Cryptoasset Promotions in Sport

Aaron Bell Excerpts

Tuesday 8th November 2022 Westminster Hall

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I beg to move,

That this House has considered cryptoasset promotions in sport.

It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank Mr Speaker for granting the debate and welcome the Minister to his place. The debate was originally set to be held on 13 September, but the very sad death of Her late Majesty the Queen meant it was rightly postponed, until today. I should also mention the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), who pipped me to the post in securing the first parliamentary debate on regulating cryptoassets, which took place on 7 September. That was a very well informed debate, which I read in Hansard. While acknowledging the opportunities that blockchain can present, it foreshadowed some of the issues I will talk about today.

As the Minister and I heard just last night in the Adjournment debate led by the hon. Member for Birmingham, Ladywood (Shabana Mahmood), our sports teams occupy a very special place in our communities. The fans have a special bond with their clubs that goes far beyond being a customer or a consumer. Their loyalties are passed down through generations, and the shared memories of league titles, cup finals and spectacular upsets bond families and communities together in tribal loyalties towards those clubs.

When an individual club or sport as a whole takes its fans for granted or seeks to exploit them, those bonds are not only frayed, but lasting damage can be done to the community as a whole. It is for that reason that the fan-led review, chaired by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), is so important, as we also heard last night. It is also for that reason that I urge the Minister and the Football Association to crack down on some of the cryptoasset promotions I will discuss today. Many have been almost entirely exploitative and have traded on fans’ love for their club and on the susceptibility of some of those fans, particularly young men, to speculative get-rich-quick schemes.

Cryptoassets are the ownership of a digital entity, whether a currency or some sort of collectible. The formal Government definition is:

“A cryptographically secured digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored, or traded electronically.”

That definition includes things like bitcoin, the currency, but also tokens that can be traded among people, which is where a lot of the current problems in sport lie.

We could debate on a moral level the fundamental value of such cryptoassets—it is my contention that many I will describe today have zero value—but what is apparent is that their value and their price is often not the same thing. Their prices can be very volatile, which is partly why they have proved so attractive in the field of speculation and in encouraging people to speculate.

In general, the crypto space is growing. There are potential economic benefits to some uses of blockchain technology and I cautiously welcome the Government’s announcement of April 2022 to

“make the UK a global cryptoasset technology hub.”

However, the field urgently needs better regulation, and the need for regulation comes from the potential risk of people losing all their money. The Financial Conduct Authority has said that consumers should regard such investments in crypto as high risk and speculative and that people

“should be prepared to lose all your money”.

The speculation surrounding cryptoassets, with prices often far exceeding any possible intrinsic value, brings to mind previous bubbles, going back to tulip mania. All of these bubbles are examples of the greater fool theory—the idea that someone might pay for an overpriced asset, knowing it to be overpriced, but they hope to sell it for even more to the so-called greater fool, to make a profit. The modern terminology used in forums to boast, by those who get involved in these schemes—the so-called crypto bros—is pump and dump, and the most effective way of pumping a cryptoasset seems to be the endorsement of a sports club or a sports star, which is also known as crypto-washing.

By endorsing these speculative assets and by letting themselves or their players be the pumpers of the assets, clubs are potentially putting their own fans in the role of the greater fool, which is something they do at considerable risk to their reputation and the long-term bonds I spoke about a moment ago.

In calling for better regulation of cryptoasset promotion in sport, there are four significant areas of concern, and I offer my thanks to the journalist Martin Calladine—@uglygame on Twitter—for the taxonomy. I will come to them in turn. They are the misleading promotion of the assets; the lack of consumer protection; the lack of due diligence by the clubs entering into deals; and the problematic nature of their attempts to monetise fan engagement with the clubs.

As I said, I will start with misleading promotion. The widespread and often misleading promotion of crypto has helped it to make it into the mainstream. It minimises the risks involved in so-called investing—in many cases, fans just spending their money on this product. Many sports teams, players and, now, leagues have made or are in the process of making deals with companies in the crypto sector and are using their own social media—clubs or players—to push these items on to people who might not otherwise have been aware of them. We know from FCA research that more than 70% of people are not very aware of what crypto is, but we also know from the same research that 10% of people, as of June this year, have held or currently hold a cryptoasset. That is up from 5.7%, I think, in January 2021, so this is clearly a growing space.

I have also talked about fan tokens: digital assets that allow holders to access a range of alleged benefits. A fan token is a fully fungible digital token giving fans some influence over certain decisions made by a sports team. Quite how valuable that influence is I will come to later, but the fan tokens themselves usually require an intermediary step of buying cryptocurrency to purchase the fan token, thus exposing the fans to the whole world of cryptocurrency and not just the alleged benefits of the fan token. Of course, both the tokens themselves and the cryptocurrency can be traded as a speculative asset.

A few years ago, barely any football clubs were doing anything with crypto. Now, nearly every single club in the top four divisions either has a crypto partner or—in a few rare cases—has turned down the offer to sign one. Cryptoassets are of course often promoted as a new and exciting opportunity, and the potential downsides are glossed over or downplayed. For example, last year Southampton football club promoted a crypto “education” website by its crypto partner, Yolo Group—Yolo presumably standing for “You only live once”. The content of that website is utterly one-sided and totally inadequate. It is just propaganda rather than education, and it is biased wholly in favour of crypto. For example, its “what is cryptocurrency” page states that €1 invested in bitcoin in 2009 is worth €60 million in 2021—without any recognition whatever that that is no guide whatever to potential future returns from any currency, let alone bitcoin or the one that it is promoting.

