Football Governance Bill

Tracey Crouch Excerpts

2nd reading
Tuesday 23rd April 2024 Commons Chamber

[Dame Tracey Crouch (Chatham and Aylesford) (Con)]

I rise, unsurprisingly, in support of the Bill. I am pleased to see you in the Chair, Madam Deputy Speaker, because I know you take a keen interest in Doncaster Rovers, and although you are not able to speak in the Chamber on these matters, you have been a fine advocate for its views during this process. May I congratulate the hon. Member for Bristol West (Thangam Debbonaire) not just on completing the marathon on Sunday, but for standing up and sitting down without an audible “oof”? Two days after, that is pretty commendable.

I thank the ministerial team and the long-suffering officials at the Department for Culture, Media and Sport who have worked exceptionally hard on bringing forward this Bill. This detailed piece of legislation has been well worked through to ensure that it moves smoothly through Parliament and is in place as soon as possible. I also pay tribute to those who have campaigned on this issue for many years. I may have chaired the fan-led review, but the truth is that a blueprint for reform was created long before. I went down a Hansard rabbit hole, thanks to James in the Official Report team, and read some fabulous references from days past, including a glorious contribution from the much-missed Alan Keen in 1997 that highlighted:

“The Premier League and the Football Association govern themselves with no appeal beyond their confines.”—[Official Report, 27 June 1997; Vol. 296, c. 1094.]

Given last week’s furore over FA cup replays, that still seems apt.

There are too many to list, but the likes of Richard Caborn, Andy Burnham, my hon. Friend the Member for Folkestone and Hythe (Damian Collins), Kevin Miles and his team at the Football Supporters Association, David Bernstein, Gary Neville, Henry Winter and Peter Crouch—no relation—have been vocal campaigners for change. The truth is that for many years, Sports Ministers, including me, have stood at the Dispatch Box with crisis after football crisis and pleaded with the authorities, “Reform yourselves, or Parliament will”, and here we finally find ourselves.

The Secretary of State has already set out the context of this Bill. It is always important to remember that the Premier League asked the Government to intervene when six clubs sought to join the European super league. The pleas led to the then Prime Minister Boris Johnson promising a “legislative bomb”. That came on the back of high-profile financial problems in the football pyramid, including the demise of Bury, which my hon. Friend the Member for Bury North (James Daly) has spoken about many times in this Chamber. The fan-led review was the outcome of the request from the Premier League and the regulatory failings to prevent clubs from disappearing from our football landscape and the subsequent massacre of the community ecosystem that supported them. The review was a deep dive into the issues, and I shall remain forever grateful to those who participated in it.

In preparation for this speech, I re-read some of the submissions to the review. It was interesting to read in its submission that the Premier League thought that there could be a use for an institution with “step-in powers” and “a capacity to intervene” should it

“manifestly have failed to uphold rules”.

The submission went on to say that

“such a body could also set the general principles required for standards for governance and transparency, including for financial regulation; strengthen the independent operation of the OADT; support the principles of standards for owners’ responsibilities as custodians; and protect decision making over key issues for fans”.

The same paragraph continued:

“Provided it operated in a proportionate way that respected the benefits of permitted well-run clubs and leagues to be nimble in their decision making and encouraged to innovate and take properly assessed risks, then this could make an important and positive contribution to maintaining and enhancing what is the world’s most dynamic and attractive football environment”.

This Bill is all those things, shaped brilliantly to reflect the words of the Premier League itself about what a great regulator could look like. It leaves many of us scratching our heads as to why the Premier League has spent the past few weeks lobbying to stop the Bill progressing.

I will say a few things about some of the specific clauses in the Bill. Clause 3 sets out to define an “ultimate owner” of a club. That is important, as part of the challenge in the past has been that that has not been as clear as it should. Clauses 5 to 8 set out the objectives and principles of regulation, making clear that the regulator should be nimble in its approach and can oblige good governance and real-time interventions, but is not obliged to guarantee zero failures. However, the Bill makes it clear that the regulator will be time-efficient, consistent and transparent. That is a departure, some might argue, from the current regulation.

