Professional Football (Regulation) — [Sir Nicholas Winterton in the Chair]
2:30 pm

Photo of Tony Lloyd

Tony Lloyd (Manchester Central, Labour)

As ever, Sir Nicholas, I welcome you to the Chair.

It is interesting to note that we are discussing the governance and regulation of football on the very day when three clubs are appearing before the courts of our land in winding-up hearings. Portsmouth is a premier league club that has received lots of publicity. Cardiff City and Southend United are lower down in the football family, but they are nevertheless central to the interests of their supporters.

I want to establish today that football is the supporters' game. It was built by the fans over the years, and it is the fans who have made all our clubs-from the international household names down to the smallest and seemingly least newsworthy. All are of tremendous importance to the communities and the people they serve. However, when we look at this great game of ours-a national and a global game; the beautiful game, as Pelé once described it-we have to set it in the context of the almost reckless level of management that we have seen in modern times.

I shall speak a little about two of England's finest clubs, which between them can claim credit for the constant debate that I have with my hon. Friend Derek Twigg about whether Liverpool or Manchester United are the most successful club in modern times. That does not matter today in a sense, because we can join with the supporters of both clubs. They would agree on almost nothing, but they would certainly agree that the crisis brought about by modern ownership risks the very existence of our football clubs, and that could be a tragedy.

Last Saturday was the anniversary of the Munich air crash. I am old enough to remember with awe and fondness those players who gave their lives for Manchester United. Their sacrifice lives on in the hearts of those who, tribally, are Manchester United supporters. I say "tribally" advisedly, because it matters so much to them. They have pride in the history of Manchester United, just as Liverpool supporters have pride in Liverpool, and the Portsmouth supporter has pride in Portsmouth. It is the same throughout our great footballing family. When Portsmouth played Manchester United last Saturday, the supporters of both clubs displayed the same green and yellow scarves. They had a common identity; they would have not agreed about the game that took place on that day, but they would have agreed that the reckless way in which those clubs have been managed is unacceptable.

The clubs might say that they treat their supporters as customers-to an extent that is true. However, ordinary supporters sometimes feel that, instead of being treated as customers or fans, they are simply mugs who are there to be milked with ever-increasing ticket prices and by the clubs finding even more ways to raise money. The reality is that, throughout the length and breadth of the football family, it is now seriously argued that the club model of football is a failed business model.

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Bob Russell (Colchester, Liberal Democrat)

I am concerned to hear what the hon. Gentleman says about Southend United. May I advise him that I challenged the Government on the matter on 10 December 2007? In response, the Secretary of State for Culture, Media and Sport said:

"I know that the hon. Gentleman has asked about that before"-

a royal commission on football-

"but I do not think that the solution to the issues arising in English football is for politicians to step in".-[Hansard, 10 December 2007; Vol. 469, c. 14.]

What has happened during the past three years to prompt the hon. Gentleman to think that the Government should now become involved?

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Tony Lloyd (Manchester Central, Labour)

Who said that it was not for politicians to step in? I do not think it was me. What I would say to my right hon. Friend the Secretary of State, who is a very good friend and a man of great credibility, is that the world has changed. The world that said two years ago that we should not regulate the banks is now regulating the banks. The world that said that we should not regulate manufacturing industry is now seeing the Kraft takeover of Cadbury. The world might be seeing the equation in a new light.

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Andrew Pelling (Croydon Central, Independent)

I congratulate the hon. Gentleman on securing this important debate. I am sure that there is nothing peculiar in politicians always wanting to support business, but these businesses employ many people. They employ not only the stars on the most significant sums a week, but ordinary working people. They, too, are important, which is why politicians should take an interest.

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Tony Lloyd (Manchester Central, Labour)

The hon. Gentleman makes an important point. That is absolutely the case. A football club represents something of enormous importance to its fans, but it is important also to the wider community in cities such as Manchester or Liverpool.

It is probably not well known that Manchester has the highest number of day visitors anywhere in the nation outside London, and one driver for that is certainly the Manchester United and Manchester City football clubs. People come from all over the world to take part in acts of reverence at Old Trafford or-I say with a certain degree of irony-at the City of Manchester stadium. Both are important for our city. Liverpool and Everton are both important for the city of Liverpool, and one could go around the whole footballing family and say the same thing. My hon. Friend Christine Russell tells me that Chester City, which was once a Football League club in its own right, is in danger of being thrown out of the Blue Square league. That is a tragedy. It is unable to field a team because it has not paid the players' wages for some weeks, and that is not untypical.

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Bob Spink (Castle Point, Independent)

The hon. Gentleman is making some excellent points. My constituents largely support Southend United and they are watching the tragedy unfold before their eyes. They know that the taxman wants only a small proportion of the money that the club has received, and they wonder what has happened to the greater sum. They are looking for ways to control the problem and remove this self-inflicted financial crisis. Does the hon. Gentleman believe that limiting the amount that clubs can pay in salaries to a proportion of the club's football-related income should be considered by the Football Association?

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Tony Lloyd (Manchester Central, Labour)

It is certainly a matter for consideration, but if the hon. Gentleman will bear with me, I shall come in a moment to some of the things that we ought to consider. Without Government intervention, we will not see the kind of action that could help Southend and the rest of the football family.

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Hugh Bayley (City of York, Labour)

York City football club was almost brought to its knees by the poor business decisions that were made by its owners when it had a traditional private company structure. However, a supporters' trust that received assistance from the Department for Culture, Media and Sport helped to rescue the club. Does my hon. Friend see a good case for supporters having seats on the boards of such companies so that people with the best interests of the club at heart are following the financial transactions being made by the board?

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Tony Lloyd (Manchester Central, Labour)

My hon. Friend probably remembers York City beating Manchester United-it is going back a week or two.

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Tony Lloyd (Manchester Central, Labour)

My hon. Friend, as Liverpool supporter, perhaps remembers that better than I do.

The York model, like the model at Exeter City, with supporters taking over the clubs, has worked. I shall come later to the role of the supporter but the fans are central to the future of football. They built the clubs, and they are the future of the clubs, so a proper role for the fan is fundamental.

The fact that we have already had a geographical tour of the nation is interesting, because this issue will be dismissed by some who will say, "Why are parliamentarians talking about football?" Does football matter when we could be debating the global financial crisis or the success of the national health service and all the things that you, Sir Nicholas, believe in as passionately as I do? Actually, football does matter. It matters to hon. Members on both sides of the House and to the people whom we represent.

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Tony Lloyd (Manchester Central, Labour)

It also matters to the people of Portsmouth.

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Mike Hancock (Portsmouth South, Liberal Democrat)

How does the hon. Gentleman envisage us changing the way in which football clubs are viewed? They are seen in regulatory terms as a financial institution, rather than as a cultural and sporting asset to any city or town in which they are located, which is how most of us in the Chamber see them. That is the mentality that we must shift, and Government have a role in ensuring that that shift comes into play.

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Tony Lloyd (Manchester Central, Labour)

I wonder whether the hon. Gentleman will allow me to make a bit of progress, but I will come on to those issues because they are central to what we are discussing.

We are now dealing with a failed business model. It is one that has seen many of our clubs-from the large to the smaller-soaked in debts to such a level that they are put at risk. Let me refer to Liverpool football club, which was taken over some years ago by its present owners. The owners made quite extravagant promises about building a new stadium, but they have in fact spent the past three years trying to repay the interest payments on the debt that was accrued.

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Derek Twigg (Halton, Labour)

I am sure that my hon. Friend is aware of the absolutely massive opposition to the current Gillett and Hicks regime at Liverpool. Given the amount of money that is involved in the top football clubs, the situation becomes dire if anything goes wrong. Promising to do something and not delivering on it is one thing but when big amounts of money are involved in football, the impact can be massive.

However, smaller clubs such as Runcorn, which will shortly move to a new ground, are just as essential to the game. Although we should concentrate on some of the concerns around the big clubs, we need to consider seriously the whole issue of football and its importance to this country.

