§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Andrew Mitchell.]
§ 1.8 am
§ Ms Kate Hoey (Vauxhall)
It gives me no pleasure whatever to initiate this debate. Everyone who really cares about the good name of football and about its future must be distressed about the variety of allegations, scandals and corrupt practices which have surrounded the game in recent years.
In the past few days, the newspapers have been full of one incident—the attack on a Crystal Palace supporter by the Manchester United player Cantona. Shocking as that incident was—and I congratulate the Football Association on taking immediate action—it is less significant than what has been happening off the field. At least the Cantona incident was in full view of the public via television.
I want to talk tonight about the many allegations that have yet to be proved or disproved. It is commonly agreed that a great deal of evidence exists. I have seen some of it, and the Minister should have as well. I want to raise with the Minister with responsibility for sport a demand for more action to get to the bottom of these matters.
Some people, both within and outside football, have stated that football has nothing to do with Parliament, and that politicians should not be sticking their noses into "private business". I heard that some people in football have a view, which I hope and believe the Minister does not share, that it is especially shocking that a mere woman Member of Parliament is getting involved in what is clearly an industry run by men, for men. I make no apology for that involvement.
Football is our national game. It gives pleasure to millions of men and women, and its future is much too important to be seen as the private preserve of a few. Crucially, it is an industry that receives millions of pounds, both directly and indirectly, from Government. In the past year, it received £23 million via the Football Trust from a specially reduced betting tax on the pools industry. That special reduction was granted in 1990, and was recently extended for another five years to the year 2000. A sum of £14 million comes into the Football Trust from the pools companies' special deal on the spotting the ball competition each year.
Privileged loans are approved by the Department of the Environment from local authorities. There is money to help with the young trainee footballers scheme. Money will be going to help with the staging of the European Championships in 1996. The Government have rightly given the football industry special privileges, unlike any other leisure activity. Special privileges using taxpayers' money mean special responsibilities, which the Minister must ensure are carried out.
In response to my letter before Christmas asking for an independent inquiry, the Minister shared my concerns about recent allegations of financial irregularities in professional football. I welcome that. He also said that the issue of transfer irregularities was primarily one for the governing body of the sport to pursue. He said:The FA Premier League has set up a Commission of Inquiry and I await the outcome with interest.He continued:So far as there are any tax implications, the Inland Revenue will and are taking close interest.828 He ended:My officials are in touch with the FA Premier League and will continue to monitor the situation.Fifteen months ago, on 4 November 1994, the Premier League Commission was set up to inquire into allegations of undercover payments during "transfer deals" and into the role of agents in an attempt to restore the public's faith in the propriety of football. Members were Steve Coppell, the former Crystal Palace manager and England international, and secretary of the newly formed Managers Association, Rick Parry, chief executive of the Premier League, and Robert Reid QC. At the time, Mr. Parry said that his aim was to have a short, sharp exercise. So far, they have failed to report.
The inquiry, however, is entirely concerned with the laws and regulation of football. The Government should be considering the whole tax evasion scam that is taking place in football. The Inland Revenue involvement is limited both by scope and time—the limits is two years in time, one year to be chosen by clubs and one by the Inland Revenue, and only six players. Customs and Excise, the collector of VAT, is taking no specific steps and is conducting no specific investigation of the transfer turnover of some £70 million a year.
From the information that I have had from Customs and Excise, it was, to put it in football parlance, "shown the yellow card". In other words, it was warned off, not just from delving too deeply, but from delving at all. Why is the Inland Revenue not passing information on to the VAT commissioner, to the financial reporting review panel or to the Director General of Fair Trading?
Perhaps the Minister can tell the House why the Government are stopping a full inquiry into the evasion of taxation by some football clubs. We know that 15 premier division clubs have, under the Government's formula, already paid £16 million in back tax and penalties. That is for only a two-year period—what would be owed if the process were extended to cover all clubs for perhaps 10 years?
