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Tessa Jowell: I thank my hon. Friend for her contribution and I welcome her support for the Olympic games. It is absolutely right that the decisions, costs and every aspect of the Olympics should be subject to scrutiny. I have set out today as best I can both the consequences of a further take from the lottery and the safeguards that we are extending. I have made it absolutely clear that it is not the Government’s expectation that any current lottery-funded project should see its funding either cut or withdrawn as a result of the Olympics. The problem, of course, lies with giving an absolute blanket assurance in respect of hundreds of thousands of lottery projects throughout the country, as some may close for reasons quite unrelated to the Olympic games. My assurances about lottery-funded projects have been put on the record in the House today and I am absolutely sure that all hon. Members will come back if they find the consequences in their constituencies to be any different.
Mr. John Whittingdale (Maldon and East Chelmsford) (Con): Is the Secretary of State aware that today’s announcement that another £675 million has been taken from the lottery on top of the existing £1.5 billion will be greeted with dismay by arts and heritage organisations, charities and grass-roots sports? Will she accept that that makes it all the more imperative that those causes should not suffer a double hit with an announcement of a cut in direct grant funding as a result of the comprehensive spending review? Can she give the House an absolute guarantee that this is the final figure for the call on the lottery, and that if there are any further increases in costs beyond the figures announced today, they will not be taken from the lottery but met by the Treasury through central Government expenditure?
Tessa Jowell: I will make two points in response to the hon. Gentleman. First, this is intended to be the final lottery contribution to the costs of the Olympic games between now and 2012. Secondly, we should not forget that a major part of the Olympics and Paralympics will be the cultural Olympiad, which starts next year when London becomes the host city and Liverpool becomes the capital of culture. There is not a single aspect of our heritage, our culture, our community sport or our national life that cannot be enriched by our hosting of the Olympic games. Finally, the hon. Gentleman asked about the comprehensive spending review, but without wishing to be coy, I am sure he will accept that that is an announcement for the Chancellor, not for me.
Meg Hillier (Hackney, South and Shoreditch) (Lab/Co-op): I welcome this pinning down of the finances— [Interruption]—particularly the money that is already being spent in my constituency. I also welcome the commitment to fund the broadcast centre—a proper legacy for jobs and business in Hackney. Will my right hon. Friend tell me and the House what work she and other agencies are doing to ensure that the money that she has unveiled and discussed today is recycled so that local and UK businesses are in a good bid position—ready to bid for the contracts that will come up? That will help to ensure that the money is invested in jobs and businesses in the UK, east London and London as a whole.
Tessa Jowell: I thank my hon. Friend for her work to support the Olympics in her own constituency, which will ensure that her constituents benefit from the job and training opportunities as well as the sporting opportunities that will arise from hosting the games. It is well known that 12,000 or so new jobs will be made available and the commitment to pre-volunteering is also important, because some socially excluded people in the Olympic boroughs will have the opportunity to get into work and to acquire the skills that will keep them in work. That will stem from their volunteering in the run-up to the games.
My hon. Friend has made a very important point, because part of the legacy of the games will be world-class facilities and a new urban park in one of the poorest parts of the country. Another legacy is just as important to my hon. Friend’s constituents and those of other colleagues with east London constituencies—the prospect of new jobs and new skills in a part of London where unemployment is significantly higher than in the rest of the country.
Mr. Iain Duncan Smith (Chingford and Woodford Green) (Con): May I gently say to the Secretary of State that it is possible for an east London MP to be in favour of the Olympics and also utterly astonished at the change in the budget figures announced today, which will so affect my constituents? May I, without any ranting, simply ask her to answer the following questions? First, will she now guarantee, as my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) requested, that there will be no further increases in demands on the lottery fund? Secondly, will she also guarantee—the Secretary of State will forgive me for not trusting the Mayor, as she may do—that no further demands will be placed on council tax payers in my constituency?
Tessa Jowell: On the first question, I have said clearly that there will be no further call on the lottery between now and the Olympic games in 2012. On the second, the Mayor has also made it absolutely clear that he does not expect to levy further council tax increases on Londoners.