Socios, the largest and most famous provider of so-called fan tokens, has repeatedly marketed its products in the UK without proper acknowledgement of the risks. If we look at a recent deal that it did with three English rugby union clubs—Harlequins, Leicester and Saracens—we see that it is clearly promoting the claim that fans can access an exciting new opportunity. Only on a separate webpage, at the very bottom of the frequently asked questions does it say:

“You should not purchase any cryptoassets if you do not fully understand the nature of your purchase and the risks involved.”

Not only are those risks not identified properly, but the benefits—most notably the potential financial returns—are hyped up.

This in particular was the subject of so many complaints that the Advertising Standards Authority drew up new crypto-marketing rules with specific reference to Socios. The ASA ruled in December 2021 that Arsenal FC

“trivialised investment in cryptoassets and took advantage of consumers’ inexperience or credulity”

in a promotion of its Socios fan tokens featuring three first-team players.

Despite my misgivings about its product, I am grateful that Socios engaged with me prior to this debate, and I should say that its official position is that it does not

“market fan tokens as investments. The purpose of tokens is to give fans new ways to engage with their club, be entertained by it and to win rewards that can’t be gained anywhere else… Our marketing materials include warnings about the risks of purchasing fan tokens for any other purpose.”

In the discussion that I had with it over Zoom, it acknowledged that it has come some way, but I still feel, fundamentally, its product is not really worth anything in particular to anybody. I will come to some of those alleged fan engagement benefits later.

The second problem that I would like to turn to is the lack of consumer protection. This is still a very unregulated space—a wild west—leaving fans with no recourse if the scheme collapses or is subject to fraud. I think there is a comparison here with the Football Index scandal, which I raised in this Chamber a few months ago. I mentioned crypto at that point, which is what ultimately led to this debate today. Again, there was no recourse for people who had lost all their money. They were led into believing in something that was regulated in that case, through the Gambling Commission. It turned out it was not, and it has been a real struggle for people to get their money back. There is even less protection in this space, given that the FCA has not regulated firmly yet.

To see the impact on the consumer, we should also look at the profile of the consumers. Socios’s own data shows that 50% of its users are aged from 24 to 34. As with Football Index, those young people interested in crypto are usually men. They usually do not have a traditional finance background and they find crypto attractive because it does look like an opportunity to get rich quick. That is precisely why the companies in turn look towards sports teams and sports players alike—because they have a huge following among young men that they can sell the emperor’s new clothes to.

Numerous non-fungible token schemes, having been pumped and dumped—again, fitting in with the greater fool theory—have rapidly lost almost all their value. The investigations writer for The Athletic, Joey D’Urso, who is here today, has covered the topic very rigorously and has set out how these schemes have infiltrated top-flight and lower-league football. He has shown how so many of them have depreciated substantially in a very short space of time, to the disadvantage of the fans who were encouraged to get in at the beginning.

Of the 20 football clubs in last season’s premier league, all but one had at least one cryptocurrency sponsor, and some had several. As I said earlier, the assets are very volatile, so much so that we have seen multiple crashes of the cryptoasset bubble, most recently a few months ago. In June 2022, bitcoin was down 70% from its all-time peak in November 2021, but at least it still has some value. Compared with when the deals were originally signed, the value of nearly all cryptoassets linked with premier league clubs tanked over the course of last season. Some have gone bust completely. Companies such as IQONIQ and Sportemon Go have collapsed totally, which has wiped out the value of any investments fans have made. IQONIQ had deals with Crystal Palace, La Liga in Spain, the McLaren Formula 1 team and several leading European football clubs.

The schemes partner not just with sports clubs but, as I have said, with players. Most infamously, perhaps, the former England and Chelsea captain John Terry launched the Ape Kids Football Club NFTs on 2 February 2022. If hon. Members were not on Twitter, they might have missed that, but those were cartoon monkeys being sold, initially, for an average price of $665—that was the early peak. They were literally cartoon images of monkeys. They are all slightly different, and buyers allegedly own their particular one, but, of course, anyone can just take a screenshot and claim that they own it too. As the scheme was going well, other footballers endorsed Terry’s project. His former teammates Tammy Abraham and Ashley Cole also posted them on their social media pages. Predictably enough, within a month those NFTs plummeted in value by 90%, and Terry’s former colleagues quietly deleted their tweets of support.

It seems to me that cryptoassets and fan tokens are the only unregulated business that those in the sports industry are willing to endorse to their fans. If a club was sponsored by a chocolate bar, for example, the chocolate bar would be tested and regulated by the Food Standards Agency. More to the point, consumers of that product would be protected by the law. There is nothing like that for crypto: no trading standards, no industry ombudsman, no FCA regulation, no fit and proper persons test and, in the event of a suspected crime—some of these cases are probably criminal—no great likelihood of any police action. In fact, the closest we have come to regulation is the Advertising Standard Authority’s new rules, which I referred to earlier. It should not fall to the ASA to be an ersatz regulator in this space.

I recognise that the FCA is doing work through its cryptoassets taskforce, and that is a matter for the Treasury, but sports bodies themselves need to do more. That is why I am grateful that we have a Minister from the Department for Digital, Culture, Media and Sport here today. I am grateful for his attention.

