Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

[Mr Dai Havard in the Chair] — Football Governance

– in Westminster Hall at 12:00 am on 9th February 2012.

Alert me about debates like this

[Relevant documents: Seventh Report of the Culture, Media and Sport Committee, Session 2010-12, HC 792, and the Government Response, Cm 8207.]

Motion made, and Question proposed ,That the sitting be now adjourned.—(Greg Hands.)

Photo of Dai Havard Dai Havard Labour, Merthyr Tydfil and Rhymney 2:30 pm, 9th February 2012

For the benefit of people in the Public Gallery and everyone else, I should make it clear that today’s debate is about the Select Committee’s report entitled “Football Governance”, which makes recommendations to the Government, and the Government have responded. Both documents are available for hon. Members. I hope that we have a constructive discussion. I call the Chair of the Culture, Media and Sport Committee to introduce the debate.

Photo of John Whittingdale John Whittingdale Chair, Culture, Media and Sport Committee, Chair, Privacy and Injunctions (Joint Committee), Vice-Chair, Conservative 1922 Committee

It is a pleasure to speak under your chairmanship, Mr Havard, and to have the opportunity to discuss the Select Committee’s report on football governance. This was a substantial inquiry by the Committee. It is worth remembering why the Committee decided that this was an important issue that deserved examination. There were two reasons, the first of which was the clear commitment given by both the parties that now form the coalition Government. It was clear that action needed to be taken, particularly to assist and encourage supporters to have greater involvement in the ownership and running of football clubs. That commitment appears plainly in the coalition agreement, although it was perhaps slightly less clear on precisely how it should be delivered. The Committee thought that it might be in a position to help the Government by taking evidence, examining that question and making recommendations.

However, this was not just about supporter involvement, although that is a very important element. It rapidly became apparent to us that there was quite significant concern among hon. Members on both sides of the House about the general state of our national game. A debate in this Chamber was extremely well attended by hon. Members, many of whom spoke up about the difficulties facing their local football clubs. There was widespread concern that something was wrong with the game. Perhaps that was best summed up by my hon. Friend the Minister, who famously described football as the “worst-governed sport” in England. I have to say that in the course of the Committee’s inquiry, we did not find much evidence to contradict what he said. However, we also found much to admire and praise about English football. There is no question but that it arouses huge passions up and down the country.

As I said, this was a substantial inquiry. We received more than 100 submissions of evidence. We held eight oral evidence sessions, to hear from every component part of the game. The Committee went on a number of visits. We went to Manchester City football club to see the huge investment that has taken place under its new owners. They have taken the club from the bottom levels to the top levels of the premier league. We went to Arsenal to see the Emirates stadium and to meet the management there. We held oral evidence sessions at Wembley stadium and Burnley football club. We also went to Germany. Looking at Germany’s model of licensing football clubs was a particularly influential part of our inquiry. It made quite an impact on the Committee.

I will not go through the whole report in detail, because many hon. Members are present and want to contribute and I hope that most of them have already read the report and are familiar with our findings.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

Will the hon. Gentleman give way before he goes into the report?

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

I apologise that I cannot stay for the whole debate because of constituency engagements. Does the Chairman of the Select Committee agree that the centrepiece of the report is the recommendation that the Football Association reassert its role as the sport’s ultimate governing body—in particular, through a licensing system, which he has just mentioned, and a modern, effective form of governance that would not allow, for example, the FA to be bounced into a naive renegotiation of the England manager’s contract as it was?

Photo of John Whittingdale John Whittingdale Chair, Culture, Media and Sport Committee, Chair, Privacy and Injunctions (Joint Committee), Vice-Chair, Conservative 1922 Committee

The hon. Gentleman—he is really a friend on the Committee—encapsulates the report in a couple of sentences very well. I am almost tempted to say that he has done my job for me and finished my speech. Yes, there is no question but that we felt that at the heart of the reforms that were necessary was the game’s governance structure: ultimately, the FA. I will go on to talk about that in more detail. I did not intend to talk at great length about the management of the England football team, although that is obviously a matter of great interest and debate today. I heard the Minister’s remarks during Culture, Media and Sport questions a few hours ago, and I entirely agreed with him. I am sure that the matter will crop up again during the debate.

Before I move to the report’s main recommendations, I want to pay tribute to three people. The first two were our expert advisers: Christine Oughton and Rick Parry, who provided enormously helpful experience and wise advice to the Committee. We relied a lot on their input throughout our inquiry.

The third person to whom I should pay tribute, particularly in a debate on football governance, is our late colleague on the Committee, Alan Keen. [Hon. Members: “Hear, hear.”] Alan was the senior member of the Committee. He was a member of it before I became Chairman. Football was his passion. He chaired the all-party group on football. He was very—I am tempted to say keen—eager that we should embark on this inquiry. It was a great sadness to us that, because of his illness, he was not able to play as great a part in the inquiry as he would have liked. He is certainly greatly missed. It is only right in a debate on football that we pay tribute to him.

Some people asked why the Committee was looking at football at all, because it is a huge success in many respects. The Premier League is probably the most successful in the world. It has an average attendance of 350,000 people each weekend and about 92% occupancy. The second league—the Football League—gets average attendances of 375,000. Some £2 billion of revenue comes into the Premier League. There is no question but that the top English clubs are watched not just throughout this country, but in almost every country in the world. It is hard to go into a bar in any country and not see a screen in the corner showing the premier league. To that extent, it is hugely successful. There were those who said, “In that case, why are you bothering to spend this time looking at it? Why don’t you go off and look at other things?” But we found that there was widespread concern about the underlying state of the game. That was felt right across football and among followers of football.

Despite the huge revenues that come in, very few clubs trade profitably. The main reason for that is the extraordinary amount of money paid out on players’ salaries. The consequence is that debt has become an enormous problem throughout the game. Debt kept coming up as one of the principal issues causing concern. More than half of Football League clubs have gone into administration at some stage since 1992, and all operate on very narrow margins. The net debt of the Premier League clubs is £2.6 billion. Some people would say that that in itself may not be a problem. Indeed, there will be clubs that operate with quite significant debt, but as long as they can service that debt and trade, it is not necessarily something that need be addressed immediately. However, there is no question but that the debt is a major issue. We were told by the chairman of the Football League, for instance, that it was the issue that kept him awake at night.

There is also concern about ownership, which is not wholly dissociated from the question of debt. That, too, was something that we considered. As Paul Farrelly suggested, we decided that if we were to address the problem, the most important thing that needed to be tackled was governance. Therefore, we wanted to establish, right from the start—this may seem self-evident, but it was not necessarily self-evident—that the FA is the ruling body of football. The FA therefore needs to be reformed if we are to get this right.

Some years ago, Lord Burns produced an extremely good report, which made a number of recommendations for reform. When we heard from him, some of his recommendations had been accepted. They included the incorporation of the FA chairman and chief executive on to the FA board, but they were still waiting to bring on the two independent non-executive directors. Progress, I believe, has been made since then.

Terry Burns told us that, if anything, he felt that he had been too timid and that he would have liked to have gone further in involving non-executive directors. Indeed, we heard from one former chief executive of the FA that he wanted an entirely independent, non-executive

FA board. We felt that that was not wholly realistic. We were also clear that, as in most corporate structures, the board needed to be relatively streamlined to be effective.

After some debate, we decided to recommend that the right size for the FA board was 10, and that it should include the chairman and chief executive of the FA, the two non-executives and two more of the FA executive directors—in particular, the director of football development. Alongside them, we decided that there should be two representatives of the professional game—presumably one from the Premier League and one from the Football League—and two representatives of the national game. Although we understood the reasons why others, such as supporters, players and managers, wanted representations, we felt that that could make the board unwieldy. Therefore, we felt that we had come up with the right composition.

