[Sir Roger Gale in the Chair]

Part of the debate – in Westminster Hall at 4:05 pm on 9th February 2012.

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Photo of Damian Collins Damian Collins Conservative, Folkestone and Hythe 4:05 pm, 9th February 2012

I am grateful for that comment, but I will make that the last intervention that I take, if the House does not mind, as I want to make a few other points. I said at the beginning of my speech that I do not think it is the role of the House or the Government to stop people running a football club badly. It would be difficult to legislate that a club now in private ownership should be majority owned and controlled by the supporters, even if the supporters might want that. As the report says, the Government should—they have stated in their response that they will look at this—make it as easy as possible for supporters’ trusts to be set up, so that such representation exists, where the club wants that.

As to ownership, I do not have a problem with clubs being owned by foreign investors. If people want to spend their money on football in this country to improve facilities and the quality of competition, that should be welcomed. However, there should be a clear register of any individual, with any investment in a football club, no matter how small, and that information should be available. I would push for it to be publicly available, but it should at least be available to the football authorities. In response to what the Football League said to me about Coventry City, if a football body—the Football League, the Premier League or whatever it is—cannot be satisfied about who the owner of a club is, it should stop that club competing in its competition. It should not necessarily be for the football authorities to chase round the world trying to find the owner of a club. If the club cannot demonstrate it to the satisfaction of the competition, it should not be allowed to take part.

A way to carry out that policy would be to request clubs, perhaps as part of the licensing scheme, to allow the football authorities to inquire of their bank what the source of funding is, and who the club’s owners are. The bank should make that information available, and if it cannot or does not, the matter should be passed to the Financial Services Authority. The ownership of clubs is not just a matter of football competition. If money is being channelled in by businessmen whose identity is not known, that should be a matter for the tax and financial authorities, as it would be in any other business.

I want to make a couple of points about the football creditors rule, which other hon. Members have touched on. As the chairman of the Football League said when I questioned him in the Select Committee, there is no moral case to justify the fact that, when a football club goes into administration, the local printer who prints the match programmes or the local building firm that does ground maintenance should get 1p in the pound for its debts, while a football club at the other end of the country or a multi-millionaire footballer get their football debts paid in full. That is wrong. The taxpayer loses too, because owed tax is not covered by the football creditors rule. That is currently the subject of a court case between HMRC and the football authorities. If that is not resolved, it should be a matter for legislation, and the House should resolve it. There is no moral case for that state of affairs, and we should move on.

On player ownership and player transfers, concerns have been raised that third-party ownership of players, although outlawed in this country, is still part of the game. A magazine, Tipsbladet, in Denmark, published an article this week that raises concerns about third-party ownership. Players are channelled through clubs in Denmark and, ultimately, on to the premier league. Funds that seek to own and control players have a financial interest in moving those players between clubs. That financial interest is greater than the interests of the player, or the club he may go on to on an intermediary basis.

Bloomberg’s news website also raised a concern last week about what it called “letterbox companies”, which are set up for a matter of days to loan money to a football club to purchase a player, and are then closed down almost straight away. It highlighted a case with Porto, in Portugal, where companies set up in this country had loaned money—non-bank lending—to FC Porto to buy players. Those companies were then shut down straight away, making it almost impossible for the authorities to identify where that money had come from.

The flow of money in football is an issue of the utmost importance, and one that we touched on in our report. The football authorities have to get to grips with the matter. The Government should consider it in their response to our report, and in their consideration of the response of the football authorities at the end of the month.