The third issue with cryptoasset promotion in sport is the lack of due diligence by those who do deals around such investments. The large sums of money on offer, combined with the opaque nature of many of the schemes, has exposed the low quality of due diligence. Football clubs are routinely doing business with crypto schemes that fans cannot interrogate, and clubs themselves often make no effort to assess their partners’ integrity.

In yesterday’s Adjournment debate, I referenced the example of Birmingham City’s ill-fated tie-in with Ultimo GG, but perhaps the most unbelievable example is the story of Manchester City and a company called 3Key. Man City has been at the forefront of football’s crypto sponsorship revolution. This time last year, the club announced 3Key as its new crypto partner, only for it to drop the company within a week when it came out that nothing about the company—even the fact that it existed—seemed to be true.

Again, Martin Calladine had the story. He established that 3Key was actually the new name for a massive, rolling crypto pyramid scheme. Man City subsequently refused to discuss the partnership or reveal what due diligence had been done, which for Mr Calladine left some serious unanswered questions. If the club signed a deal with what was, in effect, a criminal gang, and did not take any steps to establish who it was dealing with, it seems obvious that there are money laundering issues. In his article, Martin writes:

“The question is how could City not have noticed when literally just 15 minutes of googling would’ve been enough to establish that 3Key were not who they claimed to be…They didn’t have, or wouldn’t give me, 3Key’s address, company registration details or even their telephone number. If you were a junior estate agent who rented a flat to someone on this basis, you would get fired. If City actually accepted money from 3Key without having verified their identity, then this could be a breach of money laundering regulations.

In essence, it appears that it is only by luck that Man City failed to become party to a massive fraud, which could’ve severely harmed their own fans.”

I spoke to a number of clubs in the lead-up to the debate. I wanted to establish their intentions in making partnerships with crypto companies. The official line is frequently fan engagement, which I will come to shortly, but I have been told another reason: commercial reality. That applies in particular to clubs that are not at the top table—those outside the gilded land of the premier league. We know from previous debates, and from the work that so many people have done to save their local football clubs—I think of my hon. Friend the Member for Bury North (James Daly)—that it is difficult for those clubs to balance their books. Clubs are keen to get sponsorship. One club told me that crypto companies often offer five to six times more than other companies normally would. I therefore completely understand the temptation, perhaps even the necessity, to take what is on offer, particularly for clubs on the financial brink, as many are. However, that should not mean that a comprehensive appraisal of such companies—true due diligence—does not take place.

The fourth and last problem I want to raise is the issue of attempting to monetise fan engagement. The promotion of crypto as an alternative way of letting fans contribute, through tokens, is encouraging clubs to monetise fan engagement and replace the genuine consultation that many have pioneered over the past 20 or 30 years with a deeply flawed pay-to-have-your-say model.

Many clubs and crypto businesses that I have spoken with say that their main intention is fan engagement. For example, Manchester United, which has an official blockchain partner, Tezos, provided the following comment:

“Blockchain is a hugely exciting area of technology which, over the long-term, has the ability to revolutionise the way in which we digitally engage with our fans.”

On the intentions of crypto companies, Socios stated:

“We are the leading fan engagement and rewards platform in the sports industry. Through digital utility tokens, known as Fan Tokens, we are creating a new form of digital membership for sports fans around the world.”

Sorare, a French start-up digital entertainment platform that is allegedly lining up an NFT deal worth £30 million a year with the Premier League itself, provided this comment:

“Our platform connects fans with their passion for sports.”

The crypto businesses and the clubs profess that the deals are based on fan engagement, but what do the fans think? I met the Football Supporters’ Association, which gave me the following comment:

“We’ve seen a lot of clubs and players entering into partnership with crypto providers including those selling tokens which provide ‘engagement opportunities’. We don’t think supporter engagement should be monetised—if an issue is important, clubs should consult with their fans as outlined by the fan-led review of football governance…Fan loyalty is something to be cherished, not exploited.”

When we look at the fan tokens, a large number are owned by traders and not fans of the club. There is no limit to the number of tokens people can buy and therefore no limit to the number of votes they can have, and there is no limit to the number of clubs they can hold tokens in. When we look at engagement with polls, the turnout is rarely more than 20%, and the polls themselves often cover ludicrously trivial matters. There was even one that asked token holders to vote on which player’s washbag they wanted to see inside.

Tellingly, when the decision is really important, clubs have recognised that a vote via NFT is not appropriate after all. Aston Villa announced last Friday that it wanted to redesign its crest. That is a pretty fundamental thing. I remember that when Chelsea redesigned its crest, there was prolonged fan engagement. Aston Villa has launched a vote for season ticket holders and members, despite having an arrangement with Socios. To my mind, that eminently sensible decision gives the lie to the idea that the tokens are primarily about engagement rather than speculation.

What would go towards fixing these four interlinked problems? The answer is pretty simple: better regulation. That can happen on two fronts: better statutory regulation by the Government, with the Treasury and DCMS working together, and better self-regulation by governing bodies and leagues.

The independent fan-led review of football governance, overseen by my hon. Friend the Member for Chatham and Aylesford, called for a new independent regulator for English football and made many recommendations, which I endorse. My hon. Friend sits on the Science and Technology Committee with me, and she picked up on precisely the issue I am raising today during the evidence session we held on blockchain on 29 June this year. She asked David Gerard, a journalist and author who has written extensively on blockchain:

“Given the volatility that you have spoken about and we have heard about in terms of cryptocurrency and crypto cash and the volatility in football finance, surely this will create the perfect storm or disaster of which the fans of those clubs, who are buying NFTs, for example, will be the victims.”

