Select Committee on Culture, Media and Sport Minutes of Evidence


Examination of Witnesses (Questions 520 - 539)

WEDNESDAY 21 MARCH 2001

THE RT HON CHRIS SMITH MP AND KATE HOEY MP

  520. I have got it here in front of me. I said: "Can I stop you right there. Are you saying that an allocation in the budget is a lower level of agreement than the in principle decision you have given to Stoke Mandeville?" (We were discussing an issue which Mr Wyatt had raised.) Miss Simmonds replied: "Yes, I am saying that." It is different; they are two different things.  (Mr Smith) With respect, I am not disagreeing with that assessment. What I have always said is that what Sport England have done is to allocate within their budget £60 million for Picketts Lock. That is what she has confirmed, that is what the minutes of the relevant committees confirm and it is what I have always said.

  521. You are backtracking now, Secretary of State, because you are now returning to using the words "allocation of funding" and they are two different things.  (Mr Smith) I am not, with respect, backtracking, I am making very clear what I have consistently said and what they have consistently said.

  522. I would suggest to you that you are consistently using the words "in principle" to us knowing full well that they are different, because it sounds like a more substantial type of funding and it sounds as though the agreement has been agreed when it has not.  (Mr Smith) I have never claimed at any stage—and indeed I spelt it out to this Committee when we last discussed this matter, and I think it was you yourself, Mr Faber, who raised it—that there is an agreement in place. Clearly there is not an agreement in place. What I have always said is that an allocation has been made, that allocation is clearly in place, and the minutes confirm that.

  523. The case has been made, you say again and again, in principle. You say here "I rely on the in principle agreement that they have given".  (Mr Smith) The nature of the commitment is very clear from the minutes of decisions that they have taken. That is what I rely on—

  524. Why did they not tell us that when they appeared before us?  (Mr Smith)—and that is what I have always worked on the assumption of.

  525. I am sure other members of the Committee, having heard their evidence, will draw their own conclusions. When you appeared before us on 6 February we had a lengthy discussion about the arm's length principle and about the amount of pressure which it is right for a Minister to bring to bear on a Lottery fund. You said to me that if I wrote to you with a Lottery application from my constituency you would forward it on to Sport England and that would be the way in which it was dealt with. How often do you write to any of the Lottery Panels encouraging them to make a funding commitment, encouraging them to agree a Lottery application?  (Mr Smith) What I will sometimes do, very often, in forwarding on representations that I may have received from a Parliamentary colleague, is to express the hope that they will look at a particular application sympathetically. Sometimes they do, sometimes they do not. What I might also do in relation to something that I regard as being of major national importance—be it, for example, the facilities for the Commonwealth Games or the facilities for the UK Sports Institute, or indeed a stadium for the World Athletics Championships—is to say to the relevant funding body that this is something which would be of enormous benefit to the nation, that that is my view and that I would certainly hope that we could ensure that facilities of absolutely outstanding quality could be achieved, be it for the Commonwealth Games or for the World Athletics Championships. I will, from time to time, make observations of that kind. Of course, it is up to them to make the detailed decisions about whether to accept a particular proposition or not. However, I can quite legitimately, as indeed this Committee can, chart the broader parameters that need to be taken into account.

  526. So you are saying that in those three examples you have just given you have written to Sport England or the Chairman of the Lottery Board suggesting that they view applications favourably?  (Mr Smith) I have to confess that I cannot remember whether I have specifically written in each case, but in each case I have made it clear in meetings and discussions that there are national objectives which I believe are worthy of consideration. I cannot force them to take them into account because they are a sovereign body, but what I can do is indicate the broader picture which we, as Government Ministers, rightly, have to take into account.

  527. So you cannot recall whether or not you have written on the issue of Picketts Lock to Mr Brooking or any members of the board?  (Mr Smith) I certainly think I have written on occasions. I cannot remember the dates and I have certainly discussed it with them on quite a number of occasions as well.

