Football Clubs in England: Financial Sustainability

Shabana Mahmood Excerpts

Monday 7th November 2022 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I am pleased to have secured this Adjournment debate on the governance and financial sustainability of English football clubs. I am very lucky that Birmingham, Ladywood is home to both Birmingham City football club and Aston Villa. It is a privilege to advocate for both sets of fans, although it occasionally calls on all my skills of diplomacy—local football rivalries are very passionate things, after all.

My interest in the regulation of English football, or more accurately the lack thereof, has been engaged primarily because of the position in which Birmingham City fans find themselves. Like many in this House, I take the view that the only way to deal with financial and governance issues like those that have plagued Birmingham City over the past decade or so is for the Government to bring forward legislation for a new independent regulator of English football. The Government, of course, commissioned the fan-led review of English football. That review was undertaken by the hon. Member for Chatham and Aylesford (Tracey Crouch), and I pay tribute to her detailed work and advocacy on behalf of football fans all over the country. Many other Members across the House have also long campaigned for changes to be made to protect our national game. The Digital, Culture, Media and Sport Committee has done important work, as have the Football Supporters’ Association, the all-party group for football supporters, and campaign groups such as Our Beautiful Game. All of that campaigning has provided the background to the breakthrough of the fan-led review’s findings.

The Government were pushed into that review after the quickly aborted plan for a breakaway super league, which would have destroyed club football in our country. Those plans threw into sharp relief many of the issues in the game that, before then, were too easy to ignore and to leave to the clubs to sort out. We all know that things simply cannot carry on as they are. The current system incentivises teams in the premier league to spend unsustainably to remain in the premier league, and it incentivises teams in the championship to spend up to the hilt to get there because the financial rewards are so great. However, that is destabilising clubs and the whole football pyramid in our country. Too often, there are question marks over ownership and the potential motivations of those who buy English football clubs.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady agree that, although clubs may feel that they are owned by us fans, who buy the gear, attend the matches and use pay-per-view, the fact is that these clubs are big businesses and like any big business, they must be appropriately regulated and managed? I therefore fully agree that the House must do more to protect clubs from bottom-line share price profit as the driving force, as opposed to the love of the game, which we all have, and the desire for a club to perform as best as it should and could.

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[Shabana Mahmood]

The hon. Member is absolutely right. We learned through covid that fans are the lifeblood of the game. If we take away fans, it destroys not only the business model but the spirit of football.

[James Daly (Bury North) (Con)]

I congratulate the hon. Lady on securing this very important debate. As ever, it is wonderful to be in the Chamber at the same time as the hon. Member for Strangford (Jim Shannon). However, his point was very much about the premier league. Many clubs are not on the stock market. Clubs like Bury football club in my constituency are small businesses that are the centre of their community. I know exactly what Birmingham City is going through. My team, Huddersfield Town, where I am a season-ticket holder, is going through something similar, although hopefully it will be not as bad as it is for Birmingham. However, there is no regulation in the game. The English Football League and the Football Association do not regulate football teams. That is the problem and it is why we need a regulator.

[Shabana Mahmood]

The hon. Gentleman is absolutely right, and I will come to that point. Without regulation, none of football can thrive. The premier league cannot thrive, nor can all the other teams that are not in that league. It is a pyramid, an ecosystem, that depends on every part of it being well regulated to make sure that some of the smaller clubs—I hate calling them smaller clubs actually, because they mean a lot to their communities—have just as much to offer our national game as the big clubs at the top, which have much more money.

On ownership and how that can change across football clubs, too often, there are question marks over the potential motivations of those who buy English football clubs, which can become vehicles for bolstering the reputations of foreign leaders, politicians and businessmen close to politicians whose interests may run counter to our national interest. Sometimes we know who those people are, but sometimes the true ownership is disguised—a sure sign that there is something to hide. However, in those cases, and this goes to the hon. Gentleman’s point, the club, its fanbase and its value as a community and national heritage asset becomes a plaything of those who have no stake and no commitment to the community, and who do not care for the heritage value—which I consider to be the real value of football clubs—and see it only as a tool of commercial interest.

