Newcastle United Football Club: Regulation

Debate between Baroness Laing of Elderslie and Mims Davies

Thursday 24th January 2019 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

I am not sure it is in order for the hon. Gentleman just to mention a team because they play in black and white like Epping Town.

[Mims Davies]

I thank my hon. Friend the Member for Braintree (James Cleverly) for reminding me of the importance of the grassroots. We had an important debate earlier in the week about facilities and what the grassroots mean to football up and down the land. We need to make sure we protect our stadiums and our future stars.

The Government wholeheartedly agree that football should absolutely be supported and that fans have every right to ask questions about those who run their clubs. We saw protests at Bolton earlier this week, and at Blackpool and Charlton in recent times. Such protests demonstrate the discontent that can exist when fans believe that the ownership is not working in the best interests of the club at all times. Over recent years, the Government have invested significant time in finding ways to improve the relationship that fans have with their clubs. We want to see owners working with fans and seeing them as an integral part of their clubs’ successes, and I want all fans to see that, up and down the game.

The Government’s expert working group on football supporter ownership and engagement, which reported in 2016, resulted in an important rule change in football. All clubs in the top four divisions must now ensure that there is open dialogue between the owners and senior executives and the fans on the matters of most importance to the running of clubs. These meetings must now take place each season, and they are leading the way in enabling fans to be better informed about their club’s financial standing, future plans and other matters of real importance to them so that they can help to set the agendas.

Last summer, the Government took a further step in listening to fans’ concerns when we asked the FA to carry out a comprehensive review of the ownership of football clubs and stadiums. The intention of the review is to learn why many of our clubs have become separated from the ownership of their homes, so that going forward we can advise clubs and fans on how they can work together to protect these important community assets.

The issues came into sharp focus with the problems at Dulwich Hamlet, but the problems of clubs becoming entangled in land and development disputes are not exclusive to non-league clubs. As we have heard, they can occur across all levels of football. With the help of the Secretary of State, we are working to help to find a solution for the fans of Coventry City.

[Mims Davies]

Absolutely, and I thank my hon. Friend for making that point. His interest in this goes back some time—[Interruption.] My hon. Friend the Member for Bury St Edmunds (Jo Churchill) behind me raises the importance of Bury Town to Bury St Edmunds. These clubs really do matter to our communities and, as I said, that was very much the focus of the debate earlier in the week.

When it comes to club ownership, the football authorities have been progressive in recent years. They have needed to be to react to the huge investment and interest that there now is across the world in owning our football clubs. In our top four football leagues, the rules now require public disclosure of the ultimate beneficial owners of all clubs, with the full chain of ownership disclosed to the relevant football authority. The current owners and directors test has been strengthened, and it bears favourable comparison with that expected in corporate circles.

New owners have to meet the Premier League or English Football League board and provide detail on the sources and sufficiency of the funding they have in place. Clubs must submit information on their financial structure, any proposed investment and a business plan demonstrating that all liabilities can be met for the next 12 months, and clubs must submit independently audited accounts each season. If these are not filed at Companies House, clubs should take steps to ensure that they are. Clubs must also continue to work with Her Majesty’s Revenue and Customs over any tax owed. Together with the adoption of fair pay rules, the financial state of football clubs in this country is better now than at any time in the last 20 years, but I take the points made by the hon. Member for Newcastle upon Tyne Central about income streams, shop sales, player sales and the other wide-ranging issues she raised, and I will be happy to send her a fuller response afterwards. I want to reassure her, however, that we are not complacent.

The football authorities should not be complacent either. In my regular meetings with them, I will look for further assurances that they continue to review the rules constantly, ensure ongoing transparency around the ownership of clubs, make sufficient inquiries into the suitability of owners and ensure that, financially, our clubs continue to live within their means. The football authorities have agreed to keep the owner and director test under regular review and to listen to supporters’ concerns about club ownership. I will also be asking for an update on the role of the FA’s regulatory authority, which was set up in 2012 in response to the Culture, Media and Sport Committee and Government regulation around the game’s governance.

The football authorities need to take a good look at the rules and judge impartially whether clubs are in compliance. There are existing structures, but if we need to go further, I will be unafraid to give an additional appropriate focus. I will also be listening to supporters’ groups. I know that the general cost of travelling to and attending games must be kept under constant review, and I will continue to look for a fair deal for fans. I appreciate that football is heavily reliant on broadcasting contracts, but clubs must consider their fans when it comes to scheduling matches and changes to kick-off times.

I come now to the fortunes to Newcastle United. The hon. Member for Newcastle upon Tyne Central will be keen to hear this. We can all agree that this is one of our biggest and best-supported clubs, and the city, adorned in black and white, is one of the most visible and wonderful of sights. St James’ Park sits loud and proud in the centre of the city. Newcastle is a city that loves its football club and wants the very best for it, as we have heard today. Part of the case made today is that Newcastle United is currently in the hands of someone who is not a lifelong fan. If we looked at other clubs, we would probably find that plenty of owners did not meet this traditional expectation, but that does not mean they are running their clubs badly or unsustainably or without taking a huge interest in the clubs succeeding.

As the Government set out in response to the petition the hon. Lady presented last summer, to the best of our knowledge Newcastle’s owner is complying with all the financial reporting and ownership criteria I ran through earlier, but I have a list of responses to come back to. The club is also meeting its obligation to engage with supporters and discuss matters important to the running of the club. That does not mean, however, that Mr Ashley, or any other owner for that matter, could not go further than simply complying with the league rules. There is always room for progress.

Mr Ashley has made no secret of the fact that he is looking to sell the club, but until such time as he does, he remains the person responsible for its custodianship. Like every owner, his primary responsibility is to ensure that the club is financially secure, and despite the concerns raised, I am certain that Mr Ashley is shrewd enough to understand that if he wants to sell the club and realise its best value, he needs to look after it.

In summary, it is important that the issues of most concern to football fans continue to be heard. I will continue to listen to supporters up and down the land about their concerns over ownership, and will be meeting the Unified Football Supporters’ Organisation on 5 March. I will continue to work to hold the football authorities to account, and we must ensure that there is continued assessment of the regulations that are in place. We must continue to encourage good ownership, proper financial reporting and meaningful dialogue with supporters. We must support our grassroots, working with the Premier League, and make sure that we have a pipeline of young footballers coming into the game. I have not mentioned women footballers and other areas in relation to participation. I take the concerns very seriously. I will write to the hon. Lady on all those points, and I thank her for the opportunity to respond to this Adjournment debate this afternoon.

[Madam Deputy Speaker (Dame Eleanor Laing)]

We could possibly wish good luck to every team that plays in black and white. That is not in order, but there we are.

Question put and agreed to.