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Column 89Finally, on the scope of the regulations, I should mention the two new certificates that I am requiring. First, the directives require member states to
"require every insurance undertaking to have sound administrative procedures and adequate internal control mechanisms".
Although many companies do have fully adequate systems, others need to make improvements. Moreover, systems need to be progressively updated to ensure that they remain adequate.
In response to our original proposal to implement this requirement, companies expressed concern that an inappropriate form of certificate would lead to an escalation of audit costs, well beyond what could be justified by the benefits flowing from improved systems. In the regulations that I made recently I have reduced the requirement to a certificate listing the published guidance with which a company's systems comply.
I propose also that, from 1 January 1996, directors should be required to certify the general adequacy of the financial control systems that they have to meet the various regulatory requirements. I need to consult further on the form of such a certificate and will bring forward regulations in due course. This advance notice should prove adequate to allow those companies who need to make improvements to do so in good time.
The third life directive requires life companies to ensure that premiums for new business are sufficient, subject to certain conditions, to meet their commitments to policyholders. In addition to introducing that principle into the legislation, I am requiring the appointed actuary to certify the adequacy of the company's premium rates. It will be important to be able to confirm, in response to any inquiries that we may receive, that a company's rates are adequate, and the certificate should serve to provide that confirmation.
All member states are drafting comprehensive regulations along the lines of those that I have laid before Parliament. Some member states will implement the directives on time, as we will by the approval of these regulations ; others, alas, will be late, although for some the delay may only be a matter of a few weeks.
Nevertheless, to ensure that there is no gap in regulation of United Kingdom branches of companies with their head offices in a member state that has not implemented on time, I have included a transitional provision that will allow the Secretary of State to continue to regulate such branches until such time as those states have fully or substantially implemented the directives.
The House has fully supported the single market generally and, in relation to these regulations, the single market for insurance in particular. As I said at the start, the directives reflect closely the United Kingdom system of supervision. With the abolition of prior approval of premium rates and policy wordings, and the reduced annual compliance returns, insurers will have more freedom to operate in the single market and offer the highly innovative and competitive products that they have been able to develop in the United Kingdom over the years. Although in practice there will be no big bang on 1 July, United Kingdom insurers have a lot to offer policyholders in the EC and, before long, the EEA.
Mr. Hawkins : Will my hon. Friend simply bear in mind--as he has sought to do--the fact that one of the difficulties for United Kingdom insurers competing with other investment products that are not insurance policies is
Column 90that, even under the regulations to implement the third life directive, UK insurers will be required to produce ever more information, and we do not have an equivalent requirement for regulations to be provided by banks and buildings societies competing with insurers in the provision of investment products ? Will my hon. Friend continue to look, as he has in drafting the Government's response to that directive, at the burdens of regulation on UK insurers ?
Mr. Hamilton : I need not assure my hon. Friend that deregulation and the burdens that the Government can impose on businesses are at the top of my agenda. Naturally, we must strike a balance--as the Foreign Secretary often says--but the Government may pay attention to differing interests, and the protection of policyholders is vital. We must be certain that when we require firms to fill in forms and provide information to Government, that information is worth collecting and the costs that we impose are justified by the benefits to the public. I assure my hon. Friend that that technique has run throughout my consideration of how we might implement the directives. I am currently looking at a variety of ways in which we can reduce the bureaucratic form-filling burden imposed on insurance companies without prejudicing the wider interests of policyholders and others. From time to time, particularly with the recent improvements in technology, it will be possible for us to streamline our processes of information obtaining, retrieval and use. I hope that, in time, the costs to insurance companies of the regulatory requirements that the Government impose will diminish. Compared to the current costs of operating elsewhere in the European Community, the highly deregulatory regime that will now be introduced will substantially reduce the costs of British firms. Because they have operated in a much freer, more flexible market in Britain over the years, they should be more nimble of foot and, perhaps, more surefooted in the development of innovative products than their potential competitors across the Channel. A combination of those two things should provide many profitable business opportunities for our companies. I hope that these regulations will help United Kingdom insurers to remain strong and competitive in Europe through the introduction of home state control, and I commend them to the House.
Mr. Stuart Bell (Middlesbrough) : There will be heartfelt relief in the financial centres of Europe that, on 1 July 1994 when the directives come into force, they will not have the effect of "Big Bang". We are all grateful to know that, as one Big Bang in the City of London in a lifetime is enough for us all.
