National Lottery Bill

I am grateful to the noble Viscount and to the noble Lord for speaking in such reasonable terms about an unreasonable amendment. The thinking behind the amendments reflects unwarranted concern about the Government’s intention for the proposed reserve power to reallocate an excessive National Lottery Distribution Fund balance from a lottery distributing body to another body. Amendment No. 6 would completely sabotage the proposed new power, as the noble Viscount, Lord Astor, made clear in his opening speech. My ministerial colleagues in another place gave repeated assurances that the power would be used only as a last resort against a distributor who had stubbornly and persistently failed to manage its National Lottery Distribution Fund balance to a reasonable level. Both the National Audit Office and the Public Accounts Committee of another place—both bodies that this House fully respects—have concluded that the public benefit of lottery money is fully delivered only when that money has been spent. The money has no value when it is in the hands of the distributors. The distributors have already made great progress in reducing their balances. Any distributor which manages and sets clear targets for balances, as all the main distributors are now doing, will have nothing to fear from the reallocation power. As I said, the power is only a reserve one to be deployed in extreme situations. However, balances have not fallen as far or as fast as we would have wished and progress must continue. We need a reserve power in case any distributor should in future build up an excessive balance and fail to tackle it, because that money is not being used for the purposes for which the lottery is organised. Amendment No. 9, to which the noble Viscount also spoke, would build in a specific requirement for the Secretary of State to consider the effect on a distributor’s longer-term commitments before exercising the reallocation power. The noble Viscount indicated my assent to his proposition that the Government should recognise that some distributors have longer-term commitments. Of course they have. The Government have repeatedly given assurances that we would not use the proposed new power in a way that would threaten any existing commitment made by any distributor. That is absolutely clear. We fully recognise that many lottery projects are very long-term and that many such projects have already brought great public benefit. The trouble with the noble Viscount’s amendment, however, is that it would open up scope for wide debate about what constituted a threat to a distributor’s long-term commitment. Some might argue, for example, that a distributor needs to hold funds in its balance now to meet a commitment that is likely to fall due for payment in five years’ time. The Government would not accept such an argument, since new funds are flowing into the NLDF constantly and any distributor can expect that those funds will continue. We therefore believe that it would be reasonable, in the very unlikely event—I emphasise, in the very unlikely event—that we ever proposed using the reallocation power, to take account of a distributor’s future income from the lottery, as well as its existing NLDF balance. At the same time, we realise that the level of future income is variable. That goes without saying with the lottery; we have already seen variation in receipts and we can never forecast with absolute accuracy. So in calculating the amount of a distributor’s balance to be reallocated, we would leave an adequate margin to take those factors into account. I also point out that the National Audit Office, in its report on balance management in July 2004, suggested that distributors should increase their forward commitments as the most effective means of reducing their balances in the longer term. The Government are hardly likely to propose using the reallocation power against a distributor which had followed that advice offered by the National Audit Office by making longer-term commitments. I understand the anxieties of noble Lords—opposition is full of anxiety, especially about benign governments—but I emphasise that we look on the powers as reserve powers for when things reach a very difficult, indeed, almost desperate state. No distributor organising its distribution mechanisms effectively and on the lines that we have every right to expect—the public have every right to expect those resources to be made available for the purposes intended—has anything to fear. However, without any reserve power, there might be the danger that a distributor failed to allocate, to reach what are often difficult decisions on distribution, and sat happily on balances. In other circumstances, we know that that can provide a feeling of great security, but security is not the issue for lottery fund distributors. The issue is effective use of money of which they are in relatively temporary charge to produce benefits for the community. The Government need a reserve power in that respect. I hope that the noble Viscount will withdraw his amendment, having accepted that eminently reasonable argument.