At the same time, we also felt that there needed to be reform of the FA council, which is an extraordinary and enormous body. It dates back many years to include representatives from Oxford and Cambridge, the three separate services and the public schools, but very few representatives of players and people who actually watch football. We therefore felt that that was something that needed to be addressed. We were also slightly concerned that the meetings started at 11 o’clock and finished at lunchtime and that some of the members of the FA council seemed to have been there for 50 years or more. We felt that there was a need to address the composition of the council, the tenure of its membership and the form of its meetings. We felt very strongly that the council should be a parliament and not an executive decision-making body.

Once those governance reforms are in place, we will be able to move forward to tackle some of the underlying difficulties affecting the game. I have talked about debt, so the next is financial management. We welcomed the introduction of UEFA’s new financial fair play rules, which will affect those clubs that have ambitions to play in European matches. We felt that the principles underlying the financial fair play rules were absolutely right; they commanded a lot of support and should be applied throughout football.

One aspect of the financial management of clubs that caused considerable concern to the Committee was the football creditors’ rule. I have absolutely no doubt that my hon. Friend Damian Collins may talk about that a little more, because he particularly pursued that issue during our discussions. Although we could see the reasons why that rule was in place, we felt that it was unfair on creditors, as they were often small firms in local communities that had supported the local team. If that team gets into difficulty and goes into administration, they have to go to the back of the queue after all the football creditors before having their debts paid. We felt that that was unfair, and I am sure that my hon. Friend will say more about that.

One aspect that I have taken a long-standing interest in and that still creates significant potential difficulties is the ruling of the European Court on broadcasting rights and territorial sales, the full implications of which we are still waiting to see. It could have a very damaging effect and it is of concern not just to certain broadcasters but to a large number of people involved in football.

As for how we enforce the financial fair play rules and the other necessary changes, we were impressed by what we saw in Germany. Germany has a licensing model and we saw the way in which it was used to ensure that the clubs do not trade beyond their means for long periods. We saw how they were required to follow certain rules specified by the Bundesliga. We decided that if we were to achieve our changes, we needed a national licensing scheme. The best body to administer that is clearly the FA. Therefore, the other main thrust of our recommendations was that we should move to a licensing scheme under the FA, which should address issues such as the financial management of the game, the sale of stadiums, investment in youth development and all the other areas where, understandably, concerns have been raised. It could also address ownership.

Foreign ownership in the game is not necessarily a bad thing. After we saw what Sheikh Mansour had done in Manchester City, we could understand why the fans had great banners up saying, “Long live Sheikh Mansour.” However, there are other who are less committed to the development of clubs. We also felt that the fit and proper person test, which is necessary, had not always been as effective as it might have been. Indeed, we debated long and hard about what someone had to do to fail the fit and proper person test in English football.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

My hon. Friend is talking sense on the fit and proper person test which seems to be honoured more in its breach. Going back to overseas ownership, does he feel that there should be a different regime for football clubs compared with the rest of the UK economy? If so, how does he see that operating?

Photo of John Whittingdale John Whittingdale Chair, Culture, Media and Sport Committee, Chair, Privacy and Injunctions (Joint Committee), Vice-Chair, Conservative 1922 Committee

The truth is there will be different regimes governing the ownership of football clubs. For this particular aspect, a slightly different regime should apply. I am not against the principle of foreign ownership. Just as I do not have a kneejerk response to foreign ownership in football, the same is true of the wider economy. To some extent, there are special factors, but I am not opposed to overseas ownership per se.

Let me pay one word of tribute. When the Committee visited Burnley FC, we were well entertained by the chairman of the club, Barry Kilby. In many ways, he represents all that is best about local ownership. He was a business man who had been successful in his community and had put back a huge amount into Burnley FC. His passion for the club was undoubted. Therefore, a strong local owner can bring great benefits.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

Will the Committee Chairman extend the same compliments to Peter Coates, who is chairman of Stoke City? The Chairman may be aware that I have been supporter of the club since I was five years old.

Photo of John Whittingdale John Whittingdale Chair, Culture, Media and Sport Committee, Chair, Privacy and Injunctions (Joint Committee), Vice-Chair, Conservative 1922 Committee

I am very happy to pay the same tribute to Peter Coates. As an aside, let me say that the rest of the Committee used to enjoy having a sweepstake on how long it would take the hon. Gentleman to mention Stoke City during our deliberations. I am glad that he has done so today.

The issue that I want to finish on is the one that we set out to address, which is that of supporter ownership and involvement. It is a crucial factor, and the Government are right to say that it should be encouraged. It is unrealistic to say that the top Premier League clubs are likely to be owned by their supporters, but there are some clubs lower down that are already supporter owned and more should be done to help supporters’ trusts that want to become owners. For example, there was some concern about the way in which the Financial Services and Markets Act 2000 operates. It causes difficulties for supporters, and we thought that the Government might address that. We thought that when supporters’ trusts have minority stakes, there might be some merit in giving them protection, so that if a club is acquired and the 90% threshold is reached, they are not necessarily forced to give up their ownership to the new owner. There are several areas where we would like clubs if not formally to give a role to supporters, to involve them much more in decision making and with information.

One club that we visited, and whose supporters are extremely involved through the fanshare scheme, is Arsenal. When the Minister came before us, I raised the fact that Arsenal’s new owner had not then given a public commitment to support the fanshare scheme. My understanding is that he has still not done that, and I think the Minister said that he might encourage him to do so. That is an example of an active supporters’ organisation and how it can play a valuable role if the club ownership recognises it.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Justice), Shadow Spokesperson (Foreign and Commonwealth Affairs), DUP Westminster Leader

I am grateful to the hon. Gentleman’s Committee for the work that it has done in this area. The recommendation for a fan liaison officer is a good idea. Supporters up and down the land are crying out for that. Can the Chairman of the Committee offer any hope that that might be made to happen?

Photo of John Whittingdale John Whittingdale Chair, Culture, Media and Sport Committee, Chair, Privacy and Injunctions (Joint Committee), Vice-Chair, Conservative 1922 Committee

I think that that is a matter more for my hon. Friend the Minister than for me, but I certainly agree that it is something to be encouraged, and that fan liaison officers can play a valuable role. I am sure that my hon. Friend will touch on that.

I thank the Minister for the Government’s extremely positive response to the report. He could not have done more to make it clear that they want its recommendations to be implemented. I think he and I take the same view that it is not desirable for the Government to legislate, but that the matter is so important that if that is what must happen, it will happen. I hope that we will not come to that, and he may be able to say a little more about the state of discussions. He made it clear today that the deadline of 29 February is still in place, and I hope that all those involved in football who may listening this afternoon will be spurred on to ensure that the sort of reforms that we think are necessary are achieved by that deadline.

Photo of Dai Havard Dai Havard Labour, Merthyr Tydfil and Rhymney

Order. Given the number of hon. Members who wish to speak and the time constraint, Members should estimate to speak for 10 minutes, and plan do so for eight minutes.

Photo of Steve Rotheram Steve Rotheram Labour, Liverpool, Walton 2:52 pm, 9th February 2012

That is a tall order, Mr Havard. It is a pleasure to serve under your chairmanship this afternoon. I was not a member of the Select Committee at the time of the inquiry into football governance, but it is reasonable to argue from the tone of the Committee’s report and the Government’s response that the topic has been debated in a good spirit, and I wish to continue that. I am in the unique and fortunate position of being the only Member of Parliament to have two Premier League football clubs in my constituency—Everton and Liverpool. I cut my parliamentary teeth leading a well-attended Westminster Hall debate on this very issue way back in September 2010.

Before I begin my speech in earnest, I want to take the opportunity to echo the comments by the Chair of the Select Committee about Alan Keen, and to send my condolences and, I am sure, those of right hon. and hon. Members on both sides of the Chamber to the families of the 75 supporters who were killed recently at a football stadium in Egypt. No matter which club we support, we are all part of the wider football family, and that loss is a football tragedy as well as a human one.

Football is one of our country’s undoubted successes, and we are the home of the beautiful game. We are also the home of the best and most competitive leagues in the world. Children from around the globe are dreaming about the chance to play football at Wembley, the Emirates stadium, Stamford Bridge, Goodison Park, Anfield, and perhaps even Old Trafford. Wealthy tycoons are dreaming of the Premier League promised land. They are attracted to English football as a way of investing their money and seeing the best players in the world play for their clubs to an extent not seen in other countries.