David answered:

“The fans end up being the victims in this financial issue; they are the public interest here.”

As politicians, we should be mindful of the public interest at all times.

Unfortunately, my hon. Friend is away on other business and was unable to make today’s debate. I know she wanted to be here. I pay tribute to her both for the fan-led review and for her tenaciousness on this topic. The Government published their response to the review’s recommendations in April 2022, saying that they would seek to implement the proposals. I note the Minister’s words at the Dispatch Box last night about the matter. It is my hope that the problems of crypto in the sport of football could fall under the remit of the independent regulator for English football.

The FSA suggested ways to address these problems at its 2022 annual general meeting, and I hope the Minister takes those away. They include engagement on common self-regulatory standards for any cryptocurrency partnership entered into by a football club, so that we see some genuine self-regulation in the sport of football; an information awareness campaign for football fans advising them of the risks to their capital; lobbying of the Government for statutory regulation—I suppose I am ticking that box today—and better due diligence by football clubs before entering into deals, including engagement with their supporters, supporters’ trusts or fan groups before they issue any promotional material aimed at their fans.

I hope today’s debate will have helped raise the profile and, more importantly, the reality of crypto in sport so that fans and, more importantly, the senior actors in this space think twice. The Premier League really should review that proposed £30 million deal with Sorare. Is that really what it thinks of its fans? If the Government are serious about looking to make the UK a global cryptoasset technology hub, they need to work with all the relevant actors across all sectors to ensure that we have both statutory regulation and self-regulation, but that need is perhaps most urgent in sport.

--- Later in debate ---

[Aaron Bell]

It was a pleasure to speak in a debate where everyone seemed to agree with me, which is fairly unusual for this place. I thank the hon. Member for Strangford (Jim Shannon) for his kind words. He is right to emphasise the impact on our constituents. That is always at the heart of his speeches, whatever the topic—and he speaks on a number of topics. He is right that the public interest point, which I drew out in the quotation from our evidence session, should be at the forefront of what we are doing. It really is about the public interest, and the public interest in this case means the fans.

I am grateful to the SNP spokesman, the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), particularly for highlighting that huge growth figure—from $25 million to $600 million in one year. Goodness only knows where it will be next year, though perhaps it will go the other way, given the scale of the crash that has been happening. He also gave us another example of a company going bust—the one that sponsored Rangers and Hibernian. The truth is that there are plenty of examples. I had to cut so many from my own speech. They are all equally jaw-dropping in their way. I focused perhaps on some of the better known clubs and examples.

I thank the shadow Minister, the hon. Member for Manchester, Withington (Jeff Smith), for what he said. He is right that it is all very well our criticising the crypto firms, but it is really the clubs that we should be talking about. They should be in it for more than the money. They represent heritage and communities, and they really need to think carefully. Likewise, the Premier League needs to think carefully about what it does, because it is the custodian of the top flight of the game, and the FA is the custodian of the whole game. It too needs to think about what it does in this space.

I thank the Minister for his kind words. He is right that my motivation is that everyone should enjoy sport safely, but my secondary motivation is that clearly we will look back in two years’ time and say, “How on earth did that happen?” It is a potential scandal unfolding in real time, and it is for us as Members of Parliament to do and say something about it, which is what I am doing today. I hope that the Treasury does bring forward both the regulation and the consultation that it has promised. In the answer that my hon. Friend the Member for North East Bedfordshire (Richard Fuller) gave the hon. Member for Cardiff West (Kevin Brennan) on 22 July, it promised a consultation and legislation this year on this topic.

I look forward to the White Paper, and I hope that the Minister will find some space for crypto in it, and that he will perhaps work with me and my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on that. I hope that he uses his good offices to speak not only to the Treasury but to the Premier League, the Football Association and so on to emphasise that they need to do more in this space.

I thank my staff for helping me put the speech together. It has been over two months in gestation, given the delay. I also thank everyone who took the time to speak with me, including football clubs, some of the crypto firms themselves, and in particular Joey D’Urso and Martin Calladine, who have been extremely helpful. They have been completely on top of this topic as journalists for a long time. The work that they have done has obviously informed my speech and those of many Members present. It is really important to have people standing up for fans and doing that hard work in the sports sector, so I pay tribute to them.

Question put and agreed to.

Resolved,

That this House has considered cryptoasset promotions in sport.

Football Clubs in England: Financial Sustainability

Aaron Bell Excerpts

Monday 7th November 2022 Commons Chamber

[Shabana Mahmood]

The hon. Gentleman is absolutely right. There is an issue at the bigger end of the spectrum, with the involvement of potentially hostile foreign Governments, but right underneath that there are a number of individuals going to great lengths to disguise where the money ultimately comes from and to disguise their identities. I will come on to that issue in relation to Birmingham City football club. The business model that that creates for football is not sustainable and should not be tolerated in something so vital to the fabric of our national life.

In the end, as the fan-led review found, it is the regulatory underlaps and overlaps in the current system that are allowing bad behaviour to fall through the cracks, meaning that some clubs are left in severe financial distress. The Premier League and the English Football League have their own owners and directors tests, but given that there are several examples of unsuitable owners passing these tests—including those with a history of bankruptcy, those engaged in legal disputes with other football clubs, and even those with serious criminal convictions—let us just say that the tests do not fill anyone with any confidence whatsoever. The fan-led review laid bare all of those issues and the need for an independent regulator and a complete overhaul of the current system in order to prevent the collapse of football clubs across the country.

