Football Governance Bill [HL]
Thursday 24th October 2024
(2 months, 4 weeks ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text
Football Governance Bill [HL]
Wednesday 13th November 2024
(2 months, 1 week ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Watch Debate
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, football brings joy to fans right across the country, as well as a shared sense of community. It is an essential part of the social fabric of our country. Growing up, I lived within earshot of the Manor Ground, Oxford United’s former home. My dad, who was a season ticket holder, took me and my siblings to games, including to Wembley when Oxford won the Milk Cup.
Loyalty to clubs runs through families and creates a sense of pride within communities across the generations. With apologies to noble Lords who support Bolton, I was delighted when my niece Talullah and nephew Winston got to experience the same euphoria I did as a teenager—and in May as well—when we went to see Oxford win the League One play-off final at Wembley earlier this year.
English football goes beyond family loyalty and local communities. It is a global success story and one of our greatest cultural exports. It is an industry we want to protect, for its economic value and for the fans who turn out to support every week, even when their team is down on its luck.
Despite its phenomenal success, we know that irresponsible owners, unsustainable financial models and inadequate regulation have cast a shadow over too many of our clubs. Too often, fans have had to fight to protect their club’s identity, heritage and even its very existence. In recent years, we have seen the devastating impact that losing these battles can have on communities, such as with Bury and Macclesfield Town.
Since 1992, there have been over 60 instances of professional clubs in the top four divisions going into administration, and two expert reports commissioned for DCMS have shown that the situation is not improving. In 2023 alone, clubs in the top five leagues faced pre-tax losses of over £1 billion, and net debt stood at over £4 billion. These are eye-watering figures.
Unfortunately, the football industry has not gone far enough in tackling these issues, despite many opportunities to do so. That is why we are bringing this Bill forward to establish an independent regulator, delivering on our commitment to make this country the best place in the world to be a football fan.
This is historic legislation which has been developed over several years, including by the previous Government, who recognised the need to regulate in this space. I give special thanks to Dame Tracey Crouch for chairing the independent Fan Led Review of Football Governance. It was her review that recommended an independent football regulator and laid the groundwork for the extensive policy development on this much-needed legislation.
Before I get to the details of the Bill, I thank all those who have engaged so constructively in its development, including many noble Lords from across your Lordships’ House here today. In particular, I thank the Football Supporters’ Association, the English Football League, the Premier League, the National League, the Football Association, UEFA, FIFA, the Professional Footballers’ Association and Kick It Out, as well as clubs across the football pyramid.
I turn to what the legislation does. The regulator will improve the resilience of club finances, tackle rogue owners and directors, and strengthen fan engagement. It will also set out a corporate governance code of practice and prevent clubs joining breakaway leagues.
Too many clubs are living beyond their means. Therefore, the regulator’s primary purpose will be to protect and promote the sustainability of English football. It will achieve this through a licensing system where all regulated clubs in scope will need a licence to operate as professional football clubs. That scope will be set out in regulations and is currently envisaged as the top five divisions of English men’s football.
The regulator will not be a fix for all football’s woes, nor should it be. It will have a very tightly defined scope and purpose to tackle the specific risks of significant detrimental impact on fans and communities. Legally, the regulator will not be able to act outside of this scope.
The football industry has shown itself incapable of addressing these failures. We have seen in other industries that, when done well, proportionate regulation still allows for innovation and ambition—financial services being a good example. Where clubs are already well run, regulation will be light touch to ensure sustainability without standing in the way of clubs’ ambitions. Indeed, compared to some comparator countries, this is not interventionist regulation.
To better understand the landscape of English football, the regulator will periodically undertake a “state of the game” report. This is expected to include a broad assessment of the financial health and economic issues of the industry.
Under its regime, the regulator will introduce new regulation to improve financial resilience in the game. Clubs will be required to demonstrate sound basic financial practices, have appropriate financial resources, and protect the core assets and value of the club, such as the stadium. This will reduce the risk of clubs facing financial failure and the huge knock-on impact and distress that that carries for entire communities.
This Government are committed to putting fans back at the heart of the game. As such, the Bill goes slightly further than the Bill debated in the Commons earlier this year. It will put in place a stronger minimum standard of fan engagement in decision-making on a number of key issues at all regulated clubs. The Bill also introduces important new statutory protections for key aspects of a club’s heritage, such as its name, home shirt colours and badge, because although most clubs have a strong relationship with their fans and actively engage them in decisions that affect club heritage, not all do. Fans at Cardiff City and Hull City will know this well, where they have had to battle to keep their club’s name or shirt colours.
Clubs will need to seek the regulator’s approval to sell, or relocate from, their home ground. Relocation from a club’s home ground will not be approved unless it both makes financial sense and does not compromise the heritage of the club. This will help to prevent a repeat of what we saw when Wimbledon moved from their home in south London to Milton Keynes.
Fans have also suffered the consequences of irresponsible ownership. We have seen some owners acquiring clubs without having adequate finances, or who were involved in criminality, or who had histories of financial mismanagement. The regulator will put in place stronger, statutory owners’ and directors’ tests to protect fans from the impact of irresponsible owners and decision-makers by ensuring a club’s custodians are suitable. All prospective owners and directors must pass the regulator’s tests before taking a position at, or acquiring, a club. If someone already in the system is found unsuitable, the regulator will have powers to remove them.
We have removed a clause from the previous Bill that allowed government foreign policy and trade considerations to be considered when approving takeovers. This change makes it absolutely clear that the new regulator will be independent from government.
One of the main triggers for the fan-led review was the attempted breakaway European Super League, which prompted a fierce backlash from fans. Clubs will be prevented from playing in competitions prohibited by the regulator. This will mean that fans no longer face the prospect of seeing clubs trying to join unfair, closed-shop leagues that undermine the fundamental principles of English football.
I turn now to distribution of revenue in the game. Since 2019, the leagues have failed to negotiate a new distribution deal—another stark example of the industry being unable to resolve key issues. So, while a football-led solution remains this Government’s preferred outcome, the regulator will have statutory backstop powers to intervene if necessary. The backstop mechanism is designed to incentivise an industry-led solution. However, in the absence of one, it will be robust enough to ensure an agreement is put in place to fairly distribute revenue.
Only one of the relevant football leagues can apply to trigger the backstop mechanism, if they feel that they cannot reach an agreement themselves. This does not mean, however, that the process will automatically be triggered. The regulator can decide to trigger the process based on such an application if relevant conditions are met. The regulator will then enforce a mediation period to try to encourage the leagues to come to an agreement themselves.
However, if an agreement cannot be reached, the final offer arbitration process will be triggered. This process requires both leagues to submit final proposals for a distribution agreement, and the regulator will choose the one most consistent with its objectives to promote the financial soundness and resilience of football. It can reject both proposals if they are unsuitable. This decision will be enforced via a distribution order. At every stage, this process is intended to encourage an industry-led solution, while ensuring an agreement on distributions will be reached. The Bill will also establish a corporate governance code, requiring clubs to report how they are applying the football club-specific corporate governance code published by the regulator.
As noble Lords will be aware, Labour supported the introduction of the previous version of this Bill, which was debated in the other place prior to the election. The new Bill is largely in line with the previous Bill. However, we have made key changes to ensure we deliver the best possible proportionate regulation that safeguards the future of our national game.
These changes will empower fans, keep clubs at the heart of their communities and ensure the financial sustainability that will protect clubs for future generations. As a result of the changes we have made, clubs will be explicitly required to consult with supporters on ticket prices. This, among other measures, will give fans a louder voice at their clubs on the issues that matter to them. Clubs will also be required to consult their fans prior to the regulator making a decision on relocation of a home ground.
Parachute payments will no longer be excluded from consideration as part of the backstop process. They are a significant part of football’s financial landscape, and if the regulator identifies them as a relevant factor, it will be able to consider them as part of the backstop.
Finally, the fan-led review identified that the game needs to do more to ensure it is open and welcoming to people of all backgrounds. There is therefore a clear commitment from this government to do more to improve equality, diversity and inclusion within football club governance. Clubs will be required to publish what action they are taking on equality, diversity and inclusion as part of reporting against a new football club corporate governance code, which the regulator will introduce to improve decision-making at clubs. The measures in this Bill have been carefully developed to ensure we are taking a proportionate and flexible approach to regulation that reflects the unique and special place football has in our society.
The regulator will be focused on financial sustainability as well as safeguarding the heritage of English football. But, crucially, it will also have duties to have regard to minimising its impact on important outcomes such as the competitiveness of our clubs against overseas competitors and investment into the game. This will provide a stable regulatory environment, providing the certainty required to drive future investment and growth, so that English football continues to be a global success.
If clubs have the finances to back up their plans, have suitable owners and directors, engage their fans on key issues and do not join closed-shop breakaway leagues, they should feel very little impact from the regulator. Given the ongoing issues at some clubs, we are determined to ensure the regulator is in place as quickly as possible once this legislation passes. This is why we are already putting in place a shadow regulator to do the preparatory work and lay the foundations of the regulatory regime.
The case for better regulation of our clubs is clear. This Bill will provide the much-needed reform to protect our footballing heritage. I am grateful to noble Lords for their involvement in and support for the Bill. I look forward to working across the House in the weeks ahead. I beg to move.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to the noble Baroness, Lady Twycross, for moving the Second Reading of this Bill and for the generous and comprehensive way she set out all the work that has gone into it to get us to this point. I am also grateful, as is my noble friend Lord Markham, for the time she gave earlier this week to discuss the Bill with us. As noble Lords may know, and as the Bill team was warned when we were working on the Bill before the election, I am not the world’s greatest football aficionado, but it is a mark of the power and allure of the beautiful game that none of us can be mistaken about the central part that it plays in our national life.
In 2010, I had the pleasure of standing for election to another place in my native city, Newcastle upon Tyne. I was an eager, first-time parliamentary candidate and had been campaigning for nearly 18 months when the election was finally called, so it was a chastening reminder of most people’s priorities to see the front page of the local papers on 6 April 2010. That was the day that Gordon Brown finally went to the Palace to seek a Dissolution. More importantly, on Tyneside, it was the morning after Newcastle United had won promotion back to the Premier League after their relegation in 2009. The Newcastle Evening Chronicle that day was a commemorative edition, offering 10 pages of photographs, analysis and reaction from the fans. Tucked away in the corner was a tiny news in brief: “Prime Minister calls election—full story, page 11”. So I have never been in doubt about where football stands in the nation’s priorities—understandably, since it is one of this country’s greatest inventions and exports.
As we begin our scrutiny of this Bill, it is worth casting our minds back to 26 October 1863. On that date, gathered in the Freemasons’ Tavern on Great Queen Street—the same tavern, incidentally, in which the Conservative Party conference was held for the first time four years later—Ebenezer Morley, along with the representatives of a dozen other London clubs, came together in a spirit of camaraderie and shared passion to form a body that would unify the rules and practices of the sport they loved. From that meeting came the Football Association—the first association of its kind, and one which has formed the model for governing bodies around the world.
The year 1888 saw another key moment in the football canon. It brought the creation of the English Football League—again, a world first—followed a year later by the establishment of the Northern League. It was with this development that the professionalisation of football really took hold. Without that Victorian spirit of imagination and enterprise, the game of football as we know it today would not exist.
Since its inception, football has been a great unifier—indeed, even a peacemaker. It was a football match that famously brokered a momentary truce on the Western Front on Christmas Day 1914. Since the inaugural FIFA World Cup in 1930, football has brought nations together around one central purpose—the love of a game—in friendly competition. Over the years, football tournaments have flourished across the globe. It has become by far the most popular and loved sport in the world. All that would not have been possible had it not been for that evening in October 1863 here in England.
Why dwell so heavily on the history of this beloved sport? It is because history is at the heart of this Bill. Football is woven into the fabric of our nation. It is central to the identity of millions of Britons. It is the thread that binds communities together—communities such as my home town, where Whitley Bay FC are a source of great local pride, not least as the record-holding, four-time winners of the FA Vase. Football generates memories, creates its own traditions and is infused with the spirit of every player, every fan and every club.
Across the country, thousands assemble weekly in all weathers to cheer on their favoured team: the club supported by their parents, their grandparents and their great-grandparents before them. A football club is more than just a patch of soil; it is hallowed turf, nourished with the blood, sweat and tears of generations. The badge worn on the heart of every player is not merely a picture but a symbol—of hope, of heritage, of devotion. That is what English football is all about and that is why it is so important for us to get this Bill right.
A football regulator will work only if it is able to protect the beating heart of the game and if it strikes a balance between protecting the past and the future of clubs and competitions. There is much in the Bill that does indeed strike that balance, and I am proud that it was the previous Government who commissioned the review that led to its creation. I repeat the thanks the Minister gave to Dame Tracey Crouch and to the tens of thousands of fans who took part in that review and helped to shape it. The work has always enjoyed cross- party support, as the Minister noted, and I welcome the fact that the new Government have sought to continue it so swiftly.
As I have discussed, the Bill attempts to tackle the issue of heritage. The regulator will have an explicit duty to protect the unique history of each and every club and to ensure that the links between clubs and their communities are immutable bonds that can never be broken. But we must not ignore the fact that the Bill before us today, as the Minister candidly set out, is not the same as the Bill that was under discussion in the previous Parliament. Key safeguards that were intended to preserve elements of the independence and sustainability of the leagues have been changed. There are four areas of this new Bill that we on these Benches will be examining particularly keenly during its passage through your Lordships’ House.
First, in considering the principle of a regulator, we support the establishment of the independent football regulator. We are pleased that it will have a role in preserving the history and heritage of clubs and that it will protect against the threat of rogue owners, some of whom in the past have asset-stripped clubs for their own gain. But we remain concerned about the potential for regulatory overreach. We must be vigilant against mission creep, as is all too often the case with regulatory bodies. A key word in the Minister’s speech was “proportionate”. If this new regulator becomes too deeply involved with the minutiae of clubs’ finances, we risk damaging one of our most significant cultural institutions and greatest exports. If the regulator becomes too prescriptive in its requirements, how will clubs retain their competitiveness against their global rivals? Any outcome that sees a reduction in investment and creates a possibility for English football to lose its premier status must be seen as a failure. It is our job to ensure that this does not happen.
Secondly, the Bill brought before the last Parliament explicitly excluded parachute payments from the scope of the regulator. This Bill, as the noble Baroness outlined, has removed that exclusion. The Government have reasons for this, as she has explained, but we remain unconvinced. We know that payments to relegated clubs are vital for the financial sustainability of those clubs. When a club is forced into the Championship from the Premier League, its overheads do not decrease yet its income does. Football clubs are not like just any other business; they cannot simply cut costs. Without parachute payments, clubs facing relegation would be forced to the financial precipice. Surely any risk of a club being forced to enter administration because of action taken by the regulator would be the polar opposite of the aim of this Bill. That too is an outcome we must resist.
Thirdly, I turn to the backstop mechanism—a term that, I admit, still brings me out in hives after years of discussing Brexit deals. The backstop in this instance was first envisaged as a last resort, to be called on only should neither party agree on the distribution of revenue. But there are absolutely no guarantees that this will be the case. If one party wants to trigger this mechanism, it may do so whenever it wishes. The binary choice presented by the backstop, and the inclusion of parachute payments in that mechanism, could lead to a scenario where the regulator forces one business to give its money to another. Setting aside the financial risks in that, the potential for protracted legal action could have very injurious implications. If league organisers and clubs cannot be certain that they will receive the income they expect and if they cannot anticipate how often they may be bogged down by lengthy and costly battles in the courts, how will they be able to produce the business plans required by the regulator for licensing purposes? Of course, the financial sustainability of the whole football pyramid is of the utmost importance, but there must be at least some recognition in the mechanism of the unique role that the Premier League plays as the ultimate funder in the financial vitality of the English league system.
Finally, one of the laudable aspects of this Bill is the attempt to improve fan engagement. Given that the Bill was born of the fan-led review, it is only right that those who give their support to the sport should be engaged by the clubs they love so dearly. But there are important issues to examine here. How do we define who a fan is? Who decides? Will clubs be allowed to choose with which groups or people they engage? Will the regulator? What impact will this have on supporters’ engagement and on clubs? We must also grapple with the fact that fan engagement can go only so far. Once we have decided what constitutes a supporter, what role will they have? Perhaps the noble Baroness can elaborate on this, either today or as we go into Committee. Will fans come to welcome this regulator? Just as the referee on a pitch adjudicates between players and thus frequently draws the ire of both teams, will this regulator attract the same criticism from supporters?
Since that October evening in 1863 that established the foundations that have allowed football to flourish in this country, football clubs have become the nuclei of communities across the country, institutions steeped in meaning and heritage that have inspired generations. Football has become one of the central elements of our national identity but, like so much of our national heritage, it is a precious and delicate inheritance. If we do not treat it reverently, we risk destroying what makes it great. As we seek to regulate football, we must keep our eye on what makes it so special and act in the spirit of those who met in that tavern in Holborn 161 years ago. The motto of Whitley Bay FC is “Ludus est omnis”—“The game is everything”. Those wise words are worth keeping in mind as we scrutinise this important Bill.
Baroness Grey-Thompson (CB)
My Lords, I draw noble Lords’ attention to my entry in the register of interests. I am chair of Sport Wales, I sit on UK Sport, I am a trustee of the Foundation of Light and I authored the independent Duty of Care in Sport review in 2017, which was requested by the then Sport Minister, Dame Tracey Crouch. I thank the many organisations that have been open and generous with their time in preparing for today’s debate.
Dame Tracey’s fan-led review demonstrated that self-regulation in football has failed, and the creation of an independent football regulator could strengthen the game that so many cherish. As we all know, football is deeply woven into our country’s cultural fabric. At its best, it provides incredible social value, health benefits and entertainment to many communities across the UK, as well as an important revenue stream into the UK economy. Therefore, the sustainability of football for years to come is important.
While an EDI strategy is included in the Bill, there is an obvious exclusion: the women’s game. I understand that many noble friends might suggest that adding the women’s game to the Bill would create another complex layer, but I think we should be open about what we are talking about today. It is a men’s football regulator, not one for the game of football.
I have been told that the women’s game needs a chance to self-regulate and that an independent football regulator might stifle investment opportunities that could become available to women’s football in the future, but I disagree. The fan-led review concluded that:
“Fair distributions are vital to the long term health of football. The Premier League should guarantee its support to the pyramid and make additional, proportionate contributions to further support football”.
If the aim of the Bill is to ensure financial sustainability for the future of football, should that not be for the whole game?
The women’s game is still connected to men’s football in many cases. Sadly, there are very few examples of independent women’s football clubs like the London City Lionesses, although we are slowly seeing more investment in women’s football. Many will say that no regulator is required, but I believe the exclusion of the women’s game from the Bill could hinder its growth so that it continues to be an afterthought when it should be at the forefront of football’s innovation.
Would it not be beneficial for the women’s game to avoid the fate that we have seen in the men’s game and to take proactive steps to ensure that the women’s game is protected from the same misconduct? Oversight and focus could ensure that the women’s game raises governance code standards in performance, medical and welfare provisions to drive positive change for the whole game so that football players could receive the duty of care that they deserve.
I intend to table amendments that would cover corporate responsibility and would require a club to consider the impact of the club’s operations and activities on society and the environment, in particular taking reasonable steps to increase diversity and inclusion of underrepresented groups; to eliminate discrimination; to have a positive impact on the community; and to establish, and keep updated, a target consistent with corporate governance best practice in respect of the gender diversity of officers.
In a survey by Women in Football in 2024, only 21% of women who responded said they felt supported to forge a path to the top, while 89% of women who responded had experienced gender discrimination in the football workforce. Systematic change is needed to accelerate progress, taking pockets of good practice and scaling the impact of gender diversity leadership across the professional game.
Any new regulator needs to have the voices of the players included. I urge His Majesty’s Government to ensure that appropriate consideration is given to the Professional Footballers’ Association as well as to the experience and knowledge of women in football. My work on the duty of care in sport has been across many sports, both amateur and professional, and the voice of participants enhances the outcomes that we would all like to see, so it is important that any fan consultation does not just become a tick-box exercise.
With my Welsh hat on, I understand that representatives from the Welsh Government have met colleagues from DCMS on the Bill. It was agreed that the Bill impacts Wales only in relation to those clubs that play in the English football pyramid, not Welsh football in its wider sense, so I wonder whether the Minister can say whether there is a need to include or add the regulator to the Senedd Cymru (Disqualification) Order 2020. As I understand it, it is an order of the Privy Council, but clarification on that matter would be helpful.
The Lord Bishop of Sheffield
My Lords, I congratulate the Department for Culture, Media and Sport and the Minister for securing this debate, and thank the previous Government for their efforts to ensure that the sport of football—a national treasure beloved of so many—is more effectively regulated.
I realise that I cannot claim that football was made in Sheffield but, in addition to the codification referred to by the noble Lord, Lord Parkinson, in London in 1863, a second codification of the beautiful game took place in Sheffield in 1867—another early governance document for the sport that was influential for decades across the north. The city is home to the oldest football club in the world, Hallam FC, as well as to the two much better-known professional football clubs, Sheffield United and Sheffield Wednesday.
As Bishop of Sheffield, it gives me great pleasure to contribute to this important debate. It is a particular privilege to follow the noble Baroness, Lady Grey-Thompson. I want to say, first, something about the relationship between football clubs and their communities; secondly, something about financial stability; and thirdly, something about the responsibility of football clubs in relation to the climate emergency.
On football clubs and their communities, we are right to celebrate the off-field successes of English football, including club community programmes and the work of the Football Foundation to support grass-roots pitches and facilities. In addition to the tens of thousands of jobs and billions of pounds of investment that the football pyramid channels into the UK economy, its social impact is profound. A recent report compiled by Substance using data from 2019-22 revealed that English football generated over £101 million for community investment, bolstering physical health, mental well-being, education and employment.
Football clubs have a clear and undeniable duty to their fans and their localities. In any conversation about the future of football, I hope these two groups will take centre field. Fan investment is the lifeblood of the sport and I applaud the Government’s intention to place fans back at the heart of the game. To name just one example, I was pleased to see that the Bill will ensure that fans are consulted on changes to ticket prices. I hope the Bill might also require football clubs to take their civic responsibilities extremely seriously. These go above and beyond those of charity foundations and extend to local regeneration schemes.
As a mildly obsessed fan of Newcastle United, I have rejoiced to see how the 2021 takeover of the club, following the deeply unpopular ownership tenure of Mike Ashley, has led to a wonderful reconnection of the football club with the fan base and with the city. Having said that, I acknowledge that the 2021 takeover raised significant concerns about the application of the owners’ and directors’ test, and I hope very much that the new Bill will tighten up that process.
Secondly, on financial stability, while acknowledging that the majority of football clubs are stable, the Bill rightly recognises the need to protect fans, players and club staff from costly club closures and the irresponsible mismanagement of club finances. My right reverend friend the Bishop of Derby, the Church of England’s lead bishop for sport, wishes she could be here to discuss the Bill. I know how much she cares about the high-profile collapse of Derby County Football Club in 2022. Ultimately, the club was, thankfully, rescued by local businessman and lifelong supporter David Clowes, but the turbulent negotiations with investors abroad exposed serious concerns and vulnerabilities. I hope the Bill will help to prevent such collapses in future.
Finally, and briefly, on the climate emergency, I particularly welcome the enhanced provisions in the Bill to improve transparency and accountability by requiring football clubs to publish what actions they are taking to improve equality, diversity and inclusion. May I suggest that this responsibility is extended to include actions that clubs take to reduce their carbon footprint and to move towards net zero? I look forward very much to hearing the views of other noble Lords and to following the progress of the Bill in the coming months.
Baroness Taylor of Bolton (Lab)
My Lords, I very much welcome the Bill and I congratulate my noble friend the Minister and, indeed, the Secretary of State on producing a stronger Bill than the one we were faced with earlier this year. I also have to acknowledge the work that Tracey Crouch did; I think we are all grateful to her for her review.
As a former business manager, I should also congratulate Ministers on finding time in the legislative programme for the Bill. I understand that some people might ask why we should prioritise football legislation when there are so many other problems the country is facing and so many other difficulties this Government have inherited. The simple fact is that, as we have heard, football has a profound impact on society as a whole and, if you care about communities, preventive health, mental health, loneliness and enriching children’s lives, you should care about football. Very often it is our football clubs which provide food banks, holiday clubs, schemes for young people and, importantly, a real sense of belonging to local communities. That is a factor up and down the country. Regardless of the clubs we support, football is a central part of our national life. Anybody who saw the remembrance services at football clubs up and down the country, with the remarkable silences, will understand just how much football clubs are important backbones of our communities.
Football clubs need to be recognised as having a wider role than just being a sporting venue. Indeed, they are an asset of community value. I wish that our football grounds were all classified as assets of community value. That is one safeguard that all clubs should have for the benefit of their fans.
Too often, as we have heard, clubs are treated by new owners as trophies or playthings, or as a set of assets which can be targeted for asset stripping. Very often this is done by people who simply do not care about the game or what the clubs mean to the many thousands of people who should be considered the owners of the club—certainly of the traditions of the club—namely, the fans.
We have seen over the last few years that football simply cannot regulate itself. Too many clubs have been on the brink of collapse. We have seen clubs tipped over the edge, breaking the hearts of fans and sometimes ruining the well-being of some of the local businesses that they have served. I must declare an interest, as one of the clubs that came close to oblivion was my own Bolton Wanderers, one of the founders of the Football League. My colleague the noble Baroness, Lady Morris of Bolton, and I have shared our grief about what was happening five years ago when Bolton Wanderers was very close to collapse.
That was the consequence of going from a benevolent owner, who had been very generous and whose motivation was the best interests of the club, to a new owner whose motivation was, to say the least, questionable. It was noticeable that, when the club was going into administration, the administrator criticised the new owner, who had used his position to hamper and frustrate any deal that did not suit his purpose. It was not about what the club’s future should be; it was what he thought he could benefit from. Thankfully, since then the club has been rebuilt. Even when we lose, as we did 5-0 to Stockport recently, at least we still have a club to cherish.
Football fans expect to be tortured by what happens on the pitch. We should not have to expect it from what happens off the pitch as well, and too often that has been the case. Organisations such as Fair Game and the Football Supporters Association have fought to protect clubs for the fans. Individuals, such as Ian Bridge at Bolton, have been crucial in co-ordinating the efforts of fans. But we need more; we need a framework and structure for football which safeguards its future at all levels.
We have a football pyramid with the fantastic Premier League at the top, but it is a pyramid and the Premier League is not the be-all-and-end-all of football in England. We need regulation to make the football structure fit for purpose. Football in the UK is a big industry, and I understand that the Premier League has expressed concerns about killing the golden goose. No one is seeking to do that. We should remember that many Premier League players have come up from lower-league clubs or have been out on loan at lower-league clubs to help them develop. The EFL clubs are important to the Premier League, as well as to their own fans.
The financial imbalance in English football is dangerous to the future of football clubs at many levels. Current arrangements—I mention in particular parachute payments —are distorting the principle of sporting competition. That is just one reason why this Bill is so important. I know that, for many years, many people in football, including the EFL, had hoped that regulation would not be needed, but it is now obvious to almost everyone that this has to be the way forward.
