Football Governance Bill
Tuesday 23rd April 2024
(1 week, 6 days ago)
Commons ChamberRead Full debate Football Governance Bill 2023-24 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Culture, Media and Sport (Lucy Frazer)
I beg to move, That the Bill be read a Second time.
Football is part of our national life. Over the years, English football has become a universal language. Wherever you are, whatever country you are in, you are never far away from a fan of one of our great clubs. We are a global football powerhouse and our economy benefits: billions for the economy, investment in towns and cities across the country, and tens of thousands of jobs. Our premier league is world leading. And the strength of our national game goes far beyond the top tier. Hundreds of thousands of fans turn out every week and come together to support teams up and down the football pyramid. Football clubs are at the heart of our communities. Each and every Member will be able to testify to that. Each Member will also be able to testify to the fact that we have the best fans in the world.
Unfortunately, too many of those very same fans have been taken for granted. Too many fans have seen their team’s owners change club badges and colours without any fan input, or have seen their club sell its stadium and up sticks. Too many fans have watched on as their clubs tried to join closed-shop breakaway leagues against their wishes. And too many fans have seen their club struggle and even collapse under the weight of mismanagement and poor ownership. There have been 64 instances of clubs falling into administration since the Premier League was founded in 1992. Clearly, not all clubs are feeling the benefits of English football’s global success and something has to change.
We all want to see our national game prosper for generations to come, but if we want our clubs to thrive, fans have to be at their heart. If we want English football to remain a global success story, we have to ensure our pyramid is financially sustainable. I am proud to say that the Football Governance Bill will do exactly that.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
I congratulate my right hon. and learned Friend on bringing forward this Bill. As she says, football goes all the way down the football pyramid—not just in terms of its quality, but in terms of the entertainment it offers. Does she agree that a classic example of that is the fantastic entertainment that Coventry City provided in the FA cup semi-final on Sunday? Despite the club temporarily not being part of the premier league, it is none the less clear not just to the Coventry City supporters in my constituency but to everyone that the financial health of clubs that are further down the football pyramid matters for the entertainment they can provide. Does she agree?
Lucy Frazer
My right hon. and learned Friend is absolutely right: that was a tremendous match. It shows the importance of the football pyramid, and how it delights and disappoints fans across the country to see clubs go up and down.
Mr Toby Perkins (Chesterfield) (Lab)
I thank the Government for bringing forward this overdue Bill. Chesterfield has seen the worst of football, with the former owner Darren Brown ending up in jail for his crimes against the club, which almost took it out of existence. Under the ownership of the Chesterfield FC Trust, Chesterfield are now back where they belong—in the football league—after becoming champions of the national league this year. Is it not the case that what our football clubs really need is to be run by people with a commitment to those clubs and a passion for them, rather than by people who are trying to make a quick bob?
Lucy Frazer
To address the point about the Bill being long overdue, the Labour party said for some time that it would do something about this issue but did absolutely nothing. Since I have been Secretary of State, we have had a White Paper and a response to it, and we have drafted a Bill at speed. We have introduced the Bill, and I am delighted that it is having its Second Reading today. I recognise that the Labour party supports the Bill, and I am very grateful for its collaboration. I am very pleased that Chesterfield are in a good place. We want to see ownership that works across the field.
Steve Brine (Winchester) (Con)
I am very proud that our Government are bringing forward this Bill. Others had opportunities to do so but did not, and it is very important. I shall support its Second Reading tonight, because it is important to protect the football pyramid. The Bill talks about guaranteeing that fans will be consulted on key decisions that impact on them, which it will do in one respect, but fans of teams lower down the pyramid will be affected by the decision last week to get rid of FA cup replays, which are a lifeline for many clubs by providing opportunities to get a big draw at Anfield, Old Trafford or even Tottenham Hotspur Stadium. Obviously this Bill will not touch on that, but does the Secretary of State have any comments on this issue?
Lucy Frazer
My hon. Friend is absolutely right, because those David and Goliath fixtures are part of the magic of football. I know that replays have been a welcome source of income for smaller clubs throughout the years. I spoke to the FA about this issue at Wembley on Saturday, but as he will know, these are decisions for the football authorities. This Bill will ensure that we have appropriate financial regulation in place.
Valerie Vaz (Walsall South) (Lab)
I am not going to mention my local football clubs—oh, all right, I will: Walsall football club and Darlaston Town 1874 FC, which is celebrating its 150th anniversary. The shape of the Bill at the minute is due to the Minister sitting next to the Secretary of State, the right hon. Member for Pudsey (Stuart Andrew), who has engaged with all Members. I pay tribute to him for including all of us. It is a pity that the Secretary of State is looking at the Bill in a party political way, because the Government have been in power for the last 14 years. Let us all pay tribute to the right hon. Member for Pudsey, who has done a fantastic job.
Lucy Frazer
In the next part of my speech, I am going to pay tribute to a large number of Members who have played a considerable part. My right hon. Friend the Member for Pudsey (Stuart Andrew) has done a tremendous amount, as have many Members from across the House, but I pay particular tribute to my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch), without whom we would not be in this position today.
I was responding to a point about the delay. Those on the Opposition Benches might criticise us for the delay, but the truth of the matter is that they cannot legitimately do so, because they had an opportunity to take action and failed to take it. That is why we have taken the action that we have.
I agree with the right hon. Member for Walsall South (Valerie Vaz) that we should recognise that many people have played a considerable part in bringing this Bill to fruition, because many people have championed these reforms. I would like to mention again my hon. Friend the Member for Chatham and Aylesford, who was recently awarded a damehood. Her voice and her work have been instrumental in getting us to where we are today. As well as being chair of the fan-led review, she has helped lay the foundation. She has worked very closely with me, and in particular with my right hon. Friend the Member for Pudsey, to make sure that this Bill is in the shape that it is as it comes before the House today.
My hon. Friend the Member for Gosport (Dame Caroline Dinenage), who is Chair of the Culture, Media and Sport Committee, has worked with us in Government throughout the development of this Bill. My hon. Friend the Member for Carlisle (John Stevenson) has been a powerful voice in this debate and pressed hard, along with other members of the Northern Research Group, to change the status quo. I would also like to recognise the hon. Member for Bristol West (Thangam Debbonaire), who is my opposite number, and the hon. Member for Barnsley East (Stephanie Peacock), both of whom have been engaged throughout. I know that they are supportive of the ambition behind introducing a new regulator.
Particular thanks should be extended to my hon. Friend the Member for Southend West (Anna Firth), the hon. Member for Reading East (Matt Rodda), my hon. Friends the Members for Hyndburn (Sara Britcliffe) and for Folkestone and Hythe (Damian Collins), my right hon. Friend the Member for Ashford (Damian Green), the hon. Member for Eltham (Clive Efford), the right hon. Member for Walsall South, the hon. Members for Sheffield South East (Mr Betts), for Liverpool, West Derby (Ian Byrne), for Nottingham East (Nadia Whittome) and for Gateshead (Ian Mearns), and many others in this House.
I also thank the relevant all-party parliamentary groups, the football authorities, the Football Supporters Association, the FA, the Premier League and the EFL. Everybody has played their part in making sure that this Bill is in the shape that it is as we bring it forward today. Everybody knows it takes a village to develop a Bill of this size and scope, and credit is due to parties across the House, across football, across academia and across business. Hundreds of people have given us their time and their insight to help get the regulator right, and for that I am extremely grateful.
As Members will know, the centrepiece of this Bill is a new, independent regulator with a clear and unambiguous purpose: to protect the game that we all love. The way to do that is by getting football’s house in order. To that end, the regulator will not interfere with matters on the pitch. Instead, it will be focused tightly on governance, finances, ownership and fans. It will help clubs to build their resilience, while preventing teams from falling into the wrong hands to begin with.
Paul Bristow (Peterborough) (Con)
The mighty Bristol Street Motors trophy winners, Peterborough United, contacted me today to express their support for this Bill, but they suggested that it is vital that the independent regulator has the powers and the ability to intervene on financial model arrangements. Can the Secretary of State guarantee that the independent regulator will have those powers?
Lucy Frazer
The regulator will have significant powers in relation to individual clubs and, when triggered by either the Premier League or the EFL, to the leagues themselves. It will have backstop powers in order to look at the pyramid as a whole.
Kirsten Oswald (East Renfrewshire) (SNP)
I am always delighted to hear conversations about football taking place here or anywhere else. The Secretary of State talks about clubs getting their house in order. Does she agree that an important part of that would involve clubs looking at who their shirt sponsors are? Does she agree that shirt sponsorship by disposable vape companies is wholly unacceptable, has no part in modern football, and sets a really bad example to all our children? We want them to love the game that matters so much to all of us.
Lucy Frazer
I am sure that over the course of this debate many Members will raise issues of concern to them and their constituents. I emphasise that the Bill is about financial regulation, although I am very pleased that the Premier League has taken action on gambling advertising on the front of shirts, which is something we looked at very closely, and that the Government are taking action on vaping and smoking more broadly. The Bill is tightly defined and addresses financial regulation, and I am very pleased that we have introduced this legislation.
Dr Luke Evans (Bosworth) (Con)
The Secretary of State is exactly right about the financial aspects of this Bill, but we have to make sure that we get the balance right. We do not want to kill the golden goose that is the Premier League, and we want to make sure that we have growth in the sport, through the championship and the EFL. We have to consider the crowded calendar of European matches, too. Does she believe that the regulator will have the ability to chart that very fine line between UEFA, FIFA and her proposal? That is going to be pretty tough.
Lucy Frazer
We do not want to do anything that damages the world-leading Premier League, which is worth £7 billion. People across the world look to the Premier League, and we have worked very closely with the Premier League, the EFL and others to try to get the balance right. I have met the executives extensively during this period, and I have met all the clubs in the Premier League and the EFL to try to get the balance right. We are trying to get a light-touch regime that allows the leagues to do what they are already doing, but with a regulator. The Bill is all about financial regulation.
Bill Esterson (Sefton Central) (Lab)
The Secretary of State will understand that many of my constituents who support Everton are greatly concerned about the eight point deduction applied by the Premier League for breaches of its profit and financial sustainability rules. Nottingham Forest face a two point deduction for similar breaches, and other clubs have yet to face any sanction.
Can the Secretary of State reassure my constituents and many other football fans that her commitment to support the Premier League does not mean that the Bill will not have sufficient strength? Does she share my concern that my constituents and many others are worried about a lack of transparency, consistency and fairness in the case of Everton and other clubs? Will she give reassurance on that point?
Lucy Frazer
As I am making clear, the Bill is about financial regulation. I know that many fans are concerned about issues within the game itself. The Bill will not regulate how football is played, which is a matter for the footballing authorities. This is about ensuring that clubs up and down the pyramid are financially sustainable under a regulator. If no deal is agreed on distributions, the regulator can step in. This will protect the pyramid overall.
Clive Efford (Eltham) (Lab)
I am grateful to the Secretary of State for mentioning me earlier. Does she accept that one of the biggest drivers of financial stability is the parachute payments in the championship? Does she think it is a flaw that the Bill excludes parachute payments from the regulator’s powers?
Lucy Frazer
We understand that parachute payments have a role to play. There is provision in the Bill to deal with parachute payments, but that provision relates to the consideration on a club-by-club basis in the licensing regime itself.
James Wild (North West Norfolk) (Con)
When clubs like Norwich City are promoted to the Premier League, those parachute payments give them the confidence to invest, which drives competition in football. Are they not a good thing that we should be supporting?
Lucy Frazer
We believe that parachute payments have a role to play, although I know people have concerns about distortion. Under the Bill, if there is any issue relating to the finances of a particular club, particularly by reference to the parachute payments it might have received, the regulator has an ability to look at that within the licensing regime as a whole.
Mr Clive Betts (Sheffield South East) (Lab)
I have read the Bill, but I wonder whether the Secretary of State has read it. Under clause 55(2)(b), the regulator is not allowed to deal with
“revenue that the specified competition organiser distributes to a club by virtue of a team operated by the club being relegated from a competition organised by the specified competition organiser.”
In other words, parachute payments are deliberately excluded from the remit of the regulator. Why has that been done when it is one of the most distortive elements of the current arrangements?
Lucy Frazer
I have been very intimately involved in this Bill, having put together all the policy recommendations and had discussions with all the parties. I encourage the hon. Member to read all aspects of the Bill, not just the provisions in relation to the backstop, which he quoted. I know many Members feel that parachute payments are very important, so let me try to explain again.
I know that many stakeholders have concerns about the impact of parachute payments on financial stability, sustainability and resilience, and I know that parachute payments can play an important role in softening the financial blow of relegation at all levels of the football pyramid. Given the complexity of the issue, the regulator will need to undertake an holistic, evidence-based assessment of the system of financial distributions as part of its state of the game report, and this will include an assessment of parachute payments.
Parachute payments have been specifically excluded from the backstop mechanism to ensure that the two final proposals from the Premier League and the EFL are easily comparable. The impact of parachute payments on financial sustainability and resilience could be a relevant factor in both the decision to trigger the backstop and the final choice in relation to a proposal. More generally, the regulator can look at the impact of a parachute payment on a particular club when it comes to the licensing regime.
Lucy Frazer
I will press on, as I have now answered five times on parachute payments.
We will achieve our goal through the new licensing regime, under which all clubs in the top five tiers of English men’s football will need a licence to operate as professional football clubs. The regulator will have powers to monitor and enforce requirements on financial regulation, club ownership, fan engagement and club heritage protection, as well as setting a corporate governance code of practice and having the power to prohibit clubs from joining breakaway competitions.
Dr Luke Evans
It is fantastic that the top five leagues will have to have a licence. Will the Secretary of State comment on the resources that will be necessary to put that in place for the season? This is a big undertaking, and considerable resources will be needed to monitor what is going on.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I know that some colleagues who are intervening might not be seeking to catch my eye later. I remind colleagues that if they do intervene, it is customary for them to stay for the entire speech.
Lucy Frazer
The Government are very conscious of the impact on clubs, which is why we are giving them time to prepare for the measures we are bringing into play.
On top of the new licensing system, the regulator will introduce a new strengthened owners and directors test to make sure that a club’s custodians are suitable, and to protect fans from irresponsible owners. This responds directly to growing concerns about financial mismanagement in football, particularly illicit finance, as well as to fans fighting back against owners at clubs like Blackpool and Charlton Athletic. The regulator will also bring in new, robust financial regulation to improve the financial resilience of clubs across the football pyramid.
As members of this House will be all too aware, a lack of financial resilience is one of the key risks to clubs’ futures. Giving the regulator powers to oversee financial plans and to step in to require clubs to beef up their financial resilience, where it has concerns, will prevent clubs from facing cliff-edge situations like we recently saw at Southend United. That will not mean that all clubs have to break even. We know that striving for success can come at a cost and that this ambition makes the game so exciting, so we welcome sustainable, sensible investment. What we cannot have is reckless overspending, irresponsible risk taking and inadequate funding. That is why the regulator will look at each club’s plans and how they are funded, and ensure that clubs have the resources to manage their risk taking. No longer can we have short-term actions jeopardising a club’s long-term sustainability.
Ashley Dalton (West Lancashire) (Lab)
The Secretary of State has mentioned fan engagement a couple of times. Fans increasingly feel as though they are not being listened to by their clubs. The fan-led review, which she has also referred to, made a series of recommendations in 2021 to give fans a real say in how their clubs are run. Will she be clear as to how the Bill will ensure that clubs are effectively and properly engaging with their fans and that fans’ voices are not being ignored?
Lucy Frazer
The Bill identifies a number of things that we know are important to fans, including heritage assets such as the colour of shirts, badges and the location of a club’s stadium. We know that those are the things fans care about. The Bill ensures a proportionate approach, because we know that engagement with different fans at different clubs, which have very different measures in place, will require us to take a proportionate, case-by-case approach. The regulator must ensure a level of engagement with fans, particularly on the issues that I am identifying, but we also want to ensure that it works for the clubs. Therefore, it will be for the regulator to ensure that a proportionate approach is taken.
I was about to go on to discuss that aspect, because we will be setting a minimum standard of fan engagement, and requiring clubs to seek the approval of their fans for changes to those things I mentioned in order to comply with the strong existing protection for club names. We know that most clubs have a strong relationship with their fans, consciously engaging them in decisions about the club’s heritage. However, there have been some notable exceptions, as we have seen at Cardiff City and Hull City, whose fans have had to battle to bring back or keep their club’s colours, badge and name.
As I said, the regulator will also protect fan interests with the requirement for clubs to seek its approval for any sale or relocation of their home ground. The stadium a club plays in is not only of significant value to fans; it can be the club’s most valuable asset, and it is only right that a club seeking to relocate has to demonstrate that such a move would not significantly harm the heritage of the club.
Damian Collins (Folkestone and Hythe) (Con)
The regulator is asked to balance the financial sustainability of the club with heritage concerns and to make an either/or decision, under its purposes. In that scenario, could the regulator decide to allow a club to move if it felt it was best for the club’s future sustainability, even if the fans objected?
Lucy Frazer
Yes, that is right; the regulator has to take into account the views of fans and look at the proposals. If it considers the proposals to be good, that change can take place.
Under the new regulator, fans will no longer face the prospect of seeing their club signing up to ill-thought-out proposals, such as the European super league, which several Premier League clubs tried to join in 2021. The House was united in recognising that those proposals for the new competition were fundamentally uncompetitive and would have undermined the football pyramid, against the wishes of fans. This regulator will prevent that kind of closed-shop league from ever getting off the ground.
Andy Slaughter (Hammersmith) (Lab)
I respect what the Secretary of State is trying to do, but there is a huge inequality of arms between billionaire owners of clubs and fans’ organisations. I have been the MP for Queens Park Rangers for nearly 20 years, but my small borough also contains Chelsea and Fulham, and in my political lifetime all three of those clubs have faced either being folded up by greedy owners or losing their ground in perpetuity. I do not see what in the Bill is going to prevent that from happening in the future.
Lucy Frazer
All the measures in the Bill, cumulatively, will ensure that clubs are well managed and run; therefore, they will be there and will not go into financial insolvency and administration, which decimates communities. All the measures we have set out, be it the owners and directors test, or the measures to ensure that clubs have a financial plan, will ensure that clubs are properly run. We are introducing the Bill to ensure that the situation whereby we have had 64 administrations since the Premier League was founded in 1992 is not continued. We are not saying that clubs are never going to get into financial difficulty, but we are saying that we are going to put a strong framework in place to ensure that all constituents can be confident that their clubs will have a certain level to which their business is run—that they will be run well.
John Cryer (Leyton and Wanstead) (Lab)
Leyton Orient, in my constituency, with which the Secretary of State is familiar, now have owners who are genuinely dedicated to their welfare. Previously, they were owned by somebody on whom the fit and proper person test had no effect, and that person nearly destroyed the second oldest club in London. Is she confident that the Bill will ensure that such people will not get their hands on clubs such as Orient in the future?
Lucy Frazer
Yes. This Bill is all about ensuring that the owners and directors of clubs are fit and proper people, so that what happened to the hon. Gentleman’s club, which I was at just a few weeks ago, does not happen again.
Mr Robin Walker (Worcester) (Con)
I will support this legislation because many of the steps it takes are very necessary. I hope it will mean that Worcester City will never leave Worcester again. Much of what I am hearing about the need to protect the financial sustainability of clubs and leagues also applies in the smaller but still important world of rugby union. As the Secretary of State will know, and as the Under-Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Pudsey (Stuart Andrew), who is sitting next to her, knows very well, Worcester Warriors are currently without a place in professional rugby. If this legislation succeeds, will she consider applying it to other sports, or introducing legislation for other sports, where that is required to sustain opportunities in the professional game?
Lucy Frazer
As my hon. Friend knows, the Under-Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Pudsey (Stuart Andrew), and I have spent time looking at the issues in rugby, and continue to do so. We are setting out what we hope will be a strong financial framework for football. This is being watched closely by other countries that are looking into what they will do in football. Of course if other sports want to look into this, they can.
I move on to the backstop power. Obviously, broadcast revenue is a hugely important source of income for clubs up and down our top-tier football leagues, but the current distribution of revenue across the top five divisions is not sufficient, and football has not been able to come to a suitable new arrangement. Not only does that contribute to problems of financial sustainability, but it can have a destabilising effect on the sport. To avoid that in future, the regulator will have new, targeted backstop powers to help ensure a sufficient flow of money. However, those powers are intended only as a last resort, and can be triggered only if certain conditions are met. The backstop mechanism has been designed with the industry and leading experts to give football incentives to reach a timely compromise, thereby delivering the right outcomes while minimising costly regulatory involvement.
The final part of the regulator’s job is improving the corporate governance of clubs. We will establish a football club corporate governance code, and will require clubs to report regularly on their corporate governance, setting out how they have applied the code and why that is suitable for their circumstances.
Damian Collins
The language in the Bill reflects the language on corporate governance in the Companies Act 2006, but there “corporate governance” includes the relationship that a board of directors has with not only the component parts of the business, but the employees. Should it not be inherent in the Bill that the corporate governance code should suggest how clubs can maintain high player welfare standards?
Lucy Frazer
We looked closely at precedents elsewhere, particularly in regulatory fields, when forming the basis of the Bill. We have always been conscious that we are regulating in a commercial space, and that football clubs are businesses. The premier league is world leading. We are regulating because football clubs have failed to solve these issues themselves. What we do not want to do through this Bill is over-regulate, including in areas in which we would not be regulating but for this Bill. We are trying to strike the right balance. That is why the Bill, notwithstanding questions that have been put to me in this House, focuses on financial regulation. Importantly, it does not interfere with the game, or with how players are looked after. The leagues have a role to play, and they should be primarily responsible for running the game.
Valerie Vaz
Do the regulators have sufficient power to intervene if some of the owners are servicing debts in other areas of their company?
Lucy Frazer
The regulator will have strong powers to look at owners and directors tests, and at financial plans. They will have powers that are designed to ensure the financial sustainability of football. The question that would arise, I suspect, in the right hon. Member’s case is whether that issue was interfering with a particular football club.
Kevin Brennan (Cardiff West) (Lab)
The Secretary of State is being very generous with her time. I thank her for mentioning Cardiff City. I hope to catch Madam Deputy Speaker’s eye later and talk some more about them.
One reason why the Government regulate in the commercial space and in business is to promote competition. In the White Paper, the Government said that the scale of parachute payments can distort competition in the championship and encourage greater financial risk-taking by clubs not in receipt of them. If the regulator has no power in this sphere, how will we ensure that the pyramid is a reality, rather than it becoming ever more difficult to climb?
Lucy Frazer
I recognise the concerns raised about parachute payments and the distortion of competition. On the backstop powers, parachute payments have been included because of the way that the backstop mechanism works; two offers are made by the Premier League or by the English Football League. However, that is not to say that parachute payments are completely ignored. The regulator will look at the state of the game in a holistic way. Also, it is not to say that if the parachute payments affect the running and finances of a club, the regulator has no ability to look at those payments.
Robin Millar (Aberconwy) (Con)
The Secretary of State said something very important about looking at precedents for regulation in other areas. Certainly, one reason why I am in the Chamber today is my love of the game; although I recognise that there are financial matters that need regulation, that is not the whole of the issue. My concern, and that of many of my constituents, is about the matter being treated simplistically, as if there was just one set of financially related problems, without consideration for community ties, the involvement of fans and so on. When she looked at other examples, did she find anything that managed to crack that nut, or that captured that nuance?
