Contents
 
 Introductory Address to the Chancellor

One: The Case for Charitable Status

Two: The Value of the Five Good Causes

Charities
Heritage and the Arts
The Millennium Fund
Sport

Three: On the Privatising of Patronage

The Injustice of Public Subsidy
The Failings of the Arts Council
Whether the Arts Need Public Subsidy
a) Cost-Inflation in the Arts
b) An Insufficiency of Public Demand
The Role of Private Patronage

Four: Replies to Further Objections

a) The Level Playing Field
b) Fairness to the Treasury

Conclusion

Notes

Introductory Address to the Chancellor

Sir,

It is the current design of Her Majesty's Government that the National Lottery shall be operated by a private company, acting for the Department for National Heritage and under its direction. The surplus from the Lottery will be divided equally among five good causes already nominated, these being - charities, the arts,[⁽¹⁾] heritage, a Millennium Fund which has yet to be established, and sport.

Although the distribution of the surplus will correspond in some respects to public spending - indeed, the shares reserved for sport and the arts will be handed to the Sports and Arts Councils as additions to their usual Government funding - the Treasury has decided to look only at the proposed commercial nature of the Lottery.

Accordingly, your predecessor in his budget speech of the 16th last March announced that a tax of 12 per cent would be levied on tickets sold by the National Lottery during its first year of operating. Explaining his decision, he said that

I have taken into account the level of tax on other forms of gambling and the extent to which spending is likely to be diverted from other taxed activities....

The Government has always made it clear that the National Lottery would be taxed.[⁽²⁾]

He promised that the effect of this tax would be closely observed during the first year of the National Lottery, and that rates of tax in subsequent years would depend on these observations.

At first glance, a rate of 12 per cent on tickets does not seem illiberal. It is said that the Treasury considered a rate of 17.5 per cent, in line with VAT.[⁽³⁾] Certainly, other forms of gambling - or entertainments widely regarded as gambling - are taxed more heavily. The football pools, for example, are taxed at 37.5 per cent of turnover - following a reduction from 40 per cent in the 1991 budget; and this reduction was made after an undertaking by the pools companies that the revenue foregone by the Treasury should be paid to the specially-created Foundation for Sport and the Arts. Under a similar agreement made in 1975, they pay a further 2.5 percent of turnover to the Football Trust. Pleading simple fairness, the pools companies argued for a tax on the Lottery of 37.5 per cent.[⁽⁴⁾]

Commenting on the announced rate of tax, Mr Brooke, Secretary of State for National Heritage, said that

[t]he tax rate has been set at a very reasonable level. This will provide for healthy sums to be returned for good causes, around 25 per cent of turnover bringing in hundreds of millions of pounds. [Assuming administration costs of 13 per cent, i]t will also allow about half of the turnover to be returned as prizes. This can only be good news all round.[⁽⁵⁾]

Others, however, disagreed. Dave Simmonds, Head of Economic Policy at the National Council for Voluntary Organisations, strongly objected to the rate of tax. In the first place, it was two and a half times the rate normal for governments in Europe to impose on lotteries. In the second, it would cut the share of Lottery proceeds expected for charities by nearly 22 per cent.

This was not - as is often the case with figures produced by special interest groups - an idle claim. The proportionate shares of the National Lottery can be almost precisely calculated. There is some evidence from those countries where lotteries already operate that 50 per cent is the best share of turnover returned as prizes: more than 50 per cent, and demand for tickets will not rise sufficiently to maintain the absolute value of the other shares: much less, and falling demand for tickets will depress the absolute value of the other shares, despite their proportionate increase.[⁽⁶⁾]

Let us, then, deduct 50 per cent of turnover for prizes. Let us further deduct the 13 per cent mentioned by Mr Brooke for administration costs. We are left with 37 per cent. Now, the five good causes mentioned above are to share the proceeds of the National Lottery, net of prizes and other disbursements, on an equal division. With a five per cent rate of tax, charities would receive 6.4 per cent of turnover. A 12 per cent rate would reduce this to 5 per cent of turnover. "The taxman will get more than double that" said Mr Simmonds.

The public will be bitterly disappointed that the Treasury is manipulating the National Lottery as a milch-cow at the expense of "good causes".[⁽⁷⁾]

Jim Jackson, Assistant Director of the Scottish Council for Voluntary Organisations, went further. He said that

[u]nless the Government can be persuaded to reduce the take for tax to around 5% or 6% charities may start to campaign against the National Lottery because it will not be in their interest.[⁽⁸⁾]

The purpose of this Submission will be to agree that Mr Brooke was mistaken to welcome a rate of 12 per cent. Though far less than was at first planned, too much was asked by the Treasury, and too much was conceded by the Department of National Heritage. However, we go further than Messrs Simmonds and Jackson. In our view, 5 per cent also is too high. We propose that the National Lottery should be operated by a charitable foundation, and that its turnover should be entirely untaxed.

In support of this, we will argue the following:

1. That the National Lottery was conceived as a means of raising the quality of our national life; and that charitable status is the only guarantee of sufficient funding for this purpose;

2. That the good causes nominated to receive funds from the National Lottery fully deserve the additional funding that charitable status would allow;

3. In general that at least arts - and probably also sports - funding should come increasingly from private rather than public sources; and in particular that the Arts Council of Great Britain is unfitted for a just and efficient distribution of what funds it already receives, and that it should not be allowed to handle the share for the arts from the surplus of the Lottery;

4. That the arguments raised in support of taxing the National Lottery are not well founded.

One: The Case for Charitable Status

The whole present scheme of a National Lottery derives from the urging of Denis Vaughan, Executive Director of the Lottery Promotion Company Limited. An orchestral conductor, he was distressed by the funding needs of the Royal Opera House at Covent Garden and the improbability of their being met from any of the current sources. As an Australian, though, he recalled how the splendid new opera house in Sydney had been built from the proceeds of a national lottery.

Mr Vaughan's first proposal for a British National Lottery was made in 1987 to Lady Thatcher, the Prime Minister of the day. For reasons best known to herself, she rejected the proposal. But four years of strong campaigning, and a powerful and well-received policy document from the Adam Smith Institute,[⁽⁹⁾] persuaded the current Prime Minister that the scheme should be included in the 1991 Conservative Election Manifesto.

Now, at all times, it was expected that a Lottery would raise large sums of money. As with all future sums, its cash value was and has remained uncertain. The Lottery Promotion Co. predicts a turnover of £1.5 billion in the first year, rising to perhaps £3 billion after three years. Other predictions have been lower. Mr Brooke, for example, estimates a turnover of £1.5 billion after three years.[⁽¹⁰⁾] But it is generally agreed that the turnover will be very large.

Not surprisingly, hundreds of potential beneficiaries have been named or come forward. Something called the UK Industrial Group wants the whole surplus of the Lottery to be invested in manufacturing projects which no bank or person or even government agency thinks viable.[⁽¹¹⁾] The Theatres Trust wants £30 million per year.[⁽¹²⁾] The British Screen Advisory Council wants £25 million per year for three years.[⁽¹³⁾] The Royal Opera House anticipates £45 million for building works.[⁽¹⁴⁾] The Prince of Wales wants an undisclosed sum to help those gentlefolk distressed by losing money in unsound insurance syndicates.[⁽¹⁵⁾]

The list is endless. We quote David Fleming, director of Tyne and Wear Museums:

It is like being in a desert and there is an oasis. If you don't get there it will all have been drunk dry. All the beggars and cripples are stampeding towards it. It is going to be verging on the obscene.[⁽¹⁶⁾]

With this kind of rush in mind, Mr Vaughan from the beginning was clear that funds from the National Lottery should be devoted only to projects that can clearly be shown to raise the quality of life in this country, these being agreed as the five good causes of charities, the arts, heritage, the Millennium Fund, and sport.

