I am pleased to welcome so many interested colleagues to the debate. The fact that it is taking place on the eve of the World cup is pure coincidence. For the record I shall support any British team in the championship. [Hon Members: “Shame!”] It is a no-win situation, but I shall genuinely support England. The timing of the debate is fortuitous, given that there would be no major world-class events such as the World cup if communities throughout the world did not nurture, encourage, coach and promote football in schools and communities, from the minute that a child can kick a ball. The future of all sport lies at the grass roots. Years ago, our greatest players played football morning, noon and night; they lived, breathed and ate the game. To play for their school team was every player’s dream; those who were good enough or were spotted by a scout could rise up the ranks, but often just getting a game was all important.

I am secretary of the all-party group on Scottish football. When Walter Smith came to speak to us recently, he said that the problem facing us nowadays in encouraging youngsters to play the game and gain the attendant health benefits comes from Nintendo, PlayStation, computers and new technology, in which children seem much more interested, whereas previously, whenever it was light, they had the ball at their feet and were out playing. We need to encourage youngsters to play healthy sports.

There lies my concern. There are 164 junior football clubs registered in Scotland, but most are or will shortly be facing a financial crisis, which could lead to the clubs folding. That has arisen as a consequence of a tax burden being placed on the clubs by the Inland Revenue—one that they have never before had to deal with. From the mid-1960s until the 2003-04 season there was an exemption for such clubs, thanks largely to Tam Dalyell, who fought for it.

Tam Dalyell, as my hon. Friend knows, was one of my predecessors. When, in about 1966, he introduced that change, there were junior clubs in Bathgate, Broxburn, Fauldhouse, Pumpherston, West Calder, Blackburn, Winchburgh, Armadale, Linlithgow and Stoneyburn, and it is to his credit that in this very season Bathgate Thistle Juniors got to the Scottish junior cup final, and Broxburn won the east of Scotland league. It was Tam’s initiative that kept those clubs going very successfully.

That was a very helpful contribution. Tam Dalyell was a leading light in the protection of junior football. I hope that we can follow his good work and get concessions from the Paymaster General.

I congratulate my hon. Friend on securing this important debate. Before she moves on from talking about Scotland’s national coach, Walter Smith, I remind her that at that same meeting he made it clear that although professional football in Scotland should be allowed to stand on its own two feet, the junior and amateur games need help from Government sources. He suggested that investment was needed in the lower-level football leagues, if we were to have a successful national side, as England has.

That is a key point. This debate is about the fact that resources are being taken from clubs, when what is needed is far more investment. I agree with my hon. Friend and Walter Smith.

The Inland Revenue operated a concession that allowed junior football clubs to submit retrospectively informal returns detailing payments to players and coaching staff, giving their national insurance numbers. Clubs understood that any tax due to the Inland Revenue was then the responsibility of the players themselves. However, from the 2003-04 season, junior football clubs have had dealings with the Inland Revenue over the introduction of direct taxation for all payments to players and coaching staff. The Inland Revenue has determined that junior clubs are employers and, as such, are responsible for operating a pay-as-you-earn scheme. That is the crux of the matter. No one disputes that players should pay tax on what they earn, but we should not make clubs enforce the pay-as-you-earn scheme.

Since that time, to make matters even worse, the Inland Revenue has written to some junior clubs in Scotland seeking back-dated revenue, in some cases up to several thousand pounds. With the best will in the world, I would have to say that the measures have tackitty bits written all over them. The junior football clubs rely heavily on local fundraising initiatives such as running totes or selling scratchcards simply to stay afloat. Unlike senior football clubs, the small junior clubs do not generate significant income from home games—for example, in my constituency, Musselburgh Athletic averages about 80 spectators to a home game. None the less, that is a big part of the community. Everyone loves the team. It is no great shakes—it is not your Ibrox, your Hampden or even your Parkhead—but it is an important part of the community. When 80 people go to watch a game and there are 22 players at the park, those people are not doing some of the other things that youngsters do. They are not engaging in antisocial behaviour or hanging around on street corners. It is clubs like those that are being hit for money and, without wishing to sound melodramatic, that will put them under serious threat.

At a recent meeting in my constituency, which has four registered junior teams—Dunbar United, Tranent Juniors, Musselburgh Athletic, which I have mentioned, and Haddington Athletic—people were up in arms about what they saw as the decimation of junior football clubs by the heavy-boot tactics of the Inland Revenue. To illustrate how ludicrous the situation is, Tranent Juniors is struggling even to find pitches to play on. It is trying to find out whether it can use school pitches, even though it is a successful junior football team, which could be the future of Scottish football—and we certainly need a future for Scottish football. Representatives of teams in my constituency, as well as neighbouring Midlothian—my hon. Friend the Member for Midlothian (Mr. Hamilton), who could not be here today, would want to express the same concerns as I have—fear that the demands being made on their clubs will cause them to fold.

The clubs are run by local individuals who volunteer to give up their time and effort to provide a valuable resource to their communities. My fear is that many of those unpaid volunteers, who are now expected to sort out their players’ tax affairs and become financial experts and form-filling anoraks with a nearly degree-level understanding of PAYE, will walk away. Who could blame them? They are ordinary folk, some of whom are retired, who give of themselves, not for thanks and accolades, but certainly not for worry and the sleepless nights that the new burdens will place on them.

I met representatives of Pumpherston junior football club, which is run much as my hon. Friend has described. The club secretary made exactly that point: if he must now administer the taxation system he will walk away. If that happens, the club will fold.

That is another helpful intervention. My hon. Friend is correct. I do not exaggerate when I say that in my meeting with representatives of some of the small junior clubs I heard scary stories such as they, as trustees of the clubs, being liable if the money could not be paid. Their wives—it is normally men who do the volunteer jobs in question—ask, “What is going to happen? They are not going to come and take things from our house. Are we going to be liable?” I hope to goodness that the position is not so serious, but those are the rumblings of concern that are being heard. Why should such people burden themselves in that way when all that they are doing is voluntary work to keep football going in their communities, out of a love for the game?

Clubs are even being penalised for incorrectly or incompletely filling out returns. How many of us have had people come to our surgeries complaining about not being able to fill in forms? How many of us have had problems doing so? It is not the easiest thing in the world. Those people are volunteers and are not trained in administering such schemes. Yet their clubs are penalised if they do it incompletely or incorrectly.

Everyone understands that people who earn enough should pay tax, and I do not dispute that, as I said earlier. However, I do dispute that we should be trying to class as employers non-profit-making clubs and those who represent them—the officials, committee members or whatever we might call them. As recently as last week, the Scottish Junior Football Association expressed concerns and said that it could determine from its annual returns that it was losing a significant number of treasurers and secretaries from its clubs. Another of its concerns is that clubs will be expected, as employers, to pay players the national minimum wage. If clubs are forced down that route, they will incur wage bills averaging £1,000 a week as a result of players training two nights a week and playing one game on a Saturday. That is what will happen if we go down that ridiculous route.

