Football Governance Bill (First sitting)

Clive Betts Excerpts

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[Robin Millar (Aberconwy) (Con)]

I am chair of the all-party parliamentary football club group, and we too receive sponsorship.

[Mr Clive Betts (Sheffield South East) (Lab)]

I am chair of the all-party parliamentary group on football. I do not think it necessary to declare, but at least it is there on the record in case anyone wants to know that.

[The Chair]

We will now hear oral evidence from Kieran Maguire, senior teacher in accountancy at the University of Liverpool, and Dr Christina Philippou, a principal lecturer in accounting, economics and finance at the University of Portsmouth. Before calling the first Member to ask a question, I should like to remind all Members that questions should be limited to matters within the scope of the Bill. We will stick quite strictly to the timings in the programme motion, which the Committee has agreed. For this panel, we therefore have until approximately 10.10 am. I will give warning before this session finishes. Would the witnesses like to introduce themselves and say a few words before fielding questions from the Committee?

Kieran Maguire: Hello, ladies and gentlemen. I am Kieran Maguire from the University of Liverpool. I have specialised in football finance there for the last 11 years. Along with Christina, we have been asked to submit two research papers to the Department for Culture, Media and Sport; first, in respect of the state of finances of the industry during covid, and subsequently coming out of covid. I think we last produced a paper around 12 months ago.

Dr Philippou: I am Christina Philippou from the University of Portsmouth. I do a lot of work around sport finance and sport governance. Prior to academia, I was a forensic accountant.

--- Later in debate ---

[Damian Collins]

Q Briefly, I want to ask about club owners and the business plans of club owners. On your podcast, Kieran, you have recently been talking about Everton in particular. Would you look at a situation like that and say that if this is going to work and make a difference, it is scenarios like that that should be avoided? The checks on new owners’ backgrounds and their proof of finance should be robust enough to stop clubs getting into that kind of mess.

Kieran Maguire: In an ideal world, yes. I do not think that the regulator can convert us into a zero-crisis environment. It is a case of turning down the dial. In the case of Everton, there was no doubt that money was spent in a similar way to what we saw with Roman Abramovich and Chelsea, and with Sheikh Mansour and Manchester City. There was an investment in talent and options in terms of infrastructure as well. The problem is that if you have any business that is living beyond its means, and is reliant on third-party or ownership funding, I think you have to very carefully monitor the ability of that funding to be maintained on a medium to long-term basis. We have seen, sadly in the case of Everton, that that does not appear to have been the case.

Dr Philippou: That is the importance of looking at the sources of funding, which is part of what is in the Bill, in relation to the owners and directors test.

[Mr Betts]

Q Do you think parachute payments, as they currently exist, cause problems or provide solutions?

Kieran Maguire: I think they do both. The intention of parachute payments when they were introduced, which was around 2006, was to address the possibility of clubs going into administration, because of the significant step-downs between the Premier League and the Championship. At the same time, it does mean that you have created a new benchmark in levels of spending that clubs in receipt of parachute payments can achieve, and therefore those clubs in the Championship that want to be competitive are incentivised to overspend, so I think we have a problem. Parachute payments are a clumsy solution to the bigger problem, which is the significant difference between the revenues of not just the Premier League and the Championship, but also between the Championship and League One.

[Mr Betts]

Q Using your own words then, do you think it is right that that clumsy solution should be written into the Bill as a no-go area, which cannot be looked at by the regulator as part of the financial backstop?

Kieran Maguire: If we are going to look for a 92-club solution or, if we are including the National League, an 116-club solution, then the regulator should be able to deal with parachute payments, otherwise you are not dealing with the whole issue. If you have a redistribution model that does not involve parachutes, the Premier League’s position would be advantageous, and I do not think that would be in the best interests.

Dr Philippou: You need to have access over the whole of revenue, and that forms part of the revenues of Championship clubs. It would not make sense, in that sense.

[Mr Betts]

Q We are told that the regulator will still have some powers over parachute payments. Do you understand what they are and how they might work?

Kieran Maguire: One would imagine that you would look at parachute payments from two angles. First, the quantum—the actual sums involved. Secondly, the length of parachute payments. They have been reduced from four years to three years, in recent years. I think there is a third issue, in respect of those clubs that are in receipt of parachute payments and are then promoted back to the Premier League. The parachutes that are not received are kept by the Premier League and distributed between the 20 clubs. That does seem very harsh, given that clubs are losing more money in the Championship to begin with.

[Mr Betts]

Can I just ask about—

[The Chair]

Clive, I will come back to you, but a lot of people want to get in.

[Mr Betts]

This is about the backstop—

[The Chair]

Clive, I want to bring the Minister in.

