Football Governance Bill

James Daly Excerpts

2nd reading
Tuesday 23rd April 2024 Commons Chamber

[Mike Amesbury (Weaver Vale) (Lab)]

Like many across this Chamber, I thank those from across the political sphere, those within the footballing community and those who led the fan-based review because their work is finally coming to fruition with the Second Reading debate of the Bill. The referee, in the shape of the independent football regulator, will finally be on the pitch. We are beginning that journey. It is particularly fitting that this takes place on St George’s Day, as the English nation gave the world the beautiful game. That nation now needs to put its house in order, for the many and not the few, to ensure that the pyramid effectively works for leagues across the beautiful English game.

As has been echoed across the Chamber, by Members of all political persuasions, we are only in this space because the premier league and those who govern our beautiful game have not got their house in order. That hands-off the pitch and that laissez-faire approach certainly has not worked for our fans, our clubs and, importantly, our communities. That has been mentioned in reference to Bury FC, one of our oldest football clubs in the country, certainly in the north-west of England where I represent. They were expelled from the football league amid rising debts and financial problems. There have been other notable and documented examples at clubs like Bolton Wanderers, Derby County and, recently, Reading football club.

These, and other clubs—we reckoned there were around 60 such clubs—had a number of common factors: unfit owners, greed, asset selling, poor governance and long-standing alienation of the fan base. There was total disregard for history, identity, emotions and communities. This laissez-faire, anything goes approach—the wild west of football—must be brought to a full stop. To drive that, the new, independent football regulator must have teeth, with strong rules to ensure that our great footballing clubs have fit and proper owners. I would certainly like to see more clubs owned and controlled by their fanbase. We have great examples of that in my constituency, including Northwich and Runcorn Linnets, who only this weekend I saw beat our rivals Widnes.

We want to see sustainable financial plans, with fans at the heart and soul of those clubs to protect assets such as stadiums and historical identities. People have referenced that—it is certainly in the Bill—in regard to kits and badges; those things are vital.

I am a long-standing Manchester United fan, so I am familiar with problems of ownership. The Glazers, who have already been referenced, bought the club on the never-never. They were one of the richest football clubs in the world; they are now one of the most indebted, and that really has affected our performance on the pitch, which has been pretty woeful this year, including in the FA cup semi-final. I pay credit to Coventry, who played incredibly well, while we played incredibly badly. But the problems on the pitch come down to some problems with the ownership.

I gave up my Manchester United season ticket long ago—it was a difficult decision to make—because of the Glazers. I echo the clarion call—I did so at the time with my protest scarf and all the rest of it—that the Glazers really must go. Perhaps we are on the start of that journey, with some new ownership.

I am a Cheshire and Merseyside MP, and quite a number of my constituents are Everton fans, who have been aggrieved by recent point deductions. Some of those have been on financial issues—the purchasing of a stadium, and certainly players—but fairness is a real bone of contention. Everton have been deducted 10 points —a high number. That has gone to appeal and so forth, yet they look at other clubs across Britain, such as the Manchester Cities and Chelseas of this world—by the way, Manchester City have had 115 breaches—and see that those who have incredibly deep pockets, financed by sovereign wealth funds, seem to get away with it because they can afford the litigation. Of course, Manchester City are not the only ones—I have referenced Chelsea, and there are certainly others.

We have mentioned fit and proper ownership for our clubs. How can it be right that sovereign wealth funds of foreign states with woeful human rights records own Great British—English—football clubs such as Newcastle United? It has been fairly well documented that one such nation state had managed to execute more of its citizens than a striker for Newcastle United had put balls in the back of the net. That is horrendous.

[James Daly (Bury North) (Con)]

The hon. Member—as he knows, I am from the same part of the world as him—is making some excellent points. He touched on Bury FC in my constituency. I am interested in fairness in football. In the FA cup semi-final at the weekend, we saw Manchester United—the winners as a result of about 1 mm in a video call—get £1 million, while Coventry City got £500,000. For all that we in the Chamber talk about fairness in a general way, does he believe that that is a fair share of the moneys in the circumstances?