Mr Vaughan also understood from the beginning that first among the beggars and cripples stampeding towards this oasis of money would be the Treasury. Experience from abroad shows that the State is normally the largest single beneficiary from national lotteries. Bearing in mind the vast budget deficit that emerged in 1991 and has grown inexorably since then - bearing in mind the normal requirements of modern governments - the only reliable means of keeping the Treasury from eventually swallowing the entire surplus of the Lottery would be to establish as a starting principle that the Lottery shall not be subject to tax at all.

Therefore Mr Vaughan's insistence that the National Lottery should not be an arm or a franchisee of the State, but an independent charitable foundation with all the protections and obligations that this involves. He explains:

The reason we proposed a national lottery was to fund those areas of British life which are dramatically underfunded. Our board defines quality of life objectives as those which make available to the individual, from all walks of life, the widest possible range of healthy and vital leisure activities, so that all may enjoy fuller and richer lives. On the advice of some of the best economists in the UK, our board has proposed that the National Lottery should be mounted as a charitable foundation, with specific purposes. Thus it would increase the current £17bn turnover of charities to an estimated £18bn. The foundation, an idea first put forward by Sir Robin Day, would be out of the reach of government manipulation and thus in a position to make a genuine contribution to new ventures, with participation in arts, sports and the environment as particular aims.[⁽¹⁷⁾]

This insistence has been repeated from many quarters. In both Houses of Parliament amendments were tabled, though without success, to give the Lottery charitable status. Many sports personalities and organisations added their voices. Take the letter to The Times, for example, from among others Linford Christie, Adrian Moorhouse, Will Carling, Roger Black and Bobby Charlton:

We believe that an extra £285 million per annum could be achieved for the share to be given to sport, were the National Lottery to be made a charitable foundation. It is the only way to go ahead, and we should not settle for less....

Only if all the money from the Lottery goes into the good causes originally specified, can we hope to make any mark on the quality of life in this country.[⁽¹⁸⁾]

Mr Jackson of the SCVO, quoted above, doubts if a taxed Lottery would be in the interests of charities. We agree that it would be less in their interests than one run itself as a charity. And we are convinced that it would be a national disgrace if the Lottery, conceived and at all times propelled forward as a benevolent institution, should become little more than an arm of the Revenue.

Two: The Value of the Five Good Causes
 

We believe that the money spent on good causes should itself be regarded as the Lottery's contribution to the nation. As Mr Vaughan has told the current Prime Minister, "the amount which would go to good causes should itself be seen as the tax element in the lottery".[⁽¹⁹⁾]

Let us consider these causes and their value to the nation, or their claim to receive funds from the Lottery.

Charities

Little need be said about charities. They have been nominated on the grounds of fairness. There is some reason for believing that many people will divert at least part of their discretionary income to buying Lottery tickets from donating to charities. In 1991, charitable raffles raised £355 million, and were the most common form of giving.[⁽²⁰⁾] Assuming that many buy tickets less from charitable motives than from a desire to win, a National Lottery with a possible top prize of £1 million every week would be bad news for the charities. Just before the introduction of the National Lottery Bill, some charities estimated that they would lose as much as a third of their income.[⁽²¹⁾]

Probably, some charities will lose from competition with the Lottery. But there is no good evidence that charities as a whole will lose income. In Ireland, for example, donations to the top 20 charities have grown by more than 30 per cent since the introduction of a national lottery there in 1987.[⁽²²⁾]

Nevertheless, on the grounds of fairness - and, it should be said, to buy off a potentially damaging opposition - charities have been nominated to receive funds from the National Lottery. Which charities will receive funds, and how much, remains to be announced, though it is likely that individual charities which can show on the balance of probabilities a loss of income to the Lottery will be made compensating grants.

Heritage and the Arts

The ability to enjoy the fruits of a rich and varied culture is one of the benefits of living in society. The mind of a lonely savage is almost incomprehensible to us. We can scarcely imagine what it is to be without literature, without music, without the most basic of the visual arts. Even the meanest and least cultivated among us is raised far above this wretched state. And it is almost trite to affirm that the condition of the arts in this country allows us to raise ourselves still higher.

Our language has been the vehicle of what may be the greatest body of literature that has ever existed - not excepting even the ancient classics. British music, though not in the front rank, has been often respectable. So too British art and sculpture. In addition, we have many opportunities to make ourselves familiar with the arts of other nations.

Then, there is what may loosely be termed our "heritage" - not only our national culture but also the glorious and inspiring history of this country and its physical manifestation in buildings, in particular places, in processions and celebrations. There are, we regret, some people who would sneer at these words - "glorious and inspiring". But our history is exactly that. Nearly all other peoples must look into their past either with various degrees of shame or with a bravado shameful in itself. We need look back on no death camps, no reigns of terror, no wild swings between anarchy and despotism, no repeatedly spoiled hopes and periods of justified national despair.

The rule of law, industrial capitalism, representative democracy - these were all brought to their first perfection in this country. By our example, and in our days of empire at our direct bidding, these blessings have been extended to many other parts of the world. Our great wars, though often unwise - and in this century disastrous - were never undertaken for base objectives; and we celebrate their victorious outcomes with untroubled conscience.

To maintain this heritage, for our own and later generations, is work of the highest merit. To neglect it would reduce us to the level of the mediæval Greeks, who fed their limepits from the Acropolis, and the Politically Correct, who would do the same with the last 500 years of Western history.

Yet, this being said, there is endless room for improvement. There are even signs of regression rather than of progress from the high standards achieved in earlier generations. Not only is there much that remains to be done, but there is much that needs to be done again.

There are most obviously the decaying or inadequate buildings of many institutions. We mentioned above the desire for money to cover building works at the Royal Opera House. This is a legitimate desire. Covent Garden is one of the great international opera houses. It is the only place in the country where we can regularly here live performances by singers such as Placido Domingo and Kiri Te Kanawa, and where we can regularly see lavish productions of the greatest operas and music dramas. Yet the last extensive improvements there were made nearly 90 years ago. Its stage lifts are powered by submarine engines fitted before the Great War. Sets for rehearsal and performances must be changed manually, where abroad they are changed automatically with far less delay - and at far lower cost.

Again, the Theatre Trust, in a study of British theatres,

highlighted the case of the Hackney Empire in east London, a popular variety venue in one of the most deprived areas in Britain. The theatre was built in 1901 and its proscenium-arched interior, dripping with rococo, is one of the finest works of the theatre architect Frank Matcham. But in 1956 the theatre closed, and it was used as a Mecca bingo hall until its reopening seven years ago. Among its long list of necessary repairs is a set of nudes hanging in the foyer - the canvases were painted over by Mecca to avoid offending the bingo crowds.

Carpets are worn, the plumbing has not been changed since 1901, causing regular floods, and there is only one backstage shower. Beetles gnaw their way through floorboards in the stalls, turning them into powder. "As soon as we replace one board another is infested," said Ann Cartwright, the Empire's administrative director.

