WEDNESDAY 21 MARCH 2001 _________ Members present: Mr Gerald Kaufman, in the Chair Mr David Faber Mr Ronnie Fearn Mr Christopher Fraser Mrs Llin Golding Mr Alan Keen Mr John Maxton Ms Claire Ward Derek Wyatt _________ MEMORANDA SUBMITTED BY THE DEPARTMENT OF CULTURE, MEDIA AND SPORT EXAMINATION OF WITNESSES THE RT HON CHRIS SMITH, a Member of the House, (Secretary of State for Culture, Media and Sport), and KATE HOEY, a Member of the House (Minister for Sport), examined. Chairman 450. Secretary of State and Minister, in welcoming you here today I ask if you will allow me to conduct a little domestic business in public first. First of all, on behalf of the Committee I would like to give a birthday card and wish many happy returns to Llin Golding. Secondly, we know no more in this Committee than anybody else outside 10 Downing Street as to whether there is going to be an election fairly soon, but if there is to be an election then this is likely to be the last public meeting of this Committee of this Parliament. That being so, I want to take this opportunity of paying tribute to four colleagues who are retiring from Parliament whenever the General Election comes, and to say how much we shall miss them: David Faber, who, among his many other talents, brought an extremely acute focus to bear on sporting matters; Ronald Fearn, who has his local government experience and has great knowledge of tourism coming from representing a seaside resort and has seen during this Parliament, perhaps partly because of our efforts, a Lottery grant for Southport Pier; Llin Golding, who is extremely knowledgeable on many matters, including sporting matters, and if angling ever gets properly recognised it will be pretty well a single-handed achievement, as well as a reform of the gaming laws to which she has devoted herself. I would like to pay particular tribute to John Maxton, who has served with me not only on this Committee but on the National Heritage Committee during the last Parliament too and has brought huge knowledge of sporting matters and also of matters relating to communications technology and content and so, on behalf of the Committee. I would like to thank those colleagues and wish them well for the future. Could I also thank the other members of the Committee for the work that we have co-operated on during this Parliament and the Clerks and their staff too who have given us extraordinary support. We have had our ups and downs on this Committee and if it were analysed I suppose that we have had more recommendations rejected or ignored than have been accepted, but on the other hand we can look back on a number of things in which we can take pride, including work we did on the Royal Opera House, work we did which is resulting in legislation on the looting of works of art and antiquities, the work we have done on funding of film and other matters and, although it may well be that John will raise an eyebrow here, our single most famous achievement, namely the saving of HMS Cavalier from the scrap yard. Having delivered that commercial, Secretary of State, I think that you want to say a word before we launch into questioning. (Mr Smith) Chairman, if I may can I join with you in paying tribute to the Committee over the course of the last four years, its members and its staff, and particularly to those colleagues who are standing down, perhaps at an election shortly to be called. Can I also say that I trust that our record of accepting and implementing Committee recommendations is getting better as the years go by. Chairman: Thank you, Secretary of State. I should of course mention that relevant to this very inquiry we were gratified by the response of the Prime Minister in appointing Mr McCartney, from whom we had evidence yesterday, to co-ordinate the work on the Commonwealth Games. After that smug aura of self-congratulation we have all been involved in we will now return to business. Mr Fearn 451. Good morning. We were in Manchester yesterday and of course we got a lot of questions fielded at us as well as we fielding questions ourselves, one of which leads me to my first question. The Government has not given any funding guarantee to the organisers of the 2005 World Championship Athletics. The Mayor of London will not sign the staging agreement. Sport England and UK Sport cannot sign it. Why then have you given Mr David Moorcroft an assurance that the event will be underwritten by a third party? (Mr Smith) We believe it is very important that we hold a truly successful 2005 World Athletics Championships in this country. It is an objective that I think everyone has endorsed, Sport England, UK Sport, the Government, UK Athletics, in seeking to have the Games here in 2005. We are working very closely together with Sport England and with UK Athletics in ensuring that we can have a very good stadium in order to host the Games, a smooth process of running the Games and that everything will be put in place between now and 2005 to ensure that that happens. I am confident that that will happen because all the fundamentals are right. The location has been identified, the feasibility work on the design is well advanced and hopefully tomorrow we will hear from the architects with the public unveiling of the design and the costs. Already substantial areas of funding are earmarked. Of course there is some further work to be done. That would be unusual if at this stage that was not the case, but I am absolutely confident that we are properly on track. 452. The City of Manchester have put œ20 million in so far but that œ20 million has expanded to œ40.75 million already. On top of that, of the sponsorship that has come along, out of the 50 they were hoping for at this time only 30 has been received. Is the Government underwriting it? Mr McCartney could not answer the final question but certainly Manchester City did confirm that the figures had jumped from 20 to 40. (Mr Smith) And indeed it was the case at the outset of the bid for the Commonwealth Games, which of course took place under a previous administration, that at the time of that bid the City of Manchester did accept that if there were funding difficulties they as the City would be prepared to underwrite it. One of the issues in relation to London of course is that the Greater London Authority does not have the resource base that a city authority like Manchester has and that is why I completely understand the view which the Mayor of London has taken that it would be very difficult for him to act in the same way as guarantor. In the light of that, which is an entirely understandable decision on his part, we are looking, together with a range of other bodies, at what alternative steps can be taken. 453. It is going to be one of the major events worldwide, I would think, and certainly the biggest Commonwealth one that we have had. At the moment there seems that uncertainty within the finance which follows from here on and that is why I was trying to find reassurance for the North of England, for instance, in that London does not seem to bother too much about these Games but it is the Commonwealth Games for the whole of the Commonwealth and we are very proud from what we saw yesterday; it was superb. Can you tell me who will sign the staging agreement then? (Mr Smith) For the Commonwealth Games? 454. Yes. (Mr Smith) The City of Manchester have, right from the outset, accepted that they sign the agreements. It is their Games to host. The Government of course is already doing what it can to assist. There is œ131 million worth of investment in the sporting infra structure for the Games, there is the œ10.5 million of Government expenditure on the opening and closing ceremonies which is in the budget and guaranteed. There is also some œ30 million of private sector contributions already secured as well as Manchester City's own contribution, so the funding is very well advanced. There are of course some further steps to be taken and I think, as Ian McCartney will have explained to the Committee yesterday, the Government is working together with a number of different departments who are involved to see whether there is further help that can be given. 455. So it will be Manchester City who are the signatories in the final agreement? (Mr Smith) They always have been from the outset as far as I understand it in relation to the Commonwealth Games. 456. Are you confident that those will be signed very soon? (Kate Hoey) At the moment we have had no approaches from Manchester City Council to ask us to look at ways of meeting any financial deficit and I think that was probably made clear yesterday by Richard Lees. 457. Has not Mr McCartney briefed you on that? No? (Kate Hoey) I am aware that at the moment the sponsorship has not reached what they would like it to but we are still some 500 days, over a year, away and I think you will know that right up to the last minute in Sydney there were all sorts of scares and rumours and problems. I am perfectly confident that we will have a wonderful Commonwealth Games which will be terrific for Manchester, for the North West and for the whole country and that the country will join in and really want to celebrate, particularly as it is in the Jubilee Year which gives us an extra dimension to being a really fantastic Games. The facilities are superb; you have seen them yourselves. Clearly, in any major project like a stadium, there are always problems that may lead to slide over costs but there is nothing at this stage that we should feel we cannot among us all, including the City, work through. 458. It was probably because of this Committee and especially the Chairman that Mr McCartney was appointed to that position and he certainly seems to have cracked the whip as it were and things are popping very nicely. Do you have hands-on on the whole situation? Does he report to you frequently? How many times have you been to Manchester? (Kate Hoey) I have been about five times to Manchester in the last year, either to events or to see round and look at all the different facilities. I attended the World Championships in the Villadrome so I saw it in use as well, having seen it not in use. I talk to Mr McCartney the way one talks to anyone who would be in a position where he is trying in a very good way I think to pull together the various strands. First and foremost of course it is a sporting event but it is not a sporting event in terms of how we run it because you cannot run a successful Commonwealth Games without practically every department in government being involved and it would not be possible for someone who does not have the clout to be able to go through and around and deal with all the departments to pull it together and that is what he has managed to do. (Mr Smith) I have just had a note passed to me from my officials saying that we think Manchester have signed all the agreements but I will of course check and write to the Committee if by any chance that is not the case. 459. Who will sign the 2005 World Championship Athletics? (Mr Smith) That, as I indicated, is a matter still for discussion about who the most appropriate body would be. There is no immediate urgency about this. It has to be done within a relatively short period. I will be meeting with the President of the IAAF early next week and will discuss this matter further with him then. (Kate Hoey) And I am having dinner with him so I am sure we can sort out something. Ms Ward 460. Secretary of State, I am interested to note that when you came before us last time you told us that Sport England had made an in principle allocation for Picketts Lock. When we had Sport England before us the impression that we got from questioning them was that they had not actually made a decision in principle in favour of Picketts Lock. Do you accept then that there would be no case in which Sport England could support Picketts Lock if it did not comply with the usual criteria for allocation of money for that sort of capital bid? (Mr Smith) Of course any bid for this stadium, as indeed any bid for any of the parts of the Manchester infra structure, it has always been accepted have to be looked at and examined carefully on their merits by Sport England. They have a legal duty to do so. What, however, they have done is to earmark within their budget a sum of œ60 million to contribute to such a stadium if they are satisfied with the details. Indeed, the Lottery Panel minutes of 24 October last year state very clearly that the Panel agree that the feasibility study money which they were committing should form part of the œ60 million committed to the project if the recommendation was endorsed by the Council, and