Payments into the Olympic Lottery Distribution Fund etc. Order 2007

rose to move, as an amendment to the Motion, at end to insert ““but this House calls on Her Majesty’s Government to mitigate the impact of this draft order through exploration of other funding options and to guarantee that the Arts, heritage, sport, charity and voluntary sectors adversely affected by the draft Order benefit from any increase in land value in the Olympic site following completion of the 2012 London Olympic and Paralympic Games””. The noble Lord said: My Lords, I thank the Minister for his concise and clear introduction to the Motion. Unusually, I want to start by wishing the new Minister for Work and Pensions well—not something I often do. The DCMS is a field where I am glad to say that politics is not always red in tooth and claw. James Purnell, in his brief period as Secretary of State, consulted and maintained good relationships with opposition spokesmen in both Houses. He had his successes with the Treasury, too, which is rather unusual for a DCMS Minister; except in the field of tourism, he managed to increase the resources available to the organisations directly funded by the DCMS in the last spending round, as the Minister referred to. I hope the new Minister, Mr Andy Burnham, will take a leaf out of his predecessor’s book for the future. His Treasury credentials will be particularly welcome, as I will mention later. There has been understandable concern about the diversion of lottery money to the Olympics and the potential impact of such a move on the arts, heritage and other causes supported by the Big Lottery Fund and other lottery distributors—even on grass-roots sport itself. Four years ago, when the Government proposed that money be taken from the National Lottery good causes to fund part of the Olympics, we on these Benches, along with all the other political parties, agreed to it because we believed that the benefits that would accrue to sport, culture, heritage, regeneration and tourism, in terms of the Games and their legacy, outweighed the potential damage to good causes. As my honourable friend Don Foster pointed out in the debate in another place a fortnight ago, we assumed that this would be a one-off but of course we were wrong. I do not want to dwell overly long on the issue of the rise in estimated costs of staging the Olympics, but it is relevant to our discussion today. I am pleased that Tessa Jowell, the Olympics Minister, has pledged regular updates. We were originally told in the bid book that the Olympic budget would be £2.375 billion. In 2006, that figure rose to £3.3 billion and was later reported as rising to £5.1 billion. As officially announced by the former Secretary of State, Tessa Jowell, last March, we are now looking at a figure of £9.3 billion, which included a contingency of £2.75 billion, but represented a threefold rise in the original estimate. That contingency has now been reduced to £2 billion. At that time, the total funding from the lottery was expected to be £340 million from sports distributors and £410 million from non-sports good causes. Additionally, part of the package was the £750 million to be raised by new, Olympics-related lottery games. Today, after a rather long interval of 10 months, we are being asked whether we are prepared to authorise a further take from lottery good causes to fill the hole in the budget. We have always made it clear that we are strong supporters of the Olympics, and we want the Olympic and Paralympic Games to succeed. We debated the potential—indeed, potent—legacy of the Olympics just a fortnight ago. Many people and organisations, however, have strong concerns that a further cut will damage the very bodies that will deliver that legacy—the Heritage Lottery Fund, the NCVO, the Voluntary Art Network and the Central Council of Physical Recreation are good examples. In these circumstances, it would have been easy to be negative and simply to blame the Government. Instead, the Liberal Democrats decided to come up with constructive proposals to find ways of getting additional money to the lottery good causes which could make up for the cuts and which at the same time would allow the Games and their legacy to be delivered. That is what the amendment that I propose today and earlier discussions with the former Secretary of State have been about. First, we have said clearly that we want a cap on the £750 million raised by the Olympics-related lottery games. I am delighted that we now have on record an assurance not only from the previous Secretary of State but also from the Minister today that no more than £750 million will be taken from the Olympics scheme. This pledge has been welcomed by a wide range of voluntary and charitable organisations. Cannibalisation, where people switch from games that supported the traditional good causes to Olympic-related games—it has been discussed previously—is not therefore now of prime concern. What is of importance, however, is the speed at which the £750 million is raised. The original target was one-third by the Beijing Olympics and two-thirds during the four years thereafter. If it is raised any faster, good causes will be hurt. What assurances can the Minister give in that respect? Quite apart from that, we have previously heard an assurance in the other place, and again today, that there will be no further raid on the lottery good causes to fund the Olympics. We on these Benches welcome