Football Governance Bill (First sitting)
Tuesday 14th May 2024
(1 month ago)
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The Chair
Before we begin, I have a few preliminary announcements. Hansard colleagues will be grateful if Members email their speaking notes to hansardnotes@parliament.uk. I also ask everybody present to switch any electronic devices they have to silent. Tea and coffee are not allowed during sittings, although, obviously, water is provided on the tables. Members who may wish to take off their jackets are free to do so, because it is getting a bit warmer nowadays. Date Time Witness Tuesday 14 May Until no later than 10.10 am Mr Kieran Maguire, Senior Teacher in Accountancy, University of Liverpool; Dr Christina Philippou, Principal Lecturer in Accounting, Economics and Finance, University of Portsmouth Tuesday 14 May Until no later than 11.00 am The English Football League; The Premier League; The National League Tuesday 14 May Until no later than 11.25 am The Football Supporters’ Association Tuesday 14 May Until no later than 2.30 pm Solihull Moors F.C.; Dagenham & Redbridge F.C Tuesday 14 May Until no later than 3.00 pm Cambridge United F.C.; Bolton Wanderers F.C Tuesday 14 May Until no later than 3.30 pm Brighton & Hove Albion F.C.; Crystal Palace F.C. Tuesday 14 May Until no later than 3.50 pm The Football Association Tuesday 14 May Until no later than 4.10 pm Women in Football Tuesday 14 May Until no later than 4.40 pm The Football Foundation; Fair Game Thursday 16 May Until no later than 11.50 am The Professional Footballers’ Association Thursday 16 May Until no later than 12.10 pm Kick It Out Thursday 16 May Until no later than 12.40 pm Action for Albion; Supporters Trust at Reading: STAR; Arsenal Supporters’ Trust
We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about our questions before oral evidence sessions. In view of the time available, I hope that we can take these matters formally and without debate. I first call the Minister to move the programme motion in his name, which was agreed yesterday by the Programming Sub-Committee for this Bill.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 14 May) meet—
(a) at 2.00 pm on Tuesday 14 May;
(b) at 11.30 am and 2.00 pm on Thursday 16 May;
(c) at 9.25 am and 2.00 pm on Tuesday 21 May;
(d) at 11.30 am and 2.00 pm on Thursday 23 May;
(e) at 9.25 am and 2.00 pm on Tuesday 4 June;
(f) at 11.30 am and 2.00 pm on Thursday 6 June;
(2) the Committee shall hear oral evidence in accordance with the following Table:
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 3; Schedule 1; Clauses 4 to 5; Schedule 2; Clauses 6 to 9; Schedule 3; Clauses 10 to 18; Schedule 4; Clauses 19 to 20; Schedule 5; Clauses 21 to 24; Schedule 6; Clauses 25 to 66; Schedule 7; Clause 67; Schedule 8; Clauses 68 to 74; Schedule 9; Clauses 75 to 80; Schedule 10; Clauses 81 to 92; Schedule 11; Clauses 93 to 95; Schedule 12; Clauses 96 to 98; new Clauses; new Schedules; remaining proceedings on the Bill; and
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 6 June. —(Stuart Andrew.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.— (Stuart Andrew.)
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Stuart Andrew.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room, and will also be circulated to Members by email. We will now go into a private session to discuss the lines of questioning.
The Chair
We are now sitting in public and the proceedings are being broadcast. Before we start hearing from the witnesses, do any Members wish to make a declaration of interest in connection with this Bill?
Dame Tracey Crouch (Chatham and Aylesford) (Con)
I want to declare that I was chair of the fan-led review that led to this Bill.
Ian Byrne (Liverpool, West Derby) (Lab)
I sit on the management committee of the Spirit of Shankly football union for Liverpool football club.
Damian Collins (Folkestone and Hythe) (Con)
I am a trustee of The Sports Trust in Folkestone, which has previously received funding from the Football Foundation.
Robin Millar (Aberconwy) (Con)
I am chair of the all-party parliamentary football club group, and we too receive sponsorship.
Mr Clive Betts (Sheffield South East) (Lab)
I am chair of the all-party parliamentary group on football. I do not think it necessary to declare, but at least it is there on the record in case anyone wants to know that.
The Chair
We will now hear oral evidence from Kieran Maguire, senior teacher in accountancy at the University of Liverpool, and Dr Christina Philippou, a principal lecturer in accounting, economics and finance at the University of Portsmouth. Before calling the first Member to ask a question, I should like to remind all Members that questions should be limited to matters within the scope of the Bill. We will stick quite strictly to the timings in the programme motion, which the Committee has agreed. For this panel, we therefore have until approximately 10.10 am. I will give warning before this session finishes. Would the witnesses like to introduce themselves and say a few words before fielding questions from the Committee?
Kieran Maguire: Hello, ladies and gentlemen. I am Kieran Maguire from the University of Liverpool. I have specialised in football finance there for the last 11 years. Along with Christina, we have been asked to submit two research papers to the Department for Culture, Media and Sport; first, in respect of the state of finances of the industry during covid, and subsequently coming out of covid. I think we last produced a paper around 12 months ago.
Dr Philippou: I am Christina Philippou from the University of Portsmouth. I do a lot of work around sport finance and sport governance. Prior to academia, I was a forensic accountant.
Stephanie Peacock (Barnsley East) (Lab)
Q
Kieran Maguire: If we take a look at the history of both the Premier League and the English Football League, they have been successful in generating revenue. Since the Premier League was formed in 1992-93, its revenues have increased by 2,857%, whereas the Championship is at just over 1,000%. Given that prices have doubled, from a consumer price index perspective, that is absolutely fantastic. However, that has gone alongside an inability to control costs. The most significant costs in the industry are wages—while Premier League revenues are up by 2,800%, wages have increased by over 4,000%. Similarly, as far as the EFL Championship goes, if we take just one division, wages are up 1,400% compared with revenue of 1,000%. Profit is revenue less costs, and there has been a struggle to control costs.
As a consequence, if we look at the figures for 2022-23, which is a post-covid year—no ramifications—the 20 clubs in the Premier League lost a collective £836 million. In the Championship, on average the clubs were losing £20 million: League One, £4.1 million, League Two, £1.4 million; and in the National League, £970,000. All those clubs have been part of a spectacularly successful industry, of which we should be proud. It has globalised the game of football as coming from the UK. There has been a collective inability to control costs.
Dr Philippou: That summarises it pretty well. There is a general issue in relation to that, apart from that of cost control. We have also seen lots of administration, which has impacted on local communities over the years. Roughly two in five of the clubs in the top four leagues have gone into administration in the last 30 years, which is not a great stat. If we look at the post-covid years, as Kieran said—even putting into perspective what is happening at the moment—average losses in the Premier League were about £42 million, compared with its own cost controls, which are roughly £35-million losses per year. If we look at the Championship, it is roughly £20-million losses, where its own cost control saved around £15 million per year. Even by their own standards, they are not doing particularly well.
Stephanie Peacock
Q
Kieran Maguire: As far as the potential changes are concerned, the ability to have a regulator which can do real-time monitoring in respect of finances, so that it can identify potential problems at an earlier stage, would be beneficial. That would diminish the chances of a club getting into a more long-term financial crisis, where the only solution would be administration. The ability to have a regulator with a set of financial rules and observations, where you can nudge people in the right direction—I do not think that the regulator should be telling clubs how they should behave, but should be able to help the club itself to identify problems—would be beneficial.
Dr Philippou: Absolutely. Another strength in the Bill is that you can request information. One of the issues we have seen, which some of the leagues also struggle with, is the ability of the clubs to provide information in ways that are accessible and usable. That is something in the Bill which should help.
Stephanie Peacock
Q
Kieran Maguire: Owner funding is critical. We have ended up with the scenario where many clubs are what one could describe as trophy assets, where the ambition of the owner is not one of profitability but of soft power or kudos—the ability to say, “I own a football club”. Some of those owners are fantastic, as they want to repay the local community, which they have been brought through, and they have turned out to be successful. We tend to see commercial banks being reluctant to lend to the football industry because of the level of losses that we have previously described. From a lending position, a bank would always do a risk assessment in respect of any moneys that would be forwarded. My background, before going into academia, was as an insolvency specialist, and I did one or two investigations into football clubs where the bank’s response was: “We don’t want to be seen as the bad people in making this decision.”
Stephanie Peacock
Q
Kieran Maguire: Since the inception of the Premier League, the original wage-to-revenue percentage was around 45%, but that has now increased to the mid-60s. If we take the EFL Championship, for 10 years out of the 11, wages have exceeded revenue. Before they invest in the transfer market, before they switch on the floodlights, and before they put petrol in the mower, clubs are already losing money. Unless there is owner funding, there is no logic in keeping those businesses running, but football is a unique industry. If I was running a nightclub, a garage or a launderette, I would simply have closed the business down.
Dr Christina Philippou: More than half of the clubs in the top five leagues are technically insolvent, so if they were any other business, they would not be in existence. The fact that they are still standing is partly linked to how monopolistic the structure is. Obviously, fans find it quite hard to move from one club to another, and clubs tend to be a bit more resilient in keeping the fans than other businesses. However, that also has the knock-on effect of it being very community-based, and there are further knock-on impacts when those clubs go into administration.
The Chair
Stephanie, if you have any other questions, I will bring you in a bit later. There are a lot of Members who have indicated that they want to ask questions.
Damian Collins
Q
Kieran Maguire: When we had the introduction of solidarity payments from the Premier League to the EFL, which started to become index-linked to the growth in the Premier League broadcasting, exactly what you suggested tended to be the case. Any redistribution plan has to go hand in hand with a more nuanced and affirmative cost-control measure. Otherwise, you are simply transferring money from the wages of a footballer in the Premier League to the wages of a player in the Championship. I do not see how that benefits the game on a holistic basis.
Dr Christina Philippou: As we have seen, the cost-control issues are still there. The point is to try to fix that concern, rather than just to give more money to be spent poorly, which is not going to fix the problem. Fixing corporate governance and the cost controls will have a much better effect.
Damian Collins
Q
Kieran Maguire: Historically, the authorities, given the mandate that they currently have from the clubs themselves, have tended to be looking in the rear-view mirror. Therefore, they are playing catch-up. One of the advantages of having an independent regulator would be the ability to do real-time investigations and also potentially either to offer advice or, in extreme circumstances, to look at some form of regime change that allows the appointment of trustees and advisers to assist clubs in precarious financial positions.
Dr Christina Philippou: That is the whole point of something like an advocacy-first approach: you can work with the clubs before you get to the problem. Before you get to administration or those serious financial problems that we are seeing, if there is real-time monitoring, if you see the problems ahead of time, and if we have some proper budgeting and corporate governance in football clubs, that should mitigate the problem to a large degree.
Damian Collins
Q
Kieran Maguire: In an ideal world, yes. I do not think that the regulator can convert us into a zero-crisis environment. It is a case of turning down the dial. In the case of Everton, there was no doubt that money was spent in a similar way to what we saw with Roman Abramovich and Chelsea, and with Sheikh Mansour and Manchester City. There was an investment in talent and options in terms of infrastructure as well. The problem is that if you have any business that is living beyond its means, and is reliant on third-party or ownership funding, I think you have to very carefully monitor the ability of that funding to be maintained on a medium to long-term basis. We have seen, sadly in the case of Everton, that that does not appear to have been the case.
Dr Philippou: That is the importance of looking at the sources of funding, which is part of what is in the Bill, in relation to the owners and directors test.
Mr Betts
Q
Kieran Maguire: I think they do both. The intention of parachute payments when they were introduced, which was around 2006, was to address the possibility of clubs going into administration, because of the significant step-downs between the Premier League and the Championship. At the same time, it does mean that you have created a new benchmark in levels of spending that clubs in receipt of parachute payments can achieve, and therefore those clubs in the Championship that want to be competitive are incentivised to overspend, so I think we have a problem. Parachute payments are a clumsy solution to the bigger problem, which is the significant difference between the revenues of not just the Premier League and the Championship, but also between the Championship and League One.
Mr Betts
Q
Kieran Maguire: If we are going to look for a 92-club solution or, if we are including the National League, an 116-club solution, then the regulator should be able to deal with parachute payments, otherwise you are not dealing with the whole issue. If you have a redistribution model that does not involve parachutes, the Premier League’s position would be advantageous, and I do not think that would be in the best interests.
Dr Philippou: You need to have access over the whole of revenue, and that forms part of the revenues of Championship clubs. It would not make sense, in that sense.
Mr Betts
Q
Kieran Maguire: One would imagine that you would look at parachute payments from two angles. First, the quantum—the actual sums involved. Secondly, the length of parachute payments. They have been reduced from four years to three years, in recent years. I think there is a third issue, in respect of those clubs that are in receipt of parachute payments and are then promoted back to the Premier League. The parachutes that are not received are kept by the Premier League and distributed between the 20 clubs. That does seem very harsh, given that clubs are losing more money in the Championship to begin with.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
Q
Dr Philippou: It is fairly light touch from a compliance background, if you look at the financial implications and what is being asked for. In summary, you are effectively asking for some budgeting, some basic risk assessment, and knowing the roles of your senior management. It is fairly light touch, if you are running the club properly. From my perspective, it does not look particularly over-regulated. Certainly, from a compliance perspective, I would expect that if you are running the club properly, a lot of that information should be there anyway, and should be easily reportable without adding much burden to clubs.
Stuart Andrew
Q
Kieran Maguire: As far as the National League is concerned, I think the average losses were £970,000 a year. There are no cost-control measures as far as the national league is concerned, so that is why we have seen the recent arrival of owners who have transformed individual clubs, because they have been allowed to achieve effectively unlimited levels of loss. That potentially has implications when those clubs are promoted to League Two, although again they have tended to do very well.
The National League has been intriguing, and certainly issues arose with governance during covid, such as the grants that were given to support those clubs, which proved to be quite contentious. Like both the Premier League and the EFL, there appears to be some form of civil war taking place within—or between—clubs. We talk about the Premier League, the National League and the EFL, but I do not think there is a collective viewpoint within those institutions themselves from an individual club basis.
Dr Philippou: From a financial profile point of view, the National League shows very similar financial issues to League One and League Two. It is not as if National League clubs are free from problems, and the reason why they are in here is because they are pro clubs—it is professional football.
Ian Byrne
Q
Kieran Maguire: The Premier League has been successful because it has gone out to an audience and it has sold its services. There is no reason why the Premier League will not be competitive on a European basis in recruiting players, in respect of these rules. On attracting investment into the Premier League, part of the reason for its success is that we have moved effectively from a duopoly, which is where we were in 2005, to a more competitive product. In my view, if I was an investor, I would like to be able to invest in an industry where the opportunity to break even becomes greater, and I think that is more likely with the regulator than not.
Dr Philippou: We are not seeing much investment from certain areas that you would expect in most businesses. Part of that is the loss-making and the difficulty in conducting due diligence around football clubs. What we see in the Bill should fix that, and therefore we would expect to see more of a certain type of investment. Yes, perhaps there will be less investment from those who would rather not be in a more regulated environment, but that is not the overall picture.
Ian Byrne
Q
Kieran Maguire: If we look at the Premier League, when it was formed in 1992-93, 43% of revenues came from matchday tickets. If we move to 2022-23, we are now down to £1 in every £7 being generated from those. That can be slightly higher for the bigger clubs, and we are not denying that. The success of the broadcasting deals has very much meant that the broadcasting revenues are now dominant, and they now constitute more than half of the total revenues. As far as prices are concerned, it is a sensitive subject. Clubs will say, “We’re still losing money, so therefore we need to target revenue streams. We’re not getting that from broadcast, because the broadcasting rights—”
Ian Byrne
Q
Kieran Maguire: They are. During covid, we saw football matches with no fans and it was a sterile, glorified training exercise—there was no emotion. Having full stadiums is critical.
Ian Byrne
Q
Kieran Maguire: As a football fan, I would say yes. Looking at it purely from a business perspective, if you are selling 100% of your tickets at the current price, economics would say that they should be allowed to charge what they want.
Dame Tracey Crouch
Q
Dr Philippou: That is a very good question. I mean, how long is a piece of string? It depends on what you are looking at. We know what the issues are, so it depends on how targeted what you are asking us to look at is. The issues are pretty well known, so it is about how deep a dive you require—you can tell I worked in forensic accounting, with my “It depends!” But it would take months. It is not something that can be done quickly. It would require proper review to get it right, because if you are basing something on the information in a report, one needs sufficient time and access to be able to provide that information.
Kieran Maguire: The information we have put out in the reports to date has been on the basis of the financial reports published at Companies House. Therefore, we are reliant on clubs producing them on a timely basis and with a level of detail that we can make meaningful conclusions about. I used to do investigations into companies, and it is always nice to have more inside information or management information about budgets and so on, because that allows you to look forwards as well as in the rear view mirror. I think it would be a time-consuming exercise, but it is not an insurmountable one.
Matt Rodda (Reading East) (Lab)
Q
Kieran Maguire: The issues with owners are that if an owner’s personal circumstances or intentions change and they have been subsidising or funding clubs, however you want to describe it, it means that under the current environment, things are very precarious. I do not think that the football authorities themselves have sufficient powers to go in and effectively do an Ofsted to the extent that they would perhaps like to at times. That is where the regulator could be broadly more of a benefit than a cost, because it would have regulatory powers and the ability to send in a forensic team to take a look and offer guidance to clubs that may not be willing to listen to it under other circumstances. There is also the stick as well as the carrot in terms of issues with licensing or ownership, which are very much a last resort. That would perhaps focus some minds where people have historically tended not to listen and take no advice.
Dr Philippou: A lot of the issues we have seen with ownership have been in relation to sources of income. I am from the University of Portsmouth, and Portsmouth has unfortunately had two of its former owners jailed for various things relating to fraud and money coming from sources that it perhaps should not have come from. That is quite difficult if you do not have deep access to do proper due diligence. What appears to be in the Bill is access to that information and the ability to request that information, which should hopefully mitigate against some of these issues.
Matt Rodda
Q
Kieran Maguire: As an investigator, you would always want more powers than less, so I think you have to be honest there. At the same time, in terms of protecting the game from over-regulation and being mindful that FIFA does not allow government interference in football, I think we have probably hit a reasonably good sweet spot with regard to the proposals to date.
Dr Philippou: I agree with that.
Robin Millar
Q
Dr Philippou: I think it is a combination of various things. Ultimately, what you have is poor cost control and poor monitoring. Owners have to be mindful of that because, ultimately, at least half of them are putting money into football clubs every year to keep them running, so they are aware that there are cost problems there. You cannot be propping up a technically insolvent club and not know that you are propping it up, so there is that element there. You also have general cost controls —people are aware that they are losing money. It is not something where you can say there is a lack of awareness there; it is a lack of a willingness to do something about it. We saw UEFA bring in financial regulations back in 2010-11. The Premier League brought them in around about 2014. But we are still seeing these problems, even with the financial regulations in place, which tells you that there is an ongoing issue.
Kieran Maguire: What we have in terms of the present model is one of self-regulation, and self-regulation is normally walking hand in hand with self-interest. As far as owners are concerned, and I can understand this from an owner’s perspective, if I bought a football club as a trophy asset and I have unlimited funds, then why should I not spend as much money? What there has been is a trade-off between those owners willing to put in unlimited amounts, those owners wanting to put in limited amounts, and those owners wanting to put in nothing because they see the football industry as an extension of the entertainment industry, with a view to making it profitable on a longer-term basis. That is where we are at present.
The rules have effectively failed to address the loss-making in the business. Loss-making is sustainable until it is not sustainable—until those owners, either individually or collectively, decide to change the rules. Without any form of assistance from the regulator, that would mean that the industry is naturally precarious, because you only have to have, as we said earlier, a change in circumstances, as we saw with Chelsea. We have seen a club such as Bolton Wanderers have a very beneficial owner. His personal circumstances changed due to illness, and then you have a crisis for the club.
Robin Millar
Q
Kieran Maguire: I think it does deal with the financial issues. Effectively, if the regulator becomes the Martin Lewis of football in giving appropriate advice, that can benefit the industry. Many people enter the football industry with very good intentions. They have been successful in their own roles in their own businesses and think they can replicate that in football, and then they are seduced by the nature of football. For example, you run a club on a sustainable basis, and you are in seventh in the Championship in January. Your manager comes to you and says, “I’ve spotted this centre forward—costs £8 million, wants 30 grand a week, can get us into the play-offs. We can be in the Premier League in six months,” and all your common sense goes out of the window. That is part of the joy of football, but it is also one of the reasons why we have resulted in a loss-making industry. Provided the owner is aware of the consequences of their decisions, all you can do is give advisory assistance, rather than telling them what to do.
Dr Philippou: But there is an element of investment fatigue. We see all these great things, it is all going well and people are pumping money in, and then something happens in their other businesses or they lose interest, and that is when things start going wrong in the industry. I guess that is why there is also the non-financial side of the Bill, which looks at the corporate governance and fixes that side of the game too.
Stuart Andrew
Q
Kieran Maguire: In terms of the issues at the bottom of the Premier League, three clubs have just been promoted and have almost been relegated. The three clubs above them—excluding Everton, because if it had not had a points deduction, it would have been on 48 points—have been in the Premier League for two or three seasons, so there is an acclimatisation issue. There is also an issue at the top of the Championship. The clubs that have just been relegated have greater resources than their peer group, and that is going to have a yo-yo effect, which we appear to be locking in on a greater basis. That tends to be more of the case in the Championship and League One, where some clubs are moving. That is driven by the culture of the owners. The system at present encourages overspending. We have not seen that in respect of the three clubs that are being relegated, but we did see it to a greater degree with the clubs that were promoted in 2022.
Dr Philippou: Absolutely, there is that competitiveness issue, which we have seen diminish over time. That has a long-term impact on the commercial side and on broadcasting rights, because the less competitive a league becomes, the less likely people are to watch it and the less likely broadcasters are to put money in, so that can also have an impact.
Mr Betts
Q
Kieran Maguire: You would hope that the parties would be able to sort something out between themselves. If we did not have a regulator, we would be in a very similar position to the one we have at present. The Premier League has no incentive to be more beneficial, in terms of the distribution of money. It would have to be dragged to the table by the regulator, so that is why the backstop powers are important. The EFL is a fantastic league in its own right. The chances are that anybody who has supported a club in the Premier League have also supported it in the EFL.
When it comes to the regulator using last resort powers, it is effectively the same as the Bank of England. The Bank of England is the lender of last resort, but there are alternatives. Surely the same should be true in football. It is testament to the intransigence of the Premier League, in particular, which is unwilling to look at the broader football issues in the country.
Mr Betts
Q
Dr Philippou: I think a lot of the parts of the Bill that look to fix issues relating to the financial sustainability of clubs and corporate governance should in the long term negate the need for intervention, because stuff will be run in a much better way. The issue at present is that if there is no money forthcoming into the EFL, that creates a huge potential financial problem. That is why the backstop powers are there. It is one for the lawyers to debate, really.
The Chair
If there are no further questions from Members, I thank the witnesses for their evidence, and we will move on to the next panel. Thank you very much indeed.
Examination of Witnesses
Richard Masters, Rick Parry and Mark Ives gave evidence.
The Chair
Welcome to the new panel. We will now hear oral evidence from: Rick Parry, Chair of the English Football League; Richard Masters, Chief Executive of the Premier League; and Mark Ives, General Manager of the National League. For this session, we have until 11 am.
I call the first Member who wishes to ask questions, Stephanie Peacock.
Stephanie Peacock
Q
Richard Masters: We obviously support very strong ownership tests; we believe we have one at the moment. With the Bill, in terms of the way it describes the owners test, I think there are a lot of questions that still need to be asked and we may ask them in our written submission to this Committee. Thank you very much for giving us the opportunity to speak to everyone today and to put our perspectives across.
We very much support a strong ownership test. The question about whether it has been successful—I believe it has been more successful over time. Obviously, an ownership test is relatively new in football. Football has been around for centuries; the ownership test is a relatively recent intervention. Football has responded to issues—regulatory issues—as all regulators do. Football is already a highly regulated industry. We—the Premier League—are already regulated by the FA, by UEFA and by FIFA, and we are a regulator ourselves. So, the Bill and the new independent regulator for football are going to be an additional regulatory layer.
In all of our discussions with the Department for Digital, Culture, Media and Sport, we have been quite clear that we would like to continue with our own test and obviously the closeness of those two tests is quite important, and the consistency of results that come out of them is quite important as well.
When you read the Bill, one of the things that you probably notice in comparison with the Premier League’s current test, which is very similar to that of the EFL, is that it will probably capture a broader group of people and it is more subjective. One of the things that we have been quite careful about over the years is to make sure that the test is as objective as possible, because that creates more certainty and less legal challenge. We would like the Committee to think about that as they observe the Bill and to give as much clarity as possible to competition organisers on the issue of ownership.
Rick Parry: Where the regulator can help is in bringing greater transparency. Football does not do transparency very well; it likes to live in the dark. Greater consistency across leagues and statutory powers will be extremely helpful in terms of capturing information. The threat of criminal sanctions for failing to comply is pretty potent and pretty powerful—something we cannot compete with.
We will certainly not be having a parallel test; we do not want duplication. We are very happy to throw our support behind the regulator and recognise that a better test is something that we will be very happy with.
Mark Ives: First of all, thank you for allowing us to be here today; I appreciate that.
From an owners and directors test point of view, we are—from the National League—in a slightly different position than our colleagues in the Premier League and the EFL, in that the National League is governed by the FA regulation for the owners and directors test. I have spoken before about the powers that this Bill will bring with the ODT and I welcome that. I think it will give us, or give you, greater ability to be able to get access to information that we do not have. Although the current test is being reviewed from the FA’s position, it is primarily a self-assessment, which, of course, comes with many problems. I welcome the owners and directors test. I would urge Government to ensure that speed of operation is good, because the time it takes to get somebody approved is really important for takeovers and everything else.
The other challenge with the ODT relates not only to when owners come into a club, but to the question of when, during their lifetime within a club, their suitability changes. We need greater detail on how that will look. When does someone who is a good owner at the start of their tenure suddenly turn out to be a bad owner halfway through that tenure? Of course, it will be difficult, once somebody is in, to make a substantial change—not impossible, but it will be difficult. We need to think how we manage that from a National League perspective. We do not have a queue of people waiting to take over clubs, so we need to think about the consequences of the test on existing owners. Again, I would share the views that the leagues’ action to sense-check that as we move forward and make sure that clubs are compliant is really important.
Stephanie Peacock
Q
Richard Masters: I will do my best—thank you for the opportunity to do so. In general, I think we are supportive of the objectives of the Bill, and we want to see those objectives work. We are obviously concerned that what is, to all intents and purposes, a very successful industry is not harmed. It is very important that the Premier League, at the top of it, is able to continue with its success and growth—not just for the sake of the Premier League, but because that success and growth helps to fund the rest of the pyramid. We are happy to share our success, and we have a strong track record of doing so.
We would like this Committee to look at the unintended consequences of regulatory interventions that are unnecessary—proportionate regulatory interventions dealing with the issues that are arising. To use a motoring metaphor, we agree that if you are speeding, there should be regulatory tools to intervene, but we would not want to see the speed limit reduced from 70 mph to 50 mph to keep everybody safe. We think that would be a step too far.
As Mark alluded to, our core concerns are always about increasing the pool of investment that comes into football. The Premier League is successful because it has been able to create an atmosphere where people want to invest and buy football clubs and put their money behind the aspiration of moving up the pyramid. We see examples of that all the time, and we think that is really important. We need a strong and vibrant pyramid. To us, it is about long-term certainty and proportionate intervention. If those things are not correct, we might see some of the unintended consequences that I have explained.
Stephanie Peacock
Q
Richard Masters: The Premier League has a number of financial regulatory tools at the moment, such as our PSR regulations, which you will all be aware of. They are really about competitive balance, but also have an aspect of sustainability to them—essentially a limited loss situation. Where clubs are loss making, they have to provide two years of financial information to the league, and if they are loss making beyond a certain threshold, they have to stand behind the business plan of the club and provide a secure owner funding commitment to the league. The Premier League does have sustainability rules in place, as do the EFL and the National League. Perhaps it would be good for the Committee to hear about how all that works. There are measures in place, but they will be different.
What we are seeing in the Bill is prudential regulation, which is born out of the financial services industry—obviously there are not many parallels between banking and football. We are worried that prudential regulation could be too interventionist and could tie up or deter investment to the detriment of the whole football pyramid.
Stuart Andrew
Q
Richard Masters: It is unclear—a lot of this depends not on the technical drafting of the Bill, but the personality of the regulator, who we are yet to meet. Now the appointments have been made, it depends upon how the regulator and its powers are going to be utilised. For example, if the regulator wishes to put financial controls on virtually all the 116 clubs that it wants to license, I believe that will stop investment into football squads and football in general, and will slow down the growth of English football. That is the principal unintended consequence I would be concerned about.
Mark Ives: On unintended consequences, there are a couple of things, particularly when you consider the size of the National League clubs and how they are staffed. The Bill is written in a way that sets out what it intends; it does not give how it is going to achieve those aims. As far as the clubs are concerned, there is massive uncertainty.
As we see it, one of the unintended consequences is the drain on the resources of those clubs because of the duplication of work and the over-bureaucracy that there may be. For example, we already have a licensing system. Our system includes our football finance regulations, which have been activated since 2013. It is worth noting that we are talking about improving the sustainability of our clubs—but the National League, which is the only division that I can talk about, has not had a club going into administration since 2013, since it brought in its financial regulations. That is not a bad record. Our concern is the duplication of that licensing scheme. As the Minister rightly says, there is a referral back to the league regulations. We had hoped that that would go further and put the onus on the league, on the competition, to be the first to react. If that does not work, then the regulator steps in—rather than create a lot of duplication of work for our clubs, as we see it.
The other issue is costs. The Bill is intended to ensure financial sustainability. Yet the concern of this is that, as with all regulators, the people who pick up that bill are those who are being regulated. I am not sure that the clubs fully understand that. When you are at the bottom level of what is being regulated, the fear is the quantum of those costs. If you have a challenge that goes to judicial review from one of the National League clubs, I suspect that the financial cost on that is not going to be too great. However, if one of the top clubs in the Premier League challenges the regulator, the costs on that are going to be really significant. Those costs get passed on to those being regulated, and they could run into millions of pounds, when the cost of those are being borne by clubs at the National League level. In our view the Bill is not strong enough in clarifying what proportionality means. We have been given assurances: we have had some good meetings with the Department for Culture, Media and Sport, with the Minister and the Secretary of State, where assurances are that it will be proportionate. However, we do not understand what “proportionate” is. So, one of the unintended consequences is the financial and human resource burden on our clubs.
Rick Parry: It is incumbent on us to work with the regulator to make sure that this works for the good of the game. We see big pluses in terms of the regulator bringing independence, transparency and consistency across leagues, which is a bit of a disaster area at the moment. We view it positively: everything we have found so far in terms of engagement with DCMS and in terms of the shadow body that is the regulator is that all these concerns can be addressed. It is going to be a tougher environment, but football needs a tougher environment. We have had 30 years to get this right and we have failed.
Richard Masters: Just to answer your question about what plans the bodies are making to adjust to the regulatory world, we will all have to adjust to the new environment that is coming. I am very happy to do so. Like Rick, we are already meeting with the shadow regulatory team on a regular basis and have had good conversations about how it might work in practice. In reality, I think the performance of the regulator can be managed. We will meet that obligation head on and ensure that they get all the information they need, and we will respond at all times.
The issue that we are most concerned about is what impact that might have on the wider system—beyond the very positive objectives of the regulator to give fans a stronger voice—to improve the sustainability of the pyramid and individual clubs, and to avoid some of the issues we have had in the past. We agree with all that, but it is important to make sure it does not impact on the very good success story that we have at the moment.
Mark Ives: Can I echo that and clarify some points about where we stand on the regulator? From day one, and from when Tracey started the fan-led review, we met the review and we were asked whether we wanted to be part of the regulator. We said yes we did, on the understanding that it would not be too onerous for our clubs, and we would keep a mind on the costs. So we are mindful of that. We embraced the regulator. Our position was always that if there is a regulator, we thought it should be the FA, but for well-documented reasons, we know why that cannot happen. So we move on and embrace the regulator as it is.
Our challenges are not about having a regulator; they are about understanding and clarifying how the regulator will work. We embrace it and we will work with it. We have had some very productive meetings with DCMS and discussions all the way through. All we are trying to do is make sure that it is not too onerous and too costly for our clubs, because we have to protect the interests of those clubs, and they need clarity.
Damian Collins
Q
Richard Masters: Let me be clear about what the Premier League’s role in this is. As regulator, it is to perform the test. It is not to decide who the current owner wants to sell this club to. That is his decision. At the moment, he wants to continue to have discussions with 777 about it. The Premier League has made very clear the conditions that have to be met by 777 if it wishes to become the owner of Everton. At the moment, obviously, because the takeover has not been confirmed, I will leave it to the Committee to make its own conclusions about where we are with that.
Rick and Mark have talked about some of the benefits of the regulatory ownership test, in the sense that they will get access to more information that we can have, because we are not a statutory body. So we can only get the information that we are provided with and we have strong investigatory powers.
The other thing that Mark talked about was speed. I accept that takeovers that carry on for a very long time are not good for fan certainty. That is why we have a very big team of people who do nothing else in this. All I would say is that over time, particularly in the Premier League, takeovers are becoming increasingly complex. It is not a small undertaking on the part of the regulator to take this burden on. That is why we want to remain involved with it as well. This is very complicated, and we need to make sure that all those decisions are correct, even if that means taking a little more time to make sure that a decision is correct.
Damian Collins
Q
Richard Masters: It may be that they could come to conclusions quicker. I would imagine that that is possibly correct in that circumstance, but obviously, I cannot imagine what the situation would be like if we had a regulator in the current example that you raise. Obviously, I know a bit more about the background to it all. I cannot say too much about it, but I do think there are some benefits to the regulator working in tandem with leagues on this particular topic. That is true.
Damian Collins
Q
Richard Masters: Maybe a bit like “The X Factor”, you need two green ticks to get in. That is it, and in terms of the Premier League operating its own test, in the unlikely event that the regulator said yes and we said no, that person could not take over that club, and vice versa.
Matt Rodda
Q
Rick Parry: I think so. I do not think there is any reason to be doubtful at this moment, and within football we have been refining the tests that we apply over time. A decade ago, I think the tests were probably inadequate and overly simplistic. We have definitely refined them. We take a closer look at people’s track records, and I am not fearful that the regulator will be unable to do the same.
Brendan Clarke-Smith (Bassetlaw) (Con)
Q
Richard Masters: As you know, professional football exists in a global marketplace, and the Premier League is, by most available metrics, currently the most popular in the world. We want that to continue, but it is a competitive marketplace. You could not say that 20 years ago, but it is true today, and we would like it to be true in 20 years’ time. We have been able to do that by collective effort, and the clubs continue to invest in creating a really exciting football competition.
I think the key difference between the Premier League and its other European competitors is the competitive nature of it. We can talk about full stadiums, home and away fans, fantastic brands, and the history and tradition of the English game—all those things are incredibly important, but the key difference between us and the Germans, the French, the Spanish and the Italians is that you have jeopardy from top to bottom. That goes to the funding of football and the financial mechanics behind it, and the key ingredients that go towards that competitive nature and the jeopardy in English football. We do not want to damage that jeopardy at all.
In order to be able to better fund the pyramid, we have to be successful, and to be successful, we have to be able to continue to find football-led solutions to the problems we have. The regulator has a specific role, which is to step in when individual clubs have problems and to oversee certain aspects of the game, but I still believe that football needs to be football-led. The three bodies—or four, if you include the FA—can do a good job of that in the future, in the same way that they have done a good job of it so far.
Brendan Clarke-Smith
Q
Rick Parry: We think that in a better regulated environment, where there is more clarity and certainty, we will get better-quality owners—there is no reason to believe that we would not. There has been a lot of talk about investment, which is a curious word in football. To me, “investment” means sensible investment in assets that generate returns in football, but it tends to mean excessive spending and then owners moving on. What we are trying to do, in making clubs sustainable, is reduce the dependence on owner funding—as we have heard previously, owner funding is fabulous, until it is not. We have seen it with Mel Morris, we have seen it with Bolton, we have seen it with Reading: owners come in with high ambitions, but either get fed up, run out of money or become ill, and then the clubs fall off a cliff. If we have a better system of redistribution, making club solvent, then we are not dependent on that ownership culture.