I am desperate to make sure that Birmingham City football club can be rescued from its current predicament and put on a sustainable footing. It is one of the oldest football clubs in the country. It was founded in 1875 in Small Heath, which much of the country will know as peak “Peaky Blinders” territory, and which is also the part of Birmingham that I was born and raised in. It acted as a rifle range for training soldiers in world war one, and like much of Small Heath it was bombed during world war two. It is steeped in history and has a heritage that Brummies across the city are proud of, but for many years Blues fans have watched with devastation as financial and professional mismanagement has driven their beloved club to the brink.

In 2009 the club was bought by Hong Kong-based businessman Carson Yeung, who was sentenced to six years in prison on money laundering charges just two years later. The club was then bought out of administration in 2016 by the current owners, Birmingham Sports Holders Ltd, a company that is backed up by a convoluted network of shell companies and overseas stakeholders. With a crumbling stadium and a far removed invisible ownership, points deductions and crippling debts, the club continues to swing from crisis to crisis. The once premier league team has not finished higher than 17th for six years in a row.

How did our beloved club get to this point? The first issue is debt, which the hon. Member for Bury North (James Daly) has also raised, which has put the club’s finances under significant strain. The 2021 accounts reveal that the Blues spent £37 million more cash than they generated from day-to-day activities and that they are grappling with over £120 million of debt.

It is well known why and how clubs can get themselves into such eye-watering levels of debt. As the fan-led review notes, our current system creates misaligned incentives, with clubs spending to the hilt to get promoted to higher leagues in order to secure bigger TV deals and financial rewards. This creates an incredibly destructive cycle. The current lack of regulation also means that football clubs can find themselves hostage to malevolent forces acting with intent other than the sustainability of the football club that they have acquired.

What compounds those issues in the case of Birmingham City is its significant reliance on parent companies to bail it out of financial trouble. Birmingham City’s loss would have been much higher had it not been compensated by major shareholder and chief executive officer of Oriental Rainbow Investments, Vong Pech. The club now owes his company more than £22 million, raising serious questions about its financial position. The club’s own accounts state that there is

“a material uncertainty casting significant doubt about company’s ability to continue”,

but

“the directors remain in the view the company can obtain required funding from parent or ultimate parent.”

The fan-led review evidences how it was that these exact practices led to the collapse of Bury football club. As soon as an owner is no longer interested or able to invest, the club faces ruin. This is the worst-case scenario that Blues fans dread, but it shows that across English football a completely unsuitable business model has been allowed to take hold, and it is not sustainable.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I thank the hon. Lady for what she is saying about Birmingham City. When football clubs fail or are badly mismanaged, it is to the detriment of the whole community. I wonder whether she is aware of Birmingham’s tie-up with a crypto firm, Ultimo GG, earlier this year, which it promoted to its fans in February. Only two weeks later it collapsed, taking advantage of the fans’ love for the club. Does she share my concern that too many football clubs, and indeed the Premier League itself, are getting involved in crypto-promotions to their fans that can only end in tears? If she does, perhaps she would like to come to Westminster Hall tomorrow and join my debate on that?

[Shabana Mahmood]

I thank the hon. Member for his invitation. I will certainly try to make time to get to his debate—I feel that there is a quid pro quo going on here; we are certainly keeping the Minister busy. He raises an important point that goes to the ethics with which football clubs are run. Fans turn up because they love their football club, and nothing should be promoted to them that results in their being duped by financial practices that might ultimately be found wanting. They should not be put in a position where they trust their football owners and their football leaderships and then end up losing money. Fans should not be taken advantage of, and everybody who is involved in football should be able to sign up to that.

In addition to financial uncertainty, Blues fans are contending with a home stadium that is in a dilapidated and sorry state. The Kop and Tilton Road stands have been closed for two years because their steelwork is badly corroded, meaning that significant works are needed to make them safe again. That would cost upwards of £2.5 million to complete. Despite being repeatedly assured that the stands would be fully operational again by the start of this year’s season, the works remain incomplete. The latest update from the club states that work will resume during the World Cup break in November and December, with an aim to finally complete all works in the summer of 2023. In the meantime, stadium capacity remains significantly reduced, slashing the number of tickets that can be sold and further depressing the club’s revenue.

The saga of the stadium gets worse. Following the club’s points deductions for recording excessive losses, Birmingham Sports Holdings sold its 75% stake in St Andrew’s stadium, the home of the Blues football club, to a British Virgin Islands-based company called Achiever Global in June 2021 to try to improve its accounts. The deal generated £10.8 million, but a news report at the time stated that most of that would be used to repay external Birmingham Sports Holdings debts, leaving a working capital of only £2 million.

According to the Football Supporters’ Association, more than 60 clubs have lost ownership of their stadium, their training ground or other property in the last 25 years. Clubs that lose ownership of their ground have also often been forced to relocate away from their home town, which was a serious concern for Blues fans when they learned of their stadium sale. In Birmingham City’s case, it complicates the offshore ownership structure further, making accountability about stadium repairs even harder to assign.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Aaron Bell Excerpts

Thursday 24th June 2021 Commons Chamber

[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is a pleasure to follow the hon. Member for Upper Bann (Carla Lockhart). Five years ago yesterday, I voted to leave the European Union. Newcastle-under-Lyme voted to leave the European Union, and so did the whole of Britain, so eventually we did, no thanks to some Opposition Members. It was never about retreating into an island fortress, as some people like to suggest, and it was never about retreating from free trade. In fact, as the famous Spectator cover had it, for many of us it was about getting out and then into the world.