[Mr Betts]

Fair enough.

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)]

Q We have heard some accusations that the Bill is over-regulation for football. What is your view on that?

Dr Philippou: It is fairly light touch from a compliance background, if you look at the financial implications and what is being asked for. In summary, you are effectively asking for some budgeting, some basic risk assessment, and knowing the roles of your senior management. It is fairly light touch, if you are running the club properly. From my perspective, it does not look particularly over-regulated. Certainly, from a compliance perspective, I would expect that if you are running the club properly, a lot of that information should be there anyway, and should be easily reportable without adding much burden to clubs.

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[Stuart Andrew]

Q Do you worry about the competitiveness of the bottom of the Premier League, particularly after three weak clubs were promoted? That relates to some of the questions that were asked earlier. Do you have any thoughts about a reasonable timeframe for approving a takeover?

Kieran Maguire: In terms of the issues at the bottom of the Premier League, three clubs have just been promoted and have almost been relegated. The three clubs above them—excluding Everton, because if it had not had a points deduction, it would have been on 48 points—have been in the Premier League for two or three seasons, so there is an acclimatisation issue. There is also an issue at the top of the Championship. The clubs that have just been relegated have greater resources than their peer group, and that is going to have a yo-yo effect, which we appear to be locking in on a greater basis. That tends to be more of the case in the Championship and League One, where some clubs are moving. That is driven by the culture of the owners. The system at present encourages overspending. We have not seen that in respect of the three clubs that are being relegated, but we did see it to a greater degree with the clubs that were promoted in 2022.

Dr Philippou: Absolutely, there is that competitiveness issue, which we have seen diminish over time. That has a long-term impact on the commercial side and on broadcasting rights, because the less competitive a league becomes, the less likely people are to watch it and the less likely broadcasters are to put money in, so that can also have an impact.

[Mr Betts]

Q On the regulator’s powers, is it unusual to have a regulator that cannot decide to intervene until you have gone through a process, and will step in and do anything only after the parties have failed to reach agreement?

Kieran Maguire: You would hope that the parties would be able to sort something out between themselves. If we did not have a regulator, we would be in a very similar position to the one we have at present. The Premier League has no incentive to be more beneficial, in terms of the distribution of money. It would have to be dragged to the table by the regulator, so that is why the backstop powers are important. The EFL is a fantastic league in its own right. The chances are that anybody who has supported a club in the Premier League have also supported it in the EFL.

When it comes to the regulator using last resort powers, it is effectively the same as the Bank of England. The Bank of England is the lender of last resort, but there are alternatives. Surely the same should be true in football. It is testament to the intransigence of the Premier League, in particular, which is unwilling to look at the broader football issues in the country.

[Mr Betts]

Q So it is not the case that the regulator should be able to come in earlier?

Dr Philippou: I think a lot of the parts of the Bill that look to fix issues relating to the financial sustainability of clubs and corporate governance should in the long term negate the need for intervention, because stuff will be run in a much better way. The issue at present is that if there is no money forthcoming into the EFL, that creates a huge potential financial problem. That is why the backstop powers are there. It is one for the lawyers to debate, really.

[The Chair]

If there are no further questions from Members, I thank the witnesses for their evidence, and we will move on to the next panel. Thank you very much indeed.

Examination of Witnesses

Richard Masters, Rick Parry and Mark Ives gave evidence.

--- Later in debate ---

[Robin Millar]

Thank you. Mr Ives?

Mark Ives: It is an interesting question. As you say, the differences between the three competitions are striking. If I understood you correctly, the question was about there being failings in all three. If we are talking about financial sustainability, I am at a loss to see where that failing has been from a National League perspective, for the reasons that I outlined before. That is one of the reasons why I support a lighter-touch position from the regulator, but we need to ensure that there is a safety net there for the sport, so that you to step in when that is needed. As I say, from a National League perspective, the record has been quite strong. When the fan-led review first kicked off, there was a misunderstanding as to what the financial regulations in the National League are, and it was not until, I think, the second meeting that we had with the fan-led review, when that was explained, that people understood and realised what steps are being taken by the National League. That is the background as to why we think there is a lighter touch.

[Mr Betts]

Q I want particularly to look at clause 55(2)(b), which you are probably all very familiar with. Could I ask for your view on that provision—the removal from the regulator’s backstop powers of the ability to look at parachute payments? Did you lobby Ministers to include it?

Richard Masters: We do not think that parachutes should be part of the backstop power.

[Mr Betts]

So you lobbied to have that included.