As we all know, players in junior clubs are not in it to earn money. That might be true at some of the big clubs, of which there are a few in Scotland, where the bigger, better players get more money. In the main, however, we are talking about people who earn only the amount that it costs them to get to the ground. In my constituency, for example, Dunbar United pays travelling expenses of £3 per session and a win bonus of £6 per game. That is the level that we are talking about—it is hardly the thousands of pounds paid out by the big teams such as Chelsea and Rangers. [Interruption.] I nearly said, “and Celtic.” Like the volunteers who run the clubs, the players give up time with their families to train a few nights a week and they give up their Saturday afternoons. They play for the love of the game and because they enjoy the opportunity to stay fit and active. All that they expect, unless they can command the big bucks, is that they should not be out of pocket as a result of travelling to and from training and games.

If clubs are liable for PAYE and national insurance contributions and are potentially required to pay the national minimum wage, many of them will close. The clubs provide a valued community resource and generate pride in the communities that they represent. At a time when we are encouraging healthy lifestyles and tackling antisocial behaviour, and when this country will host the Olympic games and Glasgow will, I hope, host the Commonwealth games, it is ludicrous that we should be trying to cripple the very heart of our football potential.

I have had messages of support from the Professional Footballers Association, which is as appalled as I am about the threat to our junior football teams. I have been contacted by Tony Higgins, Jackie McNamara and Fraser Wishart, as well by Tom Johnston from the Scottish Junior Football Association.

Has my hon. Friend investigated the equivalents in England? I have always wondered how academies in some of the clubs fiddle things, because they give payments to some of the parents of the young people who play for them, but are not subjected to the same tax vigilance as clubs in Scotland. Is there an equivalent to junior football in England?

indicated assent.

I see the Paymaster General agreeing, so perhaps she will tell us.

I thank my hon. Friend for that unhelpful contribution. Of course I agree that we should clamp down where we can determine that there is fiddling, that backhanders are being given and that players are being paid over-the-top sums. These scams go on in all walks of life—they certainly go on in junior football and, as my hon. Friend said, in England—and we should clamp down on them because they do not help the future of Scottish junior football clubs. However, we should not launch a carpet attack on all clubs.

I can certainly help my hon. Friend on the point about England, Wales and Northern Ireland. We are talking about amateur and semi-professional clubs, not youth clubs or juniors. In England, Northern Ireland and Wales, clubs operate PAYE when they start paying their players profits and substantial amounts. They have never had the concession that applies in Scotland.

I thank my right hon. Friend for that helpful comment.

Our right hon. Friend has made a helpful contribution, because she has identified the difference between semi-professional and amateur status. The junior game in Scotland is amateur and always has been.

rose—

I give way to my right hon. Friend.

The Scottish Junior Football Association website says:

“‘Junior football’ in Scotland does not refer to youth matches. There are no age restrictions in junior football and the term probably originated as a reference to the grade of the clubs, rather than the players.”

The top clubs were called “senior”, so the next grade down was called “junior”, and the article goes on to explain that clubs can be amateur and semi-professional.

That is quite misleading. I have not read the article on the website, but representatives from the association say that we are talking about amateurs.

There seems to be some confusion. Junior football in Scotland is not senior football. Senior football is professional and people get paid, but many of the players in junior football —I would say more than 50 per cent. of them—do not get paid at all. However, it is not the payment that is causing the problem; it is the tax burden and the administration involved.

I thank my hon. Friend for that, because I want to return to a point that I have perhaps not made as effectively as I should have. If players earn enough, they should pay tax—nobody is arguing about that. However, we do not want to charge volunteers—ordinary members of the community who enjoy the game and run the clubs—with the onerous tax of implementing a pay-as-you-earn-scheme when they do not have the expertise to do that. If enough money is being earned, people should be hit, and rightly so, but there is a vast difference between junior football in England, Wales and Northern Ireland and in Scotland. In Scotland, it is non-profit-making and amateur.

When the Paymaster General winds up, perhaps it would be helpful if she explained clearly how the system works in England, Wales and Northern Ireland. How is it administered? Who pays for it? Who is responsible for it? What are the penalties—excuse the pun—if a club does not carry out its responsibilities?

I thank my hon. Friend, who is the chair of the all-party group on Scottish football. He has stood shoulder to shoulder with me in this debate, and I appreciate that.

I thank all hon. Members for their interventions, but I want to finish with some words of warning. Where will this process end? Will the same measures be introduced in rugby in Scotland, in athletics, in cricket, in hockey or in netball? We are talking about non-profit-making clubs, and what is good for the goose, as they say, is good for the gander.

It is a great privilege to follow my hon. Friend the Member for East Lothian (Anne Moffat), who is a good and long-standing friend.

If Martians decide to invade this world in the near future, they will wonder where we all are. Most of us will be sitting watching television, and a lucky few will be over in Germany, being looked after by McDonald’s, although I will not be one of them, thank God. Things have not always been this way, and mass coverage on television and the influence of big money and Russian billionaires have obviously raised the profile of football.

The other day, I was thinking about what things were like when I was younger. The last time the World cup was held in Germany was during England’s sabbatical from the competition, and the British Isles representative was the country of my hon. Friend the Member for East Lothian and most of the hon. Members here today. There were some real stars in that squad, such as Jim Stewart, Donald Ford and Tommy Allan. Who can forget them? Who can remember them? Of course, there was also Kenny Dalglish, Danny McGrain and Jim Holton—six foot two, eyes of blue. There was Billy Bremner, the man we all love to hate, and Jimmy Johnstone, the man we all love to love. Sadly, as well as being great footballers, the last three have one thing common—they are no longer with us, which is sad for us.

In 1974, I was not the man you see before you now, Mr. Chope. I was 20—that was my age, not my weight—and I was playing local football, as were hundreds of thousands of other people, just as they are now. Then, as now, the world of football seen on our screens was not the real world of football. Then, that was merely pub and club football and some school football. Today’s world is different and the situation is different.

Will my hon. Friend give way?

Certainly, but do not mention my weight.

I am grateful to my hon. Friend. He mentions the 1974 Scottish team. Is he aware that players such as Dalglish, McGrain and Johnstone all came through the junior ranks?

I was not aware of that, but I am not surprised, because that is the culture in Scotland, and where I come from: that is how we attracted people. Football in the British isles is suffering today because of the demise of that and because big money is bringing in players from abroad and not encouraging junior footballers to come through. That is a big mistake for us all.

In my part of the world, we have junior football—it is junior in the sense of age groups—and it is booming. In Blaydon, we have a football team that attracts 270 players—boys and girls. People there are even in the process of setting up a disabled team, which is something that we would never even have thought about 30 years ago. The team operates out of a portakabin, and while the children are training and playing football, their grandmothers take it over and it becomes a social centre for them. People who do not know each other and would never have met but for their children’s interest in football get together. It is part of the community, and that is what it is all about. It becomes a social event.

