(Except clauses 1, 3, 16, 183, 184 and 200 to 212, schedules 3 and 41 and certain new clauses and new schedules) - Clause 8 - London Anniversary Games

Finance Bill – in a Public Bill Committee am 2:00 pm ar 16 Mai 2013.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Nigel Mills Nigel Mills Ceidwadwyr, Amber Valley 2:00, 16 Mai 2013

I beg to move amendment 2, in clause 8, page 4, line 1, at end add—

‘(7) The Chancellor of the Exchequer shall bring forward in time for the 2014 Budget proposals in relation to exempting competitors in major sporting events, including the criteria for determining whether a sporting event meets the requirements for exempting competitors.’.

Photo of Sir David Amess Sir David Amess Ceidwadwyr, Southend West

With this it will be convenient to discuss the following:

Clause stand part.

Clause 9 stand part.

Photo of Nigel Mills Nigel Mills Ceidwadwyr, Amber Valley

It is a pleasure to serve under your chairmanship again, Mr Amess. I rise with some trepidation to speak to this probing amendment. I hope we do not end up in the same confusion as last time. Perhaps I should just press it to a vote now and make life easier. This might look like a technical and pretty tedious amendment, but a real principle is at stake here in how we handle our tax system. Given a free choice, I suspect we would all choose to have a tax system where we publish clearly in law what the rules are and we task taxpayers with abiding by them and HMRC with enforcing them. What we do not want is the most skilful or well connected lobbyists being able to obtain tax relief for the various causes that they hold dear at the expense of others who do not get the same tax exemptions.

The danger is that we will start cherry-picking certain sporting events and give tax exemptions to them so we can encourage well paid, wealthy athletes to turn up here and compete, but certain other sporting events, which may not have the same sporting value for the country, will not get that tax exemption. That is the wrong way to go. We should set out rules under which we would be prepared, in very limited situations, to grant exemptions to certain sporting events to attract them to this country because we think the overall benefits would be worth the tax that we would be forgoing. The other option would be to change the rules on how we tax overseas sports stars, music entertainers, actors and so on. If the rules are deterring the brightest, the best and the most talented from coming here to play, perform and compete, perhaps we should change them completely rather than exempting certain sporting events.

I doubt that anyone in this room would object to us exempting competitors in the Olympics. That is not a sporting event in which athletes are paid to take part. There is no prize money. We would not seek to tax them on their earnings to get that event here. It was also a once in a generation, perhaps a once in a lifetime opportunity for the country. We would all clearly accept that there were so many benefits from having the Olympics that it was worth the tax relief that we granted. However, I am not so sure that the London anniversary games will meet those criteria. We have had a diamond league athletics meeting in London for as many years as I can remember. This year we are choosing to exempt the competitors at that diamond league in London from being taxed, on the basis that Usain Bolt will turn up and compete after he refused to come for the last three years.

I am not quite sure how this meeting meets the criteria for granting these exemptions. It is not a one-off, once in a generation event that we may never have again if we do not grant this tax relief. It is an annual meeting of athletes which has taken place in London in successive years. There is also a diamond league athletics meeting in Birmingham next month. We have not chosen to give tax exemptions for that meeting. If we wanted to give a huge tax exemption to try to boost the Olympic legacy and attract the best in the world to compete, would we choose to do that in the same stadium and the same area that had the Olympics last year or would we choose to do it in Birmingham which did not have all those bonuses? As a midlands MP, I suspect that we would have chosen the latter.

I can see the advantages of trying to build on the Olympic legacy by having a huge, high-profile event in the same stadium. I can understand why the Government have done this. We exempted the champions league final, which we debated for many hours a year ago, and we had concerns about why we were giving a nice tax-free evening to a lot of extremely well paid Spanish footballers. Well, we thought it would be Spanish footballers, but those teams were knocked out and it will be German footballers by and large. We could be using the tax revenue gained to support local sports clubs in our constituencies. If I remember rightly, all the members of that Committee managed to sneak in the names of all their local football clubs as bodies to which they would prefer to give taxpayer support, rather than overpaid footballers.