The Bill, as the Minister outlined, establishes for the first time an independent football regulator. It will be a very important responsibility, and I am glad that the Bill is detailed on some aspects of how this will work in practice. There is much here to be welcomed, but that does not mean we will not press the Minister for more detail in Committee, especially on issues such as the parameters for financial distribution. There will be other areas where we will seek further clarification or assurances, such as vested interests, the women’s game, as has been mentioned, lower-league clubs, and ensuring that the individual ownership fitness test is exactly what we need. There is the issue of player welfare, with the PFA recently highlighting some of its concerns, which are probably worthy of consideration. Such points are not to undermine the Bill but to make sure that it is as effective and successful as it should be.
I hope the Minister will consider one amendment that I hope to push—namely, making sure that the regulator is accountable to Parliament, because I think all regulators should be. This will be very helpful to ensure the success of the new process.
Baroness Evans of Bowes Park (Con)
My Lords, I declare an interest as a long-standing Norwich City season ticket holder and a supporter of King’s Lynn Town FC.
England is the home of football and English football is enjoyed by millions of people, as we have heard, who watch their team every week. The Premier League is the most-watched league in the world. It drives economic growth, generating £8.2 billion of GVA in the 2021-22 season, and supports 90,000 jobs across the country. The EFL is thriving; last year, one in four paid admissions to a UK sporting event were to an EFL match. Football is a much-loved, global British success story, and it is in this context that we should consider the Bill and its proposals to create a new regulatory structure.
This Bill is unquestionably novel. The Explanatory Notes themselves acknowledge that football
“was previously not regulated by statutory provisions”,
and explicitly state that
“the new regime and the distributions provisions in particular are unique and unprecedented”.
To avoid unintended consequences which could undermine the success story that football is, we need to be very careful in our deliberations to ensure that what is being regulated for and legislated for, as the Minister has said, creates a truly proportionate regime.
That means a light-touch regulator and clear boundaries to its powers to prevent regulatory creep and overreach. Indeed, we should assess the measures in the Bill against the words of the Prime Minister, who said at the recent investment summit that
“the key test for me on regulation is … growth. Is this going to make our economy more dynamic? Is this going to inhibit or unlock investment? … where it is needlessly holding back the investment we need … we will get rid of it … we will make sure that every regulator in this country, especially our economic and competition regulators, takes growth as seriously as this room does”.
Those seem very sensible benchmarks to me when considering a new statutory regime. We should make sure it fits within those parameters.
The key objectives of the Bill—particularly enhancing financial sustainability, preventing breakaway competitions, safeguarding club heritage assets and strengthening fan engagement—are all laudable aims for the regulator and will undoubtedly be an important focus of its work; I am sure that it can take things forward in that regard. However, the competitive and unpredictable nature of football must not be undermined by the new regulatory regime. We all know that football is about promotion, play-offs and passion. All fans dream of the possibility of their team triumphing against the odds, and sometimes they even get to see it happen. So football is clearly not akin to the typical regulated sector. As a result, the regulator in its actions needs to be mindful that football is a dynamic, risk-taking industry, with competition at its heart. That is a significant departure from the approach of other regulators, but it is imperative to protect this if the football regulator is not to unwittingly undermine the very sector it is there to support and help thrive.
The task of the new regulator will be considerable—for instance, to license clubs, it will have to review detailed business plans of all 116 and reach agreement on them. In addition to mandatory licence conditions, the regulator will have the power to impose discretionary requirements bespoke to a club. Clubs already deal with a lot on regulation, with the FA, the league and other bodies, so the new regulator needs to be careful that it does not overburden or duplicate requirements, adding unsustainable costs and bureaucracy, particularly for smaller clubs in the lower leagues.
All this will come at a cost, with money spent today by clubs on the game in future being spent on funding the regulator. Can the Minister provide reassurance that, in designing the levy, the regulator will be required to adopt a proportionate approach and ensure that costs to clubs, particularly those at the lower levels, are kept to a minimum? Can the Minister also give an indication of the expected costs or levels of staffing that will be needed for the regulator once it is fully up and running, to give us a sense of the scale of the task ahead?
How revenues are distributed through the financial pyramid is essential to the health of the game. The Bill introduces backstop powers to intervene in the currently voluntary distribution of the Premier League clubs’ TV revenues. These are unprecedented and untested powers, with the potential, if not carefully developed, to cause regulatory and investment uncertainty. It is critical that we consider the possibility of unintended consequences that may flow from this Bill and that we are confident there are strong checks and balances in the legislation to ensure that it sets out an approach that supports the continued success of football.
I am sure that we all find it disappointing that, since the introduction of a version of this Bill in the last Parliament, the latest round of financial negotiations between the Premier League and EFL have broken down again—and, to be honest, from talking to them it seems that both sides are anticipating that the backstop mechanism will be triggered. The use of these powers by the regulator may, rather than being a last resort as was hoped, be used quite quickly, once the regulator is set up. So when the process is introduced, it must not do more harm than good.
In that regard, I confess that I have some concerns about the process as set out in the Bill, particularly the binding final offer arbitration model. Rather than consider each proposal and determine the best overall approach, which may be a compromise between the two, the regulator instead must choose one of the proposals in front of it. To me, that does not make sense. In any negotiation, if both sides feel somewhat disappointed at the deal reached, it is likely to be fairer and achieve a balance between the two sides’ competing proposals. Yet in the current scenario, it seems that one side will take all. I am sure that we will explore this more in Committee, but can the Minister explain in more detail why the Government think that this is the best approach to include in the Bill?
Perhaps the most significant change to this Bill from its predecessor is the inclusion of parachute payments in any consideration that the regulator may make in relation to financial distribution through the football pyramid. I am afraid that I take a different view from the noble Baroness who spoke before me. I am somewhat concerned that this change may inadvertently incentivise bottom-half Premier League clubs in particular—and, going forward, newly promoted clubs—to cut squad investment, given the greater financial risk that relegation would present. That would be hugely damaging to the competitiveness of the league and a massive blow to fans of the clubs involved.
Rather than improving the level of competition, uncertainty around parachute payments could do the opposite and weaken the competitiveness of the Premier League—the very attribute that attracts the revenues that sustain the game. I know that that is not the intention and I look forward to more detailed discussion around these issues as the Bill goes through Committee.
To conclude, the reforms in the Bill mark a step change in the regulation of our national game. To ensure that they do not do unintended damage to the game millions of us love, it is essential that the board and those employed by the new regulator are mindful from the outset of the unique nature of football and the dangers that any ineffective regulation, or overregulation, may pose.
Lord Bassam of Brighton (Lab)
My Lords, it is an honour and a privilege to speak in the debate on the Football Governance Bill, which is fundamentally a good Bill and one that the Government should be proud of. We should give thanks in that pride to the previous Government for doing much of the hard work in preparing it. I also personally thank the Minister for her careful introduction to the Bill and the Premier League, the EFL, Fair Game, Women in Football, the LSE, Civitas, the LCP, the FSA and the PFA for their informative briefings. I apologise to anybody I have missed out.
Many of us have waited a long time for this Bill and then, of course, we get two Bills in a year. Both major parties have edged towards increasing the level of regulation of our beautiful game. Some say that we do not require it, others that existing regulation does not go far enough. But, for those of us who have been watching football for a long time, the current system is failing both clubs and fans and is no longer financially sustainable.
The desire for a degree of regulation to make the game more sustainable has a long history. Back in the 1990s, Labour had a mini-manifesto for the game. Once elected, our efforts were of necessity focused on countering disorder and hooliganism. Tackling racism and violence were a priority for me in my role as the football hooligan Minister back in the late 1990s, and our actions were key to ensuring that we were able, as a nation, to continue participating in international tournaments.
In 2019, both the Tory Party and Labour made a commitment to football regulation in their manifestos. As we know, to their credit, the new Tory Government invited Tracey Crouch to lead the fan-led review, and this in turn led to a White Paper and, earlier this year, the first iteration of the governance Bill. Now it falls to Labour, as ever, to complete the job. The post-election gap has enabled the improvement of the Bill in several respects, including the regulation of the financial distribution payments system across the football pyramid and the issue of parachute payments. Changes relating to fan engagement and the equalities, diversity and inclusion provisions are also welcome, as is the shortening of the time for the production of the first “state of the game” report, which will help put football on a more sustainable financial footing.
While we produce some of the world’s best clubs and fantastic football, the Premier League is becoming a closed shop, dominated by the money generated by TV rights. The top of the league is the preserve of a few clubs, primarily the richest. The rest of the Premier League is made up of clubs trying to get into two of the three European competitions or struggling to retain their place in the Premier League. In 2022-23, 25 clubs, 20 Premier League clubs and five EFL clubs, received 92% of the distributable revenues of the English game, £3 billion, while the other 67 clubs shared just 8%, £245 million. The football regulator’s task will be to ensure that there is a more equitable distribution of football revenues across the pyramid.
Football must remain a sport about risk, reward and fair competition. The current relegation payments scheme prevents this. In the last seven seasons, two of the three promoted teams from the Championship have been those relegated the season before, bolstered as they were by their financial protection following relegation. Back in 2010-11, parachute payments were just £30 million. By 2020-21, they had grown to £233 million, an eightfold increase at a time when wages had merely doubled. In the Championship, the non-parachute payment clubs are forced to overspend on players to compete effectively for promotion, creating a risk of bankruptcy, relegation and often a long, painful recovery period. We need the regulator to come up with a system that softens the financial blow of relegation, but in a way that does not distort competition. Change will need to be gradual and carefully managed, so that club viability and competitiveness are preserved, and the strength of the leagues protected.
I welcome greater fan engagement and the protection of the heritage and culture of clubs. The devil will be in the detail on how best to achieve this. The prevention of breakaway competitions will, of course, benefit players and clubs at a time when I think we are reaching the limit of what extra competitions can bring to the game.
Finally, where would I like to see improvements and changes? The first “state of the game” report will set the tone for the future development of the regulator. The last Bill gave the regulator three years to complete this work. That was too long, so I am pleased that it has been reduced to 18 months, but see no reason at all why it should not be six months or perhaps, at most, a year. Shadow staff, already in place, will have access to data and football market intel sufficient to hit the ground running. There are urgent issues to be resolved and, if they want to demonstrate change by the time of the next election, the Government would be wise to listen to those supporting faster progress. A shorter period for the initial report would justify a longer gap before the second.
In relation to the regulator’s scope, I am strongly sympathetic to bringing the clubs in the top two women’s leagues into the regulatory framework. The rapid growth in women’s football brings with it the same issues and risks, and with this Bill we have an opportunity to address these before they become a problem. It might also help tackle discriminatory behaviour and the macho culture that can impact on the game. It does seem odd, having strengthened the EDI commitment, to then exclude the women’s game from the regulatory framework. Access to even a small element of the solidarity payments produced currently would be transformational for the game.
Similarly, we should look to include the regulation of all clubs in National League North and National League South. It seems odd to regulate one-third of the National League clubs and leave the sixth tier unregulated. Some of these clubs are significant community assets and businesses with turnover figures of £4 million, £5 million and £6 million a year. More fans are turning to watch grass-roots football, and here again is an opportunity to ensure consistency in our approach at all levels.
I have a small but significant point for the Minister. Can we ensure that, among the statutory consultees, we include the players’ union, the PFA? Try having a football match without its staff.
The Minister will no doubt have read the press coverage of the Fair Game report pressing for changes and the strengthening of the Bill. I am sympathetic to many of these, some of which I have referred to. I hope she will continue her already-begun engagement with Peers so that we can improve the Bill as it goes through its Lords stages.
The Government are to be congratulated on the progress so far. This Bill is a bit like a Brighton and Hove Albion substitution at half-time: a potential game-changer. It works. When I reflect on how close my club was to going out of business for the want of effective regulation in the mid-90s, I do not want to see other clubs and their fans put through that experience. It is my belief that this legislation, with its owners and directors test, a licensing and financial control regime, and a commitment to a system of fairer competition and financial fair play, will go a long way to putting an end to the era of irresponsible club ownership.
Lord Triesman (Lab)
My Lords, I thank many noble Lords for their good wishes and for allowing me to speak sitting down. It is a bit of paradox to be talking about a football Bill when you cannot stand up: none the less, I will do my best. I declare my interests as the first independent chairman of the Football Association, and I have had a long and warm relationship with football supporters’ organisations.
I am wearing “the blazer” largely to illustrate what is meant—rather disparagingly, I suspect—by the press about the members of the Football Association Council. We are often described, pretty accurately, as “the Blazers”, meaning old and decrepit—and wearing a blazer—and sometimes, more kindly, as the “parliament of football”.
When I first attended the Football Association Council, there were 127 people—men and women—all but two of whom were in blazers. Two were women, and neither was ever allowed to the chair the women’s football committee. That may very well reflect the point made about how women vanish when we come to look at the issues here. There were two people of colour—they were called “black faces” by the then chair of the Premier League, the amazing Herman Ouseley, whom I miss greatly—and one gentleman from Japan. One coach, the redoubtable Howard Wilkinson, refused to wear a blazer, as you would expect, and Lord Mawhinney would never knowingly wear anything that approximated to a uniform. In the “parliament of football”, there was not one footballer. Aside from very vigorous discussion on the poor quality of the tailoring of the blazers and, on occasion, on who should be on which committee or attend which dinners, some serious discussions took place about the existence of on-the-field and off-the-field regulation, prejudice and the events that compelled clubs occasionally to play with no fans present and behind locked doors—all important issues.
On one occasion, and at my instigation, there was discussion about whether people who were born men should play post-puberty against people who were born women. In my day, the issue was straightforward. It was clear that it tended to produce an unfair competition and a very significant number of serious injuries. It led us to banning those kinds of competitions because of those reasons—no other reasons. I say with regret: shame on the Lancashire County Football Association, backed up by the FA itself, because an autistic 17 year-old girl has been banned for 12 matches for asking whether a large, really quite aggressive, bearded trans woman was authorised to play in the competition in which she was playing. She was immediately accused of transphobia and the Lancashire FA seemed to take no account of her neurodiversity. She seems to me to have been treated in a shabby way, and I do not intend to let it rest.
The FA cannot be accused of reluctance in many ways. It works within the global football market, and it works to achieve a mandate for regulating pretty much everything that happens in on-field situations, but it does not regulate anything else—and it will not. When I and my successors, David Bernstein and Greg Dyke, wanted to persuade the trade association—that is what the Premier League is—that it was too parti pris and that its CEO was too close to those who were to be regulated for that to have a real effect, it was with little surprise that he would say to me, “Just look at the FA. Do you really want it to do the regulation? You must be joking”. When I looked around, I thought that that was not an unfair point in many respects.
The EFL and the EPL did not do the job either. In fact, the trade association has been allowed to fall apart. It is suing a number of its member clubs, which are in turn suing each other and the trade association. I suspect that it is great news for the noble Lord, Lord Pannick, but all of them are energetically bashing each other with multi-million-pound cudgels—less solidarity, more Vinnie Jones. The reasons for that are clear. In many cases, the clubs do not feel that they need the federation to look after their interests—although maybe the noble Baroness, Lady Brady, will say something different. Many of them are massive brands in their own right. The basis of the breakaway super league was largely due to that and because they had become distinctive.
Lest anybody tells you that it could not happen now because of this legislation, let me tell you, from being inside football for such a long time, that while you may think that that is the case, the truth is that it has already happened. The first big reorganisation steps have been taken by UEFA, with the support of the giant clubs, and recent law cases will consolidate the supremacy of the giants in this respect. The Premier League will tell you that it is the natural regulator. It plainly believes that it should do that job unrestrained. But all regulation can threaten consumer and commercial innovation. I do not believe that this will be the case, however, and this is why I welcome the Bill so much. If you tell that story to people in many other industries, they will tell you that relevant rules of engagement are possible.
It is true that the Premier League has been an extraordinary achievement. It has built a successful global business, and that is not easy to do. They say you could kill the goose that lays the golden egg. Few of the businesses that are owned by Brits and are making money in this way are keen on anything that might alter it. However, I hope it will be appreciated in the House—I say this without any rancour—that in football circles generally around the world, there is a strong feeling that we are also seriously disliked. I do not mean everybody but quite a number of people. They feel that we hoover up many of their best and aspiring players, we bring them to this country and they play in clubs which are often owned by people from other countries—that is all probably the way of business but they are seen in that way. If you really want to aggravate them—I say this to the noble Baroness the former Leader of the House—start saying to them that England is the home of football. Say that to people in Brazil who have five stars on their shirts, or to people in Germany or Italy with four stars on their shirts, or to people from Argentina with three stars on their shirts. They will say, “Do you think we’re not homes to football?” If you want to sing “Football’s coming home”, I guarantee that it will be the last time they will ever talk to you.
The test about who we should have as a regulator is a very important one, and an independent regulator is absolutely critical.
There is one other thing; I promise that I will say this very briefly. I welcome the legislation, but still missing from it is any real attempt to regulate some of the bodies that sit across football aside from the regulator. They are the bodies that will negotiate the television and other rights, and the financial arrangements that will be made will be unbelievably complex. We all think we know about football. I do not mean to upset anybody—I really do not—but I bet that your Lordships really do not. Only one specialist company ever conducted the negotiations over the financial rights—Reel Enterprises did it on behalf of the football authorities. Its complexity means that whoever the regulator is will need to understand finance. You can tinker with the regulation all you like but it will not alter some of the fundamentals about where the money flows are. Those money flows will be understood only by people who have done that job, and there are probably no more than 10 of them in this country.
I conclude on that point because I would like to see this as a possible addition to the Bill. If we really want to do the job rather than to take a step towards it and then find we failed, we ought to do the whole of the job.
Baroness Brady (Con)
My Lords, I declare an interest: for more than 30 years, I have lived and breathed English football. As detailed on my entry in the register, I am currently the vice-chair of West Ham United. Throughout my 30 years of working in this industry, I have experienced both the magic and the harsh realities of the football pyramid. I have sat in EFL and Premier League boardrooms, making difficult decisions about finances. I have celebrated with supporters through promotions and trophy wins, and consoled staff when relegation meant jeopardy and job losses. So, when I speak about the dangers lurking in this Bill, I do so not from ideology or theory but from practical, real, lived experience. I also speak, like so many millions in our country, out of a love of, and real passion for, the game.
The Bill’s intentions came from a good place. Who would not want to protect their club’s historic heritage assets, prevent breakaway leagues or strengthen fan engagement? But aspects of this legislation risk suffocating the very thing that makes English football unique: the aspiration that allows clubs to rise and succeed in our pyramid system; the ambition that means fans can dream.
I want to focus my remarks on one specific area: the backstop power on financial distributions. Premier League clubs would have no fear of the regulator making an independent determination about whether the funding we voluntarily provide to the EFL—in addition to our own substantial revenues—is sufficient to deliver financial stability for well-run clubs. This is because, by any objective measure, it is. For example, every single Championship club receives £7.8 million from the Premier League, amounting to between 20% and 40% of that club’s typical annual revenue. I will not dwell on the fact that the EFL has just signed a near-£1 billion domestic broadcast deal, helping to increase its own revenues by 50%, or £100 million, a year from next season; or that the Championship is already the sixth-richest league in all of European football.
However, a regulatory determination is not what the Bill delivers. Instead, it outlines a legally untested “pendulum arbitration” mechanism related to funding, conditions, financial system and term. The regulator can only choose the Premier League’s final proposal in its entirety, or that of the EFL; it has no ability to compromise between the two. In other words, the Bill has designed a mechanism that throws all the pieces of the pyramid up into the air, with huge uncertainty as to where they may land, and it does so every five years.
The Government have now added parachute payments, which is a competitive tool that provides the scaffolding and incentives for strategic investment in both the Championship and the Premier League, into the scope of these powers. This hugely expands the likelihood of the regulator becoming directly involved in competition tools and structures. UEFA and FIFA have already warned the Government against doing that.
The Government appear, wittingly or unwittingly, to be enabling the radical redesign of the pyramid that the EFL executive has been openly promoting. This would involve extreme redistribution from the bottom-half clubs in the Premier League to competitor clubs in the Championship; large reductions in parachute payments; and the levelling down of the Premier League to bring the Championship much closer to it.
Some advocates for this—on a frankly comical basis—think it can be done without any impact on the Premier League’s world-leading status. The vision is for a German-style system where most clubs in the top two divisions can become essentially interchangeable, just going round and round in a washing machine, while a few privileged clubs are allowed to float away and entrench their financial dominance. It would replace our brutal but brilliant meritocracy with the likelihood of a closed shop, where survival—not aspiration—becomes the ceiling. It would make it harder for stories such as Leicester winning the title, Brighton’s journey from League 1 to Europe, Aston Villa beating Bayern in the Champions League and West Ham United winning a European trophy, to ever happen again. A less exciting and unpredictable league would disappoint and turn off fans, meaning reduced broadcast interest and, in turn, diminished revenues.
The Premier League shares our success—to the tune of £1.6 billion, or 16% of our total revenue—with the whole pyramid. If we stunt the ability of the Premier League to maintain its growth and revenues, ultimately there will be far less investment in the whole of football, including the grass roots and the women’s game. That would be a very bad outcome.
I struggle to believe that Ministers would deliberately put at risk the continued success of the world’s most-watched league: what our Prime Minister recently called “our greatest cultural export”. I urge the Minister to improve the backstop mechanism so that it incentivises football-led solutions, recognises the contractual and property rights of the Premier League clubs and, above all, eliminates the possibility of extreme outcomes that would damage the success of the Premier League.
Let us protect our clubs without suffocating them. Let us regulate the game without removing its aspiration and ambition. Let us ensure that English football remains not just financially stable but vibrant, competitive and full of possibility.
Lord Wood of Anfield (Lab)
My Lords, it is a pleasure to follow my noble friend Lord Triesman and the noble Baroness, Lady Brady, who knows so much about the regulation of this game. I welcome the Bill. It is rare that a Government inherit a Bill from their predecessor and reintroduce it in a form that overlaps so substantially with the previous proposal. According to YouGov, 80% of fans across England—across all clubs and regions—support the idea of a regulator. Of course, there have been—as the noble Lord, Lord Parkinson, mentioned—governance structures in place for more than 160 years, and in many ways it is crowded territory. However, although the FA, Premier League and EFL have a range of powers, their governance is centred on the integrity of the leagues rather than the activities and sustainability of the clubs themselves.
There are many reasons why a regulator covering the leagues should be put in place. Many of these are to do with the economics of football. It is a huge industry, contributing over £9 billion to the UK economy, yet at the level of individual clubs, unregulated commercial behaviour can, and often does, have damaging consequences. Football clubs also provide significant public goods, cohesion and cultural benefits that may conflict with the desire for profit maximisation. The industry is full of very thorny collective action problems: wage spirals, debt spirals and excessively risky behaviour in the search for success. Clubs can be far too reliant on individual owners, who often use club assets as security on loans and debts. There is a lot of poor financing and overspending and a lot of debt in general.
On top of these general economic issues, we have seen a range of recent cases mentioned earlier, where relegation combines with these ownership practices and weak governance to produce existential threats to clubs that have been at the heart of their communities for a century or more. Finally, as the regrettable Super League episode showed, the lure of greater profits, particularly at the top end of the Premier League, can threaten the integrity of the competitive leagues themselves.
Given that something has to be done, therefore, the proposals set out in this Bill seem to me to have much merit. The proposals on licensing and on powers to challenge bad practice among owners should, at least, help financial stability and deter some of the excesses of bad practice. The duties on clubs to engage with fans, including on ticket pricing, as well as fundamental changes in club practices, have been widely welcomed. The backstop provision to enable the regulator to compel a financial settlement—although we will return to some of the detail of that later—should ensure that there is no recurrence of the really regrettable impasse that has now been going on for far too long between the Premier League and the EFL.
I want to flag four areas where I think this House could add value in scrutinising the detail of this Bill when we get to Committee. The first is propelled by fans’ concerns about the continuing interest of elite clubs in moving domestic league games overseas, something that the chairman of my own team—Liverpool—is still keen to make happen. Clause 48 rightly imposes a duty on regulated clubs both to consult with fans and to seek regulator approval before any domestic league or competition match is relocated. However, some fans worry that the definition of a home game needs to be much more robust. Back in 2008, fans in this Chamber will remember that the Premier League tried to introduce the idea of an extra game—the so-called “39th game”—on top of the full home-and-away fixtures. Would this extra game have been covered by the Clause 48 provisions, centring as they do around the term “home game”? I think more comfort on these clauses being watertight would be good.
Secondly, there is the vexed issue of the backstop, which we have heard a lot about already. This is a fraught area, but everyone can agree on a few things: that the revenue that is at stake in the distribution and solidarity payments is vital for the health of clubs across England; that the EFL is an extremely commercially successful organisation in its own right even before these payments, with one of the most lucrative TV deals in Europe; and that solidarity payments must not be used to subsidise bad management by club owners down the football pyramid.
I have two quite different and, your Lordships might think, conflicting concerns about the backstop provision. First, on the relevant revenues in question, detailed in Clause 56(2) as
“revenue received by a specified competition organiser”,
one of fans’ worries is that this definition of the relevant revenue does not include revenue earned by elite clubs outside of their participation in the league. Money earned from, for example, UEFA, commercial revenues, overseas tours, pre-season friendlies and FIFA Club World Cups, is the revenue that often lies at the root of many fans’ worries about competitive balance and sustainability. The fans worry that if this is excluded from the scope of the regulator, clubs will seek to expand these revenues even further, impacting on domestic competitions in much the way that saw FA Cup replays scrapped earlier this year so that big clubs could earn even more in the expanded Champions League, for example.
My second worry is quite different. The mechanism proposed by the Bill in the event of an impasse involves, as we have heard, a triggering process, the requirement of mediation and, in the event of a continuing stand-off, the ability of the regulator to pick one of the two leagues’ proposals. From my economics background I know that there are good economics game theory reasons for why this is resolution process is in place. However, the politics of redistribution of money from the wealthy Premier League looms large over this sound proposal. It is worth us taking care to ensure that we are not, as the noble Baroness, Lady Evans of Bowes Park, mentioned, introducing a mechanism that gives the EFL no incentive to get a deal, so as to force the regulator into a politically pressured choice for more money for the EFL. That would be bad for good faith bargaining but would also put English football in bad odour with UEFA, which has already expressed concern that these proposals should not politicise football governance, saying specifically:
“Mandating redistribution which affects the competitive balance in the game and wider European competition would be of concern to us”.
Lastly, there is the relationship between the regulators and the existing leagues. The Bill stipulates a range of regulatory interventions in the event of misconduct and licence breaches, but it says very little about the regulator collaborating with the existing Premier League, English Football League and National League authorities. In any governance arrangements, you would want collaboration with existing league authorities to be a presumption of the regulator, and perhaps a principle of subsidiarity embodied in the legislation that the regulator will step in with its remedies only when the relevant league has shown that it cannot or will not take the steps required.
The reason for this is not to dilute the powers of the regulator but to stop politicisation in ways that should be avoided, to avoid duplication and inconsistency in the governance regimes of the leagues and the regulator, and so that regulatory interventions on finance and licence conditions should come only at the end of a menu of options for responses that also includes the sanctions that the leagues themselves control, such as sporting sanctions. It is worth us considering language at key points in the legislation that requires more explicitly co-operation between the new regulator and the league authorities.
Lord Londesborough (CB)
My Lords, my background is not in football beyond being a lifelong Hammers fan—the club which your Lordships might remember won England the World Cup back in 1966, with captain Bobby Moore, hat-trick hero Geoff Hurst and midfield dynamo Martin Peters, all products of the famous West Ham academy. It is a pleasure to follow the vice-chairman of my club, the Irons, the noble Baroness, Lady Brady, and, of course, the former chairman of the FA, bedecked in his splendid blazer, the noble Lord, Lord Triesman.