Despite the merits of other leagues such as the Bundesliga, La Liga, Ligue Une and Serie A, it is the Premier League and even the championship that attracts international investors, because they continue to offer the best that football has. Roman Abramovich and Sheikh Mansour bin Zayed al Nahyan are the only two owners with an unlimited pot of money, and who are capable of injecting copious amounts into their respective clubs. Today, some clubs, such as Tottenham, are plcs and listed on the stock market. Others, such as Manchester United, Chelsea, Liverpool, Blackburn and Sunderland, are owned by professional sport investors. Others seem to be owned for the prestige—for example, Fulham, which is owned by Mohammed al Fayed. My hon. Friend Tom Greatrex may speak about that.

However, some takeovers reinforce the point that football clubs are simply economic entities to be bought and sold like any other commodity, which completely neglects the broader social impact that clubs have in their local communities and beyond. The result for many clubs in recent times has been to chart a course that is perilously close to the brink. Portsmouth, which I think we will also hear about, ran up debts totalling £119 million, and it is still far from fiscal safety. Southend United and Cardiff City recently managed to pay their debts just before the taxman’s axe was wielded. Several other clubs have suffered administration, such as Southampton, Darlington, Crystal Palace, Wimbledon, Hornchurch and Scarborough. Leeds United, which was probably the biggest victim of all, was allowed to play in the Football League despite no one knowing who owned the club.

In 2009, the all-party group on football found that the group most under-represented in the game was those who should have the most say—the fans. One of the biggest problems with football governance is that at most levels of the game those who pay for it are excluded from the decision-making structures in clubs, leagues and even governing bodies. In pursuit of a global phenomenon, which we have achieved with the Premier League, we failed properly to regulate our national obsession.

I do not pretend that there is a simple answer, but a major problem that needs to be addressed is the fit-and-proper-person test, to which the Chair of the Select Committee has referred. It is an absolute sham. If it were not, the majority of aforementioned clubs would never have been in the position they were because of owners who abused the system and played fast and loose with football clubs that are the pillars of communities across Britain.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

All too often, clubs in appalling financial difficulty grasp at the nearest straw like a drowning man. There may be only one individual who can save the club, but they may not pass the fit-and-proper-person test in a meaningful way. However, if the choice is that person or the club going bust, one understands why the former choice is made, albeit one that leads to other difficulties further down the line. How does the hon. Gentleman envisage getting round that problem if the alternative is for a club to go bankrupt and to spiral out of the league, as has happened to several former league clubs in recent years?

Photo of Steve Rotheram Steve Rotheram Labour, Liverpool, Walton

That is exactly the point, and I am sure that my hon. Friend Graham Jones will talk about his beloved football club, and the fact that that happens too often for the problem not to be tackled. That is exactly what the Select Committee set out to do—to consider what recommendations we could suggest on a non-party political basis to ensure that the football authorities have to take cognisance of such issues, and include football fans in the governance of their football teams.

We cannot pretend that one size fits all, because it does not. We need a proactive approach to redress the imbalance in football governance, an imbalance that has seen some owners and directors of football clubs using them like playthings that can be thrown aside when they become bored, while the fans—the lifeblood of any club—are pushed further and further away from the decision-making process. A more inclusive approach would probably not be universally popular among football’s elite. Indeed, I spoke to one senior representative of a football club who said that he did not want the lunatics to run the asylum. I am a bit fed up with seeing fans given the rough end of the stick. They are treated by some club owners as an irritant or a problem, but yet they are expected to be part of the solution when those errant owners disappear, leaving the club in financial crisis.

Supporters Direct is leading a new initiative that I think deserves more focus. It builds on the ideas and recommendations made by the Committee and on the Government’s response regarding the implementation of a new licensing framework that is impartial and independent of the reformed FA board. I welcome the changes to the FA at board level.

It is crucial that impartiality is maintained because that will ensure total transparency which, we will all agree, has been missing from the FA for some time. We must, however, give credit where it is due, and there have been welcome introductions since David Bernstein’s appointment. I hope, however, that the chairman of the FA will not rest on his laurels, and that he will do something about the current ludicrous situation that allows football managers to profit from the sale of players. Regardless of what has happened over the past 24 hours, that immorality remains, and if ever there were a conflict of interest, that is it.

There are two dimensions to the licensing framework proposed by Supporters Direct:

“Promotion of financial and social responsibility, and balancing of the supporting, commercial and social objectives of clubs.” and

“To ensure that clubs and their assets are protected for current and future generations.”

Supporters Direct has stated:

“The framework for supporter and community engagement should provide rights for supporters on behalf of the community subject to conditions…Rights would be granted to a ‘Fit and Proper Supporters’ Trust’ for engagement with their clubs.”

The level of engagement would increase according to the degree of development of the “fit and proper” supporters’ trust. If such a measure were implemented, it would give fans a voice at the top table.

I believe that football fans would use the opportunity to nominate a trusted supporter to make informed decisions—it is the big society writ large. I am aware of some football clubs that would hold an election and offer season ticket holders, as well as club members, the opportunity to vote for a candidate on the basis of a quasi-manifesto set of pledges.

Supporters Direct has stated:

“The co-operative ownership of football clubs via supporters’ trusts thus offers huge benefits not only to the way that the game is run, but also to local communities.”

Although I recognise that there will always be a tension between financial and social returns, the football world is starting to realise that a greater balance needs to be struck. We are starting to see a yearning for the greater involvement of supporters in football governance not only in the UK, but across Europe.

Another proposal is for the reformed FA board to consider ways to increase the number of ex-footballers in boardrooms. Such a move would appease the grumblings of many fans who believe that directors are not “football people” but are out-of-touch businessmen. That is currently the case at Blackburn Rovers, a club that is rich in history and has fantastic loyal support.

Despite becoming a global phenomenon with a worldwide audience, football is not immune to external forces outside the control of its internal market. Lessons must be drawn from disasters such as the global financial crash. All bubbles have the potential to burst. Football needs a regulatory framework and a governance structure that is as transparent as reasonably practicable.

I am confident that there is the political will in the Chamber and the DCMS to make progress. I hope that that continues, and that the Minister will take on board the strength of feeling on this issue.

Photo of Don Foster Don Foster Liberal Democrat, Bath 3:04 pm, 9th February 2012

It is a pleasure to serve under your chairmanship, Mr Havard. I know that many hon. Members wish to speak, so I will try to be brief. I welcome equally the report by the Culture, Media and Sport Committee and the Government response. We should pay tribute to my hon. Friend the Minister. He has been robust in his criticism of football’s current governance arrangements, and he has insisted on a response to those criticisms by the end of the month. I know he is confident that he will get a reply, and perhaps when he responds to the debate he will say what sort of content he expects that reply to contain.

We all accept that the English game is played to a very high standard, and we know that 8 million fans have already watched premiership games this season. Six premiership teams have taken part in the past 10 finals of the European championships, and we have fantastic football in this country. We cannot, however, say the same things about what takes place inside the boardroom, or the governance of the game, that we say about the quality of the playing. All too often, fans have to worry about issues such as debt and ownership, rather than performance on the pitch. Fans are losing out because of the ridiculously high price of a premiership season ticket, or because many of our top-flight clubs still do not have adequate facilities for disabled fans. Fans and clubs that want to introduce safe standing do not have the opportunity to do so, and many of the clubs that are lower in the league are in difficulty because they are obliged to adhere to ludicrously inappropriate rules such as those on transfer windows.

There is much to sort out. The predominant areas of concern expressed by the Committee were, quite rightly, those of money and governance.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

The right hon. Gentleman will appreciate the central role that football plays in communities because he is the Member for Bath, where rugby has a similar role. Does he agree that one key task for a governance regime in football is that of fostering a game where the finances are sustainable? People involved in the premiership, such as David Gill of Manchester United and Peter Coates of Stoke City, have broadly welcomed the thrust of the Committee’s report. It would therefore be surprising and disappointing if the FA, which has acted so decisively over the England captain and manager, did not welcome the reassertion of its role, and the means by which to do that.

