Steve Rotheram (Liverpool, Walton) (Lab): I am delighted to have been granted the opportunity to debate this issue. I am equally delighted to have been joined by Members from both sides of the House; their presence confirms the interest in and importance of the subject at the highest level. I also welcome the many people in the Public Gallery.
I am aware that a debate on this subject in this very Chamber was initiated in February by my hon. Friend the Member for Manchester Central (Tony Lloyd). That debate touched on many of the ills currently afflicting our national game. I am keen to establish from the outset that I do not seek to open up a brand new wide-ranging debate today; I simply want to continue a dialogue that has already begun and to highlight an idea that has already gained considerable traction. I should add that I am aware of the excellent work carried out by the all-party group on football, and I acknowledge its commitment and expertise. I am pleased to see members of that group here today and I look forward to their contribution to the debate.
It is important to acknowledge the progress made on football governance by the previous Government-particularly that made by senior members of the Department for Culture, Media and Sport. Thanks to their efforts, much of the ground work has been done. I hope that colleagues will welcome my humble attempt to build on that foundation.
I do not propose to discuss football governance per se or any other of the plethora of football-related topics. Instead, I intend to address one specific aspect: the role of supporters in the governance of football clubs. Today's debate feeds into the wider debate on the reform of football governance. In my view, a broad package of reform should include changes at every level of the football hierarchy-but that is a debate for another day.
I declare an interest at this juncture. Not only am I a self-confessed football fanatic, but my constituency happens to play host to two renowned football clubs-Everton, which I have to mention first, and Liverpool FC. I also declare an interest as a season ticket holder for the red half of that duo. I hasten to add that that is not the sole reason for my being keen to secure this debate-not entirely, at least. Indeed, Northampton Town Supporters Trust, the country's longest established supporters collective, says that this subject has an inescapably political dimension. I shall elaborate on what I mean by "politics" a little later.
I start with the basics. In 2009, the all-party group on football found that those who are most under-represented in football are those who should have the most say-the fans. One of the biggest problems connected 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 governing bodies. This debate would be an entirely academic exercise if football fans were satisfied with that state of affairs and if there was no appetite for change. However, the evidence suggests otherwise. A YouGov poll conducted in April this year reportedly found that 56% of fans wished to take control of their clubs. In Manchester and Liverpool, where fans are outraged at the way in which their clubs are being exploited by wealthy foreign businessmen, the figure rose steeply to 82% and 72% respectively.
We might expect such findings in relation to supporters themselves, but there is a broad in-principle consensus among politicians, sport analysts, football governing bodies and clubs that fans have a role to play. In 2003, the then chairman of the Football Association, Lord Triesman, said that clubs should be owned by people who embrace the history and values of football and who want to see their clubs succeed. In 2008, the then Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Leigh (Andy Burnham), urged Liverpool supporters to take back the club from within. In 2009, UEFA president Michel Platini told a newspaper:
"I think it is a great idea...that the supporters invest in a club because they at the end of the day defend the club's identity".
A range of ownership and governance models exist, from token support and representation on club boards to outright ownership. In the United Kingdom, football supporters' trusts have been established at more than 160 clubs, and 15 clubs are owned or controlled by such trusts. More than 110 trusts have shareholdings in their clubs, and almost 60 trusts have directors sitting on the club boards. Progress has clearly been made, largely due to the effort and commitment at grass-roots level, and that is to be commended.
Joan Walley (Stoke-on-Trent North) (Lab): I am most grateful to my hon. Friend for giving way. I have to declare an interest; I am a season-ticket holder at Port Vale football club. Does my hon. Friend agree that the way in which the fans of Port Vale bought out their club when it was in administration also suggests a way forward? The dilemma and the main cause of tension is that football clubs depend on investment. The degree of investment now needed because of the unlevel playing field brought about by the premiership gives the impression that people can simply come in with that money, but it is not necessarily available at the local level.
Steve Rotheram: I imagine that my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) and Robbie Williams are both Port Vale supporters. She is probably right that the premiership is top-heavy, given its revenue.
I return to the question of football governance. The problem, as I said earlier, is that it is patchy and sluggish, and is largely the preserve of lower division clubs and non-professional governing authorities. They might be
proactive and continue to reform their own governing structure, but it happens at a snail's pace; the premier league, however, remains a law unto itself, with little apparent interest in seriously engaging with the very fan base that sustains it. It is no coincidence that supporters of nearly 70% of clubs in the top five divisions of English football and the top four divisions in Scotland have established supporters' trusts. However, a 2009 report indicated that only 19 of the 92 Football League and premier league clubs have supporters' representatives on their boards, which suggests that the supporters' movement is thriving but that the clubs do not take them seriously.
The mood is changing, however, and momentum is growing. Premier league supporters are not prepared to do things by halves. They are pushing for outright control. Supporters of Manchester United and Liverpool FC, both iconic premiership clubs, have taken collective action and set their sights on more than token representation on their boards; the Manchester United Supporters Trust and its equivalent on Merseyside, SOS-ShareLiverpoolFC, advocate a long-term vision of outright club ownership.
As my hon. Friend knows, in 2005 the Glazers took over Manchester United. The club is now £700 million in debt, with £69 million a year being paid in interest-and that money comes from the fans through tickets and merchandise. It is an appalling situation. Does my hon. Friend support a more rigorous "fit and proper person" test in respect of takeovers of football clubs? In Germany, every club has to be 51% owned by the supporters. Does he support a similar provision for clubs in this country? Such a scheme would make a real difference.
Steve Rotheram: Absolutely. As for the "fit and proper person" test, it was one of the recommendations in the 2009 report, and it needs to be acted on. I will come later to my right hon. Friend's point about the German model, in which supporters have a 51% stake, and to the models in Spain. It is interesting that a YouGov poll survey earlier this year found that supporters would be prepared to invest on average £600 each to buy their football clubs. If we do the maths, the prospect of supporters seizing control is not quite as far-fetched as it may initially seem.
Toby Perkins (Chesterfield) (Lab): The amount of money that my hon. Friend mentions demonstrates the extent to which such a suggestion is out of reach for many people. At one time, football was very much the working man's game, but it has become an increasingly expensive pastime. If one has to have £600 to own a stake in a club, the prospect will be out of reach for a large percentage of our society. The example of the Glazers, who bought the club with the club's own money and then put it into debt, shows how the game has been stolen away from the supporters and become merely an interest to big business.
Steve Rotheram: Just to build on what I said, the proposal is very doable. A recent example of democracy in action has been demonstrated by Arsenal Supporters Trust, which invited fans to invest in a new "fanshare" scheme. For as little as £10 a month, Arsenal FC supporters can now contribute to a pool, which, in time, will be used to buy a stake in the premier league club. That will entitle shareholders to vote on club policy, receive financial and corporate information and attend the annual general meeting. The club is fully behind the scheme. The chief executive described the enhanced supporter-club relationships as
"good for the club's soul."
The four major shareholders all fully endorse the scheme. Arsenal FC is one of the more enlightened premiership clubs, but the success of its trust demonstrates that supporters are quite capable of forming intelligent, committed and influential collectives.
Mr George Howarth (Knowsley) (Lab): I congratulate my hon. Friend on his choice of subject for today's debate. Does he accept that the incremental nature of the Arsenal model is one way of getting over the difficulties of the vast sums of money involved in fans' taking over at any given club, particularly in premiership land?
Steve Rotheram: I totally agree with my right hon. Friend; there is not a one-size-fits-all response to this problem. First, we must identify that there is a problem, to see what we as Members of Parliament can do to alleviate it. Football supporters are shouting from the rooftops about it.
In my own neck of the woods, the pressure group Keeping Everton in our City achieved its objectives by stopping its club from being used as a pawn by big business. The aforementioned SOS-ShareLiverpoolFC has more than 30,000 members and a board packed full of expert professionals with a detailed proposal for funding and securing a buy-out of its club and for governance restructuring along more democratic lines. Supporters are thinking and talking big.
Alec Shelbrooke (Elmet and Rothwell) (Con): On the specific point about governance from the fans, does the hon. Gentleman know-perhaps the right hon. Member for Leigh (Andy Burnham) can help as well-what the fans who may be running a club would think, say, of the commercial viability of a ground share between Liverpool and Everton? Would that be an example of fans' passions overriding the business case?
Steve Rotheram: Give us an easy one! The tribal nature of football, which I will come to later if I have the opportunity, can sometimes override the common-sense approach. The example that the hon. Gentleman gives is a good one. Although the economics stack up in favour of Liverpool and Everton sharing a football ground, there are not many examples in the whole of the United Kingdom of such ground-sharing schemes. It is like suggesting to a Man United supporter that they share Manchester City's stadium. If that is what the hon. Gentleman is suggesting, it would be a difficult proposal to sell on the doorstep.
There are those who would say, "Leave them to it. Keep politics out of football and football out of politics." The UK Government have traditionally veered away from being heavy-handed in football business, leaving the sport to its own internal devices and regulatory systems. However, the game itself is now a huge, complex and lucrative industry, which, by definition, impacts on the economy. Premier league clubs alone are saddled with an estimated cumulative debt of about £3 billion. We ignore that and the culture it has permitted it at our peril.
Another major money-yielding industry that, until recently, was deemed untouchable and was pretty much left to get on with things on its own went belly up. On that basis alone, there is a strong case for the Government to intervene. I will go even further and say that the Government not only have a right but a responsibility to get involved. Football has received much financial and political support from Government over the past decade or so, and, at a national level, with Government support, it is bidding to host the World cup. Therefore, in return, the Government have a right to expect the highest standards of governance and a duty to step in when the game falls short of those standards, which it currently does.
However, the case is more nuanced than that; for many, it is personal. The football industry is unique because football is a product like no other. Supporters in general are not simply consumers who can exercise purchase power and walk away from the product if they are unhappy with its quality or performance. Football fans invest emotionally as well as financially in their clubs. Club allegiances, as we have just identified, are deep-rooted and passionate and are often passed down from generation to generation. They are inextricably bound with community ties and identities. In that respect, football, like politics, is tribal. It commands loyalty and constancy and requires member engagement if it is to thrive. The industry itself should recognise and respect that.
The issue is political in other ways. It is said that the new politics is about transparency and accountability, and about more rigorous and meaningful forms of democracy. It is precisely those democratic principles-transparency and accountability-that football followers wish to see enshrined in the conduct of their clubs. It is entirely in keeping with the spirit of the age that football fans should seek greater influence in how their clubs are run, particularly when they see the clubs being run into the ground by profit-fixated asset strippers with little or no understanding of or empathy with a club's heritage or culture.
Dr Thérèse Coffey (Suffolk Coastal) (Con): I congratulate my fellow Liverpool supporter on securing this debate. However, I do not agree that Governments should intervene in this matter. The whole issue has arisen, particularly for the supporters, because of the financial engineering that has been going on. Does the hon. Gentleman not agree that instead of trying to regulate in a particular way, we should use tax incentives to encourage mutuals, such as the Arsenal share scheme? Instead of debt-financed football clubs, which rely on tax incentives, we should have a different approach that encourages supporters' ownership of the clubs.
Steve Rotheram: I think that if that recommendation emerged from this debate and was supported by Members in the hon. Lady's party, that would be a fantastic outcome. Hopefully, during the rest of the debate, we can tease out some further recommendations.
This is a timely debate, because the calls for greater supporter involvement chime with the coalition Government's much-vaunted big society idea. It is altruism that drives supporter activism. Supporters' trusts are run by people who give their time, money, effort and skills for the love of the game. Their overriding motive is to see their clubs prosper, on and off the pitch.
