Corporate Businesses and Franchisees: Regulatory Environment

Matt Rodda Excerpts

Wednesday 2nd July 2025 Commons Chamber

[Matt Rodda (Reading Central) (Lab)]

Will the right hon. Gentleman give way?

[Sir John Hayes]

Because I am a long-standing friend of the hon. Gentleman, I will certainly give way to him, but then I must make progress.

[Matt Rodda]

I am very grateful to the right hon. Gentleman, who does the House a favour in his work tonight. I should first declare an interest, as I have a close relative who works for the Competition and Markets Authority. I do not wish to comment on competition and mergers, though I would like to ask the right hon. Gentleman to join me in supporting the Government’s work. I believe that Ministers are shortly to do some further work to offer greater support to small businesses in terms of opening up Government procurement and in other matters. Like the right hon. Gentleman, in my own constituency I am a keen supporter of small business, and my own small business competition has provided a great deal of recognition for businesses, whether local florists, those repairing small musical instruments, people providing other services, and indeed many other forms of small business. So I do want to commend the broad thrust of the right hon. Gentleman’s work tonight, although I do not want to comment on the CMA.

[Sir John Hayes]

I am most grateful for the hon. Gentleman’s support.

During the pandemic, the UK Government introduced the business rates relief package, which allowed businesses with commercial leases to claim relief on their business rates. That was designed to help firms with physical stores compensate for lost footfall during the lockdowns, and it was an essential lifeline to those smaller businesses. This automatically applied to businesses through local councils. From 11 March 2020 to June 2021 the relief was 100% with no cash cap, and ratepayers with more than one property were entitled to relief for each eligible property.

Franchisees were eligible to receive this relief, and it would have been automatically applied to stores operated by companies such as Vodafone and not through the franchise programme. It is worth noting that some corporations that benefited from that scheme, such as Tesco—although I hold no candle for Tesco generally—have since returned the money to the Government. The question is how Vodafone used that money: did it achieve its original purpose—I would be interested to hear the Minister’s answer to that question—or was it redirected in some way that was out of tune with the Government’s intention and the proper purpose? It is worth noting that that was available not only to Vodafone, but to all those organisations that had franchises. I wonder how other organisations handled the matter and how that compares with the circumstances surrounding Vodafone.

The important thing to consider as we debate these matters is that the franchisees are small business owners with families—this was important to them. Business rates relief was of huge significance and made a meaningful difference to people, as intended by the Chancellor at the time, my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak). The Government’s stated purpose for covid-19 business relief was to assist small businesses to carry on trading at a financially difficult time when profits in bricks and mortar shops were much reduced. The question is, was that the reality? The fact that the Government later introduced caps on the relief indicates that it was intended to help small businesses—those to whom £100,000 makes a great difference—not to subsidise large globalist corporations with hundreds of stores and access to other types of relief.

What is the Minister’s assessment of how that kind of funding was used during the covid pandemic? Too often, franchisees’ payments from those who franchise them are cut drastically and with little or no explanation. Contracts are often terminated with just a few days’ notice and stores repossessed with little notice, often without valid reasons for doing so, leaving debts and loans to be repaid with no income. Franchisees claim that they faced fines and clawbacks that were grossly disproportionate to the errors in question. In some cases, the errors that led to fines were the results of failures in major corporation systems, yet the financial burden was often unfairly placed on franchisees. Communications raising serious concerns, though made, were often unanswered and pressing issues were ignored for long periods of time, leaving franchisees without support or resolution to their problems.

Moreover, it has emerged that whistleblowers had warned a series of senior Vodafone executives that scores of its franchise store owners face financial ruin. What steps are the Government taking to regulate corporate businesses’ relationship with their franchisees? As I say, we are not speaking of powerful businesses with deep legal departments and balance sheets to absorb losses but ordinary people—mothers, fathers, sons and daughters—who saw an opportunity when they became a franchisee to build a meaningful business of their own under the banner of a global household name and to make a difference to their family, their community and the towns in which they are situated. People put their savings, their homes and their reputations on the line because they believe that a franchise agreement with a company such as Vodafone—there are others too—would be safe and secure.

Last month, the Competition and Markets Authority confirmed the merger of Vodafone and Three. Will the Minister confirm that the matter of the problems with franchisees were discussed ahead of that merger being approved? Indeed, more broadly, can such a merger really be said to benefit the British public, given that it is forecast to cost 1,600 UK jobs and that evidence from overseas shows that countries with fewer mobile phone operators tend to charge higher prices to consumers? Will the Minister confirm what steps the Government are taking to investigate allegations of inappropriate use of Government relief during the covid pandemic, specifically in relation to businesses with franchisees? Will the Minister confirm that all allegations of misappropriation of Government relief schemes intended for franchisees should be investigated as part of the inquiry into covid by the covid commissioner? Will the Minister urge banks to show leniency and support to those franchisees facing financial distress, and will he commit to looking afresh at the lack of enforceable regulations governing franchiser conduct?

A key lesson from the Post Office scandal is that we must not allow the sophisticated power of a corporate body, or the impression created by an impressive balance sheet, to persuade us to ignore the voices of less powerful individuals who speak out. Many franchisees have given up stable jobs. Some have taken out personal loans, and some have remortgaged their home. They train staff, open stores, serve customers, and are told by the big business that they are partners; but when the going gets rough, when the commission cuts come with little warning, when franchisees’ performance plummets due to decisions beyond their control, and when stores are repossessed with inadequate notice, they are left out on their own, high and dry. No lifeline, no dialogue—just silence from the corporations that they once trusted. I cannot believe that this Minister does not feel as I do about corporate malpractice—about greedy, soulless, heartless firms that act irresponsibly and hide behind the high wall of their substance.