Brendan Clarke-Smith
Q
Mark Ives: I think that, from a National League perspective, we are in a fortunate position. We run a licensing programme, and part of our ethos anyway, without the regulator, is to properly prepare our clubs to go into the EFL, whether they come from step two, National League North or South, into step one, the national division. If you look at the history of our clubs that have been promoted into the EFL, the vast majority of them have succeeded and continue to do so—this year you have only got to look at Wrexham’s story and everything else. That touches on your issue about foreign investments. Our challenge is to make sure that clubs that come up from step two are suitably prepared, through our licensing programme, to step into being regulated.
Equally, when somebody who is being regulated falls out of step one, sometimes because they have challenges, the issue for us is to ensure that they continue to get the support that the regulator may have given. As they go into step two, it is incumbent on us—it is still our competition—to ensure that they get the same checks and balances, to try to turn around whatever issues are there and give them a chance to grow again.
Ian Byrne
Q
My question is about financial sustainability, the profit and sustainability rules, and the lack of authority within the scope of the Independent Football Regulator. All supporters want a predictable, transparent, principled, proportionate, fair and timely system. Richard, from a Premier League perspective, I think that if you speak to the supporters of the clubs—Everton or Forest—they do not feel as though they have had that. There has been lots of confusion about the whole process and how punishment has been meted out. Then there is what happened with Manchester City—115 charges, but nothing as yet. Why would we not want to protect the integrity of the process—and the Premier League and, when it comes to that, the EFL? Why would we not want to give to the Independent Football Regulator the ability to mete out punishment in a fair and transparent manner?
The Chair
Order. While cases are pending, I ask Members to be careful about naming individual clubs in matters that may be sub judice.
Ian Byrne
Noted, Sir Mark.
Richard Masters: Thankfully, the cases you referenced have concluded now, before the end of the season, which at least gives some certainty. It has been a difficult period. This season has been the first time that the PSR rules have been activated—if we may call it that—in the Premier League. It has been a difficult experience, although Rick has more experience of it, and it is a difficult situation for fans of those clubs to live with, but if we have financial rules, we have to enforce them. I think that most people accept that, if they take a step back.
The question is: does the system work? Is the system transparent? No. The question you are asking is: should the regulator not look after all that? I think that the decision that the Government have taken, which is the correct one, is that this is for football bodies to look after. They are essentially getting involved in the running of the sport and the sporting competitive issues that exist within the game. I would not support, Ian, the regulator looking after those rules. The regulator has a clear remit to look at the sustainability of football clubs.
Ian Byrne
You think it is down to the leagues.
Rick Parry: It is the boundary of where football authorities deal with the rules that govern the competition. As Richard said earlier, part of the role of the PSR rules is competitive balance, rather than the sustainability of individual clubs. There is an element of crossover, but I do think that PSR squad cost control rules, or whatever replaces PSR, should fall firmly with the leagues to operate. We agree on that.
Mark Ives: May I add to that? I think it is important. We have our own financial regulation. If there are gaps in the financial regulation, then challenge the league —tell us where you think those gaps are for us to change. I would argue, as I said earlier, that the history of the clubs at our level is that our financial regulation works. As Richard said, it is it is only as good as ensuring that those regulations are applied, and we have applied them.
Two things about applying the regulations are that it is not just about sanctions, but about helping the clubs to make sure that they do not fall off the edge. In a few high-profile cases in the National League, we have actually been able to save some of those clubs and ensure that they do not go to the wall—I will not name them, but you know who they are. We have been able to assist those clubs to make sure that they survive. To come back to what the Minister said earlier about passing some of the issues over to the leagues, this is one example where we should have total autonomy to do our thing, and for the regulator to step in if we are not doing it.
Robin Millar
Q
Richard Masters: I am probably going to start repeating myself. I think that light-touch, proportionate regulation can work, and when the Committee is scrutinising the Bill, it should try to ensure that that is the case—that the regulator has the powers to intervene at the right moment. One of the things that we have argued for—
Robin Millar
Sorry, just to be explicit, my question is whether you think that the regulator is there to control bad actors or whether the regulator is there to intervene when it sees that somebody is about to make a mistake.
Richard Masters: I think they are both the same thing. I do not think that we should put in place broad protective measures to ensure that nobody can ever hurt themselves. What I do think is that the regulator intends to be preventive, and we will be supportive of preventive regulation to stop bad things happening, and of the regulator having the power when bad things are happening. I think those three things are subtly different and quite nuanced, and I hope that the Bill can reflect that.
It comes back to the personality of the regulator itself, which has not been formed yet; key appointments have not been made. If the Bill is structured in a particular way, and the personality of the regulator is such that it enforces on a proportionate and light-touch basis, I think that it can be made to work and will help football.
Robin Millar
Mr Parry?
Rick Parry: I would like to broaden the conversation and touch on the regulator’s systemic responsibilities, which we think are really important. The purpose of the EFL, which we defined four years ago, is to make clubs sustainable. As I said earlier, that means reducing the dependence on owner funding. To do that, you need redistribution to make them solvent and better regulation to make sure they are not profligate; the two must go hand in hand.
We think that the Bill goes a very long way towards addressing the regulatory aspects properly. What it does not do is address redistribution properly. It has ducked the key issues on that. The danger is that, if it is completely effective on regulation but ineffective on redistribution, it will just be failing to license clubs, and we will have many EFL clubs not being licensed and going out of business. That cannot possibly be the objective of the regulator.
Robin Millar
Thank you. Mr Ives?
Mark Ives: It is an interesting question. As you say, the differences between the three competitions are striking. If I understood you correctly, the question was about there being failings in all three. If we are talking about financial sustainability, I am at a loss to see where that failing has been from a National League perspective, for the reasons that I outlined before. That is one of the reasons why I support a lighter-touch position from the regulator, but we need to ensure that there is a safety net there for the sport, so that you to step in when that is needed. As I say, from a National League perspective, the record has been quite strong. When the fan-led review first kicked off, there was a misunderstanding as to what the financial regulations in the National League are, and it was not until, I think, the second meeting that we had with the fan-led review, when that was explained, that people understood and realised what steps are being taken by the National League. That is the background as to why we think there is a lighter touch.
Mr Betts
Q
Richard Masters: We do not think that parachutes should be part of the backstop power.
Mr Betts
So you lobbied to have that included.
Richard Masters: Well, when asked for our opinion, did we express it? Yes, we did, and I am very happy to repeat it here, Clive. The backstop power is a very novel power, and it should remain so. It should incentivise football-led solutions, which I believe it intends to do. It drives mediation and negotiation. At the very end, if the people at this table cannot come to an agreement, it is able to impose a solution in one specific area, which is solidarity—the funding of the rest of the pyramid, normally from the Premier League down. Any party has the ability to trigger that mechanism once every five years. All of that has been discussed with all of the people at this top table along the way, and it is right that it was, and right that everybody had their opportunity to express their views. Solidarity, parachute payments, is part of the football pyramid and has been for over 30 years. This is not just between the Premier League and the EFL, but intra-EFL and from the EFL into the national league as well, where there is a generous parachute system for clubs coming in and out of the national league and into league two of the EFL.
Solidarity is relatively new. It came around in 2007 when Lord Mawhinney, once of this parish, agreed a small deal with Richard Scudamore, the then chief executive to the Premier League. Over the past many years we have agreed a number of different arrangements. The current arrangement—which is still in existence; there is no cliff-edge—was agreed in 2019. At the moment, the amount of solidarity that comes out of the Premier League to the EFL is around about £130 million a year. This is the part that we think should be adjudicated on if there is to be a backstop power, not parachutes. Why not parachutes? Because they are a competitive balance tool. They obviously have an impact on sustainability as well, as all financial regulations do. Without parachute payments, the Premier League would not be competitive at the bottom end. You will hear from clubs this afternoon that will be able to talk about parachutes from their own perspectives. One is Brighton, which came up without a parachute.
If a club wants to be competitive within the Premier League, which is a brutal meritocracy and that is why people love it, then you have to be financially supported. That is the principal purpose of it. If you want the Premier League to be competitive and to be the economic powerhouse that it is, and to continue to redistribute its success, then we have to have parachute payments and I do not believe they should form part of this regulatory regime.
Mr Betts
Q
Rick Parry: Yes. First of all, we think that the way the clause is drafted is intellectually incoherent because it says that parachutes cannot be included in the definition of revenue—they are not revenue, they are distribution. To take Richard’s point that they should be used separately from solidarity, it is interesting that solidarity payments to championship clubs are literally pegged to parachute payments. They are defined as being 11% of a parachute payment, so they are intertwined.
In terms of the practical effect of what the clause says, if we look at the 2021 figures, five parachute clubs received £233 million between them and 19 championship clubs received £79 million in solidarity. So what we are saying is that we can apply the backstop and all its might to the £79 million, but we cannot touch the £233 million. That seems to be the ultimate definition of fiddling while Rome burns. Why you can view one without the other, I do not even begin to understand.
In terms of the effect of parachutes, just in case people are not across it, if we go back to 2010-11—which is not that long ago—they totalled £30 million. They represented 7% of the aggregate turnover of all championship clubs. By 2020-21, they had risen to £233 million and 39% of the aggregate turnover of the championship clubs. They have become the cuckoo in the championship nest. They are enormous. So if you exclude them from the backstop, you might as well not bother with a backstop, frankly.
Mr Betts
Q
Richard Masters: Sorry, Clive—
Mr Betts
The EFL have given us their understanding of the current distribution of funding within the Premier League and the EFL, particularly around media funding, and what sort of changes they would like to see. I do not think we have had a submission from the Premier League identifying what your understanding of the position is and what changes, if any, you would like to see.
Richard Masters: We have our current agreement and it was agreed in 2019.
Mr Clive Betts (Sheffield South East) (Lab)
Q
Richard Masters: It is a perfectly legitimate debate to be had—is the funding of football correct? That should be reviewed on a periodic basis. We have an agreement that stretches out way into the future and either party can terminate it after three years. The current agreement is about to become five years old, so once the state of the game report is done, the regulator will turn its mind to other issues. We are very happy to express our views on the distributions within football; we are not shy of doing that.
Dame Tracey Crouch
Q
Mark Ives: We are talking about the backstop?
Dame Tracey Crouch
Q
Richard Masters: I had not likened it to nuclear armageddon but it is an important issue. We have made attempts to come to a new deal but it has not worked yet. As I have said repeatedly, football solutions are the right way forward and the best solutions. I do not wish to be in a situation where the backstop power is being activated by any party, so I agree with you in that respect.
Rick Parry: We take a rather different view inasmuch as we do not see it as being armageddon or catastrophic. Football has manifestly failed and it will because the market forces are such that it is not an equal negotiation. We have very little negotiating power. We cannot threaten to leave and attach ourselves to the Bundesliga or La Liga, so we are basically stuck.
We think that if the regulator has clearly defined objectives, in terms of systemic sustainability, then as the fan-led review said, as the “One Year On” report said, as the White Paper said, and as the Government response said, it is the regulator that should have targeted powers of intervention. Intervention implies doing something positive. At the moment, the regulator is not actually allowed to do anything at all because it is reliant on the two leagues—the bodies that it is regulating—to step in. We believe the regulator should have those powers. The fan-led review is an enormously important and extremely helpful piece of work—an independent, objective, transparent study that has never been done before. The review will have a view on parachute payments and we are not, by the way, saying there should be no parachutes; we are discussing their level and the ability to fix them independently. We believe that, to make the Bill work, in the event that the fan-led review highlights problems, the regulator should be able to institute the process. We do not think it is armageddon. We do not think it is nuclear. We think it is logical.
Dame Tracey Crouch
Q
Rick Parry: No, we do not see it that way because so much hinges on the fan-led review—on the objective study. If the EFL were to trigger the backstop—and we hope we would not need to, or we never would—we would actually see that the EFL position would be something very similar to the fan-led review. It is the fan-led review that will inform the regulator as to whether it is able to meet its strategic objectives. It is not for the leagues to decide whether the regulator can meet its objectives; it is for the regulator to decide. If we were pushing forward a solution, I think the likelihood is it would be extremely close to what the fan-led review recommended. Why would it not be? It is not Russian roulette at all.
Richard Masters: Mark should definitely speak, but the only thing I would say is that you can observe the difference in incentives that now exists because of the regulatory power—the backstop power. It is the third person in this discussion. One of the issues that I would like to highlight to the Committee is that the backstop power creates different incentives because there is a third person who will adjudicate in the end. Since 2007, we have been able to come to agreements bilaterally, away from the gaze of the public eye, and do increasingly generous deals and share our success. We are happy to continue in that vein. I would like to point that out.
Mark Ives: There is an additional dimension for me, as far as the backstop is concerned. The backstop is really important to our clubs. We are at the base of the system, as I said earlier. We only get money from the Premier League. The solidarity payments we get from the Premier League are extremely helpful. However, there is a gap between our clubs and the EFL clubs. We could come to an agreement with the Premier League over our next round of solidarity payments. It is extremely helpful and, as it looks on the surface, it is very good. We could accept that. However, then there could be a deal between the Premier League and the EFL that has an impact of widening that gap, and that is not good for the game because the gap is already very wide.
I urge you to look at the difference in the solidarity payments across the game, including ours, and where that difference is. It would seem to be difficult, then, for us to be able to activate the backstop. We hope we never need to do it. However, it is an important aspect of the game to enable us to make sure that that gap does not get wider.
We know where we are; we know where we sit in the pyramid, and we are proud to sit there. However, we cannot afford for that gap to get wider. I would urge the wording of—
Rachel Hopkins (Luton South) (Lab)
Q
Richard Masters: It is critically important and we look forward to playing our part in it. The key issue we have is in relation to its regularity. It should come as quickly as it can, and be done properly and efficiently. However, after that, we believe it should not be at three-year intervals, which would lead to almost perpetual discussion about the state of football. There should be a longer period of time. We are suggesting that five years is the appropriate time for the regularity of those reports.
Football has had a lot of uncertainty—through covid, and through the regulatory interventions that we are now talking about. I believe that football does better when it has certainty. Our commercial deals are becoming longer, so we are doing four-year commercial agreements. I think the EFL’s are five years. Most of our international revenue is tied up over six-year agreements. If you look at other industries, Ofcom’s review is every five years. I think the telecoms industry review is every 10 years. Three years is incredibly short. It would be like painting the Forth bridge—once you have finished one report, you will have to start another. It is great for the economists and the consultants; it is bad for the competition organisers and the clubs.
The Chair
Q
Rick Parry: I echo what Richard said in terms of the report being incredibly important. It is important that it is comprehensive and able to address every issue facing the game, including parachute payments. The big point we would like to make is that we think the three-year interval for the first report to be completed is much too long. We think that should be a maximum of a year. We see no reason why it cannot be completed within a year. We actually think three years is fine, inasmuch as eight of the last Premier League TV deals have been on a three-year cycle; the champions league TV deal is on a three-year cycle; parachute payments operate on a three-year cycle. Football operates on a three-year cycle. However, the big report is the first one, and we think that the subsequent ones would be fine-tuning; they are not going to be a complete reinvention.
Mark Ives: I will be quick. I echo the importance of the report and it will address things that the regulator does not cover. It will address things that are important to our game and that the fan-led review spoke about, things that are outside the scope of the regulator—and I understand why they are outside its scope—such as three up, three down, protection of players, and all of that sort of stuff. It is really important that the emphasis on those things is not lost, and we have the ability to deal with that. The report is there to highlight the wider issues within the game.
The Chair
We will now hear oral evidence from Kevin Miles, Chief Executive of the Football Supporters’ Association. Could the witness please introduce themselves for the record.
Kevin Miles: I am indeed Kevin Miles, Chief Executive of the Football Supporters’ Association. I am very pleased to have been involved in the fam-led review process up to this point.
Stephanie Peacock (Barnsley East) (Lab)
Q
Kevin Miles: The succinct answer is, generally, yes. We are very supportive of the Bill and the reforms it sets out to achieve. We sadly drew the conclusion a few years ago that football has proved incapable of regulating itself, and it is interesting to hear Rick Parry drawing exactly the same conclusion.
We very much support the establishment of the independent regulator and the three primary objectives of sustainability, resilience, and heritage. There is a lot to like in the proposals—the enhanced owners and directors test; the club licensing system, which we think is proportional and puts advocacy first, which is a positive approach; the oversight of financial distribution; and the backstop powers which, indeed, I think are very important. Clearly, as the national fans’ organisation, we are also particularly pleased to see the provisions requiring clubs to meet the fan engagement threshold. We do have some concerns about the strengths of those requirements, and we think perhaps the Bill is not perfect, but that is part of the process, and is why we are here.
I would like to say that we have been involved in discussions with DCMS officials and ministers in preparation for this, and I would like to take the opportunity to pay tribute to their work, particularly the officials. Ministers are wonderful as well, but the team at DCMS have been excellent in their rigorous examination of all the points that we put forward. Their response has been—where necessary—challenging and combative, but it has been thorough and very well-applied, so thanks to them.
Stephanie Peacock
Q
Kevin Miles: I do think it is important that supporters trusts, their role and their position are recognised in this process. We are not expecting exclusivity for supporters trusts as the vehicle for fan engagement, but we do think that those trusts—based as they are on one-member, one-vote, and themselves regulated through the Financial Conduct Authority—are effectively reflective of fan engagement when it has not always been welcomed by clubs but been deemed necessary by fans. This is self-organisation by fans on a democratic and constructive basis.
Those organisations have earned their spurs; that was not a football team reference, by the way. They have done the preparatory work, and made large contributions to the process of the fan-led review as well, and it is important that the existing supporters trusts do have that recognised, and are taken seriously. It is important that the fan engagement process, as it is developed under the oversight of the regulator, is not used by clubs as a means of sidelining supporters trusts and the work that they have done. They need to be included and involved in that process.
Stephanie Peacock
Q
Kevin Miles: We have had a long discussion with officials about exactly what the scope of engagement with fans should be. We think the fan engagement regime needs to be robust, it needs to be appropriate to the circumstances of all the regulated clubs and it needs to be based on democratic principles, with the composition of the fan representatives being determined independently of the clubs themselves. We have had some conversations about what the particular terms of the content of fan engagement should be and we have been talking to officials and Ministers about that. The list includes strategic direction and objectives of the club, the club’s business priorities, operational matchday issues, the club’s heritage and the club’s plans relating to additional fan engagement. That is as it currently stands.
When we have asked officials about specific examples of that, they have come back, for instance, on ticket pricing, saying “We expect those to be included in business priorities and operational and matchday issues.” However, there is currently a set-up in the Premier League of fan advisory boards that are required, under the Premier League’s rules, to engage with clubs. It seems to officials in the DCMS, as a matter of common sense, that ticket pricing would be one of the things that fans would discuss with their clubs. It seems to me a matter of common sense that ticket pricing is one of the things that fans would discuss with their clubs.
Yet, in the Premier League system, our members tell us that at Newcastle United, the fan advisory board was given three days’ notice of the ticket price increases without any consultation. At Fulham, there is no fan advisory board, but the supporters’ clubs there got four hours’ notice with an embargo before the announcement of ticket price increases. Nottingham Forest announced its prices without any discussion with its fan advisory board or the trust. Similar representations have been made to us about similar experiences at Bournemouth, Tottenham, Arsenal and Liverpool. That is happening already, and that is why we think that perhaps it would be useful to have in the Bill the additional words “including ticket prices”, just to make it explicitly clear.
The general point is that there is a lot in the Bill that depends on the view the regulator takes about what is included and the guidance that is given to the regulator. We would appreciate really strong statements from Ministers in the course of this process. That might help us to avoid the necessity of amending the Bill, but a strong direction from Ministers about what should be in scope and what is required of fan engagement to fill some of those gaps would be really useful.
Stuart Andrew
Q
I remember when I was first appointed, the first meeting I had was with you and with other fans. It was clear from that meeting that some clubs do engagement extremely well and, as you have just alluded to, there are others that do it differently. Given that fan engagement is part of the licensing regime, do you think that that is going to be sufficient to bring about a significant impact on the quality of fan engagement that we are currently seeing across the board? That is, are we levelling up, to coin a phrase?
Kevin Miles: I very much hope so, and I am optimistic in that regard. It is the first time that we will have had a requirement from clubs to engage with the fans and, to use the Prime Minister’s words, to put the fans’ voice “front and centre” of all those discussions. I do think, though, that there are a lot of details still to be worked out about how that actually looks.
There are some clubs, as you say, that are very good, but one of the illustrations of the limitations of self-regulation has been that when the leagues have been trying to put together their own requirements on fan engagement, because it has to be voted on by their members and agreed by their rulebook, the lowest common denominator tends to be put into the rulebook. We know that there are clubs that will resist the idea. There are owners who think they have nothing to benefit from in listening to the fanbase—their customer base, if you like. We know from experience that there are some who will do everything that they can to get around this. We will need to have an underpinning of that in the regulatory system, and some monitoring of it through the club licensing system. We recognise that this is challenging, because it cannot simply be a look at what structures are put in place. The regulator will have to do more than just monitor that there is a fan advisory board notionally in place. There will have to be some evaluation and examination of the content and spirit of the fan engagement. We are not expecting a fan veto on club decisions, but we are expecting that the fan voice is not just heard but listened to and given due consideration.
Evaluating that is a more complex process. Somebody referred earlier—I think in the first witness panel—to the possibility of Ofsted-type investigations. Maybe in some cases it will require the regulator to be able to consult the fan groups to see how they think it has been done, and to make its own evaluation about whether the spirit of what is intended here is actually being carried forward. That will need to be underpinned by requirements in the licensing condition.
Ian Byrne
Q
Kevin Miles: Absolutely. If you look at that clause, you see that it is about the principles of the regulator. It currently reads that the regulator should,
“so far as reasonably practicable, co-operate, and proactively and constructively engage, with
(i) clubs,
(ii) owners, senior managers and other officers of clubs, and
(iii) competition organisers”.
We think that it is in the spirit of the rest of the Bill if a further provision is included that says “supporters and supporter organisations”. If the Bill really is about giving fans a voice at the heart of the game, the regulator should have that as part of those regulatory principles.
I cannot help thinking that this is an oversight rather than a conspiracy. Actually, the spirit of all the engagement we have had with the Department and with Ministers has been precisely that the supporters’ input into the regulation of the game would be an important component. But I think there’s a requirement for it to go on the face of the Bill in that clause.
Ian Byrne
Q
Kevin Miles: Again, what I do not want to do is put a whole shopping list of items into the Bill, because I think that is problematic. We would support some clear direction in the guidance notes about what should be required from clubs. You have identified another important issue. It is a complicated issue, and it is not likely to be solved on a club-by-club basis. However, the idea that we could face a situation where a club declines to discuss with its fan advisory board as part of its fan engagement process an issue as important and impactful as supporters being able to turn up to the games and support their team—which is so important to so many people—seems to me to be absurd. It is common sense that those issues should be part of the discussion, and it is sad to think that there are clubs that do not approach it with common sense and want to discuss it. I think it should be required.
Damian Collins
Q
Kevin Miles: Yes. One of the ideas that we are quite keen on is that, as part of the corporate governance code, there could be a requirement of clubs to have independent directors. In many other aspects of corporate governance codes, there is a particular responsibility on independent directors. Independent non-executive directors do have consideration for the views of other stakeholders in the work of a company. The idea that an INED in a football club could be required by a governance code to have particular responsibility for making sure that fans’ views are taken into consideration would be a very useful addition.
Damian Collins
Q
Kevin Miles: Yes, I think that that is one of the few gaps in the Bill. On the heritage items around playing name, shirt colours, club badge and that sort of thing, there are clear FA rules, and it was clear that the fan voice on those issues will be very important. The FA’s heritage rules do not cover grounds. They have found that difficult to tackle from the point of view of their rules. But the idea that the fan view on some of these issues should not be taken into consideration is an omission. We appreciate that there are other issues involved in staging a relocation. There are big economic issues et cetera. We are not necessarily saying that fans should have a veto over a business decision, but certainly they should have a level of consultation and input into that process.
As an aside, I think we should clearly define the UK-based supporters. It is entirely possible that with some of the clubs these days, given their international fanbase, you could find a huge majority of the football club’s supporter base in Shanghai quite ambivalent about whether the stadium moves 40 miles down the road. There would be a very different feeling among the people who have an extra 40 miles to travel to their home game. So I think it should be the UK supporter base that is consulted in those cases. That consultation should be enshrined.
The Chair
We move from the fans’ views to the person who started all this with the fan-led review—Tracey.
Dame Tracey Crouch
Q
Kevin Miles: Clearly, I have been sat listening with a great deal of interest to what has gone before. The organisation has a view on the issue of parachute payments. We think they need to be in scope for consideration. We are also convinced of the need, in extremis if required, for the regulator to be able to trigger their own backstop powers. That is important. I am sure this will come up in discussion later, but I understand that you, Tracey, have tabled an amendment to adjust the wording about taking cognisance of Government foreign policy, and changing that from something that the regulator “must” do to something that the regulator “may” do. That is important because it would underline the independence of the regulator, which I think will be an important issue.
I could talk all day—I know you will not allow me to do so. The Bill is not perfect. There are areas that we would love to see strengthened, but if this Bill goes through entirely unamended, it is a huge step forward from the point of view of football. This is an important process for us. On a lot of what we have been seeking to get football to do itself, which it has failed to do, this Bill provides a solution. It fills a space and provides a regulatory function that has been lacking. Clearly, there are elements that we will continue to engage with Ministers and officials on, particularly the fan engagement stuff.
A lot of what we are talking about here is clarifying and nailing down. I am going to speak bluntly to people who understand this. At the moment, in a parliamentary process, we are aware that we have a little bit of leverage here. I would like to pin down as much of this as we can in the process of drawing this together, rather than just hoping for the best later. I think a lot of Members will share our concerns about the fan engagement. We want to make it meaningful; it must have a lasting impact. We do not want to be coming back to this and looking at the limitations—let’s get it right now. It is in that spirit that we are raising all these issues around fan engagement.
Robin Millar
Q
Kevin Miles: It takes us a long way in the right direction. I think that if fans have a meaningful voice in every club, and the clubs are the ones who cast the votes in the leagues and their decision-making processes, the fan view should start to filter its way through. Clearly, we are never going to be completely satisfied.
I would also like to say that I am sitting here as the fans’ voice. I speak not just as an individual, but on the basis of the input that we have had from fans’ groups up and down the country. I need to thank my team from the FSA for the work they have done in getting this far. They work in a vary variegated landscape. There are some clubs that are really good at engaging with their fanbase and the local communities, and they deserve the credit for that. There are others where, sadly, it will need some sort of intervention to make sure that they are dragged up to at least the minimum standard. I hope we are in a process now where we can achieve that.
Brendan Clarke-Smith
Q
Kevin Miles: To be honest, I think anyone running a club who does not want to engage with their fanbase is making a misjudgment. Even from a business point of view, I cannot imagine any other sector of the economy where a business has a customer base who are this incredibly brand-loyal. They are not going to wander off somewhere else. They want to see the business thrive and succeed, and will volunteer expertise and experience of opinion in how that business could be improved and taken forward. It is a customer base that is aware of the importance of clubs to communities and local areas. In any other sector of the economy, people would bite your hand off for the opportunity to have that sort of ingrained and free-of-charge input from a customer base. I find it partly incredible the idea that football clubs would have any different approach to it.
It is absolutely true that football fans can be fickle, extremely vocal, and very passionate about some of these issues. We must find the mechanisms for constructive engagement to harness that, but I would honestly say to anybody who thinks this will be a problem that they are misjudging their own fanbase. One of the things that came across in the fan-led review was the quality of the input and understanding from supporters’ organisations. They do not have a particular financial vested interest, but they are hugely invested not only in their own clubs, but in the pyramid of the game as a whole. That is a huge asset to the game.
The Chair
That brings us to the end of the time allotted for the Committee to ask questions in this morning’s sitting. On behalf of the Committee, I would like to thank all our witnesses for their evidence. The Committee will meet again at 2 pm this afternoon in the Boothroyd Room to continue taking oral evidence. I ask Members to turn up five to 10 minutes early, just to sort out the lines of questioning.
Ordered, That further consideration be now adjourned. —(Mike Wood.)
Tobacco and Vapes Bill (Seventh sitting)
Tuesday 14th May 2024
(1 month ago)
Public Bill CommitteesRead Full debate Tobacco and Vapes Bill 2023-24 View all Tobacco and Vapes Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 14 May 2024 - (14 May 2024)
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 1 / Noes: 9 - Question accordingly negatived.
The Chair
With this it will be convenient to discuss the following:
Schedules 2 to 4.
Clauses 29 to 32 stand part.
Clause 79 stand part.
The Parliamentary Under-Secretary of State for Health and Social Care (Dame Andrea Leadsom)
It is a pleasure to serve under your chairmanship today, Sir Gary.
Clause 28 refers to the consequential amendments to do with part 1. The clause states which schedule contains which consequential amendments applicable to England and Wales. Consequential amendments revise existing legislation to ensure the law works effectively following the introduction of the Bill. This is a standard, supplementary clause that ensures the measures in part 1 of the Bill for England and Wales function as intended.
Consequential amendments that come into force two months after the Bill is passed are included in schedule 2, which amends several pieces of legislation including the Children and Young Persons Act 1933, the Children and Young Persons (Protection from Tobacco) Act 1991, the Health Act 2006, the Criminal Justice and Immigration Act 2008, the Regulatory Enforcement and Sanctions Act 2008, the Children and Families Act 2014 and the Public Health (Wales) Act 2017.
Consequential amendments that come into force six months after the Bill is passed are included in schedule 3, which amends the Regulatory Enforcement and Sanctions Act 2008 and the Children and Families Act 2014.
Consequential amendments that come into force on 1 January 2027 are included in schedule 4, which amends several pieces of legislation including the Children and Young Persons Act 1933, the Protection of Children (Tobacco) Act 1986, Children and Young Persons (Protection from Tobacco) Act 1991, the Police Reform Act 2002, the Courts Act 2003, the Regulatory Enforcement and Sanctions Act 2008, the Health Act 2009, the Tobacco and Primary Medical Services (Scotland) Act 2010, the Police Reform and Social Responsibility Act 2011 and the Children and Families Act 2014.
Schedules 2, 3 and 4 help the Bill to function effectively within the existing legislative framework and ensure that measures in the existing legislation work as intended following the Bill’s introduction.
Clause 29 provides the Secretary of State with a power to make regulations that are consequential on part 1 of the Bill. Those regulations may amend, repeal or revoke any legislation passed before the Bill or later in the same Session of Parliament as the Bill or an Act or Measure of Senedd Cymru passed before this Bill. Regulations may amend primary legislation as well as secondary legislation.
During the development of the Bill, every effort has been made to identify and make provision for any required amendments to primary legislation. However, as the Bill brings together legislation made over the last century there is a small likelihood that further consequential amendments may be required to enable the Bill to function effectively. It is therefore prudent that the Government should have the power to make such changes via secondary legislation. Any regulations amending primary legislation will be subject to the affirmative procedure in line with guidance from the Delegated Powers and Regulatory Reform Committee.
I now move on to transitional and transitory provisions to do with part 1, which are relevant to England and Wales. Clause 30 provides that the programme of enforcement under clauses 20 and 21 should apply to existing tobacco and vape restrictions in the period before the new tobacco and vape measures come into force. That ensures that the programme of enforcement in the Bill continues to apply to offences despite different provisions coming into effect at different dates. In practice, that means that in the six months following Royal Assent, the programme of enforcement applies to the current restrictions on the sale of nicotine products to under-18s.
In the period following Royal Assent, before 1 January 2027, the programme of enforcement applies to the current age of sale restrictions for tobacco, breaches of the sale of unpackaged cigarettes and breaches of the requirements for age of sale notices. Trading standards is currently obliged to consider its programme of enforcement each year, and this clause replaces that obligation. The clause is important to the functioning of the Bill, as it will ensure that effective enforcement regimes are in place for the time between Royal Assent and the commencement of provisions in the Bill.
Clause 31 provides that the fixed penalty notice regime in the Bill should apply to breaches of existing tobacco and vape age of sale restrictions in the period before the new tobacco and vape age of sale restrictions come into force. That will ensure that trading standards has additional tools available to take swift and proportionate enforcement action on under-age sales without delay. Some enforcement provisions in the Bill come into force before the offences that they relate to, and clause 32 therefore provides general transitional provisions so that enforcement is aligned with the coming into force dates of different measures.
Finally, I come to the commencement of the Bill. Clause 79 provides the commencement dates for different clauses and parts of the Bill across the United Kingdom. The clause helps the measures in the Bill to function effectively. I commend clause 28, schedules 2, 3 and 4 and clauses 29, 30, 31, 32 and 79 to the Committee.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
Clauses 28 to 32 deal with transitional arrangements after the Bill is passed and before some of its new regulations come into effect to make consequential amendments to previous Acts of Parliament that will be replaced by the new measures in this Bill. I have looked through the schedules and consequential amendments, and I am satisfied that they tie in with the measures in the Bill that we have discussed.
However, I will raise a few concerns, as the schedules relate to the commencement of various clauses of the Bill. For example, the loophole in existing legislation on the free distribution of vapes to under-18s that we discussed should be closed urgently, yet the Government have specified that that should commence only within six months of the Bill’s being passed. Can the Minister explain why she is not taking swifter action? It has already been two and a half years since we proposed changes to the law on this and that the Government take that up. Who is the Minister worried about inconveniencing by introducing the regulations quickly, apart from those who would seek to addict children to vapes? I fail to see what legitimate business could risk being disrupted by going faster here, given that clause 9 specifies that it applies
“in the course of business”,
so it would not necessarily impact the use of vapes as nicotine replacement therapies.
There is also a general point to make about timing. If we soon have a general election, the short campaign will rob us of six weeks of the normal course of business and many of the provisions in the Bill, including the consequential amendments on previous Acts of Parliament, will take effect within two months of the Bill’s passing. No doubt the civil service will ably do its job for the most part in preparing relevant authorities and retailers for the commencement of some of the new powers, but what can the Minister do to reassure me that a plan is already in place for the programme of work that needs to happen so that the transition is as smooth as possible?
Clauses 30 and 31 make it clear that local trading standards may conduct programmes of enforcement and issue fixed penalty notices for the breach of existing tobacco age of sale legislation until the new progressive rise in the age of sale comes into effect in 2027. I see nothing to argue with here, and likewise I have no issue with the transitional provisions detailed in clause 32.
Dame Andrea Leadsom
Let me respond to the point about the delay in coming into force. We seek to provide the right balance between giving retailers sufficient time to implement the measures and bringing the Bill into force as quickly as possible.
Question put and agreed to.
Clause 28 accordingly ordered to stand part of the Bill.
Schedules 2 to 4 agreed to.
Clauses 29 to 32 ordered to stand part of the Bill.
Clause 33
Crown application
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
This clause provides that part 1 of the Bill and any regulations made under powers in part 1 bind the Crown. The effect of this is that the new age of sale restrictions for tobacco and vaping products for England and Wales apply to all bodies and persons acting as servants of the Crown. That includes Government Departments, prisons run by His Majesty’s prison service and members of the armed forces. The Crown itself may not be prosecuted for an offence under this part, but that is not the case for persons in the service of the Crown, such as civil servants or prison employees. This is a standard and supplementary clause. I commend it to the Committee.
Preet Kaur Gill
I have no detailed comments to make on this clause and we are happy to give it our support.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
Clause 34
Interpretation of Part 1
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
Clauses 34 and 35 set out the definitions of tobacco, vaping and nicotine products for interpretation within the Bill. Clause 36 substitutes the definition of “tobacco product” in the Tobacco Advertising and Promotion Act 2002.
Clause 34 sets out definitions for the purpose of interpreting part 1 of the Bill. A tobacco product is defined as
“a product consisting wholly or partly of tobacco and intended to be smoked, sniffed, sucked, chewed or consumed in any other way.”
All tobacco products are harmful for health, so this revised definition will ensure that all future novel tobacco products are captured by the legislation.
Another significant definition is “vaping product”, which means either a vape—a device—or a vaping substance, which means
“a substance, other than tobacco, that is intended to be vaporised by a vape”.
A vaping product is one that contains nicotine as well as one that does not.
