Dearie me, at first glance, it looked as though the Olympic planning folk had not done their homework properly:
“The 2012 Olympics were hit by a £1 billion tax bombshell today. The Treasury has told organisers they must pay VAT on building and staging the Games - a cost which was not built into the initial budget. It is refusing to back down on the bill, saying European rules on competition mean it cannot be seen to be aiding the 2012 organisers.”
But then on further reading, it turns out that Culture Secretary Tessa Jowell had promised, when the London Olympics Bill was going through Parliament, that the VAT would be waived by the Treasury.
Maybe that was the original plan. However, now that the costs are in danger of spiralling out of control, dear Gordon is well and truly in a quandary of schizophrenic dimensions. Should he ‘generously’ waive all VAT, thus boosting his popularity, or should he act ‘according to nature’ and sting them for every last penny? It will be interesting to watch this one unfold. The downside is that if Gordon does claim the VAT, London council tax payers will find out all about it in a very painful way.
November 6th, 2006 at 5:31 pm
It’s all very well for Tessa Jowell to promise, but if they didn’t secure the formal consent of the Treasury, or the VAT-exempt status wasn’t confirmed in the Act, difficult to see how they can escape paying. Council tax going up.
November 7th, 2006 at 11:09 am
I was struck, listening to Jowell’s Commons comments on Radio 4’s PM programme last night, how instead of the dealing with the issue she tried to castigate the opposition MP who repeated what she had said, as if it was confidential.
I’m sorry but conversations of that nature should not stay private as we are talking about an effect on the taxpayer. Just because it makes her look stupid that is not reason enough to stay silent.
It was mentioned that EU rules prevent the government from waiving the VAT bill. I have one simple remedy to that… lets get out while we can and do what serves our nation’s interests instead.
November 7th, 2006 at 6:47 pm
I agree, Monty. I am astounded by the way ministers talk at times. They seem to forget that it is taxpayers’ money they are dealing with. As they are spending our money, we reserve the right to know.
November 10th, 2006 at 12:00 pm
Was Tessa Jowell able to give that assurance in the first place? Obviously not. You can’t have inter-department interference like that.
Londoners will still be paying for this for many, many years to come.