Governments have a duty not only to promote entrepreneurship and business, but to protect entrepreneurs and ensure that businesses do not take unfair advantage of their staff. We must call time on the era of corporate giants using legal structures not as a framework for partnership, but as a shield for avoidance—for avoiding responsibility and decency.

Brands that trade on their reputation and public trust must be held accountable for the actions that they take that cause real harm. We must move away from a globalist, faceless corporate model that has enriched a few, and towards a different kind of economic order, in which we shorten supply lines, encourage small and medium-sized businesses, and understand that economics must serve a civil purpose. I call that fraternal economics —an economics in which community and economic activity are bound together in a common cause. We can build that kind of economic future, but it requires Government to know when to step forward to support business, and when to step back and not suffocate entrepreneurship. That future is within our grasp, but it will require this Government—perhaps any Government —to think afresh about the power balance between large, faceless businesses, and smaller entrepreneurs. They are ordinary people, like most of us, I guess, who simply want to get on and do the best for their family and their community. I know which side I am on. I am on the side of those people, because I know that they make so much difference in my constituency, and across the whole of our kingdom.

Business and the Economy

Matt Rodda Excerpts

Wednesday 21st May 2025 Commons Chamber

[Torsten Bell]

I will in a second.

It is a legacy of stagnation not seen in living memory, with the lowest business investment in the G7; wages, which used to grow at a consistent 2% a year, flatlining for their entire period in office; the worst Parliament on record for living standards; and the public finances trashed as debt soared. It is no surprise that the Conservatives have nothing to say about the past—the Leader of the Opposition said that it was true that they had no plan for growth—and it is staggering that they still have nothing to say about the future.

[Matt Rodda (Reading Central) (Lab)]

Will the Minister give way?

[Torsten Bell]

I said that I would give way first to the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien), but I will come to my hon. Friend.

That is not just my view, but the view of George Osborne. He says that the Tory party has no “credible economic plan”. I always enjoy listening to the hon. Member for Grantham and Bourne (Gareth Davies), so I listened extra carefully just now, and there is still no plan, credible or otherwise.

--- Later in debate ---

[Torsten Bell]

Real household disposable income per capita is growing quite fast, according to the latest measure at the end of the fourth quarter of 2024. The OBR says that the legacy of the previous Government has shown it that productivity and growth in this economy have been too slow. Our job is to turn around their record, so that the forecasts and real wages start to rise.

[Matt Rodda]

I thank the Minister for giving way on that point. He is making an excellent speech, contrasting the 14 years of utter failure by the Conservatives with the quick start by Labour. He has been quoting statistics for the period since Labour was elected, but will he say more about the potential benefits of the three trade deals for growth and investment?

[Torsten Bell]

What is great about my hon. Friend is that he has a forecasting ability that is significantly above that of many economic forecasters. He has predicted exactly where I shall be turning shortly.

I want to dwell on a few points about the unequal economy. Three million workers have benefited from the introduction of a higher minimum wage last month. That is worth £1,400 to a full-time worker. Just today, the Trussell Trust provided an update on the painful symbol of modern Britain that is food banks. Far too many food parcels were provided over the last 12 months: 2.9 million. That is up by nearly a half over five years, which is an absolute disgrace, but it is down 8% on the past year and we need to keep it falling.

Several hon. Members have raised the question of tax. The right hon. Member for East Hampshire (Damian Hinds) and the shadow Minister sounded as if they were opposed to all taxes and made it the core of their argument that a higher tax level is a problem that this Government have put in place. Neither of them mentioned that the increase in taxes under the Tories in the last Parliament was significantly higher than any change in taxes under this Government—[Interruption.] It is true.

The hon. Member for South West Hertfordshire (Mr Mohindra) raised the question of non-doms, but also asked whether HMRC was behaving more aggressively. He favoured direct control of HMRC by Government Ministers. The Exchequer Secretary to the Treasury now chairs HMRC, and I am sure he will have heard the hon. Gentleman’s points. On the idea that HMRC has become more aggressive, one of my first jobs in government was being involved in merging what was then the Inland Revenue and the Customs department, and I promise Members that nobody is as aggressive as the Customs department was in the olden days. There were guns involved.

This Government had to take difficult but fair choices on tax in the autumn Budget—

Product Regulation and Metrology Bill [Lords]

Matt Rodda Excerpts

2nd reading
Tuesday 1st April 2025 Commons Chamber

[Laurence Turner (Birmingham Northfield) (Lab)]

As has been said, on the face of it this is a short Bill, but when we look beneath the surface, it is even more exciting than the bare title of the Product Regulation and Metrology Bill suggests. Most of us go through our days without giving much thought to the measurement of the units that govern our everyday lives—I confess that, until very recently, I was one of them—but so many of our scientific and medical advances have succeeded or failed on the most precise margins, as my hon. Friend the Member for Erewash (Adam Thompson) so brilliantly set out. It was a real privilege to be in the Chamber to listen to his speech.

In the city of Birmingham, best known throughout much of its history as the workshop of the world, many millions of hours must have been sweated out to meet the finest of measurements and tolerances. I suspect my hon. Friend is capable of accurately estimating just how many hours that would have taken. However, I note in passing that one of just two remaining proof houses, which fell under the scope of the Gun Barrel Proof Act 1868 and succeeding Acts—they attracted a lot of attention in the other place—is in Digbeth in the city of Birmingham.