Clause 35 provides a definition of “nicotine product”, used throughout part 1 of the Bill. The definition used is to capture other consumer nicotine delivery devices and products, such as nicotine pouches, that are not currently regulated but whose use has increased among young people. This definition is important to ensure that we capture the right types of products that might be targeted at or used by children in the future through any secondary legislation that the Government introduce to protect children from future harm and addiction.
Clause 36 substitutes the definition of “tobacco product” in the Tobacco Advertising and Promotion Act 2002. This ensures that all future novel tobacco products are captured by the advertising and display bans under the Tobacco and Advertising Promotion Act. I commend clauses 34, 35 and 36 to the Committee.
Preet Kaur Gill
This is, of course, an extremely important part of the Bill, as it defines many of the terms used in it. We know how adept the industry has become at worming its way around the spirit of regulations that Parliament has debated and agreed in the past. The ban on menthol cigarettes is one example. The clause sets out a series of definitions of what is covered by various terms that we have been using, such as “herbal smoking products”, “retail packaging” and “cigarette papers”. It is very important.
We know, and I think we should expect, that the industry will innovate in response to this legislation, and not necessarily in helpful ways. We must ensure that the wording of the definitions we use is specific enough not to have unintended consequences, but broad enough that we do not allow industry to get around them.
I appreciate that this is all tricky, but I have a few quick comments. I mentioned when we debated clause 11 that there is no definition of “retailer” in the Bill, and my concern related to vending machines. Can the Minister please provide clarity on which powers granted under this Bill enable Government to regulate vending machines for vapes and other nicotine products, if that was deemed necessary? If she cannot answer now, can she please write to me on that?
I also want to raise the issue of accessories. I mentioned the ban on menthol cigarettes introduced in 2020, which was no doubt a cautionary tale for us in ensuring that we give careful thought to designing regulations on flavoured vapes. A study published in the journal Tobacco Control, and part-funded by Cancer Research UK, surveyed 66,000 adults in England, Wales and Scotland from October 2020—five months after the menthol ban was introduced—to March 2023. It found that the number of adult smokers who reported using menthol-flavoured cigarettes at the start of the study period stayed stable at 14%, compared with 16% two and half years earlier. That may simply indicate the size of the illicit market, but the survey also found that only 15% of those who smoked menthol-flavoured cigarettes reported buying from illicit sources, such as under the counter: a proportion similar to those who smoked non-flavoured cigarettes. That instead suggests that the tobacco industry has quite adept legal loopholes to circumvent the ban.
Researchers think that that indicated that people are using legal accessories, including menthol-flavoured drops, filter balls or cards, or that they are purchasing cigarettes perceived to contain menthol flavouring without it being labelled as such. We will come back to the issue of defining flavours and those specific loopholes in other clauses, but I want to ask here about accessories such as drops, flavour cards and so on. I have looked up those products online and they are blatantly marketed for use with cigarettes—we can buy 25 packs of “rizla menthol extreme infusion flavour cards” for £9 on Amazon.
What lessons have the Government learned from that? They were meant to publish a review of the legislation in 2021, but as far as I am aware, they did not. Have the Government looked at an expanded definition of tobacco products that would include accessories? If it is appropriate to look at something more narrow and targeted in its scope, would the Minister consider specifically looking at clause 59 on the flavour of tobacco products? Expanding the regulation-making powers to include tobacco-related products and accessories would enable regulations to be designed to capture menthol flavourings and all its derivatives and analogues, including add-on accessories to cigarettes to mask the taste of tobacco. I appreciate that the Minister has until now said that we should not let perfect be the enemy of good, but that is quite a crucial issue.
First, as I mentioned, the Government already promised to review that a few years ago, so I hope that they have a considered response to those questions either way. Secondly, the same principles apply to the flavours of vapes. With the disposable bans, consumers are effectively being encouraged to assemble their devices themselves to reduce waste. If we do not think carefully about the issue of accessories, I am concerned that we will see similar workarounds in that market too, which will undermine the efficacy of the legislation. If the Minister does not have the information to hand, could she please write to me on that?
Clause 35 provides a definition of “nicotine product” that, as we have heard, captures things that are not vapes or tobacco products, and could include things such as nicotine pouches. In the national conversation about vapes, we could easily see how more unscrupulous companies that have been marketing to children would look to pivot to other products if we do not capture them with this Bill and the regulations that it allows for.
I reiterate my earlier question to ensure that the Minister takes it away. Given the inclusion of that definition of “nicotine product” in the Bill, where does she see it necessary for the Government to introduce further regulation of those products—for example, whether they should be included in a notification process or something similar? We of course support those powers and I think the Committee agree on that, but I am keen to understand how advanced her and the Government’s thinking is on this.
Finally, clause 36 amends the Tobacco Advertising and Promotion Act 2002, which was brought in under the Labour Government. That seems eminently sensible and I support it. While we are on the subject, the Minister mentioned in the first line-by-line debate that she has recently written to the Advertising Standards Authority about its work and the trends it is seeing. I would be very interested in seeing its response and I would be grateful if the Minister could share that with me too.
Kirsten Oswald (East Renfrewshire) (SNP)
I am not going to reiterate the points made by the hon. Member for Birmingham, Edgbaston, but I want to add my voice to those who are very concerned about ensuring that the Bill takes full account of all the different products. During the course of the last few days of debate, we have heard about the large number of different products out there. I think it is profoundly important that we do all we can to try to look to the future and ensure that there are as few loopholes as possible for the tobacco and vaping companies to take advantage of.
As we have heard, they are very able and enthusiastic about doing so. I am keen to hear the Minister’s thoughts on whether the clause does enough, or whether she shares my concern that there are things we cannot conceive of yet that will be in the minds of those companies. As we consider the Bill, we need to ensure that we are not leaving gaps that will be rapidly filled by products that will harm people, particularly young people.
Dame Andrea Leadsom
As all hon. Members know, the whole point of the Bill—its definitions and secondary legislation—is to enable us to stay ahead of the horrendous trade of trying to get children addicted so that they can then be captivated, and the novel ways in which big tobacco and the vaping industry are trying to capture people while they are still too young to understand the long-term harms. That is what lies behind the Bill, so hon. Members do not need to be concerned that we are missing the opportunity to stay ahead of that game.
I wrote to all Committee members last night, and there are copies of the letter in the room, with some of the answers to the questions of the hon. Member for Birmingham, Edgbaston about vape vending machines. I will look at whether there is more that I can say about how we will stay ahead of novel ideas such as vaping solutions and products, but I think all those questions have been answered in the Bill.
Question put and agreed to.
Clause 34 accordingly ordered to stand part of the Bill.
Clauses 35 to 38 ordered to stand part of the Bill.
Clause 39
Repeal of offence of purchasing tobacco products by under 18s
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
Clause 39 repeals the offence for someone under the age of 18 in Scotland to buy or attempt to buy a tobacco product or cigarette paper. Clause 40 repeals the power for constables in Scotland to confiscate a tobacco product or cigarette paper from someone in a public place who they suspect is under 18. These provisions were originally made in the Tobacco and Primary Medical Services (Scotland) Act 2010.
The clauses ensure that legislation in Scotland is in line with that in England and Wales and mean that it will no longer be an offence for someone under the age of 18 to buy or attempt to buy these products, and that police officers will no longer have the power to confiscate these products. With the change to age of sale, it was no longer considered necessary to retain these provisions.
This change will ensure that no one is criminalised for their addiction to nicotine. The Bill also repeals the equivalent powers on confiscation for England and Wales in the Children and Young Persons Act 1933, so we are doing the same for Scotland. I therefore commend these clauses to the Committee.
Preet Kaur Gill
I turn to part 2 of the Bill and some of the clauses that apply specifically to Scotland. As the Minister mentioned, Scotland has a proud history of leading on many tobacco control methods, including beating the rest of the UK in introducing regulations to prohibit smoking in enclosed public spaces in 2005. That was the crowning achievement of a proud public health legacy left by the last Labour Governments in Westminster and in Holyrood. I am pleased to see the constructive attitude taken by the Scottish Government to the Bill to avoid any unnecessary regulatory divergence and to offer more certainty for business and consistency for consumers.
Clause 39, as the Minister has said, relates to the repeal of section 5 of the Tobacco and Primary Medical Services (Scotland) Act 2010, which made it an offence for someone under the age of 18 to buy or attempt to buy a tobacco product or cigarette papers. As I mentioned in the first sitting, the correct approach is to focus the enforcement of the law on the retailer, not the purchaser. Established businesses should be expected to take a greater degree of responsibility than children, and the law should reflect that. It should be our priority to help children addicted to nicotine, rather than penalise them.
Moreover, I take the Minister’s point that this change will make the law easier to interpret and enforce. Where possible, we do not want to diffuse responsibilities between retailers and customers, or indeed the enforcement authorities that attend to them. I am satisfied that if we have strong and consistent enforcement of the responsibility of retailers to implement age of sale law, that would achieve the same outcomes that the 2010 Act intended.
Kirsten Oswald
As we have heard, part 2 of the Bill relates specifically to Scotland and clauses 39 and 40 repeal particular offences. Clause 39 repeals an offence unique to Scotland—the purchasing of tobacco products by under-18s. That was introduced in 2010 and has been criticised for some time because of the unnecessary criminalisation of young people with a nicotine addiction. The change has been requested by the Scottish Government. Clause 40 repeals the power of the police to confiscate tobacco products from people who they suspect are under 18. Again, the power is unique to Scotland and it is seen as difficult to use. I therefore welcome these clauses as they stand.
It is correct to say that Scotland has been a world leader on a range of tobacco control measures, and there has been a steady reduction in the proportion of people smoking, but we know that far too many lives are still damaged and far too many people are still killed by tobacco. Obviously, we are aware of the huge burden on the NHS and social care services, and we know about the significant health inequalities that underlie much of that. Clauses 39 and 40 are sensible because they allow operations on the ground in Scotland to move forward in a more unified and logical manner. We welcome the new age regime and the greater power for Scottish Ministers to tackle youth smoking and vaping.
Question put and agreed to.
Clause 39 accordingly ordered to stand part of the Bill.
Clauses 40 to 45 ordered to stand part of the Bill.
Clause 46
Alignment of definitions
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
This clause amends definitions in the Tobacco and Primary Medical Services (Scotland) Act 2010 for tobacco products and nicotine vapour products to align them with the definitions in the Bill. The clause amends the definition of “tobacco product” in Scottish legislation to align it with the definition in the Bill. All tobacco products are harmful to health, so this definition will ensure that any future, novel tobacco products are captured by the legislation. The clause also amends Scotland’s definition of a nicotine vapour product to state that “‘vapour’ includes aerosol”, so that the definition more closely aligns with that of “vape” in the Bill. I therefore commend the clause to the Committee.
Preet Kaur Gill
I thank the Minister for that explanation. We support the clause, which broadens the definition of “tobacco product” in Scottish legislation and seeks to align that definition with legislation in the rest of the United Kingdom, and clarifies that the definition of nicotine vapour products specifically includes aerosols.
Above all, we support the principle that there should be clear and consistent definitions of the products that we seek to capture in regulations under the Bill across all four nations of the United Kingdom. I will take this opportunity to mention my query about the definitions that we use to capture tobacco-related products and accessories, particularly products used to augment the flavour of tobacco products, but we are happy to support the clause.
Kirsten Oswald
I reiterate the comments about the importance of setting out the definitions here so that there is clarity on the products where that is needed, including on new products that arrive in the market. I support the clause.
Question put and agreed to.
Clause 46 accordingly ordered to stand part of the Bill.
Clause 47
Power to make consequential provision
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
The clause confers a power on Scottish Ministers to make provision that is consequential on part 2 of the Bill. Regulations may amend, repeal or revoke any legislation passed before the Bill or later in the same Session of Parliament as the Bill, as well as any Act of the Scottish Parliament passed before the Bill. Regulations may amend primary legislation as well as secondary legislation.
Although every effort has been made to identify and make provision for any required amendments to primary legislation, the Bill brings together legislation that has been made over the last century, so there is a small likelihood that further consequential amendments may be required to enable the Bill to function effectively. It is therefore appropriate that Scottish Ministers have the power to make such changes to devolved legislation via secondary legislation. Any regulations amending primary legislation will be subject to the affirmative procedure. I therefore commend the clause to the Committee.
Preet Kaur Gill
We are happy to support this clause, which gives Scottish Ministers powers to make consequential amendments to this part of the Bill. Scotland has a proud history of leading the way on tobacco control and putting public health before corporate profit. It brought in the indoor smoking ban before the UK-wide one was introduced nearly 20 years ago. This week, we marked 25 years of the Scottish Parliament—a proud legacy of the previous Labour Government—and the principle of pushing power closer to communities so that Scottish solutions can be found to Scottish problems remains as strong as ever.
Kirsten Oswald
The clause very much reflects the constructive work underlying many clauses in the Bill. It includes several measures that the Scottish Government pushed for, and gives proper differentiated treatment to the separate Governments across the United Kingdom.
Clause 47 gives Scottish Ministers the broad power by regulations to make provision consequential on part 2 of the Bill—the bit that directly relates to Scotland. That is important, because this issue causes difficulties across the whole UK. If the Bill is passed, the Scottish Government will consider how best to use these powers, with the consent of the Scottish Parliament, to benefit public health, and will look to avoid any unnecessary regulatory divergence. That will be helpful for those who seek to prevent harms. The Scottish Government were the first Government to commit to taking action on single-use vapes, and have now launched a legislative consent memorandum in the Scottish Parliament recommending that the Parliament give its consent to the Bill.
Dame Andrea Leadsom
I put on the record my thanks to Scottish Ministers for their collaborative approach to bringing together the Bill. I am extremely grateful to them for ensuring that it is a UK-wide piece of legislation.
Question put and agreed to.
Clause 47 accordingly ordered to stand part of the Bill.
Clauses 48 to 51 ordered to stand part of the Bill.
Clause 52
Power to restrict nicotine products offence to sale by retail
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
This clause will allow the Department of Health in Northern Ireland to make regulations to define “sale” in section 1 of the Health (Miscellaneous Provisions) Act (Northern Ireland) 2016 to mean sale by retail. If the power is used, only sales from a retailer to a customer will be caught by the vape age of sale offence, and business-to-business sales—for example, sales between a wholesaler and a retailer—will not be included. I commend the clause to the Committee.
Preet Kaur Gill
I thank the Minister for setting out the Government’s explanation of the clause, which we are happy to support. As she said, it aligns the definition of the sale of nicotine products with the definitions we discussed when we debated clause 34. The caveated phrase “sale by retail” means that business-to-business sales need not be impacted by restrictions on age of sale.
The Minister may have touched on this, but I would be grateful if she can explain why Northern Ireland is only being given powers to close loopholes on the free distribution of nicotine products and the sale of non-nicotine vapes, while the Bill will immediately close those loopholes for England and Wales. I note that a study from last year found that half of under-18s in Belfast who attempt to purchase vapes in shops are successful. As I have explained, such loopholes and regulations undermine an understanding of the law and weaken enforcement by trading standards bodies, which cannot use the Medicines and Healthcare products Regulatory Agency’s notification publication as a definitive guide to which products are legal. Has the Minister received a commitment from Stormont on introducing such regulations? If so, what is the timeline for doing so?
Dame Andrea Leadsom
I can explore that further, but the hon. Lady will appreciate that the Stormont Assembly was re-established very late on—in fact, after First Reading if I recall rightly, or at least the decision for the Bill to be UK-wide came after First Reading. At speed, the Bill was amended to incorporate Northern Ireland, and there may well be further amendments relating to Northern Ireland. The hon. Lady makes a good point, and with your leave, Sir Gary, I will write to her.
Question put and agreed to.
Clause 52 accordingly ordered to stand part of the Bill.
Clause 53
Free distribution of vapes and nicotine products
Amendment made: 25, in clause 53, page 26, line 32, leave out from “liable” to end of line 37 and insert
“on summary conviction to a fine not exceeding level 5 on the standard scale.”—(Dame Andrea Leadsom.)
This amendment changes the mode of trial and maximum penalty for an offence of free distribution of nicotine products or non-nicotine vaping products in Northern Ireland. It provides for the mode of trial to be summary only and for the maximum penalty to be a level 5 fine.
Clause 53, as amended, ordered to stand part of the Bill.
Clause 54 ordered to stand part of the Bill.
Clause 55
Consequential amendments to do with sections 51 to 54
Dame Andrea Leadsom
Clause 55 refers to schedule 5, which provides consequential amendments to clauses 51 to 54 relating to Northern Ireland. Schedule 5 amends two pieces of Northern Irish legislation—the Children and Young Persons (Protection from Tobacco) (Northern Ireland) Order 1991 and the Tobacco Retailers Act (Northern Ireland) 2014. Making amendments to existing legislation is required to enable the measures in clauses 51 to 54 to function as intended, and to ensure that the existing legislative regime works effectively. I commend clause 55 and schedule 5 to the Committee.
Preet Kaur Gill
I thank the Minister for setting that out. As we have discussed the effect of these amendments, I do not want to dwell on them. For the most part, they align legislation in Northern Ireland to capture tobacco products, nicotine products and vapes in the same way as the rest of the United Kingdom, including age of sale restrictions and the penalties for retailers who break those laws. It also specifically allows non-nicotine vapes to be captured by the same regulatory regime as nicotine vapes in the Tobacco Retailers Act (Northern Ireland) 2014, which we support.
As the Minister did not accept the amendment that I tabled in a recent sitting, I would like to draw her attention to some of the sections that schedule 5 amends. Particularly, section 12 on fixed penalty notices in the 2014 Act has allowed Ministers to introduce fixed penalty notices of £250 for breach of age of sale. In Scotland, that amount is set at £200. As we have discussed, the proposed amount in the Bill is £100 for England and Wales. Has the Minister given any more thought to that issue?
Likewise, the 2014 Act introduced a duty on councils to share information about fixed penalty notices, convictions and restricted premises and sales orders that had been given by officers in their local authority area. No similar duty has been introduced in the Bill, which touches on points I have made previously about the need for joined-up government to stop repeat offenders slipping through the net. In discussions with the devolved nations about the Bill, what efforts has the Minister made to learn from existing tobacco control legislation? Was it a conscious decision to set the fixed penalty notice regime at such a significantly lower level than in Northern Ireland and Scotland? Once again, I am keen to get a clearer sense of her thinking, although we of course welcome the inclusion of clause 5 and schedule 5 in the Bill.
Dame Andrea Leadsom
All I will say is that we discussed this matter comprehensively last week and I am sure we will discuss it again.
Question put and agreed to.
Clause 55 accordingly ordered to stand part of the Bill.
Schedule 5 agreed to.
Clause 56 ordered to stand part of the Bill.
Clause 57
Power to make consequential provision
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
Clause 57 confers a power on the Department of Health in Northern Ireland to make provisions that are consequential on part 3 of the Bill. Such regulations may amend, repeal or revoke any legislation passed before or later in the same session of Parliament as this Bill. Regulations may amend primary legislation as well as secondary legislation.
Although every effort has been made to identify and make provision for any required amendments to primary legislation, the Bill brings together legislation that has been made over the last century, so there is a small likelihood that further consequential amendments may be required to enable the legislation to function effectively. It is therefore appropriate that the Government have the power to make such changes via secondary legislation. Any regulations that amend primary legislation will be subject to the affirmative procedure, in line with guidance from the Delegated Powers and Regulatory Reform Committee. I therefore commend the clause to the Committee.
Preet Kaur Gill
We are happy to support the clause to give Ministers in Northern Ireland the power to make amendments consequential on this part of the legislation, just as we supported clause 47 for Scotland.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clause 58
Tobacco retail packaging
Preet Kaur Gill
I beg to move amendment 18, in clause 58, page 30, line 5, leave out “may” and insert
“must, within six months of the passage of this Act,”.
The Chair
With this, it will be convenient to discuss the following:
Amendment 19, in clause 58, page 30, line 29, at end insert—
“(3A) The regulations must include—
(a) a requirement for information to be provided on packaging or otherwise supplied with a product stating that smoking does not reduce stress and anxiety;
(b) the specific wording of the statement to be displayed on the packaging or otherwise supplied with a product; and
(c) requirements related to the size or appearance of the statement to be displayed on the packaging or otherwise supplied with a product.”
Clause stand part.
Amendment 22, in clause 60, page 32, line 5, at end insert—
“(f) the markings on cigarette papers (including the use of branding, trademarks or logos)”.
This amendment enables the introduction of health warnings on cigarette papers.
Clause 60 stand part.
Amendment 23, in clause 69, page 37, line 19, at end insert—
“‘cigarette papers’ includes anything intended to be used for encasing tobacco products or herbal smoking products for the purpose of enabling them to be smoked;”.
These amendment is linked to Amendment 22.
New clause 4—Mandatory health information inside tobacco packs—
“The Secretary of State must consult on draft regulations to require tobacco manufacturers to include within tobacco and cigarette packs an insert setting out—
(a) warnings about the dangers of tobacco to a person’s health and wellbeing, and
(b) information about sources of advice and support on stopping smoking.”
This new clause commits the government to consult on draft regulations to require mandatory pack inserts containing health information such as quit messaging.
New clause 5—Mandatory health warnings on cigarettes and cigarette rolling papers—
“The Secretary of State must consult on draft regulations to require tobacco manufacturers to print health warnings on individual cigarette sticks and cigarette rolling papers.”
This new clause commits the government to consult on regulations to require the placing of specified health warnings on cigarettes and rolling papers by tobacco manufacturers and importers.
New clause 12—Consultation on mandating quit information messages inside tobacco packs: publication—
“The Secretary of State must, within three months of the passage of this Act, publish a response to the consultation on mandating quit information messages inside tobacco packs.”
This new clause requires the Secretary of State to publish a response to the consultation led by the Office for Health Improvement and Disparities on mandating quit information messages inside tobacco packs.
Preet Kaur Gill
Let me touch briefly on new clause 12, on the consultation on pack inserts. The Government committed to consulting on regulations a year ago, and the Department for Health and Social Care consultation closed on 10 October 2023. However, a response has still not been published, despite Government principles stating that it should have been published within 12 weeks, or that an explanation should have been provided for why that was not possible. Will the Minister please promise that the response will be published soon, so that we can get on with putting the regulations in place with the full information to hand?
Our new clause 12 would require the Secretary of State to publish the response within three months, which is more than generous, given the delays to date. That would then pave the way for the real prize—the real purpose of clause 58—which is to allow us to introduce stronger and more detailed quit messaging in tobacco products, so that more smokers kick the habit for good.
On average, smokers take 30 attempts to quit smoking before quitting for good, so it is essential to do everything possible to motivate them to attempt to quit. There is sufficient evidence from Canada, where tobacco pack inserts have been mandatory since 2000, that they can help to motivate smokers to quit. That is why we tabled amendments 18 and 19, which I would like to be considered together. They would require the Secretary of State to make regulations within six months to require tobacco companies to include information in their products to dispel the myth that smoking relieves stress and anxiety.
I am passionate about this issue. In my maiden speech, I vowed to campaign to improve the mental health of the young people of this nation and now, in Mental Health Awareness Week, we have the opportunity through this Bill to do something that could make a real difference. In the evidence sessions the other week, we heard a passionate and moving testimony from Mark Rowland of the Mental Health Foundation that convinced me all the more that taking this action is the right thing to do.
Smoking doubles the risk of people developing depression, more than one in two people with severe mental health conditions smoke, and the life expectancy of those with mental health conditions is reduced. The issues that our young people and children face with their mental health are well known to everyone present, and smoking simply exacerbates those issues. Yet a 2022 survey found that over 40% of smokers in England cite stress relief as a reason why they smoke. Despite all the evidence to the contrary, the myth that smoking reduces stress and anxiety persists, in all its utter perversity.
This has not happened by accident. It is a myth that has been manufactured and spread by the tobacco industry. Powerful companies have commissioned research and fed it into the public domain, to create the impression that smoking has medicinal properties. It does not. We see all the time, in any gritty noir TV show or film, the stressed protagonist busily drawing on a cigarette before they face their demons. We can see how, if we do not confront such imagery head-on, it serves only to reinforce the myth.
The amendments seek to send a clear message that smoking does not relieve stress or anxiety and actually exacerbates them. The feeling that someone gets when they take a drag on a cigarette is not a real health benefit; it is a temporary relief from the withdrawal from the addiction that makes them feel worse in the first place. That is what is so insidious about this whole dynamic: it preys on the anxious, the depressed and the vulnerable.
As I have said, more than one in two people with severe mental health conditions smoke, yet whereas almost everyone understands the link between smoking and cancer, the link with mental health conditions is much less well understood. As the CEO of the Mental Health Foundation told us, it was not until 2008 that smoke-free policies were made mandatory in mental health settings. A third of mental health professionals had reservations about those policies, not understanding the link, but the evidence we have now is strong: people with mental health problems are likely to feel much calmer and more positive and to have a better quality of life after giving up smoking. Evidence suggests that stopping smoking is as effective as taking antidepressants.
As the Committee will be aware, we already face a mental health crisis in this country, with a quarter of our health burden being a result of mental ill health. We should take any opportunity to reduce that burden, so I urge the Minister to accept the amendment so that we can rid society of this insidious myth for good.
Bob Blackman (Harrow East) (Con)
It is a pleasure to serve under your chairmanship once again, Sir Gary. I rise to speak in favour of the measures that I and other colleagues on the Committee have proposed.
Amendments 22 and 23 are essential consequential amendments that seek to introduce markings on cigarette papers and to define cigarette papers so that that is clear in the law. I am interested in the Minister’s view of our proposals. We seek to make sure that health warnings can be put literally on to the cigarettes and other tobacco products themselves, rather than just on the packs.
New clause 5 is intended to look at mandatory health warnings on cigarettes and rolling papers, and at the regulations that would need to be rolled out and consulted on among tobacco manufacturers. It would enable us to have a consultation, rather than to change the law immediately.
Our proposal is not new. It was first proposed by the all-party parliamentary group on smoking and health, of which I am the chairman, in our 2021 report and recommendations to the Government. Importantly, our recommendation was endorsed by Javed Khan in his 2022 report. It is one recommendation that has not, thus far, been included in the Bill.
This is not even a novel policy. My noble Friend in the other place, Lord Young of Cookham, first proposed cigarette warnings when he was a Health Minister in Margaret Thatcher’s Government—a great Government at the time. His statement at the 1979 world conference on tobacco and health bears repeating. He said:
“The solution to many of today’s medical problems will not be found in the research laboratories of our hospitals, but in our Parliaments. For the prospective patient, the answer may not be cure by incision at the operating table, but prevention by decision at the Cabinet table…Historically, a nation would look to its doctors for better health. Now they should look to their Members of Parliament.”
Professor Sir Stephen Powis, the national medical director of NHS England, echoed Lord Young’s comments when he said to this Committee that the legislation we are considering is “possibly the most important” piece of legislation since Parliament passed the National Health Service Act 1946, which led to the formation of the NHS on 5 July 1948. In his view, the legislation that we are considering is
“one of the most important—possibly the most important—pieces of legislation since the passage of that Act.”––[Official Report, Tobacco and Vapes Public Bill Committee, 1 May 2024; c. 89, Q129.]
This year, my noble Friend in the other House, Lord Young, will have been in Parliament for 50 years—50 years in which he has fought long and hard to end the blight that smoking leaves on society. It would be a just tribute to his efforts if the Government committed to implement this policy, which he first called for more than 30 years ago. Tobacco manufacturers already print on to cigarette papers, so it would be cheap and easy to implement.
New clause 4, on mandatory health information inside tobacco products, would commit the Government to consult again on draft regulations to require mandatory pack inserts containing health information such as quit messaging. Pack inserts were first proposed by the all-party parliamentary group on smoking and health in our 2021 report, that recommendation was also endorsed by Javed Khan in 2022, and the Government consulted on their introduction in a consultation that closed on 10 October 2023.
I am sure my right hon. Friend the Minister will be well aware that the Government’s own guidelines state:
“Government responses to consultations should be published in a timely fashion”,
which is defined as
“within 12 weeks of the consultation”,
or they should
“provide an explanation why this is not possible.”
It is disappointing that, more than seven months after the consultation closed, the Government have still not published their response or given a reason for not doing so.
Dame Andrea Leadsom
I thank hon. Members for this debate and am grateful for the proposed amendments. I am sympathetic to the aims of the amendments, particularly those on pack inserts. They would provide an opportunity to introduce positive messages and provide more advice and support directly to smokers to help them to quit. The international evidence base shows that pack inserts can be effective in helping people to quit. For example, an evaluation in Canada showed that 26% to 31% of smokers had read the inserts at least once in the past month, which increased the likelihood of their making a quit attempt.
Pack inserts would complement our existing packaging measures, which include health warnings on packs and pointers to NHS advice on the benefits of quitting. We know that quitting smoking is associated with reduced depression, anxiety and stress, and that it improves mood and quality of life compared with continuing to smoke. Although it is a common belief that smoking can help one to relax, the evidence shows that it actually increases anxiety and tension, as it interferes with chemicals in the brain. Studies show that there are numerous mental health benefits from quitting smoking; quitting can in fact be as effective as antidepressants.
However, I point out to hon. Members that we already possess the regulation-making powers to go further on tobacco packaging. The Government’s eight-week consultation on pack inserts ran from August to October ’23. It explored whether we could help more smokers to quit by providing positive quit-themed information in tobacco packaging, alongside the existing information on harms. Proposed themes included the physical and mental health benefits of quitting, the financial benefits and advice on stop-smoking aids. The work to respond to the consultation is under way, and we are committed to responding in this parliamentary Session. That response will include details on the specific themes that may be included, such as anxiety and stress.
Amendments 22 and 23 and new clause 5 centre on the introduction of health warnings on cigarettes and cigarette papers, and would require the Secretary of State to undertake a consultation on that. As with new clause 4 and amendments 18 and 19, I am sympathetic towards the aims of the amendments, which would encourage smokers to quit and provide them with information on the dangers of tobacco. However, we already have some of the most stringent regulations in the world on tobacco packaging and product design, which emphasise the health harms of tobacco. They include the requirement for plain packaging and graphic picture warnings on the outside of cigarette packs. A recent post-implementation review stated that those measures remain effective in helping smokers to quit, and in deterring children from taking up the habit. We will continue to monitor the evidence as to whether further health-harm messages are required, and take further action if necessary. For that reason, I ask the hon. Member for Birmingham, Edgbaston to withdraw her amendments.
Clauses 58 and 60 are both in part 4 of the Bill, which relates to the product requirements for tobacco, vapes and nicotine products, including in respect of packaging and flavours. The powers in part 4 are UK-wide. Clauses 58 and 60 replace existing powers set out in the Children and Families Act 2014: clause 58 replaces powers to make provision about the retail packaging of tobacco products and clause 60 replaces powers to make regulations about other tobacco product requirements, such as the markings on them and the use of branding and logos.
The Standardised Packaging of Tobacco Products Regulations 2015 introduced requirements using the relevant powers, and the Bill will not change the effect of those regulations, which will remain in force. Examples include the regulations covering the minimum pack requirement of 20 cigarettes, the requirements about the colour and shape of cigarette packaging, and the permitted colours forming part of a cigarette. The packaging requirements were originally introduced because there is evidence that standardised packaging reduces the appeal of tobacco products and decreases or delays the uptake of smoking by young people. I commend the clauses to the Committee.
Preet Kaur Gill
I will press amendment 19 to a vote, but not amendment 18. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 19, in clause 58, page 30, line 29, at end insert—
“(3A) The regulations must include—
(a) a requirement for information to be provided on packaging or otherwise supplied with a product stating that smoking does not reduce stress and anxiety;
(b) the specific wording of the statement to be displayed on the packaging or otherwise supplied with a product; and
(c) requirements related to the size or appearance of the statement to be displayed on the packaging or otherwise supplied with a product.”—(Preet Kaur Gill.)
Question put, That the amendment be made.
Dame Andrea Leadsom
As per the previous clause, clause 59 replaces an existing power in the 2014 Act to make regulations about the flavour of tobacco products. Flavours, particularly menthol, have been shown to make it easier for young people to start smoking and therefore more likely to become addicted. That is because menthol flavouring makes the smoke less harsh and therefore easier to inhale. The flavour masks the harms of tobacco. All tobacco is harmful to health, and it is right that the Government have the powers to protect the population from those harms, and especially from tobacco products that may be more attractive to children. I commend the clause to the Committee.
Preet Kaur Gill
As we discussed in the previous debate, tobacco is an insidious industry that causes untold harm to its customers, privatising the profits while socialising the costs. I know that there are many sceptics out there who suggest that the Bill’s central purpose—introducing a progressive rise in the age of sale—is not necessary because the number of people who smoke is steadily declining, especially among young people, but that makes the fundamental error of assuming that those gains are a natural force, not the hard-won result of concerted Government action over many years to reduce the appeal of tobacco.
Among the other measures, restrictions on the flavours of tobacco products that can be legally sold are certainly one, and we do not take it for granted that the powers are restated on the face of the Bill. However, as I have mentioned in previous debates, the issue of flavours has proven difficult to get right. Part of the issue is accessories such as drops, flavour cards and filter balls marketed to be added to tobacco products to give them flavours that they would otherwise not be allowed to have. I ask the Minister again whether she accepts the case that I have made for an amendment to the clause to include reference to accessories to tobacco products to capture such products.
There is also the issue of capturing flavours in legislation. As I mentioned earlier, a survey of smokers in Britain conducted in October 2020, five months after the menthol ban was introduced, and again in March 2023, found that the ban had had a negligible impact. The proportion of adult smokers reporting that they used menthol-flavoured cigarettes in 2023 compared with 2020 dropped by only 2%. Some in the sector went as far as labelling the ban worthless, as tobacco companies continue to sell hundreds of millions of cigarettes laced with menthol. Japan Tobacco International put a range of replacement products advertised as “menthol reimagined” on the market the day the ban came into effect. That was backed up by a handbook for retailers on how to promoted the range, called “Making a Mint”. Smokers were quoted as saying that the products “tasted fully menthol”. A year later, Nielsen data showed that JTI had sold more than 100 million packs of it menthol reimagined brands, amounting to total sales topping £1 billion.
In 2020, Imperial Tobacco made formal complaints about the behaviour of JTI, claiming it was breaching the legislation, before following suit by launching its own green filter range. Does the Minister think that it is time to get it right, and that we should scrap the focus on so-called characterising flavours, which are subjective and difficult to regulate, and extend a ban to all tobacco flavours?
I note that the Government were meant to review the menthol ban legislation nearly three years ago, yet we have not heard anything since then. The whole point of the ban was to target flavours that make it easier for young people to start smoking and increase the likelihood that they will become addicted. I would be most grateful if the Minister shared her thinking on the issue.
Dame Andrea Leadsom
I will share my thinking, because this is important. We are all on the same side where the Bill is concerned, and I say very genuinely to hon. Members that there is an important debate about flavours. The hon. Member for Birmingham, Edgbaston says that we should scrap menthol, but the problem is that if we scrap menthol it will be reimagined as “raspberry mint crush”—it will still be menthol, but simply reimagined. That is the perfect example of how people can get round the legislation by calling it something else—something even more appealing to children.
The idea of tackling the issue in secondary legislation is to ensure that we stay ahead of the industry at all times. I understand the desire to put things in the Bill, but I hope all hon. Members recognise that there are also weaknesses associated with something which, if we are to change it, requires primary legislation to do so.
Clause 59 accordingly ordered to stand part of the Bill.
Clause 60 ordered to stand part of the Bill.
Clause 61
Retail packaging of vaping products and nicotine products
Kirsten Oswald
I beg to move amendment 26, in clause 61, page 33, line 19, at end insert—
“(l) the use of fonts in any alphanumeric markings on the packaging.”
This amendment would allow the Secretary of State to make regulations about the font used on the retail packaging of vaping products and nicotine products.
The Chair
With this it will be convenient to discuss the following:
Amendment 39, in clause 61, page 33, line 37, at end insert—
“(7) Before making regulations under this section the Secretary of State must—
(a) consider whether there are any persons who appear to be representative of the interests of those likely to have an interest in the regulations, and
(b) if there are, to take reasonable steps to consult them.”
Clause stand part.
Amendment 40, in clause 62, page 34, line 27, at end insert—
“(7) Before making regulations under this section the Secretary of State must—
(a) consider whether there are any persons who appear to be representative of the interests of those likely to have an interest in the regulations, and
(b) if there are, to take reasonable steps to consult them.”
