Chi Onwurah – 2019 Speech on Newcastle United Football Club

Below is the text of the speech made by Chi Onwurah, the Labour MP for Newcastle-upon-Tyne Central, in the House of Commons on 24 January 2019.

Madam Deputy Speaker, I must start by declaring an interest: I am a Newcastle United fan. [Hon. Members: “Hear, hear!”] Thank you. When I raised this with the House authorities, I was told I did not need to declare it as I “derived no real benefit” from it. I would dispute that. Supporting Newcastle United has brought me great joy, and a sense of belonging, shared purpose, and community as well as the opportunity to watch the beautiful game at its beautiful best in that cathedral to football, St James’ Park. But it has also brought me deep despair and disappointment, particularly in the last few years. I also wanted to present myself in my Newcastle team shirt today, but I was told in no uncertain terms that that was not allowed. Instead, I have settled for a Newcastle Libraries T-shirt with our city on it.

Newcastle United is at the heart of the city. Unlike Liverpool or London, we have only one professional football team and we are united in our support. And what support it is! Hon. Members may recall that, back when we had regional development authorities and investment in our regions, the One NorthEast tourism slogan was “Passionate people, passionate places”. Well, the passion of Newcastle is football. We have consistently high attendances—some of the highest in the league until recent times—and the economy of the city is influenced by the success on the pitch. If we are winning, we are singing—and spending. If we are losing, the gloom hovers over all our heads like individual storm clouds. It is part of our culture.

Anyone who moves to Newcastle—and we certainly have an unparalleled quality of life, so I recommend that everyone does so—will find it an open, welcoming and warm city, but whereas elsewhere they might get away with talking about the weather, in Newcastle they will need to know how the Toon are doing. It is part of our mental wellbeing—90 minutes spent at the Gallowgate end would be enough to convince anyone of that—and this is true not only in Newcastle, as my hon. Friends—and fellow fans—the Members for Gateshead (Ian Mearns) and for North Tyneside (Mary Glindon) can attest. They would have liked to be here today.

Football is the lifeblood of many cities, particularly in the north, and that remains the case despite changes that have seen money, not fans, become the driving force of football thanks to the creation of the Premier League and billions of pounds from Sky Sports. While I will speak mainly about Newcastle United football club, its finances and its owner, much of what I say applies to football as a whole.

Since 2008, Newcastle United has been owned by Mike Ashley, who also owns Sports Direct, House of Fraser and several other retail businesses. In July last year, I presented a petition reflecting the concerns of fans groups, such as If Rafa Goes We Go and the Magpie Group, and that caught the attention of Mr Ashley, something which I had been unable to do as the MP for St James’ Park, despite writing to him to ask for a meeting. It is testimony to the power of Parliament that, after announcing this debate, I was able to meet Mr Ashley on Saturday. I committed to Mr Ashley that I would make no personal attacks on him—I will not avail myself of parliamentary privilege to do so—and I say to all the fans that personal attacks on Mr Ashley or his employees are wrong and hurt our cause.

I shared with Mr Ashley my concerns about financial transparency and funding, and he was passionate in his defence of his investments and in saying that he has not taken any money out of the club other than, he said, short-term funding on a temporary basis. That, he said, was in contrast with the period prior to his ownership. He also emphasised that he had made it clear the club must stand on its own two feet and can only spend the money it generates. Well, to put it diplomatically, we disagreed. The meeting was open, frank and robust, with strong views on both sides, and I hope to continue the dialogue. Indeed, this debate is part of that dialogue. It has to be, because I have still to receive a reply to my letter of last year in which I raised several critical issues that I have also raised in correspondence with the Secretary of State for Digital, Culture, Media and Sport and the previous Sports Minister, the hon. Member for Chatham and Aylesford (Tracey Crouch).

Mr Ashley said that the club can spend only what it is generates—a form of austerity economics of which those on the Tory Benches could be proud—but Newcastle United needs investment to reach its potential. Earnings have been hit by uncertainty and the bad feeling between fans and the owner, but even if we accept what he says, how are we to know what income the club generates? As the Secretary of State said in his letter to me, clubs are treated as any other private business and must submit accounts to Companies House. I am not an accountant, but I have an MA in business administration, studied corporate finance and worked in business for 20 years. However, I have looked at the NUFC accounts and cannot work out what is going on.