the Council agreed to that subsequently on 6 November. They have earmarked within their budget the funding. They of course need to look at the details. They need to assure themselves that this is right and proper and sensible expenditure, but it does seem to me that that provides us with a very good platform to build on. 461. But you appear to have given a lot of assurances and stated a lot of confidence that Picketts Lock will be built and that they will receive the funding from Sport England. Surely you are not in a position to do that. (Mr Smith) I have indeed expressed a lot of confidence because I believe it is a good project; it has the possibility of being a real success story, and I have to say that on this I have a "can-do" approach which I believe is the best possible approach you can take to ensuring that we can successfully stage a major international event of this kind. I do believe very strongly that the potential for a world class dedicated athletics facility at Picketts Lock with a long term legacy for the future of athletics in this country is something that can be of real benefit to athletics and to this country. I am absolutely firmly convinced that that is the case. 462. Does your "can-do" approach also extend to picking up the bill for the main cost of the budget between œ60 million and the projected œ90 million it will cost? (Mr Smith) First of all, we have done further work on the costs and I am told that when the designs are unveiled by the architects tomorrow they will indicate that their best estimate of the costs is between œ83 and œ87 million rather than the œ95 million that was previously being talked about. Secondly, we already have in place not just the earmarked œ60 million from Sport England, which includes of course the œ20 million return from Wembley, but we also have a commitment to œ7 million for the high performance centre which is an integral part of the concept, and also a œ5 million contribution from the Lee Valley Regional Authority. There is still a gap to fill. It is not an insuperable gap. There is considerable interest already, even before the designs have been unveiled, from the private sector, and I have every confidence that that gap will be bridged. 463. And if it is not will you underwrite it? (Mr Smith) At this stage I cannot give such an assurance because that would undermine the possibilities of seeking other commitments, but we are actively seeking other commitments and we will look at all possibilities. 464. You are that confident that it will go ahead but clearly you would make provision if you had to? (Mr Smith) I am very confident that it will go ahead. I do not think that necessarily involves making a specific commitment at this precise moment. 465. Ms Hoey, I wonder if I could ask you a little bit about the comments that were made by Ken Bates when he appeared before the Committee. I think it would be honest to say that he was not terribly complimentary of you. (Kate Hoey) Really? 466. I wondered if you had any comments to make about your involvement in Wembley Stadium? (Kate Hoey) I think it is useful. I hope members did receive the letter which I have sent round which really put down the idea that I had never invited him in to give me a briefing and that quite clearly let out what happened. He chose not to come on two occasions. I am not responsible for his diary. I think he was abroad on one occasion. On a lot of the other comments, frankly, I do not think there is much I would want to say other than that whatever people think about the decision to take athletics out of Wembley, and I know there are some people (including this Committee) who felt it may have been wrong, the fact that we did do that in the end made no difference whatsoever to the delay in terms of when they went to the City for their money. I think his interpretation that somehow we had caused 19 months of delay and that somehow that was the reason why they did not raise the money is just absolute nonsense. If you look through what you have got with you, you will see that at the end it went to planning I think one month later than the very original deadline that they were putting to them and that was because of some difficulties with section 106. We did not delay the project. Whatever you think about taking athletics out, that was not the reason. The reality was that they did not an overall package that was acceptable to the City and the fact that athletics was in or out actually made no difference to whether they could raise the money or not. Mr Bates was chair of WNSC. He has said what he said. Frankly, I am too busy and I have been too busy getting out the sports strategy and the very important things that we are doing for school sport and huge numbers of other areas to worry too much about what Mr Bates says. 467. Would you accept that all of the debate and the public debate, particularly the commenting by the media on the Wembley project, has not helped to give confidence that we can as a country with both public and private sectors organise ourselves sufficiently to have a national stadium that is well funded and that is delivered on time, and that that will give the impression to others that we may not be able to deliver other projects on time, particularly when we have got the Athletics Championships coming in the next few years? (Kate Hoey) It is not good to be reading in the papers week after week speculation and outbursts from people about Wembley, but I have to say that certainly any major project that I am involved in, and I do consider myself now to be extremely involved with Picketts Lock, if I say I have confidence that it will happen then I intend to make sure that that will happen. I was not involved in the Wembley dare I use the word saga from the beginning. There were all sorts of other factors involved, including the World Cup bid, huge pressure on people to deliver to deadlines that were perhaps not possible from the beginning and, as far as I am concerned, the first meeting I had when I came in on the day that the project was in the papers, the day it was launched, was the day I was appointed. I had a meeting shortly after that and saw the details and the first question I asked was, "Where is athletics?" because it was meant to be a national stadium that had athletics. I envisaged that we were coming up with something rather like the Stade de France and of course we had not done that. From then on it was very much in the hands of Wembley and Mr Bates' speculation about my involvement and my stopping things and so on is really just nonsense. 468. I think it would be fair to say that there are some of us who believe that this is not a satisfactory position to be in and whilst you were not involved in the Wembley saga, as you put it, from the beginning, you, Secretary of State, were. Why did you change your mind from praising the project at the beginning? (Mr Smith) As I indicated in the evidence that I gave to your last inquiry, the precise proposals for the inclusion of athletics, which involved, as you will recall, the construction of the concrete platform, were only revealed to us at a late stage in the public promotion of the designs which had been put together. Right from the outset of hearing about the concrete platform solution I raised my anxieties with Wembley National Stadium Limited. It became very obvious once they worked those proposals up that there were serious concerns to be addressed, in relation to the cost of the platform design itself, the amount of time that would be taken for construction and for demolition, and, more importantly perhaps, the very inadequate work which had been done prior to that point on the provision of any warm-up facilities for a potential world championships. It became increasingly clear to me, as the later part of 1999 went forward, that the Wembley athletics option which was being presented to us at that point did not offer good value for money and did not provide a sustainable legacy for athletics. It was very much for those two reasons that we took the decision that we did in December of that year that athletics should be removed as a requirement from Wembley and that we should urgently look at other alternatives. What has happened subsequently has demonstrated, I think very clearly, that we were completely right to make that decision because had we continued to put our faith in Wembley as the venue for athletics not only would we have had the problems of the inadequate design but we also would now have had serious problems about meeting the timescale for the world athletics championships. 469. I am surprised that you still have such great confidence that we will meet the timetable now, given that there is very little progress to guarantee completion of Picketts Lock, that it is not a site that has particularly good transport access, and there will be some concerns over the long term legacy of it and the cost of providing that site. (Mr Smith) As I mentioned earlier, when we see the details tomorrow from the architects and the quantity surveyors that have been working on it, I think that we will see much more clearly what the costs are and indeed what the opportunities are there. Mr Maxton 470. I wonder if you perhaps could tell me whether the Government has made any assessment of when Britain is likely to be able to bid successfully for the Olympic Games? (Mr Smith) Any such bid will of course be ultimately a matter for the British Olympic Association and not for Government. However, clearly, if a successful bid is to be mounted there has to be very close partnership between the BOA, the host city and the Government. The first imponderable is what decision is made later on this year as to the venue for the 2008 Olympics. One of the very strongly bidding cities is Paris. If the 2008 Games were to be awarded to Paris then it would almost certainly mean that there is no realistic prospect of another European city after Athens and Paris in rapid succession being able to bid for 2012. That is clearly a parameter to the debate that at the moment we cannot determine and will not be able to until July when the decision is made. Secondly, if, for example, the 2008 decision is made for Beijing or for Toronto, then the possibility of a European city being capable of being in the running for 2012 becomes a possibility. We will then need to look in detail with the BOA at whether a bid, particularly perhaps a bid for London because many of the indications coming out of the International Olympic Committee at the moment are that if Britain is to be successful it may well have to be a London bid, we will then need to look at what the possibilities are, at what the potential for hosting the Olympics is, and also what the costs are likely to be because any such undertaking would of course involve very substantial costs. 