Amendment 21, in clause 63, page 34, line 36, leave out from “products” in the second place it occurs to the end of line 37 and insert—
“(g) any other features of vaping products or nicotine products.”
This amendment allows for changes to other features of vaping or nicotine products as set out in the TRPR 2016 section 36 which do not distinguish between different brands such as capacity of refills, cartridges or pods, and nicotine delivery.
Amendment 41, in clause 63, page 35, line 20, at end insert—
“(6) Before making regulations under this section the Secretary of State must—
(a) consider whether there are any persons who appear to be representative of the interests of those likely to have an interest in the regulations, and
(b) if there are, to take reasonable steps to consult them.”
Clause 63 stand part.
Amendment 42, in clause 71, page 39, line 29, at end insert—
“(6) Before making regulations under this section the Secretary of State must—
(a) consider whether there are any persons who appear to be representative of the interests of those likely to have an interest in the regulations, and
(b) if there are, to take reasonable steps to consult them.”
Amendment 43, in clause 72, page 39, line 38, at end insert—
“(4) Before making regulations under this section the Secretary of State must—
(a) consider whether there are any persons who appear to be representative of the interests of those likely to have an interest in the regulations, and
(b) if there are, to take reasonable steps to consult them.”
Amendment 44, in clause 73, page 40, line 16, at end insert—
“(5) Before making regulations under this section the Secretary of State must—
(a) consider whether there are any persons who appear to be representative of the interests of those likely to have an interest in the regulations, and
(b) if there are, to take reasonable steps to consult them.”
New clause 10—Power to change product requirements of vaping and nicotine products—
“(1) The Secretary of State may by regulations amend regulations 36 and 38 of the Tobacco and Related Products Regulations 2016.
(2) Regulations under this section—
(a) shall be made by statutory instrument; and
(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”
This new clause enables the Secretary of State to amend sections 36 and 38 of the Tobacco and Related Products Regulations 2016 related to general product requirements of vaping and nicotine products.
Kirsten Oswald
I am happy to speak to amendment 26, which was tabled by the hon. Member for Sleaford and North Hykeham, as a signatory to the amendment. The amendment seeks to deal with the use of fonts in any alphanumeric markings on the packaging. That would allow the Secretary of State to make regulations about the font used on the retail packaging of vaping and nicotine products.
The logic behind the amendment is that it would allow the Secretary of State to preclude vape companies from getting round the ugly packaging requirements by choosing an attractive or distinguishable font. The amendment provides helpful clarity. I appreciate that there is probably an ability to make provision on fonts in the Bill, but I am not sure that “probably” is good enough. The Committee has spoken about the need to try and stay ahead of the game when it comes to the companies, which are fleet of foot when trying to find ways of stopping us preventing the harms we are seeking to prevent.
Mary Glindon (North Tyneside) (Lab)
I want to speak to my amendments to clauses 61, 62 and 63, which are all in a similar vein. My amendments would bind any Government to considering whether there are people who have an interest in future regulations on vaping packaging, and if so, to consult them. The point of the amendments is consultation, which would include all stakeholders with an interest—not just the industry but those who use vaping products to help them stop smoking. While the Government and the Minister have committed to that for the first round of regulation, there is no requirement for a future Government to do so.
My amendments 62 and 63 would require the Government to consult before implementing regulations. I will not press them to a Division, but I hope that the Minister, as she said she would last week, will consider and take away everything that is being suggested. I make the plea on behalf of the industry. The vaping industry takes very seriously the notion that children should not be allowed to vape, and that every precaution should be taken to ensure that children do not vape and that vapes are used as a tool to stop smoking. I say that as a member of the responsible vaping all-party group. I have followed this for many years, and am an advocate of vaping as a tool to stop smoking. I repeat that I will not press my amendments to a vote.
Bob Blackman
I rise to speak to amendment 21, which I tabled with other hon. Members. It seeks to regulate vaping product standards and is vital to the Bill. The amendment allows for changes to other features of vaping or nicotine products, as set out in regulation 36 of the Tobacco and Related Products Regulations 2016, which at the moment do not distinguish between the differences among brands, such as capacity of refills, cartridges or pods, and nicotine delivery. My amendment would ensure that the Secretary of State has powers to revise generic product requirements, as set out in regulation 36 of the TRPR.
Importantly, my measure would be permissive, rather than a requirement. The wording of clause 63(1)(f) as drafted limits revision to features that “distinguish between different brands”, and could potentially exclude revision to generic standards such as capacity of refills, cartridges and pods, and nicotine delivery. The standards in the TRPR were developed for e-cigarettes only in the EU tobacco products directive back in 2013. Vaping and nicotine products have evolved considerably over the past 11 years, and they will continue to evolve, so it is vital that the Secretary of State has powers to revise the standards.
The change I propose is not to the intent of the clause; it is merely a clarification to ensure that there is no risk of limiting the powers of the Secretary of State only to characteristics that are brand-specific. Will the Minister, in her response, either accept amendment 21 or to come back with further consequential amendments, which will ensure that the Secretary of State has the powers that we know will be needed, because the industry will evolve and change its products. The industry will look at the Bill when it becomes an Act, and the risk is that we will have to come back and look at this again.
Preet Kaur Gill
New clause 10 would provide powers to the Secretary of State to amend regulations 36 and 38 of the Tobacco and Related Products Regulations 2016. As has been remarked several times in our debates, one of the biggest risks to the success of this legislation in achieving a smoke-free future and tackling youth vaping is that, if the Bill is not tightly worded, vexatious tobacco companies could find loopholes and workarounds. We have been discussing those with the failure of the flavours ban; the same goes for vapes.
To reiterate, Labour is ready to come down like a ton of bricks on any company that would attempt to profit at the expense of our children’s health. We know that the business model of tobacco and, let us face it, of vape companies is addiction. That is not to say that vapes are anywhere near as destructive and harmful as tobacco, but they are not good for us, and if we do not smoke, we should not vape.
The clauses on product requirements provide powers to the Secretary of State to create regulations for the retail packaging of vaping and nicotine products, as well as other product requirements, and they are, at face value, welcome. For a long time, we have been saying that we need to come down hard on those companies blatantly marketing nicotine addiction to children. I have seen egregious examples of that. It is not just the bright colours and pick-and-mix flavours. We heard in evidence from the NASUWT about vapes designed to look like USB sticks or highlighter pens so that they can easily fool teachers in schools. E-liquids available on the market called Candy King look like sherbet dip. I was sent one example from trading standards that really turned my stomach: a vape it seized that was shaped like a sippy cup. That is why we have long been calling for the standardisation of vape product requirements, to remove the risk that products can be designed to appeal to children. At a minimum, the regulations should allow for bright colouring and child-appealing imagery and product names to be removed.
The one thing that companies have shown time and again, however, is that they are agile. They are able to innovate faster than Government have been able to keep up, often to harmful ends. My concern with clauses 61 and 63, which new clause 10 seeks to address, is that the powers provided are limited. In clause 61(3), the wording specifies that the regulations that the Secretary of State may create may include provisions about
“features of the packaging of vaping products or nicotine products which could be used to distinguish between different brands of the product”.
The same phrase is used about other product requirements in clause 63(1)(f). My concern is that such a caveat could exclude revision to generic standards, such as capacity of refills, cartridges or pods, and nicotine delivery.
As I mentioned, we have heard how part of the issue with the use of vapes is their tactility. They are discreet and can easily be hidden, and all evidence I have received about the concurrent disposable proposals that are being worked on by the Department for Environment, Food and Rural Affairs is that there will be little change. The leading producers will be able to meet those new requirements with a few minor adjustments to their products, such as attaching a USB port. I appreciate from his amendment that the hon. Member for Harrow East has similar concerns. I therefore think we should include provisions for other requirements to be introduced for these products that would have an impact on their use by children, while maintaining their viability as an attractive stop-smoking aid.
I include in new clause 10 powers to amend regulation 38 of the Tobacco and Related Products Regulations 2016, as well as regulation 36 on general product requirements, as they cover a range of miscellaneous presentational issues such as misleading or harmful claims that the product has certain health or lifestyle benefits, or attempts to mimic other items. I note, for example, that the current regulations specify that vapes cannot look like a food or cosmetic product, but that does not include looking like stationery, which was an issue identified in evidence by the NASUWT. Conversely, those regulations specify that a product cannot make any environmental claims where it may, in fact, be beneficial to do so to encourage greater use of reusable features once the regulations on single-use vapes come into effect.
Simply put, the purpose of the new clause is to give greater flexibility to Ministers to design regulations that can respond to problems as they arise and so that those powers are not limited to the aesthetic features of packaging or the products themselves, but can prohibit product claims and other characteristics that may appeal to children. My concern is that the legislation as drafted would not achieve that, particularly as we are dealing with regulations that were designed for vapes but which, through the Bill, could be extended to a host of as yet less understood nicotine products. We therefore need that flexibility.
Dame Andrea Leadsom
I am genuinely grateful to hon. Members for bringing this discussion before the Committee. We all agree that with vaping, product packaging is an integral part of what we are seeking to avoid for children. As I have said before, I am on the warpath where promoting vaping to children is concerned. I want to assure all hon. Members that the reason I resist the amendments is that we already have the powers in the Bill and I want to explain how that is so.
I am sympathetic to the concerns raised. Making sure we have the right powers to tackle the appeal of vapes to children is crucial and integral. It is totally clear that the design of many vapes is targeted at children, with brightly coloured features and eye-catching designs. There is no way we will stand by while industry knowingly, deliberately and maliciously encourages children to take up addiction and use products that have been designed for adults to quit smoking. The chief medical officer has written:
“Companies trying to addict children for profit are behaving in a shameful way. Yet it is undoubtedly happening.”
That is why we are bringing forward powers to regulate product requirements as part of the Bill.
I am sympathetic to the broadening of the scope of our regulations so they cover all product and packaging features and requirements, as in amendment 21. However, the Bill already contains regulation-making powers to make provision, in relation to vaping and nicotine products, for things such as appearance, size and packaging, as well as the substances that may be included and the amount of any substance within the e-liquid, including nicotine.
Trudy Harrison (Copeland) (Con)
May I seek clarity that the font would be included in the category of appearance, because I have certainly seen some vaping products advertising lemon flavour and the font appears in a very stylised way that I would suggest is aimed at young children?
Dame Andrea Leadsom
Absolutely. The Bill does allow us great flexibility in these areas and, to clarify, this does include amending fonts and alphanumeric markings, which is the intent of amendment 26. The Bill already provides for that, just to be absolutely clear. That is why we do not need to take additional powers to amend aspects of the Tobacco and Related Products Regulations 2016, as suggested in new clause 10. The Bill already captures all the features that we may need to regulate, and allows that regulation to extend to non-nicotine vapes and other nicotine products.
Amendments 39 to 43 effectively place a duty on the Secretary of State to consult on secondary regulations. As stated in the House on Second Reading, I want to make clear my commitment to undertaking, on the vape regulations, comprehensive consultation regarding, but not limited to, packaging, product requirements, flavours and changes to the MHRA vape notification scheme. I want to make it clear to the Committee that, of course, prior to those regulations we will engage in comprehensive stakeholder discussions. For that reason, it is not necessary for a legal duty of consultation to be placed on the Secretary of State in relation to the regulation-making powers. That would result in a loss of flexibility and speed. There may be occasions when we will need to make minor changes, or quickly adapt to emerging products. Of course, in the vast majority of cases, consultation is the right and proper thing to do, but we do not need this to be stipulated in the Bill. For those reasons, I ask hon. Members to withdraw or not press their amendments.
Clauses 61 and 63 provide the Secretary of State for Health and Social Care with a power to make regulations about the retail packaging of vaping products and nicotine products and to introduce other product requirements for vaping and other nicotine products. Vaping is never recommended for children. It risks addiction and unknown long-term health impacts while their lungs and brains are still developing. We must not replace one generation addicted to nicotine with another. We know that giving up nicotine is difficult because the body has to get used to functioning without it. Withdrawal symptoms include cravings, irritability, anxiety, trouble concentrating, headaches and other mental symptoms, so I say to those children currently thinking, “A vape is going to calm me for my GCSEs” that it is going to do the exact opposite. We need to get that message across to children.
Despite the clear health advice, there has been a significant and alarming rise in the number of children vaping. Data shows that the number of young people vaping has tripled in just the last three years and now one in five children has used a vape. That is incredibly alarming and it is unacceptable. We heard, in our vaping call for evidence, that children are attracted to vapes by the brightly coloured packaging and the use of child-friendly images such as cartoons. The hon. Member for Birmingham, Edgbaston gave very good examples. Research on vape packaging has shown that reduced brand imagery can decrease the appeal to young people who have not previously smoked or vaped, and can do so without reducing the appeal of vapes to adult smokers trying to quit. To protect children from potential health harms of vaping, we must reduce the ways in which vaping appeals to them, and do so without impacting on adult smokers.
Mary Glindon
I am not sure whether this is the appropriate moment for this question, but the Minister is making such a good case for making vaping unattractive and stopping vapes being available to children that I want to ask whether she has considered the idea of the licensing scheme that the vaping industry has put together—I believe that it has been presented to the Government before, although perhaps not to the Minister, in her position—which it believes will control who sells and supplies vapes and provide a vast sum to support greater enforcement. I just ask that, incidentally, as a question that the Minister may be able to answer.
Dame Andrea Leadsom
I am grateful to the hon. Lady for giving me the chance to give my personal opinion on licensing. It is a licence for the vaping industry to get rid of the competition, make loads more money and focus even more on addicting children to vapes. It is the most cynical of all the cynical proposals I have seen. I am literally in no way in support of a licensing regime. I see lots of nods around the room; I hope that my personal view is clear and am glad that it seems to be shared by a number of hon. Members.
Clause 61 provides the Government with regulation-making powers, which could be used to limit the appeal of vapes and other nicotine products to children. This could include, for example, regulating the types of imagery that can be used on packaging, as well as the size, shape and appearance of the packaging—subject, of course, to further consultation.
Clause 63 allows us to introduce requirements that could, for example, limit the types of imagery used on the product itself, as well as its size and shape. I therefore commend the clauses to the Committee.
Question put, That the amendment be made.
Dame Andrea Leadsom
This clause provides the Department of Health and Social Care Secretary of State with a power to regulate the contents and flavour of vaping products and nicotine products.
Vaping is never recommended for children and, as we have just discussed, risks addiction and long-term health impacts. We know that children are attracted to the fruit and sweet flavours of vapes, both in their taste and smell, as well as how they are described. For example, the most frequently used vape flavouring for children is fruit flavour, with 60% of children who currently vape using them; and 17% of children who vape choose sweet flavours such as chocolate or candy.
We also recognise the importance of vape flavours to adult smokers who are looking to quit smoking. It is, therefore, important that we carefully consider the scope and impact of restrictions so that we reduce the appeal of vaping to children, while avoiding any unintended consequences on adult smoking rates. We have committed to consult on any regulatory measures regarding flavours. I can tell the Committee that I had an interesting roundtable with members of the public health sector, who were themselves entirely divided on whether reducing vapes significantly would encourage adult smokers to carry on smoking, rather than turning to vaping. It is a very live issue, at which we need to look carefully.
To achieve these aims, the clause will enable the Government to make regulations in future to regulate the substances and the amount of any given substance that may be used in vaping or other nicotine products, as well as the flavours of those products. That also means that regulations are future-proofed in the event of new nicotine products coming to market; we will be able to regulate any new nicotine product, and protect our children from future addiction and health harms. I commend the clause to the Committee.
Preet Kaur Gill
I thank the Minister for her explanation of the clause. As I have already outlined, we are very concerned about the explosion in under-age vaping in recent years, with youth use trebling in the past two years alone. I think I speak for everyone in the Labour party when I say that we have been very concerned about some of the products appearing on our local shop shelves, which are obviously marketed to children.
I do not want to lump the whole of the industry in together, but some of these companies are clearly linked to big tobacco and have used big tobacco-style tactics to target youngsters. They see the way things are going with smoking and have sought to addict a new generation through vapes and other products. We therefore support the clause, which will allow us to stop products with flavours mimicking popular sweets or with bizarre names like “unicorn shake” from sucking young people and other vulnerable non-smokers in. I am afraid to say that the Government have been asleep at the wheel on this issue, and there has been a bit of a free-for-all as a result. I was flabbergasted to learn from the MHRA that something like 600,000 different vaping products have gone through the notification process and can legally be sold in the UK now.
All that said, I do appreciate the genuine and legitimate concern from people who have used vapes to help them quit smoking that, in seeking to course correct, the Government could go too far in the other direction and take away the flavours that they enjoy and feel have helped them stay off cigarettes. I appreciate that my hon. Friend the Member for North Tyneside has raised concerns to that effect, and I want to reassure her that we are committed to consulting on this issue before introducing regulations, so that we can get the balance right.
I have mentioned on previous clauses that when it comes to tobacco regulation, some of the restrictions on flavours have been among the least successful of any regulations brought in by successive Governments in recent decades. In the disappointment of the menthol ban is the cautionary tale that implementing these regulations will take thought and care. Similarly, the quagmire that the Food and Drug Administration in the US has sunk into is something we should obviously seek to avoid. I wonder if the Minister could therefore comment on what lessons she has drawn from the US, where the blanket ban on flavours has seen only a few dozen products approved for legal sale in three years, while illegal products remain widely available in stores.
The key issue we need to crack is what the best way is of dealing with flavours—is it descriptors, ingredients or the characterising flavour itself? On the latter point, I have already mentioned the menthol ban. Can the Minister please set out her view on how to proceed, given that the Bill leaves the specifics of how to implement restrictions on flavours quite open, including how the flavour of a product is to be determined. Has she conducted a systematic review of how Governments in other jurisdictions have sought to tackle this? Given our desire to protect the use of vapes as a smoking cessation aid, can she set out how restrictive she thinks regulations on flavours should be? Would she go as far as Canada in banning all fruit flavours, for instance? Given that the powers in the clause may be some of the trickiest to implement, I would be grateful if she could devote time in her response to answering these questions.
Bob Blackman
I rise in support of clause 62, noting the two amendments proposed by a Member not on the Committee that would have removed the power of the Secretary of State to deal with flavours. I consider it vital that the Secretary of State can make regulations about flavours of vaping products and nicotine products. As has been said, this is a much-needed power to help curb youth vaping.
The chief medical officer Sir Chris Whitty spoke very strongly when giving evidence to the Committee. He said:
“We are strongly supportive of Ministers in all four nations having the power to regulate flavours…We know that otherwise the vape industry will use this to essentially drive a coach and horses through the aims of the Bill, which is to make products less attractive to children”.––[Official Report, Tobacco and Vapes Public Bill Committee, 1 May 2024; c. 74, Q103.]
Indeed, literally overnight Action on Smoking and Health has published data showing that youth vaping has stabilised. That is the good news. The bad news is that 7.6% of 11 to 17-year-olds regularly vape. That is above the pre-pandemic level of 4.4%, so it has almost doubled since then. Young people are being encouraged to become addicted to vaping and will potentially go on to even more harmful products.
Exposure to marketing is also up. Some 55% of young people are exposed to vaping in shops, where vapes are on full display, and nearly a third are exposed to vaping online, so we need to take action. The measures in the Bill, particularly in this clause, will make starting to vape far less attractive to young people. That is why it is essential that it remains part of the Bill. I hope that as the Bill progresses we can resist further proposals that might seek to remove this measure from the Bill.
Kirsten Oswald
The clause is important. We have had discussions here and listened to experts in numerous sessions, which should give us a real opportunity to pause and consider why the measure is necessary. We know the incredible damage that smoking does to far too many lives and the importance of assisting people to stop smoking. Vaping can certainly be an important and helpful part of smoking cessation—that must be acknowledged.
I find it difficult, though, to imagine that many people successfully stop smoking by using a hot pink disposable pocket-money costing vape in “candy floss unicorn” flavour. That is not what those are for nor what they are aimed at. Action to deal with flavourings, as well as names and descriptions and so on, is essential. We are more than able to deal with smoking cessation and the importance of supporting that at the same time as dealing with the harms of vaping. I would be interested if the Minister could tell us about lessons from elsewhere about how that has successfully been done.
It is important to reiterate the significant numbers of youths who vape: 7.6% of 11 to 17-year-olds currently vape. That is not those who have tried vaping. For those who have tried vaping, the numbers are significantly higher and they are absolutely targeted by marketing. Even those numbers—which, as the mother of teenagers, certainly will give me further grey hair—are partly because of the exposure to marketing. We know that wherever we are and whichever shop we go into, we see attractive displays of vapes, and the flavours are a part of those displays. More than half of young people have felt exposed to that kind of marketing in shops, and nearly a third online. The Minister will not be surprised to hear me remind the Committee that people are also exposed to the advertising when they go to watch their favourite sports teams. That is wholly unacceptable and indefensible.
I support the clause, although I think more could be done, but that will come up in our later conversations.
Mary Kelly Foy (City of Durham) (Lab)
I want to speak briefly in support of the clause. I am frustrated that we would need yet more consultation when there is an awful lot of evidence to support prohibiting the tactics, branding and sweet flavourings. Indeed, that was recommended by the Khan review. I am frustrated that I tabled an amendment to this effect in 2021. If it had been passed instead of being voted down by the Government, fewer children would be addicted to nicotine now.
Dame Andrea Leadsom
I share the views expressed here today that we have got to stop the marketing aimed at children in the brutal and cynical way that is happening right now. Hon. Members will appreciate that the limiting of flavours is a tricky thing to achieve. Is it the name of the flavour? Is it the ingredients in the flavour? Is it a combination of the ingredients and the flavours?
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (Con)
The Minister is making a considered point. The Committee has received research data from ASH that highlights how complex the issue is. Although 50% of child vapers preferred fruit flavours, 47% of adult vapers also preferred fruit flavours. We therefore have to consult on and take these issues forward in a very considered way, because we do not want to undermine the harm reduction from helping adults who are trying to stop smoking.
Dame Andrea Leadsom
My hon. Friend is exactly right. There is another factor, of course, which is that a lot of these vape flavours are non-toxic for consumption only, as the chief medical officer has pointed out. As he said to me, “If you drink a glass of water, it’s fine, isn’t it? But if you breathe it in, it’s not quite so fine.” That is a slightly silly example, but the point is that a flavour that might be fine if it was in an ice cream could have a very different impact if it was breathed in—we just do not know. It is therefore important that we consult further. As my hon. Friend and others have said, we must ensure we do not remove the ability of adult smokers to use vapes as a quit aid, but we must stop them being marketed to children.
Question put and agreed to.
Clause 62 accordingly ordered to stand part of the Bill.
Clause 63 ordered to stand part of the Bill.
Clause 64
Power to include provision about enforcement
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
Clause 64 enables any regulations made under the Bill relating to the packaging, flavours and other requirements of tobacco, vape and nicotine products to include provision about their enforcement. That will enable future regulations to include enforcement provisions similar to the enforcement provisions for current tobacco and vape legislation, which are known to be effective. Those include provisions conferring functions to the relevant enforcement authority—local weights and measures authorities in England, Wales and Scotland, and district councils in Northern Ireland—and provisions for the relevant national authority to take over the enforcement function. The effect of the clause is that future regulations relating to the requirements of tobacco, vape and nicotine products can include provisions about their enforcement and so be successfully implemented and enforced. I commend the clause to the Committee.
Preet Kaur Gill
I thank the Minister for that explanation. Of course, where we create new regulations, we must give powers to the appropriate authorities to enforce them, so we support the clause. I do not want to labour the point, as I have made it previously, but I did not receive all the answers to the questions that I asked, so I will ask them again. How will the £30 million investment in enforcement agencies such as trading standards, His Majesty’s Revenue and Customs, and Border Force be split? Is it a one-off investment? If it is, what is the timeframe over which the investment will be delivered? Or will it be an annual uplift to support their work? Can the Minister provide a breakdown of what the investment will be used to fund?
Dame Andrea Leadsom
The funding for enforcement agencies will be increased by £30 million a year, to be used by HMRC, Border Force and trading standards, and the breakdown of the funding will be determined on an ongoing basis.
Question put and agreed to.
Clause 64 accordingly ordered to stand part of the Bill.
Clause 65
Power to make provision binding the Crown
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
This clause states that when regulations are made under part 4 of the Bill—on tobacco, vaping and nicotine product requirements—the requirements could be applied to the Crown in the same way as the measures in part 1 of the Bill explicitly apply to the Crown. It is a standard clause that enables any regulations made under part 4 of the Bill to apply to the Crown in the same way as the measures in part 1. I commend the clause to the Committee.
Preet Kaur Gill
As with part 1, we have no objections to raise about this clause.
Question put and agreed to.
Clause 65 accordingly ordered to stand part of the Bill.
Clause 66
Power to amend other legislation
Question proposed, That the clause stand part of the Bill.
Preet Kaur Gill
I touched on this in relation to my new clause 10, which was grouped under clause 61. Clearly, a gamut of regulations on the statute book stands to be affected by further regulations that will be introduced under the Bill. It is therefore apposite to provide powers to amend or remove them as they are changed or replaced. We therefore agree to the inclusion of this clause.
Question put and agreed to.
Clause 66 accordingly ordered to stand part of the Bill.
Clause 67
Consent to regulations under Part 4
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
Clause 67 requires that, before the introduction of any regulations setting product requirements for tobacco, vaping and nicotine products, the Secretary of State must obtain consent from the devolved Administrations if the regulations include provisions that would be within their devolved competence. This is a standard clause that enables the Bill to function effectively. I commend the clause to the Committee.
Preet Kaur Gill
I thank the Minister for that. We of course agree with this clause to ensure that, wherever appropriate, consensus is sought on any regulations made under this part of the Bill.
Question put and agreed to.
Clause 67 accordingly ordered to stand part of the Bill.
Clause 68
Consequential repeal
Question proposed, That the clause stand part of the Bill.
Preet Kaur Gill
I do not take for granted the enormous legislative tidying-up that this Bill requires, given that there are pieces of tobacco-control legislation extending back nearly 100 years that are affected by some of the new provisions. If I have not done so already, I would just like to pay a brief tribute to the work of the officials who have done the diligent work of helping to draft the Bill, dotting all the i’s and crossing the t’s to make it fit for publication.
I am happy for this clause to be included in the Bill, but there is one element of the legislation being replaced that I want to ask about. The Children and Families Act 2014 includes a clear and generous definition of the term “packaging” in relation to a tobacco product, and, as we have seen, the “retail packaging” part of the legislation has been of particular interest to other members of the Committee. I wonder whether the Minister knows why the Bill, as drafted, provides a definition of retail packaging, but not of packaging. The definition under the 2014 Act clearly includes external packaging, internal packaging, any wrapper of that product, or any other material attached to or included with that product.
Do we not lose something by revoking that definition, particularly if we consider the changes that this Committee has been keen to make to clause 58? For example, where clause 58(3) of this Bill refers to
“any other features of packaging”,
the 2014 Act refers specifically to
“any other features of the retail packaging”.
I do not disagree with the change; I only comment on it, and ask whether defining the term “packaging”, as opposed to “retail packaging”, would be useful.
Dame Andrea Leadsom
I would like to take this moment, as the hon. Member for Birmingham, Edgbaston has, to say that this has been an incredible piece of work, at pace, by the Bill team. I would like to add my thanks and my gratitude to them for all of their hard work, and for all of the collaboration with all of the devolved Administrations, which has been superb. This Bill has really come forward at pace.
On the hon. Lady’s point about packaging, I can absolutely assure her that packaging will be included in the broadest sense of the word. If she wants me to define “retail packaging” versus “packaging”, I can do so in writing.
Question put and agreed to.
Clause 68 accordingly ordered to stand part of the Bill.
Clause 69
Interpretation of Part 4
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
Clause 69 sets out definitions to be used within the Bill, such as those to identify certain tobacco products—such as herbal smoking products—retail definitions such as retail packaging, and vape-related phrasing such as “vape” or “vaporises”. These definitions were previously covered in clause 34 under part 1 of the Bill.
Clause 70 simply provides the definition of nicotine product used throughout part 4 of the Bill. The definition that we use here is intended to capture nicotine delivery devices and products other than vapes and tobacco products. That will enable us to regulate emerging products, such as nicotine pouches, which we know are being used increasingly by young people. We simply cannot replace one generation addicted to nicotine with another; we know how damaging it is once someone is addicted. I commend these clauses to the Committee.
Preet Kaur Gill
I will not go over the same points I raised for the previous clause on the distinction between packaging and retail packaging. As the Minister says, the clauses relate to the definitions in this part of the Bill, so we have no strong quibbles. For clarity, I want to ask why the definition of nicotine product has been drafted in the way that it has. Why does the definition differ from that in clause 35 in part 1? Why have the Government not opted to define nicotine and tobacco products in similar ways, which would encompass both the ingredients and the devices used to consume them?
I note the carve-out of medicinal products and medical devices from the definition of vapes. Could the Minister tell us what, if any, discussions she has had with vape producers about designing a product that could be licensed as a medicinal product and potentially made available on prescription? If she has had no discussions, what does she see as the barriers? Lastly, has she considered whether there is any potential for other nicotine products to serve the same purpose as stop-smoking aides that are appropriate for clinical use?
Dame Andrea Leadsom
The definitions are to provide the broadest and most flexible range of powers to clamp down on all the various illicit and under-age products designed to get children addicted to nicotine as early as possible. The hon. Lady makes an interesting point about getting a licensed vape, and we have had discussions about it. Interestingly, so far no vape company has come forward to propose a prescription-only type of vape, as she suggests. That may happen in the future, and it is something we can perhaps discuss offline.
Question put and agreed to.
Clause 69 accordingly ordered to stand part of the Bill.
Clause 70 ordered to stand part of the Bill.
Clause 71
Extension of notification requirements etc
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
Before being able to sell nicotine vapes on the UK consumer market, producers should ensure that their products meet the standards required under the Tobacco and Related Products Regulations 2016 and notify the Medicines and Healthcare products Regulatory Agency as to the contents and ingredients of their products and submit their contact details. Non-nicotine vapes and other nicotine products are currently only covered by the General Product Safety Regulations 2005, which means there are no requirements to notify for these products in the same way as nicotine vapes.
Clause 71 provides regulation-making powers to introduce notification requirements for non-nicotine vapes and other consumer nicotine products, and a power to introduce fees to cover the cost of administering the new requirement. Notification plays a vital role in the oversight and compliance of vapes to help ensure that products meet regulatory requirements and are safe for consumers. Given that the Bill gives powers to introduce new restrictions on vapes via future regulations, it is necessary to be able to amend the information required by the vape notification system.
New vape regulations will likely make several changes that would impact on the design and make-up of a vape, and it is essential that the notification system can be updated with new information requirements so that it remains effective in the future. That is why clause 72 provides a power to amend the information that must be submitted when a vape or other nicotine product is notified for sale on the UK market. Without that power, the notification system would likely not align with all future restrictions placed on vapes and would therefore become ineffective.
While the notification system is not an enforcement tool, enforcement agencies use the published information to distinguish between products that have been notified for sale on the UK market and those that have not. There is currently no means by which the MHRA can withdraw a notification from the published list—for example, if a required fee is not paid. As such, clause 73 provides a regulation-making power to create exceptions to the requirement to publish notifications—that is, to allow for a notification to be removed, for example, in the event where a required fee has not been paid. The regulations that may be made under powers in part 5 may relate to consumer protection, which is a transferred—that is, devolved—matter in Northern Ireland but remains a reserved matter for Great Britain.
I turn to clause 74, which provides that if regulations relating to the notification system contain provision that would be within the legislative competence of the Northern Ireland Assembly, the Secretary of State for Health and Social Care must obtain the consent of the Executive Office in Northern Ireland. The consent provision maintains and upholds the devolution position in Northern Ireland concerning consumer protection matters with respect to regulations made under part 5. The effect of the clause is to enable the powers in part 5 to be exercised effectively, respecting the devolution settlement with Northern Ireland. I commend these clauses to the Committee.
Mary Glindon
My amendments to clauses 71, 72 and 73 are self-explanatory and I do not wish to detain the Committee on them any longer. The key to them all is that they would require the Government to consult on the new powers they are taking with these regulations.
Preet Kaur Gill
I will make some remarks about each of the clauses in turn. As we have discussed, this Bill finally addresses the issue of non-nicotine vapes, which have not been included in the same regulations and enforcement framework as nicotine vapes. In my view, that has left a left a significant loophole, undermining action to stop children getting hooked on vapes.
As I have remarked, I think most people would be shocked to learn that it is currently legal to sell vapes to children, even if they do not contain nicotine, given they could so obviously be designed as a gateway to addiction to the real thing. As I have also said, that is doubly concerning when we think about the explosion of illicit vapes ending up on British shelves. We know a considerable proportion of vapes labelled as 0% do in fact contain nicotine, giving me cause for concern that we could have allowed a spate of accidental addictions to these products.
Clause 71 is important because it allows non-nicotine vapes to be included in the notification scheme run by the regulator, the MHRA. The current two-tier system for nicotine and non-nicotine vapes is not currently robust, and that needed to change. Trading standards officers rely on the MHRA’s notification publication to identify illicit vaping products on the market. The blanket exclusion of non-nicotine vapes from that publication until now makes it much harder for them to identify products that are legitimate from those that are not—a gap that unscrupulous actors in this space are no doubt aware of and I expect have sought to exploit.
Including non-nicotine vapes in the notification process should allow for a complete database of products, while currently it is difficult to identify which products are legal or illegal, which really undermines enforcement action. I thoroughly welcome these new powers and I hope that the Minister will act quickly to remedy this issue.
What plans does the Minister have to quickly ensure that existing non-nicotine products on the UK market will be brought through the notification process? Has that work started, and if so, what is the timeline for its delivery? Does the MHRA have the resources it needs to manage this? Will those non-nicotine vape producers be required now to fund this work through their notification fees?
As we heard during evidence, the impact of vaping products on the developing bodies of children has the potential to be very harmful indeed. It is vital that we take every step to make sure that our systems of regulation and enforcement are as robust as possible, to stop a new generation of products hooking our children on nicotine and harming their health.
I also want to touch on the issue of other nicotine products. As other members of the Committee have touched on, those in the industry who are hellbent on addicting a new generation to their products—this has been a very profitable business model for them—will probably seek to pivot to other products. Nicotine pouches is one such area. Given the notification process in the Tobacco and Related Products Regulations 2016 was designed for vapes, it would not be appropriate to apply that process word for word to these very different products. Can the Minister say what preparatory work has been done on that issue?
Dame Andrea Leadsom
I am very happy to write to the hon. Lady with further thoughts, but I think we have covered all the points that she raised.
Question put and agreed to.
Clause 71 accordingly ordered to stand part of the Bill.
Clauses 72 to 74 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Aaron Bell.)
Tobacco and Vapes Bill (Eighth sitting)
Tuesday 14th May 2024
(1 month ago)
Public Bill CommitteesRead Full debate Tobacco and Vapes Bill 2023-24 View all Tobacco and Vapes Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 14 May 2024 - (14 May 2024)
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Health and Social Care (Dame Andrea Leadsom)
The clause provides quite simply that, if any measures in this Bill did not apply to the parliamentary estate, they would do so by virtue of the explicit mention in this clause. It simply removes loopholes, and I commend it to the Committee.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
I would never want us to be accused of the damning political adage that it is one rule for them and one rule for everyone else, so of course I support the parliamentary estate being subject to the same regulations.
Question put and agreed to.
Clause 75 accordingly ordered to stand part of the Bill.
Clause 76
Regulations: general
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
Clause 76 provides that any regulations made under the Bill may make
“consequential, supplementary, incidental, transitional or saving provision”.
That is a very good set of words. This enables any regulations to introduce provisions for different purposes, as well as to make different provisions for different parts of the UK.
Clause 77 provides the procedures for making regulations under the Bill. Regulations made by the Secretary of State or Welsh Minister are to be made by statutory instrument. Regulations made by Scottish Ministers are to be made by Scottish statutory instruments.
