National Lottery

Lord Griffiths of Burry Port Excerpts

Monday 16th July 2018 Lords Chamber

[Lord Griffiths of Burry Port (Lab)]

My Lords, I thank the noble Earl, Lord Clancarty, for being as ever a watchdog in this area. He registered his intention to have this debate in February. It is a bit of a pity that it is happening today rather than tomorrow, because some of the results of the Question we are discussing about the outcomes of the National Lottery will be on display elsewhere in the building. We could have lavishly referred to all of that and thus made our case without having to speak about it. There is no doubt that, in terms of the good causes that are supported by the National Lottery, the whole face of our country has been changed, so the object of this debate is to ensure that we do not lose momentum. The expertise of the noble Lord, Lord Foster, and of the noble Baroness, Lady Andrews, speaks for itself.

I have some personal experience of the operation of the lottery. I was the president of the Methodist Conference in 1994 when the National Lottery was established. We have done fire and brimstone about gambling for quite a long time and I think it was expected that I would unleash my Welsh oratory to good effect as I denounced the incoming activity called the National Lottery—and indeed, since I love fire and brimstone, I was very tempted. But I had talked to people and become aware that the lottery was something very much in line with what the public wanted. I remember appearing on a television programme presented by my noble friend Lady Bakewell on this very subject. I limited myself to two areas of serious concern.

One has been mentioned adequately by several contributors to the debate; namely, that we hoped that the income raised would not be at the expense of government expenditure but in addition to it. That was one of the strong points that it seemed appropriate to make. The other point I wanted to make in those days was that it is well attested that gambling as an activity creates problems among a certain percentage of those who indulge in it. There have been many sociological studies and while the percentages vary—I have seen 6% and 12%—let us acknowledge that problems are going to be created. Why should the National Health Service pick up the tab for dealing with problem gamblers? Should there not therefore be a levy on all those involved in the gambling industry which could be given to the NHS to help it cope with the problems?

Having said all that, the Museum of Methodism on City Road whose refurbishment I oversaw benefited enormously from the Heritage Lottery Fund. It is quite right to say that we should get clearer branding on all this so that we know that it is one single entity that provides these moneys. So the chickens have come home to roost as far as Methodism is concerned—but let it be said that of the £2.5 million we spent, £2.25 million was raised elsewhere, with £250,000 from the Heritage Lottery Fund.

On the other hand, at the moment I am struggling with someone to try to raise money for a project to encourage black opera singers to find their way in the high culture world of opera. Of course, it does not have the right cachet and does not meet the criteria, but it is a worthy cause that would widen the pool of brilliance available to us so that when Covent Garden does benefit from the Heritage Lottery Fund, we could have a few performers inside who have also benefited from it—and why not? So tomorrow I shall be down on the Terrace looking at all the wonderful things that have been done with this fund.

Camelot has written a briefing paper, which I—and other noble Lords, as I understand from the speeches so far—have read. It was a nice bit of common reading for us. Camelot recognises the very problems that we are discussing and has had an important set of meetings to evolve a strategy for the immediate future, knowing that there has been some staleness in the way things have been working and that financial returns have not been as good. Its four objectives, which were referred to by my noble friend Lady Andrews and others, include an improved range of products. Who am I to talk about EuroMillions, Lotto and Thunderball with any authority? But they do represent a widening of the variety of products.

Over the years, I have discovered that even something as fresh as a daisy today will be a wilted bloom tomorrow. Keeping things fresh and renewed is a very important part of the exercise. People are familiar with the National Lottery now. They are no longer thrilled by it. I remember “It could be you”. Do we not all remember that? All I can say is that I always bought my tickets—by proxy, of course: I am a Methodist minister and you have to be very careful about these thing—but it was never me and has not been thus far. For all that, I remember the thrill of the beginnings of National Lottery very well. I wish the Camelot operation well as it seeks to continue to refresh the product and give it continuing bite on the public mind, as it were. We have talked about the brand. I asked the Camelot members to whom I spoke about its retail activity and broadening its presence in the retail world. When high street shops are all shutting, is that necessarily where it ought to be? But they persuaded me that there are ways in which they can cope with all that.