Will the Minister confirm that there is an under-the-counter deal being done, and that guilty clubs are being told unofficially, "Co-operate, pay up and we will not pass on any information, not to other tax bodies or, where there is criminality, to the police or, crucially, to the football authorities for their further action"?
The important thing for the House and the Minister to understand is that, not only is the taxpayer being ripped off, but the supporter is being forced to pay more as a result of the dirty deals which cause money that should be in the game to be siphoned off in back-handers, bungs and fixes. Indeed, it has been suggested that the figure could be as much as £1 a ticket.
The particular problems of player transfers and illegal payments are not confined to deals done within this country. In the past few years, increasing numbers of players have been imported to play here. They originate from Scandinavia, eastern Europe, Spain, Africa and Australia. One of these transfers—that of Jensen from the Danish club Brondby to Arsenal—is currently under investigation.
It is alleged that the Danish club took only £900,000, and that the rest of the total price of £1.57 million paid by Arsenal went to the Guernsey company Interclub, run by the Norwegian agent Rune Hauge. Therefore, some £600,00 was paid needlessly by Arsenal, and George 829 Graham has not denied that he admitted to the Inland Revenue that he received an unsolicited cheque—a gift—for £285,000, which he subsequently handed back to Arsenal. Other clubs are involved with the same agent and all of them bought Scandinavian players. Those clubs include Liverpool, Manchester United and Oldham. More than 60 foreign players were being investigated before the even bigger influx of players last summer.
In Spain, using a British agent, two players were transferred back to Aston Villa from Real Sociedad. That transfer—a £2 million deal in total—is subject to Inland Revenue and other inquiries. The manager at the time of the deal was Ron Atkinson. Two east German players transferred from German clubs and played fewer than 30 games before returning to their home country. I understand that the Inland Revenue is investigating.
It is to Australia, from where the Minister has just returned, that I wish to draw his particular attention. An internal inquiry by the football authorities, which took some time and found very little evidence, was superseded by a Parliament Senate Committee of inquiry which, using its judicial powers, is conducting a wide-ranging investigation into, among other things, the transfer of football players to England. So far, the inquiry, which is currently meeting, is concerned with two English clubs—Blackburn Rovers and Brighton and Hove Albion—which used the services of an English agent, Mr. Tom Lawrence.
Commenting on the Brighton FC transfer of David Clerkson, who has returned to Australia, the report said:the English FA became involved, but does not seem to have clarified anything.As for Blackburn Rovers and the transfer of goalkeeper Frank Talia, the inquiry reports that the Talia transfer is an example of what happens when an agent acting for the transferee is involved, and that the Australian club Sunshine George Cross does not believe that it received the full moneys due to it. Blackburn paid £115,000, whereas the Australian club received only £8,500, which means that more than £100,000 has gone walkabout. It is interesting that the Australian Parliament seems to know more than the Minister about what is happening in respect of transfers of footballers to England.
As for internal transfers, the original reason for setting up the Premier League commission of inquiry was to investigate an allegation of wrongdoing and bribes involving the transfer of Teddy Sheringham from Nottingham Forest to Tottenham. That involves the England team manager Terry Venables and the former Nottingham Forest manager Brian Clough. Does the Minister know whether any evidence of financial fraud has been passed on to the police authorities in this case—or, indeed, any other? Is it not only fair to everyone, especially Brian Clough, for someone, somewhere to say whether he is guilty or not guilty?
The Commission has already in front of it much information, including an invoice regarding the transfer of Paul Gascoigne to Lazio for £200,000, and an invoice from First Wave Management for £58,000. Those should be dealt with by the Department of Trade and Industry under the Companies Acts 1985 and 1989.
The problem of money and its misuse is far too big, far too difficult and far too close to home for the football authorities to cope with by themselves. Can we expect club chairman to find themselves guilty? Can we expect club managers to judge themselves objectively, especially in a culture which has turned a blind eye to wrongdoing?