We have campaigns going from that football club. We are running a big campaign to try to get the Health Department to pay for people who need to wear glasses when they take part in sport. We should surely encourage that. A local amateur football team in our area, Whickham FC, recently won the Durham senior challenge cup—their first win for 25 years, since they won the FA vase. They were the first second division team to win the cup, and they beat first division opponents to do it. They are an integral part of the community, and good news for the community.

Another team, Birtley Town juniors, have just been awarded a charter standard by the FA and quite a lot of money from both the FA and the local council, because they want the team to develop and go forward. They realise the integral part that football plays in our communities, much more than in the past when we had a more cohesive society. That is particularly true in the area where I come from, where there were miners’ welfares and people grew up, played, lived and worked together. A lot of that has been changed, but the football clubs have been maintained and are a key part of our society. We should do everything possible to keep them going. The development in football in the past few years is good news for the whole community.

We have to ask where the joined-up thinking is in the proposal, given that we want to encourage people to engage in sport. We know that 30 years ago people went to play football and then got drunk. That was part and parcel of the situation: it was a man’s thing. Football is no longer like that: it is a community event that involves people in a very different way.

My hon. Friend the Member for East Lothian said that if children are involved in sport they probably will not be involved in antisocial behaviour, or if they are, it will be for a much more limited time. That is a crucial part of why the police in our area are involved in encouraging sport. Something else that happens now, which would never have happened when I was a young man, is that boys and girls play football together. We now have people from different racial groups coming together, and there is interaction with people with disabilities. We talk and talk in this House about encouraging people to involve themselves in diversity. This is real diversity: it is real people getting together, doing real things together and realising that they are living on the same planet.

When I played football, the engagement that we had with the local council was to ask how much rent we had to pay for a football field, and that was the end of it. Now there is real involvement with the development of community leisure facilities, environmental discussions and development as a whole. There is a plan to take over school fields in the area where I live, which has been strongly resisted by local people because it is all about building houses. The school fields should be maintained, used and developed for sporting facilities. The football clubs are right in there arguing that case and using links with organisations such as Sport England to ensure that their voices are listened to. To promote interest in sport, we should be talking about tax breaks, not tax burdens. We should be looking for incentives, not disincentives, and we should be finding support, not putting obstacles in the way. I understand the reality that PAYE must be paid, but I urge it on the Minister that if there is any way of relieving the burden on these clubs, it can only be for the good of the community.

I fear that with such a specific topic up for debate today, you may hear the same speech, or variations on it, several times, Mr. Chope. I apologise in advance if that is the case.

I start by congratulating my hon. Friend the Member for East Lothian (Anne Moffat) on securing this debate. I know that she takes an active local interest in this issue. She should be praised for the hard work she has done locally, and the fine way in which she laid out the arguments to start the debate.

As a comparatively newly elected MP, I imagine that I come fairly late to the issue. My colleagues from around Scotland, notably my hon. Friend the Member for Central Ayrshire (Mr. Donohoe), who unfortunately is not here today, have been campaigning on this issue since the Revenue announced its intention to change the rules for Scottish junior football about four years ago.

Despite this being a relatively long-standing issue, the debate is especially important and comes at an appropriate time. Junior football clubs across Scotland have just hung up their boots for the summer. The close season provides the opportunity for many of the unpaid volunteers who do such good work in those clubs to find the time and expertise to operate a PAYE system while trying to find ways to keep their clubs running with the extra burden that has been placed on them. The debate comes only a couple of months after tranche 2 of the Revenue’s programme to get PAYE established throughout Scottish junior football.

My constituency has five junior football clubs, all of which are part of a proud tradition within Dundee. Despite being the new kids on the block, Downfield FC are celebrating their centenary this year. Dundee Violet were formed in 1883, and are therefore the oldest club, closely followed by what must be the most successful club in the region, Lochee United, who managed to win 17 honours between 1977 and 1987. That feat has not been repeated in recent years, but it will not be easily forgotten. Indeed, last year Lochee managed to resurrect some of that fighting spirit and reached the final of the Scottish cup. My favourite team in Dundee, West—Lochee Harp—were formed in 1904, and Dundee North End make up Dundee, West’s complement.

In Perthshire, there are teams such as Jeanfield Swifts, Bankfoot, Kinnoull. Up in Angus, there are clubs such as Forfar Albion, Forfar West End, Brechin Vics, Arbroath Vics. Coming back down into Dundee, East, Carnoustie have been one of the most successful clubs in recent years, and were Scottish cup finalists a couple of years ago. Coming back into Dundee, there are Broughty Athletic and East Craigie. Unfortunately, my favourite team from Dundee, East—St. Joseph’s—went defunct a few years ago because of financial considerations. Moving across the Tay bridge into Fife and the constituency of the leader of the Liberal Democrats, the right hon. and learned Member for North-East Fife (Sir Menzies Campbell), teams include Tayport, who have been probably the most successful team in Scotland in recent years at junior level. I think they have won the Scottish cup three times in the past five seasons. Moving through Fife into the Chancellor’s constituency, there are clubs such as Lochgelly Albert, Lochore Welfare and Kelty Hearts.

Throughout the Tayside and Fife area, junior football clubs are at the heart of every community.

My hon. Friend makes a good point. The Chancellor was heavily involved in saving the Raith Rovers senior team, which he strongly supports, organising financial assistance and suchlike. It would be a bit silly and contradictory for him to save the senior team but let the junior teams go under.

I thank my hon. Friend for that intervention. He makes a valid point. It would indeed be sad if the junior teams in the Chancellor’s constituency were to go to the wall because of tax considerations.

I could go on with my geographical tour of Scotland, but suffice it to say that across the Forth bridge there are more junior clubs in the constituencies of my right hon. and hon. Friends the Secretary of State for Trade and Industry, the Deputy Leader of the House, the Home Secretary, the Secretary of State for Scotland and for Transport, and the Secretary of State for Defence. Junior football clubs are at the heart of the community throughout Scotland, and play a vital part in those communities.

The clubs in Dundee, West boast crowds of somewhere between 50 and 100 for their home games, but beyond that they play a vital role in the communities in which they are based. Many of those clubs run youth teams. In Dundee, I can certainly attest to the contribution that they make to the fabric of the communities in which they are based. They have been there for over 100 years, and have overcome many adversities, but the new tax regime slowly being implemented seems to be posing one of the biggest threats yet. It would be a real shame if that threat finally became insurmountable for some of them.

There are many competing views as to why the Revenue started its actions back in 2002. Some believe that a hotshot taxman was reading the newspapers and noticed big sponsorships that had been achieved by a couple of teams, and figured that they deserved attention. Other people suspect that the Revenue was getting upset about the failure of some clubs to send in their informal tax returns and that it was therefore about time to revisit the whole system.