The Minister's speech was interesting as he spoke about future regulation in relation to how derivatives affect the insurance sector. I am glad to hear that the Government are concerned about the derivatives market, which is a mystery to us all. Output options and share options can be hedged against different currencies and I surmise that the present fall in the stock market is indirectly caused by margin calls on derivative contracts in the United States. It is important to put on record on the Floor of the House our overall concern about the future of the derivatives market. My response to the Minister's speech follows on from his winding-up of our previous debate on the second
Column 91directive. Those of us who have been through the first and second directives are now happy to be at the third one. When the Minister introduced the second directive, he said that the Government attached high priority to the completion of the single market in insurance. The second directive and the regulations that we are discussing represent a small but useful step. The Minister said that he looked forward to bringing before the House regulations to implement the third directive, which would grant a single passport to European Community insurers and make the single market a reality.
It is always a pleasure to follow the Minister and equally pleasant to speak on this directive without repeating the same speech as I made on the second directive. In creating a single passport for insurers, we are mirroring directives already in effect for banks and building societies. That fact might strike a chord with the hon. Member for Blackpool, South (Mr. Hawkins). It is now possible for three strands of our financial market --banks, building societies and insurers--to do business in other member states on the basis of the authorisation that they receive in their head office's member state. That will encourage, rather than detract from, the concept of bancassurance.
Over the past few years, we have seen how markets have been changing in that respect. Banks have set up their own life assurance companies ; building societies have entered into alliance with life offices ; building societies want to become banks ; and a bank has even wanted to become a building society--or rather, take over a building society. As the directives flow together, we may see the continuation of the trend towards bancassurance. So, too, will the trend within the global economy of national insurance companies joining forces with continental insurance companies to get the best out of the single market through the directives.
We welcome the news that Commercial Union has sought to avail itself of the advantages of the single market by buying into France. It will obviate its need to enter the market of its own accord with its celebrated initials, CU, which have an entirely different connotation in France. Its acquisition of the whole of Abeille Assurance, the whole of the existing life assurance company, Abeille Vie, and 50 per cent. of the new life assurance business coming through AFER, the French savings association, show the advantages of the single market.
The Minister said that the House has generally supported the single market in the years since the Single European Act 1986. Certain sectors of the House have misunderstood it, but it has received a friendly welcome overall. In the dynamic modern economy that is to deliver opportunity to all its people--not merely to a limited number--as advocated by my hon. Friend the Member for Sedgefield (Mr. Blair), we have no hostility to bancassurance.
Mr. Hawkins : The hon. Gentleman has drawn our attention to a specific company's recent acquisition of a French company, but I am sure that he would wish to take the opportunity of joining me in congratulating a range of UK insurance companies which, for many years, have developed interests on the far side of the channel. Several life companies, including one that I used to work for but in which I have no continuing interest, have for many years
Column 92had extremely detailed links with, and in some cases ownership of, continental insurance companies and/or savings institutions.
Mr. Bell : I am grateful for the intervention of the hon. Gentleman and for the fact that companies in Germany, Italy and France have involved themselves in our country and have bought into insurance companies here. There is therefore a two-way traffic as a result of the single market and we see that, in an ancient phrase but one which is nevertheless useful, we take in each other's washing when it comes to insurance and we both benefit from the free market.
On the bancassurances, we wish gently to point out to the Government and the Minister that we must worry a little about the consequence of the horizontal mergers or takeovers where the result of such takeovers is that the financial markets are dominated by no more than six or seven of the largest producers and distributors of financial products. Although we have all agreed on the Floor of the House that it is important that the single market should be continued and balanced and that we should all benefit from it, it does not yet offer the celebrated level playing field.
Many insurance companies seeking to make a major move into continental Europe have to be sure of the route that they are taking. Acquisition is one route ; going it alone is another. The essential element of a successful penetration of the continental European insurance market is access to distribution--not unlike in our own market. Many of the major broker networks are tied in to existing insurance companies and banks are increasingly moving into the insurance business, so new entrants find it extremely difficult to establish a major foothold.
