Examination of Witnesses (Questions 180-199)
MR KEN
LIVINGSTONE AND
MS MARY
REILLY
1 NOVEMBER 2005
Q180 Mr Sanders: That still does
not explain why £50 million which might otherwise go into
other parts of London is being set aside over this.
Mr Livingstone: It would not have
gone into other parts of London. The first call on the broad investment
programme of the LDA was to develop the Thames Gateway to the
east on both sides of that river. What would you do in Sutton?
As close as you are going to get in Sutton we have full employment
and we do not have the vacant sites to develop. A regeneration
agency, by definition, is taking land, remediating it, providing
it for housing or for employment, but that land, 90% of the brownfield
sites in England, certainly in southern England, are there in
that Thames Gateway and that is where our investment was always
going to be focused.
Ms Reilly: Perhaps I can just
add to that. The Board of the LDA, which is primarily a business
board, is very conscious that the whole of London needs to benefit
from this and we work very closely with the sub-regional partnerships
who in any event would not let us forget that and we are working
on other priority areas and strategic areas. Wembley is a very
good example where we have put a lot of investment in there for
the skills and the employment opportunities in another, what is
a, very deprived area. I have been working very closely with the
West London Business Alliance and have been out to see them several
times who are primarily concerned with the regeneration of Park
Royal which is another very important strategic area. They are
very optimistic and enthusiastic about the Olympics. I went to
see them before the decision was made because they see a tremendous
opportunity for them in what I was talking about earlier, the
skills and the business opportunities that we hope will be created
in east London. For a lot of the programmes we are running now
and London programmes as well, and that is very much where our
focus going forward will be, the £50 million would have been
earmarked anyway for east London and that is only less than a
tenth of our budget this year.
Q181 Alan Keen: Before I ask you
a question, I was born in London and I was sent to Middlesbrough
to get a proper accent and understanding of the meaning of life,
but I have a fair understanding of how people in other parts of
the country look upon the Olympics being in London. In my constituency
people create a tremendous amount of noise before they land at
Heathrow and then they disappear through Feltham and Heston and
western Hounslow as quickly as they can to get to central London,
but I have an understanding. It is exciting that there is a real
spirit of co-operation throughout the country, which is just as
well, but is there any formal process or anyone who is actually
appointed to make sure that not just west London or other parts
of London, but that the rest of the country are involved? Ken,
you mentioned very wisely that there has been a commitment in
the past with the words, but now you have got a monitoring system
for making sure that employment is used locally, but is there
anyone responsible for involving the rest of the country? Has
anybody got that direct responsibility?
Mr Livingstone: That is really
a duty both on the Olympic Board and on the ODA. I am meeting
later this week with the London-wide business community where
we will be discussing their business opportunities, but we will
put in place the advice and guidance that the business community
need in order to get these opportunities and that will not just
be for London. The bid document itself was prepared by a Scottish
firm. I was approached by the leaders of the business community
in London, saying, "We really want a seminar about how to
do this, how to engage, how to exploit the opportunities coming",
and I am due to see Keith Mills in the next few days because he
perhaps is best placed, as a successful businessperson and as
acting Deputy Chair of LOCOG, actually to lead the business community
through the opportunities that will be coming. Then there is the
wider engagement which I have been struck by. I have been to schools
in the Stratford area and I also know that the Conservative-controlled
council in Richmond has put in place a sort of pre-Olympics training
package for its kids which has been incredibly successful and
I am up and down the country and I think we should get in every
council area schools saying to their young people, "What
can we do to give you extra time, extra training?" and to
ask themselves, "Are there youngsters there we can identify
now who have a chance perhaps of competing in 2012?" The
spin-off from that, when I go into schools, half the kids think
they can compete in the Olympics and their hands go up with the
enthusiasm of it, so really engaging everybody, I think, is part
of the job for all of us and Seb will be storming up and down
the country, as Tessa and I will, trying to engage and get that
enthusiasm going.
Q182 Alan Keen: On that particular
point, I understand that Crossrail is not an essential part of
the transport system. Is that true or is there a chance of it
being involved?