The theatre has been awarded £330,000 for maintenance, half from the National Heritage department. But this does not come near the £9 million that the Theatre Trust estimates is needed to bring it up to scratch.

Most theatres now rely heavily on local authority funding for the upkeep of their fabric. But the Theatre Trust notes that cuts in local government spending have taken their toll.[⁽²³⁾]

Again, the Albert Memorial is falling down. Formerly one of the landmarks of London, it is now swathed in scaffolding and plastic sheeting which hide it from public view; and, with repairs estimated at £10 million, and no funds appropriated for the Department of National Heritage to carry them out, there is little prospect that it will be restored within the foreseeable future.[⁽²⁴⁾]

Turning from repair to fresh construction, there are many worthwhile plans which cannot go ahead for lack of money. There is, for example, improvement to the South Bank arts complex. Access to the whole site is to be rationalised, with the present dreary concrete walkways replaced by a single point of entry. Then the buildings are to be linked, to create the impression of a whole complex. There are to be extensions to the Hayward Gallery and Queen Elizabeth Hall, neither of which was designed with its present and desired functions in mind. Finally, there is to be the construction of a new 450-seat concert hall and a new landscaping of the whole site.

This is expected in its most ambitious form to cost £50 million.

Its benefit will be a splendid new centre for the performing arts in London, that will house not only opera and concerts of classical music, but also rock, folk and jazz concerts, cross-media work and workshop activities.

Then we have the institutions which are housed in the buildings. These too are often in trouble for lack of adequate funding. Three great orchestras, the London and Royal Philharmonic Orchestras and the Philharmonia, are threatened by financial shortages. So far subsidised by the Arts Council, their grants are to be cut. Following a possible cut in its own budget in 1994, the Arts Council has announced that London has no justifiable need of four orchestras. It proposes entirely to withdraw its £400,000 annual grant to the Royal Philharmonic Orchestra. It want the London Philharmonic Orchestra and the Philharmonia to merge, so leaving London with just two large orchestras.

By European standards, two orchestras for a capital city is very small. According to Denis Vaughan,

If London were to rival Munich in musical matters, it would have 21 orchestras and ten opera houses....[⁽²⁵⁾]

This aside, the possible loss of this last must be particularly distressing to many collectors of compact disks, who have increasing access to the rich legacy of recordings that it made in the 1950s under the direction of Herbert von Karajan and Otto Klemperer.

The list of other performance companies threatened by reductions or withdrawal of Arts Council grants is worryingly long. There is the Glyndebourne Touring Opera. There is the Royal Shakespeare Company, with a £3 million deficit. There is the South Bank Centre, with a £1.5 million deficit. There is the English National Opera, with a £500,000 deficit. Leicester Haymarket Theatre, Nottingham Playhouse, Plymouth Theatre Royal, and others all have deficits. All these deficits could be wiped out or cut at a stroke by funds from the National Lottery.[⁽²⁶⁾]

Then there are the many other artists and performers in all the main forms of high art, presently subsidised or unsubsidised, who would benefit from the additional funds that would be made available from an untaxed National Lottery.

The Millennium Fund

What exactly this will be has yet to be announced. According to Mr Brooke,

The millennium fund will provide resources for projects to celebrate and commemorate the year 2000. It is not every day we have a millennium so there is plenty of scope to think up creative and exciting ideas. Those ideas will be considered by a special commission appointed by HM The Queen. They will be looking for ideas from all corners of the United Kingdom which show vision and imagination. There will be a number of national projects, but many local ones as well, so there is every chance to think about how the year could best be celebrated in your area.[⁽²⁷⁾]

Some may think it vainglorious for human beings to celebrate something so vast and with an outcome so unknowable as a millennium. Looking back to the bombastic pronouncements made in the British press all through 1900, we are inclined to doubt the wisdom of holding celebrations that are too ambitious, too liable to cause sadness in anyone who looks back on them from some future time.

Nevertheless, we are about to face a new millennium; and whatever it may bring, there seems to be no harm in making sure that our theatres are in good order and that various other schemes of the sort mentioned just above receive their proper funding.

Sport

Both common sense and the unanimous testimony of the researchers indicate that regular physical exercise is good for the body and mind. Indeed, without attention to the role of sport, all the care lavished on the arts and heritage may do little or nothing to raise the quality of our national life. The greatest rounded civilisation of which know, that of the Greeks, placed an equal emphasis on mental and physical culture, regarding one as incomplete without the other.

This being said, people also derive immense pleasure from watching sport. The falling attendance figures at live sporting events should not be looked at in isolation from the growing numbers of people who watch the events at home on television.

It is argued that sport benefits the nation through the number of medals awarded to British sportsmen in international sporting events. These events are regarded as the exact peacetime equivalents of battlefields: to do well in them is cause for national jubilation, badly a cause for shame. This is followed by the argument that sportsmen here lack the facilities available in other countries. Thus we have articles in the newspapers beginning:

British swimming may have to rely on the generosity of the Sports Council to wipe away the unhappy memories of the Barcelona Games last summer Britain won only one swimming medal in Barcelona - the worst Olympic return for 20 years....[⁽²⁸⁾]

Some even support the idea of a National Lottery because it will bring "in desperately needed funds to produce more British winners at international competitions".[⁽²⁹⁾]

We accept that many people who are otherwise staunch patriots find this sporting nationalism offensive, that they believe it to devalue to concept of nation and national pride when the performance of a weightlifter or tennis player is placed in the same order of importance as the securing of some object truly in the public interest. But, whatever be the case, it is undoubted that millions do worry about how "our" athletes are doing; and there is currently no other source of funding to provide the facilities that they do plainly need to improve their rates of success in international events.

And it is plain that in sporting facilities, this country is very deficient by international standards. There are 20 times more covered tennis courts in France than here, and 20 times more covered swimming pools in Germany that here.[⁽³⁰⁾]

Another argument in favour of increased sports funding is that it might improve educational standards. There is a vast literature on the incidence and causes of truancy in British schools. At any time, it seems that between 10 and 20 per cent of schoolchildren are entirely absent from their lessons. In some schools, this figure is considerably higher. If we include what is called postregistration truancy - where pupils attend registration to be marked as present, and then disappear for at least part of the day - the figure may go higher still.

According to the dominant tradition of research into truancy, children play truant when they are in some way defective - when they are ill-equipped, typically by reason of their home backgrounds, to deal with the normal pressures of schooling. In their introduction to one of the main texts on the subject, the editors state with untroubled confidence that

[t]he epidemiological contributions to this book clearly demonstrate the importance of age, sex, and social background in determining the prevalence of unjustifiable absence from school.[⁽³¹⁾]

This view has always been disputed by a minority of researchers, whose own belief is that children stay away from school when it is defective. In a recent mass survey, conducted for the Department for Education, by the University of North London Truancy Unit, solid evidence has been produced to indicate that schools are indeed more to blame for truancy than are pupils. The authors of the Report have used what among educationalists is a radical and almost unknown method of research: they have asked schoolchildren in confidence whether they play truant, and if so why.

As common sense and our own recollections might already have suggested, the results of the study

point both to the preeminence of rejection of particular lessons as a reason for truancy and to the acceptance of most of the curriculum as worthwhile by most pupils.... [T]here is little evidence of widespread, outright hostility to the world of school....

