Brooke refuses 'lifeline' for Pools firms warned to expect

PETER BROOKE, Secretary of State for National Heritage, made plain to the football pools promoters yesterday that they can expect no concessions from the Government to help them compete with the proposed national lottery.

The pools companies claim the lottery, with top weekly prizes of pounds 1m, could cost thousands of jobs in areas of high unemployment, notably Merseyside. But Mr Brooke questioned whether the pools would be able to guarantee existing levels of employment if there were no lottery.

Moving the Second Reading of the National Lottery Bill, he promised the Government would not cut spending programmes to take account of awards from lottery proceeds to sport, the arts, heritage or charities.

David Mellor, Mr Brooke's predecessor, said that the undertaking had to be honoured to the letter. He also warned against too large a slice of the takings going to the Treasury in taxation.

The lottery is due to be launched in 1994. When in full operation after about 18 months annual turnover could be around pounds 1.5bn, according to official speculation. Some 50 per cent of takings will be paid out in prizes, with the remainder going on administration, taxation and good causes.

The Government will invite tenders to run the lottery. But Mr Mellor said if administration accounted for 15 per cent of the take and tax 20 per cent, only 3 per cent would be left for each of the five good causes which are to benefit from the lottery - arts, sport, charities, the heritage and projects to mark the year 2000.

'There is no point in putting to the public a national lottery that is intended to raise money for good causes and then expecting them to believe that the principal good cause is the Treasury,' he said. Alan Howarth, Conservative MP for Stratford-on-Avon, urged the Chancellor not to impose any tax on the lottery. 'It will not be such fun and it will not be so exciting if the taxman appears at the party like an undertaker.'

Though most MPs on both sides of the Commons support the idea of a lottery, Labour maintained in an amendment - rejected by 310 votes to 269 - that the Bill was unacceptable because it offered no safeguards to protect employment in the pools industry. The Bill was given a Second Reading by 339 votes to 203, with Opposition MPs allowed a free vote on the motion.

Ann Clwyd, Labour's heritage spokeswoman, said that 4,630 people worked for Littlewoods and Vernons on Merseyside, 730 in Glasgow, 640 in Cardiff and 500 in London. In addition, about 80,000 people worked part-time as self-employed pools collectors earning an average pounds 20 a week in commission.

A perfectly reasonable proposition had been wrecked by government insensitivity. 'Ministers yet again have botched it up,' she said.

'This Bill has divided what could have been a united House. It is divided not on the principle of a national lottery but chiefly on the failure to protect large numbers of jobs of people in the private sector that will be lost when the public sector takes over.'

David Alton, Liberal Democrat MP for Liverpool, Mossley Hill, called for an assurance that the pools would be able to do everything the lottery could do by way of advertising and prizes.

The pools companies want the Government to end restrictions which prevent them advertising on television, selling coupons in shops and rolling over prize money from week to week.

Mr Brooke said that he was minded to outlaw the discounting of tickets and to limit roll-over to help avoid abuse. He described the lottery as 'at the softer end of the gambling spectrum' and predicted it might create 1,000 jobs in its central operation.

The Secretary of State was 'yet to be convinced' by the arguments of the pools companies. 'I am not minded to give way on concessions which hang on to this Bill as a flag of convenience.'

Sir Malcolm Thornton, Conservative MP for Crosby, raised a leaked report for the Government by the GAH group of management consultants which estimated the lottery would result in a loss of revenue for the pools companies of 17.5 per cent and job losses of 1,100. A succession of Labour Merseyside MPs feared the impact of the lottery on the jobs of thousands of their constituents.

But Mr Brooke said the GAH estimate was based on the hypothesis that the pools did nothing to change their operations. They had already done so - altering the points system to allow for bigger prizes more often.

'Given their own tendency to cut their workforce in recent years, and a drive towards increased mechanisation which was in place long before the lottery suggestion, I wonder if the pools companies themselves would be able to guarantee existing levels of employment if there were no lottery?

'It seems they themselves have been seeking to reduce their workforce through voluntary redundancies for some time.'

(Photograph omitted)