Scottish Football (Tax Liabilities)

Pete Wishart Excerpts

Wednesday 29th February 2012 Westminster Hall

[Pete Wishart (Perth and North Perthshire) (SNP)]

I congratulate the hon. Member for Dunfermline and West Fife (Thomas Docherty) on securing this important debate. He will know that I have spent many a fine afternoon on the terraces of East End Park as a native of Dunfermline, supporting the mighty Pars. My affections have now transferred to the mighty Saintees of McDiarmid Park in Perth. I know that it is very much to the hon. Gentleman’s disappointment that almost the entire length of the Scottish premier league separates Dunfermline from St Johnstone just now.

The hon. Gentleman mentioned two other clubs in his contribution. It was a bit remiss of him, when talking about Cowdenbeath, not to give their nickname, which I am sure that you, Mr Betts, are bursting to know. They are known as the Blue Brazil, a nickname that could never be more deserved. I remember when my grandfather used to take me to watch the cup games against Cowdenbeath, being a native and resident of West Fife, where the league support was for Dunfermline. I went to Central Park to watch the cup games when Cowdenbeath were competing. That was a forlorn activity back in the 1970s, because on only a couple of occasions did Cowdenbeath manage to get past the second round. He also mentioned Brechin City, which used to be in my constituency, in north Tayside. What is notable and significant about Brechin City is that it is the only professional football ground with a beech hedge as its border. A lot of Scottish football fans liked to go along. There were the bridies at Forfar Athletic and the beech hedge at Brechin City.

Enough of my tour around the football grounds of Scotland; let us get on to business. I think that everybody here is a football fan, but where on earth are the rest of my Scottish colleagues? There is only the hon. Member for Dunfermline and West Fife. We get so few opportunities to discuss Scottish issues, particularly important Scottish issues about football. We are all proud that we represent football clubs in our constituencies. I have St Johnstone, a fantastic team doing well in the premier league, but where are my Scottish colleagues this afternoon? It is not as if they get loads and loads of Scottish business in this House. Not one of them could be bothered to turn up today to discuss the biggest crisis that is facing our national game. That is a disgrace, which says a lot about my Scottish colleagues when it comes to debating these important issues.

We have never had a crisis like this one. It is totally unprecedented and how it will end is anyone’s guess, but the nature and the face of Scottish football will probably change dynamically because of what is going on.

[Thomas Docherty]

First, some colleagues have been detained at Select Committees this afternoon. Secondly, does he agree that many colleagues are nervous about discussing what has happened with Rangers, because it is difficult to have a rational, sensible debate about the Scottish game without many of our constituents taking umbrage at us?

[Pete Wishart]

I do not know that that is true. I know that there is a bit of interest in this debate: one only has to look across the corridor from here. That does not excuse anything, however. This is important and it is unfortunate that there are not more Scottish colleagues here to debate what is probably the biggest crisis that we have seen in our game. This deserves and requires proper debate and it is unfortunate that we will not have that today, because this crisis deserves to be dealt with as sensitively as possible.

I listened carefully and closely to the remarks of the hon. Member for Dunfermline and West Fife. Where I can go along some way with him is that there is a real desire for a solution to this problem. There has to be a solution, because it is almost inconceivable to imagine Scottish football without Glasgow Rangers. They have 130 years of history and tradition. They have huge support—some 50,000 home fans go to watch Glasgow Rangers at a home game every second week in the city of Glasgow. To have that taken out of our game would have a significant and deep impact on the ability of the SPL to continue to produce a platform that will engage and encourage people and ensure their support.

It is not just about ticket receipts. When Rangers come to St Johnstone, it is the biggest weekend that we have in Perth. It is not just the inflated gate that we get by playing one of the old firm; it is also some of the activity spin-offs for Perth. It is not just about the pubs on match day. Glasgow Rangers supporters may choose to take a day either side of the game—the Friday night or the Saturday evening—so our hotels and restaurants are busy. There are also the other activities that go on within the city. To lose that would be to lose a significant amount of income and economic activity, which would be very much missed.

There is also the issue of television rights. As the hon. Member for Dunfermline and West Fife said, they involve a fraction of the sums for television rights in England, but they represent a massive income for the Scottish game. If there were no Rangers, what impact would that have on the television rights sold to ESPN, Sky and the BBC, which play a massive part in the incomes of so many other Scottish football clubs? We would also miss the drama and spectacle of old firm games, which are enjoyed and appreciated not only in Scotland and the rest of the United Kingdom, but throughout the world.

[Thomas Docherty]

Just for the sake of clarity, it might help to reiterate that if either half of the old firm is not in the SPL, the contract with the TV companies falls. It is therefore in the SPL’s interests to treat Rangers as a special case because of those knock-on effects.

