HC Deb 23 January 2001 vol 361 cc899-906

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]

10.1 pm

Mr. Jim Murphy (Eastwood)

I am delighted to have the opportunity to raise the important issue of the proposed abolition of football transfer fees by the European Commission. I have an interest in the matter, but not a registerable interest in the strictest sense: I am the parliamentary spokesman for the Scottish Professional Footballers Association. It is an unpaid post, but I am happy to perform the role of adviser on behalf of the SPFA.

That organisation north of the border and the equivalent in England, under the stewardship of Gordon Taylor, have played an important role in the debate and have been vocal on behalf of the football players and, in some respects, the football clubs.

I do not have a professional football club, or even a part-time football club, in my constituency. I take a keen interest in football, but in my constituency I have only two junior clubs—Arthurlie Juniors and Neilston Juniors—so I have no registerable interest or a local constituency football team to speak of in professional terms.

Like me, many football fans throughout the country who support large teams and small teams are extremely concerned that major aspects of our national game may be under threat. Of course, the past few years have been a period of change in football. Much of the change has been good, but some of it has been very dangerous.

If the European Commission makes the proposed changes unconditionally, without listening to the voices of the players, clubs and supporters, I fear for the future of many of our football clubs. Already, more than a quarter of the players in the Scottish premier league are from outside Scotland, and the number continues to increase. To some extent, that change has enriched the game, but it has also undermined much of the indigenous talent.

There have also been changes in terms of salaries. The average income of players in the English premiership is £400,000 a year. Many earn a lot more, and some earn much less, but I am informed that the average salary is about £400,000 a year.

As a consequence of the changes that have taken place, we have four leagues both in Scotland and in England. In Scotland, we have the Scottish premier league and the three other divisions. In England, we have the premiership and the three divisions below that.

Those are the four official divisions, but clubs could be categorised in a different way: first, those that are extremely rich; secondly, those that are prosperous; thirdly, those that are struggling to get by; and fourthly, those that are impoverished in both football and financial terms.

It is remarkable that such a situation exists in a country where football is our national sport, and in a nation where countless column inches are devoted to the world of football and the latest intricacies of a player's injury, cold or mood that day, and where football players internet sites receive tens of thousands of hits every day.

As a nation we are obsessed by football, yet we allow such enormous inequalities to permeate our national game. If that took place in society as a whole, the Government would be rightly punished and there would be a demand for firm and convincing action, but in the world of football it is unfortunately tolerated.

Several people and organisations deserve the blame or the responsibility—perhaps some would say the acclaim—for that condition. I do not lay the blame at the footballing feet of the current Minister for Sport or, indeed, those of the Prime Minister; it involves cultural and financial developments and a shift in power. Perhaps the condition has always existed, but it has become more acute. If we are not careful, it will become much worse in the years ahead.

Perhaps the European Commission can abolish transfer fees unconditionally and without compromise, but the first stage will involve abolishing transfer fees across national borders—so Forfar could still sell players to Rangers, and Bournemouth could sell them to Manchester United. That would still be a realistic proposition, but no one who knows anything about football truly believes that, if the European Commissions makes that alteration, the change will not quickly take place in the United Kingdom. As with Bosman, there will be court action. It will take only one court action to ensure that transfer fees will be swept away not only across European boundaries, but within domestic boundaries, and the lifeline for many clubs will be pulled away.

A minority of clubs have sufficient revenue, but the gate receipts are insufficient for the vast majority in all the leagues throughout the United Kingdom. Some clubs survive on very low attendances. Their merchandising is limited, as is their use of the worldwide web, unlike some larger clubs. The television money is concentrated, in any meaningful sense, in t he hands of a minority of clubs. The once-in-a-decade hope of drawing a big club in an FA cup or a Scottish cup competition is but a dream except for a fortunate few.

The transfer fee system offers those clubs a lifeline. Every few years they sell, perhaps reluctantly, some of their best or young and developing talent simply to pay the bills involved in stadium modernisation, to pay their players' salaries, to meet other overheads or perhaps to dedicate the money to youth development—an important issue. Nevertheless, that lifeline could be taken away and all those opportunities and funding chances could be lost.

In the central belt of Scotland, teams such as Falkirk, Airdrie and Hamilton have all struggled to survive recently. A Scottish local town football team was in difficulty and crying out for change and support, so it adopted a political platform to ensure that its voice was heard during a by-election. I do not want to make too many predictions, bet I dare say that that will become commonplace in England as well. Hamilton football club, with an average attendance of 400 or 500, got four times that number of votes in the Hamilton by-election, beating the Liberal Democrats into fifth place.

Mr. Bob Russell (Colchester)

I was supporting the hon. Gentleman until then.

