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Socialism Today 160 - July/August 2012

London Olympics: run for profit

World records will not be the only things broken at this year’s Olympic and Paralympic Games. Promises for a lasting legacy – affordable housing, decent jobs, increased sports participation, etc – are being broken, too. The greatest sporting show on earth has been dragged down by crass commercialisation, and become a test-bed for increased state repression. MANNY THAIN reports on the neo-liberal Games.

IT ALL BEGAN with a lie: that the London Games would cost £2.4 billion. That figure was never credible. Inexplicably, it did not include VAT or security expenditure. With these costs added, the bill would have totalled £3.9 billion – 20% VAT on £2.4 billion equals £480,000, plus the wildly out-of-control spending on security, around £1 billion. So far, however, the elastic Olympics budget has been stretched to £9.3 billion. It all adds up to a massive swindle, a rip-off for working-class and middle-class people who stump up the most in direct and indirect taxes.

The government (via taxpayers) is paying £6.2 billion of that, the rest coming from the lottery (an indirect tax on the poorest). Despite assurances that the private sector would part-fund the major construction projects on which the Games depend, the House of Commons Public Accounts Committee, reckoned that less than 2% of the Olympics budget has come from private funding. (Guardian, 17 July 2008)

The London Organising Committee for the Olympic Games (Locog), the body in charge of ‘delivering’ the Games, has raised another £2.1 billion to stage the show. Two-thirds of this has come from sponsorship by big business – whose profits come from exploiting workers and consumers. Locog also gets a contribution from the International Olympic Committee (IOC). The rest is from ticket and merchandising sales – again, mainly out of our pockets. Locog is headed by Lord Sebastian Coe, a former gold-medal-winning athlete, former Tory MP, a ‘world ambassador’ for Nike sportswear, and multi-millionaire.


THE IOC’s MAIN sponsors each pay over £60 million on ten-year contracts. This is capitalism, so in return for that money the corporations wield colossal power. In other words, at this fiercely competitive event, the organisers go to extraordinary lengths to protect the sponsoring companies from competition.

Since the Sydney Olympics in 2000, the IOC has stipulated that bidding governments introduce legislation to guarantee this happens. In 2006, parliament passed the London Olympic Games and Paralympic Games Act which, together with the Olympic Symbol (Protection) Act of 1995, grants this powerful protection, over and above existing copyright and contract law.

As a result, it is unlawful for non-sponsors to use the word ‘Olympics’, the five-rings symbol or the Games’ mottoes. Unauthorised association is also outlawed, so a pub landlord could be prosecuted for putting up a sign saying the pub is showing the ‘London Games’ on a big screen. Any company promoting itself as ‘going for gold in 2012’ would also be in breach of the law. Locog officials will go round Olympic venues removing or covering the logos of manufacturers who are not official sponsors of the Games, on items such as soap dispensers and toilet seats.

To protect broadcasters’ rights, spectators are not allowed to upload images of events onto YouTube, or post pictures from inside the Olympic village on social media. Twitter will block non-sponsors buying promoted ads with hashtags such as #London2012. Athletes are banned from uploading video or audio recordings. It remains to be seen how strictly the laws are applied to individuals, but the impression given so far is that the authorities really do mean business.

As soon as the Olympic torch relay began its 70-day course around the UK – behind vehicles from the three ‘presenting partners’: Lloyds TSB, Coca-Cola and Samsung – the branding police swung into action. In Plymouth, Locog officials seized leaflets advertising the Life Centre café’s ‘Olympic breakfast’ and ‘flaming torch bacon and egg baguette’, saying that they contravened branding guidelines. Traders along the route have to cover up brand names that are not official Olympic sponsors. (Guardian, 21 May)

At the venues, McDonald’s, Cadbury’s, Coca-Cola and Heineken will be the only branded food and drink on sale. The irony has not been lost that such products form the backdrop to this festival of sport – they would hardly constitute the healthiest of diets. Their profit margins, however, will be very healthy.

Lord Coe steadfastly defends this money-making machine. It sounds more like blackmail: "Our first port of call has always been education rather than litigation. But it is very important to remember that by protecting these brands we’re also protecting the taxpayer. If we don’t reach these targets [for company sponsorship], the taxpayer is the guarantor of last resort". (Guardian, 14 May) As in the banking crisis, capitalists try to force working-class people to pay for the failures of the misnamed ‘free market’.

