PARLIAMENTARY DEBATE
Football Governance White Paper - 23 February 2023 (Commons/Commons Chamber)

I take your point on board, Mr Deputy Speaker, but please forgive my enthusiasm for this great announcement that we are making today.

Let me start by offering my deepest condolences to John Motson’s family. John had an incredible impact over his 50 years working at the BBC, and his legacy as a legendary commentator will not be forgotten.

With your permission, Mr Deputy Speaker, I will make a statement on the Government’s reform of football governance. As I am sure many Members on both sides of the House will agree, in this country football is more than just a sport. It is part of our history, our heritage and our national way of life, bringing communities throughout the country together week in, and week out. We invented “the beautiful game”, and the Premier League and the English Football League are true global success stories, with matches exported and watched in 188 countries across the world and streamed into 880 million homes.

Despite this global success, however, it has become clear in recent years that there are systemic issues at the heart of our national game. Since the premier league was created in 1992, there have been 64 instances of clubs collapsing into administration. Some are historic clubs that we have lost forever, taking with them chunks of our history and heritage, and leaving huge holes in their communities. Bury football club is one example. Over its proud 134-year history, it managed to survive world wars, countless economic cycles and 26 different Prime Ministers, but it was driven to the wall by financial mismanagement, which damaged the local economy and left behind a devastated fan base. Those fans are still coming to terms with the loss of their beloved club. But it is not just Bury that has been affected: the same is true of Macclesfield Town, another century-old club, and of AFC Rushden & Diamonds. Countless others, such as Derby County, have been driven to the brink after stretching far beyond their means.

Despite the global success of English football, the game’s finances are in a parlous state. The combined net debt of clubs in the premier league and championship is now around £6 billion. Championship clubs spend an unsustainable 125% of their revenue on player wages alone and some clubs face annual losses greater than their turnover. Many, if not most, club owners are good custodians of their clubs, but all too often we hear of flagrant financial misconduct, unsustainable risk-taking and poor governance driving clubs to the brink. Owners are not just gambling with fans’ beloved clubs, but threatening the stability of the entire football pyramid.

Aside from the financial roulette putting clubs’ futures at risks, this is also about the way that fans have been treated. Over the past two decades, too many lifelong supporters have been let down, ignored or shut out by their own clubs. That has included the decision to move their stadium to a different part of the country, as happened with Wimbledon FC, or to change kit or badges without fan approval, such as when Cardiff’s owners tried to change the traditional kit of the Bluebirds, from blue to red. We also saw it with the European super league, when a small group of club owners planned, without any engagement with their fans, to create a closed-shop breakaway league, which goes against the very spirit of the game.

Football would be absolutely nothing without those fans, and yet too often their voices have not been heard. But we have heard them. That is exactly why I made sure that my first meeting as Minister for sport was with fan groups. I heard at first hand how poor ownership and governance can leave clubs at the mercy of careless owners. In our manifesto, we committed to a root-and-branch review of football, with fans at the very heart of that review. That review, excellently chaired by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), highlighted a number of key issues that urgently needed resolving in football, and today we are acting on its recommendations, with the most radical overhaul of football governance since the rules were first invented in a London pub back in 1863.

With this White Paper, we will do five key things. First, we will bring in a new independent regulator to make sure that clubs are financially resilient. The regulator will operate a licensing system for all clubs in the top five tiers of English football. Those clubs will have to show that they have sound financial business models and good corporate governance before being allowed to compete. They will also be tasked with ensuring the stability of the wider football pyramid.

Secondly, we will strengthen the owners’ and directors’ test, to protect clubs and their fans from careless owners. There will be greater tests on suitability and on the source of funds. Thirdly, we will give fans a greater say in the running of their clubs. This will include stopping owners from changing vital club heritage, such as names, badges and home shirt colours, without consulting the fans first. Likewise, clubs will have to seek regulator approval for any sale or relocation of the stadium, and fan engagement will be a crucial part of that process.

Fourthly, we will give the regulator the power to block clubs from joining widely condemned closed-shop breakaway leagues, such as the European super league. Finally, we will give the regulator fall-back powers over financial redistribution. Supporting the pyramid is crucial and this Government have already committed £300 million of funding to support grassroots multisport facilities in England by 2025. When the financial health of the football pyramid is at risk, and football cannot sort out this issue, the regulator will have the power to intervene and protect the game. In short, we are protecting the long-term success of our national game, and restoring fans’ position at the heart of how football is run.

I want to reassure Members that this is not about changing the fundamentals of the game, or imposing unnecessary and burdensome restrictions on clubs. In fact, we would not naturally find ourselves in this space—having to regulate an industry that has enjoyed huge success without Government intervention over many years. However, despite the scale of the problems, and the huge harm that those problems can cause, the industry has failed to act, despite repeated calls for reform, so we have been forced to step in to protect our national game. This is about taking limited, proportionate action to maintain the premier league’s position as the strongest league in the world. It is also about safeguarding clubs across the country, from the biggest to those single- club towns where football sits at the very heart of the community.

