Monday 25 April 2022
Digital, Culture, Media and Sport
I wish to inform the House that the Government have today published their response to the recommendations made by the Independent Fan Led Review of Football Governance.
The Government’s response focuses on responding to the review’s 10 strategic recommendations. We accept or support all of the 10 strategic recommendations in our response, which sets out the Government’s planned reform of football. The sum total of our plans amount to significant reform with an independent regulator focused on financial sustainability, and a strengthened approach to ownership of football clubs and their governance.
The Government build on the case for reform set out in the review. We believe that there are two key problems in English football. First, there is significant risk of financial failure among clubs, and secondly, the cultural heritage of English football is at risk of harm. We have identified that these two problems have three root causes: the structure and dynamics of the market create incentives for financial overreach, inadequate corporate governance often affords unchecked decision-making power, and the existing regulation is ineffective. Without reform these financial failures will persist, and the economic and social costs would be substantial. Therefore, the Government believe that there is a need to intervene in football to secure the future of the game.
The issues highlighted in the review are complex and our reforms need detailed and considered analysis to ensure the sustainability of the sector long term. As a result, we have committed to publishing a White Paper in the summer which will set out further details on the implementation of reform.
In response to the strategic recommendations, the Government response sets out a vision for the reform of English football:
An independent regulator for football will be established. The response sets out the proposed objective, scope and powers of the regulator, and that it would oversee a licensing regime of the top five leagues.
The regulator will have a focus on financial regulation. The financial regulation regime will take a holistic approach, bringing together the Owners’ and Directors’ test, corporate governance and equality, and diversity and inclusion as part of one regime.
The current Owners’ and Directors’ tests do not go far enough in assessing suitability for ownership of clubs. The response sets out that the tests should be strengthened by enhancing due diligence to check source of funds and the strength of business and financial plans, and that an integrity-style test will be introduced. The forthcoming White Paper will provide further details on how the enhanced tests will work, and what will be in scope of the integrity test.
We believe that football needs a new approach to corporate governance, proposing a new model to be designed and overseen by the regulator. Football also needs to take further action on diversity and inclusion through their own plans for action. Further consideration will be given to ensure the model is proportionate and appropriate for football.
We agree with the review that supporters should be properly consulted by clubs, but we propose to share details in the White Paper on a more flexible approach to supporter engagement by making a minimum level of fan engagement a condition of the regulator licence. We have also committed to share details in the White Paper on the regulator implementing a licence condition which requires clubs to have a mechanism for fans to consent to changes to key items of club heritage.
On financial distributions in the football pyramid, we agree that more could be done by the Premier League to enhance financial flows through the wider football pyramid, and ideally this would be through a football-led solution. We have committed to revisit whether backstop powers are needed for the regulator to implement a new distribution agreement, if a solution is not found before the White Paper.
We agree with the review on the importance of football clubs to local communities, and set out that the position on “existing provisions”—which applies to football stadiums—in the national planning policy framework will be retained in the revised NPPF, in conjunction with Department for Levelling Up, Housing and Communities colleagues.
Finally, in response to the review’s recommendations regarding alcohol and football, we are committing to review the Sporting Events (Control of Alcohol etc.) Act 1985, in conjunction with Home Office colleagues.
The Government are fully committed to reforming football governance to enable a long-term, sustainable future for the game. Accepting or supporting all the strategic recommendations in the review is the next step to doing exactly this, and will represent a wholesale change in the way football is governed in England.
We recognise the scale of change that is required, and the impact that our proposals will have within football and more broadly. That is why we are setting a strategic direction in reforming football for the better, but taking some time to consider the details of exactly how we will enact these changes. We will set out even more information on the precise implementation of our reforms in a White Paper which we will publish this summer, and are committing to implementing the reforms as soon as possible.
Foreign, Commonwealth and Development Office
Room to Run Guarantee
It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the statement, except in cases of special urgency.