CPTPP is the sort of organisation that British people thought they were joining in 1973 and that they voted to join in 1975: the common market, as it was back then, where countries enforced their own laws, but there was not enforced harmonisation. Unlike the EU, by joining the CPTPP—I hope we will do, and I welcome what the Secretary of State said in her speech about the progress we are making—we will retain control of our borders, our money and our laws, and we will secure the growing opportunities, including: increased trade and investment opportunities; the opportunity to diversify our trading links and our supply chains to increase our domestic security, especially in the wake of what we have seen with the pandemic and other threats around the world; and, the opportunity to turn the UK into a global hub for free trade. That is a vision I hope we can all get behind.

[Angus Brendan MacNeil]

The hon. Gentleman is talking about free trade. I mentioned in my speech the damage to trade with neighbours in Ireland, for instance, but we used to trade very freely—with no paperwork, no hurdles and no hassle—with the 27 other member states of the European Union. How many countries across the world can we now trade with in the same way?

[Aaron Bell]

I thank the hon. Gentleman for making that point. I think he would accept the point that I have made that exiting the EU was not about wanting to retreat from free trade. I would rather we had been able to get a better deal with the European Union, but it was not interested. A lot of the time, it seemed that the EU wanted to punish us for Brexit to put other people off from doing the same. I am afraid it was aided and abetted by Opposition Members who met the EU when we were negotiating, so I will not take any lessons from the Opposition today about negotiating this agreement.

As the Secretary of State said, some of the richest opportunities will come from the Asia-Pacific area, with £9 trillion-worth of a growing middle class for our exporters. These include exporters in Staffordshire and Newcastle-under-Lyme such as global British icons like JCB, companies in my constituency like Doulton, which sells water filters to the growing markets in developing countries, and niche smaller start-up companies like the Staffordshire Gin Company. We have heard a lot about whisky today; let us talk about gin. The Staffordshire Gin Company is already exporting to Singapore. and this trade deal will reduce its tariffs. I invite the Minister and the Secretary of State to come up with me for some quality assurance of the Staffordshire Gin Company’s products. I am sure we could have a very good session there.

But I do not just want to talk about the benefits for our exporters and our producers, because, as my right hon. Friend the Member for North Somerset (Dr Fox) said so eloquently, free trade is a win-win, but the true benefit is to consumers. Companies and producers are not there for consumers to service; they are there to service the consumers. It should be up to people to make their own choices to have lower prices, whether the goods are supplied from Newcastle or New Zealand. That is the true prize of free trade—the true sense of comparison of markets and also the benefits for developing countries that he and my hon. Friend the Member for Montgomeryshire (Craig Williams) spoke about. We must not lose sight of the benefits to consumers. They may be more diffuse—perhaps a few pence off the weekly shop—but that adds up in a community like Newcastle-under-Lyme. That is the real, true benefit of this. We should obviously focus on the benefits for our exporters and the potential jobs that will be supported, but whenever we talk about free trade we must not lose sight of the real reason for it, and that is to make people’s lives better—consumers both at home and abroad.

Free Trade Agreement Negotiations: Australia

Aaron Bell Excerpts

Thursday 17th June 2021 Commons Chamber

[Elizabeth Truss]

What a welcome voice from the Opposition Benches! If only the right hon. Gentleman could be promoted to a position on the Front Bench—[Hon. Members: “Make him leader!”] Or even leader; that is a good idea. If that happened, we might see a more sensible, pro-growth, pro-trade policy on the Opposition Benches. It seems to me that the only group the Opposition want us to do a deal with is the EU. In fact, they want us to rejoin the EU. That is the strong message I am getting from the Opposition.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I thank the Secretary of State for her statement and congratulate her and her team on this achievement. The point about free trade, as she said in her statement, is that it is not a zero-sum game; it can be a win-win for us and for Australia, and for exporters such as the ceramics firms in neighbouring Stoke-on-Trent and for consumers such as my constituents in Newcastle-under-Lyme. Can she confirm that, through this deal, Aussie favourites such as wine—including Jacob’s Creek and Hardy’s—swimwear and confectionery will be a much cheaper and that there will be more choice for British consumers, saving more than £34 million in year one?

[Elizabeth Truss]

My hon. Friend is right. The idea that a free trade deal is simply about who wins and who loses is completely wrong. The whole point is that Australia is an old friend of the United Kingdom and we want to trade more with each other. We want to give opportunities for our young people in both countries. We want to give opportunities for our exporters and thus, all of us can become more successful, have more jobs and more growth in every local area, from ceramics to all the other industries, as well as being able to get their hands on those fantastic Australian goods such as swimwear and Tim Tams and, of course, Australian wine, which I have been drinking quite a lot of this week.

Agricultural Exports from Australia: Tariffs

Aaron Bell Excerpts

Thursday 27th May 2021 Commons Chamber

[Greg Hands]

I thank the hon. Lady for that question. In fact, I have met the Ulster Farmers Union twice in the past week to discuss these issues in particular. I met Diane Dodds, the Northern Ireland Economy Minister yesterday, and I am meeting Edwin Poots, the Northern Ireland Agriculture Minister, later today, so we are doing extensive outreach within Northern Ireland.