[T]he rejection of lessons plays a central part in some pupils' decisions to truant. About two thirds of truants say they engage in truancy in order to avoid particular lessons.[⁽³²⁾]

Disturbingly, among those children who admitted to playing truant to avoid particular lessons, 21 per cent named Physical Education and Games as the lessons that they most tried to avoid - only one percentage point behind Mathematics, and 12 points ahead of Geography and History.[⁽³³⁾]

The Report does not discuss how may children begin to play truant to avoid one particular subject, and then, a precedent set, decide to avoid other subjects that they might otherwise have attended. But, again, common sense suggests that this is the case for at least some children.

Would increased spending on facilities interest these children more in sport? We do not know for certain. There are too many instances of money thrown at problems, and to no discernable effect, for us to say in all honesty that money spent here would undeniably do good.

One of the largest and most recent of these disappointments comes from Kansas City in Missouri, where since 1986 $1.3 billion, or $36,111 for every place, has been spent above the normal budget on the City's public school system.

This followed decades of falling standards in the system, until it had been almost deserted by the middle classes and left mainly to the underclass. The money was spent on new school buildings equipped like universities. The Central High School, recently built at a cost of $32 million, has one computer for every three pupils, and a Classics Department which teaches Classical Greek, together with the best sports facilities that money can buy. These are a

$5 million swimming pool, a six-lane indoor track, a weight-training room, a lavishly equipped gymnasium, and fencing courses taught by the former head coach of the Soviet Olympic fencing team.[⁽³⁴⁾]

For all this, there has been no observed improvement in standards.

Indeed, some statistics indicate that things have got worse since the spending binge began. Pupils in elementary schools which have not been turned into magnet schools regularly outperform pupils in generously funded magnet schools. The rise in expenditure has coincided with a fall in the maths scores of middle-class school pupils and a surge in the drop-out rate. Moreover, the drop-out rate has risen every year, without fail,... and now stands at a disgraceful 60%.[⁽³⁵⁾]

Now, this may illustrate a general point, that high spending does not guarantee high results - or any good results at all. It can be applied in education, in sport, and in the arts.[⁽³⁶⁾] Even so, while money is sufficient condition for achievement in no field, it is often a necessary condition.

We do not know if an increase in the amount of money spent on sports facilities would diminish the truancy rate. Nor do we know if it would result in more enraptured cries of "Gold for Britain". But we do believe that it is worth trying. Certainly, to encourage more people to take an interest in active sport will require money for one pupose or another.

And, again, the most likely source of funding will be the National Lottery. Regardless of whether it be the only, it may also be the best source. This, however, brings us to the next section.

Three: On the Privatising of Patronage

Repeatedly stated during the past three years has been the fear that a National Lottery would not supplement other funding of the good causes, but would replace it. The Department for National Heritage has gone to some lengths to allay this fear. According to Mr Brooke,

we have made it clear that the money raised by the lottery is intended to be in addition to normal forms of Government spending, not to replace it.[⁽³⁷⁾]

This reassurance has not been sufficient. "[T]here is" says Brian Appleyard,

no constitutional safeguard against [substitution] and, in any case, [it] would be impossible to detect - a pruned arts budget could be justified by any means you cared to choose when, in reality, it was being cut because the lottery was taking up the slack. In every other country, lotteries have automatically led to substitution.[⁽³⁸⁾]

Moreover, Mr Brooke's reassurance must be read in conjunction with an admission, made shortly before by his Department, that he had not ruled out "absolutely and forever" the possibility that Lottery funds might be allowed to replace Government funding.[⁽³⁹⁾]

Perhaps the Government might be persuaded to promise a certain level of funding years into the future, regardless of any supplement to projects from the Lottery. This, however, is against Treasury custom, which prefers where possible to avoid long term commitments. If it complained bitterly about the great build-up of armaments, promised by Lord Callaghan's Government and continued by Lady Thatcher's - though it was widely believed that the Soviet Union might otherwise conquer the world - it will certainly refuse to commit a penny to future arts or sports subsidies.

Therefore, despite the half promises and pious hopes that attended the course of the National Lottery Bill through Parliament, substitution will almost certainly take place. Yet, this being said, it may not be so very bad. Indeed, for all of the good causes nominated, and especially for the arts, on which we now concentrate, a privatisation of funding may be very much for the best.

The Injustice of Public Subsidy

In the first place, for the Government to subsidise the arts is largely unjust. There are certain functions for discharging which governments may legitimately exist. Defence against external aggression is the most obvious of these. Then there is the maintenance of internal justice. Beyond this, all else is debatable. When all the usual words are laid aside, it will be seen that governments in every case finance their activities by a form of enslavement. A tax is, after all, a claim to the product of a payer's labour. When a government takes 10 per cent of someone's income and spends it on things that he would not himself buy, that person's real status is similar, in nature where not in extent, to that of a slave who sows that others may reap.

This argument is often used against all government. We prefer to soften a prohibition into a rebuttable presumption. Taxes are bad, but may be raised for purposes that more than compensate. Thus we allow defence and justice, partial enslavement being a lesser evil than chaos or the despotic rule of a foreign army. Thus, in our own case, we allow our rather expensive but historic institutions of state: it is arguable that by preserving these, we have avoided most of the ills that have afflicted less conservative peoples during the past 200 years. Thus we allow many adornments and celebrations to be at the public expense, which means some patronage of music and sculpture and other art forms.

But we should not allow a vast public funding of the arts regardless of how plainly the fail to rebut the above presumption. To hear Placido Domingo sing Lohengrin at Covent Garden is for some a thrilling experience that will last them all their lives. That is no reason why they should hear him sing at the public expense. Many taxpayers will be indifferent to his voice. Most who can afford the £250 for a good seat at Covent Garden will have more preferred uses for the money. Why should they have to pay for what they do not want? Where is the overriding public utility of the kind that justifies spending on the Royal Navy or the Trooping of the Colour?

It is almost incidental to add that those who pay for such subsidies are generally worse off than those who benefit from them. There are people who believe that the rich should have much of their money taken away and given to the poor. We may think this a dangerous belief. But it is at least honestly held and openly stated. We can think of no one who will say in plain words that the poor should be compelled to subsidise the pleasures of the rich.

Following from this, we will note that many of the public subsidies made to the arts do not go simply to causes on which the taxpayers would prefer not to spend money: they go to causes that are positively despised or loathed. Mr Domingo's voice is accessible to a wide audience. If he is no Madonna or Freddie Mercury, his record sales and public following in this country classify him with Cliff Richard or Cilla Black as a popular singer. Millions who would not go to hear him at Covent Garden will happily buy his recordings. Wagner is acknowledged to have been a great composer; and though Tristan und Isoldë may never be as popular as The Sound of Music, most people are familiar with some of his preludes and choruses.

Yet even to the great majority of those who enjoy classical music, a work such as Alban Berg's Lulu is unattractive where not repellent. So, despite some recent improvement, is much European music written in the classical tradition since around 1910. Who enjoys Schoenberg's atonal music, or Stravinsky after The Rite of Spring, or anything by Brian Ferneyhough[⁽⁴⁰⁾] or Karl Heinz Stockhausen? When a season of this last composer's music was broadcast on BBC Radio Three in 1985, we are told that listening figures fell to a few thousand. Yet all this is subsidised at the public expense.