In relation to the earlier intervention of the hon. Member for Blackpool, South, aided and supported indirectly by the hon. Member for Southend, East (Sir T. Taylor), there are other elements to the so-called level playing field. Protection--that pariah to the free market--can also raise its head and may be written into the single market through differing tax regimes. They may reduce the ease with which insurance products can be transported across borders. They may indirectly protect the home market for the local insurance player. Local legal requirements, as regards policy wording and the form of cover that insurers need to provide, are but one further complication that insurers attempting to move into the new market must confront. Notwithstanding the single market, therefore, the home team, as with most home teams, will continue to have an advantage simply because it is the home team. The footballing cogniscenti are no doubt widespread in the Chamber tonight--we are, after all, no doubt watching the world cup, as my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) said from a sedentary position. In terms of the level playing field, it is rather like Yeovil Town playing Sunderland at home in the FA cup. [Interruption.] The hon. Member for Leeds, North-East (Mr. Kirkhope) tut-tuts from a sedentary position, but I am sure that as a Whip he wants us all to get home early tonight and would not wish to prolong my speech by provoking me into extending it.
The directives before the House amend mainly, as the Minister said, the Insurance Companies Act 1982 and they also make consequential changes, which were the words that he used, to the effect of the Financial Services Act 1986. We can see that the home member state shall be
Column 93solely responsible for the control of an insurance company's financial position, including compliance with solvency margins, technical provisions and matching requirements.
I notice that I have mentioned the phrase, "solvency margins" and the Minister said that those directives would have some impact on byelaws at Lloyd's of London. This is the time of year when we are told that we should be worrying about the solvency margins of Lloyd's. This is the time that we are told that Lloyd's may be in a meltdown situation. This is the time that accountants begin to worry whether Lloyd's is in full compliance with its solvency margins. I am always reassured to know that Lloyd's has about £6 billion of assets and that it can meet its solvency margins many times over, but it is right to reflect on the anxieties that are felt and there is no better place to reflect them than the Floor of the House of Commons. Lloyd's is an important--an integral--part of our insurance market. It is an integral part of the City of London. We wish the Lloyd's management well in their endeavours to put the past behind them and to get on with the future, but it is right to place on record many of the anxieties.
I was discussing the supervisory requirements in the directives and the ways in which they will affect the regulation of insurance companies whose head office is in our jurisdiction. We are all aware, and I think that we would all agree, that the Government have made a dog's breakfast of their regulatory regime. Yet that is the regime that should govern the substance of the directives. Is it self-regulation ? Is it independent regulation ? Is it statutory regulation, all regulation being underpinned by the Financial Services Act 1986, which is being amended tonight ? Or is the subject too perplexing ? Even the City of London had become divided. Those people who will do business in our country under the directives will know that when it comes to their margin requirements they will look to the Department of Trade and Industry and its 90 or so insurers' supervisors, but to whom should they look to regulate their package of products and the marketing of those products ? We have the Personal Investment Authority. The proposal to establish the PIA has been in the ether for about three years and it has managed to spend about £6 million even before it opens for business. My hon. Friend the Member for Edinburgh, Central (Mr. Darling) said that it might now be appropriate for the Chancellor of the Exchequer to introduce legislation putting in place direct regulation, which would have the advantage that those continental European insurance companies wishing to set up here under those directives might know how they will be regulated. I can only repeat the words of my hon. Friend the Member for Edinburgh, Central in the debate on private pensions :
"The time has come for us to recognise that direct regulation is necessary. By direct regulation, I mean regulation by the SIB which would be answerable to Parliament."--[ Official Report , 30 March 1994 ; Vol. 240, c. 1027.]
Reverting to the subject of the PIA, it is my view, and that of Her Majesty's Opposition, that it has yet to satisfy many of its would-be members that it knows the difference between aims and methods, training and competence, costs and standards, public interest and commercial interest, whether they have a prospectus or a game plan, a consultative document or an indicative document--in short, that it knows what it is doing. The question whether
Column 94the Department of Trade and Industry should be responsible for insurance supervision or whether that supervision should be part of the work of an overarching statutory organisation is perhaps a debate for another day.
If I may quote my hon. Friend the Member for Sedgefield again--we are all anxious to have it on record that we are quoting him left, right and centre at this time
"We have to set out a new economic agenda for what will be very shortly a new millennium".
There will have to be a full debate on statutory regulation of the City of London. That will be a part of a new economic agenda as to the appropriate way of regulating our insurance industry, within an overarching framework of statutory regulation.
Mr. Hawkins : Will the hon. Gentleman consider, when calling for statutory regulation, that the much-vaunted statutory regulation of the Securities and Exchange Commission in the United States did not stop a large number of extremely complex, and costly to consumers, frauds happening in the USA ? He might wish to consider whether statutory regulation, as opposed to the Securities and Investments Board here, would therefore be any answer.
