Chelsea Football Club - Question

– in the House of Lords at 11:39 am on 31st March 2022.

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Photo of Lord Hain Lord Hain Labour 11:39 am, 31st March 2022

To ask Her Majesty’s Government what criteria they have set for granting a new licence that would permit the sale of Chelsea Football Club.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

The Office of Financial Sanctions Implementation in the Treasury considers all licence applications on a case-by-case basis. OFSI does not publicly disclosure the details of specific applications it receives. Any licence issued under the Russia regulations will be in line with the purpose of the regulations, which is to encourage Russia to cease destabilising Ukraine and cease undermining and threatening the territorial integrity, sovereignty or independence of Ukraine.

Photo of Lord Hain Lord Hain Labour

My Lords, as a Chelsea fan for 57 years, may I ask whether will the Government ensure that no winning bid loads debt on the club like the Glazers did to Manchester United? Will Ministers also bar the Pagliuca consortium bid headed by the chair of Bain Capital, which remains highly entwined with Bain & Company, recently indicted by a South African judicial commission for acting unlawfully and referred for prosecution. Bain cynically and ruthlessly disabled the country’s tax collecting agency by conspiring with the corrupt former President Zuma for a £8 million fee. Chelsea and the Premier League must not be contaminated with such despicably corrupt business practices.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

My Lords, the Government do not want to prejudge any decision Chelsea may make; it is for the club to ensure the best owners are found. We would expect all due diligence and assessment of owners to happen before an application for a licence for the sale of the club is made, which obviously we would consider on its merits.

Photo of Lord Addington Lord Addington Liberal Democrat

My Lords, would the Minister like to consider just how much easier the Answer to this Question would be if they had actually implemented an independent regulator for English football, as put forward in the Tracey Crouch report? There is a solution to this here, as somebody would be able to go in and deal with this properly without having to take it on to other levels of complication. Surely the Government have an answer here and should take it.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

My Lords, the noble Lord is correct that the primary recommendation of the fan-led review is clear and is one that the Government endorse in principle. Football requires a strong independent regulator to secure the future of our national game. We are working at pace to provide the full formal government response to that review in the coming weeks.

Photo of Lord McLoughlin Lord McLoughlin Chair, Joint Committee on the Fixed-Term Parliaments Act, Chair, Joint Committee on the Fixed-Term Parliaments Act, Chair, Delegated Powers and Regulatory Reform Committee, Chair, Delegated Powers and Regulatory Reform Committee

My Lords, the position that Chelsea is facing at the moment is not the only situation that football is facing. There is also the case against Derby County. I join those colleagues saying that implementation of the Tracey Crouch report should be taken forward. The Queen’s Speech is coming up shortly and this would be a very good opportunity to make sure that this issue is properly addressed.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

My noble friend will know very well that I cannot prejudge any content of a future Queen’s Speech. All I can say to my noble friend—and to reassure noble Lords across the House—is that the Government are working at pace to determine the most effective way to deliver an independent regulator and any powers it might need. We will also consider the full recommendations of the excellent Tracey Crouch review.

Photo of Lord Faulkner of Worcester Lord Faulkner of Worcester Deputy Chairman of Committees, Deputy Speaker (Lords)

Following on from the excellent questions from the noble Lords, Lord Addington and Lord McLoughlin, can I just press the Minister a bit on the fan-led review, the Tracey Crouch report? Its recommendations 10 to 15 deal with fit and proper persons tests for directors and owners. Does the Minister agree that those tests, whether the report is implemented immediately or later, must apply in the case of Chelsea when it is reviewing who is to take it over?

