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"Two offers have been received from serious purchasers to buy the club to pay off the debt."
One of them happens to be the Saudi ambassador to the United Kingdom and Ireland, and the other is a consortium, described as Irish-American, that is moving rapidly to try to buy out the present owner, who is facing legal challenge on whether he actually owns the club.
Where is the club going? What is happening to it? It is more than 100 years old and one of its founding members, the writer Conan Doyle, played in goal for the team. A famous bunch of footballers have played for Pompey over the decades, and one or two notorious players, too-their skill in the sliding tackle brought them notoriety-so we owe something to that team. Two years ago, a quarter of a million people lined the streets of Portsmouth to welcome back the successful FA cup winners, but virtually all that team have been sold. At one stage, 18 months ago, five of the England squad were Portsmouth players, but now we have only David James left. The likes of Crouch, Defoe, Johnson, Kranjcar, Diarra and others have all been sold, and the fans have not seen the benefits of that. There has been no return for the fans.
We have an owner, Mr. Gaydamak, who sold the club and is now virtually holding it to ransom, because he sold the stadium and the club. He did not sell all the land he had acquired around the club to build a new stadium, so he now holds that and is holding the club to ransom by demanding £30 million for it. The club cannot even develop the stadium, as the premiership is asking it to do, because he controls it. He virtually has a stranglehold on Portsmouth FC, and something has got to give.
The one thing we need, as Members have said, is a change in the way we regulate football. I do not know how easy it is to bring in new regulation, but if the Burns report's proposals, to which the right hon. Member for Sheffield, Central (Mr. Caborn) referred, had been implemented, perhaps we would not be in the position we are in today. Portsmouth is the one domino on the slide at present, but if it goes, others will follow and the domino effect will be unstoppable, particularly in the premiership, because the consequences of one club going under will be horrendous for the others. They are all being looked at by their creditors, and people who are prepared to give the benefit of the doubt will no longer be prepared to do so. We need some action, and it is the responsibility of the Government because, whether we like it or not, football is more important than just a business, and that has been the trouble. Many of the people who owned Portsmouth FC, I genuinely believe, had no interest in football whatever. Many of them, far from being keen, saw it as a good way to make money out of property. That is why I have great admiration for Sullivan and Gold going to West Ham, because at least they are committed football fans. They might be led by their hearts rather than their heads, which could be a problem.
Mr. Pelling: Does not that show the importance of the premiership seeing it as a corporate product? One can makes fun of the league system, but after all, Liverpool lost to Portsmouth, but Manchester United won five-nil, as I recall, so it can potentially change the result of who qualifies for the top four in European championship positions.
Mr. Hancock: One of the reasons for the debate's being fortuitous is that we should be looking to the premiership to put together some safety net for clubs in that position. The premiership cannot deny that it has some responsibility for what has happened, and I believe that it owes it to clubs such as Portsmouth-and more importantly, the people who pay week after week to watch the matches, whether on a big screen or live in a stadium-to show them some loyalty, perhaps by bailing out situations like the one in Portsmouth, just to keep the club in being.
As the Sky sports commentator said,
"the difference between administration and liquidation is the difference between intensive care and burial."
Liquidation would mean the immediate end to Portsmouth's season and the club, but administration might give it just enough time in intensive care to make a case to stay in existence. The premiership owes that to teams like Portsmouth, and it owes it to football to do something to protect the interests of the fans, which it has neglected since it has been involved.
Hugh Robertson (Faversham and Mid-Kent) (Con): I congratulate the hon. Member for Manchester, Central (Tony Lloyd) on securing the debate. Due to time constraints, I shall not go through all hon. Members' contributions in turn, but they showed that he has hit a raw nerve, and the message to the football authorities and the Government is clear.
I have been thinking about this issue for some time. From an Opposition perspective, it comes down to three questions. First, does our party accept that there is a problem? Secondly, if so, what do we think should be done about it, and who is best placed to take that action? Thirdly, following on from that, what is the appropriate role of the Government?
To start at the beginning, is there a problem? The debate has clearly shown that the answer is yes, although opinion is divided about whether that is a natural consequence of the depth and severity of the recession, which was a point that the hon. Gentleman touched on, an inevitable consequence of a high-octane sports industry, or something altogether more serious and structural.
The hon. Gentleman mentioned the situation at Manchester United, and others have mentioned the finances of West Ham and Portsmouth, which have recently been in the news. In the Football League, the travails of Crystal Palace, Stockport County, Watford and Cardiff City, among others, have been well documented, and it is almost certain that we do not know the full extent of troubles elsewhere.
