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Mr. Caborn: I will pass on the thanks of the two hon. Gentlemen to my staff. Although there have been some disagreements, we have been able to resolve them in a fairly civilised way. I have no doubt that there will be votes on some of the politically contentious issues later this evening, but the Bill's progress shows how the nation has got behind the Olympic bid. We were awarded the Olympics on 6 July, and hopefully we can get the Bill through Parliament by early next year, which shows the strength of cross-party support.

The consultation process will be transparent and it will involve the Mayor's office and the originators. Anyone who wants to raise an objection will be able to do so. On accountability, the elected authority is accountable to the ODA, the ODA is responsible to the Olympic board and the Olympic board is responsible to the Secretary of State and this House. On scrutiny, six Select Committees are currently considering different aspects of the Olympics, and I am appearing before the Scottish Affairs Committee tomorrow. I assure hon. Members that a lot of scrutiny is going on.
 
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Mr. Andrew Pelling (Croydon, Central) (Con): The assembly will have a role in deciding the impost on the London council tax payer, but will the Minister reassure us that it can expect the ODA to appear before it, if it has additional questions? Will such an extra layer of scrutiny be allowed?

Mr. Caborn: Yes, it will. I have no doubt that the ODA will want to make sure that its work is in the public domain and that it attracts a consensus.

I think that the answer is yes on the question of a public session with the ODA, but I will probably write to the hon. Member for Bath (Mr. Foster) to clarify the matter.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 1


Limit on Power of Greater London Authority to Raise Money from Council Tax for Expenditure on London Olympics



'The Greater London Authority shall not raise more than £625 million from the council tax for expenditure in connection with the London Olympics.'. —[Hugh Robertson.]

Brought up, and read the First time.

Hugh Robertson: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss amendment No. 3, in page 23, line 35 [Clause 33], at end insert—



'(2A)   The Greater London Authority shall not raise more than £625 million from the council tax for the purpose of exercising the function under subsection (1).'.

Hugh Robertson: The amendment and the new clause were tabled in my name and that of the hon. Member for Bath (Mr. Foster).

Let us be very clear about what is involved here. When a bid was first considered, the Government and the Mayor agreed a funding package of £2.375 billion to help meet the costs of staging the Olympics in London in 2012. That figure was made up of £1.5 billion from the lottery, 50 per cent. of which will come from existing sources and 50 per cent. from the new Olympic lottery games, £250 million from the London Development Agency and £625 million from London council tax payers.

Mr. Don Foster: I apologise for interrupting the hon. Gentleman so early in his speech and thank him for indicating that I support the amendment and the new clause. Will he confirm that in the agreement with the Mayor of London, the £625 million to which the hon. Gentleman has referred was made up of £550 million and a further £75 million, which may be drawn on only if it is necessary do so?

Hugh Robertson: The Olympic surcharge will start in April 2006, and Londoners will pay between £13.33 for a band A dwelling and £40 for band H. Some
 
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69 per cent. of Londoners are in bands A to D and they will pay between £13.33 and £20.00, and 31 per cent. will pay between £24.44 and £40.00.

As Conservatives, we entirely support the principle that Londoners should make a contribution to the financing of the games. There are four main reasons for that. London is the host city, so it is likely to benefit most from tourism and promotion; London businesses will undoubtedly benefit enormously; the east end of London will be regenerated; and Londoners will have the world's greatest sporting event on their doorstep. It is therefore perfectly reasonable that they should make a financial contribution over and above the remainder of the United Kingdom. In short, we accept the figure of £625 million and signed up to it at the time of the bid.

4.45 pm

Simon Hughes (North Southwark and Bermondsey) (LD): The hon. Gentleman is obviously right about his party. He will know that others of us who participated in the same election took the same position. Londoners were very happy to make a contribution over and above that made elsewhere, but they kept asking the question to which the amendment and new clause relate: will it be limited to that amount or open-ended? Unless we made it clear that it should be limited, they were not nearly as enthusiastic.

Hugh Robertson: I thank the hon. Gentleman for those comments. I think that he will reassured by what I am about to say.

It is fair to say that although we accepted the £625 million cost right from the outset, we—and, clearly, the Liberal Democrats—have had concerns about the possible effect on London council tax payers. The new tax will simply take the form of a larger levy on council tax bills, so it is not entirely transparent. There is no automatic cut-off after 2012. The extra money is not specifically ring-fenced for the Olympics, in obvious contrast to the congestion charge, where revenue is ring-fenced for value-for-money transport projects. There is no guarantee that the money will not be used to cross-subsidise funding shortfalls elsewhere—for example, if not enough tickets are sold.

Those initial concerns have been given further impetus by a number of factors that have become apparent in recent months and that have changed the position substantially since the initial plans for London 2012 were drawn up. First, we now know that previous games have substantially overrun their budgets. Local tax payers in Montreal are still paying off debts incurred at the 1976 Olympics. Sydney's budget of £l billion eventually came to £2.8 billion. Athens' budget of £l billion eventually became, as far as we know, £5 billion.

Secondly, security costs are likely to soar post-7 July. There cannot be a single Member of this House here today who genuinely believes that the international security situation will improve in the near future. If anything, it is likely to get worse.

Chris Bryant (Rhondda) (Lab): When the Culture, Media and Sport Committee, on which I served, first considered security, everybody was aware not only of the possible threat in Athens, where British security forces and police played an important role in ensuring
 
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the security of the games, but of the fact that there was already a heavy underwriting in terms of security measures. I do not think that, of itself, July this year will have made a significant difference. Does the hon. Gentleman have specific arguments on that?

Hugh Robertson: Yes, indeed I do. If one looks around London, it is fairly self-evident that security has been tightened immeasurably since 7 July, and rightly so—every Member would support that. I think that the security allowance in the Bill is £200 million. The Minister will correct me if I am wrong.

Mr. Caborn: It is £213 million.

Hugh Robertson: Given today's security situation, I cannot see how London can be kept entirely secure within that budget.

Thirdly, the Mayor has been commendably honest about the fact that his key aim is to regenerate the east end of London. That is not entirely compatible with the Government's priority of delivering the 2012 Olympics on time and to budget as the best games ever. Those conflicting priorities will inevitably put pressure on the budget. Fourthly, the cost of acquiring land in the lower Lea valley, and therefore of site assembly, has risen substantially since we won the bid on 6 July. Finally, as scrutiny of the financial markets shows, inflation in the construction sector is running at about 7 per cent. as a result of rising energy prices and the increased cost of raw materials. Natural disasters in the USA and Asia, allied to high demand in China, have rendered the original 3 per cent. prediction unworkable.

All Members know of the concern already felt by many of their constituents about rising council tax bills. They affect everyone, but particularly the elderly—who have no way of increasing their income to cope—and the vulnerable. We were happy to accept the original £625 million figure, although we had some worries about the lack of accountability. Since the plans were drawn up, however, the five factors that I have listed have led us to believe that Londoners should not be left with an open-ended commitment. Accordingly, I believe that the time has come to introduce a formal mechanism to ensure that Londoners receive a measure of protection.

Let me end with two pleas. First, I ask all London Members to consider a new clause that simply gives a statutory basis to the Government's own estimate of the cost of the games to council tax payers, and to support it. If they do not do so, they will risk inflicting a considerable extra bill on their constituents.


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