My hon. Friend touches on an interesting correlation between the success of Scots politicians in the English Parliament in reaching high places and the preponderance of junior clubs in their areas. Does he think that if the junior clubs were to disappear there would be fewer Scots in high places in the English Government?

I could not possibly comment on that. This is the British Parliament and every MP is allowed to vote on every issue regardless of their constituency.

As I suggested, this issue stems from the decision of one player on a fairly large retainer from a bigger club who claimed that he did not have to sort out his tax receipts as his club should do it for him. Whatever the reason, it seems that big assumptions have been made on the experience of a very limited set of teams, which has led to a regrettable situation.

The new PAYE system, which many clubs are expected to introduce, replaces the informal returns system negotiated for junior football in the 1960s by Tam Dalyell, the former Member of Parliament for Linlithgow. That system allowed clubs simply to submit an informal return to the Inland Revenue each year, on which would be a full list of all the moneys that had been paid to players over the past year, allowing the Revenue to ensure that the players’ tax returns were correct and thus ensure that it collected all the tax that was due to it. It should be emphasised that the aim of the informal agreement was not for the clubs to avoid tax altogether, but to ease the burden on the junior football clubs and to place it on the individual players and the Revenue. I like to think that that was partially in recognition of the unique role that junior football plays in Scotland and the desire in the 1960s to help to maintain it.

Phase one of the PAYE introduction tended to affect clubs that had social clubs attached to them and were more or less of a size that they could handle a PAYE system without its destroying the club. After all, some of the social clubs already employed staff and therefore applied PAYE to them. It caused some problems, although not as many as have been caused by the second tranche of the reforms.

I want to discuss three key areas. First, I should like to emphasise my belief that junior football clubs are not “employers” as any reasonable person would understand the term, and should not be treated as such. Secondly, where the tax regulations have been introduced, it has been done in a manner that has promoted rather than reduced confusion, and they have often been perceived as incredibly unfair. Thirdly, I should like to address the effect that the new tax regime is having on the volunteers, who are crucial to the running of the clubs.

The first problem is simply the mistaken belief that the clubs are employers. Under the strict letter of the law—I am talking about the Income and Corporation Taxes Act 1988—it is entirely possible that junior football clubs that pay their staff “emoluments”, which to most of us means bonuses, should operate a PAYE system in the payment of them. I can therefore see why, under the strict letter of the law, the Revenue has decided to take the position it is taking. However, it has a long history of working out special exemptions for certain areas in order to make an inflexible tax system just a little more flexible—in fact, that is exactly how the original arrangement came about. These exemptions and arrangements are designed to promote fairness in the tax system and to ensure that the burden of taxation and PAYE does not fall disproportionately on some people.

The clubs do not operate as normal employers would and therefore should not be treated as employers by the tax system. I cannot think of another “employer” in which the entire board running the company—if we are to call clubs that now—get paid nothing at all and give up all their time for free. That does not sound like an employer to me. In fact, the more we examine the clubs and how they operate, the more they sound like exactly what they are: a collection of people who care about their local community and their local football team enough to give up many hours to support the clubs and their community. We are talking about a bunch of dedicated people who do not gain financially from their enterprise and who are not necessarily cut out to be finance directors or managing directors.

Recently, I received an email from a secretary at one of the junior football clubs in the constituency of my hon. Friend the Member for Midlothian (Mr. Hamilton)—unfortunately, he cannot be here today—who summed things up well:

“Most of the guys who involve themselves in junior football clubs do it for the love of their local team. They are not rocket scientists but what they lack in brains they more than make up for with enthusiasm and the ability to gather funds locally.”

In addition to that, we need to be honest when we consider the sort of wages that are paid to the players at junior football clubs. I spoke to different clubs, and I was constantly struck by the low level of the payments that were causing all this trouble. Admittedly some players were given signing-on fees ranging from £250 to £1,000, but that aside, the so-called “wages” were small sums such as £5 or £10 for training sessions and away games. Again, it does not sound as if we are talking about the sort of employer that the Revenue would usually go after; in fact, it does not sound to me like an employer at all.

As my hon. Friend will know from his background as a trade union official, employers will sometimes be involved in cases where people are made compulsorily redundant or are unfairly dismissed. Has he known of a case of a junior football player going to a tribunal for unfair dismissal?

I thank my hon. Friend for that intervention. I am unaware of any player going to a tribunal but I am sure that a few would regard themselves as being unfairly dismissed; in football terms, that is called a “free transfer”. [Hon. Members: “On your bike”] Yes.

The decision to classify the teams as employers has other knock-on effects that are proving even more worrying for the game: For example, some clubs are being told that as they are now classified as employers they might have to start paying the minimum wage to their players. That, of course, stretches the law to whole new limits of absurdity. For example, I spoke to one club that was drawn in a Scottish junior cup game at the other end of the country. Such a journey could be from Ayrshire to Inverness and might take nearly five hours by bus. Another four hours at the stadium for the match and another five hours getting back home might be involved. If the club paid every player the minimum wage, the players would need to be paid more than £75, as opposed to the £5 or £10 that most players get for an away game.

If that were to happen, in the words of Tom Johnston, secretary of the Scottish Junior Football Association:

“We might as well shut up shop tomorrow, junior football would be finished.”

I know that that is not the Government’s aim and I hope that they will be able to use good judgment to prevent such unintended consequences.

My hon. Friend talks about the cost and the tax. Does that include the potential cost of national insurance?

I understand that it would: it would include the national minimum wage, PAYE and national insurance contributions. I think that that is why Tom Johnston says that it would drive an awful lot of clubs to the wall. I do not believe that the clubs are “employers” in the common-sense definition of the word and therefore I simply do not believe that they should be treated as such.

The second issue that I want to raise is the implementation of the new rules. I did some calling round and sent out speculative emails to clubs about the problems that they had been facing in dealing with the new tax rules. The clubs had been given a vast array of recommendations, many of which did not correspond with what had been told to other clubs or even to other players at the same club. Some clubs had been told that they could provide each individual player with a £500 tax allowance, because the players provided their own boots and shin pads and washed their own shirts at home. However, even within one of the clubs where that happened some players had their application for that dispensation rejected by the Revenue, which left the club and the players rather confused.

Would my hon. Friend be surprised to hear something from the meeting that I had between Midlothian and East Lothian clubs: when they were looking for these tax exemptions, the issue of shin pads came up and the tax inspector said that they could not possibly have an allowance reduction on shin pads because they could be used for a purpose other than shoving them down a player’s socks?

I thank my hon. Friend for that intervention, which shows why the players and the clubs are confused. I am certainly confused and intrigued about what other purpose a shin guard might have; perhaps someone would enlighten me later.

Some clubs had been told that they could allow a tax-free expense allowance of £5 for each training session and £5 more for away games. Others were told that that was totally inadmissible and that the only allowance they were allowed was 40p per mile for travelling to away games, while others still were told that they could also give a tax allowance of 40p per mile for travelling to training, although I think that decision was subsequently overruled.