[Mike Amesbury]

Clearly not, and I think that there is space for the regulator to intervene. As has been referenced, the FA cup can be a lifesaver for grassroots clubs. The hon. Member for Gillingham and Rainham (Rehman Chishti), who is no longer in his place, mentioned Gillingham, and I think that Bristol Rovers were also mentioned. Again, the issue is financial sustainability. The regulator should intervene to ensure that the FA makes the right decisions for all our clubs, right across the pyramid.

Like many Members across the Chamber, I think the Bill is great for the football community, and I credit all those who have been involved. It is very important that we have the fans at the heart of this. There are some issues, which hon. Members on both sides of the House have mentioned, to do with competition and the parachute payments, which are distorting the footballing community, but overall I very much welcome and support this Bill.

[Chris Green (Bolton West) (Con)]

It is a pleasure to follow the hon. Member for Weaver Vale (Mike Amesbury), who touched on the important issues in this debate. I particularly appreciate the way he very gently touched on the cost of the kit and of the badge, which I think follows on from his campaign to make school uniforms affordable. That is such an important issue.

I also appreciate how the hon. Member for Rochdale (George Galloway) captured that sense that football fans are not just customers who can go to one supermarket or another. There is so much more about football. It is not just about a strong fan base, the acquisition of the right players, having good management and other things that we would associate perhaps with a corporation; it is about the family, the next generation, that sense of community and wellbeing, and people going to the stadium, walking together in solidarity to see their club. That is what football is about for so many communities up and down the country.

When Bolton fell into very difficult times recently, and—looking not too far away—when Bury went into administration in 2020, it was a traumatic experience for many football fans, even those watching an opposing team. Bolton came very close to being in that position, but since then we have regained our strength and improved our position. At the moment we are third in league one. We are in the play-offs—and if Peterborough and Derby do the right thing and lose very badly with a huge goal difference, we might be in the automatic play-off position.

[James Daly]

My hon. Friend makes a sensible point, which not many people will know: Bury and Bolton were in essentially the same financial situation. Both had gone into administration at the same time. The regulator decided to expel Bury from the EFL and keep Bolton in the league. The suspicion was that, with Bolton being a bigger club than Bury, the regulator did not want to get rid of them, but poor little Bury could be used as an example. I think that is an example of why regulation is needed in this sphere.

[Chris Green]

I share my hon. Friend’s concerns. The idea of one club of the status of Bury tumbling out of the English football league was pretty grim, but to have two clubs do so would have been catastrophic for the EFL.

I welcome the fact that the Government have listened to fans and clubs and brought forward this Bill to secure the game’s future in England. The game’s fractured governance model and the inequitable distribution of finances are increasingly putting the future of the sport in England at risk. In the coming debates on the passage of this Bill, Parliament has the opportunity to give the new independent football regulator the right powers to ensure the game’s sustainability for the good of the football pyramid, from the grassroots to the heights of the premiership.

Any attempt to weaken the IFR’s powers or to make it a passive and ineffective entity should be strongly resisted. A particular concern, brought to my attention by Ian Bridge of Bolton Wanderers Supporters Trust, relates to part 6 of the Bill on financial distribution, where questions over parachute payments have not been ruled out, and to whether the Bill in its current form can deliver on its objective of protecting the financial sustainability of English football.

I look forward to supporting this Bill throughout all its stages. I think the debate has been incredibly constructive. The Bill may need a little further refinement, but I welcome the work and efforts of my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch) and of the Minister, my right hon. Friend the Member for Pudsey (Stuart Andrew) .

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

First of all, we are here today because football has failed to regulate itself over many years. It is our job as parliamentarians to ensure that, in the end, we regulate on the behalf of football fans for now and for the future, and for the communities where our football clubs are based. That is our job. I will just begin by thanking those who have got us to this position: the hon. Member for Chatham and Aylesford (Dame Tracey Crouch), certainly; the Minister for sticking with it and bringing the Bill before the House today; and the EFL, the PFA, the Football Supporters’ Association and Fair Game for their advice. I even had a conversation with the Premier League, but let us say that that conversation did not lead to as much agreement as other conversations I have had with other football organisations.