If the big society is all about citizens engaging proactively with activities and institutions that impact on their lives and the shared life of their communities-although, frankly, it all depends on which Minister is trying to define it-football governance reforms provide an ideal opportunity for the Government to push for improved supporter representation and involvement.
The social benefits of supporter involvement are already in evidence. A report recently commissioned by Supporters Direct entitled "The Social and Community Value of Football" examined this issue in full and detailed the specific advantages of supporter ownership, including
"a greater sense of engagement and inclusion with fans and wider stakeholders; better integration with the community; more open and responsible governance; good relationships with local authorities, and partnerships with voluntary organisations."
"we will reform the football governance arrangements so co-operative ownership models can be established by supporters".
I note with a little concern that the coalition Government made a rather more non-committal promise to "encourage" reform in its coalition agreement in May. I may be splitting semantic hairs here, but I sincerely hope that that did not signal a downgrading of the commitment.
My own party has a proven track record on football governance reform. It was the Labour Government who introduced the umbrella organisation for fans, Supporters Direct, in 1999. It also commissioned the Burns inquiry into football governance in 2005, and tackled the Football Association and other football governing authorities in 2009 over their failure both to work together and to implement reforms. The new Government have talked the talk on the big society and the role of football supporters in the governance of football clubs. The challenge now-I throw down the gauntlet for the Minister-is to walk the walk.
I should say a word about supporters' trusts, as they are crucial to the success of this kind of democracy in action. They are formal, democratic and not-for-profit fans organisations and they aim to extend supporter ownership, representation and influence at their respective clubs. Sadly, if unsurprisingly, they have commonly been founded in response to financial or mismanagement crises at a club; crises that have compelled supporters to take matters into their own hands.
On a far more positive note, supporters' trusts are generally voluntary, they operate effectively on minimal funding and members are motivated purely by their passion for the game. In that respect, they are true grass-roots movements and their successes prove that fan ownership, control or representation can work. Many of them are run along the lines of the extremely professional Northampton Town Supporters Trust, which was established in 1992. At that time, it was the first
collective of its kind. It enjoys a shareholding in the second division club, as well as representation on the board of directors.
John Woodcock (Barrow and Furness) (Lab/Co-op): In Barrow, many people share their love of Barrow AFC with support for other successful clubs; I would say that those clubs are Liverpool, Manchester United and Sheffield Wednesday. Will my hon. Friend join me in paying tribute to the supporters right across the country-who would imagine that there are Manchester United fans right across the country?-who have lobbied Members of Parliament to get involved in this debate? I find their energy extraordinary and it is a real sign that this can be a successful venture for football organisations.
Steve Rotheram: I absolutely join my hon. Friend in paying tribute to those supporters. I think that we ignore football fans at our peril. It is not just about Manchester United or Liverpool, or the other big clubs. Bees United acquired a 60% stake in Brentford football club in 2006, which made Brentford, who are in league one, one of only two Football League clubs to be majority-owned by their supporters. My hon. Friend mentioned Sheffield Wednesday; I think that it was Brentford who enjoyed a resounding victory over Sheffield Wednesday at the weekend.
As I have said, no discussion on this subject would be complete without reference to the Spanish and German models of club ownership, which I suspect are feared and grudgingly admired in equal measure by the corporate football world in the UK. Both Spain and Germany boast thriving, long-established equivalents to our premier league. Clubs in those two leagues exist in a culture of mutual or co-operative club ownership. In both leagues, it is a matter of civic pride that top-flight football clubs should be controlled or owned by their supporters. Spain's FC Barcelona, which is the "big daddy" in this respect, is routinely held up as a utopian ideal of football club governance and is structured as a co-operative society owned by some 170,000 members, with a democratically elected president-and Barcelona do not do so badly, generally. It is a case of "horses for courses".
The Minister for Sport and the Olympics (Hugh Robertson): I have been listening carefully to the hon. Gentleman. However, it is only fair to say that Spain has an entirely different model for distributing television revenues from Britain. Spanish clubs negotiate TV rights individually and they go directly to Barcelona and Real Madrid, so the majority of TV rights and therefore the majority of TV money goes directly to those two big clubs, and the smaller clubs underneath them, which constitute the larger Spanish football family, suffer accordingly. By contrast, here there is collective negotiation for those TV rights, putting British clubs on a very different financial basis.
Steve Rotheram: I hear what the Minister is saying. I myself do not think that the Barcelona model or any other model is a panacea. I am not suggesting that, all of a sudden, the fans of every single football club will go out and seize control of their clubs in a revolution, but regarding the way in which clubs such as Barcelona are structured, the argument cannot be made that those structures make them less likely to be successful.
As I was saying, it is a case of "horses for courses" and it would be naive to suggest that we should simply adopt the Barcelona model or anything else off the rack. Clubs such as Barcelona are long-established products of their respective cultures, politics and histories, and there is little evidence that their ownership models would prove suitable, or even desirable, here in the UK. It would be equally naive to suggest that supporter ownership or control of major clubs in the UK would prove to be some kind of panacea. Teams will always have lousy seasons, as my team did last year. There will always be controversy surrounding management decisions, many clubs will intermittently struggle financially and there have been failed, or at least unworkable, experiments in supporter ownership before now.
A useful lesson that might be drawn from those experiences, and from the European models that I cited earlier, is that mutuality alone is not enough. Mutuality must be coupled with effective business practice and regulation. Supporters fully appreciate that. Manchester United Supporters Trust has declared that
"we have neither the desire nor the intention to run the day-to-day affairs of the club. A club like United should be run by professionals whose experience and expertise will ensure its success."
Such a sentiment should allay the fears of those who view supporters as little more than a bunch of amateurs who wish to take over the show, or lunatics taking over the asylum. Supporters are not stupid-they want and recognise what is best for their club. The point is not to establish some type of cure-all for the systemic problems in the game's governance but to seek ways to make that governance fairer, more robust and more fitting for a global sport in the 21st century.
Mr Gregory Campbell (East Londonderry) (DUP): I congratulate the hon. Gentleman on the timeliness of this debate. Does he not agree that an essential element in coming to grips with the problem of the modern-day game is that however difficult it is, we must grasp the nettle of the obscenity of the six-figure-sum-per-week footballer, which is totally unsustainable and is corrupting the game from within?
Steve Rotheram: It is a difficult issue. I am a supporter of one of the supposedly big four-Manchester United, Arsenal, Chelsea and Liverpool-and that is how we and some other clubs attract the big footballers. Implementing that idea would be like turkeys voting for Christmas, but I understand the rationale behind the obscenity of somebody earning such huge sums when the people paying his wages are on a fraction of what he earns a year.
I have described the "Why?", so the next question is "How?". What can we as politicians do to assist? The social value report that I mentioned concluded with several recommendations on how national Government can do their bit. Time constraints prevent me from listing them, but they are excellent ideas worthy of serious exploration, and I urge interested colleagues to take a look at the document.
Having made a fundamental commitment to encouraging reform, the coalition Government have not yet revealed how they intend to proceed, but the previous Labour Government published a raft of proposals before the 2010 election. They include making Government support-especially financial support-conditional on co-operation, creating the right framework for better regulation from
the top down and grassroots up, and working with governing bodies to enshrine supporters' rights to buy their clubs and/or be represented in the ownership and governance of the club.
Jim Shannon (Strangford) (DUP): One thing that people have mentioned to me is their concern about admission fees. A well-heeled Chelsea supporter can attend matches on a regular basis; an Arsenal supporter does not have to be as rich, because Arsenal's system allows admission; a Bradford supporter can probably go to every match. A Leicester City supporter like me unfortunately cannot attend due to distance. In the governance Act that the hon. Gentleman proposes, will supporters' clubs have input into admission fees?
Steve Rotheram: The dichotomy is that in some of the foreign models where football supporters are represented on boards, match ticket prices are much lower than in the premier league. Anyone who goes to Europe-as we will do this year, although on a much lesser basis than in previous seasons-will find out when they buy tickets that European games are always much cheaper than their equivalents in the premier league. One does not always go with the other. Football supporter representation at least gives that concern a voice.
It is more easily said than done. In the current political and economic climate, many difficulties and setbacks lie ahead. Any lack of will or any outright resistance by the parties involved-the Government, the governing authorities and the premiership clubs-will make the task more challenging. In its 2009 report, the all-party parliamentary group on football recommended a straightforward, one-size-fits-all solution: an elected supporters' representative drawn from the relevant supporters' trust should sit on the board of all 92 football league and premier league clubs. The group also suggested that a requirement to involve supporters should be a prerequisite for future takeovers-that is interesting to a few of us here-and that the football regulatory authority can evaluate that as part of the reformed "fit and proper person" test.
Penny Mordaunt (Portsmouth North) (Con): I am a Portsmouth fan, so I welcome the momentum behind football reform, but I would like to introduce a note of caution. I support fan ownership, but we might be asking fans who are already paying clubs large amounts of their disposable income to have a stake in those clubs that is not genuinely meaningful. A Portsmouth fan might want a veto on a new owner or the sell-off of land. I welcome what the hon. Gentleman says about focusing on governance structures, and I hope that we do not miss some quick wins on that front by focusing solely on ownership.
Steve Rotheram: What happened to Portsmouth is an absolute disgrace. Football supporters on the relevant boards might at least have been able to inform other Portsmouth supporters what was going on. Apparently, one owner did not even know that he was no longer the owner after the club was sold. That is an absolute disgrace to football governance, which is why something needs to happen and the Government need to take some control.
The football regulatory authority is a good starting point, but it makes no provision for supporters seeking outright control or ownership or those locking horns
with the behemoths of the game. We need to go further and faster. Given all that, and in the absence of any overarching, fully independent body to propel matters forward, I urge the all-party group on football to undertake a fresh and specific inquiry into the subject of this debate, with the aim of developing a spectrum of practical solutions and models allowing for a range of supporter involvement options.
I have spoken at length, because I have taken many interventions. I thank everyone for their patience, but I ask to be indulged for a minute or so longer. As we have heard in Members' passionate interventions, football is not just our national sport and a source of national pride-even for the Scottish Members here today, who will remember that 97th-minute winner. At one end, football is a multi-billion-pound industry; at the other, it is a local business offering local employment opportunities. It cuts across age, class and geographical boundaries, and is one of the few unifying activities in our society. Every one of us here today, irrespective of the demographic profile of their constituency, represents significant numbers of football supporters.
For some time now, the beautiful game at its highest level has stood in danger of being blighted by controversy, debt, bitterness and poor performance, because it is structurally and organisationally out of kilter with modern Britain and the expectations and aspirations of our 21st-century democracy. Many football fans feel disillusioned and disfranchised by this great British institution. Let us put that right by doing all that we can as enlightened and socially responsible politicians to help to return football to the very people in our heartlands who made it so great.
John Robertson (in the Chair): Order. Before we proceed any further, I should say that a number of people have indicated that they wish to speak. If colleagues are as brief as possible, we will get more people in.
Mr Mark Field (Cities of London and Westminster) (Con): I congratulate the hon. Member for Liverpool, Walton (Steve Rotheram) on enticing a bigger attendance than even the antics of the Independent Parliamentary Standards Authority. He is greatly to be congratulated. I suspect that I speak for virtually everyone here when I say that I share the sentiments in his final peroration about his passion for the game. I am also a keen and lifelong football fan, having followed the fortunes of Bury. I am glad to see that my hon. Friend the Member for Bury North (Mr Nuttall) is here; he will point out, as I suspect will many hon. Members, that it is the only Greater Manchester football club to be located in a Conservative constituency, although we will hopefully work on that in time.