If we are to have new rules for the clubs and expect unpaid volunteers with no tax experience to implement them, surely there should have been rules put in place and laid down in an easy-to-use document that all clubs could follow. That has singularly failed to happen. On top of that, the exceptions that are being allowed are not being laid down equally between all clubs, which leads to even more confusion and also some hard feeling between the clubs. That is surely not meant to happen.

Another area of concern is the way the tax man has dealt with these cases. Instead of starting the new regime from scratch at the beginning of April this year for example, in some cases the Revenue is making clubs pay tax in retrospect for the past two years. There are examples of clubs having to pay bills of more than £7,000 that they never had any idea they would have to pay. For the smaller clubs, that will make a massive difference, yet despite that, the protests seem to be met with a large amount of indifference by the Revenue.

The third area is the effect on the junior football clubs. Figures from the SJFA show that the average turnover of volunteers is usually about 3 per cent. a year. This year, the rate has been 15 per cent. The figure tallies with the anecdotal evidence I have received from the various clubs I have spoken to. It may not be simply because of the tax regime and the new demands placed on the members of the club committees. There might be other reasons, but I think that we are sensible enough to know that the new tax regime has had a major effect.

I recall that in my days playing junior football we had to hitchhike to the Kello Rovers matches in Ayrshire and Dumfriesshire. What happens about insurance for injuries that may occur during those games? Is there a Government edict on players covering their own insurance or do clubs have to take it out for them? Players may also have other jobs.

I cannot give a definitive answer and I am not sure whether there is legislation to cover that. My understanding is that clubs take out insurance for every player so that they are compensated for loss of earnings from their full-time job if they are badly injured. As my hon. Friend said, the players are usually amateurs and have other occupations.

I believe that clubs take out insurance for players if they can afford to do so, but most of them cannot afford it, so their players live in danger of their main livelihood being affected.

My hon. Friend’s intervention drives home the financial constraints facing these clubs. The new tax burden is just one more exacerbating factor.

The volunteers and committee men—they are overwhelmingly men—are the lifeblood of the game and without them the clubs would simply cease to exist and the vital link that they provide for the community would go—and all for the sake of easing the bureaucracy for the Inland Revenue.

I am sure that there must be a way through the problem, albeit that it might take a little imagination from the Inland Revenue. Perhaps the Revenue could design a system so that any club with player expenses below a certain level could be allowed to use the old system and those with expenses above that level could be put on PAYE. That would provide clarity and allow the Revenue to get those clubs that they are obviously trying to target to sort out their own taxes. If the limit were set high enough it would provide protection for junior football and a long-term solution to stop what the Revenue obviously sees as junior clubs shirking their responsibilities. There would almost certainly be problems with that approach, but I am sure that my right hon. Friend the Minister and her many officials could put their minds together and come up with something suitable.

In 1997, our newly elected Labour Government published a pre-Budget report that emphasised the need for a tax system that is not only fair to current and future generations, but is seen to be fair. I am sure that we all stand by that. It is obvious from the evidence that treating junior football clubs as employers is technically legal, but will never be seen to be fair. It is not fair to the communities in which the clubs operate, it is not fair to the people who give their time free of charge to provide a service to the community and it is not fair to the many people who enjoy junior football in Scotland. I urge the Minister to reflect on that when she responds.

I shall be brief because most of the points that I wanted to make have been covered and I do not intend to make a geographical trip around Scotland because most people know what the problem is.

I do not want to give the impression that the Government have been unhelpful. There has been a lot of correspondence on this matter and I believe that the Minister is willing to try to find a way forward. We will do anything we can to help her.

I want to put it on the record that we are not whingeing Scots wanting to be treated differently. If this were a whingeing Scottish argument, Scottish nationalist Members would be here, but they have not turned up.

My local club, Renfrew Juniors, has had a very successful season and just missed promotion. Like many other junior clubs, it is under pressure from housing developers who want to build houses on its football pitch and take facilities away from the local community.

I want to paint a picture of the weekly life of committee members of a junior football club. They are usually men, while the women usually have to wash the football strips, socks and so on, and make the tea and sandwiches. Unfortunate as that may be, it is the reality of life.

The week begins with assessment of the injuries from the previous weekend and dealing with the insurance company, if the club can afford insurance and someone has been seriously injured. Committee members are involved not just in the summer months of July and August, but in November, December and January when they have to cut the grass, ensure that the park is suitable for play and repair pitch marks and so on for the weekend. They must contact sponsors to try to obtain money to keep the ground in a suitable condition for play. They must also go to the park on Saturday mornings to ensure that the game can go ahead. All those activities are part of a committee member’s life. It may be ridiculous, but are we going down the road of taxing washing machines that are used to wash football strips?

Renfrew Junior football club’s stadium is made available to other clubs in the community, particularly during the week, and people with particular skills, such as plumbers and joiners, are often excused from training in return for repairing the roof or fixing the pipes. I urge the Minister to consider our comments seriously.

My hon. Friend touched on a committee member’s week and referred to finances. People go around pubs and clubs collecting totes on Friday nights and making draws on Sundays. They are involved all week. At a recent surgery in Fauldhouse, a local committee member told me that I had to spend £50 to sponsor the ball if I did not want the risk of him going around the community saying that the local MP was miserable. Fundraising is important and happens almost daily.

I thank my hon. Friend for that valuable contribution. Life as a committee member means raising money, contacting sponsors, getting programmes printed, and making sure that players can get to games on time and that transport is available. Volunteers’ personal finances are involved because they make telephone calls to arrange referees, contact players and so on. Those imponderables are not taken into account and committee members often have huge telephone bills because their clubs cannot afford to repay them. That happens for the reasons that have been explained.

The Minister kindly offered to have a meeting with interested parties later this month. If we cannot reach a satisfactory conclusion today, I would welcome the opportunity to meet her with other interested parties to see whether we can reach some commonality and solve the problem.

I emphasise that we are not looking for something that does not operate elsewhere in the United Kingdom. If players are earning money above the threshold they should pay tax and if junior football clubs are making profits they should pay tax. The problem is that junior clubs do not have fancy accountants and expensive lawyers. They depend on people’s own experience, and therein lies the problem. The administration cost of the scheme will be a burden on the clubs. That is the crux of the problem, and it could force clubs to go to the wall.

I shall be as brief as possible to give the Minister ample time to respond to the issues raised by Labour Members.

I congratulate the hon. Member for East Lothian (Anne Moffat) on securing the debate. I also congratulate the hon. Member for Dundee, West (Mr. McGovern) on tabling early-day motion 2178, which highlights the concern that local clubs could go out of business because of the new guidelines, which put too much of a burden on volunteers who cannot cope with an extra work load.

I am sure that I am not alone is being able to cite several examples of local clubs, whether football clubs, social clubs or cricket clubs, that are run by small groups of volunteers who give hours of their time just to keep the club afloat. Those people cannot now be expected to look after players’ tax affairs as well.