Lucy Frazer
There does not need to be a nuance. The whole point of this legislation is to protect fans, communities and clubs. At the heart of that is making sure that clubs are financially sustainable. None the less, in the legislation, we also have measures to ensure fan engagement on the things that fans care deeply about—the heritage, for example. I cannot overstate the point that although we want to protect the premier league, which is an important, world-leading asset, we also want to protect fans and communities, and that is what this legislation is all about. Taken together, the new measures and the carefully considered remit of the regulator will help us to safeguard clubs, protect the interests of our fans and avoid unnecessary and excessive regulation.
The vast majority of our clubs are run well and live within their means. I am confident that those clubs and their owners will recognise that the Bill, and the new regulator, will allow us to put football on a solid basis for years to come. The Bill will preserve and enhance all the things that we love about our national game, and I commend it to the House.
Thangam Debbonaire (Bristol West) (Lab)
May I start by saying how good it is to see the Bill receive its Second Reading? Many people have been campaigning for it for many years, and as the Secretary of State has acknowledged, it has strong cross-party support. A lot of people—both inside and outside the Chamber—have put in a lot of work. Sadly, weeks, months and, I am afraid, Secretaries of State have gone by, but I am glad to see it here at last.
Since I was given the honour of serving in this role, I have met fans, clubs, representative leagues, governing bodies and special interest groups, and I want to thank them all for their time and expertise. I know that they are following our proceedings closely. I also thank the civil servants at the Department, who I know will have put in painstaking work to get us to this point. They deserve our appreciation, and I hear that same point being made by those on the Government Benches.
This new law will not fix all of football’s problems, nor is it designed to. I believe that it can be transformative, if things are done right both during its passage through Parliament and in the crucial implementation phase. The prize could be greater financial sustainability across the whole football pyramid, and, crucially, fans having a greater say in how their clubs are run. It could be those things, but it is up to us to make sure that it is. That is what fans deserve, and what Labour has called for in our last three election manifestos. We Opposition Members are therefore absolutely committed to passing this Bill into law, and to making it work. It is a once-in-a-generation chance to change the game that this country loves for the better. We must all realise the responsibility that we have to make a success of it.
Football is part of what it means to be British. It reaches across borders. It is part of our global brand. It brings us together. Yes, it sometimes brings crushing disappointment, but it also brings us joy. We watch with our families and friends at the local, in the stands or in our living room. We cheer and chant with strangers in stadiums, and together, we sit on the edge of our seat with nervousness. Labour will never take the magic of football for granted. It deserves our attention and our hard work.
Football is also an economic powerhouse. As my right hon. and learned Friend the Leader of the Opposition has clearly set out, Labour’s No. 1 mission is to go for growth. The premier league and its clubs contributed more than £4.2 billion in tax in 2021-22 and supported more than 90,000 jobs. The English Football League clubs contribute so much to our country’s finances, to jobs, and also to joy. The next Labour Government want to invest—in hospitals, in schools, in repairing the damage done by the last 14 years, and in making sure that every child gets a great experience of sport and physical activity at school. That is why football’s contribution to public funds is so important to us, and it is why we will focus on economic growth. Labour will support football up and down the pyramid to grow sustainably, and to create even more jobs, as well as joy. I say “sustainably”, because Labour believes it is important that the whole football pyramid shares in the success of the game.
England leads the world in its system for football. The English pyramid is built on competition. The fans’ love of the game was never more clearly demonstrated than when they overwhelmingly rejected the close competition model of the proposed European super league. That set in train the fan-led review by the hon. Member for Chatham and Aylesford (Dame Tracey Crouch) and led to where we are today, but there is so much more work to do.
Valerie Vaz
My hon. Friend mentioned the fan-led review. Does she agree with me that the women’s game, which is out of scope of the Bill, is growing exponentially, and that there is scope for the hon. Member for Chatham and Aylesford (Dame Tracey Crouch), in a new role, to look at the women’s game and see whether we could have some regulation there?
Thangam Debbonaire
I thank my right hon. Friend for that intervention. She rightly pays tribute to the hon. Member for Chatham and Aylesford, although Karen Carney has also made a substantial contribution in leading the Carney review. I read the review with interest—it was great—and I believe my right hon. Friend may be aware of it. It is certainly worth Members giving it a detailed read; it deserves all of our attention. I am really proud of the fact that the English women’s game is growing so strongly and so well, and that it is inspiring so many women and girls to get active and get fit. The work of the hon. Member for Chatham and Aylesford, combined with the Carney review, sets in train exactly what my right hon. Friend is looking for: strength in our women’s game, which deserves it and deserves our admiration. It is bringing in new audiences all the time, which I think is fantastic.
Thirty years ago, English Football League revenues were 75% of the Premier League’s; today they are just 6%. The gap then was £11 million; it is now £3 billion. It is not that that income is not distributed from the Premier League—it is. It is because increasing amounts are spent on parachute payments, which are made to clubs relegated from the premier league for up to three seasons. I respectfully remind the ministerial team that it was the Government’s own White Paper that recognised the scale of these payments and that they can have unintended consequences.
Sir Mark Hendrick (Preston) (Lab/Co-op)
My hon. Friend referred to parachute payments. Does she feel that the inclusion of the clause that prohibits the parachute payments as “relevant revenue” is already prejudging the outcome of the state of the game review? It is excluding them to start with, rather than leaving the question open until the review is done.
Thangam Debbonaire
My hon. Friend raises a really important point. It is so important that the state of the game report leads the way, and that the regulator is allowed to look at the evidence and have the scope to intervene where that is necessary. I fear that the Secretary of State may inadvertently have confused the issue in her earlier remarks, although I think she began to clarify it. I would be grateful if the Minister could further clarify it in his summing up, as there is some remaining confusion.
Mr Betts
I certainly think that if we do not sort this issue out today, we must at least have some time in Committee to try to untangle what clause 55 actually means. I thought the Secretary of State said that the parachute payments were in play in the discussions about distribution of funds within football until it gets to the backstop, when they are taken off the table. It is almost being said that if the Premier League does not reach an agreement with the EFL until the point of the backstop, the Premier League will in effect have a veto over parachute payments being changed. That is what is being said, and I think that position really needs to be changed when we are in Committee.
Thangam Debbonaire
I thank my hon. Friend for that intervention. Like other colleagues, he is so knowledgeable about the detail of this Bill. I urge the Government to consider what has been said in a constructive spirit. Everybody present wants to get to the bottom of this confusion. We want to make sure that football and the regulator have the tools they need to grow sustainability—a key word which the Government have themselves used. The confusion about parachute payments is worthy of further attention, because there is so much money involved. They also have the distorting effect that the Government’s White Paper rightly identified.
If we do not look at this issue, we risk distorted competition in the championship by encouraging greater financial risk taking by the clubs that do not receive those payments. We know that that can result in an over-reliance on owner funding, which again is simply not always sustainable. As my hon. Friends have mentioned, clause 55(2) excludes parachute payments from any order by the regulator on revenue distribution. I gently say to the Government that, as there seems to be some contradiction or possible confusion, we would like that cleared up. I would be grateful if the Minister could say more in his summing up about how the money currently used for parachute payments could make more impact and perhaps be shared more widely, whether he has examined that in detail and to what extent he feels the current terms of the Bill are satisfactory.
Dr Evans
Part of the problem is that football is inherently risky; the very nature of what a club does is in order to get promoted. If, in trying to engineer some sustainability from the point of view of people investing in a club, Derby County had been promoted, the model would have been deemed to have worked, but it failed and so did the club. How would Labour facilitate individuals from across the globe investing in the best leagues in the world, while making sure that clubs such as Derby County were protected?
Thangam Debbonaire
I gently point the hon. Gentleman to his Government’s White Paper, because the Bill comes from there. Yes, of course the game is inherently risky—that is part of what makes it thrilling—but we need to be thinking about whether that is a calculated risk that is part of the thrill of the game, or an unintended consequence of a possible market failure. We really need to look at whether there is distorted competition. I gently suggest that, if the hon. Gentleman has not read his Government’s White Paper, he should.
Thangam Debbonaire
Then we really need further discussion in Committee on this issue; it is worthy of such consideration. On calculated risk taking, we need to be clear about when we are taking unnecessary risks and when there are unintended consequences of the way finance is distributed.
Mr Perkins
Surely football club owners should be able to spend the money they have to take such a risk. However, if they are spending money from the future, as Derby County and Glasgow Rangers did, and the risk fails in the current year, they will inevitably go bust. Glasgow Rangers disappeared altogether, and Derby County almost disappeared. Football fans do not want clubs to take that risk, and surely the regulator should be preventing that.
Thangam Debbonaire
My hon. Friend raises the most important point, which is about how fans feel. There should be no taking of reckless risks and there should be no jeopardising of a club’s future, and that is important. Any business owner—the hon. Member for Bosworth (Dr Evans) mentioned businesses—knows that they have to think about what level of risk they are going to take. Fans are at the heart of football, which is one of the things that makes football special and unique, and what fans want is such an important feature of our discussion.
Steve Brine
I will ask the same question that I asked the Secretary of State, because the hon. Lady could be the Secretary of State this year. I do not know whether she goes to watch football—perhaps she goes to watch Bristol Rovers in her own city—but she will know that, earlier this year Bristol Rovers had the mighty Norwich City at its stadium. It had 10,000 fans for a mid-week FA cup replay, which was really important to the club. Bristol Rovers has called on the FA to reverse its decision to scrap FA cup replays. This Bill is about financial resilience and viability throughout the pyramid, so what is the Opposition’s view of the FA’s decision last week?
Thangam Debbonaire
I am grateful to the hon. Gentleman, who says that the Bill is about financial resilience. Obviously, Bristol Rovers is my local club, and I listen to what it has to say, but I also listen to what fans across the country have to say, and they are clearly very upset about that decision. My right hon. and learned Friend the Leader of the Opposition has made his views on this extremely clear, because we really think that replays are part of the game. [Hon. Members: “Hear, hear.”] He has said that replays are an important part of our game, and we can hear that in the reactions of my right hon. and hon. Friends behind me. However, as the hon. Gentleman says, replays are not part of this Bill, and we are focused on financial resilience. He will know how much I have enjoyed being at Bristol Rovers. I was on the terraces only the other week watching them lose to Reading, but that is part of the joy of football—that and the pies—isn’t it?
I want to talk about how revenue is distributed throughout the football pyramid, because that is an important consideration of this Bill. One of the many ways the Bill sets out a future for the regulator is on financial distribution. It is down to the leagues themselves to reach a deal on broadcast revenue distribution, but it saddens us all that, at the moment, a deal still seems a long way off. It seems that there has been something of a breakdown in communication. I have met many of the interested parties and listened to concerns, and I appreciate that this is complex and not easy, but I urge both sides to come to an agreement.
However, if those negotiations cannot result in a deal once the Bill is enacted and the regulator is in operation, the regulator will have the power to select one of the two options put forward by the parties. That important backstop power should be used as a last resort, but it is clearly important that such a power exists. Given how important the backstop is, will the Minister say what work has been undertaken to ensure that that specific part of the Bill works in practice? Is it legally watertight? Are there questions that still have to be answered? From my engagement with stakeholders there seem to be many important questions that still need to be answered and we will be exploring them further in Committee, but will the Minister give us a bit more of an indication at this stage regarding what work has been done and what that will mean in reality?
Proportionality will be key for us all. As many Members across the House have said, we want the game to succeed and to continue in the great future that it has for the whole country. Proportionality is important. With all legislation and regulation we must strike the right balance, and nowhere more so than with the licensing scheme for clubs. That is the mechanism through which a majority of the regulation and enforcement will be delivered, and it is right that the regulator will be able to tailor a club’s obligations proportionately, especially when it comes to clubs in the national league—many hon. Members represent constituencies in which there is a national league team. We support an appropriate transition period, to enable clubs to prepare for this process. We must bring clubs of all sizes into the system in an appropriate way.
Colleagues have also mentioned sanctions. As the Bill stands, the regulator will not be able to impose points deductions on clubs that break the rules. Labour backs that decision, but I know how much this issue matters to colleagues across the House and to fans up and down the country who are understandably devastated when their clubs are hit with points deductions as a result of decisions that the fans have no power over. After the formation of the regulator, the leagues will continue to have their own financial rules, and there is nothing to suggest that points deductions for breaches of the league’s own rules will not continue. Nobody wants to see points deductions for corporate or financial mismanagement, least of all fans. I hope, and I know fans hope, that the regulator and licensing scheme will mean that clubs are more financially sustainable, and that breaches of league rules and the associated points deductions are much less likely. Again, if the Minister would like to address that when summing up the debate, that would be helpful.
Football clubs are the pride of our towns and cities. They are an important part of our civic identity and the heart of our communities. New owners often bring important investment, but I know from speaking with clubs that it is about more than that. It is a big responsibility and honour to be the custodian of a football club, and owners should take that seriously. I know that is how it feels for the owner of my local club, Bristol Rovers.
Andy Slaughter
My hon. Friend is making a very good speech. One other thing that clubs do through their community arms—in the case of QPR that is QPR in the Community Trust—is regenerate an area. In one of the poorest communities in the country we have Andy Evans and his team. It is big business, and they make a massive contribution to the local community. However, they and the club fear that the poor governance and financial inequality of football puts all that at risk. Is that what is at stake in the Bill?
Thangam Debbonaire
My hon. Friend is exactly right. So many things are at stake in the Bill, which is why it is so important we get it right. I know Fulham well, and the important work done by football community trusts, supporters clubs, and so many people involved in the game who help to regenerate their communities. However, they cannot do that on their own, or if their club is not sustained financially. That is what is at stake, my hon. Friend is absolutely right. Indeed, I have seen that for myself in what Bristol Rovers does for our local community. I met the owner of my local club recently. It was a pleasure to meet him and to hear from him and fans about the importance of growing the club sustainably and investing in the local community. I was impressed to hear the number of ways that the owner, management and fans have engaged with each other and learned from each other. There is always more to do—I am sure all clubs would acknowledge that there is always more they can do to hear what fans have to say, and what their community trusts are doing, as well as how they can be enabled and supported to do more of what they do so well.
Although the vast majority of owners act in the best interests of their club, some do not. That is why Labour has been calling for new checks on owners and directors. The Bill stipulates that those checks will: look into whether prospective new owners have sufficient financial resources to be a suitable owner; review their finances to ensure they are sound; check whether prospective owners behave with honesty and integrity; and assess officers’ competence and whether an owner’s source of wealth is connected to serious criminal conduct. Again, will the Minister address those points when summing up the debate? What does all that mean in practice? The Bill is not clear whether the tests will be objective or subjective in nature, and some of them appear to be distinctly subjective. How will the tests be conducted and what will the criteria be? Will that issue be addressed in Government guidance or the regulations? Does the Minister expect it to be addressed in the code? I would be grateful if he clarified that.
Damian Collins
The Bill is reasonably clear that the regulator considers not only those rules, but any other rules that it wishes to write into the rulebook. This will give us for the first time ever a subjective test set by the regulator, which can be enforced with statute backing it up.
Thangam Debbonaire
The hon. Gentleman seems to be saying that it is a subjective test. I was asking whether there are any objective tests, because I think that is important in terms of fairness. Where are they objective, where are they subjective? Concepts such as competency can be interpreted both objectively and subjectively, and I would appreciate the Minister’s clarification of what he views as the Government’s position.
Mr Robin Walker
One issue we came across in the huge difficulties that Worcester Warriors went through was that it had a director who was approved on the basis that he had been approved by the footballing authorities. He was approved because he was a practising solicitor, but it turned out he was a disbarred practising solicitor. Is it vital that a regulator has the ability to check information given to it, so that even if people provide misleading information to a regulator, it has the ability to intervene and strike those people off as appropriate directors where necessary?
Thangam Debbonaire
The hon. Gentleman explains exactly why it is so important that the owners and directors test will work. That is why I am addressing these remarks to the Government—it is, after all, their Bill. I would like to know substantially more from the Minister in answer to the questions that I and others have raised.
Fan engagement is crucial and we back fans having a greater say in how their clubs are run. Therefore it is right that the Bill requires that if a club proposes changes to club crests or colours, it has taken reasonable steps to ensure that those changes are supported by a majority of fans. Fan engagement should not be reduced to a box-ticking exercise, and neither should it be one size fits all. Engagement must be meaningful and appropriate, and suitable for each club.
The women’s game is not explicitly mentioned in the Bill, but we would all agree that it has had a stellar few years. It is growing quickly, bringing new crowds to stadiums, and introducing lots of girls to the joys of physical activity. I am determined to see the women’s game grow even more. I have already mentioned that proportionality is a key principle that must be considered during the passage of this Bill. Having listened to what representatives of the women’s have to say, I do not think it wise to introduce regulation to the women’s game before it is ready or unless it is necessary. It is right that there are powers in the Bill to introduce regulation to a league designated by the Secretary of State that could, if necessary in future, include the women’s game. I will be monitoring that closely, in collaboration with representatives from women’s football.
The governance of English football is in a position of uncertainty, and on this Government’s watch that uncertainty has been allowed to carry on far too long. That has been, and continues to be, to the detriment of clubs and their finances. After the passage of this long-awaited Bill and the establishment of the regulator, I hope that football will be able to enter a new period of governance stability. As the Bill progresses, that is what Members across the House should be aiming for, and what fans across the country deserve.
Dame Tracey Crouch (Chatham and Aylesford) (Con)
I rise, unsurprisingly, in support of the Bill. I am pleased to see you in the Chair, Madam Deputy Speaker, because I know you take a keen interest in Doncaster Rovers, and although you are not able to speak in the Chamber on these matters, you have been a fine advocate for its views during this process. May I congratulate the hon. Member for Bristol West (Thangam Debbonaire) not just on completing the marathon on Sunday, but for standing up and sitting down without an audible “oof”? Two days after, that is pretty commendable.
I thank the ministerial team and the long-suffering officials at the Department for Culture, Media and Sport who have worked exceptionally hard on bringing forward this Bill. This detailed piece of legislation has been well worked through to ensure that it moves smoothly through Parliament and is in place as soon as possible. I also pay tribute to those who have campaigned on this issue for many years. I may have chaired the fan-led review, but the truth is that a blueprint for reform was created long before. I went down a Hansard rabbit hole, thanks to James in the Official Report team, and read some fabulous references from days past, including a glorious contribution from the much-missed Alan Keen in 1997 that highlighted:
“The Premier League and the Football Association govern themselves with no appeal beyond their confines.”—[Official Report, 27 June 1997; Vol. 296, c. 1094.]
Given last week’s furore over FA cup replays, that still seems apt.
There are too many to list, but the likes of Richard Caborn, Andy Burnham, my hon. Friend the Member for Folkestone and Hythe (Damian Collins), Kevin Miles and his team at the Football Supporters Association, David Bernstein, Gary Neville, Henry Winter and Peter Crouch—no relation—have been vocal campaigners for change. The truth is that for many years, Sports Ministers, including me, have stood at the Dispatch Box with crisis after football crisis and pleaded with the authorities, “Reform yourselves, or Parliament will”, and here we finally find ourselves.
The Secretary of State has already set out the context of this Bill. It is always important to remember that the Premier League asked the Government to intervene when six clubs sought to join the European super league. The pleas led to the then Prime Minister Boris Johnson promising a “legislative bomb”. That came on the back of high-profile financial problems in the football pyramid, including the demise of Bury, which my hon. Friend the Member for Bury North (James Daly) has spoken about many times in this Chamber. The fan-led review was the outcome of the request from the Premier League and the regulatory failings to prevent clubs from disappearing from our football landscape and the subsequent massacre of the community ecosystem that supported them. The review was a deep dive into the issues, and I shall remain forever grateful to those who participated in it.
In preparation for this speech, I re-read some of the submissions to the review. It was interesting to read in its submission that the Premier League thought that there could be a use for an institution with “step-in powers” and “a capacity to intervene” should it
“manifestly have failed to uphold rules”.
The submission went on to say that
“such a body could also set the general principles required for standards for governance and transparency, including for financial regulation; strengthen the independent operation of the OADT; support the principles of standards for owners’ responsibilities as custodians; and protect decision making over key issues for fans”.
The same paragraph continued:
“Provided it operated in a proportionate way that respected the benefits of permitted well-run clubs and leagues to be nimble in their decision making and encouraged to innovate and take properly assessed risks, then this could make an important and positive contribution to maintaining and enhancing what is the world’s most dynamic and attractive football environment”.
This Bill is all those things, shaped brilliantly to reflect the words of the Premier League itself about what a great regulator could look like. It leaves many of us scratching our heads as to why the Premier League has spent the past few weeks lobbying to stop the Bill progressing.
I will say a few things about some of the specific clauses in the Bill. Clause 3 sets out to define an “ultimate owner” of a club. That is important, as part of the challenge in the past has been that that has not been as clear as it should. Clauses 5 to 8 set out the objectives and principles of regulation, making clear that the regulator should be nimble in its approach and can oblige good governance and real-time interventions, but is not obliged to guarantee zero failures. However, the Bill makes it clear that the regulator will be time-efficient, consistent and transparent. That is a departure, some might argue, from the current regulation.
Clauses 12 and 13 are key to how the regulator will evolve. Good guidance will be essential to its success, as we have heard in contributions and interventions. I already foresee strong guidance required on the role of fan advisory boards and on fan engagement, such as that set out in schedules 4 and 5, along with certain technical challenges, such as pitch ownership if that is different from club ownership. Timely but thought-through guidance done in consultation with key parties will be much needed if the regulator is to hit the ground running. Equally important is the need not to overload on guidance and create regulation by proxy. The whole point of the regulator is to improve governance and to be open and transparent, yet agile in relation to change.
Clause 26, and in particular subsections (7) and (8), which I refer to in my notes as the Martin Samuel measures—Martin is a journalist, but he would regularly ask me whether the honesty and integrity test would prevent Boris Johnson from running a football club—clarify that the test is defined by crimes under the Serious Crime Act 2015. Offences covered by fixed penalty notices are therefore not relevant, which will be a relief to those involved in football who might have been issued with a speeding fine or other such fine.
Clause 37(2) relates to the regulator having regard to foreign and trade policy objectives. That has become a slight distraction from the argument on the independence of the regulator. With that in mind, I suggest an amendment to the clause to change the word “must” to “may”. It is boringly technical to the outside world, but incredibly important if we are to impress on it the value of the regulator’s independence.
Part 5 of the Bill is an important aspect for the domestic fan base, covering prohibited competitions and the protection of club heritage, including ground disposal. For the fans, it is the soul of the Bill. When we published the review, I explained that its order was crafted like a good album. We put all the chapters about governance first, before we got to the redistribution of revenue. The way I see it is that the Premier League gives a substantial amount of money to the wider pyramid, but without the necessary structures of good governance. It is akin to having the heating on with the windows open. Putting in proper regulatory structures should give the Premier League and its clubs confidence that its money is going to good owners with proper business plans in place and real-time financial monitoring that gives significant protection. The Bill follows that same mindset. We get the structure right, then we distribute the finances, and that is what part 6 of the Bill does.
On part 6, I have some key points to make. First, there is an argument to be had on whether the regulator should have the ability in principle to trigger the backstop. I am sympathetic to that, but it needs to be done carefully. Secondly, although colleagues have focused on parachute payments, clause 55 is drafted so broadly that both domestic and international broadcast revenue could be deemed “relevant revenue” and available for distribution. That is not the case at the moment. I am slightly surprised that the Premier League has not included that in its list of things that it wants to amend. It is important that we seek to clarify precisely what is considered “relevant revenue” at the earliest opportunity. Thirdly, it is essential that we define, either on the face of the Bill or at some point in parliamentary proceedings, the definition of “material change”. What might seem material to the EFL might not seem material to the Premier League.
Fourthly, the powers of the regulator will extend to the national league, as presumably will the redistribution of funding. However, I note that the National League has said that it opposes the regulator. It is in the gift of the Secretary of State to define the reach of the regulator, so she could, if she felt it necessary, remove the national league from the Bill, and in so doing, remove it from the redistribution of finances and instead allow it to continue its existing arrangement via the Football Association.