Clauses 12 and 13 are key to how the regulator will evolve. Good guidance will be essential to its success, as we have heard in contributions and interventions. I already foresee strong guidance required on the role of fan advisory boards and on fan engagement, such as that set out in schedules 4 and 5, along with certain technical challenges, such as pitch ownership if that is different from club ownership. Timely but thought-through guidance done in consultation with key parties will be much needed if the regulator is to hit the ground running. Equally important is the need not to overload on guidance and create regulation by proxy. The whole point of the regulator is to improve governance and to be open and transparent, yet agile in relation to change.

Clause 26, and in particular subsections (7) and (8), which I refer to in my notes as the Martin Samuel measures—Martin is a journalist, but he would regularly ask me whether the honesty and integrity test would prevent Boris Johnson from running a football club—clarify that the test is defined by crimes under the Serious Crime Act 2015. Offences covered by fixed penalty notices are therefore not relevant, which will be a relief to those involved in football who might have been issued with a speeding fine or other such fine.

Clause 37(2) relates to the regulator having regard to foreign and trade policy objectives. That has become a slight distraction from the argument on the independence of the regulator. With that in mind, I suggest an amendment to the clause to change the word “must” to “may”. It is boringly technical to the outside world, but incredibly important if we are to impress on it the value of the regulator’s independence.

Part 5 of the Bill is an important aspect for the domestic fan base, covering prohibited competitions and the protection of club heritage, including ground disposal. For the fans, it is the soul of the Bill. When we published the review, I explained that its order was crafted like a good album. We put all the chapters about governance first, before we got to the redistribution of revenue. The way I see it is that the Premier League gives a substantial amount of money to the wider pyramid, but without the necessary structures of good governance. It is akin to having the heating on with the windows open. Putting in proper regulatory structures should give the Premier League and its clubs confidence that its money is going to good owners with proper business plans in place and real-time financial monitoring that gives significant protection. The Bill follows that same mindset. We get the structure right, then we distribute the finances, and that is what part 6 of the Bill does.

On part 6, I have some key points to make. First, there is an argument to be had on whether the regulator should have the ability in principle to trigger the backstop. I am sympathetic to that, but it needs to be done carefully. Secondly, although colleagues have focused on parachute payments, clause 55 is drafted so broadly that both domestic and international broadcast revenue could be deemed “relevant revenue” and available for distribution. That is not the case at the moment. I am slightly surprised that the Premier League has not included that in its list of things that it wants to amend. It is important that we seek to clarify precisely what is considered “relevant revenue” at the earliest opportunity. Thirdly, it is essential that we define, either on the face of the Bill or at some point in parliamentary proceedings, the definition of “material change”. What might seem material to the EFL might not seem material to the Premier League.

Fourthly, the powers of the regulator will extend to the national league, as presumably will the redistribution of funding. However, I note that the National League has said that it opposes the regulator. It is in the gift of the Secretary of State to define the reach of the regulator, so she could, if she felt it necessary, remove the national league from the Bill, and in so doing, remove it from the redistribution of finances and instead allow it to continue its existing arrangement via the Football Association.

It is right that we put these powers in the Bill, but it is disappointing that, two years on from the review, the football authorities have not done a deal on distribution. The solid recommendations in the review would have moved this debate much further forward than it is now, but they were ignored, so here we are, with the regulator requiring powers to intervene that were promised over and over again.

Clause 94 means that all fines received are paid into the consolidated fund. Although it may not be popular with the Chancellor, I propose that, in order to ensure that the regulator is deemed independent of Government, that clause be amended so that moneys raised above and beyond the regulator’s costs are diverted directly back into grassroots football, which I am sure would be much appreciated as we look to continue the growth in participation and investment in facilities in the run-up to and long after the Euros in 2028.