So too is much art that outrages the feelings of ordinary people. We well remember Howard Brenton's play The Romans in Britain. We believe strongly in the right of free expression. We defend the right to show simulated rape on the stage and to accompany this with such comments on haemorrhoids as "like fucking a fistful of marbles", and to use all this to compare conquest of Britain by Julius Caesar with the defence of the British Union in Ulster against terrorist attack. But we do agree with millions of the less tolerant in objecting to the production of this play at the publicly subsidised National Theatre. People have no right not to have their deepest feelings deliberately flouted. They have no obligation to pay for them to be flouted.

Finally, a disturbingly large number of the works commissioned or supported by public bodies in this country do not conform even to what the average person would define as bad art.

Now, we accept that genius is not always recognised at first. The Marriage of Figaro did badly in Vienna. Beethoven's Seventh Symphony was dismissed by Weber as the work of a madman. The Symphonies of Mahler only received general recognition after 1960. Bad reviews even helped Keats to an early grave. These examples could be multiplied a hundredfold.[⁽⁴¹⁾] But we still doubt if the two large blocks of steel that lately occupied the main hall of the Tate Gallery will ever be recognised as art. We have similar doubts regarding the celebrated bricks laid out there in 1976, or the three youths awarded a grant that same year to walk 150 miles though East Anglia with a yellow pole tied to their heads.

The Failings of the Arts Council

In the second place, we doubt if the Arts Council of Great Britain, the main source of public funding for the arts, can ever be made to work in the interest of the arts. This has nothing to do with its frequent lapses of taste: the money given to bad or spurious art is as nothing compared with the huge grants to the London opera houses and theatres and orchestras. We refer to the bureaucratic nature of the Arts Council.

On its establishment in 1945, Lord Keynes, one of its founders, announced over the wireless that

[n]o one can yet say where the tides of the times will carry our new-found ship. The purpose of the Arts Council of Great Britain is to create an environment, to breed a spirit, to cultivate an opinion, to offer a stimulus to such purpose that the artist and the public can each sustain and live on the other in that union which has occasionally existed in the past at the great ages of a communal civilised life.[⁽⁴²⁾]

Whatever objections can be made to the principle of State patronage, the intention here was to avoid what at the time seemed its greatest danger. Until just recently in Germany and Italy, and to an increasing extent still in the Soviet Union and its new satellites, the arts had been nationalised and turned to thoroughly evil ends. The result had not been at all to destroy the arts. Despite occasional failures, the directing officials in the various ministries of culture had shown excellent taste and judgement. The arts had flourished under National Socialism, and continued to flourish under Soviet Socialism - at least until around 1970, when socialist realism seemed outdated and modernism began to take its place. Even so, artistic freedom had been abolished, and the two roles of the artist were to glorify the ruling system and help to pacify the masses over which it presided.

The purpose of the Arts Council was to keep the State and the artist apart. The Treasury would make an annual grant to the Arts Council, which would then make its own grants to artists and artistic institutions. The Council would be loosely supervised by a Minister for the Arts responsible to Parliament for the use of public money. Bu the object was so far as possible to avoid the nationalisation of culture.

That object has been achieved. We do not in this country have anything approaching the cultural servility apparent even in many free European countries. The Arts Council is to be praised for this. Even so, the Arts Council has developed problems not foreseen in 1945.

It is a bureaucracy. Its officers are employed on terms similar to those of civil servants, and they tend to behave like civil servants. In the 1940s, it was widely agreed that such people could be trusted to run the "commanding heights of the economy". After 40 years of incompetent management, it was widely agreed that they could not be so trusted. And as it was with industry, so it is with the arts. The Arts Council currently receives £225 million of public money every year. Much of this is wasted.

Earlier this year, the Department of National Heritage commissioned a report from Messrs Price Waterhouse into the conduct of the Arts Council. They found the usual bureaucratic sloth and inefficiency. Too many staff are employed there. These spend too much of their time sitting on committees and generating masses of useless paper. There is, for example, its latest "strategy" for the arts - a new one is ordered every few years - called "A Creative Future". 160 pages long, this took three years of research and £300,000 to produce. It concludes that

the arts, craft and media are central to the lives of individuals and the well-being of the community.[⁽⁴³⁾]

According to Caroline Lees, writing in The Sunday Times,

[t]he council's attempts to meet government requests to reorganise have so far proved expensive and bureaucratic. Last year, a report by the National Campaign for the Arts criticised the council for spending £2m on reorganising its funding system and setting up the Regional Arts Boards. The increasing amounts of paperwork sent by the council to its clients has become the subject of innumerable jokes at theatres and art galleries. One has a theatre's artistic director appearing on stage before a performance and telling the audience that the advertised play has been cancelled, but there will be a reading of the company's corporate plan instead.[⁽⁴⁴⁾]

The Arts Council, we repeat, is a child of the 1940s. Its adult years have been a disappointment; and there may be no reason for exempting it from the euthanasia already suffered by its brothers and sisters, or planned for them.[⁽⁴⁵⁾] There is certainly no reason for giving it control of that share of the National Lottery's surplus reserved for the arts.

Whether the Arts Need Public Subsidy

Against these points, it is argued that public subsidy is a necessity in the modern world - that without it, many of the arts as we know them would cease to exist. Anyone who accepts the argument given above, regarding the justice of public support, will be unmoved by this plea. We will, however, give it some consideration.

a) Cost-Inflation in the Arts

We quote from what may be the classic justification of subsidy-hunting, by H. Baldry:

Why should public funds now be needed to subsidise arts products which formerly were paid for by those wanting them? Why should the individual citizen not pay for seeing a play just as he pays for a packet of cornflakes?...

With hindsight, the answer is not difficult. Put briefly, it is that drama, along with the other arts, is labour-intensive. The economics of the theatre, unlike many aspects of our lives, have not been basically changed by the advent of the machine. The production of cornflakes must have gone up many times in the past twenty years; but it still takes fifteen actors to perform The Cherry Orchard today, as it did when Chekov wrote it; and if in addition the earnings of actors and other theatre people have risen from gross exploitation to a reasonable level, who will say that this should not be reversed?... Unless we propose to bring all the arts down to amateur level and expect most of our artists to be content with social security, public subsidy is inevitable; and it will become more obviously necessary as we move beyond mechanisation towards the automation age.[⁽⁴⁶⁾]

As a justification of subsidies not merely static in real terms but continually increasing, this has been a wonderfully successful argument. It sounds so common-sensical, so appealing to people usually deaf to pleas from arts organisations and bureaucracies. It is not unattractive ideology, poor budgeting, low performing standards, or unwise choice of material that causes deficits: it is a law of economics, doubtless capable of algebraic expression.

It is, nevertheless, a fallacious argument. As with most of the economic theories that guided public policy between about 1945 and 1980, it looks at one side of a question, to the total exclusion of whatever may lie on the other. The other side here is that a rise in average incomes relative to the price of everything except the arts will, cæteris paribus, allow an increasing proportion of income to be spent on the arts.

We give this a simple arithmetical demonstration. Imagine a community in which everyone earns £100 per week, and in which everyone spends his entire weekly income in the proportions of £80 on necessities and £20 for a ticket at the local theatre.

Imagine now that increases in labour productivity of everyone not working in the theatre raise the weekly wage to £120, leaving commodity prices unchanged; and that, for whatever reason, this increase is matched for theatre workers, despite their own unchanged productivity. This will not necessarily affect the viability of the theatre. Even if the whole 20 per cent wage increase is passed onto the public in a 20 per cent increase in ticket prices - again for simplicity, we assume that the whole cost of running the theatre is the wages of those working in it - there need be no fall in attendance.

