Dáil debates

Wednesday, 17 April 2013

National Lottery Bill 2012: Report Stage

 

11:20 am

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Amendment No. 1 in the name of Deputy McDonald is, unfortunately, out of order.

Amendment No. 1 not moved.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I move amendment No. 2:

In page 6, to delete lines 28 and 29.
We debated the matter to which this amendment relates on Committee Stage. As the Minister acknowledged at that point, the national lottery has been a great success story for a number of decades. It has provided money for good causes, prize money for the public and is considered, not least by him, as a model of good practice. I invoke the old adage "If it ain't broke, don't fix it" in respect of the national lottery. There is deep concern to the effect that the changes to the model have the potential to undermine the very good work done and the great success achieved by the national lottery.

As the Minister knows, I am opposed to his plans for the national lottery, for which reason I have moved this amendment.

11:30 am

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We debated this matter at length on Committee Stage. I restate my opposition to what the Minister is doing. There is no reason to change something that has worked well. Gambling is not something I endorse or promote. When the lottery was first introduced, many of us were concerned about the State's involvement in promoting gambling, but at least it was controlled and the proceeds of the national lottery have gone towards funding many good causes. If there is going to be gambling in society, and we probably cannot do much to prevent that, most people believe that it should be done in a controlled way and that the proceeds should go towards society and good causes so that sports, the arts and so on might benefit.

Moving the national lottery further away from direct public control to a more privatised model, with the likelihood being that private companies, quite possibly foreign, will seek the contract to run it, is a retrograde development. The only carrot that the Government has used to package its proposal is the idea that this move would be used to finance the children's hospital. We all want that to be financed. As stated on Committee Stage though, there is no reason that an element of the funds currently intended for good causes on an annual basis could not be ring-fenced to fund the children's hospital without the necessity of a privatised national lottery, one that would begin to focus more on making profits and expanding online gambling as well as the entire lottery compared with its currently controlled form.

I do not see the necessity behind this move. We can have a children's hospital and retain the national lottery's current model. Will the Minister reconsider his proposals under this legislation?

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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I have grave reservations. The system that has been in place for many years has served us well and has worked. We will call it a safe form of gambling. Like Deputy McDonald, I am concerned that we are trying to fix something that is not broken. Unfortunately, that seems to be the Government's tendency. For example, local partnership companies are being broken up for no good reason. I am concerned about the Government's approach under this Bill. For that reason, I am not supportive of the Government's actions.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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As Deputies stated, we have debated this matter at great length on Committee Stage. Despite the best efforts of the Chair, we had a debate on Second Stage and an exchange of views, which was not normal. It has all been helpful.

The rationale is that the licence for the national lottery is due to be reallocated. Contrary to what the Deputies opposite have stated, it was always open to anyone in the European Union to bid for the licence when it was available. The last time that the lottery licence was allocated, a Swiss company came close to winning the bidding. As events transpired, An Post won the lotto licence on the two most recent occasions that it was allocated.

Shortly after entering into office and because we were desperately short of capital to build the infrastructure the country needed, pre-eminently the requirement to build a new national children's hospital, the Government made a decision to try to find an innovative way of providing capital funds to ensure the hospital's construction. Deputy Boyd Barrett and others have suggested that the hospital could have a dedicated lotto or a portion of the lotto stream over the next God knows how many years. These are possible, but they would eat into the funding stream for good causes. Many people were sceptical of the lotto at its inception, as Deputy Boyd Barrett acknowledged he was, but it has since provided in excess of €4 billion for good causes. Sports, arts, health and community organisations are to the good because of a funding stream that would not have been available from any other source.

The Bill's objective is to build on the good foundation stone - I acknowledge that the lotto has been a good model - and to ensure that everything we have learned of best practice, for example, in protecting minors and compulsive gamblers, is incorporated in this legislation. We must transfer elements from the operation of the lotto to the general gambling space. During our debates, we touched on the wider issue of gambling generally beyond the structure of the national lottery. A great deal comes at us now in the form of online casinos and God knows what else. In many ways, I am not a gambler, thank God, although I suppose that I gamble in politics.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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The Minister gambled in government.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Not too much, I hope. In terms of the structure being put in place, the fundamental difference is that we are asking for an upfront payment, the reason being to build the national children's hospital, infrastructure that the country sorely needs.

Deputy McDonald's amendment would repeal the section that repeals the National Lottery Act 1986. We are replacing that Act by building on its good elements and expanding its provisions in the way we have determined. We need to do so to install the new structure. Not only is this right, but it is also appropriate at a time when we need access to capital to undertake important works.

Question, "That the words proposed to be deleted stand," put and declared carried.

Amendment declared lost.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Amendment No. 3 arises out of committee proceedings. Amendments Nos. 3, 4 and 24 are related. Amendment No. 24 is an alternative to amendment No. 4. Amendments Nos. 3, 4 and 24 will be discussed together.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 3:

In page 6, between lines 29 and 30, to insert the following:"4. The National Treasury Management Agency shall manage that portion of the proceeds from the sale of the National Lottery Licence designated for the National Children's Hospital.".
I welcome the opportunity to contribute on this topic for a third time. When I raised it on Second Stage, my understanding was that the Minister wanted to ring-fence this money for the national children's hospital. He, the Minister for Health and the Taoiseach have stated it time and again. I tabled an amendment on Committee Stage to assist the Minister in ensuring that there would be money for the national children's hospital. Doing so was necessary. Under normal circumstances, money goes into the general government coffers. When the Government sold the 4G licence last year, that money went towards reducing the national debt. I wanted to ensure that the same would not occur in respect of the funding that the Minister asserts is being raised for the national children's hospital. I wanted a mechanism to be in place to protect that money.

I have been disappointed.

I accept the Minister's good intentions but they count for nothing. When one gets to 31 December and the Department of Finance is doing its end-of-year calculations and deciding what proceeds go where, the good intentions of any individual Minister regarding the projects for which he would like to protect funds will count for nothing. Unless it is specified in legislation the Minister has no legal basis for standing up his good intentions. That is the reason I tabled the amendment on Committee Stage, at which time we had a detailed discussion. I believed we made progress on Committee Stage because the Minister appeared to be convinced of the need to examine the issue. He expanded on his commitment and how he would deal with my amendment. On the basis of the understanding I had reached with the Minister, I did not push the amendment to a vote. I listened carefully to what he said on Committee Stage and I crafted an amendment to coincide with it. I already tabled two amendments on the issue. In amendment No. 3, I sought that the National Treasury Management Agency would manage that portion of the proceeds from the sale of the national lottery licence designated for the national children’s hospital. It was an option for the Minister to consider but he did not have to specifically do it. I merely offered a helpful suggestion. I would be happy if the mechanism could be adopted but if the Minister could find a better one I am open to hearing who he decides would hold the money aside in an account.

