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Football Regulation

Volume 740: debated on Wednesday 8 November 2023

Motion made, and Question proposed, That this House do now adjourn.(Andrew Stephenson.)

I am grateful for the opportunity to speak about football regulation and about Reading football club in tonight’s Adjournment debate. Before I start, I will say a few words of thanks to Reading fans and to all those campaigning to secure the future of football clubs around the country. I also thank the Minister for his support; I appreciate that he is standing in for a colleague at the last minute. I particularly thank the Reading fans who set up the Sell Before We Dai campaign, which is calling on the current owner to sell the club to a new, more responsible owner. I would like to mention Ian Morton, who is here tonight, Eleanor Flood and many others. I also thank our supporters trust, and many other fans groups.

As a supporter-run club, Chester football club has not-going-into-debt written into its constitution. For them, it means that they will never again lose the club to the whim of feckless owners. Chester FC competes against clubs that do not have that safeguard and is therefore always at a competitive disadvantage because it is committed to a sustainable future for the club. Football regulation must mean that that is tackled. Does my hon. Friend agree that meaningful regulation, and financial incentives to promote good governance with supporter representation at its heart, has to be the way forward, from the premiership to the grassroots?

I congratulate the hon. Gentleman on securing this debate on such an important topic. Southend United football club is the heart of the new city of Southend, but it has had a terrible time and is currently under new ownership. Will he join me in welcoming the football governance Bill in yesterday’s King’s Speech, which we hope will pave the way to protect clubs such as Southend United for generations to come?

I thank the hon. Lady for her intervention. In fact, the point of my speech is not only to thank the Minister for that Bill, but to probe and ask questions about it.

We are going for a hat-trick of interventions, one after the other. I congratulate the hon. Gentleman on bringing this debate forward. It is critical not only for those here, but for many others who are unfortunately not able to make it. I agree with the hon. Member for Southend West (Anna Firth) that the football governance Bill appearing in the King’s Speech is a significant step forward. In Strangford, we have many fantastic local clubs, including Ards football club in the major town of Newtownards. Does the hon. Gentleman agree that a football regulator for finance must apply to all of the United Kingdom of Great Britain and Northern Ireland, and especially to support small, local clubs so they can reach their full potential? This is not just about Reading or Southend; it is about all of us in this great United Kingdom, if we do the thing right.

I thank the hon. Gentleman and I hope that the action the Government are proposing is brought forward and has the widest possible impact across the UK.

I take this opportunity to thank the thousands of local fans who have shown their support for a change of ownership of Reading FC, including the 1,400 people who joined a march from our town centre to the stadium a few days ago. It was an incredible show of support, and one that led to the unexpected closure of the A33 due to the huge numbers who took part. I thank all the drivers on the other side of the road—a two-lane trunk road—who hooted in support and cheered us on. I thank Reading FC legend Dave Kitson for leading the march and for his support for both the club and the campaign.

I thank our local council, including the council’s leader, Jason Brock, Councillor John Ennis, who has been a Reading fan since 1975, Councillor Adele Barnett-Ward and others. I thank John in particular, because he took part in a previous march in 1983 against Robert Maxwell’s ill-thought-through plan to merge Reading with Oxford United. I should add that John has been our lead councillor for transport for just four months and already he has shut a major road, which is not something that many councillors get to do.

I also thank my fellow Berkshire MPs, particularly the hon. Member for Bracknell (James Sunderland), the right hon. Member for Reading West (Sir Alok Sharma) and my hon. Friend the Member for Slough (Mr Dhesi). Sadly, the hon. Member for Bracknell cannot attend the debate due to illness, but he is a fan and hugely enjoyed the march. Despite the local political differences, he marched next to John and other seasoned campaigners and marchers from the Labour council—although, funnily enough, he seemed to feel more at home when the fans started chanting “Blue Army” as we walked down the road. I thank him, the Minister and colleagues from across the House for their support.

I turn now to the substance of the debate. It is clear to us all that there is an ownership problem in English football. I will use the debate to explain the terrible impact of that ownership problem on Reading and, by implication, on many clubs across the country, and to ask the Minister to reassure fans, players, staff and local communities. As I said earlier, I welcome the Government’s announcement that they plan to bring forward a Bill to regulate football. That is an important step.

I call on the Government to live up to that promise. Ministers must ensure that the Bill includes proper powers for the regulator and, crucially, that there is enough parliamentary time for the Bill in the last months before a general election. Above all, the Government need to show us that they have the determination to press forward with what they have promised. I know my hon. Friend the shadow Minister is willing to work with them, as are we MPs, fans and the whole football community. I hope the Minister will confirm that the Government are serious and will commit to them taking this vital work forward as a matter of urgency.