It is right that we put these powers in the Bill, but it is disappointing that, two years on from the review, the football authorities have not done a deal on distribution. The solid recommendations in the review would have moved this debate much further forward than it is now, but they were ignored, so here we are, with the regulator requiring powers to intervene that were promised over and over again.
Clause 94 means that all fines received are paid into the consolidated fund. Although it may not be popular with the Chancellor, I propose that, in order to ensure that the regulator is deemed independent of Government, that clause be amended so that moneys raised above and beyond the regulator’s costs are diverted directly back into grassroots football, which I am sure would be much appreciated as we look to continue the growth in participation and investment in facilities in the run-up to and long after the Euros in 2028.
I do not wish to test the tolerance of the House, Madam Deputy Speaker, so I shall wind up. I love football, and although the Premier League continues to cast me and others who support the Bill as the enemies of success, investment, growth and international competitiveness, I would argue that quite the opposite is true. The premier league is one of our finest exports, and nothing in my review or in the Bill changes that. Instead, the Bill protects the pyramid from the vulnerabilities and fragilities that have challenged football over the years. It protects football clubs from owners who forget that they are merely custodians of something greater than a trinket. It serves to protect fans, clubs and entire communities from losing their heart and soul. For those reasons, I hope that the whole of Parliament will come together to support the Bill and get it into statute as quickly as possible.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I thank the hon. Lady for her kind words about Doncaster Rovers. I get the feeling that I speak for the whole House in saying how pleased we are that her work in this area has been recognised appropriately. [Hon. Members: “Hear, hear!]
Before I call the next speaker, a great many right hon. and hon. Members wish to contribute, so my first advice to Members is to try to confine their remarks to about seven minutes. I call Kevin Brennan.
Kevin Brennan (Cardiff West) (Lab)
Thank you, Madam Deputy Speaker. I also broadly welcome the Bill. May I add the members of the Culture, Media and Sport Committee to the list of people whom the Secretary of State praised? I was a member of that Committee until the end of last year, and I am glad to see several of its members in the Chamber for Second Reading.
It is a pleasure to speak directly after my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch)—I think I can call her a friend after all these years. I commend her for her work in this area and the terrific speech that she has just delivered. I found myself agreeing with pretty much everything that she said. I know that we are in favour of replays, but it would perhaps be wise of me not to repeat everything she said, so I will try not to, although I commend her for what she had to say.
There are still some who question whether Parliament should be regulating in this area at all. Why should we legislate to regulate football? After all, we do not do that in every sport—although, as the hon. Member for Worcester (Mr Walker) pointed out, there is perhaps a strong case for doing so in rugby union after what happened to his local club and other English premiership rugby clubs. However, in reality, Parliament has a long record of legislating specifically in lots of different areas of football. In fact, my private Member’s Bill—the Unauthorised Entry to Football Matches Bill—will have its Committee stage on 8 May, and will, I hope, given its widespread support, make its way into law if we have time before a general election is called. There is a long record of football-specific legislation, so this is not that unusual. Football plays such a huge part in our culture.
Let me say, as the Member of Parliament representing Cardiff West, that although we talk about the English football pyramid, it includes Welsh clubs of course, and has done for well over a century. Football is a huge part of our culture in Wales. In fact, a lot of hon. Members will not know that it is the most popular sport in Wales—more popular even that rugby—helped greatly by the success of our Welsh men’s national football team in recent years, including their reaching the semi-final of the Euros.
Of course, as hon. Members have pointed out, we would not be legislating if football had demonstrated the ability to regulate itself, which many of us—including the late Alan Keen, whom I am glad got a mention in the speech of the hon. Member for Chatham and Aylesford—have called on it to do for many, many years. It is telling that the Bill is now widely welcomed in almost all tiers of football except, as has been mentioned, the Vanarama national league and the higher echelons of the premier league. I completely acknowledge not only that the premier league is the world’s most successful club competition, but that its existence has brought benefit down the football pyramid.
In the first 25 years of the premier league’s existence, its revenues grew thirtyfold while revenues in the second, third and fourth tiers grew more than tenfold. That is the nub of the issue: if we go on as we are without effective redistributive methods, the inevitable consequence is that that the gap between the top and lower tiers would gradually make the pyramid untenable and unworkable. Without a long-term viable pyramid, football at the top will become even more of a cartel than it currently is.
The Premier League’s chief executive told the Culture, Media and Sport Committee earlier this year, that he was
“totally accepting of the Bill and the regulator coming in after that Bill.”
As the Bill progresses we should bear that comment in mind, which he said on the record to the Select Committee. We should hold the Premier League to that.
As we have heard during the debate, football should be about competition. Business should be about competition, and regulation is about helping to promote fair competition. That is the role of Parliament, Government and the state in this sphere. In the absence of an agreement between the Premier League and the English Football League, the backstop power of the regulator is an essential tool to ensure fair competition, and so that smaller businesses are not ultimately wiped out by the gradual concentration of resources at the top of the game and the impossibility of making progress in the game without taking the sorts of risks that undermine local clubs, and ultimately led to a number of situations that we have heard about. I do not see how Ministers will be able to convince right hon. and hon. Members that that is possible without the regulator having any powers to deal with pyramid payments. As we have heard, the Government’s own White Paper acknowledged the distorting impact that they have on competition. If the Bill is about fair competition, that has to be dealt with.
I want to mention my own club Cardiff City—hon. Members would not expect anyone not to mention their own club. Its stadium is located in my constituency and its recent history has contributed to some of the clauses in the Bill, particularly around fans’ rights. Cardiff City has been very successful during my 23 years in Parliament. It has been in the premier league twice, reached the FA cup final, and lost to Liverpool on penalties in the league cup final, but as is well known, some years ago a new owner, Vincent Tan, decided to change the club’s colours from the traditional blue to red, believing it to be a colour that brought good fortune. If hon. Members can imagine, for a football club universally known as the Bluebirds, the switch to red was somewhat problematic for the fans.
I welcome the fact that the owner changed his mind, and that the Bill would not allow that sort of thing to happen without the involvement of the fans. I can confirm that Cardiff City football club welcomes the Bill. I thank the club’s director Steve Borley, who wrote to me about the Bill. He said that
“the game’s fractured governance model and the inequitable distribution of finances”
is increasingly putting the game at risk. That is why the Bill is so important.
The Bill does not make any reference to the players. That is a missing part. The players’ union, the Professional Footballers’ Association, wrote to hon. Members about that, to say:
“As drafted, there is currently no reference to players within the Bill. We think this is a significant omission”.
I would like to hear from the Minister why that is the case, whether the Government would consider the representations from the players’ union to ensure appropriate references to them in the Bill, and reassurances about some of the existing structures that protect the rights of players, which the union is concerned about.
No one here wants to damage the premier league. I simply want my club, Cardiff City, to have a fair chance of playing in the premier league again. I hope that the Bill will go some way—hopefully improved, strengthened and amended—to ensure a healthier future for football.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the Chair of the Culture, Media and Sport Committee.
Dame Caroline Dinenage (Gosport) (Con)
I also rise to welcome the Bill and congratulate the Government on bringing it forward. I have to admit that we on the Culture, Media and Sport Committee were wondering whether this day would ever come, but the Government appear to have been inspired by the mighty Portsmouth football club, who last week secured victory and promotion to the championship with a last-minute goal. It is edge-of-the-seat sporting drama like that that makes British football the best in the world, right from the very bottom to the top—from the millionaires at the top of the premier league to grassroots clubs such as Gosport Borough, who have treated fans to a romping season. They play in the southern football league and sit tantalisingly in the promotion zone. Of course, there is also Fleetlands FC, who are pushing for promotion in division 1 of the Wessex league.
Here in Parliament, we have also been kept on the edge of our seats, eagerly awaiting this Bill that could potentially reshape the landscape of football governance. Over the past few years, instability off the pitch, not the action on it, has increasingly grabbed the headlines. Soaring levels of debt have led to the collapse of clubs such as Bury and Macclesfield, an experience shared by so many fans in communities up and down the country devastated by the demise of their beloved clubs. The debt problem is getting worse: premier league clubs have reported staggering losses of over £1.2 billion over the past 12 months alone, and the figures in the championship are looking just as shocking, with Leicester losing £90 million in 2022-23.
Fans of clubs such as Everton and Reading are sick of seeing them mismanaged through the reckless decision making of irresponsible owners. Just last week, the House heard of the pain of Torquay United fans, whose club has entered into administration following years of flawed business plans. Unreliable owners who do not have the interests of their club or its fans at heart, and are prepared to play fast and loose with their finances and their future, should be held accountable. As a lifelong Pompey fan, I feel their pain: after a series of disastrous owners, it took a fan-led buy-out in 2012 to save our club, demonstrating that our fans were literally prepared to pay up in order to stay up—or, in fact, to stay afloat—such was their dedication and commitment.
The failure of English football’s wealthiest clubs, those in the premier league, to agree a financial distribution deal is putting the fabric of our national game at risk. This situation has dragged on for far too long, and it has been especially disappointing to see the Premier League spending time and money lobbying MPs and peers against the Bill, rather than lobbying its clubs to secure a fair deal for English football. Decisions are repeatedly being made in the interests of the top of the football pyramid without a thought for the vital ecosystem that generates its lifeblood. Scrapping FA cup replays may be welcome in some quarters, but once again it is a characteristically messy number, denying lower-league sides that all-important financial boost. We need a change of tactics, so I know that fans across the country will welcome these plans to introduce a regulator and attempt to bring some stability to the game.
Of course, that is not to say that the new independent regulator will be the silver bullet that the Government have sometimes presented it as. The problems faced by football are extensive and complex, and there are still some areas where I would like to see more clarification and further work as the Bill progresses. I will talk through a couple of those now.
Widening financial distribution across the football pyramid will be the ultimate test of the Bill. Last year, our Committee urged the Premier League and the EFL to urgently agree a new deal to redistribute a higher proportion of revenue throughout the football pyramid. We recommended that in the absence of such a deal, the Government should expedite their plans to establish a regulator with the power to mandate a solution. I am pleased to see that the Bill aims to address this issue by giving the independent regulator the backstop power to intervene in the distribution of broadcast revenue, but that power is subject to certain thresholds being met, and it excludes the controversial parachute payments within the pot that we have already heard about. We need reassurance that the regulator has the teeth to trigger its own backstop powers and impose a fair settlement, when and where it deems necessary and without any undue delay. We also need an indication from the Government of how the regulator will curb the reckless spending of clubs trying to keep up with those in receipt of parachute payments.
Enhanced financial regulation across the football pyramid is really welcome. It will improve the resilience of clubs, encourage sensible financial decisions and ensure that risks are mitigated. However, given that the regulator will not oversee regulations such as the Premier League profitability and sustainability rules or the squad cost controls that are set to replace those rules, the Government need to provide clarity on how both systems will work alongside each other and reassurance as to why they deemed it unsuitable for the regulator to take on this responsibility.
When it comes to owners, I am really pleased to see that the regulator will establish a new, strengthened owners and directors test to ensure that a club’s custodians are suitable for the role. I welcome the fact that the Bill confers enforcement powers on the independent regulator to protect clubs from any harm that an irresponsible owner or officer might cause and to be able to remove them, but we need further detail on what precisely will happen to those clubs that have an unsuitable owner removed. We need to understand how the regulator would remove another potential Dai Yongge from Reading without compromising the future of the club and ultimately punishing its fans. I would be grateful if the Minister could explain how the Bill will safeguard clubs that find themselves in the position of having no owner, no financial safety net to keep them going and potentially no prospective buyers on the horizon.
We have already heard from Members that football is nothing without its fans, and I am pleased to see the Bill placing fan engagement requirements on the clubs as well as requiring them to comply with heritage protections and to seek approval for the sale or relocation of their home ground. But the Bill does not go quite so far as requiring fans to have a golden share, as recommended in the excellent fan-led review led by my hon. Friend—and real-life friend—the Member for Chatham and Aylesford (Dame Tracey Crouch). At this point, it would be terribly remiss of me not to add my congratulations to her and the whole team who have put an enormous amount of brilliant work into getting the Bill to this stage. As the Bill progresses, I want to be sure that it provides a way for fans to share their concerns about their club with the regulator and to know that they will not be dismissed. The Culture, Media and Sport Committee has agreed to hold a pre-appointment hearing with the chair of the independent regulator once the Government have a preferred candidate, and I expect that this will be one of the first questions we will be asking them.
Ultimately, there are two main questions that I want to see answered by this legislation. First, does it deliver for football and its fans? Secondly, to what extent will it prevent some of the distressing times that clubs like Reading are currently undergoing? There is more to be done on the Bill—and indeed the guidance that goes alongside it—to ensure that it fully meets those aims. We cannot overlook the huge economic value, the sense of community cohesion, and the moments of both local and national pride that football gives us; nor can we ignore the vital importance of a football pyramid that delivers at every single level. I know that some, including the Premier League, have concerns about unintended consequences, so the Select Committee has written to them to give them a chance to set out exactly what they would change—because there have been plenty of chances for the sceptics to prove that this Bill is not needed. Given that this is one of the biggest overhauls in the history of English football, we must do it right.
I congratulate Ministers, particularly the Under-Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Pudsey (Stuart Andrew), on getting the Bill to this stage. I look forward to his responses and to hearing what more can be done to secure a clear win—and, just like Pompey, can we do it well before the end of the season?
Madam Deputy Speaker (Dame Rosie Winterton)
I am putting in place a seven-minute time limit to ensure that everybody gets as equal a chance to speak as possible.
Sir Mark Hendrick (Preston) (Lab/Co-op)
It is a pleasure to follow the Chair of the Committee, the hon. Member for Gosport (Dame Caroline Dinenage). Following the fan-led review by the hon. Member for Chatham and Aylesford (Dame Tracey Crouch) in 2021, I spoke in a Westminster Hall debate on a petition on this issue. I said in that debate, and I reiterate today, that the current disparity between the rich and poor and the selfish nature of the elite clubs need remedying. This Bill does not do justice to some of the issues that the hon. Member for Chatham and Aylesford raised in her report, particularly with regard to grassroots football, women’s football, anti-discrimination and equal opportunities, but I am sure that those issues will be covered by later legislation in due course.
Football in this country has become a story of the haves and have nots, and regulation is desperately needed to ensure the health and prosperity of the game at all levels, not just in the premier league. I therefore welcome the Bill, and support the creation of a single, independent football regulator. At a time when the game has become an international sporting juggernaut and a global commodity with revenues greater than ever before, the financial and long-term sustainability of the football pyramid has never been more at risk. Too many historic clubs are on a cliff edge, about to fall off it and face the fates of historic clubs like Bury, which has disappeared, and Bolton and Wigan, which have struggled since.
This is why new legislation is crucial. Fans need a greater voice in the running of their clubs, and there needs to be a better means test for owners and directors to ensure fiscal sustainability and to root out the financial mismanagement that has plagued too many clubs, through the actions of foreign investors or those of domestic owners who have done the same things. An independent football regulator should ensure that English football continues to serve the interests of regulated clubs, while also contributing to the economic and social wellbeing of the local communities associated with those clubs. However, a regulator should also be a watchdog, and a watchdog without any teeth will not be much of a regulator, which is why it is essential for this regulator to have the powers to do its job properly.
The financial gap between the Premier League and the English Football League has reached a critical point. Thirty years ago EFL revenues were 75% of the Premier League’s, but today the proportion is just 6%. The gap then was £11 million; it is now £3 billion. At this pace, the football pyramid is untenable and the financial gulf between the two leagues—and across all levels—continues to worsen, but there is no doubt that there is enough money in the collective pot to achieve sustainability at all levels if the game’s revenue is distributed in the right and fair way, coupled with proper governance and organisation.
As it stands, the Premier League continues to rule the roost when it comes to English football, but some top-flight clubs have shown that they are incapable of self-regulation. We need only look at some recent financial breaches to see that the Premier League is nowadays not in a position to self-govern and regulate the sport when it struggles to keep its own house in order. Some have reaped the financial rewards without showing any concern or desire to preserve the health of the sport outside their own needs and ecosystem. Only an independent regulator will be able to provide proper oversight, regulate clubs’ behaviour, and intervene when necessary to ensure that they act responsibly.
The Bill also provides targeted backstop powers to allow the regulator to step in when it comes to the allocation of broadcasting revenue between the Premier League and the rest of the football pyramid, if needed. On the face of it that is fine, but clause 55 requires the “specified competition organisers”, the Premier League and the English Football League, to enter into a period of
“mediation in connection with the distribution of relevant revenue received”
by one of them, and if they are unable to reach agreement, the independent regulator
“may make an order as to the distribution of that revenue.”
However, in the Bill as drafted, that does not apply to certain circumstances in which the relevant revenue referred to in clause 55(2)(b) does not include parachute payments, which are defined as payments made directly to newly relegated clubs.
As was mentioned earlier, this cannot be fair, and it deliberately excludes the English Football League from making its case that the parachute payments are disadvantaging and distorting the revenues of championship clubs as a whole. The payments are not just a parachute meant for a soft landing; they are a ladder leading back to the premier league for most of the clubs that have already been relegated. That is clear from the current position of the championship division: Leicester City, Leeds United, Southampton and Norwich City occupy four of the top six spots. Incidentally, Norwich has been relegated from the premier league six times since its formation in 1992. This exposes the fact that the payments are a ladder back to the premier league, to the disadvantage of others elsewhere in the championship division.
Preston North End, my constituency club, which has its own place in history as a founding member of the football league, joins me in believing that a regulator is the only option to underpin both sustainability and competitiveness within the financial distribution of the football pyramid. As we speak, Preston are sitting in 10th place in the championship table. They have never played in the premier league—the only former top-flight first division champions never to have done so. They have a wage bill in the region of £16 million. How can they compete against the likes of Southampton—a club that was relegated in 2023 with a wage bill of approximately £88 million, which is six or seven times that of Preston North End?
As a lifelong football fan, I believe that this House not only has the opportunity but, more importantly, the obligation to create much needed reform in the game through a transformative Bill that safeguards all clubs for decades to come.
Martin Vickers (Cleethorpes) (Con)
I rise to support the Government’s plans, although until fairly recently I had considerable reservations about them. It took some time for me to come round and accept the fact that we should have a regulator. On balance, I think that is the right thing to do, as long as it is done in a limited and careful way. I have asked myself if we really want a Government-appointed regulator to oversee our national sport, or indeed any sport. Will other regulators follow? Will there be mission creep? Very probably. Will the Government of the day get the blame for the decisions of the regulator? Almost certainly. That said, we must ensure that our clubs, which are a much valued part of many of our local communities, continue.
It is undeniable to fans who have loved football for as long as I have that the game has changed since it became truly commercialised in the 1980s and, particularly, the 1990s, with the arrival of the Premier League. The scale, particularly when considering the money involved, is difficult to comprehend. Given this trend, the type of individuals and organisations we see taking ownership of clubs has changed dramatically. As the game has become a truly global phenomenon, some owners have become somewhat detached, to say the least, from their club’s supporters. As fans know, that is one of the biggest mistakes any owner can make. We saw that with the proposals for the Euro super league, not that that concerns a Grimsby Town fan such as me. We need to preserve the pyramid that ensures the Grimsby Towns of this world, whose Blundell Park ground is in my Cleethorpes constituency, are allowed to continue.
I will break off from talking about the Bill to have my say on the replay issue; it would be remiss of me not to. To me, the magic of the FA cup goes back many years. I can remember, as I am sure one or two other Members can, when the draw was always at lunchtime on a Monday. The BBC football correspondent, Bryon Butler, would speak in a hushed voice and we would hear the rattle of the balls as the numbers came out. Replays are part of the same magic as the draw. We have heard much about the game between Coventry and Man United on Sunday; that it was decided on penalties was rather sad. Would it not be great if they were playing again on Wednesday evening, or whenever?
Perverse incentives in modern football structures can lead to poor governance and unstable clubs. Many clubs are now making regular losses and borrowing at debt levels that they cannot afford. These are not the indicators of a healthy sport and only serve to make clubs financially vulnerable, worsening the environment they operate in and creating uncertainty for fans. As Kevin Miles, the Football Supporters’ Association’s chief executive, said, the Government’s proposals represent a
“once in a generation opportunity to reset the finance and regulation of football”.
As I mentioned at the start of my comments, I approached the issue with some reservations, but having studied the Government’s proposals, I think they have struck a fine balance between the benefits and potential costs of introducing such a regulator. Mind you, I am sure that there will be some, perhaps minor, changes as the Bill goes through Committee, but I now support the main thrust of the Bill.
On balance, the Government have been careful in their approach to how they intend to regulate, ensuring that it will be proportionate to the clubs’ individual circumstances according to factors such as league, club size and financial health. By empowering the regulator with a narrow focus, we can prevent overreach while ensuring that clubs remain financially stable. I welcome the fact that the regulator’s powers to ensure financial sustainability through redistribution of broadcast revenue, for example, will apply only in extremis.
Fans are highly attached to their club’s image, whether that be the name, the badge or the colours. It is therefore welcome that owners will have to consult on such changes. We heard earlier about the incident at Hull City a few years ago when the owner tried to change the name and so on, which certainly did not go down well with fans. That was just one controversial element of the Allam family’s ownership of the club, with a frequent trend being the owner’s inability to understand traditions, which are so important to fans.
The Secretary of State actually came to Blundell Park in Cleethorpes to launch the policy, which was only right given the true status of Grimsby Town, who thankfully have been saved from relegation to the national league yet again. As she rightly noted:
“Football is nothing without its fans.”
I applaud her determination and that of the Sports Minister, my right hon. Friend the Member for Pudsey (Stuart Andrew), to put fans back at the heart of the game. The Government’s proposed regulator will ensure the sustainability of our nation’s favourite sport and that the connection to fans is maintained, while not changing the fundamentals of the game itself. On that basis, I am happy to support the Bill.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
There is much to welcome in the Bill, which builds on the excellent fan-led review conducted by the hon. Member for Chatham and Aylesford (Dame Tracey Crouch). It will give fans more of a say in how clubs are run and the wider premier league redistribution of broadcast revenues—what is not to like? The core of the Bill is financial stability. We do need an independent regulator to stand up for the interests of smaller clubs and the EFL against globalisation, which is seen in not just Americanisation but oligarchs and sportswashing. I welcome the Bill, but, of the Crouch recommendations, the Government have regrettably opted out of action on equality, diversity and inclusion.
Against a backdrop of Bury going under, a pandemic that no one predicted and the spectre of the European super league thwarted for now, it is notable that, since 1992, 16 clubs have gone into administration. How much will the Bill address? It is too late for Bury; will Reading, on the brink of extinction, be next?
We need a regulator with appropriate teeth to take away licences from rogue owners—those venture capitalists who think about balance sheets, profit margins, asset stripping and destroying clubs—because football clubs are so much more than simply businesses. I know that from the work done locally by QPR and Brentford, and the email that I got from Professor David Gilbert of Ealing. He described how his family have been Reading fans since 1871 and told me how Dai Yongge is not co-operating with the fans and has destroyed clubs in China and Belgium. After the pitch invasion against Port Vale, he said:
“I was at the game and the protests that led to the abandonment…I was watching from the seats that my late mother and brother watched from until they died…my grandfathers supported from the 1920s…I have been going since 1969. That experience is not atypical of supporters in many towns and communities across the country, who have little or no say in the fate of their clubs.”
The club may be saved—I think there is an American bid at the moment—but that is a perfect case study or a textbook example in the future of why we need more protections, because of the collective social and cultural heritage of our clubs. However, the relationship between the English Premier League and the EFL and the distorting effect of parachute payments, which have massively unbalanced the beautiful game, are not addressed in the Bill. Although there are clauses on regulatory powers to force a financial redistribution of revenue, the Bill seems to think only of broadcast revenue.
