National Lottery Bill |
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Mr. Foster: I rise to try to persuade the Minister to explain precisely why clause 3 is before us. It changes the description of whoever might receive the new licence to run the national lottery when the current licence expires. As we know, there will be a competition and the Government’s desire, which I and my colleagues share, is that it will be a single licence, although there will be a reserve power to break it up. We expect that one entity will win the new licence, whether it is Camelot or a replacement. The clause changes references to “body corporate” to “person” because the recipient of the licence could be a person. I suspect that the Minister will say that that is to enable the choice of operators to be widened to allow an individual or person to come forward for the great honour of running the lottery. However, it would be helpful if the Minister could give us at least a short explanation of why there should be a change in the wording. Mr. Caborn: The hon. Gentleman nearly got it right, but not quite. The explanation is slightly wider than he suggested. The clause amends the 1993 Act to allow the National Lottery Commission to award a licence to run the national lottery or a game that forms part of the national lottery to any person instead of only to a body corporate. I am introducing this change so that national lottery legislation will mirror the recent Gambling Act 2005, which introduced personal licences. The National Lottery Commission should be able to award a licence to an individual if it wishes to do so. The change will not alter the commission’s ability to award a licence to a company or other corporate body. Mr. Foster: I am grateful to the Minister for reminding me—I should have known about that because I served on the Committee that considered the Gambling Bill with him for many long weeks. I want to clarify this issue. Is the Minister saying that a person who holds a personal licence that was awarded under the Gambling Act might receive the great honour of running the national lottery at the end of the current licence? If so, were a body corporate to win it, presumably there would be a nominated person within that body who would hold the personal licence. Given all the issues that we debated on the problems that can occur if the nominated person within a body corporate drops dead, might there be a problem about who holds the licence? I remember the riddle and conundrum on that—will the Minister clarify that issue? Column Number: 192 Mr. Caborn: I, too, remember that very well. The body corporate is its own entity. No, there will not be an individual licence holder: the body corporate will hold the licence. We are extending the Act to allow the National Lottery Commission to award the licence to a person who has a personal licence from the Gambling Commission, and who, therefore, will be a fit and proper person, because the Gambling Commission will make sure of it. However, the National Lottery Commission will want many more assurances than just a licence from the Gambling Commission before awarding the licence. We do not think that individuals who have gone through the licensing procedure should be debarred. The clause is an extension. We are trying to ensure that we do not close off any avenues. All the issues that the hon. Gentleman raises will have to be part of the procedure to grant the licence. Mr. Foster: I apologise, Mr. Cook, for stretching your patience, that of the Committee and, no doubt, the Minister’s. I may be the bearer of a small brain, but I am genuinely confused. The Minister says that the clause extends the options. If he had said, “We are now saying ‘body corporate or person’”, I would be perfectly happy, but the clause does not add “or person” to the 1993 Act; it deletes “body corporate” and inserts “person”. I have before me what I am led to believe is called the Keeling version of the Bill, which has been referred to frequently, and which deletes the words “body” or “body corporate” and inserts “person” several times. Therefore, it does not say “body corporate or person”. If I am right to say that the term “body corporate” will go, who is the person in a body corporate to whom the Minister refers? Mr. Caborn: I can give the hon. Gentleman only the legal interpretation—I admit that I am sometimes bemused by legal interpretations. I am advised that “person” includes “body corporate”. I am probably as bemused as the hon. Gentleman, but that is the legal advice. Just to make sure that he and I are absolutely clear— Mr. Swire: And everyone else. Mr. Caborn: And everyone else, including the hon. Member for East Devon, if I may say so—he will probably disagree with that, but at least I have tried my best. I will get the wording clearly defined. The common-sense approach is that the clause extends the Act to include a person as well as a body corporate. I will write to the hon. Gentleman on that. Mr. Foster: I promise that I will not intervene on the Minister on this point again, Mr. Cook, but I ask that in the explanation that the Minister makes available to me and, I am sure, members of the Committee and you, he should make something absolutely clear. He says that “person” includes a body corporate. Earlier, he said that if that person was a single, individual human being, they would have to have a personal licence under the Gambling Act. However, he also said that a body corporate did not have to have a licence. That needs to be sorted out, because we cannot have a