I have been the vice-chairman of the all-party group on football, and I played a role in the debates and reports of 2003 and 2009, to which the hon. Member for Liverpool, Walton referred, on the governance and finance of the game. We have long argued that football as a whole is far too loosely regulated.
English football has undergone a dramatic transformation in the 18 years since the creation of the premiership, as the hon. Member for Stoke-on-Trent
North (Joan Walley)-perhaps I should say the hon. Member for Burslem and Stoke-pointed out in her intervention. There is now an unprecedented and in many ways unbridgeable gulf between the top clubs and the rest, partly as a result of lax governance and the absence of effective regulation. The fact is that English football is a multi-billion pound global branding industry, with a hugely complex domestic structure and turf wars between the Football Association, the Football League and the premier league. As the hon. Member for Liverpool, Walton pointed out, frankly, such a situation works only to the interest of the very largest premier league clubs.
The new coalition Government have sought to introduce more co-operative types of club ownership, for example, by the fans. However, in reality, that will be virtually impossible to impose without ripping up company law and effectively nationalising privately owned businesses.
Those people who push a somewhat idealistic view are a little misguided. In citing both Barcelona and Real Madrid as model clubs, the Minister made the important point that the massive advantage those two Spanish clubs have over any of their potential competitors in their home country is that they can sell their television rights in that market individually rather than collectively, as happens with the premiership. Before the world is too much older, I fear that there may be a big push to do something similar in this country-if not from the big four then from a big seven or eight that might emerge. That should be resisted at all costs.
I should also point out that the role of the president of a club such as Barcelona is similar to that of an owner in the UK-one must not get confused by the terminology. In Spain, a club that narrowly came fifth in its league, Real Mallorca, has been disbarred from European competition this year because of the magnitude of its debts. That is obviously a debate that will particularly affect Liverpool and Manchester United in their current state.
Some clubs do flourish under co-operative ownership; for example, Exeter City briefly dropped out of the league and have come back much stronger. However, co-operative ownership has also led to some big problems. Stockport County is a good example of a club that has ended up in administration. It has only just come out of administration after a damaging period in its history, which occurred after following that particular model. Forcing a single one-size-fits-all ownership model on all clubs is wrong. I am sure that some clubs would gain from co-operative ownership models, but others could fail. One ownership model will not necessarily fit the demands of every single football club. The reality is that vast majority of clubs are in one form or another owned by fans. Sometimes that might involve individuals-men and women-pumping millions of pounds into their team. They might get very little credit or support from the supporters of a club for doing so.
I would like to mention a couple of things that are happening outside the premiership, because much of the debate has inevitably focused on the big four-or at least the big 20-within the premiership. The attendance of Football League games last year exceeded 17 million, and the league clubs' community teams worked locally with more than 1.5 million people. I have had a chance to see one or two of those projects over the years and, most recently, I have watched what has been happening with Crystal Palace. That club has been in great financial difficulties, but it has done a tremendous amount of work with its academy and has ensured that educational standards have remained tremendously high for young players, some of whom are breaking into the first team already. Such clubs are very much at the heart of their communities, and I think that many hon. Members in this Chamber who are here to represent football clubs will share the community values referred to by the hon. Member for Liverpool, Walton.
The reality is that there are quite effective cost controls in league two-the fourth tier of the English professional game-because clubs cannot spend more than 60% of their turnover on players' wages. That measure has been extremely effective and I hope that it is rolled out to other parts of our professional game. There is no doubt that the championship-the second tier of football-is massively financially overstretched because of the huge incentive of going into the premiership. Parachute payments have been extended from two to four years for clubs that come out of it-in other words, provided that a club spends one year in every five in the premiership, the road seems to be paved with gold. However, all sorts of problems arise as a result of that.
We need to make it absolutely clear-I hope the Minister will do so-that it is important to pay immediate attention to proper cost controls within our national game. If we can find a way forward in that regard, it will allow our clubs to focus on what they do best in their communities. We need to ensure that they have proper community facilities and are engaged in youth development at academy level and within their local vicinity. The funds required for that crucial work, which is very much part of the big society, can be obtained only through having proper cost controls within our game. There is a vicious cycle that must be broken at the earliest opportunity.
Barbara Keeley (Worsley and Eccles South) (Lab): It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) on securing the debate; he spoke very well. I am not speaking as a football fan, but am here to represent fans. I have received more than 50 notes from constituents who are supporters of Manchester United. I am sure many hon. Members in this Chamber have also received such correspondence-those from Salford and further afield.
Barbara Keeley: And those from much further afield. The constituents who have contacted me are also members of the Manchester United Supporters Trust. They have become disillusioned with how their club is being run and are concerned about the state of the national game. They think that football must start to be regulated properly and have its governance reformed.
Many Manchester United supporters in my constituency are greatly concerned that their club is now the most heavily indebted club in the world, after a hostile and highly leveraged takeover by the Glazer family in 2005. My right hon. Friend the Member for Salford and Eccles (Hazel Blears) touched on the debt situation of that club. Prior to the takeover, the club had no debt at all. It now services debts in excess of £750 million. Although the club is still reporting a healthy operating profit, the money is not necessarily going into improving the club; it is being spent just on servicing the debt. The 2009 report by the all-party group on football points out that supporters paying off the debt in such situations do not even have a tangible influence over the direction of the club. As with Portsmouth's situation, the longer-term future of the club is no longer assured.
That level of debt and uncertainty has a clear impact on supporters. Many feel that the decisions made by controlling interests in the club in the boardroom do not demonstrate long-term commitment to the club and its supporters. That is why dissatisfaction sometimes breaks out and there is a sea of green and gold instead of red at big matches at Wembley. My constituents rightly feel it is time for dedicated football fans to be given some sort of stake in the clubs that they and their families have helped to build over many years.
Football clubs are an integral part of the community, and their ownership and financial management should not just be dealt with through company law. Indeed, I remember when Manchester United behaved as if it was part of the local community in Trafford, where the club is based. When I was a Trafford councillor, a young David Beckham came to open a new centre for young people leaving care. Members of the team made visits to schools to read to children during reading weeks and the players were much more involved in the community that was home to their club. That changed and the players started to be seen more as a corporate resource. Prices for tickets and kit increased dramatically and players' salaries soared. It has become much harder to see clubs such as Manchester United as part of our local community.
There should be stronger regulation to ensure that those owning and running football clubs understand their wider responsibilities to the community. Football clubs should not be run on the basis of massive debt, which can threaten the stability of both individual clubs and the health of the game as a whole. At the moment, the game has clear laws enforced by referees and assistants on the field. However, off the field, it is like trying to play a game with hardly any pitch markings, unclear laws and no referees. That is why, off the field, various forms of financial crisis are appearing all over the place-from Cardiff City to King's Lynn, from Chester City to Southend, and from Manchester United and Liverpool to Portsmouth. We could say that governance in the football industry is no better than the governance of the banking industry over recent years.
There is plenty of legislation on football, but it is directed at the fans-for example, on all-seater stadiums, football banning orders and controls on drinking in sight of the pitch. What about some legislation to constrain what goes on in the boardroom? Legal models from elsewhere could be adapted to work in England and Wales. We have heard about examples from Germany, but there are also examples in France, the United States and Canada. Spain already has a national sports law that establishes a statutory national sports council and a special company status of sporting limited company. That law is not perfect-I understand that the Spanish Parliament is considering reforming it-but it does give a clear legal context for professional and amateur sport and recognises the unique characteristics of professional sports clubs. Will the Minister say whether he has considered or intends to consider other models of governance for professional sports clubs?
It may also be time to consider the tax regime that gave financial incentives to leverage buy-outs, such as the takeover of Manchester United by the Glazers, and whether such tax breaks are any longer appropriate.
Supporters and fans need the Government to take action to improve the governance of football in this country. The Sports Minister made commitments to do that, but more recently he seems to have softened those commitments, saying:
"We'll give football the chance to sort itself out first by seeing how they plan to reform over the summer, and if it doesn't work then the Government will step in. We need to take a serious look at reforming the governance and structure of football in this country."
On fans owning their clubs wholly or in part, I believe that ordinary company law is insufficient because football clubs are not ordinary companies, which is shown by the fact that they are called clubs. That is how most of them started: they were clubs that were rooted in their local communities, not profit-making entities. They trade on the name, history and traditions of the city and the community they come from. They are unlike other businesses and should be treated as such. Football clubs are unique, and their sole purpose should not be to make profit for one individual or company at the expense of their fans and the wider community.
I will finish by saying that one never hears of anyone wanting to have their ashes scattered on the car park of their local supermarket or business park after they die. However, fans do want their ashes to be scattered in their football clubs. That is why football clubs are different.
Robert Halfon (Harlow) (Con):
I congratulate the hon. Member for Liverpool, Walton (Steve Rotheram) on securing this important debate. I agree with many of the sentiments that he expressed and with the points made by my hon. Friend the Member for Suffolk Coastal
(Dr Coffey) on tax incentives to encourage more democracy in football clubs. Football is close to my heart. I am proud to have a good and strong club in Harlow, and regularly meet its owner to discuss its plans; it is good to see the club back on track after years of difficulties. The new management team have some exciting plans, which I am sure will mean a great season.
I am a community Conservative, which is why I support moves for co-operative ownership of football clubs and other football institutions. I believe that we must have a democratic revolution that will give fans a greater say in the running of their local clubs. As the hon. Member for Liverpool, Walton mentioned, the Conservative pledge was to reform football governance arrangements so that co-operative ownership models could be established by supporters as part of a wider package of reform of football finance and governance. To adapt what Abraham Lincoln famously said of democracy, I hope that our Government will give football clubs a new birth of freedom, so that football of the people, by the people and for the people shall not perish from the earth.
However, the problem is not only with local clubs ignoring their fans. In my view, the real obstacle is the failed managers, failed contracts and the failed payouts-some say that it is up to £50 million or £60 million-of the Football Association itself. Some Members will have read my early-day motion 329, tabled before the recess, which called for the FA board to resign following the England World cup debacle. I said that that was the time for a democratic revolution, led by the fans, to transform football governance in our country.
The FA board is run like a Byzantine court, with decisions being made like puffs of white smoke appearing from the Vatican rooftops. The FA enjoys a virtual monopoly over the sport. It is a semi-public body and its activities are of great public concern, so the public must have some means of redress. Currently, its board is not democratically accountable to fans, and it is not even bureaucratically accountable to any outside body. That is why I tabled early-day motion 374, which calls for a complete overhaul of the way the FA is run so that the organisation can become truly accountable to England fans. There must be a form of voting rights that would give England supporters the opportunity to have their say on who should be in charge at the FA. If the FA board can be booted out by the fans, it will start to sit up and listen.
My solution would be the introduction of a paid subscription system-perhaps £50 a year-whereby England fans could exercise voting rights in the FA. It would be like a co-operative shareholding, but limited to one vote for each person. It would be in the national interest for England fans to be able to vote for the FA board and chairman and to fire them if they did a bad job. Fans could vote for the board and chairman for a three or four-year term. They would also have the right to decide the level of spending on grass-roots and community football, and to vote on the annual budget report.