It would be easy to knock the Premier League for its hospitality towards MPs—it was in here late last night, wining and dining people—and its attempts to push the free market, but in recent years our clubs have done us proud in Europe, in all-England finals in 2019 and 2021, and in 2023. They have changed football’s reputation from how I first remember it in the 1980s, when it was synonymous with fans behaving badly, racism, hooliganism and violence. They have cleaned up their act. Football brings soft power and tourism, but I worry that the value of the FA cup, which used to be such a big thing, is being lost with all these European competitions.
We need some sort of transparency and consistency, and a clear system on points deductions: why are Everton falling foul repeatedly, and not Man City? Why the mismatch between different systems and different leagues? I welcome the focus in this Bill on the football pyramid, which often seems, as Diana Ross would say, “Upside Down”. My son gave me a figure of £1.7 million a day generated by Man United, but that is not finding its way down to the bottom of the pyramid.
As the hon. Member for Chatham and Aylesford said in chapter 6 of her review:
“Football needs to improve equality, diversity and inclusion in clubs with committed EDI Action Plans”
regularly addressed by the regulator, but that is completely missing from this Bill. We know there are gaps in leadership, ownership and management—and who would benefit from reform? Players, parents and referees would benefit. The figures speak for themselves: the higher up we go, the boardrooms become almost a white male preserve. We know women’s football is increasingly expanding. We could also look at the issue of social class as well. How else will we Kick It Out, as the name of the racism charity demands? Even from a business point of view, in every other sector—civil service, local government, banks, wherever we go—EDI is central. It should not be seen as an add-on, with this patchwork of different systems and plans; we need a level playing field. Kick It Out figures show that racism and misogyny, offline and online, are all up. We need a proper regulatory framework for dealing with those, and I feel we have missed a trick.
The word “fan” appears only 16 times in this 140-page Bill. The Bill stopped short of the golden share veto power that the hon. Member for Chatham and Aylesford recommended. This legislation is fundamentally about finance, but we have heard about the ending of FA cup replays. Brentford, a local team, did well out of them a few years ago, yet now that they are in the premier league, they are all for banning replays. That needs addressing, because it is a big financial incentive to the smaller clubs.
There is also the problem of top teams in tournaments—and it is a problem. Let us not kid ourselves that the FIFA club world cup expansion did not have super league-style motives at its heart. Although that is gone, I think it is trying to come back in disguise, like the proposed champions league reforms. Those have been rejected for now, but let us be wary of all these things.
There will be resistance to change, but we need a truly independent regulator as the Football Supporters Association tells us. I welcome this Bill, but when we have Joey Barton saying women pundits should be banned from ITV, and the awful things that John Yems said, such as the N-word and “curry munchers”, there is a bit missing. The Sports Minister is excellent on this issue—he went to Qatar with a rainbow armband—so perhaps he could tell us in his summing-up what he will do to address it.
Sara Britcliffe (Hyndburn) (Con)
I refer the House to my entry in the Register of Members’ Financial Interests. I want to put on record how proud I am of how hard the Minister has worked on this Bill. He is an absolute credit to this Government with what he has done here. The recent events around changes to the FA cup show just how pressing this Football Governance Bill and the establishment of the independent regulator are.
As we consider the implications and potential of this legislation, it is crucial that we approach the task with urgency, recognising how important it is for football clubs up and down our country. Football is not just a game in our country; it is woven into the fabric of all of our communities. The clubs that dot our landscape, from the grand stadiums of the premier league to the intimate grounds of the lower divisions, serve not just as teams to support, but as community hubs and sources of local pride. Yet, despite the critical role that these clubs play, the sustainability of the football pyramid is under significant threat.
The crux of the issue lies in the financial disparities that have grown ever starker over the decades. The Premier League, while a global success, has seen its financial might grow exponentially, far outpacing the rest of the pyramid. That imbalance is not merely a matter of elite success, but a structural issue that endangers the viability of clubs across all levels. Today, EFL clubs operate at a massive loss, collectively losing £471 million during the 2022-23 season alone.
The establishment of an independent regulator, as proposed in the Bill, is a measure long overdue. The regulator would have the authority not just to oversee but to intervene and correct the course, ensuring that financial sustainability is not a mere aspiration but a reality. It would have powers to impose financial solutions that ensure the viability of clubs, reflecting the needs of community clubs across England.
We must also address the need for fair distribution of revenues. As it stands, the financial gulf between the Premier League and the EFL has become a chasm. Reforms in revenue sharing and financial regulations are necessary to prevent smaller clubs from financial catastrophe when they fall from the Premier League, or attempt to compete without adequate support.
In supporting the Bill, we are acting to preserve the soul of football in England. This is about more than business; it is about ensuring that the joy, excitement and community spirit that football brings are not lost to financial mismanagement and unchecked commercial appetites. The Bill presents an opportunity to reform our football pyramid to be both competitive and sustainable. It ensures that clubs can continue to thrive for the benefit of their fans, local communities, and our national game. It aligns with the recommendations of the fan-led review, and responds to the clear need for greater fairness and foresight in our approach to football governance.
It would be remiss of me if I did not mention my local club, Accrington Stanley, which is one of the 12 founding members of the football league. Although it is famous for the milk advert, what people also remember is that in 1962 it had to resign its position from the football league and subsequently went into liquidation in 1966. That was not common then. Unfortunately, we are now seeing it happen with many of our clubs. I have spoken with the owner of my club, Andy Holt, about this legislation more times than I can remember. He is clear, as am I, that if we are to protect clubs lower down the leagues, we need not only to give them a level playing field, but to provide them with the space to invest in their communities, whether through investment in facilities or working with children and young people. This legislation is required.
I want to talk briefly about the suggestion from my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch) on redistributing fines to grassroots communities. I think that is a very good idea. I have seen the impact Accrington Stanley has locally. It really is the heart of the community. It brings the community together and I would hate to think of the counterfactual, where it was no longer viable for the club to continue serving my constituency in the way it does.
I therefore urge my fellow Members to support the Bill, and to stand for fairness, sustainability and the long-term health of English football. Let us ensure that the game we love is protected for future generations not just as a spectacle of sport, but as a cornerstone of the communities we serve.
Matt Rodda (Reading East) (Lab)
It is a pleasure to speak today. I thank the Secretary of State, the Minister, the hon. Member for Bracknell (James Sunderland), who has been a superb campaigner for Reading football club, and other Members from across the House.
Broadly speaking, I welcome the Bill, but at the outset I would like to pay tribute to our wonderful club, Reading football club, its players and its fans. The men’s and women’s teams were both relegated last year. As was referred to earlier, that was through no fault of their own. The crisis at the club was due entirely to financial mismanagement by the current owner, Mr Dai Yongge. Despite being relegated, and with the risk of further relegation hanging over them, players and fans have battled through and we hope they have sustained the future of the club.Thankfully, Dai Yongge now appears to be selling the club, and we hope that a brighter future lies ahead. I hope that this Bill will ensure that other clubs do not have to face what Reading have been through, and that football can move on to a brighter future.
When Reading were in the championship, Dai Yongge started his period as the owner of the club by investing in their future. However, his behaviour changed over time, and the story we face is one of a failure to pay wages and, indeed, national insurance. This led to a series of winding-up petitions from His Majesty’s Revenue and Customs, and ultimately to 16 points being deducted. That, rather than anything that happened on the pitch, determined the situation at Reading.
This season, the financial problems have continued. Unfortunately, further points deductions have been made, although we are grateful to the EFL for its decision that they be suspended. In an incredible effort, the players have battled hard and avoided relegation from league one, and we hope they have secured the future of the club. However, the pressure on players, fans and the whole town has been absolutely awful. We have been through, and are still going through, the worst crisis in our club’s history. Reading football club were founded in 1871 and are one of the oldest members of the football league, and their proud history includes getting the highest number of points in the championship—106—having three seasons in the premiership and going on a glorious series of cup runs, including winning the Simod cup in the 1980s and several impressive FA cup runs.
During this period of great difficulty, emotions have run high. Some 1,400 people, including the hon. Member for Bracknell and me, joined a march to the stadium in October, and there have been numerous other protests. Fans simply want their Reading back, and I would encourage Dai Yongge to speed up the sale. As I said, we must ensure that what happened at Reading never happens again. We need a better test for owners and a better assessment of club finances, as mentioned earlier. Above all, we need to ensure that clubs, players and fans are not penalised for the actions of owners, however irresponsible they are.
I have some points to make to the Minister and the Secretary of State. Although I welcome the Bill, I would like far more detail on a number of key areas that I hope we will explore in Committee, particularly the test for owners and directors, the assessment of financial resilience, the oversight of financial plans, and the protection of grounds and training grounds, which is another problem we might face. In Reading’s case, the sale might separate the training ground from the ground, which has caused a great deal of concern and has, I hope, now been resolved.
I hope the Minister will address some of those issues and that they will be explored more fully in Committee. I believe that the Bill is a real opportunity for English football, and indeed for football in Wales, and I hope that we can all look forward to a brighter future for all our football clubs, particularly Reading.
Damian Green (Ashford) (Con)
It is a pleasure to follow the hon. Member for Reading East (Matt Rodda), as I have been watching Reading since 1965 and the last two years have been as miserable a time as any—even if supporting Reading is often through thick and quite a lot of thin.
Like everyone else in the House, I welcome the eventual arrival of the Bill. I pay tribute to Ministers for finally getting to this point, and I thank my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch) for her work on the fan-led review. Much of the Bill is welcome and necessary, but it is worth putting it into a historical context. As I say, I grew up watching football in the ’60s, ’70s and ’80s, when it was terrible. It was described at the time as a slum game in slum facilities. Grounds were crumbling, the fan experience was terrible and there was a huge amount of violence. Because some football fans behaved like animals, all fans were treated like animals, and it was altogether miserable.
Today, however, the top end of football is regarded around the world as one of the best things about this country. I remember a former tourism Minister telling me that the three things that make people like Britain and want to come here are the royal family, the BBC and premier league football, so it is important to put the various legitimate criticisms of things that happen in football into that context. The premier league has done some great things for English football, but this Bill comes from a fan-led review, and every proposal should be assessed as to whether it serves the interests of fans at all levels of the game. We need an independent regulator because the leagues, and therefore the clubs, cannot be trusted to regulate themselves.
Sir Oliver Heald (North East Hertfordshire) (Con)
My right hon. Friend and I were both there in 2006 when Reading won the championship, putting four past Derby. What a moment that was. I do not know whether he agrees, but I think the current players and manager are doing a cracking job just to keep the club alive.
Damian Green
I echo that. The fans, the players and the staff have formed a bond of survival against Dai Yongge, which shows the strength of feeling that all football fans have for their club. That is what we want to enhance.
There have been debacles such as the European super league and the increasing number of clubs whose fans have suffered—it is not just Reading, although Reading has featured a lot in this debate because it is the latest example. We hope that no more fans will have to suffer in the way that we have suffered.
The question is whether the Bill will be effective in practice. One issue at the heart of the Bill is financial distribution. How do we distribute the enormous sums generated by the Premier League without killing that golden goose? It is a difficult balancing act. The regulator cannot be a panacea, and it will have to be both tough and smart.
There are specific questions that need answering. First, are the backstop powers sufficient? In the end, the regulator has to choose between a Premier League offer and an EFL demand, and there is certainly an argument to be had about whether the regulator should have powers to make its own settlement, possibly involving other bodies in deciding on what the settlement should be.
We have debated parachute payments, and I confess that I am still slightly confused as to the Government’s attitude and desire towards parachute payments, which are the key to why the championship is a very skewed league. I have been looking at the figures provided by Fair Game, a very good lobbying group. Currently, for every £1,000 of the broadcasting deal, £882 goes to each premier league club, £73.48 goes to championship clubs in receipt of parachute payments and £32.85 goes to championship clubs not in receipt of parachute payments. More than twice as much goes to the clubs with parachute payments as goes to the clubs without parachute payments. That is how we got a skewed league.
The great disparity between the premier league payment, which people might say is fair enough because it attracts the broadcasting money, and the championship payment does not reflect attendances. For every 1,000 people who attended football matches in the 2022-23 season, 497 attended premier league matches and 234 attended championship matches. Championship crowds were just under half of premiership crowds, but the distribution of money to premier league clubs is more than 10 times as much, so it does not reflect what fans are doing.
The next question is how we solve the problem of people like Reading’s owner. He is a reckless owner who is immune to sanctions because he is not in this country. He spent money, broke rules, incurred penalties, lost interest and went away. The only penalties left, because he is ignoring the financial penalty, are points deductions. I agree with the EFL on parachute payments but, frankly, it has been a bit of a chocolate teapot on protecting Reading’s interest. All the EFL has done is deduct points, which just punishes the fans.
What in the Bill will help that? I think the licensing regime will help, because a competent regulator clearly would not let someone like Dai Yongge own a football club in the first place, even though the EFL did. The question still remains of what happens if an owner’s circumstances change, such as if they lose a huge sum of money and cannot afford to support their club any more, or if they just lose interest. They might die, and their family or business associates who take over might not care about the club. What happens then? I would make one suggestion to Ministers, which would involve only a small tweak to the Bill: clause 52 allows the regulator to levy money from every licensed club, so why should some of that levy money not be used to set up a survival fund? Where a completely reckless owner is walking away and leaving a club to go out of business, as Dai Yongge has done in two other countries, such a fund would allow the regulator, over the few months when a club needs to find a new owner, to pay things such as the national insurance that has not been paid at Reading or the wages that were not paid for a couple of months. I accept that would not be a long-term solution, but having a short-term solution would make a huge difference. As the Bill already sets up the possibility of a levy, I suggest extending its possible uses to set up this survival fund, so that if something like this happens again, the new system of regulation will explicitly be able to cope with it.
The introduction of the Bill marks a big step forward and I hope that it survives largely intact. As I, like others, have said, there are improvements to be made, and I urge Ministers at all times to keep the interests of fans at the front of their consideration, because without the fans, there is no point to professional sport.
Tim Farron (Westmorland and Lonsdale) (LD)
I declare an interest, as a lifelong Blackburn Rovers fan and a supporter of Kendal Town, who are in the North West Counties football league—I am beginning to fear that one day we might end up playing each other at this rate. To prove that football is more about uniting us than dividing us, I have, accidentally, worn claret and blue today, as a nod to our dear friends Burnley. [Laughter.]
I was at Grange Church of England Primary School last week, where a bright year 5 lad asked, “Tim, what sport do you enjoy the most?”. I nearly said football, but then I realised that I do not enjoy football at all; it makes me completely frustrated and miserable, but it does rule my life and occupy most of my waking moments. It is a hugely important thing, as it binds and creates communities, it creates shared experiences and it helps to build what it is to be English and to be British. So I am a thoroughly proud football fan. I love the game and want to stand in solidarity with all other football fans, even those of teams I do not approve of.
I pay tribute to the hon. Member for Chatham and Aylesford (Dame Tracey Crouch), who is back in her place, and the fan-led review, which has underpinned the Bill. My party and I welcome the principles behind it and the independent regulator. We acknowledge that football is integral to our culture and that the whole pyramid is vital to the game. Michael O'Neill, the chairman of Kendal Town—his is an unpaid role at a wonderful club that is doing incredibly well at the moment—has said that the
“top of the pyramid would not exist without the foundations”.
He is absolutely right about that, but the foundations include not just the clubs lower down the pyramid, but the youth game and the Westmorland County FA, and what it does for young people, supporting mental health, building resilience and teamwork, and creating community.
I am supportive of part 3 of the Bill, on licensing, although it is an important moment to do some redistribution, taking a proportionate share from each of the clubs to ensure that we fund the additional requirements of meeting the licensing. Part 4 of the Bill, as we have heard, is about owners and directors. I express my solidarity with the supporters of Reading—we think of Dai Yongge and what he has done to that club and community. Not yet so awful—but watch this space—is what has happened with Venky’s, who own the Rovers. Blackburn Rovers is a club in limbo and the question is whether or not we are a going concern, because of the owners’ plight in the Indian courts. We have to ask ourselves the extent to which part 4 will give the regulator power to deal with the Dai Yongges and Venkys of this world and make them put up, pay up or sell up. Nothing more underlines the powerlessness of the fans than situations such as those, and fans of Bury, Bolton, Hull City and Cardiff City would concur.
Part 5 deals with the duty on clubs and competition organisers. I am going to table an amendment, if I am permitted to do so, to bring back the replays in the FA cup and to restructure things so that all competing teams get an equal vote in deciding the organisation and rules of that cup. This situation is an outrage and nothing more underlines the arrogance and complacency of the Premier League than its thinking it can dictate to the rest of the league and the non-league how that glorious and almost ancient competition will be. If my amendment is successful, the Premier League might get away with one year of no replays, but we will get them back the year after when the whole of the footballing establishment actually gets a vote.
My main concern is on part 6—I will not go through every part of the Bill—and the powers of last resort. I am deeply concerned that we have only partial financial oversight. This is where football fans feel a sense of disappointment, and the Government have been a little weak in this regard. It feels like they have listened to the powerful few rather than the clubs, the fans or the volunteers. The financial powers seem to be restricted to simply being a mediator between the Premier League and the English Football League, and actually the Premier League and the championship when all said and done.
The right hon. Member for Ashford (Damian Green) has talked about some of the financial division, and let us look at the allocation. Of every £1,000 received in broadcast revenue, £882 goes to premier league clubs and £32 to championship clubs—that is about enough for Blackburn Rovers to buy another pair of goalkeeping gloves and, by golly, we could do with them. If you go down further, 15p goes to national league north clubs, and a fat zero to anything below the national league. If the pyramid is important, then the foundations are important. I want the regulator to have the power to make sure that the Premier League and the championship do not hog all the money, and that they distribute properly and effectively down the division.
I want to pay tribute to Kendal Town—the mighty Mintcakes, as we are known—because they speak for and represent so many other non-league clubs. Five hundred people a week watch the great team managed by Jimmy Marshall. Everybody at that club is a volunteer. What good could be done by a relatively small amount of redistribution of that money down to that level. Kendal Town have hosted 12 cup finals of various kinds at the Parkside Road ground this year. It costs them £8,000 to maintain that ground, and they get nothing for it. A fairer deal is absolutely essential, and, so far, this Bill is the weakest on that fair financial flow. It is important that the Government get that right beyond Second Reading.
At a time when the division between the divisions has never been greater, I think it is worth paying a bit of attention to the parachute payments. There is a widening not just in quality, but in resource between the premier league and the championship, between the championship and league one, between league one and league two, and between league two and the national league. That reduces competition, entrenches privilege and squashes ambition. One key driver—perhaps the key driver to this division, certainly at the top end of the tables—is the parachute payment, which is a completely unjustifiable disgrace. It is the greatest financial distortion in the game. This Bill ducks that distortion—every football fan has noticed that the Government have ducked that distortion. Therefore, people are deeply sceptical about whether the Government are serious about fairness in the game—
Sir Mark Hendrick
The Government have not only ducked this issue, but the Bill itself contains something explicit that precludes a discussion of parachute payments when it comes to the regulator’s powers.
Tim Farron
The hon. Gentleman makes an important point and I agree with him. That explicitly needs to be mentioned in the Bill, and we need to recognise that that is one way to allay the fears of those people who are sceptical about whether the Government are serious about this—as serious as the hon. Member for Chatham and Aylesford clearly is. Have the Government got the interest of the fans at heart? Will they do stuff that is difficult and challenging for those people at the top of the game, or will they have just listened to lobbyists rather than the fans?
In closing, Blackburn Rovers were owned by Jack Walker, the greatest owner of any football club ever. We say that we do not want billionaires in the game, but we will have people like that any day of the week—not just at Rovers, but anywhere else. He loved his club, loved his town and made a massive, massive difference. Today we are owned by Venky’s. It is alleged that, when it took on Blackburn Rovers, Venky’s believed that it was impossible to lose premier league status. It did not realise that a club could go down. Gutted though I am that we went down and got relegated, I am nevertheless glad that Venky’s were wrong: there should be movement between the divisions; there should be competition; and there should be fairness. Football is for the fans, not just for the powerful few. Let us make sure that this regulator, in its financial oversight, is able to ensure that there is genuine fairness from the top to the bottom.
Brendan Clarke-Smith (Bassetlaw) (Con)
This debate about a football regulator is quite interesting for me because, in all honesty, when I first heard about it I did not really want one. I did not believe in one from an ideological perspective, or see why we need to regulate sports at all. I always thought the Football Association should be doing that, but I think we have seen—certainly in recent weeks, but really over quite a sustained period of time—that it simply has not done its job, and that also true of the Premier League, the EFL and so on. That is why I think we now have some proposals I can certainly support, and I think they actually strike a very good balance. I pay tribute to the Minister for his work, and to my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch), who did such a fantastic report in the first place.
I am another one of those who are very angry that FA cup replays have been scrapped. Growing up, we always used to dream of lifting the FA cup at Wembley. We would watch the teams in the morning with the buses arriving, and it was a whole-day event. We would have the terrible cup final songs and the story of the non-league clubs in the early rounds, and that is really what it was all about. The diminishing pull of the FA cup for many of the teams at the top has been very sad over the years, but it is still very special for many of our smaller clubs.
We have just heard about Kendal Town, and we have Worksop Town in my constituency, which made the first round of the FA cup this season for the first time in a very long time. We played Stockport County in the first round and did manage to get an equaliser, although we let a few more goals in after that, unfortunately, and never got the replay. That was a special moment, and something many people will remember for the rest of their lives. I will mention the other football clubs in my constituency so that I do not get some stick or a lot of angry emails. We also very proud to have Retford United, Retford FC, Harworth Colliery and SJR Worksop as well.
I am hoping that licensing agreements for clubs are not too onerous and do not place too much of an unfair burden, particularly on smaller clubs, and it is the smaller clubs I am thinking of. They are the ones who maybe cannot afford to employ extra members of staff or will struggle with some of the extra bureaucracy. I think we should give them some time and make sure we do not make any unreasonable demands of them. We do not want mission creep, with the almost public sector-style equality and diversity targets, requirements and endless things that we do not actually need in football. I am very much in favour of light-touch regulation, and I do not want to be putting our teams at a competitive disadvantage to other teams in Europe.
As has been said, the Premier League does do a lot of wonderful things. I have been one of its harshest critics over the years, being a Notts County fan. I cannot see us ever winning the premier league as it stands now. In fairness, we never won the old first division either. In fact, I think we were a founder member of the premier league when it first came to fruition, so we are the only founder club—since Luton Town got back there —that has never been a member of the premier league. So I was heartened to hear what the Secretary of State said today.
We have had the situation with Gateshead this week, which very sadly have not been able to take part in the national league play-offs. If we look at some of the requirements of the EFL—this has been going on for many years—I remember when we had champions of the conference that were told they could not get promoted. Sutton United, which went up not too long ago, had a very sustainable business model, with a 3G pitch, but it was not allowed to go up with that, and I think it spent about £500,000 getting rid of it. It is second from bottom at the moment, and it may go back there. Yet at the same time, we all have teams playing on artificial pitches, and I think there is a bit of a competition issue. Worksop Town has one of these pitches, and it has really helped locally in making the club sustainable. I think where we can actually help here is that we actually talk about that competition issue. We could have better relationships between the Premier League, the EFL and the national league, and that is something to which I think a regulator can really make a good contribution.