There is a real danger that people will end their involvement with local clubs, forcing many to close, simply because when one or two walk away, there is no one left who is prepared to run them. The more serious problem with the changes is the Government’s decision to chase the tax back to 2003. I understand that, as a result, some clubs face bills of thousands of pounds in back taxes.

Two people run a club that I know about. One of them runs the bar, does the maintenance work, fills in the grant applications, acts as security when local yobs who are hanging about cause damage, cuts the grass and even referees the matches. In his spare time, he has a full-time job, too. I am sure that, given the prospect of having to fill in forms about his players’ tax affairs, he is likely to think that it is time to call it a day. The club is run on a shoestring and it simply cannot afford to pay an accountant to sort out its taxes. I also suspect that if the club were faced with a demand for back taxes covering the past three years, it would probably be unable to pay.

The hon. Member for East Lothian made a number of valid points, especially in relation to the benefits that such junior clubs bring to young people by keeping them off the streets, giving them something good to do, making a difference to their lives and keeping them fit and healthy. She also made a valid point about the payments that are made to such players. I shall be interested to hear from the Minister the effect that the rule changes might have on the money that must be paid to players. Will they eventually have to be paid the minimum wage? No doubt that would mean a massive increase in costs to clubs.

The hon. Member for Blaydon (Mr. Anderson) produced the morning’s best soundbite when he said that we should have tax breaks, not tax burdens. That is a valid point.

There is a tax break, and it was introduced three years ago.

I thank the Minister for that clarification, but I still think it is a good soundbite.

The hon. Member for Dundee, West conducted us on an excellent geographical tour of practically every constituency in Scotland, except those in the highlands and islands and that of Orkney and Shetland. I hope for his sake that he did not miss out any clubs, because that could be damaging for him locally.

We need a common-sense approach. It is crazy that Revenue and Customs is expected to chase tax payments, in some cases on as little as £10 wages. Surely taxpayers’ money would be better spent ensuring that top earners, including a number of premiership footballers, pay the right amount of tax. If the Government are determined to continue with their policy, it would make far more sense for them to consider the turnover of sports clubs and set a limit over which clubs would be expected to sort out their players’ tax affairs. A club’s turnover provides an indication of its size and scale, and therefore whether it can afford to employ an accountant, or whether it must use somebody who is capable of undertaking that work from within the club.

I also seek the Minister’s clarification on the cost of recovering such a relatively small amount of money. Has there been an assessment of what tax revenue the changes will raise? Will the amount raised cover the cost of chasing it? Will she also provide some information about the relative success of the pilot scheme that I have read about? What effect has it had on the viability of the clubs involved? Have any gone out of business, or are any under threat of going out of business in the near future.

The Government should also consider the viability of backdating the change to 2003. Local clubs are struggling to pay the bills that they expect to receive, never mind those that are suddenly dumped on them. If the Government are not prepared to review their decision, clubs should be given more opportunity to phase in the changes. They should not be chased for back payments.

It is clear from the concerns that local clubs have raised that the changes will have a serious impact on the viability of a number of them. Any additional revenue could be cancelled out by lost revenue as other clubs go out of business. The Government need to rethink their strategy, and I look forward to hearing what the Minister has to say.

Mr. Chope, it is a pleasure to see you in the Chair. I shall also be brief, because much of the ground has already been covered. I shall begin by congratulating the hon. Member for East Lothian (Anne Moffat) on securing the debate. She has been involved with early-day motion 2178, as has her hon. Friend the Member for Dundee, West (Mr. McGovern).

I am far from an expert on the world of junior football clubs in Scotland, and I suspect that the opportunities for me to enlarge my knowledge will be limited, but from what the hon. Lady and hon. Gentlemen said, one point came over loud and clear to me and, I am sure, to the House: the great social and cultural importance to the whole community of the clubs whose financial livelihoods seem to her and her colleagues to be under threat from the change that has been made. Football is not just a common language. The hon. Lady mentioned the World cup, and I was very amused by the banter between some Government Back Benchers who seem more inclined to support Rangers, and others who might be more inclined to support Celtic. Even though my knowledge of football in Scotland is limited, it is extensive enough to clock that. More seriously, football is not just a common language, but a neutral space—an odd way of putting it, but accurate—in which, as the hon. Member for Blaydon (Mr. Anderson) said, people from different backgrounds and cultures who might not mix in other circumstances can come together. That is why, as he said, the police are so often interested in building up community football, and why a threat to the financial future of such clubs is so serious.

If I understand the situation correctly, players in junior clubs were minding their own tax affairs and the clubs were muddling along happily, building up a community, building up football and playing a role in their communities—and then the change occurred. Like other hon. Members, I am not clear on why the Inland Revenue made the change, whether a local department made it, or the degree to which the decision had national backing. I would be grateful to the Paymaster General if she cleared that up; I am sure that she will.

The change will have a knock-on effect, because clubs will, in effect, become employers. Government Back Benchers brought up many examples of what that might mean in practice. I think that it was the hon. Member for East Lothian who said that clubs might have to pay the minimum wage. It is the first time that I have ever heard a Labour Back Bencher express any reservations about paying the minimum wage, but in those circumstances I can understand why she is concerned. Other examples followed, including whether shin pads will be taxed. One enters such territory if one changes the nature of taxation.

As Labour Members said—I did not get the details, but I understand the general picture—the people who make such clubs work are not professionals but essentially amateurs. They love what they do, and they support the club because it is a community endeavour. Now, they will have to deal with extremely complicated tax arrangements that will stretch their expertise. That will clearly be a problem for the clubs.

As well as asking the Paymaster General to give us a few more details of how the change arose, I should like her to comment on the element of retrospection and back payment, which, on the face of it, seems a bit questionable. I would also be grateful if she explained the wider implications—if there are any—of the change for other clubs and societies, including those involved in sport. She may have to finish off this point at the meeting that she will attend with her colleagues, but what can she do to find a way forward that will allow the clubs a bit of space, so that they can find a balance that allows them to pay the tax that they should pay without imperilling their financial future? We look forward to hearing what the right hon. Lady has to say.

I, too, congratulate my hon. Friend the Member for East Lothian (Anne Moffat) on securing the debate. A lot of important issues have been raised and I welcome the opportunity to discuss them.

Reinforced by other speakers, my hon. Friend spoke about nurturing talent and helping young people, although I think that we are all clear that “junior clubs” refers to the leagues in which they are involved, not to the age of the players. I absolutely agree with her on the importance in local communities of clubs, whether football clubs or any other kind. I understand only too clearly from my own constituency experience how important those amateur arrangements are, so I have been genuinely perplexed—both by correspondence that I have received and, at times, by the debate today—about the precise nature of the problem that is being identified. However, I shall try to deal with the points made.