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

Of course, there is already a process in place for the Premier League to judge a fit and proper person. We cannot judge whether a different test would have prevented the sale of Chelsea to Roman Abramovich in the first place or would constrain a future sale in any way. The fan-led review is about future-proofing the system. That is why we are considering how to enhance the owners and directors test to ensure football has only suitable custodians and directors.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Shadow Spokesperson (Digital, Culture, Media and Sport) (Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy and International Trade)

My Lords, it seems to be the case that the Government have effectively nationalised Chelsea Football Club—an interesting example of state intervention, I might add. The sale of Chelsea will obviously have to go ahead sooner rather than later if the club is to avoid running into cash-flow issues and facing the penalties associated with entering administration. The value of the club is such that it is likely to be purchased by a consortium of investors rather than any one individual such as Abramovich. What assessment has the department made of the likely timescales needed to complete due diligence and for the footballing authorities to carry out their fit and proper person tests for owners and directors? This could take some time, and I am concerned that the club will suffer as a consequence.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

My Lords, I have heard reference to Chelsea as DCMS FC, but I should be clear that financial sanctions do not change the ownership of the frozen assets. The Government would like to see the club sold to an appropriate owner before the end of the season, but we do not want to prejudge that process; that is for Chelsea to undertake. I understand that the initial bidding round has now closed and the Government expect to hear soon regarding Chelsea’s preferred bids.

Photo of Lord Watts Lord Watts Labour

My Lords, is it not the Government’s position that they are leaving it to the Premier League to decide whether people are fit and proper to run a football club? Is not the Premier League having a regulator imposed on it because it has failed to do its duty in the past?

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

The noble Lord is quite right that football has had numerous opportunities to get its house in order. It has failed to do so. That is why we undertook the fan-led review and are considering its recommendations very carefully.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, can I recommend to the Minister that she reads the really excellent—even though I modestly say so—Council of Europe report on football governance, which endorses the Tracey Crouch recommendations and encourages much greater fan ownership such as that of Heart of Midlothian Football Club? That is the largest fan-owned club in the whole of the United Kingdom, and the more of that the better. If Chelsea, Arsenal, Manchester United and many other clubs could move in that direction, football would be much better in the United Kingdom.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

I thank the noble Lord for his bedtime reading recommendation and join with him in the spirit of what he says about the need for greater fan involvement in the governance of football.

Photo of Lord Hain Lord Hain Labour

My Lords, can I press the Minister again? She really has not answered the Question, I am afraid. The Government have imposed all sorts of restrictions on the club. It cannot sell programmes; it cannot do all sorts of things, and now the Government are saying that it has nothing to do with them in terms of how the bids come out. That is simply not right, surely.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

It is correct that the financial sanctions do not change the ownership of frozen assets. We do not control the frozen assets and it is for the club to determine the process of the sale. The Government’s role in this is to consider any licence application under the sanctions on its own merit, and that is what we will do.

Photo of Lord Grocott Lord Grocott Labour

Does the Minister recognise the advantages of a club being owned by life-long supporters of the club known in the local community? It often brings great success with clubs, and I particularly commend to her Stoke City Football Club.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

My Lords, I have a feeling that multiple different clubs may be commended to me in the course of this Question. The only thing I would say to the noble Lord is that the Government absolutely recognise the important role of fans and the beneficial role that they can have in the governance and ownership of clubs.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Chief Whip (Lords), Deputy Chairman of Committees

My Lords, can I also bring to the attention of the noble Baroness the wonderful work at AFC Wimbledon and the work that our dear noble friend Lady McDonagh did to bring that club back after it was destroyed. I went there recently. It is a fabulous club with a fabulous ground and is wholly owned by the fans.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

My Lords, I can absolutely endorse that. I also know that my noble friend Lord O’Shaughnessy was heavily involved in the renaissance of that club.

Photo of The Archbishop of York The Archbishop of York Bishop

My Lords, I was not planning to speak, but I thought I might join in some of the fun. I refer the Minister back to her earlier answer in which she referred to football as the “national game”. I wonder whether she would like to confirm that it is the Government’s view that football and not cricket is now the national game, which is a cause of great shock to some of us on these Benches.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

My Lords, I do not know about the most reverend Primate’s idea of fun, but I cannot recall the exact words I used. All I would say is that it was great to see the victory of the England women’s cricket team in the world cup.