Photo of Ian Mearns Ian Mearns Llafur, Gateshead

I know that this is a probing amendment, but Gateshead is hosting the European athletics team championships on 22 and 23 June. Does the hon. Gentleman think that an event of that nature should be exempt from tax?

Photo of Nigel Mills Nigel Mills Ceidwadwyr, Amber Valley

No. Exemptions should be given sparingly for once in a generation events that we would not otherwise get in this country; we should not exempt regular or frequent events such as that. If we are concerned that we cannot attract the best sporting talent, we should change the basic rule about when we tax sports stars, actors and film stars; we should not give exemptions to individual events as that is not the way that a tax regime should work.

I will not list all the athletics clubs in my constituency, although there are several, or all the other sports that could be covered by these various exemptions—  [Interruption.]. I am happy to list them all, but I have three pages in small type. We have clubs such as the Amber Valley athletics club and the Charles Hill satellite club.

The important point of principle for a tax regime is whether we want general rules applied equally, or one-off exemptions that go to the best placed lobbyists. That could be the Usain Bolt tax exemption, or perhaps the Seb Coe tax exemption—he may now be held so highly in the national esteem that we would grant him anything he asked.

Photo of Ian Mearns Ian Mearns Llafur, Gateshead

I understand the hon. Gentleman’s point, but events such as the European athletics team championships move around Europe and we are in competition with other event arenas in Europe to hold that championship. If we are to exempt events such as the champions league final to attract them to Britain, should we not give similar indemnities to events such as that?

Photo of Nigel Mills Nigel Mills Ceidwadwyr, Amber Valley

I can see the hon. Gentleman’s point, but if he looks at the amendment I tabled, he will see that it would get the Government to bring forward, for next year’s Finance Bill, some criteria that set out how we determine which events get tax exemptions. Therefore, rather than people having to lobby and use media pressure or threats that stars would not attend, we would be able to point to the criteria we would use to decide whether sporting events would get a tax exemption. If the event in Gateshead met those criteria, it would get those tax exemptions, but I do not seek to list all the events that could be given exemptions.

We are on a slippery slope: what would happen if Bernie Ecclestone said, “Actually, I have got loads of cities around the world that want to have a Formula 1 grand prix. All my drivers are really miffed that they get a huge clobbering of tax by racing in the UK for that weekend. If you do not give my drivers a tax exemption, I will move the race to somewhere in the middle east where they will get that tax relief”? Would we be under pressure to say, “Okay, we will exempt the Formula 1 grand prix because Formula 1 has a huge base in the UK”—it has—“and loads of jobs are based here”?

If so, what would be next? Rafa Nadal has refused to play tennis at Queen’s Club for the last few years because he does not want to pay the UK tax bill, although he plays at Wimbledon and at the end-of-season championship. What would happen if he said that he would not play at the end-of-season championship and the organisers threatened to move it away again, as it has been around the world at various times? Would we exempt that tournament?

What if a load of golfers said, “Actually, we are not playing in the Open anymore because the tax bill is too high” and that historic championship came under threat? What if they all refused to come and play in the Ryder cup? Where do we draw the line at which we are prepared, for regular sporting events, to exempt a collection of very rich sports stars who refuse to come here because they do not want to pay the tax on the prize money that they would get from these tournaments?

If a large company were to say, “We will come to your country only if you give us a complete tax exemption,” we would all fall over in shock and horror and they  would be beaten up by the Public Accounts Committee. However, if the likes of Rafa Nadal and Usain Bolt say that, we end up giving them a tax exemption. I am not sure whether that is the message that we want to send.