830 It must be remembered that all the allegations and investigations now being discussed come from outside the game, or from newcomers to the game. Particular credit must be paid to the consistent investigative reporting of Harry Harris of the Daily Mirror, to Patrick Barclay of the Observer, and to The Mail on Sunday, among others.
The evidence in front of the Commission relating to Terry Venables is, I believe, damning. Leaving aside his business dealings, the evidence present in the order 14 application in the case when the agent Eric Hall sued Tottenham for £23,500 forpublic relations and commercial activities on the Club's behalf",raises grave questions at the least about Mr. Venables's judgment. Indeed, it is possible that he could have contravened the Prevention of Corruption Act 1906. There is certainly clear evidence of the breach of Football Association regulations, in that Venables knew that Eric Hall was acting for him, while at the same time acting for the players.
In simpler terms, the Prevention of Corruption Act means that a football agent cannot take money from a club which at the time is in negotiation with that agent's clients. Eric Hall was an agent for three Tottenham players: Justin Edinburgh, Paul Moran and John Hendry. Tottenham's lawyers discovered that Hall took money from those players while acting as their agent for new contract negotiations. Unbeknown to those players, he also took money from Tottenham for the same reason.
Section 1(1) of the Act contains similar provisions regarding persons who agree to give any such gift or agree to pay a fee. Terry Venables swore an affidavit to help Eric Hall in his fight against Tottenham. In that affidavit, he fully admits that he asked Hall to convince the players to sign contracts. Venables knew that Hall was the agent for those players, because players always have to notify their club in writing of their agent. To me, the evidence speaks for itself; no wonder the Minister awaits the commission's report with interest.
The Premier League commission of inquiry has already been overtaken by evidence and new allegations. The commission has narrow terms of reference. It is not looking into things such as the free use of credit cards valued at £2,000 a month, subsidising the purchase of houses with unreported capital sums, and cash payments to parents when signing on school-age footballers.
The reality is that most sensible suggestions to monitor financial dealings of clubs have been rejected by the Premier League chairmen. The Professional Footballers Association suggested a compliance unit. Why does the Football Association not insist on that? Indeed, Graham Kelly of the Football Association has said that that is a difficult area.
We cannot wait for them to sort themselves out. The situation is too important. But let us not forget that there are many decent, dedicated men and women involved in the football industry. They also want to clean up professional football. As a long-time Arsenal supporter, I know the pain it has caused, not only to me but to other supporters, when we hear of wrongdoing in our favourite clubs.
The Minister for Sport will not need reminding that this is the game we gave the world. Hosting the European championships in 1996 is a special honour. With it goes the responsibility of the Government, the FA and all those in football to ensure that the financial aspects of the game are seen to be perfectly honest.
831 There is a real danger that what is being discovered is so widespread that any admission of guilt or breach of the rules would bring the whole edifice of the football establishment down. No one wants to be the first person to pull his finger out of the dyke.
It is important that the football authorities do not pick on one person as the official scapegoat. The only way to counter that is for the Government to set up an inquiry along the lines of the Taylor report or other reports into football, independent of the cosy relationships in football and with the power to subpoena evidence, to examine accounts and to make a full and impartial report. That is what the country wants and that is what is needed if we are going to get back that confidence in football—the national game.
§ The Parliamentary Under-Secretary of State for National Heritage (Mr. Iain Sproat)
I must begin by congratulating the hon. Member for Vauxhall (Ms Hoey) on securing this debate, and on her persistence in pursuing allegations of improper payments and behaviour in the sport.
I welcome this debate entitled "Government Policy on Association Football", and the opportunity it affords to discuss a number of important questions which have been raised as a result of recent speculation about the conduct of certain clubs and individuals. Those are issues which worry a lot of football supporters, and the hon. Lady has set out her concerns very thoroughly.
Although football is, of course, privately run and administered by independent governing bodies, there is a legitimate public interest involved, and for that reason, both my Department and the Inland Revenue have been monitoring those issues very carefully, and I will respond to the hon. Lady's specific points about financial irregularities in a moment.