Faith in Newcastle’s accounts has not been helped by comments made by Mr Ashley at the Housing, Communities and Local Government Committee last December, when he said:

“People cheat. That is what businesses do.”

He also said:

“Accountants are able—this is their job, by the way—to move the numbers about pretty much at will.”

That seems to be what is happening at Newcastle. Mr Ashley’s ownership of the club passes through four separate companies: Mash Holdings, St James Holdings, Newcastle United, Newcastle United Football Holdings. In addition, dozens of other companies are associated with the club and Mike Ashley, and managing director Lee Charnley has more than 30 other directorships. Newcastle United’s accounts do not include a cash flow statement, although having one is a requirement of reputable accounting. All that seems designed to make it harder to follow the money and see what income is being generated.

I hope that the Minister will agree that that is unacceptable and that she will commit to ensuring that the following income streams can be identified. First, TV payments. These should be more than £123 million, but they are not reported separately. Secondly, merchandise. Mr Ashley turned the club shop into a Sports Direct shop, but the revenues from Sports Direct do not go to the club. Thirdly, player sales. The way in which the purchase and sale of players is booked and amortised is in itself arcane. Newcastle United are consistently reported as having one of the lowest spends on players in the English premiership, and many estimates indicate the club have actually made a profit on player sales overall during Mr Ashley’s ownership. Does the Minister agree that we should be able to calculate that sum?

Fourthly, advertising. Sports Direct hoardings are all over St James’ Park and, yet again, we do not see the revenue in the accounts. Finally, land sales. Next to St James’ Park is an area called Strawberry Place, which Mr Ashley allegedly purchased from the club for less than it was worth—we do not know, because the price is not visible. What we do know is that Strawberry Place is being developed for student accommodation. Selling the land stopped any further expansion of the stadium, and fans believe that the profit from the sale of that land will not benefit the club, but how are we to know? There is also an issue about land and property apparently sold to companies called Project J Newco No.39 and Project J Newco No.40, which appear to be connected to Mr Ashley, but there is no evidence of any payment.

Eddie Hughes (Walsall North) (Con)

Has the hon. Lady seen Deloitte’s “Football Money League” report? It seems to identify some of those incomes, such as £27 million for match day, £143 million for broadcasting and £32 million for commercial, figures that we can only dream of for Walsall football club.

Chi Onwurah

I appreciate the hon. Gentleman’s interest in Newcastle United, and I have seen the figures in Deloitte’s report, which make Newcastle United the 19th richest club in the world. My concern is that those figures should be reported visibly for all clubs, particularly in the Premier League, where there is so much money going around.

Mr Ashley appears to be able to move assets between his privately owned companies at will, despite the club being a historic cultural icon and the other companies being of somewhat less reputable status and longevity.

We do not know what income the club is generating and whether that money is being used on the club. What is certain is that this transfer window, like the last one, is closing without money being spent on players or training facilities. Mr Ashley’s principal investment in the club has been in the form of loans, rather than equity—presumably to protect his financial exposure. Those loans are interest free, which is good, but as loans they can be called in if needed, so the sustainability of Newcastle United depends on his other businesses being successful.

That leads me to Mr Ashley’s business practices more generally. The BEIS Committee likened them to a Victorian workhouse, with employees being paid below the minimum wage. A “Dispatches” investigation found employees were publicly shamed for talking, for spending too long in the toilet or for falling ill, and lived in fear of being fired. Now Mr Ashley says that he is going to save the high street. Forgive me for being somewhat cynical, having seen how he has saved Newcastle United.

Newcastle United is an asset to our city, a cultural giant in our lives. I explicitly pay tribute to the fantastic Newcastle United Foundation, which uses the power and passion of football to do great work across the north-east and is, in part, funded by the club, although again that funding is not transparent. The Premier League also uses some of its vast wealth for the benefit of local communities, at least what can be spared from expenditure such as its £5 million farewell gift to departing executive chairman Richard Scudamore.

Neither Newcastle United nor the Premier League consider themselves to be accountable to fans. As many constituents have made clear to me, fans feel powerless before the slow destruction of what we believe in. Newcastle United is the beating heart of our city, and we should be able to protect it.

That goes to the heart of the matter. Why is it that a person can buy a stately home in the wilds of Wiltshire and not be able to change even a window frame, but they can buy Newcastle United, which is in the heart of Newcastle, and strip it of its assets without so much as an eyebrow being raised? Why is football left largely to regulate itself when other businesses, from pubs to social media companies, must meet social requirements?