I wholeheartedly support our coalition agreement, which refers to reforming football governance and institutions so that co-operative ownership models can be established by supporters. My plea is that the FA
should be included in those reforms and freed from the iron grip of the premier league. As a Conservative, my hope is that the FA would adopt those reforms voluntarily. Just as the people of this country elect the Government, so the fans should have some say in the state of our national game. I want all England fans to be able to say genuinely that we are all in this together, and for that to be backed up by real community power. Enough is enough: if England are to win a major tournament, we cannot go on as we are. If the FA does not reform itself, I urge the Minister to develop a framework for serious reform.
Mr Dave Watts (St Helens North) (Lab): I thank my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) for securing the debate-he has been in the House only since May but he is already making a major impact, both here and in his constituency. I declare an interest as a lifelong member and supporter of Liverpool FC. Ever since my father first took me to the Kop at age seven, I have been lucky enough to be a supporter of the most successful club in Britain, and the one with the greatest fans-there, I have started my comments with an uncontroversial point.
I agree wholeheartedly with my hon. Friend that the recommendations in the report and the suggestions that he has made today are the right way forward to ensure that no further clubs fall into the same position as Manchester United and Liverpool, but I do not think that they will address our problems with those clubs. When one looks at the finances of both clubs, it is hard to see how they will reverse their terminal decline and move forward in a positive way. That is because the politicians and the football authorities have badly let down the fans by accepting that football is nothing more than a business.
I remember having a discussion with someone from the premier league who said, "It's just like Tesco; it's a business." I replied that there was a massive difference between a football club and a supermarket. If I do not like the product or the price in Tesco, I can go to Asda, but it is highly unlikely that I, as a Liverpool fan, would go to watch Everton if I did not like the product or the price. It is unlikely that a Manchester United supporter would go to watch Manchester City-that is not going to happen. There is a massive difference, and we must take that into account when looking forward at how to deal with the problems.
We need to think about how we can move on. We have let the fans down badly by allowing people such as Glazer, Gillett and Hicks to take over our clubs, frankly, with no money. They borrow money from elsewhere before taking over a club and treating it like a cash cow. When Glazer wants some money for his other businesses, he goes along and takes the money out of the club. In the case of Hicks and Gillett, they bought the club to
sell 12 months or two years later for twice the price they paid, without having put anything into it. We cannot accept the current situation or trust the football authorities any further. We need an independent regulator who will put the fans first and take into account the vested interest that already exists in the premier league.
I agree with the comments made the hon. Member for Suffolk Coastal (Dr Coffey) on the need to reform tax legislation, and with the comments made by my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) on company law. We will address the problem only if we make special provision for football and take into account the fact that it is not just a business, but something that is important to people. As footballs fans, we might be politicians or take a great interest in politics, but the one thing that normally overrules that-I see it all the time-is people taking as much interest in their football team as they do in politics. For ordinary people, it is a way of life, but we have already priced millions of fans out of the game.
I support the proposals of my hon. Friend the Member for Liverpool, Walton, and hope that Ministers will listen to them and take them on board. We need to ensure that no other clubs fall as Manchester United and Liverpool have fallen, but also to look carefully at their situation. We need to see what we can do to get rid of those three individuals and to ensure that people who have the best interests of the club and the community at heart take over the clubs.
I am probably in a unique position. When I was seeking to stand for Parliament, and my party was interviewing candidates, one question was a catch-all about any indiscretions I might want to describe. My reply was, "Actually, I don't like football." I am here not because of that but because many of my constituents are passionate about football. It is an essential part of the fabric of the English character. I am here not only because many of my constituents support national football teams, but because of the work of the Bedford Eagles Supporters Trust, which is a community organisation supporting football. It has worked through the generations to support our team, even when we were sometimes competing against the likes of Arsenal, Everton and Newcastle in the FA cup-relatively successfully. Bedford Town is not one of the big teams, but it is a home for people who believe passionately in football. No more vivid illustration of the character of supporters is drawn than when, as many hon. Members have mentioned, clubs are in trouble-and the supporters come to their rescue. Why do they not have a voice in the good times as well?
I am here because of the supporters' work and because I am passionate about the concept of the big society. The Government have a huge opportunity to make real the concept of the big society, and to introduce plans about what they will do to support organisations such as the Bedford Eagles Supporters Trust in the case of community teams and, as the hon. Member for Liverpool, Walton (Steve Rotheram) said, the supporters of large teams, to make real and tangible to the people of this country what is meant by what my hon. Friend the
Member for Harlow (Robert Halfon) called community conservatism. We can all agree with that. We do not want to hear vague recommendations about trying to work with people or trying to get support. We want real action from the Government to support the people who, every day and every week, in their hearts, believe in the clubs they support and represent.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): Thank you, Mr Robertson, for the opportunity to speak in this important, significant and-judging by the number of hon. Members here and the number of people in the Gallery-popular debate. I, too, have had e-mails from members of the Manchester United Supporters Trust. I am sure that nearly everyone has. I am not sure whether the hon. Member for Guildford (Anne Milton), is present, but I suspect that she might have had the most of all.
I congratulate my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) on securing the debate. As he said, his constituency is home to two professional clubs, which have had problems at various times over governance, ownership, fan involvement and stadiums. My constituency does not have any professional clubs-Celtic and Hamilton are just outside the boundaries-although it is home to the junior clubs of Rutherglen Glencairn, Cambuslang Rangers and Blantyre Victoria.
I wish to declare an interest, as a Co-operative Member of Parliament: Supporters Direct was born out of the co-operative movement, and the Co-operative party was very involved. As the founding chair of the Fulham Supporters Trust, I would like to speak from the perspective of being involved with, establishing and running a supporters' trust. I was involved in that long before I had any pretensions to enter elected politics.
The Fulham Supporters Trust was born from a specific and ultimately successful campaign about a football stadium. The people running Fulham football club deigned to believe that the future of the club would be better served by moving away from our traditional community and catchment area to a new ground, for the financial benefits that they prescribed would follow. Such circumstances are typical, and many trusts have come into being in response to a campaign. The issues arise when people running clubs make a mess of things: of the finances, of the issues around the stadium or of how they communicate with and involve supporters.
Such a situation shows where the importance of supporters' trusts lies and what we need to make clear in discussion. Often, club ownership, which is so disparate in character, is not the issue. However, the people below the level of ownership-those who are in charge of running clubs-often take the attitude that football supporters and fans have no business in being interested in or involved with, or in taking a view on, what is happening in the running of their club. Yet we have seen from examples, to which hon. Members have alluded, that they can in fact do a far better job than some of the paid professionals. Supporters have had to ride to the rescue on far too many occasions.
One of the most important aspects to be dealt with is the involvement of trusts other than at a time of crisis-that is, not just when rescuing a situation because no one else is prepared to take up the challenge. The role of
Supporters Direct is therefore crucial. For those of us involved in establishing and running trusts, Supporters Direct has been a superb resource-an efficient and effective organisation run, as far as I can tell, on very little money. It has done a great job of providing guidance and advice to supporters' trusts. I have asked questions of the Minister and we corresponded on the issue early on in the Parliament. I hope that since our exchange he has had the opportunity to meet Supporters Direct and to understand its work. I hope that he will refer to that in his closing remarks.
As other Members have mentioned-I welcome the words of the hon. Member for Bedford (Richard Fuller) in particular-the coalition Government have said a lot about mutualism, the big society and such issues. It would be great if we could see a concrete example of that sometimes rather difficult-to-grasp concept in how supporters are involved in their clubs-not just football clubs, but rugby league clubs and other sports that are starting to develop the trust model.
My main point is that supporters are often underestimated and quite often dismissed. Too often, the attitude of clubs is to see supporters as an irritant. If the clubs expended as much energy and time in involving supporters and their organisations as they do, in some cases, denigrating them, that would be a much better use of time and energy. I hope that that message comes out of today's debate. It is not about what some people have alluded to as imposing a model on all clubs and all situations. It is about involvement and awareness, which can help the way in which clubs are run. That is why I commend the direction in which Arsenal has developed: a progressive trust that might allow early involvement, to prevent some of those problems that would need trusts and fans' organisations to ride to the rescue. I hope that the Minister can respond to some of the issues that have been raised and give assurances about how Supporters Direct will exist in future.
Justin Tomlinson (North Swindon) (Con): I congratulate the hon. Member for Liverpool, Walton (Steve Rotheram) on securing the debate. We have all enjoyed having lots of football-related e-mails, which makes a pleasant change from some of the casework that is sent to us.
I will be brief because I am conscious that a lot of other people want to speak. Many Members have made excellent points, but I want to touch briefly on three issues. The priority has to be to tighten up the "fit and proper" test. As we have seen with Manchester United, Liverpool, Portsmouth, some of the previous owners at my local club, Swindon Town, and huge swathes of non-league football clubs, unsuitable individuals rip out the heart of the community and decimate something that is so important to many people.
I fully support the need for fan representation on clubs. I am interested in the idea of fan representation being built into any future takeover. Working with the Swindon Town supporters' trust in previous years, I pushed hard to get fans included for two reasons: first, so that the club would be open and transparent, and, secondly, because surely it makes commercial sense and
is a good thing for football clubs to be connected to their supporters-their customers, the people who are digging deep to fund ever-growing transfer fees. Actually, at non-league level, Swindon Supermarine, the other club in Swindon, faced dropping down two divisions this season unless it found £40,000. The fans got together-many hands make light work-and I am delighted that the club is still in the same division and competing well.
My final point, which I shall make quickly, is that there must be reality checks in the system. As was mentioned earlier, not all individuals who invest in clubs are terrible people. A good example was Jack Walker at Blackburn Rovers. Not only did he invest in the club that he supported from his youth-my mother remembers standing next to him on the terraces-but the trust is still putting some £3 million into protecting the club. That is an example of looking after fans in the community, and is a bit of a reality check. For all the bad individuals, there are many good individuals-it is a matter of getting the right balance.
I am wearing the tie because I am a supporter of the soccer club. That sounds bizarre, and it is bizarre, in the sense that Merthyr is a particular place. It has always had an interest in both games, both of which flourish in the town. It is odd, perhaps, to see that in a Welsh valley town. Merthyr soccer club is 100 years old, and is now a trust. It has struggled, kicking and screaming, to get to that position, and it needs assistance. This is not just about Liverpool, Arsenal, London or England. It is about something bigger than that. It is about the game of football, which is also about health and community. It is not about potentates, oligarchs and bandits of various descriptions from around the world manipulating the UK tax regime to make profit. That is not really what it is about. Football has a power beyond that, and we need to get a regulatory framework in place at the top of the game because the money-making process at the top, which we all know is now the real power of sport, perverts and distorts the whole of a process that could be something much greater than that.
Let us be clear on the business of sharing facilities. If we democratise the process a little and speak to the people who are really interested in the game of football, and to those who actually play it, we find that what they really want is for the game to flourish, not for it to be perverted by some process. One of my local pubs has now formed its own team. People are trying to play football-they want to do it-but they are not being helped to do so.
When Merthyr soccer club was in private ownership, it received some television money. They had one game in the FA cup, because they play in the English pyramid-they do not play in the Welsh league. I believe they lost 1-0 to Walsall. Sky was bumping gums about Merthyr Tydfil a lot yesterday. It did one thing for Merthyr: it provided that one game. In one night, a little bit of Sky TV money provided two years' revenue. Where did the money go? I have no idea. It went into some financial soup that the owner of the club was involved with at the time. There was no transparency.