[Pete Wishart]

I am glad the hon. Gentleman mentioned that. He is absolutely right that that is one possible consequence of losing Rangers. That is why we should do all we can to ensure the ongoing survival of Glasgow Rangers football club.

[Damian Collins]

Glasgow Rangers is too big to fail, and they will find a way of restructuring their debts and coming back, but does the hon. Gentleman share my concern that the real long-term losers will be small businesses and other football clubs?

[Pete Wishart]

The hon. Gentleman is spot on. There is, of course, talk and speculation about what happens if Rangers are unable to come out of administration. Indeed, the Scottish press, particularly the sporting press, have a fascination with the old firm, and we read about it almost every day. However, the hon. Gentleman is right that some of the small businesses that are expecting payment from the administrators will suffer a massive loss. That is a real issue, and I am grateful to him for bringing it up.

Football is our national game. All our football clubs play an enormous part in our economic activity and make a real contribution to our communities and constituencies. The Fraser of Allander Institute estimates that the old firm’s economic importance to Glasgow and the rest of the Scottish economy amounts to £190 million. More than 3,000 full-time jobs depend on SPL football, and £200 million is spent on related commercial activities in Glasgow alone. According to the Rangers annual report, the direct economic activity generated by the club is in the region of £56 million.

Most importantly, there is also the issue of what happens to the 331 people directly employed by Rangers. They must be absolutely paramount in our considerations, and I hope some solution is found so that they can continue to serve in their jobs.

This is not, however, just about clubs’ contribution to our economy, important and significant though it is. There is also the value professional clubs have for our communities, and the hon. Member for Dunfermline and West Fife mentioned that. We can all see the infrastructure that exists and the clubs our young people are encouraged to participate in. We know that our football clubs make an immense contribution to our communities. According to the SPL’s 2011 community report, 20,000 people participate in community projects weekly, and SPL clubs spent £8 million on community activity, which is no small sum.

There are also the fans in Scotland. I know the audience for SPL football has diminished, but 3.2 million people still attend SPL games each season, and a further 76 million watch them on ESPN, the BBC or Sky. Football is therefore a big business, which contributes much to our economy and our communities, and we must ensure that we respond to the current crisis with the sensitivity it deserves and requires. Scottish football is in a precarious state, and it remains a fragile product, so it can ill afford to lose one of its major protagonists.

Of course, this is not just about Rangers. Several of our clubs are teetering on the brink of financial collapse and ruin. I just wish they could all be like St Johnstone, which is run so perfectly and effectively by Geoff Brown, its chair. It never gets into debt, it always ensures it looks after its liabilities and it never has a problem with HMRC, but that is not the case with many of the clubs in the SPL. I am thinking not just about Rangers, but I will not mention the other clubs, because we all know which ones are experiencing real difficulties and pressures.

We have seen what happens when clubs cannot meet their responsibilities and liabilities. Dundee and Livingston went into administration. We have also seen one SPL club—Gretna—go to the wall in the past 10 years. It was not a particularly great example, and I doubt whether other clubs would like to replicate its business model.

These are tough times, and gates are falling. We have heard from the hon. Member for Folkestone and Hythe (Damian Collins) about the pressure of football wage inflation and how it must be brought under control. The hon. Member for Dunfermline and West Fife was of course right to mention that SPL football is totally different from the English premier league or first division, and only the wages in the old firm are similar. However, some clubs have tried to replicate what we have seen elsewhere and to buy success by buying expensive players. They have tried to compete with the old firm and they have got into all sorts of difficulties. That is probably one of the reasons why Dundee football club, in particular, experienced the difficulties that led to its going into administration. There is a demand all the time to buy more expensive players, because that is what the market dictates, and clubs are encouraged to fork out money. However, gates are falling, and there is any amount of competition from other activities for the time of constituents, who might otherwise go to watch football games.

We all accept that our football clubs must meet their financial obligations. Everybody in every business must pay their tax—it is as simple as that. They must pay it on time and they must ensure that any business plan is totally predicated on meeting their tax liabilities. However, I am sure I am not the only Member in the Chamber who will have put the case for businesses and individuals in his constituency who have got into trouble over their tax liabilities. I do not know how many letters I have sent to HMRC on behalf of small businesses and people who have got themselves into difficulties. It is absolutely right that people also make representations on behalf of Glasgow Rangers because of its significance to Scottish football and the number of jobs that depend on it, as well as its history and tradition, its success and its value to the SPL.

The club is in a mess. The hon. Gentleman mentioned the current regime, which has been a total disaster—we cannot call it anything other than that. Once Craig Whyte took over its debts, something was always going to happen. He did not have the money to ensure the club could get out of its difficulties. What he did with Ticketus was appalling, and there will now be an SFA investigation into the Ticketus deal. There will also be an investigation to see whether Craig Whyte is a fit and proper person to run a football club, and we will have to see the details. Again, it is the fans who suffer, and the people who work in the club have been the major recipients of all the bad news and all the doom and the gloom.

