National Lottery Reform

Paul Farrelly Excerpts

Thursday 22nd July 2010 Westminster Hall

[John Penrose]

I thank my hon. Friend for her intervention and make two points in response. First, it is always open to the distribution agents to award grants that can be disbursed over a period of time, sometimes several years, so that longer-term projects can be funded, and they do that already. It does not always happen that way, so I take her point. Also, the grant-giving bodies are sensibly at arm’s length from political interference, and I suspect that all Members, regardless of their party, would applaud the principle that we do not want any politicians to be able to direct or interfere with the grant-giving process, because that way lies political favouritism.

Secondly, if my hon. Friend feels that there are clear examples of funding being granted according to fashion and the direction of prevailing winds, I encourage her to write to me. I would take that evidence to the lottery distribution bodies, following the principle of an arm’s-length approach, to ensure that they are protecting themselves against such accusations so that a Minister, either me or my successors, does not take that up in the wrong way.

There are a number of things we can do to move the lottery on after 16 years. There is much to be applauded, valued, maintained and preserved in its current arrangements, but perhaps some things could be updated a little. The coalition Government have laid out a reasonable programme for that. For example, we want to examine the case for instituting a gross profits tax approach to the lottery. The lottery would be allowed to flex the rate at which it offers prizes and, in exchange, could drive up participation and ticket sales. The benefit would be that it could then win more money that could be disbursed to good causes. There are several important concerns about that proposal to be dealt with, not least the fact that the Treasury rightly wants to ensure that taxpayers, as well as good causes, are not disadvantaged. We have pledged to examine that, but good examples and interesting evidence from other gaming organisations indicate that that could be a productive and effective change, so we are looking at it seriously.

We want to reform the national lottery so that the arts, heritage and sport receive 20% of the money that goes to good causes, which was the original intention. In recent years, the funding for those areas has been cut, understandably, so that more can go to the Olympics, so their share is now down to 16.66%. We want to raise it to 20% again so that those important areas of our national life receive more of the cash. Given current projections, each of those areas would receive roughly £50 million a year extra as a result of that change. I am sure that Members from all parties would applaud that, as it clearly means that the benefits are being spread more widely.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

The Minister mentioned the arts, and we have all heard of the cuts of up to 40% that are being planned by the Department for Culture, Media and Sport. To what extent does he expect that the increased lottery funding for the arts will simply replace grants withdrawn by DCMS?

[John Penrose]

As I have said, an important principle at the heart of the national lottery is additionality, which should already be enshrined in the grants that DCMS makes and that the relevant national lottery distributors make, so there should be a firewall between the two. We must ensure that any proposed changes do not breach that firewall or that principle. All Ministers in the Department are trying to ensure that we do not breach that principle as we grapple, along with Ministers in other Departments, with the problems of dealing with the spending review. I am sure that the hon. Gentleman and others like him will scrutinise closely any announcements that are made to ensure that we are true to our word. I can assure him that we are being scrupulously careful about that.

--- Later in debate ---

[John Penrose]

The short answer to the right hon. Gentleman is that anyone is free to apply, but the real question is whether that application is successful. The test that I expect any lottery grant-giving operation would apply is whether the application matches its terms and conditions and fits the limitations that it can impose on funding. I expect that a fund would look very carefully at a straight one-for-one comparison, because it would be very concerned about breaching additionality. I know that lottery fund grant distributors are alive to that issue.

I go back to the response that I gave to my hon. Friend the Member for Solihull (Lorely Burt) a little while ago—because such operations are at arm’s length, it is rather difficult for any Minister to predict or suggest too strongly what they will do. The decision, after all, is theirs, but I imagine that they would look at such issues tremendously closely.

[Paul Farrelly]

The Big Lottery Fund is an important body. Many groups will take some comfort from the fact that the Government have no intention to abolish or substantially diminish it—turning it into a small society fund, in effect. In my constituency, the Big Lottery Fund has never been criticised for being politically correct or for making grants to bodies other than the thoroughly worth while. It has made grants of £3.8 million in my constituency since 2004.

One of my proudest moments in the previous Parliament was working with the lottery to get a £500,000 grant for the Peter Pan special needs nursery, which cares for profoundly disabled children from birth. The grant allows the nursery to operate comfortably for five years, giving it a secure future. I hope that such projects will continue to be funded and supported by the Big Lottery Fund, under whatever name the Government chooses in the future.

[John Penrose]

I completely agree with and accept the hon. Gentleman’s point about the enormous amount of good will and love for how the lottery distributors have managed to fund all sorts of important good causes ever since the lottery began.

My party has criticised the fund in a small number of cases which, none the less, are important because of the risk to the reputation of the lottery. I do not want to go into huge detail now, unless pressed or provoked, but additionality was the issue on a number of occasions, potentially leaving the way open to damage of the lottery’s reputation. None of us would want that to be a possibility even. It is important for the lottery to be like Caesar’s wife and seen to be above reproach.

I will give way once more, but then I must make progress, because other people want to speak.