This is not a Bill to destroy the Premier League, as some have tried to present it, including the Premier League itself. The Premier League has been a massively successful organisation. It has brought unimaginable wealth into football and into this country. The legislation is not here to destroy the Premier League, but to ensure that its great strength, its financial resources, can be used as a basis on which to strengthen the whole of the football pyramid. It is just a pity that the Premier League itself does not see it like that. It does not see its responsibility to the wider football game, but instead so often seems intent on narrowly focusing its attention on supporting the handful of clubs that are within the Premier League.

We just have to look at the other successful brand in English football: the pyramid. There is no other football pyramid like it in the world. The championship has the fifth-highest attendances of any league in Europe. Where else could you go on a Sunday afternoon to a second-tier relegation game and get 7,500 fans not in the home end but in the away end? Sheffield Wednesday did that at Blackburn on Sunday—and won, I hasten to add, giving ourselves hope of salvation. That is the strength there, but the incredible power of the Premier League’s resources is slowly beginning to corrode and erode the basis of the whole football pyramid. That is what we have to stop and what we have to act on.

In very simple figures, 25 clubs—not just the 20 clubs in the premier league, but the other five that are in and out of it on a regular basis—get 92% of the distributed resources within football. The other clubs in the EFL get 8%. That simply is not sustainable, and we have seen that gap grow and grow over the years. It is not just a static problem; it is an increasing problem that undermines the whole of the football pyramid.

Does the Bill, as it stands, deal with that fundamental challenge? The process for a review of football finance is far too bureaucratic. Why not give the regulator the up-front power to come to a decision about the distribution of football’s resources that makes individual clubs sustainable, and competition within and between the leagues sustainable? That is a simple remit. Let them get on with it, rather than going through this process right the way through to a backstop, knowing that the leagues have already had a chance to reach an agreement which they have signally failed to do. The Premier League never made a single offer right through the process from the very beginning.

With the parachute payments excluded from the backstop, the Minister risks destroying his own Bill. If the Bill remains as it stands, we will not achieve a sensible and appropriate redistribution of revenue. I think that has been said right across the House and we simply have to change it. I am happy to table an amendment in Committee. I hope the Minister might think about how the Government might accept such an amendment, because it will be needed to strengthen the Bill.

Is the distribution of resources simply a matter for the EFL and the Premier League, or do the fans, players and grassroots not have a view? Should there not be a wider process, at least a consultation, so that the regulator has the up-front power and also consults those groups in reaching a final conclusion? It is just strange that something that began with a fan-led review does not mention fans in that very important part.

I welcome the general approach of the licensing system. As has been pointed out, we have had too many bad owners and directors in football, and we still have some around.

[James Daly]

I am very interested in what the hon. Gentleman says. There are some very important points regarding redistribution, but there is also a very important point about the competent management of football clubs. The Derby County situation is an example, because the owner had £400 million in cleared funds when the club was bought. What happened to Derby was a result of how badly it was managed after the initial test. That is a real challenge for this Bill.

[Mr Betts]

My understanding is that it will be a test of the licensing system. It is about ensuring sustainability, and not just when an owner comes along and says they want to buy a club. They need to show that they can actually sustain that ownership going forward. That is the difference between the current rules and the rules that are being proposed, which we can test further in Committee.

Can the regulator really regulate sovereign wealth funds that own clubs? I have asked the Minister about that before, and it is something else that we have to look at, because it is a challenge to the system. I welcome the fact that fans will have a veto over their club changing its colours or name, but there is nothing in the Bill that says that fans have to be consulted about a change of grounds. The regulator has to approve it, but there is no right for fans to be consulted. We need to have a look at that.

I come back to my own club, Sheffield Wednesday—I have mentioned them once, and I will mention them again. They welcome the proposals and the EFL’s approach to the review, and they recognise the need for a change in the distribution of resources. I am not sure that the owner will be that enthusiastic about the change to require him to consult the fans properly. Many owners are like that—they want to go through the motions. Are they really going to engage in a meaningful way? That will be a real challenge for the regulator at a number of clubs. I understand why the form of consultation is not specified, but it will still be a challenge going forward and we need to keep an eye on it.