The price of a theatre ticket will now be £24, yet people will still be £16 a week better off: despite the rise in ticket prices, people will be able to afford two extra tickets every three weeks, without diminishing their other spending.

This is a simplified demonstration, but it leaves out nothing essential. The arts fall under the heading of discretionary spending, and in a mature economy such as ours, the proportion of discretionary spending constantly increases. If people today are less willing than their parents to go out to watch plays or attend concerts, it is not because economic progress has priced these things out of their reach: it is because they have what they consider to be better uses for their enlarged discretionary spending.

For the sake of completeness, we will also deny that productivity in theatres has not increased. We mention above Covent Garden's need for new lifts. These, it is claimed, will diminish labour costs, thereby raising productivity. Computerised lighting and booking systems have the same effect. So have many other innovations too numerous to mention. It may still require 15 actors to perform The Cherry Garden, but it no longer requires the same army of people employed off-stage.

We can even say that the productivity of the actors has potentially increased. Modern cameras and microphones are increasingly discreet; and 15 actors may perform The Cherry Orchard to a live audience of 300, few of whom notice that the play is also being recorded for perhaps a million television or cable or satellite or video viewers at home. We can testify that at least for opera-goers, it is now usual to be offered compact disks or videos of what has just been watched; and the sale of these recordings is reckoned among the receipts of the opera house.

However we approach it, the case for subsidy by virtue of cost inflation is to be rejected as entirely fallacious. Whether they be of Bach Partitas or the Berlioz Requiem, performances no more cry out for public subsidy today than they did in the last century.

b) An Insufficiency of Public Demand

A further argument ignores this economistic talk of cost inflation, and admits that whether people can or cannot afford the arts, they are simply not sufficiently interested to make them viable. People are said to prefer Michael Jackson to Sir George Solti, the Beatles to Mozart. If the arts are to survive into an age less barbarous than our own, they must be subsidised.

This is an absurd and an insulting argument. People do not on the whole prefer the Beatles to Mozart any more than they prefer potatoes to peppermints. To be sure, some people will never listen to the Beatles and some never to Mozart; but there is a large majority in the middle who will enjoy listening to both, if in differing proportions. The great mass of people in this country are not cultural barbarians. They are not unable or unwilling to appreciate the artistic achievements handed down to us from the past. The isolated success of classical pieces used on television commercials testifies to this - as does the huge success enjoyed by "Nessun Dorma" from Turandot since its use by the BBC to introduce its coverage of the 1990 World Cup. A large market does exist. It is only necessary to find some way of reaching it.

This has been done by Classic FM, an unsubsidised national radio station that 24 hours each day broadcasts "the world's most beautiful music". It went on air in September 1992. By the May of this year, it had become the biggest commercial radio station in the United Kingdom. According to figures supplied by Radio Joint Audience Research Ltd, it had 4.49 million listeners during the first quarter of this year, ahead of the Irish-based pop music station Atlantic 252, with 3.91 million, and London Capital Radio, with 3.08 million. It exceeded its own target of 2.8 million listeners, without apparently taking any audience away from BBC Radio Three, which increased its own audience from 2.5 million to 2.7 million during the same period.[⁽⁴⁷⁾]

Something similar, if on a far small scale has been done by the First Act Opera Company, which sings to the kind of people commonly referred to as Essex Man and Woman. With a central cast of about four performers, it offers itself to pizzerias, brasseries and private functions. Its repertoire comprises all the most popular tunes from opera - arias from the two Figaro operas, from La Boheme, La Traviata, Die Fledermaus, and so forth. Obviously, it also includes "Nessun Dorma".

"Well, before we saw First Act, we knew nothing about opera whatsoever", said John Sutton, a Benetton manager, as he tucked into his main course at the Cafe des Amis in the small Sussex town of Arundel. "We went to see all the Lloyd Webbers in London", interjected his wife, "but never opera. Now we're totally hooked. We've bought Essential Opera on CD and John, who would never come to anything like this before, can't get it off the car stereo."[⁽⁴⁸⁾

Of course, these indications of what can be done without a subsidy have attracted endless scorn. Classic FM's policy of playing mostly single movements of long works, for example, has been sharply criticised. We find this tiresome ourselves: the prelude to a Charpentier Te Deum, though enjoyable enough in itself, really is better heard as part of a whole: as is the third movement of a Haydn Quartet. On the other hand, when people find one part of a work enjoyable, they will be inclined to go out and buy a recording of the whole and eventually to listen to the whole.

We should also say that Classic FM does frequently play whole works in its afternoon and evening programmes - and not only by Dvoák and Vivaldi, who we will pause to insist were great composers, and should not be despised because the deeper beauties of their music are balanced by an immediate attractiveness on the surface: we have heard at least one performance of Mahler's Seventh Symphony, and we know that the whole of Wagner's "Ring" cycle has been broadcast over four Saturday evenings.

We assert that Classic FM is one of the most hopeful phenomena of our age. Toby Young, Editor of The Modern Review, suspects why it has been so execrated:

It's typical of the cultural intelligentsia to be in favour of popularisation in theory but in practice to throw up their hands and cry "vulgarisation".[⁽⁴⁹⁾]

We know that an appreciation of the arts may often have less to do with an enjoyment of them for their own sake as desire to separate oneself from the masses. Surely there are people who do enjoy the poetry of Ezra Pound and the pictures of Jackson Pollock. But we suspect that success of the modern movement in the arts owed much to the determination of various élites to take up forms of art that outsiders could never possibly enjoy. Equally, we suspect that the attack on Classic FM is partly inspired by an unwillingness to hear Beethoven played and enjoyed on ghetto-blasters in the street.

The Role of Private Patronage

Of course, we do not say that the arts should be entirely financed by a mass market. It is a debased economic liberalism that demands a thing to be produced for the millions or not at all. In a free market, the arts will find many kinds of support. Both Haydn and Sir William Walton benefited from aristocratic patronage. Wagner and Stravinsky were similar beneficiaries, though of middle class patronage. Alexander Pope and Samuel Johnson raised large sums by collecting public subscriptions for works as yet unwritten. A subscription among wealthy admirers raised a capital sum large enough to enable Herbert Spencer, the great sociologist, to continue his life's work free from financial worries. The same was attempted for Beethoven, and would have succeeded but for economic disturbances that embarrassed his patrons. Music publishers, such as Simrock and Schott, subsidised unknown composers of promise from their profits earned on other composers.

The Victorian art galleries and concert halls of northern England were built and endowed by successful manufacturers. The Tate Gallery in London was built by a sugar millionaire. The recent addition to the National Gallery in London was financed by the Sainsbury family from the profits of its groceries empire.

The sources of private funding for arts and other projects are limited in number only by the imagination.

It is the desire of the Lottery Promotion Company to have the surplus from the National Lottery added among those sources. The Lottery should be allowed to become a huge, private patron, to equal Maecenas, the Medicis and Prince Rasumovsky. Not to the Arts Council but to the Lottery young, struggling artists should be able to turn for support and encouragement. It is the Lottery, free from bureaucratic waste and timidity, should make its distinct contribution to preserving what is noble in our national life, and should further enhance this for our own and for future generations.