Mr. Bell : I am happy to inform the hon. Gentleman that, in the first instance, we would not propose a full SEC. As for the second, it was through the SEC that the whistle was blown on the Guinness affair. The statutory regulation had a serious consequence in that context. It also would have ensured that there would be no prospect of the sort of catastrophe that has occurred at Lloyd's in the past few years.
As you are in the Chair, Mr. Deputy Speaker--as alert as ever--I do not intend to wander too far from the subject of the directives. We are grateful to the Minister for keeping his promise of 12 January 1993. We are glad to see that all member states are introducing the enabling legislation and that France, Portugal, the Netherlands and possibly Denmark and Germany expect to implement the regulations by 1 July. We noted the Minister's hope that other states would follow. We can only say that the mills of God grind slowly but they grind exceedingly small, even in terms of regulation through the European Community--or the European Union. Other member states will follow in the next two to three months.
It has long been the ambition of the much-maligned European Commission to make it possible for insurance companies established in any member state to provide services freely throughout the European Union. It has long been the Commission's ambition for insurers to be subject to similar controls in each of the member states where they might wish to open offices. It has long been its ambition for policyholders to have a wider choice of insurers, and to be able to cover their risks--wherever they are situated within the Union--through the insurer of their choice. For the United Kingdom, those ambitions have come closer tonight.
Question put and agreed to.
That the draft Insurance Companies (Third Insurance Directives) Regulations 1994, which were laid before this House on 24th May, be approved.--[ Mr. Kirkhope. ]
Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) (European Standing Committees).
-- That this House takes note of European Community Document No. 4187/94 and the unnumbered Explanatory Memorandum submitted by the Department of Employment on 23rd May 1994, relating to vocational training (LEONARDO DA VINCI programme) ; shares the Government's view that appropriate transnational actions on vocational training can add value to national training activities by enabling exchanges of best practice ; and endorses the Government's view that such actions must be cost-effective and fully in line with subsidiarity, in particular as regards consistency with the recognition in Treaty Article 127 that member states are responsible for the content and organisation of vocational training.-- [Mr. Kirkhope.]
Question agreed to.
Motion made, and Question put forthwith pursuant to Standing Order No. 101 (5) (Standing Committees on Statutory Instruments, &c.) That the draft Litter (Northern Ireland) Order 1994, which was laid before this House on 3rd May, be approved.-- [Mr. Kirkhope.] Question agreed to.
Motion made, and Question put forthwith pursuant to Standing Order No. 101 (5) (Standing Committees on Statutory Instruments, &c.) That the draft Industrial Tribunals Extension of Jurisdiction (Scotland) Order 1994, which was laid before this House on 10th May, be approved.-- [Mr. Kirkhope]
Question agreed to.
Motion made, and Question put forthwith pursuant to Standing Order No. 101 (5) (Standing Committees on Statutory Instruments, &c.) That the draft Industrial Tribunals Extension of Jurisdiction (England and Wales) Order 1994, which was laid before this House on 10th May, be approved.-- [Mr. Kirkhope.]
Question agreed to.
Motion made, and Question put forthwith pursuant to Standing Order No. 101 (5) (Standing Committees on Statutory Instruments, &c.) That the Farm and Conservation Grant (Variation) Scheme 1994 (S.I., 1994, No. 1302), dated 13th May 1994, a copy of which was laid before this House on 16th May, be approved.-- [Mr. Kirkhope.] Question agreed to.
That Dr. Charles Goodson-Wickes be discharged from the Select Committee on Members' Interests, and Mr. William Etherington and Mr. Andrew Mitchell be added to the Committee.-- [Mr. Kirkhope, on behalf of the Committee of Selection.]
That Mr. Andrew F. Bennett be added to the Liaison Committee.-- [Mr. Kirkhope, on behalf of the Committee of Selection.]
Motion made, and Question proposed, That this House do now adjourn.--[ Mr. Kirkhope. ]
Mr. Iain Duncan Smith (Chingford) : I rise to address a packed Chamber at what I would normally describe as a late hour, but tonight I have to describe it as a ridiculously early hour. Hansard would pick up my lie if I said that it was late when in fact it is particularly early. I know that that is welcome to hon. Members on both sides of the House, and I do not wish to extend the debate until 10.30 pm, as I could do if I wished. I assure my hon. Friend the Minister that, although I intend to take a little time, I do not intend to take as much as that.