My amendment No. 4 proposes: "The Minister shall, within one month of the enactment of this Act, bring forward a report outlining how the proceeds from the sale of the national lottery licence shall be ringfenced for the purposes of meeting the cost of constructing the National Children’s Hospital." I was happy once the Minister gave a commitment that we would have a report within one month of the enactment of the legislation on how he would ring-fence the proceeds if he did not have time to get it done between now and the final passage of the legislation through the Oireachtas. I was providing time following the enactment of the legislation for the Minister to do that. We had such a debate on Committee Stage and I believed some progress had been made in that regard.

As a result of the Committee Stage debate I tabled amendment No. 24 in which I allow the Minister more latitude to put a mechanism in place to protect the children’s hospital. The amendment states: “The Minister shall, within one month of the licence being awarded...” The licence must be awarded before the end of the year. I am giving the Minister until the end of the year to bring forward a report outlining how the proceeds from the sale of the national lottery licence shall be ring-fenced for the purpose of meeting the cost of constructing the national children’s hospital. The reason I took that approach is because of what was said during the Committee Stage debate. I have transcripts of the debate. If Report Stage is to mean anything it should follow on from the manner in which amendments were dealt with on Committee Stage. I was happy with the response to some of the amendments tabled on Committee Stage and I have not tabled them again. It was not necessary to prolong the debate on certain amendments but some issues remain to be resolved that relate to the essence of the legislation. The Minister said one of the purposes of the legislation is to get funding for the national children’s hospital.

During the Committee Stage debate the Minister said in response to a previous amendment that he had no wish to report within one month of the enactment of the legislation because he would not know how much money he would have until such time as he went through the tendering process. He then added: “Only when we conclude the sale will we know the volume of money and whether I have enough to build a hospital, whether I have a significant surplus or what the story will be. However, I would be happy to give a commitment to the committee and the Chairman, once the national lottery licence is sold, placed and taken up, to come and explain exactly what to do with the money.” Hence, my amendment today follows directly from the Minister’s own words, to bring forward a report within one month of the national lottery licence being awarded. My amendment is specifically based on the Minister's own words and commitment on Committee Stage that when he knows the proceeds he will have from the sale of the national lottery licence, he will come back with a report. I framed the amendment specifically on that basis and I expect the Minister will accept the amendment because it is not my amendment; it is the Minister’s own, although he did not table it today.

If his words mean anything the Minister must accept the amendment because since the debate began, even going back to the programme for Government, it was indicated that the proceeds from the sale of the national lottery would be ring-fenced for the purpose of the national children’s hospital. That has been said ad nauseamand as part of the good PR in terms of trying to get some traction for what we are doing, namely, selling a national asset. We will have a wider debate on other national assets on another day. Commitments have been given in the context of other national assets on how things will be protected. This is the first acid test for the Minister on the sale of a national asset, in this case the national lottery licence, which is worth hundreds of millions. It would make any commitment we would ever get on the proceeds of the sale of a national asset look shallow if the Minister could not include a commitment in the legislation for the purpose we have discussed ad nauseamfor the past two years. Reference has been made to providing funding for job creation purposes but we will not believe that if we cannot believe the commitment on funding for the national children’s hospital.

During the extensive discussion on Committee Stage the Minister said he “would be happy to give a commitment to the committee and the Chairman, once the lottery licence is sold, placed and taken up, to come back and explain exactly what to do with the money”. I made another suggestion to the Minister to make life easier for him. I said that the next time the troika is in town – it is due every three months – I would be happy for the Minister to get it to agree to a reference in the revised memorandum of understanding, as there is always an update following each visit, that the funding could be used for this purpose. Therefore, even if the Minister does not want to include such a reference in the legislation, I would accept its inclusion in an updated memorandum of understanding following the next visit of the troika. I would accept a reference to the fact that the Government could use a portion of the funding for the national children’s hospital because it would be backed up by the EU, the European Central Bank and the troika and signed off by Ministers. I would be happy with such an alternative. Perhaps the Minister will confirm whether he could do that.

When I put the suggestion to the Minister he replied that he would reflect on the matter. He said that if his bona fides are accepted, he volunteered to come back once the licence has been issued. The Minister accepted it was a good idea and that he would see if satisfactory agreement could be reached with the troika but that it was not his “normal practice to open up discussions again because one never knows where these things will meander”. He gave the impression at the committee meeting that the troika knew the money would be allocated to the national children’s hospital. I asked him to put that in writing. The Minister said then that he would not like to revisit the issue because one never knows where one might end up. To me that was an example of how genuine the commitment was that he had from the troika.

Before we concluded the debate the committee Chairman said: “Before I put the question I will clarify for the committee that, regardless of what happens on Report Stage, the Minister has made a formal offer to come before the committee after the licence has been awarded and a specific sum has been set aside. The committee will then engage with him on that issue. That is a formal proposal.” The Minister, Deputy Howlin, replied “Yes, it is.” He agreed to the formal proposal from the Chairman following the debate to come back following the awarding of the licence. Hence, my amendment No. 24, which I hope the Minister accepts because it is based on his words. I gave him every opportunity to be agreeable by using his words.

People understand simple things in terms of how they affect their daily lives. If an organisation were to go onto the streets in any part of the country today to collect funds for a worthwhile cause, let us say the national children’s hospital, and it told everyone that the money was ring-fenced for the purpose, but following the collection it did not ring-fence the money for that purpose, the Minister for Justice and Equality and the Garda Síochána would have a problem with the fact that people had said they were collecting money for the national children’s hospital but did not use the money for that purpose. I could use strong words for how ordinary people would perceive the issue.

I am worried that the Minister has said so much about this, that he is collecting this money for the national children's hospital, but we have not seen a firm commitment from him. I look forward to his response on this matter. The Minister is allegedly collecting money from the sale of the national lottery licence for the national children's hospital but we have no proof that the money will be used for that purpose. It is a simple, basic point. The people of Ireland understand the principle of people collecting money for a specific purpose but are worried that the funds will not actually being used for that purpose, having given their consent to that. I look forward to the Minister's response and will be happy if he accepts amendment No. 24, in particular, which gives him the maximum amount of time necessary. That amendment gives him until next Christmas to agree that within one month of the licence being awarded, he will bring forward a report outlining how the proceeds of the sale of the national lottery licence will be ring fenced for the purpose of meeting the costs of the national children's hospital. That is the commitment the Minister gave on Committee Stage and I look forward to his agreeing to my amendment.

11:50 am

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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We have debated this issue at length. The Deputy says that he trusts my bona fides and accepts my word, yet he wants to write it into law. I have explained that the genesis of this was that we wanted a capital fund. I do not know how much we will get but I hope we will get more than enough to allocate to the national children's hospital. The bulk of the money will be going for that purpose. That is written in the programme for Government and is repeatedly on the record of this House, including in the debates on all stages of this Bill. It is also in the capital programme, published by the Government and endorsed by both the Government and the House. It is very clear that this is what we want to do.

