Football Governance Bill

Anna Firth Excerpts

2nd reading
Tuesday 23rd April 2024 Commons Chamber

[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.

Football Governance Bill (Third sitting)

Anna Firth Excerpts

Committee stage
Thursday 16th May 2024 Public Bill Committees

[Rachel Hopkins]

Q Just to follow up on that, is the women’s game sustainable and how would we ensure that the same mistakes are not made?

Ben Wright: We always bang the drum bout not making the same mistakes as the men’s game, particularly in areas such as fixture congestion in the calendar. What drives fixture overload and player workload overload? It is money. There is suddenly a realisation that people can invest and make money from holding competitions, and then, as there is in the men’s game, there is a race for space. So they try to fill the calendar. It has not worked in the men’s game and it will not work in the women’s game. That is something we watch very carefully. For it to be sustainable there has to be a proper balance with international football, which until this point has been the most high-profile format for the women’s game, particularly for an English audience, but it also has to allow the space for the domestic leagues to develop. That is something we are seeing play out in the men’s game, where there is a conflict between international scheduling and international competitions, and domestic competitions. You have to give our domestic game the room to grow and the space to do that without it being in competition with national and international formats.

[Anna Firth (Southend West) (Con)]

Q On Tuesday, we heard a lot of evidence about unintended consequences, but from the club and National League perspectives. In particular, talk was about possible additional bureaucratic burdens. Can you see any unintended consequences, but from the players’ perspective?

Ben Wright: I do not necessarily know if “unintended consequences” is how we would frame it; it is more about the need for awareness by the regulator of those consequences. A lot of them come down to practical impacts on players, and their contracts, rights and conditions. I believe that this is referenced in one of the amendments that you will consider, but where at the moment there is an outlining of the IFR’s ability to make decisions that impact clubs, whether that is sanctioning measures or things like that, there is not necessarily a huge amount of detail about what that might look like for the players, who almost inherit the decisions that are put on to clubs. That is not something that needs to be laid out in detail within the Bill, but we would argue that that is why it is so important that players and the potential consequences—unintended consequences, if you like—are reflected in the work of the regulator and in why it has that engagement with players and their representatives.

[Anna Firth]

I have one further short follow-up.

[The Chair]

Very quick, and can the answers be shorter?

Ben Wright: I will do my best.

[Anna Firth]

Q There is no equivalent of the Professional Footballers’ Association for the National League. Will the existence of the regulator and it having to consult other relevant stakeholder groups, for the National League, mean that players get slightly more consultation than otherwise?

Ben Wright: With the National League, the PFA has members who are constituted as current members of the Premier League, EFL and the WSL, then we have former members—approximately 80% of players in the National League are former PFA members, so they retain all that access and can come to us for support. At the moment, it is not constituted as a professional league. That may change and it might be that the regulator has a role in changing that, because it brings it closer to the EFL and the Premier League. But that is always something we will look at closely, ultimately.

[Ian Byrne (Liverpool, West Derby) (Lab)]

Q Thanks for the evidence so far, Ben. Some objectives of the IFR will be the financial soundness of regulated clubs and promoting and protecting the resilience of English football. How does the £410 million paid out to agents go with that? What is the PFA’s take on the payments to agents?

Ben Wright: In terms of regulation of agent payments?

--- Later in debate ---

[Brendan Clarke-Smith]

Okay. Alistair?

Alistair Jones: I agree. The FSA does a fantastic job for independent supporters’ trusts. It is more fitting for us to report into an FSA sort of body rather than directly into an independent regulator, if you want my honest opinion.

Tim Payton: The Arsenal Supporters’ Trust used to own shares in Arsenal and used that association to have a role in the governance. Unfortunately, we were squeezed out. Under companies law, somebody reached 95% and compulsorily took the shares off us. I do not see a practical way of going back to us being shareholders in the club any more, so I very much look to the Bill to, in effect, give us shadow ownership and powers going forward. I hope we see this Bill on the statute book and that it will help supporters have a more meaningful say in their clubs.

Alistair Jones: It is very difficult to give you an all-encompassing answer, because we have 12% of shareholders, represented by Shareholders for Albion. If it had not been for them telling people about the issues we have, it might have been a very different story for us at West Brom. So it is a very difficult to give an all-encompassing answer.

[Anna Firth]

Q I would like to ask about the distribution of broadcast revenue, particularly to the National League. Currently, for every £1,000 that a Premier League club gets from broadcast deals, a club like Southend gets just 57p. Given that the Premier League and the upper leagues benefit from the entire football pyramid, not just their member clubs, do you consider that to be a fair distribution? I think Sarah would be my closest ally here.

Sarah Turner: It is not, is it? It cannot be a fair distribution. The whole system and pyramid is not fair. That is one thing we would like the independent regulator to be looking at—how money could be distributed down. At Reading we looked at some of the players that have come forward and are starring in the Premier League, and they were made in the National League and the EFL—so yes, we think so.

