Ministers plan to raid Lottery to pay for Olympic bid, say MPs

Government plans for changes to the National Lottery meant that cash for good causes was being used to replace public spending, a committee of MPs said yesterday.

Government plans for changes to the National Lottery meant that cash for good causes was being used to replace public spending, a committee of MPs said yesterday.

The Select Committee on Culture, Media and Sport said the earmarking of £1.5bn for London's 2012 Olympic bid was "a straightforward raid", adding that the Games were a "huge potential drain" on the lottery.

"The principle of 'additionality' - whereby lottery resources are not supposed to be used by ministers to replace government spending - is being eroded, especially in the light of contingent plans for staging the Olympics," the report concluded.

Creating another lottery distributor to manage the £750m expected to be generated by a new Olympic Lottery to help pay for the games if the bid is successful was "unnecessary, wasteful of resources and against the thrust of the Government's own strategy for sport", the MPs said. On "pessimistic estimates" as much as 59 per cent of the revenue would come from players switching from regular lottery games, draining cash from other good causes.

The committee also called for the 12 per cent tax levied on ticket sales to be abolished and the cash redirected to good causes and prizes. It said the taxation of lottery returns for good causes was an "inappropriate double hit" and the Government's failure to recognise the unique status of the lottery's tax position was "inconsistent and wrong".

The operator Camelot should be allowed to maintain its current monopoly because compared with the Government's flawed plan to introduce rival operators, it was "the lesser of two evils", the MPs said.

The report into the proposed overhaul of the regulation and distribution of Lottery resources said plans to break up the single licence for operating the Lottery to stimulate competition risked "destabilising" the existing system.

Currently 28p from each £1 ticket goes to good causes; 12p is taken in tax and 50p goes on prizes. The committee said these facts should be made clear to the public, and the lottery should not be promoted as an effective way of giving to charity.

The Department for Culture, Media and Sport said it welcomed the report and would respond fully at a later date.