I am pleased to see that my hon. Friend the Member for Surrey, North-West (Sir M. Grylls) is present, as I know that a constituent of his has a problem similar to the one that I am about to describe. I hope that the hon. Member for Vauxhall (Ms Hoey), who is concerned about issues relating to this, will also be able to speak if I finish early.
I wish to examine the position in which a constituent of mine finds himself, and to highlight a major problem in the way in which the Football Association conducts itself. An intolerable trading environment has led to a complete lack of free market--not a position that I would expect the Government to support. The Football Association has two positions simultaneously : it is both poacher and gamekeeper, watchdog and profit- maker. It can exclude people from the marketplace, while at the same time entering that marketplace to promote its own products, which may or may not have sponsorship. Oddly enough, I have received a large amount of post since I took up the matter and secured this Adjournment debate. I confess that I was surprised by the interest engendered by something as small as an Adjournment debate among ordinary people around the country and others involved in businesses. They have written to me drawing attention to difficulties faced by those who want to get their products into the marketplace but are forced to abandon their objective because of the intransigence of the Football Association. My constituent, Steve Aldridge, received the UK patent for a game called Futbolito--a mini-football game-- in 1989. The concept comes from South America, and has been used there. Having seen the game, I believe that it provides a stepping stone to the real game of soccer, giving children basic skills and an understanding of all the necessary features of the game. It is played by small teams using small goals that can be set up outside in limited environments such as playgrounds, or even on playing fields.
In 1989, my constituent contacted the Football Association to ask for consideration to develop the mini-football game for the benefit of the national game. He was told by the FA's director of coaching, Mr. Charles Hughes, that pursuing the project could be of no particular value to the FA ; that was after some examination of it. My constituent, however, continued to believe that there was a genuine need and demand for the game, and went on to launch Futbolito in 1992.
In April 1992, my constituent received a letter from the FA saying that it was going to launch mini-soccer, which would be the only--I stress the word "only"--approved game for youngsters in the six to 11 age range. The game
Column 97was to be sponsored by Coca-Cola, which I think sets the matter in a slightly larger perspective. Coca-Cola also promoted and sponsored the national soccer show in 1993, at Birmingham's national exhibition centre.
Interestingly, one of the problems encountered by my constituent was the fact that both he and his product Futbolito were prevented from being present. He gathered later on, and I have discovered, that Coca-Cola wanted the mini-football that it had sponsored to have exclusive rights at the event. Only after it withdrew its sponsorship did the organisers tell my constituent that he could demonstrate his game and attend the show. My constituent's problems continue--a catalogue of problems, which illustrate the fact that the FA has a tremendous amount of power. It seems that, with just a nod and a wink, it can restrict the possibilities for people such as my constituent to pursue their rightful business interests.
Despite oral and written approvals of my constituent's teaching and coaching aid by FIFA, and an oral approval of the equipment by the English Schools Football Association, the Referees Association and others such as the Bobby Charlton soccer school, the FA still denies approval for the product. The irony is that in many discussions the ESFA gave my constituent plenty of assistance, expressing the view orally that the equipment was perfectly all right and that it hoped that he would receive FA approval. In trying to secure written approval from the English Schools Football Association, my constituent wrote some 20 letters, but the association did not reply. It was happy to talk on the telephone, but it never put anything in writing. I suggest that that indicates a certain fear of what might happen should it break the line and state in writing that it considered the product good.
My constituent has never sought sponsorship or other finance from the FA. He really only wants approval for his game, so that he can go out and compete with other products in the market. The only product that is FA approved at present happens also to be the FA's product. Since being denied the FA's approval, Mr. Aldridge has been virtually put out of business. Were it not for his tenacious attitude in making the project work, by now he would have gone under. He has been invited to demonstrate his product at certain venues, in particular at the start of a football match in Yeovil in August 1992 and, later that month, in Loughborough. However, on both occasions he was told at virtually the last minute that he could not demonstrate his product.
Having been refused approval for his product, Mr. Aldridge has found it virtually impossible to demonstrate Futbolito. It appears that once the FA discovers that he is about to demonstrate his product, it find ways to contact the organisers and sponsors and--surprise, surprise--the invitation to demonstrate is hurriedly withdrawn.
