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The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
It is a pleasure to serve under your chairmanship, Mr Gray.
I thank my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) for securing this debate and I thank everybody who has taken part. It has been good to take some time out from the complexities of the gambling White Paper and the questions about levies, betting terminals, casinos and loot boxes, and instead hear about and discuss the fantastic work of the society lottery sector, the great things that it does and the funding that it provides. That includes organisations such as the air ambulances, hospice lotteries, Age UK, the Royal British Legion and so many others up and down the country.
As I said in the House recently, in a previous role I set up a society lottery for the hospice that I used to work at, so I understand the important contribution that society lotteries make to charities’ incomes. I am absolutely committed to doing everything that I can to make sure that charities get as much money as they can. That is precisely why I fought for the £100 million with the Treasury: I went into battle to help with the current situation that many charities, which have been so brilliantly celebrated today, are facing.
Through my wider ministerial role, I have seen at first hand the real impact that funding from charity lottery players has in supporting a huge range of good causes, and it often sits alongside grants from the national lottery. For example, just last week I visited the London LGBTQ+ Community Centre in Blackfriars, which receives funding from the National Lottery Community Fund. Ahead of the Eurovision final in Liverpool, I saw the support that the fund had given to Daisy Inclusive UK for the work it is doing with youth social action groups in that city.
Members have articulated the tremendous amount of work that goes on in their constituencies. Indeed, the People’s Postcode Lottery has supported a range of projects in my constituency, including some that have been mentioned—the Woodland Trust, Magic Breakfast and Farsley Community Orchard. I also recognise the fact that many good causes receive funding from both the national lottery and society lotteries. The V&A in Dundee received over £19 million from the national lottery and £1.2 million from the People’s Postcode Lottery.
As Members will be aware, following a comprehensive consultation, which received more than 1,500 responses, the Government legislated in 2020 to introduce a wide package of reforms to the framework that governs society lotteries, and as a result of those reforms we significantly increased the annual sales limit, from £10 million to £50 million. For many charities that are running their own lotteries, there is plenty of headroom there, but I will come to some of the specific issues shortly.
We also increased the draw sales limit from £4 million to £5 million, which was warmly welcomed by the sector, and the increases also enabled lotteries to offer a prize of up to £500,000. I believe that package of reforms struck the right balance to achieve the best possible outcome at that time. It is important to remember that there were different stakeholders with different perspectives and priorities then. Some wanted us to go further, and called for an increase in the sales limit to £100 million and a maximum prize limit of £1 million, but others thought we had gone too far and felt that those increases would have a negative impact on, say, the national lottery and the good causes it funds.
Wendy Morton
I think we all recognise and welcome the changes that the Government made at the time, but having listened to the Minister I want to press him on two points. First, does he accept that there is a place for both the national lottery and the society lotteries? We are not talking about either/or; it is not competition. When we get it right, both sectors can benefit.
Secondly, I appreciate that when there is a consultation there will be lots of different stakeholders to accommodate, but when it comes to the People’s Postcode Lottery specifically, the issue is that charities are being negatively impacted and that, with a bit of tweaking and adjustment from the Government, charities could benefit a lot more.
Stuart Andrew
I take those two points. I absolutely agree that society lotteries and the national lottery can coexist; they have done throughout the existence of the national lottery. I will come to the point about the People’s Postcode Lottery in a moment.
Just last week, I met the current operator of the national lottery. It reminded me that the national lottery was purposefully set up to be the most efficient way to get money to good causes. It is important to remember that since it began in 1994, more than £47 billion has been raised for good causes. That is significant, and it equates to the national lottery raising more than £30 million each week. The majority of that funding goes straight to the heart of all our communities. We obviously need to ensure that that continues, because it delivers to a diverse range of groups and organisations in our communities. Given my wider portfolio, I know it is also critical for sport provision and elite sports. It is important to think about that.
In recent months I have learned a great deal about the complexities of transitioning from one national lottery licence to another and about transitioning for the first time to a new operator. It is clear that our objective for the lottery sector is for the national lottery and society lotteries to thrive together. It is also important to remember that our Secretary of State has a statutory duty to enable national lottery receipts to be maximised, and the continued growth of society lotteries needs to sit alongside that.
From the evidence that I have seen, we seem to have got the balance right to date, but, as with most things, there may be a tipping point, and I continue to bear that in mind. We last reviewed the 2020 reforms 12 months after they were implemented. We concluded that there was not yet enough available evidence to determine the full effect of the changes, and we wanted to see more substantive data over a longer period before considering any further changes. It still feels like the right approach to me, but I strongly believe that an evidence-based approach is always the right one. That is why we got the gambling White Paper into a good place: because it was all based on evidence.
We also want to make sure that the regulatory requirements placed on society lotteries are proportionate to their size. Should we enable society lotteries to sell £100 million-worth of tickets each year, we would also need to consider whether the largest lotteries should have placed on them further requirements, such as on the level of information they provide to consumers, and whether the percentage of sales they return to good causes should increase. It is important that we make those challenges too and look at some of the comparisons. I want to make sure that not just one area sees an increase but there is also an increase to charities.
The guiding principle, then and now, is that the regulatory framework regime that governs society lotteries should encourage the maximum return to good causes, and that the licensing regime should be light, protecting players without placing unnecessary burdens on operators. We will continue to work with the Gambling Commission as it keeps the sector and the case for further changes under review.
It is also not certain, when we look at the detail, that a further increase to the sales limit would necessarily result in a significant increase in funding for good causes. For example, despite a five-fold increase in the annual sales limit in 2020, I understand that what the People’s Postcode Lottery returned to good causes did not increase by nearly the same amount. We have to consider such things, so evidence and the consideration of conditions are important. For those who ask me to make further changes immediately, even if there were robust evidence to do so, there are processes that we are obliged to follow.
Wendy Morton
May I press the Minister a little more on that? If he is not willing to deal with it immediately, would he look at it as a matter of urgency, given the number of charities that are being detrimentally affected?
Stuart Andrew
My right hon. Friend has obviously seen a copy of my speech, because I am coming to that in a moment. We will need to carry out a consultation—we have to do that— take account of those views, study the evidence, seek the views of other Government Departments and find time in a busy parliamentary schedule to bring any proposals to the House. It is not as simple as might sometimes be portrayed. Nevertheless, I have heard in the debate, and throughout my time in post, that there is a desire for us to be clearer about when any such review may take place, so I will ask officials in the Department to consider the matter in more detail with the Gambling Commission to see what is realistic. I will provide an update in the autumn to those who have attended this debate.
As I said, I met the People’s Postcode Lottery just this morning, and my priority remains delivering our ambitious commitments in the gambling White Paper, because I think there is some serious work that needs to be done there. I am also keen to ensure the smooth transition of the fourth national lottery licence and to make swift progress on the horserace betting levy review, which is really important. In this morning’s meeting, the People’s Postcode Lottery recognised the considerable work that we are trying to get through.
The consideration of any further changes to the framework for society lotteries needs to be considered in the context I have set out, but I have committed to continue to explore what flexibility there already is within the system to get us through the interim period ahead of any further detailed review. In the meantime, I am confident that, thanks to the millions of people who enjoy playing the lottery or buying a scratchcard, both society lotteries and the national lottery will continue to raise much-needed funding that benefits so many people. For many independent society lotteries there is plenty of headroom. I recognise many of the points that have been made about the specifics of the People’s Postcode Lottery and assure Members that I will keep a close eye on the matter.