To try to address the issues brought forward in good faith by Deputy Fleming, I gave an undertaking on Committee Stage to revert to the House once the sum of money we raised was known and to explain how it will be used, shortly after the final arrangements are made. I think that is a reasonable way of dealing with this issue. I hope my bona fides on this are accepted. It is not appropriate, according to the advice I received from Parliamentary Counsel and others, to put that into legislation because this legislation deals with the national lottery licence but 20 years from now, the purpose of the initial capital moneys will not be relevant. Therefore, it should not be included in the legislation. The Deputy should accept what I have said, which is on the public record, including on the record of the Dáil and the Seanad, as well as is in the programme for Government and the capital plan. That is what the money is for and I can do no more if the Deputy does not accept that.

Subsequent to the extensive discussions we had on Committee Stage, I met Mr. John Corrigan of the National Treasury Management Agency, NTMA, and discussed the question of how to deal with this matter in the context of the likelihood that we will have the money in advance of the call on the money. Initially, we thought that the actual construction of the national children's hospital and the availability of the money from the sale of this licence would be happening in parallel. Unfortunately, however, due to the planning difficulties with the hospital, the construction is not happening with the speed we would like. It will happen, I hope, with great speed but it is not happening this year. However, it looks like we will have the up-front payment this year. I have discussed with the NTMA how we would construct a particular account and I will give full information when we know the amount of money involved and we have all of the details on that. In the interim, I reaffirm that it is my intention to allocate a significant portion of the up-front payment that we get from the sale of the national lottery licence, assuming it is sufficient, to that purpose. I hope the Deputy will be satisfied and accept my word on that.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I accept the Minister's commitment but I cannot accept that it is not going into the legislation. I will cut to the chase on this. The funding for the construction of the national children's hospital is not going to be required until 2017 or 2018. Neither the Minister nor I know whether we will be Members of this House, not to mention members of Government, at that stage. While the Minister's bona fides are not in question, he cannot tie the hands of a Minister who will be in Government in three or four years time, when it comes to finding the money for the national children's hospital. His good words should be legally binding on the Minister in three or four years time, when the funding is required. I cannot accept that we cannot include this in legislation. The Minister has given the weakest excuse I have ever heard, that the Parliamentary Counsel says that it is not appropriate because when the next licence is to be issued, the reference to the national children's hospital will not apply. That will happen 20 years from now and I think the Oireachtas will be well capable of amending the legislation, if necessary. I have already moved amendment No. 3, which is being discussed with amendments Nos. 4 and 24 and wish to inform the Minister that I will be calling a vote when we reach amendment No. 4.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Is amendment No. 3 being pressed?

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Yes.

Amendment put and declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 4:

In page 6, between lines 29 and 30, to insert the following:4. The Minister shall, within one month of the enactment of this Act, bring forward a report outlining how the proceeds from the sale of the National Lottery licence shall be ringfenced for the purposes of meeting the cost of constructing the National Children’s Hospital.”.

Amendment put:

The Dáil divided: Tá, 39; Níl, 90.

Tellers: Tá, Deputies Michael Moynihan and Aengus Ó Snodaigh; Níl, Deputies Paul Kehoe and Emmet Stagg.

Níl

Amendment declared lost.

12:00 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 5:

In page 7, between lines 9 and 10, to insert the following:"7. The employment rights of employees of the National Lottery and the contractual rights of agents of the National Lottery shall be protected by this Act.".

This would allow for the employment rights of employees of the national lottery and the contractual rights of agents of the national lottery to be protected by the Act. The lottery is being put out to tender and I would like to see An Post win that tender because it has done an excellent job up to now of running the lottery over many years. The public have great faith in the operation of the lottery. It is possible as a result of the tendering process, however, that the person with the biggest cheque will win. Perhaps the Minister will explain the criteria for awarding the licence. Will the person who offers the largest cheque get the licence or must bidders show a commitment on how they will develop and operate the licence?

I am concerned that there would be specific provision in the legislation that the contractual rights of employees of the national lottery and the contractual rights of its agents would be protected. If a consortium involving An Post won the contract, I am sure it would continue with the existing arrangements, which have worked well, but if the licence is awarded to a company from outside the country, there must be provision to protect the contractual rights of employees and lottery agents.

12:05 pm

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I indicated on Committee Stage that my officials had discussed the matters of staff rights, the future and the transfer of undertakings with the national lottery company. All relevant parties - the company itself, the management of An Post and the representative trade unions of the workers involved - focused on the clarification of all issues arising in the context of the new licensing regime. That is the normal way to do these things and the Deputy can rest assured the legal rights of staff will be completely safeguarded. I do not propose to write that into the legislation because labour legislation protects workers and all of the notions of contract rights are enshrined in labour law, rather than doing it on a case by case basis in the Bill. I am mindful of the rights of current workers, many of whom have a variety of rights, such as some of them being able to return to An Post, and all of that is being discussed by their representatives with my officials. We have also discussed the protection of agents' margins, another issue that will arise later in the debate.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Will the transfer of undertaking be binding on companies from outside the EU or would it only be binding on companies that have the same approach to employment and EU directives under EU law? Will the Minister include something on this topic in the licence agreement when it is put out to tender so that it is clear to those who are bidding for it that if they are awarded the licence, they must observe the normal transfer of undertakings?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Since the company will operate in Ireland, it will be subject to Irish and European law. The normal transfer of undertaking arrangements that apply in law across the Union will apply.

Amendment, by leave, withdrawn.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Amendment No. 6 and amendments Nos. 9 to 22, inclusive, are related, with amendment No. 17 being an alternative to amendment No. 16. We will take amendments Nos. 6 and 9 to 22, inclusive, together.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 6:

In page 7, to delete lines 12 to 19.
There are quite a few amendments being taken together and they all relate to the regulator. This amendment proposes to delete lines 12 to 19 on page 7, which essentially allow for the regulator of the national lottery. We discussed this at length on Committee Stage and I found that discussion helpful in that I got some information that I had not been fully clued into beforehand. Arising from that information, it is now all the more necessary that we move these amendments.

The Minister made it clear the new national lottery licence will be handled by the Minister and the Department, as has always been the case, with him setting the terms and conditions, fees, remuneration levels and all other aspects. He will collect the money and allocate it appropriately. Then, however, he told us that he will set up a regulator for the national lottery. Why? If the intention was that the new national lottery regulator would administer and run the new licence process, like many other regulators do, such as the regulator that handled the competition for the 4G licences, that would be fine. Someone has got to the Minister, however, and he is following current fashions, whereby every time something needs to be done, we have to set up a regulator. It is obvious that the Minister will do all the work, as his predecessors in the Department did. He has already admitted he has hardly ever heard a squeak from the public about it, and there were hardly any parliamentary questions on it.

