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Lord Howell of Guildford: Would the Minister agree-as I am sure that she would-that, as we are a co-guarantor of the comprehensive peace agreement in the area, we have a special duty to do everything that we can to preserve the admittedly fragile peace in time for a referendum to take place? In the longer term, looking to the more optimistic side, would she agree that if, and when, southern Sudan opts through a referendum to be an autonomous, separate country, as seems quite likely, there is a potential future that we should encourage of working very closely with neighbouring Kenya, Uganda and Tanzania in a sort of revived east African federation, which would really bring substantial prosperity and development to the whole region, where at present we just have bloodshed and war?
Baroness Kinnock of Holyhead: I thank the noble Lord. Indeed, I was in Uganda last week and raised exactly those issues with the President and others. They are very well aware of their need to focus on the needs of south Sudan. I was also struck that Kenya's Prime Minister Odinga is very engaged as well. We can feel reassured that there is a strong political push now behind ensuring that that huge country which they border has the kind of stability and security that will only be possible if they engage with south Sudan and with whatever happens after the referendum.
Lord Brett: My Lords, in answering this Question, I first declare an interest. I am a lifelong Manchester United supporter and a long-standing patron of the Manchester United Supporters' Trust. I congratulate Arsenal on their victory last night.
My honourable friend Gerry Sutcliffe, the Sports Minister, met the three football authorities-the Football Association, the Premier League and the Football League-on 8 February 2010 to discuss football regulation, governance and the national game.
Lord Dubs: I am grateful to my noble friend for that Answer. Is he aware that Portsmouth and a number of other football clubs are currently in serious financial difficulties; that British fans pay among the highest admission charges in Europe; that the money that many clubs take at the gate is pretty well all absorbed by the weekly wage bill; that some owners treat the clubs like playthings; that the Glazer brothers bought Manchester United with borrowed money and may damage that famous club through their efforts to recoup; and that we do not even know who owns Leeds United? It is a mess. Does he agree that British fans and British players deserve better than this? Will he encourage the football authorities to introduce a better system of voluntary regulation? Failing that, maybe the statutory path is the way we should go?
Lord Brett: My Lords, I can go two-thirds of the way with my noble friend. I certainly believe that the supporters of British football clubs deserve better. I also believe that it is the responsibility of the authorities to seek and provide better self-regulation. It is wrong to say that there have not been messages from government or, indeed, that there has been a lack of action. The football authorities have recently made significant moves to toughen regulations with early warning systems on tax debts, the introduction of transfer embargoes and help to monitor and curb club spending. I should like to pay tribute to the noble Lord, Lord Mawhinney, who is in his place, and to the noble Lord, Lord Triesman, both distinguished Members of your Lordships' House, who play a part in trying to bring that better self-regulation. We will continue to advise and assist, but it is not for the Government to regulate football. It is for the governing authorities and it is for the clubs to manage themselves.
Lord Mawhinney: I declare an interest, first, as chairman of the Football League and, secondly, as deputy chairman of England's 2018 World Cup bid. I thank the noble Lord for his kind words and for his recognition of the efforts that are being made to improve regulation in the world of football, on which I entirely agree with the noble Lord, Lord Dubs. Is the Minister aware that, in pursuit of our campaign against indefensible debt, the Football League has recently entered into an arrangement with Her Majesty's Revenue and Customs so that if, in any month, any of our clubs do not pay PAYE or national insurance, we apply sporting sanctions to them until they do pay?
Lord Brett: I was aware of the message that the noble Lord extends to the House. I am not sure that the whole House was aware of it. I am certainly not sure that the great British public are aware of it. The authorities are to be congratulated on that particular, and other, endeavours that they are making. Football is more than just another commodity. Football fans carry an allegiance. It is a community asset.
