Weapon of mass distribution

Lottery funds are being raided for the benefit of the Treasury's coffers, writes <strong>Gerald Kauf

I do not trust Chancellors of the Exchequer. No, this is not an attack on Gordon Brown. I believe, in fact, that Brown is the best Chancellor in my political lifetime, and that he has done wonders in implementing Labour's social and economic agendas. However, like every Chancellor I have known since I was elected to the House of Commons 34 years ago, if he can get away with not spending money from the Treasury kitty, he will do just that.

As I say, he is not alone in this. When Labour came to power in March 1974, I raised with the then prime minister, Harold Wilson, the possibility of television licences (very unpopular even then) being replaced with a grant to the BBC from a specially established public agency, rather like the University Grants Commission, which funded the universities. Wilson was attracted to the idea, but the Chancellor of the day, Denis Healey, vetoed it. He did not want to spend Treasury money when there was a hypothecated tax for which he was not required to take the blame.

When John Major's government established the National Lottery, the Secretary of State for National Heritage, Peter Brooke, vowed that a strict additionality principle would apply to the allocation of Lottery grants, which stated that they could not be used as a substitute for mainstream government funding on arts and heritage projects. I believed that Brooke was sincere, but I did not believe that his sincerity stood a chance against a pillaging Chancellor.

I was justified in my scepticism at the time, and have been ever since. Projects and causes that would previously have been paid for by the Treasury, if publicly funded at all, are often almost automatically the recipients of Lottery cash; and many deserving Lottery applications are turned down because the funding agencies do not have sufficient money left. What is more, some of those funding agencies are beginning to squeal about the depredations of their funds by the Exchequer.

At the beginning of this year, the culture, media and sport select committee, with myself in the chair, conducted an inquiry into the state of the National Lottery. Questions were asked about the robustness of the additionality principle. While government ministers, as expected, protested that it was alive and well, other witnesses had a different, less rosy view.

The Lotteries Council warned: "Additionality is something we take a strong line on, and we think that line is getting blurred." It referred to "a great deal of concern about the erosion of the additionality principle". The National Council for Voluntary Organisations believed that "Lottery funding should be independent from government but accountable to parliament . . . it should be additional to what should be properly spent by government and not a substitute for it". The council was concerned that this was not happening.

Even more worrying, one of the Lottery's own funding bodies, the New Opportunities Fund, responsible for allocating grants to worthy local projects, saw fit to redefine the additionality principle, to an extent that made it almost meaningless: "A more helpful way to look at it is really the concept of added value: what value is it that comes from Lottery money rather than from government spending."

Helpful to whom? Applicants - or the Treasury? This vague concept of "added value" could justify the Lottery being used to fund such mainstream government policies as health, education and law and order. The Treasury minister John Healey has asserted that "Lottery money . . . should allow things to happen that would not happen if it depended simply on government funding alone". If anything gave the game away, it was that sophisticated (dare I say sophistic?) definition.

But Tessa Jowell, the Secretary of State for Culture, Media and Sport, gave the game (literally) away when she said of the plan to part-fund the Olympic Games from the Lottery (if the London bid were successful): "Lottery is paying or underwriting a large share of the public cost of the Olympics, because this is something that, were that funding not available, it is very unlikely that the government would have supported." She is absolutely right. One can just imagine Brown grumbling: "I'm not going to tax people to pay for this ridiculous rubbish."

A special Lottery game to fund the Olympics is being provided for by special act of parliament, because otherwise such a game would be illegal. Yet to listen to the government, from the Prime Minister downwards (though the Chancellor maintains a dignified reticence on the subject), the Olympics is a core project to which it would be shaming for Britain not to aspire. This Olympic raid on the Lottery means that countless, often worthy, Lottery applications will have to be turned down because the money will not be there.

The government should come clean. It should admit, as its Tory predecessors should have done, that the additionality principle is bogus and that it will use the Lottery, ruthlessly, to fund projects that are core government policy. It should admit that the Lottery is a weapon of mass distribution.

Gerald Kaufman is Labour MP for Manchester Gorton

This article first appeared in the 08 November 2004 issue of the New Statesman, Bleak morning in America