Finally, I come back to the FA cup. The Minister said it is not our job to get involved in football competitions, but the fan-led review was triggered by some clubs wanting to change the competition they play in by going to the European super league. That involved a handful of rich clubs deciding that they could be better off there. We now have a handful of rich clubs deciding that European games are more important than FA cup replays—that is what is happening.

When Arsenal won the FA cup in 1979, they had five replays, four of which were against Sheffield Wednesday in one round. I remember it all these years later, because it was a great achievement. Three of those replays were at the old Filbert Street ground. We remember those things as football fans, and we should not take them away from the game. I say to the Minister that one of the requirements of the regulator is to ensure that the heritage of English football is safeguarded. Will the regulator have the power to do that under the Bill’s rules, and is the FA cup and its replays not part of the heritage?

--- Later in debate ---

[James Daly (Bury North) (Con)]

This is a unique regulatory Bill, in that it regulates the preservation of football clubs—in my view, it is regulation to save something, rather than regulation regarding competition. It is illogical to suggest that anything could level the competition between Bury football club and Manchester City, in terms of their assets or in terms of anything else.

When Bury FC were rejected from the EFL, at the heart of the matter were the serious concerns that Jonathan Taylor KC raised in his review: the owner and director roles that were being enforced by the football league, especially in relation to leagues one and two. In that report, he said that

“There is no doubt that the EFL applied the OAD”—

owners and directors—

“test properly in relation to Mr Day and Mr Dale”,

the two owners of Bury football club.

“The question is whether the test as currently written is fit for purpose. In particular, it only looks at a narrow list of objective criteria, and does not take into account various other factors that speak to whether a new owner or director is a fit and proper person to own/run a member Club.”

When Mr Dale bought the club for £1, the fact that he had numerous previous failed businesses was not taken into account. The owners and directors test did not require that Mr Dale provide proof of funds—proof that he was able to sustainably run the football club—prior to purchase. That is utterly ludicrous and something that has to change, so I hope the Minister will touch on how the Bill will ensure that the regulation and the fit and proper person test are robust enough to keep people such as Steve Dale out of the ownership of clubs.

I find myself asking time and again how a regulator will be able to intervene in the running of football clubs, unless they have a huge amount of support staff. I accept fully that a business plan is put in place, but business plans can change. The situation at Bury was virtually criminal. On the car park at Gigg Lane, which was built in 1885, the previous owner sold 250 car parking spaces in a Ponzi scheme, some of them to poor Bury fans. These were essentially sold as a financial product that people would get a return from. He was selling these things to people around the world, and when the money ran out, the whole thing went boom. Nobody did anything about that. That was a unique situation, but would the regulator have the powers, the understanding and the knowledge to be able to intervene in acts of complete criminality such as that? I hope that it will, and I would very much welcome the Minister’s response to that.

Speaking of my experience of Bury Football Club, I was at Ramsbottom United on Saturday and 2,000 people were there. It was a North West Counties Premier League match between Ramsbottom and Bury. Bury bringing the best part of 2,000 people with them gave Ramsbottom United 25% of their total annual income. When we look at what it is about clubs that matter—the history, the heritage and everything else that we have talked about—we have to get to the heart of how clubs are run. After somebody gets through the fit and proper person test, after the first business plan fails and after the ambition comes in, how is the regulator going to be able to control that unless they have a massive amount of staff?

In my view, football clubs throughout the pyramid system are incredibly badly run. Most of them are subsidised by multimillionaires, and in any other way, shape or form they would not be businesses; they would be insolvent. They exist off largesse. We have seen some really great examples of clubs coming through the football pyramid that are completely and utterly reliant on one person’s millions. If that one person’s millions disappear, there is no football club. How do we regulate that in a way that allows for sustainability? Bury was badly run. It was badly let down by the EFL. I think and hope that if this legislation had been in place when the club was expelled from the league in 2019, it would have put the club in a better place. I will put a question mark after that, and I look forward to hearing my right hon. Friend the Minister’s comments.