I will turn now to Reading football club. To put it clearly and simply, as loyal fans did on the march last week, we want our Reading back. The story of what is happening to our wonderful club is quite simply heartbreaking. It is terrible, and I could use much less parliamentary language—as was occasionally heard as we marched down the A33. The situation we face stands in stark contrast to the history and traditions of our great club.

Reading was founded in 1871, and it is one of the oldest clubs in English football. The fans, the players of the men’s and women’s teams, and the staff have all been badly let down. In men’s football, Reading has been a championship club, knocking on the doors of the premier league. It has enjoyed three seasons in the top flight. In fact, we were one place outside getting into Europe at the end of our first premier league season, in 2006-07. Fans have vivid memories of the nineties, the noughties and our most recent time in the premier league 10 years ago—the proudest possession of one of my children is a ball signed by the whole team from that heady time—under the wise leadership of brilliant managers such as Steve Coppell, who guided gifted players, many of whom were local and came up through the club’s academy, and the committed support of the then owner, Sir John Madejski, whom I thank for his wise stewardship of the club.

The club and the wider football community used to talk about “the Reading way”: developing and motivating players at a local family club, and achieving far more than others would have thought possible. That includes—I particularly like saying this—beating Watford 4-1 to win the Simod cup at Wembley; winning the championship a number of times, most recently in 2011; knocking on the door of the premier league in successive play-offs; and great FA cup runs, including sadly losing to Arsenal in the semi-final in 2015.

Crucially, the women’s team were also punching above their weight, and were a real success story. Until recently, they were playing in the women’s super league thanks to brilliant players and management, and were on the brink of doing something amazing. Sadly, that run of success has now ended.

The club was sold in 2013, and a succession of owners have presided over a worsening situation. Unfortunately, our men’s team is now languishing at the bottom of league one, through no fault of their own—16 points have been deducted from the club in the last few months for an array of financial mismanagement by the current owner, Chinese businessman Dai Yongge, not for anything that has happened on the pitch. That financial mismanagement includes Mr Yongge failing to pay wages and national insurance. His Majesty’s Revenue and Customs had lodged winding-up petitions before the NI was paid. Mr Yongge’s term as owner started well, with investment in players and the training ground, but sadly he seemed to lose interest. This may be a familiar story to others who follow the history of many of our clubs.

The effect of those points deductions has been absolutely appalling. Reading’s men’s team was relegated from the championship to league one at the end of last season, and further points deductions have left us at the very bottom of that league. To make matters worse, it now looks as if the club will be relegated again at the end of this season. That would leave us playing in league two. The owner has also pulled the funding for the women’s team, which made them unsustainable as a professional outfit—sadly, the players are no longer fully professional—and they too have been relegated.

Let me say a brief word about players, staff and fans. Quite simply, they are doing a determined job to remain positive in an extremely difficult and challenging situation that is not of their making. We are all extremely proud of them, and I pay tribute to them all. Young, less experienced players—the men’s team are the youngest in the league—who in some cases should still be in the academy or on the bench, are playing with grit and determination despite everything that has been thrown against them. Fans with families and busy jobs have come together to fight for our club in a community campaign that has made the national news. We are all very proud of them, and I want to say: “Come on you R’s!”

I apologise for being late to the debate—I was caught out by the earlier start. My hon. Friend is making a good point about the way in which football is often run by individuals who can, in the end, bring a whole club and its community down because of the way the club is managed. At Sheffield Wednesday, Dejphon Chansiri has put a lot of money into the club—great—but he has been saying recently that he may stop the funding, which is obviously a considerable threat. In the end, clubs are not just about the person who owns them, or the chairmen; they are about fans. Clubs belong to them, and they should have the right to be consulted right the way through on all those issues. We hope that the regulator, when it comes in, will have the powers to do precisely that.

My hon. Friend makes an excellent point, which I will address later in my speech. I hope the Minister will offer further detail about what he proposes, and I urge him to use his speech to give us some hope, some cheer, some optimism, and some fire in our bellies to help fight for the future of our beloved club.

The Government have announced a Bill to introduce a football regulator, which is welcome. That Bill has the potential to lead to real change in English football, but sadly it is not clear how far the Government will respond to fans’ concerns, and indeed to those of the football authorities. We are all concerned about owners, such as Dai Yongge, who seem to swoop in, hope to make money, and then lose interest if they are not successful. We are at a very early stage with the Bill, so I hope the Minister will be able to reassure us about the thrust of that Bill. I ask him to provide some detail on a number of key points.