This would not be the first time a Government have stepped in. I remember the Taylor report, and what we did with stadiums at the time. There has been a huge improvement in safety, attendances have gone up and people can bring their family without some of the fear that used to be there in the 1980s. As a Notts County fan, I suppose I did have a bit of an interest in the three up, three down from the national league, as we did spend four years there, so I will declare a bit of interest. Likewise, on the fit and proper test, we have also been a victim in the past, where the fit and proper test simply has not been fit and proper itself, and we ended up with owners that have not had the best wishes of the club at heart. Thankfully, we have excellent owners now, and this is the kind of thing we can help them to get right. We do not want mission creep, or to be interfering with VAR or things to do with players, or fiddling with the club. We are not there to be micromanagers, and it would be a terrible shame if that happened.
I am glad the Secretary of State mentioned trying to avoid excessive costs and ensure that we are focused on the mission of the Bill. I think the balance is absolutely right, and I congratulate the Department on its work. Football is not the banking industry. I know there are some things that we could take as lessons, but the Bill is about football. We need to keep it about football and realise the unique position of football in our society. Likewise, we are not Germany. Our leagues are much deeper and we have more of them, and the ownership structures are difficult. It would be wrong to copy another model. On involving fans, I was a member of a supporters trust, and the supporters trust ran Notts County, and Stockport is another great example of a supporters trust. Supporters generally do not have the finances, which can sometimes cause its own problems.
I will finish with one of Ronald Reagan’s most famous quotes when he said that the
“most terrifying words in the English language are: I’m from the Government and I’m here to help.”
In this case we do not need to be terrified. These are sensible proposals. I am looking forward to the Bill progressing and to hearing a bit more about it, but from what I can see, this is positive for the game and I congratulate the Minister on that.
Jeff Smith (Manchester, Withington) (Lab)
I rise to do something I am unaccustomed to do, which is warmly welcome a piece of Government legislation. At the outset I declare an interest as a season ticket holder at and lifelong supporter of Manchester City, the world champions. Not for the first time, I congratulate the hon. Member for Chatham and Aylesford (Dame Tracey Crouch) not just on her excellent speech—I agreed with every word—but because as the Secretary of State said, she laid the foundations for the Bill. We are all grateful to her.
Football brings communities together, but for too long decisions affecting our game have been made without reference to those communities and to the fans, without whom football would be nothing, and without regard to the long-term interests of individual clubs and the wider game. Indeed, some historic clubs have collapsed because of the owners’ reckless actions, and the perverse incentives created by the pyramid’s finances. The longer we have waited for change, the more clubs have been brought to the brink. Football has been in need of reform for some time. Labour has committed to that reform, so we are glad that this much-delayed Bill has the potential to address that. I am pleased it is here. The Bill is mostly well thought through, and the licensing regime and regulated powers are mostly well framed, tightly drawn and positive. I congratulate the Minister on his hard work.
We have heard a lot in recent weeks about unintended threats to the premier league, but not a single one of us in the Chamber wants to threaten the sporting and economic success of the premier league. I love watching premier league football. I watch too much of it. It is the most exciting, high-quality league in the world. It is one of our great exports and cultural strengths. Nothing in the Bill will jeopardise that success. We have heard a fair amount of scaremongering in recent weeks about the Bill’s unintended consequences, but without any evidence.
Frankly, I more concerned about the unintended consequences of the Premier League’s financial success, and consequent financial dominance. Clubs are spending unsustainably to get into and stay in the premier league. As we have heard, EFL clubs lost £471 million collectively during the 2022-23 season. EFL clubs are gambling everything to get into the premier league, failing, and facing financial crisis as a result. All that puts the sustainability of our teams and game into jeopardy. Those are the unintended consequences we should be worrying about, and which the Bill can help to address.
In warmly welcoming the Bill, I wish to make a few comments about areas where it can be improved and strengthened. The regulator’s objectives—rightly, I think—are to protect the financial soundness of clubs, to protect and promote the financial resilience of English football, and to safeguard the heritage of English football—excellent. There was a reference in the White Paper specifically to protecting and promoting the financial resilience of the pyramid. It might be that the phrase “financial resilience of English football” is enough, but perhaps the Minister will explain why that reference, which was in the White Paper, did not make it into the Bill.
On the proposed financial redistribution powers, it is obviously important that the regulator has backstop powers to intervene in financial distribution between leagues where necessary. It is right that the regulator will be able to step in in circumstances where the Premier League and the EFL cannot agree a deal. For that to happen, one of those parties has to initiate the process, and the regulator makes the decision based on the proposals put forward by each party. That seems a reasonable enough system, but I agree that there is a question about whether the regulator should also have the power to put forward its own proposals, if they are deemed to be beneficial to the football pyramid as a whole.
I do not understand why parachute payments are specifically excluded from the scope of the regulator, as appears to be the case in the Bill. We have heard a lot in the past few weeks about the money that the Premier League gives to the rest of the EFL. According to the FSA, between 2019 and 2022 the Premier League shared £887 million in what is termed “core funding”, but £663 million of that went to relegated clubs via parachute payments. As I understand it, 92% of the TV income went to 25 clubs—those in the premier league and those in receipt of parachute payments. The other 67 clubs get just 8%. It is obvious that parachute payments are a significant distorting element of the system. If we are to have a dispute resolution mechanism between the two bodies, it is difficult to see how that will work effectively when such a large chunk of the money for redistribution is excluded from scope.
Finally, on redistribution, I would be pleased to see more opportunity for the regulator to step in to determine further redistribution to grassroots football, community spending, women’s football, youth development, player pensions and those sorts of things. That is not to be done without careful consideration, but as a backstop provision for potential problems in the future.
I am running out of time, but I will mention football fan engagement and decision-making powers. It is good to see the setting of a strong minimum standard for fan engagement as part of the thresholds for clubs getting a licence. The original fan-led review went further with the requirement for a golden share. I am not suggesting that we must have that, but I urge the Minister to look again at those areas of the Bill to ensure meaningful fan consent. Whether we are talking about regulated colours of home shirts or the ground, clubs should demonstrate that the fans have a significant say.
Finally, there are some elements missing from the regulator’s remit that were recommended by the fan-led review. It is a missed opportunity that the Government have not taken on board the recommendation for a transfer levy to help redistribute resources. It is also disappointing that the requirement for club equality, diversity and inclusion action plans has not been progressed. The Government will say that that should be part of the annual licensing process, but I would welcome ministerial assurance on that, probably specified during the Bill’s passage. I would have liked to see some reference to environmental sustainability. We all need to play our part for the future of the planet. I also wonder whether the Bill would benefit from further clarification on what support is available if a club looks to be at risk of being unable to meet the conditions of a permanent licence.
I have run out of time. I look forward to the Bill’s passage, and I hope that the Minister will take on board the comments made today. This is an opportunity to put our football pyramid on a sustainable footing for years to come; I look forward to supporting it this evening.
Shaun Bailey (West Bromwich West) (Con)
It is great to be able to contribute to this debate, because although they say the Black Country was built on coal and metal, we were also built on football. I straddle the two clubs at the heart of the Black Country derby—namely, West Bromwich Albion and Wolverhampton Wanderers.
This is a pertinent Bill and a pertinent debate for my communities in the Black Country. We went through absolute hell with the financially precarious situation surrounding West Bromwich Albion. At one point, the club was having to borrow £20 million just to keep the lights on. An independent regulator stepping in to ensure ultimately that fans of football clubs—cherished parts of the community—can keep that club and that entity there, can enable that sustainability and can put these people, who are often behind the scenes, under the cosh and under scrutiny is absolutely the right way forward.
I commend the Under-Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Pudsey (Stuart Andrew), for his work on the Bill, and my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch), who has been an absolute champion in this space. She should be so proud of what she has achieved; the Bill is a real testament to her work.
We have covered a plethora of issues in the debate, not least the football pyramid. What I perceive at times is the inequity of the system we have got. I deal a lot with fantastic grassroots football clubs, which many Members have talked about. Sometimes the narrative and discourse about the need for regulation involves a top-down approach, and of course we must highlight the important work that our premier league clubs do, but let us not forget that the pipeline to many of those clubs is first and foremost through grassroots football, which a lot of the players we talk about—those stars and talents—come through. My fantastic local football clubs, such as Tipton Town football club in my constituency, constantly share their frustration that they are ignored, left out or put under ridiculous burdens that they often have to meet without resources.
Everyone has touched on the replay issue. I say to my right hon. Friend the Minister that it is a complete kick in the teeth, particularly for clubs that are further down the pyramid and rely on the revenue from getting people through the gate. Again, it just seems that the FA is only listening in its echo chamber, quite frankly.
Dr Luke Evans
The Government have a tricky line to tread in ensuring that football is independent and adheres to UEFA and FIFA rules on Government interference. On FA cup replays, does my hon. Friend believe that there is a role for a reconsideration mechanism, so that Government can bounce the decision back to the regulator and ask, “Have you potentially got this wrong, and will you think again?”
Shaun Bailey
My hon. Friend is almost asking for a replay of the replay—that is sort of where the question is. I get the point that he is trying to make about balance and the fine-line argument on Government interference. The point has been made quite strongly, as we have all seen—the FA’s own survey found that 70% of fans wanted to retain replays—and with that level of public pressure, there is a role for the Government in facilitating the pressure on the FA. I think that that is the point that he is hammering down on, although obviously the FA must ultimately be independent.
Rehman Chishti (Gillingham and Rainham) (Con)
I represent Gillingham, which has an amazing football club: the Gills. The club was in administration in 1995 and was bought for £1 by the then chairman, Paul Scally. Now it is doing exceptionally well and going up the league, but it is a small club and it relies on FA cup replays. If we are really passionate about supporting smaller clubs in the community, and about ensuring that the FA does the right thing by supporting them, we need the Government to work with the FA to ensure that we get this right.
Shaun Bailey
Just like my hon. Friend’s club, Tipton Town in my constituency got through on FA cup replays and benefited from that opportunity. The fact that so many Members have voiced that concern, as he has done so eloquently, highlights the strength of feeling about it.
Let me move away from that issue to look at the Bill operationally. I welcome the licensing regime; the provisional and permanent licences are a pragmatic way to do things. I will be interested in seeing, in Committee and in the secondary legislation that follows the Bill, the detail of the regime. I appreciate that there is quite often flexibility and gaps in primary legislation to allow for a more pragmatic approach, but it is important to ensure that we build structures for fan consent and support so that clubs are doing things properly, particularly when it comes to moving stadiums and grounds. That will be a really important thing for us to work on to ensure that when the legislation is implemented, it is done in such a way that people cannot circumvent and dodge its intentions, as so often happens with such legislation.
In supporting the Bill, I want to touch on the important community impact that many Members have highlighted. At the core of this Second Reading debate are the principles behind the Bill and the importance of what it seeks to achieve. My nearest club, West Bromwich Albion, does fantastic community work through the Albion Foundation. It was a pleasure to meet its representatives only a few weeks ago, and to see that the legend that is Blind Dave Heeley received an award at the EFL Awards. Dave has raised £3 million on his own for the Albion Foundation to support vulnerable people in our communities to get into sport. I am proud to support the Albion Foundation’s six town strategy in Sandwell to reach out to communities that often are disconnected and ensure that they benefit from the positives of football. Without that important financial stability, which the Bill tries to ensure through its regulatory structures and regimes, organisations like the Albion Foundation would not be able to do their work.
I want to touch on the issues of West Bromwich Albion. To be quite frank, the previous owner used the club as a piggybank, borrowing money from the club to take it elsewhere. That is not on. It is an example of someone who does not love their football club and has no understanding of the emotional attachment that a community such as mine has to it. The Bill’s transparency provisions try to stop that. We must also ensure that the corporate structures surrounding that work too. We cannot have shady or opaque ownership structures, such as what we saw with West Bromwich Albion—I am glad to say, no more—which enabled a situation like that to occur. I pay tribute to the fantastic Action for Albion group, which did amazing work to highlight the club’s issues, and fought tooth and nail for the club. Down to its work, we were able to save the club and ensure its future longevity. No politician can take credit for the work of Action for Albion; it was a truly community-led campaign to safeguard our club.
I am conscious of the time I have remaining, and I do not want to be too repetitive. I have a few asks of the Minister, which I am sure he will really appreciate. We talk of the pyramid model, which I like to refer to as aspirational. Can he ensure that, as we build out some of the requirements, clubs further up the pyramid will not have in-built advantages over clubs further down, particularly given some of the disclosure and paperwork requirements? The clubs higher up can afford savvy lawyers who can try to get around those requirements, but the clubs further down cannot necessarily do that, particularly if they are having a meteoric rise up through the league, as some have in recent years. We need to ensure that there is no disparity. I appreciate that financial provisions are in place for that, but we need to ensure that the requirement is not too onerous. I highlight to the Minister the need to ensure that consultation is meaningful—not just for the sake of it—and that the relevant structures are built in.
I support this Bill; it is the right thing. It is what communities like mine in the Black Country—football is at the heart of who they are—have been calling for. It is now imperative that as we build out the Bill, we get it right operationally. I commend the Minister for his work on it.
George Galloway (Rochdale) (WPB)
The measure is necessary but woefully insufficient. The regulator is vitally necessary but the idea that the danger is over-regulation is wholly misconceived. The danger is that the regulator will not have the power or the ambition to take on board even the excellent proposals brought forward in the fan-led inquiry led by the hon. Member for Chatham and Aylesford (Dame Tracey Crouch).
Many times during the early part of the debate it was said that football was a business, but to paraphrase Bill Shankly, it is much more important than that. I was sat in the House of Commons Celtic supporters’ club—a surprisingly large and august institution in this place—when the club’s then chairman repeatedly referred to us as customers. I pointed out at the end of the meeting, “With all respect, sir, we are not customers. Customers shop around; if they do not like what is on your shelf, they will go across the road and try someone else’s. We are here because our fathers were here, and our sons and now, thank God, our daughters will be here for the very same reasons.”
Speaker after speaker has adumbrated the local cases of their football clubs and the centrality of those clubs to their communities. Recently, Rochdale football club—which, sadly, is now in the national league—ran into real danger of hitting the wall.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman on the points he is putting forward. The consensus of opinion in this Chamber seems to be that every MP supports their club and their fans and wants to see a difference. Does the hon. Gentleman agree that the Bill that will have its Second Reading today will be to the benefit of all the clubs, the fans and their MPs? Does he also agree that Northern Ireland should also have some of the improvements and guidelines that are in the Bill, so that we in Northern Ireland can have the same guidelines and the same way forward?
George Galloway
If the hon. Gentleman will forgive me, as a supporter of a united Ireland I will not follow him down that path. I look forward to him thriving in an Irish football environment and asking the Taoiseach for the necessary support, rather than Mr Deputy Speaker.
I want to make a point about the gall of the Premier League lobbying us yesterday, saying that all these matters should be left to the free market. What kind of free market is it when at least three premiership teams are owned by foreign countries? Some are more thinly veiled than others, but there are three foreign countries in the premier league right now, and what countries! They are not countries that would be allowed to buy The Daily Telegraph, but they are allowed to buy top blue-chip football clubs in England. What is local about that? Why would we allow foreign states to buy pieces of our national treasure that are also of extraordinary importance to local communities?
I was just talking about the funereal atmosphere there was when it looked like Rochdale AFC, having fallen out of the league into the national league, might go out of business altogether. Hopefully, that problem has been at least partially resolved.
Rehman Chishti
I remember many great matches between the wonderful teams of Rochdale and Gillingham in the lower leagues. In 1999, Gillingham were playing Manchester City in the Wembley play-offs for the second division, and now Manchester City are in the premiership. The hon. Gentleman’s point is absolutely right: the success of football clubs should not be down to the investment of foreign countries. It should be about regulated investment in smaller clubs such as Gillingham and Rochdale, enabling them to go up, rather than relying on the investment of international sovereign wealth funds in our football league. He is absolutely right that the Premier League has a role and responsibility to support smaller clubs.
George Galloway
I am grateful to the hon. Gentleman, who has made a very important point. As Members can imagine, we in the Workers party want to save football for the workers: for the working class who gave it birth and were its mainstay for many, many decades—for a century—before the premiership even existed, and who are now priced out of the game. It now costs £60 to attend a premiership match. For a man and wife going, it costs £120. A woman and her son, with a burger and a cup of Bovril thrown in, are spending £100 to go to a football match—all to fund the fantastic profits that are being made in the premiership.
I declare an interest: I have three sons in youth football, all of whom I think have the capacity to make it. I will be their agent, so that is a future pecuniary interest. My sons are playing not on plastic pitches, which were disparagingly referred to earlier, but on grass that has not been cut all year, with humps and bumps and hills and hollows. By definition, a pyramid has a very, very large bottom, and that bottom is where we need to filter the money—not to agents, not to premiership players on half a million pounds a week. I am not making that number up. Some players get half a million pounds a week for playing—looking at Manchester United at the weekend—not very well or even very energetically at all. Football is in a terrible state.
The Workers party has a policy. I do not have time to discuss it, but I commend it to the House. Our policy on football is this: we believe not in fans having a golden share, though that would be a big step forward, but in fan ownership of football clubs—[Interruption.] I see some scoffing, and to those who scoff I say that German football is fan-owned. The great Bayern Munich, the next champions of Europe—who have won the championship of Europe 10 times, I think—are 51% supporter-owned. Borussia Dortmund, another power in Germany, are 78% fan-owned. Would not that solution end the problem of foreign states or these rum foreigners buying our top clubs? Johnny Foreigner has been mentioned several times. They live outside our borders, cannot be reached by sanctions and walk away from fines. Would not this solve that problem? Of course, we also have our own rum owners from our own land who own football clubs and run them into the ground. If the fans owned the team, would not that be a better solution?
Someone said that Parliament should not be regulating whether there are replays on a Wednesday. Why not? If it is the people’s game and we are the people’s representatives, we are absolutely entitled to have a view on the cheating of lower division supporters of the chance to take a big premiership club to a lucrative replay. We have every right to be outraged by that. If the Football Association is listening to this debate, we should tell it that it will be forced to reinstate replays. If not now, then soon.
My final points concern the two teams with which I am most closely associated: Glasgow Celtic in Scotland and Manchester United in England. Manchester United have foreign owners who have looted the club of billions of pounds. They did not even buy the club. They bought it, then borrowed against the club’s assets to cover the money that they paid to buy it, and they have paid themselves a king’s ransom in dividends. The Glazers must go—that is the feeling of 99.9% of Manchester United supporters—but how can we make them go? Well, we got rid of Celtic’s board. I was one of the proud members of the Sack the Board campaign and my good friend Brian Dempsey led it. We sacked the board by popular pressure, and popular pressure will have to be maintained on the robber barons from New York, the Glazers, before they destroy Manchester United altogether.
James Sunderland (Bracknell) (Con)
It is a huge privilege to speak on the long-awaited Football Governance Bill. Not only is this a matter of great importance to sports fans across the UK and beyond; it is also a personal passion and I commend everybody that has been involved in getting the Bill this far. Locally in Berkshire we have a proud football pedigree. Reading FC is the only league club in Berkshire. It has a proud history and has done brilliantly this season to survive in league one against all the odds. In my constituency, Bracknell Town and Sandhurst Town have also enjoyed strong seasons, and across the border in Hampshire, Aldershot Town are back on the map after their most exciting season for years. Well done to Tommy Widdrington and his players. I was at the Dagenham game on Saturday, which was brilliant. It was a pity that Dagenham did not quite make the national league play-offs, but next season will be even better.
As the father of two young sons who play to a decent level, I know that better regulation of the game is essential to their future, and to the future of all our clubs. This is the beautiful game, and it does need better regulation to ensure that football always comes home. We know what the Bill does: it seeks to establish an independent football regulator, and includes provisions that seek
“to protect and promote the sustainability of English football”
for the benefit of fans and local communities. That is very important, but I say to the Minister that regulation must be light-touch. Given the pre-eminence of football in the UK, we must not throw the baby out with the bathwater by inadvertently making the Premier League, the English Football League or the national league less attractive to owners, potential investors, the media or the fans. As we know, the Premier League is also the world's leading football brand, and is worth billions to the UK. If it ain’t broke, please don’t fix it.
Regulation, then, must be just enough. It must be balanced to protect clubs and fans from rogue owners, but without jeopardising the game. Recent history is littered with examples where it has gone badly wrong: Southend United, Wigan, Portsmouth, Bury, Colchester, Sheffield Wednesday, Hull, Derby and several others, but most recently and perhaps most spectacularly of all, Reading. For a fan such as me, the last few years have been galling. We have seen freefall from the premier league, 18 points of deductions, huge fines, players not being paid, bills not being settled and fans in despair, and I feel their pain. Let me put this on the record: I personally commend every single Reading fan. They have been magnificent, and they have supported the club through thick and thin. I should also mention the brilliant Sell Before We Dai group, which has been so instrumental in this regard.
Does lobbying work? Absolutely yes, and I give credit to Members as well—my right hon. Friends the Members for Reading West (Sir Alok Sharma) and for Ashford (Damian Green), my right hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald) and, in particular, the hon. Member for Reading East (Matt Rodda), with whom I have worked very closely in connection with Reading football club. Members have leant in, in respect of Reading and many other clubs. Pressure has been brought to bear on owners, and a cross-party approach really does work: politics is always at its best when MPs work together. As for the question of a pilot for the new regulator, I cannot think of a better example than Reading. The new regulator must cut his or her teeth on that particular club—and the Bill itself must have teeth, because a regulator without powers is of no use whatsoever. Let me say to the Minister that I look forward to seeing the terms of reference for the initial incumbent.
The aim of the Bill is to put fans back at the heart of the game. It is about running clubs and putting them back on their feet, and about heritage and future direction. As we have heard, it is also about sustainability, and about ensuring that we lay the foundations for clubs as we go forward in English football. It must apply across the whole pyramid, and not just to the top five leagues. It is right that new owners and directors will face stronger tests to stop clubs falling into the wrong hands, and will face the possibility of being removed and struck off from owning football clubs if they are found to be unsuitable—and much more; but the devil will be in the detail.
As for Reading football club, I have learnt several lessons this year. First, fans do matter and fan power does work. Fans have a voice, and they have used their voice this year and before in relation to Reading FC. Secondly, Reading Borough Council’s decision to list the Select Car Leasing stadium as an asset of community value under the Localism Act 2011 was a masterstroke. Dai Yongge is unable to sell the stadium, and rightly so. Lastly, I give full credit to Wokingham Borough Council for a little deed for the Bearwood Park training centre. If a club cannot legally sell its assets to another club, that club lives on. Once again, these measures have effectively stopped further asset stripping by Dai Yongge, and will lead to the successful future of Reading FC. Reading is now moving in the right direction. Bills are being paid for March, April and May; new owners are believed to be interested in the club, and we could yet survive. I thank everyone at Reading FC, and all the fans, for making this happen.
So what is not in the Bill? First, punitive action for owners who fail the test. I say to the Minister that they need not just to be banned from football but to be banned, full stop. They need to be banned from being directors, or banned by HMRC. The Bill does not address welfare provision for players. What are clubs doing to soften the blow for players who get rejected or suffer mental health issues? The Bill affects the top five leagues only; it needs to affect national leagues south, north and below because they are all worthy. The women’s game has been mentioned, but I feel strongly that the Bill needs to go further on the women’s game in due course.
Lastly, the FA cup decision on replays being stopped from round one is outrageous. It is nothing less than cultural vandalism of the world’s greatest cup competition. If the larger clubs have to play replays with the huge resources they have got, so what? I have no sympathy whatsoever. Having watched so many FA cup exploits over the years, not least at Sutton United and Woking, I do not buy the FA’s logic. These cup ties are the stuff of legends. Magic does exist in sports. Admittedly, no Government can regulate this, but if FA officials are watching, I urge them to rethink that appalling decision.