[James Daly]

I understand the hon. Lady’s point about foreign Governments, and so on. However, we have to understand that a lot of people with malevolent intent take over a football club by borrowing from exotic lenders to then, essentially, take every penny out of that club. These are people with malevolent and often dishonest intent. That is not about the big-picture, wider geopolitical issue that she mentions—I am talking about pure and utter greed by people who are dishonest.

[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.

[Kevin Foster (Torbay) (Con)]

The hon. Lady is giving a quite interesting talk, and I will intervene on the Minister in relation to Torquay United at some point. She will appreciate the slight irony in talking about St Andrew’s, because that is where, due to stadium dispute, Coventry City football club ended up playing for a number of seasons. That was a real wrench for many fans, and it just shows why there is a desperate need to reform the system of football regulation.

[Shabana Mahmood]

The hon. Member is absolutely right. I well remember having to mediate between the competing views of the different fans as well as the residents in the area who suddenly had more traffic to content with and so on. This speaks to the point that football is at the heart of our communities. It is part of the fabric of our national life and it is very much tied to the places in which those clubs were born, where they have grown, and where they are part of the history and the heritage. You cannot just pick a football club up and move it somewhere else and retain the same thing you had to begin with, and matters relating to stadiums make fans fearful about what might happen to the places they call home. I would be devastated if anything happened to St Andrew’s or Villa Park, because they are so much a part of the fabric of our great city and our region.

In the normal run of things, when these sorts of problems arise, the football club would sit down with the owners—the ultimate source of the money—and work out how to resolve them, but working out who is the ultimate owner is a huge task in itself. To say that it is complicated is an understatement. Within Birmingham City’s ownership structure, Birmingham Sports Holdings Ltd has a 75% stake in the club, but BSHL itself is owned by a total of five other companies, all with shares ranging from 2% to 28%. This structure of shell companies creates murkiness, confusion and a complete lack of transparency, and makes it impossible to track down the ultimate owner and to establish who bears responsibility for resolving problems at the club.

That came to a head earlier this year when it emerged that an individual who Birmingham City had not declared to the English Football League was actually the beneficial owner of a company called Dragon Villa—one of the companies that owns 17% of Birmingham Sports Holdings and therefore 12% of the football club. That individual goes by the name of Wang Yaohui but is also, according to press reports, known as Mr King.

Wang is a Chinese-Cambodian national who has served as an adviser to the Cambodian Prime Minister and as a diplomat in Cambodia’s embassy in Singapore. He was previously detained by the Chinese Communist party’s anti-corruption watchdog on allegations of bribery and money laundering regarding a state-owned Chinese bank. Although he went uncharged, his associate was hit with corruption charges and sentenced to life imprisonment.

It appears that Wang has gone to great lengths to conceal his undeclared commercial footprint. Documents uncovered by Radio Free Asia show that Wang was the beneficial owner of Dragon Villa and concealed from the Hong Kong stock exchange and the English Football League his substantial stake in Birmingham City football club. That is a potentially criminal offence, punishable by up to two years in prison.

The EFL is now investigating these claims. It told me that it is a complex matter and that it has made applications for the disclosure of documents, from not only the club but individuals linked to the club. It confirmed that an investigation is taking place but told me on the eve of this debate that, as the investigation remains ongoing, it is unable to comment further.

The fact that the club failed to declare Wang as an owner demonstrates how easy it is for individuals to avoid scrutiny and bypass the current owners’ and directors’ test, which in my view—a view that I know is shared by hon. Members on both sides of the House—is completely unfit for purpose. Takeovers of the Birmingham City football club have previously been mooted and come to nothing, but it is now subject to an ongoing takeover.

A consortium led by Maxi López and Paul Richardson is looking to acquire a 21.64% stake in the club after paying a £1.5 million deposit. That takeover went to the English Football League for approval in July 2022, and as part of the process the EFL is now investigating whether the club breached its rules after it emerged that it has been receiving funding from the prospective owners without EFL approval. I must say that I truly sympathise with the Blues fans—whenever they have a little bit of hope, it is quickly dashed with yet more regulatory and governance concerns.