471. If the regeneration aspects of the Olympics on a city or on an area in a city or in a country are as great as people make them out to be, should we not morally not be bidding for the Olympics ourselves but making sure or putting our weight behind ensuring that they go to Africa, where they have never been, or if they go to Beijing that will only be the second time they have been to Asia, or to South America where they have never been, rather than bidding ourselves when, to be honest, London does not need the tourist impact of the Olympic Games? It gets enough tourists; it probably gets too many tourists, many Londoners might think, already. Should we not therefore be putting our weight behind ensuring that the Olympics are used in a way to help those who perhaps need more help than we do? (Mr Smith) Of course the major advantage to a country of hosting the Olympics Games is not just in the area of the immediate tourist impact, although that can be substantial. At the moment of course London, along with the rest of the country, is suffering grievously in terms of its tourism industry and we hope that will be a temporary phenomenon. Secondly, the most important impact of hosting an Olympic Games is both the lift to national morale which can come but also the long term regeneration impact. That is certainly something which, for example, is demonstrable in Barcelona. The third point I would make is that there are substantial parts of London, as indeed I know from my own constituency experience and I suspect my colleague the Minister knows as well, that could very much benefit from major large scale regeneration. This is not a case of a very rich city becoming even richer. It may well be a case of very substantial under-investment of parts of a large city receiving substantial investment. But and the "but" has to be in there we have to make a realistic assessment together with the BOA and with the Mayor of London about what the possibilities are when we know what the decision for 2008 has been. Chairman: Can I intervene there to say that our Committee, when we were in Manchester on Monday and Tuesday of this week, were deeply impressed by the regenerative progress in Manchester, which is partly due to the Commonwealth Games. Obviously the Committee will be unanimous in believing that more could be done in the Gorton constituency. Mr Maxton: The whole thing should take place there. Chairman: But what is taking place in Manchester is quite remarkable and could I, quite tangentially, nevertheless say that we were deeply impressed by the regeneration on Salford Quays when we visited the Lowry Centre. Mr Maxton 472. My concern almost for my whole time on this Committee has always been the participation in sport, people playing the game rather than actually watching it. I am not convinced that holding major sporting events in this country actually necessarily produces any effect on the number of people playing the game. Every year we hold one of the major sporting events in the world at Wimbledon, which is probably the premier tennis tournament. For a fortnight you see children running around with tennis racquets in their hand looking for a tennis court to play on and a coach to show them how to play the game. Is that not where we should be putting our money rather than trying all the time to get these major events? (Mr Smith) The Minister may want to add a word or so but I will make two observations. The first is that we are of course already putting very substantial investment now into sport for young people and particularly into sport in schools. The earmarking of œ750 million from the New Opportunities Fund for this purpose is part of that commitment. Secondly, we also ought to recognise the commitment that the Lawn Tennis Association make with the proceeds of Wimbledon to develop and enhance grass roots facilities for tennis across the country. It is a very substantial commitment. It has been there for quite a number of years now and there are many tennis facilities in many less well off parts of the country that are a testimony to the cascading through of the profits of the Wimbledon tournament into tennis. (Kate Hoey) I agree with you, John, that there is a dilemma of chicken and egg because clearly having Olympics and the focus of the whole country on sport, if we could do it in the way that Sydney did, is a huge motivator for young people. We saw just in the few weeks after the Olympics that all the physical education teachers, when you went round to speak to them in schools, told of the interest that there was in other sports and the desire to get involved. Clearly I would not want to see us hosting an Olympic Games and then discover that we had got very few medals and no winners and actually did very badly at it. Therefore what is important, if we do decide to have an Olympic Games bid (and of course the Secretary of State said that the BOA would have to be the first to say what they would like to do) is that it really has to be a commitment not just from the Government in that sense but also from the country that they want to deliver it and they want to do it. I would not want to see that happening at the expense in the meantime of all the work that is going in in terms of long term investment to grass roots of sport, because if we do not continue to invest money and there has not been huge amounts of investment over many years then we will not have given the children opportunities at the moment, which means that by the time we come round to having an Olympic Games we will not be having people who are coming through to win. There is no point having an Olympic Games, I believe, unless we are really not just going to do it brilliantly (and that is going to be extremely difficult after the wonderful Sydney Olympics) but also be doing well at it and using sport as a vehicle for all sorts of other things as well. 473. In a sense that is all making my point. I think that our success at Sydney by the investment that we put into it through the Lottery did more for athletics and for sport than holding the Olympics in this country would ever do. I asked this as a question of the FA, that if in fact Germany had beaten The Argentine in 1966, (a) they would not be showing that game very three weeks on British television, and (b) probably nobody would remember that we actually held the World Cup in England in 1966. Is not success in sport a bigger stimulus than actually holding the sport in your own country, particularly in the days of modern communications? (Kate Hoey) I think there is a fair argument that would agree with you. On the other hand, if you talk to some of our athletes they will tell you just how wonderfully inspiring it is to win on home territory and to have home crowds and home support, particularly when you see people who have come from their community and then, for example, win something in Birmingham when it is one of the championships that we are holding there in athletics or any other sport. It was terrific for Jason Queeley, even though he did not actually win in the World Championships in cycling, when he came back to the Villadrome to be there with a huge crowd of support; it was tremendously stimulating. This is not a simple issue. We are not going to wake up one morning and say, "We are going to host an Olympic Games. Hooray!" There is a huge amount of effort and time and thought and honesty that goes into it. I think we have to be honest as a country and honest as politicians and as sports people about our capacity to do it. If we are going to do it, let us do it well. If we cannot do it, let us be honest about that as well. 474. Given the limited resources we have for sport and it is a lot more now than it has been in the past is it not better spent ensuring success than, as you say, large sums of money being spent to ensure that we will get the Olympics? (Kate Hoey) I honestly do not think that it would be sensible for me to say yes or no to that question. I genuinely do think that there is a debate to be held and I can see both sides of the argument on this. We have a commitment as a Government to help and support putting international events on the world stage in this country. I want to make sure that collectively we do as much as we can so that we get to the point where we can make that decision with all the factors weighed up. 475. Lastly can I say that, given modern communications, modern travel, and a changing political scene in the world, not in this country, does that not perhaps mean that the time has come when an individual city in one country is not the best way to run major sporting events? Why cannot we have an Olympics that is based in Europe with the sporting events spread throughout Europe, when World Cup football can be played in Europe and not in one particular country and one particular part of Europe? (Kate Hoey) Those are all very important points. One of the reasons why we have failed perhaps to have our influence felt in international sporting bodies generally is because as a country we have not seen the importance of having our voice heard on many of these international organisations where I think perhaps sometimes the sensible views and realism that we have would help to make differences and changes to the way international sport is run generally. Mr Fraser 476. I am looking up the debate we had in Westminster Hall the other day at the same time as this Select Committee and, admittedly, by all the contributions that happened there, Minister, you were not able to answer all the questions and you did say that you would be happy to answer them today. (Kate Hoey) No, I did not. I said I would be happy to write, but I will try and answer them today. 477. I have not seen a letter. (Kate Hoey) There is a whole number of questions, not just to you, Mr Fraser, but from all sorts of Members who asked things. 478. You did say, "I shall make some points about Wembley Stadium in the Select Committee". (Kate Hoey) I have been asked so I will. I do not make points. I am asked questions and I answer them if I can. 479. It was a general comment; it was not a pointed comment. Can you refresh my memory about the costs of other stadia? What sort of cost was the Millennium Stadium in Cardiff? Either of you? (Mr Smith) I think I am right in saying about œ120 million. (Kate Hoey) It is a lot less than Wembley. 480. What about the Olympic Stadium in Sydney? (Mr Smith) I think Sydney was about œ230/œ240 million roughly. (Kate Hoey) The cost of Wembley started off being more because the land had to be bought, which was what œ120 million of Sports Lottery money went into buying, so you have to add that on to the costs of the Sydney and the Cardiff stadia. 481. So you are saying they do not compare? (Kate Hoey) You have to be sure what you are comparing with when you start off looking at stadia. 482. And the Stade de France was about the same as the Olympic Stadium? (Kate Hoey) Yes, it was, but there was Government support for that. 483. The one thing that is difficult to get a grasp of, just to get some figures, is that the estimated cost for Wembley Stadium has been reported as being about œ475 million to œ600 million. Is that a fair assumption? (Kate Hoey) Again you have to look at the fact, and I am sure Wembley National Stadium would tell you, that what they are building is more than a stadium. 484. I accept that but can you do the comparison because I cannot get my mind around what the difference is because you are telling me that they did not take into account certain things and you are now telling me that it is more than a stadium. Can you be more specific? (Kate Hoey) If we were building just a stadium like the Stade de France at Wembley, including the costs of the land, it would work out more than the Stade de France, obviously, but it would be less than what it is under the present proposals, because under the present proposals it has incorporated more than a stadium. It has the hotel, it has the offices, which of course, in terms of the business plan, are what Wembley felt was needed in order to stack the plan up in order to be able to go to the City and raise the money. 485. When we were in Manchester I, like the others, was extremely impressed by the work happening up there regarding the Games and a very interesting document came our way which I referred to yesterday which was about the Sydney experience. Are you aware of this? (Kate Hoey) No. 486. It is a very telling document and it goes through some of the comparisons between Sydney and what they are trying to achieve in Manchester. What do you feel are the lessons that can be learned from Sydney that will make Manchester a better event? (Kate Hoey) Can I just say on Sydney first of all that you have a country that is besotted with sport generally and is absolutely determined that everybody gets a great sporting experience. We are talking the Olympics again? 