Photo of Don Foster Don Foster Liberal Democrat, Bath

I hope the hon. Gentleman proves to be right and we will hear about the response on that issue that the Minister will receive. He is right to mention his concern for the sustainability of finance in football. As we heard from the Chair of the Committee, although the level of debt has been declining, in the premiership it still stands at £2.6 billion. Some 68% of its income is currently being spent on players, rather than on other important things.

If we compare the premiership with the rest of European football, we discover that the English premiership has more than 50% of the total debt held by all the leading clubs in Europe. Last season, the championship declared its highest ever level of debt at £133 million, and we know that it is spending about £4 for every £3 that it generates. That is not sustainable. It is vital to welcome

UEFA’s proposals, and they will be implemented even though they will not affect all the clubs in this country. That is why the licensing proposals are so critical.

UEFA’s proposals are key. A report by Deloitte published today reflects much of what it said in its 2011 report, and points out that although there have been a lot of false dawns, the UEFA proposals may provide the key to moving forward and to financial sustainability. As it said in its 2011 report, however,

“the more things change, the more they stay the same. While football’s revenue performance has been spectacular, sustainably managing its costs remains football’s primary business challenge.”

That is a key issue that the Select Committee’s report and the UEFA proposals seek to address, which I welcome.

I also very much welcome the proposals from the Select Committee on governance of the game. It is right that the FA be the leading body for football in this country, and it must take charge of many of the deliberations that take place in the 14 different committees. It is ludicrous that so many of them report, not to the board, but to the council. The key people making the decisions are therefore at a distance from the considerations of those various committees. The Select Committee was quite right to suggest that the board must be slimmed down. We should all welcome the moves to bring non-executives on to the board, but clearly more must be done to move forward and slim down.

Reform of the FA council itself is equally important. The Chair of the Select Committee has already made it clear how inappropriate the current arrangements are. I was interested in what Malcolm Clarke, the chairman of the Football Supporters’ Federation, said:

“It is impossible in a body of 118 people to have a critical challenge to the board about what it’s doing, partly because the decisions are long since passed and partly because of the sheer format of a body of that size.”

That echoes very much what the Chair of the Select Committee said, and it is crucial.

Rule 34 should be looked at again. The report fails to say very much about that and the remarks of the Chair of the Select Committee were perhaps slightly lacking for not mentioning it. Rule 34 makes it clear that football should be run like a not-for-profit company, with sport and football put before profit, and sadly I do not see that operating in spirit or to the letter.

Finally, licensing is critical. If we wish for a financially sustainable game, the UEFA rules will not cover all the clubs that concern us. The licensing proposal that the Select Committee and others have suggested is the way forward to ensure that similar rules on “fit and proper persons”, sustainability of finance and so on can be enshrined in a way that covers all the clubs in the game. I am particularly drawn, as Steve Rotheram is, to the recommendations of Supporters Direct on club licensing, which deserve to be looked at seriously.

My right hon. Friend the Deputy Prime Minister recently advocated the great benefits of the John Lewis model of running companies and employee share ownership, but with employee share ownership comes employee participation in governance. It seems vital that those who are key funders of the game have a much greater involvement in the governance of the game that they help to fund. There are real benefits to a stakeholder model of corporate governance, which is why Supporters Direct goes through the all the key things in its proposals, but also talks about how supporters can play a key role in the governance of individual clubs as part of the licensing proposal.

I said that I would try to be quick and I hope that I have been. It is an important report, but what will matter most is not what is in it or the Government’s response but, critically, what the FA does with it. It must now get a grip on the governance and the finances of this crucial part of the culture of this country. So far, it has failed us. Let us hope that this time it will do something about it.

Photo of Dai Havard Dai Havard Labour, Merthyr Tydfil and Rhymney

Ten minutes with an intervention. Exemplary, Mr, Foster.

Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy) 3:14 pm, 9th February 2012

I will endeavour to do as well as Mr Foster in keeping to time.

I declare an interest as a founder of the Fulham Supporters Trust, which was long before I ended up in this place. I have knowledge and awareness of the issue from being involved in and running that trust, with a huge amount of support and guidance from Supporters Direct, which is a superb organisation that should valued. I hope that when the football authorities respond to the Minister, they will properly have taken into account its proposals on licensing, which my hon. Friend Steve Rotheram dealt with in some detail—I will not repeat them. I unashamedly stand here to talk about the interests of supporters. Whatever the future licensing regime, it is imperative that it involves and incorporates the views of supporters, who are in many cases the lifeblood of the clubs in which they are involved.

I congratulate the Chair of the Select Committee, Mr Whittingdale, and the other Committee members on the report; it is fantastic. He is obviously chairing a very high-profile Committee, which has lots of other issues to deal with. The report is at least as important as—if not more important—anything else that the Committee has done this Parliament. It is crucial that we deal with the issue, and I join the hon. Gentleman in paying tribute to Alan Keen. I knew him for a long time before I entered the House; I used to see him when Fulham played Middlesbrough, and he was unfailingly cheerful even after we had beaten them. His work for the all-party group on football in years gone by helped to develop the awareness in Parliament of some of the issues in football ownership that have led us to where we are now, so it is absolutely right that those tributes have been paid.

There have been ownership issues at many clubs. I was thinking earlier that we could go through a list and find very few that have not had concerns about ownership to deal with at some point, but it is striking that, with very few exceptions, most have survived. I contend that in many cases they have managed to do so due to the involvement of supporters, not all the way through in running the clubs, but because they have got involved when everyone else has walked away. We see that again and again through football history. The most prominent early example of that is probably Charlton Athletic in the early to mid 1980s, when they were effectively left homeless and nomadic. It was the fans’ involvement in the Valley party and everything else that eventually got them back to the Valley and into a sustainable position where they became a very renowned community club, as they still are, even though they have fallen a couple of divisions on the field.

Photo of Tom Blenkinsop Tom Blenkinsop Opposition Whip (Commons)

Another club in a similar situation in 1986 was, of course, Middlesbrough, which was fortunate enough to have a very wealthy supporter in Steve Gibson, a local fan and local businessman, who is highly regarded across all the English football leagues. Has my hon. Friend looked at paragraphs 43 and 44 of the Government’s response to the report? There are quite a number of points of consensus across both sides of the House on Supporters Direct’s proposals, but the real issue is whether Supporters Direct has adequate funding to ensure that there is a network to help supporters’ trusts in future.

Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy)

My hon. Friend makes an important point. I have raised it with the Minister in relation to Supporters Direct’s previous funding difficulties. It does a huge amount of valuable work and we should be able to come up with a way to enable it to continue its work supporting and guiding supporters’ trusts, often when clubs are in crisis and trusts are seeking to maintain them at very difficult times.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

Although I accept that an engaged supporters’ base that can play an integral role in its ongoing development is fantastic for any football club, does the hon. Gentleman recognise that it is not entirely a panacea for all problems? There have been examples of supporters’ trusts that have not worked terribly well—Stockport County, for example. Without the requisite expertise on top of the enthusiasm of a supporters’ base, it can often go horribly awry.

Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy)

The hon. Gentleman is perhaps in danger of straying into the territory of Ron Noades a few years ago, who said, “Fans can’t do it and probably aren’t able to do it.” I am not saying that fans should be running clubs 100%. The Chair of the Select Committee is right to say that we would not have every club completely run by supporters, but if fans are involved, they can often help to stop making the mistakes that led to the position that Stockport were in. They were in that position because of mismanagement before the supporters’ trust was able to take over. In that case, it was very difficult for the supporters’ trust to be able to rescue them. If we look at other examples, Exeter and Brentford have managed to help turn things round. My hon. Friend Siobhain McDonagh will no doubt wish to speak about AFC Wimbledon, where they started from scratch. We should never underestimate the ability of football fans from all walks of life, who have a club in common, to get together and make things happen.