At the start of my hon. Friend’s speech, he raised the question of when exactly the word “metrology” entered common parlance. I do not know what that date was, but I note that when the National Physical Laboratory was created in 1900, it was established with a metrology division. One of the early guiding forces, Mr J. E. Sears, later found a second career as a scales manufacturer, again in the good city of Birmingham. Today, when pharmaceutical manufacturing jobs are starting to return to my constituency, 20 years on from the collapse of MG Rover, I know some of the exacting standards that those manufacturers must meet.

We need only look at the number of Weights and Measures Acts passed by this House down the years to understand the importance of these questions for our role as legislators. I fear that I am about to commit an unwise act by referencing Magna Carta in this place, as that text has been the subject of one or two interesting emails that I suspect a number of hon. Members have also received, but it is telling that it stipulated:

“There is to be a single measure for wine throughout our realm, and a single measure for ale, and a single measure for Corn… And it shall be the same for weights as for measures.”

In the other place, and it is fair to say in this place as well, the arguments over the Bill have come down to a simple point: are delegated powers and statutory instruments the right processes for adapting to a rapidly changing landscape for product safety and international measurement standards? It is worth remembering two things. First, the theory that we could make sufficient updates through primary legislation can be tested against the history of legislation in this place. For example, some of the provisions in the Consumer Protection Act 1987 have been overtaken by events, and it has proved hard in practice to bring forward the necessary changes to that legislation.

Secondly, as has been said, this work was initiated by the last Government, who at the time made the case for delegated powers persuasively. As the 2021 response to the 2019 call for evidence stated:

“Over time, the limited powers we retained in domestic legislation became less effective. Rather than update these, the UK relied on powers in the European Communities Act (ECA) 1972 to introduce new harmonised legislation to deal with product safety and metrology.”

Those powers have now expired. Governments of all colours must deal with

“A complex, forever changing landscape”

and current legislation does

“not allow for many of the changes necessary to keep pace with technological advances and modern hazards.”

A good example of the ever-changing metrological field can be drawn from the 2019 changes to the international system of quantities, which altered in subtle ways the definition of the kilogram, the amp, the kelvin and the mole, with implications across a very wide range of regulations. I think it is sensible to update those definitions swiftly by regulations. We have heard examples of some of the unsafe products that are on sale at the moment. It is worth noting that the Bill is not simply about definitions, but enforcement. Clause 3 will enable some of those stretched resources, to which my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) referred, to go further. I also note that through the Transport Committee I received representations from Brompton Bicycle, a very good British manufacturing success story, which said that UK product safety regulations and enforcement have failed to keep pace with the development of e-bike technology. Unsafe, poor quality e-bike products are entering the hands of UK consumers with sometimes devastating consequences.

[Matt Rodda (Reading Central) (Lab)]

My hon. Friend is making an excellent point. Many constituents around the country will appreciate the specific points he makes about the changing product environment, and the way that product design and development is moving very quickly. I have a large number of residents who are concerned about e-bikes being ridden irresponsibly, home-made kits attached to bicycles, and cyclists often speeding on pavements. That is an interesting example of how the Bill could be very effective, so I thank him for his work on that.

[Laurence Turner]

I thank my hon. Friend for his intervention. I know that was one of the areas to which he paid a lot of attention in the transport brief. I am sure that as the Committee continues to look into this area, it will build on that work. As he says, this is an issue that comes up time and again in my constituency. We might not ever be able to get every single one of those vehicles off the road, but we need the powers to bring more of them off our streets where they pose a threat to people’s safety.

To illustrate the seriousness of the challenges the Government face and the need sometimes for very swift progress, we need only to look to the scale of technological advancements in the field of hybrid warfare and the implications of those advancements for dual-use civilian technologies. I note that clause 1(4)(d) draws specific attention to products that can

“cause, or be susceptible to, electromagnetic disturbance.”

In Ukraine, the two adversaries are locked into a cycle of innovation and reaction in drone warfare and electronic countermeasures that are escalating at a blinding speed. Some of those developments have implications for the potential misuse of civilian drones in this country. To suggest that primary legislation is capable of keeping pace with that is not realistic.

Similarly, in respect of intangible products, again an issue on which the House of Lords spent a large amount of welcome scrutiny time, there is a case that primary legislation cannot cover enough eventualities in good time, especially in the age of artificially generated code. I think back to the Volkswagen emissions scandal 10 years ago, when so-called “defeat devices” were intangible in nature.

Employment Rights Bill

Matt Rodda Excerpts

Report stage
Wednesday 12th March 2025 Commons Chamber

[Jayne Kirkham]

Local government funding will, of course, be increasing to take that into account, and funding for adult social care is rising and will rise further in the next three-year settlement under this Government.

To return to my speech, in Cornwall we have seen the rise of care workers coming from other countries to work on sponsorship visa schemes. These workers are often in a financially precarious situation, which increases their dependency. Some have been charged by their employers for induction, travel or training; in some cases, workers receive a salary below the minimum wage to make up the cost of their flights to the UK.

[Matt Rodda (Reading Central) (Lab)]

I refer colleagues to my entry on the Register of Members’ Financial Interests. My hon. Friend is making an excellent speech about the situation in her county. Does she agree that this is a national problem that affects all our constituencies? It is certainly the case in Berkshire, and in Reading in particular, that we need better pay for care workers and more understanding about the pressures they face in their very valuable work.

High Street Retailers

Matt Rodda Excerpts

Wednesday 5th February 2025 Westminster Hall

[Mr Campbell]

I thank the hon. Gentleman for that. Those two or three options are starting to develop. Those that are in vogue at the moment are reasonably successful, and they need to be built on.