I am a supporter of the Bill but with several caveats. I feel, in the broadest interests of the game, that the time for regulation has come, although we must be very careful. Football’s financial sustainability is my number one concern. That is a perspective I hold first as a fan, but it is tempered by my experience as a CEO and entrepreneur and now as an investor sitting on the board of start-ups. Wearing those hats, I have not been a great fan of regulation. I am also privileged to sit on the Economic Affairs Committee, where the subject of financial sustainability, which runs through the Bill, looms large in all our inquiries, whether it is scrutiny of the Bank of England, our public finances or our £3 trillion national debt.
I declare a personal interest in that my son’s father-in-law is chairman of the upwardly mobile Worthing Football Club, currently challenging for promotion into our fifth tier, the Vanarama National League. Also, for 20 years I lived in Wimbledon and witnessed the appalling destruction of my local club, which went from winning the FA Cup to being forced to relocate to remote Milton Keynes. We must never permit that to happen again.
Some key questions hang over the Bill and the game of football itself which, let us be honest, are divisive. How do we balance promoting the Premier League as the world’s greatest league—which it is—while protecting our domestic competitions? Should we treat football as part of our social fabric and football clubs as community assets even if they are privately owned and run as limited companies? How do you balance competition with fairness? Football is inherently unfair. Do we continue to allow market forces to turn English football into a global product, resulting in fewer English players, fewer English coaches and fewer English club owners?
These are fraught and difficult questions. I have looked long and hard at a broad range of research and data. I have also talked to chairmen, board directors and supporters. The result is that I am firmly of the view that self-regulation will not deliver financial sustainability. Football’s finances are hair-raising, from the Premier League to the Championship through to Leagues One and Two and the National League.
I will start with the Premier League, which, as we know, is by some margin the richest league in the world in terms of revenues. Yet 16 of the 20 clubs generated pre-tax losses in the 2022-23 season, each club losing on average £60 million. Total debt across the Premier League has risen to £3.6 billion. It is probably over £4 billion now, with Man United and Spurs each clocking up almost £700 million. Even well-run Brighton carries £390 million of debt. West Ham, to its credit, is one of the least indebted clubs. Looking at the clubs’ trading history over the last 20 years, only three clubs look financially sustainable: Brentford, Bournemouth and Brighton. The financial reporting of Chelsea and Man City is opaque, to put it politely. They depend on the deep pockets of their owners, without which their balance sheets would implode.
In the EFL Championship, finances are even more precarious. Over 80% of the 24 clubs have negative equity. Not one of the clubs generated an operating profit outside player trading last season. Wage costs alone exceed revenues for many of the clubs, so the clubs are propped up by owner funding as they scramble for promotion to the Premier League and its parachute payments or fight to avoid financially disastrous relegation to League One. Look at what has happened to Birmingham, Bolton, Charlton, Derby and Wigan. Five of the Championship clubs, those in receipt of parachute payments, have average revenues of £66 million per annum, while the other 19 averaged £22 million. Cash flow is volatile and unpredictable, with cliff edges all around.
In League One and League Two, the majority of clubs generate losses, with increased dependency on owner funding, and not all owners are scrupulous. I learned yesterday that one club in League Two is paying 45% annual interest on its debt to the owner—financially sustainable this is not. When TV revenue falls, as one day it assuredly will, clubs could fall like dominoes.
Turning to the Bill briefly, I support introducing financial regulation to improve the financial resilience of clubs across the all-important football pyramid. In my view, to do that effectively the regulator must have a role in ensuring proportionate financial distributions between the leagues, as covered in Part 6 of the Bill, especially the level of parachute payments—I support these, but I feel the degree distorts competition. Our football ecosystem depends on this pyramid. The ongoing failure of the Premier League and EFL to reach agreement on financial distribution underlines the need for a regulator. Of course, there is devil in the detail. I will listen closely to what others have to say on what powers the regulator will have regarding mediation and last-resort resolution and how that is structured.
Time is short, so let me finish on the well-intended measures to give fans a greater say, ranging from consultation to representation at board level. As a fan I applaud this, but as a former CEO and chairman I have some concerns. We must be careful that the Bill does not overreach itself or, indeed, overregulate or overcomplicate the running of our cherished football clubs.
Lord Maude of Horsham (Con)
My Lords, I declare my interest as someone who, 57 years ago, became a supporter of Tottenham, largely to annoy my best friend at school, Matthew Harding, who even then was a passionate Chelsea supporter. As a Spurs supporter, I am accustomed to disappointment, and I have viewed the trajectory of the Bill from review to the first iteration, then to this version, with some disappointment—although in this event it was not preceded by the brief period of optimism that accompanies the life of a Spurs supporter before the disappointment sets in.
I start from a position of scepticism about whether the introduction of a state regulator is likely to improve the position of an incredibly successful activity. We have heard from many about how the Premier League is the richest and most-watched league in the world; the EFL is immensely successful and wealthy, and all credit to it. That is despite the lack of regulation, and it is not obvious that self-regulation has failed. My position is also one of disappointment at the outcome of the review, because it was not clear that the introduction of a regulator was needed; dismay that the previous Government’s Bill added significantly to what Dame Tracey had recommended; and consternation that this Bill adds yet more burden. Listening to this debate so far, I hear contribution after contribution suggesting that it should go even further. You need only to listen to the debate to know how real the risk of mission creep and scope creep is. There is a risk that serious harm will be inflicted on an activity that gives pleasure to millions in this country and to more than a billion people worldwide. We have to cherish what has been successful.
Apart from anything else, this is a huge export, with huge soft power benefits for the country as well. If we look at the ills around financial stability identified by Dame Tracey in the fan-led review, it is an unusual area of commercial activity where we can say that, overwhelmingly, most clubs in operation 100 years ago are still around. Show me another sector where that is the case; it is an unusual degree of financial and commercial stability. She identified as a crisis the effect of the pandemic, but football survived it. The noble Lord who spoke previously was talking about the amount of debt that my own club, Tottenham, has, but that was to build a world-class stadium, generally acknowledged to be the best in the world, which was then condemned to have a year and a half with no gate money coming in, so a bit of debt was not surprising. The benefit to the area—one of the most disadvantaged areas of London—of that investment, and the activity that has been brought to the area around it, is astonishing.
Then there is the concern about the ESL. What we forget is that it was killed off within hours of being announced, and not by the Government nor a regulator but by the fans: they made so much fuss about it that its promoters and the clubs that had signed up to it rapidly drew back. It is not obvious that there is a deep problem that needs to be solved by the introduction of a state regulator. It feels to me as if this is slightly like what Sir Humphrey described as the politician’s syllogism: something must be done; this is something; therefore, we must do it. We know that the things that come most readily to hand are legislation, regulation and intervention.
We have to be very much aware of the dangers of unintended consequences. I think it was the noble Baroness, Lady Taylor, who said that no one wants damage to be inflicted. Of course not, but that does not mean that damage will not be inflicted, because there will be huge costs involved in introducing this regulator. There will be the levy, which will be levied on the clubs to pay for the cost of the regulatory body, and the compliance costs on clubs, which reduce the pot available. It is all very well to have a perfect mechanism—if this turns out to be that—for distributing the goodies through the pyramid, but if you are reducing it by virtue of the intervention being promoted in the Bill, there will be less to distribute. We need to be very aware of that.
I will not add to what my noble friend Lady Brady said about the backstop powers and parachute payments. I will say only that, if the parachute payments were to be interfered with, there would be a danger of creating a greater gulf between the top of the Premier League and those lower down. It is really important to maintain that competition. Ironically, it was concern about the effect of loss of jeopardy and the lack of competitiveness that the ESL might introduce that led to it being rejected, so we need to be conscious that we are not recreating that.
I urge the Minister to look again at some of the provisions in the Bill and ask whether this is a sledgehammer to crack a rather small nut and whether there may not be better ways to ensure that there is genuinely light-touch regulation and we do not inflict great damage on an activity that gives pleasure to many but also makes a lot of money for this country.
Baroness Fox of Buckley (Non-Afl)
My Lords, it is good to hear the noble Baroness, Lady Twycross, emphasising again and again that the Government want proportionate and flexible regulation. Despite these reassurances, I am still nervous. As the noble Lord, Lord Maude, has just indicated, regulation has a tendency to run away with itself and lead to unintended consequences. Yes, we are all seeking to tackle problems in good faith and, yes, I understand that many football supporters feel frustrated by mismanagement and dodgy ownership of their own clubs. Still, the Bill is ultimately the state interfering in civil society.
Why football matters to so many of us was perceptively explained by Luton fan and writer Dr Rakib Ehsan in his Playing by the Rules report for ResPublica, which I read in preparation for today. Clubs that are supported by families over generations, especially in provincial towns and left-behind areas, are civic institutions that provide a sense of pride, belonging and identity to local communities. Crucially, they are the epitome of free association by free citizens, a core activity for their free time. The passions of football fandom are authentic precisely because they are organic and spontaneous, not the product of top-down statist curation by regulators. We restrict and undermine football’s freedom at our peril.
I probably would not intervene in the Bill if the legislation was confined to a focus on financial sustainability. However, my worry is that once the independent football regulator is established it may well expand its mandate and indulge in the sort of interventionist mission creep we have heard about and seen from other state-appointed regulators. What is more, the clauses added to the original version of the Bill point in this expansionist direction. My dread is of politicised attempts at shaping football clubs and their fans, continuing a broader trend of what has been, frankly, an elitist colonisation and sanitisation of football over recent years.
We are told that the proposed regulatory regime is all being done for the fans—I am rather sceptical. Yes, it is popular with many fans, but many other fans are suspicious about being used as a stage army to justify interference in what they consider to be “their” game. New provisions now require explicit democratic engagement with supporters to amplify the voice of the fans, but which fans and whose voices? I remind noble Lords that, over recent years, politicians have expressed a rather ambivalent attitude to football fans’ voices.
As the Minister explained, the plans to set a minimum standard of fan engagement and decision-making about key club heritage assets, such as home shirts, club badges, the name and so on, is important to the Bill, but it seems that not all heritage assets beloved by fans are to be protected by the Bill. What about the heritage football chants and songs? They are assets too. They are most likely to be silenced by the Government’s ever-expanding football banning orders, with the state laying down strict rules on proscribed lists of words or subjects never to be mentioned—let alone sung about—at matches. Politicians have targeted and punished those they consider to be the wrong kind of fans. Too often traditional working-class supporters—the heart and soul of British football—are viewed as “the deplorables”, in need of re-education.
Another government addition to the Bill is the demand that clubs improve their commitment to, and report annually on, their actions on equality, diversity and inclusion, or EDI. It sends a shiver down my spine. This seems to contradict the Government’s claim that they want to stop the culture wars. If so, why oh why would they introduce one of the most divisive culture-wars-type policies into football? As we speak, EDI policies are political trip-wires in all workplaces across the public and private sectors—the vehicle for identitarian ideologies and assaults on free speech. Regardless of whether noble Lords agree with my hostility towards EDI, we can surely agree that these are politically contentious policies—just look at the toxic row going on at the Bar Council at the moment—so why are the Government using legislation to foist them on football clubs?
A couple of examples may act as cautionary tales. The first is the shocking case of lifelong Newcastle fan, 34 year-old Linzi Smith. Superfan Linzi, who over the years must have handed over tens of thousands of pounds to her beloved club in tickets and merchandise, has been banned by Newcastle United from attending home and away games until the 2026-27 season. What was her crime? She did not get into a fight on the terraces or abuse a steward or fellow fans; the ban was for expressing her belief in the biological reality of sex—not at a match but on X, or Twitter. In an example of remarkable EDI overreach, she has been punished for breaching the club’s trans-inclusion policy by posting her opinions outside the ground. Linzi’s story is now in the public realm because, with the support of the Free Speech Union, she is taking the club that she has been loyal to all her life to court.
It is worth reading the details of her ordeal—the way that NUFC’s EDI team worked in cahoots with the Premier League’s mysterious investigative unit to set up surveillance and compile a dossier that was handed over to Northumbria Police. Even when the police declared that no crime was committed, the club banned her anyway for breaching EDI policy. Not all clubs have such overzealous EDI officials but, if the Government use the Bill to push EDI as proof of good governance, does this not incite clubs to target and make examples of any number of fans for expressing views at odds with EDI’s rigid orthodoxies?
The second case is of a 17 year-old autistic female footballer, which has been highlighted in the media and articulated so well here today by the noble Lord, Lord Triesman. His persistence and courage in pushing this issue of fairness and safety in women’s football is to his credit and to be commended. This young 17 year- old’s “are you a man?” speech crime was reported by a member of the opposing team and the NGO Kick It Out for breaching trans-inclusive EDI rules. Ironically, she was put in the dock by the FA in the same week that it announced its new disability policy, entitled Football Without Limits—no limits unless you are a young autistic woman who offends gender ideology it seems; so much for inclusion.
EDI policies are regularly a political minefield. I urge the Minister to kick it out of the Bill. If the Government persist, and refuse to listen, perhaps it is because, to reference one bit of fans’ chanting wisdom, “You don’t know what you’re doing”.
Lord Moynihan (Con)
My Lords, I declare an interest as a former Minister for Sport, having piloted the last major football legislation through another place to enact safety measures and a football licensing authority to make our grounds safe again after very dark years. I know how challenging that can be and my sympathy, admiration and very best wishes go to the Minister.
Fast forward 30 years to 23 April 2021, when Prime Minister Boris Johnson proved decisive in taking down the European Super League. As fans, players and pretty much everyone except the breakaway club owners reacted with outrage to the idea of the European Super League, the Prime Minister called for a “legislative bomb”. However, this is more than a legislative bomb to take down a European football super league. It is a hydra of a Bill that is, as we have heard today, in danger of growing and growing.
It is a Bill eagerly seized upon in the DCMS to deliver 150 pages of new law, with 100 clauses, 12 schedules and a raft of delegated powers turning what should be light-touch regulation focused on one issue into far-reaching government and regulatory financial control of our national game. The Bill is so far-reaching that, in Clause 92, the Government believe that they, not the regulator, should have the power to amend the definition of the season. I quote from the government memorandum:
“In order to future proof any changes to the footballing calendar, the Secretary of State has the power to amend the definition of ‘season’”.
Why does the Secretary of State, by law, have to make a Statement to Parliament on the governance of football every three years? That is a far more onerous responsibility than those of the Ministers responsible for Ofwat, the Office for Road and Rail, Ofgem or Ofcom.
We have the potential—this is a very sad reflection—for government intervention marching straight through the front door. My concerns are found not just in the Bill, and I ask noble Lord to please read the memorandum from the DCMS to the Delegated Powers and Regulatory Reform Committee. The Government and the Secretary of State have delegated powers to alter the Bill in secondary legislation—after we have passed it—on the purpose, overview and key definitions of the Bill, the work of the independent football regulator, the operating licences, the suitability of owners and officers, the distribution on revenue, and the list goes on. These are not powers to the regulator; they are powers to be retained by the Secretary of State through secondary legislation following the introduction of the Act. We know how tough it is to amend secondary legislation and that is what really concerns me.
If we take the memorandum into account, we have a Bill peppered with financial uncertainty and interventionist powers, which, as my noble friend Lord Maude said, could potentially, and tragically, split the Premier League, putting at risk the £1.6 billion that goes into football and damaging the much-envied Premier League that has successfully supported the five tiers and the rest of the game in our country.
All of this is without a clear answer to the following question: what is so broken about a professional sport which has seen only seven liquidations since 1945? What is so broken with the highly successful Premier League that has led the Government to create a regulator so large that the impact assessment says it would require operational costs, initially paid by the taxpayer, not of £1 million, nor of £10 million, but of up to £106.8 million over this and the next Parliament? Much to the delight of the competing leagues in Europe and the emerging football nations in the world, we stand, unless we are very careful, on the precipice of a new era in football governance, with potentially onerous financial regulation being introduced, as set out in this memorandum. I am seriously concerned and genuinely hope I will be proved wrong.
I believe that this is no longer about the super league; it is a far-reaching and potentially intrusive affront to the very principles of competition and spirit on which the national game thrives. To demonstrate that, the Secretary of State, who tries to persuade us that the Bill simply provides the framework for the independent regulation of sport, has, in the memorandum from the department, put a total of 42 delegated powers in the Bill, including Henry VIII powers. It is maybe not surprising that we have not heard back from the Delegated Powers and Regulatory Reform Committee in advance of Second Reading. I declare an interest: I had the privilege of serving on that committee. The members are probably taking the rest of the government-defined season to recover from the plethora of secondary legislation and Henry VIII powers, each one of which I would urge both sides to consider in detail in Committee.
We already have the laws of the land which provide the legal framework in which professional sports and businesses operate. Football is a wonderful game of passion, innovation and excitement. It should not be the role of government or any regulator to impose its financial will on the Premier League or dictate how clubs should operate. Turn down that route and we are, sadly, in danger of choosing an uphill path to mediocrity, to the disbelieving pleasure of competitor leagues around the world. Place arbitrary restrictions on how clubs can invest and you risk depleting them of the very oxygen that allows them to thrive. Let us be clear—and here I agree fully with the noble Baroness, Lady Taylor—that the essence of football ownership lies in the relationship between the club, the community and the fans. Ownership is something we should be very careful about if we are asking government to dictate powerful regulatory decrees outside competition laws. If a club prospers, let it be allowed to enjoy the fruits of its success.
It may be unpopular to predict, and I do so with a heavy heart, but I anticipate, sadly, that those who front up the regulatory authority will one day become the despised target of tens of thousands of fans as the ownership structure of Premier League clubs comes under strain. I am not against measures to support the aspirations of the fans, which I think are important, but against untrammelled government and regulatory financial interference, which has the potential to reduce the levels of finance reaching down through the pyramid.
This country has an outstanding record of success in sport. It has built an international reputation on the understanding that government intervention in sport, amateur and professional, must be minimal. Because of this Bill, our involvement in international football is now for the first time under laser-focused scrutiny in FIFA and UEFA. As we have seen, if UEFA does not agree with clauses in the Bill which threaten football’s autonomy—the clearly implied objective of too much of the Bill, as set out in the memorandum—when asked to jump, the Government will have to say, “How high?”
Nobody denies that there are problems to be solved in football, just as there are in all sectors of the economy. The introduction of this football regulator with the unprecedented financial powers set out in the Bill and the memorandum will, I fear, be a blight on the game and see the steady decline of investment in our clubs, to the ultimate detriment of the Premier League, the EFL and our standing in world football.
Regulation and onerous legislation are no substitute for existing competition law, and threaten autonomy. The Bill has the inherent danger of suffocating the role of ownership and accountability. The backstop and the proposals on parachute payments provide a false promise of financial prudence. Former Prime Minister Boris Johnson launched the idea of a legislative bomb. We in this House have a duty to do our level best to defuse any layers of financial regulation that could damage the success of our pyramid structure in football—the EFL and the Premier League—and all those factors set out by my noble friend Lady Brady, who shares with me a passionate interest in the future of our success in the game, both nationally and internationally.
Lord Grantchester (Lab)
My Lords, there can be no dispute that the formation of the Premier League in 1992 has been transformative of football and has led to English top-flight football being the most dominant across European leagues. It has attracted worldwide audiences, the best players from all continents, international investment into clubs and unparallelled cash flows from broadcasting rights. Despite the success, and despite all the good outcomes—redistributions and investments in grass-roots development—serious problems have arisen, with widespread agreement and approval for corrective action. The spark for this came from the ill-advised breakaway proposals from six Premier League clubs in 2021 to form a new 12-team European Super League. Arriving at this point has been accelerated by some rogue, self-interested club owners ignoring the heritage and community aspects of football clubs; fans have rightly insisted that protections from abuse be enshrined in legislative regulations. I pay tribute to them.
I support the Bill. I am pleased with the enhancements the new Labour Government have brought to the previous Bill of the Conservative Administration. All political parties agree on the need for reform to counter inadequate corporate governance resultant from inadequate and ineffective regulation, such that the structure and dynamics of the market create incentives for financial unsustainability.
This new Bill strengthens effective engagement with fans and their representatives; it brings income redistributions from broadcasting rights within scope; it makes the regulator fully independent of industry and government’s foreign and trade policies; and it will create a new football club corporate governance code to improve equality, diversity and inclusion, and decision-making at clubs. I thank Katie Nixon from the Premier League, Rick Parry from the Championship and EFL, Sophie Levin from the Football Association, Kevin Miles from the Football Supporters’ Association and the Bill team for all their engagements on the Bill.
I declare my interest from a lifetime of experience in football and, most pertinently, from having been a director of Everton Football Club and, presently, chairman of Everton’s football memorabilia collection charity. I hasten to add that these remarks are wholly my own and not made on behalf of or representative of anybody else.
The football industry must agree to make this legislation and regulation work effectively and successfully. It is important for the whole game and to the lives of so many. I do not share the widespread general disapproval of the Premier League or of the exaggerated risks its briefings draw attention to. In many respects, the legislation may not go far enough, but it must be made to work, and we need to consider where it may lead and how it may develop and adapt to circumstances.
The immediate issue the regulator will face is in regard to the backstop Clause 57 and the divergent proposals on parachute payments and redistributions between the Premier League and the Championship. I understand the distortion of competition this brings to the Championship. However, I contend that the internal distribution between clubs in the Premier League also requires consideration and is pertinent to this. Should the Premier League distribute income more equally between the top and the foot of the table, those regulated clubs would have improved cash flows and potentially be better able to sustain the change. They can already limit exposure through their player contracts. Redistributions could be better made to Championship clubs; the sheer volume of broadcasting rights receipts counters the argument that the effects of the multiples of distribution between clubs at the top and bottom of the Premier League are less, in percentage terms, than elsewhere across other UEFA leagues.
Volumes are also pertinent. Indeed, the sheer dominance in cash terms from broadcasting rights to the Premier League leads top European clubs to consider that the Premier League is setting itself up to be the super league. In contention to this, there are fears of an emerging super league being created from the expansion of the Champions League and other UEFA competitions attracting more Premier League clubs into their participation. Protections against the super league in Clause 45 need to recognise these concerns. The cancellation of replays from round 1 of the FA Cup competition, and thereby the Premier League increasing its dominance by taking over the Football Association’s income streams, has been the result.
There are many concerns over competition law that are relevant not only within the football pyramid but internationally between England and both UEFA and FIFA. Both have issued statements of concern. It is a complex area. I highlight the conflict of interest that arises to the Premier League in relation to its being both a regulator and a marketeer of broadcasting rights.
I turn to how competitive the Premier League is. It can be argued that merit payments and their size will create elites, especially where redistributions of broadcast rights are augmented from playing in European leagues and from worldwide rights. The probabilities of any Premier League club beating another reduce from disparities between all those distributions. Is the league actually competitive? It could be argued that competitive pressures to achieve a merit position drive incentives to unsustainable behaviour. Relegation is the ultimate cliff edge. Clause 1(1) states that the purpose of this legislation
“is to protect and promote … sustainability”.
All aspects of income distributions and their effect need to be borne in mind, and the regulator must pay due regard to them.
The present problems also include financial fair play and the Premier League’s litigation against its members. Investments into clubs, their stadiums and facilities have not been adequately appreciated in the Premier League’s PSR. Surely investment should not be discouraged and penalised. In contrast, it appears to some clubs that accounting norms and standards are challenges to be circumvented or reinterpreted. For example, one of these is the length of time over which players’ contracts can be amortised.
As an aside, the Women’s Super League has adopted a better approach by having a total salary limit—a model familiar to US owners. I assure noble Lords that Everton abides by one, even though other clubs may not. The amount that can be spent on players’ wages is limited to 40% of turnover. However, the parent men’s team can invest further sums into the club’s women’s team and thereby lessen that impact, as it can spend 40% of its investment on player wages. Further discussions are ongoing in both sections, men’s and women’s. I am also pleased that the Secretary of State has powers in the Bill to extend the legislation to apply to the women’s game, which it is correct to leave to develop itself at the moment.
I commend the provisions about fans’ engagement in the Bill. I interpret them as enabling rather than prescriptive, and they should be sufficient to be effective.
Once the legislation completes its passage through both Houses into law, the very next important step is for the regulator to set up the “state of the game” report outlined in Clause 10. Its terms of reference need careful drafting, the call for evidence needs to be wide-ranging and inclusive, and the consultations need to be extensive. The reduction of time to 18 months from three years for this to be concluded is also an improvement to the Bill. The “state of the game” report is fundamental for the independent regulator to understand a full economic and financial analysis and all the implications of the market structures of the game, to have a broad remit with wide-ranging information-gathering powers, and to enable effective consultation.
The Bill is broadly balanced in its approach, and the House can consider whether amendments may be needed to make the Bill more explicit regarding the regulator’s reach. I close with a remark from Carlos Hurtado, a sports lawyer at Baker McKenzie:
“If you have strong governance and financial controls, you’re creating the perfect environment for the sport to develop, investors to come in and create more value for the business. When you do that you’re going to have more competitive football”.
Baroness Blake of Leeds (Lab)
My Lords, I remind noble Lords of the advisory speaking time. We have a lot of Members who wish to speak and we want to finish at a reasonable time.
Lord Goodman of Wycombe (Con)
My Lords, as a member of the Delegated Powers Committee, I look forward to exploring in detail what powers Ministers seek to arrogate to themselves under the terms of the Bill, following the splendid series of points made by my noble friend Lord Moynihan. I point out to noble Lords in passing that if they look at Section 92(3)(b), they will find that Ministers propose by regulation to redefine what is and is not “serious criminal conduct”, which is a proposal I find startling.
None the less, rather than risk being lost in this forest of detail, I wish instead to pan the camera back, look at this Bill as a whole and ask a question that I think has haunted this debate, namely: who owns a football club—Wycombe Wanderers, say, where I have been a season ticket holder for the best part of 10 years? Noble Lords might think the natural answer is that a football club is owned by its owners. Not so fast if you read this Bill, whatever Part 1 or Schedule 1 may say. According to the Bill, an owner is really more like a custodian than an owner and the fans are more like shareholders or co-owners than consumers, because football is judged under the Bill’s terms to be simply too important to fail. There is a heritage objective written into the Bill because it is held, I think quite rightly, that a football club is part of the very life of its community—particularly, say, in an old former industrial town where some of that industry has gone. It is essential to the coherence and well-being of the place.
As a Tory, I have no objection at all to the argument that institutions trump markets, but I cannot help following the arguments of my noble friend Lord Maude—from not quite the Front Bench but the Bench where former Ministers sit—and wondering whether this end might be better and more naturally achieved in a more evolutionary way were football to devise its rules and regulations itself, backed up, if necessary, by statute in a system of co-regulation. But we all know that this is not to be.
The Bill proposes a state licensed regulator, so in addition to Ofwat, Ofgas and the Care Quality Commission we are to have Ofball, Ofgoal, Ofside or whatever the new regulator will be called. But those regulators that I named and all the rest of them are not uncontroversial. They are sometimes accused of mission creep, of regulatory overreach, or sometimes of simply getting it wrong, often in reports composed by distinguished committees of this House. I cannot help looking at this Bill and thinking: on the one hand, a new state regulator, on the other, millions of engaged football fans; what could possibly go wrong?
In fairness and in balance, I have to acknowledge, as someone who is sceptical about the Bill, that it has the Premier League, the Football League and other interested parties more or less lined up in the same place. It is the product of years of work, and aspects of it have been widely welcomed—for example, Part 4, which seeks to deal with rogue owners. Who could possibly quarrel with that?