The one word that we need to hang on to in all of this is "transparency". We need a process in which people can see what is happening in the game. They will then understand it, and they will exert pressure. A social enterprise model would be the right one for many places. It would build the community, and clubs would run academies if we allowed them to-they have a lot to say about education-and run them properly. We know all those things, so that model is crucial.
I ask the Minister to deal with those three things: television, tax and transparency. Obviously, everyone is waiting for him to say what he will do. Was he serious when he referred during the summer to drinking in the last chance saloon? I would like to know what plans the clubs have come up with for reforming themselves. If they do not do that, my money is on him as the man to do it for them.
Mr Gerry Sutcliffe (Bradford South) (Lab): It is a great pleasure to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) on securing this debate, and on the large turnout of right hon. and hon. Members from both sides of the House. It is important that football authorities get the message that we will not go away. Some people in the football authorities think that politicians should have no truck with the running of football, and I believe they were rather pleased when there was a change of Government. Perhaps they are not now-we will hear what the Minister has to say shortly.
On the momentum of what the Labour Government were trying to achieve on governance issues, there is always a problem for a Government in their relationship with sport. It is the Government's role not to run sport but to create the circumstances in which sport flourishes. Football is our national game. Some progress has been made, but not enough and not fast enough.
Supporters' trusts are important, and I am grateful to my hon. Friend for pointing out that it was a Labour Government who introduced them and, indeed, Supporters Direct. I would be grateful if the Minister updated us on funding for Supporters Direct. Richard Caborn, who was then the Sports Minister, entered into an arrangement with the premier league to look at the Football Foundation and new ways of funding Supporters Direct. I hope the Minister can give us some comfort about that funding, because it is important that Supporters Direct continue its work not only in football but in other sports.
So the debate is about momentum. It is about ensuring that we keep the pressure on football authorities. My right hon. Friend the Member for Leigh (Andy Burnham), now the shadow Secretary of State for Health, wrote, as Secretary of State for Department for Culture, Media and Sport, to the premier league, the Football Association and the Football League about the very issues that we have been discussing today-the "fit and proper person" test, transparency, and clubs looking to their communities and fans for support-but also about the different
models on offer. It is right that we do not have a one-size-fits-all model; there are different models, and they should be developed.
We have been told that the Government should not get involved because the international federations would not like it-that UEFA and FIFA take exception to Governments trying to get involved in the running of football. Up to a point, that is true, but I know from discussions I had with FIFA and UEFA that they were concerned about the sustainability of debt in the English game, and that is why it was important that we put pressure on the football authorities to respond.
The FA has a tremendous role to play. Obviously, I am saddened by the demise of Lord Triesman in the role of independent chairman and by the resignation of Ian Watmore as chief executive. The FA has a key role to play, and how it replaces Lord Triesman will be important. The Minister might want to develop that theme. I am surprised at the time that it will take, given what needs to happen.
The hon. Member for Cities of London and Westminster (Mr Field) spoke about turf wars. The FA has a key role in sorting them out, and in ensuring that, for the good of the game and our communities, supporters' trust models can develop and we can look at other ways of doing things.
Alison McGovern (Wirral South) (Lab): My hon. Friend mentioned supporters' trusts. Will he congratulate the Tranmere Rovers supporters close to my constituency who ingeniously came up with the Les Aid fund to aid the manager, Les Parry, in developing the squad? The supporters came up with great fund-raising models and are able this season to inject cash into the club and get it through its league one campaign.
Mr Sutcliffe: I am happy to do that, and to congratulate all supporters' trusts on the innovative models they have come up with for their own clubs. There are some tremendous examples of supporters' trusts working with local communities.
Clearly, financing the game is a key factor, and people have spoken about the disparity between the premier and the lower leagues. I was heartened by the conference league's changing its rules to ensure that clubs have transparency and the right approach. The Football League is now going in the right direction with the league two regime. We cannot say that there has been no progress. There certainly has been progress, and we have seen some real changes in the premier league and Football League. We are happy that they have taken place, but change needs to continue and to happen more.
It is also important that the Government do what they can to support clubs when they are in trouble. The Revenue's relationships with football clubs needs to be looked at. I understand that Sheffield Wednesday may have a problem at the moment, so the Minister might want to consider that.
On the Labour party's election manifesto, we were prepared to legislate, because we had tried to get the authorities on board but that approach was not working fast enough or quickly enough. I am interested in hearing what the Minister has to say about that.
Dr William McCrea (South Antrim) (DUP):
During the election, both major parties promised to tackle the issues of debt, better regulation, transparency and supporter
ownership. What practical steps does the shadow Minister suggest that the Minister take to make those things a reality?
Mr Sutcliffe: A starting point would be to follow through with the seven questions put to the football authorities. People have talked about the "fit and proper person" test, but there are three tests and those need to be reduced to a single one on transparency. My hon. Friend made a good suggestion about the all-party group's continuing to consider this matter, because that will help the Minister. One frustrating thing about being Minister for Sport-the best job in Government-is the amount of time that dealing with football takes. It is helpful for the all-party group to be involved and to continue the discussion on the issues raised this morning.
The Minister for Sport and the Olympics (Hugh Robertson): Before I start, Mr Robertson, may I pay tribute to the work done by the hon. Member for Bradford South (Mr Sutcliffe) in this and so many other areas across the sports spectrum? This is the first time I have had the opportunity to do so, because questions were not asked directly during the first round of Culture, Media and Sport questions. The hon. Gentleman had a good innings as Minister for Sport, and many officials in my Department rate him highly. I thank him for his contribution.
I congratulate the hon. Member for Liverpool, Walton (Steve Rotheram) on securing this debate. He reiterated, as he did in his maiden speech, his views about the current ownership of the club that he supports-Liverpool-and his desire for supporters to have a greater role in running football clubs. The twin aims of greater supporter involvement in running football clubs and the reform of football governance are shared across the political spectrum and are, as the hon. Gentleman correctly said, part of the coalition agreement. However, I have to tell him that, although the issue is widely agreed in this place, it is not entirely shared in the wider football family. There is a battle to be fought to convince the football family of the merits of this case.
I will deal in a moment with various points raised by hon. Members, but before we get into that, it might help if I say that developments at Arsenal football club have been some of the most encouraging in recent months. I intend to meet that club urgently to examine precisely how we can encourage other football clubs to put in place a similar scheme. If one thing that anybody has said to me or that I have read about this matter has stood out in recent months, it is a quote from Arsenal's chief executive-an enlightened, able individual-who said:
"I think we are moving into a post-materialistic world."
That is an interesting phrase, which sums up my approach to football. People who think that football can be run solely and completely as a business have got it wrong. Of course there are business elements in football-it has to be run properly; nobody in this Chamber would deny that-but it is a business with a social conscience. Football is an important part of the lives of the many millions of fans who turn up to watch and play the
game, or who follow it casually in the newspapers or on television. Everybody involved in the game ignores that at their peril.
Mr Watts: May I caution the Minister against seeing a solution for the rest of football in the example of Arsenal? The owners of Arsenal want to protect the club from the sort of people who have taken over our club, and Manchester United. It is not a typical example and we need to be cautious about that.
Hugh Robertson: Absolutely. Here we get into the problem with the process. It is pointless for me to pretend that there is a one-size-fits-all solution. If there were, I am sure that it would have been implemented in the past few years.
The Spanish model has been cited at length this morning, but, as has been said correctly, two clubs sit at the top of La Liga and they have huge financial resources because they negotiate their own television rights. Hon. Members asked about Spanish sports law. I asked about that a month ago and was told that there were so many faulty aspects to it that the Spanish are now trying to re-regulate. The Spanish model is not always a great example, although some aspects of it might be relevant. We are not starting from the same point as many of the Spanish clubs.
As a young Army officer in the middle of the siege of Sarajevo, I remember saying, "I wish this was different, because this is a disaster." Someone replied, "You can't deal with a situation you wish you had. You have to deal with the one that's in front of you." That is the problem.
Mr George Howarth: The hon. Member for Cities of London and Westminster (Mr Field) mentioned the difficulties in dealing with privately owned clubs, particularly at premiership level. The one negotiating chip is the ownership of the fixtures list, with all its consequences in relation to television rights. Is the Minister prepared to consider that?
Hugh Robertson: To be honest with the right hon. Gentleman, whom I know well, I am prepared to consider any sensible suggestion that will move this discussion on. What he has mentioned is part of a much wider debate that many sports are having about betting rights and image protection. There are considerable problems with betting rights, because if a levy were taken from the bookmakers they would simply move offshore. Many Opposition Members who represent constituencies where bookmaking is a big thing would notice that. The shadow Minister will have scars on his back from that debate.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): I agree with the point about one size not fitting all. Will the Minister return to a point made by a number of hon. Members about the future of Supporters Direct, which has surely been the key to capacity building for supporters' trusts, enabling them to find the right business model? The co-operative and mutual business model has been successful, and not just in football.
I am happy to deal with that point, which relates to points made by the hon. Member for Bradford South. Let me reassure the hon. Gentleman and the hon. Lady that the approach taken on either the wider governance agenda or the funding of Supporters
Direct is no different from the position that the hon. Gentleman was negotiating at the end of his time in office.
The strength of this morning's debate lies in its representing the feeling throughout the House that something needs to be done. It is useful because it allows me to go back to the football authorities, put pressure on them and tell them that we had a Westminster Hall debate that was better attended even than those on the Independent Parliamentary Standards Authority. This debate is a pretty good weather vane, showing the strength of feeling on this issue. I am determined to make progress and to push ahead with both the wider reform agenda and football supporters' involvement.
It all comes back to the issue affecting every Member of Parliament in their constituency surgeries: there is a moment when they face somebody and ask, "What exactly do you want me to do about this?" There are a number of possible outcomes; some might work well for one club, but not for another. Many suggestions were made by hon. Members today and we might follow up on the issue of a tax concession, but no hon. Member in this Chamber will need reminding about the state of the nation's finances. Currently, six demands for taxation breaks for sport are sitting on my desk, including subs for junior sports clubs-[Interruption.]
The shadow Minister is nodding; he has been through all this. Other demands include corporation tax exemptions for sports governing bodies, so that they can invest in the grass roots; tax breaks to entice international federations back to London, so we can increase our influence; and a levy on the betting tax-and so it goes on. I am determined to ensure that
the money that we have as a Government is targeted on getting more people, particularly young people, playing sport. That remains my overriding priority. However, I will consider the demands that have been made.
Jason McCartney (Colne Valley) (Con): I am lucky that Huddersfield Town, the football club that I support, which is on the edge of my constituency, is owned by a local businessman who is a lifelong fan. Social conscience is important. Last season's shirt sponsor for Huddersfield Town was the Yorkshire Air Ambulance charity. More than £100,000 was raised for that charity and for an academy. However, not all football clubs are so lucky; we have heard about Liverpool, Manchester United and others.
Please will the Minister push forward on considering how the Government can intervene? I do not have total confidence in football's governing bodies at the moment. There are issues to do with fit and proper persons and with transparency. The manager of Manchester United cannot even be made to fulfil his media obligations. Please continue pushing forward, to see how we can intervene and ensure that all clubs can have confidence that they are being run as well as Huddersfield Town is.
Hugh Robertson: The trouble with debates such as this is that they quickly turn into a basket of issues. We have not even touched on the 2018 bid, which I am sure all hon. Members will support and is the Government's top priority.