[Matt Rodda (Reading Central) (Lab)]

Does the hon. Member agree that this is also about a series of relationships between local councils, small businesses and others to try to enhance town centres? For example, in my area, Reading borough council is working hard at getting improvements to paving and other visual improvements in the town centre to help to support small businesses. That is a valid initiative, which will hopefully help to attract more people into our town centre.

[Mr Campbell]

I concur with what the hon. Gentleman said. I notice that this is turning into an intervention debate with a speech, but, given that I intervene very regularly—

--- Later in debate ---

[Gareth Thomas]

That is generous of him. I will take that question away and look at it. I know that that is an issue particular to Northern Ireland. He will understand that it is not immediately the responsibility of the Department for Business and Trade, but I will none the less take a look at it.

[Matt Rodda]

Could the Minister provide a brief update on progress towards reforming business rates? It is a popular policy with many small businesses—particularly independent retailers in my area, who appreciate the Government’s work on this matter. They would be grateful for further updates.

[Gareth Thomas]

I am grateful to my hon. Friend. The Chancellor of the Exchequer announced in the Budget in October the intention to permanently lower the level of business rates for retail, hospitality and leisure. She published a discussion paper at the same time to involve the business community in further discussions about what else we can do in the business rates space. I strongly encourage hon. Members across the House to encourage businesses in their communities to get involved in that debate. That makes all the more striking the point made by my hon. Friend the Member for Hamilton and Clyde Valley about the approach of the SNP Government in Scotland not to get behind businesses. I hope that her speech was listened to and will be acted on by those currently in government in Scotland.

Hon. Members will know that more widely we have introduced high street rental auctions, enabling local authorities to tackle decline on the high street by bringing vacant units back into use. We are already working with three local authorities to begin to learn the lessons of how that new power works.

Football Governance Bill (Fifth sitting)

Matt Rodda Excerpts

Committee stage
Tuesday 21st May 2024 Public Bill Committees

[Stephanie Peacock]

I am pleased to have reached the part of the Bill where we can discuss the owners and directors tests. Football clubs are historical institutions with deep community ties; thus we must be careful to ensure that owners are people who view themselves as caretakers of an asset that has existed long before them, and we hope will continue to exist for years afterwards. As such, it is right that owners and directors are subject to fitness tests to ensure that the custodians of beloved football clubs meet certain standards.

At the moment, the tests are operated by different authorities depending on the league a club plays in. The Premier League, the EFL, and the FA on behalf of the National League all administer owner tests and have powers to disqualify unsuitable individuals. While those tests have been in place, many successful owners have been appointed, making selfless and sustainable investments in their clubs, which have brought about rewards on the pitch. However, not all owners have the same outlook, fortune, capacity or capability. Despite ownership tests, too many clubs and fans still have to deal with malicious, absent or incompetent ownership.

[Matt Rodda (Reading East) (Lab)]

I commend what my hon. Friend is saying. She knows full well the issues of my local club, Reading, which sadly was bought by the current owner. He was disapplied from buying Hull City but went on to buy Reading, despite a history of being involved in two clubs that went out of business overseas. I hope the measures in the clause will address this and stop other football clubs around the country getting in a similar predicament; I would not wish that on anyone. I am grateful to my hon. Friend for speaking about the issue.

[Stephanie Peacock]

I appreciate my hon. Friend’s comments and his work with his local club. I have met its supporters, and that is one example, although not a lone one, because it has been confirmed, in another example, that both Bury FC’s owners, Stewart Day and Steve Dale, passed the EFL tests. The fan-led review took a number of such case studies into consideration, concluding that things needed to change.

Alongside other measures in the Bill, which will be vital in giving owners a better landscape in which to operate and invest, the review made some distinct suggestions regarding the owners and directors tests, such as: ensuring a consistent and independent approach across all men’s football; giving tests the backing of the regulator to enable access to information not otherwise available to competition organisers, such as that from the National Crime Agency; splitting the tests into two parts to recognise the difference in the obligations and duties of owners and directors; and strengthening the qualification criteria to ensure that prospective candidates have integrity and the intention of running a club sustainably. Overall, I think the clause and this part do a good job of achieving those aims and recommendations.

I have one brief question at this stage. The EFL has indicated that it will stop conducting its owners and directors tests once the regulator is running its tests. However, Richard Masters told the Committee that the Premier League would continue to run its tests alongside those of the regulator. Putting aside the issue of clubs paying twice for the same regulation and the lack of efficiency involved in duplicating structures, a dual system could pose a dilemma. If two tests yield different results, whose decision would ultimately be adhered to? That is difficult to tell from the Bill, and I hope that this is something that the Minister can confirm for us today, or that he will write to the Committee about.

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[Stuart Andrew]

The hon. Gentleman makes an interesting point. I will not commit to introducing a new clause, but I will commit to going away and having another look at the points that he has raised, if that will satisfy him.

The Bill also allows for senior managers to be held accountable if they are responsible for the club breaching the requirements. That means that enforcement action could be taken against an owner of a club who was also a senior manager of the club and responsible for the club failing to comply with clauses 46 and 48.

[Matt Rodda]

Further to the point made by my hon. Friend the Member for Sheffield South East, in some cases there may also be an issue with training grounds being separated from the main organisation of the club. The current owner of Reading was trying to sell the training ground separately from the ground itself and from the club. Can the Minister write to me on that matter? It does not currently appear to be covered by the Bill, and I would be very grateful if he could reassure local fans.

[Stuart Andrew]

I am happy to commit to writing to the hon. Gentleman. He is right that it is really the perimeter of the stadium, the car park and so on. I will happily give him further details.