This Government have proven time and again that we are on the side of fans. We committed to this review in our manifesto. We stepped in during covid to make sure that English football was one of the first leagues back across Europe. We got fans back into stadiums quicker than almost any other country, and we took action under competition law to support broadcasting revenues during one of the most difficult periods that sport has ever faced. That secured £100 million of funding for the game. We stepped in once again to block the European super league—a competition no fans wanted. When fans have needed us, we have been in their corner. Now we are putting them right back at the heart of football, and I commend this statement to the House.

I am grateful for the support that the hon. Gentleman has indicated today. We all recognise that action needs to be taken, and I am grateful for that support from the Opposition. I accept that time has been taken, but it is important to put on record that these are not simple matters. They are complex, and it has been important for us to ensure that we get this right. I have not been sitting on my hands; I have dedicated considerable hours to this, building on the extensive work in the review led by my hon. Friend the Member for Chatham and Aylesford.

The hon. Gentleman is right to talk about the finance side of things, and of course the regulator will have the teeth it needs to ensure support for the whole of the game. On fan voice, although we have not gone down the golden share route, the voice of fans is front and centre in this White Paper. It will basically achieve exactly the same thing, and it will be a condition of a licence for clubs to compete in English football. I am extremely grateful for the offer of support on the Bill, and I look forward to working with the hon. Gentleman as we try to progress it through the House.

May I again put on record my thanks for all the considerable work done by my hon. Friend in this area? She is right to highlight the fans, and they have been at the forefront of my mind in all the meetings I have held to discuss the White Paper. I agree that there is no threat to competition within the White Paper. If anything, it will bring about a great deal of confidence, and I hope we will see even more investment—dare I say from the right people? On the time frame, we will be doing a short, targeted consultation following the publication of the White Paper. My vision is to get on with this as quickly as possible, and I know that the Secretary of State shares that as far as—Members will expect me to say this—parliamentary time allows. In the meantime we are also considering the establishment of a shadow regulator to do much of the preparatory work, so that once it is enacted, the regulator can get on with the work straightaway.

I am grateful to the hon. Gentleman for his work and for his extensive interest in this important area. He is right that we have to get this right, and that the implementation of the independent regulator will be critical. He is also right to talk about the distribution. We have secured powers for the regulator to use should there not be an agreement between the football authorities. We still urge them to get on with it. They can still come up with a deal, and I sincerely hope they do. As we progress towards legislation, we will be looking for the steer he mentions so that we can get on with the deal that everyone expects and for which they have waited far too long.

I thank the acting Chair of the Select Committee. He is right to point out that the premier league is the most successful league in the world. We were careful not to do anything to damage it as we developed our thoughts in the White Paper. He is right to talk about the importance of grassroots sport. In every meeting, I have urged the EFL, the Premier League and others to come to a deal and to get the distribution of payments sorted out as quickly as possible. Only when we have the regulator in place will the powers be available for a deal to be struck, but I urge the people in those negotiations to get on with it, and to get on with it quickly.

The hon. Gentleman is absolutely right. As a proud Unionist, I am more than happy to work with my counterparts in the devolved nations. If we want to have a lesson on how to deliver sustainable football, we will happily talk to our Scottish colleagues.

It is always hard to answer questions from my predecessors, but it is a privilege to do so. My hon. Friend is right to talk about the financial support needed by the whole pyramid. I can assure her that we have made sure the provisions of the White Paper and the powers of the new independent regulator will be there if there is no agreement, but I still believe that football can come up with a solution, and it needs to do so quickly.

If we had not published this White Paper, and if we did not have the intention to introduce an independent regulator, there would be no option for bringing the parties together to make sure a deal is secured. The regulator will look at the detail of the deal, and it will be able to consider issues such as the parachute payments. The independent regulator will have those powers.

My hon. Friend is absolutely right. It is important that the independent regulator has access to that real-time information. In preparation for legislation, we are considering exactly what we need to do by learning lessons from other regulators, such as the Financial Conduct Authority, to ensure that the independent regulator has the power to look at the proper figures on owners’ wealth and the source of that wealth. That will give confidence and stability to the whole football pyramid.

I absolutely can give that guarantee. One of the four thresholds to securing a licence to compete within English football will be the fan interest—that will be an important element. Those clubs will have to demonstrate that they are regularly engaging with their fans, and talking about the strategic plans they may have for the club and other important aspects, such as the club heritage. Throughout this, the fans need to be front and centre of everything the regulator is thinking about.