Mr. Murphy

Perhaps clubs will beat other parties, such as the Conservative party, into fourth or fifth place at by-elections in other constituencies. Clubs such as Morton and Clydebank are homeless without funds and have an uncertain future. They may not even survive this season. The transfer fee system probably will not help them this season, but if their records and those of many other clubs now in difficulty are examined, it is obvious that one of the few things that has kept them alive was their ability to sell on some talent to the larger or neighbouring clubs. That ability will end.

Tomorrow evening, Dumbarton football club will open a new stadium. It will do so not because of a great cascade of wealth downwards in the game, but largely because of the efforts of my hon. Friend the Member for Dumbarton (Mr. McFall). I pay tribute to him for finding that money through the Football Trust and other sources. However, five or six clubs face real difficulties, and that number will multiply enormously if we are not careful and if we allow the European Commission to amend the rules unconditionally.

I say without a trace of joy or satisfaction, but with a feeling of terror for many clubs, that if the European Commission continues on its current path without compromise, it is conservatively put that perhaps a quarter of Scotland's clubs—10 clubs—and perhaps an equivalent fraction in England would go bankrupt or, if they were professional, go part-time. A quarter of our clubs would disappear from our leagues simply as a result of the European Commission making that change; I predict that that would happen within five years.

That is not the only problem with the proposed changes. The area that has not been talked about enough, and perhaps the greatest danger not only to our club system but to our national teams, is the fact that the abolition of transfer fees without age thresholds will undermine our national game by reducing our ability to grow our own domestic or indigenous talent. I suspect that the youth academies that are springing up in England as a condition of membership of the premiership, and I believe of the first division, would fade away. Where is the incentive to grow one's own talent when there is no transfer fee attached to that talent if it then moves on? Why not simply wait and buy the pre-prepared article—the fully developed player—without donating millions of pounds to a youth academy?

The Scottish clubs have been much slower. Some have begun to put together youth academies, but if they have not set up a production line to grow their own talent under a system of transfer fees, why would they ever do it? What sense would it make to introduce youth academies and football learning academies when there is no transfer fee at the end of it if, after four or five years, that youth moves on free of charge?

If we allow that system to develop, our national teams will no longer pick their teams from among the top domestic leagues; perhaps they already do not. The Scotland manager Craig Brown is doing an excellent job, but he would be forced to pick players from the bottom end of the English premiership and tie bottom end of the Scottish premier league. Teams that are struggling against relegation would sometimes provide the core of the Scottish national football team. I fear that there would be a similar situation in England, where the coach would import players from the lower leagues at the bottom end of the English premiership.

We must introduce a threshold whereby clubs receive a transfer fee or substantial financial compensation for losing players, perhaps under the age of 23. There can be a debate about the exact threshold, but there must be a threshold, so that the club is rewarded for investing in its future and the future of young talent in and around its area.

Some foreign imports have contributed greatly to our national game, but unfortunately too many of them are mediocre players, in what is often now a mediocre league. The Scottish football league is not, colloquially, the Scots believe, something to be proud of. It is made up of at least three or four divisions. There are two teams at the top. Fortunately for me, they have started to take it in turns to win the league, but for a period one team used to win the league. Throughout the 1960s and 1970s it was one half of Glasgow, and throughout the 1980s and 1990s it was the other half. That is unhealthy. I fear that a similar situation is developing in the English premiership, with Manchester United winning more often than not. The national teams will be undermined enormously.

Let us look ahead to the footballing environment that we shall have in the United Kingdom and throughout Europe if transfer fees are abolished. Forty years ago, the idea that a football player would command a transfer fee of £1 million would have seemed crazy. Only five or six years ago, the idea that a player would now regularly command an annual salary of £1 million would have seemed absurd. If there is increasing individualisation and a breakdown of team spirit, with very few superstars moving between clubs, we shall be in a very difficult situation.

The abolition of transfer fees will work to the benefit of a very few star players who, I fear—this may be controversial—will move from team to team throughout the season. They will team up with their agent—who will make huge amounts of cash even though transfer fees have been abolished—and their sponsor, and shop around. They will shop around and European stars who, perhaps, are coming to the end of their careers, will sign for one or two weeks in big city clubs, get a share of merchandising and the television deal and then move on. That is not healthy. In future, we will see a period when individual stars will copyright their own names, images and everything about themselves so that they can attract even more funding.

As parliamentary spokesman for the players' union in Scotland, surely I should welcome players becoming more prosperous. However, prosperity will be in the hands of the few, not the many. The majority of football players will have short-term contracts, if any at all. Teams will have no transfer fees and clubs will know that those players will command nothing, so there is no reason at all to tie them into the system.

