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Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord, Lord Skidelsky, for his response to these amendments, although he will not be surprised to know that I do not agree with the criticisms that he has made. He began by criticising us for legislating on the hoof, as he put it, with amendments which were first introduced in Committee in another place. The Government's intention to substitute a commission for the director general was in fact announced by the Secretary of State at Second Reading and therefore another place had a full opportunity to consider the issues involved.

As I am sure the noble Lord will recognise, it is not unheard of for government amendments to appear in legislation as it reaches the second House for consideration. Indeed, if there were no such possibility there would not be much point in having a bicameral legislature. I do not apologise for the fact that the Government have had second thoughts. The only question in my mind is whether they are better than the first thoughts. I propose these amendments on their merits and not on any analogy with the Yugoslav presidency or anybody else.

I do not accept the criticism that the Government are committed to legislating every time there is criticism in the press. The noble Lord will recognise that the issue of the relationship between the director general of Oflot and Camelot was rightly taken pretty seriously in the press as the Bill was going through Parliament. It would have been irresponsible for us not to think about that relationship not just in terms of individuals, but also in terms of what better security there might be for the objectivity, independence and transparency that we want.

The noble Lord referred to the Green Paper on utilities, quite rightly and quite legitimately, but he acknowledged that what the lottery commission proposed is in line with one of the three models in the Green Paper. He asked me then whether we were going to take this proposal as pre-empting consultation on other utilities: the answer quite clearly is no. The National Lottery is different from utilities such as water or electricity, and it does not establish a precedent. If the noble Lord is concerned about a precedent I can reassure him, I hope, that no precedent is intended. The Government are considering and will consider the responses to the Green Paper on utilities and will proceed with all due propriety in that respect.

The noble Lord was worried about the proposal for the rotation of chairmanship and whether this would lead to weak regulation. I can only say that it is not the Government's intention to establish a principle of weak regulation. Provided we have members of the commission who represent expertise in the running of lotteries, gambling more generally, and the interests

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of players, and who have the integrity which is necessary and which is indeed the essential pre-condition for membership of the commission, I see no reason to suppose that these ladies and gentlemen will not act very effectively as a commission to control the National Lottery.

There are other examples of commissions; for example, the Radio Authority and the Independent Television Commission. Admittedly the idea of a rotating chairmanship is more unusual, but the Government rest their case for these changes on the merits of the case rather than on any analogies with other bodies or indeed on any past history in the relationship between Oflot and the licence holder for the National Lottery. On that basis, I commend the amendment to the House.

On Question, Motion agreed to.

4.30 p.m.

COMMONS AMENDMENT


2After Clause 1, insert the following new clause--

("The Director General and the National Lottery Commission Replacement of Director General by National Lottery Commission.--(1) There shall cease to be an office of Director General of the National Lottery.

(2) In consequence of subsection (1) above, in the National Lottery etc. Act 1993 (in this Act referred to as "the 1993 Act") section 3 and Schedule 2 (which relate to the Director General of the National Lottery) shall cease to have effect.
(3) After section 3 of the 1993 Act there shall be inserted--
"The National Lottery Commission. 3A.--(1) There shall be a body corporate known as the National Lottery Commission.
(2) Schedule 2A makes provision in relation to the Commission."
(4) On the day on which this subsection comes into force under section 26(2A) below, the functions conferred or imposed on the Director General of the National Lottery by or under the 1993 Act (including any functions so conferred or imposed by virtue of this Act) shall, by virtue of this subsection, be transferred to the National Lottery Commission.
(5) Schedule (Replacement of Director General by Commission: supplementary provisions) to this Act (which makes provision supplemental to, or consequential on, this section) shall have effect.").

Lord McIntosh of Haringey: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 2.