I would point out to the hon. Lady the huge opportunities for the Northern Irish agriculture sector. The very first beef exported to the United States last year came from Foyle Food Group in Northern Ireland. There are great opportunities for companies such as Moy Park as well in Northern Ireland to be able to export more. We are absolutely confident of being on the front foot, and ensuring that Northern Ireland also benefits from our free trade agreements, as it is written into the Northern Ireland protocol, and is able to sell more of its high quality meat into markets all around the world, including to the CPTPP 11.

[Aaron Bell (Newcastle-under-Lyme) (Con) [V]]

Free trade has mutual economic benefits, for not just producers, as we have been discussing, but consumers, who get more choice. We must not lose sight of that. As the Minister said, the understanding is that the proposed free trade agreement with Australia would be a gateway to joining the CPTPP, which is a high-standards free trade agreement of 11 Pacific nations. Does he agree that doing so will mean lower tariffs for British exports to those markets, which will be an incredibly beneficial economic opportunity for British businesses?

[Greg Hands]

My hon. Friend is absolutely right on the CPTPP. He is also right to focus on consumers, who are a vital part of our trade agenda. Under the CPTPP, 95% of tariffs between members will be removed. We already do £110 billion-worth of trade with the CPTPP. It has very liberal rules of origin, gold-standard data and digital rules, a small and medium-sized enterprise chapter, and very favourable conditions for business visas as well. It will be a great agreement for the UK, and a key stepping stone to get there is this free trade agreement with our great friends in Australia.

Oral Answers to Questions

Aaron Bell Excerpts

Thursday 14th January 2021 Commons Chamber

[Graham Stuart]

I would not want to tread on my hon. Friend’s toes. As he understands, the selection process is ongoing and it will be decided by the Treasury, but obviously we are working very closely with the Chancellor and the Treasury team, precisely to ensure that the opportunities for freeports are assigned to the best possible places and that all the benefits that they can bring are realised, for the benefit of constituents such as my hon. Friend’s.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

What progress she has made on securing a free trade agreement with Australia.

[The Secretary of State for International Trade (Elizabeth Truss)]

We have made good progress, and we are about to go into the third round of talks with Australia next month. I will be speaking to my counterpart, Dan Tehan, next week in advance of that, and we will be fighting to cut tariffs on vital British goods such as ceramics, which face a 5% tariff into Australia.

[Aaron Bell [V]]

I thank my right hon. Friend for her answer and for everything that she and her team, and her negotiators, did last year to get continuity trade agreements for Newcastle-under-Lyme exporters such as Doulton Water Filters, which I met shortly before Christmas. For all our exporters, will my right hon. Friend set out how an agreement with Australia would also facilitate our accession to the CPTPP, which is one of the most vibrant markets in the world and would give us even more opportunities in the future?

[Elizabeth Truss]

A deal with Australia will be another important step towards CPTPP, where we will be negotiating a market access schedule with Australia. It is a high-standards, rules-based agreement covering £9 trillion of GDP and, importantly, it removes tariffs on 95% of goods. It has a strong data and digital chapter and it will mean more opportunities for exporters in Newcastle-under-Lyme.

UK-Japan Comprehensive Economic Partnership Agreement

Aaron Bell Excerpts

Wednesday 25th November 2020 Commons Chamber

[Elizabeth Truss]

We had a major success in 2019 when we gained access for British lamb into the Japanese market, and, of course, one of the products that is flowing into Japan is our fantastic Welsh lamb.

This agreement is not just about economics, but about our close relationship with Japan and the Japanese. Together we are helping to set the standard for trade in the 21st century. That does not come as a surprise, because our relationship with Japan is deep and long standing. Way back in 1613, King James I concluded the UK’s first trade agreement with Japan. Under Queen Victoria, a treaty of peace, friendship and commerce was signed in 1858. We see that friendship endure under Japan’s current Emperor Naruhito, who has written fondly of his time studying at Oxford. We continue to benefit from Japanese commerce after Margaret Thatcher opened the door to new investment from companies such as Nissan, supporting local jobs and communities.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

A fortnight ago, I was delighted to receive an email from the embassy of Japan, informing me that my constituency of Newcastle-under-Lyme will receive 30 of the cherry trees that it agreed to donate to the United Kingdom. That was agreed in 2017, as part of the prosperity agreement, but it is a real symbol of what we are now doing with Japan in this trade deal. I compliment the Japanese Government and my right hon. Friend’s Department for all they have done.

[Elizabeth Truss]

I thank my hon. Friend. Our relationship with Japan is going from strength to strength. Japan and the United Kingdom are two great island nations, but we are not insular in our embrace of freedom, democracy, human rights and free trade, and we will be working together when the UK has the presidency of the G7 next year to advance on all these fronts and to champion much-needed reform of the global rules for services and digital trade.

Next year, Japan will chair the comprehensive and progressive trans-Pacific partnership, a high-standards agreement that promotes the values that we believe in for rules-based free trade. The CEPA secures Japan’s support for our joining that club and will provide further market access under that agreement. This agreement will turbocharge our trade with dynamic members from Canada and Australia to Chile and Peru. The CPTPP is more than the sum of its parts, because we gain access to a free trade area with common standards and rules of origin, which means flexibility and opportunities, but, unlike with the EU, we retain control of our borders, our laws and our money.

This huge gateway to the Pacific region will help us unleash our potential as a global hub for services and technology trade. On joining CPTPP, global Britain would have unprecedented and deep access to markets covering 13% of the world’s GDP, which equates to more than £11 trillion in some of the world’s fastest growing markets. If we add in the US, this would amount to over 40% of the world’s GDP, which equates to more than £27 trillion.