Alistair Jones: I could not agree more in terms of the distribution, and it is not just because we are at the top of the Championship or in the Premier League. We believe that it cannot be right. There is no way that the top 20 clubs can have so much power in this country over the 72 below. It has got to change. We can point to the FA Cup replays being scrapped for rounds one and two. That was decided by the Premier League, and they are not even entering it until the third round. How can that possibly be right? It has to change.

Tim Payton: The Arsenal Supporters’ Trust is also your ally, because why did we fight the Super League so hard, together with the supporter groups at all the other big clubs? We wanted to fight the self-interest. What is football if Southend cannot dream of coming up to the Premier League? Football is about us all working together. It strengthens the pyramid, promotion and relegation, and the jeopardy. Everybody must be able to dream in football.

[Anna Firth]

Q The obvious follow-up is: do you think the backstop goes far enough to address this?

Alistair Jones: Personally, no. I do not think it goes far enough. I think it needs some work on it at the moment. Again, I stress that the competition is key. There are 51 clubs that have participated in the Premier League since its inception in 1992. There are only six that have stayed in there. That means that 45 clubs have been spread right across the Football League and even the international leagues—Oldham being an example that are now in the National League but were in the Premier League. We have to support, carry and help those clubs.

Sarah Turner: I would really hope that the Premier League and the EFL could come to an agreement without requiring the backstop.

Tim Payton: I would just take you back to what I said before, which is that if a backstop is going to be activated, the Bill needs to redefine “relevant revenue”, so that it is effective. It must capture all the revenue coming into the game, rather than just the broadcast revenue, or it will not do what you want in the years to come.

--- Later in debate ---

[Ian Byrne]

Q On the strength of the fan engagement element, Tim, you have touched on what is happening now. We know that some fan advisory boards are already getting swamped by club employees and then they become toothless, which is a real worry regarding what we do, going forward. Alistair, you have touched on your good relationship with West Brom. That could change; those people could go. So how do we ensure that we have provided for longevity and the teeth that are needed for fan independence? What could that look like? And would you all support an independent voice on the IFR board? I think that is really important. We have not touched on it. I think it needs to happen as well. That is just my opinion.

Tim Payton: I always think independence is good and important, so I assume the IFR board will have INEDs in its process. I think you asked how we make the fan engagement processes better. Ultimately, it comes down to the fact that a supporter trust must have the ability to go to the IFR and say that it does not think that the consultation has been effective. To do that it probably needs a checklist or a process of consultation to have been set out so that it can say, “This has not been followed”. That takes you back—it is starting to sound a little bit repetitive—to a supporter impact assessment or a regulatory impact assessment for all consultation issues.

Alistair Jones: You are right. We cannot guarantee that we will have constant and good communication with our football club—we did not for eight years, for instance. The IFR needs to put procedures and processes in place to address any lack of meaningful communication with the football club. That needs to be addressed in the Bill as well.

Sarah Turner: I agree. Fans are the best early warning signal of anything going wrong, so any independent body that you can go to will always be useful.

Alistair Jones: At the end of the day, if you have 12,000 people marching on a football stadium, it is too late. We need action before that. That is something that needs to be addressed in the Bill.

[Anna Firth]

Q Using a football stadium as collateral for large loans is a complex issue. Owners see it as a valid practice to raise capital, but, as has happened, particularly in Southend and at West Bromwich Albion, that capital then fails to materialise and be directed into the football operation. What more can the regulator do to prevent those sorts of situations happening?

Alistair Jones: From the point of view of West Brom, it fell upon Albion fans and Shareholders for Albion to get an asset of community value to try to protect the stadium. It was probably not the all-seeing answer that we hoped it would be, but again, that was reliant on us.

To put it simply, we need better governance. Our previous owner borrowed money from West Bromwich Albion to put into another business portfolio. He could do that without any governance at all. That was never paid back, even though he promised it three times. It was finally paid back by our new owner last month. There must be procedures in place where that can be stopped. If you have money from broadcast revenue, or wherever the money has come from from your football club, and you are using it for other areas of your business portfolios, that should be stopped and not allowed.

Sarah Turner: We would also like the other assets protected, such as the training grounds. We cannot get an ACV on our training ground because it is not a public property, but we think that should be protected in some other way so that it is for the use of the football club.

[The Chair]

If there are no more questions, may I thank all three of you for your concise and very helpful answers? Thank you very much.

Ordered, That further consideration be now adjourned. —(Mike Wood.)

Football Governance Bill (Fifth sitting)

Anna Firth Excerpts

Committee stage
Tuesday 21st May 2024 Public Bill Committees

[Stuart Andrew]

My hon. Friend makes an important point. This will be the statutory regulator, and this will be where the reporting will need to happen. If the leagues add anything, it is for them to make that decision. As this process progresses, I hope they will see that there is no need for the extra layer of reporting and that the regulator’s powers will be sufficient to secure the future of English football.

