National Lottery

I will do my best to keep my remarks brief. As so often, it is a pleasure to follow the hon. Member for Bath (Mr. Foster). I agreed with much of what he said. As the Secretary of State knows, when the Government first decided to bid for London to host the 2012 games, I held the position now filled by my hon. Friend the Member for South-West Surrey (Mr. Hunt). At that time, I expressed the Conservative party's support for the Government's decision to bid. I remain of the view that it was the right thing to do, and that the Olympics will greatly benefit the country. The Secretary of State and the Minister for the Olympics occasionally interpret any criticism of the preparations for the games as a lack of support for their coming to London at all, so I put my support on record at the outset. I am encouraged by the evidence that we in the Select Committee have received that progress is on track so far. Although the costs have escalated, at least the timetable appears to have been observed. The Secretary of State and the Minister for the Olympics would have been encouraged had they joined us this morning when we took evidence from the five host boroughs and heard the enthusiasm with which their leaders spoke of the benefits that they saw coming to their part of London. However, if more than £5 billion is being spent in an area, it is not surprising that the local people should expect quite a lot of benefits to come from it. The challenge for the Government has always been not just to ensure that there are benefits for that part of London, but to persuade the other parts of the country that they will benefit, too. In that respect, the order before us will not assist, because not only will there be no huge investments outside London, but money is being siphoned from the pot—the national lottery—from which other parts of the country might otherwise have benefited. That will jeopardise part of the soft legacy, which is the Government's aim, and it comes on top of the Department's recent decision to cut the amount of money going to VisitBritain, which will jeopardise another part of the soft legacy of the Olympic games—the tourism potential. When the Government originally drew up their funding package, it was to meet an estimated cost of £2.375 billion, of which £1.5 billion was intended to come from the lottery—£750 million from the new game, £340 million from the sports distributors and £410 million from the non-Olympic distributors. In the report that the Select Committee issued a year ago, we expressed concern about the impact that the original £1.5 billion take would have on good causes, in particular sport. We quoted the Central Council of Physical Recreation, which my hon. Friend the Member for South-West Surrey (Mr. Hunt) has also quoted, which said that the move"““would…reduce…funding available to all other aspects of community sport””," which would"““undoubtedly be detrimental to achieving the lasting legacy of sporting participation””." We also received evidence from the non-Olympic distributors, such as the Heritage Lottery Fund and Arts Council England, which expressed concern about the money going into the Olympic pot that would be lost to them. That was why the Select Committee concluded that any further transfer of funds out of the lottery to support the Olympics would penalise good causes yet further. We made it clear that that was not our preferred option. When the Secretary of State had to reveal a budget of £9.325 billion—a considerable extra cost, which had to be found from somewhere—it was with some trepidation that we read reports that the extra would come from the lottery. It appears that the Minister for the Olympics achieved a better deal in her negotiations with the Treasury than some suggested she would. We should therefore be grateful that we are debating an order that will take only a further £675 million from the lottery, and not an even bigger sum. However, there is no doubt that taking £675 million, in addition to the original £1.5 billion, will have a further detrimental effect. Indeed, that sum alone will result in £420 million being taken from Big Lottery Fund, £90 million from the Heritage Lottery Fund and £63 million from Arts Council England. Those sums cannot be taken out without a detrimental effect on those bodies' funding programmes. That will make it harder to sell the Olympic games to the other parts of the country, which are not seeing the immediate benefits from the investment in east London. At the time of the report last year, the Committee suggested that the rise in land values that would undoubtedly result from such investment should not benefit just the London Development Agency. We therefore very much welcomed the then Secretary of State's announcement, a few months later, that part of the money that would become available from the sale of that land in due course would be repaid to the lottery. As has been said in this debate, she set out a clear order of priorities for how it would be allocated. It appears, however, that some doubt has arisen over how much will be available. The Mayor's office, which gave evidence to the Committee this morning, dismissed the story in The Times and said that it had always been the case that the amount of money raised from land sales could be between £800 million and as much as £3 billion. However, when I look at the memorandum of understanding I see no mention of the word ““if”” in relation to the land sales achieving the necessary £1.8 billion to repay the London Development Agency and the lottery distributors. In fact, it uses clear language, stating:"““the National Lottery income…will be re-paid””," and that the LDA will be reimbursed. However much it is now suggested that this does not represent a new story, a degree of uncertainty that did not previously exist seems to apply to the likelihood of the lottery being reimbursed for its contribution. That is obviously a matter for concern. Even if the money is repaid in full, it seems unlikely that that will happen until about 2030. The lottery will therefore have to put up with a substantial hit for a considerable time, and it will not be a great reassurance to the bodies that hope to receive lottery funding to hear that the amount of money available will increase again by 2030. The one other concession that the Secretary of State has made this afternoon, which I strongly welcome, is his pledge that the Treasury will look again at the case for a gross profits tax for the national lottery. I am always slightly suspicious when I am told that a taxation change will increase not only the amount of revenue to the Exchequer but the amount available to good causes—but PricewaterhouseCoopers has apparently assured us that that would be the case, and that should be grounds for at least examining the idea. The Secretary of State has clearly been extremely persuasive in his discussions with the Treasury, so perhaps he could push his luck and ask whether it will reconsider its intention to have its tax take from the national lottery game. That money, too, could provide extra funding that could be better used elsewhere. I welcome the Secretary of State's concession, and I also strongly welcome his pledge that there will be no further raid on the national lottery. I hope that that will not be necessary, in any case. Of the £9.375 billion, £2.75 billion represents a contingency fund, and we all hope that that fund will not be fully drawn down. We are alarmed, however, by the evidence that has already been given by the permanent secretary in the Department, who stated that he expected that it might well all be necessary—and the Minister has said that she cannot guarantee that the final figure might not prove even higher. We understand that she can offer no such guarantee. I regret the necessity for this order, as I still believe that the Government could have found other sources for the funding that would have been less damaging to the good causes, and I must express my strong hope that it will not be necessary to come back to this issue, either to raid the national lottery or to find some other source of funding because the bill has risen even higher than it is currently predicted to do.