I do not wish to test the tolerance of the House, Madam Deputy Speaker, so I shall wind up. I love football, and although the Premier League continues to cast me and others who support the Bill as the enemies of success, investment, growth and international competitiveness, I would argue that quite the opposite is true. The premier league is one of our finest exports, and nothing in my review or in the Bill changes that. Instead, the Bill protects the pyramid from the vulnerabilities and fragilities that have challenged football over the years. It protects football clubs from owners who forget that they are merely custodians of something greater than a trinket. It serves to protect fans, clubs and entire communities from losing their heart and soul. For those reasons, I hope that the whole of Parliament will come together to support the Bill and get it into statute as quickly as possible.

[Several hon. Members rose—]

--- Later in debate ---

[James Sunderland (Bracknell) (Con)]

It is a huge privilege to speak on the long-awaited Football Governance Bill. Not only is this a matter of great importance to sports fans across the UK and beyond; it is also a personal passion and I commend everybody that has been involved in getting the Bill this far. Locally in Berkshire we have a proud football pedigree. Reading FC is the only league club in Berkshire. It has a proud history and has done brilliantly this season to survive in league one against all the odds. In my constituency, Bracknell Town and Sandhurst Town have also enjoyed strong seasons, and across the border in Hampshire, Aldershot Town are back on the map after their most exciting season for years. Well done to Tommy Widdrington and his players. I was at the Dagenham game on Saturday, which was brilliant. It was a pity that Dagenham did not quite make the national league play-offs, but next season will be even better.

As the father of two young sons who play to a decent level, I know that better regulation of the game is essential to their future, and to the future of all our clubs. This is the beautiful game, and it does need better regulation to ensure that football always comes home. We know what the Bill does: it seeks to establish an independent football regulator, and includes provisions that seek

“to protect and promote the sustainability of English football”

for the benefit of fans and local communities. That is very important, but I say to the Minister that regulation must be light-touch. Given the pre-eminence of football in the UK, we must not throw the baby out with the bathwater by inadvertently making the Premier League, the English Football League or the national league less attractive to owners, potential investors, the media or the fans. As we know, the Premier League is also the world's leading football brand, and is worth billions to the UK. If it ain’t broke, please don’t fix it.

Regulation, then, must be just enough. It must be balanced to protect clubs and fans from rogue owners, but without jeopardising the game. Recent history is littered with examples where it has gone badly wrong: Southend United, Wigan, Portsmouth, Bury, Colchester, Sheffield Wednesday, Hull, Derby and several others, but most recently and perhaps most spectacularly of all, Reading. For a fan such as me, the last few years have been galling. We have seen freefall from the premier league, 18 points of deductions, huge fines, players not being paid, bills not being settled and fans in despair, and I feel their pain. Let me put this on the record: I personally commend every single Reading fan. They have been magnificent, and they have supported the club through thick and thin. I should also mention the brilliant Sell Before We Dai group, which has been so instrumental in this regard.

Does lobbying work? Absolutely yes, and I give credit to Members as well—my right hon. Friends the Members for Reading West (Sir Alok Sharma) and for Ashford (Damian Green), my right hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald) and, in particular, the hon. Member for Reading East (Matt Rodda), with whom I have worked very closely in connection with Reading football club. Members have leant in, in respect of Reading and many other clubs. Pressure has been brought to bear on owners, and a cross-party approach really does work: politics is always at its best when MPs work together. As for the question of a pilot for the new regulator, I cannot think of a better example than Reading. The new regulator must cut his or her teeth on that particular club—and the Bill itself must have teeth, because a regulator without powers is of no use whatsoever. Let me say to the Minister that I look forward to seeing the terms of reference for the initial incumbent.

The aim of the Bill is to put fans back at the heart of the game. It is about running clubs and putting them back on their feet, and about heritage and future direction. As we have heard, it is also about sustainability, and about ensuring that we lay the foundations for clubs as we go forward in English football. It must apply across the whole pyramid, and not just to the top five leagues. It is right that new owners and directors will face stronger tests to stop clubs falling into the wrong hands, and will face the possibility of being removed and struck off from owning football clubs if they are found to be unsuitable—and much more; but the devil will be in the detail.