Mr Livingstone: We looked at the
possibility at one point of whether Crossrail would be ready on
time and it would have been touch and go, but also there are huge
funding implications still to be resolved. The Bill is now making
its way through the Houses of Parliament and that will be a two-year
process. We have over 300 petitions to be heard and I do not think
the Government will take the funding decision until the end of
that process. I can see the value of that because at the moment
we are strongly in the down-swing of the business cycle and revenues
are tight and I think I might get a decision I am going to be
happier with if we take it in 2007 when we should be coming out
of the trough of the business cycle and revenues should be picking
up. You are talking about a £12-13 billion project which
is absolutely essential for London's continued development after
the Olympics and clearly there will be painful decisions about
how the burden of that is to be shared.
Q183 Alan Keen: Coming on to a different
issue altogether, I want us to learn from the Olympics and I think
one of the most enjoyable times of my previous two sessions on
this Committee was having in front of us and having spent five
separate inquiries that involved Wembley Stadium, I knew that
our then Chairman, Gerald, did not know that Wembley was not going
to be the athletics stadium as the inquiry had spent months looking
into this and I wanted to ask the question which would have set
the steam coming out of the Chairman's ears. I do not apologise
for putting the same points I put last week to the Secretary of
State, but it is such a mammoth project to get the Olympics successfully
produced that unless we do something different, unless we get
the IOC to look ahead, how on earth can any less-developed nation
than us ever host the Olympics? Now that we have been awarded
the Olympics we cannot offend the IOC, so should we learn from
this and change it somewhat so that under-developed nations or
developing nations can actually play a part in hosting the Olympics
in the future? Is it something you would like to look at, Ken,
as we go through?
Mr Livingstone: Basically I have
to say that the period of time when you cannot offend the IOC
is coming up to the vote. We could be quite offensive now if we
chose to as the boot is a little bit on the other foot, but we
have a very good working relationship and there was real enthusiasm
as they engaged with the London bid. I do think that this is something
the IOC have got to consider. For the fourth richest nation in
the world and its capital city, we can drive forward the costs
of this without any subsidy from outside our own borders. Basically
Athens was the smallest city since Helsinki in 1952 to host the
Games and they had substantial European Union assistance, mainly
around the infrastructure to modernise the city, and I do think
the IOC have to consider to what extent they may need to have
a degree of subsidy to any developing nation that actually is
thinking about hosting these Games because I think it would be
an impossible situation to say to an emerging economy that you
will divert billions of pounds of your resources into this one
site, this one city and, therefore, I think perhaps the IOC would
have to consider, given the volume of income from the TV rights
and the merchandising with the top dozen sponsors, whether they
will not have to assist in some of the infrastructure works if
they are seriously looking for sites in Latin America or Africa
for 2016. Otherwise, I fear that you will have New York and Moscow,
Paris and Madrid all back again because we are the nations that
can afford it.
Q184 Alan Keen: That is why I mentioned
Wembley Stadium when I started off because had it not been a requirement
for the village to be within half an hour's travelling distance
of the main stadium, then we could have used Wembley Stadium for
the athletics, as it was in 1948, so it is something we should
learn from as we go along. I do not mean to be antagonistic to
the IOC; it is something the whole world has to take into account
and thank you for the answer you gave.
Mr Livingstone: When the IOC came
to me four years ago asking if I would back the bid because they
cannot proceed without the backing of the mayor or the council
leader of the host city, they started saying that the choice was
between Wembley and the East End and I stopped them and I said,
"I am really not interested in looking at the West End of
London", because there is not the space and we would end
up, like the last time this was considered in 1985 with the Greater
London Council under Horace Cutler, where it involved concreting
over Barn Hill Nature Reserve for a temporary Olympic village
and this would be totally unacceptable. It was not popular then
in Wembley and it would be totally unacceptable now. For me, this
was about using the Olympics to regenerate the East End as, in
the same way for Delanoe and for Bloomberg, it was about regenerating
run-down parts of their city and I really do not think it could
be justified to divert the sort of resources we are talking about
to an area that does not need that regeneration. Third World cities
are prime candidates for this, but whether they can do it without
some assistance from the IOC and from the merchandising and sale
of television rights, I doubt.