I accept that the Commonwealth games deserves to be in the same position as the Olympics, as athletes do not get paid and huge, lucrative earnings do not accrue from those events, but I am not convinced about the London anniversary games. I can see why it has been done and now that it is a done deal we need to stand by it, but in future Finance Bills should not grant tax relief to different one-off events each year. If certain events need tax exemptions for all those who take part, let us set out those criteria in law and enforce them fairly so that similar events get the same treatment and we do not have this spectre of exemptions for those with the best lobbyists.

In the last few weeks, we have seen all the media attention about musicians and actors wanting the same treatment to try to boost the cultural olympiad legacy; to try to get films made here and the best performers to appear here. We are in danger of completely undermining the basic rules for the most high-paid worldwide talent. I do not think that any of us want to see that.

Although I suspect the Minister will not accept the wording of my amendment, I urge him to reassert the policy that overseas sports stars, entertainers, musicians and so on get taxed on their winnings or earnings in the UK and on the proportion of their sponsorship that relates to them competing or performing in the UK. That is the basic rule.

If sports stars really do not want to come and compete in a high-profile sporting event taking place in the Olympic stadium a year after the Olympics, which will get them a huge worldwide profile and millions upon millions of television viewers, let us just say, “Don’t bother. Go and compete somewhere for the highest buck.” We should not pander to them by giving them those tax reliefs.

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury)

It is a pleasure to be back this afternoon, Mr Amess. I am going to address some of the issues raised by the amendment and also clauses 8 and 9.

We can all remember the excitement, joy and pride felt in communities across the UK when the Olympic games came here last year. I recall that many miles away in my constituency of Kilmarnock and Loudoun, thousands of people lined the streets. A new athletics facility had opened in Kilmarnock just prior to that and there was the excitement of the Olympic torch wending its way through. At one point it was carried by David Coulter, who is a 7th dan karate champion and was twice world champion. People’s excitement at seeing a local sporting hero carry the Olympic torch through Kilmarnock was something to behold.

I hope that we are going to see that atmosphere rekindled at other sporting events, not least when the London 2012 anniversary games come to the Olympic park and when the Commonwealth games come to Glasgow in 2014. Such events are necessary to ensure that we build on the legacy of the Olympics, not just on the success of the games themselves but the goodwill and enthusiasm felt by adults and children across the country. I am sure we all have very positive examples at local level of that legacy.

I want to mention a couple of points about the importance of the Commonwealth games to Glasgow, of course, but also more widely in Scotland. Labour in the city council in Glasgow was very involved from the beginning in making and supporting the bid for the city to host the Commonwealth games. I know that many Scots and people in Glasgow thoroughly enjoyed the spectacle of the London 2012 games, watching it on television in their homes and at community events throughout the city, looking forward to the time that Glasgow would have the opportunity to have its own great sporting events. We want to build on that legacy.

The Minister told me that he is coming to Scotland soon and I hope other hon. Members will take the opportunity to visit Glasgow for the Commonwealth games, not least to sample the famous Glasgow hospitality on offer. [Laughter.] I leave it to hon. Members’ own thoughts as to which parts of the hospitality they would most like to sample.

Photo of Pamela Nash Pamela Nash Llafur, Airdrie and Shotts

That hospitality is not just in Glasgow but throughout the west of Scotland and Lanarkshire. I am sure my hon. Friend will agree that the legacy of the Commonwealth games will benefit everyone in Lanarkshire, including young people going into sports and local businesses. Does my hon. Friend welcome, as I do, the Daily Record headline on Monday that declared that Glasgow’s Commonwealth games will be as big as the Olympic games in London last year?

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury) 2:15, 16 Mai 2013

I thank my hon. Friend for those comments. I know the part of the world that she represents very well, as it is relatively close to my own constituency, and I am sure that people there will enjoy the games. The legacy of sporting activity and involvement—of seeing sports stars—is important, to inspire young people but also to give a boost to the many people who work week in, week out to support sport in their local community. She was right that it was a brilliant headline. The Daily Record is, of course, always on top of such issues, putting forward what is happening in Scotland and making the case for us. I hope that there will be as much excitement and enjoyment from the Commonwealth games as there was from the Olympics.