Mr. Caborn: I shall try to give that explanation in writing to members of the Committee. Mr. Turner: I am grateful to the hon. Member for Bath for repeating what he thought the Minister had said, because that is what I thought he had said, too. I was not clear, however, on what basis he was saying it. He asserted that a person who was a human being, rather than a body corporate, had to have a licence under the Gambling Act, but I can see no reference to the Keeling version in sections 5, 6 or 7 of the Act, even as amended. Was that assertion correct? Mr. Caborn: This is a completely separate licensing regime from the one in the Gambling Act. The purpose is to allow a person or body corporate to hold a lottery licence. From a common-sense point of view, the legal interpretation can create some confusion, and I shall try to get that interpretation put into lay person’s words to explain the object of the exercise. I say again that a body corporate licence, which is not an individual licence, can be awarded in the same way as in the past. We are now extending such provisions to individuals. I shall make sure that what the lawyers are trying achieve is fully explained to the Committee—probably in words of one syllable and definitely in common-sense terms. I am assured that what they are trying to achieve is the right way forward. Mr. Swire: I am grateful to the Minister and I hope that he will include Conservative Members when he informs the Committee how he arrived at his position. However, there is clearly something behind the drafting, because it applies to the licensing of bodies in sections 5 and 6. When the Minister gives us the legalistic, definite interpretation of what he seeks to do, will he also tell us what representations, or even protests, made him want to change the wording, so that we can see how that thought process evolved? Mr. Caborn: I will. Question put and agreed to. Clause 3 ordered to stand part of the Bill. Clause 4 Length of licence Mr. Swire: I beg to move amendment No. 21, in clause 4, page 3, line 7, leave out ‘15’ and insert ‘10’. The Chairman: With this it will be convenient to discuss the following amendments: No. 22, in clause 4, page 3, line 13, at end insert—
Column Number: 194 No. 74, in schedule 1, page 15, line 26, leave out ‘15’ and insert ‘10’. Mr. Swire: We now enter the choppy waters of the licence renewal and the length of licence, and we have just heard who can apply for the licence. I suspect that what is really behind all this is the fact that a sense of panic is beginning to creep into the Government because, given the constraints that they and the Bill impose, there are perhaps not that many people out there who are particularly keen to apply for the next national lottery licence when the present one expires in 2009. No doubt we shall pursue that further during our discussion of this group of amendments. Amendment No. 21 relates to proposed new subsection (1A), which states:
The amendment would limit the length of a licence to operate the national lottery—it is currently held by Camelot—to 10 years instead of the proposed 15 years. 12.15 pmThe second amendment in the group, amendment No. 22, inserts a new subsection. It ensures that any extension to an operator licence granted by the commission does not exceed the length of licence as stated in subsection (1A)(b), which, as I said, we seek to amend to 10 rather than 15 years. The third and final amendment, amendment No. 74, is a consequential amendment to schedule 1, which will be necessary if we are to change the length of the licence under section 7 of the 1993 Act. Taken together, the amendments signal our concern at the Government’s proposals in the clause as a whole. I shall not detain the Committee for long, but I want to find out why the Government want not only to extend the licence period beyond the current seven years to 15 years, but to allow licences to be carried on ad infinitum. Having seen the national lottery—that great Conservative creation—operate, I think that we all acknowledge that it can be an expensive operation at the outset, given the new machines, the technology that is required and the advertising. There is a need constantly to update networks to take advantage of up-to-date technology, new games and so forth. However, I do not see that that in itself is sufficient argument for granting licences for up to 15 years. Perhaps a near equivalent is the charter given to the BBC—a topical subject, given that Lord Fowler’s interim report was published this morning. That is granted for 10 years, of course. Now that the national lottery is up and running, I do not believe—I am happy to be corrected by the Minister—that the same huge start-up costs that Camelot faced in 1994 would be faced by anyone who was granted a licence. Indeed, from what we read,
I hope that the Minister can assure the Committee that there will be no pressure on the lottery commissioners unduly to extend operator licences. I hope also that he will assure the Committee that a decision to extend licences would not be based on any fear that there may not be another bidder for an operator licence in 2009. After all, such a fear could explain the power in the clause to extend operator licences and we saw during the last licensing process just how badly the Government got it wrong. I have described the fear that lies behind the amendments and my thought process in drawing them up. We all hear on the trusty grapevine that the Government are in something of a quandary. We are approaching the end of 2005 and the new licence has to be issued in 2009. The gap is beginning to close. I suspect that when Ministers first turned their attention to the issuing of a new licence, they thought that there would be a clamour of activity and that people such as Sir Richard Branson would be queuing round the block to become the new operators of the national lottery. I hear that the reverse is the case, and that the Government are now moving into that indefinable area otherwise known as near panic. That is why they are trying to give themselves “flexibility”, which is the Minister’s favourite word—flexibility in allocating a licence to a person or a body corporate; flexibility in giving one licence or multiple licences; and flexibility in extending the period for which the licence can be granted or in allowing it to be extended by the commissioners. Flexibility seems to be the Government’s answer to the looming crisis—I