Q185 Adam Price: The Barcelona Olympics
was tremendously successful of course and had the kind of local
regeneration that you have just referred to, but at the time of
course it also spawned a huge local opposition movement to what
was seen as essentially a gentrification of resources, social
dislocation and moving out of lower-income families into the margins
of the city, and here there are some parallels with the Docklands
experience. Do you see that there are dangers sometimes in major
regeneration initiatives that actually the benefits do not accrue
equally and how can we prevent that kind of gentrification happening
this time around?
Mr Livingstone: Perhaps I can
express my philosophy on this because, as one who was equally
opposed to the imposition of the Docklands Development Corporation
without any democratic input and with people having five or six
generations behind them as East Enders turning up at the LDDC,
saying, "We're getting married and we would like accommodation",
and being told, "You can't afford to live here anymore",
that was not my idea of regeneration. Sir Peter Hall in his analysis
of the development about six years ago, which was a sufficient
gap then to make an assessment, calculated that for each job created
in that early phase of the LDDC, the public subsidy was £135,000.
That is not viable for the sort of scale we are looking at and
my approach has been quite different. We have all across London
run down estates where there are huge social problems and the
reason I changed our policy on density is that you cannot say
to people who have lived in those conditions, "Now you're
moving out and others are coming in". What we have done is
we have said to councils that we work with that we want to double
the density so that the people who are there will get rehoused,
but stay in the area and you get the social mix by bringing in
housing for sale, so you do not move people out, but you move
people in and you get the social mix that works. That is the only
way and I would not be interested in any other way of taking this
forward. That is certainly what will lead the view of the LDA
and my office and the ODA and LOCOG. The East End of London has
been left behind for 30 years with the collapse of the docks,
the collapse of Woolwich arsenal and really all governments and
civic administrations have largely failed that area. We are not
saying to them now, "We've got a good idea, so would you
mind moving?", but they are getting the benefits and we will
move more people in. These are not areas of high-density population.
London is the lowest density of any major city in Europe and what
it is is bad planning and poor transport links that have left
it behind, so we intend to do what we can to keep the local people
there and give them opportunities.
Q186 Janet Anderson: The LDA is responsible
for acquiring the Olympic site through its CPO powers, if necessary.
How much have you set aside for total land acquisition costs,
including compensation for disturbance and relocation, as well
as perhaps professional fees of those companies that you have
to move and what will happen in the event that you have underestimated
these costs? Can you dip into that £250 million that you
will be stockpiling from 2008?
Ms Reilly: Originally when we
looked at this budget we set aside £478 million. We are now
reviewing those budgets and reviewing the fact that we want to
acquire more land for relocation. The remediation in some of the
areas is deeper and longer than we thought, therefore, we have
not yet finalised the budget, but we are looking at some worst-case
scenarios of, "What if this goes wrong? What if it takes
more to remediate?", et cetera, and we are happy, as a board,
that that is within the resources that will be available to us.
We may of course have to do some borrowing and certainly we will
have to do some land disposals at a time that is suitable for
those, and those are ones outside the Olympic area, so we are
broadly happy that the resources are there with our extra requirement—
Q187 Janet Anderson: To deal with
it?
Ms Reilly: Yes.
Q188 Janet Anderson: And how are
negotiations progressing? I think in September you indicated that
you had signed some private contracts with 24 out of 284 businesses.
Are negotiations now progressing more smoothly?
Ms Reilly: Yes, they are. Basically
there are 284 businesses and 150 of those have appointed advisers
because, as you know, we are going over and above the CPO process
and have offered to the businesses that we will fund their legal
and surveying fees, so 150 of those have now taken up advisers.
We have 32 agreements in principle, so an advance on the 24, and
of those 32, we have 22 who have signed heads of agreement. As
I have said, I am meeting some of the businesses on 10 November
and some are still sitting, waiting to see what happens, but the
fact that we have engaged with 150 of them in one form or another
suggests that the momentum is increasing now.
Q189 Janet Anderson: Do you think
they will all stay in London or might some of them move outside
London?