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Tony Lloyd (Manchester Central, Labour)

My hon. Friend is absolutely right, and that is central to what I want to get across. It is about the whole of football. Yes, it is about the big clubs such as Manchester United and Liverpool, and my hon. Friend is right to say that the sheer volume of debt that has been dragged into those clubs puts their very basis at risk. However, the same applies to the minnows-I do not use that word dismissively-in football, which are absolutely vital to the long-term future of our national game.

In the context of Manchester United, may I just say that their support base is aggrieved? Last Saturday, tens of thousands of the 75,000 supporters were waving green and yellow flags-as my right hon. Friend Mr. Caborn is demonstrating-to show their unhappiness, anxiety and concern about their club, which was once free of debt. The takeover by the Glazer family in May 2005 cost £810 million. Of that, some £540 million was in loans. In the period since the takeover, £340 million has left the club to service the debt that was brought in to finance that highly leveraged deal. That is a preposterous amount of money to be leaving a club such as Manchester United, even though the club, along with Real Madrid, lays claim to being the biggest or the second biggest sporting venture on the globe. That money has been put in week after week by supporters and customers.

Last year, Manchester United reported a profit of £32 million. Only the sale of Ronaldo for £80 million-he was clearly an asset, but I was not necessarily sorry to see him go, given the saga that took place-turned a loss of £48 million into a profit of £32 million, and arguably that was in the most financially successful playing period in English football in recent times. I do not say this with any happiness, because it is clearly a very unhappy situation, but the situation has become even more perverse, with the club floating a bond of £500 million to retire some of the debts. We are told that as a result of that, and of the commitments that have been made, the Glazer family can take £172 million out of Manchester United next year, which is a phenomenal amount of money for a club with a sales turnover of £280 million. Such figures do not add up in the long run. It might be that the Glazers have a cunning plan, but nevertheless I must say to my hon. Friend the Minister that we now need transparency at club level to ensure that the supporter knows what is going on.

If there has been a failure at club level, there has also been a failure at league level. We see so many clubs-the ones that we have already talked about up and down the country-in difficulty, and that is felt at a national level. A sad reality is that it makes economic sense for clubs to scour the world looking for nearly-ready talent to come into our game, rather than putting the money into the development of the next generation. That is why the smaller clubs matter in football. Clubs such as Chester City and Stockport County were the feeders for the bigger clubs, and then the bigger clubs were feeders to the even bigger clubs.

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Ann Coffey (Stockport, Labour)

I entirely support my hon. Friend in his efforts to get a new framework that will give greater protection to football supporters.

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Nicholas Winterton (Macclesfield, Conservative)

Order. Will the hon. Lady address the Chair? I am getting on, and my hearing is not quite as good as it used to be.

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Ann Coffey (Stockport, Labour)

I apologise, Sir Nicholas. Before Christmas, I wrote to the Football League after a meeting with the administrators of Stockport County. Basically, I was seeking assurances about the release of the club's share of media funding. When I read the response from the Football League, it was very clear to me that there is very little flexibility in the rules and regulations that govern the operation of the Football League. Does my hon. Friend agree that it is essential for clubs such as Stockport that we have a review of those regulations and rules to ensure that the Football League operates in the wider interest of the public and of football supporters?

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Tony Lloyd (Manchester Central, Labour)

I agree with my hon. Friend. Let me turn to the regulatory framework, which simply does not work. Whether we talk about the Football League or the premier league that have commercial interests or the FA that supposedly takes the high-order view of the global interests of the game, I regret seeing clubs operating by standards that do not work. When the FA wrote to me in preparation for this debate, it said that it has made great progress in recent years, working alongside its professional game partners to ensure collectively that the football authorities provide the right balance of regulation and incentive to ensure the sustainability of football clubs. If that is the case, where have the FA been in recent times? An FA that is so complacent is an FA that is not fit for purpose, which is why we need external regulation.

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Graham Stringer (Manchester, Blackley, Labour)

I am grateful to my fellow United supporter. I have been following his arguments very carefully and find that I agree with them. United's competitors are not York City or Southend or even really Portsmouth. United's main competitors are Real Madrid, Barcelona and Bayern Munich. We need a level playing field for international competition, and that is the responsibility of FIFA and UEFA, and they should introduce regulations to ensure transparency and to limit the amount of debt, and that would stop leveraged buy-outs, as happened to Manchester United.

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Tony Lloyd (Manchester Central, Labour)

My hon. Friend anticipates part of what I am going to say. He is absolutely right: if we do not have an international dimension to all this regulation, we fail our national game, because there is no doubt that at every level-not just the top level-the interrelationship of clubs across Europe and around the world matters. Even in the lower leagues in England, we see players being drawn in from south America or Africa. Our game is global at almost every level and that is why we need to internationalise the regulation.

At no point would I argue that there is no room for debt in football. Debt is probably a necessity when clubs-whether Runcorn or Liverpool-are looking to develop new stadiums. It is quite possible that the introduction of some debt is legitimate. I am also not arguing against foreign ownership and least of all against foreign players coming into the English game. There are good examples of foreign owners. Randy Lerner at Aston Villa is an American and he has shown a real commitment to the game of football, to Aston Villa and to all that the club means to the people of Birmingham and beyond.

However, we must now have something that begins to bear down on the excesses that have taken place in football. My right hon. and hon. Friends in government-our Ministers-have a responsibility to look seriously at the Government's role. We can no longer accept a hands-off approach from central Government. Football is our national sport and an international issue, and if we are taking this argument into Europe and around the world, we need the Government to be behind it, as they are, for example, rightly behind the campaign to bring the World cup to England in the years to come.

We need to look at establishing some principles. We need to say that the development of the national game is vital, so that any strategy for football must look at the game as a totality and not just at the individual clubs. We must look at the need to develop home-grown players and at how we bring those players through the system. We also must look at the role of the supporter. My hon. Friend Hugh Bayley raised the issue of the supporter, and we have to put the football fan at the centre of the football family.

There is a paradox: 10 years ago, the football taskforce produced a very sensible report. Its majority report made very sensible recommendations; yet a decade on, we are still waiting for their implementation. In fact, the all-party group on football, which includes a number of Members who are in Westminster Hall today, including my hon. Friend the Member for City of Chester, made very sensible recommendations a year ago about the future of football. In that sense, there is nothing new in what I am about to say. However, what is frustrating is that we have seen so little action on this issue, although football is now arguably in a state of financial crisis.

We have to put the Football Association back in charge of football. However, it must be an FA that, first, is not cowed by the money in the premier league or the Football League and, secondly, does not express the complacency that I evidenced earlier and begins to say that it will stand up for the stakeholders in modern football.

We have got to give some reality to the question, "Who is a fit and proper person in the game of football?" With Portsmouth, for example, nobody even knew who the owners of the club were, never mind whether they were fit and proper people to be in football. Clearly, the concept of a fit and proper person is way beyond not only the ordinary supporter but the wider stakeholders in football. Within that concept, we have to include the idea that financial stability and credibility is part of that matrix of fitness and properness. That financial stability and credibility must include the capacity to absorb debt, or rather not absorb debt, into the club. There is nothing anti-capitalist in this argument-I say that for the benefit of my hon. Friend the Member for Hayes and Harlington.

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John McDonnell (Hayes and Harlington, Labour)

You were taking me with you. [Laughter.]

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Tony Lloyd (Manchester Central, Labour)

Only because I want to appeal to the global audience.

The NFL-the National Football League in America-regulates American football and has very strict limits on the amount of debt that clubs can take on board. Frankly, if that is good enough for the Americans in this sporting context, we ought to learn at least some of the lessons from the United States and impose them over here.

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Andrew Pelling (Croydon Central, Independent)

The hon. Gentleman mentioned American sports. Would it not be better perhaps for the premier league to copy what is done in America, by sharing revenue among clubs to ensure a healthier and more competitive league system?