The main point that I want to make about football fan involvement in the running of clubs is that it should not happen at the point of crisis. It should not be when everyone else walks away, or when owners have mucked it up and decided that they have had enough and walk away.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

My hon. Friend is making a powerful argument on behalf of supporters. It can be seen in its purest form with FC United of Manchester, a club that started from nothing. It is building a multi-million pound stadium and gets regular decent attendances.

Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy)

My hon. Friend mentions another good example, of which there are many. FC United formed a club on the basis of issues around ownership of Manchester United and the takeover by the Glazer family. It would be much better if supporters were involved not at the point of crisis—not when everyone else walks away —but on a sustained basis. We have seen such examples. The Chair of the Select Committee mentioned Manchester City. In Scotland, the owner of Heart of Midlothian effectively persuaded fans to give up their shareholding and give it all over to him, because he had a great plan that was going to be the salvation of the club. Now look at the position they are in. That has happened on more than one occasion. The sustained involvement of fans will be much more valuable to the interest of clubs in the medium and long term, despite the difficulties and the misjudgments that different owners may make.

The other point that I want to make—again, it was in the Supporters Direct proposal, which is important—is about grounds. In many cases, football grounds and stadiums have strong links with the communities that the clubs serve and with the clubs themselves. Too often in the past we have seen situations in which teams end up, through different ownership structures, being separated from the grounds or moving out of their grounds for other reasons, and that creates all sorts of problems. As a Fulham supporter, I know about that. At various times we have come close to losing our ground, largely because the potential value of the ground’s real estate is higher than the value of running the club. That is due to an accident of geography—where the ground is.

There was a period in the mid-1980s when Fulham, Queens Park Rangers and Chelsea were owned by a property development company whose interest was not anything to do with the three football clubs, but to do with the potential value for development on those sites. At one point we were going to merge with QPR, but that got stopped. In 2001, the current owners of the club that was referred to earlier thought it would be a great idea for Fulham to move out and have a new ground near White City. In the end, that did not happen, partly because of the views of supporters who were able to persuade the club that its judgment was wrong. However, I am pleased to say that that position has changed and we are now on the same side as the club. Supporters are back at Craven Cottage and will hopefully be there for many years to come.

We need protection in the football licensing set-up that stipulates a club cannot leave a ground unless it has somewhere else to go.

Photo of Andrew Bingham Andrew Bingham Conservative, High Peak

What does the hon. Gentleman think about those lower down the football pyramid in the lower league level? I am thinking of a team such as Witton Albion, which he is probably not familiar with. They sold their ground, and as part of the sale they got a brand-new ground, which was a great facility that could be used by the community. What does he think about that? I take his point on the higher levels, but what about the lower levels?

Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy)

The hon. Gentleman has anticipated my next point. If a club has somewhere to go and has plans in place, that is fine. There are plenty of examples of clubs that have moved and got new grounds. I am reminded of Manchester City and Bolton. I am concerned about clubs that are left high and dry without a ground. Not being allowed to leave a ground without somewhere else to go would be an important protection. When clubs are separated from their grounds, it causes huge difficulty.

I am conscious of the time. I have not managed to do as well as Mr Foster. I will conclude by saying that I think the Committee’s report is superb and it should be congratulated. I also want to compliment the Minister. Whenever I have asked him about these issues, he has always been forthright in his opinions and in his views on football governance. He is absolutely right. I hope that the response that he gets from the football authorities at the end of this month will be good and comprehensive and deals with the issues. If not, I hope that he has the courage to go back to the football authorities and say that that is not good. I hope that we get the right system in place for the future of football in this country.

Photo of Dai Havard Dai Havard Labour, Merthyr Tydfil and Rhymney

My only disappointment, Mr Greatrex, is that you did not mention Merthyr Town, which is my club. It is now a community club. It has gone through many of the same things. Welsh clubs who play in the English league have an interest.

Photo of Penny Mordaunt Penny Mordaunt Conservative, Portsmouth North 3:26 pm, 9th February 2012

My apologies to hon. Members. In addition to being the home of Fratton Park, Portsmouth is home to the surface fleet, and I am due to speak in the debate on Somalia.

I thank the Select Committee for an excellent report. Its conclusions are sound and its arrival timely. Portsmouth football club has been poorly served by its successive owners, and it is a prime example of why we need reform in football. It has been badly abused, but it is worth saving. Much has been said about the social value of the club.

I want to thank all hon. Members who have been helpful and supportive towards Portsmouth. At this time, we do not know what the future holds, but the grim situation is checked with a mass of good will, and the professional approach that the supporters’ trust and the fans are taking in response. Our club has a future, and for the first time it has a well-run supporters’ trust that is keen to have a financial stake as well as a governance foothold in the club.

At the end of last year, I sat down with the trust and listened to their frustrations. Despite being able to lever considerable funds, they could not get access to the financial information of the club or see the administrator. On my quick and dirty maths, they were being asked to demonstrate that they had access to funds five times the amount that the club was worth before they could even start a dialogue. They have managed to talk to the administrator, but they are still not being taken seriously. The administrator has even gone to Portsmouth city council, which we all know does not have deep pockets, to ask for help, yet they are ignoring the community, which can demonstrate that it has considerable funds. That illustrates the considerable culture shift that is needed, and that I hope the report will help.

Given that it is in everyone’s interests that Portsmouth is sold to new owners—ideally, in my book, to a coalition of businesses and supporters who are genuinely interested in Pompey—it is a frustration to me that the dialogue that would make that outcome more likely is being frustrated. Today, I hope we can send a clear message to all those who hold sway over a club’s future, especially administrators and Her Majesty’s Revenue and Customs, that this Parliament wants everything that can be done to ensure that the businesses survive. We would want that for any business, and I am sure that many of us in this Chamber have gone in to bat for businesses and individuals to sort out their tax affairs. We should not shy away from doing the same for football clubs. I also argue that these businesses are a special case. The point that I made to the Prime Minister last week was that if a supermarket folds, someone can go and buy their carrots elsewhere. If Portsmouth goes under, the fans will not be content with buying their season tickets from another club.

We also need to recognise the social value of clubs. The Portsmouth study centre is an award-winning education facility and it was a pilot site for the national citizenship programme. Its health outreach programmes are also exceptional in a city that has poor health and education outcomes. Add to this the community cohesion, the bridge it creates between generations and the sense of place and identity that it brings and we soon realise the impact that its absence will have.

There is, however, reason for optimism. I congratulate Pompey fans on recently forming the Portsmouth Supporters Trust, and on the unity they have shown in pushing for a greater role in the governance of their beloved club. I have been struck by their professionalism—ably supported by the wonderful Supporters Direct—by their knowledge and by how they have conducted themselves. There should be no concerns about their ability to respect confidentiality and develop a bid, and reassuringly they are considering several scenarios on how they can contribute to Portsmouth’s survival, including a community buy-out. Time and a level playing field are needed if the fans are to contribute, and I am sure that the report will go a long way to creating the latter. The report contains both practical measures for a more pragmatic approach to such a crisis, and measures to prevent one happening in the first place.

I know that Pompey fans would want me to mention the appalling fit and proper person test, which has so badly let them down.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

I am making brief interventions in lieu of a speech. I am sorry, Mr Chairman.

Photo of Dai Havard Dai Havard Labour, Merthyr Tydfil and Rhymney

You will get pinged if necessary, Mr Farrelly.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

Does the hon. Lady agree that Portsmouth is the most recent case in point in which a licensing model that applied a rigorous fit and proper test would have produced a wholly different outcome? The Football Association could use its licensing power to encourage not only the formation of supporters’ trusts but their access to administrators, by making it clear that it is most likely to favour bids that involve registered supporter organisations.

Photo of Penny Mordaunt Penny Mordaunt Conservative, Portsmouth North

I absolutely agree. It is an amazement to Portsmouth fans, who after just 10 minutes on Google have discovered that someone should not be anywhere near their club, that somehow that person is allowed to become an owner of it.

