London Olympics Bill

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. 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"““sharing arrangement to be agreed as appropriate with the Mayor of London and through seeking National Lottery funding in amounts to be agreed at the time.””" 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.