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Mr. Caborn: Before I address the details of the new clause, I want to make a couple of comments about how we approached the decision to bid for the Olympics. We took the decision only after a lot of discussion with cities that had run the Olympics. We asked what they would do differently if they got to run the games again, and many of them told us, "You must make sure that the budgets that are put in place are robust, and will stand examination over time". We therefore adopted that approach, and were commended for it by the evaluation team—the IOC. So we believe that the formula, which I shall outline later—the memorandum of understanding between the Government and the Mayor—is the right way to proceed in order to ensure best management practice in running the games, particularly from a financial perspective.

It would be unfortunate if the House of Lords decided to delay the Bill on the basis of this issue. I say that for the simple reason that we received another crucial message from cities that had hosted the games: that the quicker we set up the company—the ODA—and lay the contracts, the farther we shall be from the end date and the more we shall be in the driving seat and able to control costs. That is why, as I acknowledged earlier, we are grateful for the support that we have had from all political parties and for the way in which the House has dealt with the Bill. We won the games on 6 July and we could well get legislation on the statute book by the early part of next year.

Terminal 5 has been mentioned as a major construction project—in fact, the major construction project in Europe at this stage. It will cost just under £5 billion, it will come in on time and it may well come in well under budget. We are working closely with the team guiding that project. It should be recognised that more apprentices have been trained at terminal 5 than in the whole of the construction industry put together, so the hon. Member who was quipping from a sedentary position about Romanian, Polish and other labour should re-examine that comment and go and look at terminal 5, which is a credit to the construction industry and to the British Airports Authority. About 8,000 people are working on the terminal, but as my hon. Friend the Member for Rhondda (Chris Bryant) said, tens of thousands of people around the country are part of the supply chain, providing high-quality engineering—a supply chain that is probably the envy of the world. If we apply that type of management to the scheme that we are now embarking upon for the Olympics, I am pretty sure that all that we said we would do in our candidate file is deliverable, so we stand by the statements.
 
6 Dec 2005 : Column 778
 

We have debated proposals of this type before. It would place a cap on the amount of council tax income that might ever be spent on preparing for the games. We cannot agree to such a cap, and I hope that when I have restated the reasons, the hon. Member for Faversham and Mid-Kent (Hugh Robertson) will feel able to withdraw his amendment.

It is true that, as the hon. Member for Bath (Mr. Foster) said, the Government and the Mayor have agreed that the GLA will make available £550 million towards the public sector funding package, with a further £75 million if required. That is how the hon. Gentleman gets his total of £625 million. The Mayor's contribution will be raised through the GLA precept on council tax, starting in the 2006–07 financial year.

We have no intention of letting costs run out of control, and the Government and the GLA will make every effort in managing the Olympic project to keep to the original budget. However, if costs exceed the provision allowed for in the public sector funding package, the memorandum of understanding between the Mayor and the Government states that the costs should be met through a

I want to clear up a misunderstanding about land acquisitions by the London Development Agency. Small amounts of money may well have come from elsewhere, but the vast majority of the LDA's work has been directly funded by council tax. The LDA has been responsible for purchasing the land. Indeed, any overrun on price as the cost of land increases will not directly affect the council tax funding.

Let us consider the assets on the balance sheet post-2012. It is true that the LDA purchased considerable amounts of land well before 6 July and the price started to escalate, but those assets will stay on the LDA's books. I do not know what will happen if there is an overrun on the funding arrangements, but the assets acquired by the LDA—they are London's assets, not central Government's—could well be deployed. So the memorandum of understanding is an agreement that we would share that responsibility, depending on the prevailing conditions at the time.

Mr. Mark Field: Perhaps the right hon. Gentleman can clarify the situation in the interests of all London council tax payers today and in the future. Is he saying that the LDA will be obliged to liquidate some of its assets and therefore release some of the perhaps substantial property gains made to fund any possible overrun?

Mr. Caborn: I am not saying that at all. What I am saying is that such things will be reviewed at the time. That is why we are not prepared to accept the new clause. It would be wrong at this stage to include that type of cap on the various funding streams. That could be deployed at a later stage.

Simon Hughes: I agree with the Minister when he suggests that, if the land held by the LDA were to increase in value significantly, logically, that increase
 
6 Dec 2005 : Column 779
 
should be used to reduce the general council tax burden. That is my understanding of one of the reasons why that was put into the original memorandum.