Sir Michael Grylls (Surrey, North-West) : The dismal and worrying catalogue of events that have beset my hon. Friend's constituent have been almost exactly reflected in the experience of one of my constituents, Mr. Mickey Clarke who lives in Egham. He invented a similar mini-football game and has been treated disgracefully by the FA. My hon. Friend the Minister has been given the facts and I know that he is considering them carefully.
The case of my constituent adds force to what my hon. Friend the Member for Chingford (Mr. Duncan Smith) has said. Something should be done. The Football Association seems to be omnipotent. If it were a commercial company
Column 98it would be outlawed by the Office of Fair Trading. Indeed, if it were trading across European Community boundaries it would be fined heavily by the Commission. Perhaps the OFT could do something. I certainly support my hon. Friend in all that he has said.
Mr. Duncan Smith : As my hon. Friend clearly explained, his constituent has a problem similar to that of my constituent. Indeed, his constituent has also written to me with copies of his correspondence--not because he expects me to check up on my hon. Friend, but because his case bears such a remarkable similarity to the issues surrounding my constituent's problem. I know that my hon. Friend has assiduously pursued his constituent's case, probably with much the same results as I have achieved on behalf of my constituent. I wish my hon. Friend's constituent the very best of luck, although I gather from the correspondence that he is having tremendous difficulty getting any results. Indeed, he is probably shorter of his objective than my constituent is.
The main problem for my constituent relates to demonstrations. On one occasion he was prevented from demonstrating Futbolito at an English Schools Football Association event literally as he was about to go on to the pitch. After a series of telephone calls from the Football Association, the ESFA was left in that hazy area of not being told directly "thou shalt not", but having it made quite clear that if it were the FA's decision, it certainly would not do so. I gather that in the football world that is tantamount to saying, "Don't do it." The ESFA then withdrew my constituent's invitation as he was about to go on to the pitch to demonstrate the product. Yet before inviting him it knew that he did not have official FA approval. The truth is that the FA did not like the fact that my constituent had been invited to demonstrate his competitive product. It is difficult for my constituent to promote his product to schools. Imagine his position. He writes to a school and suggests that he goes there to demonstrate his product or talk about it. The school-- especially if it is an inner-city school--looks at his literature and thinks the product is a good idea. Then the person reading the literature realises that he does not have FA approval, or perhaps in conversation with him they ask, "Does this product have FA approval ?" The answer is no, in which case they say, "Well, we shall probably look instead at the FA approved products," little realising that in fact there is but one approved product, which also happens to be the FA's product. The schools do not understand all that ; they simply look for the FA badge of approval. That is right because they want something approved on the grounds that it is reasonably safe and is a good game that teaches children the right skills. That is what they are looking for, but it is not the essence of why FA approval has been withheld.
The FA makes money from its approved version of mini-football. It also sells a variety of other things over which it has control of approval. Like Futbolito, the FA is a limited company and therefore quite legitimately--I do not criticise this--seeks to make a profit from its mini-football game. However, it has a massive advantage as it can at the same time--this is my major point--deny its competitors the official approval that it gives to itself.
There are differences between the two games. One is smaller than the other and in one sense they do not directly compete--yet still approval is not given. What is the FA so
Column 99scared of that it refuses to give my constituent an opportunity to compete in the open marketplace ? What is so much to be feared that my constituent cannot be allowed to demonstrate his game so that those wishing to buy a game can make a decision on whether his is worth the money, whether it is a good game, whether it is cost-effective and all the other aspects that consumers take into consideration in making a choice ? Instead, only one product is available.
I do not want to go into detail about who stole whose idea. That is always a grey area. I am not saying that the FA set out to steal my constituent's idea, although there are disputes on the margins about when its product was devised and whether it got the idea in some part from my hon. Friend's constituent or from mine. The real point is that there should be a proper, competitive marketplace, but the FA is preventing that by refusing people such as my constituent a fair crack at selling their products.
My son and daughter attend an inner-city school in London, which has a limited tarmac playing area about half the size of the Chamber. It would be perfect for my constituent's product, but would not be right for the FA's larger mini-soccer product. Such schools are denied the opportunity to consider Futbolito and therefore to encourage their children to kick a ball around.
I am passionate about the concept of team sports, as is my hon. Friend the Minister. I criticise both this and past Governments for laying less and less emphasis on the need for children to compete with each other, learning what it is like to win at the same time and, more importantly, learning what it is like to lose--to learn to live with failure as well as with success. The best way to do that is go out and kick a ball around or, in the summer, to hit a cricket ball--the sort of things that we used to enjoy doing when we were young, but which are now rarely available for children. They spend far too long sitting in front of computers playing computer games ; they have forgotten what it is like to compete.