  528. Could I move on to the issue of the £20 million and follow up slightly what the Chairman was asking? I certainly understood Mr Casey's letter to correspond directly with what you have already written to this Committee about, and I think Mr Casey's view of what WNSL's view was came from WNSL's evidence to this Committee, in which they did say that they expected to pay the tranches back at subsequent dates following on. I do not know if you have had a chance to read Sir Nigel Mobbs' evidence to us a couple of weeks ago? When I asked you on 6 February about your meeting with Mr Bates at your house in December 1999, you said "We had quite a number of discussions prior to the crucial funding meeting with Ken Bates between my officials, the Football Association and Sport England." Why did you not tell us that you had appointed Sir Nigel Mobbs to undertake these discussions on your behalf?  (Mr Smith) There was no formal appointment of Sir Nigel Mobbs. I had asked him to assist as an honest broker between the various parties to see what might be achievable. I have to say, he fulfilled that role with considerable expertise and great helpfulness.

  529. Why did you not tell us on the previous occasions when we have discussed this in great detail that that is what he had done, and that effectively when Mr Bates arrived at your house that day the deal had already been done?  (Mr Smith) I think I did indicate to the Committee at some stage that that meeting was a confirmation meeting, it was not a negotiating meeting. Precisely how we arrived at that position did not at the time appear to be material.

  530. He told us also that you had originally suggested a figure of £40 million should be returned. Were you satisfied with the £20 million, or would you have liked more?  (Mr Smith) I was satisfied that the £20 million was both fair and represented what was achievable.

  531. When we subsequently published our Report and the department replied—as always happens with Select Committee reports—Sir Nigel's letter to you was appended to the document as an appendix. He told us in a letter which we have just received that he did not even know that was going to happen. Do you not think that is quite extraordinary?  (Mr Smith) I certainly appended it on the assumption that I had made at the time that he had been informed and consulted that we were going to do so. It has come as something of a surprise seeing his letter to the Committee that says he was not, and I would certainly want to apologise to him for that omission.

  532. Presumably the reason you appended the letter was because at a superficial level the letter very strongly supported your refuting of this Committee's Report on Wembley. He said that he felt that having the athletics track at Wembley would provide a blight, with reference to a possible Olympic bid for 2012. Of course, most of our Report has to do with the issue of holding athletics at Wembley in 2005, and we were a little surprised that he told us that he had actually advised you that it was perfectly conceivable for athletics to be held at Wembley in 2005. So you were actually using the letter under slightly false pretences.  (Mr Smith) Not at all. If I had been seeking to do that I would have quoted partially from the letter rather than providing it in its entirety to the Committee. However, I would point out that Sir Nigel Mobbs' advice to us was certainly that it was feasible to hold the 2005 World Athletics Championships at Wembley. We indeed confirmed that ourselves at the time. However, he also said that there were very considerable problems, particularly in relation to the provision of the warm-up facilities. It was the warm-up facilities as much as it was the difficulties of the concrete platform that dictated the view that we held.

  533. The Committee has had another lengthy letter from Trevor Brooking on the issue of the differing views on the costs of converting Wembley into athletics mode, but we have been through that so many times before we will not go through it again now.  (Mr Smith) I have seen the letter and I have to say that there is an assumption in that letter that it would be perfectly possible to have used the Copelands School site as the warm-up facility. Leave aside the fact that the Copelands School site is getting on for a mile away from the stadium and across a whole series of residential roads and a major railway line, the evidence which Sport England themselves gave us at the time was very clear. Indeed, at a Wembley Task Force meeting of 11 November (as I think I have indicated before to the Committee) the view of Sport England given to us very clearly at that time was that Copelands School was, and I quote, "a non-starter" as a warm-up facility. So I think one needs to take the letter that the Committee has received in the light of what was being said at the time.

  534. So you are saying that Trevor Brooking's letter is not accurate?  (Mr Smith) I am saying that Copelands School was never—and Sport England took this view at the time—a sensible place to look to build a warm-up facility.

