Lotteries: Limits on Prize Values

Priti Patel Excerpts

Tuesday 12th December 2017 Westminster Hall

[Priti Patel (Witham) (Con)]

It is a delight to be called to speak in this important debate. I congratulate my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) on securing it. He spoke in great detail and with great knowledge about the benefits of society lotteries. I commend him for the strength of his case and his arguments; I agree with them all.

In my seven and a half years as a Member of Parliament, I have been really moved and pleased to see the amazing actions and the positive impact of charities, particularly small charities, not only in my constituency but in other parts of the country and across the world. The commitment and dedication of charity workers, particularly volunteers, transforms lives and communities. I echo my hon. Friend’s words about the big society—that is exactly what we see in the dedication of motivated individuals who want to serve their community and help others. That is what we see from small charities and society lotteries: valuable support and service provision, responding to local needs in a way that central Government, big charities and bureaucracies quite frankly cannot and will not.

In my own constituency, I have seen many great charities supporting amazing causes, from branches of the Royal British Legion across Essex to remarkable charities such as Brainwave, which fundraises for itself, with no Government funding or support, but is changing the lives of children who suffer brain injuries and cerebral palsy and is also transforming the lives of their parents and families. From Farleigh hospice to the Witham Boys Brigade, people are working hard every week to support vulnerable people and enhance our local communities. The Health lottery, which my hon. Friend mentioned, has invested more than £45,000 in just one charity in my constituency, 2nd Witham Boys Brigade. The Health lottery is an astonishing vehicle for bringing direct support to the grassroots—the communities and charities that achieve a transformative effect. In the case of the Witham Boys Brigade, the money has gone to its stadium, a street project and a neighbourhood living project that is transforming the community and bringing employability skills and empowerment to a whole generation of young people. Enhancing outcomes for young people is something that we should all support, while also encouraging greater volunteerism within the community. Funding from the Health lottery not only enables young people to take part in activities, but helps to build skills for life and give them the confidence to become good citizens.

One of the benefits of local society lotteries is that the people who pay to play will see and know the good causes that they are supporting, because they will be surrounded by them in their local community. That is an enormous contrast with the national lottery, in which there is no direct link between someone’s stake and the various causes that it may go towards or support in some way. The national lottery’s funds go into a central pot and are redistributed from the centre—not a principle of redistribution that I support—whereas local society lotteries serve a genuine grassroots need. Their promoters are themselves active citizens within their communities, so they have that community connection.

I want to see more charities and good causes benefiting from funding from society lotteries. Having looked at this matter, I urge the Government, as other hon. Members have done, to support that goal by reforming the regulatory regime under which society lotteries work. In fact, one of the representations I received before the debate was from Essex and Herts Air Ambulance. Our air ambulances are amazing. Naturally, they believe in raising the cap on society lotteries to ensure that more money goes into communities—something that we all support.

In my former role in the Government, I saw for myself how society lotteries benefit international causes and charities—a point that my hon. Friend also mentioned. Causes such as Water Aid and Mary’s Meals, a charity that my former Department supported in Scotland, are given a tremendous helping hand in delivering support on nutrition. The People’s Postcode lottery and the Postcode Global Trust support many global charities that are helping young people around the world to develop new life skills and giving them new life chances. We should be very proud of that; I hope the Government will acknowledge it and be proud of it too.

It has been five years since a review of society lotteries was announced, but progress on regulatory reform has been slow. Local charities and organisations that support people are being held back by outdated legislation. By law, non-commercial fundraising lotteries must donate at least 20% of proceeds to charity. Outdated regulations designed to protect the national lottery from competition are preventing them from growing. That is simply not right.

The case has already been made for raising the maximum prize to £1 million—a proposition that is rightly supported by the sector. A higher prize fund will attract more players, which in turn—believe it or not—will generate more revenues for good causes. A £1 million prize is also a clear and memorable figure that is easy to market when promoting these very good society lotteries and charities with a strong local connection. I believe that society lotteries that are able to do so responsibly should be free to adapt their model, increase their maximum prize to attract more players and bring that money to our communities.

The real question for the Government is why society lotteries should be held back. We should give them the freedom to succeed and the trust and confidence to go out there and deliver the big society. We should empower more communities and charities. As a Conservative, I am naturally a great supporter of the freedom to succeed, choice, innovation and the role of the market. When playing lotteries, consumers should have a choice of causes to support, including causes that they themselves may be associated with or have an affinity with. That is really important, but it is being restricted by the existing regulatory framework. We should trust consumers to make informed choices about which lottery products they want to support. They should know how, and towards which causes, each £1 that they pay and play will be divided up, and what the ultimate benefit will be.

As we have heard already today, the national lottery has changed its product range, although that has not necessarily worked, and has put its prices up. We all want to support the next generation of Olympians and win more medals as a country, but some consumers quite frankly do not want to bankroll the fat-cat salaries of Camelot. Likewise, many people who give to charities do not want to bankroll large charities’ fat-cat salaries. As someone who has been a great advocate and supporter of local charities, and of moving moneys away from big charities and big causes, I think we should make absolutely sure that we empower smaller charities, so that they get out there and provide the support that is required.

The other point I will make—I say this with some personal experience, as my parents were shopkeepers—is that the national lottery’s monopoly completely restricts the opportunity for smaller lotteries to have a staging post in many retail outlets. The national lottery is very restrictive in terms of the regulations and the restrictions around it, and it places burdens on small shopkeepers, such as my parents once were, even though they run the types of shops that we should be supporting on high streets and in our villages, as well. They provide a great local service to our local communities, too.

Camelot has a monopoly and as there is only one national lottery that restriction obviously has ramifications and wider implications. The Government are supporting choice and competition in many other sectors—energy, banking, education or higher education—so there is an enormous opportunity for the Government now to grasp the nettle and to be incredibly proactive in this area.