We must try to reverse that trend. My hon. Friend the Minister is one of the great supporters of the concept of team sports. This debate is not just about my constituent, although his case is vital ; it not just about the fact that we no longer have a proper, competitive marketplace, although that is also vital ; it is about the fact that at the heart of the problem there is a sickness that affects the way in which we can draw talent from all our children. It is no wonder that we find it difficult at times to get people into coaching and into senior sides and end up producing a side in England, Scotland, or Wales that does not go off to the world cup. It is ironic that I am holding this debate tonight when I watched television on Saturday night and applauded the Irish for their fantastic effort in beating the Italians. I applauded them because they showed every bit of the determination and drive that we should have done in this country. I do not necessarily blame just the players ; I blame the whole system and at the heart of that system is the Football Association, which illustrates that sickness by the way in which it has behaved towards my constituent and others. I must press my hon. Friend the Minister on the matter because we need to do something about it. I am the last person to say that something must be done, but I have to
Column 100say it in this case because we have a problem. It is not only about sorting out how football is played, but about the fact that there is a lack of competition in that marketplace. We are allowing the Football Association to act almost as gods. My hon. Friend and I have had considerable correspondence on the matter. Although the Government's position is that it is not their place to interfere in the matter, and I understand that argument, the booklet about mini-soccer states :
"The sponsorship of Mini-Soccer by Coca Cola Great Britain has been recognised by an award under the Government's Business Sponsorship Incentive Scheme for Sport, Sportsmatch', which is administered in England by the Institute of Sports Sponsorship." It appears, therefore, that we are putting some money towards the product. I am not questioning whether that was right or suggesting that this sponsorship is in any way is wrong. I am questioning the decision that we should do nothing when clearly something needs to be done. We have an entre e because we gave the FA--reasonably enough, it would be appear--sponsorship to deal with the problem of getting children on to the pitch to play football, so let us ensure that there is proper competition and that there is not unfair use by the FA of its position.
I believe that there needs to be a separation between the FA's right to approve products and its right to produce products for itself. Let us start there. Let us find a way to separate those powers and we may see a Football Association which moves forward to protect and encourage the game across the country. We must do that and get those basics right, because my constituent, who worked very hard and put up a large amount of money to try to get his product off the ground, is being forced towards bankruptcy because he cannot get a fair shot at the market. Most people listening to or reading the debate would think such a situation absurd and I demand that we do something about it : some mechanism must be found to get inside the FA and sort it out.
Ms Kate Hoey (Vauxhall) : I am grateful to the hon. Member for Chingford (Mr. Duncan Smith) for allowing me a few moments to speak in the debate. I congratulate him on his persistence in trying to get the topic discussed, because, under the rules of the House, it has been extremely difficult. However, we now have a useful debate raising the subject of the Department of National Heritage's responsibility for sport.
Like the hon. Gentleman, I shall not take advantage of the fact that we could talk for another hour and three quarters on this topic or widen my remarks too much to go into the Department's responsibility. However, the topic raised by the hon. Gentleman is a useful opportunity to raise one or two points about the Football Association generally, for which the Minister, in his responsibility for sport generally and, especially, for football, which is the national game, loved and cared for by so many millions of people, has ultimate responsibility, even though the FA is responsible for the game.
I agree whole-heartedly with the hon. Gentleman and his views on Futbolito. I have also been involved--obviously not as much as the hon. Gentleman-- with the case. I also know about the other case to which the hon. Member for Surrey, North-West (Sir M. Grylls) referred.
However, I shall raise first an issue of concern to me : the scheme called Soccerfun. It is also a new, innovative
Column 101scheme, which was devised by Mr. Terry Densham. It is in a similar situation, although it has not quite gone to the length of the case about Futbolito. It is also a game for five to seven -year-old boys and girls in family groups. It has been developed, there have been many meetings and it has been started following meetings in Leeds, Watford and Manchester.
The Junior and Family Football Supporters Association asked Soccerfun to introduce sessions to eight clubs during the summer of 1992. It was proposed, if the scheme was successful, to provide the other 67 major football clubs with the results and to recommend the introduction of Soccerfun. The condition, once again, was that the FA had to give approval in writing. Unfortunately, in spite of repeated attempts, meetings and discussions, two years later a dialogue is still continuing, but absolutely nothing has happened. It is just another example of the way in which the FA use its power to control and its power to divide and decide what it wants to do and what is in the best interests of football.