Richard Masters: Well, when asked for our opinion, did we express it? Yes, we did, and I am very happy to repeat it here, Clive. The backstop power is a very novel power, and it should remain so. It should incentivise football-led solutions, which I believe it intends to do. It drives mediation and negotiation. At the very end, if the people at this table cannot come to an agreement, it is able to impose a solution in one specific area, which is solidarity—the funding of the rest of the pyramid, normally from the Premier League down. Any party has the ability to trigger that mechanism once every five years. All of that has been discussed with all of the people at this top table along the way, and it is right that it was, and right that everybody had their opportunity to express their views. Solidarity, parachute payments, is part of the football pyramid and has been for over 30 years. This is not just between the Premier League and the EFL, but intra-EFL and from the EFL into the national league as well, where there is a generous parachute system for clubs coming in and out of the national league and into league two of the EFL.

Solidarity is relatively new. It came around in 2007 when Lord Mawhinney, once of this parish, agreed a small deal with Richard Scudamore, the then chief executive to the Premier League. Over the past many years we have agreed a number of different arrangements. The current arrangement—which is still in existence; there is no cliff-edge—was agreed in 2019. At the moment, the amount of solidarity that comes out of the Premier League to the EFL is around about £130 million a year. This is the part that we think should be adjudicated on if there is to be a backstop power, not parachutes. Why not parachutes? Because they are a competitive balance tool. They obviously have an impact on sustainability as well, as all financial regulations do. Without parachute payments, the Premier League would not be competitive at the bottom end. You will hear from clubs this afternoon that will be able to talk about parachutes from their own perspectives. One is Brighton, which came up without a parachute.

If a club wants to be competitive within the Premier League, which is a brutal meritocracy and that is why people love it, then you have to be financially supported. That is the principal purpose of it. If you want the Premier League to be competitive and to be the economic powerhouse that it is, and to continue to redistribute its success, then we have to have parachute payments and I do not believe they should form part of this regulatory regime.

[Mr Betts]

Q I expect the EFL has a different view?

Rick Parry: Yes. First of all, we think that the way the clause is drafted is intellectually incoherent because it says that parachutes cannot be included in the definition of revenue—they are not revenue, they are distribution. To take Richard’s point that they should be used separately from solidarity, it is interesting that solidarity payments to championship clubs are literally pegged to parachute payments. They are defined as being 11% of a parachute payment, so they are intertwined.

In terms of the practical effect of what the clause says, if we look at the 2021 figures, five parachute clubs received £233 million between them and 19 championship clubs received £79 million in solidarity. So what we are saying is that we can apply the backstop and all its might to the £79 million, but we cannot touch the £233 million. That seems to be the ultimate definition of fiddling while Rome burns. Why you can view one without the other, I do not even begin to understand.

In terms of the effect of parachutes, just in case people are not across it, if we go back to 2010-11—which is not that long ago—they totalled £30 million. They represented 7% of the aggregate turnover of all championship clubs. By 2020-21, they had risen to £233 million and 39% of the aggregate turnover of the championship clubs. They have become the cuckoo in the championship nest. They are enormous. So if you exclude them from the backstop, you might as well not bother with a backstop, frankly.

[Mr Betts]

Q We had a very detailed submission from the EFL, explaining your understanding of the current distribution of media money within the EFL and the Premier League and what the challenges were. I do not think we have had anything similar from the Premier League, have we? You have not given us your understanding of the current position and what you would like to see it changed to, if you want to see any change?

Richard Masters: Sorry, Clive—

[Mr Betts]

The EFL have given us their understanding of the current distribution of funding within the Premier League and the EFL, particularly around media funding, and what sort of changes they would like to see. I do not think we have had a submission from the Premier League identifying what your understanding of the position is and what changes, if any, you would like to see.

Richard Masters: We have our current agreement and it was agreed in 2019.

[Mr Clive Betts (Sheffield South East) (Lab)]

Q So that is it? So you do not want to see any changes?

Richard Masters: It is a perfectly legitimate debate to be had—is the funding of football correct? That should be reviewed on a periodic basis. We have an agreement that stretches out way into the future and either party can terminate it after three years. The current agreement is about to become five years old, so once the state of the game report is done, the regulator will turn its mind to other issues. We are very happy to express our views on the distributions within football; we are not shy of doing that.

[The Chair]

We must move on, Clive.

Football Governance Bill (Second sitting)

Clive Betts Excerpts

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[Chris Green]

Q When we think about good business, with you coming in with those cultures and values from a healthy business environment, and that culture shock when you come into football, this is the divide that the football regulator Bill ought to be bridging.

Sharon Brittan: I completely agree. May I just say that in football, generally it can be a non-trusted environment? I have a football manager who has stayed with me four years and who has turned down three jobs in the Championship that would have given him three times his salary. I have a CEO who has stayed with me three and a half years. I have built a team of trusted people, because we are working in a culture where everybody has bought into the journey to where this football club is going. You can see that after five years, we are a differentiator in what we are doing in Bolton, and if more football clubs worked in that way, I am absolutely positive that it would enhance the economy and life for the 65 million people who live in this country, and beyond. I am on a mission.

