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From The Socialist newspaper, 26 May 2010

London 2012 Olympics: A big business spectacle

IN 2012 the Olympics and Paralympics come to east London. On show will be the world's elite sportsmen and women, flexing their muscles and straining their sinews in state-of-the-art stadia. The possibility of seeing Usain Bolt smash more sprint records, local athlete and world 400-metre champion, Christine Ohuruogu, and swimming free-style double-gold winner, Eleanor Simmonds - among countless others - is a mouth-watering prospect.

Manny Thain

For all the inspiration on display, however, the sporting spectacle is a sideshow. In the eyes of the property developers and multinational corporations, their fixers on the organising bodies and their cronies in government, the main purpose of the Olympics is to make huge amounts of money.

For them, the real action will take place in head offices and boardrooms, their eyes fixed on world-record profits screwed out of record numbers of punters and the exploitation of workers on the sites and at the venues.

There are seven 'tier-one' sponsors: Lloyds TSB, EDF Energy, BT, BP, Adidas, British Airways and BMW. Each has stumped up 40 million-80 million to the London Organising Committee for the Olympic Games (Locog), headed by former Tory MP, Lord Coe.

Another 20 major companies are advancing cash, products and services. In addition, Locog receives a share of the revenue from the sponsors of the International Olympic Committee (IOC) with global rights, including Coca-Cola, McDonald's, Visa, GE, Panasonic, Omega and Samsung. In return, these companies have privileged access to the venues, backed by draconian legislation to keep out competitors and stop others using the Olympic rings and logo.

The commercialism of the enterprise is symbolised in Locog's 'food strategy'. Locog estimates that 20% of the 14 million meals served at the Olympics will be supplied by McDonald's. After all, its sponsorship deal prevents other branded foods being sold at the 40 games venues. Coca-Cola has exclusive marketing and advertising rights at the Olympics until 2020. These huge capitalist conglomerates - champions of the so-called (but non-existent) 'free market' - have bought themselves heavily protected domination.

Recent New Labour governments - for whom staging the games was one big prestige-pumping trip - claimed that the Olympics will bring a long-lasting legacy in terms of health, housing, regeneration and jobs.

These claims will not be realised. In fact, they were cynical spin to secure backing for the project. While most people will relish the chance to be part of this sporting festival, the real legacy will be attacks on democratic rights, deteriorating working and living conditions in local communities, and a hefty bill to pay.

Now, the axe-wielding Con-Dem coalition picks up the baton. It is sure to continue, even extend, New Labour's policy of diverting lottery funds from arts and social projects to plug any funding gaps.

Footing the bill

WHEN THE London bid beat Paris in July 2005, it was costed at 2.4 billion. By March 2007, then secretary of state for sport, Tessa Jowell, had revised that up to 9.3 billion, the current benchmark. That is made up of a build budget of 7.1 billion, 1 billion for emergencies - part of which has been used to cover the shortfall in private-sector funding due to the credit crunch - and 1.2 billion for areas, such as security, not run by the Olympic Development Agency (ODA), the public-private body overseeing venue construction.

The Olympics curse is that venues are left underused or abandoned after the circus leaves town. The claimed legacy includes future use of stadia and facilities, yet there is no agreed tenant for the 540 million Olympic stadium or for the 334 million media centre - prime candidates for 'white elephant' status.

The cost of security at the games is expected to more than double, although the overspend may not figure in the Olympic budget, which is the responsibility of the Department for Culture, Media and Sport. Extra security spending could be hidden in the Home Office budget. Taxpayers will be hit by an additional 500 million to convert the Olympic park after the games, on top of the 1.7 billion debt from acquiring the site in Stratford and preparing it for the games. So, the final price-tag is anybody's guess, dependent on property markets, the economy in general, and many hidden costs.

Although Locog is commercially funded, it is underwritten by the government. And we know what that means. If it goes belly up, taxpayers will be expected to pick up the tab - just as Canadians did with the winter Olympics in Vancouver earlier this year. Dubbed the 'bailout games' and 'recession Olympics', they were costed at 1.2 billion, initially. Now, estimates put it nearer 3.6 billion. It will take decades before the city pays off the debt.

Vancouver had lost its AAA credit rating last year when the city took over financing the athletes' village after a New York hedge fund stopped paying the construction loan. The global economic downturn also hit revenues, with the IOC unable to sign up two of its eleven global sponsors, reportedly losing C$30 million (18.2 million) - a warning to London in light of the stormy economic forecast for the coming years.