It is now only around 500 days until another important event in Scotland happening in 2014; there is somewhat less time until the Commonwealth games. Everything is well on track and within budget. Around £2 billion has been invested in games-related infrastructure, from the Commonwealth arena and the Sir Chris Hoy velodrome to the new Scottish Hydro arena. Many of us were disappointed that we will not see Sir Chris in action in Scotland in the same way as he was in the Olympics; none the less it is great to have that facility—named after him—made available to us, as one of several world-class sporting facilities owned and used by the people of Glasgow.

The Glasgow games have to produce a legacy of their own and 2014 has to provide tangible benefits. In terms of an economic legacy, that has already begun, with Glasgow city council investing in Glasgow guarantee of employment programmes, with the Commonwealth apprenticeship initiative, the Commonwealth jobs fund,  the Commonwealth youth fund and the Commonwealth graduate fund. The Glasgow guarantee has seen almost 3,000 people gain jobs and apprenticeship places over the past few years. That is a real legacy, and that is why it is important that we can attract people to Glasgow for the Commonwealth games.

We have also seen the appointment of very high profile UNICEF ambassadors, Ewan McGregor and David Beckham, linked to the Commonwealth games, to ensure there is that inspirational approach of involving young people, and to ensure the games have a legacy not just in Glasgow and Scotland, but in the wider world. That is important: people in Scotland take their responsibilities elsewhere seriously, and will want to support the fundraising efforts that will go on around the Commonwealth games to reach children across the world who require help and support.

For those reasons—to help boost the games’ legacy, to attract big-name stars and the world’s sporting elite, and to confirm that the UK, with Scotland a part of it, remains on the map as a world-class sporting venue—we support the measures in the Bill. However, I understand the motivation of the hon. Member for Amber Valley in tabling his amendment, although as we previously got into a tricky situation with one of his amendments I assume that it is a probing amendment.

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury)

Perhaps it was not at the time; however, today I am working on the assumption that his amendment is a probing one. I understand that the hon. Gentleman feels that we ought to have a wider look at some of the issues. He raised a number of points. Members of this Committee who served on the Finance Bill Committee last year will remember the lively debate we had on exempting from UK taxation the income made by non-resident footballers and team officials in relation to the UEFA champions league final. We heard how current UK tax law was introduced after HMRC won a landmark case in 2004 against American tennis star Andre Agassi, allowing it to claim tax on a proportion of his worldwide endorsement earnings.

The effect of that case was that competitors were suddenly deemed tax residents by the UK for a tax year purely by virtue of coming here for a week, or even just a day, to compete in a single event. Many saw that as unfair to competitors who now faced being taxed twice, by their home country and again by the UK, and as a result, many sporting organisers have since made it a requirement that overseas competitors be exempt from tax in the country in which they compete. The hon. Member for Amber Valley referred to some of the consequences of that case, including Rafael Nadal announcing that he would not play in the 2012 pre-Wimbledon tennis tournament due to UK tax demands, and Usain Bolt refusing to race in grand prix meetings in the UK for the same reason. We need to explore the issues in more detail, but we must also try to find ways to ensure that people come here to compete, because such events will help to confirm the legacy of the Olympic games and continue to inspire children and adults across the UK.

Photo of Nigel Mills Nigel Mills Ceidwadwyr, Amber Valley

I have sympathy with the hon. Lady’s suggestion that the worst aspect is the taxation of overseas residents on their annual endorsement income.  Provisions such as that in clause 8, however, mean that we do not tax athletes on prize money that they earn by winning sporting events in the UK; I am thinking more of the diamond league event than the Commonwealth games. Does she agree that that is not right, and that there is nothing wrong with taxing prize money that athletes win in the UK?