For example, can the Minister spell out what the Government hope the Bill will achieve? Can he be clear about the powers he is considering for the regulator, and will he reassure fans that they will actually have a say? Will he also put an end to clubs being punished for the actions of irresponsible owners? In short, will he commit to doing what it takes to make sure that no more clubs and no more fans have to suffer what we have had to suffer?

Dai Yongge has announced that he plans to sell Reading. He made that announcement in October, and so far there appear to be three bidders who have shown an interest in the club. That means that the sale could go through before the Bill is passed, so is the Minister able to reassure me about the club’s immediate future? If the sale does go ahead, will he commit to Reading becoming a pilot for new regulation to protect the club, and indeed to other measures that may be necessary to offer support?

Mr Deputy Speaker, I thank you once again for allowing me to have this debate tonight, and I thank Members who have intervened on me. Most of all, I thank Reading fans and our whole community. I look forward to the Minister’s response.

I start by congratulating the hon. Member for Reading East (Matt Rodda) on securing this debate. As he mentioned at the start of his remarks, it was the intention of the Minister for Sport, my right hon. Friend the Member for Pudsey (Stuart Andrew), to respond to the debate, but he has had to return to his constituency urgently for reasons that I think colleagues will fully understand.

In his remarks, the hon. Gentleman highlighted the deep concern that he and many of the fans he represents have expressed regarding football ownership. I pay tribute to his commitment, and to theirs; having listened to his description, we understand how difficult it must have been for those fans over the past few years. We are very much aware of the passion and interest that many hon. Members feel about the long-term sustainability and governance of English football, and their commitment to their local clubs. I thank the hon. Members for City of Chester (Samantha Dixon), for Strangford (Jim Shannon) and for Sheffield South East (Mr Betts) and my hon. Friend the Member for Southend West (Anna Firth) for their contributions to this debate. In particular, as a Member of Parliament for Essex, I am very much aware of the difficulties faced by Southend United, and my hon. Friend has been a fantastic champion for the fans of that club.

The presence of those hon. Members in this debate demonstrates how important football clubs are to the lives of people in this country. In 2011, when I chaired the Culture, Media and Sport Committee—quite a considerable time ago now—we conducted an inquiry into football governance. It is somewhat depressing that, 12 years later, we are still debating many of the same issues. However, I hope that the inclusion of the football governance Bill in the King’s Speech yesterday will reassure the hon. Member for Reading East and others that this Government are intent on delivering and safeguarding the future of football clubs for the benefit of communities and fans.

The hon. Gentleman has talked about his own local club, steeped in the fabric of its community. It has been relegated, suffered sporting sanctions and faced financial penalties because of reckless decisions made by owners and terrible mismanagement. We have also heard about poor and non-existent governance practices, with fans being prevented from influencing key decisions that affect them and having to petition local councils, in some cases to protect stadiums. All such incidents threaten the long-term health and sustainability of all clubs, not just Reading.

We have heard about how English football clubs make significant contributions, and also about what happens when the community is let down by irresponsible owners in charge of football clubs. No employee, be they a player or, indeed, someone in the club shop, should fear not being paid. It is the local communities and fans that are the lifeblood of these clubs, and they bear the brunt and fallout of bad ownership decisions. They see where the structures are not working for the good of the game, and they can articulate most clearly how these are set right.

My colleagues in the ministerial team have prioritised engaging with fans and listening to their concerns, and I would like to pay tribute to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) for leading the fan-led review of football governance. This has been of immense value in developing the White Paper and during the period of the consultation we held earlier this year. I would like to thank the Football Supporters Association for its support; its contribution has been extremely valuable.

Too many clubs have been brought to the brink with unsuitable owners taking over, stripping them of their assets and refusing to fund them any more. We are committed to breaking this cycle of inappropriate ownership, financial instability and poor governance practices. That is why the inclusion of the Bill in yesterday’s King’s Speech is so important. The Bill will establish an independent football regulator, which will put fans back at the heart of football and help to deliver a sustainable future for all clubs. It will strengthen the governance and financial resilience of football clubs to protect the national game and clubs linked with communities and fans. Crucially, the regulator will address systemic financial issues in football, while providing the certainty and sustainability required to drive future investment and growth. This will ensure that English football remains the global success story and tackles the harms that exist.