Ms Reilly: Obviously we have two
quite separate processes. One is the CPO process, but we are trying
to encourage the businesses to relocate within that part of London.
We certainly have enough available space and there are other councils
who have come forward and said, "We've got some space if
they want it". We cannot force them to relocate, but we are
very anxious to give them a package that is as favourable as possible
to make them stay within this area and I think we have had good
indications that most of them want to stay in that area, so it
is just fine-tuning the precise location for them.
Q190 Chairman: Of the 284 businesses,
some may find it relatively easy to relocate, particularly if
they are subsidiaries of big companies, but the small firms are
going to find it hard and expensive and they are going to have
to look at the costs of finding an alternative site, adapting
that site to their needs, relocating their staff and relaunching
the business. Can you give an assurance to those companies that
all those costs will be met?
Ms Reilly: I can give an assurance
that we will look at what are reasonable costs. Clearly with some
of the businesses we have to look at what they are asking for
and think about whether this is reasonable to be paid for from
the public purse because the CPO process, as I have said, we will
be giving them market value on the land and whatever else we are
acquiring and we will be going over and above our legal obligations
by helping them with their legal and surveying expenses, so when
it comes to relocation, we will be looking at those businesses
and assessing what their needs are and clearly trying to come
to a reasonable agreement. This is our preferred option all the
time, to negotiate, and there are some people with whom we have
got agreements in place and we have got a fair idea of what some
of the businesses want. With some of them, if you look at what
they are asking for, you have to say, "Let's be reasonable.
Let's find a middle ground".
Q191 Chairman: Following that up,
let me give you an example. FH Brundell Wire Mesh & Company
is a relatively small firm, the success of which has actually
been built on the fact that they are located where there is a
lot of traffic passing, construction companies who stop and acquire
materials from them. They have had to try and find alternative
premises, but they have found it very difficult to find anything
which offers them the same advantages as the premises they are
in at the moment and they also estimate that the difference between
the amount of money that is on the table for their premises and
what it is going to cost them to move and to set up again is something
like £2 million. Now, when you come to examine claims of
that kind, would you consider appointing some kind of independent
arbitrator who will be able to reach a judgment and then provide
you with what they believe to be a reasonable cost that you should
meet?
Ms Reilly: First of all, under
the CPO process, if they are not satisfied with the amount that
is offered, the process allows for an appeal to the Lands Tribunal,
so that deals with that. Secondly, yes, I think it is very reasonable.
I am an accountant myself, so I would think it is only fair if
somebody comes along with a proposition that we ask our advisers
to look at it. I think it is a very good way forward and that
is actually one of the things, in talking to the businesses, that
I am prepared to do.
Q192 Chairman: But the Lands Tribunal
presumably is simply looking at whether or not it is a reasonable
price you are paying for the land?
Ms Reilly: Yes, sorry, I was answering
the second part of your question which is the additional compensation
that will be required for moving a business and put it in a like-for-like
position and the answer I gave to the previous question, which
I would reinforce for this one, is that we need to look at, "Are
those requests reasonable?", and it is quite clear that there
are people out there who will be able to help us assess those,
and we will negotiate this. I cannot talk about specific businesses
because I do not actually have that detail to hand, but those
are the sort of questions when I referred earlier to meetings
my CEO has had that I am now taking forward with some of the businesses
so that we can have a look at what is being asked. I agree, it
is an ideal way to get independent advisers to look at issues
like that where there are some differences to try and find a way
through it and at the end of the day if the case stacks up, then
we will have to look at that on a case-by-case basis.
Q193 Chairman: But there are bound
to be disputes of this kind.
Ms Reilly: Yes.
Q194 Chairman: It is helpful that
you say that you are seeking independent advice, but is there
not a case for going further and saying that there should be some
kind of binding arbitration process carried out by an independent
assessor where a dispute of this nature arises?