I have today laid a departmental minute outlining details of a new liability, the Room to Run Guarantee, which FCDO plans to undertake in order to guarantee a US$1.6 billion—£1.23 billion at the current exchange rate—portfolio of African Development Bank loans.
The African Development Bank (AfDB) is Africa’s premier regional financial institution. It is a well respected multilateral development bank which lends to 50 countries and the private sector within Africa. The UK is a long-term AfDB shareholder.
The UK is creating this new liability for two reasons. First, to meet a clear climate financing need. Africa has large and growing financing needs for clean and green development. It is estimated that $3 trillion is needed to implement Africa’s climate strategies over the next 10 years. Secondly, to support the AfDB. The economic impact of the pandemic has constrained AfDB’s capacity to lend to member countries. This guarantee would allow the AfDB to continue to prudently increase its lending capacity at an important time.
The liability is expected to last for up to 15 years. FCDO would only pay official development assistance if a default occurs and if first loss cover provided by the African Trade Insurance Agency (ATI) is exhausted. The departmental minute sets this out in detail.
HM Treasury has approved the proposal. If, during the period of 14 parliamentary sitting days beginning on the date on which this minute was laid before Parliament, a Member signifies an objection by giving notice of a parliamentary question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.
On Thursday 21 April, I met His Excellency, Vadym Prystaiko, Ukraine’s Ambassador to the United Kingdom, where we reached an agreement in principle that the UK will liberalise all tariffs on imports of Ukrainian origin under the UK-Ukraine political, free trade and strategic partnership agreement. This follows the commitment made by the Prime Minister in Kyiv that the UK would step up our economic support. This agreement in principle is in direct response to a request from the Government of Ukraine and is part of the UK’s commitment to their economic stability. Both countries are now completing the necessary processes to rapidly bring this into force.
The UK Government offered this policy on a non-reciprocal basis, with no expectation or ask of the Ukrainian Government in return. However, the Government of Ukraine has confirmed that their preference is to match our approach and they will fully liberalise their tariffs under the FTA with the UK, in order to maximise the economic benefit for Ukraine and to help secure their economic future.
Key details include:
Liberalising all tariffs under the Free Trade Agreement to zero on all goods originating from Ukraine which will provide economic support in their hour of need.
Our analysis shows that the average tariff on imports from Ukraine not already fully liberalised is currently around 22%. Removing these tariffs provides broad and deep support for the people of Ukraine.
In the unlikely event of a surge of Ukrainian imports into the UK market, I have put in place a broad safeguard mechanism to protect domestic industry.
These changes will be for an initial period of 12 months but include a simple process to agree an extension with Ukraine.
The Government will shortly lay a statutory instrument to amend our domestic legislation accordingly.
This approach is leading the world in how we support Ukraine, and I will encourage trade ministers in other countries to follow our direction. With that in mind, I will soon convene Trade Ministers from the G20 and other nations to continue the international effort to put pressure on Putin and support Ukraine.
On Thursday 21 April, we announced that the UK will bolster its sanctions against Russia by expanding the list of products facing import bans and increasing tariffs. With these new measures, the UK will be imposing import tariffs and bans on over £1 billion-worth of Russian goods. The new sanctions will include import bans on silver and high-end products from Russia including caviar, and tariff increases of 35 percentage points on a range of products from Russia and Belarus, including diamonds and rubber. These new measures follow on from the tariff increases imposed on goods from Russia and Belarus on 25 March, and a ban on the import of many iron and steel products from Russia on 14 April. Legislation will be laid in due course to implement these measures. We encourage all importers that use Russian imports to source alternative supplies. As with all sanctions, these measures will be kept under review.
Today, we also announce additional sanctions to continue putting pressure on Putin’s regime. These sanctions include expanding our existing strong export prohibitions and closing loopholes to ensure that the UK is not selling Russia products and technology which could be used to repress the heroic people of Ukraine.