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Tony Lloyd (Manchester Central, Labour)

Many of these ideas obviously ought to be on the table. I can think of arguments for and against such revenue sharing; as a Manchester United supporter, my instinct is to say no to it. However, the reality is that football needs to see itself as a totality. No one club can compete against itself. I am sure that I will not be popular in my own constituency for saying this, but if Liverpool FC was to go out of business, it would actually not be in the interests of Manchester United or Manchester City, because we need quality teams to play against, however frustrating it is on those occasions when the wrong result emerges from those contests with Liverpool FC-they emerge less now than they did previously.

Another issue is almost bizarre, and I ask my hon. Friend the Minister to look at it. Tax relief is available for those who buy football clubs with leveraged bids. It is preposterous that we are allowing rapacious corporate raiders to come in and use tax relief as a way of gearing their acquisition of otherwise financially sound clubs. Quite frankly, we ought to get rid of that tax relief in this industry.

Across the board, let us go back to the football taskforce and its majority report and to the all-party group on football's recommendations. Let us consider those recommendations and that report quite seriously, and let us begin to say that we will implement them.

I want to conclude with a couple of specific propositions. We have got to look at the models for protecting supporters' interests that exist elsewhere. In Germany, for example, a club's supporters have the golden share, which prevents abuse by the German football clubs against the interests of their natural support base. That makes a real difference. Germany has bigger crowds and lower ticket prices than this country does. Ticket prices come up, time after time, among ordinary fans here, because they feel that they are being ripped off.

We also need to look at the Barcelona model or, if people prefer, the John Lewis model of share ownership, which establishes ownership among the ordinary supporters. [Interruption.] I will not venture further down that path. However, it is important that we look at the different models that exist.

Whatever happens, we must ensure that the supporter can be included. I was once a shareholder of Manchester United; that shareholding was liquidated, under company law, when the present owners took over the club. I had a nominal shareholding as a matter of tribal loyalty or tribal support, not because I wished to take over the club or run it.

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Mike Hancock (Portsmouth South, Liberal Democrat)

You had shares? Why did you not vote?

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Tony Lloyd (Manchester Central, Labour)

I once had shares. Of course, they have now gone, because they have been liquidated and that has applied across the board. So we must find a way of involving the fans in the governance and running of the clubs and the leagues.

I want to finish on a very personal level. I mentioned the Munich air crash before. I can remember the impact on the city of Manchester when those young men died-at the time, when I was a boy, they were men to me. It had a profound effect on a city such as mine. That memory is still strong and vivid, and it is not a memory just for one generation; it is carried down culturally from one generation to the next. The same would apply to people in the cities of Liverpool, York or Portsmouth, or wherever.

Actually, I am one of those people in Manchester who has always watched both football clubs; I watched Manchester City as well as Manchester United. I can talk about City players from the past such as Johnny Crossan and not just the famous City players such as Lee, Bell, Young and Summerbee.

In the end, football does matter. It is about our tribal identities. That can be bad, in the worst excesses. But football is the beautiful game; it is the game that ennobles people if it is played in the right way, and it is the game that is about giving entertainment but also values if it is played in the right way. Most of us grew up thinking that those role models-the captain of England, when it was Bobby Moore or Billy Wright-were sterling people who had values that carried us through in life.

I look back to that older generation who gave me those values, and I am grateful for that. We should not put that at peril by saying that football is only a commodity to be bought and sold; if we do so, I am afraid that we betray this beautiful game of ours, and we betray the heritage that we ought to hold precious.

I have spoken at length; I hope that other Members might have the chance to speak.

Several hon. Members:

rose-

Photo of Nicholas Winterton

Nicholas Winterton (Macclesfield, Conservative)

Order. Clearly, a number hon. Members would like to catch my eye and I would like to fit them all in. I intend to call the Front-Bench spokesmen shortly after 3.30. We therefore have just over half an hour for all Back-Benchers who wish to get in. If anyone can guarantee that they will talk about Macclesfield Town football club, I assure you that they will be called.

3:00 pm
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Mark Field (Cities of London and Westminster, Conservative)

I am a lifelong supporter of Bury football club, which beat Macclesfield Town only last night to record a sixth consecutive victory. I was not going to bring up that sore subject.

I congratulate Tony Lloyd on securing this extremely timely debate. This very day, the futures of Portsmouth, Cardiff City and Southend United are being debated in the courts. I welcome the opportunity to discuss the state of our national game and its governance and regulation. I have a keen interest as a lifelong fan and follower of football, and as a member of the all-party football group, to which the hon. Gentleman referred. I represented the Conservatives on our reports on the game's governance in 2003 and on the finances in 2008-09.

I have long argued that the sport is too loosely regulated, perhaps in the self-interest of the top premiership clubs that have a global reach. One difficulty with trying to empower the Football Association is that the premier league will not have it.

As the hon. Gentleman rightly said, many people claim that politicians should not interfere in the running of our national game. However, in my view, it is perfectly legitimate for us to debate the issue. Tens of millions of pounds of public money have been spent over the past 25 years on repairing football stadiums since the Taylor report. Football plays an important and significant role in the local economies of numerous towns up and down the country. Furthermore, it is an integral part of British culture and remains a highly successful export.

Live coverage of English football, predominantly of premiership games, goes out literally worldwide, attracting a regular audience of nearly 600 million people. When I was in Dhaka in Bangladesh recently, I turned on the television at 11 o'clock the night before I came back and on ESPN were live Arsenal and Manchester United games.

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Bob Spink (Castle Point, Independent)

On a positive note, will the hon. Gentleman join me in congratulating the Football League on its partnership with Help for Heroes? It has fundraised for returning heroes and provided free and discounted football tickets for our armed forces.

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Mark Field (Cities of London and Westminster, Conservative)

I agree with the hon. Gentleman. I saw that work when I watched my local club at Aldershot, where perhaps it is understandable to see Help for Heroes, and Dagenham and Redbridge in recent months. I vouch for that being a tremendous initiative.

Those who do not subscribe to the obsession that we football fans share will perhaps fail to understand the passion and growing concern that many of us have about the game and its future. There are serious questions to be asked about the morality and values underpinning the game, particularly in the premier league. The people's game has undergone a dramatic transformation over the past 18 years since the formation of the premier league and there is an unprecedented and probably unbridgeable gulf between the top clubs and the run-of-the-mill premiership teams, let alone clubs playing outside the top flight. I fear that is partly due to the lack of competition that has been referred to. It is the direct result of lax governance and an absence of effective regulation. There are no wage, squad size or registration restrictions-a state of affairs unknown in other sports around the world, from Aussie rules football to US baseball, as the hon. Gentleman said.

Before discussing the potential reforms that could improve the situation, we must take a step back and consider how we got to this point. A key contributor to the radical change in English football is the huge revenue incomes of premier league clubs, in comparison with their Football League counterparts. To indicate the scale of that revenue, premiership clubs receive £2.8 billion, split between 20 teams over a three-year contract. In stark contrast, the Football League's latest contract is worth £88 million annually, divided between 72 clubs.

Crystal Palace, here in London, are the latest club to enter administration. They join a host of clubs that have experienced that traumatic fate in recent years, including Leeds, Southampton, Rotherham United, AFC Bournemouth and Luton, which is no longer in the league. Premier league clubs have hitherto only flirted with that prospect and we all await the fate of Portsmouth today. The sole difference is that the premiership clubs, by virtue of the vast sums of TV money, tend to have a greater ability to attract some form of bail-out.

One of the few pieces of regulation that premier league clubs adopted from the Football League is the fit and proper persons test. However, that is more honoured in the breach and is in urgent need of attention. Half of premiership clubs are foreign owned, often involving dubious investment made by cagey consortiums. It seems that the need for immediate cash-flow relief renders the test optional rather than compulsory.

