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Nick Harvey (North Devon): Since its launch in 1994, the national lottery has been of great benefit to many people. The money that it has raised has allowed much regeneration in our communities, enhanced the lives of many people and improved all our constituencies. The hon. Member for City of Durham (Mr. Steinberg) paid a heartfelt tribute to what it has achieved in his constituency, which I visited for the first time a few weeks ago. I do not know how many of its treasures can be directly attributed to the national lottery, but if it is helping to keep the city as wonderful as it is, it is clearly doing good.

Such achievements should not be underestimated. Hon. Members have already mentioned the sums of money that have been raised. However, in many cases the value of the projects that have been funded by lottery proceeds cannot be calculated because of the lottery's success in unlocking other forms of finance, triggering many projects that would not otherwise have happened and which therefore go beyond what the lottery has directly funded or stimulated.

Although the national lottery is a relatively new creation, we must be aware that it is likely to have a limited lifespan. The experience of lotteries elsewhere around the world is that however successful they may seem to be for a considerable time, in the end they inevitably roll over and implode. No one can predict with any certainty how long they will last. Indeed, our own lottery has shown some diminution in ticket sales, and we cannot afford the luxury of believing that it will last for ever, continuing to generate the revenue figures that it has so far enjoyed.

We must ensure as best we can that we maximise ticket sales and thereby the investment that the distributing bodies are able to make; that the lottery operates in a manner that is fair, accountable to the punter and protects the vulnerable; that the distributors have extracted the best value for money from the funds that have been made available through ticket sales; that that money is administered in the best and most efficient manner; and that investment is maximised in every sense. In short, we must ensure that we make the most out of the lottery because, like all good things, it will eventually come to an end. Whatever money is raised, and however it is raised, it is most important that we spend it wisely.

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The funds raised for good causes—28p in the pound for every ticket sold—are distributed between arts, sports, charities and heritage, and education, health and the environment. Historically, arts, sports, heritage and charitable causes have been low down on the Treasury's list of priorities.

When we look around, we can all see examples of what the lottery has achieved. Mention was made of the millennium stadium in Cardiff, which I visited on Sunday for the Worthington cup final. It is a fantastic stadium and it was wonderful to see a full house. The atmosphere that is created when a match is played with the roof closed is extraordinary. That would not have happened without lottery proceeds being made available, and the same can be said for much of what has been achieved in the arts, sport and heritage and for charitable causes.

The same cannot be argued in respect of health and education. Those are high up on the list of voters' priorities, and they expect the Government to fund services in those sectors appropriately and adequately. We have already talked about additionality. The hon. Member for Harrow, West (Mr. Thomas) challenged the hon. Member for Vale of York (Miss McIntosh) on whether she would want finance to be withdrawn from after-school clubs. After-school clubs are clearly an adjunct to the education system, not one of the core parts that have traditionally, as the average member of the public would expect, been paid for by the taxpayer. If those are the sorts of new opportunities that the fund is creating, that is consistent with the original aims and objectives of the lottery.

However, when one starts to consider using the new opportunities fund to pay for hospital equipment, which the man in the street would expect the Government to fund from Exchequer revenues, one begins fundamentally to stray from the original purposes and objectives of the lottery. When the new opportunities fund was established, the then Secretary of State for Culture, Media and Sport said:

The Secretary of State touched on that this morning when she said that lottery money should not and will not be a substitute for such spending. She acknowledged that there is a fine line to be navigated. There certainly is, and in some cases the new opportunities fund has ended up on the wrong side of it.

Chris Grayling: Does the hon. Gentleman share my concern that the new opportunities fund may become an excuse for the Government not to consider funding certain areas? One example is the hospice movement, where the voluntary sector has traditionally played an important role in appeals—such as that for the Shooting Stars hospice, which was so memorably not visited by the hon. Member for Richmond Park (Dr. Tonge). The Government should consider providing additional support in that area, but it is easy for them to use the new opportunities fund as a smokescreen for not doing so.

Nick Harvey: The hon. Gentleman makes a good point that echoes my worry about the current scope of the new opportunities fund. Welcome as the additional expenditure may be, it is not the right place for it to come

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from. That is not only a matter of principle, but central to my point about all good things coming to an end, including lotteries and the funding stream that they bring with them.

The Government are using lottery money to fund their commitment to cancer care through the £150 million living with cancer programme, which the public may not want to think is contingent on lottery funding for its existence. The principle of additionality—that any funds created by the lottery should add to, not substitute for, services provided by the Government—was enshrined in the original legislation. At best that is being ignored, and at worst abused. That was the point that the hon. Gentleman was making.

Time and again, the Government pledge themselves to universal access to health—a comprehensive NHS that cares for all regardless of ability to pay—and, rightly, attack plans to make the less fortunate pay extra for their health care. The Government commit themselves to broadening the spectrum of education and to improving the infrastructure in our schools. Those are laudable objectives, but they should not be paid for by siphoning off funds that lottery players think are going to the original good causes. Such funds should not be pumped into the health service and education, which the public think are being financed by general taxation revenues. That is the most regressive form of taxation. Certainly it is not in the spirit in which the lottery was originally set up.

Of course those extra forms of funding are welcome, but in the long term they are not a right or sustainable method of funding. Are we to presume that the scanners, the new breast screening equipment and the cancer prevention projects funded by the new opportunities fund would not have gone ahead otherwise? If teaching our teachers and librarians to use the computers and the internet is funded in that way, would it never have happened without lottery funding? If so, although those may be among the biggest achievements of the national lottery, one would have to say that the lottery was propping up public services that the public would expect to be provided by Government.