487. This was simply put to us about Manchester 2002 and the Sydney experience, and it very capably went through all the details of the type of Games that Sydney was and the lessons to be learned from Sydney to make Manchester a better event, and I just wondered what you felt were the main issues that we could benefit from Sydney to make Manchester better? (Kate Hoey) Manchester went out both to the Olympics and the Para Olympics because there is a disability interest as well for the Commonwealth Games, and they have come back with some very concrete ideas on how they can make things better in Manchester. One of the things that they picked up very strongly was the hugely important role of the volunteers and the way that people were drawn into supporting the Olympics by getting involved in a voluntary capacity. Not only can we use those people as helpful and useful but the experience can be used not just as an educational experience for them but also in terms of leadership and qualifications. I think the whole voluntary effort of the Olympics was something that I hope we are going to build on at the Commonwealth Games and I know that there is a lot of work going into that, but there was also the way in which Sydney brought the flame right across the country. One of the quite interesting ideas now that Manchester has is the baton running across the country so that the whole country can feel involved, that they are doing something to be part of the Games and part of an experience that everybody will not be able to attend in person but will watch on television and can still somehow feel that they are part of it. (Mr Smith) Could I just add a couple of points? The first is that of course there are some very substantial differences between the Olympics and the Commonwealth Games. There are fewer sports involved in the Commonwealth Games, there are fewer countries, and the Para Olympic competitions are folded in as part and parcel of the Commonwealth Games rather than being a completely separate event. We have to remember that there are substantial differences but there are also some similarities. I think one of the lessons which has been learned is, for example, the importance of not under-investing in the opening and closing events. It was because of learning from the Sydney preparations on this that the original expectation which Manchester had had, which was that something like one million or one and a half million pounds would be required for the opening and closing events, was changed. They came to Government, we discussed their needs with them and that is why we have earmarked now œ10.5 million, in order to ensure that those events can be of major importance, particularly with the link to the Queen's Jubilee. Also, one of the lessons which became obvious, not just during the Sydney Games but in the preparations for the Sydney Games, was the need to have a single point of control over what was happening to prepare for the Games. Manchester had started out with two separate bodies and I think it was about a year ago that we, together with Ian McCartney and with Manchester, decided that it would be much better to focus everything into one body, Manchester 2002, which is now what has happened with Charles Allen, of course, in the lead. That also very much chimes with the experience in Sydney. Mr Fraser: Do you think that it would be a very good exercise to have a document like this entitled The Dome Experience? I asked that to the Minister yesterday and he said there was no comparison between one and the other and then we found later on, if you would like to read ----- Chairman: I am allowing a certain amount of latitude here, Mr Fraser. Mr Fraser 488. I am sure you are. I am coming back to this issue because there is a comparison perhaps between running a championships in Manchester and the Dome in terms of sponsorship. Are there lessons to be learned from the Dome that can be applied to Manchester? (Mr Smith) There are always lessons to be learned from the Dome, Mr Fraser, and indeed many of those are spelt out in the excellent reports which your Select Committee has made on the subject. In relation to whether a document entitled The Dome Experience would be helpful, I think that already exists in the shape of the National Audit Office's report which is very detailed and has some pertinent observations to make ----- 489. And quite damning observations, some of them. (Mr Smith) ----- and indicates that, along the line, by virtually everyone involved in the project under governments of different hues mistakes were made, and that is something which some of us at least have readily admitted on many occasions. 490. When is Sport England going to get its œ20 million back? (Mr Smith) The agreement is that the first tranche of that money will come at the financial close of the funding deal and then, subsequently, over the course of the next four years, it will come in, as has always been envisaged from the outset in the agreement that Sport England had made with the Football Association. Chairman 491. Before you go on, Mr Fraser, we have had a letter which the Committee have just seen, dated yesterday, from Mr Casey, the Chief Executive of Sport England, with regard to this very matter. He says in that letter: "We now envisage that the first payment will be made" (which Mr Fraser has been talking about) " - as indicated by the Secretary of State - as soon as the project's funding arrangements have been put in place. Our working assumption is that the other four payments will then be made as per the original schedule. However, we are grateful to you for highlighting WNSL's differing interpretation of its agreement with the Secretary of State, which would result in the second, third, fourth and fifth payments being made on anniversaries of the first." The schedule, or payment profile, as they call it in this letter, is set out as being the first payment in December 2000 - which obviously has not happened. The second payment is December 2001 and then three other payments in the Decembers of the subsequent years, ending in December 2004. That is what is in the agreement, but according to Mr Casey, WNSL take the view that the four subsequent payments will not be made in those Decembers but on the four subsequent anniversaries of the date on which the first payment is made. So it will be very useful if you, with your authority, Secretary of State, could let us know what you believe is going to happen. (Mr Smith) Chairman, from your description of Mr Casey's letter, which I have not seen ---- 492. We have only just seen it ourselves, dated yesterday. (Mr Smith) From your description of Mr Casey's letter that does accurately reflect my understanding of the situation, that the original December 2000 deadline for the first œ3 million payment was obviously not achievable because it was always understood that it depended on the finances being put in place. It is our expectation that that payment will be made as soon as the funding deal is put in place and the remaining payments of 3, 3, 5 and 6 will be made according to the originally agreed timetable as set out in Mr Casey's letter. 493. Two further things on that, before I return to you, Mr Fraser. First of all, since we are getting on for four months after - thinking of December 1 rather than December 31 - when do you think the arrangements will be in place for the first repayment? When do you believe the first repayment will be made? (Mr Smith) Of course, this depends very much on the progress which Sir Rodney Walker and his team make in securing the private sector finance that he requires in order to proceed with the Wembley project. When I last discussed this with him, which was about a week ago, he was extremely confident that things were going well. However, beyond that, obviously, he would not, I suspect, wish at this stage to reveal commercial confidentialities which must inevitably be part of this process. 494. This Committee has got a very clear record of it never asking for commercially confidential matters to be revealed in public; it has an equally clear record of asking for the commercially confidential information to be provided to us privately. However, in view of the fact that the timetable for the first repayment has slipped and may slip substantially, it is very important to clarify - and this is a good opportunity to do it - who has the authority to require those repayments according to a given timetable? Sport England are perfectly clear in their letter, signed by Mr Casey, that they believe that the four subsequent repayments will be on the anniversary of the date which we do not know and may not know for some time. You, on the other hand, are clear in what you are saying to the Committee today, that whatever the date of the first repayment the four subsequent repayments have got to be made on December of this year, December 2002, December 2003 and December 2004. Have you got the authority and power to require that that happens? (Mr Smith) Chairman, there may be some misunderstanding, because I had understood you, in giving Mr Casey's interpretation in his letter - and I am at a disadvantage in not having it in front of me - to say that he was saying the same as I was saying, that the payments would come in on the original schedule. That is my understanding of the agreement. It is an agreement, of course, between Sport England and the Football Association, brokered by ourselves in Government, in the first instance, and that is my clear understanding of what will be expected. 495. I am sorry to labour this but it is important, and this is the only opportunity we are going to get for quite a while of clarifying this situation. If I, inadvertently, misrepresented him in my reading of this letter I apologise. Sport England say that their working assumption (whatever that may mean in terms of precision) is that the four subsequent payments after the first payment will be made as per the original schedule, which is what you are saying - whenever that is. On the other hand, they say that WNSL has a different interpretation in the agreement, which would result in the second, third, fourth and fifth being made on the anniversaries of the first - the date of which we do not know and we may not know for some time. Since this is public money (Mr Bates would say it is not public money because it does not come from the taxpayer but I think the rest of us would agree it is public money), and we being, if we are anything on this Committee, the custodian of public money, would like to be clear in our minds - you having been very clear - that your interpretation of the agreement is that whatever the date of the first payment the four subsequent payments are made in the Decembers, starting with December of this year. Now, since Sport England tells us that WNSL's interpretation was different, do you have power to enforce your interpretation? (Mr Smith) No, because it is an agreement between Sport England and the Football Association. Indeed, WNSL do not have the ability to enforce their interpretation either. I would look to Sport England and the Football Association to maintain the spirit and, as far as possible, the letter of the original agreement. I will make that very clear to all parties. 496. What happens if they do not, Secretary of State? After all, in the end, this money - and I do not want to be derogatory to anybody about this - which is floating around in the ether like a piece of flotsam, is our money, paid by all our constituents by buying lottery tickets. A disagreement between Wembley and WNSL on a very substantial amount of œ20 million is something which, it is perfectly clear, Secretary of State, you are not willing to allow to impede these repayments. I am not going to press you on this, it would be idle to do so, but I do put to you, Secretary of State, that there will be severe anxiety if, due to a disagreement between two bodies over which you have no direct power, this public money is not repaid according to the schedule by which you expected it to be repaid. (Mr Smith) My expectation is entirely clear, as I have indicated to you. That is also Sport England's expectation. I have no reason to believe from the Football Association that they demur from that interpretation. I will be doing everything I can to make it clear to all parties involved in the agreement that on behalf of the public that is the expectation which we have. 497. The problem is, Secretary of State, and I hope you will forgive me because it is far from my intention to put you on the spot in any way about this, if we do not clarify this now it is going to be quite a while before we can clarify it. Mr Casey goes on in the next paragraph to say this: "It is our intention to clarify this point as the arrangements are finalised with the FA/WNSL prior to financial close. However, I am sure you will appreciate that Sport England was not a party to the original agreement between the Secretary of State and Mr Bates, so we believe that the DCMS and the FA/WNSL are best-placed to end this uncertainty." So what Mr Casey has done, I am sure with the best possible will in the world, is to kick the ball right back to you. (Mr Smith) With the best possible respect in the world, Chairman, I have kicked the ball firmly into goal by indicating very clearly what my understanding of the agreement is and what my expectation of the agreement is. 498. Perhaps, Secretary of State - and please do accept that on my part there is no intention whatever to put you on the spot but this has arisen in the past 24 hours and it is our duty to try to clarify it - it would be helpful if you could write us a letter, and write us a letter reasonably quickly so that we can include taking account of that in the report which we are about to draft. (Mr Smith) Chairman, I have made it as clear as I possibly can, and I will redouble that clarity in any letter which I will willingly write to you. Indeed, I have in front of me the letter of 7 January last year, from me to Mr Bates, in which I set out very clearly the agreement that had been reached. That agreement, that letter, does not refer to annual intervals, that record of the agreement refers very specifically to the commencement of repayments in the year 2000 (and that is where the financial close issue has, of course, arisen, but it then says " ... paying œ3 million per annum in each of 2000, 2001 and 2002, œ5 million in 2003 and œ6 million in 2004." There is no 12- month gap indicated there, it is clearly by date and that is how we intend to maintain it. 499. Just a small matter, Secretary of State, because it is not clarified in Mr Casey's letter. When it says December in each of these cases, have you any idea whether they mean December 1 or December 31? (Mr Smith) I do not. Chairman: Thank you, Secretary of State. Mr Fraser 500. I shall just put one more point to you, and others can come in on this. If the œ20 million from Wembley Stadium is dependent upon Wembley reaching its funding agreement in the way we have discussed, and the athletics stadium is short of its budget, can you tell us about the contingency plans that you have got for funding the athletics stadium at Picketts Lock so that it can actually reach its proper funding in time for the 2005 championships? (Mr Smith) Of course, that question, Mr Fraser, is predicated on the assumption that Wembley does not reach its financial necessities. If that were to happen we would have a substantial number of problems on our plate, of which Picketts Lock might be one, but Wembley itself would be another. I am, as I indicated earlier on, absolutely confident that we will be able to ensure a good, world-class athletics facility at Picketts Lock. That remains my belief. 