As I made clear to Ambassador Prystaiko, the UK will do everything in its power to support Ukraine’s fight against Putin’s brutal and unprovoked invasion and ensure its long-term security and prosperity. We stand unwaveringly with Ukraine in this ongoing fight and will tirelessly work to ensure Ukraine survives and thrives as a free and sovereign nation.
Work and Pensions
Completing the Move to Universal Credit by 2024
In 2012, Parliament voted to end legacy benefits and replace them with a single modern benefit system, universal credit. The UC system stood up to the challenges of the pandemic and ensured that support was provided for a significant number of new claimants with varying needs across the country. As the rest of Government and society returns to business as usual, it is appropriate to resume the process to complete the move to UC by 2024.
There are around 2.6 million households receiving legacy benefits and tax credits who need to move across to UC. The natural migration process, where claimants experience a change in circumstances and consequently move to UC, has largely continued throughout the last two years. The voluntary migration process has also been available throughout. We are taking steps to increase people’s awareness of the fact that they could be better off financially if they were receiving universal credit, including through the publication of our document “Completing the Move to Universal Credit” today on www.gov.uk. I will place copies in the Libraries of both Houses.
In that document, we set out our analysis which estimates that 1.4 million (55%) of those on legacy benefits or tax credits would receive a higher entitlement on UC than on legacy benefits and would benefit from moving voluntarily, rather than waiting for a managed migration. This is particularly the case for tax credit claimants, with our analysis estimating that around two thirds of them would benefit. That is why we have included information on UC in this year’s renewal forms for current tax credit recipients. It is important for current recipients to satisfy themselves that they would be better off on UC using independent benefit calculators before moving voluntarily, as once the claim is made recipients cannot revert to tax credits or legacy benefits, nor receive any transitional protection payments. More information is included in the document.
For those claimants who do not choose to move and have not migrated naturally, we will manage their migration to UC. Parliament committed to providing transitional financial protection to those who are moved on to UC through the managed migration process. While many households will be better off financially on UC, for those with a lower calculated award in UC than in their legacy benefits, transitional protection will be provided for eligible households. This means they will see no difference in their entitlement at the point they are moved to UC, provided there is no change in their circumstances during the migration process.
Before the pandemic, the Department had started testing processes for managed migration in a pilot based in Harrogate. In 2020, the pilot was stopped to handle the significant increase in new claims for UC resulting from the pandemic. During this pilot there was proactive engagement with 80 people, 38 of whom were moved to UC. Thirty-five claimants were better off and only three people required transitional protection. The remainder of moves were not completed before the pilot was stopped. This pilot only involved claimants that the Department had an existing relationship with. No claimants on working tax credits were approached directly to commence a move to UC.
The pilot provided valuable insights. First, while claimants will likely look for support from organisations they already know, such as a local authority, we are no longer assuming that all engagement needs to be managed by that organisation. Secondly, claimants can and will move autonomously, but some may need more support, particularly on digital access. The pandemic reinforced the importance of claimants being able to manage their own claims online and the strength of this system. Thirdly, claimants can successfully choose a date for their claim, factoring in other income and expenditure points during the month. Finally, the pilot allowed the Department to understand the processes and tools required to complete a managed move, such as those needed to calculate transitional protection.
As I have said to the House previously, we are not resuming the Harrogate pilot. We have learned from that experience and our wider experience over the last two years. As we complete the move to UC, I am absolutely committed to making this a responsible and safe transition. Next month, we will be starting a multi-site approach across the country with a small number of claimants—approximately 500 initially—being brought into the mandatory migration process. We will continue to develop our processes and systems to scale the migration process and complete by 2024.
We are resuming under existing regulations, although I intend to bring forward to Parliament amendments to the UC transitional provisions regulations, following their consideration by the Social Security Advisory Committee.
Universal credit is a dynamic welfare system fit for the 21st century. As part of our levelling-up agenda to support the British public, we will continue to help people into work and to progress in work, taking advantage of the recent reduction in the taper rate and boost to work allowances.