In my lifetime I have lived through paternal ownership, vanity ownership and international financial ownership. The latter seems to me to carry some dangers and requires a much stronger self-regulation. In the absence of that, there will be continuing pressure on clubs from dissatisfied fans. Today three more clubs were in the High Court. Southend and Cardiff City were given extended periods of 35 and 56 days. We hope that they will escape from going out of existence. However, HMRC has a responsibility to collect money owed to the taxpayer. We cannot have clubs running on the avoidance of paying their obligations to the taxpayer.
Lord Grocott: My Lords, will my noble friend acknowledge that one club that is recognised by the Premiere League and others as being particularly well managed financially, and which lives within its means, is Stoke City? Does he agree that this is in no small part due to an excellent chairman, born and brought up locally and personally totally committed to the club, as well as a splendid manager and a very talented squad of players? Will he join me in wishing them all the best in tonight's match?
Lord Brett: My Lords, I recognise a totally impartial speech when I hear one. Stoke City is indeed a good example, but there are others. We should not necessarily pray in aid solely British ownership; I happen to think that Aston Villa is also a well run club, and it has an American owner. It is not about physical ownership. I think it is astonishing, as does everyone else, that Leeds United fans cannot know who the directors of Leeds United are, but those are the vagaries of Swiss law. I hope that the endeavours of Ministers for Sport over a number of years, which will continue when the current Minister for Sport meets the football authorities again in June, mean that we will continue on the right path. In the mean time, we will do all that we can do. The Inland Revenue, or HMRC, as I should insist on calling it, looks to assist clubs. It does not seek to force them into liquidation-although one, Chester City, went into liquidation today-when there are other ways of finding means of providing the money and paying back debts within a reasonable period.
Lord McNally: My Lords, is the Minister aware that Watford Football Club lost its third game on the trot last night and is now only two points from relegation, and that recently the noble Lord, Lord Ashcroft, invested 37 per cent in that club? Is there a pattern here of the noble Lord backing losers?
Lord Brett: My Lords, if I were to extrapolate from Watford to the noble Lord's other interests-that is, the funding of particular political party candidates in a number of seats-I would expect the crowd at Watford to rise by about two percentage points, but I doubt whether its performance would improve at all.
The Financial Services Secretary to the Treasury (Lord Myners): My Lords, I understand that no amendments have been set down to the Bill and that no noble Lords have indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.
( ) where appropriate, direct the relevant authorities to act in accordance with the powers available to them under the relevant legislation"
Baroness Noakes: My Lords, it a pleasure to find oneself among friends again as we start this Committee. The Minister will recall our Second Reading, only two weeks ago. We had a constructive and good-tempered debate then, from which he will have learnt that we have considerable concerns about this Bill. The fact that more than 330 amendments have been tabled so far shows how deep those concerns are.
I move Amendment 1 and speak to Amendments 5, 20, 21 and 26, which are in this group. These amendments return to a question that has been asked about the tripartite arrangements, on and off, since 2007: who is in charge? The Treasury Select Committee in another place put that question formally to the Governor of the Bank of England when taking evidence for its report, The Run on the Rock, published in 2008. The governor famously replied:
Last summer, the Government announced in their White Paper, Reforming Financial Markets, that they would set up the Council for Financial Stability. The Treasury Select Committee's verdict is set out in its 14th report of 2008-09 as follows:
Legislation cannot achieve better co-operation between the three parties, but we can expect legislation to clarify responsibilities. I regret that the Bill does not do that. Under the arrangements that existed before the Northern Rock crisis, there was a Memorandum of Understanding between the three bits of the tripartite authorities. If this Bill becomes law, there will be formal terms of reference issued by the Treasury, a draft of which is already available, and a Memorandum of Understanding which is not available.
and for "coordinating or agreeing action". The draft terms of reference for the Council for Financial Stability, according to paragraph 15, are as a "monitoring and coordinating body"; the following paragraphs talk about considering things and discussing things. I do not expect the Memorandum of Understanding which will complement this to fill the gaping hole headed "Who is in charge?".
