Mellor warns of windfall tax on Lottery profits

A warning that the Chancellor could be contemplating a windfall profits tax on the National Lottery organisers was given yesterday by David Mellor, the former Secretary of State for National Heritage, writes Colin Brown.

Mr Mellor told Kenneth Clarke that he would score a "spectacular own goal" if he made any attempt in his forthcoming Budget to increase the tax on the profits of Camelot, which are reputed to be pounds 1m a week.He revealed in a Commons debate on the lottery that the Treasury had wanted the 12 per cent lottery tax to be higher. It was raising pounds 500m a year, plus corporation tax, but Mr Mellor said senior Treasury figures still felt bruised by their defeat. "It is a nice little earner for our Ken," said Mr Mellor. "Anyone with the temptation to get a higher tax take in the coming Budget must think again. In the history of spectacular own goals, it would need a chapter all of its own."

Virginia Bottomley, Secretary of State for National Heritage, will announce on Monday new awards from lottery funds to young people who are promising in sport, the arts, and science. The millennium bursaries echoed a proposal by Labour for some of the money to be channelled into a "talent fund".

She strongly defended the National Lottery against the criticism of the Church and ruled out imposing a cap on the big jackpot pay-outs.

Jack Cunningham, Labour's national heritage spokesman, attacked the "excessive" profits being made by Camelot. Mr Cunningham also made it clear that a Labour government would cut their profits on coming into office.

Inside Parliament, page 8