The Budget: Good causes could lose out on 126m pounds: Lottery

THE National Heritage Department welcomed the decision to put a 12 per cent tax on the national lottery after fears that it could have been as high as 25 per cent, writes David Lister. But lottery campaigners were less happy, warning that even 12 per cent could deprive good causes of pounds 126m.

The independent Lottery Promotion Company, which has done most of the research for the national lottery, which will come on stream in 1994, said that the taxation announcement was premature as the first tickets would not be sold until well after the next budget.

Denis Vaughan, founder of LPC, said estimates based on foreign lotteries showed that money for good causes in the arts, sport, heritage and charities could be as high as pounds 1bn. With 12 per cent tax these causes would lose out by about pounds 126m. He said taxation led to reduced turnover with less money available for prizes, and the whole concept suffered. He said the Government should have set up a charitable foundation for money from both the lottery and the pools to go to good causes. However, Peter Brooke, the National Heritage Secretary said last night: 'The climate is being created for a highly successful national lottery.'

The department's estimates of lottery cash are far lower than outside estimates. Mr Brooke thinks total turnover could be about pounds 1.5bn (rather than the pounds 3bn some have estimated) with pounds 750m in prizes and pounds 375m, after tax, going to good causes.