Lord Faulkner of Worcester (Labour)

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as vice-chairman of the Cardiff Millennium Stadium.

The Question was as follows:

To ask Her Majesty's Government what are the arrangements for the tax treatment of foreign footballers playing in final matches in European competitions at stadiums within the United Kingdom; and what are the likely consequences of these arrangements for winning the rights to stage finals in the United Kingdom.

Lord Davies of Oldham (Deputy Chief Whip (House of Lords), HM Household; Labour)

My Lords, the Government do not withhold tax from payments made by non-UK football clubs to their employees when they play for their club in team competitions in the United Kingdom. Non-resident footballers may be liable to UK tax on payments relating to games played in the UK and would have to complete a tax return for any UK tax liabilities arising. The legislation and its implementation have remained unchanged for many years.

Lord Faulkner of Worcester (Labour)

My Lords, I thank my noble friend for that Answer. He will have seen press reports at the weekend that according to UEFA the Football Association's bid to stage the 2010 Champions League final at Wembley was dismissed for the reason that Her Majesty's Government, unlike the authorities in Germany and Spain, could not give an undertaking that the players taking part would not be subject to British taxation. As my noble friend knows, UEFA takes the view that they should be taxed only in their country of domicile. As the Government's position may have been misunderstood, would Ministers allow my noble friend Lord Triesman to get back in touch with Mr Platini and make it clear that we are anxious to see the 2011 Champions League final at Wembley and indeed the 2012 final at Cardiff? Will he ensure that no taxation issues stand in the way of that or of our staging other international events, such as the ICC's World Twenty 20 Cricket Cup in 2009?

Lord Davies of Oldham (Deputy Chief Whip (House of Lords), HM Household; Labour)

My Lords, the Government are concerned to safeguard the interests of international sport in terms of its performance in the United Kingdom. But, of course, we did stage the European cup finals in 2002 and 2004 under the tax arrangements that are still in force and have obtained over the past two decades. It may be that UEFA has misunderstood the position, which has caused it to make this decision on 2010—but we note that it is leaving open the decision on where the final should take place in 2011. Wembley will undoubtedly be a key bidder. There is time for us to clear up this matter.

Lord Davies of Oldham (Deputy Chief Whip (House of Lords), HM Household; Labour)

My Lords, I was aware that my noble friend was chair of the Football Association. I emphasise that we are at present pursuing a tax regime which has ensured in the past that these games have come to the United Kingdom. If there is a change in the situation, of course we will examine it with the greatest care, but the change seems to have occurred in other countries. This country has reciprocal bilateral arrangements with other countries, made on the basis of firm agreements. Therefore, we will have some work to do to identify the nature of UEFA's concern. In so far as UEFA expressed it in terms of Britain withholding tax with regard to matches played here, that is not so. UEFA is labouring under a misapprehension.

Lord Oakeshott of Seagrove Bay (Spokesperson in the Lords, Treasury; Liberal Democrat)

My Lords, we all seem to be declaring interests today, so I should declare that I am an Arsenal season ticket holder and that my son works for the FA.

As the noble Lord made clear, we have just lost the 2010 UEFA cup final to Hamburg, so we are one-nil down against the Germans, and the ref has now given us a chance to equalise. How long does it take the Treasury to pick up the phone to Mr Platini and make the position clear? Are the Government more worried about having state visits at Arsenal rather than football finals?

Lord Davies of Oldham (Deputy Chief Whip (House of Lords), HM Household; Labour)

My Lords, I think that the country appreciated that Arsenal was the host for part of the state visit last week, and I say that as a Tottenham Hotspur supporter. However, let me make it quite clear to the noble Lord: the Treasury has been taken aback by UEFA's contention that we intended to do something that the Treasury has no intention of doing and has no legal authority to do: to withhold taxation. If there are other grounds that exercise UEFA in these terms that we need to address of course we will, because we are concerned that international events should come to Britain against a background where the greatest event of all, the Olympic Games, is coming in 2012.

Lord Lawson of Blaby (Conservative)

My Lords, is the problem not that taxes in this country are too high for professional footballers but that they are too high for everyone?

Lord Davies of Oldham (Deputy Chief Whip (House of Lords), HM Household; Labour)

My Lords, I knew that the noble Lord would express sympathy for professional footballers on £180,000 a week or more. However, the British taxation regime has been in place, under a Labour Administration, for a decade and more, and we have held these matches in this country over that decade. The noble Lord must recognise that the Government have an issue to resolve with UEFA in its recent action.

Baroness Noakes (Shadow Minister, Treasury; Conservative)

My Lords, I declare no interest at all in football—

Lord Stoddart of Swindon (Independent Labour)

My Lords, is the noble Lord aware that many people in this country are far more concerned about the taxation arrangements for poor people who have been hurt by the withdrawal of the 10 per cent rate than about well paid footballers from foreign lands?

Lord Davies of Oldham (Deputy Chief Whip (House of Lords), HM Household; Labour)

My Lords, I am not always able to agree with the noble Lord, particularly in a week in which we are discussing European legislation, but I am in wholehearted agreement with the sentiment that he just expressed.