Mr. Caborn: Absolutely. That is why we say that all those factors will be taken into account. The memorandum of understanding mentions:

That is what the MOU is all about, and the way that it has been interpreted by some hon. Members is fundamentally wrong. We believe that this is the right approach. It would not be prudent at this stage to close off any of those funding options to meet a hypothetical future shortfall by capping the amount of council tax that the Mayor may raise. The GLA takes exactly the same view.

In the event of cost overrun, the Government and the Mayor will need to consider all the options available to them. It is right that council tax will fund some of the games, as they will bring a great many benefits to Londoners—again, that has been explained already this evening—but we have no intention of making a dramatic raid on ordinary council tax payers. If cost overruns were to occur, we would want to balance any possible costs sensitively to avoid imposing punitive costs on individual households. Nevertheless, the Olympic project will be overseen jointly by the Government and the GLA. Under the existing funding and governance arrangements, we have shared interests in running things properly and keeping down costs. That is the right way to do things.

We must ensure that we retain a shared interest in keeping down costs, but it would be entirely imprudent to cap the liability of one of those parties at this early stage in the process. It is therefore vital that everyone involved should have the maximum incentive to remain hawkish about keeping down the costs. My right hon. Friend the Secretary of State has already called in the aquatic centre proposals because of the possible cost overrun. I send a very clear message to all those who will be involved in contractual agreements that we will expect them to keep to those costs. That can be done—it can be done by the type of management that we have at terminal 5.

The Government feel that it would be irresponsible to place a statutory limit on council tax funding at the outset of the Olympic project. I reassure hon. Members again that in the unlikely and unfortunate scenario in which costs run over budget, we would sit down with the Mayor to work out a sensible solution that would not cripple the average household. The Mayor and the GLA are content with that reassurance, so I hope that hon. Members will also accept it and that the hon. Member for Faversham and Mid-Kent will withdraw the motion.

5.45 pm

Hugh Robertson: Time is marching on and we have a great deal more to debate tonight. I am afraid that we have reached a position in which there is a straightforward divide between the Government and the main Opposition parties, so I will press the new clause to a Division.
 
6 Dec 2005 : Column 780
 

Question put, That the clause be read a Second time:—

The House divided: Ayes 201, Noes 275.