[Mr Clive Betts (Sheffield South East) (Lab)]

Q I want to focus on the point you just made. Obviously, Bolton had a terribly difficult time. If this Bill had been passed five or six years ago, would it have stopped Bolton getting into that mess, or is it that the financial distribution would still be needed to change the world in such a way?

Sharon Brittan: It is a very good question. Football has—or has had—a habit of bringing semi-maniac types of people to the table. I think it is driven by ego. In those situations, it comes down to the fit and proper persons test. The previous owner at Bolton spent £180 million. He was a very good man, but a huge amount of that was spent trying to get out of the Championship. If you have someone who is hellbent and comes in just wanting to spend, I do not know if you can actually stop that, per se.

Ian Mather: Can I come in on that point? I think real-time monitoring would have been really helpful with a lot of the problems we have seen with football; Bury was a really good example. You look back over time and you think, “Well, that wasn’t very good. In fact, it was terrible,” but that was years ago. Actually, the ability to look at what is happening in real time is really important.

I know one of the criticisms is that that will be an expensive item for small clubs. As a small club, our turnover is £7 million. Let me put that in perspective for you. We have a Man City supporter in the room; Erling Haaland earns about £7 million in eight weeks. That is equivalent to our turnover. Nothing in this Bill causes me any trouble at all about form filling or submitting accounts. If you want to see our accounts—they might be four weeks out of date, but that is as much as you are going to get—our cash flow forecasts, forecast profits and losses, which are done every month, or our business plan, that is not a problem. I would not buy the argument that this is all cumbersome and difficult, because it just is not. That sort of monitoring would have helped to prevent problems like Bolton, Derby, Bury and a whole lot of other clubs experienced..

[Mr Betts]

Q You have described your situation at Cambridge, with an owner who is philanthropically putting a lot of money into your club. Where does a club go to if that suddenly stops?

Ian Mather: That is a really great question, and one that would keep me awake at night. There would be lots of people who would want to come in and own Cambridge United. We get approaches all the time, and we just bat them off like flies, because none of them is particularly well motivated. When we last looked seriously, in 2018, there were a lot of poor owners. I know that some went on to other places, and I bet those clubs wished they had never seen them. Their interest was in property and profit, not in football.

Sharon Brittan: People go into owning football clubs for the wrong reasons, which we discussed earlier. That is why you have to have people who go into owning these football clubs for the right reasons—people who understand that the responsibility that goes with these clubs is enormous. I invite any of you to come to Bolton Wanderers and see what we have created. The work that goes into it is non-stop, every day. If you cannot deal with stress, you should be nowhere near owning a football club.

[Mr Betts]

It will only increase on Saturday!

[Dame Tracey Crouch (Chatham and Aylesford) (Con)]

Q Sharon, your passion is obvious, and I am sure that if the Clerks could craft an amendment to the Bill to have you cloned, we would all support it. Ian, you sort of answered this question, but I will ask it again: there has been a lot of scaremongering about the impact of the Bill and some of the unintended consequences—the duplication and so on—but is there anything in the Bill that you fear? That question is to both of you.

Ian Mather: The thing that I fear is that it does not work in key places. On the parachute payment clause, protecting that does not work. I know that Rick has made the point, but I would endorse it: we are not against the concept of parachute payments if they are right. I do not believe that they are right, but let’s have a state of the game review and find out whether they are right, or whether they are an impediment to fair competition in the football world as we want it. But do not then hamstring the regulator so that it cannot deal with that problem, if indeed it is a problem.

The problems here are few: they are about who can trigger it, the parachute payments and how often you do a review. Those are the key issues. It comes down to the money. The other bits in the Bill, such as those about protecting heritage, are really good. We were looking at introducing a golden share in Cambridge United to give fans protection against things such as stadium moves and so on, but the Bill probably makes those redundant.

Sharon Brittan: Tracey, what you said about unintended consequences is really interesting. I have looked at the situation closely, and I like to look at both sides of the story, so we get a clear, honest picture from the Premier League side and the EFL side. I do not even understand unintended consequences; I cannot work out what he is referring to, unless I am missing something. I can understand the EFL’s argument, which is very clear and concise. From the Premier League’s point of view, I have so far not been presented with anything or read anything that has made me think, “What they are saying actually makes sense.” They have put together a very weak argument —I do not think there is an argument—and have conducted themselves poorly. I do not think they have presented themselves in the right way. They are arrogant. They think they are an island, on their own, sailing off and forgetting that 14 of the clubs in the Premier League have come from the EFL.

