Andrew Bridgen calls out failures of the English Football League regulations including the 2016 regulation which allows clubs to be separated from their stadiums and still comply with the financial fair play regulations, and also delays caused by the Football Creditor Rule.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I commend my hon. Friend the Member for Mid Derbyshire (Mrs Latham) for securing this debate of huge local interest.
At this stage, the most constructive way to deal with this matter is to look at how we got here and what we can do to ensure that no club and no fans end up suffering the anguish that Derby fans have had to suffer over many months. We have to look at the historical actions of the English Football League, as mentioned by colleagues. There have been significant issues with its regulations. In 2016 an absolutely nonsensical regulation change relaxed the rules in order to allow clubs to sell their stadiums and still comply with the financial fair play regulations. I ask the Minister, what consideration did the English Football League give to the idea that owners that were looking to gamble would use this loophole to abuse the system, allowing them to spend huge amounts of money and separate the club from its stadium?
The history of football is littered with examples of the consequences of a club being separated from its stadium, and the financial problems that inevitably follow. Indeed, Wimbledon lost its entire club from the borough as a result of that loophole. The loophole has now been closed, but had the Derby County owner not had the option of selling the stadium in order to circumvent the financial fair play rules, then I do not think we would be having this debate today. There is no doubt in my mind that this presents a huge failing in regulation by the English Football League.
I turn next to the football creditor rule, of which Derby County also fell foul. Many weeks of the administration were spent dealing with legal claims against Derby County by Middlesbrough football club and, to a lesser extent, Wycombe Wanderers football club. During that time I spoke to both Her Majesty’s Revenue and Customs and the Middlesbrough football club owner about what, to many people, was a fairly opportunist and spurious claim that was undoubtedly causing huge problems for the sale of the club, because the claims for so-called cheating were categorised as a football debt by the English Football League, with a potential liability of over £40 million. That understandably made interested parties rather nervous, as no one can ever predict the outcome of any litigation with 100% certainty, and this was during an administration.
With the delays caused by this action, the value of the club decreased day after day and cost the creditors money, including the taxpayer through the liability to HMRC. This example will surely put pressure on the football creditor rule, a point about which I warned various regulators, including the English Football League, while we went through this very painful process.
My hon. Friend the Member for Mid Derbyshire has been particularly critical of the administrator, Quantuma. Some of her criticism is valid, and certainly the naivety and the failure of due diligence on the Kirchner bid was particularly erroneous. Quantuma has certainly been poor on communication, but I reserve some judgment. The administrator will be able to put its side of the story only when the Derby County sale is successfully completed and explain why certain actions had to be taken. We should be cautious about pre-judging that and give Quantuma the opportunity to defend itself.
However, it is certain that many Derby County supporters have suffered considerable distress over the past nine months or more, and many creditors have been left out of pocket. With a resolution looking likely, it is important that Members of this House take the necessary action to ensure that the Government do everything they can to learn from this painful process so that the same mistakes are not made again. I wish Derby County and its many supporters across the midlands the very best for the future, and I hope the new owners will cherish it.