12:15 pm

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Then look what happened. When there was never a blip, they got their six and nine mixed up.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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They did not have the six and nine marked; I saw that. There were extra-lucky winners and that is the luck of the draw. I was conscious of that when I was talking about the-----

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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The bonus was wrong as well.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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The bonus was wrong as well.

I am always minded of the lottery when before it used to spin the wheel, Mr. Ronan Collins or whoever used be on always had this independent auditor from KPMG standing by to ensure everything was okay. In my constituency, anybody who saw this senior accountant there ensuring everything was right when the person went to spin the wheel asked what use he would be, that if the wheel did not spin, it is a technician one would want, not an accountant. They thought this guy was there to ensure the wheel spun properly. People view matters in extraordinary ways. They saw no need for the accountant but the need for a technician in case the wheel got stuck or whatever.

All those side-issues aside, this lottery regulatory is not needed at all. The Department has done a great job up to now and An Post has done a great job. I hope whoever will get the next licence will do equally as good a job. I do not know what that person will regulate because he or she will not be required to issue a licence for possibly 20 years. If there was ever a case of a new quango - I use that word and will return separately to sunset clauses with which we will deal later - not being required, this is the definitive one. The regulator is being set up with the job. There is nothing to do only watch the results every week, or every day or night, as the draws take place. If the Minister were looking at this again in the cold light of day, he would not even establish this regulator or else he would have the regulator in situ to run the competition. Because the latter is not happening, I see no need whatever for this regulator.

The Government will set up an office of independent regulator. He will have to report to an Oireachtas committee - the operator will have to do all that. There will be a head office. There will be lease agreements. It will be possibly amalgamated with other regulators to do with gambling when the time comes - that may never happen. If there was ever a case for the Minister to save money for the Irish taxpayer, he should let his Department carry on the good job it has been doing up to now in overseeing the lottery licences and overseeing the lottery operation, and forget about Part 3 of the legislation that deals with the regulator. I ask the Minister to continue to do the good work his Department has been doing. This is an unnecessary quango of no benefit. If one thought about why the Government is doing this, there is no good case for this lottery regulatory for the next 20 years.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I understand we are taking together all of those amendments referring to the regulator.

I understand why the office of regulator is being established in this legislation. I recall from the Committee Stage discussions that the Minister indicated that in the first instance the regulator's concern will be the national lottery but that it is envisaged that the regulator would have a broader role. This is the core point of the legislation that illustrates most graphically the shift in model. Of course, the regulator is necessary because the core public interest basis of the lottery is to be replaced by a privatising-for-profit model. The regulator will mean that the Minister will no longer have any involvement in the company, hold shares and appoint directors. That is the rationale for it and it is a worrying one.

As I said to the Minister earlier, in the course of this debate at Second Stage he stated, "It is fair to say concerns have never been raised about the integrity, probity or ethos of our lottery." That is correct. My party has acknowledged that it has been a success on every front. The licence is up again for renewal. That is not an issue. That, in itself, is not a rationale for changing the model so fundamentally but the Minister is choosing to do so. The office of the regulator most clearly points to that shift in ethos which is not a desirable one for the lottery or its beneficiaries.

Amendment No. 17 is contained within this basket of amendments. I raised this with the Minister on Committee Stage. It relates to a person holding the position of regulator who would then leave that position and the legislation envisages a 12 month prohibition for that person in respect of taking up another position in the private sector that might constitute a conflict of interest given his or her public role. As I pointed out on Committee Stage, that runs right against the grain of the programme for Government commitment, which states, "We will amend the rules to ensure that no senior public servant (including political appointees) or Minister can work in the private sector in any area involving a potential conflict of interest with their former area of public employment, until at least two years have elapsed after they have left the public service." The commitment states "at least two years", and yet the Minister, in establishing this office of regulator, is sticking to a 12 month prohibition period. I could not understand on Committee Stage why the Minister would not accept my amendment, given that it is in line with the programme for Government commitment. Also, the nature of the lottery, and the gambling sector across the State in which, as the Minister has told us, he envisages the regulator having a role, is all the more reason the Minister would provide for a two-year cooling off period should the regulator leave that position.

I ask the Minister again to reconsider it. I ask him to support this amendment. It makes sense. As the Minister will be aware, I am opposed to this legislation from start to finish. I do not believe that he should be tampering with the model of the lottery but if he is intent on establishing an office of regulator, surely he should stick at a minimum to his own programme for Government commitments in respect of the public interest and public confidence in any individual who would take on that role of regulator. I commend amendment No. 17 to the Minister.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The fact the Minister is setting up an office of regulator really is the giveaway that the Government is going for privatisation of the lottery. His line on this legislation and on this new development in terms of the lottery is that not a great deal is changing except that the State will get money up-front for the children's hospital but the setting up of the office of the regulator belies that fact. The Minister needs a regulator because he is letting off the leash the lottery, and potentially gambling, previously controlled by the Minister and operated by a semi-State company controlled by the State, and putting it very likely into the hands of private for-profit companies. If not much was changing, the Minister simply would not need a regulator. I support the amendment in the same context as I oppose the entire move and the Bill itself.

The history of regulators is not a good one. That is linked to the fact that regulators seem to be set up precisely when we are letting important sectors of the economy off the leash and they have failed, time and again, to control the sectors that they are supposed to control. The most obvious example is the Financial Regulator's abysmal failure to control the banking and financial sector with devastating consequences for the economy but another example I cite is the Taxi Regulator.

Few taxi drivers have a good word to say about the Taxi Regulator given the utter failure of that regulator to control the taxi industry with pretty devastating consequences for that industry, which was deregulated from its previous position. That is another strong case for the establishment of a regulator and the Minister has not really done that because he does not want to acknowledge that something is happening in terms of the privatisation of something that has rightly been controlled up to now by the Government.

It goes against the grain of the Government's commitment to reduce the number of quangos when here we are setting up another one. Why can this not be policed as has been done in the past? With people being hit left, right and centre with austerity measures and cuts, it will grate with people to establish yet another quango.

12:25 pm

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I thank the Deputies opposite. This is a broad range of amendments, all dealing with the establishment of the National Lottery regulator, including the terms and conditions etc. Section 7(1) provides for the establishment of the National Lottery regulator. Section 7(2) states: "The Regulator shall be appointed by the Minister on such terms and conditions, including remuneration, as the Minister may determine." Section 7(3) states: "The Regulator shall, subject to this Act, be independent in the performance of his or her functions." The fundamental question Deputy Fleming posed very strongly on Committee Stage and restated here was to ask why the Minister is establishing a new office to regulate the National Lottery, which is a reasonable one. I want to outline the approach as to why the Government deems it appropriate to have a regulator.