Even at home, it is noticeable how much money talks. Last month, David Gold and David Sullivan completed their takeover of West Ham United. Twenty years ago, a similar approach by the same duo was rejected out of hand because they were regarded as below the salt, their money having been made in soft porn publishing. Today, they are rightly perceived as transparent and legitimate investors in football and as preferable to the many foreign and shady owners.

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Mark Field (Cities of London and Westminster, Conservative)

Indeed, they are fans. Even Manchester United and Liverpool are saddled with the burden of foreign leveraged buy-outs.

How can we improve the state of the game? Football agents have been under intense scrutiny in recent years. Sadly, it has become fashionable for the media, clubs and football authorities to heap all the blame on agents. Although they are easy scapegoats and, as we are told frequently, leeches on the great game, the facts are less simple. Clubs, managers and owners have often colluded in the worst practices, furtively using agents to tap up players who are not on the move, with the agents feeding soccer journalists self-fulfilling stories about player unhappiness or club desire.

The core of the problem is the eternal conflict of interests in all agency relationships, which is made worse by the grubby antics of all too many football clubs. Essentially, agents are not instructed on many of the transactions in which they involve themselves. They claim, and are given, fees by players and by clubs, both at the buying and selling ends of the deal. Some have wider consultancy arrangements whereby clubs pay for their services, which can involve sabotaging transactions and tipping off journalists with misinformation.

It is time for a proper code for agents in the game. There must be clear, punitive sanctions, especially against clubs and their employees. Any fee for agency services should be paid by only one party to a transfer deal. It is all too easy to blame agents for what has happened in the game. There are also a number of underlying problems. Financial irregularities have become all too frequent in recent times and have gained high-profile exposure. Football is languishing in the lurid world of celebrity, increasingly appearing on tabloid front, rather than back pages.

I have painted a somewhat grim picture thus far, but there is some positive news. It relates to the Football League, which continues to lead the way in good governance of the national game. Over the past few years, the Football League has rolled out a number of measures to try to stabilise the financial health and future existence of its 72 clubs. We should highlight those measures and promote them to our top flight clubs.

In April 2003, the Football League clubs introduced a sporting sanction of 10 points for any club entering administration so that financial irresponsibility and unsustainable growth off the field is met with a real punishment on the pitch. The risk of losing points or a place in a certain league promotes responsible management and is surely factored into risk taking in the Football League, if not in the premiership.

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John Leech (Manchester, Withington, Liberal Democrat)

I agree that losing 10 points is a bad sanction that encourages club owners not to go down that financial route. Unfortunately, it is the fans who lose out as a result of their club losing 10, 20 or 30 points.

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Mark Field (Cities of London and Westminster, Conservative)

It is the fans who lose out. To be brutally honest, when the Glazers first appeared on the scene in 2005, most Manchester United fans were entirely happy because they saw the huge amount of money coming into the club as a counterbalance to the influence of Roman Abramovich at Chelsea.

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Mark Field (Cities of London and Westminster, Conservative)

If the hon. Gentleman will excuse me, other hon. Members want to speak and I want to say just a couple more things.

Another positive step forward is the divisional pay clause in players' contracts, which states what each player will earn regardless of relegation or promotion. As Mr. Pelling said, league two clubs have the obligation that only 60 per cent. of football revenue can be paid in wages. That is a sensible way forward.

My worry is that the game cannot remain split into the haves and have-nots. The community game mentioned by the hon. Member for Manchester, Central-it is very much a passion for him-has existed for the past 100 years, but is in great danger of drifting irreversibly towards a franchise structure that is more akin to that in American football, where only a small number of franchise clubs in just 10 or 12 of the biggest cities can play a part. We have already seen the first step in that direction, with the birth of the Milton Keynes Dons in 2004, which saw a south London club, Wimbledon, bought, relocated-notionally, at least-from south-west London to Buckinghamshire and given a new identity.

This is a timely and important debate. I hope that Members will gather that I have a lot of passion for football, as many other Members do, and I look forward to hearing their contributions.

3:10 pm
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John McDonnell (Hayes and Harlington, Labour)

I declare an interest as the honorary vice-president of Hayes and Yeading football club, which was created in a recent merger. We won 4-0 last night, although I was in the House debating alternative votes, but there you are.

We all share the passion for football. I come from Liverpool and I am a Liverpool supporter; indeed, my family is obsessive about the club. When my mum and dad got married after the second world war, their honeymoon was a home match and an away match, with a reserve match thrown in, my dad being the romantic that he is.

I share the analysis of my hon. Friend Tony Lloyd. What is happening in football mirrors what is happening in the wider economy, with the boom and bust, the speculation, the leveraged buy-outs and the unsustainable debt ratios. None the less, the Government had an excellent record before the credit crunch hit football and the wider economy, and I pay tribute to my right hon. Friend Mr. Caborn for the Football Trust report, the first stages of its implementation and the 5 per cent. that we got from TV levies to support football at the grass roots-all that was excellent. I also support UEFA's plans for financial controls, because we need a Europe-wide approach, despite the criticism from some premier league clubs.

In the face of the crisis that has hit the football economy and the wider economy, however, we need to go much further, and I want to make a few brief points. First, on leveraged buy-outs, due diligence needs to be extended from directors to the sustainability of any bid proposal. Controls should be placed on debt ratios, and debt should be limited to reflect the realistic record of income levels, so that the debt and the club can be sustained in the future. Such issues should be assessed independently by a football financing commission, which could go in and prepare an independent and fully open and transparent report so that supporters and the wider public can see whether a buy-out or an investment is sustainable.

Secondly, my hon. Friend Hugh Bayley mentioned stability, and I share his view. The best forms of stability are always secured when the supporters are fully involved, and we need look only at Barcelona. Germany has also been mentioned, and 50 per cent. of the clubs there are owned by the supporters, so there is a model. That is why I supported the Government's promotion of supporters' trusts, which is an excellent idea as far as it goes, although even some of the trusts are finding themselves in financial difficulties-Brentford is one example. We need to introduce regulations to reserve 20 per cent. of board membership for supporters' representatives, who would be duly elected from the supporters clubs. In that way, those who actually love and support the club will have a more effective influence over the board.

Thirdly, there is the issue of wages, which is raised with me at every match. Players' wages, particularly in the premiership, are obscene. Players earn in one year what many of my constituents fail to earn in their lifetime. I appreciate that a player's footballing career can be short, but such high levels of pay are not sustainable, and I want to suggest an alternative. The Prime Minister has discussed a Tobin tax on banks and speculation, and I would support a Tobin tax-it has been renamed a Robin Hood tax-on players' wages. If a player was earning more than, say, £2,000 a week, they could pay 5 per cent. in tax, and the money could go towards supporting the development of grass-roots football in the developing world. In a way, that will send a message to clubs that have paid so much for players.

Photo of Gregory Campbell

Gregory Campbell (East Londonderry, DUP)

I have listened with interest to some of the hon. Gentleman's suggestions. It would be valuable and interesting to examine the one that he has just outlined, but it would surely work only if it was introduced on a European basis, because we cannot have even more of our best players ending up playing for Bayern Munich and Barcelona.

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John McDonnell (Hayes and Harlington, Labour)

I fully agree, which is why we should ask UEFA to take the issue up. Actually, Hayes has just bought a Latvian player, but never mind.

The final issue that I want to raise relates to the various reports about corruption. Where money is available on such a scale, corruption will eventually come on the scene. There have been various reports about the level of betting fixing in youth football, and I would welcome news from the Minister about what has happened on that. A review was undertaken, and proposals were made for an integrity unit-it could be part of the Gambling Commission if we could make the commission more proactive. Again, I would welcome information on how far we have got with those proposals to staunch the possibility of corruption breaking out more widely in the sport.

I agree with everyone else that football is too important to be left to the market and to the greed of speculators and others. Returning football to the supporters, combined with a limited amount of regulation, will sustain football in this country in the long term. You never know, we may well win the World cup again.