On how the pyramid works together, we loaned two players over the last two seasons. Both of them—James Trafford and Conor Bradley—went back to their respective football clubs, and they are absolutely flying in the Premier League and talking about their time at Bolton Wanderers. I could bring players to the table who will say to you that they have never worked in such a culture. People need to work in the right culture to bring out the best in them. There is enough stress in the world today.

On unintended consequences, I would love to sit down with Richard and for him to explain it to me because I do not understand it. They are just words, and there is no substance or arguments behind the words. I have not yet come across a cohesive argument to which I can say, “Actually, that’s a fair point.” I am not going to talk about the numbers—we all know the numbers. In my opinion, that this goes back to greed, envy, jealousy and thinking about me, myself and I. I cannot comprehend how someone can view this through that lens when we are a football pyramid, and what we do as custodians affects this country and beyond. We should be cherishing what we have here.

--- Later in debate ---

[Damian Collins]

Q If we passed an amendment to the Bill that made parachute payments illegal and they were scrapped, how would that affect your preparations for next season?

Tony Bloom: I think it would be disastrous for the Premier League. The Premier League has done an amazing job to make it far and away the strongest domestic league in the world, and that is where we want it to stay. It is so important for this country. If that was to happen, then outside the biggest five or six clubs, which may think their chance of relegation is tiny, the clubs could not invest the money in players. And then what would you have?

In countries like France, with Paris, and also with Juventus and Munich, there is domination between the top one or two clubs and there is frequently only one winner in the league. The middle and bottom clubs would not be able to invest, and the differential between the top clubs and the middle and bottom clubs would be so big that it would not be so competitive. Then people would not want to watch it; the broadcast money would not be there; and we would veer towards Spain, Italy, Germany and France. I think it would be an absolute disaster. Clubs could not invest because of the worry about relegation. As it is, with the parachute payments, clubs still have to sell players, typically. Often, they get into serious financial problems even with the parachutes.

[Mr Betts]

Q I have a couple of issues to put to both of you. You have said that everything works well. I think most people would be in disbelief at hearing that statement, because we all can see problems in football right the way through. Individual clubs have had them. There are problems right through the leagues in terms of funding and insolvency. Both your clubs nearly got to the point of extinction. Can you not see the need for regulation to stop grounds being sold away from clubs and to stop clubs going into administration repeatedly and facing those problems?

Steve Parish: The reality is that all around Europe and probably the world, football is a billionaire or millionaire-funded industry. That is the reality of it. It does not make money anywhere in the world. We are not unique: this is not a country where uniquely we lose money in football. It is not a business with a profit principle; it is a business with a winning principle. Whatever rules you put in place, people’s desire to win will always trump their desire to make money. So the problem is that if you restrict our league so much that we are taken out of that game, you very quickly could make us very uncompetitive in terms of a European landscape.

[Mr Betts]

Q Is it not true that the Premier League actually has more money than any two other European leagues put together?

Steve Parish: I have put more money into my club in the Premier League than I used to in the Championship. I write bigger cheques in the Premier League than I did in the Championship. It used to cost me a lot less money to run in the Championship.

Tony Bloom: The reality is that across the world in sport—but particularly in football—clubs everywhere lose money every year. People put it in because they want to be competitive, and they want things for their community, and so the problem you have for every single owner in this country is that they want to be competitive, and they want to spend money, but they want to try to be sustainable—and the two are not compatible. Almost every club—and certainly every league—loses a lot of money. The Premier League loses a lot more money than every other league, and that is true on the continent as well. To be competitive, that is what you need to do—spend money. That will never change, whatever happens with the Bill. You will always have that, and you need to accept it, because that is the reality. Without that, or if you try to stop that, the Premier League would not be the best league in the world.

[Mr Betts]

Q Some might argue that the regulator is there to put backstop powers in place in general to try and stop that unsustainability of clubs going bust, when fans then have no team to support.

Tony Bloom: But going—

[Mr Betts]

Q It seems that both of you are arguing from a completely self-interested point of view. You are saying that, “It is terrible in the Premier League because the few at the top are rigging the system to suit themselves with the help of European competition, and we in the rest of the Premier League clubs find this unfair, and the distribution of resources ought to be fairer to us; however, when we look down to the EFL, we say we do not want parachute payments to end because that disadvantages Championship clubs, so we are happy to support that because it supports our friends in the Premier League”. Is all that self-interest?