Preet Kaur Gill
As the Minister says, clause 76 provides that, where regulations are made under the Bill, the regulations may make
“consequential, supplementary, incidental, transitional or saving provision”,
and it allows regulations to introduce different provision for different purposes, as well as different provision for different parts of the United Kingdom. The explanatory notes to the Bill cite the helpful example that
“under powers in Part 5 (Notification requirements etc for vaping and nicotine products), different provision may need to be made for Great Britain and Northern Ireland”,
since Northern Ireland uses its own portal for publications. I expect our colleagues in the other place will have their own comments to make about the various consequential and incidental provisions in the Bill, but, as far as I am concerned, I am happy to see the inclusion of the clause.
Similarly, on clause 77, I have no substantial comments to make apart from noting how important it has been to ensure that the important new regulations that we are introducing through this Bill are implemented equally and at the same time across all four nations of the United Kingdom. I echo the Minister’s thanks to Ministers in the devolved nations for the constructive way in which they seem to have engaged with and supported the Bill.
Question put and agreed to.
Clause 76 accordingly ordered to stand part of the Bill.
Clause 77 ordered to stand part of the Bill.
Clause 78
Extent
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
This clause simply outlines the extent of the Bill: part 1 applies to England and Wales, part 2 to Scotland, part 3 to Northern Ireland and parts 4, 5 and 6 to the whole of the UK. It is a standard clause that helps the measures in the Bill to function effectively, and I commend the clause to the Committee.
Preet Kaur Gill
As the Minister has set out, clause 78 outlines the territorial extent of the Bill. We have discussed many of these discrepancies with earlier clauses, particularly on the sale and supply of tobacco, vapes and nicotine products. I have no further comments to add.
Question put and agreed to.
Clause 78 accordingly ordered to stand part of the Bill.
Clause 79
Commencement
Bob Blackman (Harrow East) (Con)
I beg to move amendment 24, in clause 79, page 42, line 16, leave out “and 8” and insert
“, 8 and (age verification policy)”.
This amendment to the commencement provisions would mean that NC6 (age verification policy in England and Wales) would come into force six months after Royal Assent.
The Chair
With this it will be convenient to discuss the following:
New clause 6—Age verification policy—
“(1) A person commits an offence if the person—
(a) carries on a tobacco, herbal smoking product or vaping product business, and
(b) fails to operate an age verification policy in respect of premises at which the person carries on the tobacco, herbal smoking product or vaping product business.
(2) Subsection (1) does not apply to premises (“the business premises”) from which—
(a) tobacco products, herbal smoking products, cigarette papers or vaping products are, in pursuance of a sale, despatched for delivery to different premises, and
(b) no other tobacco, herbal smoking product or vaping product business is carried on from the business premises.
(3) Before the specified date, an “age verification policy” is a policy that steps are to be taken to establish the age of a person attempting to buy a tobacco product, cigarette papers or a vaping product on the premises (the “customer”) if it appears to the person selling the tobacco product, cigarette papers or vaping product that the customer may be under the age of 25 (or such older age as may be specified in the policy).
(4) After the specified date, an “age verification policy”—
(a) in relation to a tobacco business or herbal smoking product business, is a policy that steps are to be taken to establish the age of a person attempting to buy a tobacco product, cigarette papers, herbal smoking product or cigarette papers on the premises (the “customer”) if it appears to the person selling the tobacco product, cigarette papers, herbal smoking product or cigarette papers that the customer may have been born on or after 1 January 2009 (or such earlier date as may be specified in the policy);
(b) in relation to a vaping product business, is a policy that steps are to be taken to establish the age of a person attempting to buy a vaping product on the premises (the “customer”) if it appears to the person selling the vaping product that the customer may be under the age of 25 (or such older age as may be specified in the policy).
(5) In relation to times before the end of 2033, the reference in subsection (4)(a) to the customer being born on or after 1 January 2009 (or such earlier date as may be specified in the policy) has effect as a reference to the customer being under the age of 25 (or such older age as may be specified in the policy).
(6) The appropriate national authority may by regulations amend the age specified in subsection (3) or (4)(b).
(7) The appropriate national authority may publish guidance on matters relating to age verification policies, including, in particular, guidance about—
(a) steps that should be taken to establish a customer’s age,
(b) documents that may be shown to the person selling a tobacco product, cigarette papers, herbal smoking product or a vaping product as evidence of a customer’s age,
(c) training that should be undertaken by the person selling the tobacco product, cigarette papers, herbal smoking product or vaping product,
(d) the form and content of notices that should be displayed in the premises,
(e) the form and content of records that should be maintained in relation to an age verification policy.
(8) A person who carries on a tobacco, herbal smoking product or vaping product business must have regard to guidance published under subsection (7) when operating an age verification policy.
(9) A person guilty of an offence under subsection (1) is liable on summary conviction to a fine not exceeding level 2 on the standard scale.
(10) Regulations under subsection (6) are subject to the affirmative resolution procedure.
(11) In this section—
“the appropriate national authority” means—
(a) in relation to England, the Secretary of State, and
(b) in relation to Wales, the Welsh Ministers,
“herbcal smoking product business” means a business involving the sale of herbal smoking products by retail,
“the specified date” is 1 January 2027,
“tobacco business” means a business involving the sale of tobacco products by retail,
“tobacco, herbal smoking product or vaping product business” means a business which involves any one or more of the following—
(a) a tobacco business,
(b) a herbal smoking product business, or
(c) a vaping product business,
“vaping product business” means a business involving the sale of vaping products by retail.”
This new clause introduces a requirement on tobacco, herbal smoking or vaping product businesses to operate an age verification policy covering steps to be taken to establish the age of persons attempting to buy tobacco, herbal smoking or vaping products, or cigarette papers. It reflects provisions in place in Scotland.
Bob Blackman
I rise to support the amendment and new clause tabled in my name. I will save the Committee time and will not go through the amendment in detail, because obviously colleagues have it in front of them. The key point is that the new clause would introduce a requirement on tobacco, herbal smoking or vaping product businesses to operate an age verification policy, covering steps to be taken to establish the age of persons attempting to buy tobacco, herbal smoking or vaping products or cigarette papers. It reflects that which is already in place in Scotland, where mandatory age verification has been a legal requirement for tobacco and vapes since 2017. A survey of independent UK tobacco retailers for Action on Smoking and Health in 2022 found that 83% supported the introduction of mandatory age verification for anyone aged under 25, with only 5% opposing it, and 91% supported it in Scotland, where it is already in force, with only 4% opposed to it.
I think we should take a lead from our colleagues in Scotland on this particular issue. The Scottish legislation is supported by guidance from the Scottish Government and the Government worked with trade bodies to ensure that retailers understood it. The Scottish legislation provides a legal underpinning to the voluntary Challenge 25 scheme, which operates in the rest of the United Kingdom. A voluntary scheme such as Challenge 25 is by definition inconsistent in its application, leaving some customers unsure about whether they will need to provide proof of age. Seeking verification for anyone who looks under 25 is in line with the legislation for alcohol and is supported by retailers and by the Association of Convenience Stores.
One of the key challenges we face in this Bill is that of workers in retail units challenging people about whether they are old enough to buy such products. The new clause would make it clear that they have a requirement to do so, which would be a good defence for them when they are challenged by their customers.
As the explanatory notes to the Tobacco and Vapes Bill set out, the Bill updates the Scottish legislation to ensure that age verification is consistently and appropriately applied in line with the new age of sale restrictions for tobacco products, herbal smoking products and cigarette papers. Ensuring consistency in the application of age verification is just as important for the other nations of the United Kingdom as it is for Scotland. Why should the Scots have this and not the rest of the United Kingdom?
Kirsten Oswald (East Renfrewshire) (SNP)
I am grateful to the hon. Gentleman for giving way when he was making such a compelling argument. I am also very grateful to hear him speaking so positively of the Scottish Government. He is almost doing my job for me, so I will not seek to speak on the amendment. I want to make it clear to him that I will not support the amendment and new clause purely because they do not impact on Scotland. That says absolutely nothing about my interest in the principles of what he is setting out.
Bob Blackman
I thank the hon. Lady for that intervention. I am always willing to praise people who do the right thing. Unfortunately the SNP Government do not always do the right thing, as many of us know.
Extending the requirements for Scotland to the rest of the United Kingdom is supported by the vast majority of the general public and of retailers surveyed by ASH in 2024. To quote John McClurey, a retired tobacco retailer from Newcastle who, during his 39 years as a small shop owner, successfully implemented the increase in the age of sale from 16 to 18, putting tobacco out of sight in his shops and introducing standardised packaging of tobacco products:
“Like the communities they serve, retailers support creating a smokefree generation by raising the age of sale one year every year from 2027 onwards. However, I know from experience it will be easier for retailers to implement if age verification was required from anyone trying to buy tobacco who appeared to be underage. This won’t apply to existing adult social smokers only to those who look as though they were born after 2008. It’s popular with the public as well as with retailers and it will be a legal requirement in Scotland, so why not the whole of the UK?”
Preet Kaur Gill
I thank the hon. Gentleman for setting out the case for his amendment. We have already debated clause 79 to some extent, and I raised my concerns that we were not introducing regulations to close the loophole on the free distribution of vapes to under-18s sooner.
On new clause 6 and amendment 24 I recognise the point that the hon. Gentleman is making, which is that a mandatory age verification policy has been in force in Scotland for anyone looking under 25 since 2017. My understanding is that that is working well and, indeed, we also have Challenge 25 here in England and in Wales, although not on a legislative footing. The policy of providing a buffer can only help to ensure that those who are under-age, but who look over-age, are caught and are asked for ID—provided everyone knows where they stand and the Challenge 25 policy is well advertised.
As we have already discussed, the view taken in the design of these regulations is to put the responsibility for age of sale restrictions with the retailer, rather than the customer. The question the hon. Gentleman is raising is whether to make carrying ID effectively mandatory for customers buying cigarettes or vapes. I have a few concerns about that that I would like to raise. First, quite rightly, in order to be consistent with the rest of the regulations, his amendments put the responsibility for such a policy on the retailers. However, the effect of the policy would be to require customers to carry ID in order to buy these products if they were under a certain age. There does seem to be a bit of a disjunct, as that risks legislating twice for the responsibility to make sure that retailers do not sell to people who are under-age. Does this not suggest that the penalties for breaching the age of sale legislation need to be stronger in order to incentivise retailers to put robust policies in place?
I am slightly concerned that the policy will also remove flexibility when it comes to, for example, shop workers in local corner shops, who know their customers. Would they not end up having to ask people for ID every time, even when they already know they are over-age? Secondly, I just want to ask how the hon. Member envisages this working in the longer term, given that the age of sale for tobacco will rise every year? How will the Challenge 25 buffer be set accordingly? As it stands in his proposals, it would run out in 2033.
My other question is for the Minister. Presumably there has been a conscious decision to not align with the Scottish law on this subject. Can she explain why that decision was taken, on balance, when consistency in the law across Great Britain would surely be beneficial? Moreover, can I ask whether she has discussed this with Ministers in Wales? Once again, I thank the hon. Member for Harrow East for tabling the amendment and I will be interested in the responses to the questions that I have raised.
Dame Andrea Leadsom
I have a lot of sympathy with the point made by my hon. Friend the Member for Harrow East, and with his amendment and new clause 6. The hon. Member for Birmingham, Edgbaston mentioned some of the reasons why they are potentially slightly confusing and also, perhaps, unnecessary. I understand the point about the neatness of aligning to Scotland. The hon. Lady asked whether we have discussed this with Ministers in devolved Administrations and, of course, the answer is yes.
The decision we took is that the proposal that we have is adequate. New clause 6 would introduce a requirement for businesses selling tobacco products, herbal smoking products and vaping products in England and Wales to operate an age verification policy. The policy would establish a customer’s age if they look under the age specified by the new clause. The new clause seeks to replicate the existing requirements in Scotland, and the related amendment 24 would mean the requirement to operate an age verification policy would come into force six months after Royal Assent.
For purchases of tobacco and herbal smoking products from 1 January 2034, when anyone born on or after the 1 January 2009 turns 25, the age verification policy would need to be updated to reflect the new age of sale for tobacco or herbal smoking-related products. That means that a person selling such products from 2034 onwards would be required to take steps to establish a customer’s age if they looked like they were born on or after 1 January 2009. The age verification requirement for vaping products would remain the same—that is, to take steps to establish a customer’s age if they look under 25.
Although I welcome my hon. Friend’s intention to ensure that retailers do not sell to anyone under-age, there is a fine balance to strike. We do not want to place undue burden on those retailers who understand their business and customers by introducing new mandatory age verification policies. It is already an offence to sell tobacco and vaping products to anyone under-age, and that is enforced by trading standards, who will continue to take an intelligence-led, proportionate approach to enforcing the law through age of sale test purchases. Retailers should continue to take reasonable steps and exercise due diligence to ensure they do not break the law. Most retailers already follow recommended practice and regularly ask for identification from customers, but, as the hon. Member for Birmingham, Edgbaston said, they do not have to do so every single time if they know who the person is and they always buy products at that shop.
Under the new clause, failure to operate an age verification policy could result in a fine of up to £500 for a business on conviction. The Government feel that that is disproportionate and not what we are trying to achieve through the Bill with the introduction of fixed-penalty notices. The on-the-spot fines will complement existing sanctions, allowing trading standards to take swifter action to fine retailers that sell tobacco or vape products to someone under-age.
Bob Blackman
One of the clear concerns expressed by retailers—not necessarily the owners of shops but the staff who work in them and sell the products—is that if they can turn round to customers and say, “Look, it’s the law. I’ve got to ask you for your age verification. It is not something I can choose not to do; I have to do it,” that would strengthen their position. It would prevent arguments when they say, “I think you look under 25,” or “I think you look under 21.” That would strengthen their arm and make sure they abide by the law.
Dame Andrea Leadsom
As I say, I have a lot of sympathy for my hon. Friend’s point of view, but he will appreciate that Challenge 25 has been in place for a good long time, and it works reasonably well. It is well understood right across the country, and therefore the Government’s position is that it is not necessary to move to mandatory age verification.
I can also reassure my hon. Friend that we are investing £15 million a year in national anti-smoking campaigns, which will help explain the legal changes that the smoke-free generation policy implements. They will also prepare the public and retailers for those changes. For those reasons, I ask my hon. Friend to withdraw the amendment and the new clause.
Bob Blackman
Given the Minister’s answer, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 79 ordered to stand part of the Bill.
Clause 80
Transitional provision
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
The clause provides a power to make transitional or saving provisions. Transitional provisions address how existing legislation will be phased out or replaced by new legislation, and saving provisions preserve certain rights, obligations or legal consequences from existing statute. Welsh Ministers can make transitional or saving provision relating to the coming into force of clause 27 and schedule 1, which relate to the handing over of tobacco to under-age people in Wales. Scottish Ministers can make transitional or saving provision in relation to part 2. The Department of Health in Northern Ireland can make transitional or saving provision in relation to part 3, and the Secretary of State can make transitional or saving provision in relation to any measures or part that has not been mentioned. This is a standard provision, and I commend the clause to the Committee.
Preet Kaur Gill
I thank the Minister for that explanation. I have no further comments to add.
Question put and agreed to.
Clause 80 accordingly ordered to stand part of the Bill.
Clause 81
Citation
Question proposed, That the clause stand part of the Bill.
Dame Andrea Leadsom
This clause provides that the Bill may, in due course, be cited as the Tobacco and Vapes Act 2024. This is a standard clause, and I thoroughly commend it to the Committee.
Preet Kaur Gill
I have nothing further to add.
Question put and agreed to.
Clause 81 accordingly ordered to stand part of the Bill.
New Clause 2
Tobacco products statutory scheme: consultation
“(1) The Secretary of State must consult and report on the desirability of making a scheme with one or more of the following purposes—
(a) regulating, for the purposes of improving public health, the prices which may be charged by any manufacturer or importer of tobacco products for the supply of any tobacco products;
(b) limiting the profits which may accrue to any manufacturer or importer in connection with the manufacture or supply of tobacco products;
(c) providing for any manufacturer or importer of tobacco products to pay to the Secretary of State an amount calculated by reference to sales or estimated sales of those products (whether on the basis of net prices, average selling prices or otherwise) to be used for the purposes of reducing smoking prevalence and improving public health.”—(Bob Blackman.)
This new clause would require the Secretary of State for Health and Social Care to consult on proposals for regulating the prices and profits of, and to raise funds from, tobacco manufacturers and importers.
Brought up, and read the First time.
Bob Blackman
I beg to move, That the clause be read a Second time.
The clause stands in my name and the names of other hon. Members. Clearly, its concern is consultation on proposals for the regulation of profits from big tobacco —a recommendation of the all-party parliamentary group and of Javed Khan’s excellent report. The provision is designed to look at the profits of big tobacco, but big tobacco would not be allowed to pass on any calculated levy to its end customers. At the moment, it makes a veritable fortune every single year from selling its products. The new clause would limit big tobacco’s profits and, in doing so, its ability to market its products, but there would be no impact on, for example, tobacco taxation. My right hon. Friend the Minister might be concerned that the measure might delay the Bill, but the clear intention is to give the Secretary of State the power to conduct such a consultation; it would not prevent the Bill from going on to the statute book or from being enacted.
There has been a lot of debate over this issue for a long time. The Treasury appears to decline to do anything in this regard for some reason, but in my view, and that of the all-party parliamentary group, it is clear that this consultation could be done. The money raised from any such regulation could be directed at the national health service for smoking cessation services and to combat the effects of tobacco and other products, ensuring that people who wanted to quit could be assisted to quit.
I would welcome the Minister’s views. I do not want in any shape or form to impede the progress of this legislation, but I do want to get on record that I will continue to press for this provision, even if it is not agreed today, because I think it will bring into the health service much-needed money from big tobacco to help combat the impact of its products.
Preet Kaur Gill
I thank the hon. Member for Harrow East for raising the issue. As we know, separately from the Bill the Government are also introducing a one-off increase to tobacco duty as well as a vaping excise duty. I know that similar proposals to this one have been raised with the Government in the past, through the great work of the APPG on smoking and health. Previous Ministers expressed concerns that the proposals as previously drafted would serve to make tobacco companies pass on the cost to consumers in the shops. Undoubtedly, none of us wants any policies introduced that would come at the expense of consumers but miss their target: the tobacco giants. When it comes to addiction, we know that our most deprived communities are most likely to smoke. I am conscious of making their lives any more difficult. That said, I am certainly no proponent of any policy that would make tobacco cheap and easily available, and indeed it was a Labour Government who brought in a specific tobacco duty in the 1970s in the first place.
I understand that the revised proposal includes provisions to ensure that the Government can raise additional revenue from the enormous profits of tobacco producers, while ensuring the costs are not passed on. It is a complicated proposal that would require a team of officials within the Department of Health and Social Care to conduct market analysis, and for a tax to be set at a rate to hit those profits while regulating the prices in shops. Undoubtedly, something with as many moving parts as that would require thorough analysis and consultation, and I recognise that that is what the clause seeks to do. Given the existing levers we have available to us in tobacco duty and the focus we are trying to put on delivering a smoke-free future, I am reluctant to introduce something to the statute book that would distract from that priority. Through the Bill, there is already much consultation to be getting on with: on vapes, flavours, packaging and much more besides. I congratulate the hon. Member and the APPG on their excellent work, but this is not our priority at present.
Mary Kelly Foy (City of Durham) (Lab)
We heard during our evidence session about the immense damage that is done to our health, wellbeing and the economy, costing the public finances nearly double the amount raised by tobacco taxation. We also heard about the inordinate profits of the tobacco industry and about the idea of a polluter pays levy, which could raise up to £700 million a year. I hope Members would agree that that would help to deliver the smoke-free future that we all want to see.
I am vice-chair of the APPG and we have called for this proposal for many years, and it was great to see it in Dr Khan’s recommendations. The levy is popular and feasible and, as the report from ASH shows, is supported by voters of all political persuasions and the majority of tobacco retailers.
The tobacco manufacturers have the money; they should be made to pay to end the epidemic that their products are causing for our communities. However, I understand that there is still a nervousness from the Treasury and a reluctance on both sides to accept the new clause at this time. I hope that it will continue to be explored, so that the onus is put on to big tobacco, not the taxpayer, for paying for the damage caused by these products.
Dame Andrea Leadsom
I also pay tribute to the all-party group, and to the work of my hon. Friend the Member for Harrow East over so many years; the effort that he has made to get us to this point really is incredible, and I commend all hon. Members who have been a big part in trying to stamp out this horrible trade and its effect on young lives in particular. I have a lot of sympathy for my hon. Friend’s request, and I hope that I can reassure him that the Government are determined to abide by the polluter pays principle, while not at this point wanting to accept an amendment that introduces a new tobacco levy, essentially because it would take years to bring into action.
The Treasury consulted on a tobacco levy in 2015 and, as set out in the consultation response, the Government’s preferred approach remains to continue with the proven and effective model of dealing with tobacco products through increases in tobacco excise and duties. As all hon. Members know, that generates up to £10 billion a year, which can support a full range of public services, including public health and the NHS. The Department of Health and Social Care will continue to work with the Treasury to assess the most effective regulatory means of making the industry pay for the undoubted and enormous harms that its products cause to our society.
Alongside the Bill, we are taking strong action to reduce the affordability of tobacco, which is an effective measure to trigger smoking cessation. The UK already has some of the highest tobacco taxes in the world. The World Health Organisation recommends that total taxes on tobacco are at least 75% of the retail price on typical cigarettes. The UK comfortably meets that target, with taxes at around 80% of the selling price. The Government have also committed to a tobacco duty escalator, which increases duty by retail price index inflation plus 2%, at each Budget until the end of the current Parliament.
Data from the Office for National Statistics shows that the average price of a pack of 20 king-sized cigarettes has almost tripled in the past 15 years, from £5.37 in March 2009 to £15.66 in March 2024, and I can say that, when I took up smoking at age 14, they were about £1.50 a pack—I know I’m old, but that is an impressive escalation in the price. Cigarettes are also subject to a minimum excise tax, which sets a minimum amount of duty collected on a pack of cigarettes, discouraging manufacturers from selling cheap cigarettes by reducing the profitability of cigarettes sold at or below the minimum excise tax trigger price. The new minimum excise tax is £8.46 for a pack of 20, and applies to a pack of 20 cigarettes sold at or below £12.86.
We are going still further on tobacco tax. As announced in spring Budget 2024, there will also be an additional one-off increase for all tobacco duties, which will come into force on 1 October 2026, when the vaping duty comes into effect. From a financial perspective, that will incentivise people to continue to choose vaping over smoking once the new excise duty on vaping products comes into force. We currently do not believe that a tobacco levy would be an effective way to further protect public health or raise revenue. It would add complexity to the system and impose additional costs, and it would be unlikely to raise the amount of revenue envisaged due to the volatile nature of the tobacco market.
Bob Blackman
If I may, my right hon. Friend must have smoked for only a brief period because she certainly does not look old. Most of what she said was about the end customer and the cost to the end customer. Every time the Government raise tobacco duty, that makes the price for the end customer more expensive. What we are talking about is a levy on the profits of the big tobacco companies, which they would not be allowed to pass on to the end customer by increasing the price. That reduces their profit and potential to inflict more damage on the health of the country—that is what we are looking at. It is estimated that £700 million could be raised through such a levy. Of course, that would be only a dent in their profits, frankly, but it could be directed towards public health measures. Surely that is something that my right hon. Friend will want to look at—if not today, because obviously we do not want to add to the complexity of the Bill, then in the future.
Dame Andrea Leadsom
I assure my hon. Friend that I am very taken with that proposal—I very much like it—but I make the point to all hon. Members that this is just not the appropriate place for it. As a matter of fact, as he will know, the Treasury can consult on and impose a tobacco levy at any point; it is not necessary to include powers in the Bill. As I have been saying, it would be complicated and would require consultation, and it could take several years to materialise. Our preference for the time being is to continue with high tobacco taxation and excise as the best means and most efficient process to generate finances that can be put back into public services. The Department of Health and Social Care obviously liaises closely with the Treasury on its plans. I have a lot of sympathy for my hon. Friend’s proposal, but I ask him to not press it to a vote on this occasion.
Bob Blackman
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 3
Notification fees
“The Secretary of State may by regulations vary notification fees for novel tobacco, vaping and other nicotine products in order to include costs of enforcement and testing.”—(Bob Blackman.)
This new clause would enable the Secretary of State to vary the level of notification fees collected by the competent authorities in order that fees may be used to cover the costs of enforcement including product testing.
Brought up, and read the First time.
Bob Blackman
I beg to move, That the clause be read a Second time.
It is my show this afternoon! New clause 3 looks at the notification fees collected by the authorities, so that fees can be used to cover the costs of enforcement, including product testing. It would enable the Secretary of State to change those fees by regulation, and to look at what big tobacco and the vaping industry are doing to introduce novel products.
We have talked throughout the Committee about the ability of tobacco and vaping companies to vary their products considerably. We are of course trying to ensure that we capture everything we can so that we future-proof the legislation. New clause 3 would future-proof elements of the notification fees, raise some money and act as a barrier, frankly, to companies trying to flex their products to avoid the whole point of the legislation, which is to create a smoke-free generation and prevent young people from starting to vape. The Committee has already heard about the attitude and approaches being taken, particularly now by vaping companies, to market their products. The new clause would give power to the Secretary of State to do something about it by preventing those companies from bringing products in that no one wants to see on the market.
Preet Kaur Gill
The new clause relates to the testing of nicotine products and seeks to allow notification fees to be used for more than just the administration of that scheme but a wider, more comprehensive regulatory process, which we have supported. We have discussed clauses 71 to 74 on modifying the notification scheme to include non-nicotine vapes and extend to other nicotine products. Will those clauses allow for the notification fees regulations, which set fees at £150, to be amended accordingly?
I commend the hon. Member for Harrow East, as ever, for his work. I must remark that I rather regret that we have scheduled a debate on funding a notification scheme to test products before agreeing on the merits of such a reformed scheme itself. I look forward to coming to that in detail with two of my new clauses shortly, but I note that I do not necessarily agree with the Member that it should be a Medicines and Healthcare products Regulatory Agency competence to conduct enforcement. My issue with this process has been how products are getting on to the market in the first place. I would not want to disrupt or diffuse responsibilities for cracking down on the very real issue of the widespread market in illicit vapes. I think that that should still primarily be a matter for trading standards on the ground. None the less, I commend the Member for tabling the new clause, and I hope that he will support our proposals on testing.
Dame Andrea Leadsom
I am grateful to my hon. Friend the Member for Harrow East for bringing this discussion before the Committee. He has given the Bill a great deal of thought, and I am so grateful to him for that. His new clause seeks to change the level of fees for novel tobacco, vaping and other nicotine products, so that they can be used to pay for enforcement and testing costs as well. I support the ambition of the new clause but, as he will know, we already have the ability to test products and to take decisive enforcement action where and when illegality occurs. The notification system, as he will know, is not an enforcement tool and cannot currently be used as such. It is the responsibility of trading standards to ensure compliance of vaping products and to remove non-compliant—that is, illicit—vapes from the market.
To help to tackle illicit vapes, we announced new funding last year to set up an illicit vaping enforcement unit to gather intelligence and conduct market surveillance. This programme of work, led by National Trading Standards, is helping to stamp out criminal activity and disrupt illicit supply, and we have been testing products as part of it. As colleagues are aware, we also recently announced £30 million of new funding per year for enforcement agencies. This will crack down on illicit tobacco and under-age tobacco and vape sales to support the regulations put forward in the Bill. For those reasons, I hope that my hon. Friend will not push the new clause to a vote.
Bob Blackman
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 7
Retail licence for sale of tobacco, vaping and nicotine products
“(1) The Health Act 2006 is amended as follows.
(2) After section 13 (Power to amend age for sale of tobacco etc.) insert—
“13A Retail licence for sale of tobacco, vaping and nicotine products
The Secretary of State may by regulations introduce a scheme in England to require a person to obtain a licence before selling tobacco, e-cigarettes, novel nicotine products and related goods.””—(Bob Blackman.)
This new clause would enable the Secretary of State to introduce by regulation schemes to require the licensing of sale of tobacco, vaping or nicotine products.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 8—Sale of tobacco, vaping and nicotine products—
“The Secretary of State may by regulations limit the places in England where tobacco, vaping or nicotine products are available for retail sale.”
This new clause enables the Secretary of State to limit by regulation where tobacco, vaping or nicotine products can legally be made available for sale.
Bob Blackman
There is a degree of repetition in this. New clauses 7 and 8 relate to where tobacco products are sold and the licensing of them. There is a genuine debate, in both the industry and the House, about whether we should have a licensing scheme for tobacco, vaping and other nicotine products. These two new clauses would allow the Secretary of State to introduce regulations both on a licensing scheme and to limit the products that would be made available for sale in particular premises. The whole purpose behind this provision would be to say that the individuals who are selling these products would have to apply for a licence. Presumably, after a consultation, there would be a licence fee. That would add to the ability of the enforcement agencies to know that these products were properly licensed and being sold from licensed premises.
There is of course the issue that this could limit the number of retailers that would be able to sell such products. One concern that I have in this regard is not so much on tobacco but on vaping. We have seen, up and down the country, the rapid growth of stores selling just vaping products. They have—without doubt, without question—been selling to younger people, and we are concerned about the rapid growth of those particular areas.
There has been quite considerable legislation limiting tobacco sales over the years. We can go back over the age of sale. We can talk about the advertising displays. We can talk about keeping the products literally behind shutters so that people have to ask for the products rather than their being openly and clearly available. The two new clauses would get us to a position whereby there would be a requirement for the proper regulation of those markets. I know that the intent behind the Bill is to create a smoke-free generation, but we are taking on the vaping issue as well. At this stage, we propose that, if such a scheme were to be introduced, the Secretary of State would need to consult on those issues. I do not intend to prevent the Bill from progressing, but the Secretary of State will need to consider these things, whether during the later stages of the Bill or subsequently.
Preet Kaur Gill
I do not have much to add, but note that when the Bill was introduced some in the tobacco industry lobbied MPs to include a licensing scheme for vapes only. It would be an egregious situation if we were to take a stronger stance on vapes than on tobacco, which is the real killer. I suspect they hoped for the inclusion of something like that primarily because it would slow the Bill down. I thank the hon. Member for Harrow East for tabling a more balanced new clause, which would introduce licensing schemes for tobacco products as well as for nicotine products and vapes.
I have some questions for the Minister. Will she set out why the Government have not opted to set up a licensing scheme for tobacco and vapes? We have a licensing scheme for alcohol in England and Wales, but the Government have never sought to extend it to tobacco, although it would help us to identify shops that sell the products and streamline our enforcement efforts. I appreciate that many of sanctions related to licensing that are often cited, such as the power to take a licence away, are perhaps a less strong argument in relation to this Bill, because we have restricted premises and restricted sales orders, but I am interested in the Minister’s views.
On illicit products, the Government have introduced a track and trace system for tobacco, which is a useful component in monitoring the flow and patterns in the trade in tobacco products around the country. Given the improved provisions for product IDs, which will come into effect for products entering the country when the new vaping excise duty is introduced, we remarked in Committee that this could be an opportunity to look at setting up something similar for nicotine and vaping products.
I fully appreciate the concern of the hon. Member for Harrow East that enforcement will be crucial to the Bill’s success, but my view is that our priority must be to make a success of the enforcement regime that the Bill introduces before considering the case for further regulation. There probably will be a case for further regulation in future.
Dame Andrea Leadsom
I am grateful to my hon. Friend the Member for Harrow East, and to the hon. Member for York Central, who proposed a similar licensing scheme; other amendments that have not been debated also proposed the creation of a licensing scheme.
I was frank this morning, and I will be again: the proposal sounds like a licence for those with licences to squeeze out those who cannot get licences and therefore to build more market share for themselves, enabling them to funnel their energy into getting more children addicted to nicotine. That is my personal view. We can debate whether that is the likely result, but it seems extraordinary that the vaping industry should be so in favour of licensing when, on the face of it, it is so clearly against its interests. I find its backing of it quite cynical.
From a practical point of view, His Majesty’s Revenue and Customs already operates a track and trace system for tobacco products, which tracks their movement from supply through to sale. Every business involved in the supply of cigarettes and hand-rolling tobacco must be registered on the tobacco track and trace system, and HMRC can penalise businesses for non-compliance, including by removing their ability to legally buy or sell tobacco products, in the most serious of cases.
As Members will recall, in oral evidence the Chartered Trading Standards Institute told the Committee that HMRC’s track and trace scheme gives many of the same benefits as it would want from a licensing scheme. The Government also plan to introduce a new excise duty on vaping products. HMRC is currently consulting on the new vaping duty, and that consultation has a question about whether to introduce a track and trace system for vaping products to regulate the supply chain. That consultation will close on 29 May, and I feel it would be inappropriate to bring forward a licensing scheme for vapes when the ability to track these products from supply to sale is currently under consideration.
Bob Blackman
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 9
Prohibition of sponsorship: vaping substances containing nicotine
“(1) A person who is party to a sponsorship agreement is guilty of an offence if the purpose or effect of anything done as a result of the agreement is to promote a vaping substance containing nicotine in the United Kingdom.
(2) A sponsorship agreement is an agreement under which, in the course of business, a party to it makes a contribution towards something, whether the contribution is in money or takes any other form (for example, the provision of services or of contributions in kind).
(3) A person does not commit an offence under this section—
(a) where it is alleged that the purpose of what was done as a result of the agreement was to promote a vaping substance containing nicotine in the United Kingdom, if the person did not know, and had no reason to suspect, that that was its purpose, or
(b) where it is alleged that the effect of what was done as a result of the agreement was to promote a vaping substance containing nicotine in the United Kingdom, if the person could not reasonably have foreseen that that would be its effect.
(4) A person does not commit an offence under this section if he did not know and had no reason to suspect that the contribution referred to in subsection (2) was made in the course of business.
(5) This section comes into force on such day as the Secretary of State may by order appoint.
(6) The day specified may not be later than 1 June 2026.”—(Kirsten Oswald.)
Brought up, and read the First time.
Kirsten Oswald
I beg to move, That the clause be read a Second time.
As Members can see, new clause 9 seeks to stamp out the advertising of vape products in sports. We can all—or perhaps just those who spend more time than we should watching football—think back to days in the past when our favourite football teams ran about the park with cigarettes advertised on their shirts. We would find that quite unthinkable now; it would just be unacceptable. Similarly, we would find it unacceptable if our sports stadiums were named after tobacco companies or cigarette brands, but it is still possible—in fact, it is happening—that sports kits and sports grounds are sponsored by vape companies. I cannot think that should be acceptable when we look at the comparators, and I do not think sports is an appropriate place for vape advertising.
In the evidence sessions, experts told us about the deeply challenging impact on young people of vapes and vaping. We know that it impacts on their education as well as on their health. We heard this morning in the recent statistics from ASH that a very significant proportion of our young people are vaping. We need to deal with that. The vast majority of those young people have never been smokers, so this is not vaping for the purposes of smoking cessation, but a new addiction that has taken hold. It is our responsibility to try to deal with that. We will have to deal with it while being aware of the incredible and fast-moving marketing and product development that the industry has shown it is all too capable of bringing to bear. We also heard from the chief medical officers, who were uniformly keen that sports should be a positive influence. Anyone can go back and read the transcripts to see how they variously described it, but that was certainly the order of the day.
Smoking cessation is important, and smoking cessation and sport are things that can be positively connected, but that is very much not what is happening. We need to be clear that young people are seeing sports and vaping together, when we really should be taking steps to prevent young people who have never smoked from seeing vaping as something they may want to do. I have heard others say that now is not the time to do this—that we should not use this Bill. I have to say that yes, this is absolutely the time for us to do it. If it is not this Bill, then I really begin to wonder what on earth would be the vehicle for us to take this step. This is the time.
People may be fed up of me speaking about this—I am almost fed up of me speaking about this. I have spoken about this for years, on and on and on, but I am going to keep speaking about it until it is fixed. I want the Committee to think carefully about it. I am sure Committee members may have noticed that, through whatever stroke of good luck, I have had the first question in the last two Prime Minister’s questions, and I have asked the Prime Minister to think very carefully about this issue. It is something that is very important for all of us in this place to do. I hope we are now getting to the point where we agree that it is time for us to act, that this is the vehicle where action is best placed and that we should put a stop to vape advertising in sports, once and for all.
Bob Blackman
I thank the hon. Lady for tabling the new clause. We will come to further new clauses that deal with advertising for vaping products. We are clearly now in the position whereby if anyone suggested that football teams should have tobacco advertising on their shirts, they would be laughed out of court. That is equally true in all the other circumstances that the hon. Lady described.