Several hon. Members:

rose-

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Nicholas Winterton (Macclesfield, Conservative)

Order. I make a plea. There are three Members who want to speak. We can go on for another 15 minutes before I ask the Front Benchers to start. It is a question of self-discipline; if one Member speaks for a long time, he will cut another Member out.

3:16 pm
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Richard Caborn (Sheffield Central, Labour)

I spent a happy and productive afternoon at Macclesfield football club when I opened its centre for technology and development, which is still being used. I also represent Sheffield, which has the oldest football club in the world, so I have something of a vested interest in this issue.

On political intervention, I disagree with my hon. Friend Tony Lloyd, which I rarely do. In 2005, when I was Minister for Sport, this country had the presidency of the European Council. We held a meeting in Liverpool with members of the European Commission, Members of the European Parliament and Ministers for Sport from all member states to look at the state of football and how we could address something called the Nice protocol. Heads of Governments had said that sport was different from business and the commercial world, and that it had a specific value, and the question was how to translate that into practice, because there was no legal base in the European Union to help us do so. However, with the support of UEFA, we set up an independent European sports review, which produced the Arnaut report. That resulted in a European white paper and a number of moves from UEFA that I will describe a little later.

There was real concern about how we would tackle sport in the European Union, and that was particularly true of football because its regulations were being settled in the European courts and the Bosman and Charleroi rulings were having a profound effect on how football was being governed. We had to determine whether football was a business, because if it was not, the question was how it would be governed.

Interestingly, there was some political intervention, because Ministers for Sport were looking at the good governance of sport. Rugby league and cricket modernised their governance. Cycling, which was bankrupt, also did so, and its progress has been fantastic from then on in. A whole series of governing bodies looked at themselves and asked, "Are we fit for purpose as we move into the 21st century?"

The FA set up the Burns report and a structural review. Had the report been implemented-Terry Burns said that it was the absolute minimum that the FA would have to undertake to become a fit-for-purpose governing body-we would probably not be facing some of the problems before us. If I make one plea to the Government and sport in general, it is that football should modernise its governance, otherwise we will deal with the symptoms but not the cause, which is the problem that football does not have good governance and good regulation because it has not implemented the Burns report or something like it. Such modernisation will be fundamental if football is to be governed in the way in which many people want.

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Mike Hancock (Portsmouth South, Liberal Democrat)

The right hon. Gentleman was intimately involved in the production of many of these reports. What aspects of the Burns report frightened the administrators in football and prevented them from making the changes?

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Richard Caborn (Sheffield Central, Labour)

Those people did not want to relinquish the power of football to independence. They wanted a board in relation to which there would be the professional game, the national game and good quality independence that could take an objective view and break the stalemate. That is effectively what we have got-the professional game on one side and the amateur game on the other. We have got the status quo, but that is not good enough. If hon. Members look at the Burns report-I do not have time to deal with it now-they will find that it is a very interesting read. They need to look at what Burns said and where we are now.

On the Arnaut report, I met all the chief executives of the premier league in 2006 and told them that there were excesses. I paid tribute to the premier league and told them that it was the most successful league in the world-it is, by any standards, the best in every conceivable way-but I also said that there were structural weaknesses and excesses. I told the chief executives that they must start to address those excesses in the light of good regulation, and that if they did not actually get into Europe and start influencing the way in which sport and football were regulated, there would be problems down the road. There were problems down the road and the chickens are coming home to roost. If the chief executives had taken action at that time, we would not be in the state we are now.

UEFA was also affected by Arnaut. I will talk briefly about the club licensing system and financial fair play, which will be implemented in Europe in the next two to three years. The six points in the specific objectives for the club licensing system are

"Introduce more discipline and rationality in the club football finances; encourage clubs to compete with their revenues; decrease pressure on player's salaries and transfer fees and limit inflationary effect; ensure clubs settle their liabilities on a timely basis; encourage clubs' long term investments (infrastructure, youth); protect long-term viability and sustainability of European club football."

The proposed measures are the break-even rule, which relates to the financial fair play concept, as well as the

"enhanced overdue payable rule; cash flow analysis; guidance on salaries and transfer spending; guidance on level of debts; limit the number of professional players."

Those measures will have to be implemented by clubs, and if they are not, those clubs cannot play in the European competitions.

I pay tribute to what UEFA has done at a European level. It is acting with more certainty now because, in the Lisbon treaty, sport has for the first time got a legal base. We can therefore, with some justification, go to the Commission and the Council and say that we want the matter to be considered much more effectively. UEFA has found a level of certainty in Europe. FIFA is applying the "six plus five" rule, so I believe that regulation, both internationally and at a European level, is finding its feet and being implemented. Finally, if the FA follows through and implements the Burns report, we will have the type of regulation that we need in this country. We have got such regulation through Europe, and we will get it again through FIFA.

3:23 pm
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Andrew Pelling (Croydon Central, Independent)

It is a great pleasure to serve under your chairmanship again, Sir Nicholas. It is most apposite that the debate is a 90-minute game, but it is unfortunate that you do not have the discretion to add a few extra minutes, as would happen in an actual football match. It is also most apposite that the debate is being held now, given the problems facing Crystal Palace football club. In the four minutes that I have, I will discuss why that is an important concern.

I am running a petition with Malcolm Wicks on two issues relating to Crystal Palace. One issue is the 10-point deduction, which was introduced to stop clubs obtaining a competitive advantage by seeking protection from their creditors. That does not apply in Crystal Palace's case, because it has been subject to an involuntary administration that has been imposed due to the actions of a hedge fund that owns Selhurst Park. Unfortunately, the history of Crystal Palace is such that Selhurst Park is held by another company that is also administration, which is partly owned by a hedge fund that does not necessarily have any sentimentality towards the club.

One must have a lot of sympathy with Simon Jordan, the chairman, who sunk £35 million into the club-he is obviously the club's biggest creditor-at a time when play off prospects were sound and the amount of income that could be secured was hugely different. The prospect of the extra income from being in the premiership, compared with being in the championship, has had a distortive affect. It is unfair on players, club staff and the club itself-the fans-that the 10-point deduction is in place, so that is one of the issues raised by the petition that the right hon. Member for Croydon, North and I are running, which will be coming to Parliament.

Lloyds Banking Group is the main lead banker both to the club and the owners of the ground, who are in administration. We are concerned that, within the restrictions of Financial Service Authority rules, the Lloyds Banking Group should try to work to bring the two parts of the club back together. The fact that the group has been acting in a very positive way is encouraging. It has essentially worked to avoid the move into administration, and it has recognised that

"Crystal Palace occupies a special place in the affections of many in South London and if we can play our part in funding a sensible, commercial solution that enables Crystal Palace to have a sound future, then we would be both happy and proud to do so."

That shows that Lloyds Banking Group has a very positive attitude, which is appropriate for a bank that is almost majority-owned by the taxpayer. I hope that supporters and the people involved with the ambassadors club and the fanzines of www.holmesdale.net can perhaps come and see the Minister to talk through some of the issues. I appreciate that he has only a limited amount of leverage, but I would be most grateful if that were possible.

I want to allow Hugh Bayley to contribute, so I shall be brief. I am wearing my Croydon football club tie, and we must not forget those who are in the lower leagues. There are 60 people who watch the matches of my local team and many of us have been disappointed that the local council has not been able to be supportive of the club. Tram construction meant that the practice ground was dumped on five years ago and it has not been possible to use it. Great promises of support were made by the council, but that has not really happened. Dickson Gill, the chairman, does excellent work to keep the club going, and we have great hope about what will happen. Although great promises are made by the council, as I said, nothing gets delivered. To return to Crystal Palace, there is tremendous support for the petition from 500 people who are very upset about how the club has been treated.