I think that the average person in the country who cares about football would say that the last body in Britain that could organise, care and understand football is the FA, because it has had a series of failures. If people are absolutely honest, they would not blame the England players or even the England manager, but they would blame the system in this country and the FA. The FA is responsible for football in the country and it has not served the game or the supporters well.
There has recently been quite a lot of publicity about the charges and penalties as a result of the difficulties and scandals happening in football, especially relating to the problems at Tottenham Hotspur. Much as I want to see the underhand dealings, the kickbacks, the bungs in the envelopes and such matters sorted out, the way in which the FA has responded and dealt with the problems at Tottenham Hotspur has not done the attempts to get to the bottom of the matter any good whatever.
I remind hon. Members that the FA set up a commission almost a year ago to look into those charges of financial dealings and nothing happened for months and months. Finally, the only occurrence has been that the chairman of Tottenham, Alan Sugar, went to the FA and produced some of the background, which he had found out since he joined the club--I do not want to get into the difficulties between Alan Sugar and Terry Venables--and there was no doubt that Tottenham came clean with the new chairman and produced as much documentation as they could. As a result, the club has been very badly treated. There is no doubt that it should have been fined, although, interestingly, the person responsible for most of the matter-- Irving Scholar--is sunning it in the south of France and getting away with absolutely everything. The very least that the FA should have said was that Irving Scholar should have absolutely nothing to do with any football club and should never be allowed to have anything at all to do with football in this country. It has not even said that. The FA has taken the easy route out. It has punished the supporters ; those people who pay their money week in and week out to watch Tottenham, when the team have not been doing especially well and when they have been doing well. Those people have paid their money on wet and cold nights and they have been punished. Indeed, the entire club is being punished for something for which the people who are curently running the club are not responsible. It is extremely unjust. It raises the question whether a vendetta
Column 102might be being waged by the FA against Tottenham in particular because of the difficulties that there were between Terry Venables and Alan Sugar. It would not do now, of course, given that Terry Venables has been appointed the manager of England, for him to be in any sort of difficulty. We must question whether the FA is prepared to get to the bottom of the financial irregularities. It should be taking a much more serious view and not picking on one club and using it as a scapegoat.
The FA should be setting up independent tribunals to examine the ways in which players are sold from one club to another. There should be an independent tribunal system. There must be a great deal more control of agents. There was the ridiculous situation over the past few days concerning Eric Hall. I do not think that any player in this country would want Eric Hall to represent him. On the other hand, there are some good agents who are willing to be regulated. They are willing to put all their financial dealings through the FA. The association should be taking the lead from the good agents who want to work properly for the players.
The FA fouled up the appointment of the England manager. It is to be questioned whether it is capable, as constituted, of running the game. It is all very well saying that it is the governing body of soccer and we should leave it to run things.
Soccer is an important part of our sporting and cultural life and it matters what is happening to it. Therefore, it is the responsibility of the Minister to be aware of who is running the FA. Who are the sort of people who are running it ? Is it good enough to have people like Charles Hughes running the coaching system ? The Minister should adopt a much more hands- on approach. He should be doing much more to knock heads together, to lay down guidelines and to insist that certain things are done. Ultimately, the average soccer supporter has only the Minister to help to change things. I hope that he will take on board some of the changes that are necessary.
The way in which the FA has handled the television coverage of soccer is disgraceful. It has allowed television companies to decide when matches will be played. It has played into the hands of people who are interested only in making money. I recognise, of course, that clubs need to be financially sound. We want clubs to have sufficient money to enable them to buy players, for example. In the present climate, however, it is the ordinary punter who is suffering once again. I am talking of the person who goes along to a match, pays his money and tries to watch football. He has to go through the hoop to watch matches on a Monday evening. He travels long distances and pays large amounts of money. Such circumstances should not have been allowed to develop.
One of the problems is that football is being run by people who are still living in the past. They have not moved into this century and they are certainly unprepared to move into the next. They are not in tune with the modern game. We have a responsibility in the House to take an interest in what is going on.
Another problem is that many people, including some hon. Members, do not like criticising the FA because they like getting free tickets. It is wrong that, even in the House, we cannot make it clear that we think that there is a great deal more that could be done to clean out the game and to ensure that it is run by people who have an interest not only