What would happen if the lottery funding eventually dried up? Surely the cancer care would not be withdrawn from the NHS and the teachers withdrawn from the training programmes. The lottery funding is not a long-term answer to the long-standing funding problems from which both the health and the education system suffer.

The new opportunities fund was set up to focus particularly on the needs of the most disadvantaged—an aim reiterated both in its list of key objectives and throughout the mission statement for its projects. However, four of the 81 most deprived districts in the UK received no new opportunities fund money in 2001, and 33 of them received less than the national average. Of the 80 districts that received more than £10 per head, not even half appear on the Department for Transport, Local Government and the Regions list of the most deprived districts. Clearly there is a problem, and I was pleased to hear the Secretary of State acknowledge it this morning. I hope that the initiatives announced yesterday will begin to make serious progress in solving that problem.

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Once the funds reach the distribution bodies, how should they be distributed? When I tabled questions, I received the answer that the prompt payment of grant by distributors to successful applicants was "desirable". In my opinion, it is more than desirable, it is essential. We all understand that when funds are committed they cannot necessarily be paid at once, because proper performance of what the bid entails has to be achieved to the satisfaction of the distributing bodies first.

We cannot be glib and pretend that there are simple solutions, and I welcome the fact that the Secretary of State has entered a dialogue with each of the distributing bodies to try to address the serious problem that has built up. The reserve funds of the distributing bodies have continued to grow—by almost £150 million since December 2000—and now stand at almost £3.5 billion. That is more than a quarter of the £12 billion that the lottery has raised since it began; the equivalent of almost two years' net income has not yet been distributed. One understands some of the reasons why that has happened, but there is a clear need for action to sort it out. I hope that what the Secretary of State is now proposing will succeed.

The amount going to the distributors has been falling every month, and one can understand that that may cause a cash flow problem in the fulness of time. I do not believe that the present situation is the result of an attempt to manage a cash flow problem, but I hope that if the trend continues—we all hope that it will not—such a problem will not arise in the future. We all hope that Camelot's new plans will begin to reverse the trend.

In many cases, the lottery distributors do a fine job of distributing funds, and also provide excellent advice to project leaders, not only about how to make their bids but how the projects can be carried on.

Community sports clubs would benefit, and their financial affairs would be made much easier, if they were given the tax concessions for which they are now campaigning. I welcome the sounds that the Minister for Sport was making at Question Time on Monday, and if it is possible to persuade the Charity Commissioners to allow clubs to act as if they were charities, but in a less bureaucratic way than the rest of the charity movement has to endure, that would be welcome. If it could be pulled off, I suspect that many other charities would look on with envious eyes and wonder whether such an arrangement could be extended more widely.

When grants are provided by distributors, the promises that applicants make and the contracts that they sign must be upheld. Where they are not, we should have no hesitation in trying to recover moneys. I hope that in the case of Wembley, with the unfortunate saga that has dogged it in recent years, that will not ultimately prove necessary.

As the lottery pledged the money for Wembley so long ago, it is a great pity that more progress was not made, and it was not possible to find a solution to the Wembley conundrum in time for the World athletics championships to be held there in 2005. It will be a supreme irony if a stadium, which we are now told will be compatible with athletics, opens either for the cup final in May 2005 or the charity shield in August of that year—because that will be a month or so either side of the very athletics championships that we hoped would be conducted at Wembley. However, there is now a new plan on the stocks for Wembley; we must wish it success and hope that the

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athletics capability will come to fruition, and that in the fulness of time we shall see a major athletics tournament conducted there.

Very few of the projects would have gone ahead at all if it were not for the success of the lottery and its high sales. Camelot has done an exceptional job in operating an efficient lottery; ours is consistently ranked among the best and most successful lotteries in the world. Dwindling sales are a concern, but we must hope that the sales improvement programme that Camelot is now putting together will lead to a significant improvement.

The Secretary of State made a series of remarks about her plans for the future. For example, before the summer recess she will issue a licensing consultation document, and I look forward to seeing that and commenting on it. As she said, additionality is a fine line to navigate, and I hope that we shall debate further exactly where that line is to be drawn.

The recognition that local equity needs to be improved is welcome, and I hope that the plan announced yesterday will enjoy success. The Secretary of State has already been asked about amending the legislation to allow endowments, and she said that the Government would do so. It would be useful to have the facility to do that, but endowments are an expensive way of bringing a funding stream into a project, so I hope that using lottery funds in that way will not become widespread.

The Secretary of State said that she wanted to see devolution of decisions to the most local level possible. We all welcome that, but I cannot understand how, at the same time, the same Department is beginning to devolve decision making in sport, yet appears willing to smile on a movement in the opposite direction in the arts. I hope that in the end, the Government will not agree to that movement.

The national lottery has achieved a great deal. However, we cannot assume that funding streams can be sustained at the current level indefinitely, so when we decide how to use the money we must avoid the mistake of making any essential public services dependent on lottery proceeds.

There is a great deal to celebrate. I hope that in the coming months we will be able to consider the various suggestions that the Secretary of State has made today about how the lottery can be improved, that we will find ways to sustain and improve it, and that there will continue to be a lot to celebrate for many years to come.

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