Just the ticket

LOCOG AIMS to raise 1.95 billion. That includes a projected 400 million from ten million tickets - eight million for the Olympics, two million for the Paralympics. A website registration scheme has been launched and tickets will go on sale from spring 2011. But how can Locog make 400 million while honouring its (vague) pledge on affordability? It could be simply that Lord Coe & Co define 'affordability' in a different way to most of us. In effect, the online registration, which offers no guarantee of getting tickets, is a colossal market research exercise: the higher the demand, the higher the ticket price, is the market logic.

European Union law prevents preferential treatment for fans in the host nation of a major sports event. Some politicians have demanded opportunistically that those living near the games should receive free tickets. As a Newham resident, I agree - it would be some compensation for having lived on a building site for seven years! And an average of 20 is being levied on London council-tax payers each year towards the games. Of course, a fair means of allocating free/low-cost tickets to any low-income person from anywhere should be worked out.

There will be some discrimination in ticket allocation, however. According to the London Evening Standard (11 February), 130,000 of the most highly sought-after tickets are reserved for two corporate hospitality companies. There will also be allocations to the 202 national Olympic committees worldwide, to the IOC, its big-business sponsors, and the media. Last in line will be the vast majority of people without such privileged connections.

The race to the bottom

AT PRESENT, there are over 9,000 workers on the various sites. This will rise to 11,000 over the coming year. The ODA says that 53% of them are from London and 20% are local, classified as those living in one of the five host boroughs: Greenwich, Hackney, Newham, Tower Hamlets and Waltham Forest. The ODA classifies a worker as local if s/he has been living in one of those boroughs for one day.

But unemployment in Newham - the most ethnically diverse borough in Britain - is rising. In January, according to the Office for National Statistics, Newham had 10,229 people claiming job seekers' allowance. This was up from 10,112 in December, and up 28% from 7,998 in January 2009.

At a meeting in Stratford on 23 March, called by Newham Trades Council, attention was drawn to job centre figures stating that there are 69,000 unemployed building workers in Hackney, Newham and Waltham Forest. None of the job centres in these areas seems to advertise Olympic site jobs.

At the meeting, there were reports of shady recruitment agencies, building workers subjected to intimidation and the fear of being sacked or blacklisted and of site agreements being broken. There were cases of contractors bringing in labour from other countries, paying 300 a week and then taking 150 for rent for a room shared by six workers. Clearly, these workers are trying to support themselves and their families. But they are being ruthlessly exploited.

The conditions echo the East End of the late 19th century. Then, British capitalism was expanding at breakneck speed, sucking in workers from rural areas, from Ireland, Europe and further afield. Those workers helped form the backbone for the modern trade union movement - on the basis of united, mass action. It will take similar movements to improve wages and conditions today.

The sole intention of the contractors is to maximise profits through the super-exploitation of the workforce, and by undermining trade union organisation, pay and conditions.

A succession of EU rulings - the Viking, Lavall, Ruppert and Luxembourg cases - means that workers who are paid lower wages in their own country, can work in another country where rates are higher, but at the lower rate. This raises the urgent need for action. The methods of last year's strikes at Lindsey oil refinery, and by other construction engineers throughout Britain, need to be applied - to raise the pay and conditions of all those on site, and to ensure jobs for unemployed construction workers.

What jobs are available to local young people are on the bottom of the pile - for example, 7,000 burger-flippers, ticket collectors and stewards. So, another part of the legacy will be to 'train' east London's youth for a low-pay, temporary-job future - welcome to the East dead-End. The London Development Agency and local councils are providing 27 million to create 12-month contracts for 5,600 long-term unemployed in the five boroughs (Evening Standard, 21 April). That's only 4,820 per job!

The 'housing legacy' myth

AS FOR housing, the Guardian reported (9 February): "Quarterly accounts released by the ODA have revealed that officials expect to make 150 million less from the sale of land after the games because of the credit crunch."

Nonetheless, over the past decade, property prices in the four boroughs around the Olympic park have risen faster than anywhere else in London, with the highest rises being in the last five years - up by 129% in Hackney, 131% in Waltham Forest, 137% in Tower Hamlets and 151% in Newham.

Even so, property prices in Stratford, the epicentre of Olympics construction, are still a third lower than in Greater London, with one-bed flats starting around 185,000 - down 20% from their peak, although way out of reach for most people in the area.

Research by estate agents Knight Frank, shows that 42% or 32,000 of the 76,000 homes under construction in Greater London are in east London. And more than half of the 130,000 homes with planning permission but not yet under construction are also in that area. However, many of these homes may not be built due to the credit crunch, especially in the areas more distant from the Olympics sites - the nearer to the centre of attention, the higher the political imperative to show progress.