501. If I may, just on that point, go back to the problem we had with the Millennium Dome, we went through this time and time again with the Millennium Dome about the contingency plans. Each time we asked the question it came back "We are on schedule, everything is all right, contingency plans are not required", and look what happened. Okay, it did open on time but there were an awful lot of open-ended questions about sponsorship and other issues. I put it to you that your department fell short of its responsibility for ensuring that proper contingency plans were in place, and from what you are telling me this morning, in effect, there is no contingency plan now. (Mr Smith) Firstly, I disagree with your analysis of the Dome. Indeed, that does not accord with the reports which were put together by this Committee. Secondly, in relation to Picketts Lock, we are working very closely with all the parties involved in Picketts Lock to ensure that the necessary funding is put in place. Obviously, for something that is going to be for a world championship in 2005, it would be strange if we were to assume that every single penny was already secured and in our pocket in order to deliver it. However, the commitments are there, there is a relatively small funding gap in prospect, there are quite a number of discussions under way to secure that funding gap and I have no reason to believe that this is not on track. 502. How big is that funding gap? (Mr Smith) As I indicated in earlier evidence, which you may not have been listening to, Mr Fraser ---- 503. I was, I just want you to remind me. (Mr Smith) The commitment in their budget from Sport England is œ60 million, the high-class performance centre is œ7 million and the Lee Valley Regional Authority is œ5 million. The requirement for the stadium from the latest figures that we have from the quantity surveyors is between œ83 and œ87 million, so the gap is round about œ15 million at worst. 504. Comfortable. (Mr Smith) That is, in my view, eminently meet-able. Mr Faber 505. In Mr Fearn's initial question I think it may have slipped your mind that one of his questions was what assurances you have given to Mr Moorcroft and UK Athletics in respect of the funding of Picketts Lock. He clearly feels he has been given cast-iron assurances. What actually have you assured him? (Mr Smith) I have assured Dave Moorcroft, as indeed everyone involved in Picketts Lock, that Government will be doing everything it possibly and legitimately can to ensure that this is going to be a success. 506. What is that? (Mr Smith) That is the commitment of approach and intention that we have given, and we stand very strongly by that. 507. What does that represent in a tangible way? What tangible support is there? It is all very well to give Mr Moorcroft nice words, but ---- (Mr Smith) As I have already indicated, the vast majority of the necessary funding for the creation of an excellent stadium is already earmarked. The on-going revenue costs of the facility after the World Athletics Championships is also coming fully into place and we are working very closely with all the other relevant authorities to ensure that the Games can be a success. That is the commitment that we have given, and that is, I would suggest, the sort of commitment which any sensible government would, at this stage, be giving. 508. Mr Moorcroft said to us "We are involved in discussions with the commercial sector, obviously through the Secretary of State, sums of other public funding." What does he mean by that? (Mr Smith) That, of course, refers to both the commitment from the Lee Valley Authority and, also, the possibility of further regeneration potential through the LDA and the Greater London Authority. There are a lot of discussions of this kind going on at the moment and there are a lot of possible routes to make progress. It is our intention that we should make progress on all of them. (Mr Smith) Mr Fearn also asked him, as he asked you earlier, who will underwrite the Games and bear any financial losses, and in that he included building the stadium, to which Mr Moorcroft replied: "It is far more appropriate that either the Secretary of State or the Minister answers this question because the assurances we have are from them ... ". Again, what actual assurances have you given him that you will underwrite any losses? (Mr Smith) As I have indicated to the Committee already earlier this morning, and as I have indicated to Dave Moorcroft, we understand absolutely the difficulties that the Mayor of London has. It would be the normal expectation in most cases of this kind - as, indeed, in the Manchester Commonwealth Games and, indeed, the Birmingham 2003 Indoor Athletics Championships - that it is the city that undertakes that formal underwriting process. 509. I am sorry, Secretary of State. Mr Moorcroft is saying that it is you that has given him the assurance, not the city. He is quite categoric about it. (Mr Smith) I am sorry, Mr Fraser. If you are not interested in an intelligent reply to your question then, I am sorry, but if I can continue. The normal circumstance in these cases is that the city authority would be expected to perform that formal underwriting process. Now, because of the particular nature of local government structures in London, that is difficult in the case of a championship in London. That is why we are now looking at what alternative arrangements can be put in place. This is not something that is an immediate issue. It has to be resolved within the next few months and work is under way to do so. 510. Minister, there is one option for you to sign the contract. (Kate Hoey) Ultimately, I think, if we are being honest, if we want this world championship to be successful and we want the whole thing to succeed - which I hope everyone, whatever their differences in the past about Wembley, will now want to make sure we deliver a really good World Athletics Championships - it will either be UK Sport or the Government, or UK Sport via the Government ---- 511. UK Sport has told us quite categorically they did not ---- (Kate Hoey) They would not do it without knowing that they were going to be able to rely on us as Government to - I hate to use the word "bail" them out because I do not think it would come to that, but they obviously could only do it if we agreed it. 512. So you are saying that if UK Sport were required to underwrite and sign the agreement, that would be with an implicit ---- (Kate Hoey) I am not saying that, David. I am saying that somebody is going to have to sign this agreement. We are caught in a situation at the moment where we need to sign it and we will make sure, in our discussions with the IAAF next week, that the detail of when that will happen and who will be worked out. I know it is an important issue and you all seem to think it is an important issue, but in the broad scale of things I have to say it is a technicality. 513. Perhaps we can move on, Secretary of State, to the money which is in your opinion the agreed œ60 million, and we all know how the œ60 million from Sport England is made up. Why did you tell this Committee again and again on 6 February that Sport England had made an in principle allocation of this money when that is not the case? (Mr Smith) Because, Mr Faber, that is what has happened. I would refer you to the Lottery Panel minutes of Sport England of 24 October and I would refer you to the council minutes of Sport England of 6 November. 514. Miss Simmonds of Sport England, who sits on that council, told us quite categorically that no in principle allocation had been made. (Mr Smith) The allocation has been made in their budget. That is very clear from the minutes, both of the Lottery Panel and of the council. 515. Secretary of State, she explained to us in great detail the difference between an allocation in their budget and an in principle agreement to fund. She explained to us in considerable detail that an allocation to fund is the first step towards the funding of a Lottery project and an in principle agreement is a more formal type of agreement to fund the project prior to the money actually being handed over. She said that you might have a misunderstanding of the words "in principle", but that "in principle" does represent something, which is not what you are saying. (Mr Smith) That is why, when I spoke with the Committee earlier, I spoke about an in principle allocation, which is indeed what Sport England have put in place, and not about an agreement to fund. An agreement to fund can only come once they are completely satisfied with the detail. 516. Why would Sport England's Chairman, Chief Executive and Brigid Simmonds sit in front of us and tell us that is not the case? (Mr Smith) With respect, I think what they have told you is exactly what I have told you. 517. No it is not, it is completely different to what you have told us. Either you have misled this Committee in saying that an in principle agreement has been reached when it has not by Sport England, or you, as Secretary of State, are not aware of how one of your Lottery funding boards works. Tony Banks, when he sat before us a couple of weeks ago, understood perfectly; he said he had always in his time as a Minister understood the difference between an allocation to fund and an in principle agreement. (Mr Smith) As I repeat, that is why when I have spoken with the Committee I have talked about an in principle allocation, because that is what Sport England have made, and the minutes of both the Lottery Panel and of the council meeting confirm that. 518. So you are saying that when Mr Brooking, Mr Casey and Miss Simmonds appeared before us they misled or, even more seriously, lied to this Committee by telling us that --- (Mr Smith) I am not saying anything of the kind, Mr Faber. I do not think that your line of questioning is accurately reflecting either what they have said or what I have said, or the intention of both of us. 519. I have got it here in front of me. I said: "Can I stop you right there. Are you saying that an allocation in the budget is a lower level of agreement than the in principle decision you have given to Stoke Mandeville?" (We were discussing an issue which Mr Wyatt had raised.) Miss Simmonds replied: "Yes, I am saying that." It is different; they are two different things. (Mr Smith) With respect, I am not disagreeing with that assessment. What I have always said is that what Sport England have done is to allocate within their budget œ60 million for Picketts Lock. That is what she has confirmed, that is what the minutes of the relevant committees confirm and it is what I have always said. 520. You are backtracking now, Secretary of State, because you are now returning to using the words "allocation of funding" and they are two different things. (Mr Smith) I am not, with respect, backtracking, I am making very clear what I have consistently said and what they have consistently said. 521. I would suggest to you that you are consistently using the words "in principle" to us knowing full well that they are different, because it sounds like a more substantial type of funding and it sounds as