Draft Football Governance Act 2025 (Specified Competitions) Regulations 2025
(1 day, 20 hours ago)
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The Committee divided: - Ayes: 12 / Noes: 4 - Question accordingly agreed to.
The Minister for Creative Industries, Media and Arts (Ian Murray)
I beg to move,
That the Committee has considered the Draft Football Governance Act 2025 (Specified Competitions) Regulations 2025.
It is a great pleasure to serve with you as referee this afternoon, Ms Lewell. I am pleased to speak to the regulations, which were laid before the House on 13 October. This Committee is scheduled for 90 minutes, but I am hopeful that we will take only till half time, if not before—I might get an early bath. The puns probably will not stop there. Given the tight scope of the regulations, there is time for me to mention only one football club, which is Heart of Midlothian, who are currently eight points clear at the top of the Scottish Premier League thanks to a 3-1 win over Celtic on Sunday. That will keep everyone in Edinburgh—or certainly the bigger half of it—happy.
Back in July, the Government delivered on our election pledge to set up an Independent Football Regulator through the passing of the Football Governance Act 2025. The regulator is designed to protect football clubs in England only, to empower fans and to keep clubs at the heart of their communities. The regulator is the first of its kind and reflects the important and special place of football in our society and every single one of our communities. It will provide the certainty and sustainability required to drive future investment and growth so that English football continues to be the global success that it is.
We did not specify in the Act the clubs and competitions that will be within the scope of the regulator. This is in line with how other sports legislation works and will ensure that the regulator is able to react to any changes in the structure of the football pyramid in a timely manner. That is a really important point for the Committee to consider. For example, without the regulations the regime could not readily adapt to the restructuring or renaming of leagues, as in 1992 when the First Division became the Premier League, or in 2015 when the Football Conference was renamed the National League—that is the fifth tier of English football. That decision was made in the Act because, as we know, it is quicker and easier to amend legislation through delegated powers than through primary legislation.
During the Bill’s passage, there was much discussion about the scope of the regulator, across both Houses. The competitions within scope of the legislation are the same as Tracey Crouch’s 2021 fan-led review and the scope proposed by the previous Government in 2024— I draw the shadow Minister’s attention to that. The statutory instrument sets out the scope of the regulator as the Premier League competition, organised and administered by the Football Association Premier League; the Championship, League One and League Two competitions, organised and administered by the English Football League; and the Premier Division of the National League competition, organised and administered by the National League. The scope is based on years of work, evidence and consultation, including in the independent fan-led review. I thank everyone who corresponded with the previous Government on that review and, of course, Tracey Crouch for taking it forward.
The issues that concern the regulator, such as financial mismanagement, unsuitable owners and the distribution of revenue among leagues, are most prevalent and stark in the top five professional leagues of English men’s football. We do not believe that extending the scope beyond the top five tiers would be proportionate, and the burdens on smaller clubs would outweigh the benefits of the regulations.
On the possibility of the women’s game being within the scope of the regulator, Karen Carney led an independent review of domestic women’s football that was published in July 2023. Her review recommended that the women’s game should be given the opportunity to self-regulate rather than moving immediately to statutory regulation. The Government support that recommendation. The systemic financial issues that led to the creation of the legislation for the men’s game are not mirrored in the women’s game, which is at a different stage of development and growth, and we do not feel it is necessary to include it within the scope at this stage.
However, the Government acknowledge that the circumstances may change, which is why the review of the Act, to be conducted within five years of the commencement of the licensing regime, will look again at the scope to include women’s football if necessary. The Secretary of State can carry out an assessment of the regulator’s scope, and would consult the regulator itself, the Football Association and other stakeholders as appropriate.
This statutory instrument is another important step in the overall set-up and commencement of the Independent Football Regulator. For too long, football clubs have been mismanaged, been run by unsuitable owners, and not listened to fans. The Government are changing that today.