Right now, the administrator is responsible for running the club. In the next few days, Duff and Phelps expect to announce the first round of job losses, which will first impact on the playing staff. There are outstanding issues of payments to other clubs, and I have heard the representations from Dunfermline football club that it should be paid. The hon. Member for Dunfermline and West Fife is right that money should be paid to clubs that are owed it, and Rangers have no right whatever to retain it. However, the job losses show the real impact that going into administration has on people’s careers and jobs.

The hon. Gentleman talked about the Scottish Government’s role, and they stand ready to offer assistance to anyone affected by job losses. They have said they will do all they can to keep in contact with the administrator and to be available to provide support and assistance if there are job losses. In addition, there is the PACE—partnership action for continuing employment—programme in Glasgow, which has offered to provide any assistance it can if there are job losses. PACE has offered Duff and Phelps assistance almost daily to take things forward, and there have been several conversations to that effect. This is a developing and emerging situation, and Scottish Ministers and PACE are keeping their eye on it.

[Thomas Docherty]

Perhaps the hon. Gentleman can provide some clarity, because he speaks on sport for the Scottish National party. He will be aware of reports in this morning’s newspapers that the Scottish Government are apparently offering all the assistance they can to the Scottish open, and the assumption is that financial assistance may be forthcoming. Does the hon. Gentleman agree that if the Scottish Government are going to put money into the Scottish open, they should also see what financial assistance they can provide to the SPL?

[Pete Wishart]

The hon. Gentleman is right, and I am grateful for that assistance for the Scottish open. I am sure that he will be the first to recognise that the input that the Scottish Government have made to Scottish football is significant—the £25 million that was announced towards the national performance centre, for example, the £8 million through CashBack for Communities and the £4 million going into the refreshed youth action plan for the next four years. That shows the Scottish Government’s support for Scottish football and their commitment to ensuring that it will continue to develop in the next few years. That will be welcomed in football throughout Scotland.

I want to mention a couple of initiatives. Unfortunately there was some appalling behaviour two weeks ago at Glasgow Rangers, in the home game against Kilmarnock, which shows that there is still a massive problem with sectarian chanting. I am delighted that for the first time the Scottish Government have put in place legislation to tackle that effectively. It was not supported by the rest of the parties in the Scottish Parliament, but at last something will be done to try to get rid of that curse from the national game.

[Thomas Docherty]

I regret the fact that at the end of a good speech the hon. Gentleman is trying to bring in party politics. I went to the Dunfermline and Rangers game as a guest of the police, early in the season; the procurator fiscal was there. The PF, the clubs and the police were clear about the fact that that legislation, which no one else in the Scottish Parliament supported, was unnecessary, and unworkable.

[Pete Wishart]

It is the police who have been telling the Scottish Government that the legislation is required. We have had that debate in the Scottish Parliament, and thank goodness that behaviour will at last be challenged effectively. I welcome the fact that the SNP Scottish Government are deciding to take on the issue head on, and trying to get that appalling scourge out of the Scottish game.

There are other issues in Scottish football, but the one that we are debating is the big one—the thing that we need to get tackled and sorted out. I hope that HMRC will work sensitively with the administrator, and that we will get a solution that will ensure that it will be paid what it is owed. The main thing is that HMRC should secure the outstanding liabilities that Glasgow Rangers has towards it. Let us hope that we get a solution that will allow Glasgow Rangers to come out of administration—a solution that will mean that as much as possible will be done to retain the staff who work on its behalf; that we will have a Scottish premier league worthy of that title and enjoyed by its supporters; and that we can go on ensuring that that product can be developed, and made entertaining and exciting for people not just in Scotland but worldwide.

--- Later in debate ---

[Mr Gauke]

I will deal with the hon. Gentleman’s second point first, which he is absolutely right to raise. From April 2012, HMRC will be able to seek securities where PAYE is at risk. That mirrors existing powers for VAT, which are already in place. If a taxpayer does not pay the security, they will commit a criminal offence. There are, of course, safeguards to ensure that the power is not abused by HMRC—it is not to be used widely—but where there is concern about repeated failure, that is an additional tool available to HMRC. That, in itself, will have a deterrent effect, which I hope will be helpful in such circumstances.

[Pete Wishart]

The Minister has mentioned some of the sticks available to HMRC to secure its liabilities, but what about the carrots? What about incentivising the clubs that meet HMRC requirements on time? I mentioned the example of my football club, St Johnstone, which has never gone into the red. Does HMRC want clubs to behave and be able to balance their books on that basis?