Steve Parish: That is not what we are saying at all. We are representative of every club like us; what I—quite clearly—said to you is that I believe that if Bolton were in the Premier League, they would believe what I believe, which is that yes, the pyramid should have a sustainable amount of money, or more money so it can better compete—as Tony says, it is very unlikely, in a normal business case, that any of these things will ever look sustainable; there are a lot of people putting a lot of money into football from their own pocket for the enjoyment of the public and their fan base—but there is another problem, and that is the growing wealth of the big clubs, and that has to be identified. What we need to do is make sure that when we pass these distributions down the league, they come from the right place and are fairly apportioned. That is not me being selfish—that is me being sensible.

[Mr Betts]

Q Should the regulator not have the power to do that?

Steve Parish: As I said, if you had a regulator that we all believed would uniquely make all the right decisions for football, of course we would be in favour of it. What you asked me is what my concerns about the Bill are; my concern with the Bill as a starting point is that relevant revenue is only broadcast income, which would be 75% of Bolton’s revenue should they get into the Premier League, and it is about 20% of the top six’s revenue. That straight away is an example of an area of concern.

I just want to come back on parachute payments, because I need to give you some numbers. In the Premier League, if you finish around midtable, you will turn over about £180 million—it is not an unreasonable thing to budget for. The first year in the Championship, with parachute payments, is about £70 million—so you have about an £110 million drop in revenue, which is pretty catastrophic for any business to try and contend with if they get relegated. Many clubs manage to get back in the first year—on average, it is about one a season for the last 10 years—but the average finishing position of a parachute club is eighth. Many clubs, like Stoke or Sunderland, disappear from the Premier League, and that big gap and big drop gets them in a lot of financial difficulties. This is why parachute payments are so important for the sustainability of football.

Tony Bloom: You talk about self-interest: that is not the case at all. I care about every football club in this country. I am not worried about the top six—I have not said anything about the top six. We have regulations in the Premier League, and if something is going to be changed, you need a two thirds majority; if they get two thirds majority, and the top six vote, and get a few more people, that is the way it is. I am not complaining. Football needs to vote, and the Premier League has its constitution; I have no issues with that.

I used to be in the Championship, and we had parachute payments. I was not complaining—we just worked away to try and be the best we could for our football club. I was never in favour of parachute payments when we went and won the Championship; I never voted for that or discussed that. All I was asking when I was in the Championship was for there to be a bit of sustainability so clubs did not lose an average of £10 million a year, which was voted against because clubs wanted to give themselves a chance to get promoted to the Premier League. I am saying exactly the same in both divisions.

[Stuart Andrew]

Q Tony, I was interested in the comments that you made a moment ago. You said that your concern about the regulations and the Bill is that your preference would be for the Premier League, EFL and National League to all work together for a solution for the future of football. Why has that not happened?

Tony Bloom: Because of the talk of a regulator, as I said—

--- Later in debate ---

[Damian Collins]

Q That was perhaps not the best use of words. I meant if information was brought to the regulator, or if it had reasonable grounds to be concerned; its primary job would not be to check on those things, but it could relay that information back to you as the FA, which has investigatory powers of its own. It is more a question of whether, in principle, you think that those sorts of standards should be incorporated into the corporate governance standards that the regulator should set. That would simply be good practice.

David Newton: I guess it depends on what you mean by good standards. If you are talking about things like national minimum wage or employment rights, then absolutely, those things would be expected. In football, we have our own structures, as you say, for dealing with player-related disputes, or players not being paid—the leagues have very strong rules on that—so those things are dealt with in the structure. Sharing of information with the regulator will obviously be something that may come into focus, once it is up and running, because it is important that there is not duplication of requests for information and that those information requests are shared efficiently.

[Mr Betts]

Q It has been mentioned that the remit of the regulator and the legislation is on things that do not matter to the FA, but do to the fans, such as the FA Cup. One of the objectives of the regulator is to safeguard the heritage of English football. Do you not think that the FA Cup is part of that heritage?

David Newton: Absolutely, the FA Cup is an essential part of our football heritage. We reflect that and take the FA Cup extremely seriously. It is a fantastic competition. Everyone cares passionately about it within the FA, me as much as anyone else. Prior to Dame Tracey’s report, we had already established heritage assets in protection of club playing names. Since the report came out, we have also established rules in the FA on club crests and club colours, so we are very aware of heritage responsibilities in that respect.

[Mr Betts]

Q I think most fans would think that FA Cup replays were part of that heritage.

David Newton: We are very aware that FA Cup replays are a hugely emotive subject. The FA Cup as a whole is a hugely emotional subject for football fans. We took a decision based on an extremely congested football calendar with which, as has been referred to previously we are very much in the hands of the world and European governing bodies and the fixture list. We took a decision that, in such a congested calendar, certain difficult decisions had to be made. But in doing so, we also preserved other elements of the FA Cup that we think are equally strong things, such as exclusive weekends for the FA Cup, which sends a strong message. A stand-alone Saturday for the FA Cup final and things like that also play into the whole narrative. We are particularly keen for the David and Goliath aspect of the FA Cup to continue. Many historic FA Cup games have been decided on the day, and that will continue.

