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Simon Hughes: I rise to support my hon. Friend the Member for Bath (Mr. Foster) and the hon. Member for Faversham and Mid-Kent (Hugh Robertson). I wish to add a couple of points that may persuade many hon. Members, and not only those from London, of the merits of the case. The House may be aware that I am a great enthusiast for the Olympic games. I was really keen that we should make a bid and before the mayoral elections, I made it clear that I supported the Government—as did the Conservative candidate. In case the hon. Member for Rhondda (Chris Bryant) has another go at my hon. Friend the Member for Richmond Park (Susan Kramer) who was my predecessor as candidate—and an excellent candidate she was, too—I should make it clear that she and our party in London also believed that it was right to support the games.

Concerns were expressed, as might be expected in our capital city, not only in political circles but by ordinary members of the public, that the project might run out of control financially. Therefore, we watched with interest in the last Parliament—before the last mayoral election—as the negotiations went on between the Mayor of London, Ministers and others about the funding package. The negotiations produced a split between a London contribution, a lottery contribution and a London Development Agency contribution. It was also proposed that the games themselves, once everything had been built, would be self-financing.

I wish to give a couple of reasons for supporting the amendment. First, it is of course the case that people in Loughborough and Bath are further away from the games than people in London, and people in Perth and North Perthshire are further away still. However, people in Hillingdon or Uxbridge, or on the edge of north-west London and in Watford, or on the southern edge of Croydon, which is almost into Surrey, will receive no direct benefit from the regeneration of the east end, any more than people in Loughborough or Wales or Scotland. They may be part of Greater London, but in many ways they consider themselves to live in Surrey, Hertfordshire or Middlesex, so they too want to know that they will not be asked to pay an undue amount. It is different for people who live in
 
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Hackney or Tower Hamlets, because they know that they will benefit directly from projects connected with the Olympics, such as the extension of the East London line, the development of the Lea valley and the legacy of housing and sports facilities. That is not the case for people a long way away on the other side of the largest metropolis in Europe.

Secondly and self-evidently, another of the contributions comes from Londoners—the LDA contribution. The LDA is one of the four children of the Greater London Authority, just like the Metropolitan Police Authority. So although the LDA is regarded as a separate heading in the funding streams, the money will not fall out of a tree and it certainly will not come out of the Mayor's pocket. It will come from Londoners. It gets money from other places, but it is basically a London kitty to which Londoners make a contribution.

Mr. Caborn: The budget of the LDA, like any other development agency, comes from the Exchequer.

Simon Hughes: But the reality is that when the Mayor stands for election and determines how much he will charge as a precept across the authority, some of the money that is collected can be spent on the sort of things that are done by the LDA. I accept that some of the LDA's money comes from the Exchequer, but—I stand to be corrected on this point—not all of it comes from the Government. The authority raises some of the money itself; some of it comes from joint schemes with the London boroughs and some of it indirectly from people who visit London. Certainly, businesses and individuals perceive that they contribute to all the budgets for all the spending streams from the Mayor's office, of which the Mayor administers one, and that is where pressure can be applied.

5.30 pm

The hon. Member for Perth and North Perthshire (Pete Wishart) pointed out that the proposal would mean capping the burden on Londoners at the expense of the Scots. That is a dangerous road to take. I do not want to be divisive, but I must put the case on the record: London contributes about 15 per cent. net to the UK economy, which is far more than it receives. Under the Barnett formula, Scotland has done very well, far better per capita than the rest of the United Kingdom. That is part of the constitutional development of the UK. London continues to raise, and spend, money and puts it into the UK kitty. As a capital city, it is happy to do so, but the hon. Gentleman would be wrong to think that we do not constantly make a significant contribution to Scotland.

Pete Wishart: I accept some of what the hon. Gentleman says. However, we have only to consider what happened yesterday, when the Chancellor had to impose a windfall tax on Scotland's North sea oil to pay for all the shortcomings in the economy, to see how much Scotland contributes to the general economy of the UK.

Simon Hughes: I do not say for a second that Scotland does not make a huge contribution to the UK economy, and I know well the history of the debate about the oil
 
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around the shores of the UK, including Scotland. Of course we remember yesterday's announcement, but the capital city of the United Kingdom has contributed for as long as the hon. Gentleman and I can remember to the United Kingdom's coffers, and that money has been spent throughout the UK.

Furthermore, of the 10 most deprived local authorities in the UK, five are in London, including the east end. If we want to ensure that there is fairness, it is wrong and improper to say that London is a great and affluent place that will benefit hugely. Some areas need to benefit as they have been deprived; inner-city areas, especially in capital cities, are often deprived.

There will be benefits for London and, as people travel in and out of London, those benefits will be shared before, during and after the games with people throughout the UK. I am talking not just about hope, expectation, aspiration, ambition and motivation, but also about opportunities for training and for individuals and teams to visit between 2008 and 2012, and the legacy.

There will be other, indirect, effects. A local London paper reported recently that, as a result of the Olympics, the costs of housing in London, both rented and purchased, are likely to be considerably higher than in other parts of the country, much more so in the east end. Many costs will be borne and the new clause proposes a cap on the element of the cost that is part of the deal whereby, as part of the formula, every London household puts more into the kitty.

Mr. Don Foster: Will my hon. Friend confirm that his understanding of the proposal is the same as mine? We are talking about a cap on the contribution paid by the council tax payers of London, but were there to be an overrun, which we do not believe is likely, it would be funded by all taxpayers throughout the country, including London taxpayers, who, as my hon. Friend has rightly pointed out, make a rather greater contribution in that regard than taxpayers in other parts of the country. We would not be capping the total contribution of Londoners.

Simon Hughes: My hon. Friend is right. Nobody is saying that Londoners would not have to bear their share of the burden if, despite the undertakings and expectations, there was an additional cost. We would pay our fair share like everybody else, but we are already making a specific extra commitment. We know that we have to do that; it could be for 10 or 12 years, which is not insignificant, especially for people on the lowest incomes, so we think that contribution should be capped.

As you would imagine, Mr. Deputy Speaker, this proposal has been debated across the political parties in London. As the Minister knows, when it went to the London Assembly, 14 members of the Assembly across all parties, including the Minister's, supported it; no one opposed it.

Chris Bryant: Funny, that.

Simon Hughes: The hon. Gentleman says, "Funny, that". People are elected, as he was elected for the Rhondda, to represent the people in their communities. What I am trying to say is that this issue is not divisive
 
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politically; there is a unity of view. Just as there is a broad unity of view in London that we should have the games, that we shall make a great success of the games and that we want the games to do well, there is equally a view that there should be a financial responsibility on all of us—a discipline that limits the amount that we expect Londoners to pay. If that can be agreed, it will be an additional reason why Londoners will support the games and the planning for the games in the years ahead with even greater enthusiasm. I hope that, if the Minister does not accept the proposal today, he will at least accept its merit and agree that it may have to be part of the eventual outcome of the deliberations on the Bill.


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