................................................................................ ON THE RECORD CHRIS SMITH INTERVIEW RECORDED FROM TRANSMISSION BBC-1 DATE: 29.3.98 ................................................................................ JOHN HUMPHRYS: The Government wants to change the way the National Lottery is run. There's going to be a new law which means another "good cause" will be added to the existing ones. The difference is that THIS one will shell out cash to anyone the government chooses.... things like health and education perhaps, all very deserving, but is this what the Lottery was MEANT to do? The Culture Secretary Chris Smith is with me, and if I may I'll come to that in a moment having set it up. But the story this morning first about these commemorative knives, to commemorate the World Cup in France on sale. I'd have thought you wouldn't be very pleased about that? CHRIS SMITH: Well, we're certainly not very pleased about that, and particularly in the aftermath of the tragedy at Gillingham last night, this is something that is of great concern. It was actually only picked up when my Sports Minister, Tony Banks, was over in France discussing arrangements for the World Cup, and discovered these knives on sale in shops in France, there to commemorative supposedly the World Cup. We're bringing a lot of pressure to bear now through diplomatic channels to see if we can get these knives removed from sale, because it's not only in practical terms something that's very worrying, but also it sends completely the wrong signal. HUMPHRYS: Any response from the French government? SMITH: At the moment they're considering our representations. In the aftermath of what happened yesterday we're going to step those up. HUMPHRYS: Let me move on to another story this morning, that your leadership considered using Number Ten to help raise funds from big corporate donors, in other words access to Number Ten, access to the Prime Minister in return for funds offered to the Party. Now that seems to suggest that you've not yet cottoned onto the difference between Party and Prime Minister. SMITH: Oh, we're very well aware of the difference, and in fact the leadership never considered it. This was a paper that was prepared by a middle-ranking official as a proposal. The moment it got anywhere near senior officials, they said this is completely inappropriate, not something that any Party, any Government should do. It was spiked and no more was heard of it. HUMPHRYS: But you can see why people might be concerned about it. I mean, the links perhaps, they will say, with the Bernie Eccleston affair, the man who gave a million pounds to the Party. Tony Blair just this past week, talking to the Italian Prime Minister on behalf it was said, of Rupert Murdoch. People will kind of add one and one and two and two together, won't they? SMITH: No, the rule is very clear, and it's very strictly adhered to by all of us; and, that is that there should be no favoured access to anyone, Prime Minister, Cabinet member, any Minister, any part of the Government; no favoured access at all, simply because someone happens to be a member of the Labour Party, a supporter of the Labour Party or a donor to the Labour Party. The two are very distinct. HUMPHRYS: Why then, did Alastair Campbell on behalf of the Prime Minister deny that those conversations with Mr Prodi had taken place, or at least that Rupert Murdoch was mentioned, when he clearly had been. SMITH: Well, the conversation with Mr Prodi was actually a call from Mr Prodi at Mr Prodi's behest about- HUMPHRYS: It didn't make any difference did it? SMITH: -many things, and indeed Mr Prodi specifically asked at the outset of the conversation I understand, that it should be a matter of confidence between the two Prime Ministers. I think, it's important that Prime Ministers should be able to talk in confidence to each other. HUMPHRYS: But not that Prime Minister's spokesmen should not tell the truth on their behalf? SMITH: But the Prime Minister's Spokesman as far as I'm aware was simply saying that the contents of the conversation were confidential and that is absolutely appropriate in the circumstances. HUMPHRYS: I think he used the word and he spelled it out - C-R-A-P - in response to the first question. SMITH: Alastair Campbell's language, as ever, is robust. HUMPHRYS: And misleading? SMITH: Not necessarily at all. HUMPHRYS: Let's turn to other matters then. The Lottery - which you came here primarily to talk about. Just to remind you - remind the listeners, remind the viewers - that when the Lottery was set up five years ago the rules quite clearly said that Lottery money - money raised from the Lottery - would not be used for sort of core Government spending, the kind of things that we spend our taxes on at the moment. You're changing that rule now aren't you? SMITH: No, we're not. We're actually holding very fast to that rule because that's what's