though the agreement has been agreed when it has not. (Mr Smith) I have never claimed at any stage - and indeed I spelt it out to this Committee when we last discussed this matter, and I think it was you yourself, Mr Faber, who raised it - that there is an agreement in place. Clearly there is not an agreement in place. What I have always said is that an allocation has been made, that allocation is clearly in place, and the minutes confirm that. 522. The case has been made, you say again and again, in principle. You say here "I rely on the in principle agreement that they have given". (Mr Smith) The nature of the commitment is very clear from the minutes of decisions that they have taken. That is what I rely on ---- 523. Why did they not tell us that when they appeared before us? (Mr Smith) ---- and that is what I have always worked on the assumption of. 524. I am sure other Members of the Committee, having heard their evidence, will draw their own conclusions. When you appeared before us on 6 February we had a lengthy discussion about the arm's length principle and about the amount of pressure which it is right for a Minister to bring to bear on a Lottery fund. You said to me that if I wrote to you with a Lottery application from my constituency you would forward it on to Sport England and that would be the way in which it was dealt with. How often do you write to any of the Lottery Panels encouraging them to make a funding commitment, encouraging them to agree a Lottery application? (Mr Smith) What I will sometimes do, very often, in forwarding on representations that I may have received from a Parliamentary colleague, is to express the hope that they will look at a particular application sympathetically. Sometimes they do, sometimes they do not. What I might also do in relation to something that I regard as being of major national importance - be it, for example, the facilities for the Commonwealth Games or the facilities for the UK Sports Institute, or indeed a stadium for the World Athletics Championships - is to say to the relevant funding body that this is something which would be of enormous benefit to the nation, that that is my view and that I would certainly hope that we could ensure that facilities of absolutely outstanding quality could be achieved, be it for the Commonwealth Games or for the World Athletics Championships. I will, from time to time, make observations of that kind. Of course, it is up to them to make the detailed decisions about whether to accept a particular proposition or not. However, I can quite legitimately, as indeed this Committee can, chart the broader parameters that need to be taken into account. 525. So you are saying that in those three examples you have just given you have written to Sport England or the Chairman of the Lottery Board suggesting that they view applications favourably? (Mr Smith) I have to confess that I cannot remember whether I have specifically written in each case, but in each case I have made it clear in meetings and discussions that there are national objectives which I believe are worthy of consideration. I cannot force them to take them into account because they are a sovereign body, but what I can do is indicate the broader picture which we, as Government Ministers, rightly, have to take into account. 526. So you cannot recall whether or not you have written on the issue of Picketts Lock to Mr Brooking or any members of the board? (Mr Smith) I certainly think I have written on occasions. I cannot remember the dates and I have certainly discussed it with them on quite a number of occasions as well. 527. Could I move on to the issue of the œ20 million and follow up slightly what the Chairman was asking? I certainly understood Mr Casey's letter to correspond directly with what you have already written to this Committee about, and I think Mr Casey's view of what WNSL's view was came from WNSL's evidence to this Committee, in which they did say that they expected to pay the tranches back at subsequent dates following on. I do not know if you have had a chance to read Sir Nigel Mobbs' evidence to us a couple of weeks ago? When I asked you on 6 February about your meeting with Mr Bates at your house in December 1999, you said "We had quite a number of discussions prior to the crucial funding meeting with Ken Bates between my officials, the Football Association and Sport England." Why did you not tell us that you had appointed Sir Nigel Mobbs to undertake these discussions on your behalf? (Mr Smith) There was no formal appointment of Sir Nigel Mobbs. I had asked him to assist as an honest broker between the various parties to see what might be achievable. I have to say, he fulfilled that role with considerable expertise and great helpfulness. 528. Why did you not tell us on the previous occasions when we have discussed this in great detail that that is what he had done, and that effectively when Mr Bates arrived at your house that day the deal had already been done? (Mr Smith) I think I did indicate to the Committee at some stage that that meeting was a confirmation meeting, it was not a negotiating meeting. Precisely how we arrived at that position did not at the time appear to be material. 529. He told us also that you had originally suggested a figure of œ40 million should be returned. Were you satisfied with the œ20 million, or would you have liked more? (Mr Smith) I was satisfied that the œ20 million was both fair and represented what was achievable. 530. When we subsequently published our report and the department replied - as always happens with Select Committee reports - Sir Nigel's letter to you was appended to the document as an appendix. He told us in a letter which we have just received that he did not even know that was going to happen. Do you not think that is quite extraordinary? (Mr Smith) I certainly appended it on the assumption that I had made at the time that he had been informed and consulted that we were going to do so. It has come as something of a surprise seeing his letter to the Committee that says he was not, and I would certainly want to apologise to him for that omission. 531. Presumably the reason you appended the letter was because at a superficial level the letter very strongly supported your refuting of this Committee's report on Wembley. He said that he felt that having the athletics track at Wembley would provide a blight, with reference to a possible Olympic bid for 2012. Of course, most of our report has to do with the issue of holding athletics at Wembley in 2005, and we were a little surprised that he told us that he had actually advised you that it was perfectly conceivable for athletics to be held at Wembley in 2005. So you were actually using the letter under slightly false pretences. (Mr Smith) Not at all. If I had been seeking to do that I would have quoted partially from the letter rather than providing it in its entirety to the Committee. However, I would point out that Sir Nigel Mobbs' advice to us was certainly that it was feasible to hold the 2005 World Athletics Championships at Wembley. We indeed confirmed that ourselves at the time. However, he also said that there were very considerable problems, particularly in relation to the provision of the warm-up facilities. It was the warm-up facilities as much as it was the difficulties of the concrete platform that dictated the view that we held. 532. The Committee has had another lengthy letter from Trevor Brooking on the issue of the differing views on the costs of converting Wembley into athletics mode, but we have been through that so many times before we will not go through it again now. (Mr Smith) I have seen the letter and I have to say that there is an assumption in that letter that it would be perfectly possible to have used the Copelands School site as the warm-up facility. Leave aside the fact that the Copelands School site is getting on for a mile away from the stadium and across a whole series of residential roads and a major railway line, the evidence which Sport England themselves gave us at the time was very clear. Indeed, at a Wembley Task Force meeting of 11 November (as I think I have indicated before to the Committee) the view of Sport England given to us very clearly at that time was that Copelands School was, and I quote, "a non- starter" as a warm-up facility. So I think one needs to take the letter that the Committee has received in the light of what was being said at the time. 533. So you are saying that Trevor Brooking's letter is not accurate? (Mr Smith) I am saying that Copelands School was never - and Sport England took this view at the time - a sensible place to look to the warm-up facility. 534. There seems to be an awful lot of areas of disagreement between yourselves and Sport England. From our point of view, looking at this inquiry in the whole, and from my point of view looking at how sporting events should be staged in this country, I think we have all said at various different times that there seem to be so many different bodies involved, so many different interests involved, and yet Sport England, who are the senior Lottery distribution body for sport in this country, operating under the auspices of your department, you do not seem to be able to agree with them on anything. (Mr Smith) With respect, we agree with them on many things. On the issue of Copelands School we do not agree with them. Indeed, they did not agree themselves at the time when the decision was taken back in December 1999. 535. You do not seem to agree with them on the in principle funding of Picketts Lock. (Mr Smith) I agree with them entirely about the fact that the money has been allocated in their budget. 536. Finally, Chairman, just on the issue of the œ20 million, I know you have written to us about Mr Bates' view about the possible relaxation of some of the commercial restraints at Wembley and the details of your meeting, but I think what confuses me is not whether or not an agreement was reached at the meeting that commercial restraints could be restricted to the naming rights of the stadium, but why, when you wrote to Mr Jeff Thompson of the FA on 19 February, you raised the issue of naming rights when no one had raised it previously in any of the previous correspondence? (Mr Smith) Because there had been some discussion prior to that point about whether at some stage in the future the issue of naming rights for the stadium as a whole might be worth discussing, and because that matter had been discussed on various occasions it seemed to me sensible simply to flag up that that was a matter on which I would be perfectly relaxed about a discussion taking place. No agreement of any kind or even specific discussion in relation to the œ20 million had ever included the issue of naming rights. Mr Wyatt 537. Good morning. I wanted to pick up Mr Maxton's point about whether the Olympics are really where we should be. We did not do too well in swimming. As I understand it from Trevor Brooking, nearly every municipal swimming pool has either got concrete fatigue or is leaking and needs major repair, and the cost of that is over œ5 billion. It is also clear that local authorities do not have that sort of money. A bid to do the Games would cost around that, in some way or other - either in regeneration of bridges or the infrastructure as well as everything else. It would be nice if we could have both actually, but is there not an audit that is required first? I want to put that into yesterday's announcement that there is five-year Premier League funding for the arts. Does that mean there will be a five-year Premier League funding for world-class facilities for our major cities so that instead of having to bid and, therefore, create facilities we could have just the facilities for everybody to begin with? (Mr Smith) Of course, we know that the range of facilities for a variety of different sports that we have in many cities in this country are not up to the scratch that they ought to be. That is something which gradually, over time - you cannot solve it overnight, obviously - with the commitment from the Lottery to sport of œ250 million, roughly, a year, with the enhanced revenue for sporting that we have been able to put in place as a result of the spending review, and with the new commitment under the opportunities fund for school sport (?) we can begin to make a dent in that. If we were to contemplate a bid for the Olympics in due course, I would not want to see any of those existing streams of commitment to the development of the sporting infrastructure of this country being disadvantaged in any way because we had decided to move ahead with an Olympic bid. (Kate Hoey) I think that is really what I was saying earlier. 