This is an argument to support choice and competition, but fundamentally it is an argument to support our local communities and our local charities. Naturally, there will be benefits from increased competition, which is something I support. So, like my colleagues here today and like my hon. Friend the Member for North West Norfolk, who secured this valuable debate, I feel that this is a wonderful opportunity to live and demonstrate the values of choice and competition, as well as to promote the role of our small charities, to show that the big society can exist and operate through the hard work of smaller charities and their lotteries, and through other society lotteries.

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[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Tracey Crouch)]

It is a pleasure, as always, to serve under your chairmanship, Sir Edward.

I am grateful to my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) for calling what has been a stimulating and wide-ranging debate on an important issue, and I thank all Members who have taken part. Many of the issues that have been raised are complex, and are exactly the ones my Department has been grappling with for a while now, so it has been timely and invaluable to hear everyone’s considered views.

I will start with some specific comments. The hon. Member for Ceredigion (Ben Lake) asked whether I recognised the value of society lotteries. Of course I do. I certainly do. Like those of many colleagues, my constituency has benefited from society lottery funding, including for Kent search and rescue and the Luton Millennium Green community nature park. So naturally, like many people, I understand the value of both society lotteries and national lotteries.

I want to deal up front with the issue of the advice from the Gambling Commission, which has been raised by many colleagues. I have received the commission’s advice and have been considering it carefully. The commission will publish the advice in due course, and I hope to update Members soon. One particular piece of the advice, on transparency, was published just this afternoon. Many Members will know that the Gambling Commission recently consulted on introducing new licence codes to improve the transparency of society lotteries, and its proposals include requiring lotteries to publish the various proportions of their proceeds. I want first to deal with those issues—I will come back to the timetable later in my speech.

It is clear that the society lottery sector plays an important and growing role in supporting a diverse and wide range of good causes in the UK. We have seen sustained growth in the sector since 2008, when the per draw sales limit was doubled from £2 million to £4 million. Indeed, sales have increased by more than 100% in the last five years. Last year, a record £255 million was raised for good causes, which was an increase of more than 20% on the previous year. Not only are society lotteries raising more funds for good causes, they are giving a greater proportion of their sales back to good causes, with a sector average of just less than 44%.

Each year, more charities and good causes start their own lotteries to raise funds to support their important work. I recognise that, for charities, money raised through society lotteries has become an important source of funding, which allows their work to continue and grow. Colleagues will appreciate that I am the Minister with responsibility not only for gambling but for civil society so, whatever we do on the issue, I recognise the contribution the lotteries make to charities that I support in another part of my brief.

In 2015, I was a member of the Culture, Media and Sport Committee, the report of which many colleagues have cited today. We looked at society lotteries in some detail. The guiding principle then, as now, was that the regulatory regime which governs society lotteries should encourage the maximum return to good causes. The licensing regime should be light, protecting players without placing unnecessary burdens on operators. In some bizarre twist, I, in my role as the Minister responsible for lotteries, and the former Secretary of State for Culture, Media and Sport, the right hon. Member for Maldon (Mr Whittingdale), who had previously been the Chairman of the Committee, agreed either to accept the report’s recommendations, or to explore them with expert advice from the Gambling Commission. The issues are important and complex, and it has been prudent to take our time over them and to consider a number of options.

My hon. Friend the Member for North West Norfolk and other colleagues mentioned limits, which was a recommendation for review in the Select Committee report. However, before making any changes to the current rules, it is important that all options are looked at and consideration is given to the wider picture. We do not want any unintended consequences.

The key consideration in the reforms has been how to strike the right balance between society lotteries and the national lottery. The sectors grew in tandem for many years, and it is important that any reforms enable them both to flourish. I want to pause here to acknowledge the importance of the national lottery. This year marks its 23rd anniversary and, since 1994, more than £37 billion of national lottery funding has been raised—an average of more than £30 million each week—for more than half a million projects all over the UK. The national lottery has had an unparalleled impact on 21st century Britain, making a valuable contribution to funding our many Olympians and Paralympians, our historical buildings and monuments, and even our Oscar winners, one of whom I was fortunate enough to meet a fortnight ago, alongside some of our future stars who are benefiting from film clubs run with lottery funding. It is, of course, our communities who benefit most of all from the lottery. The majority of national lottery money goes straight to the heart of our communities. Last year, most of the grants made were for £10,000 or less—small amounts going to community-led projects that make a huge impact.

I was sorry to hear that my right hon. Friend the Member for Witham (Priti Patel) is unaware of some of the national lottery funding in her constituency. We are working with all distributors to ensure that people are made more aware of the local as well as the national good causes that the lottery supports. Just as a headline, in my right hon. Friend’s constituency the national lottery has funded the Museum of Power—somewhere we should all visit—Tollesbury sailing club and the local rifle club. I know that Braintree District Council covers more than her constituency, but it has had more than £18 million of Sport England funding. I do not know the details of all the other national lottery distributors, but I will ensure that we write to her with them.

[Priti Patel]

I know very well the distribution of national lottery funds and support in my constituency and I thank the Minister’s officials for giving her the chance to tell the House today where the money has gone. But there is a point of principle here, which is that of competition and choice in communities—also the purpose of the debate—ensuring that society lotteries are able to compete with the national lottery and that a wider pool of funds goes to a much wider range of local charities and communities.

[Tracey Crouch]

I am grateful for my right hon. Friend’s point, which—she is right—the whole debate has addressed. It is important, however, and other colleagues have made this point, that we have a strong national lottery. It has become a part of our national fabric, but that does not mean that we cannot also have strong society lotteries. The Secretary of State made that point recently.