3:27 pm
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Hugh Bayley (City of York, Labour)

I am grateful to you, Sir Nicholas, and to colleagues for leaving some time for me to say a few words. I want to speak up for small clubs. My hon. Friend Tony Lloyd said that Manchester United's turnover in a year is some £280 million, which is enough money to keep York City going for 100 or 200 years. It will probably take us that time to repeat the success of 1995, when York City beat Manchester United 3-0 at Old Trafford, which he was generous enough to acknowledge. That illustrates what has happened to football in the past 10 years. Like the high street, it has split between small businesses at one end and huge multi-million pound enterprises at the other. The Government's policy and the policies of sports' bodies need to show that things have changed.

Some interest has been expressed during the debate in the supporters' trust model, which was how York City football club was saved some 10 years ago. I pay tribute to the help that the club got from the Department and from my right hon. Friend Mr. Caborn. There was a disastrous period when one chairman of the club split the club from the ground, so that if it went under, he would have a property development opportunity. The club was then taken over by John Batchelor. He was a motor racing entrepreneur who ran the club for a season and managed to attract sponsorship of £400,000, which matters to a small club such as York, but when it went into administration at the end of his period, the £400,000 was nowhere to be seen. It disappeared into some motor racing enterprise he had. The supporters' trust rescued the club, and four years later, in 2006, they sold a majority of the club to one of their members, Jason McGill, the current chairman, whose family business had put enough money into the club to rescue it.

If the smaller clubs are to survive, nurture new talent at the grass roots and make an input to their communities-York City FC has been expanding its community programme over the past two years, providing healthy support and training to around 10,000 children and young people in York-the Government must ensure that supporters have a greater say within clubs, as I have said. The Government must look at the business structure of clubs. Perhaps we should follow a mutual model, more like those of building societies, or a co-operative model, rather than a plc model. If we look at how building societies operate, in comparison with the plc banks, we can see the advantages. Although I understand the reservations of someone who represents a large club that generates much income, we need to look at how revenues from television and other sources for this great game are shared to ensure that small clubs remain beautiful so that the whole game can remain beautiful.

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Nicholas Winterton (Macclesfield, Conservative)

I thank the hon. Gentleman for his brevity, following my request.

3:31 pm
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Mike Hancock (Portsmouth South, Liberal Democrat)

I congratulate Tony Lloyd on securing the debate, and all Members who have spoken on the support football has received. If the debate were taking place in the Chamber and could last a whole day, it would be full of Members equally committed to both the national sport and their local village, town or city team.

I have followed Portsmouth FC through the divisions when they were close to winning a third championship in the old first division, down to the fourth, all the way back and then into the premiership. The one common factor over those 50-odd years has been the loyalty of the fans. The one thing that has never been taken seriously in football anywhere is the role played by fans and the credibility they give the game. They have undying loyalty and the tribalism of supporting a club through thick and thin, standing on uncovered terraces in pouring rain in the middle of winter to support a team because they want to.

I remember when international footballers used to live down the same street and one would meet them going to the corner shop, and the next week they would be playing for England or Ireland, and Scotland in one case, and it was a pleasure to meet them. Now footballers live in a rarefied atmosphere and it is difficult to see them even on a team bus, let alone out in the street.

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Andrew Pelling (Croydon Central, Independent)

Obviously, we should not be jealous of the money that comes with the skills, but is not another effect of big money in the premiership that it undermines our national teams because we have fewer players playing in top-ranking football?

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Mike Hancock (Portsmouth South, Liberal Democrat)

That point is as valid as those that have already been made about football administration. Some players have lost touch with the reality that gives football its strength-the fans. My own club is a classic example.

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Mark Field (Cities of London and Westminster, Conservative)

Much as I share the hon. Gentleman's passion-I, too, am a long-standing supported of the game-I think that he might be seeing things through rose-tinted glasses. In the mid-1980s, football was at its lowest ebb, well before premiership money arrived, when hooliganism was rife and attendance was at an all-time low. Attendance has increased considerably since then, even though players are paid a lot more. I am not saying that there is not something in what he says, but we must be careful not to allow nostalgia to overtake what is otherwise a reasonable argument.

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Mike Hancock (Portsmouth South, Liberal Democrat)

I do not doubt that football had problems, and Portsmouth had a notoriously bad record for away support troubles, which I would not disguise or deny or do anything other than apologise for, but the loyalty of the fans was always there. They have been, in many instances, totally disrespected by the situations that have arisen.

Portsmouth FC, to catalogue what has happened to it, has had four owners in the past six months. Owner three did not even know that he had lost ownership of the club to owner four, and we did not even know who owner four was. Owner three is now suing owner four to try to get the club back. In the High Court today we heard that we do not owe £7.5 million to Her Majesty's Revenue and Customs, but in fact owe £11.5 million. We have been lucky enough to secure a seven-day or nine-day reprieve before having to go back to the High Court. To explain why, I will quote directly from the evidence given in court by the barrister representing the club:

"Two offers have been received from serious purchasers to buy the club to pay off the debt."

One of them happens to be the Saudi ambassador to the United Kingdom and Ireland, and the other is a consortium, described as Irish-American, that is moving rapidly to try to buy out the present owner, who is facing legal challenge on whether he actually owns the club.

Where is the club going? What is happening to it? It is more than 100 years old and one of its founding members, the writer Conan Doyle, played in goal for the team. A famous bunch of footballers have played for Pompey over the decades, and one or two notorious players, too-their skill in the sliding tackle brought them notoriety-so we owe something to that team. Two years ago, a quarter of a million people lined the streets of Portsmouth to welcome back the successful FA cup winners, but virtually all that team have been sold. At one stage, 18 months ago, five of the England squad were Portsmouth players, but now we have only David James left. The likes of Crouch, Defoe, Johnson, Kranjcar, Diarra and others have all been sold, and the fans have not seen the benefits of that. There has been no return for the fans.

We have an owner, Mr. Gaydamak, who sold the club and is now virtually holding it to ransom, because he sold the stadium and the club. He did not sell all the land he had acquired around the club to build a new stadium, so he now holds that and is holding the club to ransom by demanding £30 million for it. The club cannot even develop the stadium, as the premiership is asking it to do, because he controls it. He virtually has a stranglehold on Portsmouth FC, and something has got to give.

The one thing we need, as Members have said, is a change in the way we regulate football. I do not know how easy it is to bring in new regulation, but if the Burns report's proposals, to which Mr. Caborn referred, had been implemented, perhaps we would not be in the position we are in today. Portsmouth is the one domino on the slide at present, but if it goes, others will follow and the domino effect will be unstoppable, particularly in the premiership, because the consequences of one club going under will be horrendous for the others. They are all being looked at by their creditors, and people who are prepared to give the benefit of the doubt will no longer be prepared to do so. We need some action, and it is the responsibility of the Government because, whether we like it or not, football is more important than just a business, and that has been the trouble. Many of the people who owned Portsmouth FC, I genuinely believe, had no interest in football whatever. Many of them, far from being keen, saw it as a good way to make money out of property. That is why I have great admiration for Sullivan and Gold going to West Ham, because at least they are committed football fans. They might be led by their hearts rather than their heads, which could be a problem.

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Andrew Pelling (Croydon Central, Independent)

Does not that show the importance of the premiership seeing it as a corporate product? One can makes fun of the league system, but after all, Liverpool lost to Portsmouth, but Manchester United won five-nil, as I recall, so it can potentially change the result of who qualifies for the top four in European championship positions.

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Mike Hancock (Portsmouth South, Liberal Democrat)

One of the reasons for the debate's being fortuitous is that we should be looking to the premiership to put together some safety net for clubs in that position. The premiership cannot deny that it has some responsibility for what has happened, and I believe that it owes it to clubs such as Portsmouth-and more importantly, the people who pay week after week to watch the matches, whether on a big screen or live in a stadium-to show them some loyalty, perhaps by bailing out situations like the one in Portsmouth, just to keep the club in being.

As the Sky sports commentator said,

"the difference between administration and liquidation is the difference between intensive care and burial."