Given the title of the debate, let me begin by explaining that the Government's role in football, as in other sports generally, is to encourage the development of, and participation in, the game through appropriate policies and expenditure programmes.
The Government do not, and indeed should not, attempt to run football itself. That is the responsibility of the properly constituted governing bodies, such as the Football Association, the FA Premier League and the Football League, and my Department does not have any jurisdiction over their day-to-day affairs. That is not to say, however, that the Government do not take firm action when that is appropriate.
The title of the hon. Lady's debate is "Government Policy on Association Football", so, although I will come to the issue of financial irregularities in a moment, I must start by looking at our policy in the round. Following the terrible tragedies at Bradford and Hillsborough, the Government passed the Football Spectators Act 1989 and stipulated that all clubs in the Premier League, and the First Division of the Football League, must convert to all-seated accommodation.
In addition, the Government established the Football Licensing Authority and funded the Football Trust through a 2.5 per cent. reduction in pool betting duty. Government funding of the Football Trust, which began in 1990, was 832 originally due to end this year, but, as hon. Members will know, it was decided in August 1993 to extend the arrangement for a further five years.
As a result of those actions, football grounds have been transformed. From old, dangerous and uncomfortable grounds, often with inadequate facilities, and uncovered terraces, we have moved to a position where our stadiums are among the finest in the world.
Also, £387 million has been spent so far on major ground redevelopment projects, of which £121 million has been contributed by the Football Trust, which assesses all grant applications to take into account the club's own resources. Together with smaller ground improvement schemes, that represents a major investment in the future of football, and it was a significant factor in UEFA's decision to award the finals of the 1996 European championships to England.
Responsibility for organising the championships rests with the FA, but my Department has been fully involved and has provided advice and assistance as necessary. As I have said on a previous occasion, the decision to award the finals to England was a vindication of all the work that the clubs have put into upgrading their stadiums to provide the facilities and comfort which spectators are entitled to expect as we enter the 21st century. It was also a vindication of the Government's policies on football.
Financial assistance from pool betting duty has not been limited to clubs in the top divisions. Clubs in the second and third divisions have received more than £14 million, and that does not include the funding provided to those clubs, and those in the GM Vauxhall Conference, from the Football Trust's income from the 'spot the ball' competition.
Now that the all-seating policy has largely been implemented, we can look forward to increasing the resources available to clubs in the lower divisions to achieve improvements in the safety of terracing and the quality of facilities. As can clearly be seen, the Government are concerned to help the modernisation and development of all football clubs, not just those at the top. That support extends right down to the grass-roots level, with the sportsmatch scheme, which is funded by my Department, providing grants worth more than £900,000 to football, and stimulating an equivalent level of support from private sponsorship. Without a healthy and thriving base, no sport can flourish, and I am very keen to support and encourage that base.
The Football Licensing Authority, on behalf of the Department of National Heritage, is responsible for licensing grounds at which designated football matches are played, and for ensuring that safety certification under the Safety of Sports Grounds Act 1975 is properly implemented, to avoid any repetition of the tragedies that we have seen in the past. Looking ahead, the Sports Council is responsible for distributing sport's share of the money which the national lottery will contribute to good causes, and I have no doubt that football will be one of the beneficiaries.
My colleagues in other Departments are responsible for other aspects of football. The Home Office, for instance, has a very important role in ensuring public order, and I am sure that hon. Members will agree that the police have been very successful in reducing the level of violence associated with football games, and will join me in welcoming that improvement.
833 The reduction in violence can be seen from the fact that, over the past five seasons, arrests at league games have fallen by 30 per cent. I have no doubt that that has played an important role in the rise in attendances, and particularly the increasing number of families who now go to football games.
Having set the framework within which football can operate safely and successfully, it is right that private clubs and governing bodies should be allowed to operate freely without Government interference—as long, of course, as they are seen to be acting in a responsible manner.
