Olympic delusions

Britain was swept up in the euphoria of staging London 2012. Now we face the real Olympic legacy, says Merryn Somerset Webb. A huge pile of extra debt.

I missed the Olympics. We spent the entire period on a small island north of Scotland with no phone reception or TV. When we left, everyone we talked to was irritated about the Olympics. Irritated by the way politicians insisted the £9.3bn (at least) cost was "within budget", when the original budget was £2.4bn, and when most final estimates put the cost at around £12bn.

Irritated by the London traffic restrictions. Irritated by the exhortions from the organisers not to be so churlish as to be irritated. Irritated by the ludicrous spectacle of the tens of police outriders and sponsorship lorries belching carcinogenic diesel fumes into their children's faces when they made the mistake of going out to watch the torch go by. And maddened by the fact that this orgy of other people's glory would cost each of them, as taxpayers, £400 or so.

But while we were attending agricultural shows, admiring Shetland's subsidy-driven wind turbines and busying ourselves with the various methods of judging what makes a sheep a champion sheep and what does not, something changed. Instead of operating within a normal level of rational cynicism, Britain's population seems to have collapsed into a post-Diana-style state of euphoric delusion.

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The papers, all critical faculties suspended, are full of inanities about how the Games, "a feast of dazzling sports celebrating fine young bodies against the backdrop of ancient buildings" (Simon Barnes), have somehow not just handed out the largest Summer Olympic medals in history (diameter 81mm apparently), but single-handedly recast our "national identity" (Hugo Rifkind), while proving "the UK can mount large-scale projects and do them well" (The Times).

They haven't done anything of the sort. They have merely proved something that most of us will soon realise we knew already: if you chuck enough money at one narrow target, you usually hit it. But amid the Boris-tastic backslapping, bear in mind the opportunity cost of each many-million-pound medal. Our politicians are trying to persuade us that the legacy of the Olympics will be a fitter population, better infrastructure and a pile of affordable housing. But the real legacy isn't that at all. It's more debt.

We might have more buildings than we had seven years ago. But we are also down £10bn-£12bn in real money. I'm told that I don't get it because I wasn't here to see it. But I suspect that as the euphoria wears off, more people might begin to wonder if the brief feel-good factor of the most expensive Games in history was really worth it. Wouldn't it have been better to spend the money on something with more lasting value (such as high-speed rail links)? Or not to have spent it at all, what with our record public debt? Maybe don't answer that now. Wait until the next budget, when your taxes are almost certain to rise again and when you can barely remember who won what in the diving. Answer it then.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.