Four: Replies to Further Objections

Two main arguments have been put forward for taxing the National Lottery. These are - that the football pools companies deserve "a level playing field", and that the Treasury should not have to lose revenue when people switch spending from taxed entertainments to an untaxed National Lottery. We consider these arguments in turn.

a) The Level Playing Field

"The pools could not exist if the national lottery took off" said Desmond Pitcher, Chief Executive of Littlewoods, speaking in 1991. "There is already more gambling per head in Britain than in most other countries in Europe".[⁽⁵⁰⁾]

The pools are seen as part of a working class culture that has been dying since the 1960s. Their total turnover has barely kept pace with inflation in recent years. In 1990, Littlewoods, which has 77 per cent of the market, made profits of £17.3 million, compared with £17.1 million in 1989.[⁽⁵¹⁾] It may be that the National Lottery, once established, will pay out a top prize of £1 million every week, with smaller prizes amounting to £16 million. Compare this with an occasional £1.5 million from Littlewoods, and we can understand the alarm felt by the pools companies. They used all their political influence behind the scenes to delay the introduction of a National Lottery - their 1991 agreement with the Treasury was an instance of this - and they are now campaigning for it to be heavily taxed.

Part of their campaign is to join forces with various trade unions and nostalgic socialists. They claim that the jobs of 70,000 people employed in the pools industry are threatened.[⁽⁵²⁾] In the March of this year, the Managing Directors of Vernons and Littlewoods Pools came together in a formal alliance with the the leaders of the Union of Shop, Distributive and Allied Workers to save these jobs by ensuring that the Lottery should not be allowed to grow too attractive to customers. Members of this Union approached Darlington Council, asking it to join the campaign.[⁽⁵³⁾]

The cry was taken up by more than a hundred Labour Members of Parliament during the National Lottery Bill's passage. Though the Lottery had been promised in the Labour as well as the Conservative Election Manifesto in 1991, the 100 Members demanded that their Party should oppose the Bill for the sake of preserving pools jobs.[⁽⁵⁴⁾] Their subsequent opposition was a cause of much good-natured ridicule. See, for example, Matthew Parris:
 

Try to guess why a socialist MP in the great tradition of George Lansbury and Nye Bevan might object to a Tory government running a mega-lottery. Did Labour spokesmen suggest it was demeaning or vulgar? Pickpocketing the poor? Worshipping materialism? Did they object lest Her Majesty's Government should soil its hands? Not a bit of it. Labour's concern was that a big lottery might threaten the pools industry.

MP after MP, people who would have opposed the idea of the pools when it was first mooted, leapt to plead for this great British tradition. Ann Clwyd, Labour spokesman, told of grandmothers, mothers and daughters who had laboured on the pools down the ages. "It reminded me very much of the mining industry", she said, "where generations had worked in coal. MPs thrilled to the concept of a sisterhood forged by common suffering at the rockface of the coupon pile.[⁽⁵⁵⁾]

But all this arguing is based on untrue facts. Gambling in Britain is not among the highest in Europe. It is among the lowest - £14.40 per head per year, compared with £145.03 in Norway and £48.50 in France, which was the next lowest.[⁽⁵⁶⁾] There is plenty of room for growth that need not be at the expense of the pools.

Again, the pools industry does not employ anywhere close to 77,000 people. According to Charles Miller, who headed initial research into the Lottery,

The pools industry has been shedding jobs for a number of years because of mechanisation and new technology. In 1951 the pools industry directly employed 23,000 people. These days the figure is more like 6,000 people.[⁽⁵⁷⁾]

We should also say that possible job losses in the pools industry, however many there may be, should be no reason for national concern. A transfer of spending from one area to another will necessarily result in a transfer also of employment. All this talk of preserving jobs in the pools industry is at best only Luddism in its earliest and most fallacious meaning.

The rest of the level playing field argument is answered with equal shortness. The football pools are a commercial enterprise. They exist to make a profit for their operators. The National Lottery, in whatever form it may come into being, will exist to improve the quality of national life. Certianly, the pools companies give 5 per cent of their turnover to sport and the arts, but this is money offered and accepted in lieu of tax or the licensing of competition.

We may think it most unjust that the pools companies must pay 42.5 per cent of their turnover in taxes, direct or indirect. We may in the future return to the justice of taxation at this level. But we repeat that where the National Lottery is concerned, the money given to good causes will be the tax.

We mention in closing that the pools companies have secured something like their level playing field so far as regulation is concerned. A series of measures has liberalised the distribution of pools coupons, and the companies are now able to offer larger prizes more frequently than before.

b) Fairness to the Treasury

We accept that an untaxed National Lottery will at first deprive the Treasury of some revenue. We would again urge, however, that the money given to good causes should be regarded as the tax. We also repeat our suspicion that the Treasury will in any case offset the revenue lost by cutting its own grants to the good causes. Substitution may leave the Treasury's position unchanged, or even improved.

Additionally, we urge the Treasury to show restraint for the long term health of this country. During the present century, the share of gross national product taken by British governments has rise from less than 10 per cent in 1913 to more than 40 per cent today. We do not regard this growth as having been at all in the national interest. We will not do anything so fantastic as to claim that a share of government activity unchanged since 1913 would have maintained our relative position in the world unchanged. But we are convinced that the scale of the resources withdrawn from the private sector and their fantastically wasteful and destructive use, has greatly accelerated and worsened a relative decline that was inevitable for other reasons.

Recent governments have realised this, and have attempted to slow where not to reverse the relative growth of the public sector. We would ask that the Treasury should contribute to these attempts by not opening a new source of revenue.

Conclusion
 

The National Lottery may become one of the great achievements of our age. Its product, though as yet unknown, promises to be enormous. We ask you, Sir, to ensure that it shall be a force for positive good, and not just another promising scheme that ran into the sands of smallmindedness and national acceptance of decline.
 

We strongly urge that the operation of the National Lottery shall be awarded to a charitable foundation, and that its untaxed surplus be used to make a uniquely effective contribution to the quality of our national life.

Notes

1. Since we shall throughout this Submission refer continually to "the arts", we apologise now for any impatience that we may cause.

We are aware that "the arts" have come to be used in reference to anything which is not popular or currently profitable, and therefore receives a subsidy from some government agency. This can demean much that may be regarded as the true artistic achievement of our age - our rock music, our television, our films.

On reflection, though, we use the term, because it is convenient, and almost everyone knows what it means.

2. From the Budget Speech, reported in The Financial Times, 17th March 1993.

3. "Levy on tickets satisfies Brook", The Times, 17th March 1993.

4. Ibid. The Inland Revenue had earlier argued for a rate of 37.5 per cent - see "Lottery bill seeks to find safeguards against abuse", The Times, 30th May 1993,

5. Ibid.

6. "The London Economics study [commissioned by the Sports Council], which looked at 141 lotteries around the world, concluded that the proportion of prize money critically affects the success of a lottery. A one percentage point increase in the payout ratio of 50 per cent would raise turnover by about 6 per cent.

"Round the world the payout ratios for lotto games where players choose numbers are in the band 46 per cent to 50 per cent. Passive ticket lotteries are mainly 41 per cent to 45 per cent, while the payout on instant lotteries based on scratching cards 55 per cent to 65 per cent" ("Low taxes urged for lottery and pools", The Financial Times, 2nd February 1993).

