Hallo Martin,
I have (had?) a Rollo Elf that is now out on permanent loan to a friend. Mine is the 'hand-cranked' version, which I suspect yours was originally too. There was a motorised version of the Rollo but that used a Sturmey Archer 3-speed hub to drive it but it also differed in other small details from memory.
Anyway – your lathe looks to be very similar to mine but with the addittion of the motor drive and mine doesn't have the large flywheel behind the larger of the two gears. However, the gear train is permanently engaged and there is no eccentric movement (that I can recall) of the rear shaft (such as with a back-gear set-up for instance) – so that lever would appear to be attached to (what on my lathe) would be just be the end of a revolving shaft.
So I cannot help you I'm afraid but would be curious to know more specifics of how that lever attaches to the shaft (given its revolving nature) – as that might offer more clues as to its intended use.
Regards,
IanT