At the outset, I want to make it clear that Her Majesty’s Revenue and Customs is not proposing any change to the long-standing informal arrangements operated by smaller community clubs. I am not sure that I can put it any more clearly than that. I was asked what goes on in England, Wales and Northern Ireland. We are seeking the same treatment in Scotland as in England, Wales and Northern Ireland. Whether I happen to represent an English constituency is irrelevant; I know that my hon. Friend the Member for East Lothian and other hon. Friends feel as strongly as I do that what is important is nurturing talent anywhere in the United Kingdom.

When football clubs of whatever status in England, Wales and Northern Ireland make payments that represent profit to players over 16, they are obliged to operate pay-as-you-earn. As is the case for any employer, when HMRC discovers that a club should be operating PAYE, it requires it to do so. That is what we are discussing today. We are talking about a minority of clubs where quite significant sums of money can be involved.

Will my right hon. Friend give way?

I shall just finish my point. Such clubs will be asked to operate PAYE.

I was about to come to the point made by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan). He said quite clearly that hon. Members contributing to the debate were not asking for anything different from what operates in England, Wales and Northern Ireland. The hon. Member for Manchester, Withington (Mr. Leech) talked about using the common-sense approach. I agree with him and I hope to explain to him what I understand that approach to be. We could then pursue that question if it is not settled here today.

Will the Paymaster General define in layman’s terms what she means by profit? Is £1, or £1,000, or £50 profit?

That is at the heart of some of the questions asked. Frankly, the point made by the hon. Member for Manchester, Withington, about pursuing a club for £10 is just daft—it would not happen—so let us try to lay out clearly what is going on.

My right hon. Friend refers to clubs as employers who have responsibility for PAYE. Can she define who in the clubs would be responsible for administering PAYE? Would it be the unpaid community volunteers?

I will come to that, but let us just keep the matter in perspective. As I understand it, there are 164 of the clubs in question. Forty-five of them are larger—I shall come later to how they got to be larger and to the sort of sums that we are talking about. They have been asked—and they have agreed—to operate PAYE from 2005-06. That is the position with regard to the clubs. As all my hon. Friends have acknowledged, tax and national insurance law requires employers to operate PAYE and class 1 national insurance. Those requirements apply to all employers, no matter how large or small, whether they are running a business, a club, a voluntary organisation, or even just employing a nanny in their own home.

In the case of the Scottish junior football clubs, a special arrangement, to which my hon. Friends have referred, involving an informal return was introduced. That arrangement will not be disturbed; it is not as if it is being taken away from all 164 clubs. That arrangement was introduced because, at the time, except in exceptional cases, clubs paid only small amounts to cover expenses that would not have been taxable. So although technically the clubs were employers and should properly have come within the scope of the PAYE rules, the informal return, which still exists for the vast majority of clubs, was a pragmatic simplification that saved both the club and the Revenue from having to operate the system fully.

Those arrangements simply required the club to provide a list of players and details of payments made to each of them, and if the payment included any profit element—I shall come to the expenses issue later—that was included in the tax code relating to the players’ main employment. That informal arrangement lasted a long time. It was reviewed for two reasons—this will answer the point made by the hon. Member for Wycombe (Mr. Goodman). The first reason was that the financial circumstances, in terms of the amounts being paid, had changed for some clubs. They were no longer paying only non-taxable reimbursements of expenses—for example, those relating to kit. By the way, kit does include shin pads; I have no idea where the ridiculous suggestion that shin pads could be used for something else came from. I heard clearly what was said about that, so I am saying clearly now that it is an expense. Many clubs are paying substantially greater sums in real terms than they were in the 1960s, and there can now be a real profit element involved. That causes issues at the boundary as they move away from the amateur reimbursement of expenses.

The second reason for reviewing the arrangement was that under the old system—I suppose the question is why it has taken so long to get to this point, but never mind—the informal arrangement meant that things would be picked up through the tax system with the employer, but the introduction of self-assessment in 1997 cut across that, because it was no longer possible to identify third-party information. It therefore became difficult to determine a person’s tax liability. I can see you smiling Mr. Chope. You are no doubt very familiar with this problem from your constituency experience. [Interruption.] Did someone ask me to give way?

I was making reference to my right hon. Friend’s comments about you smiling, Mr. Chope. You are familiar with all these tax complexities. Unfortunately, that is not true of most of the people who will be burdened by the administration.

On a separate point, my right hon. Friend said earlier that out of 164 clubs, 45 fall into the category of making a profit. Will she make available a list of the 45 so that we can make an assessment of it?

I will certainly try to do that. I was smiling at Mr. Chope because I was thinking of his Public Accounts Committee experience. As a Minister, I am used to the probing questions that it rightly asks.

Regarding the list of clubs, I have asked for that information. I would prefer to have it myself, but it is covered by taxpayer confidentiality. If we can find some way of getting those clubs to agree to the disclosure of their names by HMRC, I will be more than happy to pass it on.

There is no question of backdating the system to 2004. The clubs have agreed to operate the system—I shall give some examples of the things that cause difficulty—and as far as we are concerned, the remainder of the 164 clubs are covered by the informal arrangements. Of that remainder, 11 have not submitted an informal return for a number of years—that is where the point about 2004 comes in—or their returns do not make sense. A further discussion will take place with those clubs, which I hope will resolve the matter.

Let us consider the sort of things we are talking about. Some clubs have been asked and have agreed to operate PAYE under exactly the same arrangements for clubs in England, Wales and Northern Ireland. It may be that they have received substantial sponsorship. It varies from the fixed amount, but it could be anything from £3,000 to £200 for advertising at the ground. These amounts, together with gate receipts—which can be up to £1,000 per game for some clubs—and other forms of supported income, help to finance payments to players and coaches. We are trying to ensure that the informal arrangement works in the way agreed and that the rules are applied.

There is no intention to add burdens to what we all agree are perfectly reasonable arrangements. The review referred to commonly made payments, such as signing fees for players that can vary from £150 to £2,000 per player, averaging at £800. Those are not insubstantial amounts. One club paid a player £100 per week. During the review, when the treasurer of one club was asked what happened to the balance of £400 in gate receipts in a particular week after all other disbursements—payments, expenses, running costs and so on—had been made, he said that the club simply paid it to the players by dividing it equally. That falls outside the informal arrangement, which is what the HMRC is trying to deal with.

I absolutely agree with all the pleas that my hon. Friend are making. Where the informal arrangements are working, that is fine: the majority are, and should be, left undisturbed by the recent changes. We should find ways of ensuring a sensible outcome for clubs that have moved beyond the circumstances with which the informal arrangements were designed to deal. Such clubs have agreed to operate PAYE.

My right hon. Friend seems to be contradicting herself. Perhaps she can help me because at the beginning of her contribution she said that there has been no change, but she then said that she wants to bring Scotland into line with England, Wales and Northern Ireland. Can clubs still operate the informal arrangement? Can I go back to the junior football clubs in my constituency and say, “The Minister is telling me very clearly that nothing has changed and you can continue to operate the informal arrangement. You can tell the tax department where to get off”?

