National Lottery

Viscount Younger of Leckie Excerpts

Monday 16th July 2018 Lords Chamber

[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.

--- Later in debate ---

[Viscount Younger of Leckie]

Indeed. Some points have been raised on that issue and I will come to it later, but if I do not manage to address it, I will certainly write to the noble Lord.

The recently launched consultation, which has been mentioned today, outlines measures aimed at finding the right balance between enabling the sustainable growth of society lotteries while protecting the National Lottery’s unique position. I invite noble Lords with an interest to engage with the consultation before its closing date of early September. I echo the noble Earl in saying that we welcome all views on this matter. The noble Earl raised some important points about the contributions and this debate will be taken account of in the consultation.

In conclusion on the matter of falling sales, we believe that Camelot’s revised strategy will go a long way to address this issue, supported by the distributors and, of course, DCMS.

The noble Lord, Lord Berkeley of Knighton, spoke about disabled access. He made an important point that all areas of visitation must have the correct disabled access. The point has been noted.

As has been mentioned, we will be celebrating the 25th anniversary of the National Lottery in a little over a year’s time. Work is under way to ensure that we make the most of this opportunity to further showcase the National Lottery’s singular ability to deliver life-changing outcomes, both in the awards it makes to good causes and in the value of prizes that can be won by lottery players. To reassure the noble Earl, the Government are looking forward to celebrating this important anniversary. Working together with Camelot and the distributors, we will make everybody aware of what this great institution has made possible over the past 25 years. Detailed plans are being advanced and further details will be announced in due course.

The National Lottery has had an unparalleled impact on 21st-century Britain. Across the country the lottery is not just well known but has a recognised brand name, as the noble Earl said. This is not surprising if you stop to consider that the majority of National Lottery money goes straight to the heart of our communities, locally and nationally. Some 71% of the grants made are for £10,000 or less; in other words, small amounts of money going to community-led projects that make a big impact. Less than 1% of the grants awarded exceed £1 million.

Furthermore, as the noble Earl said, this week is National Lottery in Parliament week. As the noble Earl did, I encourage noble Lords to visit the Upper Waiting Hall, where one can learn more about the Lottery and its history, and participate in a range of competitive activities—to keep noble Lords on their toes before we break up for the Summer Recess.

More seriously, we must ensure that we retain the warmth of public sentiment for the National Lottery among existing players and attract new participants. It is critical to ensuring that income is maximised to continue delivering awards across the breadth of this country and to the widest array of good causes. There are some questions that I still have to answer and I will write to all noble Lords. Noble Lords can be assured that this is a clear imperative of the Government and is a core objective in the department’s single departmental plan—

[Lord Foster of Bath]

I think there is some confusion in your Lordships’ House. I will read the Minister a quote from the Gambling Commission, which said:

“The relatively low prizes and generally limited distribution footprint are key factors that have traditionally differentiated”,


the society lottery sector from the National Lottery. Do the Government still believe that that distinction should be maintained?

[Viscount Younger of Leckie]

That is a question that should be put to the consultation. This debate will allow these sorts of questions to be put to the consultation. I reassure the noble Lord that that will be taken into account.

To conclude, we hope to see the National Lottery continue to flourish, both now and for the next 25 years.

House adjourned at 7.34 pm.