The Bill will give fans more of a voice in the running of their clubs by setting a minimum standard of fan engagement. Clubs will need to meet this, and will be required to comply with the FA on its new rules for club heritage. It will give fans a veto over changes to the badge and home shirt colours, in addition to the strong existing protections for club names. Most clubs have a strong relationship with their fans and consciously engage them in decisions about club heritage, but not all do. For instance, fans of Cardiff City and Hull City will understand the importance of these measures after they recently had to battle to bring back or to keep their club’s colours and badge. Likewise, the new system will create strengthened owners and directors tests to make sure a club’s custodians—their owners and directors—are suitable.

I think the consultation with fans is absolutely at the heart of this. It was at the heart of the fan-led review, and I pay tribute to the hon. Member for Chatham and Aylesford (Tracey Crouch) for that. For the fans, it will be really important that the legislation specifies how fans groups will be appointed as part of the consultation, and it should not be left to the owners of clubs to decide which fans they want to talk to and which they do not, because that is at the heart of the current problems in many clubs.

I just remind the Minister that at 7 o’clock the Whip will once more move the motion for the Adjournment of the House.

Thank you, Mr Deputy Speaker.

I do understand the concern expressed by the hon. Member for Sheffield South East (Mr Betts). Certainly, we would not wish to have a system in which the directors decided who they do and do not wish to talk to. It will be part of the licensing requirements that fans are involved. I am sure we will wish to explore that further during the passage of the Bill, but it is certainly the intention that that is one of the conditions for licensing.

We have seen other examples of fans fighting back against their owners to save their clubs at Blackpool, Charlton Athletic and, as we have heard tonight, Reading. That should not have had to happen.

Does the Minister agree that part of the issue here is about the test for ownership? It was interesting in Reading’s case that Dai Yongge was refused as a potential owner for Hull City when it was in the premiership —unlike Reading, which was in the championship at the time. The English Football League allowed him to become the owner of Reading. There is an issue there and a question about the fit and proper test for owners.

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Andrew Stephenson.)

I understand the hon. Gentleman’s concern on that point, particularly given the record of the owner of his particular club. The Bill will insert as one of the duties of the new football regulator the requirement to conduct an owners and directors test, to make sure that clubs and fans are protected from irresponsible owners. I am sure that we will want to explore that matter in greater detail when the Bill comes to be debated in this House.

The Bill will also require clubs to seek the regulator’s approval for any sale or relocation of the stadium and to demonstrate how they have consulted their fans as part of that. To give another example, at Derby County we saw the issues caused by the decision to sell the club stadium to a separate company owned by the club’s owner. More recently, as the hon. Gentleman has graphically described, we have seen fans at Reading petition the council to list the ground as an asset of community value, to make sure that it cannot be sold quickly and without warning by the current owner. The stadium that the club plays in not only has significant value to fans, but can be a club’s most valuable asset.

In addition, the regulator will prevent clubs from joining breakaway leagues. As Members will be aware, in 2021 fans were faced with the prospect of a breakaway European super league that was fundamentally uncompetitive and threatened to undermine the footballing pyramid. Fans will no longer face the prospect of seeing their club sign up to such ill-thought-out proposals. Ultimately, we want a thriving footballing pyramid and more money must flow through the game to make that happen.

On financial distribution, it remains our firm belief that the best solution is a football-led solution, but if one is not found, the regulator will have a backstop power to intervene and force a solution. I hope a resolution on that point will be found soon, and I urge both sides to reach a deal as soon as possible. It is in the game’s interests to avoid the risk of further financial uncertainty.

In short, through this legislation we are protecting the fundamentals of the game we love while ensuring a more sustainable future with fans at its heart for generations to come. Meanwhile, alongside the introduction of legislation, the Government will take the time to explore the extent to which preparatory work can be done ahead of the regulator being established in law.

I fully recognise the plight of Reading football club, as the hon. Gentleman described, and I understand his wish that measures should be brought in as soon as possible. I am afraid that I cannot commit to a pilot at this stage, but I can tell him that the experience of Reading FC and other clubs will continue to inform policy development and decisions about how the regulator is set up. Likewise, any sale that takes place in advance of the regulator is a matter for the football authorities’ existing rules and checks on owners and directors, but I urge hon. Members who are concerned on that point to encourage clubs and their leaderships to engage with the team in the Department as we take the policy forward.

If the hon. Gentleman has particular concerns, I know that the Under-Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Pudsey, will be happy to talk to him further. I thank him for bringing the matter before the House. I think we all look forward to the introduction of the Bill and the establishment of a regulator in due course. I certainly share his view that that needs to happen quickly, and before a general election.

Question put and agreed to.

House adjourned.