I must say, however, that the attentions of the Premier League and the Football League are more engaged with Part 6 on the distribution of revenue. If you want to find out what really engages most of those who take an interest in this Bill, follow the old rule of follow the money. I have to say myself, as the fan of a League One team that is currently top of the table, I have no objection whatever to money flowing down the pyramid and I can see why the Bill is widely welcomed. There you have it.
None the less, I have to say to the Government Front Bench that it is of course widely said, and it is true, that fans are angry when the market fails, and I warn the Government that, if the fans are angry when the market fails, they will also be angry if the state regulator fails or is seen to fail. What will fans say if they support an ambitious Championship club and the regulator reproves it for running up debt? What will the fans say if they believe that the fee that the regulator is charging the clubs for its services is too high? What will the fans say if they do not like where the club has got to on ticket prices? And there are myriad similar examples. I will be told that these fears are exaggerated or mistaken. I would reply, “Let’s put that to the test”. Let’s have a review of this regulator after it comes into existence in, say, five years. Let’s even consider writing a sunset clause into the Bill whereby we can review where this Bill is going”.
In conclusion, we are told that the football pyramid is the envy of the world, one of Britain’s great sporting successes—and so it is. But we are simultaneously told that the whole system is so fragile that it needs a state regulator to support it. I find these claims very difficult to reconcile—or, if they can be reconciled, could it be that it is the very fragility of the system, the sense of risk, adventure, innovation and dynamism, that has made the pyramid the success that it is? And could it be that the regulator is putting all that at risk? Let us find that out, have a review and consider putting a sunset clause in the Bill so we can find out in due course whether the fears I have expressed are mistaken and whether the hopes that the supporters of the Bill vest in it have come to pass.
Lord Bach (Lab)
My Lords, like many others in this debate, I am a self-confessed football obsessive. I have been a Leicester City season ticket holder for more years than I care to remember and, even more sadly, I am an addict of Fantasy Premier League, too. I find the Premier League riveting and have admiration for its success over more than 30 years: shown, as we have heard, by its vast global appeal, its world-class players, its huge crowds and its employment of a large number of people. It is intoxicating, so intoxicating that one can be tempted—as many are, I fear, including many young football fans—to think that the Premier League nowadays is all that football is. It is not, and it is because it is not that this cross-party Bill is so necessary.
Many noble Lords will perhaps know the wonderful fictional description of football fans at a Bruddersford United match during the Great Depression. It is at the start of JB Priestley’s wonderful novel The Good Companions. It is too long to remind the House this evening of the full description, but let me use an extract or two. Priestley wrote in 1929 that football turns you
“into a member of a new community, all brothers together for an hour and a half … and there you were, cheering together, thumping one another on the shoulders, swopping judgments like lords of the earth, having pushed your way through a turnstile into another and more splendid kind of life, hurtling with Conflict and yet passionate and beautiful in its Art. Moreover, it offered you more than a shilling’s worth of material for talks during the rest of the week”.
Of course, football, like society, is very different today, but fans’ emotions, as described by Priestley, and their response to a game, whether they are watching Manchester City or the bottom club in the 12th division of a Leicestershire local league are, I would argue, still the same.
I make this point to support the need for sustainability and fairness, which I believe are at the heart of the Bill. It is at this moment of almost total Premier League control and success that we need to take stock, surely, and ask whether this level of success is ultimately sustainable and, perhaps as importantly, whether it is always a good thing for the vast football world that lies beneath the Premier League. Of course, this Bill deals with the top four tiers, but let no one be in doubt that this Bill’s effect will be clearly felt right across English football.
To me, the case for a regulator is overwhelming. An industry as large as this, both in numbers and in money, and as significant to our national life, involving 35 million fans a year and almost 40,000 football clubs, should arguably have had a regulator some years ago. Given the bad experiences, but perhaps even more the near misses, that football has been through in the past few years, it seems important to have a regulator with real powers who is prepared to use them. Of course, no one on either side of this argument wants the regulator to run football, but any signs of weakness will be bad news indeed.
By way of example, the problem of football ownership has to be tackled. So much depends on the owner of a club. My club, Leicester, has been incredibly fortunate. Our owners have been marvellous, model owners, winning the confidence of the fans from an early stage and helping the community around Leicester and its county for years and years. Not many clubs, I admit, have been that lucky. Others have had years of worry and concern for fans. This is where the regulator should be prepared to step in.
I want to say a quick word about parachute payments and how reform is pressing. The present position, as others have said, particularly my noble friend Lord Bassam, is just plain unfair on other Championship teams. I am not against them as a matter of principle, but they are too high in relation to what other Championship clubs receive. Recent figures show one club that had just been relegated receiving £48.9 million in its first year while other clubs in the Championship received £5.8 million in something called solidarity payments. That is too big a distinction and it should change.
There are other big issues in the Bill and I look forward to taking a small part in Committee, but I agree that the abolition of replays in the FA Cup from round one on is a sad occasion. We all grew up, whatever our views and whoever we support, with cup replays in the middle of winter. They were exciting, surprising and very much part of the English game. I still do not know why they have been abolished.
Whether it is true that the existence of football has prevented violent revolution in our country, as we used to be told at school, I do not know, but its importance can hardly be exaggerated and that is why this Bill is so vital.
Lord Hannan of Kingsclere (Con)
My Lords, to what problem is this Bill a solution? That should be the first question we ask of every piece of legislation but, not for the first time, I find that I am the only person —so far, at least—who has asked it. Here we are, a revising Chamber conceived as a check on the necessary radicalism of the popularly elected Chamber. It is precisely our job to uphold the principles of proportionality, propriety and property. As my noble friend Lord Goodman said, of course people are going to be angry about individual market failures now, but it is our job to foresee that their anger will be all the stronger when there are worse failures, as assuredly there will be once the entire business is taken into state regulation.
I ask again: to what problem is this a solution? Are we facing national bankruptcy as a result of the terrible failure of football? On the contrary: every speaker so far has acknowledged the success of English football. The Minister called it our greatest cultural export. I understand that not only is the Premier League the most watched in the world but the sixth most watched is the English Football League, and they are the first and second in terms of takings at the gate. So to what problem is this a solution?
There are plenty of things that need reform—we have a Civil Service that has stopped bothering to show up at the office since the pandemic and a healthcare system that is delivering fewer and fewer procedures despite getting bigger and bigger budgets—yet we seem to be going after all the things that work, whether it is the City of London, private schools or now, outstandingly, what everyone agrees is the most successful football league in the world.
What are we going to solve by doing this? The Bill talks about the one notional problem of clubs closing and being allowed to close. The one that everyone keeps mentioning is Bury, but I cannot help noticing that Bury is still there. It is a wonderful example of what Joseph Schumpeter would have called spontaneous order. Without any regulation, that was solved. Can we be certain that, with the full force of coercive law, we would have improved that situation and made it more likely that we would have had the investment to come back?
I used to work at the Sunday Telegraph—in fact I still write a column for it, as did my noble friend Lord Goodman for a while. We had a former colleague there who is now, sadly, deceased, Christopher Booker, who had the wonderful phrase, “using a sledgehammer to miss a nut”. I am afraid that is exactly what I can see this legislation doing. It is not going to succeed in its declared notional goal but, my word, it is going to have a lot of unintended and unforeseen secondary consequences.
Who has ever known a regulator to say, “Actually, our job is done, we’re going to dissolve ourselves”, or even, “Do you know what? We’re probably doing a bit too much. Let’s take a step back”? Has there ever been an example of any regulator that has volunteered to relinquish its power? Once this one gets going, who can say for sure that we will not have gender quotas, net-zero policies, ticket price fixing and any manner of things beyond the remit originally foreseen? That is what regulators do. One more time, what is the terrible crisis that is so severe that it justifies bringing in a measure of this magnitude?
I was very impressed last week during Questions by the responses of the Minister, the noble Baroness, Lady Twycross. Those who were here will remember that there was a debate about boxing and about male-presenting boxers in female boxing rings. Despite a great deal of moralistic fervour in the Chamber, the Minister quite properly stood by the principle that it was not for Governments to tell independent sporting federations what rules they should follow. That has been a pretty good principle in this country.
Lord Addington (LD)
My Lords, if the noble Lord will take an intervention, it was actually about two rival bodies with different definitions of what they were, one of which was corrupt.
Lord Hannan of Kingsclere (Con)
None the less, the principle surely applies that these bodies, whether they are for boxing, football or anything else, exist to serve their members, and they have done so extremely well—this is something that sets us apart from a lot of other places in the world—without needing state regulators. It would not occur to somebody setting up a sporting federation now to go to the Government for a licence, and that is in keeping with our common-law traditions, in keeping with the principle of free contract and property and in keeping with the history and temper of this country.
Let us not abandon what should be those core principles that have served us extremely well. Let us defend the freedom of private organisations, which have never asked the Government for a penny in support, to do what they do well. Let us not intervene in something that is working extremely successfully. There is a basic principle that is often attributed to Edmund Burke, and in fact I think you can trace it all the way back to Confucius, but I am going to express it in the words of the third Viscount Falkland, a Civil War royalist who, if he was not exactly the first Tory, may reasonably be said to be the forerunner—let us say the morning star—of Toryism: “If it is not necessary to change, it is necessary not to change”.
Lord Mann (Lab)
If there were no crooks or conmen, Bury Football Club might not have been forced to go to the very bottom of the pyramid rather than staying where they were—a club with a huge history and a huge fan base.
I declare an interest as one of the deplorables. I am elected by the fans of Leeds United Football Club to chair their supporters’ club, the oldest in the world at 105 years old. I am a statistical economist by training, and I calculate that my members have spent in their lifetime between £3 billion and £5 billion following Leeds United Football Club. In reality they are investors in Leeds United Football Club. They meet a few government objectives on the way because, in that 105 years, they have provided green transport and taken cars off the road by providing buses to every fixture, home and away—and I mean every fixture. They have reduced the police bill, not marauding around the streets in any way but going point to point for every single match. That is another contribution.
What do we get for that? Let us look what happens in Germany. Germany was cited as a bad example because there is no competition in Germany, fans have a say and it is a bad model. Let us get our facts right. Here are entrants by success from German football into UEFA competitions for the first time in their history in the last 10 years: Freiburg, Augsburg, Mainz, Union Berlin, Hoffenheim and Heidenheim. The champions of Germany, the Bundesliga, for the first time ever last season were Leverkusen. There is fan involvement—unlike in this country—diversity of success and a growing business model.
Let us jump down the scale. I had to intervene several times to assist the fans of Worksop Town Football Club—the fourth oldest in the world, created in 1861—in preventing it going out of business. No one else was going to intervene—not the football authorities. We had to save the club not once but more than once. For a town like Worksop a football club of that age, however relatively unsuccessful, is fundamental to its very being. Should that club be allowed to disappear? Should Bury have to come in at the lowest possible denominator because of that?
I have some questions for the Minister. If Worksop Town at its low level were to be brought into any regulation, would that require action by the regulator, primary legislation or secondary legislation? If the players’ union had to be consulted, which of those three would that require?
What if women’s football were to be included? I shall cite Solihull Moors. Does the situation four weeks ago at Solihull Moors classify as potential action for the regulator under the legislation or not? If not, which of those would be required—regulation, primary legislation or secondary legislation?
Football has to report on modern slavery but not on footballers. The Commonwealth Parliamentary Association in co-operation with the Kenyan Parliament has a big project on this at the moment. It is a huge issue. If we want to require football to report on footballers, including under-16s, under the modern slavery requirements that apply to all other employees, which of those three does that require?
Paragraphs 8 and 9 of Schedule 5 talk of a requirement to consult representatives elected by fans, but a number of clubs are choosing who the fan representatives on their supporters’ advisory boards are. With the legislation as it stands, will that be superseded by the ability of democratically run fan groups to elect their own representatives?
There is good news on one of my other declared interests—anti-Semitism. In the last four weeks, we have had Jewish Fulham supporters able to go to a Hanukkah event at their club as a Fulham Jewish supporters’ group. Manchester City have agreed to a similar event in the last four weeks and Leeds United will have another Hanukkah event—one of the fastest growing, with significant numbers joining. Orient will have its first-ever such event in a few weeks’ time. Should those fan groups expect that their clubs recognise their existence and speak to them on relevant issues? I suggest that would be rather a good thing for society. How does that fit into how this Bill is worded? I am a Kick It Out ambassador on anti-Semitism. Will the reporting on equalities be better or worse than the requirements we put on the banking sector? They ought to be at least as good. Will they be?
Above all, there are two big questions that the Government have to answer. One is the Bury question. Bury was taken out of existence by a conman, and lifelong fans of Bury wanted to get hold of the assets in order to run it themselves and keep it alive. Will that be possible technically with this Bill? What they required was the asset of the ground, the name and probably a bit of cashflow in whatever capacity—loan or whatever—to keep the show on the road in the league they were in, if they chose to remain in that league. Is that possible?
I shall reference Leeds United Supporters Club for the other big question. We do not want to be called Red Bull Leeds by some of the new investors. We do not want to be like Red Bull Salzburg; in fact, I refuse to wear a shirt with red on. I am happy to wear a red rosette every election—and only a red rosette—but in my football I and many others do not wish to be Red Bull Leeds. Does this legislation give us the power—if we can persuade the rest of the fans—to vote yes or no to such a proposition?
They are the two key tests of this legislation. I hope to hear from the Government that, on both, those powers will be there.
Baroness Morris of Bolton (Con)
My Lords, it is a pleasure to follow the speech of the noble Lord, Lord Mann. I was born into a family of avid Bolton Wanderers supporters, married into another and am a long-standing season ticket holder. I see that, sadly, the noble Lord, Lord Bach, has just left, but my husband and my son both drive me mad every weekend with their fantasy football teams. So, I welcome the opportunity to speak in this Second Reading of the Football Governance Bill and thank the Minister for her clear explanation, despite her reference to the Bolton v Oxford result in the League One play-off final. I also thank her for her warm tribute to Dame Tracey Crouch, who through her work on the fan-led review of football laid the foundations of this Bill.
Like at Leicester, as we heard from the noble Lord, Lord Bach, we are incredibly lucky at Bolton Wanderers that since August 2019 we have had owners in Football Ventures and a chairman in Sharon Brittan who instinctively understand the right way to run a football club. From the inclusion of and communication with fans and the community, to the obvious care and support of staff and players, they have been a breath of fresh air. It has not been easy, and finances are still tight, yet their visibility at events and matches, turning up, showing up and embracing and understanding the highs and lows, have endeared Sharon, in particular, to fans and the wider Bolton family. If all clubs had been run this way, there would be no need for the Bill.
But it has not always been like this. As one of the 12 founding clubs of the Football League—as we have already heard—Bolton has a rich and proud history, but it has never been easy being a Bolton Wanderers fan. We have watched them play in all divisions from the old Division One down to Division Four, go back to the Premiership and play in Europe, and then fall all the way down again through the divisions of the EFL to our current place in League One. But through all these highs and lows we retained hope, and the next season was always going to be the season where things came right.
That was until 2015-16—as we have heard from the noble Baroness, Lady Taylor of Bolton—when things began to go financially wrong and we came under new ownership. We reeled from winding-up orders from HMRC to unpaid wages, player strikes, Marc Iles, a much-respected local journalist, having his credentials withdrawn for asking questions about how the club was being run, threat of expulsion from the EFL and an owner who saw himself as a secured lender rather than a custodian of a much-loved club. So incensed were we that my good friend, the noble Baroness, Lady Taylor, and I wrote a joint statement addressing the then ownership of the club, fearful as we were that our families and future generations of Wanderers’ fans would be denied the pleasures and the pain we had enjoyed.
The long journey back from going into administration to being bought by responsible owners in Football Ventures was plagued by chancers, dreamers and time-wasters, all of whom placed the club in further jeopardy. We were not alone. Many other clubs have been through the same nightmare including, as we have heard, Bury, our next-door neighbour. I know there is a view that if a club is failing it should be allowed to fail, that fans will simply transfer their allegiance somewhere else. But the fortunes of a club have ramifications far beyond the football pitch.
In January last year, John Tribe, a senior lecturer in law at the University of Liverpool, published an article in The Conversation entitled “Football Club Collapses in Lower Leagues: How to Avoid Them for the Good of the Community” in which he said:
“Behind every collapse is a story of people losing their jobs and investors losing money, but the community uniquely suffers too”.
Supporters and wider communities are the lifeblood of football clubs and, correctly, have an interest, even a sense of ownership. Owners of football clubs have a clear responsibility to those supporters and to those communities. Too many failures to meet that responsibility bring us here today.
By instinct, I believe, wherever possible, in self-regulation; nevertheless, I believe a degree of regulation is now necessary. But football clubs are independent businesses, as we have already heard, and the delicate balance between precautionary oversight and stifling over-regulation must be protected.
How we regulate will be as important as what we regulate. Despite the reassurance of the Minister, we must ensure, as my noble friend Lord Parkinson said, that there is not mission creep. It would be tragic if the beautiful game went from being buffeted by the inconsistency and uncertainty caused by some owners and bad league decisions to reeling from the storms of a regulator whose actions smothered the ingenuity and brilliance that makes British football the great game it is.
Baroness Jones of Moulsecoomb (GP)
My Lords, it is a pleasure to follow the noble Baroness, Lady Morris of Bolton. I did not realise she was a football fan. It is amazing how all these football fans have crawled out of the woodwork today. I am delighted I am one of them—I support Arsenal. I am sad to say that I am mostly reduced to listening to matches on the radio these days. Life is too full to do much else.
The Green Party welcomes this Bill but it wants, as others have said, the regulator to address the unfairness of the Premier League clubs getting nearly all the money, when 67 professional clubs share just 8% of the revenue. That does not seem like a logical place to be. We agree with the English Football League that there is enough money in football to ensure that all levels of the game are sustainable and thriving.
As other noble Lords have said, football in this country is part of nearly every park, sports hall, school playground, beach, empty piece of tarmac and patch of grass. It matters to the hundreds of thousands of parents, children and young adults who go along to play on their local pitch, or who travel for a couple of hours to the next match. It matters to the coaches and others who give hours and days to make it happen. It matters to the women’s teams. It matters to the pub teams. Whether it is pensioners or people with Parkinson’s, football is part of their lives and identities.
The Green Party wants to see football grow from the grass roots up. That means reversing the damage done by the last Government at a local level, with nearly 1,000 football pitches being lost since 2010. We want local authorities given the power to invest in their local professional football clubs and to reinvest the dividends back into sports facilities in their communities. We want to ensure that local authorities are able to maintain key sporting infrastructure, such as swimming pools, sports halls and playing fields, that can be used by all sections of the community.
Being a Green, I am going to bring climate change into this. Then noble Lord, Lord Hannan, is not in his place any more, but I agreed with one thing he said: he did not like the idea of net zero. I do not like net zero either. We are way past the time for net zero; we have to think about real zero. I know that this Labour Government have a real problem with understanding climate change. I am very happy to help them out at any time, with tutorials from scientists or meteorologists. In the meantime, this Bill fails to prepare football for one of the biggest challenges that it will face in the future.
Climate change needs to be part of this legislation, because the adapting of facilities to deal with flooding, drought and excessive heat is already starting to be a regular feature of football life. If you think this is a side issue, you should go and talk to soccer schools in Valencia, which are covered in cars, fish and mud.
There are 23 professional teams that can expect partial or total annual flooding of their stadiums by 2050. That probably sounds a long way off, but others will be vulnerable in the meantime. Zurich Insurance found that nearly one in four of the biggest stadia face major building work or crippling insurance bills simply because of trying to face up to climate change. Both the Bundesliga of Germany and the Ligue de Football of France include environmental sustainability as part of their licensing. Why are we not including climate change as a specific issue that our new regulator has to consider and deal with?
When Carlisle United’s Brunton Park was devastated by flooding caused by Storm Desmond in 2015, the club’s insurance covered its substantial losses. Following that claim, the club said it found it nearly impossible to renew its insurance. Climate change is happening, and it is already having a big impact at grass-roots level, where local clubs will need help to find the resources to cope. The chair of the FA, Debbie Hewitt, revealed that:
“We have something like 120,000 games a season cancelled because the pitches are not playable”.
In recent years, grass-roots teams have swung from cancelling games because the ground is baked like concrete to pitches being regularly flooded.
Giving the new regulator of the professional game a specific remit to consider climate change is a reasonable thing to do. It would send a signal to the Football Association that grass-roots football is also going to need resources to adapt to what is now happening to our climate.
Lord Harlech (Con)
My Lords, it is a pleasure to follow the noble Baroness, Lady Jones of Moulsecoomb.
Lord Harlech (Con)
Even if she is a Gooner.
This legislation seeks to overhaul football governance structures in England and Wales to make the sport more transparent, financially stable and responsible. Like any significant reform, it has both pros and cons, and has particularly sparked concern from the Premier League.
One of the Bill’s most significant provisions is the introduction of stronger financial regulation for clubs. The Bill aims to prevent the kind of financial mismanagement that has led to the collapse of several clubs in the past. The Premier League has seen several clubs run up huge debts. More than half of Premier League clubs reported losses in recent years. In the 2022-23 season alone, Premier League clubs collectively posted £1.1 billion in losses.
The issue of financial mismanagement is not confined to the Premier League. The English Football League has also seen its fair share of clubs that have gone into financial turmoil, leading to administration or outright bankruptcy. As the noble Lord, Lord Mann, explained, one of the most high-profile examples in recent years is Bury Football Club. In 2019, Bury, one of the oldest clubs in English football, was expelled from the Football League after it failed to meet financial obligations but could not find a buyer to stabilise the club’s finances. The collapse of Bury FC was a stark reminder of the financial vulnerabilities that can plague even historic clubs if the proper oversight is not in place.
As we have heard, clubs such as Bolton Wanderers, Macclesfield Town and Blackpool—clubs that are intrinsic, essential and at the core of their local communities—have experienced financial crises and been forced into administration. These situations affect clubs, their fans, local communities and the broader football pyramid. The Football Governance Bill seeks to address these issues by introducing stronger financial regulations and governance structures to ensure that no other clubs face the same fate as Bury.
The establishment of an independent football regulator is another cornerstone of the Bill. According to the 2021 survey conducted by the Fan Led Review of Football Governance, 92% of respondents supported the idea of an independent regulator, emphasising the desire for greater accountability in football governance. However, I would caveat that: 92% sounds like a lot, but the total number of respondents was 20,000. If you think about how many fans attend football across a weekend—on a Saturday afternoon or a Sunday—that is not a huge number. We have to think about what the fans who did not engage with the review want. That is just a word of caution before we proceed wholeheartedly down this track.
As other noble Lords have said, not all regulators in this country have been successful. While many are called independent, their accountability, particularly to Parliament, has been called into question. Can the Minister say how the Government will ensure this new regulator’s accountability to Parliament?
Proposals for more transparency in club ownership, and implementing a more rigorous owners’ and directors’ test, might help ensure that only financially responsible, ethical owners run clubs. This is particularly relevant given the history of some club owners who have brought financial ruin or unethical practices to their clubs.
An example is the Glazer family’s ownership of the club I support, Manchester United. Since the Glazers bought the club in 2005, Manchester United has been plagued by massive debt and a lack of investment in crucial areas such as infrastructure and youth development. The Glazers financed their acquisition of the club through highly leveraged debt, meaning that Manchester United was saddled with a debt of £500 million at the time of the takeover. Since then, the club has paid hundreds of millions in interest on this debt, money that could have been better spent on improving the club’s facilities or player acquisitions. Moreover, their ownership has been marked by a lack of transparency, with millions siphoned out of the club through dividends and “management fees”. This has sparked widespread fan protests and has contributed to a decline in Manchester United’s competitive edge despite its enormous global fan base. The Glazers’ negative impact on the club exemplifies the need for stricter ownership regulations, which the Bill proposes, to ensure that clubs are run in the best interests of their fans, their communities, and their long-term success.
However, the impact of these reforms will be felt not just in England; Welsh clubs that compete in the English football pyramid will also be affected. Welsh clubs such as Cardiff City, Swansea City and Newport County are integral members of the English Football League. These clubs will be subject to the same regulations and financial reforms as their English counterparts, meaning that they could benefit from increased financial solidarity payments from the Premier League and the EFL as part of the Bill’s redistribution proposals. However, there are concerns about how Welsh clubs will navigate their unique position within the English system. Welsh clubs are governed by the Football Association of Wales, rather than the FA, which adds a layer of complexity to any governance changes.
One of the main concerns from the Premier League is that the Bill represents excessive government intervention in football’s internal affairs. While the Government argue that reform is necessary, the Premier League contends that football should be governed by its authorities, not politicians or bureaucrats. Football, after all, is a global industry with complex dynamics, and many believe that government interference could stifle its autonomy and commercial success. According to a report by the Premier League, over £10 billion of commercial revenue flows into the English game each year, mainly due to the unique, autonomous structure of the league. Any increase in government regulation could jeopardise the commercial appeal of the league and its competitiveness, which might undermine the Premier League as the most profitable in world football.
As eloquently explained by my noble friend Lady Brady, another significant concern is the Bill’s proposed redistribution of football revenue. The Premier League generates substantial income from domestic and international broadcasting deals, and there are proposals to redistribute a more significant portion of this revenue to lower-league clubs. The Premier League earned £10.6 billion from broadcasting deals in the 2022-25 cycle. While this is a crucial source of income for the league, the Premier League argues that a large-scale redistribution could undermine its financial stability. Any reduction in this income could make it harder to maintain that competitive advantage.
In conclusion, while the Bill has some positive aspects, the dangers must be addressed. Redistributing wealth between leagues and introducing stricter ownership tests could have unintended and far-reaching consequences for the entire football pyramid.
Lord Hayward (Con)
My Lords, I feel somewhat of an interloper in this debate. I have learned an enormous amount listening to some very knowledgeable people about football and its structures. As I think many noble Lords are aware, I am committed, like the noble Lord, Lord Addington, to the game of rugby. However, I am an interloper not only because of that—a strong interest in another sport—but also because, unlike all the noble Lords who have been declaring their support for one team or another, I wear with pride my referee’s tie. I seem to be the only person who has an ability to be impartial in relation to elements of this debate.
Although the noble Lord, Lord Mann, is unfortunately not here at this moment, I should add that my brother and his wife are season ticket holders at Leeds. I am old enough that in the days when I did have a team to support it was Headington United—now Oxford United —formerly at the Manor Ground that the noble Baroness, Lady Twycross, referred to in her opening comments.
My concerns are not, as the noble Lord, Lord Hannan, suggested, that there are no problems and therefore we should not do anything; he called into question whether this was the right route to follow. However, I am concerned, for example, by the opening statement in the notes of the overview of the Bill, which describes a
“regulatory regime, with the primary aim of ensuring the long-term sustainability and resilience of English football”.
There is no reference there to its success, about which we have heard over and again from contributors on all sides. Surely that must be an objective of this legislation. If it is not, one has to ask why.
I will not replicate the comments made by many noble Lords—my noble friends Lady Brady, Lord Maude, Lord Moynihan and Lord Goodman—in relation to questions that need to be put to the regulatory process. I have asked colleagues in meetings where I have been over last few days, in which a mixture of different industries were represented, to identify a successful regulator. With only one exception, I had nobody say, “Oh yes, we’re well regulated”. The exception was the MHRA, which has a very special role in regulation. A lot of people here this evening have referred to clubs’ financial problems. Did the road and rail regulator intervene in the failures of the rail companies? Did Ofwat intervene in Thames Water’s failings? We have to be incredibly careful about this regulator, because otherwise what should be in that first paragraph—success in English football—will disappear. I say “success” despite comments from the noble Lord, Lord Triesman, about World Cup victories; I wish England had had far more over the decades. I am referring specifically to the clubs, which are the subject of this Bill and the regulation associated with it.