Moved, That the House do agree with the Commons in their Amendment No. 2--(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

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COMMONS AMENDMENT


3After Clause 4, insert the following new clause--

Access by Comptroller and Auditor General to documents etc (".--(1) Section 33 of the 1993 Act (accounts of Secretary of State and National Debt Commissioners) shall be amended as follows.
(2) After subsection (3) there shall be inserted--
"(4) For the purpose of exercising his examination function in relation to any accounts prepared under subsection (1), the Comptroller and Auditor General--
(a) shall have a right of access at all reasonable times to any documents which he reasonably requires which are in the custody or under the control of any section 5 licensee; and
(b) shall have a right to require from any officer or employee of any section 5 licensee, or from the auditors of any section 5 licensee, an explanation of, or information relating to, any such documents;
but a section 5 licensee shall not, by virtue only of this subsection, be a body to which section 6 of the National Audit Act 1983 applies.
(5) For the purpose of--
(a) exercising his examination function in relation to any accounts prepared under subsection (1), or
(b) deciding whether, or to what extent, to exercise any right conferred by subsection (4),
the Comptroller and Auditor General shall have regard to any information which the Director General has obtained from any section 5 licensee and which is relevant to the exercise of that function.
(6) Where, in exercising his examination function in relation to any accounts prepared under subsection (1), the Comptroller and Auditor General obtains any information which gives him grounds to believe that a section 5 licensee has, or may have, contravened any of the conditions of its licence under section 5, the Comptroller and Auditor General shall as soon as practicable disclose that information to the Director General.
(7) A section 5 licensee shall be under a duty--
(a) to permit the Comptroller and Auditor General to exercise the right conferred by subsection (4)(a); and
(b) to do all that may be reasonably practicable to secure that any person who under subsection (4)(b) is required to provide an explanation of, or information relating to, any document complies with that requirement;
and any breach of that duty shall be actionable at the suit of the Comptroller and Auditor General.
(8) The right of access to documents conferred by subsection (4)(a) includes a right to take copies of or make extracts from documents.
(9) In this section any reference to documents includes a reference to information held by means of a computer or in any other electronic form; and in the case of information so held the right of access conferred by subsection (4)(a) includes a right of access to, and to take copies of, that information in a visible and legible form.
(10) In this section--
"examination function", in relation to the Comptroller and Auditor General, means his function under subsection (3);
"section 5 licensee" means a body which holds or has held a licence under section 5."

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(3) This section has effect in relation to accounts prepared under section 33(1) of the 1993 Act so far as they relate to periods beginning on or after 1st April 1999.").

Lord McIntosh of Haringey: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 3, which stands by itself. This amendment will allow the Comptroller and Auditor General access to the records of the lottery operator for the narrow purposes of auditing the National Lottery Distribution Fund but it will not set any general precedent for access to private bodies within regulated sectors.

This amendment will allow the Comptroller and Auditor General to examine documents held by the section 5 licence holder--that is, at the present time Camelot--and require written and oral explanations of them when carrying out his functions of examining, certifying and reporting on the accounts of the National Lottery Distribution Fund. The amendment is intended to meet the concerns indicated by the Public Accounts Committee in its 20th Report in 1996-97. The Government accepted that necessary access sufficient to complete the audit of the National Lottery Distribution Fund was appropriate in their response to the Public Accounts Committee in July 1997. The change is being introduced now, after careful consideration between other government departments and the National Audit Office. Because of the need for wide consultation it was not possible to introduce this amendment earlier, and I apologise to noble Lords that it was not possible for them to review the clause in the Grand Committee.

The work to be carried out by the Comptroller and Auditor General will be complementary to the regulatory work currently conducted by the Director General of the National Lottery. In drafting the amendment, we are mindful that the extra compliance costs it creates should be modest. As the Minister made clear in another place, it ensures that the Comptroller and Auditor General has a duty to take into account the work undertaken by the director general and the documents available to him through Oflot. We believe that this change, which has been welcomed by the chairman of the Public Accounts Committee of the other place, will reinforce transparency in the audit of the National Lottery Distribution Fund, will add to the public confidence in the lottery and ensure greater parliamentary accountability for the sums due to good causes. I beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 3--(Lord McIntosh of Haringey.)


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