When the regulator is testing the fitness of prospective new or incumbent owners of clubs, it must have regard to any action of a regulatory or disciplinary nature that is being or has been taken in relation to the individual. The regulator already has the power to consider that as part of an owner’s suitability termination. For those reasons, I cannot accept new clause 3, and I hope that the hon. Member for Sheffield South East will not press it.

Football Governance Bill (Fourth sitting)

Matt Rodda Excerpts

Committee stage
Thursday 16th May 2024 Public Bill Committees

[Stephanie Peacock]

No. The point I am making is that, as we heard in the evidence sessions, lots of clubs have lots of good structures and some best practice that we can learn from, but this particular part of the Bill lists the groups that the regulator should have a relationship with, and I am simply suggesting that we could strengthen that. I am interested to hear what the Minister has to say.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent point about the importance of fans and players, and indeed, by implication, football club staff. As we heard this morning, fans, players and others have suffered from enormous challenges when there have been problems with ownership. It is difficult to describe the full level of stress and pressure that many fans of clubs have suffered over long periods, sometimes for more than one season. I believe that my hon. Friend is making a very worthy and important point, which I hope the Minister will consider.

[Stephanie Peacock]

I appreciate my hon. Friend’s intervention. I know the amount of work that he has done with his local football club and with fan groups.

Football Governance Bill (First sitting)

Matt Rodda Excerpts

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[Matt Rodda (Reading East) (Lab)]

Q You mentioned very serious issues with the behaviour of some owners. I wonder if you could say how big a challenge this is for the game and how far you feel the Bill will go in tackling these potential problematic behaviours.

Kieran Maguire: The issues with owners are that if an owner’s personal circumstances or intentions change and they have been subsidising or funding clubs, however you want to describe it, it means that under the current environment, things are very precarious. I do not think that the football authorities themselves have sufficient powers to go in and effectively do an Ofsted to the extent that they would perhaps like to at times. That is where the regulator could be broadly more of a benefit than a cost, because it would have regulatory powers and the ability to send in a forensic team to take a look and offer guidance to clubs that may not be willing to listen to it under other circumstances. There is also the stick as well as the carrot in terms of issues with licensing or ownership, which are very much a last resort. That would perhaps focus some minds where people have historically tended not to listen and take no advice.

Dr Philippou: A lot of the issues we have seen with ownership have been in relation to sources of income. I am from the University of Portsmouth, and Portsmouth has unfortunately had two of its former owners jailed for various things relating to fraud and money coming from sources that it perhaps should not have come from. That is quite difficult if you do not have deep access to do proper due diligence. What appears to be in the Bill is access to that information and the ability to request that information, which should hopefully mitigate against some of these issues.

[Matt Rodda]

Q Do you feel then that the Bill goes far enough in tackling these issues?

Kieran Maguire: As an investigator, you would always want more powers than less, so I think you have to be honest there. At the same time, in terms of protecting the game from over-regulation and being mindful that FIFA does not allow government interference in football, I think we have probably hit a reasonably good sweet spot with regard to the proposals to date.

Dr Philippou: I agree with that.

[Robin Millar]

Q Dr Philippou, you describe a industry that is reliant on patronage. If I could remind you, Mr Maguire, you said that a collective inability to control costs characterises the industry. How do you reconcile the two? Is it the inability of owners to control costs? Is it the structure that has the problems? Is it actually an inability, or is it an ignorance of costs or an unwillingness to address them?

Dr Philippou: I think it is a combination of various things. Ultimately, what you have is poor cost control and poor monitoring. Owners have to be mindful of that because, ultimately, at least half of them are putting money into football clubs every year to keep them running, so they are aware that there are cost problems there. You cannot be propping up a technically insolvent club and not know that you are propping it up, so there is that element there. You also have general cost controls —people are aware that they are losing money. It is not something where you can say there is a lack of awareness there; it is a lack of a willingness to do something about it. We saw UEFA bring in financial regulations back in 2010-11. The Premier League brought them in around about 2014. But we are still seeing these problems, even with the financial regulations in place, which tells you that there is an ongoing issue.

Kieran Maguire: What we have in terms of the present model is one of self-regulation, and self-regulation is normally walking hand in hand with self-interest. As far as owners are concerned, and I can understand this from an owner’s perspective, if I bought a football club as a trophy asset and I have unlimited funds, then why should I not spend as much money? What there has been is a trade-off between those owners willing to put in unlimited amounts, those owners wanting to put in limited amounts, and those owners wanting to put in nothing because they see the football industry as an extension of the entertainment industry, with a view to making it profitable on a longer-term basis. That is where we are at present.

The rules have effectively failed to address the loss-making in the business. Loss-making is sustainable until it is not sustainable—until those owners, either individually or collectively, decide to change the rules. Without any form of assistance from the regulator, that would mean that the industry is naturally precarious, because you only have to have, as we said earlier, a change in circumstances, as we saw with Chelsea. We have seen a club such as Bolton Wanderers have a very beneficial owner. His personal circumstances changed due to illness, and then you have a crisis for the club.

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[Damian Collins]

Q How would you respond if you were overruled? What would be the effect if the regulator took a different view from you?

Richard Masters: Maybe a bit like “The X Factor”, you need two green ticks to get in. That is it, and in terms of the Premier League operating its own test, in the unlikely event that the regulator said yes and we said no, that person could not take over that club, and vice versa.

[Matt Rodda]

Q This question is for Rick Parry. Where a potential owner has a track record of being associated with clubs overseas that have got into difficulties, do you believe the Bill has enough powers to prevent that in future?