I echo the comments made by a number of my colleagues, particularly on this side but also on the other side, but I will raise two other things. One was raised by my noble friend Lady Evans earlier. I am disappointed that we do not know what the cost of the regulation will be. That is a burden that will be carried by all the clubs covered by this legislation. Do not believe that they will be imposed just on the Premier League; they will be imposed on all the clubs covered. We need to know urgently what the burden will be— I deliberately use the word “burden” because this is not just financial; it is interventionist—as a result of the cost on all the clubs covered.
I certainly echo the comments of the noble Baroness, Lady Grey-Thompson, and others, on the need to cover women’s football as much as men’s football, because it will happen at some stage of another.
Having agreed with most of my colleagues, and a number of noble Lords on the other side, on different elements of their contributions, I conclude with the form of arbitration, which has been much commented on. I spent many years in industry, negotiating on behalf of management with trade unions. I do not foresee the problem of swing arbitration to the extent that a number of noble Lords identified today. In many cases, it can work incredibly well and is an alternative solution to battling it out in a stalemate that one sees so often.
With those few comments, I echo the view expressed by a number of noble Lords—that if we are to have a regulator, the regulation should be of an extremely light touch. I would not dissent from the suggestion by my noble friend Lord Goodman that we should have a sunset clause or some form of review clause to see how well it is working after a number of years.
Lord Birt (CB)
My Lords, may I take noble Lords back? In the 1980s, I scheduled ITV at the weekend, and among my responsibilities was football coverage of the then First Division. Of course, there was no Premier League then. This was the period that you now see on archive match footage, where the centre forward shoots at goal and the ball gets stuck in mud six yards away. All games were played at 3 pm on a Saturday, and ITV’s pitiful contract allowed us only to show highlights of a few games on Sunday afternoon, 24 hours later, long after the results had been thoroughly digested. Unsurprisingly, the football audience was bored and was drifting away.
ITV, and then the BBC, called time, and no football was shown on British television for some months until the then football authorities finally agreed that some live football could be included in a new deal. Not many years later, a breakaway league was formed, the Premier League; a little later still, Sky Sports made the live broadcast of games the staple of every football fan’s life. Later still, the Premier League became a global force. I hiked high up in the Himalayas with my wife about 10 years ago. There were no roads or vehicles but there was solar power, and in every single village, high up in the Himalayas, young boys, almost all wearing Manchester United or Liverpool shirts, could be found kicking a football around some rocky patch.
Let us be clear: the Premier League’s success is not an accident but an unrivalled achievement, forged over decades. A high proportion of the world’s best footballers play in it; a high proportion of games produce brilliant, scintillating football of extraordinary creativity; and, unlike in some other countries, there are no invincible superpowers. Every team in the Premier League plays to a high standard and, on its day, is able to beat any other team. Thus, in the past 12 months or so we have had Wolves 2-1 Manchester City and Liverpool 0-1 Nottingham Forest. Just this last weekend—the noble Lord, Lord Maude, is not in his place, so I am sparing him a moment of pain—we had Spurs 1-2 Ipswich.
Of course, success brings new problems, and I support the measures in this Bill designed to address them. Clubs are businesses, but they are not just businesses: they have long heritages, many from over a century. As everybody who has spoken today agrees, they are deeply embedded in our local communities; they have been followed by generations of the same family. One of my grandfathers, whom I knew, was brought up in the 1890s, only 200 yards away from Anfield football ground. Perhaps unsurprisingly, all my grandchildren are now impassioned Reds. The noble Lord, Lord Parkinson, has just left the Chamber, but I am mystified that he could have grown up in Whitley Bay in the north-east and managed not to be indoctrinated in the pleasures of supporting Newcastle.
Football’s very success has made clubs targets of responsible, capable, well-funded entities but also, on occasion, of owners with neither the skill, means nor financial acumen to run them properly. There can be no excuse whatever for any club in the world’s richest leagues suffering a loss; that is simply bad management—and the noble Lord, Lord Harlech, has just given us a very vivid example of that. The provisions in the Bill to protect clubs from rogue owners, promote effective board governance, mandate financial prudence and solidify fan engagement are all most welcome. However, I have some significant reservations about the Bill as it stands.
First, it fails to address some critical issues in the game—for example, player welfare, which the noble Baroness, Lady Taylor of Bolton, mentioned earlier. Football is now inducting talented players from a very young age, yet we know that 99% will not finally make it to the top tier. I know from personal encounters that not all clubs are scrupulous about ensuring that young players maintain their studies to the level of their academic ability or about preparing them for what can be the psychological trauma of ending up with no future in football. Moreover, Sheffield Hallam University and others have identified indefensible practices and behaviours in a minority of clubs across the leagues, with apprentices used as cheap labour, facing humiliation, enduring punishment regimes and exposed to homophobia.
The second major shortcoming of the Bill is that it does not explicitly address the issue of fan safety. We have had some narrow escapes in recent years. I feared for my life at the UEFA Super Cup in Istanbul in 2019. We experienced anarchy at Wembley in the 2020 Euros final, and the 2022 Champions League final at the Stade de France, which I also attended, was a well-chronicled episode of near-disastrous failure on the part of all the multiple organisations involved, inadequately supervised by UEFA. Let us heed these warnings: fan safety, at home and abroad, requires regulatory attention. The present system has not been working.
I come to the third shortcoming. Neither the Bill nor the regulator should inhibit the development of football. The proposal for a European Super League by common consent, as an exclusive enclave, was a significant misjudgment, but I see no objection in principle to the emergence of small, tiered European leagues that are purely based on merit. We must allow the game to continue to develop, as I hope my opening observations about life in the 1980s underline and illuminate.
Finally, like a number of noble Lords, I am wholly unconvinced by the mechanism in the Bill for regulating fund flow down from the Premier League to other leagues. The Premier League is not a closed shop: three of 20 clubs go down each year and three go up—and 51 clubs have been in the Premier League since its inception. In 1992, Bournemouth were in the old Third Division; they are currently bang in the middle of the Premier League, and so far this season they have beaten both Arsenal and Manchester City. This is a league where good club governance and effective management at every level can bring success.
In the 2023-24 season, the Premier League distributed around £500 million down the football pyramid, including to the grass roots and the women’s game. That is a seventh of its broadcast media pot, and it is by far the biggest transfer of funds by any league in any sport anywhere. Absent a regulator, that has been a purely voluntary act on the Premier League’s part.
The annual transfer from the Premier League to the Championship is itself a hefty £370 million. With rising revenues of its own, the Championship, as my noble friend Lady Brady reminded us, is now the sixth-richest league in Europe, notably larger than the tier 1 leagues in Portugal, Belgium and the Netherlands.
It is crystal clear that this model is very definitely not broken. Worse still, the method proposed in the Bill for resolving a negotiating impasse between the Premier League and the Championship is a form of Russian roulette. It is simply bizarre and will mightily deter investors of quality. A number of people have spoken on this, including my noble friends Lady Evans and Lady Brady, and the noble Lord, Lord Wood.
Lord Birt (CB)
I am on my closing remarks and the time is advisory, as the noble Baroness knows. I am about to conclude.
A regulator-backed land grab of Premier League funds risks undermining the extraordinary success of the Premier League, killing the goose that lays the golden egg and reducing the massive, beneficial impact that the Premier League has had on the whole of English football and on our national life. I ask the Government to think again.
Lord Jackson of Peterborough (Con)
My Lords, the aims of this Bill are laudable. It is legitimate to be concerned about issues such as poor financial and operational management, the inequitable distribution of funds, particularly broadcasting fees, and insufficient input from football fans. I concede that, for most people, their local football club is the heart of their community, town or city; it is part of their history, heritage and culture, and the fabric of everyday life. As a communitarian, I understand and applaud that these clubs are cultural icons and often community champions. One of the most memorable occasions I remember as a Member of Parliament in the other place was attending the civic reception for the back-to-back promotion of Posh at Peterborough Town Hall in 2009.
I am not a devil-take-the-hindmost libertarian; I believe that there is a place for government intervention. It is right to intercede in a dysfunctional marketplace where there is unfairness, oligopoly, monopoly, price gouging or barriers to entry, and it is appropriate to protect the consumer in extremis. However, this Bill, while potentially improving the financial sustainability of individual clubs and English men’s professional football, does so at too high a price, with its encroachment by the state in the form of a behemoth regulator and ministerial fiat into the operation of a free market, broadly successful and lucrative business model, and private associations and private enterprise.
The impact assessment tells us that, over a Parliament, compliance and operational burdens will cost upwards of £140 million. Even the non-monetisable and monetisable social benefits in the impact assessment are essentially unquantified. The Bill represents another example of incremental mission creep that, sadly, we have seen over the last number of years, outsourcing governance and policy to reviews and consultations, and specifically to regulators.
Naturally, I do not blame the present Government for bringing the Bill forward; they actually believe in big government, state interference, regulatory overreach and that Whitehall knows best. But this legislative process began under the Conservative Government, despite it being completely at variance, ideologically and philosophically, with our values as a party of localism, free-market dynamism, minimal regulation and entrepreneurial endeavour in order to deliver profit and tax revenues to drive improved public services.
This Bill should be measured simply against the key tests. Is it proportionate? Is it necessary? Is it justified? I would answer no. Football is not unique. Woolworths was at the heart of the high street when it closed in 2009, but we did not immediately legislate to have a sweet shop regulator in the wake of its closure. Football clubs have always gone bust: Aldershot in 1992, Exeter City in 1994, Chester City in 1998, Crystal Palace in 1999, Swindon Town in 2000, and so on. Invariably, the free market corrects where there is a local demand and community support to re-establish and reconstitute clubs previously in administration and insolvent. This bespoke Bill is therefore not necessary or proportionate.
That does not fetter the discretion of Ministers or their ability to improve the English game using other regulatory or statutory levers. Surely it is not an insurmountable challenge to enhance and strengthen the existing owners’ and directors’ standards and the fan engagement standards.
I will now move from the political and ideological background to the details of the Bill, in particular its earlier parts. As my noble friend Lord Moynihan said, the Bill contains 42 delegated powers and 10 Henry VIII clauses, giving Ministers sweeping powers, notwithstanding the use of the affirmative resolution in respect of statutory instruments.
The creation of a new regulator is for me problematic. Theodore Theodoridis of UEFA is quite right to highlight the dangers of overreach and scope creep:
“While the initial intent of the IFR is to oversee the long-term financial sustainability of clubs and heritage assets, there is always a risk that, once established, the IFR may expand its mandate beyond these areas”.
He warns, rightly, of “government interference”.
Clause 45 is particularly problematic. It is drafted so very loosely, and the Government’s memorandum to the Delegated Powers Committee explicitly references a “strong steer” for the Government in developing regulations on prohibited competitions. Even Dr Jan Zglinski of the LSE, an academic football specialist otherwise supportive of the Bill, believes that the clause will give rise to litigation and disputes due to its opacity.
It is difficult to legislate for something you cannot define. How can you protect and preserve important cultural heritage assets or engage with fans if you cannot define these terms in the Bill? If one consults Schedule 11 and paragraphs 82 and 83 of the Explanatory Memorandum, one finds that neither “fans”, “local community”, nor “heritage of English football” are defined. Perhaps the Minister will consider that issue. Furthermore, Clause 2, which gives the Secretary of State powers to define “specified competition”, is unprecedented.
I am concerned by other aspects of the Bill, such as encompassing investigatory powers and data sharing with public authorities, as well as the onerous powers under Clauses 28 and 29 on the suitability of ownership and officers, and the Minister’s powers therein. I am most concerned about the powers conferred in Part 3, and particularly Clause 22, on varying the discretionary licensing conditions. Clause 22 is particularly wide and loosely drafted, and contains Henry VIII powers to enable the most onerous and far-reaching interference by the IFR into individual clubs’ everyday activities. It would allow Ministers unlimited carte blanche to change and amend the licence conditions on a whim and without appropriate notice.
This brings us inevitably to the Trojan horse: the pernicious woke ideology of identity politics inserted into the Bill at paragraph (7)(2)(d) of Schedule 5—the EDI clause. The last thing football needs is primary legislation to embed identarian zealots into the operation of our national game.
I fear that the Bill is the Dangerous Dogs Act de nos jours; driven by anecdote and special interest, it is well-meaning but egregious. After all, in respect of Clause 49, on changing the crest, shirt colours or name, is this really necessary or enforceable, and is it really appropriate for primary legislation? We all want a successful football industry and we all support the aim of economic growth, but we must be careful about killing the proverbial goose with overregulation and legislative overkill, which I believe the Bill represents.
Lord Moynihan of Chelsea (Con)
My Lords, I refer to my interests and to 65 years of attendance at Stamford Bridge. Your Lordships should oppose this Bill, root and branch. It is badly written, of course—it is a Christmas tree.
However, beyond this one very bad Bill, there is a major problem facing us: far too much regulation, with both major parties over the past two decades having succumbed to the impulse to interfere, to busybody, to regulate. Excess regulation kills economic growth, reduces wealth and suppresses human happiness. Fact-based academic studies from around the world confirm this, but, in the UK, regulation has mushroomed.
We cannot roll out a decent nuclear programme. We have demolished the London Stock Exchange, with so few companies now opting to list there. Policy Exchange cites 25 destructive Human Rights Act impositions, one for each year since its adoption. Then there is the £100 million bat tunnel: noble Lords, over the last few days, have expressed bemusement as to how it came about. People ask why these things happen. It is regulation and regulators—that is what goes wrong. My own recent book on economic growth estimates that reversing all of this would increase GDP per capita by some 13% in a decade.
If most of us agree that there is too much regulation, how come regulation has proliferated so much? It is because those few who love regulation have become adept at pushing it through. First, find yourself a problem—in this case, parachute payments and alleged financial incompetence, although it is odd to assert that about one of the world’s most financially successful industries. In phase one, cry that something must be done, and then create a further panic about diversity or equal pay and get to phase two, “The Government must step in”. Talk something about, “Football, blah, grass roots, blah, women’s football, blah”, and stir up a general feeling that a regulator would be a damn fine thing. Phase three is, “There ought to be a regulator”. So, a football regulator—what could possibly go wrong?
The Bill is actually an attack on the Premier League. It is driven by Willie Sutton’s philosophy, “That’s where the money is”. Are we so sure the Premier League will be unscathed? It pays £4 billion a year in tax and £1.6 billion to lower leagues and grass roots. With overseas TV deals, it is a great export success, and there are 90,000 Premier League jobs. It drives Britain’s soft power around the world: you can have a vivid chat about Arsenal or Liverpool in a taxi from Jakarta to Lagos. All of that raises people’s estimation of this country around the world. There are 3 billion viewers, in 900 million homes, in 189 countries.
Did this happen by accidental circumstance? No, it was private enterprise that created this. Would it have happened had a regulator had been suppressing experimentation and initiative over the past 20 years? You know that it would not. Free markets need competition, fair exchange, no rent seeking, no crony capitalism and private property rights. They wither when subjected to heavy-handed regulators. Do we really want to be known in future times as the Parliament that destroyed the global success of the Premier League?
Establish a compulsory governance code—because, after all, we know best—licences, the imposition of removal orders and disqualifications for life on not-proper owners. Look, I am as anti-oligarch as anyone, but why dissuade a billionaire from dropping a substantial proportion of their wealth into the UK to invest in a football club? Which bureaucratic regulator would be able to distinguish between a good owner and a bad one? Would Sheikh Mansour have been permitted to purchase Manchester City and turn it into one of the greatest teams of the modern era? Would Sir Alex Ferguson’s famous hairdryer have been allowed by an equality, diversity, inclusion-loving regulator? What possibly can the “E” in EDI—equality of outcome—mean in football? Football is a competition. Winning and losing is the whole point. You cannot have equality of outcome—or will the regulator require that all games end in a draw? Or perhaps, if we are to diversity, they will require that 50% of teams be women. That would be difficult when there are 11 in the team, but I am sure they can solve that, too.
Seriously, we know there will be regulatory creep. We have already heard this afternoon from a number of hungry, prowling Peers eager to add their own obsession to the regulatory Christmas tree. We are told that this is a fan-led initiative, but do these busybodies, incidentally demanding that they be put on the board of this regulator, truly represent fans? Public First’s poll asked which kind of regulators were needed. Least wanted of all was a cricket regulator, and second-least wanted was a football regulator.
Of course, with the artfulness of polling, when you offer a list of possible regulations, people say they are in favour of the most absurd things, which could eventually be added by the regulator. Force the whole club to go on mandatory EDI courses, cap footballers’ wages, give equal pay to women footballers, create quotas for English players in Premiership teams—all in favour. Just a few of those would destroy the Premier League’s success. There would be no more global supremacy, no more soft power and far less tax revenue—a depressing future to contemplate.
We must pull back from this overweening belief that we know best. We do not. Hayek’s book, The Fatal Conceit, nailed that error. I recommend it; Lady Thatcher loved it and I am sure noble Lords will, too. It is the free market that knows best. We should back off from so much regulation, and in particular from this attempt to plunder and distort that precious jewel in the economy’s crown, the Premier League.
I end by asking the Minister: has there been a request for a formal evaluation of this proposed regulator’s possible damage, both to football and to the economy? If not, will she conduct one?
Lord Hampton (CB)
My Lords, I declare my interest as a lapsed Torquay United fan and a “606” listener. I thank the Minister for her time, both in the introduction and in her very good briefing beforehand.
This Bill is badly needed and I congratulate both Governments on bringing it forward. It may have been triggered by the breakaway attempt by the ESL, but I genuinely think there is a need to regulate league football in this country. Let us not forget that, in the 1985-86 season, after the Heysel and Bradford disasters, when football barely appeared on television and attendance was at a record low, there was no European football as English clubs were banned. More recently, there were lessons from rugby union in 2022-23, when three of the Rugby Premiership teams—Wasps, London Irish and Worcester—went bust with debts totalling over £155 million. So, however healthy the game may seem now, disaster is only a few unfortunate events away.
According to Fair Game, 58% of the top 92 clubs are technically insolvent. Now, I am not an economist, but my noble friend Lord Londesborough gave us a pretty stark analysis—stark enough to give the noble Lord, Lord Hannan of Kingsclere, some problems to deal with.
Something needs to be done. Everyone has asked the question: can the IFR solve the argument about the levels of payment, let alone parachute payments? In the Bill, the badly needed scrutiny of owners seems to be toothless. The Explanatory Notes say that it can only have power over
“the suitability of an incumbent individual owner or officer where it is in possession of information which provides the IFR with grounds for concern about the individual’s suitability”.
This sounds suspiciously like a “don’t ask, don’t tell” situation. There is no barrier to politically reprehensible countries and no concerns about modern slavery or sportswashing.
We talked about fans when we had the briefing. The Bill enshrines fans’ right to be consulted. This is the best place in the world to be a fan—but what is a fan? It is easier down the leagues, where you can say that it is someone who regularly attends a game. I was passing the Emirates—I did not go in—and took a picture of the display of Arsenal Supporters Clubs. I estimated that there were 140 different clubs, including Japan, Nagpur and the rather unwisely named Iraqi Gunners.
The Explanatory Notes try to define “fans”, referring to them as
“individuals who follow and identify with the club”,
which can
“include (where applicable) but is not limited to: members of any Community Benefit Society”.
They also include
“any fans who regularly attend matches played by the club’s first team”,
which is clear. They add:
“Clubs should have due regard to the views expressed by the representative group of fans but will not, however, be bound by the views of fans”.
How will the IFR police that? Maybe it is for each club to decide what the definition of a fan is—as long as they do not go down the road of Serie A, where the hardline ultras, with their violence and often overt fascism, are courted and sometimes sponsored by the clubs.
As we have heard, one of the main drivers of the Bill seems to have been an attempt to set up a European super league, and it aims include regulating clubs so that they are
“not … able to enter into, be a member of, or participate in a prohibited competition”.
The A22 website now says that the new European super league will have:
“Participation based on sporting merit … No permanent members … Participating clubs stay in their domestic leagues which remain the foundation of European football”.
Could Premier League clubs join the new European super league? I ask the Minister: would the Premier League be able to join, according to the Bill? Far from throwing out English clubs because of the Bill, I think that UEFA will unite with the IFR to challenge any outside competition. As the noble Lord, Lord Triesman, mentioned, there could be a lot of legal work going on fairly soon.
The word “heritage” slightly worries me, too. As Jan Zglinski from the LSE points out:
“The sole issue on which support from a majority of a club’s fans needs to be established is the changing of the home shirt colours”
and the crest. He adds:
“For other changes, which can be just as significant for the fan community, such as a stadium sale or relocation, no such majority is needed”.
The Bill’s overview says:
“Heritage in this context refers to the tangible and intangible elements that define the unique historical identity of English football and its clubs, and which are passed on through generations of fans”.
This sounds less like law and more like a Hovis advert.
There is also a philosophical argument. I presume that the regulator is called the independent football regulator—rather than “Offoot”, the one name that the noble Lord, Lord Goodman, did not suggest—to avoid any taint of government interference. But will it have powers to inspect, rather like the dreaded Ofsted? I speak as a teacher when I say that you cannot accuse Ofsted of lacking teeth. Will it produce one-word judgments of a club’s performance? A RAG rating would be a good choice; it would be a sub-editor’s dream—imagine Man City getting a red card.
Currently, the Bill is a noble attempt to define the indefinable and tame the untameable. For that lucky person who becomes the IFR, three things are certain: they will need the wisdom of Solomon, the brains of Sherlock Holmes and the determination of Boudicca to succeed.
Lord Ranger of Northwood (Con)
My Lords, as a 12 year-old boy, my father took me to my first football match, the 1987 FA Cup final at the old Wembley Stadium: Tottenham Hotspur v Coventry City. It was a classic. I was thrilled just to be there. My father was not a football fan, but he had promised to take me if we got to the final. I inform my noble friend Lord Maude that we lost. Such is the lot of a Spurs fan, but I was besotted by the game and my club. So today I speak as a fan—one who watched this weekend as we lost again, this time to Ipswich.
Football is the beautiful game. It is simple, graceful and physical; fast and slow; and accessible to those who play and for the many who watch, support and listen. It is a game for everyone, which is why it has become the world’s most played and most watched sport. In that context, English football is the pinnacle of successful club football when it comes to commercial success, especially since the advent of Sky TV and its innovative partnership with the Premier League. Billions of pounds of revenue have flowed into English football. This has caught the eye of various types of club owners—some are in the game for their own passion, but, more so now, some wealthy owners seek to utilise football for other purposes, including making themselves wealthier—but the game and the fans have made our football the most watched and admired in the world.
This was never clearer than during Covid, when the world got to watch the Premier League being played without fans in the stadiums. That meant that, although we could hear the thud of boot hitting ball, there was a total absence of atmosphere, making the whole experience like watching a game in zero gravity—no noise and no atmosphere. This demonstrated how important and integral, and how much a part of the fabric of the match experience—or should I say the product?—are the fans and their passion and voices. It was so much of an issue that broadcasters started to play recorded crowd noises for the TV audience. Fans are not just for match days; they are for life.
Our football is steeped in communities, families, generations and the lifeblood of local residents. Clubs now have fan bases that span the globe, but it is the rich history that makes English clubs unique, as well as what fans sing on the terraces. Our football is not some fabricated, franchise-based, Monopoly board model where owners can have absolute power—such as in American sport, which is based on that; Major League Soccer has continued in that vein. Around the world, other sports, notably cricket, have adopted franchise-based models to turbocharge their development of leagues as commercial cash-producing machines, churning out games and merchandise in equal measure. Let me be clear: there is an audience and a market. By all means, create a product—but that is not the nature and history of our game. In our game, fans have power.
Modern-day owners can be loved, if they spend money to buy players and invest in the club—and, most importantly, if the team wins. They will be hated, if they do not win or are seen not to care about the club, and they will be hounded out. It has been said by the Premier League that its clubs have a virtuous-circle approach to their finances, investing in world-class players and facilities, in player development and local communities. But it seems clear that the old analogy to prune juice once made by the noble Lord, Lord Sugar, is still accurate, as ever-increasing amounts of money come in and go out of the game through huge transfer fees, player wages, agents’ fees and more.
So, what is the modern-day owner’s dream? What are they in it for? Maybe it is to buy a small, lower-league club, invest in the ground, buy smart when it comes to players with potential, use technology and data to inform their decisions, build a global fanbase by leveraging social media and even have a fly-on-the-wall TV show—basically, sweat the asset. Then, hopefully, you watch the value of your investment go up, with maybe a promotion or two to keep the fans happy. Is anything wrong with that? Football is now as much a business as it is a sport. We must acknowledge that. But it must still deliver for the fans, who also know that not everyone can win every game—because the magic ingredient of our game is competition and jeopardy.
Taking all this into account, and the unequal success of English football, means that an independent regulator must tread lightly—or, dare I say, it may undermine the magic pyramid. Football fans have already seen how the promised land of good intentions can end up mutilating the beautiful game. I speak of the video assistant referee—VAR. Ask any fan if they would like that genie put back in the bottle: the erosion of the undiluted joy of scoring a goal as fans in the stadium best-guess whether the goal will be disallowed, fans at home wait while watching endless replays, and the poor chaps at Professional Game Match Officials Ltd draw lines on screens. Fans are now rueing what they wished for, and I would go as far as to say that they would rather live with a few human errors than the suspension of the joy of a goal, the increased ambiguity and the removal of power from the official in black to the faceless operators miles away behind a bank of screens. Let us not let the good intentions of the excellent, fan-led review by Dame Tracey Crouch lead us into the unintended consequences of heavy-handed regulation that will potentially do similar damage to our game and its commercial success that is the envy of the sporting world.
Lord Shamash (Lab)
My Lords, I am delighted to be able to follow my dear noble friend Lord Triesman; he is now not in his place, but I was delighted to see him here at all.
I have to congratulate the Government and my noble friend the Minister on introducing this Bill so early in this Parliament. Listening to this debate, it is clear there is considerable interest across the House, and it is clear from the speeches that preceded my contribution that the introduction of the regulator will be, on the whole, welcomed.
I must declare an interest in that I am currently a director of Manchester United Supporters Trust and was its former chairman over the past decade. It is a substantial trust with over 100,000 members. It came into being following the takeover in 2005—which my friend, the noble Lord, Lord Harlech, referred to—by the American family, the Glazers, who used a leveraged buyout to acquire the club. I was the proud owner of a number of shares at the time of the takeover and I felt, like many other fans who held shares, that I owned part of the club—albeit probably only a blade of grass on the pitch, but it was my blade of grass. However, company law required that the minority shares had to be sold to the Glazer family. The funds received by the fans who were shareholders were in a considerable number of cases put into what was then known as the Phoenix fund, and the cash has been managed by our trust for the benefit of the fans as a whole.
In context, following the highly publicised leveraged buyout, the debt at the club at the time was £500 million, which I think was referred to earlier. As I understand from recent reports in the New York Times, that debt at the moment is approaching £1 billion. As I have said, I welcome the creation of the regulatory framework set out in the Bill, but a question I pose for the Minister and indeed the Government is whether the independent regulator would have the power to interfere with such a leveraged buyout of the kind that took place in 2005.
