks to the point that my hon. Friend the Member for North West Norfolk made. It is not always about the size of the prize; what is important is maintaining the balance and variety currently on offer.

I will briefly respond to the points made by our Northern Ireland colleagues. Although lotteries carry a lower risk of harm than commercial gambling, they are still a form of gambling, and tickets can be bought at 16. That is one reason why we are considering the evidence carefully before making a decision. Gambling policy in Northern Ireland is devolved, as was pointed out. I have listened with interest to the points that the hon. Member for Strangford and others have raised, and I encourage them to raise them with the Northern Ireland authorities. In addition, colleagues will know that I announced a consultation on social responsibility on 31 October. It will look at advertising, which was a point that the hon. Gentleman raised, and I encourage him to feed into the consultation. I continue to keep the devolved Administrations up to date on our work on this issue.

[Gavin Robinson]

The Minister will be aware that the Northern Ireland legislation on gambling and social charities has not been revised since 1994. The Department for Communities started a consultation in 2011, and we still have not got the outcome of that process. It is no surprise that there is huge divergence between the legislative framework in Northern Ireland and that in the rest of the United Kingdom. Given that we do not have devolved institutions at the moment, and regrettably might not for some time, it might be worth the Minister engaging with the Department for Communities to get an update on where that consultation is.

[Tracey Crouch]

I would be very happy to do that. The hon. Gentleman makes a good point.

The other comment I wanted to make was on the call for evidence. Responses to the call for evidence have been considered alongside the Gambling Commission advice. The process has taken time. There have been two general elections since it started, but I assure colleagues that it is very much at the forefront of my current work. We are carefully considering the evidence. While colleagues may say that there is consensus for change, which is true, I respectfully point out that there is not necessarily consensus within the sector on what the changes should be, and we are looking at that area as part of our consideration. As my hon. Friend the Member for North West Norfolk and others have pointed out, changes to the limits for sales and prizes can be made by statutory instrument, but the parliamentary process, as many know—there are some very experienced colleagues in this room—can take around nine months to conclude from when an announcement is made. We are trying to work the issues through. I hope to be able to update colleagues in more detail in the new year.

To conclude, society lotteries, both large and small, play a rich, varied and important role in supporting and championing good causes. For some, they may well be the mechanism for providing their main sources of income, and it is my intention to ensure that the sector has every opportunity to grow and thrive. I thank my hon. Friend for giving us the opportunity to set that on the record.