Ms Reilly: Well, I would need
to go back and look into whether we need that. I am hoping that
we can negotiate those differences and come up with an acceptable
compromise. We have got to be wary obviously, as the Board of
the London Development Agency, that this is public money and we
cannot just throw it around, but equally we need to recognise
that businesses, such as the one you have described, have got
a legitimate concern and, therefore, we need to look at what we
can do within our resources and availability. I think that setting
up an independent arbitrator probably is not necessary. Certainly,
as I have explained earlier, we have got some independent people
who have come along to the meetings and we have recognised expertise
in these areas and have had fed back to us that it seems to be
that the differences are closing and I am hopeful that we can
negotiate. I would rather seek independent advice with the consent
of the business where we say, "Who can we get to look at
this case?" and then just come back and test the assumptions
and the quantity rather than set up an arbitration because I think
that would be a bureaucratic process which would not, in my view,
help move things forward.
Mr Livingstone: There is another
factor in this, that if there is such a failure and such protraction
that the firm then closes, it is entitled to a lot more in terms
of its being forced into liquidation by this process, so it might
get five to 10 times that, so that is a real pressure on the LDA
to find a deal. With all these firms, if we could not remove them,
it was protracted, and then they went into liquidation, the costs
would be absolutely amazing, so that is a very strong pressure
on the LDA, and actually most probably more of a pressure because
it carries real financial penalties than having some complex independent
arbitration procedure. It is not that the LDA is sole master in
this domain; there is the Lands Tribunal on the one side and the
real financial costs of failure to agree when you get into the
costs of a liquidation of a business.
Ms Reilly: And, as I said earlier,
the Board of the LDA is a business board, so they understand these
pressures and they are putting pressure on to the executive officers
to sort these problems out.
Q195 Paul Farrelly: I just wanted
to explore something which has already been touched on briefly
which is trying to ensure the maximum spin-off for business and
employment in this country from the Olympics. There is a general
feeling that we might not be as robust in this country as the
French or the Italians or the Germans in making sure that our
firms and people do benefit to the maximum. Last week in evidence,
the Secretary of State predicted that about 550 contracts would
be needed and that most would be of sufficient size to fall within
the procurement law and regulations. Ken, my notes here say, to
pick up some comment you made to the London Assembly in a Plenary
Session, that you would get the best legal advice possible to
make sure that those regulations were interpreted in such a way
as to guarantee we got the maximum spin-off. What thought has
been given to this issue and what approach are you taking?
Mr Livingstone: There are two
stages to it. From now until the summer of 2008, we will be acquiring
land, remediating contaminated sites, clearing them, preparing
them, and at the same time there will be the design competitions
and the awarding of contracts for building all the major stadia.
Now, there are not that many firms in the game for undergrounding
power-lines or building Olympic-sized stadia and that is not,
I think, where the real focus is, but it comes from that area
of LOCOG. There is this huge debate about whether it is private
or public, but effectively LOCOG will operate as a private corporation
with the input of people like Keith Mills who understands the
business dimension. As I said earlier, I am meeting the Business
Board of London, all the three business organisations, the London
regions of the CBI, the London Chamber and London First to take
them through this, so we have a year or two to put in place getting
it right for that wealth of contracts of a much more varied size
and not specifically geared to construction, but which are going
to flow out of the LOCOG process. Therefore, it is not like it
is all being let now and there is a great panic on. Most of this
stuff will not start coming into play until much closer towards
the actual Games themselves. It is not like we let the £88
million contract for undergrounding the power-lines as we are
just not going to be in a position to go up to about 50 jobbing
builders in Hackney and say, "Can you club together to do
this?" as these are real skills, but there is no doubt that
collections of small firms in London and nationally can come together
and jointly bid for one of the smaller contracts that LOCOG will
be handing out over the run-up to 2012.
Ms Reilly: This is an area where
obviously the LDA is very focused and, as I mentioned earlier,
we have kicked off today with the £9 million funding that
is going to help businesses, particularly SMEs, get ready to apply
for these jobs and it is a programme we have been doing anyway,
but we are ramping it up across London and particularly the east
and south-east London. We have talked to people in Manchester
asking them what they did for the Commonwealth Games and we have
talked to people in Sydney and Barcelona, asking, "What worked
for you? How did you get local businesses really engaged with
this?" I actually sit on the London Business Board because
I am currently Chair of the CBI Regional Council for London, and
this is a very key area that they are all involved in as well.