Regulation in football was first raised in 2014 in the lead-up to the 2015 general election. I was involved in setting up a specialist working party to formulate the policy that included fan ownership. Reform of football governance was subsequently in the Labour Party’s manifesto for the 2015 general election, and I subsequently learned that in fact it would have been in the Queen’s Speech if Labour had won that election. As has been discussed this evening, this new Government, following the fan-led review under the chairmanship of Dame Tracey Crouch, have now laid the Bill before this House.
At the core of football are of course the fans. There are many types of fans, and indeed the Bill does not seek to set out the impossible task of trying to define what a fan actually is. Fans range from those who sit on a sofa and watch matches regularly to others like me who have season tickets, have had them for many years and attend games, in my case not just at Old Trafford but at grounds across the country and indeed in Europe. I have been a fan for over 70 years.
The Bill sets out fan consultation as a condition on a club and the issues on which a club must consult. Consultation is to be with
“persons elected by the club’s fans to represent their views, or … persons otherwise appearing to the IFR—
that is, the regulator—
“to represent the views of the club’s fans”.
Quite rightly, the Bill does not seek to be prescriptive. However, it does not refer to the substantial network of supporters’ trusts that exist: of 92 league clubs, 73 have what could be described as community benefit societies in the form of supporters’ trusts. To be added to this number are similar trusts within the National League and below. I ask the Minister to recognise that supporters’ trusts in my experience are democratically elected, have a membership and constitution, and in many cases are regulated by the Financial Conduct Authority and operate under the Co-operative and Community Benefit Societies Act 2014.
Active trusts in many cases properly and fully engage with their clubs, and a growing number of them have fan advisory boards made up of members of the trust and those of the club. I am concerned that, if there is not a properly established trust that the club could deal with, there is the likelihood that a group of fans could set themselves up and the club could deal with them as they may offer a less critical view of the way the club is run. This of course will be a matter for the regulator through guidance and further consultation with those involved in the administration of various fan groups and the club in the future.
I am delighted that the Bill is now before the House and I am aware that most supporters will welcome the creation of the independent football regulator as being to the benefit of football in England, so that football can continue to make a major contribution to the economy of the country with its huge popularity across the globe.
Lord Taylor of Warwick (Non-Afl)
My Lords, I thank the Minister for her opening statement and for giving Peers, including me, the opportunity to discuss the Bill with her last week.
I am originally from Birmingham, which is renowned for its two leading teams, Aston Villa and Aston Villa reserves.
Lord Taylor of Warwick (Non-Afl)
I see that your Lordships agree.
I declare an interest as one of the founding members, in 2002, of the Independent Football Commission, I have been a patron of the Aston Villa Supporters’ Trust, and I was honoured to play on a number of occasions for the England parliamentary football team and indeed the Sky Sports Aston Villa All Stars team, which plays for various charities.
I support the key aims of the Bill, especially strengthening fan engagement, enhancing financial stability, protecting club heritage assets and stopping breakaway competitions. The issue is whether it will work. I am sceptical, which is why the Government should perhaps consider a sunset clause so that, at some time in the future—maybe in three to five years—the success of the regulator can be assessed.
The financial regulation model that has been chosen is based on the banking world. The Bill introduces a new concept of “backstop powers” to intervene in the distribution of TV revenue, but these are untested powers and could cause uncertainty. Banking is about finance, but football is about finance and romance. I do not hear much about an account holder’s undying love for a bank, but there are fans who will support their football club through thin and thin, through relegation after relegation. That is why I have so much sympathy for Villa’s main rivals, Birmingham City.
I note that women’s football is not currently covered by the Bill. However, I trust that the Government will keep to their promise to take forward the recommendations set out in Karen Carney’s review of women’s football, Raising the Bar. We must not forget that the first senior England team to win a major cup since 1966 was the England women’s team.
I am not in favour of EDI overreach. That is the last thing that I want to see, but we have to accept that prejudice still exists. If it did not, we would not need EDI. I welcome the commitment in the Bill to do more to improve equality, diversity and inclusion within the game. Among the 92 clubs in the top four tiers of English football, there are currently just two black managers. Noble Lords might say, “So what?”, but I do not think that is a good reflection on our multiracial nation. It should be about the colour of the shirt, not the colour of the skin. Furthermore, fewer than 2% of football governing bodies or club boards are black or ethnic minority. Again, I do not think that is acceptable.
The Premier League has many black stars—indeed, 43% of the total number of players. The new regulator’s role has been described as that of a referee. The noble Lord, Lord Hayward, spoke about being a referee, yet football referees are still woefully lacking in racial or gender diversity. Currently, there is only one black Premier League referee, 15 years after the first one.
After my father stopped playing professional cricket for Warwickshire, he became a qualified referee for the Birmingham County FA. I still remember as a small boy in the 1960s being with my father when he turned up to referee his first match in Sheldon Park. There were no dressing rooms, so he got out of his Ford Cortina in his black referee outfit, clutching his whistle. The 22 white players were waiting for the referee, not knowing who had been allocated. I will never forget the stunned look on their faces when they saw this black man coming towards them to be the referee. He said, “I want no nonsense. Get on with the game. I’m blowing my whistle”. During that match, there was not one swear word and none of his decisions was challenged. In fact, in the following months, the local FA would even get requests from club officials for “the black referee” to be appointed to their games. So, if this was possible in the 1960s, why does it remain so difficult more than 60 years later, when the conduct of top referees is in question this very week? I am hoping that the new regulator will at least look at this aspect of the game.
I asked the Minister when we met last week about cost. The cost of the regulator is unclear, and this is quite important because, if litigation results in relation to problems that this new regime might enhance, Manchester City has unlimited revenues.
Perhaps the Minister can confirm that the powers of the new regulator will not in any way conflict with or override the existing regulatory powers of the Premier League, Football Association, UEFA or FIFA. It is reported that, in September this year, UEFA contacted the Government, expressing some concerns that the new regulator would be in breach of UEFA’s rule that there should be no government interference in football.
Hopefully, the new regulator will solve the stand-off between the Premier League and the EFL concerning finance. However, we must not forget that the origin of football was not really about money. About half of the Premier Division clubs were started in the Victorian age by churches—including Villa, Everton, Man City and Southampton. Their remit was not money: it was to keep young men in particular out of pubs and into parks, keeping them physically and mentally fit. Since then, football has become the nation’s most watched and played sport. The Premier League is regarded as the best in the world. Football’s soft power brings nations together. Yes, I accept that it is now so big that this £8 billion industry cannot be left to regulate itself, but regulation must not become so tight that it creates stagnation.
Lord Watson of Invergowrie (Lab)
My Lords, I declare an interest as a long-time season-ticket owner, indeed joint owner, of AFC Wimbledon. I say “joint owner” because AFC means “A fans’ club” and I am one of 4,000 in the Dons Trust, which oversees the general direction of the club, not the day-to-day management of it.
I go to a football match at least once a week—anything from level 2 in the Championship down to level 8, which is the Isthmian and Southern Leagues. I no longer go to Premier matches, for the reason outlined by the noble Lord, Lord Ranger: VAR. In my 65 years of watching football, that is the worst development that has happened. It sucks the spontaneity and excitement out of much of the game and leaves the fans, as the noble Lord said, confused. It is a blight on the game and needs to be removed—but of course it will not be.
I was interested to read the comments recently of Trevor Birch, who is the CEO of the English Football League. When asked about VAR in that competition, he said, “We won’t be having it”. He used a term that I think was very apt when he said, “We’re authentic”. Quite.
I welcome the Bill that noble Lords have been discussing today very much because it stems from the fan-led review and will ensure that the interests of fans are heard in a meaningful way in a sector—I suppose, necessarily—dominated by billionaire clubs. The Bill will introduce the independent regulator, which I believe is necessary, given the fragile nature, to which many noble Lords referred, of too many clubs in the EFL. The word “fragile”, of course, would never be seen in the same sentence as “Premier League”, which, by contrast, is vibrant. Self-styled as the premier league in world football, it is certainly the strongest—financially, at least, though not necessarily in playing terms, something about which I shall say more a little later.
The Premier League, though, is something of an anomaly as an English institution, because only four of the 20 clubs are English-owned and only three have an English manager. Russell Martin at Southampton was born in England, but he represented Scotland as a player. In the 32 seasons that the Premier League has existed, not once has the champion club had an English manager. At the start of the current season, just over a third—36%—of players registered in the Premier League were eligible to play for England. That probably explains why the competition is not called the English Premier League, because it is actually an international league that just happens to be based in England.
That begins to explain why—as highlighted by my noble friend Lord Triesman; what a delight it is to see him participating in this debate—the England team has not been nearly as successful as it should have been. As a Scot, noble Lords will understand that this does not keep me awake at night, but the Premier League makes it harder for the England team to achieve success because of the limited pool of top-level players from which the manager can select. There is an even more limited pool from which the FA can select when choosing the England manager. As far as we know, not one of the three English managers currently with a Premier League club was deemed by the FA to be good enough even to be interviewed for the post that went to Thomas Tuchel.
Therefore, having the world’s strongest league based in England is, to put it mildly, a double-edged sword. Yet even with the considerable number of world-class players that it contains, the Premier League underperforms. Since it was formed in 1992 there have been 32 competitions for the European Cup, now the Champions League. Spanish clubs have won 12, and English clubs have won seven. Only three of the past 12 Champions League semi-finalists have been from England, and last season there was none. It is legitimate to ask where the vast resources generated by the Premier League are going other than in inflated transfer fees and player salaries—and the inflated fees for their agents.
In its briefing for this debate warning against the backstop powers contained in the Bill when agreement on financial distributions cannot be agreed, the Premier League says that they are not necessary because the EFL is thriving, but that is not what the EFL says in its own briefing. The EFL’s briefing points out that its clubs will lose around £450 million this season and are reliant on their owners to fund this shortfall, which is unsustainable and affects not just clubs in the Championship but throughout League 1 and League 2. That is why, although he is not in his place, I say to the noble Lord, Lord Hannan—frankly, he sounded as though he had stumbled into the wrong debate—that everything in English football is not well. An independent regulator is therefore very necessary.
The regulator must have the powers to decide on distribution deals between the Premier League and the EFL, not simply to choose one or the other league’s preferred figure. That assumes a genuinely independent regulator and board members without conflicts of interest, and the tests provided for in the Bill must be robust enough to make that a certainty. It is right that parachute payments, excluded from the first version of the Bill, have now been included. There is no reason why clubs relegated from the Premier League should be given a financial windfall from which to launch their bid to return to the top level, thus distorting the competitive nature of the Championship, which was set out clearly by my noble friend Lord Bassam. The parachute money should be added to the Championship’s existing solidarity payment on the basis of league positions the previous season. This would mean that the three clubs relegated from the Premier League would get the most and the three clubs promoted from League One would get the least, but it would be fairer, more equitable and would lead to a better competition.
The regulator must be genuinely independent and look after the whole of the football pyramid, because the importance of the pyramid cannot be overstated. I would like the Bill extended to level 6, covering the National League North and National League South, and the top two levels of the women’s professional game. It is worth noting that six current Premier League clubs have played at the fourth level in English football and a further four have played at level 3. I say to my noble friend Lord Bassam that although Brighton and Burnley were saved from dropping out of the English Football League on only the last day of season some years ago, prior to 2014 Luton Town spent five years in the National League at level 5; nine years later they were in the Premier League.
That is the most dramatic example of the pathway that the pyramid can provide and highlights why its sustainability is vital. The pyramid is not just about the professional game. There are 11 levels, stretching down to the grass roots, as exemplified by the story of AFC Wimbledon and—I say to the noble Lord, Lord Hannan—the resurrected Bury FC. Without any consideration for its loyal fans, Wimbledon FC relocated 60 miles away. When the fans appealed to the FA, it set up a commission which upheld the decision with the now-infamous opinion that allowing Wimbledon to remain where it had been since 1888 was
“not in the wider interests of football”.
That decision was proved spectacularly wrong because days later the fans formed AFC Wimbledon and the club entered the pyramid at level 9. After just nine years it won promotion to the EFL at level 4. This Bill will ensure that any decisions relating to changes to a club’s location or heritage must be subject to a vote by fans, meaning that the sequence of events that wrenched Wimbledon FC from its roots would be outlawed. Although there is much in this Bill to be welcomed, that alone makes it worthwhile.
That said, the Bill does have a couple of glaring gaps. Schedule 11 has a three- page index of defined terms. “A fan” is not one of them. That needs to be addressed in Committee, as does another glaring omission. This is a Bill about professional football yet not once in its 125 pages does it mention professional footballers. The independent regulator has the potential to impact the careers of those without whom there can be no game. The players have a right to know how the regulator will engage with them, which should be in the Bill. I very much look forward to getting to grips with these and other matters in Committee.
Lord Addington (LD)
My Lords, the first thing that I must do is admit to your Lordships that I am possibly not of your tribe. Of those here, I would lose the least sleep if football disappeared overnight—or at least not very much. However, I am in the minority. I was brought up within earshot of Carrow Road in Norwich and when it was a good day and nothing else much was happening, you could hear the noise coming across.
I know most people identify with a soccer team, and even I still check whether Norwich have done well and wonder what things will be like at home. It does not go further than that—I am a person who thinks that the church might look nice in good light but I do not worship there.
I welcome the Bill, at least in its intentions and approach, because I have covered sport for a long time and am interested in it. For a long time, I have heard about bad managers, bad actors and people taking over clubs. It used to be a property deal: you take over a nice city centre ground somewhere and want to turn it into flats or something else, and you offer the fans a deal that is miles away. The world has moved on and the money is bigger, but that is where I came in on this. There has always been a tradition that football attracts those who are doing deals—and fantasists are in there as well—and who want to take advantage of tradition and structure. If the Bill is about more than a business, we need the regulator. We need something for those people who feel that football and being a supporter of a club is a vitally important part of their lives.
We have a long tradition and a lot of clubs in the English leagues—and in Britain generally, but we are talking about the English leagues here. I recognise the comments that Wales should probably be addressed in Committee. There are five full-time professional leagues. Most countries get away with two—and let us face it, their trophy cabinets are a heck of a lot fuller than England’s most of the time. Look it up. How many times have Spain, Italy and Germany won the European Cup? And let us not talk about the World Cup, as the noble Lord, Lord Triesman, pointed out earlier with incredible simplicity and directness. We have a lot of these institutions, which people cherish, and that is why we need the regulation.
These are not businesses in the traditional sense of the word but something more. They can be sweated as assets, but they are not businesses as most people would understand them. They are institutions. As they are institutions that are part of our society, I would hope that the regulator will be prepared to act; there is no point in having powers unless you act—a regulator that does not act is basically a waste of paper. We will have to have a regulator that goes in when somebody breaks the rules and bites hard enough to leave a scar. They have to remember that it happened. It may not have to do it very often, but if we have a regulator that does not do it or that holds back, we will have problems. It will become bluster or a threat. We all know that, if you want an enforcement capacity, making sure that something happens is infinitely more successful than a big threat or a reference to “maybe sometime in the future”. We will have to do something along those lines.
If anybody here agrees with me—my noble friend Lord McNally should have been here, and the rest of my colleagues do not seem that inspired by this subject—
Lord Addington (LD)
I thought I would let that one fall.
If we are going to do this, what do we need to do to get out the great social power that this has? I would like to see a little more attention paid to using the great power we have in association football, or soccer—call it what you like—as a positive thread throughout society. If I remember correctly, Clause 1(3)(b) talks about that social power.
Would it not be wonderful if all these clubs that we are giving so much attention to and regulating properly did a little something that steps just outside football? I have a radical suggestion: why not have them run training schemes for people to be treasurers, secretaries and chairmen of voluntary groups and sports clubs—something small like that? That is my starter for 10. This would make sure that these clubs contribute to the society from which they draw their fan base and would make them an even better social asset.
There are many other things that have been suggested to me. For instance, should we be taking on the green agenda, as has been suggested by my own party? The right reverend Prelate the Bishop of Sheffield suggested this also, along with the noble Baroness, Lady Jones, who does not seem to be here at the moment.
Lord Addington (LD)
She is a moving target— I appreciate that. If we are going through this structure, maybe clubs can be used for other social methods, but only if they are properly regulated.
The fact of the matter is that football—particularly at many of the clubs lower down—has been hanging on by its fingernails, and by tradition. What bank manager would have put up with some of the financial stresses we have heard about recently if they were dealing with anything else? Virtually none. There is something special about football. I hope that the regulator will put it on a firmer foundation.
As to my opinion on whether we should have parachute payments, and whether the arbitration is set to go through, football has had a chance to sort this out for itself. We would not be here if football had got a hold of it, spoken to itself—the various bits—and sorted this out. The previous Government brought a Bill forward only because football did not do those things. Football could have addressed this itself, so it should not blame others for its own inactivity. We have a situation where, as all noble Lords have said, a club going down will have greater costs than a club that is already down. Whether we use parachute payments or something else, that has to be addressed. I look forward to suggestions on that.
We have something here where we are trying to make sure that something fundamental to much of our society survives all the way down in its historical structure. That is what we should be worrying about. Yes, we must make sure that it remains a success—it will be much easier with football generating the money—but that social capital, that investment of faith in this game, is something that I hope all sides will say should be preserved. I look forward to discussions at later stages of the Bill but I hope we remember that we are not talking about a business or casual activity. We are talking about something that touches many people’s lives. I know that, and I am not part of it.
Lord Markham (Con)
Like other noble Lords, I begin with a declaration of interest—maybe a bit of a confession—in that I have been a Chelsea season ticket holder for the last 20 years. I also still feel a bit stiff from playing for the parliamentary team against the Army in the Remembrance Day game yesterday. Please do not ask me the score.
I join the noble Lord, Lord Parkinson, in thanking the Minister for her inclusive approach to date. I am sure that will stand us in very good stead as we get into a lot of what I think we would all accept are the quite tricky issues in Committee. I also thank noble Lords for their contributions. As ever, they show how fantastic this House is in breadth of experience. Talking to us tonight have been club directors, former FA chairs, Sport Ministers, sports media experts, supporters’ clubs’ chairmen, and rugby referees—all passionate fans, even if some of us are misguided about our choice of clubs. I will not point those out.
We are all here because we know that, as Bill Shankly famously once said, football is not a matter of life or death; it is much more important than that. I prefer the more fitting phrase that football is the most important of the least important things. Why? It is because, as we all say, it captures our hearts and that often overrules our heads. To paraphrase the noble Lord, Lord Bach, during those 90 minutes all of us feel like brothers together in a community.
We would all agree that football clubs are a unique place. I agree with the noble Lord, Lord Addington, that they are more than just a business. They are part of the social fabric of a community and a force for wonderful social good. That is why I believe there is a general consensus among all the stakeholders—the supporters’ clubs, the FAPL, the English Football League—that there is a role for the football regulator in some of those basic protections. I mean clubs not moving away, as in the MK Dons example, the names, shirts, logos, the fit and proper owners’ tests, and the breakaway league threat—although I note my noble friend Lord Maude’s point that it was the English fans that killed it, unlike those in the other countries.
We also need to be careful in any area where the heart often overrules the head. The noble Baroness, Lady Morris, gave a cautionary tale. We all know that fans can be a fickle bunch. As the noble Lord, Lord Ranger, said, more than anything, fans care about the success of their club. If you ask those Chelsea fans whether they cared about their owner being a Russian, they probably cared the most about being very successful during that time. As the noble Lord, Lord Ranger, asked, how quickly will today’s regulator be seen as tomorrow’s VAR—not the solution to the problem?
The general consensus here is that the regulator should be light touch. The high degree of concern is for overreach—very eloquently put by the noble Lords, Lord Hannan, Lord Jackson and Lord Moynihan—and mission creep. Just in today’s debate, I noted at least eight new powers that noble Lords have suggested, and this is just the start of the process. As the noble Lord, Lord Jackson, pointed out, the £140 million of cost we are talking about for this regulator does not feel like a light-touch situation.
The biggest area for mission creep and the biggest potential involvement is the financial regulator being more and more involved in football financials. As noble Lords have said, the Premier League is the UK’s clear stand-out industry—number one in the world. Unlike any other industry, there is no doubt that it is number one. As mentioned, the Premier League is the richest and the Championship the sixth-richest, richer than the Netherlands, Portugal and Belgium. That has benefited all the clubs and all the tiers; it has led to investment in grass-roots facilities right the way through the game, as the noble Baroness, Lady Jones, mentioned.
The Premier League is the most attended worldwide of all football leagues; the second-most attended, as mentioned, is the English Football League. That is all founded on media rights value. I confess that, like the noble Lord, Lord Birt, I have some experience in TV media rights, having founded a pay TV company and been involved in many sports deals and seen worldwide the power of football. I have had pay TV businesses in Thailand tell me that they are going to have a big increase in subscribers the following year because they have won the English Premier League rights.
Why is the English Premier League so popular? It is because it has so many competitive games. Spain, Italy, Germany and France each has two or three top clubs. We would probably argue over which, but I can think of at least eight big clubs in the Premier League. As pointed out by noble Lords, we have many clubs—the Bournemouths, Leicesters and Brightons of the world—that have come in and shown real upward mobility and won competitions. That volume of competitive games really drives the viewership and the pay TV subscriptions, which drive the TV rights money, which funds everything else we are talking about here.
Fundamental to that, I believe, and if you speak to the Premier League, is the parachute payment element of it all. As the noble Baroness, Lady Evans, said, come February, any club that does not have the comfort—for want of a better word—of a parachute payment will suddenly be thinking that it has to cut back on wages and sell players because it will be in financial oblivion if it gets relegated the following season. It is not just the bottom three clubs but the bottom six, seven or eight that will be in danger of that. All of a sudden, you have a third of the games remaining, probably even more, and they become uncompetitive. The value that the world TV companies are paying for disappears.
Now, things are always a game of two halves. If you speak to the English Football League about this, which I have, it says that the flip side of these parachute payments is that relegated clubs are much richer and that two-thirds of the promoted clubs depend on those parachute payments. That distorts competition in the EFL. As the noble Lord, Lord Birt, said, the Premier League is the most generous in the world in terms of the big solidarity payments, which enables, among other things, the English Football League to be the sixth richest. So, in absolute terms, the English Football League is very rich. However, the English Football League would say that the issue is not about absolute wealth but about relative wealth: because it does not have nearly as much money as the Premier League, it is harder for it to compete.
Among all of this, we are asking the regulator to step in. That is the danger from all this, because we are asking this regulator—unlike any other regulator that I am aware of—to get involved in the redistribution of money from one entity to another. All the other regulators might talk about payments that they have to make, but they do not talk about taking money away from part of the industry and giving it to another part. Yet we are asking the independent regulator to wade into exactly that issue—the use of those powers—like some sort of super-referee. That is the danger, and I believe that we will get some unintended consequences.
There seem to be some elements in some of the detail that will actually prevent deals being done. We will put restrictions on deals being for more than five years. Again, the Premier League will say that if it is longer than five years, it is prepared to pay over more money. Is that not the basis of a potential solution? Maybe it is, maybe it is not, but surely it is not the role of the regulator to put in red lines that could stop those sorts of agreements coming in. I share the concern expressed by the noble Lord, Lord Hayward: surely, if you have only the objective of sustainability and not the objective of the success of the Premier League or the Football League, the predisposition of the regulator must be to think about redistribution between clubs in terms of sustainability, rather than their overall success. Should one of the objectives not be the success of the Football League and the Premier League?
Most of all, anything that reduces the competitiveness of Premier League and Football League games will decrease viewership and TV rights. That is a danger, because the Premier League has no God-given right to be number one. Spain and Italy used to be number one. As the noble Lord, Lord Grantchester, said, the European Champions League has absolutely been set up to try to compete with the Premier League. We really do not have a God-given right and we need to tread very carefully. At the very least, as the noble Lords, Lord Goodman and Lord Taylor, said, we should consider sunset clauses as part of all of this.
Clause 7 says that the regulator must exercise its functions in a way that avoids impacting the sporting competitiveness of any club against another club. Is that not exactly what the parachute payments are doing? They are eliminating competition in the lower half of the clubs towards the end of the season. Is that not exactly what UEFA is concerned about? It says that any member association might
“be suspended if state authorities interfere … in such a significant way that”
the association
“may no longer be considered … fully responsible”.
Lord Bassam of Brighton (Lab)
The noble Lord seems to be obsessed with competition at the bottom end of the Premier League towards the end of the football season. What about the distortion in the English Football League as a product of the parachute payments that he accepts have a distorting effect?
Lord Markham (Con)
That shows why the subject needs to be considered in detail in Committee. Leagues are deciding payments between themselves and their clubs. We are asking about the regulator and about trying to change that structure—the competition between the clubs and the different leagues. As part of that, there is the risk that UEFA will be concerned about this, so will the Minister meet UEFA to try to get its approval in advance? The last thing any of us want is England being banned from the Euros because we have a Bill which oversteps the mark.
This has been a very good discussion. There has been a lot of passion, as we expect, and a general agreement that there is real social good. But we have the UK’s number one industry here and we need to tread carefully to make sure we have a light-touch regulator without the mission creep and the unintended consequences. I look forward to those discussions in Committee.
Baroness Twycross (Lab)
My Lords, I thank all noble Lords who have spoken today. I share the strong sentiments expressed about the importance of our football clubs and the central importance of fans, which is why we, like the previous Government, are acting in this space. I have particularly enjoyed hearing accounts of what football means to noble Lords on a personal level, and I hope that the noble Lord, Lord Markham, recovers from his recent match soon.
As the noble Lord, Lord Parkinson, outlined in his opening, football means more to fans than politics, which we all forget at our peril. Today’s debate has shown the knowledge and passion in this House for football and for improving governance in the game. It also highlights, as my noble friend Lady Taylor of Bolton articulated better than I can, why the Government have prioritised this legislation. I agree with the noble Lord, Lord Addington, that had football sorted its own house out this legislation would not be required.
I respect the right of the noble Lord, Lord Hannan, to question the need for this legislation but I do not agree with him, and I note that nor did the previous Government, which is why they also bought forward legislation—
Baroness Twycross (Lab)
Fair enough. As I previously set out, the case for reform and for regulation is clear. Far too many of our clubs have been subject to poor ownership and financial distress, and it is ultimately the fans and communities who suffer when things go wrong. My noble friend Lord Bassam gave a useful overview of some of the issues with the financial distortion that occurs within football, as did the noble Lord, Lord Londesborough. The noble Lords, Lord Moynihan and Lord Maude, had a different view, one that in my view ignores the considerable financial risk that currently exists within the pyramid.
It is clear, with notable exceptions, that there is a degree of consensus across this House on key aspects of this legislation. It has the same motivation as the previous Government’s Bill, with very few changes. A number of noble Lords have raised the importance of preventing rogue owners, giving fans a greater voice, ensuring clubs have stable finances, and stopping another dreaded European super league—a point raised by my noble friend Lord Wood of Anfield. It is these issues that the Bill will deliver on through better regulation, ensuring the financial sustainability of our clubs, and protecting the heritage of the game. The noble Baroness, Lady Morris, gave a powerful description of what the impact can be on a community when things go wrong. Unfortunately, the Bill will not deal with VAR—which is the issue raised by the noble Lord, Lord Ranger—nor is it intended to.
While a number of noble Lords, including the noble Lord, Lord Maude, and the noble Baroness, Lady Fox, question the need for regulation, and others suggested we could have taken a different approach—including, as my noble friend Lord Grantchester said, that we could have gone further—we think this Bill is proportionate and gets the balance right. It will tackle harms where they exist, while ensuring that English football remains the fantastic product we all know it to be. I will respond to as many of the questions and points raised as I can but I am not confident I will get through them all, so where I cannot I will write to noble Lords and place a copy in the Library.