Mr Louie French (Old Bexley and Sidcup) (Con)
It is a pleasure to serve under your chairmanship, Ms Lewell. Today’s statutory instrument prescribes the top five flights of the men’s English football pyramid as “specified competitions” for the purposes of the Football Governance Act, and brings them into the scope of the Government’s new regulator. Although I think we all understand and support the desire for stronger governance and transparency across football and sport more broadly, I and many others have concerns about the impact that the statutory instrument will have on smaller clubs. Last week, I spoke to the National League and some of its clubs about their 3UP campaign and their broader concerns about the state of the game. Many were concerned about their ability to comply with the new regulatory demands and paperwork that will soon be coming their way.
The Premier League and its clubs, and, to a certain extent, the Championship and its clubs, can meet the new burdens of red tape the Government’s new regulator will bring, but the smallest clubs—those closer to the foothills of the football pyramid—will struggle. The truth is simple: many of these teams just do not have the capacity, the officials or the financial resources to cope with the new layers of bureaucracy and the increase in costs that the Government’s regulator will bring. That is something I warned the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Barnsley South (Stephanie Peacock), of during Committee stage of the Football Governance Act.
In that Committee and in the Chamber, I have said that football is one of England’s greatest success stories. From grassroots pitches to packed stadiums, it embodies our values of teamwork, fair play and community pride, but it is also a fragile ecosystem. If the Government keep layering on costs and compliance demands at the bottom of the pyramid, the Government risk hollowing out the very base that sustains the sport. Every £1 spent on regulatory compliance is £1 not spent on improving an ageing stand, an overgrown pitch or introducing a new generation of local youngsters to the game. It is an evening of paperwork instead of an evening coaching the under-12s, potentially depriving us of the next Harry Kane or Jordan Pickford.
Peter Fortune (Bromley and Biggin Hill) (Con)
I agree with my hon. Friend strongly that the regulation will impact clubs both large and small, such as Bromley FC in my constituency. The financial impact will be quite onerous, with very little benefit. Would my hon. Friend agree that we should have a review of the impact of the regulator on smaller clubs such as Bromley?
Mr French
My hon. Friend is right that we should have a review of the impact on smaller clubs. He will know from his club, Bromley FC, just how difficult it is to get out of the National League and into the English Football League. Bringing these clubs into scope will make it even more difficult for teams seeking promotion—especially to the National League, and then on to the English Football League—as they go from a successful but unregulated club to a heavily regulated club at the bottom of a higher division in fewer than 60 working days. Clubs already struggling to balance the books could find themselves in breach of regulations simply because they do not have the manpower to meet sudden new obligations placed upon them.
I would also like to talk about the timing of the statutory instrument. First, it has come months into the current season, and will come into force in less than a month’s time—not the Christmas present that many lower league clubs were looking for. Secondly, and most importantly, the Government have laid the statutory instrument before us in the full knowledge that there is an ongoing investigation into the Secretary of State’s decision to appoint a Labour crony to the chairmanship of the regulator. Will the Minister tell us why the Government think it is appropriate to appoint their Labour crony to the chairmanship of the regulator while there is an ongoing investigation into the process? Will the Minister also please tell us why he thinks it is appropriate to lay the statutory instrument while that investigation is ongoing?
The Football Governance Act was thought up as a way of protecting football clubs as community assets, not just businesses. We all know that these clubs are organisations that do so much more. They give young people a sense of belonging and purpose, provide an economic boost to local businesses and, most importantly, bring entire communities together. If the Government, however, make it too difficult for smaller clubs—such as Bromley FC, in my hon. Friend’s constituency—to operate, we risk losing them forever. As we know from recent memory, when a club disappears, it does not just take the team with it; it takes away an often major piece of local identity, history and pride.
It is because of the Government’s gung-ho attitude to the burdens it is placing on the smallest clubs—I warned it would—that we will vote against the statutory instrument today. As we have set out previously, we welcome stronger tests for owners, and I am grateful to the Sports Minister’s letter to me yesterday outlining some of the steps being taken on this. We support giving fans more of a say over their clubs, but we do not support state interference in our sports or burdening them with more red tape.