If Maxi López and Paul Richardson are as they say they are, and wish to acquire the club and run it in the way that such things should be run, of course I wish them well and hope that they are transparent and open about their funding source and what they intend to do with the club. Although I am keen not to prejudge the outcome of that process—we all wish to see Birmingham City thrive—I would have more confidence in the English Football League’s investigations and approvals process if its tests were up to scratch.

Regardless of where we stand on potential takeovers of the club, or any other club in a similar position, we can all agree on the absolute need for transparency. When someone is looking to buy such an important community asset, they should not be hiding their financial sources or income streams. They should be open and transparent about them, so that we can be sure that our football clubs will be protected. As one Blues fan told me:

“hidden in the dark, these owners need to understand they’re guardians/guests of the club. 147 years of history, it isn’t just a pop up throw away company”.

I could not have put it better myself.

I pay tribute to the Blues fans, who have shown such commitment and dedication to their club. As much as I love to hear from them, I also dread it, because they get in touch with yet more problems at the club. I despair that unless and until we have an independent regulator of English football, we will not be able to solve the problems that we see at Birmingham City football club.

As we have heard in some of the interventions, the issues at Blues are not unique; they are happening in stadiums and clubs across our country, and in proud towns and cities such as Derby, Oldham, Bury, Wigan and many more. All of those fantastic clubs—all those amazing heritage and cultural assets—could face ruin unless we see decisive action and a regulatory overhaul from the Government, exactly as we were promised earlier this year.

Will the Minister, in his response, explain what he thinks about the predicament of the Blues fans, and what he would say to fans across the country about club ownership structures and stadium difficulties? We all know that there is no overnight solution to the problems at the Blues, but the long-term future of the club and many others like it can be secured only if the Government implement the recommendations of the fan-led review in full. They have long promised a White Paper, which would pave the way for legislation to create an independent regulator for English football.

The time for delay is over. The Government agree that there is a problem, and the fan-led review has given us the solution. The Government say that they agree with that solution, and I say to the Minister that this is literally an open goal.

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[Stuart Andrew]

How could I possibly not agree with my hon. Friend? He is absolutely right. In the short few weeks I have been in this job I have really noticed the passion that everybody has for the sport. Fans sometimes get frustrated with their club’s performance, but their passion and loyalty are to be admired. My hon. Friend is absolutely right to praise the hon. Member for Birmingham, Ladywood for securing this debate.

As I said, I was keen to hear from the fans first, which is why they were the first people I met when I took on this role. I met representatives from the Football Supporters’ Association, Fulham Supporters’ Trust, Charlton Athletic Supporters’ Trust and Blackpool Supporters Trust to hear their stories. All those clubs had suffered at the hands of owners who used and abused their stewardship. This relates to the point made by the hon. Member for Strangford (Jim Shannon). Some of the stories I heard were frankly shocking, and some of the sacrifices that the fans had to make to make their point were astounding. The fact that Blackpool supporters boycotted their own club for four or five years really does show the strength of their feeling.

Too many clubs have been lost to the cycle of unsuitable owners taking over clubs, stripping them of their assets, as the hon. Member for Birmingham, Ladywood said, and leaving them as empty shells, as my hon. Friend the Member for Bury North (James Daly) said. Too many clubs have been brought to the brink, with owners refusing to fund them any more. We are committed to breaking the cycle of inappropriate ownership, financial instability and poor governance practices. I look forward to the debate that my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) has secured for tomorrow. He mentioned the issue of cryptoassets; I am sure we will be having that conversation for a good few months.

Since my meetings with fans, both the Secretary of State and I have met representatives from the football authorities—the FA, the Premier League and the English Football League—to understand their perspectives on reform, too. The policy is complex and it is important that we get it right. We are talking about matters of finance and governance, and I make no apology for taking the time to ensure that I have properly considered all the issues before me. That is why we continue to engage and hear views from a wide range of stakeholders, including the football authorities and, most importantly, the fans’ groups.

[Shabana Mahmood]

I totally understand that when we are trying to build a totally new regulatory regime, we have to make sure we have thought of every possibility and any unintended consequences, but will the Minister confirm that the end position he is trying to get to is an independent regulator and that he is trying to make sure that the regulatory regime is fit for purpose? The end state we must have is an independent regulator of English football.