Division No. 115
[5.45 pm


AYES

Afriyie, Adam
Alexander, Danny
Arbuthnot, rh Mr. James
Atkinson, Mr. Peter
Bacon, Mr. Richard
Baker, Norman
Barker, Gregory
Baron, Mr. John
Beith, rh Mr. Alan
Bellingham, Mr. Henry
Benyon, Mr. Richard
Bercow, John
Beresford, Sir Paul
Binley, Mr. Brian
Blunt, Mr. Crispin
Bone, Mr. Peter
Boswell, Mr. Tim
Bottomley, Peter
Brady, Mr. Graham
Brake, Tom
Brazier, Mr. Julian
Breed, Mr. Colin
Brokenshire, James
Brooke, Annette
Browne, Mr. Jeremy
Browning, Angela
Burns, Mr. Simon
Burrowes, Mr. David
Burt, Lorely
Butterfill, Sir John
Cable, Dr. Vincent
Cameron, Mr. David
Carmichael, Mr. Alistair
Carswell, Mr. Douglas
Clappison, Mr. James
Clark, Greg
Clegg, Mr. Nick
Clifton-Brown, Mr. Geoffrey
Conway, Derek
Cox, Mr. Geoffrey
Crabb, Mr. Stephen
Curry, rh Mr. David
Davey, Mr. Edward
Davies, Philip
Djanogly, Mr. Jonathan
Donaldson, Mr. Jeffrey M.
Dorrell, rh Mr. Stephen
Dorries, Mrs. Nadine
Duddridge, James
Duncan, Mr. Alan
Duncan Smith, rh Mr. Iain
Dunne, Mr. Philip
Ellwood, Mr. Tobias
Evennett, Mr. David
Fabricant, Michael
Fallon, Mr. Michael
Farron, Tim
Field, Mr. Mark
Forth, rh Mr. Eric
Foster, Mr. Don
Francois, Mr. Mark
Gale, Mr. Roger
George, Andrew
Gibb, Mr. Nick
Gidley, Sandra
Gillan, Mrs. Cheryl
Goldsworthy, Julia
Goodman, Mr. Paul
Goodwill, Mr. Robert
Gove, Michael
Gray, Mr. James
Grayling, Chris
Green, Damian
Greening, Justine
Grieve, Mr. Dominic
Gummer, rh Mr. John
Hammond, Mr. Philip
Hammond, Stephen
Harper, Mr. Mark
Harris, Dr. Evan
Hayes, Mr. John
Heald, Mr. Oliver
Heath, Mr. David
Heathcoat-Amory, rh Mr. David
Herbert, Nick
Hermon, Lady
Hoban, Mr. Mark
Hogg, rh Mr. Douglas
Hollobone, Mr. Philip
Holloway, Mr. Adam
Holmes, Paul
Horam, Mr. John
Horwood, Martin
Howarth, Mr. Gerald
Hughes, Simon
Huhne, Chris
Hunt, Mr. Jeremy
Hunter, Mark
Jack, rh Mr. Michael
Jackson, Mr. Stewart
Jenkin, Mr. Bernard
Jones, Mr. David
Kawczynski, Daniel
Keetch, Mr. Paul
Kennedy, rh Mr. Charles
Key, Robert
Knight, rh Mr. Greg
Laing, Mrs. Eleanor
Lait, Mrs. Jacqui
Lamb, Norman
Lancaster, Mr. Mark
Lansley, Mr. Andrew
Laws, Mr. David
Lewis, Dr. Julian
Liddell-Grainger, Mr. Ian
Lidington, Mr. David
Loughton, Tim
Luff, Peter
Mackay, rh Mr. Andrew
Main, Anne
Maples, Mr. John
May, rh Mrs. Theresa
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Mercer, Patrick
Miller, Mrs. Maria
Milton, Anne
Mitchell, Mr. Andrew
Moss, Mr. Malcolm
Mulholland, Greg
Mundell, David
Murrison, Dr. Andrew
Newmark, Mr. Brooks
O'Brien, Mr. Stephen
Öpik, Lembit
Osborne, Mr. George
Ottaway, Richard
Paice, Mr. James
Paterson, Mr. Owen
Pelling, Mr. Andrew
Penning, Mike
Penrose, John
Pugh, Dr. John
Redwood, rh Mr. John
Reid, Mr. Alan
Robathan, Mr. Andrew
Robertson, Hugh
Robertson, Mr. Laurence
Robinson, Mr. Peter
Rogerson, Mr. Dan
Rosindell, Andrew
Rowen, Paul
Ruffley, Mr. David
Russell, Bob
Sanders, Mr. Adrian
Scott, Mr. Lee
Selous, Andrew
Shapps, Grant
Shepherd, Mr. Richard
Simmonds, Mark
Simpson, David
Simpson, Mr. Keith
Smith, Sir Robert
Spelman, Mrs. Caroline
Spink, Bob
Spring, Mr. Richard
Stanley, rh Sir John
Streeter, Mr. Gary
Swayne, Mr. Desmond
Swinson, Jo
Swire, Mr. Hugo
Syms, Mr. Robert
Tapsell, Sir Peter
Taylor, Matthew
Taylor, Dr. Richard
Thurso, John
Turner, Mr. Andrew
Tyrie, Mr. Andrew
Vaizey, Mr. Edward
Vara, Mr. Shailesh
Villiers, Mrs. Theresa
Walker, Mr. Charles
Wallace, Mr. Ben
Waterson, Mr. Nigel
Webb, Steve
Whittingdale, Mr. John
Wiggin, Bill
Willetts, Mr. David
Williams, Mark
Williams, Mr. Roger
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wilshire, Mr. David
Wilson, Mr. Rob
Wilson, Sammy
Winterton, Ann
Winterton, Sir Nicholas
Wright, Jeremy
Yeo, Mr. Tim
Young, rh Sir George

Tellers for the Ayes:

