Deregulation Bill

Lord Collins of Highbury Excerpts

Tuesday 11th November 2014 Grand Committee

[Lord Rooker]

My Lords, I would like to ask a question. I know nothing about the detail of this, but I take it that these four elements that the noble Lord has described do not hang as a package. In other words, I am saying to the Minister: just for once, pick one. Okay? The case seems overwhelming. I have spent more time in this Grand Committee than I have done at any time since I was in the Minister’s position, so I know what it is like; because there is no vote, you can stonewall and accept nothing, hoping that, by the time you get to Report, you can wing it through.

Given the figures that the noble Lord, Lord Mancroft, gave, I would also say to the Minister that this is not a threat to the National Lottery. I understand that when the lottery was first formed, a lot of constraints were built in to protect it. For example, someone tried to start a lottery betting on the six numbers, and I think that it was banned because it would drain off other funds. The National Lottery is now so well established that there cannot possibly be any threat to it.

There is another factor here, if I have got it right, and I do not declare an interest but I do the odd lottery myself: this would mean more choice for the player. In the National Lottery you do not get any choice. We know what the overall picture is—it is a public good, we know that massive benefits to sport, culture and our heritage have come from it, and long may that continue—but we do not get any choice. However, with the society lotteries you get a choice. You can make that your key.

I will also say, although I know that these words are not used often these days by the Government, that this is classic “big society”. Does the Minister remember that? All the elements of society lotteries—individual choice, very small beer compared to the National Lottery but substantial benefits to the societies involved—make them the big society. They fit in exactly with what the Prime Minister used to talk about. It was a good idea; he just could not sell it. The fact is that these schemes seem to fit with that.

I say to the Minister: go on, just pick one of them. I am sure that he will still be there when we get to Report—it is too late for reshuffles now—so pick one that is really good and go back to the boss, as I used to do occasionally. I used to go back and say, “Look, we’re going to be defeated on this”, and we did not really want all the mess connected with that. I know that we cannot have a vote on this, but the fact is that on Report this could be a bit tricky at the wrong time of day. It would be a lot better if the Minister showed a bit of willingness, and I think he should be prepared to accept one of them.

[Lord Collins of Highbury (Lab)]

My Lords, I hope that we are not going to disappoint my noble friend or even the noble Lord in terms of the position of the Opposition. As someone who has spent a lifetime trying to raise money—for causes that were perhaps difficult, like the Labour Party campaign—I understand the importance of lotteries, and the importance of a range of options when it comes to raising money. However, we have to understand that this proposal would considerably change the lottery regulations, and such a change—again, I am glad that my noble friend Lord Dubs is not here—would need detailed study regarding its consequences. Not just the National Lottery but also smaller lotteries may be squeezed by the larger society lotteries that can expand and push the smaller ones aside. The Opposition would want to discuss that in detail before we could consider any changes.

--- Later in debate ---

[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 Rooker]

My noble friend is rewriting history. The Labour Party was opposed to a national lottery—I remember the years I spent in the other place when it was being promoted—because it would damage the football pools. That was the argument given. My noble friend is arguing from a monopolistic position. Where is the threat to the National Lottery? It may be a good model for a national lottery, which is fine—the past 20 years have shown that it works—but this is not the National Lottery; these are society lotteries, which are minnows compared to it. We were not always in favour of the National Lottery, just as we were not always in favour of the minimum wage, so I cannot sit here and have history rewritten.

[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.

[Lord Gardiner of Kimble (Con)]

My Lords, I thank my noble friend for his amendment and noble Lords for the lively debate that has followed. The effect of this amendment 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. I know that my noble friend disagrees with this but we do think that this may—and I use the word “may”—present a serious risk to the good causes funded by the National Lottery. We believe that the best way of raising funds is through encouraging people to play by offering them the life-changing prizes possible only through mass participation in a single national lottery.

As the noble Lord, Lord Collins of Highbury, has said, in the past 10 days I have answered two Questions on the Olympics and the importance of the National Lottery. I was asked about the dangers if National Lottery proceeds were to reduce and the impact that that would have on the Olympics. Indeed, it was borne out into the many other aspects of the National Lottery. I am sure that we all agree that the National Lottery has been an extraordinary success, raising over £32 billion for good causes in its 20 years of existence. It has funded everything from large-scale national projects to thousands of small-scale local groups and has had a transformative effect across the whole of the United Kingdom.

It is appropriate today to refer to what the Heritage Lottery Fund has been doing. It has awarded more than £12 million to enable the National Museum of the Royal Navy to turn HMS “Caroline” into a visitor attraction in time for the centenary commemorations of the Battle of Jutland. At the other end of the scale, the Heritage Lottery Fund also awarded more than £5 million to more than 700 projects through its First World War: Then and Now community grants programme.

It is this scale and reach that makes the National Lottery so unique. Ultimately, a total of over £60 million was given to more than 1,000 First World War centenary projects, covering nearly three-quarters of constituencies across the United Kingdom. This is only a fraction of the funding distributed by the National Lottery each year. The Government believe that allowing the sort of direct competition that could result from this amendment goes against the very spirit of the National Lottery. My noble friend makes clear that he does not believe that it puts this at risk, but there are others who feel that it may.

I want to refer to what the noble Lord, Lord Low of Dalston, said about society lotteries. They are undoubtedly very successful at raising funds for good causes and have grown significantly in recent years. We very much welcome that success but we are clear that they are part of a wider good cause landscape and, again, we would not want that to be at the expense of the National Lottery.