First in line

QUICK TO SPRINT to the defence of big business, Lord Coe & Co are also quick to run from attempts to call them to account. Take tickets – which, unfortunately, most people in Britain have not been able to do. Ordinary punters had to submit to an exhausting trial by online lottery in their attempts to obtain a ticket. Tens of thousands have been left empty handed.

It is impossible to get a breakdown of ticket allocation for all the events. Lord Coe & Co refuse to provide this information. What is clear is that the more prestigious the event, the more the ticket allocation favours officials and sponsors. The Guardian (23 May) reported that, of the 80,000 seats available for the men’s 100m final, only 29,000 (36%) have gone to the public. For the finals in the velodrome, 2,500 of the 6,000 seats will go to the public. The Olympics and Paralympics showcase the world’s elite sportsmen and women, but pride of place in the audience goes to the world’s greedy elite: the rich and powerful.

Even this late in the day you may get a ticket if you have connections with officials from 54 of the world’s 204 countries represented at this year’s Games – the source of a booming black-market trade. A ticket bought this way, however, could cost up to £6,000. The IOC has been forced to announce that it will investigate, although any report will probably be delayed until after the Games are over. What it shows is the rotten state of world athletics’ administration, run by an unaccountable, privileged clique at the top.

The preferential treatment for the 70,000 members of the so-called ‘Olympic family’ – officials, athletes, media, assorted hangers-on – does not stop there. It is one thing to ensure that the athletes are well taken care off. They, at least, play a worthwhile role at the Games. It is quite another to roll out the red carpet to thousands of cosseted, bloated bureaucrats and political leaders, some from the world’s most oppressive regimes.

They will be given exclusive border control lanes to speed their way through customs. They will be rushed to the sporting venues and hospitality suites along special road lanes, whizzing past the ‘little people’ struggling through London’s traffic even more congested than usual. Transport officials have warned of 100 days of travel disruption for the capital’s residents.

Queues will be reserved for the 600,000 unconnected overseas visitors. An extra 585 civil service workers are to be drafted in, while summer leave has been cancelled for existing staff. Yet, 880 jobs have been cut from the UK Border Force since 2010 by the Con-Dem coalition government. As soon as the Games are over, the axe will fall again, with a further 1,550 workers due to be sacked in 2014/15, culling staff numbers down by 18% to a total of 6,440. (Guardian, 2 May)

Cut down by the Con-Dem axe

OF ALL THE legacy commitments, you might think that the aim to increase participation in sports would be straightforward. Half the job will be done by the incredible performances on track and field. With rates of obesity rising and a health service stretched to breaking point (especially by deep Con-Dem cuts), this is a crucial issue of public health, not to mention finance. Driving through its savage austerity programme, however, the government only cares about short-term savings.

In December, it abandoned its target of getting one million more people playing sport by 2013. The Independent on Sunday (3 June) reported that the numbers swimming regularly in 2010-11 actually fell by 435,000 compared with 2007-08, with those playing tennis, football and rugby also falling. Among those aged 16 to 19, overall sports participation fell by more than 100,000 to 825,900.

The Con-Dems have taken the baton from New Labour, whose policy of selling-off school playing fields ensures that young people get off to a very bad start. Since 2004, the budget for school sports has been slashed from £216 million to £35 million, with 3,400 sports coaches and coordinators sacked, and grants for 1,300 proposed playgrounds scrapped. Free swimming for under-16s and over-65s has gone. Cycling England, which was funding improvements to the cycle routes in 18 towns, has been shut down. The 2012-13 budget to promote walking and cycling in Scotland has been cut by a third.

The Con-Dems have put the boot into people with disabilities, in spite of another legacy promise to widen their access to sport. At present, 18% of disabled adults undertake physical activity for more than 30 minutes a week, compared with 38% for non-disabled adults. The government plans to replace disability living allowance (DLA) with personal independence payments from 2113.

DLA is a non-means-tested benefit worth between £20 and £131.50 a week, paid to about 3.2 million people. It helps with the extra costs of transport, equipment, care and other needs. It has been crucial in enabling disabled athletes to participate and compete.

To enable it to do this, Atos Healthcare, which describes itself as ‘the UK’s leading occupational health service provider’, has been brought in to test 11,000 claimants a week under a £100 million-a-year contract. As a matter of course, Atos passes disabled people fit for work, driven by targets to get 500,000 people off benefits. It has left thousands wrongly denied payment. To add insult to injury, Atos Healthcare is a major sponsor of the Paralympics, paying £62 million over ten years.