Mr Clive Betts (Sheffield South East) (Lab)
I am astounded by the shadow Minister, or perhaps I am not—I have heard it all before from him. Let me make this clear; I chaired a meeting two weeks ago with the National League on its 3UP campaign. One thing that it wanted to talk about was the football pyramid, and how the “State of the Game” report would then determine the strength of the pyramid in future with the proper distribution of resources, which is a key role that the regulator will have. The National League actually welcomed a possible meeting with the regulator that the football group will have, and the National League will be there to influence the regulator as far as possible to ensure that the bottom of the pyramid, where it sits, is sustained going forward. I think the Act has the potential to strengthen those clubs, rather than weaken them.
Of course, there are two fundamental parts to the Act. The first part is the distribution of resources, the “State of the Game” report and the powers that the regulator will have. The second part is the fit and proper person test for owners. I will just say this to the shadow Minister: bad owners do not wait until the end of the season to destroy their clubs—they can do it at any time. He suggested that we should have postponed all this for a few months and hoped that everything would be alright in the meantime. I would just tell him to look at the mill we have been ground through with Sheffield Wednesday over the last few months.
The EFL has been good; it has been constructive in speaking to MPs and supporters, and it has had meetings with the Supporters Trust to keep it updated. In the end, however, it admitted that it could not deal with an owner who failed to pay the taxman five times, who did not pay players or staff at the club on five occasions, and when part of the ground was closed down because it was not safe. This is a man who waited in his office in Bangkok to sign cheques for a leaking roof in the training ground, or to give the manager the money to buy straps to put on the players’ socks. How can he run a football club like that? This is not a fit and proper person, but the league had no power at all to intervene.
Mr French
I understand the hon. Gentleman’s passion as a fan of the club, and we all sympathise with the situation of Sheffield Wednesday. However, his point also highlights the fact that we must reflect on the original test of this individual and whether such tests were strong enough at the time. That is why the Opposition have said that we support strengthening ownership tests, but we need some honesty from the Government in saying that they cannot stop a bad owner from turning up any time in the future for any club.
Mr Betts
The problem with strengthening ownership tests is that, in the end, it is a members’ club that currently imposes them—it is the league. Owners do not want to come out strongly against other owners, as they worry that they will be the next ones to be caught. That is why we need an independent regulator to do tests of not just new owners but existing owners, which is a key part of what the Bill does. Yes, owners can pass the initial test, and they can even lie about their circumstances. They can claim they have money, or they might even have had money when they began. The owner of Sheffield Wednesday, Chansiri, did have money, but he ran out of money to the point that the club almost collapsed.
If we had a regulator in place, we could have ended this farce at Hillsborough quite a long time before. In the end, we came very close to the club completely collapsing. Ultimately, it got so bad because of the strength of the fans’ boycott. I know that my right hon. Friend the Minister will also have had a history of this, given his own connections with Hearts. The fans standing together in a boycott drove the source of income down such that the owner had to go through administration. That was a long, horrible process, and it has not ended yet.
The prospect of the regulator being in the background was always there as a safety net for the fans. Ultimately, they knew that something could be done, even if it could not be done immediately. I think it is an incredibly good step forward not just for football generally but for fans who see their clubs in distress. We have seen fans at Morecambe, Derby and Reading go through the mill on these issues in the past, where a regulator could have stepped in much earlier and helped fans through that process.
I ask the shadow Minister: do I tell my fans at Sheffield Wednesday that a Tory Government would have let Wednesday go under? I am sorry, but that is entirely a possibility. I know there are not many Conservatives in Sheffield who have to worry about their seats in that regard, but nevertheless, that is entirely a possibility that could have happened. The regulator could have stepped in earlier, and been the backstop.