[Stuart Andrew]

The hon. Lady tempts me to go a bit further than I can at this stage, but I can tell her that I am currently doing all the deep work on the White Paper because I want that to address many of the points she has raised.

Football can take forward some of the reform measures—such as financial redistribution throughout the leagues—now, and I strongly urge the relevant authorities to act and to do so quickly. Meanwhile, we have a new set of Ministers so we are taking a little time. We recognise that clubs are at the heart of many of our communities. Were I not to do the due diligence, I am sure that clubs would not be happy with me for not double-checking that everything is right. We are taking the time to consider the policy and consult the numerous stakeholders. We remain committed to publishing a White Paper setting out our detailed response to the fan-led review of football governance, but let me make it clear: the case for reform is not in doubt.

Question put and agreed to.

Trade Bill

Shabana Mahmood Excerpts

Consideration of Lords amendments
Monday 22nd March 2021 Commons Chamber

But it also “noted the similarities” between what is happening in China and what happened in Nazi Germany. By backing the genocide amendment, we can act when we say, “Never again”, by allowing the Uyghur to be included in, not excluded from, the Government motion. I hope colleagues will join me in the Aye Lobby on the genocide amendment, which just gives further teeth to the Government’s earlier sanctions and tidies up a little flaw in the Government’s proposal. We cannot have a two-tier genocide process. We have moved so far forward, let us not fall at the last hurdle. We must and we can be on the right side of history, by voting for the genocide amendment.

[Shabana Mahmood (Birmingham, Ladywood) (Lab) [V]]

I support the motion tabled by the hon. Member for Wealden (Ms Ghani) and very much appreciate the opportunity this evening for a straight vote on the Alton amendment, which is particularly welcome in the light of the procedural shenanigans that prevented it last time. I want to call out the rank hypocrisy of the Government on their approach to the whole issue of determining whether a genocide is taking place. They have always ducked the question of whether the Chinese regime is committing genocide against the Uyghur people in Xinjiang by saying that the determination of genocide is a judicial decision, not a political one, and that it requires legal determination. The Prime Minister said that when he was the Foreign Secretary; when answering Foreign Office questions in November 2017, he said:

“genocide is a strict legal term, and we hesitate to deploy it without a proper judicial decision.”—[Official Report, 21 November 2017; Vol. 631, c. 839.]

In fairness, that has been the position of successive Governments, but this Government know that there is no international mechanism that will enable a legal determination on genocide against the Uyghurs because China will use its veto. None of the options for competent courts under international law is viable.

Now that there is a way forward in a domestic setting with the new Alton amendment, which in itself is a significant compromise—we are no longer considering a role for the High Court, but one for former senior judges in the House of Lords to make a determination on genocide—the Government say that they are happy to leave this issue to parliamentary Select Committees instead. This is unconscionable, unacceptable, breathtaking hypocrisy, and the House should take a stand against it today. If the Government are acting in good faith, I cannot think of any reason why they will not accept a role for the judges panel in the House of Lords, as per the Alton amendment. So we all have a fundamental judgment to make today. It has nothing to do with constitutional precedent or any other separate actions that the Government have announced today, in particular their welcome, though long overdue, decisions on deploying the Magnitsky sanctions regime. Today is simply about whether we draw a line in the sand and say that Britain must not do trade deals with countries that commit genocide. That is the only issue at stake here today, which is why I urge all Members to vote for the Alton amendment this evening.

[Andrea Jenkyns (Morley and Outwood) (Con)]

I would like start by commending the Department for International Trade for its fantastic work in continuing to secure free trade agreements around the world. Last week, I hosted a webinar on exporting, in partnership with the Department and my hon. Friend the Member for Wakefield (Imran Ahmad Khan). It was inspiring to hear of the opportunities our small and medium-sized businesses were taking in boosting skills and jobs in our local areas. With about 6.5 million UK jobs supported by UK exports, it is vital that we continue to support and encourage businesses to export, which will help drive a jobs-led recovery from the covid-19 pandemic.