My noble friend Lord Bach raised a number of near misses, as he described them, over the past few years in relation to football and football sustainability, and expressed surprise that the industry has not had a regulator up to now. The noble Lords, Lord Parkinson, Lord Moynihan and Lord Ranger, and the noble Baroness, Lady Evans of Bowes Park, asked whether the regulator might create additional burdens on clubs. The noble Baroness, Lady Fox, questioned whether it was a statist regulation, I think, a point that was echoed by the noble Lord, Lord Hannan, while the noble Lord, Lord Goodman of Wycombe, raised concerns as well. I stress that the regulator really is genuinely designed and required to take a proportionate and flexible approach. That is made clear in the regulatory principles in Clause 8, which the regulator must have regard to in carrying out its functions. I hope that reassures those who are concerned about the regulation in this regard, although I know we will have a further debate on that in Committee.
The licensing provisions in the Bill are designed to deliver a bespoke, tailored licensing system. The requirements on each club should reflect the club’s unique circumstances, such as its size, financial health and risk profile. The noble Baroness, Lady Evans, raised the cost of the levy. That cost will be proportionate to the size of an individual club and the league it plays in. The regime is designed so that, where clubs are already well run, the regulator will not need to lay on extra requirements, so there should be minimal additional burdens.
The noble Lords, Lord Hayward and Lord Jackson, and the noble Baroness, Lady Evans, asked about the cost to clubs of the regulator. The regulator is required to take into account a club’s financial resources and the league it plays in when setting the levy. That should ensure a proportionate approach where no club is asked to pay more than what is fair and affordable, so a National League or League Two club can expect to pay just a fraction of what a Premier League club would pay. The regulator will be committed to providing value for money and only charging costs that are absolutely necessary for it to function effectively. There are numerous checks and balances in the Bill to ensure that, including the requirement to consult the industry on the levy and the tightly defined set of costs laid out in the Bill.
In relation to UEFA, the noble Lords, Lord Moynihan, Lord Jackson, Lord Taylor and Lord Markham, and others raised concerns that might be raised by UEFA. The Government have engaged extensively with relevant stakeholders, including the FA and UEFA, and this week the Minister for Sport had a productive discussion with UEFA and they committed to continuing to work together.
The noble Lords, Lord Moynihan and Lord Harlech, and the noble Baroness, Lady Brady, among others, raised concerns that the regulator could negatively impact investment. This Government are pro-business and want to see football continue to thrive. That is why we have designed a proportionate regulatory system with intervention targeted only where necessary. It is also why the regulator has a specific duty to, where possible, avoid adversely affecting investment in English football.
In response to the noble Lord, Lord Markham, and others, we want football to be successful. Within the Bill, I point noble Lords, including the noble Lord, Lord Hayward, to Clause 72 on the regulator’s general duties.
The noble Baronesses, Lady Evans and Lady Brady, and the noble Lords, Lord Maude and Lord Markham, raised concerns about regulatory involvement in financial matters relating to the backstop between clubs. We do not see the backstop as a first option, and we do not intend for the regulator to view it as such or for the leagues to view it as the first step they would take. Revenue distribution is crucial to the survival of many clubs; as a number of noble Lords referred to, it represents one-third of EFL revenue, and the noble Baroness, Lady Brady, highlighted how important that is to the game. I do not share her dystopian view of the model proposed, but I look forward to discussing that further in Committee.
If football is unable to reach an agreement on that distribution, it is important that the regulator has targeted powers to intervene as a last resort. Those backstop powers have been designed to incentivise an industry-led solution, delivering the right outcomes with the minimum regulatory involvement. However, given the importance of financial flows to the sustainability of the wider pyramid, if football cannot resolve this, the regulator will help to find a solution.
On financial distributions in relation to parachute payments, a number of noble Lords, including the noble Lords, Lord Parkinson, Lord Londesborough and Lord Maude, my noble friends Lord Grantchester and Lord Bach and the noble Baroness, Lady Brady, spoke about changes to parachute payments being included in the regulator’s remit. It is right, in the Government’s view, that the regulator has the right tools available to solve financial sustainability issues. This change does not mean that parachute payments will necessarily be amended or abolished. If the regulator does not have evidence that they are a problem, it will not act. But, if it does have evidence that they are harming wider sustainability, it will have the power to address that through this legislation. There are also safeguards in place with this change to ensure that the financial sustainability of relegated clubs is provided for.
My noble friend Lord Bassam suggested that the “state of the game” report should be published sooner. This came up in discussions with noble Lords ahead of this Second Reading debate. Under changes to the Bill, the regulator will now need to publish its first report as soon as possible and no later than 18 months after the Secretary of State has specified that competition is in scope of regulation. Of course, the regulator could publish sooner than 18 months, but we do not want it to rush this important market study, which will lay the foundations for the regulator’s regime.
My noble friend Lord Wood of Anfield asked whether the regulator would be able to ban matches being played overseas. FIFA is currently reviewing its position on overseas league matches. It has committed to looking at how this may impact supporters and players, among a number of other valuable considerations. While the industry is still considering its position on this matter and there are no current plans to move English matches abroad, we think it is right to ensure that clubs consult with their fans on any changes to match days, including moving the location, rather than imposing a blanket ban.
The right reverend Prelate the Bishop of Sheffield, my noble friends Lady Taylor, Lord Grantchester and Lord Watson and the noble Lord, Lord Taylor of Warwick, raised the importance of more fan involvement in clubs, as did others. My noble friend Lord Mann articulated clearly what fans themselves put into clubs, not just in terms of moral support but in the financial cost to the fans. We have strengthened measures to put fans and communities back at the heart of the game and to protect football heritage.
My noble friend Lord Mann asked what would happen if a club wished to be known by a new name. The Bill sets out a number of protections for club heritage assets, including the club’s name. If, as my noble friend said, the club wishes to be known as Red Bull Leeds or any other new name, the club would be required to get the approval of the FA. The regulator would be able to act as an enforcement backstop for the FA’s approval process. The Bill will look to protect this decision process and protect club heritage.
The noble Lord, Lord Hampton, and my noble friend Lord Watson asked how a fan of a club could be defined. As my noble friend Lord Shamash said, this might be an impossible task. I am sure there are as many views on this across the Chamber as they were noble Lords who spoke this evening—arguably more—and I would encourage colleagues to engage with the regulator on how this aspect of the legislation will be implemented in practice.
It is important, however, that the regulator itself is able to set out guidance on who may count as a fan and where it will vary according to club context. Providing a strict definition in legislation could risk excluding a number of the very fans that make football what it is. This Bill is intended to increase the fans’ say within the game.
The noble Baroness, Lady Grey-Thompson, asked about action on corporate governance and the noble Lord, Lord Taylor of Warwick, asked about equality, diversity and inclusion, with the noble Baroness, Lady Fox, taking a different view—one that, she will not be surprised to hear, the Government disagree with. This Government believe that equality, diversity and inclusion are an important part of good corporate governance and, as the noble Lord, Lord Taylor, said, there is an issue to address.
The requirements on clubs to report on modern slavery was raised by my noble friend Lord Mann. He asked whether action to bring players into scope of modern slavery reporting would require action by the regulator, primary legislation or secondary legislation. The requirements for which organisations should publish an annual statement on modern slavery are set out in existing guidance and legislation. As there is existing legislation on modern slavery, this Bill will not make separate provisions for it, as it is not within scope.
My noble friends Lord Bassam and Lord Mann asked about the scope of the regulator and whether it should or could include lower leagues and grass-roots football. My noble friend Lord Mann asked if extending the scope of the regulator to lower leagues would be via secondary legislation. This would indeed be the case. However, the Government’s view is that the regulator’s scope should be limited to where there are the most significant harms that the market has failed to resolve. Extending the scope further down the pyramid and into the grass roots would risk imposing disproportionate burdens on both the industry and the regulator.
The noble Lord, Lord Addington, the noble Baroness, Lady Jones, and the right reverend Prelate the Bishop of Sheffield raised issues of climate change, the climate emergency and sustainability. This will not be within the scope of the regulator because it will have a tightly defined scope, focusing on the issues causing serious harm to fans and communities and that cannot be solved through market regulation. Environmental issues are therefore not in scope.
On the topic of scope, women’s football was raised by a number of noble Lords, including my noble friends Lady Taylor, Lord Bassam and Lord Watson, and the noble Baroness, Lady Grey-Thompson. It is not currently included as part of the regulator’s remit. Clearly the women’s game has come a long way from when I was not allowed to play football at school, and this is a good thing. Karen Carney led an independent review of women’s football, which was published in July last year. We agree with its recommendation that the women’s game should be given the opportunity to grow and self-regulate, rather than moving immediately to independent statutory regulation. The regulator will be able to engage and share best practice with industry —for example, the Women’s Professional Leagues Ltd, which is responsible for the women’s game. My noble friend Lord Grantchester highlighted this and my noble friend Lord Mann asked if it was the case. If the picture changes, the Secretary of State will be able to conduct a formal review and, if appropriate, extend the scope of the regulator via secondary legislation— I will come to secondary legislation in a moment—to include women’s football.
The noble Lord, Lord Birt, raised player welfare. While this is not an issue that would come under the regulator’s remit, given its tight focus on financial sustainability, we recognise the point about the welfare of players exiting the game. They need to be better protected, particularly at a young age, as a matter of urgency. We are therefore encouraging the football leagues and the FA to work together to develop a consistent programme of support. We will continue to discuss it with them.
A number of noble Lords mentioned delegated powers, including the noble Lords, Lord Moynihan, Lord Goodman of Wycombe and Lord Jackson. They raised issues around the use of delegated powers in the Bill and I look forward to discussing these further in Committee. These powers are constrained through a combination of procedural, affirmative and legislative consultation requirement safeguards.
In determining which matters should be dealt with through delegated legislation, we have aimed to provide detail to give as much clarity to industry as possible at this stage, and to ensure that Parliament can scrutinise the detail of the regime. However, we also recognise the need for the regulator to have the flexibility to determine its own processes, which may need to adapt over time and will be subject to consultation with key stakeholders.
I have a response to the question about Wales, which I will speak to the noble Baroness, Lady Grey-Thompson, about afterwards. I welcome my noble friend Lord Triesman’s contribution and support for the Bill. His recognition that the existing football authorities have failed to tackle the major issues in the game is welcome. That is why we are bringing forward this legislation.
As we bring this debate to a close, I thank all noble Lords again for their contributions. Given the wide-ranging and thorough debate, I know I will not have responded to every point raised by every noble Lord today. I will try to ensure that other points are responded to in writing. In a lot of ways, this has helped us tease out some of the debates we will discuss further in Committee. There are points of broad consensus, even if there are differences in how positively some of the measures are viewed.
This is really important legislation, which the previous Government first introduced. I look forward to working with Peers to ensure that the Government now get the job done. I sincerely hope we do not need the refereeing skills of the noble Lord, Lord Hayward, to work through any of the issues.
A strength of this House is the rigour and scrutiny that noble Lords bring to the issues before them. As we have seen today, that is precisely what noble Lords will bring to this Bill, so that we make sure it is the best possible legislation before it goes to the other place. It is through this legislative process we can ensure that we avoid some of the unintended consequences that a number of noble Lords have warned against today. I am keen to work with all noble Lords across the House as the Bill progresses. I invite noble Lords who wish to talk about any issues related to the Bill to contact me and my officials.
Football Governance Bill [HL]
Wednesday 27th November 2024
(1 month, 3 weeks ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Amendment Paper: HL Bill 41-I(a) Amendments for Committee (Supplementary to the Marshalled List) - (26 Nov 2024)
Lord Parkinson of Whitley Bay (Con)
My Lords, I will also speak to Amendments 2, 3 and 4, in the names of my noble friends Lord Hayward, Lord Moynihan and Lord Maude of Horsham. I look forward to hearing them introduce their amendments later.
I am very pleased to open this first day in Committee on the Football Governance Bill and thank all noble Lords for their evident interest in it. I repeat my thanks to the Minister for the time she has made available to me and my noble friend Lord Markham as well as to other noble Lords across the Committee. I also thank her for the letters she sent this morning following the Second Reading debate; they were greatly appreciated by all who spoke then.
It is fitting that we open this debate with perhaps the most fundamental of the issues under discussion: what will this Bill do, what are its guiding principles and what is its overarching purpose? The Bill states that it intends
“to protect and promote the sustainability of English football”.
The inclusion of the word “sustainability” in this initial purpose clause is a curious matter and the reason I tabled my Amendment 1. Why should English football be merely sustainable? Taken at face value, sustainability is a reasonable approach, and perhaps a reasonable one to take in this Bill. The Cambridge English Dictionary, which is far superior to dictionaries available from other universities, defines the word “sustainable” as being
“able to continue over a period of time”.
I would not argue against English football being able to continue long into the future—that is the reason that the Bill has been brought before your Lordships—but is that all we want from it? My Amendment 1 seeks to question and, I hope, to clarify what we are trying to achieve through the Bill. By removing the words, “the sustainability of”, from Clause 1, I am trying to highlight that the Bill should be aimed at protecting English football in toto.
As I set out at Second Reading, football has an incredibly long and rich history in this country. The Football Association was the first of its kind anywhere in the world, as was the English Football League. I spoke of the importance of heritage and how the distinct identities of each and every football club arouse the passions of so many people across the country and the globe. This strength of feeling and these passions are not best encapsulated by the limited notion of sustainability; they include something much more human and emotional, which we should have a go at capturing. Surely, through the Bill, we are also seeking to protect and promote these emotions and desires for the game.
I note that the provisions on home grounds and team colours seek to work to that effect, as do further amendments that my noble friend Lord Markham and I tabled, which we look forward to discussing later in Committee. However, if there are provisions relating to this in the Bill, why does the purpose clause at the very beginning—Clause 1—not address it? Sustainability is too limited a condition for success. If we leave it as it is, would we not condemn the regulator from the start to be inert? Would the regulator not be frozen in time and unable to look to the future and to the positive beneficial changes that could be made to the game? It is important that the regulator should have a forward-thinking attitude. It should not be merely content with the current state of football but constantly looking to drive the game forward. If it does not, this whole endeavour would be, at best, a wasted opportunity and, at worst, a failure.
That is why it is so vital to question what is meant by “sustainability” in the clause and seek to go beyond that limited and limiting definition, which risks putting the sport in a box or creating stasis. As my noble friends have pointed out through their amendments, which we will consider shortly, we could, rather than striking out words in the clause, supplement sustainability. My noble friend Lord Maude of Horsham, through his Amendments 4 and 4A, invites us to extend our focus to the success and growth of football. Those are two key goals and are important when we discuss the Bill and the game. No club would want to be frozen in time, never moving forward, eschewing new ventures or winning new glories. As has been pointed out by my noble friend Lady Brady, the many advantages of English football come from achieving the right balance between growth, competition and aspiration. Should we not look to place each of those concepts in the Bill or encapsulating them in its foundational principles? Those would give the regulator a clearer guiding path and ensure that it does not stray from the objectives that the Bill and this Parliament seek to set out.
One of the concepts that my noble friend Lord Maude mentions is growth; the Bill would stand to gain from its inclusion, focusing the regulator on moving the sport forward by growing the number of fans, the amount of revenue, the extent of viewership at home and around the world, and in other areas. I hope that this would entrench from the outset a forward-thinking vision, thereby preventing the independent football regulator from falling into the trap of other regulatory bodies, which have been blinkered in their outlook.
Like other noble Lords, I have been struck by the coverage we have seen this week from the all-party group that has looked at the work and conduct of the Financial Conduct Authority. Cross-party and cross-House concerns have been raised about the way in which the FCA has gone about its work. It is important, as we set up a new regulator, to give it clear instructions about what we want it to do and clear guard-rails about what we do not want it to do.
As I said at Second Reading, it is important that we get the Bill right. If we do not provide the regulator with the necessary tools from the outset, we would be setting it up merely to fail. That would have catastrophic consequences for the game and all those in this country who love it.
Football is, as well as a hugely enjoyed pastime, one of our largest and most popular industries. The Premier League makes up the largest share of the United Kingdom’s television exports, totalling £1.4 billion in 2019-20. Football is broadcast to over 1.5 billion people in 189 countries across the world. Through that export and shared enjoyment, it amplifies our values, spreads the best of British culture and generates hugely important economic growth for the whole nation. Football is undoubtedly a significant soft-power asset for the United Kingdom, and it is important to keep that in mind as we begin our detailed consideration of the Bill in Committee.
That is to say nothing of the millions of people who follow football here at home. To all those people in the United Kingdom and across the world, the ruination of English football would rip the heart out of communities across the length and breadth of the country. I am sure that Members of the Committee would not want that, and I hope that giving detailed thought to the purpose of the Bill and dwelling on its initial clause will be a way to lift our aspirations for it and seek a more important and meaningful goal than mere sustainability. I beg to move.
Lord Maude of Horsham (Con)
My Lords, I am grateful to my noble friend on the Front Bench for the eloquent way in which he moved the amendment and started the important debate on this group. It is important that we take time to consider this properly, because the Bill, if enacted in this form, will create a state regulator with an ability to impose a levy to make exactions on the football clubs that make up the football leagues. It is important that the tone of the regulator is set from the beginning.
Lord Hayward (Con)
My Lords, before I start my comments in relation to my amendment and the others in this group, I want to thank the Minister for her kind comments at the end of Second Reading, when she said she hoped she would not need to call on my refereeing skills too often. I appreciated the thought, but when she made that comment she was probably unaware that, when I qualified as a rugby referee, the laws said that the decision of the referee was correct and final. Given that breadth of my ruling, I am quite willing to use it on any number of occasions.
At Second Reading, the noble Lord, Lord Triesman, drew attention to our failures at national level, but, of course, this legislation relates specifically to the league clubs. In proposing amendments to the Bill in a number of places, I am not saying that everything that exists within the leagues is perfect—it is not; what I am asking in my amendments and in my probable support for others is whether this Bill needs substantial change.
I have tabled an amendment to insert “success”. I said at Second Reading that I was disappointed that there was no reference to success at any point within the Bill. My noble friend Lord Maude just referred to project creep. Clause 1 says that the purpose of the Bill is to
“promote the sustainability of English football”,
but the Explanatory Notes refer to
“the primary aim of ensuring the long-term sustainability and resilience”.
Somebody has immediately written in another element of what the regulator’s responsibility would be. There inevitably will be creep, and it is therefore important that we include some other terminology to which any regulator needs to operate.
The world of sport is changing and changing fast. We cannot, as the noble Lord, Lord Maude, said, work on the basis that one is going to have an English Football League and a Premier League, and that is fine, and it will achieve what it achieves now without any change. We see the NFL hosting matches in this country. Why is it doing that? It is because it wants to extend its footprint and income on a worldwide basis; it wants to challenge other sports. Equally, American college football has reorganised recently. If we look at tennis, cycling and every single major sport, we see that they are reorganising because they are trying to extend their footprints to a worldwide base. The IPL is a classic example of how a sport has been changed. I agree completely with what the noble Lord, Lord Maude, said about how, with the way this Bill is phrased, football will be surrounded in aspic, it will carry on, and we will protect everything; there will be no change. What will happen then is that other sports take over on a worldwide basis in terms of viewership, income, finance and therefore attention around the world.
My amendment would insert “success” in the first clause and in one or two other places. I looked at the impact assessment—I intend to return on a number of occasions to that, because to be blunt, it is not an impact assessment. As the noble Lord, Lord Maude, suggested, the figures are interesting; I would be generous to say that I think they are interesting. My understanding is that some of the clubs that were asked to give an indication as to the costs that would be involved said they did not know. I would like the Minister to indicate what detailed figures were identified by the clubs that were consulted.
Lord Goodman of Wycombe (Con)
My Lords, I support the amendment moved by my noble friend on the Front Bench, and those spoken to by my noble friends Lord Maude and Lord Hayward. I will also offer some expression of sympathy to the Government, because it is not altogether clear what the origins of this word “sustainability” may be. I suggest that they go back to the original so-called fan-led review produced by Tracey Crouch, which I have here and which noble Lords will have read. The Bill is drawn expressly from the so-called fan-led review.
I say in parenthesis that “fan-led review” seems a strange title for it, since Dame Tracey emphasises in the report that its conclusions are hers alone. Although I pay tribute to the work she did and the consultation she undertook, she received 20,000 responses and there are some 33 million football fans, but we will leave that for a moment.
I will read the very opening of Dame Tracey’s foreword as it sets the tone for the Bill as a whole and for an element that is missing from it. She wrote in her introduction:
“For those who say that English football is world leading at club level and there is no need to change I would argue that it is possible simultaneously to celebrate the current global success of the Premier League at the same time as having deep concerns about the fragility of the wider foundations of the game. It is both true that our game is genuinely world leading and that there is a real risk of widespread failures and a potential collapse of the pyramid as we know it”.
So Dame Tracey made two points. One was about the success of the game and the other its fragility and the potential failures, but the oddity of the way the Bill is presented—my noble friends all picked this up and elucidated it in their speeches—is that the first part of the Bill refers only to the fragility of the system by using this word “sustainability”. There is nothing about success in it. I suggest to Ministers and to noble Lords that some reference to success would be a better reflection of what was originally in Tracey Crouch’s report and the balance that she gave between the fragility and the success of the game—for the two, after all, may be bound up together.
Lord Goddard of Stockport (LD)
My Lords, I apologise for missing Second Reading. I feel like I am coming on at half-time into this debate, but sometimes if you come on at half-time you have a little bit more energy.
I want to address the sustainability issue, because it is fundamental to what we are trying to do. I am not sure whether any other Member of this House has been in the unenviable position I was in as a leader of a borough, when the local football club came to me and said, “We’re going to go bankrupt and go bust unless you financially support us”, which I had to do at Stockport. We offered all our support, and we did it for a reason. It is more than just a football club, as other speakers have said; they are part of the fabric of society and of communities. They are economic drivers for towns. Most of these football clubs were built in town centres. They kick off at 3 pm on a Saturday because men, predominantly, used to work Saturday morning and they would go to the football in the afternoon. As we watch global football now, we see football matches at 5.30 pm, 8 pm and 10 pm. No one cares about the supporters. When Newcastle played West Ham the other night, the last train home from Newcastle left before the final whistle.
There is a bigger picture at stake here about how you regulate and control football, so my opening comment is that the sustainability bit—the bit that says a football club must be able to sustain itself—must be core to what we are trying to do. On all this saying, “The Premier League will look after itself”, I wish people would not keep bringing the Premier League in as the golden egg. It is the Championship, League One, League Two and the non-league teams—that is your pyramid. That is part of the regulator’s job: to secure their sustainability.
I say to all Members when they go through the Bill —some things in it are quite laudable and supportable—that the aim is not to get into the situation we have got into before, where the six that were going to join the European league could have collapsed the pyramid. That needs to be stopped again. Owners buy a football club like somebody buys a yacht or a hotel. That has to be stopped, as does changing the colours a team plays in and changing the ethos of a club. That is regulation, but at the heart of it is sustainability. That needs to be woven into the Bill somewhere, if not on the face of it: sustainability absolutely must be included in the regulator’s remit.
Lord Birt (CB)
My Lords, sustainability is an insufficient word to describe what the Bill should be trying to achieve. It is necessary but not sufficient. We need football to flourish, develop and innovate and the Bill should make that extremely clear. As I mentioned at Second Reading, I have been around a long time and remember when football was highly conservative. I remember when football bitterly resisted the notion of live broadcasting, which was completely and utterly to transform and create the modern game.
The regulator must not stop football developing, and that needs to be crystal clear in the Bill. Football needs to continue to innovate, as it has done over the last 30 years. The notion for the European super league was quite wrong and rightly kicked into touch, but there are other possibilities in the modern age for having European leagues based on merit and allowing the game to develop. Live-streaming games which are not broadcast live on a subscription service for fans would be a perfectly reasonable way to allow the game to develop. Let us ask the regulator not to stand in the way of the game continuing to improve as it has done so successfully over recent decades.
Baroness Taylor of Bolton (Lab)
My Lords, I want to make a few brief comments, not least because, as I have been here rather a long time, I know what is happening when speakers use the words “word search” and “dictionary definition”. It is not exactly intended to accelerate the passage of a Bill. I will be brief even if others, perhaps, were not. I remind Members opposite that this Bill came out of an inquiry from a Conservative former Sports Minister and was a Conservative piece of legislation introduced in the other House, so it is not exactly rushed. In terms of sustainability, there are a heck of a lot of clubs that would settle for any guarantee that they had a future and that the future was more secure for them.
Lord Hayward (Con)
I have great respect for the noble Baroness, but she just made reference to comments I made in relation to word search. I believed that doing the word search emphasised the point I was trying to make in relation to the amendment that I had tabled and the comments that other people had made as well.
Baroness Taylor of Bolton (Lab)
That is how the noble Lord saw it, and I will say it how I saw it. What I was going to say in relation to the last contribution was that, yes, we all want the football leagues—the Premier League and everybody—to flourish and be more successful, but football will be a success only if the whole pyramid can flourish and be sustainable.
I want to say a word about Amendment 10, which is just one practical suggestion that could be considered to help clubs manage their own financial stability. One of problems we have seen in football over recent years is a degree of optimism on the part of football management about what it can achieve by minimal investment. Amendment 10, which my noble friend Lord Bassam and I have tabled, suggests that regulated clubs under the Bill should meet a financial commitment to have resources for at least six months. Many businesses are under very similar obligations. Charities have to have some financial security, so it would be worth considering whether we should actually make that kind of obligation something that the regulator should look at because, unless we get the overall funding of football clubs more sustainable, the whole pyramid will not be sustainable.
Lord Moynihan (Con)
My Lords, I speak to my Amendment 3, and in so doing will cover a number of other amendments in the group. I say to the noble Baroness, Lady Taylor, that I see this as a Bill that is almost uniquely all-party. Both Front Benches are in favour of it. One introduced it in another place, albeit for another purpose; the Prime Minister at that time talked about dropping a legislative bomb in the path of a possible breakaway super league. It has morphed quite considerably since that time to take into account many other issues.
In a sense, it is a Bill of two parts, and they have not always completely aligned. On the one hand, there is the role of the regulator with regard to the financial success or otherwise of English football. We will come to what that means in a moment, because it is fairly important. On the other hand, there are the many recommendations that came out of the fan-led review. The noble Baroness and I have both been around a long time; it is about 40 years since I started in the other place, and I have rarely seen a Bill with 340 amendments tabled from all sides of the House before we got to Committee. That is because many Members of your Lordships’ House are interested in the fan-led review; equally there are those—I echo the words that she has just said—who are concerned indeed that a regulator should not diminish or damage the success of the football league on which the waterfall payments depend. The more successful that Premier League is, the better for football and the better for everything that we are looking at.
My noble friend in sport—dare I say that?—the noble Lord, Lord Mann, looked just a moment or two ago as if he felt that spending too much time on the Bill was nearly as depressing as three minutes before the end of the Swansea-Leeds game at the weekend, and some noble Lords opposite look as though that is how they feel. However, at the weekend he was awakened by a wonderful goal that led to a 4-3 victory by Leeds, which we both celebrated.