known in the jargon of the trade as additonality - that means that Lottery money should not be used to replace Exchequer spending. That rule remains very very firmly in place. It was in place with the last Government to give them credit. It's in place still and we hold very fast to it. HUMPHRYS: But you're using lottery money for instance, to fund the Kids' Clubs. Now, that is core Government spending because without the Kids' Clubs some crucial policies wouldn't work. SMITH: No, what we're doing with the new stream of good cause money that we're creating with the Lottery Bill is targetting projects that are connected with Health, Education and the Environment in ways that help the core delivery of service but don't replace it. So we're not for example using the money in order to employ nurses, or fund operations, which quite correctly are the business of Central Government through taxation but what we are doing is enabling the setting up of healthy living centres in the high street, on-in the shopping mall, on housing estates; we're enabling the setting up of Kids' Clubs, Out of School Hours Clubs ... HUMPHYS: Will it actually be necessary, essential, will it not? SMITH: This is something which has never been done on this scale in this country before. So we're not actually replacing anything that's happened before, we're adding value to the education. HUMPHRYS: Oh, that's splitting hairs, isn't it? I mean the fact is you want those clubs - the Kids' Clubs - that is part of your policy. If you hadn't raised the money through the Lottery you would have raised the money through taxation. That's what you would have done - surely? Otherwise you're telling me that it's a kind of peripheral thing and it's not. SMITH The choice is not between raising taxes or raising money through the Lottery. It's through either using the Lottery money for this purpose or not doing it at all and we believe that it is a sensible way of using Lottery money. And actually in the responses that we had to the White Paper when we - which we issued last July, sent out the White Paper, widespread consultation - ninety per cent of the people who responded to that White Paper said: we believe these are very good proposals. HUMPHRYS: Ah, that's a different matter because if you ask people whether they'd like the Lottery money to be used on the Health Service - let's say,to provide extra nurses, or beds - I bet you they'd say yes to that as well. SMITH: Well they might do but we're not proposing that. HUMPHRYS: No, precisely. So it- SMITH: There has to be a very clear line between what is the core responsibility of government and what can be added to it. It's exactly the same, actually, as the last government did in the fields of arts, sports and heritage with the Lottery. These were fields that were already being funded by government, to a certain extent, they said let's use Lottery money to add to that, not to replace what's being done at the moment, to add to it and that is precisely what we're now doing in the fields of education and health as well. HUMPHRYS: Well take education then. You're going to use Lottery money to train some teachers in IT, so that they can educate children how to use IT better. SMITH: Teachers and public librarians - we mustn't forget the real importance of the public library. HUMPHRYS: Absolutely not. Well, now again, that surely is called Government Spending. Certainly Nigel de Gruchy, trade union leader, Teachers' Union leader, believes it is. He said it's a vital part of education, it's now going to be seen as a charity. SMITH: No, it's a one off exercise to help all of those existing teachers who did their teacher training in the years before Information Technology and computers and the use of digital technology became anything familiar to either teachers or pupils. And what we are doing is saying let's earmark a portion of Lottery money to ensure that those teachers and public librarians can come up to speed on the ability to use and teach Information Technology. HUMPHRYS: More spending. SMITH: It doesn't mean that the traditional teacher training courses that people now coming into the teaching profession will be funded by the Lottery, they won't, they'll be funded by the exchequer in the same way that they always have. This is a one-off exercise, again to add value to what teachers can do in the classroom and librarians in the public library. HUMPHRYS: I'm not sure that it matters whether it's a one off exercise or not because if there are enough one off exercises you find it being whittled away and whittled away and whittled away. And this is exactly what's happening isn't it. You breach the basic principle, from now on you can do any number of things - say it was only a one off exercise - do it again. SMITH: We haven't breached the basic principle at all. These are all things that haven't been done up to now, haven't been funded by the exchequer up to now. We are not