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury)

We have some sympathy with the hon. Gentleman’s aim of trying to achieve consistency of approach. Inconsistency over tax exemption rules for international athletes who compete in the UK has been a problem. Different sporting events have been dealt with in different Bills, under which some athletes have received exemptions for some sporting events and others have not. For example, the Finance Act 2012 dealt with this year’s UEFA champions league final, the Finance Act 2010 dealt with the 2011 UEFA champions league final and the Finance Act 2006 dealt with the London Olympics. The rules that govern exemption have been rather fluid and have changed from event to event, and that has created uncertainty and unfairness for athletes who have come to the UK.

HMRC currently argues that if an athlete is here for an event, it can tax not only the competition fee but a proportion—based on the number and duration of events—of the star’s worldwide earnings. In other words, if an athlete comes to the UK to compete in a major event that is one of 10 that they do during the year, the UK levies tax on a tenth of that individual’s worldwide income for the year even though they may be in the UK for only a few days. Some have argued that such uncertainty and unfairness has denied us the opportunity to have some of the star names at UK sporting events.

There has been concern about the potential loss to the UK of entire competitions. For example, the UK failed in its bid to host the final of the UEFA Europa league in 2010 after deciding not to provide assurances on tax exemptions. We debated that a lot during the proceedings on the previous Finance Bill, and it shows that inconsistencies can cause problems. The 2011 UEFA champions league final yielded an estimated £45 million for the London economy, so the impact on the economy of the UK’s being unable to attract such events is not to be scoffed at.

Has the Minister considered any plans to clarify the situation? Perhaps he will not accept the wording suggested by the hon. Member for Amber Valley, but will he tell the Committee what work the Government have done on clarifying tax exemption rules for non-resident athletes competing in the UK? Is the Minister considering plans to exempt athletes involved in any future sporting events? I have mentioned some of the inconsistencies between different competitions, and another example of such inconsistency is that the provisions in last year’s Finance Act on the UEFA champions league final also applied to officials, but the Bill does not include such an exemption. Will the Minister explain why that is? What assessment has he made of the economic benefits to London, Glasgow and the UK of staging the events that we are discussing today? When the Government were considering making the exemptions, what assessment was made of the impact of not doing so on the economy and individuals?

As I said earlier, more needs to be done to ensure that the legacy is assured. We have had a debate both in the media and in Parliament about what the Government  are doing to make that happen. Now that we are moving forward from the legacy of the 2012 games, what more is going to be done to support that at grass-roots level?

Finally, the hon. Member for Amber Valley referred to the requests that are now beginning to be made by others who are coming to the UK for major events. The Minister will be aware of a letter of 7 May, which has had quite a lot of publicity, from dozens of orchestras and classical musicians. The letter was published in the Daily Telegraph. It called for visiting foreign musicians to receive the same tax treatment as visiting foreign footballers and athletes coming to events. What is the Minister’s response to that? Does he intend to look at the issue in a way that would allow us to consider a consistency of approach for future events, rather than simply having to do everything on a case by case basis, or does he feel that there is more of an argument for dealing with it case by case? Is it about the nature of the event itself, or is it based on the likely economic benefits to a particular part of the UK or a particular area? How much of that is linked to the possible legacy that would arise from those events?

Photo of Steven Baker Steven Baker Ceidwadwyr, Wycombe

My hon. Friend the Member for Amber Valley made a thoroughly honourable speech. I wish the tax code did embody equality before the law for all, and the idea of equal treatment was at the heart of what he said. I am absolutely astonished, because I did not know anything about this particular area of tax. I am astonished to discover that if someone makes money through some popular means, they get tax cuts, but if they make their money through some means that is not so popular or does not have widespread celebrity status, they are not merely taxed at the same rate as everyone else but often positively discouraged from creating wealth in this country. It is a most astonishing area of tax law.

Photo of Ben Gummer Ben Gummer Ceidwadwyr, Ipswich

Just as an interesting aside, there is the question of what is deemed popular by some groups of people. Why would the exemption not exist for people playing in symphony orchestras, for instance, who are paid a great deal less than Mr Bolt?