As for Reading football club, I have learnt several lessons this year. First, fans do matter and fan power does work. Fans have a voice, and they have used their voice this year and before in relation to Reading FC. Secondly, Reading Borough Council’s decision to list the Select Car Leasing stadium as an asset of community value under the Localism Act 2011 was a masterstroke. Dai Yongge is unable to sell the stadium, and rightly so. Lastly, I give full credit to Wokingham Borough Council for a little deed for the Bearwood Park training centre. If a club cannot legally sell its assets to another club, that club lives on. Once again, these measures have effectively stopped further asset stripping by Dai Yongge, and will lead to the successful future of Reading FC. Reading is now moving in the right direction. Bills are being paid for March, April and May; new owners are believed to be interested in the club, and we could yet survive. I thank everyone at Reading FC, and all the fans, for making this happen.

So what is not in the Bill? First, punitive action for owners who fail the test. I say to the Minister that they need not just to be banned from football but to be banned, full stop. They need to be banned from being directors, or banned by HMRC. The Bill does not address welfare provision for players. What are clubs doing to soften the blow for players who get rejected or suffer mental health issues? The Bill affects the top five leagues only; it needs to affect national leagues south, north and below because they are all worthy. The women’s game has been mentioned, but I feel strongly that the Bill needs to go further on the women’s game in due course.

Lastly, the FA cup decision on replays being stopped from round one is outrageous. It is nothing less than cultural vandalism of the world’s greatest cup competition. If the larger clubs have to play replays with the huge resources they have got, so what? I have no sympathy whatsoever. Having watched so many FA cup exploits over the years, not least at Sutton United and Woking, I do not buy the FA’s logic. These cup ties are the stuff of legends. Magic does exist in sports. Admittedly, no Government can regulate this, but if FA officials are watching, I urge them to rethink that appalling decision.

[Dame Tracey Crouch]

There is a larger point about FA cup replays. Those lucrative replays are once in a lifetime opportunities, but the fact that there are clubs that are relying on those lucrative replays demonstrates why we have a problem with finances in the football pyramid. Although my hon. Friend says that the Government cannot regulate on the matter, the Bill gives the Secretary of State some amazing powers to bring the FA cup into conversations. Does my hon. Friend agree that while it is not something that I particularly favour, it is something that can be done?

[James Sunderland]

I agree wholeheartedly. Anything that we can do in terms of the regulation is worth pursuing. I was at the Aldershot-West Brom game earlier this year, which was an incredible day out. That could have been a third round replay. The money raised from such occasions is extraordinary. While clubs cannot depend upon that lifeline, it is a fantastic bonus when it happens. Certainly, it helped Aldershot massively with its finances this year.

To conclude, I strongly support the Bill. I commend the DCMS, the Minister, the authors of the Bill and my fantastic hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch). The Bill is long overdue, but it is here now. I am also reassured that the Conservative Government have done this. It will make a huge difference to all clubs and fans—let’s bring it on.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)]

I thank all Members for their thoughtful and wide-ranging contributions, and I am grateful for learning about the first black professional footballer, Arthur Wharton, from my hon. Friend the Member for Darlington (Peter Gibson). I am pleased to hear the broad support for what the Government are proposing, and I am grateful for it. I am also grateful for the continued engagement with colleagues as we have prepared for the Bill.

My right hon. and learned Friend the Secretary of State rightly pointed out the successes of English football, and the contribution it makes to our economy and the pride of our nation, but it is important to remember why we are here today. My very first meeting when I was appointed as Minister was with fans’ groups. I heard at first hand their experiences of when it all goes horribly wrong—even to the point of having to boycott their own club for five years, in one instance. The fans felt unheard. We know that clubs are more than just football clubs. When they go into administration and are run down, the fans are obviously in despair, but that also has a significant impact on the wider community because they are more than football clubs; they are community assets.