I thank the hon. Member for Liverpool, Walton for instigating the debate and I thank all hon. Members who have taken part in it. The governance reform agenda and how we secure greater involvement for supporters are both issues that I am-
Jon Cruddas (Dagenham and Rainham) (Lab): As the terraces empty from the previous debate, I want to make a few comments about unscrupulous landlords in the private rented sector. As a Portsmouth football club fan, I wish I had been present for the previous debate because I would have had something to say.
I apologise for my croaky voice-I am full of cold-but to set the scene, I shall read two quotes that clearly detail the Government's thinking. The first is from the Minister for Housing and Local Government, the right hon. Member for Welwyn Hatfield (Grant Shapps) who said as recently as June:
"With the vast majority of England's three million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords."
"In the past, over-regulation drove landlords out of the rented market. We don't want to introduce any measures which would form a barrier to potential landlords considering renting out their properties."
Those two quotes are unequivocal, and we conclude that the Government do not see a need for further protection for tenants or for the regulation of unscrupulous landlords, and that they believe the current arrangements strike the right balance, not least because of the fear of red tape. That is in contrast with the previous Government's views. At their departure, they had plans for a new national register of landlords, regulation of letting and management agents, and compulsory written tenancy agreements. The current Government's status quo position is unfortunate, and Shelter today announced a new investigation into rogue landlords, which aims to raise the profile of the private rented sector as a political issue.
Let us consider one basic statistic from Shelter. Nearly 1 million people throughout the UK have fallen victim to a scam involving a landlord or a rented property in the past three years, so on average, every MP will have just under 1,500 constituents who have been the victim of landlord scams. The purpose of this short debate is to help to raise awareness, to praise Shelter's campaign, to raise some concerns, and to ask the Government some questions. We want the Government to recognise the problem of rogue landlord activity in the private rented sector, and to take action because rogue landlords cause enormous damage to the lives of often vulnerable tenants, which may spread to the wider neighbourhood, resulting in run-down properties blighting communities.
Chris Leslie (Nottingham East) (Lab/Co-op): I commend my hon. Friend for securing this debate. My constituents include 165 leaseholders of the Peverel Group, which is a massive freehold landlord with 500 estates throughout the country. At a recent tribunal, they managed to claw their way to overturning a scam whereby leaseholders, when paying their service charge, find that one third of it is an odd cash-back arrangement between the insurer and the freeholder. There are many loopholes in the law, and I hope that he will press the Minister to change his mind and to take a more proactive stance today.
The essential points that I want to make include the following. Most private landlords are responsible and honest in how they deal with their tenants. That is beyond dispute, but those who are not bring down the reputation of the whole sector. The Government must accept that Shelter's investigation has uncovered significant problems with rogue landlords that require action. Many aspects of existing law are not properly enforced by local authorities. They often do not treat this as a matter of priority or do not have a properly resourced enforcement team available.
Let us consider some basic statistics from Shelter. There are just over 3 million private rented households, representing 14.2% of all households. In that sector, 1.3 million tenants-approximately 40%-are in receipt of housing benefit. The sector has surged in popularity in recent years, with the percentage of households renting privately increasing by 40% since 2001. If that rate of increase continues, there will be more private renters than social renters within the next five years.
Some 80% of private renters are aged under 55; almost one third are aged 25 to 34; 58% of 16 to 24-year-olds are private renters, and 59% of private renters expect to buy in future, compared with 27% of social renters. However, compared with two years ago, private renters expect to rent for longer before being in a position to buy their own home. Vulnerable households who rent their accommodation privately are more likely to live in non-decent homes compared with social tenants-the averages being 51% and 26% respectively.
MPs regularly deal with problems associated with unscrupulous landlords, and my hon. Friend the Member for Nottingham East (Chris Leslie) touched on this. They include harassing tenants or throwing them out of their homes without notice, effectively making them homeless; failing to carry out essential maintenance, leading to unhealthy or unsafe conditions; deliberately ignoring the legal requirement to protect tenants' deposits using an approved scheme, and then unfairly withholding the deposit at the end of the tenancy; and driving tenants into arrears by adding exorbitant fees or charges to their account without telling them, and then presenting them and their guarantors with a huge unpaid bill at the end of the tenancy.
What does the law say? Harassment and illegal eviction are criminal offences. Local authorities can prosecute landlords who commit such crimes, and can serve improvement notices or prohibition orders if housing conditions fall below acceptable standards. If the landlord fails to comply, they can be prosecuted. Landlords and letting agents are legally obliged to protect tenants' deposits using an approved scheme, although that can be enforced only if a tenant takes the landlord to court. Landlords are now obliged to obtain a licence from their local authority to rent out larger houses in multiple occupation, and must meet certain standards to do so. Failure to obtain a licence is a criminal offence.
Mr Andrew Smith (Oxford East) (Lab):
I congratulate my hon. Friend on securing this debate, and I commend the Shelter campaign. Does he agree that proper regulation of multiple occupation properties and private landlords must go hand in hand because the problems overlap?
Indeed, in retreating from and watering down the measures that the Labour Government were introducing, after much campaigning by many MPs on behalf of tenants in that sector, the coalition Government risk giving a green light to rogue landlords.
Jon Cruddas: I agree totally, and I shall conclude my comments with similar questions. My right hon. Friend will agree that rogue landlords escape the law because of three basic elements: lack of awareness by tenants, lack of enforcement, and lack of resources afforded to authorities to carry out such tasks. On lack of awareness, victims of rogue landlords frequently do not report them because they are not aware of their rights, or fear that if they come forward their landlord will find out and evict them. On lack of enforcement, the law is not enforced often enough. For example, in 2004 only 26 landlords were convicted or cautioned for unlawful eviction, and in 2008 only one person received a custodial sentence under the Protection from Eviction Act 1977.
Mike Weatherley (Hove) (Con): Does the hon. Gentleman agree that the legal process may be a little slow, not only for legal remedies for tenants, but for landlords when tenants are in arrears? Perhaps both problems should be examined.
Jon Cruddas: I do not dispute that there are occasionally problems on the other side, and I think we all agree on that. Such problems also need resolution, but they are completely and empirically outweighed by tenants' problems that confront us as MPs.
On lack of resources, the Government's Rogers review showed that more than 60% of councils devote a low or very low proportion of their regulatory resources to enforcing health and safety requirements or HMO licensing.
What can be done? The problem could be split between local and national Government. The Government could prioritise the private rented sector and give councils the tools that they need to force out rogue landlords. They could tighten the law to close the loopholes that rogue landlords use to exploit tenants, and they could make it easier for tenants to enforce their legal rights. Transparency and accountability could be increased, so that the public are better able to hold local politicians to account.
Local governments could prosecute rogue landlords and make use of the full range of tools and powers already at their disposal. They could be proactive in protecting tenants by carrying out regular housing condition surveys, and they could make sure that enforcement is properly resourced. They could also take advantage of the Housing Act 2004, which allows them to recoup costs by charging them to the landlord.
Today, Shelter has launched its campaign, and a new section of its website focuses specifically on action to tackle rogue landlords. It highlights the top scams that rogue landlords use against their tenants and releases the results of a survey produced jointly with the Chartered Institute of Environmental Health. It publicises the online and face-to-face advice service for people who have fallen victim to rogue landlords, and it encourages MPs to approach Shelter directly if they know of rogue landlords operating in their areas and to refer their constituents to the advice services.
I would like to refer to some of the key findings in the Shelter-CIEH survey. The results are stark: 99.2% of environmental health officers working in the private rented sector claim to have encountered landlords who persistently ignore their responsibilities; 96% of environmental health officers have encountered damp and mould; over 90% have found electrical hazards; and more than 91% have found fire safety hazards in the private rented sector. More than 60% of environmental health officers say that cases involving vulnerable people make up more than half their work load, and over half those officers believe that environmental health problems in the private rented sector are set to get worse over the next year.
Those issues cannot be separated from the wider policy context, which cannot be ignored. Many vulnerable people have been forced into the private rented sector because of the shortage of social housing. Local authorities increasingly look to the private rented sector to house homeless families, which in turn has forced up the bill for housing benefit. The Government spend millions of pounds on the private rented sector through the local housing allowance, and as a major customer in the sector, it is important that they properly monitor and question quality and standards. The recession has changed the nature of the private sector. There has been an increase in the supply of private lettings as home owners defer sales or are unable to sell and become "reluctant landlords". Meanwhile, the majority of people whose homes are repossessed will move into the private rented sector.
The National Landlords Association has warned that the coalition Government's planned changes to the local housing allowance will drive vulnerable tenants into the hands of rogue landlords. Making local housing allowance payments directly to landlords would make the market more attractive and secure for reputable landlords, while helping tenants who find it difficult to manage their finances.
As I said earlier, the Minister for Housing and Local Government has announced that Labour's plans for a new national register of landlords, the regulation of letting and managing agents, and compulsory written tenancy agreements will be scrapped in the name of protecting "good" landlords from red tape. The national register of landlords planned to allow tenants to make basic checks on prospective landlords. It aimed to make it easier for councils to identify local landlords, thereby making the enforcement of letting rules simpler. The regulation of letting and managing agents was aimed at tackling rogue landlords and driving out the worst practices, such as wrongful eviction. It aimed to raise standards and provide protection for landlords and tenants in the event of a dispute. The compulsory written tenancy agreements sought to strengthen the hand of tenants in the event of a dispute and to ensure that tenants and landlords were clear about their rights and responsibilities. In the light of Shelter's report, perhaps the Government will look again at those ideas and give them another hearing.
I know that my colleague, the hon. Member for St Austell and Newquay (Stephen Gilbert) wants to say a few words, so I shall conclude with some questions for the Minister. Does he recognise the problems with rogue landlords that Shelter has identified? Given the steady increase in the number of private renters, does he
agree that tackling those problems should be a Government priority? Will the Government introduce measures in the decentralisation and localism Bill to ensure that local authorities can be properly held to account for their policies on tackling rogue landlords? What steps will the Government take to tackle rogue landlords who repeatedly commit the same offences?
Many MPs urged the last Government to fast forward their plans to implement the national register and to crack down on those unscrupulous landlords whom we have all come across. Those ideas appear to have been kicked into the long grass. I urge the Minister to study in detail the report launched today by Shelter and to come back and think again about what can be done to stop exploitation, harassment and negligence in the private rented sector.
Stephen Gilbert (St Austell and Newquay) (LD): I commend the hon. Member for Dagenham and Rainham (Jon Cruddas), and I thank him for securing this debate on the important research that Shelter has published and for allowing me to say a few words. Cornwall is experiencing an acute housing crisis, and the private rented sector continues to play an important role in addressing that crisis for my constituents. However, Shelter's research should be a cause of concern to hon. Members from all parties. We all know that the majority of landlords act responsibly and treat their tenants reasonably. Nevertheless, a minority of landlords are inflicting great suffering on vulnerable people.
Across the United Kingdom, 3 million households live within the private rented sector-that is 14.2% for statistics junkies. That number has grown massively over recent years, and in my constituency, latest statistics show that in Newquay, one in five homes-20%-is in the private rented sector. That is well above the England average. We must ensure that private landlords look after people in their care. That is an important issue across the country.
During the three or four months in which I have been a Member of Parliament, my constituency postbag has shown examples of the kind of rogue landlord activity that Shelter mentions in its report. That includes illegal evictions, sometimes including violence, or cutting off water and electricity to force people to leave their homes.