replacing exchequer expenditure. And actually the theological argument about whether this is additional or not, whether it replaces or not - I'm saying it doesn't - but, actually that is all theological because I think if you ask most people in this country: do they believe that giving kids the chance to go somewhere after school to engage in arts and sports activity, to do their homework. Do you think it's right that our teachers should be able to learn about new technology and pass that onto our kids. I think the overwhelming majority of people would say yes. Those are good things and we like to know that our Lottery money, the money we spend week by week. HUMPHRYS: I'm not arguing for a moment whether they are good things or not. But let me remind you of what Tony Blair said. He said Lottery money should not be used for, and I quote, "government responsibilities". Now, what you are doing and you've added this in, you're saying existing responsibilities. Well, it's a cop-out that isn't it. SMITH: No, it's not a cop-out at all. Very clear, right the way through and there's a litany of quotations from the previous Prime Minister, the previous Secretary of State, from the present Prime Minister, from myself, right the way through the last two years, making the very clear point that the thing about Lottery money is it can't be used for on-going revenue commitments and it cannot be used to replace existing exchequer expenditure. That's very clear, it has to add value, it has to do things which aren't being done at the moment. HUMPHRYS: One would like to think everything you do adds value. SMITH: And that principle we are sticking very strictly to. HUMPHRYS: But now you have this fifth fund, there's nothing to stop you, is there, sixth fund, I obviously need some of your training, sixth fund, you've got five, you're adding the extra one on. There's nothing to stop you, is there, raiding the other funds and the millennium fund has got to go anyway in another couple of years, nothing to stop you raiding the other funds for extra money for your sixth fund, is there? SMITH: No, what we've said is very clearly there's a billion pounds between now and 2001, for this new fund. And the reason that we can do that without harming the interests of the other funds, is that the success of the Lottery, the number of people in particular playing the midweek draw as well as the Saturday draw, means that actually more money is coming into the good cause pot from the Lottery, than anyone had expected at the outset. So each of the existing good causes, the arts, sport, heritage, charities, will get exactly the amount, one point eight billion, that they were always intending and intended to get. And we can protect that and use the extra that's come in, in order to help health and education. HUMPHRYS: Is that an absolute guarantee? An absolute commitment that you will not take another penny from those- SMITH: Yes. We have said that very clearly and we have written in terms to all the Lottery distributers saying one point eight billion is what you were promised at the outset and that is what you will get. HUMPHRYS: Are there going to be more draws? Lots of people are suggesting there's no reason why you shouldn't have one every day, six draws a week. SMITH: There's no proposal of that kind on the table at the moment. HUMPHRYS: Not yet. SMITH: If and when anyone were to suggest that formally, it would of course be up to the Director General of OFLOT to make a proper decision about whether this was appropriate or not. And the thing that he would need to bear in mind, is his very clear duty under the Act, that the National Lottery should not encourage unnecessary gambling. And that is something that he is under a duty to ensure and that would be the point that he would have to consider, if such a proposal were put forward. HUMPHRYS: If that's your view, six days would be that, wouldn't it?. Why can't you say this morning: we wouldn't consider it. SMITH: It would be up to him to make that decision, not up to me. I don't have the judicial authority and I don't want to queer his pitch by- HUMPHRYS: Your not saying that he under the law could simply introduce six draws a week and you couldn't do anything to stop him? SMITH: He is charged with making that decision. HUMPHRYS: You could override it? SMITH: No, he has the legal authority to do it and I would expect him in such circumstances to bear in mind very clearly that duty that he has not to encourage excessive gambling. HUMPHRYS: Alright then, in that case, is it your view that six draws a week would be encouraging excessive gambling. SMITH: Well, if I gave my view I might be leading him towards a particular conclusion- HUMPHRYS: Well indeed. SMITH: -and I wouldn't want to do that. HUMPHRYS: Why not? SMITH: What I've said, however, is it would be a very clear duty on him to make a decision as to whether this involved excessive incitement to gamble. And