I thank my hon. Friend for her question and she is right to highlight the great experience that so many fans at Forest Green Rovers have each week. The independent regulator will primarily be focused on financial stability, but I assure her that, whenever I have opportunities to raise issues such as sustainability, I always do so. Of course, I would be more than happy to meet as she requests.

I assure the hon. Lady that for me grassroots football and grassroots sports are really important. It is a force for good in so many ways. It is important in increasing people’s activity levels, it is good for their mental health and it has so many other benefits. That is why we have already committed nearly £300 million for the provision of grassroots sports facilities. We will continue to work with the Premier League, the EFL and others across sport to encourage more investment in grassroots facilities, because we recognise the huge benefits that brings to the population as a whole.

My hon. Friend is right to raise that important issue, which was of course an important area of work within the review. I am pleased to say that we have set up an independent review of women’s football. We can all celebrate the wonderful expansion in the popularity of women’s football that we have seen since the Lionesses’ tremendous success. I have been meeting colleagues within the Department for Education to talk about the provision of sport for women and girls, because we recognise that that is an important area of work. I am looking forward to that review concluding and providing its report. Obviously, we will give our comments on it once it is published.

I thank the right hon. Gentleman for his question. We are going to look at all these issues in preparation for the legislation and we will, of course, look at the issue he mentions as part of the consultation that will happen following the publication of the White Paper.

Absolutely. This is why we will make sure that the independent regulator is backed by legislation; we want to ensure that it has the powers that are needed. We need to ensure that it has the sanctions needed so that it can do the important work that we are commissioning it to do. My hon. Friend is right to highlight those specific areas and as we develop the legislation we will ensure that that aspect is as strong as possible.

I have mentioned, time and again, in the many Westminster Hall debates in which the hon. Gentleman has appeared that leagues such as those he mentions are incredibly important. I see my job as dealing not just with the professional side of the football pyramid; all those amateur clubs are incredibly important, as they do so much good work in our communities. Supporting them will be incredibly important and they will feature heavily in the sports strategy that we will develop very soon.

First, I pay tribute to my hon. Friend and my hon. Friend the Member for Dudley South (Mike Wood), who have been diligent in campaigning hard on behalf of their local fans. I would be more than happy to meet them. As I said, I ensured that my first meeting as Minister was with fans, because I wanted to hear their voice loud and clear, and I am glad that through this White Paper their voices will be heard loud and clear by the regulator.

I am glad the hon. Gentleman referred to Kevin Miles and all those at the FSA. They were the group I was talking about a few minutes ago and I was particularly struck by some of their horrific stories, including that of Blackpool fans who had to boycott their own club for five years, which shows the huge sacrifice they were making.

Absolutely, there is a long list. I can assure the hon. Gentleman that I am actively looking at the shadow board and, while I cannot make that commitment right now, I understand the merits of our having one.

I know some within football are somewhat critical today of our publishing this White Paper and our intention to establish an independent football regulator, but they had their chance. They have had many opportunities to sort this out and have failed to do so. It is precisely because of the examples that my hon. Friend rightly points out and the difficulties that so many fans have experienced in the past that we have stepped in and we will sort this out.

The hon. Lady raises an important point. While this is not about a foreign policy, we will ensure, first, that we know who the owners actually are—I have had examples of some clubs that have no idea who actually owns the club—and, secondly, that that person will have to go through a vigorous fit and proper person test, so we can examine the points that I think all the fans want examined. Fans want to know that owners have the best interests of their clubs at heart, just as they do.

I congratulate my hon. Friend and pay tribute to her for the enormous amount of work she is doing on behalf of her constituents and the fans at Southend. She has been relentless in pursuing me on this issue and I am sure the fans will be extremely grateful to her for that. She is absolutely right: the independent regulator will be monitoring the situation in each club at a much earlier stage so that there can be intervention, if necessary, before we get to the crisis point, to put those clubs on a stable footing so that they can be there not only for the people who enjoy them today, but for their children and grandchildren.

My hon. Friend is right that it is disappointing that we have had to step in here to introduce the regulation. That is why we have taken time. We are ensuring that it is proportionate. We do not want to put too much pressure on the clubs that are lower down the league, but we need to ensure they are run properly. He is asking me to make a spending commitment; I think my colleagues in the Treasury would be extremely cross with me if I committed to that, but I am more than happy to meet him to discuss his proposal.

Bill Presented

Holocaust Memorial Bill

Presentation and First Reading (Standing Order No. 57)

Secretary Michael Gove, supported by the Prime Minister, the Chancellor of the Exchequer, Secretary James Cleverly, Secretary Suella Braverman, Secretary Kemi Badenoch, Secretary Gillian Keegan and Secretary Lucy Frazer, presented a Bill to make provision for expenditure by the Secretary of State and the removal of restrictions in respect of certain land for or in connection with the construction of a Holocaust Memorial and Learning Centre.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 254) with explanatory notes (Bill 254-EN).