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Mr. Andy Reed (Loughborough) (Lab/Co-op): So far, the hon. Gentleman has told us why London council tax payers should not make a larger contribution. If London council tax payers did not make the contribution, someone else would have to do so. Which of the other funding bodies does the hon. Gentleman think should do it?

Hugh Robertson: The hon. Gentleman is right, but it is difficult for me to give him an answer. Every time we have asked the question, the Minister has said—as I expect him to say in 20 minutes' time; indeed, he told me
 
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that he would do so—that the budget for the games was drawn up according to the most advanced formula ever and that there would be no cost overruns. If that is the case, let us flip the argument over—why should there not be a cap?

Mr. Andrew Pelling (Croydon, Central) (Con): Mary Reilly, chair of the London Development Agency, said in the Financial Times that the estimate of the cost of cleaning the land on which the games would take place had already doubled, which means an increase of hundreds of millions of pounds.

Hugh Robertson: Indeed; Mary Reilly made that point when she appeared before the Select Committee two weeks ago.

My second plea, on which I have touched already, is to the Minister. Although the new clause has cross-party support, it is perfectly possible that the Bill will be defeated in the other place, which will delay it. We are, after all, simply trying to give the Government's own calculations a statutory basis. Therefore I do not hesitate to urge the Minister and the House to accept the new clause.

Mr. Andy Reed: Having heard what the hon. Member for Faversham and Mid-Kent (Hugh Robertson) had to say, I have an opportunity to go a little further. I appreciate that many London Members, among others, will have a view on the level of council tax payments to the fund, but, as I said before, if the money does not come from London council tax payers, where is it to come from? The new clause makes no mention of that, which is why I offered the hon. Gentleman a chance to tell us.

I am quite confident about the £2.3 billion package, and I am sure that the Minister will confirm it. The figures that make up the package, which had cross-party support when we went to Singapore, represent a built-in flexibility based on the understanding that projects such as this always involve a cost overrun. The package assumes a potentially large overrun and builds in flexibility at a level that I consider acceptable.

I hope that the new clause will be rejected on the basis that, as I have said, it does not tell us where the rest of the contribution will come from. The hon. Gentleman knows that I am already anxious about the amount that will have to come from existing lottery funds. I should be more anxious if, as a result of the new clause, more money had to come from funds for grass-roots sport or other lottery contributions.

Mr. Philip Hollobone (Kettering) (Con): The hon. Gentleman, like me, is worried about the amount that we are raising from the national lottery to fund the Olympics. I suggest, however, that instead of focusing on the new clause, he should focus on the Minister's reassurances that the £625 million is an accurate figure that will not be exceeded.

Mr. Reed: The Opposition have tabled a new clause and it is only right for us to respond. Indeed, I am delighted to do so.
 
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There are other questions about funding. We know that 50 per cent. of the £1.5 billion from the lottery will come from existing lottery funds, and the other 50 per cent. from the new lottery game. Another £250 million is to come from the London Development Agency. It is bound to be difficult to raise the desired amount. So, if the money is not going to come from the London council tax payer, which other funding body will it come from? It is absolutely necessary that we have that information before we vote on the new clause.

Adam Afriyie (Windsor) (Con): The estimate of the cost of the Olympic games seems to have been made by the Treasury. If the new clause were reworded so that any cost overrun would be spread across the whole nation, or was met in some other way, would the hon. Gentleman be more inclined to support it?

Mr. Reed: I would be more inclined to support anything that went a bit further than this proposal, to be honest. As a non-London Member of Parliament, it would be dead easy to stand here and say, "It's great. The London council tax payers will pay", but I recognise that we will all benefit from the London Olympics in some way, particularly those of us in Loughborough.

Pete Wishart (Perth and North Perthshire) (SNP): The chances of the London Olympic games coming in on budget are about the same as Scotland's chances of winning the World cup. There will be an overspend, and I share the hon. Gentleman's concerns about how it will be met. Will the Minister assure us that it will not come from the lottery? With £1.5 billion coming out of the lottery in the next 10 years, it will have suffered enough.