We have been talking through with them ideas about how we can
put together a prospectus, for example, for businesses in London
so that people will understand. Another initiative we are doing
is we are setting up a website that will actually tell businesses
what is coming on-stream, where are the opportunities, and there
are lots of opportunities. For example, there will be 6,000 construction
workers and I read the other day that they will need something
like 120,000 bacon butties a week or something, so there is obviously
a contract for local catering businesses there and there are other
issues like that. We are very much attuned to that and are setting
up the process so that businesses will know how to procure. We
are coming up with a procurement code that has now been shared
with the five main boroughs and the London Business Board has
had a look at that, so it is trying to make it user-friendly for
people for whom procurement codes are not everyday occurrences.
We have tried to identify the opportunities that are coming other
than just the huge construction ones.
Q196 Paul Farrelly: We would like
you to be as robust and as helpful as possible, but, Ken, on my
patch when there is a £500 million hospital, I like to see
them using Staffordshire brick and Staffordshire pottery wherever
necessary. In London with a project of this size, we would like
to see that robustness and help given to firms across the country
and, if I can pick you up on one contract, Ken, where I think
you expressed some regret, the Congestion Charge contract with
Capita, actually a lot of the employment spin-offs went to Coventry
where the call centre was and that was not something you would
repeat. How are you going to reassure people that, whilst being
robust, you are going to be allowing access to firms across the
country for these sorts of opportunities?
Mr Livingstone: The position on
this is that there will have to be an open tendering process.
Much as I, as a London politician, would like to pass all the
jobs out to Londoners, clearly the Government would not be happy
with that and I think most probably it would not be legal anyhow
even if I did employ some good lawyers to try and find a weasel
way of words to achieve it. I think there is going to be enough
there for every region and major city in Britain to get some real
benefit. I do emphasise that Keith Mills with his background,
having created success for businesses, will most probably be best
placed to actually lead the education process for businesses in
Britain about the way to wise up to the opportunities of all of
this. It might be useful if I send the Committee for you to look
at the form of the contract that we have just done on the East
London Line, particularly those clauses that take employment and
local labour forward, because I think you might have an interest
in that, and also the LDA's document, if you have not had it already,
about sustainability and procurement that we want to underpin
the Games because we have got time to talk this through, hear
your advice and then amend it and then get it right before these
contracts start.
Q197 Paul Farrelly: I have just one
final question on the employment angle in this sense. Clearly
in the UK we have not got a limitless supply of cheap labour,
as they have in building the Peking Airport, and I know in London
that many people breathed a sigh of relief in the construction
industry when EU enlargement came along so that there were not
hordes of Polish workers and people from the Czech Republic and
so on and so forth employed here illegally all supporting the
London construction industry. Could I ask what estimates have
been made of the number of workers and the different types of
skills that will be needed and, within that, what assessment has
been made of the possible knock-on effects on other construction
activity in London or indeed around the rest of the country?
Mr Livingstone: The first thing to start with
is that this Olympics is in this area of high unemployment and
for some people they have never had a secure job since they left
school and they are now in their 40s. There is there a cycle of
under-employment that is being passed down from generation to
generation, I suspect, starting with the failure of the school
system to give the kids there the skills they needed to get the
jobs. Therefore, the LDA has been working for well over a year
now towards putting in place the expansion of the training for
local people in the area in these construction jobs coming because
the cultural bridge we have to cross here is that we are dealing
with people, black and white, who are all suffering high unemployment
and the defining issue is their class. They are working-class
boys who went through school, thinking they would sell their physical
strength and they then discovered that that world had left London.
Here is a chance and we would like to see that we could train
these people to work in offices, and some of them will through
the Learning and Skills Council work, but for many of them this
will be the best chance they have ever had and the LDA has been
doing a lot of work with the Learning and Skills Council and local
colleges to make sure that we ramp up the capacity of the industry
because, as I understand it, at the moment inflation in the building
trade is running at 8% a year. Now, that suggests to me that we
are not getting the supply of workers through, as one factor in
this, to keep these costs down and it is in our interests to actually
undermine the inflationary pressures by actually getting a real
throughput of skilled workers from the local area. One of my first
decisions as Mayor was to agree the creation of a Serbo-Croat
labour camp in Heathrow for the construction of Terminal 5. That
whole community has been brought in from abroad and given their
own small temporary city for constructing Terminal 5 and an entire
Serbo-Croat community, and Kosovan as well, is all down there.