On the financial side of things, we are very keen to emphasise that no lower league club will lose out as a result of the loss of replays. We would rather see clubs budget sustainably for revenue in the FA Cup on a consistent basis, rather than for the one-off potential replay chance. We realise we cannot budget entirely for hope, and every football fan—I am no different—loves replays in the sense of the hope, but unfortunately difficult decisions have to be made and that is where we have got to.

[Mr Betts]

Q Are you frustrated at the FA that, somehow, this great competition and its heritage are being undermined by the interests of a handful of clubs who are going to play European games? It is the top few clubs, again, driving what happens for everybody else.

David Newton: I do not think that is necessarily a fair characterisation. The fixture calendar is extremely complex. We sit down two years prior to the season with our colleagues at the Football League and the Premier League and discuss how we are going to best fit in the games we have. We are the only major European footballing nation with three domestic cup competitions: the EFL trophy, the Carabao cup and the FA cup. We have 20 teams in the top league and 24 in each of the other three leagues, and the calendar is extremely congested. It is not just as a result of European ties. Each of those is a fantastically vibrant competition in its own right. Each of those competitions has a heritage and importance, and it is about a balance between all those competitions, as well as the European ones, that allows them to be fitted in.

[Stuart Andrew]

Q We have heard, in these sessions and beforehand, about the scope of the Bill. Some feel it goes too far; some feel it does not go far enough. Can you talk about your perspective of its narrowness in terms of financial regulation, and why that matters in relation to the relationships and statutes that FIFA and UEFA have?

David Newton: It is common knowledge around the room that UEFA and FIFA have statutes of their own, which basically prevent state interference in the running of football and football competitions. We have worked closely with UEFA and FIFA, and with the DCMS staff who have worked so hard on this Bill. They have been taken through where we have got to. Although we have not had a definitive view as such, it is reasonably clear that a tightness of the Bill relating to football governance is not likely to present huge or significant problems, subject to any changes that may occur. However, anything wider would increase the risk of FIFA or UEFA intervention. That is obviously a place we do not want to be, because of the sanctions that may flow, in theory, from that. We continue to work closely with both those bodies and keep them abreast, along with DCMS, of where the Bill has got to, but I think the narrowness of scope is very important.

Girlguiding UK: British Overseas Territories

Clive Betts Excerpts

Tuesday 23rd January 2024 Westminster Hall

[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to see you in the Chair today, Mr Betts. I congratulate the hon. Member for Strangford (Jim Shannon) and the right hon. Member for Romsey and Southampton North (Caroline Nokes) on securing this Backbench Business debate and on setting out the keenly felt concerns about the ability of girls in the British overseas territories to continue to benefit from all that girl guiding has to offer. The importance of girl guiding, and of the opportunities and experiences that it provides, has been amply illustrated by every Member in this debate, which speaks to the impact that girl guiding has in all our constituencies and across the world.

As the largest youth organisation dedicated completely to girls aged between four and 18, Girlguiding UK provides a vital growing space for many girls across the UK. Girl guiding allows girls and young women to develop their skills and confidence while providing opportunities to which they may not otherwise have access. Like many hon. Members, I am a former brownie and Girl Guide. On my way here today, I reflected on what was perhaps my first taste of leadership as a brownie sixer, and—like my hon. Friend the Member for Bradford South (Judith Cummins)—I too was a pixie. As the mother of former rainbows and brownies, it is heartening to witness the ongoing success of Girlguiding UK, with over 300,000 girls and young women regularly coming together to have fun, learn new skills, go on adventures and make new friends. They are supported by the nearly 70,000 volunteers who enable that to happen by giving their time, skills and energy.

Girlguiding UK has 9,000 members in Nottinghamshire alone, and I have always welcomed the opportunity to meet up with its units in Nottingham South to see the brilliant work that it does. That includes a visit to Wollaton brownies during UK Parliament week to answer their tough questions about the role of an MP and how they can make a difference in their local community. I listened to guides voicing their concerns about the pressures that young women face regarding body image and mental health. I have loved seeing girls working in teams, getting creative, planning activities and presenting their ideas. Last year, I joined volunteer leaders in handing out medals at the Race for Life in Nottingham. I am always impressed by everything Girlguiding UK does to help girls and young women to thrive.

I therefore share the concern raised today regarding the closure of British Girlguiding Overseas. While we all understand the risks that Girlguiding UK identifies, and the resources needed to provide assurance, it is disappointing to contemplate hundreds of girls across the overseas territories missing out on the joys of girl guiding.