I have a lot of sympathy with this proposal, but I am slightly concerned that it is limited to particular sporting events. In my view, we need a comprehensive ban on the promotion of vaping products. When the chief medical officer gave evidence to the Committee, he rightly said that if you smoke, it is safer to vape, but do not take up vaping. We should not be allowing vaping companies to advertise their wares, particularly to younger people. As I said this morning, 7.6% of young people aged 11 to 17 are regularly vaping. That is a serious concern, because they will be addicted to nicotine and will probably have to escalate their nicotine demand as time goes on.
My concern is that the new clause does not go far enough. The hon. Lady has raised the issue on several occasions, and is rightly banging the drum. I agree with her: it is a disgrace. I think I am right in saying that Blackburn Rovers football club just agreed a sponsorship deal for their shirts with a vaping product, which is a great shame, but it has chosen to do that.
The chief medical officer also said that, right now, the vaping industry does not have a product that doctors could prescribe to help people to quit smoking. That is a challenge for the industry. If it is serious about encouraging people to quit smoking, it needs to develop a product that doctors can prescribe and help people to quit smoking. If it is not going to develop that product, that demonstrates that all it is trying to do is to hook people on to nicotine.
Kirsten Oswald
The hon. Gentleman is generous in taking my interventions. I am not entirely sure that these two things are totally connected. He is quite right that the vaping industry has questions to answer, but I do not think that has anything at all to do with whether it should be okay to advertise vaping companies and vaping products on football shirts, on sports stadiums or in any other way that is proximate to sport. We need to be clear that this practice specifically needs to be stamped out. On the questions the vaping industry has to answer, I am sure that the hon. Gentleman and I have the same ones; we can crack on and get them answered, but let us not not do this.
Bob Blackman
I have a lot of sympathy with what the hon. Lady asks for. I ask my right hon. Friend the Minister, in dealing with this new clause and the other new clauses about advertising, to go away and come up with a comprehensive series of amendments that will ban advertising for vaping products in their entirety—not just in sports stadiums and not just on sports shirts, but comprehensively, right across the piece. We can then all support that and make sure we deliver it in the Bill.
Preet Kaur Gill
I thank the hon. Member for East Renfrewshire for tabling the new clause. We absolutely share her concern: we must ensure that children are not exposed to marketing and branding that encourages them to vape. I echo the comments of the chief medical officer: if you do not smoke, do not vape. These are not products for children, and we are determined to crack down on companies trying to addict a new generation to nicotine. The principle that the hon. Lady has raised is really important, which is exactly why the previous Labour Government legislated to end sponsorship by tobacco companies.
Although sponsorship for vapes is not prohibited outright, as it is for tobacco, there are clear restrictions on how vapes and nicotine products can be marketed at and advertised to children. For example, the 2016 regulations prohibit e-cigarette product placement or any sponsorship promoting e-cigarettes on radio and TV programmes, where they are most likely to be widely seen. Most crucially, they ban ads for nicotine-containing vapes from most online media, including social media. The very limited exception to that is factual, not promotional, claims on companies’ own websites.
Why has the Minister not aligned the legislation in this respect with the extension of other regulations that we have discussed in Committee? Elsewhere, non-nicotine vapes and other nicotine products are essentially treated under the same regulations as those that affect nicotine vapes.
I again thank the hon. Member for East Renfrewshire for sharing her concerns, which I fully appreciate. I hope the Minister takes this proposal away and looks at it more closely. The restrictions on broadcast sponsorship aside, I would have expected her to be able to share more comprehensive data from the regulators showing what children are being exposed to and where. Will she address that head on and write to us with more detail if she needs to? In the meantime, my greatest concern remains promotions in store and on social media.
Kirsten Oswald
The hon. Lady says that Labour is determined to crack down; well, here is her opportunity. She is not cracking down if she does not deal with this issue. She says there are clear restrictions on how these products can be advertised or marketed to children, but children can see football strips and sports stadiums. I do not know about anybody else’s children, but mine watch football on the television, and they can see what is advertised on football strips. I would like her to take that thought away with her.
Preet Kaur Gill
I thank the hon. Lady for that intervention, but as I said my greatest concern remains promotions in store and on social media, because that is where lots of young people consume this information. My view is that we need to get on with cracking down on the companies that deliberately sell these products to children in the first place.
Nickie Aiken (Cities of London and Westminster) (Con)
I fully support what the hon. Member for East Renfrewshire says about sports marketing and vape companies. I pay tribute to my hon. Friend the Member for Sleaford and North Hykeham for the work that she has been doing in this policy area, and I fully support what my hon. Friend the Member for Harrow East just suggested.
With this Bill, we have perhaps a once-in-a-lifetime opportunity to send a clear message to the tobacco companies. More importantly, we can say to young people, our children and parents generally, “Do not take up vaping.” Vaping has always been meant to be about stopping smoking, but sadly it has become a stand-alone product. I was shocked when I walked through my neighbourhood of Pimlico last week and saw that we now have a huge stand-alone vape shop that sells only vapes.
The new clause seeks to do the right thing, but it does not go far enough, so I ask the Minister whether we can step back, before Report, to understand what the Government can do to send a clear message about all advertising, marketing and sponsorship across the whole nation, whether it is TV or radio advertising or any form of sports sponsorship. We have to treat vapes as we treat tobacco.
Dame Andrea Leadsom
I thank all hon. Members for this discussion. I have to say that I agree with them. It is extraordinary that vapes are advertised and promoted in places that are seen by children. I pay tribute to the hon. Member for East Renfrewshire for her determination on this matter. She and I were discussing earlier the fact that we both know teenagers who tell us that in many cases it is not one in five vaping but more like four in five. I think that will resonate with a number of hon. Members, so we have to do everything we can.
I also pay tribute to my hon. Friend the Member for Sleaford and North Hykeham, who I believe is the only paediatrician in the House. She has done so much to seek to improve all health issues for children, but she is particularly passionate about this area. She is away on a trip with the Health and Social Care Committee, quite rightly, but I regret that she cannot be here to debate this issue. I know that she would have strong views; I have heard her speak powerfully about the need to clamp down on advertising and sponsorship.
Kirsten Oswald
I am grateful to the Minister for what she said. I am not unsympathetic to how she has set out her logic, but I would be more comfortable if there was something more than a commitment to explore formal steps to impose further restrictions. What does that mean? I do not know whether the Minister is able to tell me or whether it is in order for me to ask. I want it banned. [Hon. Members: “We all do.”] I want it banned in the field of sports, and I am open to it being banned in all the other fields that have been mentioned. Committing to explore formal steps to further restrict it seems slightly less than certain to me. Is the Minister able to give me a little more certainty? I would be happy to withdraw the new clause if I were certain that it was going to be contained in a Government amendment, for instance. I just want to make sure that the issue is dealt with once and for all.
Dame Andrea Leadsom
I would like to give the hon. Lady the reassurance that I will be coming forward with proposals from the Government to address the issues that have been raised.
Kirsten Oswald
On that basis, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 11
Testing of samples of nicotine-containing e-cigarette products
“(1) Regulation 36 of the Tobacco and Related Products Regulations 2016 is amended as follows.
(2) At end insert—
‘(12) The Secretary of State may—
(a) approve and monitor one or more laboratories (“approved laboratories”) which must not be owned or controlled directly or indirectly by the tobacco or e-cigarette industry; and
(b) arrange for an approved laboratory to verify the product requirements referred to in this regulation.
(13) For the purposes of enabling the Secretary of State to perform functions under paragraph (11)(b), a person who produces e-cigarettes or nicotine-containing liquids, or manufactures e-cigarettes or nicotine-containing liquids for export must provide to the Secretary of State (or to such person as the Secretary of State may specify) such samples, at such times and intervals and from such sources, as the Secretary of State may reasonably require.’
(3) The Secretary of State may by regulations make provision that is consequential on this section.”—(Preet Kaur Gill.)
This new clause enables the Secretary of State to approve laboratories for the purpose of testing product requirements of nicotine-containing vaping products set by the Tobacco and Related Products Regulations 2016 and to require manufacturers to provide samples for testing.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 13— Report on the powers of the Medicines and Healthcare products Regulatory Agency: vaping and nicotine products—
“(1) Within 12 months of this Act receiving Royal Assent, the Secretary of State must lay a report before Parliament examining the case for giving the Medicines and Healthcare products Regulatory Agency (the MHRA) the explicit power to—
(a) request samples and test vaping and nicotine products as part of the notification scheme; and
(b) recall and remove from the list of notified products vaping and nicotine products which do not comply with product standards.
(2) The report should also examine the case for a requirement for local trading standards authorities to notify the MHRA of any instances where vaping or nicotine products are being sold which—
(a) have not been notified to the MHRA; or
(b) do not comply with product standards.
(3) The Secretary of State may by regulations give effect to any recommendations made in the report.
(4) Regulations under this section—
(a) shall be made by statutory instrument; and
(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”
Preet Kaur Gill
I rise to speak to new clauses 11 and 13 on the testing of nicotine-containing vape products. Earlier we debated clause 73, which will allow Ministers to create new exceptions to publication as part of the notification scheme. We of course welcome those new powers, which represent a concession on the Minister’s part. However, the current notification process, which is what products must go through to get on to the UK market, is not as robust as it should be for nicotine-containing vapes.
As we have said, youth vaping is a serious growing issue. In 2021, Labour voted for an amendment to the Health and Care Bill to crack down on the marketing of vapes to children. Since then, according to the most recent survey by ASH, the number of children aged 11 to 17 who are vaping regularly has more than trebled to more than 140,000 British children. Meanwhile, one in five children have now tried vaping.
This issue is not only a concern in itself, but there is the issue of whether all these products are safe and whether they are what they say they are. I have raised serious concerns, for example, about the fact that children are puffing on 0% vapes that actually do contain nicotine, which gets them accidentally addicted. This is something that we discussed at the evidence session and that goes to a fundamental question about the MHRA’s role in the regulation of vapes. Is the MHRA really only the administrator of the notification scheme, or should it have a clearer responsibility to regulate and to take responsibility for the safety of vaping products?
Clause 73 indicates that the Minister agrees that it should. This is something one would expect the MHRA to take an interest in. Vapes are a product with clear consequences for the health of the population. There are risks, and some of the long-term health consequences of sustained vape use are not properly understood, but the Government’s policy is effectively to recommend this product as a stop-smoking aid. The Government, therefore, have a responsibility to be able to say with confidence that the products they legally allow on to the market are what they say they are and are safer than smoking.
We heard evidence from Dr Squire, the chief healthcare quality and access officer at the MHRA. It was an interesting discussion but, when it came to the notification process, what I took away was the fact that she could not say, “This is an absolutely robust system that keeps everybody safe,” and, “That is why the Bill is important.” I supported clause 73 to provide exceptions to publication, which would allow policies to be set where the MHRA would refuse to publish the notification for products that would make them available for legal sale. My concern, however, is about what is missing from the legislation to give the MHRA the information it needs to say confidently whether a product is actually safe.
I want to be clear in case the Minister raises it: new clause 11 is not about undermining the enforcement role of trading standards teams. After a product gets to the market, trading standards proactively ensure that potentially dangerous products are not stocked on shelves, and we have the yellow card scheme for customers to report an adverse reaction to a vaping product. Who is monitoring the long-term risks of these products? I doubt they would be caught by either trading standards or the yellow card scheme, but that is another question.
In relation to new clause 11, however, what I am talking about is the screening of products before they get to the UK market to enable the MHRA to have the information it needs to refuse a notification publication, even if the company has, on paper, met the requirements. I appreciate that the exceptions in clause 73 are not yet defined, but the MRHA does not have the powers to gather the information it needs in the first place in order to make those exceptions. As Dr Squire admitted herself, there are cases right now of products getting on to the market that do not match the product registered through the notification scheme. Those products could have tank sizes that are too large; they could include dangerous chemicals or include dangerously high nicotine strengths.
Our fundamental concern is that these products are now extremely popular with children. That is why I contend that the MHRA should have additional powers to test a proportion of products to ensure that they comply with their notifications. I think any outside observer would contend that that is common sense. The Secretary of State has testing powers for tobacco products, so why not for vapes? Will the Minister therefore support my new clauses, which seek to address that through this Bill? This is not just about the market as we know it today; this is about safeguarding the future of vapes to ensure that consumers can have confidence in those products and that we, as legislators, can have confidence in the products that we are recommending as stop-smoking aids. That is why I commend new clause 11 to the Committee.
Finally, new clause 13 would require the Secretary of State to report on some of the new powers on testing that I have just described, as well as on another power that the MHRA does not have at present, which is to remove notifications from publication. Currently, this power rests with the Secretary of State in the Tobacco and Related Products Regulations 2016 to recall a product if it is deemed to pose a serious risk to human health. This is a high bar. It is my concern that in practice the emergence of such risk can be a slow process.
I have told the Minister before how the limitations of this power were made clear the other year when Elf Bar, which is perhaps the market leader in this space, was found to be selling vapes with tank sizes that were larger than allowed. The responsibility to remove those products from the market actually lies with the producer—quite rightly—but this issue is about the recourse that the Government have when a threat is urgent and a company does not comply.
New clause 13 would also examine the case for a duty to be applied to trading standards that would be similar to the duty on councils in Northern Ireland to share intelligence on non-compliant and illicit products, so that we can better join up the enforcement response at the national level. Once again, I urge Members to support these new clauses and I commend them to the Committee.
Dame Andrea Leadsom
I am grateful to the hon. Lady for bringing these issues before the Committee. These new clauses seek to give more powers to the MHRA to introduce a testing regime for vaping and nicotine products, and to ensure that the laboratories conducting the testing are independent of the tobacco industry. They also aim to give the MHRA powers to remove notifications and thus prohibit the sale of products if they are found to be non-compliant.
New clause 13 would require the Secretary of State to produce and lay before Parliament a report to consider whether the MHRA should be given new powers to request and test samples, and to remove vaping and nicotine products from the list of notified products. The report would also have to examine the case for a requirement for local trading standards authorities to notify the MHRA of any instances where vaping or nicotine products are being sold that have not been notified or are non-compliant.
I am very sympathetic to the aims of these new clauses, but the current notification system is not an enforcement tool and should not be viewed as such. It is the responsibility of trading standards to ensure compliance of vaping products and to remove non-compliant—that is, illicit —vapes from the market and stop their sale. It is also the responsibility of trading standards to test a product if they believe that it contains illegal substances or too much nicotine. The MHRA supports this work by providing intelligence from the notification system.
New clause 11 would facilitate the previous new clause by giving powers to the Secretary of State to approve, as part of the testing regime, certain laboratories that are not in any way funded or controlled either by the vaping industry or the tobacco industry.
The Secretary of State can already commission independent laboratories to undertake the testing of vapes, in order to check and confirm that they meet our regulatory standards as set out in the Tobacco and Related Products Regulations 2016. We can also produce relevant guidance to support this work, so the new clause really is not needed. Trading standards, supported by the MHRA, work with local scientific services that are independent of the tobacco and vaping industry in order to test vapes and to take action where non-compliance is found. These testing facilities support our enforcement programmes.
In fact, last year the Prime Minister visited an independent lab in Kent that checks for specific ingredients and harmful substances. The Prime Minister, who was accompanied by the chief medical officer, Sir Chris Whitty, described the laboratory as “a centre of excellence” and said that it was at the frontline of testing, providing vital information in the campaign to tackle illegal vaping.
In summary, although I completely understand and support the aims of each of these new clauses to ensure that products are rigorously tested, adhere to our regulations and do not pose additional risk or harm, we can already test products, and indeed do, using quality-assured laboratories for this work. In addition, there are tough penalties in place for those who break our rules, including unlimited fines and prison sentences. As hon. Members know, we have also provided new funding and support to help local trading standards to enhance their enforcement capacity and to test products. For those reasons, I ask the hon. Lady not to press her new clauses to a vote.
Preet Kaur Gill
I say to the Minister that my concern is about certain products entering the UK market in the first place. If the MHRA is the only organisation that can test what has been notified, it will be supplied to us, but we know that what arrives is sometimes not actually what is in the notification process. If they were testing before the product came into the UK, that would be the point at which we want to try to address the growth in the illicit markets. I hope the Minister will consider this, especially before Report.
I will not push new clause 13 to a vote, but I would like to push new clause 11 because it is really important. The point is about what comes into the country. The MHRA in evidence actually said that it recognises that what is notified that eventually enters the UK is not exactly what is on the notification process.
Question put, That the clause be read a Second time.
Trudy Harrison (Copeland) (Con)
I beg to move, That the clause be read a Second time.
I am channelling my hon. Friend the Member for Sleaford and North Hykeham and her passionate work as a consultant paediatrician or, as she would say, the children’s doctor in the House. I regard her experience highly. As technology evolves, so do our habits. This new clause seeks parity for smoking and vaping, so that the same rules that apply to smoking in public places will also apply to vaping, thereby protecting non-vapers from exposure to harmful substances.
As the Minister put it, we know that vapes are not harmless, but we think that they are less harmful than smoking cigarettes. I acknowledge that there is a lack of evidence—we heard this in the evidence session last week—but I think there is also a lack of research into the evidence on the impacts of vaping. Could the Minister reassure us that evidence will be sought on the impacts of vaping, not just on those who are vaping but those who are in the vicinity of vaping products? We should be trying to prevent the normalisation of vaping products, particularly among children and other impressionable audiences. We have heard much about the principle of polluter pays, which I absolutely agree with, but it is equally important to prevent the pollution and avoid promoting polluting substances to the potential polluter. That was an awful lot of Ps.
Mary Glindon (North Tyneside) (Lab)
I thank the hon. Lady for giving way. She makes a strong argument but, on the other hand, Cancer Research says that there is no comparison between passive vaping and passive smoking. I know many former heavy smokers who have given up smoking and now vape, and that is one of the reasons why I am such an ardent supporter of vaping as opposed to smoking. It is awful for those people to have to go outside and stand with smokers. If people are not allowed to vape indoors, there should be a separate area for vapers. Does she not agree that such a situation sends out the message that vaping is dangerous when we need heavy smokers to give up smoking, and vaping is the best way for many of them to do that?
Trudy Harrison
I welcome that intervention, but we cannot ignore the trebling of the number of 11 to 17-year-olds who are starting to vape. However much the Minister says that people who are not smoking should not vape, and that no children should be vaping, that is not the reality in the communities that we serve. It is certainly not the reality in my Copeland community. I think the hon. Lady is saying that vaping helps us to fix the problem, but I am equally keen to prevent the problem. The rate at which young people are taking up vaping needs serious consideration, but we also need serious evidence-gathering to understand not only the harms that could be caused by those who are vaping in the vicinity of others, but nicotine addiction.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (Con)
My hon. Friend is making a very passionate speech on behalf of herself and my hon. Friend the Member for Sleaford and North Hykeham, who I am sure will be very pleased with the contribution. However, I have to say that I agree with the hon. Member for North Tyneside because the evidence that we heard strongly suggested that smoking and vaping are not commensurate. My hon. Friend the Member for Copeland is entirely right that we need further evidence, but perhaps we should be looking at evidence-based policy making so that we make the policy when we have the evidence. The best way forward would be to seek such evidence.
Trudy Harrison
My hon. Friend makes an excellent point. That is really what I am calling for, although it does not detract from the need to prevent the normalisation of vaping. However, I repeat the request for more in-depth research into the impacts of vaping and nicotine addiction on children.
Preet Kaur Gill
Most public places are already smoke free on a voluntary basis. We do not believe it is necessary or proportionate to make such a legal requirement, which would risk increasing the widespread misperception that vaping is as harmful as smoking. In the United Kingdom, vaping is already prohibited on a voluntary basis in most, if not all, places visited by children; public transport—trains, airports, planes, buses, coaches and ferries—most, if not all, sports stadiums; music venues; many hospitals or hospital grounds; restaurants and cafes, at least definitely those used widely by children; and a lot of pubs and bars. As was discussed in last week’s evidence sessions, the health harms underpinning the smoking ban are not proven for vaping, and such an approach would be hard to justify on health grounds. This would be a complicated piece of legislation to introduce, and now is not the time at which, and the Bill is not the place in which, to do so.
Dame Andrea Leadsom
I am grateful to my hon. Friend the Member for Copeland for moving the new clause tabled by our hon. Friend the Member for Sleaford and North Hykeham. I think all hon. Members are keen to see much more evidence on this issue, and I absolutely share that concern. I have urgently commissioned research into the impact of vaping on both the vaper and those second-hand breathers-in. As we all heard during the public evidence sessions, and as my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow set out, we do not have the evidence. We therefore need to provide evidence-based regulation as a matter of urgency, and I absolutely assure hon. Members that that will be forthcoming.
It is certainly the case that the ban on smoking in indoor spaces has been a great public health success story since its introduction in England in 2007 and across the UK from 2006. There is no doubt that the ban has protected many adults and so many children from the harms of passive smoking; it will have saved lives.
We know that vaping is less harmful than smoking, and indeed is a very effective quit aid for adult smokers. Although I have grave concerns about whether we err too far on the side of saying “Vaping is much better than smoking,” and are therefore inadvertently saying to young people that it is fine to vape, which of course it is not, that is why we also always say, “If you don’t smoke, don’t vape, and children should never vape.”
Although smoking in a public place may be seen as a nuisance by some, and there is some evidence that it can trigger asthma attacks, in the same way that pollution or car exhaust fumes can, there is very limited evidence of the potential harms of vaping in enclosed spaces, and simply none to suggest that it is at all similar to tobacco smoking. Vapes emit vapour, not harmful tobacco smoke. Vaping does not burn tobacco or produce tar and carbon monoxide—two of the most harmful elements in tobacco smoke. Evidence of the harm from exposure to second-hand tobacco smoke is well established, and because of its carcinogenic content, there is no safe level of exposure. It is totally incomparable to vaping, where there is very little evidence to suggest that second-hand vapour is anything more than an irritant. I repeat: that is not to say that vaping is good for anyone or a good thing to try. It absolutely is not. We know it is extremely harmful to children, whose lungs and brains are still developing.
In addition, many businesses, venues and spaces have already introduced their own bans on the use of vapes where smoking is prohibited, such as on public transport, on work premises and in many restaurants and bars. In 2016, Public Health England produced guidance regarding the use of vapes in public places and workplaces, which has helped businesses to make informed decisions on their vape-free policies, but given the lack of evidence of any harm from second-hand vapour and the way that the majority of businesses, restaurants and bars self-regulate and have vape-free policies in place, as well as the fact that vaping in enclosed spaces was not raised in our call for evidence as a major issue to address youth vaping, we just do not feel that the new clause is necessary at this time.
We will of course keep this under review and continue to monitor the evidence base. As I said, I have urgently commissioned proper research into the effects in the short, medium and long terms, and I hope to make further announcements on exactly what I am doing during the Bill’s passage.
Angela Richardson (Guildford) (Con)
Sometimes I think that when people listening to this debate hear the words “no evidence” or “lack of evidence”, they assume that that means there is nothing at all wrong with vaping. Will my right hon. Friend make it clear to anyone listening that there is a difference between not having done sufficient studies to gain the evidence and having no evidence of any harm?
Dame Andrea Leadsom
Yes, I am very happy to do that. My hon. Friend is exactly right: saying that we do not have the evidence right now is not the same as saying that vaping is not harmful. As I said, the chief medical officer has said that although we can be fine consuming strawberry sherbet ice cream in our tummies, it may not be so good to inhale it. We simply do not know what the truth is. We do believe that carcinogens may be innate in some flavours, and we know that vape products can contain heavy metals in the coils. We know that there can be significant harms from vaping, especially to children. I am happy to state once again, “If you don’t smoke, don’t vape, and children should never vape.”
With those remarks, I hope that my hon. Friend the Member for Copeland will not press the new clause to a vote.
Trudy Harrison
There could be no better Minister to convince me of her concern for babies, children and young people. On that basis, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
The Chair
I am flying a bit free here, but new clauses 16, 19, 20 and 22, all tabled by the hon. Member for Sleaford and North Hykeham, may have been caught by the Minister’s commitment to look deeply into the advertising issue and might therefore not be moved. However, I want to give Members the opportunity to do so if they wish.
It appears that the Minister’s reassurance has convinced the Committee.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Dame Andrea Leadsom
I rise to thank all Members, on both sides, for their time, their focus, and their really well thought through and considered contributions in this Committee. The scrutiny has been carried out in the best traditions of this place, aiming to achieve something that this Parliament can be proud of.
I also thank you, Sir Gary, for your excellent chairmanship—[Hon. Members: “Hear, hear!”]—and all the other Chairs who have taken us through this life-changing Bill, as well as the officials and civil servants who have supported us, and the Bill team, who did extremely well in putting this together. Finally, I thank the Clerks, who always brilliantly support everything that goes on in this place.
Preet Kaur Gill
I echo the Minister’s thanks. This Bill implements a flagship public health policy, and all of us are privileged to have taken part in the passage of this world-leading legislation. It is really important that we have heard so many powerful testimonies about the health impacts of smoking, but parents are also worried about the increase in youth vaping, so the fact that we are to ban the marketing and sale of vapes to children will be welcomed by many people across the country.
I put on record my thanks to you, Sir Gary, for brilliantly chairing our sittings, and to the Minister, who has been very gracious in her responses. I thank colleagues on both sides of the Committee; it has been brilliant to work with them all and to reach a degree of consensus, although I have no doubt there will be many more things to discuss on Report. I also thank the Clerks and everyone on the Bill team. It has been a privilege.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Football Governance Bill (Second sitting)
Tuesday 14th May 2024
(1 month ago)
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The Chair
We will now hear from Darryl Eales, chairman of Solihull Moors football club, and Steve Thompson MBE, managing director of Dagenham & Redbridge football club. We have until 2.30 pm for this panel. Would the witnesses please introduce themselves for the record?
Steve Thompson: Good afternoon. My name is Steve Thompson and I am the managing director of Dagenham & Redbridge football club. I have been at Dagenham & Redbridge—well, it was Dagenham football club when I was first there, 41 years ago. I have seen Dagenham go from the Isthmian League to League One, and back down again to the Conference. I was involved when we had the merger with Redbridge Forest in 1992. I hope I will be able to answer some of your questions.
Darryl Eales: Good afternoon. I am Darryl Eales, chairman and majority owner of Solihull Moors football club. Prior to that, I owned Oxford United from 2014 to 2018 in the English Football League.
The Chair
Before I ask Members to put any questions, I declare an interest: I am the patron of my local football club, Southall football club.
Stephanie Peacock (Barnsley East) (Lab)
Q
Steve Thompson: In my opinion, I am worried about clubs at our level being over-regulated. Most of our clubs work on one or two full-time staff. Some of them are run by volunteers. We already do an awful lot of financial regulation reporting. There is reporting to the National League and a licensing certificate that we get from the Football Association. Many of us took advantage of the Sport England winter sports loans. The quarter reporting on that—I appreciate that it is public money—is so onerous, and I am really worried that the extra reporting that will be required by National League clubs will be more than a lot of them can manage without taking on extra staff.
There is also the cost of the regulator. We are not 100% certain how much a National League club will have to pay for their contribution. Those are some of the concerns with the set-up of the regulator. The support we need is a better understanding of how that will work.
Darryl Eales: I agree with Steve. I think this is about proportionality and reflecting the resources available to clubs at our level. That is simply because we do not have the financial resources or the distributions from central funding that, obviously, English Football League clubs have to support the growth of an administrative function to support the information requirements of the regulator.
Stephanie Peacock
Q
Steve Thompson: It is imperative that the amount in fees charged to National League clubs is really proportionate, for example, between us and English Football League Two clubs. They receive 14 times the amount that a National League club receives in central distributions and solidarity money. Leaving aside the central distribution—because it could be argued that that is what the league itself raises—with the Premier League solidarity money, last season an EFL club received £519,000 each whereas a National League club received £69,000. Next year, the Premier League solidarity money for an EFL Two club will go up to £550,000; for a National League club, it will stay at £69,000—that is an eight times difference.
When Dame Tracey set up the fan-led review, I was lucky enough to be on one of the calls to present on behalf of National League clubs. One of the things that clubs at our level want to get out of this is a better financial package. The gap is going from seven and a half to eight times; we should be reducing that, not increasing it.
The other thing that the Bill does not address completely is three up and three down, and artificial pitches. As far as I am concerned, the majority of my supporters and people around my club believe that the regulator is going to deliver that. I understand why it is not in the Bill, because there are bigger things, but there is definitely a perception from supporters that three up and three down will be on the table, and artificial pitches will be allowed into the Football League. It is not there.
In the last three years, we have had three clubs promoted that had artificial pitches, and another one with Bromley this summer. Those pitches have mainly been funded by Football Foundation grants. They have been put in to support their local communities, and they have got to be ripped up. What a complete waste of money. It deprives their communities of those pitches.
With three up and three down, Darryl will speak for himself, but unfortunately last week Solihull Moors lost out in the play-off final. We have one club going up automatically and then another club—it is the only league in the pyramid where that happens. Last season—or the season before the one just finished—Wrexham won, and Notts County went up via the play-offs. Had they not won the play-offs—they nearly did not get to the final—they would have not gone up, and they had over 100 points. That would never happen anywhere else in the pyramid, but it happens in the National League.
The problem we have is that the last time a second promotion place was given was 2001. Some of the Committee might be old enough to remember that that was related to the ITV Digital collapse, when the FA stepped in and paid an extortionate amount of money to keep League One and Two clubs running. In return, we were given a secondary promotion place. My opinion is that we will only get a third promotion place if someone buys it. The only people in football these days that can buy it are the Premier League. That should be a condition of any new solidarity funding between the Premier League and the EFL. Sorry—I am talking too much.
Darryl Eales: To pick up on what Steve said, having read the Bill, for me there is not enough focus on the regulator contributing to ensure that there is a level playing field across the pyramid—I do not even think the pyramid stops at the National League—and there is not enough focus on the crucial value of grassroots football to the whole pyramid and to communities. One of my friends runs a step nine team, and it costs him £50,000 a year to run that club. We get £60,000 a year of solidarity money in the National League.
For me, the regulator has to understand the philosophy of English football and the value of grassroots football. That seems to be missing. Obviously there is regulation, but it needs to understand that most owners at our level are stakeholders for fans and just want to move the club forward sustainably to the next owner. I would question the ownership motives of a lot of owners as you go up the pyramid, because we strive every day to look after the best interests of our clubs and generally we are not paid.
Stephanie Peacock
Q
Steve Thompson: We have a fan representative on our board; the season ticket members elect a representative on our board, so I hope that we try to be in tune. We have at least two fans’ forums, where anybody is invited along and they can ask questions of me and of the manager. But at a small club, you are walking around the ground and the bars before and after the game and talking to people, and if there is a problem, they soon come up and tell you.
Darryl Eales: Similarly at my end, we have a monthly meeting with the SMSA—Solihull Moors Supporters Association—and we work very closely with them. From a personal perspective—this is just me—I go for a beer before every game, both home and away, with the fans in the bar, exactly as Steve says, because people will pick up on their concerns. From a community perspective, we run about 65 youth and junior teams; every weekend, they are running around in Solihull Moors shirts.
Shaun Bailey (West Bromwich West) (Con)
Q
Darryl Eales: The interesting thing for me is that the Bill does nail a few points that are very, very important from my perspective. The stadium and the club should be umbilically linked. There should be, for every club, something that prevents owners from separating out the ownership. In our division this year, Gateshead did not make the play-offs, because they did not have tenure of their ground. To me, that seems to be fundamental. Where I echo Steve is that I think there are an awful lot of information requirements in the Bill. When I talk about proportionality, the reality of life at our level is that it will be us doing those things, and without being too rude, I have better things to do with my life than fill in forms.
Damian Collins (Folkestone and Hythe) (Con)
Q
Steve Thompson: Sutton United are a prime example from a couple of years ago. They went up and had to dig up their pitch. It was very much part of their community and their academy structure. Bromley are in the slightly fortunate position in that they have some land behind the stadium, where they are going to transfer the artificial pitch to, but it will still cost them several hundred thousand pounds. The annoying thing is that Sutton played Arsenal in the FA cup a couple of years back, and Arsenal, who are in the Premier League, happily and readily played on Sutton’s artificial pitch when they were at the National League side—no complaints. Every year, EFL clubs in the FA cup will play on artificial pitches, so that does not seem logical.
There are some arguments about how good the football is on such pitches and things like that, but the majority of young players at the top level now are coming through the EPPP—elite player performance plan—academies, and they all play on artificial pitches. It does not make sense. We have had this happen to four clubs in the past few years, and it is stopping other clubs that have the ambition to be promoted considering putting down an artificial pitch. That might help their community and their academies, but they think, “We can’t do that, because we can’t afford to put it in and then dig it up again.” Supporters are almost turning around and asking, “What’s your ambition?” The ambition of most clubs is to win their league, whatever league they are in, and to go forward.
That brings up another thing about academies at our level, and making certain that clubs at our level get the proper compensation for players that they have developed. At the moment, there is not that—National League clubs are not allowed to register a 16-year-old. Such things are not addressed in the Bill. Whether they should be, I do not know.
Damian Collins
Q
Steve Thompson: Since 2001, when the second promotion place was introduced, some clubs have gone up and down, but before the end of this season just gone, 40 different clubs will have been promoted, and 29 of them are still in the Football League and one is in the Premier League—Luton Town. For teams that are struggling in the Football League, when they get relegated, the National League is a fantastic league for them to reorganise and to come back. There has been a number of them: Stockport and Wrexham, to name two. The football pyramid needs the National League. We have developed lots of players on loan from the Premier League, the Championship and other Football League clubs, and we are there to help support clubs.
Darryl Eales: To pick up on what Steve said, for me, the distribution of economics is completely inequitable between the two leagues above us and our league—so much so that other than the promotion from the Championship to the Premier League, the next most valuable promotion is from the National League to League Two, which I think drives Steve’s point, but we are entitled to only two promotion places. Fans, when I talk to them—from every club—say, “We don’t understand this.”
Damian Collins
Q
Steve Thompson: We were the first league to introduce reporting to His Majesty’s Revenue and Customs. About 20 or 25 years ago, a lot of football clubs were basically using HMRC as a bank, and HMRC was reluctant to take football clubs to court. The National League—the Football League has followed us—introduced the rule that HMRC reports to the league if a club is behind with its HMRC or VAT payments, and the league will immediately put them on a registration embargo, which concentrates people’s minds. Since then, we have not had a problem, because when a manager comes and says, “I want to sign a new player,” and you say, “You can’t, because you haven’t paid HMRC,” they look a bit silly. We have quarterly reporting to our league and an annual licence with the FA. That is why I worry that this will just be another layer of bureaucracy.
Ian Byrne (Liverpool, West Derby) (Lab)
Q
Darryl Eales: To me, it just does not start off in the right place from a contextual perspective. It tends to be completely focused on money, rather than the English game in its broadest context. You have only to go around your own local community to see the number of kids—girls and boys—now playing on local parks that have been funded by parents or local businesses. There does not seem to be anything in the Bill that reflects the community aspect.
Ian Byrne
It is, yes.
Darryl Eales: It is quite complicated. If you asked me about sanctions—I am probably going off-piste here—I would say that financial sanctions and points deductions do not work. The only sanction that will stop clubs flouting rules is relegation—three or four leagues. Even this season—and I know this is nothing to do with this Committee—the points deductions in the Premier League meant absolutely nothing. The clubs flouted the rules, but there was not a big enough points deduction to affect their league status. I am a Birmingham City fan by background, and we had a 12-point deduction a few years ago. I thought it was a joke, because we did not get any penalty from it other than the 12-point deduction.
Ian Byrne
Q
Steve Thompson: We work with supporters and have different supporters’ groups. We also work in our community; all our clubs have a community trust, and all the Football League and Premier League clubs will have a community trust. Everybody does lots of work in the community. As parliamentarians, many of you will know that at the 2010 election there was a big British National party problem in Barking and Dagenham, and as a football club Dagenham & Redbridge stood up and made a big thing about that. A couple of months before the election, there was a big game, and McDonald’s was selling burgers for 99p, so I said, “We’ll let everybody in for 99p, with kids in for 25p.” We had the managers of small local football teams buying all the players a ticket and it costing less than a fiver.