The question of a balance between the National Lottery and society lotteries has been amply referred to. I have also spoken to people from society lotteries—at least, from one or two of the ones that we can cope with, I should say. There is a way of gathering things together under an umbrella and finding ways to avoid paying tax through loopholes and shortcuts. It is incumbent on the Government to look at that. It has been referred to again and again over the years. I trust that the Minister will assure us that the time has come to take this in hand.

I know that we have an ongoing consultation. I know that Camelot has set strategic objectives. Therefore, it seems that we are on the wrong side of things that are about to happen and which we cannot yet evaluate. I hope that the noble Earl, Lord Clancarty, will put down his name now for another debate in November, when we can see the results of the consultation exercise and how the impact of Camelot’s strategic goals is working out. There has to be a balance of some kind between the National Lottery and local expressions of a lottery. If the balance is right, they can be complementary, but it will need the wisdom of Solomon. I look to the Minister; my conversations with him have suggested Solomonic qualities in his character, so let us hope that it all works out well.

Finally, we had a debate on fixed-odds betting terminals. With a sigh of collective relief on all sides of the House, we welcomed the fact that the Government seemed committed to taking a £2 stake as the norm, rather than something between £2 and £100. Then we were all disconsolate because of the time it is taking to implement that decision. None of guessed in that debate that it would be so intricate. I remember the Minister’s colleague trying to explain the critical path to implementing what we had all decided was a very good thing. So let us remind ourselves that we have recognised the problematic nature of betting on lotteries and decided to stop it. I hope that it will not be as intricate to deal with what we have decided in this instance as it has been in the other.

Well: gambling. A Methodist minister at the Dispatch Box going on about getting a wholesome approach to all these matters. The noble Lord, Lord Beith, a friend of mine, talked about those projects where the money applied led to the widening of access to the project that was being refurbished. I cannot see why, if that works for a chapel of the north of England, it cannot work for the Covent Garden opera house, which also ought to have its access widened so that little old ladies with Zimmer frames can go in and listen to the treasures of music as much as anybody else.

[Viscount Younger of Leckie (Con)]

My Lords, I do not know about Solomonic characteristics, but I am pleased to respond to this debate. I sincerely thank the noble Earl, Lord Clancarty, for raising a discussion on the National Lottery at this pivotal point in its history. We have nearly succeeded today in having as many or more speakers in the gap than those who put their names down to speak in the first place, such is the noble Earl’s popularity. As he said, we stand on the cusp of the National Lottery’s 25th anniversary year and work has begun to consider the shape of the National Lottery when the current licence expires in 2023.

I start by addressing a question raised by the noble Baroness, Lady Andrews, and the noble Lords, Lord Berkeley and Lord Foster, about the importance of the relationship between online gambling and the National Lottery, and the link to the next bidding round. It is an important issue and it will certainly be considered by DCMS and the Gambling Commission as we consider the design of the next licence.

Before we get into the details, I will set the scene. We believe, as some noble Lords have said, that the National Lottery has been an undeniable triumph since it was launched by Sir John Major in 1994 with the objective to raise money to enhance the sports, arts, heritage and charity sectors in this country. It is easy to forget that the lottery also raised funds to help us mark the millennium. Its performance has far outstripped the initial expectations of £1 billion for good causes per year. In fact, more than £38 billion has been raised over the National Lottery’s 24-year lifetime, as was mentioned. This has meant that more than 500,000 good cause grants have been awarded across the whole of the UK. Every single local authority has benefited by an average of more than 1,200 awards.

So many individuals and organisations have benefited. I will select just a few to mention here. The National Lottery has supported the small and seemingly simple, yet very important, such as funding the travel costs to allow World War II veterans who would otherwise not be able to attend to take part in commemorative visits. It has allowed the United Kingdom to excel increasingly at the Olympic and Paralympic Games; supported more than 42,000 heritage projects, including the restoration of more than 19,000 historic buildings and monuments; and of course, as the noble Earl so eloquently mentioned, funded the overarching gamut of art and culture, inspiring and uniting us.

So, as the noble Baroness, Lady Andrews, said, it is vital that the National Lottery continues to thrive, but equally we must acknowledge that this relies on people continuing to buy tickets. As the noble Earl said, while ticket sales, and thus amounts generated for good causes, naturally fluctuate year on year, there have been undeniable challenges recently. Recent years have seen lower levels of good cause income than we might have hoped for. The noble Lord, Lord Griffiths, might be right that there is, as he put it, a certain staleness in it. However, the sums raised are still not insignificant—namely £1.6 billion in 2017-18.