use the term advisedly. I do not seek to undermine the national lottery. It is an excellent game; when it works, it benefits causes in each of our constituencies. I do not wish to undermine the lottery at a time when new games designed to fund the Olympics are being introduced, particularly as it is being undermined by the Government. I see that the Minister is writing something and circling it in pink; he is chuckling to himself because he clearly thinks that I have been undermining the lottery. It is not me who has undermined the lottery but the Government. They have been keen to siphon off at least 50 per cent. of lottery spending to make up for the lack of Government expenditure. That is why sales in recent days have not been as good as everyone had hoped. The Minister’s answer is to extend the licence. The question is who has been getting at the Minister to make him want to do it? He agreed to write to Committee members telling us about his thought processes on the granting of a licence to a body corporate or a person; and he agreed when I intervened
Adam Afriyie: I am glad that my hon. Friend has raised that point. It would seem shocking that the Minister should respond to pressure from an incumbent in whose interests it would be to make such changes. Mr. Swire: My hon. Friend goes further than I would dare in suggesting that it might be the incumbent—but it could be. We will not know if it is the incumbent unless the Minister shares that information with us. He may say that it is privileged information, and that it could be prejudicial to the incumbent. One never knows what kind of information one will be given by Ministers. My hon. Friend the Member for Windsor makes a good point. If it is the incumbent and the Minister is willing to act under pressure, whether from the incumbent or from anyone else, will that be done for reasons of logic—because the Minister and the Secretary of State believe that the previous licence was too short—or in response to the fact that there is only one bidder, and that the bidder is calling the shots? I suspect that my hon. Friend is hot on the trail of something, and it would be good if the Minister allowed the Committee to share whatever information he has. Adam Afriyie: I have an extensive background in technology, and I recognise that the situation with regard to the technology that delivers the national lottery service has changed. In 1995, the internet was pretty much embryonic, whereas nowadays it is ubiquitous. I suspect that technology cannot really be the justification for extending the licence, and that there must be some other reason for doing so. Mr. Swire: As I said, I agree with my hon. Friend, particularly if Camelot is, in effect, the only bidder and is granted this new long licence. I cannot believe that it will have to replace all the technology in year one. I presume that some of the technology could continue and that Camelot could phase it in and out, as could any corporation turning in profits of £30 million a year. All of us who still hold shares—declared or otherwise—in companies and are not obliged to sell them would be very happy to hold shares in a company that already had a licence of this sort, that was already returning profits of £30 million and that was, in effect, being given the opportunity to bid for a longer licence and that would not have to spend huge amounts of money in start-up costs, which it had to do right at the beginning. My hon. Friend makes an extremely good and valid point. Column Number: 197 I hope that I am wrong. I hope that the Minister and the Government have created such a thirst and hunger for the licence that there are bidders, who might listen to the debate or read the record of it, who would be pleased to bid for the next licence because there is such faith in the Government’s handling of the national lottery, despite all the things that they have got wrong—from the dome to the creation of the Big Lottery Fund, from the merging of Government spend with lottery spend. We return, however, to the question of the length of the licence. I still do not believe that a licence should be granted for this long. The fact that the licence should not exceed 15 years means that it could be for 15 years, which could well be the duration of three Parliaments, thereby binding three Parliaments to using the same operator. Three Parliaments hence the Minister will no doubt be ennobled and might even be the chairman, with expenses, of a lottery distributor. He might even be a lottery licensee, or be involved in one of the gambling areas. He will be entitled to do all that, provided that he notifies the civil servants and complies with all the forms. Mr. Caborn: In a Labour Government. Mr. Swire: Perhaps by then, after 15 years of another Conservative Government, it will be Labour’s turn again. We could waste a lot of time looking towards those far-off days, Mr. Cook, and you, for one, would not allow me to do so. Three Parliaments is a long time to grant a profitable licence of this sort. It is profitable, because if the company is turning in £30 million now, what will it be turning in once it gets its act together in 15 or 20 years? This is, in effect, a licence to print money. Adam Afriyie: My hon. Friend makes the key point that the operation of the lottery is, in effect, a private monopoly and a licence to print money. Perhaps the Minister is simply proposing that we extend that licence to print money, but I am not sure that we all want that to happen when technology is not driving the decision. Mr. Swire: Indeed. We return to the basic problem; if the national lottery were given a DNA test, the test would show that the Conservatives were the mother and the father. The Chairman: Order. May we return to the basic problem in a less repetitive way? Mr. Swire: I am grateful for your protection, Mr. Cook. I was about to return to the question of the length of the licence, and to say again that this represents a move away from what the Conservative party