Theresa Villiers (Shadow Chief Secretary To the Treasury, Treasury; Chipping Barnet, Conservative)

I welcome you, Mr. O’Hara, to the Chair. I shall speak briefly to clause 65, and not trouble the Committee by referring to the clauses linked to it. I shall take this opportunity also to put on the record my congratulations to the London bid team for its remarkable achievement in bidding successfully for the 2012 games. Given, as we have heard, that the provisions in the clauses were a requirement for the bid to have been made, there is no question but that the Government should honour the undertakings made in it.

Will the Financial Secretary tell us whether the clauses are expected to cost a significant amount? One would not necessarily expect the London organising committee or the IOC to raise significant revenue, but it would be useful to hear any information that he might have on that.

Will the Minister comment also on the points raised by the Institute of Chartered Accountants about whether the model for the exemption could be useful for charities as well? A number of complications with charities in general might make the model inapplicable, but I thought that it was a constructive idea from the institute, and I would welcome his thoughts on the matter.

I realise that it is not strictly related to the clause, but may I urge the Treasury to keep a watchful eye on the overall cost of the Olympics? I have raised that point with the Financial Secretary on the Floor of the House; it is of particular concern to my constituents in Chipping Barnet, who are London council tax payers who will pick up the bill for cost overruns, along with the lottery.

The budget for the London organising committee has increased already from £1.46 billion, envisaged last year when the London Olympics Bill went through the House, to around £2 billion, as confirmed by the Minister for Sport in Westminster Hall last week. He indicated that the increase was due to inflation, presumably over the  period until the games in 2012. However, that increase would put inflation at 33 per cent. over that 6-year period.

Furthermore, the heightened security needed following events on 7 July must surely have an impact on the overall cost of the games and could presumably drive it up further. I believe that the funding package on security is about £220 million, which was set before the 7 July attacks. The Government have said plainly that they will not meet the cost of overruns and that those must be shared by the lottery and London council tax payers. However, the Minister must be aware that if the games go badly over budget, there will be pressure on the Government to step in. For the sake of London council tax payers and to guard against future demands on the Exchequer, I urge the Government to do all that they can to ensure that the highest standards of procurement are applied to Olympic projects so as to avoid the cost overruns that have dogged many previous games.

If Olympic construction projects are late, we cannot just shift events to Cardiff, as we can the FA cup. I hope that we can learn lessons from Wembley and public procurement disasters such as the Scottish Parliament. I am told that the residents of Montreal are still paying for the games that it held over 30 years ago. Sydney’s budget was £1 billion, but its games ended up costing £2.8 billion, I believe. The Athens Olympics overran massively, with costs spiralling from £1 billion to £5 billion, much of which was due to security considerations, which of course will be more significant in London. I appeal to the Ministers here, as representatives of the Treasury and guardians of the public purse, to ensure that that sort of overrun does not happen in 2012.

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