He obviously means in terms of principles - that the manager of the England NT should be English, manager of the Spanish NT should be Spanish etc...not that foreign managers can't do a better job than English managers.
But the divides on the international scene in all sports are weakening. Qatar have been able to buy athletes to race for them in athletics and the English cricket team has been carried by South African players.
Personally, I think it's alright for the manager to be foreign. I don't really care either way - it's not going to make a difference; with these sets of players, we've got no chance of getting far.