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Football Clubs

Volume 404: debated on Thursday 8 May 2003

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5.

What his policy is on the Inland Revenue's dealings with professional football clubs in administration. [111886]

When a football club, or any other business, goes into administration, the Inland Revenue must act in accordance with insolvency law, and will seek to recover no more and no less than that to which it is legally entitled.

I declare an interest as the unpaid chairman of Supporters Direct. The Minister will know that the collapse of ITV Digital last year left many of the great names of English football on the brink of collapse. I thank him for the Inland Revenue's general approach of rescuing those clubs, rather than closing them down, but I draw his attention to the inconsistency in some of the deals struck in respect of unpaid tax. For example, the business consortium at Leicester City paid 10p in the pound, yet the not-for-profit supporters trust at York City paid more than 60p. Will he agree to meet MPs from the all-party group on football to discuss whether a standard approach could be adopted towards unpaid tax, to ensure fair competition in the league? In particular, will he look at a special regime for not-for-profit supporters trusts, given the community benefits that they can bring?

The Inland Revenue does indeed have a good track record in helping some of our football clubs out of administration, and has been party to agreements in 13 cases in the past couple of years. It is serious about trying to secure a viable future for such clubs, at the same time as fulfilling its duty towards the taxpayer. So it has a consistent policy and approach, but every situation in every business is different: the assets, liabilities, prospects and potential investors are all different, so it is not surprising that the agreements struck are different. Notwithstanding those remarks, my right hon. Friend the Paymaster General will indeed meet my hon. Friend and his colleagues in the all-party group.

May I congratulate the Government on reaching an agreement with the administrator to allow York City football club to be taken out of administration? The club was given a tax reduction of about £60,000, which made the difference between its having a future and not having one. In particular. I thank the Minister for responding so quickly when I wrote to her asking for the quick decision that was needed. As a result of that quick decision, she is seen as a good supporter of York City, and I give her colleague who is answering—he is a good Yorkshire lad—the opportunity to wish the club well for this season, and for the future seasons in which it will play because of this decision.

For the avoidance of doubt, the Minister whom my hon. Friend refers to is not me but my right hon. Friend the Paymaster General. The Paymaster General has indeed worked closely with the Inland Revenue. I welcome my hon. Friend's remarks, and the support given and the part played by the Revenue in reaching this latest agreement relating to the succession of problems that football clubs have experienced. We wish York City well for the future now that it has come out of administration, along with the other clubs that are suffering similar financial difficulties. The pressures are indeed severe in the lower divisions.