Liquidation would mean the immediate end to Portsmouth's season and the club, but administration might give it just enough time in intensive care to make a case to stay in existence. The premiership owes that to teams like Portsmouth, and it owes it to football to do something to protect the interests of the fans, which it has neglected since it has been involved.

3:40 pm
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Hugh Robertson (- Shadow Minister (Sport and the Olympics), Culture, Media and Sport; Faversham and Mid Kent, Conservative)

I congratulate Tony Lloyd on securing the debate. Due to time constraints, I shall not go through all hon. Members' contributions in turn, but they showed that he has hit a raw nerve, and the message to the football authorities and the Government is clear.

I have been thinking about this issue for some time. From an Opposition perspective, it comes down to three questions. First, does our party accept that there is a problem? Secondly, if so, what do we think should be done about it, and who is best placed to take that action? Thirdly, following on from that, what is the appropriate role of the Government?

To start at the beginning, is there a problem? The debate has clearly shown that the answer is yes, although opinion is divided about whether that is a natural consequence of the depth and severity of the recession, which was a point that the hon. Gentleman touched on, an inevitable consequence of a high-octane sports industry, or something altogether more serious and structural.

The hon. Gentleman mentioned the situation at Manchester United, and others have mentioned the finances of West Ham and Portsmouth, which have recently been in the news. In the Football League, the travails of Crystal Palace, Stockport County, Watford and Cardiff City, among others, have been well documented, and it is almost certain that we do not know the full extent of troubles elsewhere.

However, in trying to come to a fair and balanced judgment on the matter, which I suppose is in many ways the role of the Government, it is fair to say that there are a few mitigating factors. We are coming out of the longest and deepest recession since the 1930s. In such circumstances, it would be extraordinary if clubs were not facing real financial difficulties. Secondly, debt on its own is not a particularly useful measure to assess a situation unless it is allied to turnover. Thirdly, conventional measures can be meaningless, particularly for some of the premiership clubs that are owned by an extremely wealthy individual who stands behind it. That was demonstrated recently when the Chelsea owner simply converted the club's debt into equity.

Finally, there is pressure from UEFA, which was mentioned by the former Minister for Sport, Mr. Caborn, whom I think I can call my right hon. Friend. I strongly believe that sport is a national competency that should be regulated and governed here in England, but it would be wrong to ignore Europe as a factor. Our clubs are key to UEFA's competitions, and we need its support if we are to bring home the 2018 World cup. Furthermore, its goal of ensuring good financial management of clubs is one with which we would all agree. The issue is whether a one-size-fits-all approach across the many different structures prevalent in European football is the best way forward.

Therefore, given the well-publicised troubles of several clubs and the external pressures on football, it is impossible to conclude that there is not a problem, although it is perhaps not as terminal as has been suggested. Having reached that conclusion and accepted that there is a problem, the second question is what we think should be done about it, and who is best placed to do it.

I absolutely agree with the many hon. Members who said that football is a great deal more than simply a business. It has always been a central tenet of my party's sport policy-and indeed our wider approach to politics-that we should free up individuals and bodies to run and regulate themselves. The bodies in football that are responsible for governance and regulation are the Football League, the premier league and the Football Association, and the question is whether they are able to sort this out themselves.

I entirely agree with my hon. Friend Mr. Field when he says that the Football League has come a long way. Unsurprisingly, I pay tribute to my friend and former colleague, Lord Mawhinney, for his work in this area.

Among other things, the Football League has produced a 10-point sporting sanction, as Crystal Palace has just found out. It publishes agents' fees, has a workable fit and proper persons test, and has introduced a salary cost management protocol. In governance terms-this point was picked up earlier-it also has at least two independents on its board. Despite the recession, the league's attendance over the past five seasons has topped 60 million, and it is now at its highest level for that league for more than 50 years.

Sitting suspended for Divisions in the House.

On resuming-

4:12 pm
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Nicholas Winterton (Macclesfield, Conservative)

I ask the spokesman for the Opposition to continue his winding-up speech.

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Hugh Robertson (- Shadow Minister (Sport and the Olympics), Culture, Media and Sport; Faversham and Mid Kent, Conservative)

Thank you, Sir Nicholas-

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Hugh Robertson (- Shadow Minister (Sport and the Olympics), Culture, Media and Sport; Faversham and Mid Kent, Conservative)

I have barely started, but I give way to the hon. Gentleman.

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Andrew Pelling (Croydon Central, Independent)

I want to follow on from what the hon. Gentleman was saying before the Divisions about the 10-point deduction for Crystal Palace. Could there be any exceptional circumstances in which those 10 points would be given back, bearing in mind that the club did not seek administration?

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Hugh Robertson (- Shadow Minister (Sport and the Olympics), Culture, Media and Sport; Faversham and Mid Kent, Conservative)

I suppose that the straightforward answer is that there will always be circumstances in which that could be considered, but that is a matter for the relevant authorities, which are much better placed to make that decision than politicians.

Before the break, I set out some improvements to governance and regulation that the Football League has made. By those actions, it has shown that it can be trusted to regulate its own affairs, at least for the moment.

Further up the football tree, the premier league is inevitably the centre of attention, as recent events-indeed, today's events-have shown. However, we should balance the lurid headlines by remembering that it is the best league in the world, as well as the UK's most successful sporting export. More than 13.5 million people-our constituents-attended its games last year, so the balance is that the premier league is a remarkable success story.

After listening to this debate, one might think that the premier league had done nothing in recent years. However, among other things, it has strengthened the fit and proper persons test and introduced new financial criteria, which are a step forward. In my view, on balance, the premier league deserves the chance to sort things out before we resort to direct intervention.

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Tony Lloyd (Manchester Central, Labour)

The hon. Gentleman's comments about this matter are of great interest to hon. Members. However, rather like with the banks, there is always a danger in repeating the words, "It'll be all right on the night." I would caution the hon. Gentleman because debt is already imbedded in a lot of premier league clubs. Were interest rates to go in a different direction, which is quite possible in the long term, those debts could prove to be unsustainable.

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Hugh Robertson (- Shadow Minister (Sport and the Olympics), Culture, Media and Sport; Faversham and Mid Kent, Conservative)

I do not disagree with anything that the hon. Gentleman says in any way, shape or form. I suppose that the issue at the centre of the debate is whether it is time for the Government to intervene and force the hand of football's regulatory authorities by taking over, or whether we should trust those authorities to regulate their own sports. Should the Government apply pressure? The debate has shown the severity of the problem and the strength of feeling about it. Do we point those regulatory authorities in the right direction and give them one more chance to sort the situation out themselves?

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Richard Caborn (Sheffield Central, Labour)

The Government have written to the FA about strengthening its governance with the seven-point plan approved by the previous Secretary of State for the Department for Culture, Media and Sport, my right hon. Friend Andy Burnham. Would the hon. Gentleman support that type of approach towards the FA? That would involve stronger regulation until it gets its house in order, which would make it stronger and better able to deal with any of the problems within football, whether in the premier league or elsewhere. It is important to get cross-party consensus on that.

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Hugh Robertson (- Shadow Minister (Sport and the Olympics), Culture, Media and Sport; Faversham and Mid Kent, Conservative)

Broadly speaking, the answer to that question is that I would support that approach. If the right hon. Gentleman will give me a moment, I will continue with my speech, which I think will give him some comfort, and then if there is a minute left, he can respond, should he wish to.

The final regulatory authority is, of course, the FA, and its board is made up of the constituent parts of the professional game-the Football League, the premier league, which we have already discussed, and the national game. Like other bodies, the FA has recently introduced a number of measures, such as Her Majesty's Revenue and Customs debt reporting, and it uses its own financial advisory unit to provide a financial health check to all clubs below the premier league. Its grassroots programme is extraordinarily successful and will be familiar to all hon. Members. Like many others in the Chamber, I have been impressed by the way in which the FA has conducted itself of late. Therefore, I would like to give its new chief executive, Ian Watmore, the chance to make his mark in this area, albeit along with applying the sort of pressure that Mr. Caborn has mentioned.