Ms Dawn Butler (Brent, South) (Lab): I thank my right hon. Friend for her statement, and I would like to say how important it is to keep stressing the part of the Olympics that money cannot buy—not just the legacy, but the hopes, aspirations and dreams of many young people, especially in my constituency of Brent, South. I thank the Secretary of State for coming to the opening of the Willesden sports centre. We hope that at least five to 10 of those young people will be able to compete and win medals in the games. It is also important to stress that some of the Olympic games will come to Wembley stadium— [Interruption]—and I would like to tell the House that that will be opened on Saturday. As I said at the outset, it is so important to stress the aspects that money cannot buy.
Tessa Jowell:
I thank and congratulate my hon. Friend. The ambition of the young people now training at the Willesden sports centre to win medals at the London Olympics is unequivocal. All power to their success. My hon. Friend is absolutely right to say, despite all the cynical barracking from Opposition
Members, that Wembley stadium will be one of the finest in the world. It will host the football events in the 2012 Olympics.
Mr. Mark Field (Cities of London and Westminster) (Con): We all regret that the Secretary of State has had to come back to the House as she has. In all honesty, I suspect that on 5 July 2005 she did not expect us to win the Olympic bid; hence the budget was much slacker than it otherwise might have been. She rightly points that there has to be legacy, and that providing a catalyst for regeneration is the raison d’être of the Olympic games. We all know that it will be a spectacle and a great sporting success in 2012, but without that legacy it will have been a wasted opportunity. My fear is that with the budget now set at £6 billion—much higher than the original budget—it is the regeneration that will be lost if costs continue to spiral as they have. Will the Secretary of State—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. A question can be inferred from what the hon. Member has already said.
Tessa Jowell: I think that we should ask for a declaration of interest from Conservative Members before every contribution, if what they really mean is that it would have been better if we had not won the Olympic games bid. [Interruption.] To deal with the hon. Gentleman’s point, yes, legacy is absolutely— [Interruption.]
Mr. Deputy Speaker: Order. There may be tensions in the House about this issue, but the Secretary of State must be heard, as must every hon. Member who is asking questions.
Tessa Jowell: The hon. Gentleman’s question is specifically about legacy. The investment in regeneration and Olympic infrastructure in and around the Olympic park is precisely about legacy, because the sporting venues that will be built will be used for decades to come—long after the 60 days of the Olympics and Paralympics. That is one of the reasons why we should look at this not just as a cost but as an investment in the quality of life of those communities for decades to come.
Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): A key aspect of the legacy is that it will bring into beneficial use a huge area of land in east London that is very close to the City, but hitherto could not be used because of its highly contaminated nature. I was interested to hear the Secretary of State mention profit sharing in relation to the added value of the site. Does she intend to return to the House with more details of those profit-sharing arrangements? If not, will she ensure that there is another opportunity to examine how the profit will be shared between regeneration projects and returns to the lottery fund?
Tessa Jowell: I will of course provide the House with details of the redrafted memorandum of understanding between the Mayor of London and me, which will set out how the profit sharing will work.
Mr. Andrew Pelling (Croydon, Central) (Con): Will the Secretary of State, as a fellow London MP, concede that additional money will now have to come from London taxpayers, despite the agreement that there should be no increase in the Olympics tax? The £300 million that needs to be found by the Mayor will have to come either from a reprioritisation of his budget or from an increase in that other element of council tax, the main council tax itself. Will not additional money also have to come from London taxpayers through the so-called profit sharing, bearing in mind that the London assembly had previously been assured that all the money coming from the increased value of the land would be secured by the London Development Agency? Now that extra money is to be taken away from Londoners.
Tessa Jowell: Let me deal specifically with that point. The intention will be to return to the LDA the cost of the land that it has acquired for the Olympics. Any profit resulting from the sales will be shared between the lottery and the regeneration of the east end.
Mr. Andrew Love (Edmonton) (Lab/Co-op): As a number of Members have already pointed out, what is unique about these Olympics is the legacy and regeneration benefits. Regeneration is critical to the area, which is one of the most deprived parts of the country. It will involve 9,000 homes, a shopping centre and a media centre—and I could go through all the benefits and additional jobs that have been mentioned. I understand that the infrastructure costs have risen from £1 billion to £1.7 billion. Will my right hon. Friend tell me how much of that increase is due to inflated construction costs, and how much will be additional regeneration benefits that will link not only the five boroughs but the rest of London and the rest of the country to all the benefits that the Olympics will bring?