Dame Tracey Crouch
There is a larger point about FA cup replays. Those lucrative replays are once in a lifetime opportunities, but the fact that there are clubs that are relying on those lucrative replays demonstrates why we have a problem with finances in the football pyramid. Although my hon. Friend says that the Government cannot regulate on the matter, the Bill gives the Secretary of State some amazing powers to bring the FA cup into conversations. Does my hon. Friend agree that while it is not something that I particularly favour, it is something that can be done?
James Sunderland
I agree wholeheartedly. Anything that we can do in terms of the regulation is worth pursuing. I was at the Aldershot-West Brom game earlier this year, which was an incredible day out. That could have been a third round replay. The money raised from such occasions is extraordinary. While clubs cannot depend upon that lifeline, it is a fantastic bonus when it happens. Certainly, it helped Aldershot massively with its finances this year.
To conclude, I strongly support the Bill. I commend the DCMS, the Minister, the authors of the Bill and my fantastic hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch). The Bill is long overdue, but it is here now. I am also reassured that the Conservative Government have done this. It will make a huge difference to all clubs and fans—let’s bring it on.
Mike Amesbury (Weaver Vale) (Lab)
Like many across this Chamber, I thank those from across the political sphere, those within the footballing community and those who led the fan-based review because their work is finally coming to fruition with the Second Reading debate of the Bill. The referee, in the shape of the independent football regulator, will finally be on the pitch. We are beginning that journey. It is particularly fitting that this takes place on St George’s Day, as the English nation gave the world the beautiful game. That nation now needs to put its house in order, for the many and not the few, to ensure that the pyramid effectively works for leagues across the beautiful English game.
As has been echoed across the Chamber, by Members of all political persuasions, we are only in this space because the premier league and those who govern our beautiful game have not got their house in order. That hands-off the pitch and that laissez-faire approach certainly has not worked for our fans, our clubs and, importantly, our communities. That has been mentioned in reference to Bury FC, one of our oldest football clubs in the country, certainly in the north-west of England where I represent. They were expelled from the football league amid rising debts and financial problems. There have been other notable and documented examples at clubs like Bolton Wanderers, Derby County and, recently, Reading football club.
These, and other clubs—we reckoned there were around 60 such clubs—had a number of common factors: unfit owners, greed, asset selling, poor governance and long-standing alienation of the fan base. There was total disregard for history, identity, emotions and communities. This laissez-faire, anything goes approach—the wild west of football—must be brought to a full stop. To drive that, the new, independent football regulator must have teeth, with strong rules to ensure that our great footballing clubs have fit and proper owners. I would certainly like to see more clubs owned and controlled by their fanbase. We have great examples of that in my constituency, including Northwich and Runcorn Linnets, who only this weekend I saw beat our rivals Widnes.
We want to see sustainable financial plans, with fans at the heart and soul of those clubs to protect assets such as stadiums and historical identities. People have referenced that—it is certainly in the Bill—in regard to kits and badges; those things are vital.
I am a long-standing Manchester United fan, so I am familiar with problems of ownership. The Glazers, who have already been referenced, bought the club on the never-never. They were one of the richest football clubs in the world; they are now one of the most indebted, and that really has affected our performance on the pitch, which has been pretty woeful this year, including in the FA cup semi-final. I pay credit to Coventry, who played incredibly well, while we played incredibly badly. But the problems on the pitch come down to some problems with the ownership.
I gave up my Manchester United season ticket long ago—it was a difficult decision to make—because of the Glazers. I echo the clarion call—I did so at the time with my protest scarf and all the rest of it—that the Glazers really must go. Perhaps we are on the start of that journey, with some new ownership.
I am a Cheshire and Merseyside MP, and quite a number of my constituents are Everton fans, who have been aggrieved by recent point deductions. Some of those have been on financial issues—the purchasing of a stadium, and certainly players—but fairness is a real bone of contention. Everton have been deducted 10 points —a high number. That has gone to appeal and so forth, yet they look at other clubs across Britain, such as the Manchester Cities and Chelseas of this world—by the way, Manchester City have had 115 breaches—and see that those who have incredibly deep pockets, financed by sovereign wealth funds, seem to get away with it because they can afford the litigation. Of course, Manchester City are not the only ones—I have referenced Chelsea, and there are certainly others.
We have mentioned fit and proper ownership for our clubs. How can it be right that sovereign wealth funds of foreign states with woeful human rights records own Great British—English—football clubs such as Newcastle United? It has been fairly well documented that one such nation state had managed to execute more of its citizens than a striker for Newcastle United had put balls in the back of the net. That is horrendous.
James Daly (Bury North) (Con)
The hon. Member—as he knows, I am from the same part of the world as him—is making some excellent points. He touched on Bury FC in my constituency. I am interested in fairness in football. In the FA cup semi-final at the weekend, we saw Manchester United—the winners as a result of about 1 mm in a video call—get £1 million, while Coventry City got £500,000. For all that we in the Chamber talk about fairness in a general way, does he believe that that is a fair share of the moneys in the circumstances?
Mike Amesbury
Clearly not, and I think that there is space for the regulator to intervene. As has been referenced, the FA cup can be a lifesaver for grassroots clubs. The hon. Member for Gillingham and Rainham (Rehman Chishti), who is no longer in his place, mentioned Gillingham, and I think that Bristol Rovers were also mentioned. Again, the issue is financial sustainability. The regulator should intervene to ensure that the FA makes the right decisions for all our clubs, right across the pyramid.
Like many Members across the Chamber, I think the Bill is great for the football community, and I credit all those who have been involved. It is very important that we have the fans at the heart of this. There are some issues, which hon. Members on both sides of the House have mentioned, to do with competition and the parachute payments, which are distorting the footballing community, but overall I very much welcome and support this Bill.
Chris Green (Bolton West) (Con)
It is a pleasure to follow the hon. Member for Weaver Vale (Mike Amesbury), who touched on the important issues in this debate. I particularly appreciate the way he very gently touched on the cost of the kit and of the badge, which I think follows on from his campaign to make school uniforms affordable. That is such an important issue.
I also appreciate how the hon. Member for Rochdale (George Galloway) captured that sense that football fans are not just customers who can go to one supermarket or another. There is so much more about football. It is not just about a strong fan base, the acquisition of the right players, having good management and other things that we would associate perhaps with a corporation; it is about the family, the next generation, that sense of community and wellbeing, and people going to the stadium, walking together in solidarity to see their club. That is what football is about for so many communities up and down the country.
When Bolton fell into very difficult times recently, and—looking not too far away—when Bury went into administration in 2020, it was a traumatic experience for many football fans, even those watching an opposing team. Bolton came very close to being in that position, but since then we have regained our strength and improved our position. At the moment we are third in league one. We are in the play-offs—and if Peterborough and Derby do the right thing and lose very badly with a huge goal difference, we might be in the automatic play-off position.
James Daly
My hon. Friend makes a sensible point, which not many people will know: Bury and Bolton were in essentially the same financial situation. Both had gone into administration at the same time. The regulator decided to expel Bury from the EFL and keep Bolton in the league. The suspicion was that, with Bolton being a bigger club than Bury, the regulator did not want to get rid of them, but poor little Bury could be used as an example. I think that is an example of why regulation is needed in this sphere.
Chris Green
I share my hon. Friend’s concerns. The idea of one club of the status of Bury tumbling out of the English football league was pretty grim, but to have two clubs do so would have been catastrophic for the EFL.
I welcome the fact that the Government have listened to fans and clubs and brought forward this Bill to secure the game’s future in England. The game’s fractured governance model and the inequitable distribution of finances are increasingly putting the future of the sport in England at risk. In the coming debates on the passage of this Bill, Parliament has the opportunity to give the new independent football regulator the right powers to ensure the game’s sustainability for the good of the football pyramid, from the grassroots to the heights of the premiership.
Any attempt to weaken the IFR’s powers or to make it a passive and ineffective entity should be strongly resisted. A particular concern, brought to my attention by Ian Bridge of Bolton Wanderers Supporters Trust, relates to part 6 of the Bill on financial distribution, where questions over parachute payments have not been ruled out, and to whether the Bill in its current form can deliver on its objective of protecting the financial sustainability of English football.
I look forward to supporting this Bill throughout all its stages. I think the debate has been incredibly constructive. The Bill may need a little further refinement, but I welcome the work and efforts of my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch) and of the Minister, my right hon. Friend the Member for Pudsey (Stuart Andrew) .
Mr Clive Betts (Sheffield South East) (Lab)
First of all, we are here today because football has failed to regulate itself over many years. It is our job as parliamentarians to ensure that, in the end, we regulate on the behalf of football fans for now and for the future, and for the communities where our football clubs are based. That is our job. I will just begin by thanking those who have got us to this position: the hon. Member for Chatham and Aylesford (Dame Tracey Crouch), certainly; the Minister for sticking with it and bringing the Bill before the House today; and the EFL, the PFA, the Football Supporters’ Association and Fair Game for their advice. I even had a conversation with the Premier League, but let us say that that conversation did not lead to as much agreement as other conversations I have had with other football organisations.
This is not a Bill to destroy the Premier League, as some have tried to present it, including the Premier League itself. The Premier League has been a massively successful organisation. It has brought unimaginable wealth into football and into this country. The legislation is not here to destroy the Premier League, but to ensure that its great strength, its financial resources, can be used as a basis on which to strengthen the whole of the football pyramid. It is just a pity that the Premier League itself does not see it like that. It does not see its responsibility to the wider football game, but instead so often seems intent on narrowly focusing its attention on supporting the handful of clubs that are within the Premier League.
We just have to look at the other successful brand in English football: the pyramid. There is no other football pyramid like it in the world. The championship has the fifth-highest attendances of any league in Europe. Where else could you go on a Sunday afternoon to a second-tier relegation game and get 7,500 fans not in the home end but in the away end? Sheffield Wednesday did that at Blackburn on Sunday—and won, I hasten to add, giving ourselves hope of salvation. That is the strength there, but the incredible power of the Premier League’s resources is slowly beginning to corrode and erode the basis of the whole football pyramid. That is what we have to stop and what we have to act on.
In very simple figures, 25 clubs—not just the 20 clubs in the premier league, but the other five that are in and out of it on a regular basis—get 92% of the distributed resources within football. The other clubs in the EFL get 8%. That simply is not sustainable, and we have seen that gap grow and grow over the years. It is not just a static problem; it is an increasing problem that undermines the whole of the football pyramid.
Does the Bill, as it stands, deal with that fundamental challenge? The process for a review of football finance is far too bureaucratic. Why not give the regulator the up-front power to come to a decision about the distribution of football’s resources that makes individual clubs sustainable, and competition within and between the leagues sustainable? That is a simple remit. Let them get on with it, rather than going through this process right the way through to a backstop, knowing that the leagues have already had a chance to reach an agreement which they have signally failed to do. The Premier League never made a single offer right through the process from the very beginning.
With the parachute payments excluded from the backstop, the Minister risks destroying his own Bill. If the Bill remains as it stands, we will not achieve a sensible and appropriate redistribution of revenue. I think that has been said right across the House and we simply have to change it. I am happy to table an amendment in Committee. I hope the Minister might think about how the Government might accept such an amendment, because it will be needed to strengthen the Bill.
Is the distribution of resources simply a matter for the EFL and the Premier League, or do the fans, players and grassroots not have a view? Should there not be a wider process, at least a consultation, so that the regulator has the up-front power and also consults those groups in reaching a final conclusion? It is just strange that something that began with a fan-led review does not mention fans in that very important part.
I welcome the general approach of the licensing system. As has been pointed out, we have had too many bad owners and directors in football, and we still have some around.
James Daly
I am very interested in what the hon. Gentleman says. There are some very important points regarding redistribution, but there is also a very important point about the competent management of football clubs. The Derby County situation is an example, because the owner had £400 million in cleared funds when the club was bought. What happened to Derby was a result of how badly it was managed after the initial test. That is a real challenge for this Bill.
Mr Betts
My understanding is that it will be a test of the licensing system. It is about ensuring sustainability, and not just when an owner comes along and says they want to buy a club. They need to show that they can actually sustain that ownership going forward. That is the difference between the current rules and the rules that are being proposed, which we can test further in Committee.
Can the regulator really regulate sovereign wealth funds that own clubs? I have asked the Minister about that before, and it is something else that we have to look at, because it is a challenge to the system. I welcome the fact that fans will have a veto over their club changing its colours or name, but there is nothing in the Bill that says that fans have to be consulted about a change of grounds. The regulator has to approve it, but there is no right for fans to be consulted. We need to have a look at that.
I come back to my own club, Sheffield Wednesday—I have mentioned them once, and I will mention them again. They welcome the proposals and the EFL’s approach to the review, and they recognise the need for a change in the distribution of resources. I am not sure that the owner will be that enthusiastic about the change to require him to consult the fans properly. Many owners are like that—they want to go through the motions. Are they really going to engage in a meaningful way? That will be a real challenge for the regulator at a number of clubs. I understand why the form of consultation is not specified, but it will still be a challenge going forward and we need to keep an eye on it.
Finally, I come back to the FA cup. The Minister said it is not our job to get involved in football competitions, but the fan-led review was triggered by some clubs wanting to change the competition they play in by going to the European super league. That involved a handful of rich clubs deciding that they could be better off there. We now have a handful of rich clubs deciding that European games are more important than FA cup replays—that is what is happening.
When Arsenal won the FA cup in 1979, they had five replays, four of which were against Sheffield Wednesday in one round. I remember it all these years later, because it was a great achievement. Three of those replays were at the old Filbert Street ground. We remember those things as football fans, and we should not take them away from the game. I say to the Minister that one of the requirements of the regulator is to ensure that the heritage of English football is safeguarded. Will the regulator have the power to do that under the Bill’s rules, and is the FA cup and its replays not part of the heritage?
Damian Collins (Folkestone and Hythe) (Con)
It is a great pleasure to follow the hon. Member for Sheffield South East (Mr Betts), who has done much work on this issue, and to follow the wonderful speech earlier from my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch), who has done such fantastic work on the important fan-led review. It builds on work done over many years by Members and Committees of this House.
When I was a new MP, I took part in the 2011 football governance review undertaken by the Culture, Media and Sport Committee, which was chaired by my right hon. Friend the Member for Maldon (Sir John Whittingdale), and this issue has been a recurring theme of interest for the House. The reason is that when clubs get into distress, it becomes evident very quickly that the competition’s primary interest is protecting the competition, not individual clubs.
When a club goes into administration, it can be too late to solve the problems. The actions of the league are to protect the integrity of the competition and to complete the season, rather than to save the individual clubs. Because the leagues are effectively governed by the collective views of the chairs of those clubs, they are often not very sympathetic when one of their own gets into trouble, particularly if they think the clubs have got into financial trouble because they have been overspending or, as the leagues would see it, cheating in some way. As we saw with Bolton and Bury—Bury failed financially and were expelled from the league, and Bolton very nearly were—and as we have seen with clubs like Derby, had there been an intervention and had it been made clear that the clubs were already playing and trading in breach of league rules, as they stood, the situation could have been avoided. There could have been an earlier intervention, rather than waiting until the last minute when nothing more could be done.
It is in response to those concerns that the fan-led review was triggered and this Bill has come forward today. We have seen numerous cases of bad ownership. Massimo Cellino acquired Leeds United a few years ago, and the football league did not think he was a fit and proper person, which demonstrates that there was no fit and proper person test. If a person was qualified to be a company director in the UK, they had as much right to be a director of a football club as any other entity, and he defeated the football league in the courts. We desperately needed a test in which somebody could stand up and say, “We are not convinced by this person’s track record. They cannot own the club.”
Coventry City were owned by an investment fund at one point, and nobody knew who the investors were. Leeds United were owned by somebody we did not know, and Sheffield Wednesday were almost bought by somebody who did not exist. It was the wild west, and the Bill seeks to address this by having a regulator that is required to license clubs and has the power to say to a potential owner, as Ofcom does to broadcasters when it is not happy with how they execute their licence, “We are not convinced that you have met the tests, so you can’t be the owner of this club,” or, “You must demonstrate and prove who you are if you are investing in this club. And we must have a robust business plan that demonstrates that you can run the club sustainably, meeting its requirements for this season and future seasons.” That does not require the regulator to invent new rules for football. It simply requires an independent body to enforce the competition rules that already exist. If we had that transparency and that ability to tackle rogue owners, many of the game’s problems would be resolved.
I do not believe that this form of effective regulation will deter people from investing in English football. If anything, it will encourage them. If someone is looking to buy a club in the championship or league one, with the hope of investing in that club and getting it into the premier league, having proper governance and enforcement of the rules will attract better owners into English football, which will be good for everyone.
I seek the Minister’s advice on a few specific points. As I said to the Secretary of State, the Bill’s structure is very interesting. The primary purpose of the regulator is to ensure sustainability, alongside which it has three objectives to consider: soundness, resilience and heritage. In making a determination, the regulator should always act in a way that is sustainable and that supports at least one of the three objectives.
This raises a question where, say, a club does not own its own ground. The ground might be owned by a private third-party entity that is seeking to push up the rent by an extortionate amount that the club cannot afford to pay, so it has to move to a new ground. The fans might be against the move, and the heritage test might say that the club should not move, but the soundness and resilience tests would say that, no, the club should move. The Secretary of State said earlier that the regulator could set aside heritage concerns and make that decision.
The regulator needs to establish some guidelines and principles that it will follow in making such decisions, so that there is proper consideration and so that it does not always defer to the financial case but considers the other points in the round. It is important that the test for directors is subjective and that the regulator can say when it is not satisfied, rather than the test simply being a tick-box exercise in which people may own a club if they can demonstrate that they do not have live convictions for particular offences. The regulator should have a robust power to say no.
The licensing conditions say that a club has to produce a corporate governance report, and the Companies Act 2006 sets out the sort of criteria that a company has to include in its report. And the Bill’s explanatory notes say that a corporate governance report should cover
“the nature, constitution or function of different parts (‘organs’) of the club; the manner in which those parts conduct themselves; the requirements imposed upon them; and the relationship between them.”
That would exclude the players and any relationship, responsibility or obligation that the club has to them. I agree with Ministers that the regulator should not be writing welfare standards and policies for football, but it could act as a guardian in making sure they are being properly enforced. It could use its investigatory powers, if it feels that there are grounds to investigate, to make sure that welfare standards are being properly maintained. This is important because where this idea has failed in football and other sports in the past, it has been because of the power structure within a sporting organisation, whereby the coach and team doctor often have huge influence over the athletes and it is difficult for people to know where they can safely blow the whistle. A backstop guardian, through the regulator, on welfare standards would be totally consistent with the requirement on the clubs to produce a corporate governance statement to the regulator every year. I urge the Minister to consider that.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. So as to accommodate everybody, I am going to have to reduce the time limit, after the next speaker, to six minutes. I call Charlotte Nichols.
Charlotte Nichols (Warrington North) (Lab)
It is a pleasure to speak in this debate. Although Warrington is known primarily as a rugby league town, we also have many thousands of football fans: those of our nearby premier league clubs, Everton, Liverpool, Manchester City and Manchester United; those of our fantastic non-league clubs, Warrington Rylands and Warrington Town; and those involved in our vibrant and diverse grassroots, amateur and Sunday league scenes.
Across the board, there are deep concerns that the beautiful game is becoming ever more distant from the communities it should be rooted in; and that decision making is made in the vested interests of the biggest clubs with the most resources, and is not about fairness and strengthening the sport right through the football pyramid. There are the obvious indicators of that: extortionate prices of season tickets and replica kits; and a lack of rigour in fit and proper persons tests for directors and owners. Even before this weekend’s controversy, I have heard from many constituents: about how the use of VAR is killing the game; that the decision to abolish replays after the first round of the FA cup will mean fewer moments of magic like those we saw at Marine AFC versus Tottenham, will make it less financially viable for smaller clubs to participate, and risks undermining the FA cup’s reputation as the most egalitarian competition in world football; that there is a concerning lack of transparency about points deduction decisions—something that I have received much correspondence on from Everton fans in my constituency, but which has also affected a number of other clubs in recent years; and, of course, about the disaster that is the proposed European super league.
In whose interests are those decisions being made? It is certainly not those of the fans. I therefore welcome the establishment of the independent football regulator, although there are some areas I think it can be strengthened through, which I will address. First, I want to see a regulatory structure that not only acts in the interests of supporters and protects their clubs, but acknowledges and prioritises the role of players and staff at the clubs. When we think about footballers and their working practices, it is easy to think about some of the huge salaries and transfer fees in the premier league, but most players are not on anything like that kind of money and can be in very precarious and short-lived employment. Career-ending injuries that take place on the pitch or illnesses that leave them unable to compete can leave them cut completely adrift, and in many cases without some of the skills and qualifications they need to find alternative employment easily because they invested everything into a footballing future that did not pan out. Just as football is nothing without its fans, it is nothing without its players either.
The Professional Footballers’ Association has pointed out that nowhere in the Bill, as drafted, is there any reference to players, and that that is a significant and serious omission, as they are the primary employees of the industry. There are potential direct impacts on them from decisions taken by the IFR, with no mechanism for consultation with them. There is no mention in the IFR’s regulatory principles of the need for the IFR’s decision making to recognise existing and successful mechanisms that have been developed to encourage co-operation between stakeholders, including the Professional Football Negotiating and Consultative Committee—a crucial backstop that has been effective in ensuring that substantive changes to player contracts and conditions cannot be made unilaterally. That is a straightforward thing to fix, and doing so would strengthen the Bill and ensure that there are no unintended consequences of its implementation. The Bill should acknowledge the existence and validity of these non-IFR mechanisms within the new regulatory ecosystem and formalise the responsibility of the IFR to work in a way that recognises them.
Secondly—and vitally—the Bill currently gives the IFR only partial oversight of financial sustainability, with no authority or oversight of profit and sustainability rules. The IFR should therefore have full authority for financial sustainability, including the oversight of profit and financial sustainability rules, in line with the recommendations of the fan-led review. This should include: full authority in applying sanctions; published guidelines on how sanctions will be applied; a guiding principle that sanctions do not unfairly impact fans but instead target club ownership, leadership, and management; and full consideration and involvement of fan representation as part of any sanctions process. Hopefully, this would help to prevent the scenes that we have seen at Everton this season, which have caused real distress to many fans in my constituency and in the wider region, and which have also meant that I have not had a moment’s peace since from my Everton-supporting family members.
As I said in opening my remarks, we are a town that has much to be proud about with our football clubs—something that the brilliant Warrington Football Podcast does so much to highlight with “More Than Just A Rugby Town!” Warrington Town have just secured their highest ever league finish in the club’s history in the national league north, while fans are having to fundraise to make the costly improvements to meet onerous FA ground grading criteria to allow them to continue playing at this level. That does not feel right when we see how much money there is swirling around the game at clubs just a few miles up the road.
The Premier League’s domestic TV deal alone is worth over £6.5 billion, and it is a shame that the recommendation of a transfer levy from the fan-led review has not been taken up. The better redistribution of some of these funds throughout the rest of the football pyramid is crucial for the financial sustainability of the wider game.
Warrington Rylands have made it into the northern premier league play-offs this weekend, after a successful few years, including lifting the FA vase at Wembley, and have just launched their first deaf football team, making the game ever more accessible to more players and fans; and women’s football in Warrington is coming on enormously.
There is plenty to be optimistic about for the future, but we know that we need a regulatory framework for the game that puts more power and resource into the hands of supporters and clubs, sees a fairer distribution of wealth across the game, and increases sustainability, transparency and accountability to get there. I hope that the Government will commit to a constructive cross-party engagement as the Bill makes its way through the House and on to the statute book.
