Chancellor must explain Olympic budget guarantees - Cable

5.41.25pm GMT Mon 27th Nov 2006

Today, Liberal Democrat Shadow Chancellor, Vincent Cable MP will attack the role the Chancellor played in approving open-ended budget commitments to the Olympics and in setting the VAT rules.

Dr Cable has put down a series of parliamentary questions seeking to establish which Treasury ministers and officials were involved in the key decisions when the Olympic bid was submitted.

Commenting, Dr Cable said "Costs have clearly been massively underestimated. The Chancellor accepted the International Olympic Committee requirement to give a government financial guarantee. We need to know what checks he made before making this commitment.

"There is particular confusion over the Treasury's role in taxation. Ministers have said that there would be favourable tax treatment for the Games but no one appears to have realised that this had major implications for the VAT status of the Olympic delivery vehicle.

"Hundreds of millions of pounds of taxpayers' money is at stake. I am pressing for a clear explanation of precisely what role the Treasury and HMRC have played.

"I also want to make it clear that my party will not support an open-ended commitment to a tax-payer bail out. There should be no further raid on lottery good causes and no increase in the council tax burden in London. Any extra financial support should come mainly from the private sector."