Photo of Steven Baker Steven Baker Ceidwadwyr, Wycombe

I agree with my hon. Friend. I would not want to make a moral judgment one way or the other. If somebody’s conduct is lawful and they create value for other people and thereby make a profit, whether it is in sport or orchestras, or indeed entrepreneurship, they should be treated equally by the law. I congratulate my hon. Friend the Member for Amber Valley on his deeply honourable speech and I look forward to his further deeply principled contributions. I find that every time he makes such a speech, I agree with him.

Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury

Clauses 8 and 9 introduce two income tax exemptions for non-resident athletes competing in two major international sporting events to be held in the United Kingdom. Clause 8 will exempt from UK tax any income received by non-resident athletes who compete in the 2013 London anniversary games. Clause 9 will do the same for non-resident competitors in the 2014 Glasgow Commonwealth games. The Government’s objective in providing the exemptions is to ensure that both events make a real contribution to building on the legacy  of the London 2012 Olympic and Paralympic games. Encouraging world-class athletes to take part in each event is a key objective.

I will briefly provide the Committee with some background to the clauses. Under normal tax rules, non-resident sportspeople are fully liable to UK income tax on their earnings in connection with any activities they undertake in the UK. That includes their income from appearances at international sporting events, both their direct income, such as appearance fees and prize money, and a proportion of any worldwide endorsement income that they might earn. The UK’s approach is consistent with international practice as set out in the OECD model tax convention.

I turn specifically to clause 8. The London anniversary games will take place in the Olympic stadium in east London from 26 to 28 July 2013, and will provide a great opportunity to promote and sustain the legacy of the London 2012 Olympic and Paralympic games. The anniversary games will begin on the first anniversary of the 2012 Olympic opening ceremony, and a number of Olympic and Paralympic medallists are expected to return to the UK for the first time since 2012 to compete in the event. The tax exemption provided by clause 8 will apply to UK income on all appearance fees, prize money and endorsement income related to the anniversary games. The tax exemption will be restricted to accredited, non-resident competitors. It will not cover those not competing in the games, such as officials, sponsors or coaching staff. The cost of the exception will be negligible.

I now turn to clause 9, which mirrors clause 8 and provides an income tax exemption for non-resident competitors in the Glasgow 2014 Commonwealth games. The hon. Member for Kilmarnock and Loudoun spoke to both clauses, but she understandably focused on Glasgow. I thank her for her support of these clauses. She helped to illustrate how important the games are to Glasgow, Scotland and the UK in a wider sense. I agree with everything she said about Glasgow’s hospitality. I also agree with what the hon. Member for Airdrie and Shotts said about people in Lanarkshire. I not only have friends in Lanarkshire, I have family in Lanarkshire. I cannot say that they voted for the hon. Lady, but they are generous and warm people, like all Scots.

The events will feature competitors from more than 70 nations in 11 days of competition from 23 July to 3 August 2014. They will take place in various venues in Greater Glasgow, including the iconic Hampden Park stadium and the new Sir Chris Hoy velodrome. Again, the exemption will apply to competitors’ income that arises directly from taking part in the games, and to a portion of their worldwide endorsement income that relates to that appearance. It will also be restricted to non-resident competitors, and will not be available for team officials and similar individuals who do not compete themselves. As is the case with clause 8, the cost of providing the exemption will be negligible.

I turn to the amendment tabled by my hon. Friend the Member for Amber Valley, who I understand is a keen sports fan. If I am not mistaken, he is a season ticket holder for Notts County FC. His enthusiasm for sport and for winning causes is reflected in his amendment. I will go into detail about the amendment. Although I  will ask him to withdraw it, I understand the reasons for it, which he set out passionately, and I noted the support of my hon. Friend the Member for Wycombe for it.