Yes, as long as that club is not paying a profit element, which was never part of the informal arrangement. As long as clubs are not doing that, they still fall squarely within the informal arrangement. It is a question of the profit element and the payments over and above the norm. I am not referring to reimbursement of expenses or other such matters, but the sharing of the profit element from the club. My point about England, Wales and Northern Ireland is that that is how the rules operate in those countries.

My right hon. Friend made the point clearly and effectively about the distribution of profit among the players. Has she any evidence of how often players do not get paid because the club is in some dire trouble? Players may have to take a cut in wages, or receive no wages at all. I bet that that happens quite frequently.

I do not have the evidence to hand, but in circumstances where clubs are squarely within the arrangements for amateur clubs—this is also the case in England, Wales and Northern Ireland—there is no PAYE requirement. We are talking about the sharing of payments over and above a certain point and how that should be declared. I want to make it absolutely clear to my hon. Friends that we have not suddenly decided that all 164 amateur clubs, the value of which has been clearly outlined today, have to apply PAYE rules. They are not being asked to do that; that is not happening.

My right hon. Friend mentions 45 clubs that have agreed to operate PAYE. Would she explain what prompted that? Did those clubs simply come forward and volunteer to adopt PAYE or were they chased up by the Inland Revenue? How did the change happen?

My right hon. Friend may be coming on to answer the question I asked earlier, but if a club is regarded as an employer, who is responsible for returning the PAYE forms?

I shall double check how the change came to pass. I hope that I am giving my hon. Friend the correct information, but I believe that in some areas the informal returns, which are considered periodically on a compliance basis, raised questions about whether clubs had moved beyond the exact requirement in the informal arrangements. That goes on all the time in the tax system and makes sure that the system operates as it should. I am taking part in the Committee on the Finance Bill, which attempts to do that every year.

It is my understanding that the treasurer and secretary are responsible for the informal return. It would depend on the structure of the club, I suppose, but I presume that they would be required to do it. My problem in answering my hon. Friend’s question is that I do not know in how many different ways I can say that the vast majority of such clubs will still fall within the informal return arrangements and that that is where they will stay.

There has been considerable discussion with the Scottish Junior Football Association since 2002 about the problems and the need to clarify the arrangements. The new provision was not simply dreamed up. Questions arose about what was happening in some clubs, which were then raised with the clubs. Discussions took place and 45 clubs have agreed to operate PAYE if it is necessary for the payments that are to do with making a payment—a wage, or a share of the profits—other than the reimbursement of expenses.

My experience is that the clubs in my constituency have had PAYE imposed on them by the Inland Revenue, not that they have happily agreed to do it. Would my right hon. Friend look favourably on the clubs that are saying that that is the case?

I would certainly look favourably on clubs that take the view that they have been unreasonably asked to operate PAYE, but if they are making payments that are, in effect, a wage or a share of profits and that take them beyond the informal relationship, they have put themselves under the law that every employer in this country has to apply if they make payments in a particular way. I cannot say on the Floor of the House that we will let some employers not operate the system. That would be a disaster in the exploitation of people.

We have entirely reasonably said that we need an informal arrangement when clubs are amateur and are not making such payments. They should not have any contact with the tax authorities, but should simply complete a return to confirm that they still fall under the informal arrangement and to supply the information that is requested.

I thank the Paymaster General for giving way yet again. In her many discussions with the SJFA, has she or any of her officials offered it any resources in assistance? Could the SJFA engage an accountant to deal with all the clubs that would have to pay? Would there be a tax exemption if someone were engaged to do that?

It is not for me to advise on how to plan tax from this Chamber. I am not aware whether such discussions have gone on. I have not had such discussions, but I will take my hon. Friend’s point away and check with my officials. I operated a PAYE system, many years ago, before I was in this House, and I am rightly required to understand the system now as Minister.

Will my right hon. Friend give way?

I will just finish this point, and then I will give way.

I assure my hon. Friend the Member for Paisley and Renfrewshire, North that there are a lot of simple, quick and easy ways to fulfil the obligations, most of which come in the form of software and require simple applications, such as putting in figures so that returns are automatically done. I will certainly check whether, if someone were employed to do it all for the club, that would be tax deductible as a business expense. I think that I know the answer but I do not want to get it incorrect.

My right hon. Friend said that the 45 clubs that have agreed to operate PAYE did so because the Inland Revenue felt that their informal returns moved beyond an exact requirement, which sounds pretty definitive to me. Could my right hon. Friend tell me what that exact requirement is and when a club moves beyond it?

In some cases, clubs were not even submitting the informal declaration or return, or were missing out some of the information. I said earlier that the return required them to explain the expenses payments they made, so they would have to submit a list of what they had paid out. The Department has business support teams, which have offered to assist the clubs that are operating PAYE if they have any questions or requirements.

We are coming to the end of the debate and I want finally to —

Will the Minister give way?

I want to make this point, and then I will be happy to give way before I conclude.

Many important points have been raised. I hope that I have been able to clarify some of the misunderstandings, but I can see that there would be value in meeting interested Members to try to ensure that the final elements are sorted out.

The minimum wage?

My hon. Friend prompts me on the issue of the minimum wage, but frankly £100 for a day’s play or a couple of hours’ play probably exceeds the minimum wage requirements.

I want to raise the same point. The Paymaster General might be right that one person might get £100, but if we are saying that at least 45 clubs must now accept that they are employers what will that mean for them? Will everyone who plays for them attract the minimum wage? Will they attract national insurance contributions? That is a big difference from one person getting a one-off payment of £100.

That is difficult to deal with at this stage. I am perplexed that I need to go through the national minimum wage on this occasion. We are talking about people being paid from a profit or made another payment when they might well be working elsewhere.

Will my right hon. Friend give way?

Just a minute. I know that my hon. Friend thinks the matter is important and I am keen to hear him, but I need occasionally to answer a question before the next one comes along.

I am advised that the national minimum wage is not an issue when it comes to the payments that we are discussing. Clubs do not have to run the scheme for everyone, and the payments involved significantly exceed what would be considered the hourly rate for the national minimum wage.

In the last minute, I will give way to my hon. Friend the Member for Livingston (Mr. Devine).

Obviously, the word “profit” still causes problems to us old socialists. Can I present a scenario to the Paymaster General? A team could go from the informal arrangement to employer status in one season. It could go on a cup run, get a lot of money in and pay some of that money out, but if in the next season it were knocked out in the first round of the cup, it would be back to the old scenario. Is that correct?

That may well be the case. I suggest that my hon. Friend comes along to the meeting that has been arranged. If my hon. Friends give me a list of the specific questions in advance, I will do my best to cover in detail more of the tax-planning points rather than the general points about what is happening.

I congratulate my hon. Friend the Member for East Lothian on securing the debate, which has been excellent. I hope that I have been able to assuage fears that the provision is a blunt instrument to every club. I recognise that there are a number of detailed points that we need to deal with and answer and I look forward to doing so.