The Bill updates and builds on our existing continuity trading relationship, which formed part of our membership with the EU. I particularly welcome the WTO’s agreement on Government procurement, which will secure access for UK businesses to overseas procurement opportunities worth £1.3 trillion a year. I also welcome the new trade remedies authority, which will enable Britain to secure the benefits of freedom while providing a safety net for domestic industries.

This country leads the way in making the case for human rights, as proven by my right hon. Friend the Foreign Secretary’s statement this afternoon, and we have not embraced an independent trading policy to do otherwise. Our trading policy must therefore reflect our human rights priorities in a way that is both practical and coherent with our constitution. First, in order to work effectively, the determination of matters of genocide needs to be practical and follow established methods. As a result, it is perfectly reasonable for the judgment to rest with the competent courts, which include domestic criminal courts and relevant international courts, rather than Governments or non-judicial bodies. We all support the objective of upholding human rights; it is a question of how we best achieve that in practice.

As my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) has already stated, the Government have listened and given an assurance that Parliament and Select Committee Chairs will be part of the process to establish new joint committees or sub-committees or to bring in the expertise of former members of the judiciary. Amendments proposed by the other place, however, would apply a wrecking ball and enable the High Court to fundamentally challenge the royal prerogative. In my view, such a move would undermine our confidence in Parliament.

Brexit was about strengthening the voice that Parliament has. This Bill and the amendment from my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) give a clear role for Parliament to act quickly and decisively in human rights situations, while also seizing the new global opportunities ahead.

Trade Bill

Shabana Mahmood Excerpts

Consideration of Lords amendments & Ping Pong & Ping Pong: House of Commons
Tuesday 19th January 2021 Commons Chamber

[Madam Deputy Speaker]

Before I call the next hon. Member, I give notice that the time limit will be reduced to four minutes after the Chairman of the Select Committee, the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil). We have three more colleagues on six minutes; thereafter, four minutes. I call Shabana Mahmood.

[Shabana Mahmood (Birmingham, Ladywood) (Lab) [V]]

I wish to speak in support of Lords amendment 3, known as the genocide amendment, moved by Lord Alton in the other place, which deals with trade agreements made with states accused of committing genocide. I associate myself with the remarks made by my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), the shadow Secretary of State for International Trade, on that amendment and on the human rights situation more generally.

I am grateful for the cross-party efforts that led to the addition of the amendment to the Bill; I hope that another cross-party effort in this House will be successful today. I note the comments the Minister made in opening the debate today. They follow the position taken by the Foreign Secretary when he made a statement to the House on forced labour supply chains last week. The approach taken by the Government is dispiriting and deeply disappointing. If the Government prevail today, I believe they will come to regret it.

The amendment will, first, send a clear signal about the absolute basic threshold that must be crossed before we strike trade deals around the world, and about the sorts of people, countries and regimes that we will do business with. Not being a genocidal state should be the absolute minimum requirement that all of us in this House should be able to sign up to. It would enable the UK courts to make what is, in effect, an advisory preliminary determination of genocide for the Government to consider when they are signing trade deals with states accused of committing genocide.

The Government say that genocide determination is a matter for judges, not politicians. That is the long-standing position of UK Governments of all political persuasions. The amendment would provide the only viable legal route to have a genocide determination made by judges.

That is why the remarks made by the former Secretary of State for International Trade, the right hon. Member for North Somerset (Dr Fox), just a few moments ago, are entirely wrong. When we talk about genocide, it has to be a determination made by judges in a legal context. The problem is that at the moment the international legal system—the routes provided by the United Nations and international treaties—are, frankly, a busted flush. Something is needed to break the cycle of inaction and ineffectiveness. We are awash with warm words that simply do not change the situation on the ground. All we are currently laying the ground for is an after-the-fact statement of sorrow when genocide has occurred. The world keeps saying, “Never again” in relation to genocide, yet it occurs with shocking, depressing regularity.

China is, of course, the most striking example of the failures of the international system. The Government recognise and condemn the actions of the Chinese regime against the Uyghur people in Xinjiang. Mountains of evidence exist about forced sterilisation, mass detentions, slave labour and the destruction of culture and heritage. To my mind, a genocide is being perpetrated by the Chinese regime against the Uyghur people, but of course that requires a legal determination in a court to have legal force, rather than simply political and moral force.

