National Lottery Reform

Debate between Baroness Burt of Solihull and John Penrose

Thursday 22nd July 2010 Westminster Hall

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)]

It is a pleasure to serve under your chairmanship, Mr Benton, and to have the opportunity to address Members on what is, by any stretch of the imagination, a British success story—the national lottery. It was set up under the previous Conservative Government in 1994 and has continued ever since, with some ups and downs, to perform an extremely valued job across the country. It has become an integral part of Britain’s national life, principally because it gives so much to good causes. The figures are truly remarkable. Since it was set up 16 years ago, the national lottery has given more than £24 billion to good causes and funded more than 345,000 projects. I doubt that there is an MP in the current Parliament, and certainly in previous Parliaments, who could not tell stories of how those donations and projects have transformed the lives of some of their constituents. That is the case in every constituency across the country, from Lands End to John O’Groats. That is a measure of the national lottery’s success and of how it has worked its way into the marrow of the nation’s bones.

It is important to remember that one of the founding principles of the national lottery was additionality—an arcane piece of Whitehall jargon that means something very important. It means that national lottery funding for good causes needs to be in addition to core Government spending; it should not be used to subsidise or replace Government spending but should go to causes that would not otherwise receive funding. That is essential, because the four areas to which it gives money—heritage, sport, culture and what is now called the big society—all go to making the soul of the country work. They go to make Britain a better place to live in, rather than just somewhere that works okay. We would all be impoverished and diminished if the national lottery did not fund those things, and that is why it has become an accepted part of our national life. That demonstrates how successful and loved the national lottery and the projects that it funds have become.

Not to say that the national lottery is perfect. In the 16 years since it was set up, the world has moved on. It would be irresponsible for any Government, particularly a newly elected one, not to run over the figures with a slide rule and look at whether some things could be improved. The national lottery might be doing a vast amount right, much of which is tremendously valued, but can we give the tiller some small tweaks to improve what is already excellent?

[Lorely Burt (Solihull) (LD)]

My hon. Friend mentions small tweaks, and what immediately springs to my mind are the small charities in my constituency, many of which have difficulty planning, sometimes even for the next year, because of the short-term way in which decisions on lottery funding pan out. When charities are turned down for funding, the reasons for the decision often seem inexplicable. That is especially true for small charities, which sometimes suspect that there is an element of fashion in the funding decisions and conclude that they are not in fashion that year and so are left to go to the wall.

[John Penrose]

I thank my hon. Friend for her intervention and make two points in response. First, it is always open to the distribution agents to award grants that can be disbursed over a period of time, sometimes several years, so that longer-term projects can be funded, and they do that already. It does not always happen that way, so I take her point. Also, the grant-giving bodies are sensibly at arm’s length from political interference, and I suspect that all Members, regardless of their party, would applaud the principle that we do not want any politicians to be able to direct or interfere with the grant-giving process, because that way lies political favouritism.

Secondly, if my hon. Friend feels that there are clear examples of funding being granted according to fashion and the direction of prevailing winds, I encourage her to write to me. I would take that evidence to the lottery distribution bodies, following the principle of an arm’s-length approach, to ensure that they are protecting themselves against such accusations so that a Minister, either me or my successors, does not take that up in the wrong way.

There are a number of things we can do to move the lottery on after 16 years. There is much to be applauded, valued, maintained and preserved in its current arrangements, but perhaps some things could be updated a little. The coalition Government have laid out a reasonable programme for that. For example, we want to examine the case for instituting a gross profits tax approach to the lottery. The lottery would be allowed to flex the rate at which it offers prizes and, in exchange, could drive up participation and ticket sales. The benefit would be that it could then win more money that could be disbursed to good causes. There are several important concerns about that proposal to be dealt with, not least the fact that the Treasury rightly wants to ensure that taxpayers, as well as good causes, are not disadvantaged. We have pledged to examine that, but good examples and interesting evidence from other gaming organisations indicate that that could be a productive and effective change, so we are looking at it seriously.

We want to reform the national lottery so that the arts, heritage and sport receive 20% of the money that goes to good causes, which was the original intention. In recent years, the funding for those areas has been cut, understandably, so that more can go to the Olympics, so their share is now down to 16.66%. We want to raise it to 20% again so that those important areas of our national life receive more of the cash. Given current projections, each of those areas would receive roughly £50 million a year extra as a result of that change. I am sure that Members from all parties would applaud that, as it clearly means that the benefits are being spread more widely.