Complaints that increases in admission prices are driving spectators away and that clubs are exploiting their supporters by over-frequent changes of their strips are not new, but they should also be seen in the proper context. For example, attendances at football matches have risen every year since the 1986–87 season. Again for example, supporters are not obliged to buy replica kits and all the other souvenirs on offer at clubs these days.
It is also an interesting fact that 70 per cent. of replica kits are sold in large or extra-large adult sizes, which shows that, at least in the majority of cases, it is not children who are being targeted. Besides, a club's commercial activities help to keep admission prices down. It must also be remembered that football is not only a sport but a business, and that, if clubs are to be successful on the field, they must also be successful financially.
As well as paying for the essential ground improvements which I mentioned earlier, clubs must be able to buy quality players, which will enhance their teams' performance and attract more supporters. There have been complaints that transfer fees and players' wages are too high, but, although multi-million-pound transfer fees may seem like lottery money, clubs in this country must compete not only with each other but with those in other countries.
If we want British clubs to be successful in Europe, they must compete for the very best players with the likes of AC Milan and Barcelona. It is also worth remembering that footballers have very short playing careers, and that the majority of the money paid in transfer fees stays within the game.
Complaints about the role of television should also be seen in context. I know that a number of hon. Members are concerned about premier league matches being shown live exclusively on satellite television, but it is for footballing bodies to decide how to market their sport and where best to strike a balance between income and television viewing figures. BSkyB and the BBC are paying the FA over £200 million over five years, which is almost four times as much as television was previously paying, and that is without taking into account the ITV contract with the Football League. It is again worth remembering that these moneys all help keep down the cost of football to the supporters who go and watch their teams on Saturday afternoons.
The hon. Lady listed a number of concerns involving financial irregularities. I would urge her to send all the evidence she has to the appropriate authorities. As she is 834 aware, the Inland Revenue is responsible for these matters, and for some years now it has had a special team which has looked at payments in football.
These are very wide-ranging inquiries covering football clubs, players, management and agents, and involving teams at all levels of the game. The hon. Lady and other hon. Members can be assured that, if there are cases which merit prosecution, this will be done, as it was in the case of Swindon Town in 1992, when the chairman, secretary and treasurer were all successfully prosecuted.
§ Mr. Sproat
I do not know if that is true. I can assure the hon. Lady that I will speak to my right hon. and hon. Friends at the Treasury. I shall find out the answer, and send it to her.
Football is not helped, however, by exaggerating the problem—I am not saying that the hon. Lady is, but it has been known—and it is very important to note that Premier League clubs have agreed voluntarily to commission independent accountants to prepare reports for the Inland Revenue, which has agreed the scope and content of these reports with the Premier League. The aggregate cost of this exercise will be half a million pounds. I am happy to see that the clubs have decided to put their own house in order, and the Inland Revenue is very pleased with the co-operation it has received from the Premier League.
The FA Premier League is conducting its own inquiries into allegations of financial irregularities, and have set up a commission of inquiry whose membership includes an independent QC, who is also a recorder and deputy High Court judge. I am sure that the inquiry is conducting a thorough and rigorous investigation.
The inquiry had already been set up before the latest allegations of transfer irregularities were made, and it was quite rightly decided that it should look into those allegations too, rather than having a separate FA inquiry. The inquiry's terms of reference give wide-ranging powers, and I am confident those powers will be fully used.
The FA Premier League has made it clear that there will be no cover-up, and that it wants to produce long-term solutions, which will prevent a recurrence of these problems. The priority is to complete the inquiry properly rather than quickly, but I understand that the findings in the Arsenal case will be available very soon. I certainly agree that it would help public confidence if the findings of the inquiry were made public, and I urge the Premier League to ensure that this is done.
The serious allegations concerning Bruce Grobbelaar are being investigated by the FA and the police.
I see no need for a public inquiry. The Inland Revenue is looking into the financial aspects. I am satisfied that the—
The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned accordingly at twenty-two minutes to Two o'clock.