For the purposes of the competition for the next lottery licence, it is considered that a better outcome for the State can be arrived at if the office of the regulator is an independent office from Government. The Bill provides that the regulator's office will be fully funded by the operator. It is not intended to be an elaborate affair. The lottery is a significant business with a turnover of €750 million - hopefully that business can grow. There are significant administrative issues involved. There are issues of determination of games to determine what games are appropriate. I believe we need a small specialist unit to do that. It does not need a big staff. Hopefully it will have particular expertise and will be able to look at international best practice and so on rather than simply be - with all due respect to very competent civil servants who have done this to date - civil servants temporarily assigned among many other duties to do this. It will be a modest set-up.

As Deputy McDonald mentioned, a comprehensive gaming Bill is being prepared. I am not sure how long it will take for the Department of Justice and Equality to complete it. There is a general view that while we have robust tight regulation of the lottery, as we always had and will have under this new legislation, there is a considerable amount of other gambling, including small-scale casinos, some of which have appeared in my constituency, of which there seems to be no regulation. There is also online gambling. Coming home late from a meeting and turning on the television, one will be invited into these online casinos and God knows what. We need to have overarching legislation that is much broader in scope than what is envisaged here. If we are to have a gambling regulator - this is the discussion I have had with the Minister for Justice and Equality, Deputy Shatter - I believe this could be the nucleus of it. That is something I have said. Obviously that will be for further legislation the Minister for Justice and Equality will determine and bring forward. We can all debate that in due course, but a case for it can be made.

I will deal with some of the general issues raised and then go on to some of the specifics. Deputy Boyd Barrett made a general criticism of regulators. By and large international experience is that regulators work. However, regulators are only as good as the base legislation that we put down. The Deputy has rightly underscored the failure of financial regulation in the State. However, was that the failure of the regulator or was it because the regulator was disempowered by the overt policy of Government at the time, which wanted light touch regulation? That was the mantra. When a committee investigated it, there appeared to be a policy to break up the centralised power of the then Central Bank into a light-touch regulator. I believe it was the policy of Government not to have robust regulation, rather than the failure of the regulator to regulate. I am not as versed in the Taxi Regulator's failings or otherwise and I do not want to go into it. However, my main point is that the regulator is as effective as the legislation and the terms of reference given to that regulator. Internationally, regulators have proven very good consumer protectors to ensure that in an open market if there is free enterprise with competing - whether it is lotteries here or anything else, sometimes a monopoly - that it is done in a way that is consumer focused and implements social policy as determined by law and central Government and that is done in a clear transparent way.

While Deputy Fleming is opposed to the regulator in principle, he proposed that a regulator - should there be one - should be amenable to freedom of information and to the Oireachtas. Both of those will happen, which represents an important advance. Freedom of information requests will be available and the regulator can be brought before the appropriate Oireachtas committee to test policy and ensure it is fairly and manifestly implemented.

I disagree with Deputy Boyd Barrett in his general criticism of quangos. It is often portrayed that there is a huge phalanx of non-governmental organisations that are wasting money. By and large the big so-called quangos are the most effective agencies for delivering State policy. Some of them have large staffs, including Enterprise Ireland, whose chief executive I met this morning, IDA Ireland, the National Roads Authority and the Environmental Protection Agency. Such agencies and others are doing sterling work and have been downsized. We have carried out a root-and-branch analysis. I have asked every line manager to see what can be brought back into the Department, what manifestly should be done at arms-length from the Department, what can be done more efficiently and what can be amalgamated. We have done many amalgamations, all set out on my Department's website, and we have more to do. While I am not suggesting they are quangos, we have rationalised, for example, the vocational education sector very dramatically. There will be further rationalisation in the local government sector, some of which will be opposed and some of which will be accepted on the benches opposite. We have done a lot of that. We have a robust record on the quangos front after two years.

Deputy McDonald raised an important issue in amendment No. 17 on the cooling-off period. She rightly instances the programme for Government commitment. As she knows I have established a reform unit within my Department.

We will be very busy in committee in the coming months with regard to a number of Bills which will be published during this session. The heads of many of these Bills have already been discussed at committee, including on freedom of information legislation, a register of lobbyists, whistleblowing protection and inquiries, and all of these will come on stream. I was involved in whistleblowing legislation because I had personal experience which brought me before the High and Supreme Courts, and having outstanding legal liabilities of €500,000 is a vulnerable place to be. Whistleblowers should not be in this position, and neither should those who give information. We have a job of work to do on this front.

With regard to the cooling-off period we can all see cases in which, without knowing the individuals concerned, it is just not manifestly right that people would walk out of a regulatory or supervisory role in a Government Department or agency and become gamekeeper turned poacher in one fell swoop. We must have a cooling-off period. We have taken extensive submissions on this, and when we introduce the regulation of lobbying Bill we can have robust debate about it. I am open to hearing views on it. I want to be fair. I do not want to have the debate now, but the issue is presaged by this legislation with regard to establishing a cooling-off period.

We must be fair to people and not deprive them entirely of their livelihood for an unfair period. We examined what happens elsewhere. I suggest 12 months is an appropriate and proportionate cooling off period for people involved in a regulatory role before they get involved again. It is a judgment call and when the generality of the issue is determined on the lobbyist Bill I will listen to argument on it. Proportionately with regard to this legislation 12 months is the appropriate cooling-off period I would like to have supported in House.

12:35 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I asked why have this new regulator and in his opening remarks the Minister stated he felt it would be better if the next lottery licence were carried out by an independent regulator. If the Minister believes this he should have it for the current competition-----

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Ideally I would.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Is it possible for the Minister to extend the licence for six or 12 months to allow this if he believes it is better that an independent regulator runs the lottery competition, as he believes should happen in 20 years time? We will agree to disagree. I do not see the urgency to pass legislation to establish the national lottery regulator to run a national lottery competition licence in 20 years time when the House could be dealing with 1,000 more urgent issues. If the Minister thinks it is such a good idea that a regulator does it he should practice what he preaches and put in place a regulator now, even with a temporary mechanism, or hold a competition for several months. The Minister does not need the money for the children's hospital this year. It could arise next spring. It does not have to be before the end of December. I presume the current national lottery licence has a mechanism. Given the Minister is so convinced the current competition would be better if it were done by a regulator, whoever he would have to clear it with, regarding EU procurement, extending the licence or the troika, would happily agree on the basis the Minister was doing it solely to allow an independent regulator conduct the licence rather than it being conducted by a Minister. We will not debate the licences issued by Ministers of the previous Government of which Deputy Howlin was a member. Perhaps he has learned a lesson but he should implement it. Perhaps it is better that a regulator conducts the next competition.