Rick Parry: I think so. I do not think there is any reason to be doubtful at this moment, and within football we have been refining the tests that we apply over time. A decade ago, I think the tests were probably inadequate and overly simplistic. We have definitely refined them. We take a closer look at people’s track records, and I am not fearful that the regulator will be unable to do the same.

[Brendan Clarke-Smith (Bassetlaw) (Con)]

Q Gentlemen, one thing that has been raised is international investment and creating a level playing field with other leagues. Do you still have any particular concerns there? One of the previous witnesses we interviewed suggested that, at the moment, what we are doing is very light touch. Do you think that is still the case? Richard, perhaps I could ask you that first.

Richard Masters: As you know, professional football exists in a global marketplace, and the Premier League is, by most available metrics, currently the most popular in the world. We want that to continue, but it is a competitive marketplace. You could not say that 20 years ago, but it is true today, and we would like it to be true in 20 years’ time. We have been able to do that by collective effort, and the clubs continue to invest in creating a really exciting football competition.

I think the key difference between the Premier League and its other European competitors is the competitive nature of it. We can talk about full stadiums, home and away fans, fantastic brands, and the history and tradition of the English game—all those things are incredibly important, but the key difference between us and the Germans, the French, the Spanish and the Italians is that you have jeopardy from top to bottom. That goes to the funding of football and the financial mechanics behind it, and the key ingredients that go towards that competitive nature and the jeopardy in English football. We do not want to damage that jeopardy at all.

In order to be able to better fund the pyramid, we have to be successful, and to be successful, we have to be able to continue to find football-led solutions to the problems we have. The regulator has a specific role, which is to step in when individual clubs have problems and to oversee certain aspects of the game, but I still believe that football needs to be football-led. The three bodies—or four, if you include the FA—can do a good job of that in the future, in the same way that they have done a good job of it so far.

Football Governance Bill (Second sitting)

Matt Rodda Excerpts

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[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.

[Matt Rodda (Reading East) (Lab)]

Q You have spoken so eloquently. I am looking at this from the perspective of my local club Reading, which has had very serious problems with the current owner. The previous owner was absolutely wonderful in creating a positive culture. My question is: how do we find more owners with the right intentions and motivation, and help them to play a bigger role?

Sharon Brittan: I completely agree with that. Even in the five years that I have been involved, I have seen better owners coming into the game because the EFL has changed the rules. You cannot having a bankrupt owning a football club, and you cannot have somebody who has been struck off; the rules are much more stringent. I do not want to talk about the numbers, and I do not like talking about them, but the problem we have is that in five years we have put a huge amount of money into the football club. Any sensible businessperson probably would not do that, because they would look at it and say that it does not make any financial sense.

Ian Mather: In direct answer to your question, I would say that it is the numbers. If an owner can look at a football club and think, “Broadly, if I run that club properly and well, with the income I get from running a football club and the sustainability payments from the Premier League, I can roughly break even. I may want to be ambitious and build a new stadium here, or improve the training ground, but broadly I can balance the books.” If you cannot balance the books, or worse, the books get more unbalanced each year, you are reducing the pool of people who can buy into being a football owner.

Sharon Brittan: I agree with Ian.

[Damian Collins]

Q I think I have to ask this, given everything you have said in your very compelling evidence. How has Ipswich Town managed to do what you called the “near impossible”?

Sharon Brittan: Isn’t it fabulous? That is what I love about football: the near impossible can happen.

Ian Mather: I would also answer it by saying that a North American pension fund has provided—

Sharon Brittan: I did not want to say that!

--- Later in debate ---

[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.

[Matt Rodda]

Q To return briefly to the point that Clive made, there is enormous strength of feeling among many fans and clubs about the replays. What is the process for reviewing that decision?

David Newton: The decision has been signed off, effectively, by the FA board for next season. Indeed, the fixture calendar is so full that the spare slots, if you like, have already been allocated. At the moment, there is no review of that position. We are obviously aware of the strength of feeling, and I hope I have gone some way towards explaining how we take that decision. We take the custody of the FA cup extremely seriously.

[Matt Rodda]

Q What will you be able to do for seasons in the future?

David Newton: In fairness, I do not think the calendar shows any let-up. As has been mentioned, we have a FIFA Club World cup involving 32 teams in the summer next year. That will continue to sit in the calendar, as will the expanded Champions League format, with extra midweek matches. We still operate three domestic cup competitions, which all have to be accommodated as well.

--- Later in debate ---

[Brendan Clarke-Smith]

Q I want to ask quickly about grassroots football. My constituency has benefited from the Football Foundation, as I think most people’s around the table have. What positive role do you see this as having in encouraging more partners to work with organisations such as yourself? Is the Independent Football Regulator in a good place to help drive that, or is this again something where we are looking at the overarching security of other organisations that are going to be the ones pushing it? Is there a role for the football regulator to do more with your organisation?

Robert Sullivan: To be honest, I am not sure yet. I would be cautious about passing a judgment on that. If you pull back a level, what does the Football Foundation need? It needs two things really: it needs a very healthy and thriving elite end of the game that generates lots of excessive revenues that can be distributed back into the grassroots; and it needs the grassroots of the game to be excited, growing and wanting to have lots of kids getting out there and playing. To answer in a very broad sense, if the regulator is allowing that ecosystem of English football to continue to thrive—not only at the top end with more sustainability, and all the things that people talked about today, but with the game still generating crazy passion and demand from kids getting out there— that is brilliant for English football and the Football Foundation. There are going to be lots of people needing great pitches, and we are going to get out there and give everyone a great place to play.