The powers are very clearly set out in the Act—you will be pleased to know I am not going to go through all of them today, Ms Lewell. Part 4 clearly sets out the new tests for owners and officers of football clubs, which are reasonable and proportionate. I draw hon. Members’ attention to an important one, which probably has not had a lot of attention. Section 51 talks about insolvency proceedings, which Sheffield Wednesday is now going through, and states that the administrator and regulator
“must take reasonable steps to keep…fans informed about the progress of the proceedings.”
That is sensible. Currently, they do not have to; an administrator does not have to liaise with fans at all— I am told by colleagues that that happened at Derby. The administrator and the regulator will have to keep fans informed during insolvency proceedings.
The administrators at Hillsborough are doing a good job. They are talking to the Supporters Trust and liaising with it. They do not have to, but the Act means that in future they will have to. I give credit to the Supporters Trust, which has done a brilliant job. On Wednesday night last week, we had an almost complete boycott of a game. By Friday, when the club went into administration, there was a queue along the road to the club shop, and £500,000 was spent by supporters who wanted to keep the club, without Chansiri involved, afloat and alive. That shows the strength of supporters.
I also give great credit to the players. Barry Bannan, the club captain, turned down £20,000 a week—probably not enormous sums of money for some—and is playing for Wednesday for £7,000 a week, for his love of the club. We give awards to players for being good footballers; how about giving awards to people who are just good people and who have that loyalty and commitment to a club? Barry Bannan is there, along with Liam Palmer—great credit to them. Also, the office staff have worked without pay for some weeks—great credit to them as well.
The spirit of this statutory instrument and the Act is about fan involvement. The Act came from the fan-led review—that was its essence. We must make sure that the administrator, the English Football League—which is currently the regulator—and the regulator that will take over, probably in December, bake into any agreement with a new owner the right of fans to be involved in their football club. That is the essence of what we are debating today. This instrument will put the basis of that in place. I just ask that the administrator, the EFL and the regulator ensure that fan involvement and engagement are baked into the administration and running of Sheffield Wednesday football club and any other clubs that they may have involvement with.
Ian Murray
I will start where my hon. Friend finished. The whole point of the Football Regulator and this statutory instrument is to give power back to the fans, for the very specific reasons that he talks about at Sheffield Wednesday. We could all reel off a dozen clubs that have fallen into problems because of ownership in recent history, including Bury, Derby, Bolton, Morecambe and Blackpool. A whole host of clubs have fallen into problems because of the way they were run.
Football is a magnet for people who want to invest their money, but it has also become a magnet for people who think they can make some money out of it. Indeed, for many, it is an ego trip. I would maybe even argue that in the case of my own Heart of Midlothian football club, it was a money laundering exercise for the Russian oligarch who held it before. The common thread is that it is the fans who pay the price. The shadow Minister, the hon. Member for Old Bexley and Sidcup, said exactly the same thing in talking about how our football clubs are at the heart of our communities.
Before the club went into administration, many Sheffield Wednesday fans would have been completely bereft at the thought of a Saturday afternoon coming along when they would not have to commiserate with each other that Sheffield Wednesday had lost again, at not being able to celebrate the highs as well as the lows, and at having their lives without Sheffield Wednesday. Any football fan will completely appreciate that the fans are the lifeblood of the game. It is famously said that the game is nothing without the fans.
The principle behind the Football Regulator—a principle that the shadow Minister used to share—is that football is for the fans, and the fans have in some circumstances have been taken for granted, as we have just heard. That is the whole point of this draft statutory instrument. It is defined in scope, but I am glad, Ms Lewell, that you allowed my hon. Friend the Member for Sheffield South East to make those points slightly wider than scope, because it shows that this is needed in football. Having the Premier League, the Championship, League One and League Two, and the National League as the feeder league into the top four leagues, as part of that is important. They are all covered.
I appreciate—the hon. Member for Old Bexley and Sidcup mentioned this, I am sure in the spirit of the game—that this will burden some smaller clubs in the National League with additional responsibilities when they should be running the football club, training the kids and making sure they can have the Harry Kanes of the future—whoever that is. The bottom line, however, is that the National League is feeding the major leagues, and it needs to be part of this to make sure that those clubs are properly run and properly resourced, because it is about sustainability. A sustainable pyramid makes the whole pyramid much stronger.