The other issue that the fans would want me to mention is the creditors rule. I shall not steal the thunder of my hon. Friend Damian Collins, but I will pay tribute to the staff at Portsmouth football club, who have done a lot of work in repairing the damage that was done by the rule the last time they were in this situation. They have worked very hard to rebuild both trust and the support of local businesses and charities.

We must all keep the pressure on for reform. I am pleased that tomorrow morning Her Majesty’s Revenue and Customs will be back around the table with Portsmouth football club, but I sincerely hope that we get a result from the dialogue. If it fails, the supporters’ trust and all in our city will rally behind a community buy-out, and I would welcome the Minister’s views on that and his support. I take this opportunity to praise his involvement. We all agree that he is a genuine champion for the reforms, and I welcome the Government’s response to the Committee’s report.

Finally, I want to say that Portsmouth will survive. We all know that a club’s true and unique value lies in its fans; the question is how. Whatever course of action the trust and the fans take will be greatly strengthened by the report’s proposals and strong message. We must, therefore, all get on with implementing the report’s recommendations.

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden 3:33 pm, 9th February 2012

My contribution to the debate is from the viewpoint of a fan of one of the clubs that has been most adversely affected by poor football governance over the past quarter of a century. Some 24 years ago, a team that had been in the Football League for only 11 years beat probably the best team in Europe—[ Interruption. ] It’s not going to get any better, is it? The Dons of Wimbledon beat the mighty Liverpool in one of the FA cup final’s greatest giant-killings. In the words of the great John Motson:

The Crazy Gang have beaten the Culture Club.”

My dad, a proud Wimbledon season ticket holder, and my sister, who is known to many Labour Members, were there. That weekend was one of the happiest of their lives. When we attended the civic reception the following Sunday, my dad embarrassingly took his autograph book along and got the signature of every member of the team. Because of my line of work and that of my sister, my dad has had the opportunity to meet many great famous people, but that was the first and last time he took along his autograph book.

Clubs such as Wimbledon have enormous meaning to people, not just to my dad and my family but to the whole community I live in. As we now know, however, great joy was eventually to turn to great anger and frustration. Just three years after that win, the club left its home at Plough Lane in 1991 and never returned. The owner, Sam Hammam, persuaded Merton council that Plough Lane was unsuitable for top-flight football, which required all-seater stadiums, and that he should be allowed to leave while a new stadium was found. As a former Merton councillor, my biggest regret is that we accepted his word. Wimbledon began a ground share with Crystal Palace at Selhurst Park in Croydon and never returned.

I like to think that if proper licensing of football clubs had been in place then, supporters would have had a greater say over the move, and that that would have made all the difference. Instead of returning, Sam Hammam sold the club, and Plough Lane was turned into blocks of flats. Worse still, in 2001 the club’s new owners announced that they wanted to move to Milton Keynes. Despite opposition from fans of not only Wimbledon but virtually every football team in the country, and from many MPs and even the Football Association, which blocked the move twice, in May 2002 an independent commission gave the move the green light. That decision was the end of the road for our Dons, but it could have been prevented with proper licensing of football clubs and genuine supporter involvement on the boards.

The case of Wimbledon is relevant not only because we want to prevent such a thing from happening again, but because we can learn from what happened next, and use our experience of the aftermath to learn how communities can be enriched by genuinely inclusive, supporter-run football clubs. What happened next is the remarkable story of AFC Wimbledon. When it was agreed that Wimbledon could move all the way to Milton Keynes, most fans, including my dad, simply stopped supporting the club. As a result, it went into administration even before it had moved up the M1. Supporters could have reacted with anger alone—justified anger—but instead they did something remarkable. A group of fans met and decided to set up their own team, owned by the fans and rooted in the local community—a club of which they could be proud. In June 2002 they held open trials on Wimbledon common, and cobbled together a team in just a few weeks. They quickly found somewhere to play—Kingsmeadow, just over the Merton border in Kingston—and persuaded the Combined Counties Football League to let them enter its competition.

What has followed has been astonishing. The ground has been packed for virtually every home match, and after five promotions in nine years the team has made it all the way to the Football League, playing good football, the right way, and winning the Fair Play award year after year. The club is owned by the Dons Trust, a supporters’ group which has pledged to retain at least 75% control of the ownership, and it has been the model of a good community football club. It has a genuine commitment to community sport, and the chief executive, Erik Samuelson, is nothing short of fantastic. Until recently, his pre-match ritual was not living the high life in the boardroom, but directing cars in the car park. He is typical of fans who paint the ground, sell programmes and do all the other essentials.

The review of governance will not only stop clubs going the way of Wimbledon but be an opportunity to ensure there are more clubs like AFC Wimbledon. We need to ensure that it is not possible for clubs to just up sticks and leave the communities that support them, and we must make it clear that the future has to be based on genuine relationships between clubs and the communities in which they operate. The Supporters Direct formal licensing model would have prevented

Sam Hammam and his successors from ruining our community’s club, and new rules to give rights to supporters on behalf of the community will strengthen clubs such as AFC Wimbledon and encourage more to behave like it. I therefore support the proposals for a fit and proper supporters’ trust to engage with each club. In my view, the trusts should have basic rights to information, including financial information, and rights to meet club executives. It should be mandatory that any fundamental change to a club, such as the sale of its ground or a move to a different part of the country, must first have the agreement of the fit and proper supporters’ trust. I also hope that we can prevent clubs from assimilating other clubs’ identities.

I hope that all Members with an interest in not just football but the power of community will want to join me in saying how proud we are of AFC Wimbledon, and how pleased we are that the club has risen to the Football League. This is an opportunity to say: let us support the model of clubs such as AFC Wimbledon, and prevent clubs from collapsing, as Wimbledon did.

Photo of Mark Lancaster Mark Lancaster Conservative, Milton Keynes North 3:39 pm, 9th February 2012

Perhaps it is appropriate that I, as the Member of Parliament for Milton Keynes, have the opportunity to follow Siobhain McDonagh. I shall be brief.

I commend the hon. Lady on the passion that she showed for AFC Wimbledon. Certainly, I would hate to see this debate descend into a rivalry between two clubs. Perhaps one thing that we can agree on is that whatever the process, we now have two thriving football clubs out of it, and perhaps we should focus on that.

In the brief time available to me, I want to focus on three things. First, I want to put on record the timeline of the move. Much of what the hon. Lady has said is correct, but she has failed to mention a few gaps, which I think should go on the record. Secondly, I want to celebrate the economic success that Milton Keynes Dons has brought to Milton Keynes. Finally, I fear that I have some bad news for the hon. Lady, as I will explain why her campaign to drop the word “Dons” is set to fail.

The hon. Lady was quite right: the last game that Wimbledon played at Plough Lane was in May 1991, and the club was moved as a result of the Taylor report. That was the last time the club played in Wimbledon, some 21 years ago. I cannot comment on Sam Hammam—I do not know the man—but I take the hon. Lady’s word for what happened in that period.

In July 2001, the Wimbledon board confirmed that it would pursue the relocation to Milton Keynes, 10 years after the club left Wimbledon. In August 2001, Wimbledon wrote to the Football League to seek permission to relocate to Milton Keynes, but the league rejected the request. Interestingly, at the time, Merton council, of which I believe the hon. Lady was a member, produced a report equating the task of finding a home for the club in the borough as

“achieving the impossible in a densely built up urban area”.

In April 2002, the Football League received a further letter from Wimbledon, and on 27 May 2002, the Dons Trust was formed to develop an alternative club—that was before the announcement to move to Milton Keynes was made. On 28 May 2002, the independent Football Association commission met and said:

“Our decision is that, in light of its exceptional circumstances, WFC should be given approval to relocate to Milton Keynes…We do not believe, with all due respect, that the Club’s links with the community around the Plough Lane site or in Merton are so profound, or the roots go so deep, that they will not survive a necessary transplant to ensure WFC’s survival. What is unusual about WFC fans is that they do not seem to come from a single geographical area. Indeed, the vast majority of WFC fans do not live in Merton or Wimbledon. 20% of current season ticket holders live in Merton and 10% in Wimbledon. We do not accept that WFC will die if the Club relocates”— of course, we have seen evidence of that. The commission continued:

The Club has been in Croydon for 11 years (almost half its Football League history). There is no stadium which is a focus for the community in Merton, and has not been for 11 years.”