Trade Bill

Aaron Bell Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Monday 20th July 2020 Commons Chamber

[Greg Hands]

I absolutely give my hon. Friend that assurance, and I will come on to discuss those deals in a moment, although they are not within the scope of the current Bill.

My hon. Friend the Member for Huntingdon has tabled new clause 4 on new trade agreements, and that gives me the opportunity to stress the importance that the Government place on parliamentary scrutiny, and the commitments we have made in that space. The House will know that the negotiation and entering into of international agreements is a prerogative power of the Executive. The new clause would give Parliament veto rights over our negotiating objectives.

The Constitution Committee in the other place reported on that issue in 2019, and stated:

“This would impinge inappropriately on the Government’s prerogative power and limit the Government’s flexibility in the negotiations.”

I agree, and as the House will know, there are already rigorous checks and balances on the Government’s power to negotiate and ratify new agreements through the Constitutional Reform and Governance Act 2010. [Interruption.] The right hon. Member for Islington South and Finsbury (Emily Thornberry) is fond of heckling, but she voted for that Act.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I concur entirely with what the Minister is saying. Is it not the case that if we allow further parliamentary scrutiny, we will not get the best deal from these negotiations, and that at present this is the Westminster-style democracy with the greatest parliamentary scrutiny of trade deals?

[Greg Hands]

My hon. Friend is absolutely correct that our scrutiny offer compares very favourably with Australia’s and New Zealand’s and is at least equal to Canada’s. He is right in other regards as well. Some of these amendments would obligate the Government to publish the text after the end of each negotiating round. At the moment, we publish a written ministerial statement. The idea that we publish the interim text with the United States so that Australia, New Zealand, Japan and all our partners could see it when this Government—this country—are undergoing simultaneous negotiation with different partners is not a sensible way of proceeding.

Oral Answers to Questions

Aaron Bell Excerpts

Thursday 5th March 2020 Commons Chamber

The Secretary of State was asked—

[Aaron Bell (Newcastle-under-Lyme) (Con)]

1. What recent assessment she has made of the potential economic benefits to manufacturing industries of a free trade agreement with the US.

[The Secretary of State for International Trade (Elizabeth Truss)]

A free trade agreement with the US could deliver a £15 billion increase in bilateral trade, increase manufacturing output and benefit all parts of the UK economy, particularly the midlands, Scotland and the north-east.

[Aaron Bell]

I thank the Secretary of State for that answer, and for the scale of the Government’s ambitions for the trade deal. In Newcastle-under-Lyme we have a number of firms that have US subsidiaries or sister companies, or that themselves have US parent companies. Can she confirm that a comprehensive UK-US trade deal would benefit such firms by cutting red tape and increasing the trading ties between our two countries?

[Elizabeth Truss]

My hon. Friend is absolutely right; every morning more than 1 million people in Britain get up and go to work for American firms, and more than 1 million people in the US go to work for British firms. We want a closer economic relationship so that we can share ideas, products and goods, to the benefit of both nations.

Oral Answers to Questions

Aaron Bell Excerpts

Thursday 23rd January 2020 Commons Chamber

[Graham Stuart]

It may come as news to Labour, or at least its Front Benchers, that we will not be a member of the customs union as we were in 2012. Leaving the EU provides the opportunity to do things differently. We are taking a new cross-Government approach to developing ambitious free ports to ensure that towns and cities across the UK can begin to benefit from the trade opportunities that Brexit brings. It is about time that Labour Front Benchers started to recognise the upside to Brexit instead of always talking this country down.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

4. What steps she is taking to ensure that most favoured nation tariffs support UK manufacturing industries after the UK leaves the EU.

[The Secretary of State for International Trade (Elizabeth Truss)]

We are developing our own most favoured nation tariff schedule, ensuring that it is right for the UK. We want costs kept low for consumers and to ensure UK manufacturers are not disadvantaged against their competitors.

[Aaron Bell]

I thank the Secretary of State for her answer and for visiting me and my colleagues in Stoke-on-Trent last Friday. For industries such as ceramics and businesses such as Ibstock Brick in my constituency, which has two sites—at Chesterton and Parkhouse—does she agree that it is essential that we put in a robust regime of tariffs when we have countries that do not respect the rules-based order and threaten to flood our market with dumped or subsidised products?

[Elizabeth Truss]

One of our aims in a US trade deal will be to bring down the tariffs on ceramics. When I was in Stoke-on-Trent, I heard that those producers face a tariff of 28% on their fantastic crockery. We want to bring that down so that we can have more jobs in Stoke-on-Trent. We will also establish the trade remedies authority, which will take a tough line on dumping from the anti-competitive activities of other nations.

--- Later in debate ---

[Elizabeth Truss]

I believe that the UK has a huge opportunity to promote clean energy and our climate change agenda—our carbon reduction agenda—across the world. Yesterday I met the New Zealand Trade Minister to discuss how we can work together in the future to incorporate those into forward-leaning trade agreements. We will seek to do that with the US, the EU, and all the other partners with which we work.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

T5. In the light of the very welcome UK-Africa investment summit, what assessment has the Minister made of the commercial opportunities for British firms across the whole of that great continent?

[Graham Stuart]

I spent months working with colleagues across Government to deliver the UK-Africa investment summit, which took place on Monday. I am delighted with the result and proud of the work of so many officials in making it happen. We have announced 27 commercial deals worth more than £6.5 billion from across African markets, but as my hon. Friend has pointed out, there is enormous potential for more.