The hon. Member for Old Bexley and Sidcup asked if there would be a review. There will be—a review is written into the Act, on the face of the primary legislation. On three up, three down, that is a matter for the footballing authorities and the game itself to resolve, but the strength of the three up, three down argument could be enhanced by having a structure in the National League to mean that the clubs have fit and proper owners, are properly run and are in compliance with the Football Regulator. The regime is very much a light-touch one, and it is important to see that through the lens of not just new owners, but existing owners, looking at football as a whole in those top five leagues in England.
The hon. Gentleman mentioned the issues around the chair of the new Football Regulator. I was delighted that the chair was endorsed by the cross-party Culture, Media and Sport Committee. It was really important that that was done. Now the regulator can get on with doing the work, as things have been going on for too long.
I am not sure where the Opposition were coming from, because the Act is in essence their legislation. We made a few tweaks to it along the way, and the other place made a few more, and attempted some major tweaks. It is stuff that the shadow Minister used to agree with. In fact, his party made arguments in the past about how important the Football Governance Act would be for football and for sustainability in football, putting the power back in the supporters’ hands where it should lie. Now they say they are not keen on it and that it will jeopardise football: I am not sure what their angle is. Fans across the country will wonder why the previous Government, who introduced this regime through the Tracey Crouch review, are now standing wholeheartedly against it.
Mr Betts
With regard to David Kogan, the regulator, he has done an outstanding job so far. If Opposition Front Benchers are going to criticise him, I wish they would criticise what he has done—within a few weeks, a 100-page consultation document on how he will operate for the benefit of football fans. It would be helpful if the Opposition could address the issues to do with how the regulator is operating, rather than some scaremongering talk about some donation many years ago, which has no relevance at all.
The Chair
Order. I have allowed some kickabout in the debate, but can we please stick to the legislation before us?
Ian Murray
I will take your guidance, Ms Lewell. In response to the intervention of my hon. Friend the Member for Sheffield South East, I will say that when the Opposition lose the argument, they do not take the ball, they take the man. I think that that is what we are seeing.
Mr French
A strange dynamic is going on here: we seem to be pretending that the Secretary of State and the chairman of the new Football Regulator are not under investigation. That is what is happening. That is not my investigation; that is an investigation that is taking place. That brings the whole regulator into question, and its independence. That is the point.
The Chair
Order. The hon. Member is aware that that is not in the scope of the draft statutory instrument before us.
Ian Murray
The chairman of the new regulator declared his donations before the said CMS Committee, which endorsed his chairmanship.
Implementing this regime to help to protect clubs in financial peril and putting the interests of fans up and down the country first is a priority for this Government. It was a priority for the previous Government as well, and it has been lost. That is why work is under way to deliver the next phase of the Independent Football Regulator regime as quickly as possible. Defining the exact scope of the Independent Football Regulator is a key step in delivering that.
The IFR will need time to get fully up and running. The newly appointed CEO, chair and board members need to build up the staff, continue to consult the industry, work with fans and football clubs and understand the new requirements. The regulator will have heard the shadow Minister’s comments about the burdens on smaller clubs from the National League, and I hope it takes that on board. I am sure that there will be support for that to happen. This Government look forward to working with parliamentary colleagues to deliver the remaining secondary legislation required to enact the Independent Football Regulator’s key powers later this year.
In conclusion, people who support football clubs that are not a global product, whether they are in Wales, Scotland, England, Northern Ireland, or just go along to their local school pitch on a Saturday morning to watch their eight-year-old kick a ball around, are the lifeblood of football. This is about making sure that the game is sustainable. Let us never, ever have a situation where Government stand on the opposite side of the road while great clubs like Sheffield Wednesday, which are the lifeblood of our communities, go to the wall.
Question put.