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Lord Lipsey: I apologise for the discourtesy of being late for the speech of the noble Lord, Lord Soulsby. In declaring my interest as chairman of the British Greyhound Racing Board, perhaps I may add briefly that within the next 24 hours, an announcement will be made of bookmakers' support for greyhound racing which will show an extremely substantial increase in the sums available, including the funds available for the cause so close to the heart of the noble Lord, Lord Soulsby.
Lord Moynihan: If nothing else, this afternoon has allowed both Members of the Committee and the public to learn a great deal about what is coming in the future.
Lord McIntosh of Haringey: And it has allowed me to know!
Lord Moynihan: I am delighted that the Minister has joined this happy club. On a more serious note, I am equally delighted at what the noble Lord, Lord Lipsey, has just had to say. In the light of that and of the comments made by the Minister, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 40A and 41 not moved.]
On Question, Whether Clause 18 shall stand part of the Bill?
Lord Moynihan: The purpose of rising on this occasion is to place on the record the comments made by the Committee on Delegated Powers and Regulatory Reform, which focused on this clause. I shall quote from its report:
- "Clause 18 provides for the Treasury to make regulations (subject to negative procedure) altering what would otherwise be the tax position as a result of a scheme transferring the property of the Horserace Betting Levy Board. The taxes concerned include income tax, corporation tax, capital gains tax and stamp duty. The need for the power is explained at paragraph 26 of DCMS's memorandum. Both this paragraph and paragraph 74 of the Explanatory Notes say that the purpose of the provision is to enable transfers to be made tax neutral. But the power in the bill is open-ended (almost skeletal) and can be used to affect the substantive tax position in other ways. The House may wish to invite the Government to provide some assurance that this provision will be used for the purposes specified in the Explanatory Notes".
There is little I can add to the above except perhaps to say that it is a shame that VAT on the sale of rights is not included. However, I invite the Minister to provide further assurances to those that he already began to give the Committee when responding to the previous group of amendments.
Lord McIntosh of Haringey: I am grateful to the noble Lord, Lord Moynihan, for giving me an opportunity to provide the clarification which the Committee on Delegated Powers and Regulatory Reform advised noble Lords to seek about the use the Government intend to make of the wide powers provided for in Clause 18.
The purpose of the clause is not to safeguard recipients from future tax liabilities they will normally incur. That would be wrong. But it will mean that the Government do not receive any windfall taxes simply as a result of transferring the assets away from the Levy Board.
The aim of the clause is to ensure that a transfer is tax neutral and the recipient inherits the tax history attaching to whatever he receives. That is the limited purpose that the Government intend for the use of this clause. I believe that that is what the Committee is seeking.
Lord Moynihan: That is exactly right and I am grateful to the Minister for responding accordingly.
Clause 21 [Licensing of Olympic Lotteries]:
Lord Moynihan moved Amendment No. 41A:
- Page 13, line 16, at end insert—
The noble Lord said: We move on to Part 3. I think that I will be on target for how far we intended to progress this evening, which is more than I can say about tipping winners of the Grand National on
Turning to the separate and new subject of Part 3, there are a number of reasons why I have tabled Amendment No. 41A. First, surely it is good practice that government and Parliament are completely aware of the commitment they are making in bidding to host the Olympic Games. Let us not forget that the London 2012 bidding document states clearly that:
It is also helpful to recap on what the Minister, the noble Lord, Lord Davies of Oldham, told the House at Second Reading:
The Minister said that in early March, but I am afraid that I do not share his view that the £410 million that is due to be diverted from the other good causes will be required only in "dire extremis". That is the reason why I have tabled this amendment to ensure that Parliament receives,
This is about contingency funding. There are four sources for the contingency as set out in the Olympic funding memorandum of understanding between the Government and the Mayor of London. These funds intend to be drawn down in a specific order, starting with money from the lottery good causes. The order is as follows: first, £410 million from the lottery good causes; secondly, an additional £75 million from the Olympic council tax precept; thirdly, £250 million from the London Development Agency; and, fourthly, the Mayor of London and the Government remain the ultimate guarantors, with the Government indicating that they will meet their contribution through the lottery. Lots of Treasury funding is put through the lottery.
In other words, the £410 million to be diverted from other good causes is the first contingency fund to be employed. I therefore ask how the Minister can say that diverting money from the other good causes will be used only in dire extremis. It may be useful to recap briefly on the experiences of other cities hosting the Olympic Games.
