Leeds United

Dai Havard Excerpts

Tuesday 21st June 2011 Westminster Hall

[The Minister for Sport and the Olympics (Hugh Robertson)]

Thank you, Mr Havard. May I say how nice it is to be responding to the debate under the chairmanship of someone who has, throughout his parliamentary career, been a great fan and supporter of sport in the House?

[Mr Dai Havard (in the Chair)]

If not the financing of it.

[Hugh Robertson]

Indeed.

I congratulate my hon. Friend the Member for Folkestone and Hythe (Damian Collins) on securing the debate and on his considerable research. Crucially, he and other members of the Culture, Media and Sport Committee have done invaluable work into football governance and the regulation of professional football clubs. Their work has proved invaluable in taking stock of a range of issues that affect the way that football is run and in ensuring that our national game is in the best possible place to make the most of its strengths and weaknesses and to address the challenges it faces.

With reference to this morning’s debate, it is worth reassuring my hon. Friend the Member for Folkestone and Hythe that a number of Culture, Media and Sport Committee members have approached me about a range of things that disturb them across football. I know about their experience at Leeds, where I understand that the Committee was unable to find out who the owner of the club was at that stage, which appalled people in a way that little else has.

I look forward to receiving the Committee’s report and recommendations next month, after which, within the statutory time period, I will set out the Government’s official response. Without prejudicing that too much, I am grateful to my hon. Friend for giving me the opportunity to outline the Government’s current thoughts on the regulation and governance of football clubs and specifically on the issues that he has raised around Leeds.

It is worth repeating—this is really important—that the starting point is that the Government do not want to run football or micro-manage its future. All sport, including football, is best run by sport governing bodies. However, those bodies must prove that they are strong, effective, independent, transparent and, crucially, accountable organisations. The Government’s role, and my role as Minister, is to challenge the FA and the organisations that run the leagues—the Premier League and the Football League—and to ensure that the game and its governance arrangements are capable of responding to the challenges and opportunities. Of course, that is the background to the current Select Committee investigation. It worth saying in that regard that I do not particularly want to legislate, but football should be in no doubt whatsoever that if it does not react to what the Government lay out after the Select Committee report, we are prepared to do so, if necessary.

Leeds fans will of course be pleased finally to know who owns their club. However, the whole episode signals the complete disconnect between the supporters’ legitimate expectation of knowing who owns their club and the requirement to publish that information. The football authorities deserve some credit for the rules that they introduced in recent years on financial regulation and club ownership. They include a new means and abilities test, which requires proof of funds of prospective new owners as well as strengthening the rules on owners and directors. However, the situation that my hon. Friend has outlined shows how much more needs to be done.

Touching on a point made earlier, football clubs are not investment banks. They are part and parcel of the community. I often refer to them as businesses with a social conscience. It is not unrealistic, therefore, for supporters to have higher corporate expectations of the owners of their club than they do of some local businesses. Supporters at every club have a right to know, with certainty, which person or people own their football club, whether they own it outright or in shares of less than 10%.

The football authorities need to work with the clubs to make full disclosure a priority and to ensure that appropriate inquiries about the identity and circumstances of potential buyers are always carried out with due diligence, and that needs to be done before ownership is allowed to change hands. This is not me, as a Minister, hammering football clubs once again; it is a requirement for all good businesses. Furthermore, the necessary checks should continue to be made throughout a director’s or owner’s tenure at a club. Club owners have a responsibility of stewardship. Supporters need to have trust in them and to know that they will not jeopardise the long-term future of the club. Under no circumstances should the owners take the fans for granted or deliberately or inadvertently misrepresent the position in relation to their club.

It is for the football authorities to take a hard look at whether they should tighten their rules. The inquiry with which my hon. Friend is involved will clearly play a big part in that. My preference is that the two should be done together—that the findings of the Culture, Media and Sport Committee are discussed with the football authorities, so that we can agree a way forward collaboratively. That should happen under the leadership and direction of the sport’s national governing body, the FA. It remains to be seen whether that is achievable, but I am encouraged by the strong statements made to the Committee by the chairman of the FA, David Bernstein, about the importance of transparency.

I do not wish to prejudice the Committee’s findings, but as my hon. Friend has mentioned the matter, it is worth saying a little about the football creditors’ rule and HMRC. I would rather not give an absolute answer on the creditors’ rule until I have seen the results of the Select Committee’s investigation. Indeed, I have tried not to provide a running commentary on it, as it would not help the Committee or the Government. However, it is clear that the football creditors’ rule has probably had its day. The moment when people in football said that it was morally indefensible was the moment when everyone felt that a considerable corner had been turned. I await the Committee’s findings with interest.

If my hon. Friend sends me the details I will happily pass them on to HMRC. However, he will know that although it is a governmental body, it is independent of Government. It would be worth the Committee Chair writing to HMRC on behalf of the Committee, given the strength of feeling that was evident following its investigation into Leeds.

[Hugh Robertson]

The simple answer is that I am perfectly happy to write, which my hon. Friend can do equally easily. The bigger point is that I have a sense that after the Select Committee’s visit to Leeds, the Committee was unusually disturbed by what it found. Normally speaking, that would be a good moment for the Chair of the Select Committee to write directly to HMRC on behalf of the Committee. That would be powerful, but I am also happy to write, if he wishes to do that through me to a Minister.

In conclusion, I understand my hon. Friend’s desire for an inquiry into what has happened in Leeds’s case. His speech was powerful and convincing. However, with a Select Committee report due in the next month, I would rather wait until then to decide what needs to be done, simply in order to achieve the best use of time and resources. The exact detail of what has happened is not clear, but the overall lessons most certainly are, and those lessons should inform what happens next. My intention, as part of the wider process of the inquiry’s recommendations, is that the FA will be able to make any changes to the issues highlighted by today’s debate. If not, the FA should be in no doubt that the Government will legislate to ensure that such things do not happen again.

[Mr Dai Havard (in the Chair)]

That concludes the debate. We now move, slightly early, to the next debate.