this. We propose also that the Government carefully consider the proposal to change taxation on the National Lottery to gross profits tax. That is a regime in which tax is paid after, rather than before, prizes have been paid to players. GPT allows the operator to increase prize payouts on selected lottery products, thereby stimulating sales growth while protecting and ultimately enhancing absolute returns to the Exchequer and good causes. We know that the Treasury was initially sceptical about GPT, but I am delighted that it appears now to have become agnostic about it. The DCMS has moved from being agnostic to being advocates. Camelot should be congratulated on its persistent campaigning on this issue during the past five years. It is deeply ironic that the lottery, which provides such a huge benefit to good causes, is not taxed on this basis, yet all the other gaming sectors—bookmakers, casinos, football pools and bingo operators—benefit from a GPT regime. PricewaterhouseCoopers has calculated that if such a change were to go ahead, something like an extra £45 million per annum would be generated for good causes. This figure might well be greater under the terms of the new Camelot licence, which starts next year. The former Secretary of State has said that he will carry out a review and these Benches welcome the signs that serious work on evaluating the benefits of GPT is being done in the Treasury. Can the Minister confirm that the review is being carried out with urgency and that if the results of such a review are positive the change to GPT could be announced in this year’s Budget so that GPT could be applied in the first year of operation of the new National Lottery licence? Can the Minister say when the review will be completed? The new Secretary of State was, in the immediate past, the Chief Secretary to the Treasury so he is in an outstanding position to understand and influence the Treasury and his former ministerial colleague, Angela Eagle, in this respect. Thirdly, we ask the Secretary of State to examine what he called the grey area of lottery-style gains. Most people who play the National Lottery know that a proportion goes towards supporting good causes. However, in recent years gambling operators have introduced lottery-style betting games, especially online, which they admit are intended to compete with the National Lottery. They look like National Lottery games but they are run solely for commercial gain and have no good cause benefits. Independent experts have shown that if we can eliminate those games so that players switch back to the National Lottery, it would mean on a conservative estimate an extra £44 million a year—more than £500 million by 2019—for good causes. The fact is that although the regulation of commercial gaming was modernised in the Gambling Act, no such process has taken place with the regulation and legislation governing the National Lottery. We need to ensure that the National Lottery, with its philanthropic purpose, is protected from encroachment, whether through the liberalisation of gambling advertising, the impact of society lotteries, welcome though many of them may be, and the spread of online lottery games run by bookmakers, who, of course, as I mentioned earlier—to add insult to injury—are taxed on a GPT basis. Fourthly, we ask for clarification of the memorandum of understanding between the Secretary of State and the Mayor of London, which specifies in some detail how expenditure from different sources, including the costs of the land incurred by the LDA and the £675 million from the National Lottery, will be recouped from land sales by the LDA following the Olympics and Paralympics. There has been much debate in the other place and in the media about what the eventual value of the Olympic Park will be. Will it be £1.8 billion? Will it be £1 billion? As a long-standing London resident, I have in the past consistently undervalued the likely growth in value of London property and I do not believe I am alone. So I doubt whether it is particularly useful at this stage to speculate on the eventual value of the Olympic Park. However, I hope that the Minister can give an absolute undertaking that the memorandum of understanding is binding on all parties, including the mayor and the DCMS, and that no attempt will be made to try to change the priority on the proceeds of the sale of the land. This is a sensible package of measures on which to move forward. If we add the possibility of additional money through the third Camelot licence, which could lead to between £600 million and £1 billion extra for good causes, and the increase in DCMS funding for various bodies as a result of last year’s CSR settlement, we have a context which at least holds out the possibility that good causes, taken over the long run, will not be disadvantaged. Indeed, if all these proposals come to fruition in due course more than £400 million could be returned to good causes before the 2012 Games. I beg to move. Moved, as an amendment to the Motion, at end to insert ““but this House calls on Her Majesty’s Government to mitigate the impact of this draft order through exploration of other funding options and to guarantee that the arts, heritage, sport, charity and voluntary sectors adversely affected by the draft order benefit from any increase in land value in the Olympic site following completion of the 2012 London Olympic and Paralympic Games””.—(Lord Clement-Jones.)