538. Picketts Lock will cost around, it seems, œ90 million, give or take œ5 million, which I reckon means, in VAT terms, nearly œ16 million will go to the Treasury. I just wonder what discussions you have had with the Treasury on hypothecating the VAT, because it seems to me that that is a very slick way of having, if you like, a back stop for the money, a funding arrangement if it goes in the budget, and some assistance to the city that is bidding. I asked this yesterday at Manchester and I will ask it again. What sort of negotiations have you had with the Treasury on Smart funding? (Mr Smith) Well, of course, matters of this kind are entirely matters for the Chancellor of the Exchequer. I have to say that my experience of discussions with the Treasury on the subject of VAT are that they tend to be extremely reluctant to make any changes whatsoever in the VAT regime. However, on all of these sorts of matters we are in regular discussions with our colleagues in the Treasury. (Kate Hoey) We did have a successful outcome with the Treasury this year on the long-standing campaign from sport by everybody to get amateur and committee sports clubs recognised as some form of tax exemption. That was a major victory, but it has taken 20 years. 539. If we are to encourage international events, irrespective, if we knew that within the amount of money it costs, the hypothecation of VAT was part of that, that would encourage a much more ambitious bidding arrangement. Let me just move on. We recommended a Minister for the Commonwealth Games, you have not yet recommended a Minister for the World Athletics Championships and I have not heard anything about a Minister for the Olympics. Is it your assessment that having a Minister for the Commonwealth Games has been a good thing or a bad thing? If it is a good thing, what are your recommendations to the future international events? (Mr Smith) Let me have a first go, then Kate may want to add a word or two. First of all, I think that having Ian McCartney in place, with an oversight role, for the Commonwealth Games has been enormously beneficial. That has been very much because a whole range of different government departments have interests in the progress on the Games, particularly, of course, the Home Office and DETR, as well as ourselves, but a range of other departments as well, particularly given the Commonwealth focus of the occasion. Having Ian in place to co-ordinate what is happening across different departments has been extremely useful. In relation to the World Athletics Championships, it may well be that in due course, when we come nearer to the holding of the Championships, if there are cross-departmental issues to be resolved that could benefit from a ministerial cross-departmental champion, then it may well be that a similar sort of role for someone might be advisable. I do not think we are at that stage yet. The focus at the moment is making sure that we get all the building blocks in place to ensure that we can build a high-quality stadium and make all the necessary preparations for beyond that, and that is what we are working extremely hard on already. (Kate Hoey) I think that we have already said how important Ian McCartney has been in this whole process. As far as in London is concerned, the World Championships in 2005, I think that as we get nearer there may well be a need, but particularly the work with the BOA and with the World Athletics Championships is going to be very, very crucial and the involvement of the Mayor is going to be very important as well. I think that may be something that is new for London, which we will be able to use. As far as the Olympics are concerned, we are certainly going to need more than a Minister to deliver an Olympic Games; we would need to have a prime ministerial involvement in the Olympic Games. Clearly, in terms of the Olympic Games, the scale of it is so huge and vast that we would have to look very carefully at it, and that would be part of the decision-making as to whether we are going to have an Olympic bid. 540. Let me try to tease out the Olympic bit. Here we are, the BOA has no money, but sends a document, leaks some private leaks to journalists - leaks or whatever, something happened last week - does not send it to UK Sport or Sport England, so they do not participate in any of this whatsoever. Here they are, the two senior bodies of sport. To anyone out there it seems utter confusion as to what is going on in sport, and therefore, before anything else happens, maybe a Minister for the Olympics should be appointed now, because from what I have been able to read so far of the bid from the BOA, it is inside the M25, except for the business of the yachting and so on, which is extraordinary. We have London-Gatwick, London-Heathrow, London-Luton. I am sure I have left one out there. You can have a bid along the North Thames gateway, along any part of London, it does not have to be west or east, but they are beginning to put down agendas as though they are cast in stone already. They are not going to pay a single penny for the Olympics. So it seems to me that we have already started the process wrongly; that if we are not careful, it then becomes political between three or four different organisations, and that is not the way to represent British sport internationally, is it? (Kate Hoey) I think that in fairness to the BOA, it is important to point out that we are only one of the two countries in the world where the Government gives no direct support to our Olympic team, therefore they raise huge amounts of money in sponsorship which is very, very important to them and will continue to be important for the next Olympic Games. So I think it is being very unfair to say that somehow BOA do not bring any money ever to the table; they do actually. In terms of staging an event like the Olympics, it is clearly not something that the BOA would be involved in in the facilities, the infrastructure and all of that; they have another role to play in terms of the actual delivery of the Games themselves. 541. Do you not think it is extraordinary that the UK Sports Council was not part of this? (Kate Hoey) I am all in favour of transparency. I personally do not take the view that the BOA do, which is that this document, which we have all seen, is somehow going to raise prices or whatever in terms of land values. Actually, I think that anyone who has got any development sense will be already pretty aware of where any Olympic Games or any subsequent Olympic Games were to be held, so I would be in favour of them making it. I would actually like generally to have a real public debate on this, not just in London but in the country. You do not have that public debate unless you have as much openness as possible, and that would be what I would like to do. 542. Can I come back to the single Minister and perhaps a single Ministry which we might have to think about. I was present at the Americas Cup in Freemantle where Freemantle was transformed from a small town to a major international village, with massive facilities put in. I said to the mayor at the time, "What's coming next year?" He said, "Next year?" He had built all these facilities. If you go to Freemantle, very sadly they are no longer there. When we went to Manchester, the only way that Manchester can really work is to bring in world-class events month after month after month. They do that with the cycling. They cannot do that with the athletics terminal because it will go to Manchester City Football ground. Do you think that we need a much more engaged government that is not necessarily a department of CMS or DTI, but it is actually centrally in Cabinet, so that we are winning these things, bidding, putting up the money to go there, so that we can say to Manchester, "By the way, there's this coming up, we think you should bid" - not just sport, whole international events? (Mr Smith) Of course, in relation to what individual cities wish to do, in terms of regeneration and so forth, there is already such a role in Cabinet for the Deputy Prime Minister. In other respects, though, the encouragement of the cities to consider cultural or sporting bids is something that our Department does, and we are launched now on a programme of encouraging cities across the country to bid to be the European Capital of Culture in 2008. That is something which quite a number of cities have indicated to us they are interested in bidding for, and we will be in close touch with them throughout that process. In relation to the 2005 World Athletics Championships, we worked very closely with UK Athletics, and indeed with the Borough of Enfield, in putting forward a bid to the IAAF, and we are now working very closely with them to make sure that it can be a very successful games. I very much hope that everyone else, from whatever side of this Committee, will get behind that project which can be, I think, of enormous success and benefit. It may well be that in some cases where you come towards the concluding stages of preparing for an event, and where a range of government departments are involved, having a dedicated Minister who can cross departmental boundaries is helpful. I am not convinced that you need a specific Minister just challenged with doing this sort of work on a permanent basis. Mrs Golding 543. Good morning, Secretary of State. Good morning, Minister. Are you satisfied with the performance of Sport England and UK Sport in supporting requests to bid for and stage international events and indeed any sporting event? Are you satisfied with their performance? (Mr Smith) Certainly in relation to the Commonwealth Games, both UK Sport and Sport England have been extremely supportive; they have put very substantial resources into them, and I have every confidence that they will continue to do so. In relation to the World Athletics Championships, give or take the semantic argument which we were having just a moment or two ago, the earmarking within the budget for funding for the stadium is already there, as indeed is the commitment also within their budget to provide funding for the holding of the Championships themselves. So there is real commitment there from both Sport England and UK Sport, and we very much hope they will continue to take that approach to other international events. 544. Secretary of State, you have now talked about two very major events. There are other international events. (Kate Hoey) I was going to say that. There are a huge number of small, so-called minority sports events that we host, that we stage and that we do very well in. I think UK Sport, with its sub-committee that it now has on world-class events, has a much more proactive and looking-ahead attitude, so that it is not just about a sport deciding that they automatically want to host a championships, but there needs to be some discussion on whether the benefit of hosting that is actually in the long-term interests of their sport and not just about a one-off event. I think what they have done is they have been bringing their group together, meeting regularly and looking at how again those governing bodies can have much more influence in the international world. 