7. "Lottery ticket tax angers charities", The Scotsman, 17th March 1993. See also "National lottery levy: sheer greed", The Observer, 21st March 1993.

8. "Charities worried about losing out", The Herald, 18th March 1993.

9. Denis Vaughan, The Case for a National Arts Lottery, Adam Smith Institute, London, February 1990.

10. "Good causes could lose out on £126 million", The Independent, 17th March 1993. He earlier, though, admitted that he had been "rash" to predict a turnover so large. "My figure was basically taken out of the air" he told a House of Commons National Heritage Select Committee hearing - "Lottery forecast 'rash'", The Daily Telegraph, 14th January 1993.

We should say, however, that other predictions are higher and may be better founded. In a report published last May by the GAH Consultancy Group, the turnover was predicted to reach as much as £6 billion - "Huge popularity predicted for lottery", The Financial Times, 10th May 1993.

11. Manufacturing lottery", The Guardian, 30th June 1993.

12. "Theatres 'need £30 million a year from the new national lottery'", The Daily Telegraph, 19th May 1993.

13. "Movie money-go-round", The Evening Standard, 12th may 1993.

14. Stuart Jeffries, "PS", The Guardian, 20th April 1993.

15. "Charles wants YOU to save stately homes", Today, 3rd July 1993.

16. Arts world gambles on big money from the national lottery", The Sunday Telegraph, 9th May 1993. Mr Fleming himself is hoping for money.

17. Letter to the Editor, The Financial Times, 23rd December 1992.

18. Letter to the Editor, The Times, 17th June 1993.

19. "Treasury to take more from lottery", The Sunday Telegraph, 26th July 1992.

20. "Personal Finance", The Observer, 22nd November 1992.

21. "The Great British Lottery", The Sunday Telegraph, 8th November 1992.

22. Ibid. This claim is contested by the National Council for Voluntary Organisations:

"[T]he survey of irish charities was misleading because the sample represented only 0.5 per cent of the Irish charitable sector, and concentrated on the 20 top charities. Recent research in the UK shows that while overall charitable income has fallen, the income of the leading charities has grown, thanks to their greater fundraising potential.

"The NCVO claims that British charities will face a net annual loss of £147 million when the National Lottery is up and running" ("Personal Finance", The Observer, 7th February 1993).

23. "Cuts and neglect take toll of theatres", The Guardian, 19th May 1993.

24. See: Mira Bar-Hillel, "The way to save our Albert", The Evening Standard, 2nd June 1993.

25. "Letters to the Editor", The Times, 14th July 1993.

26. Joan Bakewell, "Time to check into a rescue plan", The Sunday Times, 4th March 1990.

27. Peter Brooke, "Lottery that can create museums as well as millionaires", The Herald, 22nd January 1993.

28. "Only cash can keep Britain Afloat", The Daily Telegraph, 28th january 1993.

29. Letter to the Editor, from the President of the Lawn Tennis Association and others, The Times, 25th January 1993.

30. "Odds shorten on national lottery", The Observer, 22nd November, 1992.

31. L. Hersov and I. Berg (ed.s), Out of School, John Wiley, Chichester, 1980, "Introduction", p. 3.

32. The University of North London Truancy Unit, Truancy in English Secondary Schools: A Report Prepared for the DFE, published in draft by the Department for Education, June 1993, pp. 76-78.

33. Ibid., p. 92.

34. "The cash street kids", The Economist, 28th August 1993.

35. Ibid.

36. Returning to this last, we notice that Roger Rees, chief executive of the Salford City Council, is asking for £37 million with which to build a Salford Arts Centre. He claims:

I genuinely believe that with a population as large as ancient Athens we should, if we have the proper facilities, be able to produce a Euripides...  ("Arts world gambles on big money from lottery", The Sunday Telegraph, 9th may 1993).

No grant of money, however large, we suspect, will turn Salford into another Athens, or Mr Rees into another Pericles. There are one or two further conditions required.

37. Brooke, op. cit.

38. Bryan Appleyard, "Triple jackpot for the Government", The Independent, 25th February 1993.

39. The arm's length way to wave goodbye", The Observer, 17th January 1993.

40. Stephen Johnson on a special tribute to Mr Ferneyhough on his 50th birthday broadcast by BBS Radio Three:

"For many, no doubt, the whole event would have been the epitome of modernist elistism. Before a tiny audience in the Maida Vale studios, quite a few of the faces familiar from music publishers' brochures, two hours' worth of intense, densely textured music unfolded - if 'unfolding' isn't too simply linear a metaphor. At about the half-way point, Ferneyhough talked to David Osmond-Smith, in language almost as dense and hyper-active as his music. We heard of 'the temporary, illusory reconstitution of the self', and warnings of the dangers of 'post-Adorno recommodification' - God preserve us all!" ("True songs for a melody-starved age", The Independent, 3rd July 1993).

41. Even so, while current taste can often surprise later generations, there are very few instances of genius wholly unrewarded in its own time. Both Mahler and Beethoven did well as musicians. Though not spectacular, Mozart's earnings towards the end of his life would have been enough to support him in respectable comfort, but for his spendthrift ways.

Regarding Keats, we have yet to be persuaded by a single line of Endymion or his lesser works that he was indeed a genius. He might well have lived longer and improved the human condition rather more, had he stayed an apothecary's assistant and kept his childish comments on the sameness of beauty and truth to himself. The savage reviews by Lockhart and Croker have been cited during the past 170 years for the support and comfort of legions of other bad poets, but still seem to us quite justified, if a little harsh.

42. Lord Keynes, "The Arts Council: Its Policies and Hopes", The Listener, 12th July 1945.

43. Quoted in Caroline Lees, "Arts Council condemned for wasting time and money", The Sunday Times, 30th May 1993.

44. Ibid.

45. This has for some time been suspected by the Council's own directors. A member of the Council said in 1990:

"There is a growing feeling that the point of the Arts Council is becoming less and less obvious" ("Arts Council ponders and diminished role", The Times, 26th November 1990).

46. H. Baldry, The Case for the Arts, Seeker & Warburg, London, 1981, pp. 10-11.

This is not an argument original to Mr Baldry, but derives from the work of the American economist William Baumol - see Baumol and Bowen, Performing Arts: The Economic Dilemma, New York, 1966.

47. "Classic FM secures victory over pop with 4.49 listeners", The Guardian, 4th May 1993.

48. "Arias a la carte", The Independent, 31st May 1993.

49. Quoted in, "Classic FM: successful overture or symphonies gone to the devil?", Scotland on Sunday, 31st January 1993.

50. "Winning ways of pools family", The Sunday Times, 28th April 1991.

51. Ibid.

52. "The Great British Lottery", The Sunday Telegraph, 8th November 1992.

53. "Pools alliance to fight job losses", The Herald, 15th March 1993; "Fight lottery, says union", The Northern Echo, 15th March 1993.

54. "Lottery rebels put Smith on the spot", The Evening Standard, 20th January 1993.

See also Jane Kennedy MP, Letter to the Editor, The Guardian, 25th January 1993.

55. Matthew Parris, "Political Sketch", The Times, 2nd February 1992.

56. National Lottery Sales and Related Per Capita Expenditure Per Annum - Opax International, 1991
 

Figures supplied by the Lottery Promotion Company.

57. Quoted, "The Great British Lottery", The Sunday Telegraph, 8th November 1992.