I know that the Minister recognises the importance of football clubs and the custodian role of owners, because she said so during the recent debate on Coventry City. Will she now put that recognition into action? Will she launch an inquiry into the reporting requirements of premiership clubs, using Newcastle United as a test case? Will she ensure that that inquiry answers the financial questions that I have raised? Will she ensure that supporters have a voice on football club boards, as Labour has called for? Will she make reputable custodianship a requirement of club ownership? The fit and proper person test is clearly not fit for purpose.

It is with great sadness that I say that I have come to the conclusion that football is broken. Its governance has not kept pace with its income, and money has won over sport. We cannot turn back the clock, but we can put in place effective regulation so that financial transparency enables the beautiful game’s true splendour to shine forth once more.

Chi Onwurah – 2016 Speech on Housing in Newcastle

Below is the text of the speech made by Chi Onwurah, the Labour MP for Newcastle upon Tyne Central, in Westminster Hall on 10 May 2016.

I beg to move,

That this House has considered housing in Newcastle.

It is a great pleasure to serve under your chairmanship, Mr Hollobone. I am pleased to have secured this short debate on a subject that is so critical to my constituents.

I am sure that everyone present is an avid reader of my website, chionwurahmp.com, and so will know that I publish pie charts that summarise the issues that constituents come to me with. At the moment, March’s pie charts are up, showing that I dealt with 36 housing issues that month—just behind the 37 benefits issues. Since I was first elected six years ago, housing has consistently been in the top three issues in Newcastle upon Tyne Central, and often No. 1, which is why I have secured several debates on housing and related issues, including on empty properties in 2012 and on local authority funding settlements and holdbacks in 2013.

Earlier this year, I held a ward summit in Blakelaw in my constituency that was attended by local councillors, residents groups and other organisations. The minutes are on my website, and show that, again, housing was the No. 1 issue. Late last year, I held another ward summit, in Benwell and Scotswood, where housing was also the No. 1 issue. Just last week, I held an informal surgery with the Sisters Study Circle group at the Tawheed mosque in Elswick, and housing was of great concern to them.

Why, I was asked, is it now next to impossible to get a council house in Newcastle? I tried to explain that there are 6,000 households on the waiting list, of which 4,000 are actively bidding for properties, but only 185 properties become available each month. I also explained that much of the council housing stock has been sold off and that, really, it was now available only to those with the greatest need. “Why did the Government not build more houses?”, they asked me. “Did they not realise the impact bad housing has on health, crime and education? How can young people focus on studying or getting a job if they haven’t got a decent roof over their head? How can parents give children the support they need if they are worrying where they are going to be living next week?”

After some time, I grew tired of trying to explain the Government’s logic while at the same time thinking, “I myself don’t understand.” My job is not to justify the Government but to hold them to account. I am sure the Minister agrees that my constituents are right to be concerned about the lack of housing in Newcastle. I applied for this debate to find out from him exactly how he believes Newcastle City Council can overcome the barriers preventing it from building more houses to improve the lives of the thousands of people in my constituency who need a decent home.

Last year, the Government presided over the building of just 9,590 homes for social rent, compared with the 33,180 delivered in Labour’s last year in office. Last year’s was the lowest level of affordable homes built for more than two decades. Having knocked on a great many doors over the last few weeks—indeed, over the last few years—I know that they bear testament to the last Labour Government’s investment in our housing stock. Labour could, and should, have built even more homes, but the decent homes programme—visible in new doors, windows, kitchens, bathrooms and the very fabric of so many homes in Newcastle—effectively renewed the existing stock so that it could last for another generation.

That programme contrasts with this Government’s record of cutting investment and of building just one new social home for every eight sold off through right to buy—a Government whose use of the term “affordable rent” is not recognisable to most people; who thought up the unfair bedroom tax, which has affected half a million households; and who have overseen a 22% rise in private rents in Newcastle since 2011, when incomes have barely risen at all.

Newcastle is a growing city. It is estimated that by 2021 there will be 16,200 more people living in our great city, and the Government have a duty to ensure that local authorities have the means—both the funding and the powers—to provide the homes that local people need. Newcastle needs 16,400 new homes between now and March 2030: around 1,000 new homes per year, not including student accommodation for those studying at our world-class universities. Residents quite rightly do not want to lose any of our fantastic greenfield assets in and around Newcastle, so much of the land available for building these homes for Newcastle is brownfield, with high clean-up costs.

