How could a Liverpool lottery begin to compete against the three national lotteries and the plethora of local ones?
Daft ideas in Liverpool seem to be like buses sometimes – they tend to come in threes. So far we have had two from the Mayor of Liverpool. One of these the idea of a referendum for 10% increase in council tax he has dropped. Why? Because just as the Lib Dems said when he raised the matter in council the people of Liverpool would not vote for such an increase. There have been 6 referenda on raising council tax to date and not one has been passed. Council tax is a very regressive tax – it hits poor people harder than rich people for a variety of reasons. The people of Liverpool were right to tell the Mayor in advance of him holding a referendum that they would not vote for it and the Mayor was right to listen.
However, he has now come with an idea that is almost as bad. He wants to have a Liverpool lottery. For the reasons I give below the Lib Dems will oppose this when the required report and recommendation is put to Cabinet. Raising money locally is not in itself a bad idea. Liverpool is a compassionate City where we do all pull together. I will suggest something when we oppose the Mayor’s recommendation that would be be a better way of attracting money into the City Council’s coffers.
But for now here are the 7 reasons that Liverpool should not try and raise money for services in this way:
- We should not encourage gambling. There are increasing problems of gambling addiction which like any other addiction can lead to mental and physical health problems. A lottery is not the ‘crack cocaine’ of gambling that fixed priced betting terminals are but they are a part of an encouragement of gambling that is leading to problems.
- This is a national problem not just a Liverpool problem. For 25 years governments have not planned for an increase in life expectancy and ill health which all demographic trends have foretold. The result is that in many hospital trusts up to 30% of beds are taken by people who do not need medical help. The problem is that there are no the residential care places of domiciliary support that is needed. Hospitals are dangerous places where people can get ill by lying around. They are not the home that people want to live and they are very expensive. What we need now is for all Parties and others to get together to look nationally at how we fund health and social care. The Labour Party have come up with an idea which Lib Dems too are looking at. The idea is that something like the Office of Budget Responsibility would independently review health and care needs and then make recommendations to government about the spending needed to deal with what is found. There are many other things that could be looked and Norman Lamb’s independent panel looking at funding will report in the late summer.
- The lottery will find itself in a crowded market with three ‘national’ lotteries now competing for business. All of these are heavily advertised and have big jackpots. They also need a huge amount of money to establish them. I do not see how a local lottery will compete with them.
- It won’t raise enough money even if it does well. Let’s have a quick look at the figures. The big lotteries at most give 40% of their ticket price to their good cause. If 50% of Liverpool adults bought a £1 ticket each week it would generate £68,000 for good causes or about £3.5 million per year. This is massively below the requirement of the increasing numbers of elderly. It is also a very ambitious target. It is a higher percentage of the population playing this game than play the National Lottery in the City.
- It may well detract from the fund raising activities of small and medium sized charities that exist to serve the social needs of our city. There is only so much that people will spend on this type of activity and there is no evidence that existing lotteries now expand the market rather than redistribute the market. Even when the National Lottery came on the scene it only really did well because it almost killed off the football pools.
- It will distract people from the fundamental arguments that need to be looked at. These problems will get worse year by year. People think (or choose to think) that a lottery is a panacea for the funding problems caused by longevity it will reduce the need for and the quality of the debate on the fundamentals.
- Like the idea of a council tax increase that preceded it the lottery will be a tax on the poor, albeit it a voluntary one. All the evidence is that the vast majority of lottery tickets are bought by people on low incomes. Unless they move their preference from another operator (with bigger jackpots and bigger dreams) they will simply increase their own debt levels.
Lib Dems are not unsympathetic to the position that the Mayor finds himself. But Liverpool is in the same position as Manchester, Leeds, Newcastle and most of the big cities of the North. BUT we have seen no signs of them establishing lotteries as anything other than a small activity or threatening 10% council tax increases.
It has been suggested to me several times that this is a way that the Mayor has of causing problems for the Liverpool City Regional mayoral Candidate. Far be it from me to try and work out the internal machinations of the increasingly dysfunctional Labour Party. What I do know is that neither of the suggestions made to date are runners. As I said to start with bad ideas come in threes. We await the next one from Joe Anderson with trepidation!