I take evidence from the Minister for Sport, Richard Caborn, who said to the CMS Select Committee on 15 January last year:
Secondly, evidence submitted by the DCMS on 17 January last year to the CMS Select Committee shows that for the Sydney 2000 Olympics the public subsidy was six times more than was initially estimated and the cost of the games doubled from £1 billion to £2.3 billion.
Thirdly, it was similar to Athens. The original cost of £1 billion had increased to £1.23 billion by January last year and it is still rising. I should add that the figure of £1.23 billion does not include the £2.75 billion government spending set aside to cover the cost of building and refurbishing Olympic venues. Here in the UK, the Secretary of State for Culture, Media and Sport told the CMS Select Committee on 15 January last year that the Commonwealth Games in Manchester more than doubled in cost.
I return to the purpose of the amendment. It is apparent that it is important to ensure that Parliament is fully aware of the costs and commitments that accompany an Olympic bid. By accepting the amendment, we have the opportunity to ensure that that is the case. I hope that my noble friend will agree that it is important that Parliament has the opportunity of receiving a report setting out in detail the cost of hosting the Olympic and Paralympic Games in a United Kingdom city.
One of the main reasons why I want that to be on the face of the Bill will be apparent at a later stage of our deliberations: namely, if Parliament is convinced that a contingency will have to be raided, the implications for other causes and for starting the Olympic game earlier than at the time we win the bid in Singapore in July 2005 is far more compelling.
If Parliament is not persuaded of the merits of that argument, and if Parliament takes the view that the chances of raiding a contingency fund are negligible—indeed, are non-existent—the case for starting the game next summer is a good deal stronger.
I have kept the introduction brief because I cannot believe that we will not return to the subject in far greater detail at a later stage of our proceedings. However, I hope that I have clearly demonstrated that there are few, if any, cases of an Olympic bid being granted to a city and being funded within the original budget available for the consideration of this House. On the contrary, every recent example concludes that raiding a contingency is inevitable, even when, as the Government would be proud to announce, the size of the contingency they have made available is so great.
Those are the reasons why I have proposed the amendment standing in my name and so ably supported by my noble friend Lord Luke. I very much hope that it meets with the agreement of the Minister and that we will have the opportunity of having a report laid before Parliament setting out in detail the cost of hosting the Olympic and Paralympic Games, be it in London for 2012 or in any other successful city in the future. I beg to move.
Lord McIntosh of Haringey: I am grateful to the noble Lord, Lord Moynihan, for having tabled this amendment in order for him to make that wide-ranging and clearly well-informed speech. It has little to do with the amendment, but—
"( ) This section shall only have effect once the Secretary of State has laid before Parliament a report setting out in detail the cost of hosting the Olympic and Paralympic Games in a United Kingdom city."
"The Government [will also] be the ultimate guarantor of Olympic funding should [there be any] shortfall between Olympic costs and revenues".
Indeed, it is a requirement in bidding for Olympic Games that governments must provide a covenant for the bid.
"As for transfer or raiding of lottery funds for the Olympics, both my noble friends are right to draw attention to the power in the Bill, but I would have to define it as a precautionary measure. We have no intention of raiding good causes to provide for the Olympic Games. That is why there is specific provision in the Bill for money from the alternate structure".
He went on to say:
"However, we must bear in mind that should we win this bid—every noble Lord who spoke expressed the hope that we be successful—we will then be committed to substantial expenditure. Especially as this is likely to be the only legislation that will underpin the Olympic Games bid—it is certainly the only Bill that will be passed in time for the long run-in to the games that is necessary—it would be remiss of us not to include a reserve power in the Bill for alternative funding. However, I think that my noble friends would recognise that we regard the use of that power as being only for dire extremis [a mixture of languages here] concerning receipt of lottery funds from the Olympic Games lottery".—[Official Report, 2/3/04; cols. 585-86.]
"a report setting out in detail the cost of hosting the Olympic and Paralympic Games in a United Kingdom city".
I refer to "a United Kingdom city" because, as we shall see in a later amendment, I am keen for the Bill not to focus exclusively on London 2012, but provides the framework for parliamentary support for future cities which may have the good fortune both to bid for and win the right to host the Olympic and Paralympic Games in future years, be it 2016, 2020 or 2024. That may not be necessary—I hope that we will win in 2012—but it is important that Parliament provides the right framework for supporting bids which the British Olympic Association of the day seeks to put forward.
"On the financing, one point that was very interesting on our visit to cities that have already run Olympics was that in broad terms on the costs everyone of them has doubled from the first figure that was given".
7.15 p.m.
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