Last summer, a family of four were evicted without warning, under the threat of violence and the use of knives. They were left with only a car to sleep in while one of the family's daughters was doing her GCSEs. Another couple in my constituency, who have a small baby, were living in rotting, damp, leaky conditions. They were threatened by their landlord for reporting the situation to the environmental health officers that the hon. Member for Dagenham and Rainham referred to. The situation culminated in their utilities being cut off during a cold spell last winter.
Cases such as those and the many others across the country are unacceptable. We are hugely indebted to Shelter for its research and for bringing the problem to light at a national level. However, the issue is not just about violence and evictions. Tenants can suffer if landlords refuse to carry out essential maintenance and basic
repairs, thereby wilfully neglecting their responsibilities and putting the health of their tenants at risk.
The Minister for Housing and Local Government is clearly experienced and knowledgeable about housing, and he is committed to ensuring that everyone has somewhere decent to live. He has already said that he expects councils to use
"the full range of powers at their disposal to make sure tenants are properly protected."
I believe that local authorities must take a zero-tolerance approach to rogue landlords and that they must use all levers at their disposal to root them out. Enforcement powers are available to local authorities, but all too often such powers are not used. We do not necessarily need a raft of new legislation, but priority must be given to the enforcement of current legislation against rogue landlords. Councils must be proactive in protecting tenants by ensuring that they know where the problems are locally and prosecuting when necessary, and by considering the use of existing powers to introduce selective licensing.
Again, I congratulate the hon. Member for Dagenham and Rainham on securing the debate. This is a vital issue that affects millions of people across the country and I will be interested to see what plans the coalition Government have to tackle the problem.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): I congratulate the hon. Member for Dagenham and Rainham (Jon Cruddas) on securing the debate and other colleagues on their potent interventions. In particular, let me mention my new colleague, my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert), and thank him for bringing to the attention of the House some of the specific and horrific examples that he described.
I think that everyone present understands the importance of the private rented sector in delivering affordable and suitable accommodation for households. As has been reported, there are 3 million private tenants in this country. In the area represented by my hon. Friend and in London, a much higher percentage-as many as one in five-are in private rented accommodation. The sector provides a lot of choice and flexibility at all levels of the housing market.
Graham Jones (Hyndburn) (Lab): The Minister makes the point that there is quality provision in the private rented sector, but I should like to point out the situation in my constituency and the east Lancashire corridor, which probably reflects that in many areas of the country. In my area, 40% of properties do not meet the decent homes standard and 11% are unfit for human habitation; and within those statistics, it is predominantly the private rented sector that features. How can he say that there is adequate provision and no need for regulation when such squalid conditions exist? Urgent action is needed on rogue private landlords. The hon. Member for St Austell and Newquay (Stephen Gilbert) made the good point that environmental health officers are really struggling. The sector does need regulation, because such landlords are able to evade legislation. They are able to work round-
Andrew Stunell: Indeed. I am getting a bit cramped for making my own speech, if I may say so, Mr Robertson. I shall just challenge the hon. Member for Hyndburn (Graham Jones) on one point. He says that 40% of the homes in his constituency are below the decent homes standard-a figure that I fully accept. I do not know what proportion of them are in the private rented sector-he did not say-but of course a lot of homes below the decent homes standard are not in the private rented sector, and I do not want him to get away with the idea that the coalition Government believe that there should be no regulation. On the contrary, I shall outline in a moment, I hope, what we think is there and should be there and what should be done to enhance the situation that we face.
The hon. Member for Dagenham and Rainham, in introducing the debate, was, I think, criticising my right hon. Friend the Minister for Housing and Local Government for saying that the vast majority of private tenants are satisfied with the service that they receive. Well, 75% of them say that, which I think is somewhat near to being a vast majority, but I certainly recognise that there is poor practice.
There is bad practice; a minority of landlords clearly behave in an unacceptable way; and the management of the poorest-quality stock is an issue. Those properties are often the ones that are occupied by the most vulnerable tenants, too. That causes real problems, as my hon. Friend the Member for St Austell and Newquay pointed out.
The Minister for Housing and Local Government is well aware of the position that some people face. He is also well aware of the Shelter campaign. I can tell hon. Members that he will attend a public meeting with Shelter in a couple of weeks' time, when he visits the Liberal Democrat conference, so I am sure that if he is in any doubt, he will be able to understand the position fully there.
What can we do to tackle the problem? Local authorities already have significant powers. Some hon. Members talked about illegal action that has taken place. Illegal action can be confronted by local authorities, whether by environmental health or by rent officers. Indeed, in Liverpool, there is an interesting situation in which such action is being confronted by the primary care trust, which is also involved in local health issues. It is certainly our intention to work with those who have an enforcement role, to ensure that the barriers to them using their powers effectively are lifted. Of course, those are mostly powers that are given to local authorities, which is exactly as it should be. Where landlords fail to maintain their properties, local authorities can use the housing health and safety rating system to make a risk assessment.
The health and safety rating system involves very minimum standards. Does the Minister not agree that it involves appallingly low standards and
does not come anywhere near meeting the decent homes standard? When environmental health officers are asked to go round and look at properties, they have no power at all to make the house reach a decent standard, as has been pointed out by the hon. Member for St Austell and Newquay.
Andrew Stunell: I am not quite sure what the hon. Gentleman is asking me to do. If he thinks that there should be a legal requirement for private landlords not to let if their home is not of a decent standard, I think that that will give a number of social housing landlords problems as well. I fully accept his point that standards in some places are low and need to be brought up to standard. I was trying to illustrate the fact that local authorities have powers at their disposal to achieve that.
There is an extensive enforcement framework. Where high levels of hazard are identified-categories 1 and 2-the local authority can compel private landlords to make the necessary improvements. It can issue improvement notices and require property to be closed down. Failure to comply carries a fine of £5,000.
One of the points that the hon. Member for Dagenham and Rainham made was that there are repeat offences, and one of his questions to me was what the Government will do about repeat offenders. Repeat offenders go to the courts, and the courts will take the decision based on the facts of the case. I strongly support the hon. Gentleman in thinking that the courts should take those breaches very seriously.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): Given that the legislation in place to pursue rogue landlords is not strong, and even if we take the Minister at his word that the current legislation is strong enough, is it not the case that when local authorities are being asked to make cuts of 25% to 40%, the ability to pursue those landlords will be curtailed?
Andrew Stunell: The reality that we face means that there will be less public money to spend. The policy of the Department for Communities and Local Government and of the Government is to devolve the priority-setting process to local councils. If local councils share the hon. Gentleman's view that increased enforcement is an essential core activity that they must build up, they will have much more freedom to do that. They will have to set priorities, just as the Government have to set priorities.
Conditions in the private rented sector have improved. Since the early 1990s, the gap in the level of decency between owner-occupied and privately rented homes has narrowed. Indeed, on average, the private rented sector has become more energy efficient than the owner-occupied sector. I fully understand that averages disguise highs and lows, but we should not demonise one sector of the housing market without taking better account of the evidence.
Local authorities have powers in respect of management standards. Under the houses in multiple occupation regime, there are statutory requirements for HMOs of three or more storeys occupied by five or more people who form more than one household. It is a bit of a rigmarole to say that, but we know what we mean. There is also the power for local authorities to have discretionary licensing schemes in their areas, covering smaller HMOs that do not meet the mandatory licensing
criteria where they have identified problems with management and property condition. Hon. Members will know that there is a selective licensing scheme to cover all privately rented property in areas that suffer from low housing demand and persistent antisocial behaviour.
As part of the previous Government's localism agenda, local authorities were granted, from April of this year, a general consent to introduce discretionary licensing schemes without reference to the Secretary of State. It is right for local decisions to be made by those who are directly accountable to local communities. We certainly have no plans to repeal that power.
Licensing schemes mean that local authorities can impose conditions on licences, such as a specified maximum number of occupants and that adequate amenities are in place. Private landlords have to be identified as "fit and proper" in terms of their suitability to manage the property. That perhaps deals with the repeat offenders point from a different direction. A breach of a licence condition is an offence. Letting or managing a property that requires a licence without one could result in a maximum fine of £20,000. Given all that, the Minister for Housing and Local Government came to the view that there was no need for more regulation at present. We do not want to introduce new burdens for landlords that will discourage them from letting homes to those who really need them.
Several comments were made about the tenancy deposit protection scheme. Of course, that is statutory. It helps to ensure good practice in deposit handling, so that when a tenant pays a deposit and is entitled to get it back, they can be assured that that will happen.
Perhaps in the last second of the debate, I can say that when it comes to raising tenants' awareness, I am entirely with the hon. Member for Dagenham and Rainham. I believe that it is of absolute importance that at national and local level, and by us as MPs, the point is made to tenants-
Damian Hinds (East Hampshire) (Con): The debate title given in the Order Paper is "Unauthorised encampments and development in the countryside"; when that topic comes up, it is often accompanied by the words "Gypsies" and "Travellers". When seeking this debate, however, I deliberately omitted reference to any community or tradition. I did so for the simple reason that most Gypsies and Travellers are not engaged in unauthorised development. What we are talking about today would be just as problematic for any community.
The vast majority of Gypsies and Travellers are entirely law-abiding. Four fifths of caravan pitchings are in authorised locations, and many more among these communities live in bricks-and-mortar homes. We are therefore talking about a small segment. We should acknowledge up front that Gipsy and Traveller communities face particular problems. In health and education, they are among the most disadvantaged groups-their life expectancy is 10 years less than the national average and their attainment at GCSE is less than half the national average. As politicians, we have to rise more fully to those challenges, to ensure good life chances for all. Without doubt, the provision of decent sites in workable locations is an important part of that; so, too, is mutual understanding with others in the community, to ensure that everyone is on board.
As I said, most Gypsies and Travellers are entirely law-abiding, but the small segment who are not-those who occupy land illegally or make unauthorised developments to land that they own-can sour relations with local communities. That, in turn, can make it harder to secure the improvements in life chances and outcomes that we all want to see.
Problems that arise can be roughly categorised under one of three headings: first, trespass and occupation of public land by Gypsies and Travellers; secondly, their trespass and occupation of private land; and thirdly, unauthorised development on land owned by them. That last category has seen big growth in recent years and is the source of the greatest problems in my constituency of East Hampshire-and, I dare say, in many other constituencies.
Since 2004, there has been a national increase of more than two thirds in the number of Gypsy or Traveller caravans stationed on unauthorised sites owned by Gypsies or Travellers. I note in passing that that increase occurred at the same time as a large increase-indeed, in absolute terms a much larger increase-in the number of authorised sites.
This is a typical scenario. Someone buys a field from a farmer to keep horses, for example; after a while, an electric line and water supply are installed in connection with the keeping of the animals; then, over a weekend or a bank holiday, one or two caravans or mobile homes arrive, along with the heavy machinery needed for laying a hard surface and other works. A retrospective planning application is then made. It often turns out that the field in question is located on the edge of a settlement in
what the planners define as a sustainable location. Temporary permission may be given, and so a cycle begins.
It is said by some that local authorities have only themselves to blame because they do not make adequate provision for sites within their borders-even if, for example, a site is available just outside the boundary. The assumption may be that one new authorised site will mean one unauthorised site less, but that will not always be so. Nevertheless, I repeat that I support provision of good authorised sites, and I welcome the Government's inclusion of Traveller sites in the new home bonus scheme; I hope and trust that that will result in more sites.