[Anna Firth (Southend West) (Con)]

On behalf of a National League club, Southend United, I welcome the light-touch approach set out in clause 8(c). I welcome the Minister’s comments that where the National League is already regulating itself well, there will be a proportionate, light-touch approach to any additional regulation.

[Stuart Andrew]

At the end of the day, we want to ensure a standard approach to regulation to ensure that we secure clubs in the future. As I say, I hope that as the regulator starts getting up and running, the leagues will see that there is no need for duplication and will make decisions accordingly. Ultimately, however, it is up to them to make that decision.

Question put and agreed to.

Clause 15 accordingly ordered to stand part of the Bill.

Clause 16 to 18 ordered to stand part of the Bill.

Schedule 4

Threshold requirements

--- Later in debate ---

[Mr Betts]

Sorry. When we come to the new clause, I will say that I have already said what I will say.

[Anna Firth]

I am very pleased that we have got to this important part of the Bill, which deals with owners and directors tests. I am conscious that we may be about to come on to the provisions that I am about to support. I would be grateful if I could say my piece now, and then not come back to it. Perhaps you could guide me, Mr Sharma.

[The Chair]

I hope it relates to clause 26.

[Anna Firth]

It relates to clause 37, so I will wait.

[Stuart Andrew]

Everyone is obviously getting so excited that they are getting ahead of themselves. To be fair, I understand why. It is important to acknowledge what my hon. Friend the Member for Chatham and Aylesford said about the many people who put themselves forward to support their local football club to build and become competitive. They are hugely important to the local communities in which they are based. We should acknowledge that there are many who do that well and with the best of intentions—even those who make mistakes, as the hon. Member for Sheffield South East said. Their intention is right.

We are focusing on ensuring that owners and directors tests get to the heart of the detail that we need. The test will be much stronger with the regulator, which will have access to information from statutory organisations such as the National Crime Agency, as the hon. Member for Barnsley East mentioned. She asked about the Premier League continuing with its own owners and directors test. It can continue with it if it wishes. I note that the EFL has made a different decision, because it recognises that the tests that the regulator will provide will get much more detail and information than the leagues may be able to. Because the tests will be statutory, they will take primacy.

Football Governance Bill (Sixth sitting)

Anna Firth Excerpts

Committee stage
Tuesday 21st May 2024 Public Bill Committees

Finally, I will address the criteria for considering an individual’s honesty, integrity, competence and financial soundness. On the whole, I believe these are comprehensive, covering everything from whether an individual has been involved in criminal conduct and disciplinary proceedings for the integrity test, to whether the individual has become bankrupt for the financial soundness test. The influence that the Financial Conduct Authority test of honesty, integrity and reputation has had on the respective criteria is also clear. Overall, I am pleased with the transparency and clarity that the clause provides in terms of how the tests might work in practice.

[Anna Firth (Southend West) (Con)]

Second time lucky, Ms Nokes! I am delighted to talk about this part of the Bill and the important owner and director test, and I want to support clause 37(3) and (4). The current Premier League and English Football League owners and directors test requires that any prospective owner must not have been subject to two or more bankruptcy events—so the current position is that someone could have been subject to one bankruptcy event, and in theory still own a football club. I am pleased to see that the clause removes any minimum number of events; obviously, that will place further emphasis on sustainable management and stewardship, and is much to be commended.

For context, I should say that Southend United Football Club in the National League has had 19 winding-up petitions in the last 25 years; the last one was last Wednesday. During the course of this Bill, the club was in court and was given a further six-week adjournment—hence my interest in making sure that no other clubs in future suffer the same fate as Southend United and its loyal fans.

[Rachel Hopkins (Luton South) (Lab)]

I want to carry on the debate about clause 37 and reflect on honesty and integrity as set out in subsection (3), on “matters relevant to determinations” of the “requisite honesty and integrity”, and subsection (3)(g), which talks about

“such other matters relating to honesty and integrity as may be specified”

by rules. I would be interested in a little clarity from the Minister about that. Some of the other prerequisites or matters to be considered, such as whether someone is financially sound, can involve hard evidence, and someone’s competence can be tested by qualifications; integrity, however, is a bit of a subjective matter. It is more about things that are not against the law but are certainly not in the spirit of the law, and it is often behavioural.

Does the Minister have any examples that he might want to see in those rules? Someone might have used poor employment practices, for example, as we have seen in other industries, some of which are regulated and some of which are not. The issue would not reach a tribunal so it would not be a piece of hard evidence, but it would bring into question why an owner or officers of a club, in a different business, deployed fire-and-rehire tactics, for example, that were detrimental to their workforce and local community. Similarly, in a positive sense, would there be any consideration of what high integrity might be: for example, owners and officers who championed equality and diversity—an issue that we have been speaking a lot about in this Bill? I would welcome the Minister’s comments.