That put out a message, and it was an important message. At the time, I was reported as saying that we are in a white working class area, as it was in 2010, that the majority of our supporters are white males, and that if there are 10 BNP councillors out of 50 in Barking and Dagenham, some of the supporters must have voted for them. We had a really multiracial team at the time: we had a Barbadian international, a South African player and a Muslim player. We had several. I turned around and said, “You’ve got to show them that you can’t be cheering on a multicultural team on a Saturday and then expect them to all go home on a Monday.” That took traction. We stood up. Darren Rodwell, who might be part of this establishment within the year, will turn around and say that “he”—unless I am in the room, in which case he will say “we”—kicked the BNP out of Barking and Dagenham. That is the power of your local football club. We can stand up and do things like that, and it is important that we can. The supporters will go with you.
Stuart Andrew (Pudsey) (Con)
Q
If the Bill goes through, there will be a statutory regulator. What discussions have clubs had with the National League about whether it will row back and allow the statutory regulator to do the work so that there is no duplication?
Secondly, the independent experts we had in this morning said that clubs are looking in the rear-view mirror at the moment and that the advocacy-first approach means that there will be a real-time approach to analysis of clubs, which would be helpful for clubs. Do you agree?
Steve Thompson: I was quite hoping that the regulator would work with the National League, the EFL and the Premier League, allow them to continue with their reporting, and step in only if there was a problem with particular clubs. It would be a much more light touch. We have discussed that before. I understand that that will be down to the regulator, but I was hoping it would be more like that.
Darryl Eales: I think the forward-looking approach is to be welcomed. I am an accountant by background, and I am very happy to share my ideas on how that approach can put more pressure on owners to be financially responsible. The only reason football clubs get into trouble is their playing budget, so there needs to be some linkage between your playing budget and the financial resources of the owner.
Robin Millar (Aberconwy) (Con)
Q
I am interested in how clubs fail, too. This touches on what the Minister was just saying: where should the balance of the regulator fall? Should it simply issue licenses, have a fitness test for owners, and so on—take more of a “control the bad actors” approach—or should it be more interventionist and say, “We think there’s a problem here; we think there’s a mismanagement. They’re going to make a mistake, and it’s going to cause problems”? Where does the balance properly fall?
Darryl Eales: That is quite a toughie.
Robin Millar
Q
The Chair
We do not have much time left. Please be brief in your answer.
Darryl Eales: For me, a critical part of the fit and proper person is: what is the motive of a person who is taking over a club? As you go up the pyramid, it is not clear to me what the motives are, beyond financial. My concern, looking at other sports, is that it is missing the fundamental trick that clubs in the UK are stewarded for the benefit of the fans. They are not franchises.
Steve Thompson: I agree with that. Even at our level, there is not a big queue of people trying to buy a football team. It is about being involved with your community, and that is what is important.
The Chair
Order. I am afraid that brings us to the end of the time for this Committee to ask questions to this panel. I thank the witnesses on behalf of the Committee. Thank you very much.
Steve Thompson: Thank you for the opportunity.
The Chair
Q
Ian Mather: Hello. I am Ian Mather, and I am the director of Cambridge United. I was on the board in 2018, and prior to that I was a solicitor in private practice for 35 years. In that time, I spent a period doing insolvency work, which was good training for looking at football. I became chief exec in 2019 on an interim basis while we did the change of ownership, and we moved from 705 owners to one. That was meant to last for a season but then covid hit. I stayed for another season, and then we got promoted, so I stayed for another one. I have a good insight into how the world of football works and the economics of football.
Sharon Brittan: Good afternoon, everyone. I am Sharon Brittan, the chairwoman of Bolton Wanderers football club. I came into football five years ago, having only been in the game from the perspective of being a fan of Burnley football club all my life. I had not worked in football before. Prior to that, I worked in industry, which I still do alongside football.
Stephanie Peacock
Q
Ian Mather: I can give you a real-time answer to that. We are currently at the point in the season where contracts come to an end and we renegotiate new contracts with players. Without giving you the names of individuals, the pressure is on for a 30% pay increase for players who have been under contract for two years. That is a sense of entitlement. Where is that coming from? It comes from the level of money in the football league above us, which has a wash-down effect.
I will specifically address the point of parachute payments: if you pump £100 million into the top of the pipe, that is bound to start appearing at the bottom. Therefore, the pressure on us, as a League One club, is ratcheting up each season. We were in League Two in 2019-20, and every year since we got promoted, the owners are being asked to pay more money. We have a brilliant lead owner, Paul Barry, who is absolutely Cambridge United through and through. He went to Seattle and made money through a business, but he loves Cambridge and will be there any time he can be. His mum and his brothers are season ticket holders, and he supports the foundation in Cambridge.
As Cambridge United, we are in one of the poorest parts of Cambridge. If you follow the inequality of the UK, the Gini coefficient says that Cambridge is the most unequal city in the country. We are in the poor bit, and our owner really wants to do what he can to help that community, and we do loads. However, the effect of consistently having to put more money into the hopper to have any hope of staying in League One—and then staying in League Two—is just more and more pressure. The risk is that it affects the owner model, which is broken. If our wonderful owner were to move on, which is unlikely—it is more likely that his heart gives out under the pressure—who will replace him? In 2019, 2018, we were looking at alternative buyers for the football club, because Paul was not sure at that stage if he could commit the whole lot; I would describe them largely as tyre kickers and property speculators, and we had had enough of those.
The club went into administration in 2005 because it was badly run, but a lot of people out there are interested in owning football clubs for the wrong reasons. We have an owner who really wants to own it for the right reasons, but increasingly revenue does not equal cost, and that gets bigger and bigger and bigger each year. On your point, if that carries on, eventually it is our owner or some other good owners who will say, “I cannot do it any more.” We then populate our football world with owners who are not motivated in that way.
Sharon Brittan: Can I give you a bit of preamble before I answer your question, if that is all right? I came into football five years ago for two reasons: one, because I love the game, and two, because I wanted a platform to do good. Having worked in industry, I wanted to come into football and run a football club the way that I work in business, which is by having the right people in the right way doing an honest, transparent job and coming together as a team and about the impact that that would have on the community.
I cannot explain the pitiful situation that I walked into at Bolton Wanderers in 2019. The previous owner had left the club—I cannot even say on its knees, because it was beyond that. There were staff and people in the community who had not been paid and were eating from food banks. People had not paid their mortgages or their rent. Their mental health and wellbeing, which I do a lot of work in, were beyond catastrophic. I have seen at first hand the impact of having the wrong owners at football clubs and the effect that that has on the community. I have worked with Rick Parry over the last five years, and I cannot stress enough that the owners’ fit and proper persons test must be stringent.
Football in the UK changes people’s lives. We have the ability, as owners of these football clubs, to make change, give people hope and help them. More so than ever now, even since I came into the football club, people have very difficult lives, and it is about not just money and what we must pay in League One as the salaries, but the impact that the whole football pyramid has. That is why the financial distribution must be fair to give us as owners the opportunity to continue the work that we are doing. I still go into Bolton on a Saturday afternoon and have grown men crying to me, “You saved our football club. God, my family and you are up there with what you have done.” It is not just for the 300,000 people in Bolton: there is a wider impact than that. As good owners, a good owner will work with another good owner to ensure that that extends out further.
I am sorry that I am outspoken, but I work in an honest, transparent way with a good, clean heart, and people need to do the right things. This is a pyramid. It is not just the Premier League: it is the Premier League, the EFL and the National League. It is a travesty that it has got to the stage where all you very important, hard-working people must be involved and spend your time dealing with this when the football authorities have been unable to resolve it themselves. I am sorry to go on, but I have been at the heart of it for five years, and I am passionate about where this is going. The pressure has got higher and higher and higher in terms of what we must spend to remain sustainable.
Bolton is a big club, but I love sporting jeopardy; I think it is brilliant. I think the pyramid is absolutely brilliant. The promotion and relegation all add to the excitement, but the financial distribution will make a difference to every single club, regardless of its size. We have to seriously consider this if we get promoted on Saturday. I am a custodian of the football club—that is clear. This football club is owned by the fans, and to keep fans happy is a full-time job. I have to trust the fans—I work with them, I am there day to day, on the ground, with the fans on a Saturday afternoon. I also think that British owners understand English football—I was brought up in English football from zero to now—but we are losing that as well. That is another conversation, but we are losing that as well. But yes, it does cost more and more.
Stephanie Peacock
Q
Sharon Brittan: All I would like the Bill to do is to bring in—it is just about doing the right thing. It is not even complex. That is what baffles me; it is actually relatively simple to do the right thing. Let me give a brief example: I have five original investors in Bolton Wanderers, who have bought into this journey and have done incredible things, supporting me as the chairman all the way. If we get promoted this Saturday, if we get into the Championship, everyone—our fans—will say, “It’s incredible, marvellous, wonderful—just fabulous!” and we will move into a world where it is not a competition any more. How can we compete with the clubs that have come down from the Premier League and have the Championship payments?
I am hugely respectful of money. I would have to go back to our investors to say, “We need £20 million a season to try to be competitive”—but we would not really be competitive. If you look back over the past six years, the chances are that you will see that the three that have come down, because they have the parachute payments, go straight back up. I want to go higher up the pyramid; the higher up the pyramid I go, the more good I can do for this country, the more impact I can have and the more I can help people who are less fortunate and who need help.
For me, the question is: do I get to the Championship? I have to be responsible to my investors. I have to be responsible to the fans who, if we are not competitive, will not be happy. When I moved to Bolton, the fanbase was finished, it was over, and now we get 25,000 coming to the home games, so you can see the impact of running a club properly and where that gets you to. But my dilemma is, do we continue in the Championship when we know that it will cost us £20 million a year? That £20 million a year could be put to doing other, really good things. I have to be a responsible human being and decide, “Do we want to remain there? Do we want to take that risk?” but it is impossible to take that next step.
The Chair
With respect, we have many questions, so may we have brief answers?
Ian Mather: I have a very short response: we need better financial distribution, and rules that bite to stop money being wasted through the game, so real-time regulation.
Chris Green (Bolton West) (Con)
Q
Sharon Brittan: How delightful to have you here to endorse what I am saying!
Chris Green
I have some sense of this already, but does the Bill go far enough to empower the regulator in the distribution of funds?
Sharon Brittan: As things stand, the EFL would like to have some areas of the Bill looked at. I will not go into the detail, but I have a request. To me, Rick Parry, with what he has done over the past five years, is a man who has led an organisation in the right way. I am sorry, but I do not think that the Premier League have done the same. I would say that to them—anything I say, I will say to the person’s face; I do not talk behind people’s back and I do not gossip. Rick Parry has done a superb job. I have read through the Bill and we have talked through the areas where he thinks that the Bill needs to be amended. It is important that those areas are understood and agreed, and the amendments made. At the moment, the Premier League are not working with us, so if, after going to all this effort to get the Bill, we do not get the Bill quite right, it will cause further problems. I would like to see a Bill go through that is absolutely effective, so we can all move forward in a really excited way with our football pyramid. Football is global, and there is so much good we can do for this country, for the world.
Ian Mather: This Bill is really good in many ways. A lot of work has gone into it, and it is a thoughtful Bill, but there are flaws. One of the flaws, to answer your point, is the inability of the regulator to act if he or she sees that something is happening that makes football not sustainable. We are going to have the state of the game review, which definitely needs to be done quickly. Let us say that the state of the game review says that parachute payments, to pick an obvious one, are bad for the game. At the moment, it requires the EFL or the Premier League to trigger the backstop powers. You might say that the EFL would definitely do that, but actually, with the voting structure in the EFL, it might not. There are powers within the Premier League to coerce and influence clubs in the EFL so that that backstop might not be triggered. Why create a power for a regulator but not give the regulator the power to intervene if he or she definitely sees something is wrong? I think that is a fundamental flaw in the Bill.
Chris Green
Q
Sharon Brittan: It absolutely brings trauma, for the reasons that I gave before. I have to behave as a responsible human being, and it is whether I can then go to my investors and say, “Would you like to commit £20 million a year?” The reality is that you will fail. I want to be progressive every season, because like I said, when we are progressive, that gives me a bigger platform to do good. In the Championship, however, because of the parachute payments, it makes it almost impossible.
Chris Green
Q
Sharon Brittan: I completely agree. May I just say that in football, generally it can be a non-trusted environment? I have a football manager who has stayed with me four years and who has turned down three jobs in the Championship that would have given him three times his salary. I have a CEO who has stayed with me three and a half years. I have built a team of trusted people, because we are working in a culture where everybody has bought into the journey to where this football club is going. You can see that after five years, we are a differentiator in what we are doing in Bolton, and if more football clubs worked in that way, I am absolutely positive that it would enhance the economy and life for the 65 million people who live in this country, and beyond. I am on a mission.
Mr Clive Betts (Sheffield South East) (Lab)
Q
Sharon Brittan: It is a very good question. Football has—or has had—a habit of bringing semi-maniac types of people to the table. I think it is driven by ego. In those situations, it comes down to the fit and proper persons test. The previous owner at Bolton spent £180 million. He was a very good man, but a huge amount of that was spent trying to get out of the Championship. If you have someone who is hellbent and comes in just wanting to spend, I do not know if you can actually stop that, per se.
Ian Mather: Can I come in on that point? I think real-time monitoring would have been really helpful with a lot of the problems we have seen with football; Bury was a really good example. You look back over time and you think, “Well, that wasn’t very good. In fact, it was terrible,” but that was years ago. Actually, the ability to look at what is happening in real time is really important.
I know one of the criticisms is that that will be an expensive item for small clubs. As a small club, our turnover is £7 million. Let me put that in perspective for you. We have a Man City supporter in the room; Erling Haaland earns about £7 million in eight weeks. That is equivalent to our turnover. Nothing in this Bill causes me any trouble at all about form filling or submitting accounts. If you want to see our accounts—they might be four weeks out of date, but that is as much as you are going to get—our cash flow forecasts, forecast profits and losses, which are done every month, or our business plan, that is not a problem. I would not buy the argument that this is all cumbersome and difficult, because it just is not. That sort of monitoring would have helped to prevent problems like Bolton, Derby, Bury and a whole lot of other clubs experienced..
Mr Betts
Q
Ian Mather: That is a really great question, and one that would keep me awake at night. There would be lots of people who would want to come in and own Cambridge United. We get approaches all the time, and we just bat them off like flies, because none of them is particularly well motivated. When we last looked seriously, in 2018, there were a lot of poor owners. I know that some went on to other places, and I bet those clubs wished they had never seen them. Their interest was in property and profit, not in football.
Sharon Brittan: People go into owning football clubs for the wrong reasons, which we discussed earlier. That is why you have to have people who go into owning these football clubs for the right reasons—people who understand that the responsibility that goes with these clubs is enormous. I invite any of you to come to Bolton Wanderers and see what we have created. The work that goes into it is non-stop, every day. If you cannot deal with stress, you should be nowhere near owning a football club.
Dame Tracey Crouch (Chatham and Aylesford) (Con)
Q
Ian Mather: The thing that I fear is that it does not work in key places. On the parachute payment clause, protecting that does not work. I know that Rick has made the point, but I would endorse it: we are not against the concept of parachute payments if they are right. I do not believe that they are right, but let’s have a state of the game review and find out whether they are right, or whether they are an impediment to fair competition in the football world as we want it. But do not then hamstring the regulator so that it cannot deal with that problem, if indeed it is a problem.
The problems here are few: they are about who can trigger it, the parachute payments and how often you do a review. Those are the key issues. It comes down to the money. The other bits in the Bill, such as those about protecting heritage, are really good. We were looking at introducing a golden share in Cambridge United to give fans protection against things such as stadium moves and so on, but the Bill probably makes those redundant.
Sharon Brittan: Tracey, what you said about unintended consequences is really interesting. I have looked at the situation closely, and I like to look at both sides of the story, so we get a clear, honest picture from the Premier League side and the EFL side. I do not even understand unintended consequences; I cannot work out what he is referring to, unless I am missing something. I can understand the EFL’s argument, which is very clear and concise. From the Premier League’s point of view, I have so far not been presented with anything or read anything that has made me think, “What they are saying actually makes sense.” They have put together a very weak argument —I do not think there is an argument—and have conducted themselves poorly. I do not think they have presented themselves in the right way. They are arrogant. They think they are an island, on their own, sailing off and forgetting that 14 of the clubs in the Premier League have come from the EFL.
On how the pyramid works together, we loaned two players over the last two seasons. Both of them—James Trafford and Conor Bradley—went back to their respective football clubs, and they are absolutely flying in the Premier League and talking about their time at Bolton Wanderers. I could bring players to the table who will say to you that they have never worked in such a culture. People need to work in the right culture to bring out the best in them. There is enough stress in the world today.
On unintended consequences, I would love to sit down with Richard and for him to explain it to me because I do not understand it. They are just words, and there is no substance or arguments behind the words. I have not yet come across a cohesive argument to which I can say, “Actually, that’s a fair point.” I am not going to talk about the numbers—we all know the numbers. In my opinion, that this goes back to greed, envy, jealousy and thinking about me, myself and I. I cannot comprehend how someone can view this through that lens when we are a football pyramid, and what we do as custodians affects this country and beyond. We should be cherishing what we have here.
Matt Rodda (Reading East) (Lab)
Q
Sharon Brittan: I completely agree with that. Even in the five years that I have been involved, I have seen better owners coming into the game because the EFL has changed the rules. You cannot having a bankrupt owning a football club, and you cannot have somebody who has been struck off; the rules are much more stringent. I do not want to talk about the numbers, and I do not like talking about them, but the problem we have is that in five years we have put a huge amount of money into the football club. Any sensible businessperson probably would not do that, because they would look at it and say that it does not make any financial sense.
Ian Mather: In direct answer to your question, I would say that it is the numbers. If an owner can look at a football club and think, “Broadly, if I run that club properly and well, with the income I get from running a football club and the sustainability payments from the Premier League, I can roughly break even. I may want to be ambitious and build a new stadium here, or improve the training ground, but broadly I can balance the books.” If you cannot balance the books, or worse, the books get more unbalanced each year, you are reducing the pool of people who can buy into being a football owner.
Sharon Brittan: I agree with Ian.
Damian Collins
Q
Sharon Brittan: Isn’t it fabulous? That is what I love about football: the near impossible can happen.
Ian Mather: I would also answer it by saying that a North American pension fund has provided—
Sharon Brittan: I did not want to say that!
Damian Collins
Q
Sharon Brittan: The Premier League has allowed 13 of our precious 20 football clubs to be owned by Americans. Lose one more and they make the vote. How has that been allowed to happen? The Premier League stops the FA cup replays without even consulting us. How has that been allowed to happen? The Premier League is not fit for purpose, in my humble opinion.
Damian Collins
Q
Sharon Brittan: If this Bill goes through, I would love to fast-forward three years and see where Bolton Wanderers are. Then, you guys can see where a football club gets to when it is run properly in the right way, with the right people doing the right job in an honest, transparent and reasonably sustainable way. There is money, and obviously that helps.
Ian Mather: It is largely to do with money.
Sharon Brittan: But that is their good fortune.
Ian Mather: And Luton has come down again. You need money to drive success, and there is quite a clear correlation between league position and how much money you have, which explains why Cambridge United keep on cheating relegation. We are roughly around where we should be, and it is about the money.
Sharon Brittan: I am looking to get longevity of success; I am not looking to bounce around the pyramid. To get longevity of success, you have to create a culture that people buy into, so that they stay on the journey with you. So far, it looks like we are delivering, but we will see. I think that there are so many unscrupulous things that happen in football. Let us try to prevent those things from happening so that we can enjoy the game and the jeopardy.
Damian Collins
Q
Sharon Brittan: Please do not quote me as saying that! If we get rid of the parachute payments, that might be possible. Thank you—I am really appreciative.
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank our witnesses on behalf of the Committee.
The Chair
We now hear from Tony Bloom MBE, chair and owner of Brighton and Hove Albion Football Club, and Steve Parish, co-owner and chair of Crystal Palace Football Club. We have until 3.30 pm for this session. Will the witnesses please introduce yourselves for the record?
Tony Bloom: Good afternoon, everyone. I am Tony Bloom. I have been chairman and owner of Brighton and Hove Albion Football Club since 2009. I will give a brief introduction about how I got to that position. I have been a fan of Brighton since I was very young: I was born and brought up in Brighton. My grandfather was vice-chairman of the football club in the ’70s, until he passed away on the team bus in 1980. My uncle has been on the board for almost 40 years. The football club and football is in my blood.
As some of you may be aware, we had some rogue owners in the 1990s. They sold our stadium, the Goldstone Ground, without a stadium to go to. We were really struggling. The owners did not keep the fans informed at all—in fact, they lied to the fans on an ongoing basis. It was the fans who saved the club.
The Chair
Thanks.
Tony Bloom: I will be quick. The point is that there is no doubt that the club almost went out of existence because of what happened. The owner of a football club should not be allowed to sell the stadium.
Steve Parish: I am Steve Parish, co-owner of Crystal Palace Football Club and also the chairman. Fourteen years ago I bought the club out of administration. It was its second administration in a period of 10 years. Since then we have been fortunate enough to have a level of success against what I think everybody agrees is a difficult backdrop and industry, where for some to do well others, unfortunately, have to do badly. It is very enjoyable, although as Sharon pointed out it is also very stressful. It is very much about the local community and the fans who we serve.
Stephanie Peacock
Q
Tony Bloom: The Super League was a dreadful idea; in my opinion, it never had a chance of being allowed to go forward in this country. Apart from the owners of the six English clubs—it is different on the continent, where there was a bit more support—everyone was dead against it. Even the fans of the clubs by and large were completely against it: it never had a chance. I do not understand it, apart from not wanting to miss what they thought was the gravy train. It would have been terrible for English football and for Brighton and Hove Albion Football Club. Because of what those six clubs did, it has brought a bad name to the Premier League, which is such an amazing product. It certainly does not help clubs like mine.
Steve Parish: We believe that the effect of it on the Premier League would have been catastrophic as the top four positions would not really have mattered. The race to the Champions League and relegation are obviously the two things that preoccupy most football fans, and obviously there is the Europa League and other things as well. However, if there was no consequence to getting into the top four—in fact, if you could finish 10th and still qualify for a European competition—that would obviously make a mockery of all the domestic leagues and the whole meritocracy of football. Sadly, that still goes on.
A stealth version of the super league is gradually coming into operation. If Aston Villa are fortunate enough, as it looks like they will be, to qualify for the Champions League, which would be fantastic for all of us and for football, they will not enjoy the same money for doing exactly the same thing in the Champions League as an Arsenal or a Liverpool will, because the amount of money you get is based on your five-year performance.
We are constantly fighting to have a meritocracy. As the manager of Atalanta said when they succeeded in Europe, seeing a club like that that does not have the fanbase or fan size do well gives hope to all the clubs, but there is a continuing move from clubs in Europe to pull the drawbridge up and create a permanence around qualification for Europe, which is something that we all have to be careful of.
Stephanie Peacock
Q
“Not a lot irritates me in football...Maybe the governing bodies of FIFA and UEFA, who both regulate the game but also run tournaments. There’s a big conflict there.”
Steve, in 2023 you were reported as saying:
“The people organising the tournaments and the people regulating them, and taxing those tournaments for the greater good, should be two different people.”
In the context of those quotes, are you pleased to see an independent regulator established that can help regulate football finances without a conflict of interest?
Tony Bloom: I was talking with FIFA and UEFA because they are always looking to create more tournaments and more revenues for themselves, such as the FIFA club championships. They were looking to have a World cup every two years. UEFA now have an expanded Champions League, which is in direct competition with the Premier League.
The domestic competitions are of the utmost importance to the country and to domestic football in this country, although the other ones are fine. What I think is absolutely wrong is that they regulate the game, yet they can distort it against the interests of the domestic fixture list and the domestic tournament. The FA is not looking to do that. It has one tournament—the FA cup. The FA works very well with the Premier League and the Football League in terms of that tournament, so they are very different things. I was talking about UEFA and FIFA, and for me that does not relate to the FA. That is why I do not think that the two things go hand in hand.
If you are asking me about a regulator, obviously a regulator is coming in. From my point of view as an owner of a football club, I am concerned about a lot of things. I do not think that anyone in industry is a great fan of having external regulation. If it is light touch and on things about sustainability and ensuring that clubs cannot sell stadia, their chance of going out of business is reduced and they cannot change their club crest or colours without discussions with fans, I am in favour of that, but I have significant concerns with a lot of the other things.
Steve Parish: FIFA controls the world calendar, so it takes first crack at the calendar. It is pretty clear that FIFA wants smaller, 18-team domestic major leagues and one cup competition, so there is a huge difference between the scope creep of their tournaments and the governance role that they should have in the game.
The issue is certainly not about distributions. In fact, if you are going to compare the distributions, I think UEFA give something like 5% of their overall income to solidarity payments, whereas the Premier League give 16% of their overall income even now to solidarity payments down the pyramid, so I do not think that you can compare those two things. In so far as you touch on somebody to adjudicate or the right person to adjudicate or look into whether the distributions down the pyramid are at the right amount or right level, there may well be some role in that, and it looks like that is where we are heading.
When we sit in the much-maligned Premier League, where we are all tarred with the same brush as being just full of self-interest, I can certainly speak for Tony and myself and say that we understand the position and obligation we have to the greater game. We also do not feel like we are permanent members of the Premier League—certainly not. Far from it, we know that pretty soon we could be back in the Championship. I am pretty sure that Sharon would agree with a lot of the things that we stick up for and advocate in the Premier League if she was in the Premier League. It is interesting that Sharon wants the ladder up and she wants to get there, but I am also pretty sure that, once she gets there, she does not want to just go straight back down again. She wants the possibility of staying there.
We have heard about parachute payments and all this distortion, but Palace did not get promoted with parachute payments, and nor did Forest, Brighton, Wolves, Brentford or Luton. In fact, Bournemouth did not get promoted the first time with parachute payments, and nor did Fulham or Burnley. There are a lot of prosperous clubs in the Premier League that did not get promoted with parachute payments—the average is one club a year. There are these causes célèbres, where everybody looks at things through their own individual lens. I understand that, and it is important that we have a broad perspective; my concern is whether the regulator will have that.
We are talking about a system that, at the moment, has served us incredibly well. We have got a democracy, really. Football is run by the clubs and their various governing bodies. Over the last 150 years, we have managed to make it the world’s most popular game. Within that, we have managed to make the Premier League the world’s most popular league. Of course, if we had a regulator that made all the right decisions all the time and was not lobbied by the big clubs more than maybe the smaller clubs, then of course that might be of benefit, but I am severely worried about the potential unintended consequences and the power of the big clubs to dominate the debate.
Stephanie Peacock
Q
Steve Parish: The problem with football is that there are so many moving parts. Competitive balance and sustainability in some ways go hand in hand. If you look at Bolton as an example, there was a lot of money invested in Bolton. The infrastructure was massively improved. Yes, it got into financial trouble, but it did end up a lot better off, with a lot of investment over that period, and it enjoyed a sustained period in the Premier League.
My big concern is that if you only focus on sustainability, the biggest businesses can always cope with regulation the best. There is another chasm, which is between the top clubs in the Premier League and the rest of the clubs. If you look at the Bill, it classes relevant revenue as the broadcast income, but broadcast income is 75% of Tony’s and my revenue, and about 20% of the bigger clubs’ revenue. So straight away, it has the ability to competitively disconnect the league even further.
That is just one concern I have. Of course, if the regulator is well informed, lobbied by all the right people and comes to the right decisions, which create the right platform for football to continue to thrive, it will be a good thing. But when I read the Bill—when I see how, frankly, imprecise it is; when I see areas where the Secretary of State can interfere or where the rules can be changed; or when I see 116 different licences or each club being treated differently—I do see a lot of worrying issues that could arise.
Damian Collins
Q
Within the Premier League board, you have all those big clubs. Would it be more effective to allow some of the enforcement and supervision of the league’s rules to be done by an independent regulator that is, if you like, separate from the politics of football? It is set up by Government, it is not open to being lobbied or cajoled, and it is not making decisions on the regulation of clubs that it has to trade off against other decisions that are taken by Premier League clubs about how they organise the affairs of their league.
Steve Parish: If the Bill looked at the whole of football, that might be the case, but we are looking at it in a very myopic way. We are not looking at all the European revenue, the growing scope creep of European fixtures, the increase in the size of UEFA club competitions, or the gerrymandering of coefficients, so that even if we qualified, we would not get anywhere near as much money as a club that has been in the league three years previously. Within the Premier League itself, the top clubs have got—what is it?—four times our income. That is probably going to head towards five or six times our income.
The Bill, very narrowly, looks only at the Premier League media money. Actually, the Premier League is the most egalitarian by distribution in Europe by far. Where it is heading to right now is 1.8:1. Although that is worse for Tony and me, this is still by far the fairest league in Europe: in Germany, the ratio is about 3:1—the top club to the bottom club. So actually, in terms of distributing the revenue that it gets, the Premier League has done a very good job of making it fair and maintaining competitive balance.
The problem is that such huge revenue is now pouring into these clubs from European competition, and from the commercial deals that that gives them, that it is creating a massive distortion. What I fear this Bill will create is a permanent top six or top seven and then a kind of washing machine of clubs that will rotate between the two divisions below. That may well be what some people want as a vision for football. It is not mine. Mine, like Sharon’s, is to try to get into the Premier League and stay there. I accept it comes with jeopardy every year. I accept there are three relegation places. I accept that everybody is trying to stay in the league and it is highly competitive. But the aim, I think, of most clubs is to try to stay there, ladder up and improve.
Damian Collins
Q
Tony Bloom: Obviously I have had many years in the Championship and League One, and we have had many discussions there. The relationships between the Football League and the Premier League, I think, have got a lot worse since there was talk about regulating football. Overall, although there have been difficulties over the years, it has worked very well. But ever since the Football League has realised that there is going to be a regulator and, “If we can’t get a deal, there may be something from that,” things have not worked out so well, so I think there are, again, unintended consequences.
I think it is much better for football—the Football League, the Premier League, the National League and the FA—to work things out itself. Without it being perfect, I think the fact there have been three liquidations since 1992, despite the fact that, as you say, so many clubs are in financial distress—most clubs lose a lot of money every single year—is a very good result. You can look at other businesses. I know we do not want to compare businesses to sport; it is a completely different stratosphere. But I do worry about what will happen if you put in lots of extra regulation and lots of extra cost for the clubs, even though I am sure the Premier League will pay the vast majority of the regulator bill. I am just worried about future investors. That is absolutely critical.
Damian Collins
Q
Tony Bloom: I think it would be disastrous for the Premier League. The Premier League has done an amazing job to make it far and away the strongest domestic league in the world, and that is where we want it to stay. It is so important for this country. If that was to happen, then outside the biggest five or six clubs, which may think their chance of relegation is tiny, the clubs could not invest the money in players. And then what would you have?
In countries like France, with Paris, and also with Juventus and Munich, there is domination between the top one or two clubs and there is frequently only one winner in the league. The middle and bottom clubs would not be able to invest, and the differential between the top clubs and the middle and bottom clubs would be so big that it would not be so competitive. Then people would not want to watch it; the broadcast money would not be there; and we would veer towards Spain, Italy, Germany and France. I think it would be an absolute disaster. Clubs could not invest because of the worry about relegation. As it is, with the parachute payments, clubs still have to sell players, typically. Often, they get into serious financial problems even with the parachutes.
Mr Betts
Q
Steve Parish: The reality is that all around Europe and probably the world, football is a billionaire or millionaire-funded industry. That is the reality of it. It does not make money anywhere in the world. We are not unique: this is not a country where uniquely we lose money in football. It is not a business with a profit principle; it is a business with a winning principle. Whatever rules you put in place, people’s desire to win will always trump their desire to make money. So the problem is that if you restrict our league so much that we are taken out of that game, you very quickly could make us very uncompetitive in terms of a European landscape.
Mr Betts
Q
Steve Parish: I have put more money into my club in the Premier League than I used to in the Championship. I write bigger cheques in the Premier League than I did in the Championship. It used to cost me a lot less money to run in the Championship.
Tony Bloom: The reality is that across the world in sport—but particularly in football—clubs everywhere lose money every year. People put it in because they want to be competitive, and they want things for their community, and so the problem you have for every single owner in this country is that they want to be competitive, and they want to spend money, but they want to try to be sustainable—and the two are not compatible. Almost every club—and certainly every league—loses a lot of money. The Premier League loses a lot more money than every other league, and that is true on the continent as well. To be competitive, that is what you need to do—spend money. That will never change, whatever happens with the Bill. You will always have that, and you need to accept it, because that is the reality. Without that, or if you try to stop that, the Premier League would not be the best league in the world.
Mr Betts
Q
Steve Parish: That is not what we are saying at all. We are representative of every club like us; what I—quite clearly—said to you is that I believe that if Bolton were in the Premier League, they would believe what I believe, which is that yes, the pyramid should have a sustainable amount of money, or more money so it can better compete—as Tony says, it is very unlikely, in a normal business case, that any of these things will ever look sustainable; there are a lot of people putting a lot of money into football from their own pocket for the enjoyment of the public and their fan base—but there is another problem, and that is the growing wealth of the big clubs, and that has to be identified. What we need to do is make sure that when we pass these distributions down the league, they come from the right place and are fairly apportioned. That is not me being selfish—that is me being sensible.
Mr Betts
Q
Steve Parish: As I said, if you had a regulator that we all believed would uniquely make all the right decisions for football, of course we would be in favour of it. What you asked me is what my concerns about the Bill are; my concern with the Bill as a starting point is that relevant revenue is only broadcast income, which would be 75% of Bolton’s revenue should they get into the Premier League, and it is about 20% of the top six’s revenue. That straight away is an example of an area of concern.
I just want to come back on parachute payments, because I need to give you some numbers. In the Premier League, if you finish around midtable, you will turn over about £180 million—it is not an unreasonable thing to budget for. The first year in the Championship, with parachute payments, is about £70 million—so you have about an £110 million drop in revenue, which is pretty catastrophic for any business to try and contend with if they get relegated. Many clubs manage to get back in the first year—on average, it is about one a season for the last 10 years—but the average finishing position of a parachute club is eighth. Many clubs, like Stoke or Sunderland, disappear from the Premier League, and that big gap and big drop gets them in a lot of financial difficulties. This is why parachute payments are so important for the sustainability of football.
Tony Bloom: You talk about self-interest: that is not the case at all. I care about every football club in this country. I am not worried about the top six—I have not said anything about the top six. We have regulations in the Premier League, and if something is going to be changed, you need a two thirds majority; if they get two thirds majority, and the top six vote, and get a few more people, that is the way it is. I am not complaining. Football needs to vote, and the Premier League has its constitution; I have no issues with that.
I used to be in the Championship, and we had parachute payments. I was not complaining—we just worked away to try and be the best we could for our football club. I was never in favour of parachute payments when we went and won the Championship; I never voted for that or discussed that. All I was asking when I was in the Championship was for there to be a bit of sustainability so clubs did not lose an average of £10 million a year, which was voted against because clubs wanted to give themselves a chance to get promoted to the Premier League. I am saying exactly the same in both divisions.
Stuart Andrew
Q
Tony Bloom: Because of the talk of a regulator, as I said—
Stuart Andrew
Let me finish my question. There has been talk of a regulator for a much shorter period than there have been issues relating to the historical problems in football; this has not just happened since the publication of the White Paper or the fan-led review. The reason why the fan-led review was brought in the first place was that a solution had not been brought by football. My question again is why that has not happened, because that is why we are here today—because football has not stepped up.
Turning to another thing that I want to talk about, I agree with you and I am glad to hear that you want to see the sustainability of clubs within the pyramid. The independent experts who we heard this morning said that the problem in the past was that too many clubs were looking in the rear-view mirror, whereas this Bill presents us with a real-time approach that will identify problems much earlier so that they can be addressed. Do you welcome that?
My final question is about fan engagement—to change the subject completely. I am interested in whether you think the Bill hits the right notes on that and what you do there, because I hear that you have an interesting approach as a club.
Tony Bloom: In terms of fan engagement, we are a club that regularly engages with the fans. Even before talk of a regulator, we had many fan forums with a broad range of our supporters’ clubs. I do them, as do the CEO, the head coach and so on. We have seen in the last couple of years that we have a fan-led board and we have many meetings as well. Our relationship with our fans is really good. I can talk only about my football club, but if you speak to our fans, they would be very happy with the engagement. What was the second question?