Providing the homes required in such circumstances is already a huge challenge for the council, given the ideologically and politically driven extent of the cuts to central Government funding, yet the Government seem insistent on piling on further pressure and putting further barriers in the way. The 1% cut in social housing rent over the next four years will leave a hole of £593 million in the council’s 30-year financial model—that is £0.6 billion. That investment was earmarked for building the homes that the city needs and for investing in the city’s stock. Although a 1% cut in social rent may seem a good thing for social tenants, it is the council that pays for it, not the Government. It will take money away from the capital investment needed for repairs, improvements and, critically, new homes.

If the Government were so concerned about saving social tenants’ money, they would abolish the grotesque bedroom tax. By the way, the Government are actually the greatest beneficiary of this rent cut, because the housing payment bill for the Department for Work and Pensions will fall considerably. It is the Government who will benefit from this cut, not social tenants.

It is not hard to see that when housing authorities’ incomes are cut, they will have less to invest—more than half a billion less, in the case of Newcastle City Council. Trampling over locally elected and accountable councils’ planned infrastructure investment in such a way deserves its own debate. But there is more: that hole in the city’s investment plan will be widened even further by the Government’s forced sale of higher-value housing to pay for the new right to buy. Building a new home in Newcastle costs a minimum of £120,000, but the result of the much criticised Housing and Planning Bill will be the selling off of homes at an average price of £80,000—so, £80,000 in income versus £120,000 to build them. Even if all the income were reinvested, at best we would replace only two thirds of all homes sold.

I hope the Minister is aware of the analysis published by Shelter last month, which showed that Newcastle will need to sell more than 400 homes every year to raise the £52 million annual contribution to the Government’s policy. That £52 million contribution must be paid for by selling off homes. That is 100 more homes than are built each year now, before the Government’s housing Bill bites, with its inevitable knock-on effect on investment.

My constituents who are on the lowest incomes already find it much more difficult to buy homes, even at the lower end of the market, than they would in other parts of the country. The council has done some brilliant work in recent years: delivering much needed specialist house building; building more affordable homes; returning vacant private sector properties to the market, which is very important; and working to reduce homelessness. But it is under attack from a Government who seem determined to dismantle our social housing stock from Whitehall. I simply cannot see how the council is supposed to meet the needs of local people, given the straitjacket that the Minister is putting them into. Those I have spoken to in Newcastle believe, as I do, that Government locally and nationally have a duty to provide homes for people. I want to see a healthy mix of tenures. [Interruption.] Perhaps the Minister is looking on his mobile phone to see how that can be achieved.

The actions of the Government and the housing Bill will throw up more barriers to building homes that, frankly, seem designed to destroy social housing altogether. Will the Minister tell us what role he sees for councils in building and providing homes, and how much discretion they should have in fulfilling that role? What modelling have his Government done on the effect of the 1% cut in social rents on investment in Newcastle and across the country, and will he publish that modelling? Does he not agree that decisions on rent should be with the local authority, and that if central Government want to cut rent—a laudable aim—they should provide the money to pay for it, rather than punish future generations? What modelling has he done on the forced sale of council homes to fund his right to buy policy? Does he agree with the analysis that Shelter has done on this and, if not, will he publish his own sums?

On the subject of the right to buy policy for housing associations, I wrote to the Minister last year about constituents of mine who are unable to sell their properties because the freehold is owned by the St Mary Magdalene & Holy Jesus Trust, which refuses to extend the leases. In his response, he said that my constituents should write to the advisory body LEASE, which they did, to no avail. There are three different housing Acts that affect three different types of properties and the rights they enjoy. The Minister said he would consider this further as part of the Housing and Planning Bill. Has he any hope, or indeed any clarity, to offer my constituents on that issue?

What would the Minister say to my constituents who cannot get a council home and cannot afford the rising rents in Newcastle? Does he think that his housing Bill will enable Newcastle City Council to build enough homes in the next 30 years and can he explain how? If it will not, how does he expect the private sector to fill the gap at affordable prices for different types of tenure? Finally, will he take a leaf out of the book of the new Labour Mayor of London, Sadiq Khan, and commit to ensuring affordable housing in Newcastle?