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The economy needs more than the Olympics to perk it up

13 August 2012

3:00 PM

13 August 2012

3:00 PM

We won’t know the economic impact of the Olympics until the GDP figures for the third quarter of this year are released, but today both Boris Johnson and Downing Street tried to strike an upbeat note.

In his Telegraph column, the Mayor of London writes:

‘As we marvel at what they have done, and the general success of the Games so far, I want to issue a general word of caution to the Olympo-sceptics, who will be itching to return to their gripes. They will say there will be no increase in sporting participation, and no economic benefits, and that we will not succeed in regenerating east London. Well, just remember one thing, everyone. These Olympo-sceptics were proved decisively wrong about the Games. They will be proved wrong about the legacy as well.’

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Johnson enlarged on this at a press conference this morning, where he said the early indications that the gains from the Games could reach £13 billion, saying that most people ‘will think the money well spent’.

And at lobby briefing, the Prime Minister’s official spokesman said:

‘We think that there will be economic benefits associated with the Olympic Games and we set out that we thought they would be of the order of £13 billion… There are significant economic headwinds because of what’s happening in the eurozone and there are also problems that need to be addressed and we need to rebalance the UK economy and that process is going to take some time.’

The Olympics were never really about raising money for Britain’s coffers, anyway. Whether or not they do have a positive impact on growth, there remains a larger problem with the government’s current approach to bringing the economy back to full fitness, and while Boris was full of praise and warm words today, let’s not forget that he joined a large rump of worried Tory backbenchers yesterday to press ministers to go further on supply-side reform.

His comments to the Sunday Telegraph were obviously a clever means of reaching across the river to those he might need in the years to come if and when he does launch his bid for the Conservative leadership. But they also show a growing unease at the government’s reluctance to make reforms that business leaders are crying out for.

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Show comments
  • Ghosts will run and run

    London won the games bid on a budget submission of £2.4 billion, which
    blew out eventually to some £13.3 billion (so far), according to Andrew
    Gilligan’s excellent piece here: http://blogs.telegraph.co.uk/news/andrewgilligan/

    And
    now we know that Sebastian Coe has been made the Legacy Czar.

    Having
    now won Olympic gold for smashing game budgets, he will run amok — and not a
    single politician will dare stand in his way. The modern Olympics are,
    after all, a political vanity project.

    The costs to come may well dwarf what we’ve seen so far!

  • Daniel Maris

    You can’t just say it’s £11billion well spent without saying what else you could have done with it. You could have launched a special exhibition…improved one million hotel rooms at £11000 a time. Created a new UK based film industry. Built a new airport.
    Or you could have paid for £100 million advertising campaigns in each of 110 countries around the world.
    It was a lot of money! – a lot to pay for a glorified two week advertising campaign.

  • John_Page

    A vacuous post heading.

    • tele_machus

      quite

  • Olaf

    I wonder how much of the Olympic budget is off the balance sheet like a lot of public debt?

  • Mr L

    I don’t believe a word about that £13bn. What would politicians have said about a citizen who borrowed tens of thousands simply to throw a party and put one in the eye of the neighbours? Because that’s all it was.

  • Mr L

    I don’t believe a word about that £13bn. What would politicians have said about a citizen who borrowed tens of thousands simply to throw a party and put one in the eye of the neighbours? Because that’s all it was.

  • Noa

    “…the gains from the Games could reach £13 billion…”

    Hmmm- is that before or after the £10 billion of revealed direct costs is deducted? And what about the various indirect costs, for example, of deployed troops.
    No politician ever could count taxpayer money for toffee, but they can micro-manage their own with the greatest accuracy.

  • Noa

    “…the gains from the Games could reach £13 billion…”

    Hmmm- is that before or after the £10 billion of revealed direct costs is deducted? And what about the various indirect costs, for example, of deployed troops.
    No politician ever could count taxpayer money for toffee, but they can micro-manage their own with the greatest accuracy.

  • Noa

    “…the gains from the Games could reach £13 billion…”

    Hmmm- is that before or after the £10 billion of revealed direct costs is deducted? And what about the various indirect costs, for example, of deployed troops.
    No politician ever could count taxpayer money for toffee, but they can micro-manage their own with the greatest accuracy.

  • Irascible Old Git

    Who, exactly, came up with this mythical £13billion projection? Not that centre of empirical excellence, the OBR?

  • Irascible Old Git

    Who, exactly, came up with this mythical £13billion projection? Not that centre of empirical excellence, the OBR?

  • Irascible Old Git

    Who, exactly, came up with this mythical £13billion projection? Not that centre of empirical excellence, the OBR?

    • Percy

      Perhaps it was Mr 110%.

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