Football Governance Bill

Caroline Dinenage Excerpts

2nd reading
Tuesday 23rd April 2024 Commons Chamber

[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.