Mr. Mark Prisk and
Susan Kramer


NOES

Abbott, Ms Diane
Ainger, Nick
Ainsworth, rh Mr. Bob
Allen, Mr. Graham
Anderson, Mr. David
Anderson, Janet
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Bailey, Mr. Adrian
Baird, Vera
Balls, Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Begg, Miss Anne
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blizzard, Mr. Bob
Brennan, Kevin
Brown, Lyn
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Browne, rh Mr. Des
Bryant, Chris
Buck, Ms Karen
Burgon, Colin
Butler, Ms Dawn
Caborn, rh Mr. Richard
Cairns, David
Campbell, Mr. Alan
Campbell, Mr. Ronnie
Cawsey, Mr. Ian
Chapman, Ben
Clapham, Mr. Michael
Clark, Ms Katy
Clark, Paul
Clarke, rh Mr. Tom
Clelland, Mr. David
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Cooper, Rosie
Corbyn, Jeremy
Cousins, Jim
Crausby, Mr. David
Creagh, Mary
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
Davidson, Mr. Ian
Dean, Mrs. Janet
Denham, rh Mr. John
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Dobson, rh Frank
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Durkan, Mark
Eagle, Angela
Eagle, Maria
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Fisher, Mark
Fitzpatrick, Jim
Flello, Mr. Robert
Flint, Caroline
Flynn, Paul
Follett, Barbara
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Gapes, Mike
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Mr. Roger
Goggins, Paul
Goodman, Helen
Griffiths, Nigel
Grogan, Mr. John
Gwynne, Andrew
Hain, rh Mr. Peter
Hall, Mr. Mike
Hall, Patrick
Hanson, Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Havard, Mr. Dai
Healey, John
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Hesford, Stephen
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodgson, Mrs. Sharon
Hoey, Kate
Hoon, rh Mr. Geoffrey
Hope, Phil
Hopkins, Kelvin
Hosie, Stewart
Howarth, rh Mr. George
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Humble, Mrs. Joan
Hutton, rh Mr. John
Iddon, Dr. Brian
Illsley, Mr. Eric
Irranca-Davies, Huw
Jackson, Glenda
James, Mrs. Siân C.
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Lynne
Jones, Mr. Martyn
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Kemp, Mr. Fraser
Kennedy, rh Jane
Khabra, Mr. Piara S.
Khan, Mr. Sadiq
Kidney, Mr. David
Kilfoyle, Mr. Peter
Knight, Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, Mr. David
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Llwyd, Mr. Elfyn
Love, Mr. Andrew
Lucas, Ian
MacDougall, Mr. John
Mackinlay, Andrew
Mactaggart, Fiona
Mahmood, Mr. Khalid
Malik, Mr. Shahid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCarthy, Kerry
McCarthy-Fry, Sarah
McDonagh, Siobhain
McDonnell, Dr. Alasdair
McFadden, Mr. Pat
McFall, rh Mr. John
McGovern, Mr. Jim
McGuire, Mrs. Anne
McIsaac, Shona
McNulty, Mr. Tony
Merron, Gillian
Milburn, rh Mr. Alan
Miliband, Edward
Miller, Andrew
Mitchell, Mr. Austin
Moffat, Anne
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moran, Margaret
Morden, Jessica
Morgan, Julie
Mountford, Kali
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Denis
Murphy, Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
Olner, Mr. Bill
Osborne, Sandra
Palmer, Dr. Nick
Pearson, Ian
Plaskitt, Mr. James
Pope, Mr. Greg
Pound, Stephen
Prentice, Bridget
Prentice, Mr. Gordon
Price, Adam
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, James
Rammell, Bill
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Riordan, Mrs. Linda
Robinson, Mr. Geoffrey
Roy, Mr. Frank
Ruane, Chris
Russell, Christine
Ryan, Joan
Salmond, Mr. Alex
Salter, Martin
Sarwar, Mr. Mohammad
Seabeck, Alison
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Short, rh Clare
Simon, Mr. Siôn
Simpson, Alan
Skinner, Mr. Dennis
Slaughter, Mr. Andrew
Smith, rh Mr. Andrew
Smith, Geraldine
Smith, rh Jacqui
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Straw, rh Mr. Jack
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thomas, Mr. Gareth
Thornberry, Emily
Timms, Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Trickett, Jon
Ussher, Kitty
Vaz, Keith
Walley, Joan
Waltho, Lynda
Ward, Claire
Wareing, Mr. Robert N.
Watson, Mr. Tom
Weir, Mr. Mike
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Williams, Hywel
Winnick, Mr. David
Winterton, Ms Rosie
Wishart, Pete
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wyatt, Derek

Tellers for the Noes:

Mr. Dave Watts and
Mr. John Heppell


Question accordingly negatived.


 
6 Dec 2005 : Column 783
 

New Clause 2


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