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

People will remember that Arsenal, although now based in north London, started its life in Woolwich, south of the river. Queens Park Rangers obviously was not based in Shepherd’s Bush for quite some time. I am afraid that the logic of that argument is that it gives a green light to any would-be owner to think, “I will relocate for a few years, and then we can franchise the club to a different part of the UK entirely.”

Photo of Mark Lancaster Mark Lancaster Conservative, Milton Keynes North

There is a strong parallel. In 1913 the owners of Arsenal, Henry Norris and William Hall, moved the club away from Woolwich Arsenal and in the following year dropped the word “Woolwich” from the name to just “Arsenal”.

In June 2002, AFC Wimbledon was formally established by the Dons Trust, and I congratulate AFC Wimbledon on its success in the past 10 years. However, as a result, crowds fell at Wimbledon from an average of 6,961 to just 2,787, placing Wimbledon FC into even further financial difficulties.

In June 2003, Wimbledon went into administration. The administrator decided that the only possibility to keep the club alive was to pursue the relocation to Milton Keynes. In the same month, Milton Keynes council stepped in and supported the community element of Wimbledon FC by employing staff who had been made redundant by the administrators and paying their salaries. The London borough of Merton made no attempt to continue the community side of club. In September 2003, the first game in Milton Keynes at the Hockey stadium against Burnley was played; I was there.

The administrator moved Wimbledon to Milton Keynes. No approach was made by supporters of Wimbledon to take the club over, and no support was given by the London borough of Merton to Wimbledon FC.

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden

I hope that my contribution was in no way unpleasant or anti. I congratulate the MK Dons on its fantastic success at the moment with its great young manager and its great chairman, Pete Winkelman. My point was about what had happened in our local area and how people felt about it. It does not in any way indicate a suggestion that I do not want the MK Dons to do well, although I might like them to change their name; “MK City” might be a better name, as it would fully represent the city—the town is likely to become a city—and the area.

Photo of Mark Lancaster Mark Lancaster Conservative, Milton Keynes North

I accept the hon. Lady’s point, but unfortunately I will seek to disappoint her on the issue with the name; we will get to that shortly. Equally, I am not seeking to offend anyone. We simply have two successful clubs now, and perhaps we should focus on the future.

Photo of Mark Lancaster Mark Lancaster Conservative, Milton Keynes North

I will not, because that is not fair on other hon. Members, and I have given way to my hon. Friend once already.

In July 2004, Inter MK brought Wimbledon out of administration and the name was changed to “Milton Keynes Dons FC”. That was approved by the Football League without any comment. The community staff transferred to Milton Keynes Dons from Milton Keynes council after the support from the council. Since then, we have had a fantastic new stadium, which next year will achieve elite status from the Union of European Football Associations at championship level. We have had great success at the club, winning the Johnstone’s Paint trophy and the league 2 title. Only today, MK Dons has been unveiled as the Coca-Cola community club of the year for the south-east.

The move has been successful, and the club is of enormous importance to the community. The introduction of professional football has supported huge economic activity, with active public policy support and partnership but no public money. We have seen inward regeneration investment of £250 million. Some 3,500 full-time jobs have been created around the site of Stadium mk. More than £10 million has been invested into the local transport and other civic infrastructure.

In addition to MK Dons matches at all levels, there have been special events in the new stadium, including two England under-21 internationals, two full internationals involving the England’s women’s international team, three Heineken cup rugby union games, including a semi-final, an Aviva premiership rugby game, and even a JLS pop concert, which I confess I did not go to. It has been a success story.

While the hon. Member for Mitcham and Morden rightly praised the community work of AFC Wimbledon and elicited support from the Minister in her Adjournment debate, it is worth noting that the community work of MK Dons has been established over a shorter time frame to an even greater success—this is no disrespect to AFC Wimbledon—engaging some 55,000 people directly, including the piloting of the Government’s national citizenship service programme, the championing of apprenticeships in MK and a disability scheme that offers support to more than 250 people with a disability. As I have already mentioned, only today we have been announced as the community club of the south-east.

I shall briefly touch on the hon. Lady’s campaign to drop the word “Dons” from the name. The overwhelming majority of MK Dons fans want the club to retain its name. It is now part of our history, as can be seen from the Johnstone’s cup and the league 2 championship. When the Queen came to open our stadium, it was there as the MK Dons stadium, and at no point was there ever an agreement not to use the word “Dons” in our title.

I have already mentioned that, subsequent to the move of the club to Milton Keynes in 2003, the patrimony of Wimbledon was transferred to the London borough of Merton in 2006 after the signing of an accord. The accord was an arrangement between the MK Dons FC, the MK Dons Supporters Association and the Wimbledon Independent Supporters Association. Its purpose was to transfer the honours obtained by the original club to the London borough of Merton, not, it must be said, to AFC Wimbledon. However, during the negotiations, the MK Dons agreed that the trademarks related to the old Wimbledon, such as the badge and the term “Crazy Gang”, could be passed on to AFC Wimbledon by the London borough of Merton in return for dropping the call from the Wimbledon contingent that MK Dons should drop the “Dons” element of the club’s name. Indeed, apart from the accord itself, an e-mail dated 10 September 2006 from Ross Maclagan, the Wimbledon Independent Supporters Association secretary, confirms that.

Although I am sure that this is not the case, there is a feeling among some in Milton Keynes that we are attempting to renegotiate the accord signed in 2006. I must therefore say to the hon. Member for Mitcham and Morden that the feeling in Milton Keynes, given the signing of the accord, is that we will be keeping the name MK Dons.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons) 3:50 pm, 9th February 2012

It is a pleasure to serve under your stewardship for the first time, Mr Havard. I declare an interest as a season ticket holder at Blackburn Rovers, where I have been attending regularly since 1978. Blackburn’s proud 137-year history and status as a founding member of the Football League is under significant threat due to the risks of poor foreign ownership. The club is in a sorry state, finding itself in the firestorm of the foreign ownership debate. I hope that lessons can be learned from my contribution.

Over the past 14 months, the club’s proud history has received little respect from its new Indian owners, Venky’s London Ltd. I must apologise at this stage; I was supposed to be joined by my right hon. Friend Mr Straw, who wanted to concur with a lot of what I am going to say. I would like that noted on the record.

The club’s sale by the Jack Walker Trust to the Indian company Venky’s in November 2010 has been followed by a series of damaging headlines, shock resignations, instability and regression of the club’s fortunes on and off the field. More recently, elements within and connected to the club have engaged in a damaging PR campaign against supporters that has been confrontational and, in my view, has highlighted significant failings of the owners, the manager and his expansive role and associated parties. They are at the centre of the shambles that is currently Blackburn Rovers, a club held up and respected by the football industry as an example of one of the best-run clubs in the premier league. Weekly protests, a plummeting league position, huge losses, dubious transfers, escalating agents’ fees and—more pertinently, and against league rules—the suggested involvement of agents in the running of the club have all undermined its authority and management.

I put on record the comments of Alex Ferguson, who seemed to echo that final point about the role of agents in football clubs. The role of the board of directors is now unclear, and their authority is now negligible or, at worst, undesirable. That is far removed from the mirage painted by the new owners: a Shangri-La of increasing transfer budgets, Champions League football and the promised continuation of a stable and well-run club.

The current situation at Blackburn Rovers opens up a new set of questions about football governance, transparency, the fit and proper persons test and the undermining of the premier league itself. What concerns me and many supporters is the role of Jerome Anderson, a leading football agent, and of Steve Kean, manager and, more significantly, Anderson’s client in the running of the club under the Venky’s governance arrangements.