Sweatshop labour

ANOTHER CLAIM WHICH has fallen at the first hurdle is that the Games will be the ‘most ethical ever’. The Independent on Sunday (6 May) reported a survey by Playfair 2012 into sweatshops producing goods for the Games. It cites mistreatment at factories in the Philippines and China supplying Adidas, and factories run by Next in the notorious free-trade zones in Sri Lanka. None of the factories allow union membership.

One of the Next factories employs 2,500 people, making outfits for the opening and closing ceremonies, as well as formal suits for Team GB and Paralympic GB. According to the report, workers are forced to work 60 hours overtime a month, have no contracts and can be sacked with no notice. Typical wages for a 12-hour day are 12,000 Sri Lankan rupees a month (£58), with workers recruited from poor areas to ensure an illiterate and compliant workforce.

Dow Chemicals is a £63 million IOC sponsor and is funding a £7 million fabric wrap around the Olympic stadium. Dow continues to deny any responsibility for the 1984 toxic gas and chemical disaster in Bhopal, India, which killed up to 20,000 people, and injured hundreds of thousands. Legal action is still being pursued in the US and India by victims and their families.

Other companies with appalling records of exploitation in the neo-colonial world, such as Rio Tinto, are major sponsors too. Rio is providing the gold, silver and bronze for the medals. The Olympic park has also been the focus of many protests by construction workers blacklisted in Britain, with effective trade union organisation kept off site.

War Games

ONE LEGACY GUARANTEED by the London Olympics and Paralympics will be a further strengthening of the repressive powers of the state. A lesson from previous Games is that, once the toys are taken out of the box, they will not be put back. The Olympic park is surrounded by an 18km fence, much of it electrified, patrolled by 55 teams of attack dogs. Peripheral buffer zones are being enforced by police helicopters, CCTV vehicles, road checks and stop-and-search.

The security operation behind the Games will be the largest in the UK since the second world war. Surface-to-air missiles are being sited on top of high-rise flats in east London, on Blackheath, Shooters Hill, and in the Lea Valley and Epping Forest. Fighter aircraft have been stationed in Northolt, north London. Warships are patrolling the Thames.

Alongside 13,500 troops and thousands of police officers, there will be 48,000 private security staff. The company G4S is to train 23,700 personnel and will have 10,000 on duty in a contract said to be worth £284 million. (Guardian, 21 June) The Games will boost the ongoing privatisation of security services, further undermining any accountability to local communities.

One innovation that looks set to become a permanent and ominous feature is the use of drones. A number of British police forces have been trying them out, but their use during the Games is likely to be the launch pad for their widespread use nationally. The agencies of the capitalist state will apply the operational lessons learnt as well as the hardware acquired in policing the Games against future workers’ struggles.

You’ve been quangoed

CENTRAL TO AN understanding of the Olympic/Paralympic Games swindle is seeing how the bid was won and the stitch-ups that followed. The second edition of Ground Control, by Anna Minton (Penguin Books 2012), exposes the unaccountable decision-making, with a maze of quangos rail-roading schemes through, against the wishes and interests of local people.

Before London won the Olympic bid, the Chelsfield property company had plans to build a huge shopping complex in Stratford, in the east London borough of Newham. In 2004, it was bought out by three companies: Westfield, the world’s biggest shopping centre operator, Multiplex, which built Wembley stadium, and the Reuben Brothers, property/asset dealers who made a fortune in Russia in the 1990s.

Public support is considered to be critical to any successful bid. So, the Olympic Bidding Committee (OBC), then chaired by Lord Coe, asked for the backing of Telco (The East London Communities Organisation – now known as London Citizens). With members throughout the East End, including the support of around 80 community and religious groups, Telco had a bit of clout. It drew up an ‘ethical Olympics agreement’, including demands for affordable housing for local people, education, health and jobs on the London living wage. The agreement was signed in 2004 by Lord Coe, Ken Livingstone (then mayor of London), and Labour London Assembly member John Biggs, deputy chair of the London Development Agency.

The OBC was wound up once the bid had been won – with the plans to regenerate Stratford a major selling point, and including benefits to the other ‘Olympic boroughs’: Tower Hamlets, Hackney, Waltham Forest and Greenwich. The Olympic Delivery Authority (ODA) quango was set up in 2006 to plan and develop the facilities after the Games. It refused to meet Telco or recognise the agreement on the grounds that the ODA had not existed when the agreement was signed.