Given that we have 30,000 fewer public servants than we had several years ago the OPW has office space available to it. If a regulator is put in place, but will be merged with a gambling regulator in the future, I ask the Minister to ensure this new regulator does not sign up to a 35 year lease which cannot be exited when the regulators are to be merged. I ask the Minister not to enter into any commitment for the new regulator next year, because from what he has stated it will be a temporary arrangement until we have a larger suite of regulators.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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The Deputy has only a two minute slot.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I ask the Leas-Cheann Comhairle to clarify.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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The time limit for a Deputy's second contribution is two minutes.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The points have been largely made. Regulators dealing with market forces deal with a different type of regulation and we could certainly examine issues in this regard. One must think carefully when giving market forces freer rein in sensitive or critical areas or sectors of the economy or society. The reason the Minister needs a regulator in this instance is precisely because he is moving from a much more publicly controlled form of gambling to opening up a potentially dangerous area of gambling. I am concerned, as are others, that this is what the Minister is doing and he needs a regulator to do it. The experience has been where free market forces have been left off the leash regulators have failed. I accept the Minister's point that certain consumer areas have done okay, although I would like to see evidence to debate this wider issue.

The more I hear what the Minister says what seems to be implicit is that we want to see the gambling sector grow. If this is what we are saying I have grave concerns about it, and it should be debated as an issue on its own before we decide we are moving, perhaps out of economic desperation because of the state of the economy, to open up an area such as gambling. It does not seem to be a very sustainable way to deal with the current climate. I do not see why, if what we are trying to do is continue to control gambling and have a lottery which will be a controlled form of gambling to finance good causes as has been the case in the past, we must shift from direct control by the Department to a regulator. It can only be happening because we are opening up the area to privatisation, which is potentially dangerous.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I will not go back into the issues with regard to the regulator as I have made my case. We have strayed beyond the confines of the Bill which is to establish a new-shaped national lottery which will be put in place to benefit the community and not in any way to harm it. It will be very strictly regulated in a way no other lottery is in the State. I want to see people continue to play the lottery so those who can afford to do so get a flutter, and hopefully a few bob, and perhaps on occasion a great few bob. It lifts the psyche when it happens in a community or workplace and we can all see this. A large proportion of the population takes a flutter on the national lottery and it has been successful. This is the model I want to see replicated.

The larger issue raised by Deputy Boyd Barrett with regard to whether we want to grow gambling is not in the scope of this legislation.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Minister is linking the regulator to it.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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It is linked only in the sense the regulator is a controller who might ultimately be able to regulate what is uncontrolled now. To answer the Deputy's question directly, from a personal point of view - this is not in my area of responsibility as it will be under the remit of the Minister for Justice and Equality - it is not that I want to grow gambling but that I want it regulated. Much of what is going on now is not regulated. Perhaps Deputy Boyd Barrett is more techy than I am but I do not know whether one can control such matters, as gambling platforms can be centred in Thailand or somewhere else, but we need to see if we can because I am concerned about it.

There are two things I want to say in conclusion. I do not want to be puritan about it. Paddy Power is a very big employer in this town. Horse racing is a big industry and people gamble on it. Cheltenham is an important part of Irish culture, not to mention all the Irish racecourses which many of us have visited over time.

Deputy Fleming has made an important point about premises and I have asked my officials to take note of it. We have done an inventory of premises and, quite frankly, the Deputy is dead right. An awful lot of long-term leases were taken by people, especially in the decentralisation period that went on in the previous Administration. There was an expectation that a great number of people would go to a location but it did not happen, so one is stuck with a big premises on a long-term lease and somebody is making a stack of money on it. That is not going to happen here, however.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

12:45 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 7:

In page 7, between lines 19 and 20, to insert the following:“(4) The Regulator will cease to exist at a date to be set by the Minister.”.
This amendment is very straightforward and the Minister knows precisely what I am getting at. I raised the issue on Committee Stage, although I did not table an exact amendment on it then. I spoke about it, however, and had with me the document which the Minister personally issued in November 2011 on reform of the public service. I do not know what its title was because the Minister issues so many documents and we see the press releases.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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He is a very busy chap.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Nobody asked the Minister to do it, but he inserted in that document a provision that all new State bodies or agencies being established from November 2011 shall have a sunset clause. I pointed that out to the Minister, yet here he is setting up his first ever agency since becoming Minister for Public Expenditure and Reform, and lo and behold he has not included a sunset clause. I do not know why he issues these documents, other than for public relations purposes. It is a bit disingenuous, however, to issue such documents stating how wonderful he is going to be. He says he is against quangos and that new ones should not be established. If one is to be set up, however, he stated that it shall have a sunset clause. I know he is going ahead with this one and we have different views as to whether a lottery regulator is required, but he should implement his own stated Government policy position, which is to include the sunset clause.

My amendment has been drafted to be easy on the Minister. I states: "The regulator will cease to exist at a date to be set by the Minister.” I did not say the sunset clause should be for five, ten or 15 years. I do not mind how long it is for, I just want the Minister to implement his own words.

When we discussed the children's hospital issue earlier, the Minister did not agree with the details of the amendment but he did agree with the principle. In this case, I have left the detail so open that he can insert whatever he wants regarding the sunset clause. All I am asking is for the Minister to implement the principle of his own stated personal policy as Minister for Public Expenditure and Reform when it comes to establishing new bodies, which is to include a sunset clause. He may tell me it will be many years away, but I do not mind what year he inserts in the clause. However, if he is not going to insert such a clause, he should withdraw the document he issued last November because it is having no real effect. If he is not even prepared to accept the principle of that document, what is the point in issuing such documents to begin with?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I think the Deputy is being a bit mischievous in this amendment. There will be many organisations which should have a sunset clause applied to them. However, there is no sunset clause for the lottery itself. We are all agree that it should continue on in perpetuity and, therefore, the lottery regulator has to continue in perpetuity, in my judgment.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I understand the logic of that, which is why I specifically did not put a date in the amendment. I know the lottery licence is to run for a long period. Normally people would have put five or ten years, but I left it wide open. If that is the Minister's stated position, however, he should revise the document he issued in November 2011 in which he referred to sunset clauses. He said that there would be exceptions to this when he deemed it fit, yet he did not insert any exceptions concerning that document. He will get the gist of what I am saying and I think he agrees with the principle of it. If there are exceptions, however, he should have said so on day one.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The old rule of reading law, which also applies to issues like this, is that one must apply logic and it must be read in context. Clearly, some bodies will be set up to serve the State in perpetuity and it is not intended that they would have a sunset clause. Most people would apply that logic to the policy statement that was issued at that time.

