On 21 November, in front of the Select Committee on Culture, Media and Sport, I announced that a further £900 million would be required for the Olympic park. I explained that we are awaiting the results of the assessment by the Olympic Delivery Authority’s delivery partner, CLM. I also said that the Government are discussing the requirements for security, contingency and the treatment of tax. I will report to the House when those discussions are concluded.
To ease public anxiety that the rising costs of the Olympics will fall on London or national taxpayers or the lottery, will the Secretary of State confirm that she and the Mayor are both operating strictly within the budget agreed on an all-party basis when the bid was submitted? Will she specifically rule out new items such as the £400 million now proposed for an Olympic delivery partner?
No, I cannot. It seems to be a quirk of the Liberal Democrats’ approach to public spending that the need is for more but the means to raise it is denied. In relation to the Olympics, the hon. Gentleman has described himself as being like Victor Meldrew on a bad day. He wrote forcefully in the Richmond Informer that London did not need the Olympics. Let me reassure him, in a spirit of Christmas cheer, that he is adrift of the 75 per cent. of Londoners—and rising—who support the Olympics, see the benefit that it will bring to the city and support the great legacy. A number of those who provide such echoing endorsement also live in his constituency.
I think—the Secretary of State will tell me if I am wrong or right—that the Olympic lottery fund is ahead of the set budget, so more will be spent. Outside the M25, there is a real love for the Olympics. What the nations and regions need, however, is a fund. Has she been able to persuade the Treasury to part with 12p in the pound from a lottery ticket to make that a challenge fund for the nations and regions for Olympic facilities?
I pay tribute to my hon. Friend’s work as chairman of the all-party Olympic group. He is right: it is important for the high levels of support for the Olympics around the United Kingdom to be maintained, and for the people’s confidence to be justified. That means branding local activities as being associated with the games, and also—as my hon. Friend says—producing evidence of benefit, such as investment in support, culture, creativity and other activities allied with the games.
There is not yet a specific challenge fund, and it is for the Chancellor of the Exchequer rather than the Secretary of State for Culture, Media and Sport to determine lottery duty, but I entirely agree with my hon. Friend about the need for the whole country to understand the benefit that will result from the games in London.
Two of the largest threats to the Olympic budget are clearly the VAT bill and the level of contingency funds. Given that the whole Cabinet approved the original budget, which waived VAT and set funds for contingencies and preliminaries at a level—23.5 per cent.—considerably lower than is currently being mooted, and given that those clear commitments were presented to the world, accepted in Singapore and confirmed to the House on countless occasions during the passage of the London Olympics Bill, why is the Treasury now threatening to renege on them?
With great respect, I do not think the hon. Gentleman should mistake a proper engagement relating to large sums of public money in the interest of the biggest capital project in the country for reneging on an agreement. The nature of contingency provision is different. The hon. Gentleman is right: project contingency provision for each and every venue is about 23 per cent. The question is whether programme contingency is necessary to safeguard against further risks. All who apply it in the construction industry would say that contingency provision diminishes over time, not necessarily because it is drawn on but because as delivery becomes closer, the risks themselves begin to diminish.
We are discussing those matters in Government. I have also had discussions with the Opposition, in the spirit of cross-party consensus on the Olympics, and will continue to do so.
In my constituency we expect to see great investment in our area of the Olympic park, for which many Hackney residents are extremely grateful. We are already seeing investment in the burying of power lines, in the East London line—which is currently being built—and, from next November, an increased service on the North London line. I understand that none of that investment is in the Olympic funding envelope.
Will my right hon. Friend tell me, and my constituents, what discussions she is having with agencies and other Departments about investment in jobs for the future, after the Olympics? That is one of the main concerns in my constituency.
I pay tribute to the work that my hon. Friend has done for her constituents in making them aware of the potential benefits of the Olympics. She is also right to draw attention to the extent of investment in 2012, beyond any Olympic funding package. During that period, the eyes of the world will be on London and the United Kingdom. Both London and the United Kingdom more widely will benefit from expenditure decisions—whether in the private sector or by local government and other public bodies—enabling new projects, such as the investment in London’s transport infrastructure, to be completed in time for 2012.