Meanwhile, in the couple of years following the bid’s success, Westfield had bought the other companies out. It passed the housing rights on to the developer, Land Lease. By this time, the subprime mortgage crisis was looming. The Land Lease deal collapsed and Westfield was stalling on work on the shopping centre.

As the New Labour government was preparing its £50 billion bailout and part-nationalisation of the banks, £5.9 billion of public money was pumped into the Olympic project to bail it out, too. The government agreed to finance the athletes’ village, taking Land Lease on to manage it. Westfield was given £200 million of public money to pay for roads leading to the shopping complex. Without similar bailouts, all the other projects planned by Westfield and Land Lease around the country came to a halt. Again, money taken from taxing working-class and middle-class people was handed over to some of the wealthiest property and construction companies in the world.

Park life

WHEN THE 500-acre Olympic park reopens after the Games, in 2013, it will be named the Queen Elizabeth Olympic Park. It is the first park to be built in London since Victorian times and the first to be called a royal park since then. This, too, is deceptive. London’s eight royal parks were created in 1851 with the passing of the Crown Lands Act. This transferred parklands owned by Queen Victoria into public ownership. In contrast, the Olympic park and its contents will be run privately.

The Olympic Park Legacy Company (OPLC) is the quango that oversees the park. Chaired by Baroness Margaret Ford, it has already sold the athletes’ village to a consortium led by the Qatari royal family, and plans to sell off the other bits of the park to different bidders.

Baroness Ford said she wants to create a great estate in the tradition of London’s Georgian developments of the early nineteenth century. The parallel is too close for comfort. The Georgian estates were private, the public locked out. They were only opened up as central and local government grew in power. The baroness wants to take us back to the time before universal suffrage. It is a dangerously retrogressive step.

The Olympic park lies at the intersection of three boroughs: Newham, Tower Hamlets and Hackney. But who will be accountable for the provision of services? Presumably, the Qatari royal family is responsible for the governance of the village although it will, no doubt, employ an estates management company. Privately-owned areas are likely to be sold on to other owners in the future. In those places, will people be paying council tax without representation?

The OPLC is to be replaced by another quango, the London Legacy Development Corporation (LLDC), with considerably greater powers over a far larger area. The area under the remit of the LLDC includes the Olympic park, athletes’ village, Westfield Stratford City, Hackney Wick, Fish Island, other areas of Stratford, Three Mills and Bromley-by-Bow.

This means that a huge part of east London will be run privately, effectively out of the control of local government. It has similarities with the situation in Docklands in the 1980s. Then, Margaret Thatcher’s government oversaw a huge development controlled by and in the interests of multinational financial institutions. This was part of the Tories’ strategy of breaking the power of elected local government.

No legacy to stand on

THE LEGACY PROMISE is that up to 11,000 homes will be built in the Olympic park, with 35% of them supposedly ‘affordable’. It is unclear how many of those will actually materialise. The athletes’ village, however, will provide nearly 3,000 new homes in 2013, half of them ‘affordable’. But what does that mean?

Changes brought in by the Con-Dem government in April mean that rent charged for so-called ‘social housing’ (subsidised housing mainly provided by housing associations) can be increased up to 80% of market rent. This is a massive increase. The housing charity, Shelter, explains that a three-bedroom property in an outer London borough costing £126 a week in social rent could rise to £390, at 80% of market rent. (Anna Minton, Ground Control) The Con-Dems also lowered the already restrictive maximum limits (introduced by New Labour) on what can be paid out in housing benefits.

Newham includes 13 of London’s 15 most-deprived wards. Nearly half the population lives below the poverty line and 70% of children live in low-income households. There are 32,000 households on the council’s waiting list, with a 16-year wait for a three-bedroom council house, 15 years for a four-bedroom house. People have no choice but to rent privately.

The consequence of all that is that very little, if any, of the new housing will be affordable to the vast majority of the people in Newham or the other Olympic boroughs. The legacy commitment to regenerate this poverty-stricken area of east London – supposedly, the foundation on which the bid was won – is and has always been a complete and utter con.

The Olympic and Paralympic Games are occasions to celebrate and experience inspirational feats of skill, speed, strength and stamina. They are a chance to participate in a great global party as athletes and spectators come together, watched by millions the world over. The capitalist system, however, only has eyes for short-term profit. For the multinational corporations, the Games are just an immense merchandising opportunity. They dictate the pace, aided and abetted by the rotten political establishment and corrupt officialdom.

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