The UK overseas territories are an integral and cherished part of the global British family, and the Minister and I were both privileged to address the UK Youth Parliament late last year, which included representatives from the overseas territories. Girlguiding itself has acknowledged that

“guiding for girls who live in British Overseas Territories, has been a valued part of Girlguiding UK for much of our 113-year history.”

There are nine UK overseas territories in which Girlguiding operates and, according to the chief commissioner of British Girlguiding Overseas, there are 618 Girl Guides in the overseas territories and 182 volunteer leaders. I know those numbers have been said before, but they bear repetition. Although that is a very small proportion of all Girlguiding’s members, it would be very sad if British girls and volunteers living outside mainland UK were denied the opportunities that their mothers and grandmothers were afforded for so many years. As my hon. Friend the Member for Bradford South said, surely the challenges that Girlguiding cites are not insurmountable and can be overcome.

I am aware that my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who is not present but is Labour’s shadow Minister for the overseas territories, also raised his concerns directly with Girlguiding UK in April 2023 and that he and other Members, including those present, have been working together in the hope of finding a solution that will allow girl guiding to continue in the overseas territories. In June 2023, before I took up my role, I also wrote to the Minister regarding the issue after constituents raised their concerns about the proposed changes and I was pleased to hear that he was engaging with Girlguiding.

The House last considered the proposals from Girlguiding in September 2023 when the hon. Member for Gosport (Dame Caroline Dinenage) led a debate on youth programmes and Girlguiding. The Minister assured the House then that he had been in regular contact with Girlguiding, and that he intended to make them aware of hon. and right hon. Members’ concerns. I would be grateful if he could update us on those discussions.

British Girlguiding Overseas operations in the middle east, Africa, Asia, Benelux, France and Europe closed on 1 September 2023, including units operating on military bases. I share concerns about how that decision will impact girls in armed forces families living overseas. The hon. Member for Strangford and the right hon. Member for Romsey and Southampton North made this point very clearly: it is a time in their lives when they might really need that sense of community that girl guiding provides. I understand that Girlguiding is in communication with the Ministry of Defence and other military stakeholders to explore future guiding support for girls on overseas military bases, and I should be grateful if the Minister would give us a flavour of any discussions he has had with his colleagues in the Ministry of Defence and how they are developing.

It is welcome that Girlguiding’s board of trustees decided to extend the timeline for girl guiding activities in overseas territories into this year to allow extra time to explore options that would allow operations to continue. I understand that Girlguiding proposed two options to Government. The first option sought Government funding and the second sought Government support for the management of welfare and risk. Girlguiding has said that the Minister was unwilling to provide Government funding to enable it to continue to operate in the British overseas territories—he might want to say more about that decision—but that his officials are working with it on a second option for an affiliate-type agreement, whereby a Government entity could be responsible for the girls and volunteers and Girlguiding would provide all the materials with which girls are familiar. I am sure that everyone hopes that the Minister will continue that engagement with Girlguiding, no doubt alongside his colleagues in the Foreign, Commonwealth and Development Office, to explore what is possible and to try to find a solution that ensures that girl guiding is still available to girls growing up in the British overseas territories. Perhaps the Minister can say more about that.

Despite Girlguiding being an internationally respected and valued charity that has been operating for more than 100 years, it is understandable that it is thinking about how best to use its resources. Charities across the UK are feeling the impact of a reduction in Government support and of the rising cost of living. The pressure on family budgets has undoubtedly made it harder for them to operate. It is not a new issue; it is affecting charities across the board. Just last week, the Charities Aid Foundation warned that much higher demand and sustained financial challenges are leading half of charities to say that they are at full capacity and cannot help anyone else.

The impact on young people is particularly concerning. We all know the benefits that activities such as girl guiding can have on children’s confidence and the development of valuable skills, yet services that support young people are being shut down or scaled back because of financial difficulties. Reductions to local authority funding resulted in the slashing of their expenditure on youth services in England by 73% since 2010, with more than 4,500 youth work jobs lost, and thousands of youth centres closed. That makes the opportunities provided by voluntary and community organisations even more important, so I understand the difficult decisions trustees face about how best to use their limited resources to maximum benefit, in accordance with their charitable objectives.

Investing in the next generation is absolutely vital. We know the benefits of good youth services and how they can transform young lives. Girlguiding is one of those services. I hope that the Government continue to engage with Girlguiding, and that a solution is found to ensure that girls across our overseas territories do not miss out.

[Mr Clive Betts (in the Chair)]

I now call the Minister, who probably won’t be telling us whether he was in the pixies or the brownies.