Mr. Reed: Obviously, I cannot give the hon. Gentleman that assurance, but I am sure that the Minister is listening. The hon. Gentleman and I have shared many a debate in the lead-up to the successful Olympic bid, and expressed our concerns about the potential impact on grass-roots sport of the Olympics needing new money from the existing lottery funds. I am sorry that the hon. Gentleman has such a pessimistic view of Scotland's future, although I am not sure whether he meant the football World cup. I am sure that his constituents will be delighted to hear of his pessimism, however. I hope that Scotland does well in future world cup competitions, whatever the sport, but perhaps it will have a rethink in regard to the participation by the Scottish Football Association, which is denying not only its senior men a place in the 2012 competition, but the other teams that would benefit from joining England and possibly Wales as part of a UK team.

I had meant to make a very short contribution to ask for further information, but I seem to have attracted a number of interventions. I cannot support the new clause because it makes no mention of where the additional money would come from in the very unlikely event of costs to the lottery bill and the Olympic bill overrunning.

Mr. Don Foster : I am delighted to follow the hon. Member for Loughborough (Mr. Reed), because he has teased the House with his suggestion that, if someone
 
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were to tell him where the overrun money would come from, he could support the new clause. Perhaps I can give him an answer to his question in a second, and if that is satisfactory to him, we shall look forward to seeing him in the Division Lobby shortly.

I was grateful to the hon. Member for Faversham and Mid-Kent (Hugh Robertson) for mentioning the Liberal Democrats' support for the new clause. It should have come as no surprise to him that we would support it, however, because my hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) made it clear, back in the run-up to the June 2004 mayoral election—in which he was an extremely good candidate for the Liberal Democrats—that, while the Liberal Democrats would welcome the contribution of the people of London on account of the fact that they would be among the main beneficiaries of the Olympic and Paralympic games, that contribution should be capped so that Londoners knew where they stood.

The hon. Member for Loughborough shares with me, as the Member for the wonderful city of Bath, the certain knowledge that our constituents will benefit enormously from the games because we—along with Sheffield and other cities—have some of the premier sporting facilities in this country, which will no doubt be used by the visiting and home nation teams in the preparations for the games. That might offer a bit of a clue as to where the contribution might come from, should there be an overrun.

5 pm

Before discussing the possibility of such overruns, let me say that I joined the Minister, the Secretary of State, the leader of my party, the leader of the Conservative party and the Prime Minister in putting up my hand and saying to the International Olympic Committee that we believed that our bid was backed by an extremely robust financial plan. We made it clear that we were so confident that we had learned the lessons from previous Olympics that we were certain that an overrun—which others described as probable—was not likely to happen. Nevertheless, the hon. Member for Loughborough challenges us to say where the money should come from in the event of an overrun. If he wants the answer, he should examine what we told the IOC when we bid for the games in the first instance, because our bid document provides the answer.

Our full bid statement made it clear that we were committing the United Kingdom Government to be the ultimate guarantor in the event of any shortfall, including any shortfall in the operating budget of the London organising committee for the Olympic games. When the IOC evaluated our submission, it said clearly:

"The UK Government has guaranteed it would act as the ultimate financial guarantor to cover any shortfall from the Games."

It went on to say—as I suggested, I am not surprised—that the

"budget appears to be reasonable and achievable".

The position is therefore clear. Let me say to the hon. Member for Loughborough that I am confident that there will be no overrun or budget shortfall. Should that eventuality occur, however, it is not right for London council tax payers to pay more than what appears to me to be their fair share.
 
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I suspect that, in a minute, the Minister will tell us that if we remove the responsibility from London council tax payers, that will lift any pressure on the Greater London authority and the Mayor to bear down on costs. Clearly, that is not the case. As I said in an intervention on the hon. Member for Faversham and Mid-Kent, London has pledge £550 million, with an extra £75 million to call on if needed. Clearly, it is in the interests of the Mayor of London and all GLA members to ensure that even that £75 million is not called on. Within the deal, there is a mechanism to exert downward pressure on costs. It is perhaps also worth reflecting that the Government are not currently making a direct contribution to the Olympics and Paralympics, but are seeking that money from all sorts of other bodies. At the same time, however, the Government will generate significant revenues as a result of the games coming to this country. Later, we will debate one source of revenue—the VAT on the Olympic lottery game.

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