Tessa Jowell: In relation to construction costs, when I appeared before the Select Committee on 21 November I made it clear that we had revised the estimate of construction inflation from 5 to 6 per cent. and that we had allowed for the cost resulting from that. My hon. Friend has been an incredible champion of the Lea Valley athletics centre, which is a state-of-the-art world-class training facility just up the road from Stratford. That is a good example of how regeneration can be brought to a deprived community through world-class investment in sport.
Robert Neill (Bromley and Chislehurst) (Con): Will the Secretary of State accept that many people in London will regard the suggestion that Manchester is a different kind of host city from London as the biggest load of baloney yet to come from her Department on this subject? Given her announcement that the memorandum of understanding between herself and the Mayor is to be rewritten, will she undertake that it will spell out specifically that there will be a binding cap on council tax increases for Londoners, and that it will give a specific indication of how much money will be given away by the London Development Agency to the rest of the country through the percentage of the profit to be transferred out of the LDA—
Hon. Members: That’s a vote for Paris.
Tessa Jowell: That is right: that was a vote for Paris.
I want to deal with the matter of VAT status. The city of Manchester ran the Commonwealth games, and it was therefore exempt from VAT. London is constituted on a different basis, as it is making a contribution to the cost of the games. I, too, am a London Member of Parliament, and I do not think that those of us who represent London constituencies need a binding cap on the take from the council tax, because we know precisely—and are sensitive to—the views of our constituents. I am quite sure that the rewriting of the memorandum of understanding between the Mayor and me will reflect that.
Jim Dowd (Lewisham, West) (Lab): I am grateful to my right hon. Friend for her assurances about the position of London council tax payers. However, there is a concomitant concern that a loss of other resources might occur. We shall have to return to that issue over time. Will she give me an assurance that in the search for private sector partners—especially sponsors—to fund the games, regard will be given to those whose commercial activities conflict with Government health priorities, particularly those in the fast food and food processing industries?
Tessa Jowell: I thank my hon. Friend for his question. I would like to remind him of the scale of private sector investment that has already come into London as a direct result of the games, and of the potential tourism dividend, which has been estimated at between £1.4 billion and £2 billion, 40 per cent. of which is expected to be enjoyed not by London but by the rest of the country. I understand what my hon. Friend’s question about private sector partners is getting at, but a number of the sponsors are nominated and contracted by the International Olympic Committee rather than directly by the host city.
Mr. Nick Hurd (Ruislip-Northwood) (Con): The Secretary of State should be aware that people in my constituency in west London will be profoundly sceptical about her statement that the Mayor does not expect to increase the council tax for London beyond current commitments. I want to ask her a simple question: can she guarantee that my constituents’ council tax will not rise beyond current commitments?
Tessa Jowell: The decision about council tax is a decision for the Mayor. It is not a decision for me as Secretary of State and Olympics Minister. I have set out for the House this morning the budget for the Olympic Delivery Authority and I have indicated the scale of the wider funding provision. There is a memorandum of understanding, and the Mayor has made his position very clear. If the hon. Gentleman wishes to pursue this point—which, again, I take as a vote for Paris—he should take it up with the Mayor.
Mr. Sadiq Khan (Tooting) (Lab):
Is my right hon. Friend aware that some members of the Public Accounts Committee, on which I sit, will be devastated by the fact that she has set this budget today, because it takes away the one weapon that they had with which to attack the 2012 Olympic games? Does she share my
frustration that some of the wider benefits of the games—the regeneration, the improved transport infrastructure, the housing—have been included in the public perception of the costs of the Olympics, which takes away from the perception of the huge benefits that we will see in London?
Tessa Jowell: My hon. Friend is absolutely right. The message not only for London Members of Parliament but for those representing constituencies up and down the country is that there will be opportunities for all their constituents, and they can help them to achieve them. So the responsibility also lies with them. My hon. Friend referred to the Public Accounts Committee, and I would remind him that we welcome the National Audit Office report on the Olympic games. In presenting the budget and the wider funding provision today, we have addressed the outstanding risk about which the NAO expressed concern, in what was overall an extremely positive report.