[Matt Rodda]

Q Do you think the Bill does enough at the moment to ensure that fans have a meaningful say on what matters most to them? Also, are there areas where you would like to see the Bill go further, with further say for fans?

Niall Couper: I think there are gaps. We heard of one earlier, about the club heritage and the name. To my mind, these are simple amendments. Making sure that there is a proper fan consultation about a proposed name change is, to me, important. You strike on a cause that is close to my heart—I am an AFC Wimbledon fan. Today, 14 May, is a significant day for me: in 2002, the three-man FA commission began its deliberations about moving the club to Milton Keynes. I have had loads of messages about that—they all knew I was coming here—and for me, making sure that a club cannot move from its area is fundamental.

At the moment, that is not clear enough in the Bill, and I think it needs to be made fundamentally clear. It talks about financial considerations still being part of the conversation. As a Wimbledon fan, it was the financial considerations of a three-man commission that allowed us to lose the club. We would describe it as our place in the Football League being given to a town in Buckinghamshire. Effectively, that is what happened. For any other club, that needs to be addressed, and fans need to have their voice heard first in that particular conversation. At the moment—I will use this phrase, although I was trying desperately not to say it—the unintended consequence of the Bill is that it legitimises franchising. That is the bit that needs a red line put through it.

[Matt Rodda]

Q I will ask a second question about grassroots football. I was thinking about this, because I have two kids who used to play and had regular problems with waterlogged pitches and other issues: how would you describe the state of grassroots pitches and provision across the country?

Robert Sullivan: It is a huge challenge for the game, but we are definitely on an upward trend. For the first time, we have been able properly to map and record, and to improve grass-pitch quality by use of digital data. That has been a big change, because with 30,000 grass pitches in England, it is hard to get out to reach them all, but we can now use technology through phones, so we can assess those pitches remotely and help clubs to improve them, to do the simple things, and give them funding that can address some of the waterlogging situations.

We now have more than 8,000 of what we have rated as good-quality grass pitches. That is a big step forward on where we were five or 10 years ago, but we are perhaps only halfway through that journey. We are going to do everything we can to escalate that number as quickly as we can, and to build many more artificial grass pitches, because of the difference. On a good grass pitch that does not waterlog, we get maybe six hours of play; and on a good artificial pitch, we can get 60 hours of full-on community usage for kids, disability or vulnerable groups, older men who are coming for dementia classes, and whatever it might be. Those artificial grass pitches, which is what we want to invest in, are the game changers that will help us to support that growth in the women and girls’ game and all other parts of grassroots football.

[Dame Tracey Crouch]

Q The original fan-led review had a transfer levy recommendation that was proposed to the panel by somebody from the Premier League. The Bill was not necessarily the right place to include that proposal but, presumably, given the fact that it was designed as a policy that would invest in grassroots sports, certainly further down the pyramid, is that something that you would still at some point be interested in seeing?

Niall Couper: Yes is the answer. I think it is something that we need to look at, considering that—in my mind—a lot of it depends on what happens with this Bill. It is important, because it is about redistribution and giving support to a lot of the clubs that are trying to do the right thing in the right way. Again, to go back, it needs to be caveated to make sure that it is ringfenced where possible to support the grassroots pitches.

I talk to clubs like Tonbridge Angels, Maidstone United, Sutton United and so on. Those clubs will talk about wanting to have the 3G pitches and their training pitches in there so that they can be put to community use—those 60 hours a week. That is really what they want, because that is where they see the big growth. That is where your club becomes a community hub. That is where it makes the difference.

For me, the money that you talk about from the transfer levy, if you give it to those sorts of pitches and so on, is where you can make a real fundamental difference. Where it will go, I do not know, Tracey. It is one perhaps that we can talk about once we are post the Bill. It was something that I was really excited about when you proposed it—it really appealed to me. It is something that came a bit from left field, but it is something that we should look at in the months and years ahead.

Post Office (Horizon System) Offences Bill

Matt Rodda Excerpts

2nd reading
Wednesday 20th March 2024 Commons Chamber

[Paul Scully]

My hon. Friend makes a really good point. To follow on from the intervention from my right hon. Friend the Member for Haltemprice and Howden, it is difficult for us as parliamentarians, and doubly difficult for Government Ministers, to speak with authority on behalf of a public organisation—rather than the private sector, which we do not speak on behalf of—without necessarily having all the facts, because there is only so much we can drill into.

Obviously, we want to right the wrongs of the past and make sure as best we can that the people’s situations are restored so that they can have a future for themselves and their families. There is also the case of the Post Office itself. The Post Office still has more branches than the banks and building societies put together. I know that there have been closures in certain areas—that is a whole other debate, perhaps for Westminster Hall—but none the less, the Post Office has a massive impact on people’s lives, especially in rural communities. We must not forget that when we are looking at the Post Office, its brand and its overall aim. This is not a reflection on the current management or anything like that. We have to give the Post Office a future.

[Matt Rodda (Reading East) (Lab)]

I thank the hon. Gentleman for his work on this issue and other issues protecting local post offices and looking at the range of services they can offer to the community. Has he had any further reflections about the role of post offices in communities? I also want to thank him specifically for the work he did to support my constituency. Perhaps, now that he has left the Government, he can tell the House his own thoughts on post offices as part of the local community and the potential for new services to be based in them.

[Paul Scully]

I appreciate the hon. Gentleman’s kind words regarding when we worked together on his constituency issue. We ask the Post Office to do a lot of work of social value and economic value, and those often conflict. It is difficult to get that right. We cannot ask the Post Office to turn a good profit as if it was just another bank, as well as to do the things we sometimes expect as parliamentarians, especially when we talk about our own constituencies and those in more rural areas. That is something we have to give careful consideration to. My original point is that while we are righting the wrongs of the past, we have to remember that this is an important organisation for our country and our constituents and we have to give it a future as well.