Every international legal route is blocked by the Chinese Government—China has a veto. It has a majority on the UN Human Rights Council and is not a party to the International Criminal Court. The amendment provides a mechanism for the UK High Court to make a preliminary determination in the context of a trade agreement. If the UK High Court rules that the extremely high evidential bar for the crime of genocide is satisfied, its judgment will be available for the Government to consider.

Perpetrators of genocide should not be rewarded. They must know that actions have consequences, and an increasingly belligerent China needs to see that the British Government will not simply stand by and watch, impotent and unable to do anything whatsoever. The modest import and export restrictions linked to forced labour abuses that were made by the Government last week are welcome, but they do not deal with the specific charge of genocide, so I am afraid that that action, although it is welcome and although it was taken by the Government only last week, cannot get them off the hook on agreeing with the amendment today.

The amendment does not give the courts too much power. It is supported by eminent lawyers in the other place who have dealt with the issues around the separation of powers far better than I can in the short time available to me. In any case, if the Government agree that genocide determination is a matter for judges, the fact that at the moment their position amounts to saying that they will go along with a genocide determination made by international judges through the international system, but not one made by our own High Court, to my mind, simply does not stand up.

The amendment does not prevent the international legal system from kicking into action, although frankly that seems impossible at this point. In any case, it is a preliminary determination. It would enable the word “genocide” to be used credibly in a legal sense and I simply do not buy the idea that the courts would be swamped with vexatious claims. They can, will and regularly do dismiss claims that lack minimum standards of evidence. I say to the Minister that, if the amendment still does not work for the Government, they should have considered compromise amendments and efforts to reach compromise offered by Members from their own Benches, which I agree with and support. They say we have no trade agreement with China. We do not have an FTA with China, but we have other bilateral trade agreements with China, such as the UK-China bilateral trade and investment treaty. Others could be made.

Genocide is described as the crime above all crimes. Surely we can all agree in this House today that it must be the minimum starting point for the conditions we will place on whom we will trade with. I urge the Government to change course and accept the amendment today.

[Tom Tugendhat (Tonbridge and Malling) (Con) [V]]

It is an enormous pleasure to speak in the debate this afternoon because this is one of the most important questions our House will consider. It is worth remembering why genocide is a crime beyond others. It is not just that many of us in this House have personal experience through family of genocide within the lifetimes of many people alive today. That is one reason why the Jewish News has been so active in support of this measure. Genocide tries to do something that no other crime attempts. It tries to end history. It tries to remove an entire people, an entire culture and an entire part of our world from the planet and to pretend it never happened. It is an erasure of life unlike every other crime. It is worse in all senses, therefore, than torture or murder, worse than the destruction of cultural property and worse than slavery, even though it may include all those elements. That is why I think genocide stands unique, and why I think the amendment does not give way to a drip, drip of further encroachment.

Genocide is unique. Genocide is distinct. It is much, much worse than any other crime, even though it makes up others. That is why we have always reserved this power to the courts. We have always said that this is not a political tool. It is not a tool for politicians to wield against trade rivals or enemies. It is a charge that can be wielded only by a court. The way we have done that is to try to act together, and allow the charge to sit only with international courts. For years we could see why that was the case, because it ensured that we all acted together. If there was a charge and it was proven, we were all as one responding to an abuse against the whole of humanity. Genocide is a crime against the whole of humanity.

Sadly, the way the world has changed means that the obstacles we are facing in our international institutions is becoming overwhelming, so we have a choice. That choice is either to allow the current system to stand and to say that in reality we will never again recognise genocide, or to say that there is a way through this. There is a way through, and that is by trusting our institutions and our judges, and recognising that our judges and legal institutions are actually trusted worldwide. The House does not have to take my word for this—look at how many foreign cases are pressed through our courts. That is a choice that we have to make, and I understand the Minister’s comments. In fact, he has done an amazing amount of work in supporting Britain’s position overseas, defending our legal infrastructure and promoting our legal business around the world, so he knows better than anyone the respect in which we are held.