I would look to him to make that judgement and to make it very carefully on the basis of the evidence. HUMPHRYS: It sounds to me as if you're at least agnostic on this thing. You're certainly not totally opposed in principle are you? SMITH: What I'm not going to do is make a judgment, instantly here and now, when it is actually up to him to make that judgment and I don't want to affect that legal duty which it's placed upon him. HUMPHRYS: Now, the BBC Lottery - the new Lottery Show last night, that involves Scratch Cards - what's you view about it? You know, Gerald Kaufman thinks that it shouldn't have been shown, the BBC were wrong to do it - what's your view now that it's been on the telly? SMITH: Well, I must confess, I had a speaking engagement last night so I wasn't able to see it. I will, however, be wanting to watch it and see the content of the programme. HUMPHRYS: But, you know what happens? SMITH: There was, of course, the mistake of the forty balls, rather than the fifty balls, which is-now has to be dealt with and I'm actually pleased that Camelot have said very rapidly that they will pay out on either of the set of four numbers that came up on the different judgments on that. But, I, nonetheless, will, again, be looking to the Director General of OFLOT to keep a very careful watch on Camelot to make sure that they're operating in this matter with complete propriety. HUMPHRYS: But, you mean-you know what happened on that programme. You were able, as everybody else to buy one of those cards that shows you what the conditions are. Gerald Kaufman said absolutely no question, having seen the cards and all the rest of it, that it blatantly breaches the BBC's Guidelines. Well, you're responsible for the BBC - you can't duck this one and hand it over to the OFLOT man, can you? This is down to you. SMITH: The Chairman of the BBC and all the Governors have very clearly said that they've looked also at the Guidelines, they've looked at the Charter, they've looked at the Agreement and their conclusion is that it doesn't breach the Charter and they're not operating
outside the Producers' Guidelines. HUMPHRYS: And, Kaufman's answer to that is: well, they would, wouldn't they? SMITH: Oh, well, Gerald Kaufman's answer is that he believes they are. Now, I need to make a careful judgment, having seen the programme. I'm not prepared to make a judgment without seeing the programme. HUMPHRYS: But, you know, you don't need to have seen the programme to know that if you- SMITH: I will want to make a careful judgment as to whether I think the BBC Chairman is right. I think, this is an area that he needs to operate with very great care on because the key point about the Charter, which is at issue here, is that the BBC as a public service broadcaster should not be in the business of promoting a private product - a scratch card, for example. Now, the key question is: did the content of the programme promote the sale of Scratch Cards? HUMPHRYS: Not whether merely having to buy the card to get on the show promotes it? I mean, wouldn't you have thought that promotes it? SMITH: That-That, I think, is a matter that has been dealt with by the Board of Governors. HUMPHRYS: To your satifaction? SMITH: To my general satisfaction but the question about whether the content of the programme induces the sale of Scratch Cards is one that I will want to make a judgment on, once I've actually seen the programme? HUMPHRYS: So, you'll be popping home to look at a video of it - when you will tell us about that? SMITH: Well, I will be having a very careful look at it and, then, taking the matter further, if necessary, with the Chairman of the Governors. HUMPHRYS: Let's look a little bit into the future. You said that the next operator of Camelot - of the National Lottery - would have to be a no-profit operator. That's to say Camelot couldn't keep it because they do it for profit - the next one will. Are you beginning to move away from that a little bit now? SMITH: What we've always said is that we will seek an efficient, not-for-profit operator and that remains very much our wish. HUMPHRYS: A hundred per cent commitment? SMITH: If-If we can find someone coming along who's - on all the evidence we have available to us, going to operate it on a not-for-profit basis, no one will be more pleased than I. What we have, also, said is that we do not want the sort of open ended profit mechanism that is in the current contract. And, so, that is the basis on which we will be going out to invite approaches for the new franchise as it-as we near the date when it comes up for-for the taking and we will be looking to make sure that the very careful judgment at that time is on two bases. No excessive profit and the maximum return for the good causes. HUMPHRYS: Chris Smith, thank you very much, indeed and that's it for this week. Next week, the Education Secretary, David Blunkett. Until then, Good Afternoon. ...oooOOooo...