During the evidence sessions in the Public Bill Committee in another place, my honourable friend Mr Mark Hoban asked who was responsible for financial stability. The answer seemed to be that the Bank did a bit, the FSA did a bit and the Treasury does a bit. That is exactly the position that appeared to obtain before the Northern Rock crisis revealed so clearly that the tripartite arrangements did not work. When pressed, the representatives of the Bank of England and the
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with their powers. Amendment 26 is a related definition amendment. It is nonsense to think that the council is worth having at all if all it does is discuss and co-ordinate. Also, the council seems to be predicated on unanimity at all times and on all issues. Suppose that having looked at an issue-increased leverage in the banking system, perhaps, or the emergence of a new way to slice and dice risk-the council wants the FSA to alter the way in which it regulates banks. If everyone agrees, there is no problem. But what if the FSA did not agree, or did not think it was a high priority compared with the other activities, which of course go way beyond prudential regulation and supervision? My amendment allows the council to direct the FSA to act in accordance with its powers.
However, he went on to say that this was about whether decisions would be made by majority vote, and how decisions would be enforced. I hope that the Minister today has a more incisive critique. A Government who can draft a Fiscal Responsibility Bill which had no enforcement mechanisms whatsoever for its fiscal targets cannot complain about an amendment which seeks to make plain how the decisions are to be transmitted to the relevant tripartite authorities.
An alternative formulation for this concept is found in Amendment 21, which is based on the concept of the council actually making a decision-a notable absence from the current Bill. Amendment 21 is in the form of a new clause to be inserted after Clause 2; this is a sharper-edged version of Amendment 1. I can see no problem with the council telling the FSA or the Bank of England what to do, provided it was within its own statutory powers. However, there is a problem if the FSA and the Bank of England gang up on the Treasury: it would be pretty odd if two quangos could tell the Treasury what to do. It would certainly be undesirable, because those decisions could well involve taxpayers' money and we do not want unelected bodies having powers like that.
Therefore, I have tabled Amendment 20, which says that if there is no agreement on the exercise of the council's functions the Chancellor should decide. This deals with the question that eluded the Governor of
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Lastly, Amendment 5 in this group amends Clause 1(6). Subsection (5) refers to the Treasury preparing a statement about the exercise by the council of its functions, and subsection (6) says what the statement may contain, which includes,
the matters to which it must have regard, and its procedure. However, as in a lot of this Bill there is a great big hole where one would expect some substance. Amendment 5 adds to the list in subsection (6) by adding that it may,
Since the council itself has no powers other than of reviewing or co-ordinating under the Bill, it has to work through the FSA, the Treasury and the Bank of England, and my amendment simply reflects that.
The draft terms of reference to which I referred earlier include reference to responsibilities-in fact, more than a page is spent on this-and the earlier Memorandum of Understanding did the same thing. Specifying the responsibilities is clearly important to those who drafted these documents, so it seems curious that the Bill remains silent on the matter. Is it conceivable that the terms of reference could ever be drafted under Clause 1(5) without specifying a responsibility?
My party does not favour this Council for Financial Stability, as was made plain at Second Reading. We will come to that later. For the present, the Bill represents the Government's decision to create this new council and our task in Committee is to make sure that, however ill conceived it is, the drafting at least deals with very important issues of substance which have been around for a long time and have been ducked. I beg to move.
Lord Barnett: My Lords, when my noble friend replies to this amendment-if he wants to bother-will he be so kind as to explain to the Committee why on earth the Government have decided to put it on the House of Lords Order Paper at all? We all know that there is not a cat in hell's chance of the Bill getting anywhere near the statute book when the House rises or prorogues shortly after Easter. Will the Minister kindly explain why the usual channels have not at least got together to see if there is a consensus on any parts of the Bill, so that they can go on the statute book? Why is he asking the Committee to bother looking at the Bill, knowing very well that there is no chance whatever of it appearing on the statute book?
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