James Wild (North West Norfolk) (Con)
I declare an interest as a Norwich City supporter and a King’s Lynn Town FC fan. As has been mentioned, it is fitting that on St George’s Day we are talking about our national game, which is loved by millions of people in our country. As we have heard, the premier league is also the most watched league in the world, and last year the EFL had the highest attendances for more than 70 years, with over 21 million supporters passing through turnstiles, so football is a great success story. It is in that context that we consider the Bill and the proposals to create a new regulatory structure for the game. As the explanatory notes set out, football was
“previously not regulated by statutory provisions”
and the measures are “unique” and “unprecedented”.
My first point is the one that I made a year ago when the Government published their response: we need to ensure that this is a truly proportionate regime and be mindful of the success of the game. That means having a light-touch regulator, which Ministers have committed themselves to. The Government response set out that the regulator would operate an advocacy-first approach to regulation, meaning that it would use constructive engagement rather than formal intervention wherever possible. However, that could be better reflected on the face of the Bill in the objectives and duties of the new regulator, otherwise the risk of mission creep is more likely to materialise. We have heard a number of contributions already this afternoon in which the regulator is being actively encouraged to expand its scope even before it has been set up.
I support the objectives of financial soundness and resilience, as well as safeguarding the heritage of football—the ground, the crest, the shirt colours and the name of a club are all part of its DNA. Incidentally, Norwich City can boast the oldest song in world football: “On the Ball, City.” I will not sing it. Football is competitive—it is about promotion, play-offs and passion—so the regulator must also understand the essence of the game and not reduce it to a dry, technical analysis of profits and losses, and impose a banking-style straitjacket on clubs.
As a member of the Regulatory Reform Group—I see the chairman, my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), entering the Chamber as I speak— I welcome the principles set out in clause 8. However, they can certainly be strengthened to deliver that light-touch regime that is so important. The scale of the task that we will be asking the regulator to undertake will be considerable. It will have to review detailed business plans of 116 clubs and reach agreement on them.
In addition to the mandatory licence conditions, the regulator can impose discretionary requirements on any or all of those clubs. Such requirements would have to be bespoke, and they would then have to be monitored. Clearly, that comes at a cost, which has not really been discussed in the debate so far. The impact assessment estimates that the new regime could cost £132 million over 10 years. Admittedly, there is a lot of uncertainty, because we do not know precisely what conditions the regulator will put in place. That is money spent by clubs on football that in future will be spent on the costs of regulation. The national league is not the only one that has warned about the risk of the burden on smaller clubs. On licensing, the regulator must avoid duplicating existing requirements and ensure that it adopts a proportionate approach to the levy.
Clearly, a key driver of the legislation is money and how revenues are distributed through the pyramid that is so essential to the health of the game. This has been agreed on a voluntary basis to date, and it would be better if football came forward with its own solution. However, if that does not happen, there is part 6 of the Bill, which sets out the backstop mechanism. Either the Premier League or the EFL can trigger it, and if mediation does not work, a committee of experts drawn from the regulator’s panel will consider final proposals from both.
I have to confess to finding the decision process curious at that point, as rather than looking at each proposal and then adjudicating and determining what is the best overall approach, which could be between the two proposals put forward, the regulator can only opt for one of them. In any negotiation, if both sides feel a bit disappointed with the deal reached, it is likely to be fair. In this scenario, however, only one side will win, so I ask the Minister: why create an expert panel and a regulator if they are not able to apply their own judgment? Given the importance of that provision, I hope the Minister will outline the Government’s thinking. What consideration has been given to how that could be gamed, and will he look again at those provisions as the Bill goes forward?
On revenues, I will briefly focus on parachute payments, which are important elements in enabling clubs promoted to invest and, yes, to take calculated risks so that they can compete. If parachute payments were removed, clubs like Norwich City that are run sustainably and can get promoted—I am optimistic for the play-offs this year—would not have the confidence to invest, knowing that if they go down this path and get relegated, there would be no smoothing of their income. I therefore support the approach in clause 55.
Finally, I return to where we began, with the fan-led review. During covid, clubs were not able to let fans in, and King’s Lynn Town and others had to take sports survival loans—£13 million of them were issued—and their repayment threatens the viability of some clubs. As we look at financial resilience, I encourage the Minister to consider allowing clubs to convert, say, up to 49% of the loans they have taken out and give them to supporters’ trusts as shares. That would create a legacy of community ownership, which would be very worthwhile and would reduce the burden on clubs.
To conclude, football is an important part of our national character, and as the Bill proceeds it is essential that the regulator works with the game, the clubs and the league to ensure that football continues to flourish.
Navendu Mishra (Stockport) (Lab)
I start by placing on record my congratulations on the success of my local club, Stockport County football club, in its elevation to league one. On top of that, it has topped the table in league two. I use this opportunity—shamelessly, one might argue—to encourage Members on both sides of the House to sign my early-day motion celebrating the success of Stockport County football club in recent months? This is the first EFL title that Stockport County has won since 1967, and it is an important occasion for me as the MP who represents the club in the House of Commons.
Before I go into the main points of my speech, I join other Members on both sides in thanking the hon. Member for Chatham and Aylesford (Dame Tracey Crouch) for the work she has done, as well as the members of the Select Committee and the Minister, who has returned to his place. I have done some work with him on grassroots cricket, and I know he takes time to engage with Opposition MPs and MPs from his own party. He has a long-standing record of working hard on this issue, so I wanted to place those words on the record.
Premier league teams need to pay a fair share of the revenue to ensure that all fans can continue to enjoy the sport of football. Clubs like Stockport County football club in my constituency make a valuable contribution to the lives of supporters and countless others in the local community. However, as many have highlighted, the game’s fractured governance model and the inequitable distribution of finances are increasingly putting that risk.
Stockport County football club, and many other clubs, are an important part of England and Britain’s sporting culture, and we must do a lot more to ensure that the model is sustainable. Currently, English football is nowhere near meeting its objective, with EFL clubs losing £471 million during the 2022-23 season. With the shortfall having to be met by club owners, those are serious numbers. Football has failed to take the collective action needed to protect clubs due to the number of vested interests in its governance model. That has been echoed by representatives across the House. The English Football League wants local clubs to prosper as beacons of community pride in towns and cities throughout the country. I know that many fans of all football teams, and other sporting teams, take a lot of pride in and cherish the history and culture of their local team. I am glad that the English Football League welcomes the Bill and this parliamentary scrutiny and discussion. This is a good opportunity to reform the football pyramid—a lot of MPs have made points about that, so I will not repeat them.
Labour has long supported football reform. Our last three manifestos committed to reviewing football governance, giving fans a greater say in the way their clubs are run, and calling for the Premier League to redistribute more of its television rights revenue to the wider game. Labour also supports the implementation of an independent regulator, and we urgently need to bring in new laws to prevent further clubs from going bust or being used as playthings for the wealthy. Sadly, since 1992 more than 60 clubs have gone into administration. Although the Bill is welcome, it is likely to be too little too late for several clubs that had to witness their structures collapse, with fans left disappointed and angry. The fan-led review was published in 2021. Why has it taken the Government so long finally to act? Labour welcomes the Bill, but several issues need to be addressed and I am critical of the time it has taken the Government to come forward.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. I make no criticism of the fact that Members are using the time made available to them, but we will have to reduce the time limit again I am afraid. After the next speaker it will go down to five minutes.
Robin Millar (Aberconwy) (Con)
May I add to the many thanks already offered to the Minister and my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch) for the considerable work that has gone into this issue? Many others have rightly been mentioned, but time does not allow me to say anything more.
I stand in support of the Bill despite, as my hon. Friend the Member for Cleethorpes (Martin Vickers) said, having come to it with a degree of reluctance. I say that because I stand for the love of the game. This has been a fascinating debate, but in one sense it has been characterised by the many different perspectives that people have offered and, with the greatest respect, they have all been partial perspectives. No one person has held a complete and perfect view of football in this country, or the impact of this regulation, and that is vital. Those listening who may be questioning our right as MPs to be talking about the game they love should be reassured that we are just like them—this is a game that we love too.
I am a terrible fan and make no claim to stand here as a fan. I have never held a season ticket in my life, but I do stand here as a player, from my early days at Bangor Juniors—many of my school friends will remember me playing then—through to playing in the Suffolk League in Sporting 87 football club. I joined it when there were about 14 of us fellas from across East Anglia kicking a ball around, and left it when there were more than 600 members, many of them youth players, and we had won a couple of Suffolk fair play awards. I now play—my colleagues might say that is a loose description of the word—on a Friday afternoon for the Dyffryn Conwy Amateurs in Llanrwst. That is a different kind of club. It started for people just to have fun kicking a ball around, to work through some of the things that we pick up during the week, such as issues of mental wellbeing, and for building friendships in the community. I have been very appreciative of that support, in particular the work of Ian in setting up the club.
It would be remiss of me not to mention that I chair the all-party football club group, and I know that hon. Members are sitting here wondering how we got on today against the Lobby. Well, suffice it to say that at half time it was 3-1. It was a closely fought game, played well, but I think I ran out of fingers towards the end. Congratulations to the Lobby on that one; we will be back again next time to even the score.
The aims of this Bill are worthy, and putting the fans’ voice at the heart of football is vital. I grew up in Bangor. In 2019, I saw the club fall from the heady heights of 1985-86, when it played in the cup winners’ cup against Atletico Madrid, to seeing its Farrar Road ground turned into an Asda supermarket through mismanagement and many other episodes. Bangor City Supporters Association formed a breakaway club in 2019. What it stated at the time captures the essence of the Bill. It said:
“We want fans to reconnect with each other and restore the pride and feeling of being a supporter of our historic club. The new club is a creative and positive solution for an ever-changing and precarious situation. We are not disowning Bangor City FC or its history, the club is OURS, it belongs to the fans and local community. ‘Owners’ will come and go but the people remain. Keep the faith.”
There is much in there and much more history than I know—I have been away from the area for many years, so I am not familiar with all the steps in that journey—but it speaks to the concern that people have felt and that constituents have written to me about. I stress that those are constituents of the hon. Member for Arfon (Hywel Williams), but that is my home, and they have written and spoken of those concerns.
Importantly, this Bill recognises that community ties, sustainability and ethical governance are right at the heart of things and are essential. I would argue that those things resonate with the very Conservative values of heritage, community and sustainability.
Having described a rather unfortunate episode in the history of Bangor City, I can contrast that with the lessons I have learned from watching Llandudno football club, the Seasiders, where the work of Doz and her family over the years has made sure that the club is viable. Rod, Dave Guinn and others on the board at present are seeking to take the club forward.
This Bill makes the point again, as my hon. Friend the Member for Chatham and Aylesford said, that structure is important. We have to put in place these structures so that the money can flow. I argue that the Bill sends a signal that the era of opaque and unchecked ownership is over. Football is no longer just a plaything for those who see it only as an investment class. It is important that the backstop is in place. It is essential that the potential to fine clubs is retained, so that the regulator has some teeth. I question the scalability and applicability that are mentioned in the Bill.
I felt a chill when I heard some speak with an ambition to interfere with matters of football and apply preferred political agendas or even create a game in which everyone wins a prize. That is not the sport I know or love. I urge the Minister to give time at later stages to clarify some of the points being made and to make sure that while the Bill will deal with bad actors and bad management, it will not remove elements of bad luck.
Mr Toby Perkins (Chesterfield) (Lab)
First, I welcome the Bill. As others have encapsulated, our football clubs in this country are unique. They are institutions at the heart of their communities with long, long histories that far outlast whoever might be the chairman, the manager or the players in any period of time. That is why this regulator is overdue, and I very much welcome the work done to get us to this stage.
The regulator has an unenviable job. The number of things that people want to see addressed in football is huge. I am sure there will be all kinds of calls for the regulator to take action on things that fall outside its remit. The Secretary of State was at pains to clarify the regulator’s limited role around football. It is not about a new organisation running football; it is about ensuring that football is sustainable in the future. As my colleagues have said, this legislation has been introduced because football has been unable to break the logjam itself. It will be important for some of the remaining uncertainties in the Bill to be worked out in Committee.
Football is a business—generally a privately owned one—but it is also an institution. As we have heard from many speakers, one of the main reasons for that is that the fans remain. However, it is also a different kind of institution because of the rewards available to those who are successful and the appalling failure that happens when gambles go wrong. Many of us remember the Aston Villa versus Derby County play-off final. It was widely believed that whoever lost that game would end up going bust. Derby County, as we know, went into administration and is now in league one, while Aston Villa is fourth in the premier league with untold riches. For the sake of 90 minutes, those were the differences on the line that day. We cannot have a situation where one person’s gamble leads to that kind of success and another person’s gamble leads to the club almost ceasing to exist. We need the regulator to balance an individual businessperson having a go and the endangering of the cultural institution that is a football club, so that it is does not mean disaster if those having a go fail.
The success of the Premier League has been spoken about many times. My hon. Friend the Member for Sheffield South East (Mr Betts) was right to say that the championship is the fifth biggest division in Europe. In addition, league one is the tenth most-watched league anywhere in Europe. Right down the pyramid, this country has a thing of unique strength. My club, Chesterfield, which is in the fifth tier, attracted 10,000 fans on Saturday. Its history is informative. Darren Brown almost bankrupted the club and ended up in jail because of the way he conducted himself as the head of Chesterfield. The fans had to step forward and save the club back in 2001. Then, we had Dave Allen as chairman. He got the new ground built and got the club to the edge of league one, but found that, with every further league the club went into, the losses grew.
It is a unique business in that losses grow as the club moves from league two to league one, and from league one to the championship, so there is a perverse incentive. Until the club reaches the promised land of the premier league, the losses grow all the time. Look at some of the losses that championship clubs are experiencing—it is just appalling. Dave Allen lost interest and the club was on the verge of bankruptcy again. The Chesterfield FC Community Trust stepped forward, and the passion, commitment and professionalism that the trust board members have introduced got Chesterfield back into the football league, now with the help of the Kirk brothers—local fans who have their heart in the club. The club is looking much brighter.
The truth is that almost all our premier league clubs are owned not by people with that kind of history and passion for the club, but by foreign-owned institutions and foreign Governments who do not have the same understanding of and commitment to what football is about. I welcome the fact that the Government have introduced the Bill, which enjoys cross-party support. Now, we need to ensure that it works.
Peter Gibson (Darlington) (Con)
I congratulate the Under-Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Pudsey (Stuart Andrew), and pay tribute to my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch) for her tremendous work in this area.
Football is a vital part of our communities, bringing people together in support of their much-loved clubs. Since 1883, Darlington has been home to Darlington football club, known as the Quakers or simply Darlo. It is the team that Arthur Wharton, the world’s first black professional footballer, played for. I declare my interest as an individual shareholder of that fan-owned club.
As a fan-owned club, Darlington’s profits are reinvested back into the club. Following the financial collapse of the club some years ago, it is building back and has ambitious plans to secure its own ground to further sustain its financial future—an ambition that I am proud to support. A club with close links to the community has the potential to develop deeper, longer-term partnerships.
Community-owned clubs offer greater protection and transparency within their constitutions, which appeals to partners, funders, and sponsors. Giving people the chance to have a stake in their club can increase their connection with it. People can share the responsibility of sustaining their club, unlocking more volunteers and participation. If supporters know that the money they spend will be reinvested in the club, they are more likely to spend and donate more.
I welcome that, in the face of the gaps getting bigger, the Bill seeks to overhaul the football finance system to protect and promote the sustainability of English football for fans and communities like those in Darlington. I want to put on the record my thanks to David Johnston at Darlington football club for his engagement on the Bill in recent weeks. The Bill puts fans back at the heart of the game. With no fans, there is no game. Sadly, Darlington football club has suffered in the past, and its future has hung in the balance, causing uncertainty for the club and the community at large. That is why I applaud the stronger tests in the Bill for prospective owners.
Findings from the report by Fair Game show the disparity in the distribution of TV income. For every £1,000 in the broadcast deal, a premier league club gets £882.42, whereas Darlington FC, as a national league north club, gets merely 15p. That is simply not right, and focuses on protecting the bigger, wealthier clubs as opposed to the smaller ones that are so integral to their communities. I must recognise the wonderful work of the Darlington FC Foundation, which does so much good in my constituency.
I take this opportunity to thank the Government for their support of sports more generally in the community. Darlington has received over £900,000 for a new pitch, running track and changing pavilion at Eastbourne sports complex. Firthmoor community centre received over £90,000 for its multi-use games area, and there has been much needed investment in football across Darlington. All that helps inspire people and ensure that children can stay fit and healthy. Yet again, it is an example of the Government investing in football in our communities for people of all ages and abilities.
Finally, the Bill recognises that major changes must occur to keep our grassroots sports alive. I welcome the Bill, which is much needed for our fantastic football clubs to ensure that fans are put first and our clubs can not only survive but thrive.
Clive Efford (Eltham) (Lab)
For those who have opposed the Bill, particularly the Premier League, it is worth pointing out a few facts that the English Football League has provided. In the four years that the deal between the Premier League and the Football League was negotiated, wages in the premier league have gone up by £800 million—from £3.2 billion to £4 billion. In 2022-23, premier league clubs spent £2.8 billion on player transfers, and in 2024 the premier league spent £410 million on agents’ fees. Anyone who says that the Bill will damage the viability of the premier league needs to look at those figures.
We must remind ourselves of why we are here. As everyone has, I rightly pay tribute to the hon. Member for Chatham and Aylesford (Dame Tracey Crouch), but the arguments from the fans go back many years. I know that because I wrote Labour’s manifesto on football back in 2015, and we spoke powerfully about the need for fans to have a say. Fans are of the communities where the clubs are situated; they have sustained those clubs through generations, and they are an early warning system when there are problems in those clubs. One of my criticisms of the Bill is that it does not say enough about consulting and empowering fans. It could go further in those areas,
The legislation on the regulator is defective in two ways. It does not give the regulator step-in rights to settle a deal between the various organisations in the football pyramid. More importantly, the regulator is not empowered to deal with the issue of parachute payments. We are told that that issue is going to be dealt with through the licensing system; I would like to know how that is going to work, because that is about individual clubs. The impact of clubs having parachute payments is that other clubs are enticed to try to compete with them financially. Are we going to say to clubs that are receiving parachute payments under the licensing scheme, “You can’t spend that money”? That just does not make sense, so how will we be able to deal with this inequality of arms for clubs with parachute payments under the licensing system?
We are also told that through the licensing system, clubs that are overspending and perhaps overstretching themselves will be dealt with by the regulator. That seems to put the disparity in wealth and resources into legislation—actually to legislate to keep those clubs in abeyance, way behind the clubs that receive parachute payments. We know that parachute payments are the driving force behind many of the problems that exist in the financial arrangements of many clubs in the football league. That has led to difficulties, so how can we possibly have a regulator to deal with the issue of football finance that does not have the right to step in and deal with parachute payments? That has to change—it cannot be accepted.
On the issue of assets, Charlton Athletic do not own their ground, and they do not own their training ground. The training ground is in my constituency—it is metropolitan open land. The former owner has kept the rights to, and ownership of, the stadium and the training ground. I can only assume that he has done so out of spite, or perhaps he thinks there is going to be a payday down the road where he can develop those assets. As I say, the training ground in my constituency is metropolitan open land; he will develop that over my dead body. Perhaps he is going to arrange that—I do not know—but the stadium will not be given planning permission for development by the local authority in any case, so I think the former owner needs to think again. He should deal with Charlton even-handedly and hand over the rights to that ground.
Lastly, as other Members have said, there is the issue of sovereign wealth funds owning football clubs. The regulator must be given powers to get to grips with that, because the current situation is unacceptable. I support the Bill, and I hope I will get on the Bill Committee.
James Daly (Bury North) (Con)
This is a unique regulatory Bill, in that it regulates the preservation of football clubs—in my view, it is regulation to save something, rather than regulation regarding competition. It is illogical to suggest that anything could level the competition between Bury football club and Manchester City, in terms of their assets or in terms of anything else.
When Bury FC were rejected from the EFL, at the heart of the matter were the serious concerns that Jonathan Taylor KC raised in his review: the owner and director roles that were being enforced by the football league, especially in relation to leagues one and two. In that report, he said that
“There is no doubt that the EFL applied the OAD”—
owners and directors—
“test properly in relation to Mr Day and Mr Dale”,
the two owners of Bury football club.
“The question is whether the test as currently written is fit for purpose. In particular, it only looks at a narrow list of objective criteria, and does not take into account various other factors that speak to whether a new owner or director is a fit and proper person to own/run a member Club.”
When Mr Dale bought the club for £1, the fact that he had numerous previous failed businesses was not taken into account. The owners and directors test did not require that Mr Dale provide proof of funds—proof that he was able to sustainably run the football club—prior to purchase. That is utterly ludicrous and something that has to change, so I hope the Minister will touch on how the Bill will ensure that the regulation and the fit and proper person test are robust enough to keep people such as Steve Dale out of the ownership of clubs.
I find myself asking time and again how a regulator will be able to intervene in the running of football clubs, unless they have a huge amount of support staff. I accept fully that a business plan is put in place, but business plans can change. The situation at Bury was virtually criminal. On the car park at Gigg Lane, which was built in 1885, the previous owner sold 250 car parking spaces in a Ponzi scheme, some of them to poor Bury fans. These were essentially sold as a financial product that people would get a return from. He was selling these things to people around the world, and when the money ran out, the whole thing went boom. Nobody did anything about that. That was a unique situation, but would the regulator have the powers, the understanding and the knowledge to be able to intervene in acts of complete criminality such as that? I hope that it will, and I would very much welcome the Minister’s response to that.
Speaking of my experience of Bury Football Club, I was at Ramsbottom United on Saturday and 2,000 people were there. It was a North West Counties Premier League match between Ramsbottom and Bury. Bury bringing the best part of 2,000 people with them gave Ramsbottom United 25% of their total annual income. When we look at what it is about clubs that matter—the history, the heritage and everything else that we have talked about—we have to get to the heart of how clubs are run. After somebody gets through the fit and proper person test, after the first business plan fails and after the ambition comes in, how is the regulator going to be able to control that unless they have a massive amount of staff?
In my view, football clubs throughout the pyramid system are incredibly badly run. Most of them are subsidised by multimillionaires, and in any other way, shape or form they would not be businesses; they would be insolvent. They exist off largesse. We have seen some really great examples of clubs coming through the football pyramid that are completely and utterly reliant on one person’s millions. If that one person’s millions disappear, there is no football club. How do we regulate that in a way that allows for sustainability? Bury was badly run. It was badly let down by the EFL. I think and hope that if this legislation had been in place when the club was expelled from the league in 2019, it would have put the club in a better place. I will put a question mark after that, and I look forward to hearing my right hon. Friend the Minister’s comments.
Ian Byrne (Liverpool, West Derby) (Lab)
First, I place on the record my thanks to the hon. Member for Chatham and Aylesford (Dame Tracey Crouch), who has always listened to supporters, and will be sorely missed. Much of this legislation comes from the efforts of the fan-led review. I also pay tribute to the FSA, to Kev Miles and to the Minister, who bear the scars of getting us here today.
This legislation has come about because football supporters have lost trust and faith in the current custodians of the game to protect football for the people who really matter, whose loyalty is often taken for granted. Football supporters, along with the working-class communities the game originates from, are too often now an afterthought, if indeed they are considered at all. At the bottom of the pyramid, there is a shocking, criminal lack of investment in the grassroots game, which should be accessible to all. This is something that the wonderful stalwart campaigner Kenny Saunders does so much to highlight via his Save Grassroots Football campaign.
At the top of the pyramid, clubs continue to price out working-class supporters and the next generation of their own support. This poses an existential threat to the very strands of the game that give English football its authenticity, passion and worldwide popularity. Football must therefore be very careful not to kill off the golden goose that provides these riches—the loyal supporter. It is worrying to see significant price rises again for next season at many clubs amid the cost of living crisis. Some lessons are not being learned, and the clubs must take heed.