But let me be clear: we are concerned about the fall in income. The noble Baroness, Lady Andrews, raised some points about this. We understand the difficulties this drop in income means for distributors. The Gambling Commission has provided detailed econometric modelling of future national lottery returns to distributors. That modelling was last shared in March this year. She also raised a linked point about the sharing of data by the department, but I reassure her that DCMS is also working with the Gambling Commission to ensure that distributors have all the information they need to plan ahead—it is an important point.

So, what are the Government doing about this? As soon as the income drop became apparent in 2016, the Government engaged immediately with the lottery distributors, with the Gambling Commission, which regulates the National Lottery, and with Camelot, the National Lottery operator, to agree a series of remedial actions designed to return the National Lottery to its strongest possible position. This remains work in progress. Returns to good causes appear to have stabilised in the 2017-18 financial year, following the 15% drop in 2016-17, but the Government know that there is more to do and we continue to drive this strategy actively. Last year, Camelot undertook a thorough strategic review of its business and has brought in a wide range of measures to improve results. This has already seen the return to television of the National Lottery draw results and the introduction of additional games. Further measures are in the pipeline to reinvigorate and extend the portfolio, with new products such as an annuity-based game, allowing winners to receive a monthly prize over a long period. Further details will be forthcoming on this.

Lottery distributors themselves are also working with Camelot to improve the public’s perception of the National Lottery and ensure that players are aware of the good causes they are supporting. Some valuable points were made on this by the noble Lord, Lord Foster, who was particularly concerned—this was a clear focus of his speech. Events, such as the Heritage Lottery Fund’s “Thanks to You” campaign last December, are building an association between the sale of lottery tickets and the local good cause projects that these tickets ultimately fund. I deliberately use the word “local” because lottery funding has reached all corners of the country. In addition to successful film-making, which was mentioned this evening, and saving the capercaillie, which, as a Scotsman, brought a smile to my face, the lottery funds allotments in Angus, pottery in Port Talbot, theatre in Thurrock, bell-ringing in Belfast, wildlife in Westminster and cricket in Rugby.

The noble Lord, Lord Beith, spoke about the importance of funding our historic buildings through the Heritage Lottery Fund and he is right. I also echo the thoughts of the noble Lord, Lord Berkeley, about the lottery providing important funds for heritage. In the last financial year the Heritage Lottery Fund provided £20 million for places of worship and has ensured that the same proportion will be spent this year, so the breadth is pretty wide.

The noble Earl, Lord Clancarty, voiced concerns that society lotteries, such as the Health Lottery or the People’s Postcode Lottery, pose an increasing threat to the National Lottery’s monopoly position—this addresses the points raised by the noble Lords, Lord Foster and Lord Griffiths, as well as the noble Earl, about so-called umbrella lotteries. I reassure the House that we continue to look at this issue very carefully and have taken expert advice from the Gambling Commission. The noble Earl may be surprised to hear that current evidence suggests that while players see the two types of lottery as distinct, there is little danger of product substitution. The evidence shows that players are drawn to the National Lottery because of its life-changing prizes and the ability to support a broad range of causes, while they often play society lotteries to directly support a specific charity or cause.

However, to help ensure that this distinction is maintained—as the noble Earl said, this is important—this year the Gambling Commission introduced stricter requirements for branded society lotteries, such as the Health Lottery, to be clear with players about the cause that each draw is being held to support. Society lotteries are now also required to make players aware of how much of what they raise goes to good causes. The Government value the place of society lotteries in raising money for charities and good causes—more than £250 million last year, supporting causes such as the Royal British Legion, the RNLI, and air ambulances across the UK. The noble Lord, Lord Griffiths, made the point that there is a balance to be struck between national and local, and the Government remain committed to ensuring that both society lotteries and the National Lottery are able to thrive side by side; indeed, we have heard from many organisations that receive valuable funding from both.

[Lord Griffiths of Burry Port]

I think we were worried about the level playing field in terms of taxation and conditions for operating and so on. I wonder if there is an answer to some of those concerns.