Football Governance Bill

Luke Evans Excerpts

2nd reading
Tuesday 23rd April 2024 Commons Chamber

[Lucy Frazer]

I am sure that over the course of this debate many Members will raise issues of concern to them and their constituents. I emphasise that the Bill is about financial regulation, although I am very pleased that the Premier League has taken action on gambling advertising on the front of shirts, which is something we looked at very closely, and that the Government are taking action on vaping and smoking more broadly. The Bill is tightly defined and addresses financial regulation, and I am very pleased that we have introduced this legislation.

[Dr Luke Evans (Bosworth) (Con)]

The Secretary of State is exactly right about the financial aspects of this Bill, but we have to make sure that we get the balance right. We do not want to kill the golden goose that is the Premier League, and we want to make sure that we have growth in the sport, through the championship and the EFL. We have to consider the crowded calendar of European matches, too. Does she believe that the regulator will have the ability to chart that very fine line between UEFA, FIFA and her proposal? That is going to be pretty tough.

[Lucy Frazer]

We do not want to do anything that damages the world-leading Premier League, which is worth £7 billion. People across the world look to the Premier League, and we have worked very closely with the Premier League, the EFL and others to try to get the balance right. I have met the executives extensively during this period, and I have met all the clubs in the Premier League and the EFL to try to get the balance right. We are trying to get a light-touch regime that allows the leagues to do what they are already doing, but with a regulator. The Bill is all about financial regulation.

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[Lucy Frazer]

I will press on, as I have now answered five times on parachute payments.

We will achieve our goal through the new licensing regime, under which all clubs in the top five tiers of English men’s football will need a licence to operate as professional football clubs. The regulator will have powers to monitor and enforce requirements on financial regulation, club ownership, fan engagement and club heritage protection, as well as setting a corporate governance code of practice and having the power to prohibit clubs from joining breakaway competitions.

[Dr Luke Evans]

It is fantastic that the top five leagues will have to have a licence. Will the Secretary of State comment on the resources that will be necessary to put that in place for the season? This is a big undertaking, and considerable resources will be needed to monitor what is going on.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I know that some colleagues who are intervening might not be seeking to catch my eye later. I remind colleagues that if they do intervene, it is customary for them to stay for the entire speech.

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[Thangam Debbonaire]

I thank my hon. Friend for that intervention. Like other colleagues, he is so knowledgeable about the detail of this Bill. I urge the Government to consider what has been said in a constructive spirit. Everybody present wants to get to the bottom of this confusion. We want to make sure that football and the regulator have the tools they need to grow sustainability—a key word which the Government have themselves used. The confusion about parachute payments is worthy of further attention, because there is so much money involved. They also have the distorting effect that the Government’s White Paper rightly identified.

If we do not look at this issue, we risk distorted competition in the championship by encouraging greater financial risk taking by the clubs that do not receive those payments. We know that that can result in an over-reliance on owner funding, which again is simply not always sustainable. As my hon. Friends have mentioned, clause 55(2) excludes parachute payments from any order by the regulator on revenue distribution. I gently say to the Government that, as there seems to be some contradiction or possible confusion, we would like that cleared up. I would be grateful if the Minister could say more in his summing up about how the money currently used for parachute payments could make more impact and perhaps be shared more widely, whether he has examined that in detail and to what extent he feels the current terms of the Bill are satisfactory.

[Dr Evans]

Part of the problem is that football is inherently risky; the very nature of what a club does is in order to get promoted. If, in trying to engineer some sustainability from the point of view of people investing in a club, Derby County had been promoted, the model would have been deemed to have worked, but it failed and so did the club. How would Labour facilitate individuals from across the globe investing in the best leagues in the world, while making sure that clubs such as Derby County were protected?

[Thangam Debbonaire]

I gently point the hon. Gentleman to his Government’s White Paper, because the Bill comes from there. Yes, of course the game is inherently risky—that is part of what makes it thrilling—but we need to be thinking about whether that is a calculated risk that is part of the thrill of the game, or an unintended consequence of a possible market failure. We really need to look at whether there is distorted competition. I gently suggest that, if the hon. Gentleman has not read his Government’s White Paper, he should.

[Dr Evans]

I have.

[Thangam Debbonaire]

Then we really need further discussion in Committee on this issue; it is worthy of such consideration. On calculated risk taking, we need to be clear about when we are taking unnecessary risks and when there are unintended consequences of the way finance is distributed.

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[Shaun Bailey (West Bromwich West) (Con)]

It is great to be able to contribute to this debate, because although they say the Black Country was built on coal and metal, we were also built on football. I straddle the two clubs at the heart of the Black Country derby—namely, West Bromwich Albion and Wolverhampton Wanderers.

This is a pertinent Bill and a pertinent debate for my communities in the Black Country. We went through absolute hell with the financially precarious situation surrounding West Bromwich Albion. At one point, the club was having to borrow £20 million just to keep the lights on. An independent regulator stepping in to ensure ultimately that fans of football clubs—cherished parts of the community—can keep that club and that entity there, can enable that sustainability and can put these people, who are often behind the scenes, under the cosh and under scrutiny is absolutely the right way forward.

I commend the Under-Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Pudsey (Stuart Andrew), for his work on the Bill, and my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch), who has been an absolute champion in this space. She should be so proud of what she has achieved; the Bill is a real testament to her work.

We have covered a plethora of issues in the debate, not least the football pyramid. What I perceive at times is the inequity of the system we have got. I deal a lot with fantastic grassroots football clubs, which many Members have talked about. Sometimes the narrative and discourse about the need for regulation involves a top-down approach, and of course we must highlight the important work that our premier league clubs do, but let us not forget that the pipeline to many of those clubs is first and foremost through grassroots football, which a lot of the players we talk about—those stars and talents—come through. My fantastic local football clubs, such as Tipton Town football club in my constituency, constantly share their frustration that they are ignored, left out or put under ridiculous burdens that they often have to meet without resources.

Everyone has touched on the replay issue. I say to my right hon. Friend the Minister that it is a complete kick in the teeth, particularly for clubs that are further down the pyramid and rely on the revenue from getting people through the gate. Again, it just seems that the FA is only listening in its echo chamber, quite frankly.

[Dr Luke Evans]

The Government have a tricky line to tread in ensuring that football is independent and adheres to UEFA and FIFA rules on Government interference. On FA cup replays, does my hon. Friend believe that there is a role for a reconsideration mechanism, so that Government can bounce the decision back to the regulator and ask, “Have you potentially got this wrong, and will you think again?”

[Shaun Bailey]

My hon. Friend is almost asking for a replay of the replay—that is sort of where the question is. I get the point that he is trying to make about balance and the fine-line argument on Government interference. The point has been made quite strongly, as we have all seen—the FA’s own survey found that 70% of fans wanted to retain replays—and with that level of public pressure, there is a role for the Government in facilitating the pressure on the FA. I think that that is the point that he is hammering down on, although obviously the FA must ultimately be independent.