Amendment put and declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 8:

In page 7, between lines 19 and 20, to insert the following:“8. The Minister shall reply to Parliamentary Questions relating to the regulation of the National Lottery.”.
This amendment also arises from the debate on Committee Stage. I presume that, at the moment, the Minister is responsible for parliamentary questions concerning the current national lottery company and the operation of the lottery, which is fine. He did say that very few queries had arisen, which is also fine. I only want to ensure that when the new national lottery regulator is in place, there will still be a mechanism for this. It is not sufficient to say that the regulator can appear before an Oireachtas committee. On an ongoing basis, however, if something did happen, there needs to be a mechanism whereby the Minister would take parliamentary questions on the regulation of the national lottery.

My amendment does not refer specifically to the regulator but states: “The Minister shall reply to Parliamentary Questions relating to the regulation of the National Lottery.” We might find something connected to the national lottery that is not specific to the regulator's office, so the Minister should continue to be able to answer questions - few as they may be - concerning the overall regulation of the lottery. It would be another step in the wrong direction to establish another body that we cannot access by way of parliamentary questions.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I have listened carefully to the Deputy's proposals and I have said that the regulator will be subject to the Freedom of Information Act. The regulator will also be amenable to an Oireachtas committee and will be able to answer any questions. If there are any issues that still fall to the Minister, although I cannot think of any that might, I am sure there is a mechanism for doing this. However, we do not normally in any legislation say the Minister should answer parliamentary questions on any body. By and large, the Houses determine these matters. The rules and regulations of the Houses are a matter for the Oireachtas and I do not want to trespass upon it.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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The Minister already mentioned the National Roads Authority. I do not think the Minister for Transport, Tourism and Sport can take a parliamentary question on the NRA because he will be told he has no function in the matter.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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It depends on the type of question. If it concerns the funding of national roads, it would be relevant.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Yes, but the Minister gets my point. I think it is a further weakening of democratic controls if the House cannot seek a response through the Chamber.

Amendment put and declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 9:

In page 7, to delete lines 20 to 25.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 10:

In page 7, to delete lines 26 to 32, and in page 8, to delete lines 1 to 11.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 11:

In page 8, to delete lines 12 to 23.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 12:

In page 8, to delete lines 24 to 27.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

12:55 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 13:

In page 8, to delete lines 28 to 38.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 14:

In page 9, to delete lines 1 to 8.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 15:

In page 9, to delete lines 9 to 18.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 16:

In page 9, to delete lines 19 to 29.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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We will move on to amendment No. 18.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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What about amendment No. 17?

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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According to the note I have to hand, as amendment No. 16 has been disposed of, amendment No. 17 cannot be moved.

Amendment No. 17 not moved.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 18:

In page 9, to delete lines 30 to 32.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 19:

In page 9, to delete lines 33 to 37, and in page 10, to delete lines 1 to 19.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 20:

In page 10, to delete lines 20 to 38, and in page 11, to delete lines 1 to 3.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 21:

In page 11, to delete lines 4 to 6.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 22:

In page 11, to delete lines 7 to 12.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 23:

In page 13, between lines 5 and 6, to insert the following:“(2) The amount of the annual levy under this section shall be decided by the Minister.”.
This is the levy that will be used to meet the expenses properly incurred by the regulator in the discharge of his or her functions. I note the licence shall provide for the payment by the operator of an annual levy to the regulator. As the Minister indicated earlier, the regulator's office will be funded through the lottery and will not be a cost on the taxpayer. It will be a cost on the successful applicant, which will be charged an annual levy that will include the cost of meeting the functions of the regulator's expenses, including the salaries of the regulator, staff members and other employees of the regulator. When this issue was debated on Committee Stage, I stated this levy should be decided on by the Minister. Incidentally, as the regulator will not be in place when the first licence is given out, Members are having a discussion on something that might happen in 20 years' time. In any event, even if the Minister has a change of heart and postpones the issuing of this licence until the new regulator is in place, there is something wrong in principle that the regulator effectively can request a blank cheque from the successful operator. It is wrong that the regulator could state X hundred thousand or X million euro were required to run his or her office and procedures or could state that he or she needed to be able to travel the world to ascertain how all the other operators operate and do their business. In such a scenario, the regulator could state he or she should have a levy of €5 billion per annum to run the office, even if the staff pay and conditions were in line with Government guidelines, because of the other associated costs. It is not right that a regulator should be able to set his or her own levy to run the cost of the regulator's own operation because it puts the operator in an invidious position. Moreover, no mechanism for negotiation is provided in respect of what constitutes a reasonable fee. The right thing to do, in the public interest, is for the Minister to decide on the amount of the levy and to tell the regulator what is the budget from which he or she must employ the staff and meet the expenses of the regulator's office. This is a reasonable suggestion.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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As the Deputy noted, section 24 of the Bill provides that the amount of the annual levy will be provided for in the licence. Obviously, this will not apply to the next licence, as those determinants will be made by me because the regulator has not yet been created and I want to get on with issuing the licence. Having again listened to Deputy Fleming and the points he made on Committee Stage, I understand his concern is that once the office of the regulator has been established, the regulator is being given a blank cheque to travel the world, enhance his or her office or God knows what. Section 17 of the Bill provides that the appointment by the regulator of his or her staff, as well as their numbers, grading and remuneration, will be subject to the consent of the Minister for Public Expenditure and Reform. Consequently, the regulator will not be able to establish some great phalanx of support and luxury that must be monitored by me. Even when the next licence comes up in 20 years' time, as the Deputy rightly noted, it will be done by the regulator in line with the direction of the Minister then in office. I do not expect to be around myself in 20 years' time. However, Deputy McDonald of course is highly likely to be around in 20 years' time and in office. She might give such direction at that stage in respect of the duration of the licence, its financial terms, as well as the terms and conditions for the granting of the licence. I believe the measures set out in the Bill are the way to go about this. There is transparency and accountability in this regard and I do not propose to accept the amendment.

Amendment, by leave, withdrawn.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 24:

In page 13, between lines 23 and 24, to insert the following:“26. The Minister shall, within one month of the licence being awarded, bring forward a report outlining how the proceeds from the sale of the National Lottery licence shall be ring fenced for the purposes of meeting the cost of constructing the National Children’s Hospital.”.

Amendment put and declared lost.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I move amendment No. 25:

In page 13, to delete lines 26 to 36, and in page 14, to delete lines 1 to 17.
The amendment proposes to repeal the provisions for the licence to hold a national lottery. I have moved the amendment as much for the purposes of consistency as anything else. Members have had a debate on the regulator and there will not be a meeting of minds on it. However, the Minister can see the logic behind the reason I have moved this amendment. Without harping on the issue, I am really disappointed by the Minister's rejection of the proposals regarding the cooling-off period. As there is much work to be done on whistleblowing legislation, lobbyists and so on, I hope that the next time Members engage the Minister in debate, they will have an assurance of a genuinely open mind, because it is important to get these things right for the purposes of good administration and public policy.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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For the same reason that Deputy McDonald is consistent, I must be consistent in opposing the amendment.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I move amendment No. 26:

In page 14, lines 25 and 26, to delete “except in accordance with any terms or conditions set out in the licence”.
The intention is that it shall not be possible to amend the term of the licence, which sets out its duration. Therefore, it is proposed to remove the qualifying words, "except in accordance with any terms or conditions set out in the licence". The duration has been set and I expect people to bid on that and, consequently, the duration will be 20 years.