The Olympic Park Legacy Company (OPLC) is supposed to bring 10,000 homes to the area in the 20 years after the games - a pathetically low target given the scale of need. Central to that are 2,800 homes in the athletes' village, half of which will be 'affordable', the OPLC claims. This is rubbish. The OPLC has no direct say over what happens to the Olympic village. Ultimately, housing allocation is likely to largely come down to market forces.

Property developer vultures are circling, speaking of the need to sell the unaffordable half to so-called 'aspirational families'. It makes you wonder how they describe the other 50%. Marcus Dixon, from Savills estate agents, said bluntly: "The challenge ahead will be attracting buyers from outside the local market to new schemes in Stratford, and establishing the area as one where higher-income households can relocate to" (Evening Standard, 9 April).

No! The real challenge is to build decent homes for the thousands currently living in substandard housing. The housing charity, Shelter, estimates that it would take Newham's New Labour council 24 years to clear its council house waiting list at the current rate of 'progress' so long as nobody else is added to it. There were 28,629 households on that list - more than any other London borough - as of April 2009, the most recent official figure available (Newham Recorder, 6 January).

As with many 'regeneration' schemes, working-class and poorer households will be driven out of areas where property prices and rents are rising. For the vast majority of people in east London, a lasting legacy of the Olympics will be a slide into ever-worsening housing and living conditions. Instead of leaving it to private sector profiteers, government and council resources should go into providing good-quality homes to clear the waiting lists.

Building companies should be nationalised under workers' control and management. They should prioritise providing the housing so desperately needed by tens of thousands of families throughout Britain, while providing long-term employment for construction workers, as well as apprenticeships for young people. Likewise in the financial sector, some of which is nominally under state control. It should be fully nationalised and made to provide cheap loans to working-class people.

Big brother and the holding company

ANOTHER ASPECT of the games will be heightened security. And Britain's state forces are standing on the shoulders of Beijing and Vancouver for an even better 'view'.

People in Vancouver complained bitterly about heavy-handed policing, the loss of civil liberties, the 1,000 extra surveillance cameras, 30 miles of crowd-control fencing and sealed security zones around the city.

The games were guarded by the Vancouver Integrated Security Unit, set up by the Canadian government specifically for that task. Dawn raids and pre-emptive strikes against protesters were commonplace before and during the games.

Drones flew over the Olympics handover party in central London last summer, an ominous dress-rehearsal. Beefed up stop-and-search measures and coordinated CCTV to track people's movements across the capital are to be introduced.

The police have been handed sweeping powers under the 2005 London Olympic Act. This allows police officers and Olympics officials to enter homes and shops - to defend the monopoly of official advertisers on the 2012 site.

The law has been drawn so widely, however, that it includes 'non-commercial material', which could mean protest literature, posters, banners, etc.

Once in place, these powers will remain. So, another legacy will be performance-enhanced state forces - starting in east London and spreading across Britain. These powers can be used against the workers' movement in future struggles, and against other resistance to the capitalists and their system.

Although the Olympics are centred in Stratford, a private city is being built, owned and controlled by the Australian property company, Westfield. Called Westfield Stratford City, it aims to become the largest shopping centre in Europe. Here, the streets and 'public places' will be policed by private security. And, apart from the erosion of civil liberties, the detrimental effects of this influx of big-business muscle on small shops and shopping centres throughout east London are likely to be devastating.

A legacy of graft

ON THE subject of legacies, Juan Antonio Samaranch, former IOC president (from 1980-2001) died on 21 April. He was the driving force behind the rampant commercialisation of the Olympics - the neo-liberalisation of sport. The Olympics rings are now one of the world's most lucrative corporate symbols.

According to Matthew Syed: "There were no checks and balances, no scrutiny... Samaranch altered the rules so that members of the IOC no longer had to pay their own travel costs, insisting on first-class flights, five-star hotels and luxury on a scale that left athletes gasping for breath... As early as 1991, seven years before the defining Salt Lake City scandal, members were lavished with so many gifts from cities bidding for the 1998 winter Olympics that the IOC had to set up a parcel post station in the Hyatt Regency hotel to help delegates to send their swag home" (The Times, 22 April).

Samaranch was forced to launch an investigation into allegations that millions of dollars were paid to IOC members in the run-up to the Salt Lake City games. Six members were expelled, four resigned. Samaranch was exonerated. Rules were brought in to outlaw gifts and ban visits to bidding cities. But the die had been cast. The IOC remains a big-business driven juggernaut. In 2001, Samaranch nominated his son, Juan Antonio Junior, a Madrid-based businessman and vice-president of the International Modern Pentathlon Federation, onto the IOC. He was accepted overwhelmingly, keeping it all cosily in the family.

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