Therefore, to answer my own question, I believe that the three main football regulatory authorities-the Football League, the premier league and the FA-should at least be given the chance to put their shop in order, and I urge them to make that a top priority for the coming year. They will be aware of the key areas that need attention such as the fit and proper persons test, the question of debt that is allied to turnover and, crucially, financial transparency, which was a point raised by many hon. Members. That is a challenge that they must not duck.

That brings me, finally, to the role of the Government.

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Nicholas Winterton (Macclesfield, Conservative)

Order. I cannot stop an intervention, but we must give the Minister time to reply to the debate. The Opposition spokesman's time is virtually up.

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Tony Lloyd (Manchester Central, Labour)

Briefly, will the hon. Gentleman say something about the role of the supporter?

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Hugh Robertson (- Shadow Minister (Sport and the Olympics), Culture, Media and Sport; Faversham and Mid Kent, Conservative)

Time is ticking away, and I was going to say that it would be a positive and, in my view, overdue development if football started by sorting out its own corporate governance, and particularly the lack of independent directors-and, many would say, female directors-on many of its boards.

I am heading into the last minute, so I will conclude by saying four things. This has been an interesting and timely debate, so I congratulate the hon. Member for Manchester, Central on securing it. Secondly, as the contributions have shown, this is a serious issue that clearly needs addressing. Thirdly, I encourage in the strongest possible terms footballing bodies to come together and work out a proper solution as a matter of urgency. My final point is that if they do so, we will back them, but if they do not, Government intervention remains an option.

4:19 pm
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Sin Simon (Parliamentary Under-Secretary, Department for Culture, Media and Sport; Birmingham, Erdington, Labour)

It is a great pleasure to serve under your chairmanship, Sir Nicholas, as I last did at great length on the 2008 Finance Bill Committee. On behalf of the Government, may I take the opportunity officially to congratulate and commend Macclesfield Town for its great works and successes, whatever they may have been?

I also congratulate my hon. Friend Tony Lloyd on securing the debate and on setting the tone for what has been an erudite and informed discussion involving hon. Members on both sides of the Chamber who have been following the issue for years and who spoke, as he did, with great passion and lyricism, as well as erudition.

I apologise to you, Sir Nicholas, and to other hon. Members for not being the Minister for Sport, my hon. Friend Mr. Sutcliffe who is in charge of these matters for the Government and would normally have been here. He is expected to take some important business in the main Chamber; otherwise he would certainly have been here, although I have begun to suspect, as his name and business have not yet appeared on the screens, that on my last afternoon in government, I may be the victim of an elaborate practical joke.

These are important matters and these are challenging times for football. As all hon. Members have said, this is a timely debate, with three clubs at different levels of the game in different courts in the land. It is fair to say that the game has come a long way since the 1970s and '80s, which saw stadiums in decay, violence on the terraces and our clubs banned from European competition. With Government's help, football has worked hard to ensure that we have growing grass-roots participation, new facilities at all levels, world-class stadiums, two of the most popular and best leagues in the world, success for our top teams in Europe and an improving national side that looks as though it might be ready to do better. Those positive changes have happened in great part because, although the clubs, leagues and associations may be imperfect-many of their imperfections have been noted this afternoon-they and the Government have worked hard together.

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Hugh Bayley (City of York, Labour)

The future of the city of York's football club depends on its being able to build a new financially viable, sustainable stadium. Will my hon. Friend the Minister speak to my hon. Friend the Minister for Sport and ask whether he will write to me after the debate to let me know what recent discussions Sport England, the Football Foundation and other bodies have had with the club and City of York council to take that project forward?

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Sin Simon (Parliamentary Under-Secretary, Department for Culture, Media and Sport; Birmingham, Erdington, Labour)

I will be delighted to do that. My hon. Friend is very concerned about doing everything that he can to help people and supporters in York to protect the future of their club.

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Andrew Pelling (Croydon Central, Independent)

Let me put a question to the Minister to prepare him for answering questions when he is mayor of Birmingham. Does he really think that it was appropriate that John Terry was sacked as captain of England?

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Sin Simon (Parliamentary Under-Secretary, Department for Culture, Media and Sport; Birmingham, Erdington, Labour)

As the hon. Gentleman mentions Birmingham, I can say on behalf of two soldier friends of mine that I am short of two tickets for the league cup final. As I am here, I thought that I might as well mention that.

The positive changes in the game have been a result of the work done by everyone concerned with the game, including the supporters, as has been said. However, that is not to say that football is immune to the problems that we all face in these difficult economic times. Although Deloitte's well respected financial report tells us that the income into our top league remains healthy due to increased broadcasting, sponsorship and overseas rights revenues, the debt sometimes looks almost unsustainable, as many hon. Members have noted at length this afternoon. Clearly, one lesson of the global financial crisis is that models of business that look sustainable and solid at one moment can turn out to be precarious the next.

Of course we understand why fans are becoming increasingly concerned about the debt accumulated by some clubs. As hon. Members have said, clubs are valuable community assets and every care should be taken to protect their long-term financial future for the sake of not just the investors, but the supporters, future generations of supporters and the communities in which the clubs sit. The game today makes money because of the fierce, passionate loyalty of fans and the history of civic pride and local allegiance forged over decades and, indeed, centuries. Football, professional though it is now, has its roots deep in the community. It is an expression of personal, local-the word "tribal" has been used-and family identity. It is sport that has become big business, not vice versa. No one in the Government is in any doubt about that. That is why we are keen that supporters should have a bigger role in the financial accountability and governance of their clubs.

There are many examples of supporters' trusts proving their value in recent years. They have prevented some 37 clubs from going out of business. They have proven their worth, and more should be done to acknowledge their significant contribution to the game. We are pleased that the football authorities have financially supported that work in the past. Hon. Members may recall that my Department was among those responsible for setting up Supporters Direct-an organisation that has been very successful over the past few years in encouraging supporters to take a greater share of ownership in their own clubs.

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Nicholas Winterton (Macclesfield, Conservative)

Order. May I say to the Minister-I want to be helpful-that he has only two minutes left? I am sorry about that, but these debates are timed and hon. Members have contributed to that problem. I would just like him to know that he has two minutes.

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Sin Simon (Parliamentary Under-Secretary, Department for Culture, Media and Sport; Birmingham, Erdington, Labour)

I am grateful, Sir Nicholas. Would that I had longer. My speech, unfortunately, would take considerably longer than that to deliver, and I am resigned to the fact that I will not be able to put on the record all the points that I would like to make this afternoon.

Of course, it is not for the Government, ultimately, to run football or to tell the businesses that make up the football community how they should go about regulating their affairs. It is for the clubs themselves to ensure that they manage their finances well, and for the football authorities, as their governing bodies, to run the game. However, the Government have a legitimate role to play-that of a critical friend of the game. Given our long-term strategic investment in safety and security, our promotion of grass-roots participation, our role in the bidding process for major championship events and our relationship with the European Union on sport issues, such as protecting TV deals from regulation, it is right that we take a view and help to frame the debate and to reflect the views and interests of supporters in particular.

We therefore have a legitimate expectation that those in the football world, including the associations, leagues and clubs, have the most effective governance and accountability arrangements in place and that they are working together for the long-term good of the game. That is why as far back as October 2008, the former Secretary of State for Culture, Media and Sport, my right hon. Friend Andy Burnham asked the football authorities in England to respond to seven key questions concerning football finance, fit and proper persons for owning clubs, the competitive balance within the game and the strength of the national side. Last September, the Minister for Sport-the real Minister for Sport-wrote to them again, following their responses to the challenges that we set down. In his letter-

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Nicholas Winterton (Macclesfield, Conservative)

Order. We have run out of time. I have allowed a little leeway. I apologise to hon. Members, but I have to carry out the rules relating to debate here. I am particularly sorry that the Minister was not able to complete what he wanted to say. We now move on to the next debate.