Amendment 2 would place a new requirement on the Government to bring forward proposals for exempting competitors in major sporting events, which would include the relevant criteria underlying these exemptions. It is not entirely clear to me what the amendment is intended to achieve, and I will explain why. It makes no reference to tax, but I assume from what my hon. Friend the Member for Amber Valley said that that is an oversight, and that it is focused entirely on tax. Nor does it stipulate that the competitors in question should be non-UK resident for tax purposes, but again I assume that is what he meant by his amendment. The criteria for providing tax exemptions for non-resident sportspeople are already very clear, and were restated with the exemption of the Glasgow Commonwealth games announced in January 2012.

My hon. Friend mentioned a number of sporting events. He asked about the granting of a tax exemption to the diamond league meeting in London but not to a similar event in Birmingham. The London anniversary games and the Glasgow Commonwealth games 2014 are both exceptionally placed to build on the Olympics’ legacy. For example, both events will not only be multi-sport, but will include para-athletic events, which is not usually the case for the diamond league. It is in order to keep promoting the legacy of the Olympics that we have provided special treatment here and not for a similar event in Birmingham.

My hon. Friend also asked about Wimbledon. The All England Lawn Tennis and Croquet Club, which hosts Wimbledon, does not compete for the event each year. A tax exemption would therefore neither help nor make any difference to securing the event in south-west London every year. That is why events of such nature are not considered for similar tax exemptions.

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury) 2:30, 16 Mai 2013

Does the Minister agree that it is important to sustain the legacy at grass-roots level and that it is not simply about having a whole series of high-profile events? The legacy must also be about grass-roots sport, particularly involving young people, and about the economic regeneration of local areas that comes as part of the process of hosting such events.

Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury

I agree entirely. I hope that the hon. Lady agrees that the Government have worked hard on a cross-party basis to try to maintain the legacy and maximise the economic benefit from it. That has been made clear by some of the announcements regarding east London.

Unfortunately, however strong and passionate the case made by my hon. Friend the Member for Amber Valley, amendment 2 is unnecessary for the reasons that I have stated. The Government’s policy is that such tax exemptions are provided when they are a requirement of the bidding process to host an international sporting event at the highest level of world sport. That is why, for example, exemptions were provided for the Olympic games in 2012 and the champions league final in 2013 at Wembley stadium.

The Government are committed to building on the legacy of the 2012 games. I need not remind Members of the games’ great success. Central to London’s successful  bid to host those games was the pledge to create a genuine and sustainable Olympics and Paralympics legacy. Both the London anniversary games and the Commonwealth games are major sporting events at the highest level of international sport. The Government believe that they are exceptionally well placed to support the UK’s Olympics legacy. That is why it is right to provide tax exemptions to non-resident competitors, which will help attract top international athletes and increase the profile of the games. The Government do not have any plans to change their existing policy of granting an income tax exemption to non-resident competitors at international sporting events, nor do they intend to abandon the commitment to building on and maintaining the legacy of the 2012 games. I therefore ask my hon. Friend to withdraw the amendment.

The hon. Member for Kilmarnock and Loudoun asked why coaches and team officials had not been included in the exemption, as they were in the Olympic games. That is because the exemptions for the 2012 games were a requirement in the bidding process to host them. The requirements included granting tax exemptions to non-resident team officials and coaches. Such tax exemptions were not required for either the London anniversary games or the Glasgow Commonwealth games. The Government have therefore provided exemptions only to non-resident competitors in those two games.

Before I conclude, with your permission, Mr Amess, may I briefly correct something in respect of clause 6, which will mean my not having to send a letter to the Committee? The hon. Member for Nottingham East has left the room, but the hon. Member for Kilmarnock and Loudoun might be aware that when we discussed the clause on the reduction in the corporation tax rate, I referred to the last City bonus pool and linked it to the Labour party’s policy requirement to raise money for a new bonus tax.