The Premier League has done much good for the beautiful game, with stadiums now a world away from those in the ’80s and earlier, where in some cases horrific tragedies took place. English football is now seen as world-leading, and the Premier League’s community work is beyond reproach and actually world-leading. I have worked with the team at the Premier League on the issue of tragedy chanting, and I would like to put on record my thanks to Richard Masters and his team, the LFC Foundation, the Manchester United Foundation, my hon. Friend the Member for Weaver Vale (Mike Amesbury) and Joe Blott representing the FSA.
However, despite its perceived success, the Premier League was powerless to prevent the attempted European super league breakaway in April 2021, with six of the 12 clubs coming from its ranks. The actions of those six clubs that attempted to end football as we know it and place the entire football pyramid in peril in their rush to form a European super league showed exactly why we need a football regulator to protect the interests of all. Shamefully, my own club, Liverpool, was part of that, but the collective fightback from supporters halted it in its tracks.
From the flames of that chaos, Liverpool fans then created what we hope is an exemplar model of fan engagement and influence to prevent clubs from making the same mistakes again. I am delighted that elements of this structure appear in the Bill: that is a tribute to the actions of Spirit of Shankly and the associated fan groups, and to the engagement of the UK-based element of Liverpool’s board. Fan engagement and influence must be in the heart of the Bill, because fans are the true custodians of the game, not the rogue club owners who will destroy the fertile ground that nurtures its roots. That is surely more of a commercial threat than a Bill that seeks, as the Premier League admits, only to embed normal business practice within the game. A good footballing organisation should not fear regulation; rather, it should welcome it.
The Bill currently gives the independent football regulator only partial oversight of financial sustainability, with no authority or oversight in respect of profit and sustainability rules. Football supporters are rightly demanding a transparent, proportionate, fair and timely system. The chaos and confusion caused by the Premier League’s handling of PSR has proved that it has not met these requirements. Many supporters, including Dave Kelly of Everton’s fan advisory board, are now calling for the football regulator to have full authority in relation to financial sustainability, in line with the recommendations of the fan-led review. They believe, and I share their view, that trust matters. The vast majority of this legislation will, I believe, begin to restore that trust, but it must go further.
Worryingly, given the importance of fan engagement, it is notable that the word “fan” appears only 16 times in the entire 140-page Bill. The interests of supporters must be adequately factored into governance and strategic decision making at the highest levels of the game, and the Bill must reflect that I would like to see independently elected fan representatives on the regulator board, the expert panel and the Premier League board. The expertise and experience of supporters must be hardwired into the decision making of the regulator and the Premier League. It is greatly missed, and it needs to be added to the Bill in Committee. Let us never forget what the great Jock Stein once said, which has resonated through the Chamber today: football without fans is nothing.
Anna Firth (Southend West) (Con)
I welcome the Bill, and thank the whole ministerial team, particularly the Under-Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Pudsey (Stuart Andrew). I also thank my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch). Their commitment has been fantastic, in respect of the fan-led review and all the other work that has been done. I would love to say more about that, but time does not permit it.
Occasionally people ask me whether this job is stressful, and my reply is always the same: it is nowhere near as stressful as 90 minutes on the terraces at Roots Hall. Although Southend United always give us a thundering performance, it is often not until the second half that they show their full skill and dominance of the game. However, the stress of being a Shrimper has been taken to a whole new level in the last two years, which is why I welcome the Bill.
For too long, football clubs like my own—Southend United—have been left at the mercy of unscrupulous owners who are either unwilling or unable to fulfil their obligations to the clubs and the fans. For too long, fans have suffered the making of vital decisions on their heritage with little or no consultation. For too long, there has been no focus on sustainability and future planning, which has left many clubs just one season away from insolvency. While I would normally be completely against the regulation of a successful industry like football, in this case I welcome the proposal for an independent regulator, which is absolutely necessary to put fans back where they belong—at the heart of English football.
To date, I have mentioned the plight of Southend United no fewer than 11 times in this place. Had it not been for the heroic actions of those at the club—the chief executive Tom Lawrence, the manager Kevin Maher, the players themselves who have somehow delivered week after week, the fans who cleaned and repaired the stadium so that we secured our health and safety certificates to start the season—we could well have lost 117 years of history. Against the instability of that background and the background of an outgoing owner who has been subjected to 19 winding-up petitions in 25 years, I welcome the strengthened owners and directors test. I particularly welcome clause 37 and the fact that the Bill removes any minimum number of bankruptcy events to disqualify a future owner.
However, instead of just punishing poor owners, I hope that the regulator will have a mechanism to reward the good owners who are making a positive and tangible difference to their club and community. Southend United Community and Educational Trust’s social value to the city of Southend and south-east Essex communities is measured at over £10 million a year. It gives back and encourages, so if there were a way for that to be rewarded, that would be a good improvement.
Southend United have a remarkable fanbase, so of course I welcome the detail in the Bill about engaging more with fans and hearing their voices. I would also mention supporters’ trusts. Almost every club will have a fantastic supporters’ trust. We have the Shrimpers Trust, ably led by Paul FitzGerald and James Schooley. I understand why supporters’ trusts are not named specifically in the Bill, but it would be nice if there were a way for such trusts to be recognised because of all their hard work and the engagement they have had with the ministerial team to make the Bill as good as it is.
I hope the regulator will be given the power it requires to mediate in all matters between the Premier League, the EFL and the National League, not just financial ones. Of course, I refer to last week’s concerning news regarding the unscrupulous scrapping of FA cup replays. Everybody knows the magic of the FA cup—every single person hearing those words will have a memory. For Southend United, the magic of the FA cup is best shown in 1979, when 31,000 spectators crammed into Roots Hall to witness their heroes taking on European champions, Liverpool. To put that into context, more than 11% of the entire city of Southend was engaged on that day. That is why it is so important we preserve the replays.
I appreciate the Bill has its sceptics, but I say there is not a moment to lose. Let’s get on with it. Let’s bring this Bill home.
Rachel Hopkins (Luton South) (Lab)
I am very pleased to finally be able to speak in today’s historic debate. A new independent football regulator is an important development, coming as a result of dysfunction in the game. I thank those who have worked hard to improve how football functions, including the hon. Member for Chatham and Aylesford (Dame Tracey Crouch) for producing the fan-led review, the Football Supporters’ Association and Fair Game. I thank Luton Town’s chief executive, Gary Sweet, for sharing his views on a number of occasions and, importantly, I thank members of Luton Town Supporters’ Trust and Loyal Luton, who have always been willing to meet me and tell me their views, because ultimately football is about the fans.
However, the status quo is failing fans across the country. While the premier league is arguably the most globally popular and commercially successful sporting competition, more than 60 clubs throughout the English league system have gone bust since it was established in 1992. The financial power at the top of the English game has distorted competition and powered unsustainable business practices as clubs scramble to be one of the elite 20 clubs at all costs. We all agree that the future sustainability of the pyramid is heavily reliant on securing a fair financial distribution deal between the Premier League and the pyramid system, not to mention preventing any potential re-emergence of the European super league plan.
We also have a multitude of examples that demonstrate the owners and directors test has not stopped dubious owners buying clubs and running them into the ground. We Lutonians sadly know the ugly side of the beautiful game better than most. Back in 2003, in response to Luton fans wanting to save their club, the previous Luton Town chairman, John Gurney, disgracefully said:
“If they expect me to walk away from Luton with nothing, I’ll make very sure there’s nothing to walk away from”.
This was from a person who had already recklessly suggested renaming the club, pushing for a merger with Milton Keynes-bound Wimbledon FC and, wait for it, attaching a Formula 1 circuit to a new 70,000-seat stadium on stilts. My personal favourite, which did see the light of day, was suggesting selecting the club’s next manager through “manager idol”, with texts costing 50p. That was all in the face of clear and vocal opposition from the fans. Thankfully, due to the work of a group of fans creating Trust in Luton, including one of its founding members, Gary Sweet, who is now Luton Town chief executive, control of the club was wrestled away from that disastrous ownership.
However, that was not the last time that fans had to step up to protect the club, as the fan-led 2020 consortium bought them out from yet further mismanagement after they went into administrative receivership in 2007. Unfortunately, the previous mismanagement led to a huge 30-point deduction and ultimately relegation to the national league. While it has not always been plain sailing, successes on and off the pitch since have enabled Luton Town now to compete at the pinnacle of English football—from non-league to the premier league. How did Luton Town do it? They ensured that they were a unified club from top to bottom, with a clear vision rooted in our Luton community.
Mr Deputy Speaker, if I may, I will take the opportunity to celebrate a significant part of our Luton football heritage through the period by wishing Alison Taylor, the landlady of the Bricklayers Arms, a well-earned and relaxing retirement at the end of the season after 38 years of service.
I fully support the creation of the new independent football regulator to protect and promote the sustainability of English football, and particularly to safeguard the traditional features that matter most to fans and communities. I will put on the record a few initial concerns with the functioning of the regulator, as set out in the Bill. First, the regulator will have the backstop power to intervene in the distribution of broadcasting revenue between the Premier League and the wider pyramid if needed. It is important that we explore that to ensure that the regulator can facilitate a just and fair financial distribution deal, including parachute payments, and including the ability to initiate any regulation.
The regulatory principles in clause 8(b) do not make reference to fans or fan groups—or indeed players or employees—as groups that the regulator should proactively and constructively engage with. When I worked for a regulator in the health sector, we directly engaged with patients, so why would the regulator not directly engage with fans, who are the beneficiaries of football? I also have reservations about whether the Bill is sufficiently free from any vested interests. Further clarity may be needed to ensure that a person with a conflict of interest cannot be on the expert panel board.
The Bill is supported by so many of us on both sides of the House, and this is a historic moment. The game is not just a business, but one with deep roots in the nation’s identity and communities, which is central to our global appeal. I look forward to supporting the Opposition Front-Bench team in taking the Bill forward.
Stephanie Peacock (Barnsley East) (Lab)
I am pleased to be here to welcome the Football Governance Bill. Football clubs sit at the heart of communities up and down the country. Family, friends and neighbours come together to watch games, win or lose. While providing role models as well as infrastructure, football clubs also inspire the next generation of footballing talent across every town, village and city. At the same time, English football is world leading. English clubs have fans on every continent, and the players and managers they attract are admired from all corners of the world. That combination of local togetherness and global acclaim is the envy of many.
As the shadow Secretary of State set out, the Premier League and its clubs have contributed billions to the economy and supported more than 90,000 jobs. This worldwide success has seen bigger revenues than ever coming into the game. But despite that, the financial sustainability of the English football pyramid is at risk.
As my hon. Friend the Member for Luton South (Rachel Hopkins) member for Luton South just outlined, along with my hon. Friend the Member for Preston (Sir Mark Hendrick) and many others, too many fans are having their attention forced away from the pitch and into the troubles of malicious ownership, mishandled finances and poor management. That could be Bury fans, who witnessed their club being expelled from the football league almost five years ago or, more recently, Reading fans, who shared with me their deep concern over the future of their club when I met them just a few months ago. I pay tribute to my hon. Friend the Member for Reading East (Matt Rodda), and indeed the hon. Member for Bracknell (James Sunderland), for their campaigning work on this issue.
There are clearly structural issues in the pyramid that must be addressed. Indeed, the fan-led review shone a clear light on the issues within the game, and I pay tribute and thanks to the hon. Member for Chatham and Aylesford (Dame Tracey Crouch) for all her work. As my hon. Friend the Member for Weaver Vale (Mike Amesbury) noted, the debate is taking place on St George’s day, so I take the opportunity to wish the whole House a happy St George’s day.
I am supportive of the Bill and the principle of an independent regulator for football, with a strict and focused remit on the financial sustainability of the game and the ability to act with proportionality. Labour supports giving fans a greater say in their clubs, ensuring that owners and directors are stringently tested on their integrity, competence and financial soundness, as my hon. Friend the Member for Chesterfield (Mr Perkins) spoke about. It is also important to prevent any further attempts at a breakaway league, which puts financial gain before the all-important principles of competition and qualification based on merit.
In preparation for the Bill, I have met representatives from across the industry: from the Premier League and its clubs, the English Football League, the National League and the FA to the Football Supporters’ Association and supporters groups, including the Barnsley FC Supporters Trust. I know how important Barnsley football club are to my town, and I was pleased to watch them at Oakwell just a few weeks ago. While not everyone agrees on every detail of the Bill or with the shape that the regulator will take, there is a lot of agreement that English football offers something world-beating and special that must be protected for years to come. That is what I believe the Bill seeks to do, and I look forward to helping to shape it with careful scrutiny.
The regulator does not address all the issues facing football today, nor is it meant to, but some of those issues have understandably been spoken about in the debate. For example, my hon. Friend the Member for Cardiff West (Kevin Brennan) gave a thoughtful speech, and has brought forward a private Member’s Bill, on unauthorised entry to matches. His Unauthorised Entry to Football Matches Bill is a proportionate intervention, designed to ensure the safety of fans by creating a specific offence for those attempting to enter stadiums without a ticket, and it has my support.
Over the weekend, we all saw the news that FA cup replays will be scrapped. That has understandably featured in this debate, with a number of Members raising their concerns. I believe it was the wrong choice, and fans will rightly have questions about how decisions are made that affect clubs all the way down the pyramid. The magic of the FA cup is that clubs from right down the football league, and indeed some non-league clubs, can compete with those at the very top.
At the moment, however, grassroots clubs across the country are facing difficulties, while contributing so much to communities, as the hon. Member for Westmorland and Lonsdale (Tim Farron) said. The hon. Member for West Bromwich West (Shaun Bailey) highlighted how important they are to the football pipeline. The clubs in my Barnsley East constituency—Wombwell Town, Worsbrough Bridge AFC and Wombwell Main—all contribute so much to the community. Hundreds of young people and adults play there every week, but the latter two face flooding issues at their facilities. In the case of Wombwell Main, which I visited a few weeks ago, flooding is causing multiple game cancellations. That is sadly typical of grassroots football across the country, which provides the foundations for both players and fans.
It is right that the regulator is strict in scope, covering the financial sustainability of the top five leagues, but a big part of that is to give fans a meaningful say in their club. I would therefore like to hear from the Minister on the strength of the measures for fans within the Bill. There has been a lot of rhetoric about how football must be for the fans, but is the Minister confident that the Bill’s provisions will live up to expectations and give fans the voice they deserve? I welcome the contribution from the hon. Member for Gosport (Dame Caroline Dinenage), the Chair of the Culture, Media and Sport Committee. I thank the Committee for its work and the fact that it has agreed to hold a pre-appointment hearing with the new chair of the independent regulator once there is a preferred candidate in place.
My hon. Friends the Members for Sheffield South East (Mr Betts) and for Eltham (Clive Efford) both spoke about this issue, and I pay tribute to both of them for all the work in this area, as well as to my hon. Friend the Member for Liverpool, West Derby (Ian Byrne); I know there has been keen interest in the issue of the so-called backstop powers and the ability of the regulator to intervene in the distribution of broadcasting revenue throughout the pyramid. That is an unprecedented power and must be carefully crafted in order to achieve its aims. Can the Minister assure Members across the House that the regulator will be given all the targeted powers it needs to secure the sustainability of the pyramid, as per its primary purpose?
Given that players and staff at clubs are often the first to notice that the club is experiencing financial difficulties, and that their livelihoods will be directly impacted, it seems odd that they are not mentioned once in the Bill, as my hon. Friend the Member for Warrington North (Charlotte Nichols) pointed out. Can the Minister explain why that is? The hon. Member for Folkestone and Hythe (Damian Collins) also made some important points on that subject.
I ask for a little more detail on some of the work being undertaken to ensure that the regulator hits the ground running. For example, what progress has been made on the shadow regulator, and is there any more detail on how the expert panel, which will be responsible for much of the regulator’s decision making, will be appointed? My hon. Friends the Members for Ealing Central and Acton (Dr Huq) and for Manchester, Withington (Jeff Smith) brought up the issue of equality, diversity and inclusion in football clubs. It will be for the regulator to decide what is contained within the corporate governance code of practice, but that is one of the issues that I would expect it to consider.
Before I conclude, I would like to touch on women’s football. There is widespread agreement that placing the women’s game in scope of the regulator would not be right at this stage. The Carney review revealed a number of pressing issues in the women’s game, including poor pay, professional standards, mental health support and union representation. It is important that we take them seriously. It is crucial that we ensure the financial sustainability of the men’s game, but that should not result in resources being stripped from the women’s game. I would therefore welcome an update from the Minister today on what progress has been made on implementing the recommendations of the Carney review, and on the Department’s plans for protecting the future of women’s football as part of the Bill.
To conclude, I thank all those involved in the Bill: my opposite number, the Under-Secretary of State for Culture, Media and Sport, the right hon. Member for Pudsey (Stuart Andrew), the civil servants, the clubs and, of course, the fans. Labour has long committed to reviewing football governance. This is a once-in-a-generation opportunity to preserve the future of our nation’s favourite sport. We can and must get it right.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
I thank all Members for their thoughtful and wide-ranging contributions, and I am grateful for learning about the first black professional footballer, Arthur Wharton, from my hon. Friend the Member for Darlington (Peter Gibson). I am pleased to hear the broad support for what the Government are proposing, and I am grateful for it. I am also grateful for the continued engagement with colleagues as we have prepared for the Bill.
My right hon. and learned Friend the Secretary of State rightly pointed out the successes of English football, and the contribution it makes to our economy and the pride of our nation, but it is important to remember why we are here today. My very first meeting when I was appointed as Minister was with fans’ groups. I heard at first hand their experiences of when it all goes horribly wrong—even to the point of having to boycott their own club for five years, in one instance. The fans felt unheard. We know that clubs are more than just football clubs. When they go into administration and are run down, the fans are obviously in despair, but that also has a significant impact on the wider community because they are more than football clubs; they are community assets.
That is why we committed to the fan-led review. Like everyone else, I want to put on record my thanks to my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch) and to the people who helped her, including Kevin Miles from the Football Supporters’ Association. The review was the foundation for the White Paper, and now we have the Bill today. I thank all those who engaged with us for all they have done: the FA, the Premier League, the EFL, the National League, the FSA and the Select Committee. I also want to put my particular thanks on the record to the officials in the Department. I cannot tell the House how many hours they have put in; they have been first rate and I thank them a great deal.
I want to focus, in the short time I have left, on some of the points that were raised. Many issues were raised and I will try to get through as many of them as I can, but I am happy to engage with colleagues afterwards if need be. When constructing the Bill, we have been careful to ensure that it is carefully drafted, considered and proportionate, and that it provides an advocacy-first approach; and that there is focus on the clubs where it is needed, and we make sure it is proportionate to their place in the pyramid.
A number of Members raised the owners and directors test. Too many clubs have been brought to the brink with unsuitable owners taking over, stripping them of assets and refusing to adequately fund them. That is why we are bringing in strong statutory tests to help prevent unsuitable owners at the point of entry, before they can do harm to clubs. Prospective individuals will be prohibited from becoming club owners unless the regulator has determined beforehand that they are suitable. They must pass a fitness test, which means: they have the requisite honesty and integrity; are financially sound; have passed the source of wealth test to ensure that their wealth is not connected to illicit finance; and have a plan and the resources to run the club.
Even once an owner is in place at a club, the regulator will still be able to make sure that they continue to be suitable. If it has grounds for concern about their suitability, it can test them on their fitness and their source of wealth. If it finds them unsuitable, they will have to sell the club. To prevent further harm being done to the club during the sale process, the regulator will have the powers to limit the owner’s involvement in the club, and if the unsuitable owner ultimately refuses to sell the club, the regulator will have the powers to step in and force a sale as a last resort. Strengthened tests and robust powers to remove unsuitable owners will mean that fans have the suitable owners that they deserve.
Hon. Members asked about what would happen if a club’s owners were forced to divest. Let me be clear: we hope that such a circumstance will be incredibly rare. The regulator’s objective is to promote clubs’ financial sustainability, and it will introduce tests on governance and financial oversight, which will greatly reduce the likelihood of financial distress and make football more resilient in the long term. For example, we will ensure that the regulator is able to look at a liquidity buffer, which could provide the club with time to seek a new owner, and the regulator will have the power to test an incumbent owner where it has grounds for concern about their suitability.
Almost every Member mentioned the backstop, and I repeat that we want football to come up with a deal itself; it is the best option, and this delay serves no one. We need to remember that we are talking about a commercial arrangement—businesses giving businesses money—which is why we believe it is best that football does it, but we recognise that there is no deal at the moment. That is precisely why we have put provisions in the Bill for a backstop—something to fall back on—so that they can consider the relevant revenues.
Dame Tracey Crouch
Does my right hon. Friend agree with my interpretation of clause 55, which is that international broadcast income is included in the relevant revenue for redistribution? That is currently not the case for solidarity payments. If it is the case, has this issue come up in his discussions with the Premier League?
Stuart Andrew
My hon. Friend raises an interesting point. I have had dozens of meetings with the Premier League, but as far as I can recall, I do not think that it has raised carving out international broadcast revenue in those discussions, which have always revolved around the net media revenues and the aggregate revenue received by both the Premier League and the EFL; she raises a very interesting point.
Some say that the regulator should be able to trigger the backstop right at the outset. Frankly, that would just be a frontstop, and it may hinder a deal being struck by football itself, but the Bill provides that if there is no deal because one has not been offered or one side cannot sign it because it is not a good deal, that side can ask the regulator to trigger the backstop.
Members have mentioned parachute payments, and I am always happy to meet colleagues to discuss and look at that matter further, particularly in Committee. I am also happy to organise a briefing, if that would be helpful, because it is quite a complex issue. Parachute payments play an important role in the sustainability of the system by softening the financial blow of relegation, and removing them could have adverse effects. Look at Bradford City: when they were relegated from the premier league in 2001, there were no parachute payments, and the following season they went into administration.
Stuart Andrew
I literally have two minutes. I have offered a briefing, and we can have this debate afterwards.
We realise that parachute payments can have a distortive impact, particularly in the championship, which is why the regulator has the power to address any structural or systemic issues through its licensing regime. Any distortion created by parachute payments also has the potential to be addressed through distribution to non-parachute payment clubs; that is exactly what the regulator will be able to look at as part of the backstop. Leading experts have advised us to keep the backstop targeted and simple, which we have done, and to design it so that it may never need to be triggered, which we have also done. As such, we do not think it is appropriate to include parachute payments in the backstop, nor we do think it is necessary to do so, as we have ensured that the regulator will be able to address any distortive effects that they cause via the licensing regime.
I am running out of time to answer more questions. This is a landmark Bill for football. It has been carefully designed to celebrate the sport’s success and encourage investment, but it is about providing stability for clubs, sustaining the pyramid and putting fans at the heart. We recognise that there are many successes, but it is important that we tackle the issues. The IFR will be focused on football, focused on financial stability and focused on fans.
I close by playing on the iconic words of 1966. Too many fans have seen their club on the brink, and they think it’s all over. Well, it’s not now.
Question put and agreed to.
Bill accordingly read a Second time.
Football Governance Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)), That the following provisions shall apply to the Football Governance Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 6 June 2024.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Joy Morrissey.)
Question agreed to.
Football Governance Bill (Money)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Football Governance Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred under or by virtue of the Act by the Secretary of State.—(Stuart Andrew.)
Question agreed to.
Football Governance Bill (Ways and Means)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Football Governance Bill, it is expedient to authorise:
(1) the charging of a levy by the Independent Football Regulator in connection with the exercise of its functions under the Act; and
(2) the payment of sums into the Consolidated Fund.—(Stuart Andrew.)
Question agreed to.