However, in trying to come to a fair and balanced judgment on the matter, which I suppose is in many ways the role of the Government, it is fair to say that there are a few mitigating factors. We are coming out of the longest and deepest recession since the 1930s. In
such circumstances, it would be extraordinary if clubs were not facing real financial difficulties. Secondly, debt on its own is not a particularly useful measure to assess a situation unless it is allied to turnover. Thirdly, conventional measures can be meaningless, particularly for some of the premiership clubs that are owned by an extremely wealthy individual who stands behind it. That was demonstrated recently when the Chelsea owner simply converted the club's debt into equity.
Finally, there is pressure from UEFA, which was mentioned by the former Minister for Sport, the right hon. Member for Sheffield, Central (Mr. Caborn), whom I think I can call my right hon. Friend. I strongly believe that sport is a national competency that should be regulated and governed here in England, but it would be wrong to ignore Europe as a factor. Our clubs are key to UEFA's competitions, and we need its support if we are to bring home the 2018 World cup. Furthermore, its goal of ensuring good financial management of clubs is one with which we would all agree. The issue is whether a one-size-fits-all approach across the many different structures prevalent in European football is the best way forward.
Therefore, given the well-publicised troubles of several clubs and the external pressures on football, it is impossible to conclude that there is not a problem, although it is perhaps not as terminal as has been suggested. Having reached that conclusion and accepted that there is a problem, the second question is what we think should be done about it, and who is best placed to do it.
I absolutely agree with the many hon. Members who said that football is a great deal more than simply a business. It has always been a central tenet of my party's sport policy-and indeed our wider approach to politics-that we should free up individuals and bodies to run and regulate themselves. The bodies in football that are responsible for governance and regulation are the Football League, the premier league and the Football Association, and the question is whether they are able to sort this out themselves.
I entirely agree with my hon. Friend the Member for Cities of London and Westminster (Mr. Field) when he says that the Football League has come a long way. Unsurprisingly, I pay tribute to my friend and former colleague, Lord Mawhinney, for his work in this area.
Among other things, the Football League has produced a 10-point sporting sanction, as Crystal Palace has just found out. It publishes agents' fees, has a workable fit and proper persons test, and has introduced a salary cost management protocol. In governance terms-this point was picked up earlier-it also has at least two independents on its board. Despite the recession, the league's attendance over the past five seasons has topped 60 million, and it is now at its highest level for that league for more than 50 years.
Mr. Pelling: I want to follow on from what the hon. Gentleman was saying before the Divisions about the 10-point deduction for Crystal Palace. Could there be any exceptional circumstances in which those 10 points would be given back, bearing in mind that the club did not seek administration?
Hugh Robertson: I suppose that the straightforward answer is that there will always be circumstances in which that could be considered, but that is a matter for the relevant authorities, which are much better placed to make that decision than politicians.
Before the break, I set out some improvements to governance and regulation that the Football League has made. By those actions, it has shown that it can be trusted to regulate its own affairs, at least for the moment.
Further up the football tree, the premier league is inevitably the centre of attention, as recent events-indeed, today's events-have shown. However, we should balance the lurid headlines by remembering that it is the best league in the world, as well as the UK's most successful sporting export. More than 13.5 million people-our constituents-attended its games last year, so the balance is that the premier league is a remarkable success story.
After listening to this debate, one might think that the premier league had done nothing in recent years. However, among other things, it has strengthened the fit and proper persons test and introduced new financial criteria, which are a step forward. In my view, on balance, the premier league deserves the chance to sort things out before we resort to direct intervention.
Tony Lloyd: The hon. Gentleman's comments about this matter are of great interest to hon. Members. However, rather like with the banks, there is always a danger in repeating the words, "It'll be all right on the night." I would caution the hon. Gentleman because debt is already embedded in a lot of premier league clubs. Were interest rates to go in a different direction, which is quite possible in the long term, those debts could prove to be unsustainable.
Hugh Robertson: I do not disagree with anything that the hon. Gentleman says in any way, shape or form. I suppose that the issue at the centre of the debate is whether it is time for the Government to intervene and force the hand of football's regulatory authorities by taking over, or whether we should trust those authorities to regulate their own sports. Should the Government apply pressure? The debate has shown the severity of the problem and the strength of feeling about it. Do we point those regulatory authorities in the right direction and give them one more chance to sort the situation out themselves?
