Deregulation Bill

Lord Collins of Highbury Excerpts

Thursday 5th February 2015 Lords Chamber

[Lord Collins of Highbury (Lab)]

My Lords, I wish to address three areas of concern regarding the noble Lord’s proposals: the impact on the current consultations; the impact on public confidence; and the impact on the National Lottery. We exchanged views on these issues in Committee but I want to reiterate some of the concerns.

The current DCMS consultation closes on 4 March. At the same time, the Culture, Media and Sport Select Committee is separately investigating society lottery regulation and should report its findings fairly shortly. We have argued for a detailed study of the proposals and their consequences.

I hear what the noble Lord, Lord Mancroft, says, but it is not just the National Lottery that may have concerns. Smaller lotteries and other charities have raised concerns that they may be squeezed by large society lotteries, which could expand and push the smaller ones to one side. Certainly, we on this side of the House would want to discuss the implications of that in detail before we consider any changes. Changes to this sector must be proportionate and evidence-based. We must not risk negatively impacting on the perception of charities—and, in turn, on the levels of public trust and confidence.

It is difficult to come to any conclusion on whether to substantially increase the sizes of prizes, of the individual draw or of annual proceeds caps as there is insufficient information available on this market. Without understanding how many lotteries are hitting the prize limits, the individual draw or the annual caps, and which would therefore benefit from being able to sell more tickets with higher prizes, I do not think that we can say that there is sufficient evidence for a change in policy.

There is a strong case for making more information available—certainly for increasing the data available on each society lottery’s ticket breakdown. We would like to see the Gambling Commission maintain up-to-date and publicly available data tables that show the proportion each lottery divides between good causes, prizes and expenses. It is fundamental to public confidence that the people who buy tickets understand the choices that they make. What are they supporting? How much of the money that they contribute will go to a good cause? That really is important.

I have also raised before, in the Chamber and in Committee, concerns over lottery operators, and in particular the loophole exploited by the Health Lottery. It is supposedly made up of 51 separate companies, yet they have the same three directors, the same office and the same branding. In effect, it operates as an alternative to the National Lottery. I do not think we can disregard concerns about the National Lottery. We do not fully understand the consequences. If we deregulate this market and other people come in, we are looking at a serious potential threat to the National Lottery.

The National Lottery was established on a monopoly basis for a very good reason: to balance people’s desire that the money goes to a good cause with the effect of gambling. There is no doubt that people participate in a lottery because they want to win; it is not simply about giving money to a good cause. From the way the Health Lottery and other operators market themselves, we can see that if we deregulate without properly considering all the consequences, we could have new entrants to the market. The market might grow, but it could certainly be distorted. I have mentioned this before: we could have companies such as Tesco, which has the infrastructure to mount a lottery, becoming a lottery operator, and, no doubt, giving 20% of its money to good causes—but we still do not understand how that could impact on the National Lottery.

As we have heard in previous debates, the National Lottery is not just about great big amounts of money going to big exercises. A huge amount of money—80%—goes in small amounts to local causes, which would not otherwise have been able to raise the money themselves. It has made a huge impact on our society, and we should not risk it without fully understanding the consequences.

[Lord Gardiner of Kimble]

My Lords, I thank my noble friend for tabling these amendments. He is certainly tenacious in these matters.

The amendments seek to remove or relax regulations governing the amounts that society lotteries can raise and the level of prizes they can offer. The effect of the amendments together would be to allow society lotteries to offer jackpots of up to £5 million per draw and to hold as many draws as they wish. Our concern is that this could put society lotteries in direct competition with the National Lottery, and this might present a serious risk to the good causes funded by the National Lottery. The best way of raising funds is through encouraging people to play by offering them the life-changing prizes that are possible only through mass participation in a single national lottery. Indeed, the lottery was set up in 1994 to do just that.

As the noble Lord, Lord Collins of Highbury, rightly suggested, the National Lottery has been an enormous success, raising more than £32 billion for good causes in its 20 years of existence. It has funded everything from very large-scale national projects to thousands upon thousands of small-scale local groups, and this has had a truly transformative effect across the United Kingdom.

Society lotteries have also been very successful at raising funds for good causes and they have grown significantly in recent years. We welcome that success and are clear that they are part of a wider good-cause landscape. However, we cannot let their success be at the expense of the National Lottery.

Even if all the amendments are not taken together, it is unclear what effect making changes to individual limits will have. The limits taken as a package have so far allowed society lotteries to flourish while maintaining the success of the National Lottery. If we wish to change these limits, either singly or as a package, it must surely be done on the basis of evidence and with a clear understanding of how any changes will impact on society lotteries, both large and small, as well as on the National Lottery.

The Government agree with my noble friend that it is now time to consider these limits. That is why we are currently consulting through a call for evidence, asking for views on how we can ensure that society lotteries continue to flourish alongside the National Lottery. In addition, as has been mentioned, the Culture, Media and Sport Select Committee is currently investigating society lotteries and will be considering whether their current limits are appropriate.

We are currently gathering the evidence that will highlight whether any reforms are needed, and I believe that it would be unwise to make any changes now without waiting for that evidence. The Government expect to have it after the call for evidence closes on 4 March. Once we have this evidence, any reforms to monetary amounts or percentages can be made through secondary legislation. Therefore, I am confident that the Government could move to make changes if, indeed, it was decided that this was the right and sensible course of action. For those reasons, I ask my noble friend to withdraw his amendment.