Deregulation Bill

Debate between Lord Collins of Highbury and Lord Mancroft

Tuesday 11th November 2014 Grand Committee

[Lord Mancroft]

My Lords, the noble Lord says that we do not know. We do know; this has been out to consultation several times. We also have the recent report of the Centre for Economics and Business Research, which, as he knows, was published in February this year and went into this subject in great detail. After carrying out a great deal of research, it made it absolutely clear that all the changes that have been made to society lotteries over the years and the ones that we are proposing today have absolutely no negative effect on National Lottery sales at all. What they can do and have done in the past is to expand the market overall, therefore actively improving National Lottery sales. The biggest increase in society lottery sales was in the past year, which also saw the biggest increase in National Lottery sales. Therefore the argument that he is proposing at the moment has been proven to be completely wrong.

[Lord Collins of Highbury]

I will come to that point, because in this market the proposals could result in an expansion with unforeseen circumstances and I want to address that. I have raised that with the Minister before, with regard to who may enter that market if we deregulate it. That is one of our major concerns. The principle of the National Lottery is that it was designated as a monopoly to ensure that it generates sufficient income for all the causes that Sir John Major originally envisaged for it. We need to be very careful about weakening the protection of that principle. That is the point that I am making at this stage. My noble friend Lord Rooker quite rightly pointed out that there was a range of proposals within these amendments; I will come to one of them, which could be well worth considering.

We need to protect the principle of the model that has worked successfully over the past 20 years. Measures that could have the potential to undermine that settled principle of one national lottery alongside many small small-scale society lotteries need to be avoided. I shall mention as an example the increase in prize caps for society lotteries. The level of prizes on offer to players is a fundamental differentiator between the National Lottery and society lotteries. When we introduced the National Lottery, we had that in mind. Any substantial increase in prize caps for society lotteries risks fragmenting the money spent by players across all the different lotteries available, which would lead to smaller jackpots, fewer tickets sold and, ultimately, less money for the good causes that were highlighted in the Chamber yesterday.

[Lord Collins of Highbury]

I was not attempting to rewrite history—far from it. That is why I mentioned the debate yesterday where noble Lords referred to Sir John Major’s proposals and their legacy. In the context of the Olympic Games and their legacy, the National Lottery has played a critical role. I think that the Labour Party has learnt many lessons over the years and adopted policies that perhaps it had been concerned about. My noble friend referred to the national minimum wage. I worked for a trade union that opposed that every step of the way, but it has learnt the lesson of reconsidering positions. We are talking here about the outcome of the National Lottery and the huge amount that it has achieved for a whole range of good causes, not just the national legacy causes but local causes and, in particular, the cultural impact. Any change to that principle therefore needs to be considered extremely carefully.

The proposal that the 20% contribution should be spread over a period of time may be one that the Minister will take on board. However, another point that I want to make about any changes, and I have raised this in the Chamber, relates to the loophole that we have seen exploited by the Health Lottery. It is supposedly made up of 51 separate companies yet has the same three directors, the same office and the same branding, in effect enabling it to operate as an alternative to the National Lottery. That is something that the Minister needs to look carefully at, despite the actions of the Gambling Commission in this regard. The amount that goes to worthy causes there is 20% but it is not absolutely clear how it is spent, and its promoters are certainly operating on a commercial basis.

[Lord Mancroft]

I do not want to enter into a debate about the Health Lottery now, but it is registered with the Gambling Commission. For every single lottery that it does, every single week, it submits a return to the Gambling Commission, which noble Lords can all see online today. There is no hidden money anywhere else. The putting together of a group of societies into one big one, with a lottery operator working above it, was debated and agreed very forcefully in your Lordships’ House 15 years ago. There is nothing secret about it. I accept the fact that Mr Desmond is, for some reason I am not clear about, a very unpopular person, but he has done exactly what the law envisaged and what Parliament intended. I took part in all those debates, and that is exactly what we planned. The Health Lottery has not produced any threat to the National Lottery. Camelot endlessly says that it does but, in the year of the Health Lottery’s birth and rise, National Lottery sales increased at a greater rate than at any time in its history, and long may that be so.

[Lord Collins of Highbury]

I do not accept what the noble Lord says because that lottery has exploited a loophole which I had hoped that the Government would be able to close. I am not suggesting for one moment that, in the dodgy sense, there is hidden money but only 20% of the money raised by that lottery goes to good causes. That may be seen to be a reasonable return, but it is advertised on Mr Desmond’s channels and in his newspapers, it is competing with the National Lottery and people think that it is a national lottery. It is even called a “national lottery”, which I think is in breach.

Furthermore, if that company can do it, what if Tesco suddenly decides, “This is a market we need to expand into. It’s a worthy cause. We can say to our customers that we’ve the infrastructure and the stores”? I believe that this is why we need to exercise caution. We have a model that has worked. We need to support local societies, even small societies, in terms of enabling them to raise money, and that includes local lotteries. I do not believe that when people buy those tickets they are necessarily thinking, “I need to win £4 million”, but we know the impact and the dream of the National Lottery, which is why it is so important to regulate the area. I am sorry to have banged on a bit on this, but there is a principle here that is worth defending and protecting. If we move forward in any step to deregulate that, we need to understand fully the consequences for the good causes.