I have nothing against Serbo-Croats or Kosovans, but I would like
to think that people who have really never had a secure job in
the East End of London have a chance now to get these.
Ms Reilly: In fact, again, another
initiative we have just set up in the LDA is a specialist construction
employment sector, so we will be working with the contractors
and sub-contractors helping them to recruit local labour and the
diversity of labour that is required in the construction industry.
Indeed, most of our successful initiatives in employment areas
have been where we have gone to the industry sector and through
the employers and asked them "What are the skills that you
need?" so it is demand-led rather than supply-led. We have
had a lot of interaction with the construction industry and it
is one of the first initiatives we are kicking off.
Q198 Mr Hall: Can I just change tack
slightly, the International Olympic Committee place very strict
restrictions on advertising to protect the intellectual property
of the Olympics itself, and there is a certain byelaw to maximise
their own income from advertising. What is your view about how
we are going to help local bars, clubs, pubs, market stall traders
to associate themselves with the Games and not fall foul of the
restrictions the IOC want to place upon them?
Mr Livingstone: Basically it will
be managed by LOCOG, you will not have a heavy-handed IOC over
in Switzerland issuing these edicts to the little local Greek
taverna that happens to be called The Olympia. I have to say I
think the IOC have got this right. When you look back at the bidding
of the American networks for the Moscow Games, people were talking
about a million here, a million there, you are now talking about
hundreds of millions of pounds and that manages to mean that we
keep ticket prices at a reasonable level and the actual running
of the Games usually makes a profit. They restrict it to a dozen
what they call top sponsors, obvious ones like Coca Cola, McDonalds,
Nike and so on, and that also brings in a huge sum of money. The
shadow LOCOG is negotiating with our share of that. We are in
there arguing about how many hundreds of millions we get to subsidise
the running of the Games in London. We would like a billion, thank
you very much, they would mostly like us to take a few hundred
million. We have only got that because a very far-sighted long
term strategy has been put in place to take it out of the hands
of local negotiating committees and have a professional core of
people develop the skills to really screw the maximum amount of
money you can out of sponsorship for this. Below that, LOCOG will
manage basically our national sponsorship and, therefore, it has
to be run by people who are UK-based and are UK citizens and understand
the needs locally. We are not going to have some new Gestapo stomping
around, tearing down people's hoardings and so on. What we want
to avoid is the gross situation that there was in Atlanta where
NBC, Dick Evershall, instructed his camera crew never to have
a shot of the city in the background because it was so grossly
offensive. You can cheapen this to the point where you lose the
rights but it will be managed sensitively. These are all my voters,
I am not going to offend them, whether they vote for me or not!
Q199 Mr Hall: The London Olympic
Bill enshrines these restrictions in domestic law and places the
responsibility for policing that on LOCOG. Will you have any locus
over LOCOG to make sure that we do have sensible approaches to
this and people who are used in 2012, or various other things
associated with the Olympics to try and associate their business
with the success of the Olympics, are not going to fall foul of
the law?
Mr Livingstone: I have one appointee
to LOCOG and this is one of the things that they will focus on.
I have discussed this with Keith Mills because this is an issue
which has come up. We have had some quite alarming statements
from the advertising industry about how it would all be appalling
but we will take a very sensible approach on this. The objective
here is to allow everyone to maximise the benefit but without
it all going so over the top that we all feel it is a bit shameful
and a bit tacky on the day. Athens was a city disfigured by illegal
hoardings, you could hardly see the vistas of that great old city,
whereas the morning I arrived at the Games they were all gone.
It was absolutely brilliant, you just say "What a beautiful
city this is" when advertising is the right balance, and
we want to make sure we maintain that. Certainly I will make sure
as long as I am there that the focus is on this being a sensible
approach without having heavy handed nonsense about "You
have got to change a hoarding you have had up there for 30 years".
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