Following Rothschild’s failed attempt to sell the club, Mr Anderson was brought in to find a new buyer, and found Venky’s. After that takeover, he became an adviser for Venky’s at Blackburn Rovers. In his own words, that involved sleeping and eating at the training ground and advising and helping during the transfer window of 2011. I remind the House that rule H8b of the football agents regulations governs the behaviour of agents and their organisations and prohibits them from having an interest in a club, which includes

“being in a position or having any association that may enable the exercise of a material financial, commercial, administrative, managerial or any other influence over the affairs of the Club whether directly or indirectly and whether formally or informally.”

It could not be clearer.

Anderson has stated on his own website and reported on the Sky Sports website:

“In January 2011 I was requested by the owners to assist the club during that transfer window…At the conclusion of the January 2011 transfer window I ceased to assist Blackburn Rovers Football Club in any capacity and I can confirm that I have not had any role or influence in their transfer policy or any other business of the club whatsoever since that date.”

I wish to draw Members’ attention to a leaked letter signed by the former and respected chairman John Williams, currently employed by Manchester City, his equally able assistant Tom Finn and the finance director of Blackburn Rovers. The letter says:

“Finally, our Football Secretary” at Blackburn Rovers

“has, this morning, been instructed by SEM”— the company with which Jerome Anderson is involved—

“to issue a mandate to a third party without any reference or approval from the Board. We are not familiar with the player concerned nor is he one that has been mentioned to us by the Manager. Could you please, therefore, clarify the role of SEM in our transfer policy?”

That letter was sent to the owners last January. I will draw further on its contents later.

Those decisions have led to the resignation of an experienced and highly regarded set of administrators, risking the club’s ability to manage its own affairs. Notable and of grave concern is an agent’s admission that he has been involved in decision making within the club, that that has allegedly involved instructions to the club’s directors to make payments to third parties, and that the manager connected to that agent and given overall responsibility for all affairs at the club—on and off the field and above the board—has a conflict of interest.

Photo of Dai Havard Dai Havard Labour, Merthyr Tydfil and Rhymney

Order. Can I advise the Member? I need to be careful about privilege. I understand what you are saying, but I am listening carefully. Quoting from published material is fine, and I noted your word “allegedly”. If you carry on with caution, I am happy, but I am listening carefully.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

Thank you for that advice, Chair. I respect your latitude. The letter has been published in several national newspapers and online, just for clarity.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

It is more than alleged; I think it is probably true, as nobody has come out and disputed it.

Clearly, there is a significant risk that Blackburn Rovers will regress rapidly while its owners have little understanding of football and the whole management of the first team and club administration rests with an individual as unqualified and inexperienced as Steve Kean. Mrs Desai, the club’s apparent owner and quasi-decision maker, confirmed in the Lancashire Telegraphthat Mr Williams did not get on with manager Steve Kean:

“I know that he did not get along with Steve (Kean) and he had struggled to accept Jerome (Anderson)’s role at the club.”

Ian Battersby, a well-known supporter and local businessman, flew out to meet Venky’s in Pune, India. Blackburn Rovers football club is just one of 170 subsidiaries in the Venky’s group. Each has a business head who reports directly to the Venky’s board. In the case of the Rovers, that appears to be Steve Kean. Ian Battersby said:

“The notion of a board executing the owners’ plans on a day-to-day basis is a complete anathema to them and many of our problems flow from that…We have a sporting director who nobody would know if they were sat next to him, and that’s a high-profile job allegedly responsible for player recruitment. We have a deputy chief executive—but no chief executive—whose effectiveness is, in the circumstances in which he operates, negligible.”

I place on record the manager’s statement that he had an irrevocable confrontation with the outgoing manager and that important questions persist about his involvement, as a client of Jerome Anderson, in a coup to oust the former manager, Sam Allardyce, bypassing the board of directors. None of that serves the club well.

Questions remain whether proper due diligence took place and whether Mr Anderson or his associates had a predetermined managerial change in mind and were interested not in the club’s assets and liabilities but in first team managerial contracts. The FA must look into it. What we do know is that the current board tasked with the responsibility of managing the club seems powerless to act in the best interests of the club. Serious questions now have to be asked about the owners’ ability to manage an English premier league club; their awareness of Premier League rules; their future intentions for the club; whether foreign business practices bring the club into disrepute; and whether such practices should be prohibited within the framework of the Football Association premier league’s fit and proper persons test.

Recent financial accounts have resulted in further destabilisation of the club, and newspaper reports have claimed that the club’s bank, Barclays, has initiated steps to protect its liabilities. Recent club accounts detail losses accrued up to June 2011 of £18.6 million; the previous year’s loss was only £1 million. The club’s value while it is in the English premier league is approximately £40 million. According to newspaper reports, Barclays is protecting its liabilities in the club by reducing credit facilities and discouraging asset sales of high-value players. In other words, the bank is determining transfer policy. That practice is not new. John Williams stated a year ago in his letter to the owners of the club:

“Brian Foreman from Barclays Bank is attending the Liverpool game tomorrow and has asked for a catch up meeting with us before the match. He will inevitably ask about our plans for the transfer window and at the present time not only are the Board unaware of these but it has been made clear that we will not have any input into the strategy. This is unacceptable and not in the best interests of the club.”

Why were Blackburn Rovers purchased by Venky’s? Were they purchased to promote football or to promote chicken burgers? Worryingly, during this period, fees paid to agents have risen approximately threefold. The £475,000 transfer of Ruben Rochina carried an additional agent payment of £1.65 million, which was during Jerome Anderson’s admitted involvement. Despite an alleged defensive injury crisis, an out-of-contract 28-year-old, Bruno Ribeiro—described by the manager as the next Denis Irwin—who had no caps and little top-flight Brazilian experience, was given a three-year contract and has yet to make a single appearance in the team or on the bench. Myles Anderson, who is Jerome Anderson’s son, was brought in despite having made only one appearance in the Scottish league. David Goodwillie, who is, to quote the manager, “the next Wayne Rooney,” was brought in from Scotland.

What has been destructive in this spiralling vortex is a smear campaign by the manager, his agent and other clients, which is aimed at ordinary Blackburn Rovers fans who seek only constructive dialogue with the club on the subject. To my knowledge, there have been no arrests or public disorder during the protests, which have always been conducted with the full consent of the police and dialogue with the club. The protests were suspended for seven matches to facilitate positive discussions, but those discussions have not taken place. Three pre-arranged meetings between the manager and organisers have been cancelled by the manager or by the club, the authority over which lies with the manager.

The Premier League is culpable in allowing the current trend of foreign ownership to continue without suitable safeguards; we have heard about Liverpool, Manchester United and Portsmouth. I welcome the comments of the Select Committee Chair that one can drive a coach and horses through the fit and proper persons test. That is clearly the case. This is coming from a completely different angle from Manchester United and Liverpool, and it should open our eyes to how we deal with football governance matters. As Mr Battersby, the Blackburn businessman, states:

“We hear an awful lot about the sham that is ‘fit and proper’…This is a major industry we are talking about here—it’s worth billions globally and there has to be something akin to licensing of owners. How can someone wing their way into the UK, take ownership of a club and within 12 months destroy a community? The warnings of Portsmouth, Notts County and now Blackburn must be heeded.

If the same had happened at Jaguar or similar, there would have been outrage in the House of Commons and yet we sit and watch this happening. In essence, the Premier League are watching one of their member clubs get savaged and haven’t batted an eyelid. It is nonsense.”

Venky’s management of Blackburn Rovers has raised a number of broader questions about the corporate governance of premier league clubs. The FA must look beyond its current ownership rules at arrangements for licensing prospective owners. Those arrangements must include, as Mr Battersby recommends, stricter compliance over financial strength and track record; the quality and strength of the management team; experience of delivery in the sector; the feasibility of the business plan and strategy; and corporate governance. There would need to be provision for the submission of quarterly or half-yearly accounts in addition to the annual ones. The fit and proper persons test in this case has failed. Dialogue with supporters has failed, because the owners have resisted all communication and have neutralised the board’s involvement.

I conclude with another remark from Mr Battersby:

“137 years of football heritage has been decimated inside 12 months. It is like watching a slow motion car crash.”