Mr. Nigel Evans (Ribble Valley) (Con) rose—
Mr. Evans: Yes, it is good to have a non-London Member asking a question about the cost of the Olympic games. The cost will be borne equally by my constituents, who receive as much national lottery funding as anyone else. Will the Secretary of State tell the House what assessment she has made of the impact on the sporting bodies, especially those outside London, that will now lose their budgets because of this extra raid on the national lottery of £675 million? Who will be the losers? The Government will get a gold medal for the biggest increase in the cost of an Olympic games ever. The Olympic rings are hanging like a noose over future generations, who will have to pay the huge debt that the Government have created. They have completely lost control of the financing of the Olympic games.
Mr. Deputy Speaker: Order. I do not want non-London Members to suppose that they must speak for longer than London Members. I am trying to allow every Member who wants to speak to do so. Another important statement and then a debate on higher education are to follow, however, so I would appreciate short questions and concise answers.
Tessa Jowell: Thank you, Mr. Deputy Speaker; I fear for the health of the hon. Member for Ribble Valley (Mr. Evans) when he rants as he does. Briefly, the answer to his question is that the lottery is not the only source of money for sport in this country. That is why so many more young people have been taking part in sport and so much more has been achieved. Sport has been enjoying an unprecedented level of investment, and we need that to continue.
Derek Wyatt (Sittingbourne and Sheppey) (Lab):
Dick Pound, who was on the International Olympic Committee for 20 years, said that the bid books were the best piece of creative accounting he had ever seen. Given the legacy of Atlanta, Sydney and Athens, we should not be surprised to know that, by and large, the figures double. I ask my right hon. Friend to step back
from the lottery £625 million. I sit on the South East England Development Agency and Kent county council Olympic groups, and we need a challenge fund to bid for elements of the Olympics in 2012. Therefore, if she is going to take some of the lottery money away, will she reconsider the 12p in the pound that the lottery takes in tax and use that 12p, not cuts in the lottery, to resolve the dilemma?
Tessa Jowell: I pay tribute to my hon. Friend, who chairs the all-party group on the Olympics. As I always say when he raises this question, lottery duty is a matter for the Chancellor.
Pete Wishart (Perth and North Perthshire) (SNP): During those heady, euphoric, nonsensical days when London was first awarded the Olympic games, the Scottish National party and Plaid Cymru were alone in warning of the spiralling costs and highlighting the threat to our national lottery, while the other Opposition parties were compliantly silent. Surely it is not credible or realistic to suggest that further raids on the lottery will not result in real pain. Why should grass-roots sports and good causes in my constituency lose out to pay for the regeneration of east London, when the London taxpayer will not pay a penny more?
Tessa Jowell: I do not think that the hon. Gentleman supported the idea of the Olympic games in London or in Paris—but perhaps he does support the prospect of holding the Commonwealth games in Glasgow. I welcome the support in Scotland, Wales and Northern Ireland for the London Olympics. Young people in those countries will also be beneficiaries of the unprecedented investment in sport.
Clive Efford (Eltham) (Lab): It is the duty of every Member of the House to scrutinise budgets and make sure that we get value for money, particularly with expensive schemes such as the Olympics. What the Opposition have shown, however, is that they know the cost of everything and the value of absolutely nothing. Over the past two generations, the affected part of east London has seen factories, docks and, south of the river, the Woolwich arsenal close. Is not two thirds of the budget announced by my right hon. Friend for infrastructure and regeneration? If what we have heard in the Chamber is the sort of publicity that the Olympics is going to get, it is important for the Olympic movement to make every community a part of the games, to overcome the penny-pinching and negativity of Opposition Members.
Tessa Jowell: My hon. Friend is absolutely right. To sound a note of warning to the Opposition, I remind them that public support is with the Olympics. In every school in this country, young people are counting the years and the months until the Olympics. The Olympics have lifted prospects, ambitions and aspirations, as more young people take part in sport. The approach of the Conservative party is to say that it is a great supporter of the Olympics, but then to seek to destabilise, carp and criticise at every turn.
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