Smith: furious at Camelot

The Heritage Secretary lays into Camelot

Shake-Up of National Lottery Ahead

"We understand that there is obviously going to be a change in the shape of the lottery for the future," said Camelot's chairman, Sir George Russell.

"We've offered to work with the government to provide for them within six weeks our views on the shape of a lottery that is without profit in the long-term and possibly changing in the shorter," he said.

Sir George: conciliatory over directors' bonuses

"Willing to work with government"

Sir George also offered to give the equivalent to directors' bonuses to charity. He said he was powerless to change directors' contracts, but said Camelot would pay out of its profits into a charity fund a sum equal to the bonuses received by the firm's directors in the past year.

He said Camelot had shown only a little contrition and added that his office had been flooded with calls from "hundreds of thousands" of furious Lottery players angry at large pay-outs to Camelot directors.

Mr Smith had summoned Russell to express the Government's outrage that Camelot's executive salary bill rose 40 percent in the year to March while the sums it raised for good causes fell.

The Heritage Secretary emerged from the Department soon after to express disappointment at the proposals which he said failed to address the central issue of overpayment to directors.

"They came armed with one small concession which doesn't address the nub of the issue which was that Camelot should make a donation from its own profits equivalent to the bonuses paid to directors," said Mr Smith.

"I don't believe that addresses the public anxiety and concern that's being shown and I was disappointed that they hadn't come armed with anything else," he added.

"Non-profit" lottery ahead

Mr Smith said he wanted to see the bonuses paid to charity now and in future years and a firm commitment to donate the £6 million interest payment to charity.

He repeated his warning that it was in Camelot's own interests to stem the criticism. "It's the people who play the lottery who have ultimate judgment on them," he said.

Last week's revelations that Camelot profits and the amount raised for good causes had slipped in the last year while directors' pay had shot up by an average of 40% had launched a torrent of public disquiet, said Mr Smith.

"The tidal wave of public criticism that's come in over the course of four days has been absolutely astonishing. Hundreds of thousands of people have been in touch," he said.

However, he stopped short of saying he would curtail Camelot's contract which runs until 2001 if improvements were not made, insisting it was up to Camelot to enact reforms which would restore public confidence.