had in mind when the licence was introduced. Unless the Minister is prepared to give us the information we seek, he should accept our amendment. Column Number: 198 12.30 pmMr. Turner: One of the things that concerns me about a lengthy licence is that with the guarantee of the business the lottery operator may become complacent, distribute more of his profits than perhaps he should and invest less in the development of the lottery. Let me take an example referred to by my hon. Friend the Member for Windsor. If, at the beginning of a 15-year licence, one invests in a lot of technology, there will be no great incentive to invest in new technology in seven or eight years time, despite the fact that it may have changed over that time as much as it has over the past 10 years. Mr. Swire: My hon. Friend is of course entirely right. The Minister will almost certainly argue that we have to provide that length of time to allow any operator to make the worthwhile investment needed. That does not add up, because technology will change and will constantly need to be renewed as the years roll by. Clearly, that is not a sufficient argument, particularly if Camelot is given the new licence, as it will not have to phase in new terminals and technology in year one anyway and will write that off in the same way that any company in the corporate sector would. Somebody or some group has got to the Minister or his officials at some point to argue that the length of the licence needs to be extended. All we seek to do is to establish who they are and why they did that. Mr. Foster: I congratulate the hon. Member for East Devon, who has brought to the Committee a whole new approach to probing amendments. For example, if the hon. Gentleman desperately wanted to ensure that more people rode bicycles, he would no doubt table a probing amendment to change taxation law, introduce huge additional taxes on bikes, add a bicycle road tax, and extend congestion charging and even the end-of-life EU regulations to bikes. It seems to me that he has done exactly the same with this series of amendments. The hon. Gentleman, quite rightly, told us that it was a probing amendment that sought to ascertain why the proposed length of the new licence was what it was in the Bill. He said that he had concerns about what was going to happen, and I share those concerns. He will be aware that during the last round of bidding for the lottery licence, there were only two compliant bidders. There is cause for concern that next time around not many competitors will enter the field. I share wholeheartedly the hon. Gentleman’s belief that competition is crucial. It is the only way we will ensure that the process is not a licence to print money, as he and his hon. Friend the Member for Windsor put it, but is rather a means to ensure that the maximum amount of money is given to good causes. We are at one in believing that. We are not at one on all the remarks made by the hon. Member for East Devon. He referred to the fact that sales are not as good as was hoped for. The whole Committee ought to express pleasure at the way in which the sale of lottery tickets continues to rise in marked contrast to what is happening in a number of other countries. I think that we can say,
Three years ago, when the Public Accounts Committee reviewed competition for lottery licences, it concluded that there was a real risk that there would be no effective competition for future licences to run the National Lottery. The Committee was concerned three years ago, just as the hon. Member for East Devon and I are concerned now. The question, then, is how to generate competition. Is it, as the amendments suggest, by reducing the length of the licence, or is it, as the Government propose, by accepting a longer period? In this instance, we agree with the Government’s line. It is worth reflecting that the Department consulted extensively on the issue, as the Minister will no doubt remind us in a second. After that wide consultation, the decision document stated, in November 2004, that it was considered
The implication is that it would encourage more applications. The hon. Member for Windsor and the hon. Member for East Devon made several references to what they called “the incumbent”, by which I assume they meant Camelot. They implied that it would be wrong for Camelot to put any pressure on the Government. I agree, but it would be wrong if Camelot, which is the body with experience of running the national lottery in this country, did not at least share its views on the matter with the Government. It has, indeed, done that, and deserves at least a hearing. In a briefing to all members of the Committee last week, Camelot stated:
I am not an experienced business person, but that seems like common sense to me, and it is borne out by all the consultation that the Department did. Camelot went on to say that it did not
such as seven years with a three-year extension, or eight plus two. That also makes sense to me. That requirement, set out in the amendments, would reduce competition. The Government and previous Governments have become involved in many competitions. It is worth reflecting on what was done in those instances. Did the Governments in question decide on shorter and
It appears that the lottery licence is likely to be as set out in the Bill, and there are already far more than two potential bidders showing an interest. Lehman Brothers, Gala, Sportech, the People’s Lottery and of course Camelot are already indicating an interest in bidding. With the length of licence that is in the Bill and not the one proposed in the amendments, it is more likely that those five and possibly others will put in bids that will ensure the maximum return for good causes. I accept that the amendment was a probing amendment, and I look forward to what the Minister has to say. However, if such an amendment were pressed to a vote, the Liberal Democrats would not be able to support it. |
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