545. What do you mean by "bringing their group together"? Who is this group? (Kate Hoey) They have got a staging events sub-committee. I think UK Sport talk about that in their evidence. That brings together the varying governing bodies to talk about how they can best benefit from staging an event, but also learning from the difficulties - for example, what lessons can be learned from things that went wrong or did not go so well with having the World Cricket Championships here. They are having the World Amateur Boxing Championships in Belfast later this year. How could they learn from some of the other events that have been staged in this country? I think that is really the role of UK Sport; it is very much strategic, an overview, sharing the experience. I do genuinely think UK Sport has got a grip of that, within the limited money that they have made available or that we have made available to them. (Mr Smith) Indeed, I am just checking here through the list. There were, in the year 2000 alone, 15 different international events which received support from UK Sport financially, ranging from the small amounts to things like the World Indoor Bowls Singles Championships, through to more major events like the World Track Championships and cycling. Those have been very successfully supported by UK Sport. (Kate Hoey) I am sure you yourself will be aware of the support that was given to the World Angling Championships - the Coarse Fishing Championships - last year. 546. Yes, but not the World Fly Fishing Championships. (Kate Hoey) I attended. I opened the World Coarse Fishing Championships. Chairman: Minister, I think I had better tell you here and now that you are never going to trump Mrs Golding. Mrs Golding 547. I must say that I am pleased that at last they seem to be getting their act together, because when Sport England appeared before us first of all, they seemed to have a shortlist of sport beyond which they were not prepared to go or to consider. They certainly seem to have changed, and I hope this Committee has made some contribution to that, but they still have an attitude of "If people come to us and ask." Surely they should be more outgoing, encouraging people if they are considering it; if they have got a sport that they think could host an international event, they should be much more outgoing, rather than waiting for people to come and ask? (Mr Smith) I would certainly very strongly agree with that as an approach that we would hope both UK Sport and Sport England would take. Indeed, it is part of that can-do approach which I referred to earlier on. I have to say that a fairly crucial difference has been made by the rejuvenation that we were able to put in place following the recommendations of this Committee for UK Sport, because it is the establishment of UK Sport as a Lottery distributor with its own stream of money as well as its Exchequer money that has enabled them to take a much more proactive approach than perhaps they were doing, along with Sport England, before. (Kate Hoey) Of course, at the moment there is also a review going on into Sport England generally. One of the first quinquennial reviews is looking at the whole ways Sport England works, whether it needs to be changed in the way its strategic focus has widened. I think everybody will find that extremely useful. 548. Secretary of State, you did say that they were the sovereign bodies. I hope they will not be too sovereign, and that you will get a bit more body into them and see that they do the right thing for British sport. (Mr Smith) Whilst I sympathise with that approach, I must, of course, always bear in mind Mr Faber's injunctions that I must not trespass on the arm's-length principle. Chairman: That rather says that, does it not? Mrs Golding: An excuse for doing nothing. Mr Keen: It looks like I am the last one to ask questions at the end of what is possibly the last session of this Committee in this Parliament. Can I say how very much we appreciate the Chairman's running of this Committee as well. I do not know whether global warming will affect the environment in the Golding constituency and whether we will ever get the Fly Fishing Championships there, but we will do our best. Chairman: If we can stop North West Water from building its accursed Northside Park Business Park, we can use the reservoirs. Mr Keen 549. I am sure the Secretary of State will take note. Christopher Fraser was asking questions about the comparisons of capital costs of the various stadia that were used for major events recently. He seemed to be getting at the fact that Wembley seemed to be costing an awful lot more than the other ones did. The Minister of Sport gave the direct answer that the reason why it was very expensive was because it had a hotel and office complex attached to it, and that is attached to it because of sustainability. Picketts Lock seems to be the opposite, in that it is being built as cheaply as possible because there is not a lot of money left to allocate to it. How will that be sustained, then, if there is nothing other than athletics to sustain it, I would presume? (Mr Smith) First of all, in relation to Picketts Lock, it is not anyone's intention that it should be built as a cheapskate, cutting-of-corners exercise. We want a good, high-quality stadium. Certainly my expectation is that what we will see from the architects tomorrow is precisely such a stadium. Secondly, the long-term legacy for athletics is precisely why UK Athletics have seen Picketts Lock as something that is of enormous promise for them, because this is not a case of a stadium which has to be built in one mode and then spatchcocked into another mode for some other sport; it is a stadium which can be built for the World Championships and then scaled down to a limited extent so that it is a long-term legacy stadium for athletics, coupled with a high-class performance centre which will be a first conjunction of a stadium facility of this kind, together with a high-class performance centre, with the long-term existence of both the warm-up facility and the throwing facility. That combination is something which is of enormous potential benefit for athletics, both, I regard, for elite athletes who will come to train there, but also for community athletics which, across the whole of north and east London, are at the moment very short of good facilities. 550. I think that that is very much what UK Athletics have found, but what is going to happen to the other athletics venues? If it is going to cost an awful lot to sustain a stadium of that quality, which you tell us is going to be Picketts Lock, what effect is that going to have on other venues around the country and athletics training centres - Crystal Palace for one, Gateshead for another? (Mr Smith) First of all, Sport England have already made a very public commitment to improving the facilities at Crystal Palace, and that will, for south London, be a very much enhanced facility. In terms of the National Athletics Centre at Picketts Lock, I think UK Athletics envisage as well as the UK Championships having the London Grand Prix held there, and also I think they hope the AAA Championship, but there will be a range of other championships which will be able to be held elsewhere in the country, such as Gateshead, Birmingham and Sheffield, where there are also good-quality athletics facilities. All of that does not take account also of the desire on everyone's part to develop the sport of athletics so that there are more events that the public will want to come to, so that athletics has an increasingly high profile within the sporting calendar. That is something that we are already beginning to see following the success of the Olympics, and I hope following the Commonwealth Games and the World Indoor Championships and the World Outdoor Championships we will see further boosts to the standing and profile of athletics as a sport. 551. The most regular athletics events are the inter-club competitions on a virtually weekly basis. Many of those tracks struggle to maintain the quality required for that. Will not the amount of money put into Picketts Lock diminish the amount of money that is left to support those grounds? (Mr Smith) The commitments that are already being worked up for the long-term running costs of Picketts Lock, both from the Borough of Enfield and, we also hope - as I think is seen in the evidence - the Committee from the London Marathon Trust, will, I am sure, enable good-quality maintenance of Picketts Lock as a facility to take place and, as I envisage it, both being used for the high-class performance work which will be ongoing and continuous, but also, I would hope, for a lot of schools' and community use across London. 552. Moving on to the world stage, we understand that there are changes proposed, or that can be put into being, by FIFA, for instance, and the IOC, in the method of selecting host nations. Are you happy with those changes that are being made? (Mr Smith) We think that progress is being made. (Kate Hoey) I think that certainly the IOC has attempted - indeed, I think it has succeeded - in being much more transparent about how it is handling the bid process, because the next decision will be in early July. I still think for all of us who care passionately about what is happening really to our constituents' daily lives in terms of sporting opportunities, we have to be concerned at the huge amounts of money that need to be spent by countries in order to win championships. As it happened, staging the 2005 Athletics Championships and winning that did not actually cost us that much money, and it was not in the scale of an Olympics bid. They certainly have made it difficult. I personally welcome FIFA's changes in terms of how we can perhaps have a more understandable way of choosing who should host the World Cup. Again, it gets back to my earlier point that for too long this country has lost out in terms of its influence in international bodies, and we have not had people in the bodies that mattered, to be putting forward what I am sure would be sensible views and helping to realise that money being spent on the kind of glitz that went on, the present-giving and the wining and dining, is actually not very sensible. 553. Do you think that Government should take a more proactive role in insisting on changes? I will give you one example in football. The European competitions are increasing year by year in the number of games involved to get through to the final stage. It seems to grow, rather than a decision being taken on where we would like to be in ten years' time and what sort of European competitions there should be. It seems to me that that is really because it is the football bodies wanting to get as much money as they can into their own coffers, rather than looking at the future of the game. Do you think the Government should take a view on that? (Kate Hoey) Of course, Government does not run football, and we do run the risk, particularly in such a high-media sport, that every time you make a comment on football it becomes a headline. I think that our involvement and our role has to be to try to influence and support, and, certainly as Minister for Sport, to get governing bodies to accept their responsibilities and long- term development of the sport, and also in terms of getting participation rates increasing. I think we are seeing a change now, in that most of our bigger governing bodies of sport do recognise that they have a responsibility, and therefore that some of the money from television rights should be going down and should be earmarked to go down to a clear development plan. Cricket, rugby and tennis and more recently football in the Sport Foundation are making that difference. I think we can only influence in a way that is by sometimes saying things that they do not like to hear, that they do not want us to say, and kind of encouraging them to be responsible and long term, not to make short-term fixes in terms of instant money which long term may not be for the best development of the sport. 554. You have mentioned in response to my question that it is getting the money down to the grass roots, but also on a world scale it is getting the money to the nations that have very little. People have already mentioned this morning about should we not be encouraging major events to go to Africa, and we could help the funding in Africa, rather than competing ourselves against them. As my final question, do you not think that we should be much more proactive as a government in world sport, rather than trying to say the right things to try to influence sporting bodies to take better action? It is so wishy-washy, is it not? (Kate Hoey) I think that for sport more recently there has always been this debate over many years about sport and politics not mixing. Clearly sport is politics, and politics have to involve sport. Certainly on a European scale the Sports Ministers meet regularly and have very interesting discussions about how we can try to make things better in terms of looking at a number of these issues, and particularly on the aspect of drug abuse in sport which is a huge, huge problem and something for which I believe governments have a responsibility and in which they have a role to play. Like in so many things, sport only really becomes an issue of interest to the media when something goes wrong. There is not a development of a long-term interest in the media generally. It did not take very long for most newspapers to start thinking about other sports after the Olympics. So I think we all have a responsibility. Mr Keen: At least there are no drugs or use of drugs in fly fishing. Chairman: Secretary of State, Minister, we would like to thank you very much for giving us so much time today. The Members of the Committee will remain behind for private deliberations, but this concludes the public evidence sessions on this Inquiry. I would like to thank everybody who has participated, and I hope I will not be unreasonably controversial if I wish everybody a Happy Easter.