To wind up, some of those trends already exist and many of them are, perhaps, unstoppable. However, the proposed unconditional, uncompromising change by the European Commission will hasten the downfall of many of our clubs. If we think of the rich heritage across our continent, the famous and historic matches and brilliant individual flair and skill, and, in years to come, ask our own children which football player contributed most to European football and had the greatest lasting effect on our national game and the European game, sadly, the answer will be a gentleman called Bosman—not the great Platini or any other player. If we do not see meaningful change at this late hour in the European Commission's proposal, Bosman II will run him close as the second best known football player ever to play on our continent.

10.16 pm
The Minister for Sport (Kate Hoey)

First, may I congratulate my hon. Friend the Member for Eastwood (Mr. Murphy) on securing a debate on the European Commission's present review of the football transfer system? I feel that the players' union in Scotland is very lucky indeed to have such a fine spokesman in the House. He has shown his deep concern for football from top to bottom and has represented strongly the views of many people in the country.

The debate is of great interest. It has also been of great interest in Scotland, as my hon. Friend is aware; the Scottish Parliament itself has taken up the issue, which concerns everyone in football and all of those with an interest in its well-being. It is an issue of some complexity and, partly because of that, recent press comment has created a rather misleading impression of the progress of negotiations and, indeed, the Government's role in the matter. I am happy to set out the present position and discuss the Government's aims for the future of the transfer system and the steps that we are taking with football to achieve a satisfactory outcome.

First, we must consider the reasons for the Commission's present review, which is a prerequisite for any informed discussion of the issue. It has been said that the Commission seeks nothing less than the destruction of the transfer system. The Government's understanding is that that is not the case. The Commission is legally obliged to investigate complaints made to it. In this case, the present review is a result of a complaint made to it some time ago by a Belgian trade union against FIFA's transfer regulations and of complaints from two clubs in the European Union.

One complaint held that the present regulations restrict competition in the football market by concentrating sporting power in the hands of a small number of clubs that can afford inflated transfer fees for top players. It can be argued that the grounds of that concern are doubtful in the light of football's present economic structure. Player salaries may be thought to be more relevant. Whatever the merits, the Commission has raised legitimate concerns, including the possible effects of the remaining restrictions on players' freedom of movement following the important Bosman ruling.

Following the Commission's statement of objections in 1998, FIFA was asked to make proposals for revising the regulations to address the concerns that arose from the original complaint. However, it took rather a long time to do that. The Commission is proceeding under an established administrative procedure and, to the Government's knowledge, its agenda is no wider than that. I should add that the Commission is currently considering only international transfer regulations—player moves between European Economic Area countries. However, as my hon. Friend said, it is possible, but by no means certain, that domestic transfer systems would have to be revised to reflect any reform of international regulations, as happened after the Bosman ruling. Whatever form it takes, reform of the transfer system will come from football itself. The Commission's role is to ensure that any new framework is compatible with European Union law and capable of withstanding any subsequent legal challenges.

There have been calls recently for the Government to attempt to influence the negotiations by pursuing the matter with the Governments of other member states or by some unspecified means. That is very understandable because the legal process in the European Union is often cumbersome and unexciting. However, it is important to realise that there are no easy answers in the matter and there are limits to what may reasonably be achieved. Having said that, the Government have been active throughout not only in helping football to achieve a solution, but in seeking to mobilise support in other European Union countries for the beneficial aspects of the current system and of football's reform proposals.

Given the importance of football in our sporting culture, it is natural that the Government should have our own views on the future of the transfer system. We wish to see a framework that continues to support the smaller clubs which encourage the development of young players, promotes competition between clubs and affords stability to the sport. The Prime Minister has made that clear on a number of occasions, particularly in a very important joint statement in September with the German Chancellor. However, that does m t mean that we seek to defend every aspect of the current system, because the system has weaknesses.

The current framework does indeed perform a role in supporting smaller clubs. It also encourages them to develop talent. However, that support and encouragement are both limited and arbitrary. They are limited as the amounts paid by the premier league to football league clubs are greatly exceeded by the amounts that the premier league clubs pay to each other and by the amounts paid for overseas players. Additionally, much of the trickle-down effect is offset by transfer money going back from the football league to the premier league.

The support and encouragement are arbitrary as the benefits derived by smaller clubs are neither targeted at need nor reflect the true costs of developing young players. When Les Ferdinand joined Tottenham Hotspur from Newcastle United, in 1997, his first club, Hayes—I am very pleased to see my hon. Friend the Member for Hayes and Harlington (Mr. McDonnell) in the Chamber—received £800,000 under a sell-on clause. Hayes did well and invested its wind 'all in a new stadium. However, that example is not typical. Many struggling clubs receive next to nothing for players whom they have developed. We would like to see a system in which clubs are fairly recompensed for identifying and bringing on talent.