Stuart Andrew
Q
Tony Bloom: When I was in the Championship about 10 years ago, there were big discussions, big debates and big negotiations with the Premier League. For sure, as you can imagine, the English Football League wants to have more revenues and a bigger percentage of the Premier League revenues. A deal was done—it was not easy, but it got done.
Of course the lower league clubs always want more money. As Sharon was saying, if she gets promoted, she is going to have a much bigger bill. If there was more money going into Bolton, no doubt for that season and the season after, things would be a bit easier, but have no doubt that when more money goes into the English Football League—the vast majority of it will go to the Championship—it will go on player salaries. That is what happens, so there will still be issues. Unless you have sustainability levels where there are caps on spending, and clubs have their money there, there will always be such issues.
On your first question, regardless of the Bill, the English Football League and the Premier League are becoming much more forward thinking in the way they have the football regulations for finance. Regardless of what is happening with the Bill, that is what the Premier League and the English Football League are looking to do, which I think is a positive thing.
Steve Parish: The implication is that nothing is being done. Profit and sustainability rules were the first step in trying to control spending. People have to realise that we are subject to competition law as well, and we are being challenged on some of these things within the league. Some of the things that the majority of clubs would like to do—salary caps in some instances, which some people would like to do, or the cost caps that we are working on at the moment, which are broadly salary caps—are challengeable under competition law, so we have to get advice and be very careful that we are proportionate in the things that we undertake.
In terms of why a deal has not been done, I think it is quite simple: it is the backstop. It was made quite clear in the last panel that view of people at the EFL is that whatever deal is given to them now, they will pocket it and then go and see the regulator to get a much better one, because they do not think it will be good enough. I genuinely think that is the reason that a deal has not been done so far.
Ian Byrne
Q
The Chair
I ask the witnesses to send their responses in writing, as I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank our witnesses on behalf of the Committee.
The Chair
We will now hear from David Newton of the Football Association. We have until 3.50 pm for this session. Will the witness please introduce himself for the record?
David Newton: Thank you, Chair, and thank you for the opportunity to speak to the Committee this afternoon. My name is David Newton. I am head of football operations in the FA’s structure, with responsibility for player-related matters, competitions and professional game relations.
Stephanie Peacock
Q
David Newton: The state of the game report will be a valuable asset to us as a sport, because it will draw on the widespread aspects of football, not just the narrow responsibility of the regulator, so it will reflect the whole football pyramid. As you know, the FA is responsible for 16 million or 17 million players and all the money flows within football. It is important that the work of the regulator is set in the context of the wider game. That is where we feel that the report could add value. As previous speakers have alluded to, football is a fast-moving industry, so three years seems about right.
Stephanie Peacock
Q
David Newton: The short answer is no, we do not believe that competition format matters should be an aspect for the regulator to consider. In Dame Tracey’s report summaries, competition format was not part of that, and I think we feel that competition format matters should remain the province of the football authorities, whether that be ourselves or the leagues. There are specific football-related matters that should remain in our ambit, and this is certainly one of those we feel quite strongly about.
Damian Collins
Q
Football clubs are not only licensed by the regulator. They are licensed by the Football Association as well. There are articles of association of the Football Association, which place responsibilities on all clubs. Do you think it would be good and proper due diligence for clubs to have to demonstrate through their corporate governance reporting how they meet all their obligations within football—to the FA, to their players and to the welfare standards they are expected to follow?
David Newton: It is an interesting point. It is not one that we have necessarily considered in detail. I do not see any reason why, in good corporate governance practice, you would not refer to your corporate governance standards with all employees, whether they be players or not. From that perspective, on the face of it, it would seem a reasonable assessment.
Damian Collins
Q
David Newton: I guess it depends what you mean by checking up on the clubs. We have quite a strong structure of engagement with the players: the players’ union, and the Professional Football Negotiating and Consultative Committee, on which both leagues and we sit with the PFA to discuss on a quarterly basis every aspect of players’ employment by clubs. We would certainly consider that to be the appropriate avenue for those things to be dealt with. I would not necessarily advocate the regulator having formal step-in rights in respect of players as you have outlined, but reporting standards on employees I can see.
Damian Collins
Q
David Newton: I guess it depends on what you mean by good standards. If you are talking about things like national minimum wage or employment rights, then absolutely, those things would be expected. In football, we have our own structures, as you say, for dealing with player-related disputes, or players not being paid—the leagues have very strong rules on that—so those things are dealt with in the structure. Sharing of information with the regulator will obviously be something that may come into focus, once it is up and running, because it is important that there is not duplication of requests for information and that those information requests are shared efficiently.
Mr Betts
Q
David Newton: Absolutely, the FA Cup is an essential part of our football heritage. We reflect that and take the FA Cup extremely seriously. It is a fantastic competition. Everyone cares passionately about it within the FA, me as much as anyone else. Prior to Dame Tracey’s report, we had already established heritage assets in protection of club playing names. Since the report came out, we have also established rules in the FA on club crests and club colours, so we are very aware of heritage responsibilities in that respect.
Mr Betts
Q
David Newton: We are very aware that FA Cup replays are a hugely emotive subject. The FA Cup as a whole is a hugely emotional subject for football fans. We took a decision based on an extremely congested football calendar with which, as has been referred to previously we are very much in the hands of the world and European governing bodies and the fixture list. We took a decision that, in such a congested calendar, certain difficult decisions had to be made. But in doing so, we also preserved other elements of the FA Cup that we think are equally strong things, such as exclusive weekends for the FA Cup, which sends a strong message. A stand-alone Saturday for the FA Cup final and things like that also play into the whole narrative. We are particularly keen for the David and Goliath aspect of the FA Cup to continue. Many historic FA Cup games have been decided on the day, and that will continue.
On the financial side of things, we are very keen to emphasise that no lower league club will lose out as a result of the loss of replays. We would rather see clubs budget sustainably for revenue in the FA Cup on a consistent basis, rather than for the one-off potential replay chance. We realise we cannot budget entirely for hope, and every football fan—I am no different—loves replays in the sense of the hope, but unfortunately difficult decisions have to be made and that is where we have got to.
Mr Betts
Q
David Newton: I do not think that is necessarily a fair characterisation. The fixture calendar is extremely complex. We sit down two years prior to the season with our colleagues at the Football League and the Premier League and discuss how we are going to best fit in the games we have. We are the only major European footballing nation with three domestic cup competitions: the EFL trophy, the Carabao cup and the FA cup. We have 20 teams in the top league and 24 in each of the other three leagues, and the calendar is extremely congested. It is not just as a result of European ties. Each of those is a fantastically vibrant competition in its own right. Each of those competitions has a heritage and importance, and it is about a balance between all those competitions, as well as the European ones, that allows them to be fitted in.
Stuart Andrew
Q
David Newton: It is common knowledge around the room that UEFA and FIFA have statutes of their own, which basically prevent state interference in the running of football and football competitions. We have worked closely with UEFA and FIFA, and with the DCMS staff who have worked so hard on this Bill. They have been taken through where we have got to. Although we have not had a definitive view as such, it is reasonably clear that a tightness of the Bill relating to football governance is not likely to present huge or significant problems, subject to any changes that may occur. However, anything wider would increase the risk of FIFA or UEFA intervention. That is obviously a place we do not want to be, because of the sanctions that may flow, in theory, from that. We continue to work closely with both those bodies and keep them abreast, along with DCMS, of where the Bill has got to, but I think the narrowness of scope is very important.
Matt Rodda
Q
David Newton: The decision has been signed off, effectively, by the FA board for next season. Indeed, the fixture calendar is so full that the spare slots, if you like, have already been allocated. At the moment, there is no review of that position. We are obviously aware of the strength of feeling, and I hope I have gone some way towards explaining how we take that decision. We take the custody of the FA cup extremely seriously.
Matt Rodda
Q
David Newton: In fairness, I do not think the calendar shows any let-up. As has been mentioned, we have a FIFA Club World cup involving 32 teams in the summer next year. That will continue to sit in the calendar, as will the expanded Champions League format, with extra midweek matches. We still operate three domestic cup competitions, which all have to be accommodated as well.
Robin Millar
Q
David Newton: I can completely understand fans’ passion for the FA cup. People who work in football—all of us in football—have that same passion for the FA cup and our other competitions. We have all done those things that you talk about. Competition formats have changed over the last 30 years in a variety of the different competitions in English football that I have referred to, and that has been the way. I guess, as the game evolves and different demands are placed on it, that will continue to happen. As I have explained, the decision taken was based not just on one set of circumstances. There is a huge number of factors relating to the fixture calendar, which is an extremely complex piece of architecture. As I say, the decision was a necessary consequence of that, but, absolutely, we understand the passion and the interest that is involved in the FA cup.
Rachel Hopkins (Luton South) (Lab)
Q
David Newton: Correct.
Rachel Hopkins
Q
David Newton: In club playing names?
Rachel Hopkins
Yes.
David Newton: We introduced the rule about 10 to 15 years ago, and the rule actually gives the FA Council the final approval of a name change to a club in the top tiers of English football. As part of that, we conduct an extensive consultation. Thinking about one in particular, there was a significant amount of consultation with local stakeholders, the local MP, the local fans’ groups concerned, and so on. The decision was voted on by the FA Council, which also has supporter representation on it, so supporters are very much part of the stakeholder community that will consider those changes in names.
Rachel Hopkins
Q
David Newton: As I say, the most recent one or two that I can think of were some time ago and were probably quite well publicised. The consideration of those decisions would have been accompanied by all the relevant submissions made by the various stakeholders and considered in the round, and the weight given to those views.
Dame Tracey Crouch
Q
David Newton: On the first point, as I outlined at the start of this session, the FA is responsible for the whole of English football, ranging from grassroots right the way up to the international team. The Bill is concentrated, as we know, on a small—but none the less very important—subset of that. Our role as an observer on the board is extremely helpful to that. I am confident that with the work we do—whether that is in grassroots, on and off-field regulation, disciplinary matters, the national teams and that sort of thing—our position as the governing body of English football remains.
Regarding the women’s game, you are absolutely right. We raised the potential concern of the unintended consequences of investment in the women’s game being affected by their co-dependency in some situations on the men’s game, and with funding being removed or reduced as a result of decisions by the regulator. It is important that the regulator, in exercising its powers, does so in a proportionate and reasonable fashion and bears in mind that co-dependency, where it exists.
The Chair
Q
Jane Purdon: I am Jane Purdon. I have worked in football and elite sport for about 22 years, starting as the in-house lawyer at Sunderland football club. I went on to do 10 years at the Premier League, rising to become director of governance. I then went to UK Sport, where I co-authored the code for sports governance. More recently, my work has been with Women in Football. I have just stepped off the board, but I remain an ambassador; I think that means I have the privilege of rocking up to events like this. Thank you for having me. I also have another chair role in football and a quasi-board role with Premiership Rugby, so I now have a portfolio career.
Stephanie Peacock
Q
Jane Purdon: Women in Football does not have a corporate view on this, and we do not have a view on the regulator at all. The reason for that is that opinions vary, so I cannot answer for Women in Football. A lot of our focus—we have put in a written submission to the Committee—has been on the effect on the football workforce and the women in it as a result of this legislation.
If I can give you my personal opinion, the Government launched and backed Karen Carney to write a review on the future of women’s football, and it really was a privilege to be an independent expert on that. I am still working with Karen on what is called the implementation group, run under the auspices of the Secretary of State and the Minister.
A lot is going on in women’s football. It is fast evolving and the needs are huge. We need innovation. Not all the solutions that have worked for men’s football will work for women’s football. The Government are—I do not know what the word is—managing the process, or putting the right amount of pressure on the stakeholders, to see where we get to. But at some point, we may need to review those processes, how they are working and whether women’s football is landing in the place where we want it to land. Whether when we get to that point we say, “Gosh, we have a regulator here. The regulator has a role,” I do not know, but it is an open question and one that I think we ought to keep asking.
Stephanie Peacock
Q
Jane Purdon: As I say, we have this implementation group run under the auspices of the Secretary of State and DCMS, and there are some real, chunky issues there. Where I am right now with it is allowing that group, which I think is due to meet again in July, to continue its work, but we must keep this under continuous review and not feel complacent that we have sorted women’s football.
Stephanie Peacock
Q
Jane Purdon: One of the classic models at the moment, as you have heard, is that the women’s team sits within the same legal entity as the men’s team, and there are pros and cons to that. The pros are obviously that the club has the brand, the IP and the infrastructure. The cons are that it can make the women’s team very vulnerable to what happens in the men’s team. I saw that with my own club, Sunderland, which 20 years ago was so ahead of the game, but the men’s team fell down two divisions. I understand that it is a cost centre and tough decisions must be made, even if they are not the decisions that I would make.
I have actually posited the question before of what happens when women’s football begins to make money and becomes profitable. What are we going to do with that profit, and how much will go back into the men’s game and how much stays in the women’s game? I think that would be a great question for football to debate.
Dame Tracey Crouch
Q
Jane Purdon: There are some statistics and research showing that, I think, 10% of current Premier League directors are women. That research was done earlier this season, but the key thing is that it has not shifted since somebody last looked at it in 2019. The answer, with a very broad brush, is that it would appear not. I have to say that there are some clubs doing fantastic work, some of whom have given evidence today. If you want a great exemplar, take a look at Brentford football club, but as a whole, I do not think the industry is moving fast enough. We need to look at not just boards but executive committees—the lead executive decision-making body within the club.
We speak to our members a lot about this. We have 9,500 members, 80% of whom are women—we do welcome men into our membership—and we talk to them regularly about how they are feeling. We are getting a very mixed picture. We are told that 89% of them feel optimistic about the future of football, but at the same time, again, getting into 80% say that they have experienced sexism in their football careers. A minority of them feel that they are supported to get to the highest path. I would say that things are changing but not quickly enough.
To the second part of your question about what the regulator could do, we have a proposal for a code of governance practice. What concerns us at Women in Football is that both on the face of the legislation and through discussions we have had with the Government in our lobbying activity leading up to this point, there is an indication that it will not include any provisions about diversity. Having co-written the code for sports governance in 2016—under your maestro-ship, Tracey, if I may say so—and having seen how that really shifted the dial, I am really concerned about this. I think it is a poor vision of corporate governance if you do not address equality and diversity. You are not actually writing something about governance. You are writing something else.
To really shift the dial on this, you need three things. You need to make the business case and win hearts and minds. People need to understand and not be frightened, and realise that there are really sound business reasons for doing this. You need to give them support, but you do need to have a bit of a lever—whether that is a funding consequence or a “comply or explain” consequence and the transparency that comes from that in the case of the UK corporate governance code. That is one thing we would like more assurance on and express reference to in the legislation.
Dame Tracey Crouch
Q
Jane Purdon: This is such a tough question, because that money has to come from somewhere, and what do you cut? Do you cut funding to your academy? It is so tough. The real answer is that we have to get women’s football independently standing on its own feet and turning a dollar in its own right.
Damian Collins
Q
Jane Purdon: I think transparency is a great thing, as is transparency in sport. If you have ever read the code for sports governance, it kind of flows through that. We said to the sport governing bodies who were not as well resourced as many football clubs, “Tell the world what you are doing. Even tell them when you don’t hit your targets and then explain what you are going to do, because it breeds trust.” Against that, we do need to be proportionate and make sure that we are not asking organisations to report for the sake of reporting, and that there is real value that comes from the onerous work that reporting involves.
Damian Collins
Q
Jane Purdon: In the legislation there is provision to say how you are meeting this code of practice. I do not have a problem with that in theory. As with all these things, the devil is in the detail, but I think that is right. I have talked about not making it too onerous, but on the other hand it can be a very simple measure to engender trust, and fan trust as well.
Damian Collins
Q
Jane Purdon: As I say, Women in Football does not have a position on this, so I have to be quite careful. If I am brutally honest, my personal opinion—and this is not shared by all by Women in Football colleagues—is that I am not convinced by the intellectual case for an IFR at all, particularly financially. I would need to be persuaded on that one. Maybe it is something we need to think about going forward in the game, and look at the fact that the two teams, the two set-ups, sit in one legal entity. The plus side is when you have a club like Chelsea or Manchester City, which get it and back its women’s team and provide the spectacle in the women’s game that we are used to seeing in the men’s game, that is fabulous, but there is risk as well. Maybe how we manage that risk is something we need to take forward.
Damian Collins
Q
Jane Purdon: There is a proportionality. One of the other bodies I chair is PGAAC—the Professional Game Academy Audit Company—which is the academy quality assurance body. It is a joint venture between the FA, the Premier League and the EFL, and there is proportionality in what we do. We quality-assure all the academies, and we have just started doing the girls’ game as well. We are not taking what we apply to Manchester City to what we apply to a League Two community organisation that happens to run a girl’s elite training centre. It has to be proportionate and you have to make sure that you are adding value all the way.
In fairness, for full disclosure, I have spoken to people in the women’s game who disagree and say that if this if this is coming in for the men’s game, it ought to come in for the women’s game. I look at things like the owners and officers test, which we have written to the Committee about, because we think there are real problems in the drafting. I think that is going to be incredibly onerous for clubs. If you then put that into the women’s clubs as well, many of them who are running on much lower resources, it is an unintended consequence of bureaucracy to what end.
Robin Millar
Q
Jane Purdon: By the way, hearing where you are from, may I sound a note of congratulations to Wrexham FC? I saw it had an attendance of 9,500 for one of its women’s games—wonderful.
What are the barriers? We need the role models. We have those. Our Lionesses are wonderful. We need infrastructure. We need more, more, more, more, more. It is as simple as that. We need more pitches, we need more people, we need more coaches. I sometimes say to people if you want to know what needs to happen in future, take a walk around your town and count up all the football pitches you come across—the ones down the park, the ones in the school, the ones for the professional football club. Now double that. If we are serious about opening up football to the other half of the population, it will look something like that. So, yes: more, more, more.
There has to be some rate of organic growth in this. We cannot do everything at once. Many of the people looking at this, the people at NewCo, the people at the FA and, in fairness, the Sport Minister, have taken a good interest in this. There is good work happening, but we have a long way to go.
The Chair
If there are no further questions from Members, I thank the witness. We will move on.
The Chair
We will now hear from Robert Sullivan, CEO of the Football Foundation; Niall Couper, CEO of Fair Game; and Simon Orriss, head of legal at Fair Game. We have until 4.40 pm for this session. Will the witnesses introduce themselves for the record?
Robert Sullivan: I am Robert Sullivan, chief exec to the Football Foundation, an independent charity that has been going for 23 years to fund and transform the state of grassroots football facilities in England. We are funded directly by the Government through Sport England and from redistributions from the Premier League and the FA. We work in each of your communities and across England to improve grass pitches, build new artificial pitches, and change the community stock of clubhouses and changing rooms. We think we make a real social difference across England.
Simon Orriss: My name is Simon Orriss. I am a solicitor specialising in corporate law and sports law. For the last couple of years I have been working with Fair Game, which Niall will speak about in due course, as the head of legal providing general legal support.
Niall Couper: I am Niall Couper, the CEO of Fair Game. I was a former fan-elected member of the Dons Trust, owners of AFC Wimbledon. I was a sports journalist at The Independent for five years and I have published a number of books on football, which you can get on Amazon.
Stephanie Peacock
Q
Robert Sullivan: We have communicated and I hope we have been helpful. I think it is generically equivalent across the country, but obviously there are local differences according to specific football needs and socioeconomic conditions in each part of the country.
The state of grassroots facilities has always been one of the biggest strategic challenges facing English football. When the FA conduct its annual survey where it asks grassroots players, coaches and participants the No. 1 thing they would like to improve and change in the game, people always say the state of grassroots pitches. We are in no doubt that the primacy of what we do and the importance of the work and the investment of the Football Foundation is fundamental to the future of English football and how we can improve it all. We recognise that there is a huge amount of work to do. The more we can receive support from all parts of the game and from the Government to do that, the better. We are part of the Carney implementation group. It is worth dwelling on what Jane told you a few moments ago, which is that demand for high-quality pitches across this country is set to double over the next 10 years, because of the rise and growth in women’s and girls’ football. That is a massive challenge and a brilliant opportunity for all of us.
That is why I would like to make a specific point about the Bill and some of the provisions in it. The way in which the backstop is currently drafted as part of this potential legislation places primacy on the funding decision between the Premier League and the EFL. Effectively, that means that the Premier League will not be able to work out its other distributions to other parts of the games until it has confirmed the amount of money it will have to give the EFL through the arbitration and backstop process.
As the head of an organisation whose responsibility is grassroots football, I would say that that is a subjective choice: subjectively, I would choose that the Premier League puts the primacy of funding grassroots facilities—it could be women’s football, or whatever your organisation cares about most—at the front of that queue. I do not want the Football Foundation to wait to receive its funding distribution once other causes have been settled first. I believe that our cause, for some of the reasons we have discussed, is the most important in English football.
Stephanie Peacock
Q
Robert Sullivan: I am the chief executive of a charity and my charitable purpose is to raise as many funds as I can to reinvest in grassroots football—all of our funding is welcome. We believe that at the moment we are well funded and well supported by the Premier League, the FA and the Government: I want to stress that. If I may use the term of the day, we are more concerned about the unintended consequence of how the legislation may be written and whether that has a negative impact on what funding may come through to grassroots football from those football bodies once everything else has been worked through.
If I may make a second point about what other changes should be considered, the experience of the Football Foundation and the Premier League Stadium Fund, which we operate on behalf of the Premier League to invest in national league system grounds—and I know a lot of you have national league system grounds in your constituencies—is that investing in facilities, in sustainable assets for clubs, is really important. I would be concerned that money that is passed without requirements to put that money into sustainable facilities that can generate future investment and support future revenues, and instead is just passed over as cash to be spent on running the clubs, without those requirements, would be a missed opportunity to send some of the wealth at the top of the game to the things that will make the game sustainable for the future.
Stephanie Peacock
Q
Robert Sullivan: As I tried to highlight, if the backstop makes the funding of the EFL the primary budgeting step of the Premier League—all other distributions are whatever is left—that is a subjective choice, which may not be meant by everybody in Parliament. Every single Member of Parliament has lots of grassroots community football clubs. Not all of them have an EFL club which they need to support. There is a choice about what is more important. What is the first choice of where the distribution of Premier League money goes—is it to the grassroots or is it to the EFL pyramid? They are both very valid causes. I represent an organisation which is here to represent the voice of grassroots football.
Stephanie Peacock
Q
You have been campaigning for a long time on many of the matters that are addressed in the Bill. As a way of giving a view, are you pleased overall with the independent regulator that is proposed in the Bill, and do you have broader comments to add?
Niall Couper: There are a few things that are missing. When we look at the financial flow within football, the difference is dramatic. We have done studies, and there is a written submission that I hope the Committee has received. At every single level, those gaps are getting wider. At the moment, the decisions are being made by the Premier League, and to some extent by the EFL as well, and that is not actually benefiting those clubs. It is making it harder, and more of a gambling culture, for every single club throughout the pyramid. That is putting clubs in serious jeopardy.
In the very latest statistics, we are aware that 58% of clubs in the top four divisions are technically insolvent. Brighton and Crystal Palace are both technically insolvent as well—I heard them earlier on. There is a real fundamental issue there.
What we want is to see more of that revenue redistributed down the pyramid. At the moment, for every £1,000 that a club in the Premier League gets in the broadcasting deal, 14p goes to a National League North or South club, or 57p to a National League club. Those differences are dramatic. That is why we really need to look at it.
I go on to what the Football Foundation is saying. We want to see the money invested in the right way. We want to encourage and incentivise well-run clubs. We want to see sustainability. That means investing in infrastructure. It means making grounds a 24/7 operation and making them the hubs of the communities that we all want, with the kind of things that we want to see, such as dementia clubs, working groups, walking football and community programmes, which are all are embedded in those local clubs. That is where we should be looking to encourage investment. That is where the investment in lower clubs goes—that is the difference they make.
Combined with what the Football Foundation does, and looking at the parameters of what a Bill should be about, that should be the first thing. When we are looking at a television distribution deal, we need to be thinking about the parameters that deal should be meeting and what it should address, such as closing the gaps that are causing insolvencies and heartache.
When a club goes into administration, we all know the consequences. That is the loss of your local plumber, caterer or whatever. They are the ones that lose when a club goes into administration. It is not some harmless thing. This was talked about earlier on. If it is liquidated, yes, it goes, but if it goes into administration, there is a lot of pain that goes with that. Those things need to be addressed. If we have the correct parameters to define a distribution deal, the hard-working community clubs can thrive and the grassroots can thrive. That is ultimately what we want to see. That is the growth of the game.
You talked about girls’ football. I have got two girls who play football. The issue of pitches that you talked about is a big problem. A lot of the local big National League and National League North and South clubs really want to invest in that as well and give that, but the money is not there. They are struggling to survive day to day. They live hand to mouth. Those are the clubs that fold. Those are the clubs that disappear, because they are not in the public eye.
In the broadest sense, for all the politicians around the table, those are the clubs that we should really be looking to cater for. That is what the Bill can look at: changing the parameters of what it looks like in distribution.
Stephanie Peacock
Q
Niall Couper: You probably spoke to a couple this morning. I saw the panels and I am aware of some of those people. You have an issue here. Where does the investment come from? Who are the people making the decisions? Where is the funding coming from for some of these people who will be putting their names forward? We have to look at making sure that people who perhaps work for the Premier League or the EFL, who have been making an awful lot of these decisions, are not allowed to be on those boards, or that those organisations that are majority funded are not on those boards.
It is really difficult. I would like to see a whole load of organisations get independent funding. It would be really beneficial to allow them to have that free voice that football really needs. At the moment, the Premier League is the de facto regulator of football.
Robin Millar
Q
DCMS has done a brilliant job in making sure that money gets out to grassroots clubs. I have seen some in my own constituency, even though that is over the border in north Wales and comes via the Football Association of Wales.
You have just said something that I have written down—every MP has grassroots football clubs in their constituency. Potentially, every single MP here has an interest in voting to see money vired directly to grassroots football.
You make the point about the key transaction between the Premier League and the English Football League. I am curious, however, about how that might happen. Is the structure in place to cope with, suddenly, tens of thousands of projects across the UK? Is the FA—I will use the phrase— fit for use, in terms of distributing and monitoring that? What do you think needs to be done from your end of the telescope?
Robert Sullivan: Let me pick through that carefully. The way in which projects are identified to invest in grassroots football is done by the Football Foundation, who fund us alongside the Government and the Premier League. In Wales, their money goes straight into the FAW, who have set up their own equivalent of the Football Foundation. Without passing comment on whether the FA were fit to do it, which I am sure they would have been, they tasked us with doing it.
I am delighted to say that we worked really hard to build what we call a local football facility plan for every local authority in the country. If any of you go on our website—I am seeing some nods; it is good that you know about your local football facility plans—there is effectively a shopping list of all the projects that we want to do in every part of England. We have built a team and we are building in the investment from our partners to go out there and deliver those projects.
Robin Millar
Q
Robert Sullivan: Yes, because it would 100% be my job to build the operation or structure to do that. To give you some comfort that we can do that, we have basically doubled what we have done in the last three years. If the Minister responsible for the future investment of any Government of any colour said to me, “You need to double it again,” that is what we would set out to do.
Robin Millar
Q
Niall Couper: I am very much in favour of more investment going through to the Football Foundation. If we are looking at a body that could potentially help to deliver that infrastructure and that way of doing it and ensure that clubs are investing in the right ways, which I am also in favour of, it is a good thing. We need to look at those lower levels of football and how that comes in. It goes back to that parameter question. When you look at how a distribution deal is decided, having an independent regulator to say, “These are the parameters that that deal must reach” is where you can see a real, fundamental difference.
When we look at the Football Foundation, I think you get 2.5% of the £3.19 billion that is there. What would happen if that was 5%? How many extra pitches would there be? What extra stadiums would we see? There are crumbling stadiums that are outside the Premier League. The extra facilities that could be changed and used for all the community clubs and community assets there, to use a very good Conservative phrase, is levelling up. That is what you could see in all those grounds and areas. That is what you could do, but it comes about only if the parameters of that distribution deal are robust enough and set by the regulator to deliver the change that is needed.
Robert Sullivan: I want to put it on the record that the Premier League has been far and away the most supportive and consistent funder over the 24-year period of the Football Foundation, and it is really important to say that. I am not sat here in any way saying that we do not feel well-supported by the Premier League.
Robin Millar
If I ask more questions, the Whip will start getting nervous about amendments that I might want to lay down. I will just say that every community has churches, pubs and football clubs, and there is a good reason for asking these questions.
Rachel Hopkins
Q
Niall Couper: When we look at that area, when Tracey Crouch wrote that original fan-led review it was one of the key recommendations. When you go to our clubs and look at them, the clubs that thrive and are actually forward thinking are the ones where you see that diversity put into the boardrooms and staffing structures, and where they actually try to address it.
It is a travesty of justice when you look at a football ground at a men’s match and it is 80% male. When you go into the club’s shop, nearly all the merchandise is for men. When you look at the toilet facilities, they are pretty poor for women. All those things are naive both financially and in terms of actual gender representation, and those are the things that need to change. The clubs that we have in Fair Game, which are across the pyramid, are the ones that are more forward thinking and realise that actually we cannot live in the dark ages.
A proper code of governance needs to have EDI embedded in it. It needs to be part of the way forward and part of how we look at football holistically, and that has not been the case. Having been a board member of a football club and sat there, there have been far too many instances where unfortunately it has been an awful lot of people looking an awful lot like me being the entire representation. That is not really appealing to wider society. If we want football to grow and thrive, ignoring vast sections of society is completely remiss.
Rachel Hopkins
Q
Niall Couper: When you look at it, there are a couple of things that clearly can be part of the Bill, such as the governance code. When you look at the governance code, that needs to include EDI representation, as you would see in nearly all other sports governance codes that exist. That is an obvious place. The other thing is the state of the game report, and I think we need to look at having proper benchmarking and seeing where we can improve. Fair Game has looked at a lot of this—we have done a lot of stuff on the gender divide and we are doing a lot of research on that—but we need to look at this issue as constantly going forward and improving. We cannot perform just tick-box exercises; it needs to be about developing real outcomes so that women and people from ethnic groups can feel safe within a football ground, and that is not the case.
On a side point, we have been doing some work on the women’s game and there is a significant difference in how that operates compared with the men’s game. The issue we have seen is that women are not feeling safe, and that is an area that we really need to address. Until we get to that position, we will have loads of steps and things we need to improve. Every single element in the Bill needs to address that and ensure that that goes forward and improves what we have. Going back to the Bill, I would say that 90% of it is pretty good, but there are bits that can be improved, and that is definitely one area that can be.
Brendan Clarke-Smith (Bassetlaw) (Con)
Q
Simon Orriss: I don’t think it has. I have discussed it with a couple of colleagues—barristers and other people that I know in the profession—and the general consensus is that it is unlikely that some of the FIFA statute articles that prevent Government interference in the governance of the game would be enacted. In particular, we have looked at institutions in France and Spain, which don’t have a completely identical remit to what the IFR is proposed to do, but they have some role in regulating the sport in those countries, and FIFA has largely left them to that. Although it has been noted, as you have just done in your question, it has not been something that has got people terribly agitated.
Brendan Clarke-Smith
Q
Robert Sullivan: To be honest, I am not sure yet. I would be cautious about passing a judgment on that. If you pull back a level, what does the Football Foundation need? It needs two things really: it needs a very healthy and thriving elite end of the game that generates lots of excessive revenues that can be distributed back into the grassroots; and it needs the grassroots of the game to be excited, growing and wanting to have lots of kids getting out there and playing. To answer in a very broad sense, if the regulator is allowing that ecosystem of English football to continue to thrive—not only at the top end with more sustainability, and all the things that people talked about today, but with the game still generating crazy passion and demand from kids getting out there— that is brilliant for English football and the Football Foundation. There are going to be lots of people needing great pitches, and we are going to get out there and give everyone a great place to play.
Matt Rodda
Q
Niall Couper: I think there are gaps. We heard of one earlier, about the club heritage and the name. To my mind, these are simple amendments. Making sure that there is a proper fan consultation about a proposed name change is, to me, important. You strike on a cause that is close to my heart—I am an AFC Wimbledon fan. Today, 14 May, is a significant day for me: in 2002, the three-man FA commission began its deliberations about moving the club to Milton Keynes. I have had loads of messages about that—they all knew I was coming here—and for me, making sure that a club cannot move from its area is fundamental.
At the moment, that is not clear enough in the Bill, and I think it needs to be made fundamentally clear. It talks about financial considerations still being part of the conversation. As a Wimbledon fan, it was the financial considerations of a three-man commission that allowed us to lose the club. We would describe it as our place in the Football League being given to a town in Buckinghamshire. Effectively, that is what happened. For any other club, that needs to be addressed, and fans need to have their voice heard first in that particular conversation. At the moment—I will use this phrase, although I was trying desperately not to say it—the unintended consequence of the Bill is that it legitimises franchising. That is the bit that needs a red line put through it.
Matt Rodda
Q
Robert Sullivan: It is a huge challenge for the game, but we are definitely on an upward trend. For the first time, we have been able properly to map and record, and to improve grass-pitch quality by use of digital data. That has been a big change, because with 30,000 grass pitches in England, it is hard to get out to reach them all, but we can now use technology through phones, so we can assess those pitches remotely and help clubs to improve them, to do the simple things, and give them funding that can address some of the waterlogging situations.
We now have more than 8,000 of what we have rated as good-quality grass pitches. That is a big step forward on where we were five or 10 years ago, but we are perhaps only halfway through that journey. We are going to do everything we can to escalate that number as quickly as we can, and to build many more artificial grass pitches, because of the difference. On a good grass pitch that does not waterlog, we get maybe six hours of play; and on a good artificial pitch, we can get 60 hours of full-on community usage for kids, disability or vulnerable groups, older men who are coming for dementia classes, and whatever it might be. Those artificial grass pitches, which is what we want to invest in, are the game changers that will help us to support that growth in the women and girls’ game and all other parts of grassroots football.
Dame Tracey Crouch
Q
Niall Couper: Yes is the answer. I think it is something that we need to look at, considering that—in my mind—a lot of it depends on what happens with this Bill. It is important, because it is about redistribution and giving support to a lot of the clubs that are trying to do the right thing in the right way. Again, to go back, it needs to be caveated to make sure that it is ringfenced where possible to support the grassroots pitches.
I talk to clubs like Tonbridge Angels, Maidstone United, Sutton United and so on. Those clubs will talk about wanting to have the 3G pitches and their training pitches in there so that they can be put to community use—those 60 hours a week. That is really what they want, because that is where they see the big growth. That is where your club becomes a community hub. That is where it makes the difference.
For me, the money that you talk about from the transfer levy, if you give it to those sorts of pitches and so on, is where you can make a real fundamental difference. Where it will go, I do not know, Tracey. It is one perhaps that we can talk about once we are post the Bill. It was something that I was really excited about when you proposed it—it really appealed to me. It is something that came a bit from left field, but it is something that we should look at in the months and years ahead.
Ian Byrne
Q
Robert Sullivan: It is a big challenge, Ian. When we fund a site, we will put in terms and conditions on such sites that should provide a check and a challenge on the affordability. So, if that is happening on a site that we have funded, we should pick that conversation up separately, because when we provide a grant, it comes with terms and conditions: we need to see, basically, an income and expenditure plan that has sensible and appropriate pricing policies with it.
If I may go back to pick up on Tracey’s offer—
Dame Tracey Crouch
For the money—
Robert Sullivan: For the money. I am agnostic about where the money comes from, but we have a massive challenge, and we need as much as possible going into grassroots facilities.
To make one supplementary point about what Niall said, he alighted on a really interesting example. Sutton had a fantastic 3G pitch that was doing brilliant community things, but when Sutton went into the EFL, it had to pull that pitch up. That is an interesting question, although it is inadvertent. I understand all the competition reasons why that might be the case in the EFL, but Sutton went from having a very sustainable community asset to one that was not when it moved up into the EFL pyramid. That is an issue that I would potentially raise as well.
The Chair
As there are no further questions from Members, I thank the witnesses on behalf of the Committee. Thank you very much for coming.
Ordered, That further consideration of the Bill be now adjourned.—(Mike Wood.)