--- Later in debate ---

[Mr Jones]

I agree totally with my hon. Friend and I pay tribute to him. In all these debates over the years, he has always been on my right hand side arguing for his constituents. I thank him for his work and his persistence.

My hon. Friend also raises a bigger point. When the state get things wrong—badly wrong in this case, but he mentions other cases as well—it goes into tortoise mode and says that it cannot be wrong. Well, it has been wrong. I am not making a party political point here, because is not one. Across the House we need to come up with a system of dealing with these cases, in terms of the transparency of information that we need to get out of the system and of having a swift compensation system for putting things right. We need to work on that in the next Parliament on a cross-party basis. As the Minister said earlier, he was involved in a number of cases that involved not the state but the private sector, but they were very similar. This is something I would certainly like to work with colleagues on.

I also want to thank the Minister for his work. I would not describe him as a show pony in politics; he is the steady shire horse of this place. He is solid and determined and he pushes on, even when obstacles are put in his way. I also give credit to him for the cross-party work he has done. He has not seen it as point scoring. He has worked closely with my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) and other Members across the House and I really appreciate that. I would just say to any new Ministers after the election: if you want two examples of how to do the job, the hon. Member for Sutton and Cheam and the Minister are it and they should take credit for that.

Today’s Bill is historic. We are doing something very unusual and there is a delicate balancing act to be struck between this place and the judiciary. I understand that. I always respect the judiciary, but I also reflect on the fact that it has some questions to answer in this process. We had the trade union movement for the lawyers earlier on when the hon. and learned Member for Bromley and Chislehurst (Sir Robert Neill) and the right hon. and learned Member for South Swindon (Sir Robert Buckland) were on their feet—it would not be a debate without that lobby coming in—but the judiciary needs to ask the question: how did we get into this position? There was a pattern here, and robust questions were not asked. The hon. and learned Member for Bromley and Chislehurst said that we should not attack judges, but the conduct of certain judges in some of these cases was not very sympathetic to the victims, and we need to reflect on that. I do not think this place should interfere with the judiciary. The instant reaction that this is a fight between Parliament and the justiciary is wrong, but in this case the judiciary got it wrong.

The other area that desperately needs to be looked at is the use of computer evidence in court cases. At the moment, there is no reference to computer code in law. After the election, or sooner, we need an urgent review to reflect how computers are not static machines. They might be machines, but their software and code are ever changing. That is important.

I support the current approach, although I accept that some people are not comfortable with it. As the Minister said, only 103 cases have been dealt with so far, so I will explain why I am committed to this approach. Last year I had a phone call from an individual from the north-east—I do not want to identify him—who said that his friend’s wife had been prosecuted and that he thought it might be a Horizon case. I said, “Get him to speak to me, or I can go to see them.” It took quite a few months for him to persuade his wife to meet me.

It was only when I went to see the victim in her small council flat in the north-east of England that I understood why such people never come forward. This woman had run a successful sub-post office, but she was prosecuted by the Post Office. She should have a comfortable retirement and a highly respected name in the local community in which she still lives, but she does not. She is traumatised by her experience, and she was very reluctant to see me. She was terrified and kept asking, “My name won’t be in the paper again, will it?” I said, “No, no one will know what you have told me.” She would never have come forward to go into a court process. I have subsequently spoken to the family to reassure them that, if the Bill is enacted, the victim will not go to court. This woman is terrified. Her good name will be cleared, and she will have access to the compensation that she rightly deserves.

That is just one example, and there are numerous others. People ask whether the Bill is a messy way of doing it, but I do not think it is, because people like that victim would never have justice without it. Some people might be uncertain about what we are doing, but I am not. These are unique circumstances, and I do not think they set a precedent. We can ensure that these people have their good name restored.

When the newspapers have said that a sub-postmaster stole money that they did not steal, it takes a lot for them to stay in their small community. This happened 20 years ago and the victim is still traumatised, which is why this Bill is the right approach.

I welcome last week’s announcement that fixed awards will be offered through the Horizon shortfall scheme. The advisory board was pressing for this, and the Minister championed it too. These awards are a good way of ensuring that we deal with cases speedily. I read the Select Committee’s report, and I disagree on the time limit. We need to settle the straightforward cases—they are not all straightforward, but some are.

The Minister, like me, does not want to pay lawyers. It will be better if we can avoid paying lawyers by ensuring that the compensation goes to the victims, and fixed awards are the way to do it. I consider this to be like a bucket, and we need to take out the simpler cases. We then need to consider the more complex cases, which will take time. It is easy to say that officials are deliberately slowing down the system, but I do not believe that at all. Even the lawyers representing these people need time to do it. As the Minister knows, some cases will be very expensive, more than the £600,000 compensation award. This is the right approach.

[Matt Rodda]

My right hon. Friend is making an excellent and powerful speech, and I particularly concur with his description of the enormous challenges that many victims face. Does he agree that the nature of any review or policy development is particularly important? If we can find a way to speed up the compensation by dealing with the slightly less difficult cases first, it could benefit everyone and may reduce the costs to the Government and the public.

[Mr Jones]

I think it is. In fairness, the Minister wants to get these cases done quickly, as does the advisory board. One controversial thing is that some people will get a little more money than they lost. I am comfortable with that, because I would sooner they get the money than it go to the lawyers or the process be dragged out. If we can get those cases dealt with speedily—some progress has been made on that—we can then get the effort and force put into sorting out the more complex ones.