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Payments to London Organising Committee in Respect of Olympic Lotteries

'(1)   The Secretary of State shall from time to time pay to the London Organising Committee such sums as are, in his opinion, equivalent to the sums paid into the Consolidated Fund as a result of the operations of any Olympic Lottery.

(2)   The London Organising Committee shall use any sums paid to it under subsection (1) for the benefit of sport.

(3)   In this section "Olympic Lottery" means a lottery so designated by virtue of section 21(1) of the Horserace Betting and Olympic Lotteries Act 2004 (c. 25) (licensing of Olympic Lotteries).'. —[Hugh Robertson.]

Brought up, and read the First time.

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

I tabled the new clause with my hon. Friend the Member for East Devon (Mr. Swire) in the light of the omission in yesterday's pre-Budget report of any extra funding for elite athletes who are training for the Olympic games and of increasing concerns among sports outside the Olympic movement about the amount of funding available.

The parliamentary background to the new clause is well documented. The new Olympic lottery games were established under section 3 of the Horserace, Betting and Olympic Lottery Act 2004. It provided for four things: a regulator, the National Lottery Commission, to license lottery games; the establishment of a fund to hold the proceeds generated by the new games; the establishment of a body to distribute money held in the fund; and the principle that money held in the fund would be distributed to meet the costs of staging the 2012 Olympic and Paralympic games.

As the Bill passed through the House, my party raised two concerns—the start time, which we felt should coincide with the Athens Olympics, and the tax take—so the amendment is nothing new. We know that the Government plan to use £1.5 billion from lottery sources to finance the games—£750 million will come from existing sources and £750 million from the new
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Olympic lottery games. As money from the new games will be split in the same way as existing lottery proceeds, we know that 50 per cent. will go to the winners, 28 per cent. will go to good causes—in this case, the Olympic games—12 per cent., and this is the crucial figure, will go to the Government in tax, 5 per cent. in commission to retailers, 4.5 per cent. in operating costs and 0.5 per cent. to Camelot.

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It is therefore relatively easy to calculate that if the 28 per cent. earmarked for good causes—in this case, the Olympic games—has to fund the £750 million that the Government are looking for, total lottery sales from the new games must be about £2.68 billion. The Government's tax take—12 per cent.—is £320 million, which is how we arrive at that figure.

The British Olympic Association has already announced its intention to move Great Britain from 10th to fourth in the medal table. It is a brutal fact of life that the public will judge the success of the 2012 games by the number of medals we win. The BOA has calculated that an extra £25 million is needed each and every year to deliver on that commitment, with an extra £25 million needed for minor sports. The BOA expected that from yesterday's pre-Budget report and was cruelly disappointed.

Furthermore, sports outside the Olympic movement, and particularly the main mass participation sports of football, cricket, tennis and both codes of rugby, supported the London 2012 bid precisely because of its generic benefit to sport. They should receive enormous credit for this, as it enabled British sport to present an unusually united front to the International Olympic Committee. However, now that the games are secured, they are, quite reasonably, asking what this means for them. They have a number of concerns.

First, the new Olympic lottery game could lead to a diversion of funds from existing lottery games, meaning less money in the pot for those sports. Secondly, the diversion of a further £750 million from existing lottery sources will obviously mean that less money is available for non-Olympic sports. As a practical example of the effect that this will have, the Rugby Football League told me that it had planned to bid for the 2012 World cup. It now fears that lottery funds will not be available to finance that.

Thirdly, Government reforms to the lottery, by moving away from the four original pillars—sport, the arts, charities and heritage—mean that there is less money available in the first place. Fourthly, all four of the major sport national governing bodies have told me that they worry that UK Sport is becoming Olympics-dominated in its thinking. That is entirely understandable, but it is vital that we do not lose focus on mass participation sports, which, with the best will in the world, is what the vast majority of people will be playing in the seven years up to 2012 and beyond.

Fifthly, the sponsorship needed for London 2012 to be a commercial success is, I am told, twice that of the current market value. Although London 2012 will undoubtedly attract new sponsors, it is inevitable that some of sport's existing sponsors will, for obvious reasons, be lured towards the Olympics. As commercial companies do not have unlimited resources, that is
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bound to impact on the everyday sports. The sponsorship market will fall and that will impact on grass-roots activity.

Finally, there is the possibility of disruption to the UK's sporting calendar as a result of the IOC's prohibition on major sporting events during the period of the games. I know from my discussions with the Rugby Football League that the super league season, which runs from February to October, faces disruption, as does the Challenge cup final at Wembley on the August bank holiday. The England and Wales Cricket Board made clear its concerns at an all-party cricket group dinner the other week that its ICC future tours programme is already projected until 2013. I know and accept that there is scope for negotiation with the IOC but—this is the important point—many sports outside the Olympic movement have made compromises without, as yet, seeing any return.

There are two arguments here, one moral and one practical. The moral argument is that given that the Olympics is a one-off, national event, it is utterly iniquitous that the Chancellor should seek to fill his coffers in this fashion. The practical argument is that the concerns of sports inside and outside the Olympic movement could be met by the Government allocating the £320 million that they intend to take in tax from the new Olympic lottery games to the benefit of sport.

I can do no better than quote directly from the chief executive of the British Olympic Association, who, in the absence from the pre-Budget report yesterday of an increase in Government funding to train our elite athletes, said:

Even UK Sport, the Government's own quango, whose chair is a Government special adviser, said:

On the other side of the fence, among the mass participation sports, the chief executive of the Football Association said recently:

it is fair to say that everybody accepts that—

I was encouraged by that—

I could not agree more on both counts.

Sport, both Olympic, to fund our elite athletes, and non-Olympic, needs extra funding if the aspirations raised by winning the bid are to become reality. The return of the £320 million in tax taken from the new Olympic lottery games is both morally right and a practical way of starting to deliver for sport. I therefore urge all hon. Members to accept the new clause.
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