I said that it was the Labour party’s policy intention to raise £1.6 billion from a new bankers’ bonus tax, but I now understand that that figure was not correct, in that it is the Labour party’s intention to raise £2.5 billion. I will give the hon. Lady an opportunity to correct me if the £2.5 billion figure is wrong, but statements made by the party after the recent Budget said that it wished to raise £2.5 billion, not £1.6 billion.

I said that our best estimates from independent sources were that the bonus pool in the City for 2012 was £1.8 billion. I have been informed that the figure is £1.6 billion. I unintentionally overstated the amount. It is even lower than I thought, and compares with approximately £11 billion in 2008.

Mr Brooks Newmark (Braintree) (Con) rose—

Photo of Sir David Amess Sir David Amess Ceidwadwyr, Southend West

Order. I have allowed the Minister great latitude in putting something on the record. Now is not the moment to have a further debate. Minister, will you complete correcting the record?

Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury

I said that, in order to meet its objective, the tax rate that Labour would have to impose would be 90%. I have now to correct that, and say that it would be closer to 150%, in theory. Of course, we know that a tax of 150% would raise nothing.

Photo of Brooks Newmark Brooks Newmark Ceidwadwyr, Braintree

If you will indulge me, Mr Amess, will my hon. Friend give way?

Photo of Brooks Newmark Brooks Newmark Ceidwadwyr, Braintree

Is that not another example of when the Labour party’s figures simply do not add up?

Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury

I agree wholeheartedly with my hon. Friend. I could not have put that better myself.

In conclusion, the two clauses will help to make the anniversary games and the Glasgow Commonwealth games attractive events for top-class international athletes. They will positively contribute towards the 2012 Olympic and Paralympic legacies in the United Kingdom. I therefore respectfully ask my hon. Friend the Member for Amber Valley to consider withdrawing his amendment.

Photo of Nigel Mills Nigel Mills Ceidwadwyr, Amber Valley

I am grateful to the Minister for his comments and especially grateful for his mentioning Notts County in his speech. They are the very embodiment of the Olympic legacy of the Team GB football team, who started with much promise and then faded away into disappointment. That is about where we are. I am sure they will not be asking for a tax exemption.

I accept the argument that the Commonwealth games deserve a tax exemption. There is no dispute about that, but I am not completely convinced by the arguments for the anniversary games. I am sure that if Birmingham had been offered a tax exemption for its diamond league meeting, the world’s best athletes would have turned up there, too. The problem is that we do not advertise the criteria at the start. I can understand why, as a one-off for the diamond league event in London, tax exemption is justified, but I hope that it is a one-off, and that a tax exemption will not be sought each year.

We are in a strange position. We believe that, overall, there are economic benefits from attracting global stars, in which case I am sure that Wimbledon can set out the amount of economic advantage that the UK receives from that tournament. All the hotels in London are booked, if nothing else. I am sure that the Open golf at St Andrews can set out the huge advantage that it brings to that area of Scotland. We will be in an unfortunate position if we do not make the criteria clear. Such a policy should be for one-off, truly top-of-the-world sporting events, otherwise we can go through all the events for which we received gold medals at the Olympics and wonder why they do not all receive a world championship tax exemption.

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury) 2:45, 16 Mai 2013

The hon. Gentleman referred to sporting events that take place in Scotland. Of course, they are very important for the economy there. Does he agree that the events we have discussed are linked to the opportunity for economic regeneration? They have been absolutely vital in regenerating communities, as they have for the grass-roots legacy. The Minister was able to support that; does the hon. Gentleman think that that would be important in future decisions?

Photo of Nigel Mills Nigel Mills Ceidwadwyr, Amber Valley

Exactly. Those are the criteria that we should apply. If we just said that there had to be general economic benefit, we would be exempting the premier league or something disastrous, so I absolutely agree that there needs to be a grass-roots benefit of getting young people involved in sport. We must consider the  impact on the community around the event. That is why the exemption must be for truly special, one-off events and not an annual series. However, we have kicked the issues around, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 ordered to stand part of the Bill.

Clause 9 ordered to stand part of the Bill.