The Government have written to the FA about strengthening its governance with the seven-point plan approved by the previous Secretary of State for Culture, Media and Sport, my right hon. Friend the
Member for Leigh (Andy Burnham). Would the hon. Gentleman support that type of approach towards the FA? That would involve stronger regulation until it gets its house in order, which would make it stronger and better able to deal with any of the problems within football, whether in the premier league or elsewhere. It is important to get cross-party consensus on that.
Hugh Robertson: Broadly speaking, the answer to that question is that I would support that approach. If the right hon. Gentleman will give me a moment, I will continue with my speech, which I think will give him some comfort, and then if there is a minute left, he can respond, should he wish to.
The final regulatory authority is, of course, the FA, and its board is made up of the constituent parts of the professional game-the Football League, the premier league, which we have already discussed, and the national game. Like other bodies, the FA has recently introduced a number of measures, such as Her Majesty's Revenue and Customs debt reporting, and it uses its own financial advisory unit to provide a financial health check to all clubs below the premier league. Its grassroots programme is extraordinarily successful and will be familiar to all hon. Members. Like many others in the Chamber, I have been impressed by the way in which the FA has conducted itself of late. Therefore, I would like to give its new chief executive, Ian Watmore, the chance to make his mark in this area, albeit along with applying the sort of pressure that the right hon. Member for Sheffield, Central has mentioned.
Therefore, to answer my own question, I believe that the three main football regulatory authorities-the Football League, the premier league and the FA-should at least be given the chance to put their shop in order, and I urge them to make that a top priority for the coming year. They will be aware of the key areas that need attention such as the fit and proper persons test, the question of debt that is allied to turnover and, crucially, financial transparency, which was a point raised by many hon. Members. That is a challenge that they must not duck.
Hugh Robertson: Time is ticking away, and I was going to say that it would be a positive and, in my view, overdue development if football started by sorting out its own corporate governance, and particularly the lack of independent directors-and, many would say, female directors-on many of its boards.
I am heading into the last minute, so I will conclude by saying four things. This has been an interesting and timely debate, so I congratulate the hon. Member for Manchester, Central on securing it. Secondly, as the
contributions have shown, this is a serious issue that clearly needs addressing. Thirdly, I encourage in the strongest possible terms footballing bodies to come together and work out a proper solution as a matter of urgency. My final point is that if they do so, we will back them, but if they do not, Government intervention remains an option.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Siôn Simon): It is a great pleasure to serve under your chairmanship, Sir Nicholas, as I last did at great length on the 2008 Finance Bill Committee. On behalf of the Government, may I take the opportunity officially to congratulate and commend Macclesfield Town for its great works and successes, whatever they may have been?
I also congratulate my hon. Friend the Member for Manchester, Central (Tony Lloyd) on securing the debate and on setting the tone for what has been an erudite and informed discussion involving hon. Members on both sides of the Chamber who have been following the issue for years and who spoke, as he did, with great passion and lyricism, as well as erudition.
I apologise to you, Sir Nicholas, and to other hon. Members for not being the Minister for Sport-my hon. Friend the Member for Bradford, South (Mr. Sutcliffe) who is in charge of these matters for the Government would normally have been here. He is expected to take some important business in the main Chamber; otherwise he would certainly have been here, although I have begun to suspect, as his name and business have not yet appeared on the screens, that on my last afternoon in government, I may be the victim of an elaborate practical joke.
These are important matters and these are challenging times for football. As all hon. Members have said, this is a timely debate, with three clubs at different levels of the game in different courts in the land. It is fair to say that the game has come a long way since the 1970s and '80s, which saw stadiums in decay, violence on the terraces and our clubs banned from European competition. With Government's help, football has worked hard to ensure that we have growing grass-roots participation, new facilities at all levels, world-class stadiums, two of the most popular and best leagues in the world, success for our top teams in Europe and an improving national side that looks as though it might be ready to do better. Those positive changes have happened in great part because, although the clubs, leagues and associations may be imperfect-many of their imperfections have been noted this afternoon-they and the Government have worked hard together.
Hugh Bayley: The future of the city of York's football club depends on its being able to build a new financially viable, sustainable stadium. Will my hon. Friend the Minister speak to my hon. Friend the Minister for Sport and ask whether he will write to me after the debate to let me know what recent discussions Sport England, the Football Foundation and other bodies have had with the club and City of York council to take that project forward?
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