That is why we committed to the fan-led review. Like everyone else, I want to put on record my thanks to my hon. Friend the Member for Chatham and Aylesford (Dame Tracey Crouch) and to the people who helped her, including Kevin Miles from the Football Supporters’ Association. The review was the foundation for the White Paper, and now we have the Bill today. I thank all those who engaged with us for all they have done: the FA, the Premier League, the EFL, the National League, the FSA and the Select Committee. I also want to put my particular thanks on the record to the officials in the Department. I cannot tell the House how many hours they have put in; they have been first rate and I thank them a great deal.

I want to focus, in the short time I have left, on some of the points that were raised. Many issues were raised and I will try to get through as many of them as I can, but I am happy to engage with colleagues afterwards if need be. When constructing the Bill, we have been careful to ensure that it is carefully drafted, considered and proportionate, and that it provides an advocacy-first approach; and that there is focus on the clubs where it is needed, and we make sure it is proportionate to their place in the pyramid.

A number of Members raised the owners and directors test. Too many clubs have been brought to the brink with unsuitable owners taking over, stripping them of assets and refusing to adequately fund them. That is why we are bringing in strong statutory tests to help prevent unsuitable owners at the point of entry, before they can do harm to clubs. Prospective individuals will be prohibited from becoming club owners unless the regulator has determined beforehand that they are suitable. They must pass a fitness test, which means: they have the requisite honesty and integrity; are financially sound; have passed the source of wealth test to ensure that their wealth is not connected to illicit finance; and have a plan and the resources to run the club.

Even once an owner is in place at a club, the regulator will still be able to make sure that they continue to be suitable. If it has grounds for concern about their suitability, it can test them on their fitness and their source of wealth. If it finds them unsuitable, they will have to sell the club. To prevent further harm being done to the club during the sale process, the regulator will have the powers to limit the owner’s involvement in the club, and if the unsuitable owner ultimately refuses to sell the club, the regulator will have the powers to step in and force a sale as a last resort. Strengthened tests and robust powers to remove unsuitable owners will mean that fans have the suitable owners that they deserve.

Hon. Members asked about what would happen if a club’s owners were forced to divest. Let me be clear: we hope that such a circumstance will be incredibly rare. The regulator’s objective is to promote clubs’ financial sustainability, and it will introduce tests on governance and financial oversight, which will greatly reduce the likelihood of financial distress and make football more resilient in the long term. For example, we will ensure that the regulator is able to look at a liquidity buffer, which could provide the club with time to seek a new owner, and the regulator will have the power to test an incumbent owner where it has grounds for concern about their suitability.

Almost every Member mentioned the backstop, and I repeat that we want football to come up with a deal itself; it is the best option, and this delay serves no one. We need to remember that we are talking about a commercial arrangement—businesses giving businesses money—which is why we believe it is best that football does it, but we recognise that there is no deal at the moment. That is precisely why we have put provisions in the Bill for a backstop—something to fall back on—so that they can consider the relevant revenues.

[Dame Tracey Crouch]

Does my right hon. Friend agree with my interpretation of clause 55, which is that international broadcast income is included in the relevant revenue for redistribution? That is currently not the case for solidarity payments. If it is the case, has this issue come up in his discussions with the Premier League?

[Stuart Andrew]

My hon. Friend raises an interesting point. I have had dozens of meetings with the Premier League, but as far as I can recall, I do not think that it has raised carving out international broadcast revenue in those discussions, which have always revolved around the net media revenues and the aggregate revenue received by both the Premier League and the EFL; she raises a very interesting point.

Some say that the regulator should be able to trigger the backstop right at the outset. Frankly, that would just be a frontstop, and it may hinder a deal being struck by football itself, but the Bill provides that if there is no deal because one has not been offered or one side cannot sign it because it is not a good deal, that side can ask the regulator to trigger the backstop.

Members have mentioned parachute payments, and I am always happy to meet colleagues to discuss and look at that matter further, particularly in Committee. I am also happy to organise a briefing, if that would be helpful, because it is quite a complex issue. Parachute payments play an important role in the sustainability of the system by softening the financial blow of relegation, and removing them could have adverse effects. Look at Bradford City: when they were relegated from the premier league in 2001, there were no parachute payments, and the following season they went into administration.