Hon. Members may have read in the press about the village of Ropley in my constituency. The local community woke up to find that a Traveller site had been developed overnight. It was not the first in the area. The villagers knew that the matter could lead to months or years of appeals and uncertainty. So little faith did they have that the matter would be resolved that they clubbed together through voluntary subscription to buy the site at a substantial premium over what it had changed hands for previously.
If a small village community feels compelled to find a six-figure sum because they simply have no faith in the fairness of the legal and planning systems, there is clearly something wrong with the system. We need to find new ways to deal with the problems of unauthorised development and encampments in which the whole community can have confidence. People want fairness; they want to see the same rules applying to all.
Richard Graham (Gloucester) (Con): I am grateful to my hon. Friend for giving way. I entirely support his proposals, and I congratulate him on securing the debate. Does he agree that, in trying to rebalance things to recognise the human rights of those who live next to Travellers' unauthorised sites, we should give greater recognition to those already living in the location, tipping the balance away from what was proposed by the previous Government? They appeared to favour greater human rights for those who illegally occupy sites, such as the three that have been occupied in Gloucester during the last 12 months. They are all public sites and the most recent is on school land.
Damian Hinds: I thank my hon. Friend for that intervention. What he says goes to the heart of the issue. I believe that people want to see not so much a tipping of the balance towards or away from one group or another; they want to see the same rules applying to everyone. That is what underpins the compact of a cohesive society.
Some steps are already being taken. I welcome the announcement made by the Department for Communities and Local Government on 29 August, which revokes flawed Whitehall planning circulars. It gives new incentives to provide sites, which is important, and it gives stronger tenancy rights to Gypsies and Travellers on official council sites. The Secretary of State said in the same announcement that he was looking for new ways to empower local authorities to deal with rogue developments. I wish to suggest one, and I would be interested to hear the Minister's opinion of it.
I understand that there is a role for retrospective planning applications, but it must be possible to construct a set of principles that allows for genuine mistakes yet excludes the wilful abuse of the system to create wholly new dwelling places. That would not solve every problem, but it would go some way to restoring public confidence in the system, which has become badly discredited. I hope that the Minister and his colleagues will consider the idea.
I conclude where I started, by stressing that we are talking about the actions of a small segment of the Gypsy and Traveller community. We need fairness and equality before the law. I am confident that that would aid rather than impair community cohesion and mutual understanding, with further improvement of the conditions and outcomes for members of the Gypsy and Traveller communities. I know that many hon. Members wish to speak, so I shall stop there. I look forward to hearing their contributions.
Annette Brooke (in the Chair): The Minister and the Opposition spokesperson have agreed to take 10 minutes for winding up. Many Members have indicated a wish to speak. The calculation is in their hands. I call Mr David Tredinnick.
David Tredinnick (Bosworth) (Con): I am grateful to you, Mrs Brooke, for calling me in this debate, not least because I have in my constituency a very large community of travellers, some of whom have been resident there for a very long time. Some live on the Good Friday site, which came about, predictably, on Good Friday when a group of Travellers moved in. They fell under the third category of Travellers mentioned by my hon. Friend the Member for East Hampshire (Damian Hinds), whom I congratulate on securing this debate. Those in that category buy land and then illegally improve it.
The group moved in with diggers and concrete-laying equipment, and laid out a properly made up caravan site. They had no permission, and, unfortunately, the council was caught napping. The chief executive was not available and nor were the councillors who might have been able to do something about it. As a result, we have a major problem there. Other sites in the area that have been purchased and then improved without permission have also proved to be very difficult to remove. That infuriates local communities more than any other issue. We have seen such developments across Warwickshire, Hampshire and Gloucestershire, and it infuriates law-abiding constituents to see the law flouted in such a way.
A related issue is the allocation of housing after an appeal. In the Markfield area of my constituency, a site went to appeal and, as a result, 112 new houses, which had been opposed by local people, are now being imposed on the community. That further increases the tension, not least because at Groby, just by Markfield, I have had another problem of illegal encampments on roads.
What we need is a new policy. I very much welcome the plans of the Secretary of State for Communities and Local Government to introduce new powers for councils in relation to Traveller sites. The plans do not excuse councils from not implementing the existing rules; for planning officers, that can be a huge challenge because
such an issue is not necessarily at the top of the list. Nonetheless, I welcome the plans to give new powers to local authorities.
In addition, we should not automatically be expanding areas on which we have a large number of existing sites. There should be a fairer distribution across the country. [Interruption.] I am most grateful for the applause from my hon. Friends. It is absurd that this tiny community in my constituency, between Bagworth, Newbold Verdon and Barlestone, should have a disproportionate number of sites. Moreover, why should we not put the new sites nearer roads, so that travellers can actually travel? Not all the communities are settled.
Why allow travelling people who are coming into the area to park their caravans way off the roads? The situation has been further exacerbated by the policy in the Republic of Ireland, which, paradoxically, took a very tough line with itinerants. As a result, we have a large number coming over here.
Moreover, we also have large numbers of illegals coming over from the European Union. Romanians, for example, have chosen to come into the area. I have to say that Leicestershire county council has been magnificent in the way in which it has helped the children of those communities in the schools. In particular, Barlestone Primary Church of England School, which has a disproportionate number of Traveller children, has made very great efforts.
Notwithstanding how we feel about trying to help such minority communities, we have to come back to the fact that the majority is very dissatisfied. If we have a situation in which most people think that the law is an ass, they will take the law into their own hands. On that note, I will end and ask the Minister to take note of my concerns.
Gordon Henderson (Sittingbourne and Sheppey) (Con): I agreed with my hon. Friend the Member for East Hampshire (Damian Hinds) when he said that we needed fairness, which is why I am speaking out on behalf of the settled community in Sittingbourne and Sheppey. People there are fed up to the back teeth with the way in which the previous Government allowed a two-tier planning system that explicitly gave preferential treatment to Gypsy and Traveller sites. Settled people in my constituency do not object to Gypsy and Traveller sites per se, but they believe that planning applications for those sites should be treated in exactly the same way as any applications from the settled community.
I could give any number of examples of unauthorised sites that have sprung up in my constituency. They have infuriated a number of communities, including that of Upchurch, which is surrounded by seven unauthorised sites, and Brambledown on the Isle of Sheppey. I should add here that, historically, the Isle of Sheppey has never had any Travellers or Gypsies, yet a site has now been installed.
One site in particular epitomises the concerns that settled people have with the two-tier planning system. In the small semi-rural community of Bobbing, just outside Sittingbourne, a crematorium has been established for just a handful of years. Opposite is a large field that was being used as a paddock. A couple owned the
paddock. Unfortunately, the chap's health deteriorated about three or four years ago and he became disabled. He wanted to be close to his horses so he put in a planning application to Swale borough council for a bungalow to be built on that land.
The planning officers and the development committee turned down the planning application on the grounds that the building of a bungalow in a countryside gap was inappropriate. The couple then decided to sell their land to somebody who lives in Medway, which is outside my constituency. As soon as the land was purchased, a planning application was submitted for a static caravan and a Travelling caravan to be installed on the site and for outbuildings to accommodate them.
The planning officers, who only 18 months before had turned down a planning application on the grounds that it was inappropriate to have development in an important countryside gap, recommended approval of the planning application on the grounds that, because the applicants were of Gypsy extraction, it was appropriate to have a development in the countryside gap.
That type of contradiction infuriates settled people. People go through the correct procedures to submit planning applications and then somebody else comes along and gets approval. The officers were following Government policy; they were not making it up on the hoof. They were following guidance put out by the previous Government. I very much hope that, as a priority, the Secretary of State for Communities and Local Government will scrap that particular guidance note, which persuades local authorities and makes them give preferential treatment to one community over another.
I know that there is some talk about local authorities not being able to move people on because they are not providing sufficient sites. In my view, however, this issue is not about providing additional sites; too often, it is about somebody making a fast buck. That is epitomised by the case that I have just mentioned.
I want to talk about the issue of people illegally developing land, and to focus particularly on the issues caused by multiple temporary consents. The established practice of a community's moving on to land and putting down infrastructure before the local planning authority can respond has been referred to already. When that happens, the usual procedure is for the local authority to invite the people carrying out the development to apply for permission and, if that permission is granted, for it to apply retrospectively. That is not just in respect of this type of development; it is in respect of all types of development.
However, when somebody goes on to agricultural land and puts down infrastructure, in most cases the application is refused. Of course, that application then goes to appeal and in many cases the appeal process is very lengthy. The matter then becomes one of enforcement, but enforcement cannot take place while an appeal is pending. All these things take time.
During that time, development becomes entrenched, roadways are often made up, hard standings are put in place for mobile homes and fences are erected. While
that is happening, the law-abiding settled community sees laws apparently being disregarded, often by another group, and they become frustrated at the lack of progress. So it is clear that the system needs attention and that councils need stronger powers.
The concept of retrospective applications should not be available in certain cases. By way of example, I want to focus on a particular area that has suffered from multiple temporary consents. It is a village or hamlet called Barnacle in the northern part of my constituency and it is in the green belt, where there is a presumption against development.
Barnacle is a small community, with 105 households and a population of 267, according to the 2001 census. It is approached by narrow country lanes and its parish council describes it as an ordinary place where working people enjoy living in a friendly, sociable environment. However, those people now have on their doorstep a site comprising 50 caravans and 10 mobile homes, and it is believed that there are 28 separate households on the site. It is the contention of those who live in Barnacle that the scale of the site is out of all proportion to a village containing 100 households.
I want to set out the sequence of events that has led to this situation, which started as long ago as April 2003. On the Good Friday, unauthorised use of a paddock began and the local authority immediately issued an enforcement notice. An appeal was immediately lodged against it. It took until February 2004 for the Planning Inspectorate to uphold the enforcement notice, but it set the period of compliance at 18 months.
At the end of that period of compliance, in August 2005, a planning application was submitted for a temporary two-year permission to be granted for people to reside on this particular site. That application was heard by Rugby borough council in October 2005. The council refused the temporary consent, but it extended the period of compliance, with the enforcement notice delayed until August 2006.
In April 2006, four months before the new compliance period expired, a planning application was submitted for a permanent dwelling. It took until July 2006 for the local authority to refuse permanent consent, but at that time the authority extended the period of compliance, so that the enforcement notice ran until August 2007. An appeal against the refusal was submitted and in September 2007 consideration of the planning appeal was deferred while the council considered the matter further.
We now move on to January 2008, when the Planning Inspectorate again granted a temporary planning consent at the site for a further two-and-a-half years, to expire in July 2010. At that time, the residents got in touch with me, as I was the new Member of Parliament for the area. The application made in July 2010 has not yet been heard; it is likely to be heard by Rugby borough council in October. The anxiety of the residents of Barnacle is that a further temporary consent may be granted, meaning that there will be no resolution to the issues that they face.
The problem that I want to draw attention to is the number of temporary permissions and extended compliance periods that have been granted. Temporary consents were granted principally on the basis that suitable accommodation would be available at a later point in
time at a redeveloped caravan park nearby. That development has not happened, and it is feared that that new site is still not available. The concern of the residents of Barnacle is that there will be a further temporary consent. They have suffered from the "nowhere for them to go" issue; despite continued unauthorised development, that issue has enabled the site to be occupied for seven years already. And as each year passes, the site becomes more established and more permanent in its nature.
The residents of Barnacle find on their doorstep a development that contravenes both national and local planning policy and one for which local elected representatives have consistently refused consent. Yet they have lived with it for the past seven years. This issue needs to be redressed, with a review of the legislation, so that residents of places such as Barnacle can again enjoy their normal quality of life.
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