I am glad to say that the football authorities themselves recognise that the current system is not perfect. However, the sport recognises as we do that the current transfer framework is the best known means of achieving the benefits that we seek.

The Government are therefore helping football to work towards a new system that will be acceptable to the Commission while retaining the beneficial effects of the current arrangements. Under the proposals put to the Commission by the joint FIFA-UEFA task force, on 31 October, clubs developing players will be guaranteed a fair level of recompense for losing promising talent.

Support for smaller clubs, however, forms only one part of the negotiations. Many observers are more concerned by the suggestion that players should be able to break contracts if their teams are relegated, if they are not selected for matches or if they disagree on tactics. That proposal came from FIFA, but has now been withdrawn. The Government share football's concern about the possible effects of that proposal on the stability of domestic and international competitions.

We have made plain our concerns to football, but it is right that all sports should run themselves and it is for the football authorities to reform their transfer system. The Government's proper role is to help that process and to ensure that the interests of all part; of the sport are fully considered by the sport's international governing bodies and by the Commission.

To that end, we have had three roles in the negotiations. First, through the United Kingdom football authorities we have actively encouraged the FIFA-UEFA working group to come up with sensible proposals that meet some of the Commission's concerns while achieving a solution that meets the needs of the whole sport It is well known that the international governing bodies were for a time unable to agree a common approach. After a couple of weeks of uncertainty, the Commission is once again discussing the 31 October proposals with the taskforce, starting with a meeting tomorrow. The Government are receiving regular reports of the progress of the negotiations, and we shall continue to offer every possible assistance through our national football authorities.

Secondly, we have sought to encourage football to speak with one voice. The Football Association and the premier league are taking the lead in negotiations. The Scottish FA has been kept fully info med of developments and is represented at the regular UEFA Euro leagues meeting. My Department has also remained in close touch with the other devolved Administrations on the issue.

Thirdly, we have tried to ensure that the Commission acknowledges the special characteristics of sport. That was the aim of the declaration on sport, which the Government fully supported, at the Nice summit. The declaration expressed the belief of European Union states that sport is different from other industries, and that the Commission should take account of that, not least when considering the transfer issue. The Nice declaration included a specific paragraph on that issue. That shows how seriously Governments in the European Union are taking the issue. We are confident that the Commission has taken account of that message as negotiations have continued.

We have remained close to the issue, and have offered every assistance to football when appropriate and potentially productive. UEFA and FIFA will pick up the negotiations with the Commission again, and I believe that there are grounds for cautious optimism.

It is entirely possible that we will and up with a transfer system that, although rather different from the present arrangements, has some significant advantages over current practice.

Mr. Bob Russell

In view of the serious points that the hon. Member for Eastwood (Mr. Murphy) made in his powerful speech, would the Government intervene if there was a possibility of smaller clubs going to the wall?

Kate Hoey

The Government already intervene—in a way in which a Government who do not run the sport can do that. We are being as supportive and helpful as possible. We are also working with our European partners, who share our anxiety. Their football bodies have different views, but most agree that the Commission's initial proposals were not acceptable.

My hon. Friend the Member for Eastwood and other hon. Members will remember the anxieties about the Bosman ruling. Contrary to fears expressed at the time, it did not destroy football. Although the ruling appears to have helped to usher in the present wage spiral for top footballers, much of that is down to the huge amounts of television money. The inflationary transfer market has been encouraged by agents who stand to make vast amounts of money from television. The football governing bodies pay great attention to the Commission's actions, but they and FIFA must do more to stop the clear abuses of the system by agents. All the factors that I have mentioned combine to shift the power in football from the grass roots upwards, as my hon. Friend said.

The ability to change clubs without a fee when out of contract, which the Bosman ruling granted, has sometimes been to the advantage of many players. Stuart Pearce's current renaissance at West Ham is arguably a demonstration of that. A fee may well have dissuaded his new club from rescuing him from Newcastle United's reserve team.

We hope that the Commission's review will have a satisfactory outcome, and that the flexibility that football has long shown will enable it to adapt to any new conditions. I can assure hon. Members, especially my hon. Friend the Member for Eastwood, that the Government will continue to help football to work towards a successful conclusion to the present negotiations.

I thank my hon. Friend for bringing the issue to the House's attention. It is clear that hon. Members from all parties believe that, whatever the ultimate system, it must protect the small clubs, safeguard talent and, as my hon. Friend rightly said, encourage home-grown talent. That is the future of our football.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes past Ten o'clock.