  535. There seems to be an awful lot of areas of disagreement between yourselves and Sport England. From our point of view, looking at this inquiry in the whole, and from my point of view looking at how sporting events should be staged in this country, I think we have all said at various different times that there seem to be so many different bodies involved, so many different interests involved, and yet Sport England, who are the senior Lottery distribution body for sport in this country, operating under the auspices of your department, you do not seem to be able to agree with them on anything.  (Mr Smith) With respect, we agree with them on many things. On the issue of Copelands School we do not agree with them. Indeed, they did not agree themselves at the time when the decision was taken back in December 1999.

  536. You do not seem to agree with them on the in principle funding of Picketts Lock.  (Mr Smith) I agree with them entirely about the fact that the money has been allocated in their budget.

  537. Finally, Chairman, just on the issue of the £20 million, I know you have written to us about Mr Bates' view about the possible relaxation of some of the commercial restraints at Wembley and the details of your meeting, but I think what confuses me is not whether or not an agreement was reached at the meeting that commercial restraints could be restricted to the naming rights of the stadium, but why, when you wrote to Mr Geoff Thompson of the FA on 19 February, you raised the issue of naming rights when no one had raised it previously in any of the previous correspondence?  (Mr Smith) Because there had been some discussion prior to that point about whether at some stage in the future the issue of naming rights for the stadium as a whole might be worth discussing, and because that matter had been discussed on various occasions it seemed to me sensible simply to flag up that that was a matter on which I would be perfectly relaxed about a discussion taking place. No agreement of any kind or even specific discussion in relation to the £20 million had ever included the issue of naming rights.

Derek Wyatt

  538. Good morning. I wanted to pick up Mr Maxton's point about whether the Olympics are really where we should be. We did not do too well in swimming. As I understand it from Trevor Brooking, nearly every municipal swimming pool has either got concrete fatigue or is leaking and needs major repair, and the cost of that is over £5 billion. It is also clear that local authorities do not have that sort of money. A bid to do the Games would cost around that, in some way or other—either in regeneration of bridges or the infrastructure as well as everything else. It would be nice if we could have both actually, but is there not an audit that is required first? I want to put that into yesterday's announcement that there is five-year Premier League funding for the arts. Does that mean there will be a five-year Premier League funding for world-class facilities for our major cities so that instead of having to bid and, therefore, create facilities we could have just the facilities for everybody to begin with?  (Mr Smith) Of course, we know that the range of facilities for a variety of different sports that we have in many cities in this country are not up to the scratch that they ought to be. That is something which gradually, over time—you cannot solve it overnight, obviously—with the commitment from the Lottery to sport of £250 million, roughly, a year, with the enhanced revenue for sport that we have been able to put in place as a result of the spending review, and with the new commitment under the new opportunities fund for school sport of £750 million we can begin to make a dent in that. If we were to contemplate a bid for the Olympics in due course, I would not want to see any of those existing streams of commitment to the development of the sporting infrastructure of this country being disadvantaged in any way because we had decided to move ahead with an Olympic bid.  (Kate Hoey) I think that is really what I was saying earlier.

  539. Picketts Lock will cost around, it seems, £90 million, give or take £5 million, which I reckon means, in VAT terms, nearly £16 million will go to the Treasury. I just wonder what discussions you have had with the Treasury on hypothecating the VAT, because it seems to me that that is a very slick way of having, if you like, a back stop for the money, a funding arrangement if it goes in the budget, and some assistance to the city that is bidding. I asked this yesterday at Manchester and I will ask it again. What sort of negotiations have you had with the Treasury on Smart funding?  (Mr Smith) Well, of course, matters of this kind are entirely matters for the Chancellor of the Exchequer. I have to say that my experience of discussions with the Treasury on the subject of VAT are that they tend to be extremely reluctant to make any changes whatsoever in the VAT regime. However, on all of these sorts of matters we are in regular discussions with our colleagues in the Treasury.  (Kate Hoey) We did have a successful outcome with the Treasury this year on the long-standing campaign from sport by everybody to get amateur and community sports clubs recognised as some form of tax exemption. That was a major victory, but it has taken 20 years.


 
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