Labour foretells the last days of Camelot

Labour’s manifesto promise to look for a not-for-profit operator for the Lottery could signal the beginning of the end for Camelot. Tom O’Sullivan reports

Buried deep in the Labour Party’s 15,000 word commitment to the family, law and order, and sound economics is a paragraph which will chill some hearts in the Berkshire headquarters of Camelot.

“When the current contract runs out (for the National Lottery in 2001) Labour will seek an efficient not-for-profit operator to ensure the maximum sums go to good causes,” declares the Labour manifesto.

No ifs, no buts, no alternatives – that sentence is effectively a death sentence for the Lottery’s private operator Camelot, which has raked in more than 100m in pre-tax profits since it won the licence three years ago. It is not a non-profit making body and unless it has a conversion akin to St Paul on the Road to Damascus, it is not going to become one.

Labour has threatened to reform the National Lottery on several occasions, routinely accusing Camelot of greed each time its profits are announced. At its party conference in 1995, shadow chancellor Gordon Brown raised the prospect of a non-profit making body running the lottery, while shadow heritage secretary Jack Cunningham said at the end of last year that while a not-for-profit operator might have public support, “a more effective cap on profits should be introduced” if a not-for-profit body can not be found.

But the “profit cap” option appears to have been dumped – Labour’s most definite statement of intent about the future of Camelot. The main not-for-profit bidder in 1994 was Virgin’s Richard Branson.

“By the time the licence is reviewed Camelot will have made a substantial amount of money and if it wants to pursue the next licence it will be up to it,” says a spokesman from Cunningham’s office. “But it is important to note that the manifesto says “seek” a not-for-profit operator, not that we will definitely award it – if we cannot find one we will have to look at alternatives. It is impossible to say which suitable not-for-profit organisations will be out there.”

Despite the semantics, and the fact that the existing licence has four years to run, the election of a Labour Government will have an impact on Camelot’s running of the Lottery. Labour is committed to reforming distribution of monies to the good causes and restructuring the regulator Oflot which it has accused of being compromised because it both grants, and monitors, the Lottery licence. By contrast, the Conservative manifesto does not comment on Camelot’s performance but commits itself to using lottery money to train young athletes and artists.

“We will be happy to work with any Government,” says Camelot’s head of Parliamentary affairs Richard Brown. “We have obviously looked at all the manifestos, including Labour’s, which does not give details of actual policy, and we would hope to have negotiations with a new government.

“When Camelot won the licence, we offered the best deal of all the bidders, including those offering a not-for-profit operation. We have sent briefing material to Jack Cunningham’s office, as we have to a lot of other people – but beyond that there has been no face-to-face talks with Cunningham. Camelot was not invited to give evidence to Cunningham’s advisory group but we were happy with that,” says Brown.

It is in this environment that Camelot, which has generated 2.5bn of income for the good causes since it began operating in November 1994, is trying to accelerate the expansion of its international consulting business. If it does not regain the licence in 2001, the consortium members Cadbury Schweppes, De La Rue, Gtech, ICL and Racal Electronics will want to exploit the knowledge they have gathered in the UK in other markets.

In March, when the General Election was announced, the Mirror invited a psychic to predict highlights in the six-week campaign. One of the crystal ball watchers predicted that during the election campaign: “Camelot will find itself caught up in a huge political row”. So far that row has not materialised, but if Labour wins on May 1 it might not be long in coming.

Manifesto highlights for marketers

While guaranteeing to “preserve the national identity” of the Royal Mail, the Conservative manifesto renews the controversial prospect of privatising the service. Parcelforce will be transferred to the private sector as will London Underground if the Tories win on May 1. Both main Parties are committed to introducing a Competition Bill to give protection against price fixing, dumping and other restrictive practises. It may also lead to changes in the role of the Office of Fair Trading. But neither offers the “fair competition” law demanded by brand owners to outlaw copycats (MW March 28).

Labour is committed to establishing a rail authority to take over some of the powers currently held by the rail franchiser and the Department of Transport – but it will not renationalise the railways. It also hints at regulatory changes in the media world to “balance sensible rules, fair regulation and national and international competition”. But the reference is too unspecific to offer any real insight into its plans. And its commitment to devolution, although dented by Tony Blair’s “Parish council” comments at the end of last week, is also expected to have an impact on regional marketing.

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