Amendment agreed to.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Amendments Nos. 27 and 28 are related and may be discussed together.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 27:

In page 15, to delete lines 9 to 12.
The purpose of this amendment essentially is to delete section 28(4), which provides that if the regulator, deeming that the details of the licence which are deemed by the regulator to be commercially sensitive should be published in the public interest, he or she shall give the licence holder notice of the intention to so do and affords the licence holder the opportunity to make representations. I am concerned that this will compromise the freedom of information aspect of the legislation. The Minister has stated that this will be covered by freedom of information provisions.

I do not believe there should be provision here for the withholding of information due to commercial sensitivity. I can understand why commercial sensitivity is provided for in other legislation, and the person to whom the commercially sensitive information relates should be given an opportunity to make representations. However, it should not apply in this situation. Whoever gets the licence will have a State monopoly for the next 20 years, so the commercially sensitive information cannot be used against that operator by any competitor. The usual reason these protections are provided is that a competitor could use commercially sensitive information. If there was a situation where there would be competitions for aspects of the national lottery licence on a regular basis, I can understand that there would be commercial sensitivity. However, when the person who gets the licence knows they do not have to deal with the market again for another 20 years I do not see how information gleaned in 2014 will be in any way commercially sensitive when the next licence becomes available in 2033.

This section is not necessary because there will only be one State monopoly operator of the licence.

1:05 pm

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I understand the point the Deputy makes. My Department's financial and commercial advisers have advised that the licence might include information which the licence holder would not like to be made public. The feature of the next licence bid which resulted in the licence being granted might have a proprietorial approach to individual products that, for example, might be in operation in other countries or that might be the subject of bids in other countries. The State recognises that there are or might be exceptional cases where provisions of the licence deemed commercially sensitive should be published if there was an over-riding public interest. It is right that in a scenario where it is deemed that the publication of the licence is in the public interest, the licensee who has paid the State for the licence has an opportunity to make an appropriate representation and plan for any public reaction in advance of that publication. The provision is consistent and is in accordance with the advice we have received.

I understand we are also discussing amendment No. 28. To make that section consistent with the other sections of the Bill which contain references to the regulator, it is proposed, to be gender positive, to insert the words "or her" after the word "his" in line 11.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I wish to make a brief observation. We tabled amendments on Committee Stage asking that the freedom of information legislation apply to the national lottery regulator. The Minister said that was not necessary because the new legislation he will introduce will include all these bodies. It is clear from what the Minister has said now, however, that there will be some exemptions from freedom of information. He said a moment ago that there might be some exceptions with regard to some of the commercially sensitive information as part of the licence that might not be published due to it being deemed commercially sensitive. If the Minister is to apply FOI to this measure, the licence and the conditions of the licence should be available under FOI. The Minister said he is going by the legal and commercial advice from his Department that perhaps the information could be used against the operator in bids in other countries. He is saying, therefore, that the licence to be issued by the regulator or the Minister will not be fully subject to FOI. The last few minutes has seen a rowing back on full application of freedom of information to the national lottery licence and the legislation has not even been passed by the House.

I spoke about the Minister's document on the sunset clause months ago. The Minister has talked about the commitment on the children's hospital but he will not include it in the legislation. He also talks about the commitment regarding the sunset clause, but he will not put it in the legislation. We have been given a commitment that this will be covered by freedom of information, but now he tells us there will be exemptions from disclosure of some information on the lottery licence because it might be commercially sensitive. The Minister is rowing back on the commitment to full freedom of information relating to the national lottery regulator. The longer this goes on, the murkier it gets. I thought this was a simple legislative measure but I am disappointed to hear the Minister say that some of this information might not be fully disclosable.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Sometimes I wonder why I bother addressing issues because the more one tries to be accommodating, the more the Deputy tries to nitpick. There are no exceptions to FOI in respect of this legislation. There are the general exceptions which the Freedom of Information Act itself applies with regard to commercially sensitive information. There is no change. The normal rules of FOI will apply. Where there are commercially sensitive data in any application, the deciding officer will have to have regard to that under the existing overarching FOI legislation.

Question, "That the words proposed to be deleted stand", put and agreed to.

Amendment declared lost.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I move amendment No. 28:

In page 15, line 11, after “his” to insert “or her”.

Amendment agreed to.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 29:

In page 15, between lines 30 and 31, to insert the following:“(2) The operator shall be resident in the State.”.
This is a straightforward amendment which provides that the operator shall be resident in the State. We touched on this topic on Committee Stage and we spoke about the operator being from a country outside the EU. I asked the Minister if he could give a guarantee that the operator will be subject to corporation tax on the profits they make in the State from the national lottery. I do not believe I got an answer on that. The Minister says that the successful applicant will have to operate through a company. That is fine. One can have a company registered here but the parent company can have its tax affairs located in the Bahamas. This is something that can be included in the licence, because the Minister has not drafted it yet. When the Minister goes to tender for the licence one of the conditions should be that the successful operator will pay corporation tax on the profits they make from the national lottery in this State. It is a straightforward point.

This could damage the national lottery. Until now, An Post and the subsidiary operating the lottery on behalf of the State were not subject to corporation tax. They only received a fee and did not make profits from it. They received a management fee of a set percentage. This company, depending on how successful it is with the interactive games, has the potential to make substantially more profits than An Post ever did through its fee arrangement. Companies will only get involved if there is a profit to be made. The Irish people would think it a very bad day if we passed legislation providing for a new national lottery licence, without ring-fencing money for the children's hospital, which also provided that the profits the operator will make will not be subject to corporation tax as a company in this State. We must address this. It must be included in the licence.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I wish the Deputy would not keep repeating that we have not ring-fenced the money. We have. If the Deputy dismisses my word as having no value at all, that is well and good. I have told him and that is as much as I can reasonably do. In most reasonable cases when a Minister of the day gives such an undertaking in the Dáil, it is the normal practice that it would be accepted. Please do not repeat that again.

The operator of this licence will be subject to corporation tax.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Where? Will it be in the State?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The operator will be subject to corporation tax, unlike An Post which has been the operator to date. This new company will be subject to corporation tax. Section 29 of the Bill requires the licence holder to be formed as a company and, for the purposes of the Bill, a company means a company formed under the Companies Acts in this jurisdiction. The competition for this lottery is open to bids from outside the State, as was the previous licence. Limiting the bids to the domestic market is not possible under European law, as the Deputy fully understands.

Debate adjourned.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.