I want to focus first on the important issue of the Delegated Powers and Regulatory Reform Committee, because it is important that we recognise and understand clearly what it stated. It said:
“The fundamental purpose of the Bill is to ‘protect and promote the sustainability of English football.’ … One must go through a series of definitions only to find that the Bill does not, after all, provide the definition of English football. Ultimately, the meaning of ‘English football’ depends on regulations to be made in due course by the Secretary of State—albeit by the affirmative procedure”.
The report stated:
“‘English football’ means ‘all regulated clubs and specified competitions, taken together’. A regulated club means a club that operates a relevant team. A relevant team means a team that is entered into, is a member of, or participates in a specified competition. A specified competition means a competition specified in regulations made by the Secretary of State”.
That means that the meaning of English football is deliberately left unclear on the face of the Bill that we are debating in this critical Committee. The answer will emerge only after the Bill is enacted, when the Secretary of State makes regulations to fill in the definitional gap left in the meaning of “specified competition”. As a result, the remit of the new regulator is presently unclear. The report goes on to conclude with a recommendation that
“the power of the Secretary of State in clause 2 to define ‘specified competitions’ should be removed from the Bill. Government policy is clear—that the top five leagues of the men’s professional game should be regulated. This policy should appear in primary legislation, not be relegated to secondary legislation”.
My noble friend who has just spoken from the Back Benches is also aware that, as we have discussed, there is a question of hybridity about the Bill. When the Minister comes to respond to this set of amendments, I would be grateful if she could say, first, what she intends to do to give clarity to the issue of English football and what it means in the context of this legislation and, secondly, answer the question on hybridity. Until we have answers to those two questions, we have a number of challenges. I think there is widespread agreement across both sides of this House that there should not be a whole series of major decisions left to secondary legislation. They should be in the Bill and we should be considering them in detail as we progress.
On the question of sustainability, which is key to this series of amendments and the first part of this legislation on the role of the regulator, I hope that Amendment 12 in the name of my noble friend Lord Maude commands widespread agreement across the House. It provides that football needs to continue
“to be globally competitive in relation to audience and quality … to attract significant domestic and foreign investment …. to grow economically in terms of commercial revenues, domestic and international broadcasting agreements, and asset and enterprise values”
and continue
“to produce industry-led agreements on the distribution of revenues”.
Capital will travel overseas if that is not the case. Fans will benefit from ensuring that they and their clubs see success in English football, and that success is driven by a successful Premier League.
We can debate at length how much money flows through to the rest of English football but, unquestionably, the more successful the Premier League is, the better for the fans and better for the clubs that should benefit from that. The regulator is appointed in part to opine on that relationship, so it is critically important that the regulator takes into account the success of the Premier League and of English football. Indeed, the Prime Minister is very much on that page as well. He has recently pledged to get rid of regulation: his view is that he would
“do everything in my power to galvanise growth including getting rid of regulation that needlessly holds back investment”.
So we need to explore in detail the powers of the regulator and what it is going to do—and immediately, that is a highly complex area of regulation.
The regulator that we are appointing here also has to work alongside the regulations put in place by the Premier League, the EFL, UEFA and FIFA. We have already seen what happened when UEFA came forward and said, “We don’t like one of the powers that you’re giving to the regulator”. The Government immediately said, “You’ve told us to jump—how high? We’ll remove that from the Bill”. We therefore have a highly complex tapestry of regulation and are adding significant further regulation to that. I am going to look, in further deliberations of this Committee, at how we align the work of the regulator to the UEFA financial fair play regulations.
The point that the Minister made in Committee was really about the number of Premier League clubs that have been in trouble over the years. She kindly referenced and name-checked my comment in her letter, which we have very much appreciated today. She said:
“The Noble Lord, Lord Moynihan, referenced there having been ‘only seven liquidations since 1945’. For the fans and communities who bore the brunt of those failures, that is seven too many. There have also been over 60 instances of professional clubs entering administration since 1992”.
Yes, I agree that there have been seven liquidations since 1945 and seven too many, but that is nothing like the number of liquidations and insolvencies we see in society at any given time. The numbers for the country at large are substantially greater and football has been highly successful. Only last year, something like 25,158 companies went into liquidation in the country at large, with 2,827 of those being compulsory liquidations.
So I think that the success of English football has been underestimated by the Minister and by those have been compiling the arguments that, in some sense, we should not on the face of the Bill recognise the importance of growth, financial success and financial sustainability, which are at the core of the amendment that I have tabled.
With those initial comments, I will just add one other very important point for the consideration of the Committee. All the indications are that in France, which has far greater regulation, and in Germany, which has much greater regulation as well, there is no evidence that that regulation has forestalled the insolvency of some of the clubs made insolvent under those two regulatory bodies. On the contrary, it is not the regulation that stops insolvency after all. I am very happy to give way to the Minister on this. If there is a club that seems to be in financial trouble, what will the regulator do about it? At what stage will he or she intervene? At what stage will they therefore state whatever steps they feel should be taken at that point?
That is not on the face of the Bill because, no doubt, it is the Minister’s view that that should be left to regulation and it is up to the regulator. But the reality is that you appoint a regulator only if you really believe there is a serious problem and you know exactly what that regulator would do in any given circumstance. That has not been the case in either France or Germany, which are the two major case studies relevant to us at this stage. So I would echo the points that have been made. We need to make sure on face of the Bill that the regulator recognises that football should be as successful financially as possible, and that nothing the regulator does should inhibit the success and growth of the financial success of football. With those comments, I am supportive of both my noble friend Lord Maude’s amendment and, clearly, my own.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to speak in Committee on the Bill, and obviously at Second Reading as well. I put on record my thanks to the Minister for her helpful and comprehensive letter today, which also referenced my reference to Woolworths. I think she might have misunderstood what I was saying, but we will let that pass.
I will focus specifically on Clause 1, which is the centre of this Bill: it is the cause, the purpose and the raison d’être of this Bill. As I mentioned at Second Reading, if you cannot adequately identify what the problem is that you are seeking to solve, you are very unlikely to reach an efficacious solution. This Bill—this Act, assuming it gets Royal Assent at some point—will be a living document. It will be the Government, the state, via a large regulator with unique powers, intervening in what hitherto has been a very successful commercial activity—perhaps one of the most successful commercial and business activities in the whole of our country, and certainly one that is globally very well regarded.
Therefore, it is incumbent on the Government to look seriously at the excellent amendments put down by my noble friend Lord Parkinson and to take on board some of the points raised by my noble friends Lord Maude, Lord Moynihan and Lord Hayward. The odd thing is that the Bill is drafted in such a way that it ignores some of the key points made in the impact assessment. The first page of the impact assessment contains a commitment to “improve financial sustainability”, which is in my noble friend Lord Moynihan’s amendment. However, in the Bill the wording is quite opaque and that wording does not appear.
Equally, focusing narrowly on Clause 1—which is the reason the Bill is coming to this House—I note that it seems odd that the local community is not defined in primary legislation. Ministers will say, “That’s because we need the leeway to bring forward subsequent secondary legislation and statutory instruments for unusual circumstances”. That is not an ignoble or unfair interpretation, but it is a difficult proposition to put to this Committee when we have to judge what is in front of us and not what might happen in the future in a very complex market model. So that omission is still problematic, which is why I repeat it from Second Reading. The other issue is that clubs’ fans are not defined definitively in the Bill, probably for the same reason.
Lord Bassam of Brighton (Lab)
My Lords, I am intrigued by the amendments from the Benches opposite because there is a degree of amnesia in some of this debate. The noble Lord, Lord Parkinson, moves to strike out “sustainability” from Clause 1. I have a copy of the Bill that was introduced in another place at the beginning of the year. In Clause 1, “Purpose and overview”, it says:
“The purpose of this Act is to protect and promote the sustainability of English football”.
That is the same wording as is in the Bill before us. I say to noble Lords on the Benches opposite that this Clause 1 is exactly the same as the Clause 1 that the noble Lord, Lord Parkinson, would have brought to this House, had he still been the Minister and had the Conservative Party not lost the general election. So I am extremely puzzled by the approach of noble Lords opposite.
Lord Maude of Horsham (Con)
Picking up that point, I think the noble Lord is trying to make it appear as if this is a partisan thing, but it is not. I would have tabled exactly the same amendments if this had been the previous Government’s Bill that he refers to. This is not a party-political matter at all; it is about a game that we are passionate about and that is a spectacular success. We do not want to see something done that damages it.
Lord Bassam of Brighton (Lab)
The noble Lord has the benefit of supporting Horsham FC. I have the benefit of supporting Brighton and Hove Albion, and I am absolutely passionate about my football club, which is one of the best clubs in the Premier League. I would not be party to wishing to do anything that damages the Premier League, and neither would my colleagues on these Benches. We recognise, understand and appreciate that the Premier League is an institution that is more than worth supporting. It is the best in the world and we know that.
The other thing that noble Lords need to focus on in this debate is that when the noble Lords opposite were in government, they were very keen to have this legislation. A DCMS report published in September 2023 quoted the findings of a research paper that showed that there continues to be
“a widespread issue of clubs being run in unsustainable ways from a traditional financial analysis viewpoint”.
That was then the position of the party now in opposition, and I am hoping that it has the same range of concerns about our football finances now as it did back then, because it was quite clear that that was the primary motive for the legislation, and it is the primary motive for the legislation today. It is about its financial sustainability.
If a product or a good cannot be produced in a way that is sustainable, it will not be, as the noble Lord, Lord Hayward, made a great song and dance about, successful. That is why my noble friend Lady Taylor and I have tabled our amendments in the first group—to focus on making sure that the Bill and the regulator that the Government are seeking to create promote the sustainability and success of our beautiful game. That is why we are here today; that is what we are arguing about and what we are so passionate about. It is for that very reason that we tabled our Amendment 10 to Clause 1.
I hope that the party opposite is not going to suffer from this collective amnesia for too long, but that it will get behind the Bill, get behind the purpose and objectives set out very clearly in that first clause—a clause that, in government, it amply supported and gave voice to. We need to get behind the Bill and make sure that it is sustainable for the future.
Lord Mann (Lab)
My Lords, I declare an interest in the Register of Lords’ Interests, as the elected chair of a football supporters’ group with 13,000 members. On Sunday, the weather advice was that nobody should travel in south Wales. I and 3,000 others did travel in south Wales. On Sunday afternoon, we travelled, not of our choice but because football fixtures are being changed to all sorts of obscure times. We went, and returned very late, very happily. That will not be the case at all fixtures if I wish to attend this House. In the new year, we have three fixtures that have been shifted to 8 pm on a Monday, and that does not quite balance with the sitting times of the House. I am just one fan, but there are many thousands who face that.
Imagine trying to get to Plymouth by 12.30 pm on a Sunday. That is what we had to do. It is not an easy way of life, and it is not just the bishops who are losing custom by this odd scheduling. It affects people’s ability. If there were to be an added word in here, it should be “enjoyment”—enjoyment of the game. Yesterday, one club, Manchester United, announced its new prices for this season. For a child, the minimum price is £66. That was my first away fixture, supporting Leeds United, aged five. I was lifted over the barriers—in for free—as I was at Leeds until the age of eight or nine, because that was how children were welcomed then. I did not pay to go in for the very many hundreds of matches I went to in that age span, and now it is £66. Well, it is a business.
The noble Lord, Lord Moynihan, who has good football taste, was none the less slightly awry with the example he gave in terms of liquidation, insolvency and the problems. If we take where I live—I will take Lincoln City and Notts County at random—both were about to disappear. The only reason they survived is that the supporters saved them. That is the difference between this industry and other industries. There are countless examples. If they were private sector businesses, they would have vanished.
In some cases, the fans could not do it. In 1987, as a Leeds United fan living in London with a few friends, I got a season ticket for a club called Wimbledon. It was a good choice; we got to the cup final with Wimbledon. I had a young daughter and I could not get to Leeds all the time, so a group of us went to Wimbledon in our spare time. If you are a fan of Wimbledon and your club wins the cup after coming from nowhere, you see what that does for the area and the fans, and people in south London. Then, a few years later, your club is extinguished, gone, shifted to Milton Keynes—vanished. The fans had the wherewithal to set it up again as AFC Wimbledon, and build from the bottom up, which is what they are having to do at Bury.
I almost thought that one or two noble Lords were suggesting that the state should not intervene in successful business, and I will end on this point. If we combine Scottish and English football, the most successful moment in terms of success on the pitch was around 1971. England had won the World Cup; Manchester United were the first English team to win the European Cup. Celtic had won the European Cup in 1967; Rangers were about to win the European Cup Winners’ Cup. We had the Cup Winners’ cup and the Fairs cup, and a whole succession of English teams about to take on the European Cup through the 1970s and dominate world football. It was the one moment when both Scottish and English football were at their height.
On the 2 January 1971, at a high moment, 66 people died at Ibrox football stadium. The state did very little intervening then. Then there was the fire at Bradford— I knew people who were there—when the state had not intervened sufficiently in the industry, and people died. Then there was Hillsborough, where people died. The state has intervened in the sport and the interventions, when they have been hard and focused, have been transformative. It was not the owners of the clubs who brought in the model of football with all-seater stadiums, revenue generation and corporate hospitality. I shall tell you the first club that did it. It was Glasgow Rangers. After 1971, their manager, Willie Waddell, went to see how others across the world did it. They rebuilt the stadium before anyone else did because of his experience of seeing people dying in front of him—that is state intervention.
In the balance between the fans, the state, the entrepreneurship and people’s ability to put in money—if anyone wants to put money into our club, we would be delighted because we are not trying to stop that—we want to see a slight tilt so that the fans are listened to. If we end up shifted to the bottom like the fans of Bury—I do not think we will, but you never know—the state should allow us to do something that they were not able to do; that is, for more to be done along the lines of what was done by the genius of those Wimbledon fans. It took them years to get back up. Wimbledon Football Club, having beaten Liverpool in the cup final in 1988, should have been able to survive seamlessly with their fans. That is the point of this regulation, and it is why I hope the Opposition Front Bench will be reluctant to further push this line of argument.
There are interesting issues that should be explored in getting that balance right. It will be legitimate to go into them and hold the Government to account, to question and even amend. Sustainability means that I, as a fan, will have my club in the future, whether it is badly or well run. That is what is critical about this legislation, and I commend the Government for bringing it forward.
Baroness Brady (Con)
My Lords, I refer the Committee to my interests, which are declared in the register. I want to give the noble Lord, Lord Mann, a bit of comfort in that had he been going to a Premier League away game, he would have paid only £30, because there has been a cap on the price of away tickets for the past five years.
Lord Bassam of Brighton (Lab)
I am told that EFL clubs are likely to lose around £450 million in this current football season, and I think the noble Baroness said something similar. The regulator in this Bill, which is focused primarily on financial sustainability, is surely a good thing for football regulation because it is trying to make sure that those clubs—yes, involved in the business of risk and jeopardy—are financially sustainable and have a duty to their communities, and that their activities do not risk the future of those clubs. The point of the legislation, from the previous Government and our Government, is to make sure those clubs can be sustained and not have undue financial risk.
Baroness Brady (Con)
I thank the noble Lord; he made his point very well. The Bill does not say “financial sustainability”. Sustainability is not defined. If you put sustainability above overall success, growth and the competitive nature of the game, you might have a safer league, but you will have one that no one wants to watch. You might, notionally, have a more sustainable ecosystem, but it will also be smaller, more boring and poorer. If sustainability is the number one aim of the regulator, can the Minister explain to us what she and the Government consider to be the definition of the “sustainability” of English football? Can she also explain why sustainability does not include supporting the sustainability of the success and growth of the Premier League?
Lord Londesborough (CB)
My Lords, I intervene briefly as an impartial Cross-Bencher. In the interest of productivity, I am aware that we are still on the amendment to:
“Clause 1, page 1, line 4”—
although many of us are still discussing line 1. I will suggest a compromise. The word “sustainability” on its own is too undefined; I suggest that it should be “financial sustainability and success”—thereby combining Amendments 1, 2 and 3.
However, I do not agree with Amendment 4. On growth, I would go back to the banking sector. I know that football is a very different industry, but banking and the financial services in the noughties had the most phenomenal growth rates and we are still all picking up the tab as taxpayers. That was not financially sustainable. So my suggestion is that the words should be “financial sustainable” and “success”—those two together.
Lord Ranger of Northwood (Con)
My Lords, I will speak briefly in support of Amendments 1, 2, 3 and 4, because words matter. We have been debating the words “sustainable” and “sustainability”, but I will mention the word “unpredictable”—as was my team this weekend in trouncing Manchester City 4-0 away; a completely unpredictable result by all accounts. That is exactly what the Bill is trying to work against—if somewhat inadvertently.
Having spoken to many organisations in the professional game, I get a sense that the Bill is trying to establish a vision for the game that it does not need to. That vision needs to be left in the hands of this successful industry. That is why there is a general feeling that, when we are focusing on whether it is sustainable or on how much we are listening to fans, we are stepping in to an arena that we do not actually want to control and should leave to the people who have been so successful so far.
Many views have been expressed—including, with respect, those of the noble Lord, Lord Mann—on football’s past, but we should be cautious of looking back through rose-tinted spectacles at the history of our game. Yes, it is celebrated by fans, but the future is about innovation, as the noble Lord, Lord Birt, said. Whatever we say, the game will evolve—because of pressures from fans and commercial pressures. The European Super League did not succeed, but have we seen what UEFA has done with the Champions League? It has evolved again, with more games and more clubs. I am not sure that I completely understand the process it works in at the moment, but it has created a whole new league. Again, as the noble Lord, Lord Mann, said, maybe the Church is losing some of its customers, but these leagues and clubs are gaining customers, eyeballs and commercial contracts that are only getting bigger. So something is succeeding and it will continue to succeed and drive the evolution of our game.
I say in conclusion that, as we go through the Bill and look at the regulator, can we say that the regulator does not drive the vision of football—leave that to the successful industry—but steps in if there is going to be significant failure? That is what a good regulator should do.
Lord Watson of Wyre Forest (Lab)
My Lords, I apologise to the Committee for withdrawing from the Second Reading debate at short notice because of an urgent personal matter, and also draw the attention of the Committee to my declaration. Like the noble Lord, Lord Mann, I have occasionally not paid for football tickets as a guest of the EFL and the Premier League, mainly in my former role as shadow Culture, Media and Sport Secretary.
It is right that we focus on definitions, and I should like to point out a couple of the amendments in this basket. We are saying that we want to protect the sustainability of football and are effectively or explicitly saying that football is so unsustainable that the state wants to intervene in a market to such an extent that we are going to create a new regulator—another regulator. I have been in politics for about 40 years and I have been in many debates where people often talk about the failure of regulators and regulation. If there is one lesson that I have learned from that, it is that the politics of regulation are this: you can always delegate power but you can never delegate responsibility.
What we are saying to 1.5 billion people on the planet is that we are so concerned that your weekly viewing of English football is so unsustainable that politicians, the ones who moved Clause 1 last year and the ones who are moving Clause 1 this year, are taking responsibility for your hopes, desires, heartache and disappointment every week when you watch English football. Well, in the words of Sir Humphrey Appleby, that is about the bravest and most courageous decision I have ever seen taken in either House of Parliament. Good luck with that.
My second point is this: I have been in another bit of the territory, trying to get the Secretary of State to define what she means by “football fan”. Whatever you think a football fan is, an English football fan—the ones I am thinking about today watch a lot of football, including the World Cup and European Championship —wants everyone in this House to guarantee that our national team will be able to play in every international competition.
The noble Lord, Lord Maude, has spoken to Amendment 6, which he has told the Minister is very helpful to the Government. On this occasion, I agree with him. This is explicitly saying to English football fans, “We will not allow our regulator to allow the rules of UEFA or FIFA to be breached such that there is a threat to England playing in future competitions”. We are not going to resolve this discussion today, but I guarantee that by the end of the passage of this Bill, this Parliament will have to say to 1.5 billion English football fans that we will guarantee that England can play in an international competition. I should be grateful if, in his summation, the Minister could reassure at least this English football fan that that will be the case at the end of this Bill.
Baroness Evans of Bowes Park (Con)
My Lords, I rise briefly to support Amendment 4, to which I have added my name. I must admit that I am slightly surprised that it seems controversial to want to make it clear in the legislation that the purpose of the Bill in setting up the new regulator is to ensure the continued success and growth of English football. That is exactly what the regulator, or part of the idea behind the regulator, is supposed to do. To achieve sustainability and resilience in the game, the regulator will need to preserve and encourage the conditions for growth and continued success. So, I do not quite understand the issues around having those objectives added to the Bill. As we have already heard, there is huge success that can be built on.
Lord Markham (Con)
I must admit that I am similarly scratching my head over how the debate seems to have gone into whether it needs to be one or the other—whether there is somehow a trade-off between sustainability and success. I am just surprised that success is not something that we would all want. I do not just mean success in terms of England playing in all the tournaments, which I hope we would all agree we want, and I do not just mean success in terms of taking on responsibility, as the noble Lord, Lord Watson, says, for how well the teams do. We are talking about the success of the game in terms of the financial wherewithal.
I am a big believer that in life you want to maximise the size of the cake before you argue how you divide it. How do you maximise the size of the cake? Certain measures are vital to that. TV viewership is key—not just because of how much people enjoy watching the game, but that is what the media rights companies pay for. That is what is paying for the game, so why would we not want that as one of the criteria? I think the noble Lord, Lord Londesborough, was absolutely correct. Why is there not room for both? Why, all of a sudden, as the noble Baroness, Lady Evans, said, has growth become something we do not want here? Surely we all want growth; the Government are saying, quite rightly, that they are all about growth. I could not agree more, so why would not we want a measure of success here in the objectives of the football regulator to have growth?
Baroness Taylor of Bolton (Lab)
I hear what the noble Lord is saying, and as I have been chairing the Industry and Regulators Committee, I have heard a lot about growth. What worries me is that in one moment he and his colleagues are complaining that the regulator is going to be interfering too much, but in the next, we are hearing that the regulator should do more—it should be responsible for growth, for getting more fans and for getting more viewers. Is it more or is it less?
Lord Markham (Con)
I am very glad the noble Baroness mentioned that. When you set the objectives of any organisation, you want to set out the balancing factors. If it is only sustainability, you can get into the lowest common denominator, because a regulator would have absolutely done its job, by the nature of what is set down, just by the survival of all the clubs. There is a very easy way to do that: just dole out all the Premier League money to all the clubs straight away. That would make them all sustainable, giving the money to all the clubs. I think we would all agree that that would be a pretty nonsensical way to do it, but that would achieve the objective. If you set only a single objective, it is very one-dimensional.
Why would you not want a regulator to take into account that the overall financial health of the game is dependent on the TV viewership? That is what drives the money. What drives the TV viewership? It is how competitive the games are—not just the top games but all the games through the league? As I mentioned at Second Reading, and as the noble Lord, Lord Birt, mentioned, we are people who have sold and bought media rights around the world. The reason why countries as far flung as Nigeria, Thailand and everywhere else will pay so much for the rights is that every game is competitive. There is a chance that Bournemouth will go out and beat Liverpool, so everyone cares about it. The Premier League does not have a God-given right to be successful. As the noble Lord, Lord Birt, said, many years ago, the Italian league was more successful. The difference today is that you do not have just two or three top teams, as you see in Germany, Spain and Italy. You have a whole host of teams which are all competitive in the league, so every game becomes interesting to watch.
My concern in all of this is if the only criterion set down is that of sustainability, it is so one-dimensional that the regulator could just decide to discharge its duties in that way. I hope it will not, but when it comes back to the scrutiny that we are all saying it should have, the regulator could sit here among us all and say, “Look, I have made all these clubs sustainable. Okay, too bad that the TV viewership has gone down and too bad that a load of the games are no longer competitive, so the TV rights money has gone down, but they are all sustainable, because I doled out all the money”. I do not think that is what any of us would want. I really do not understand why this should be. This is not a political point; I really do not understand the objective at all. I am literally scratching my head as to why there should be a problem with that.
That is why in our later amendments we try to put in other criteria of success. Those are designed to be the ones that are all about maximising the size of the financial pie, by making sure that TV viewership and attendance are high. People forget in all of this—
Lord Mann (Lab)
I thank the noble Lord for giving way. Would he like to comment on the Premier League vote of last week? Some clubs, led by Manchester City, wanted to grow the amount of money coming into football by allowing different forms of sponsorship, which were designed purely and precisely to put more money into certain clubs—for example, Manchester City, which is obviously why it is in favour. That would obviously be growing the amount of money going into the game, as the noble Lord said. Is that an issue that the regulator should be deciding or, on his argument, that the clubs should be deciding?
Lord Markham (Con)
I definitely do not want the regulator to be involved in every nook and cranny, but when the regulator is sitting here in front of us and we are assessing whether or not it has done a good job, to me, the only criterion is not whether all the clubs are still out there in existence. That is a pretty limiting move. Why would we want to narrow ourselves down to that measure? I do not understand why any noble Lord would not want an objective to be that TV viewership goes up or that media sports rights money goes up. I will sit down to give noble Lords a chance.
Lord Maude of Horsham (Con)
The noble Lord, Lord Mann, asks: would we want a matter such as that to be decided by the regulator or the clubs? Well, the clubs made the right decision. The decision was: “We want the Premier League to remain very competitive to prevent those who have access to, in effect, unlimited funds being able to stack the odds in their favour”. The clubs made a decision that this would not become a less competitive league than it currently is.
Lord Markham (Con)
I thank my noble friend for his point. I would totally include in that measure of success, as the noble Lord, Lord Mann, says, enjoyment. That is absolutely part of it, because it is the enjoyment which means that people will pay a lot of money for their TV subscriptions, but it is all about the financial health of the game.
On the point made by the noble Baroness, Lady Taylor, I know that in terms of Clause 10 and the funds for six months, the amendment is well intentioned and sounds quite reasonable. However, I have been speaking to a different Premier League chair—I am sure that we have all been speaking to club chairmen—and from one of those clubs that is very respectable. They are afraid of having to lock a lot of money into escrow for their sustainability. They said that all that this will stop them doing is investing in their team and their players. They look at their club as a balance sheet, with assets and liabilities. If the worst came to worst, they would look to sell one of their players, because they are assets. That is what businesses do; it is what clubs do. You do not need to say, “You’ve got to lock six months’ worth of money in there, £30 million, so you can’t afford a striker”. It is, “If you want to buy that striker, take the risk,” as my noble friend would say.
Baroness Taylor of Bolton (Lab)
Would the noble Lord agree that many other businesses have constraints on the kind of reserves that they have to have and that charities certainly have constraints on the reserves that they have to have? One of the difficulties, when many clubs go under or are on the verge of going under, is that there is a category of football creditors who have special access to any money that might be there, so lots of local businesses, as well as many fans, get really hit if things go wrong. Even discussing this seems to be alien to him. I am not saying that the wording of that amendment is perfect, but it is an area that is worthy of consideration if we are going to improve the future of clubs throughout the pyramid going forward.
Lord Markham (Con)
The point that I was trying to make is that I absolutely agree that the noble Baroness’s amendment is well intended in terms of sustainability. I am worried that, as we all get back to the mission creep point and try to resolve all these things, we get into the law of unintended consequences. I know from speaking to a club chairman that if you put that money aside in that way, all you will do is deter their ability to invest in players. As the noble Lord, Lord Watson, said, if we want to make ourselves unpopular in all this, it is by starting to do things that stop clubs buying players and investing. We think that VAR is unpopular today. Suddenly, you make all the clubs put £30 million to £40 million in escrow and they cannot buy those players. That would be a very brave decision for a Minister.
Lord Bassam of Brighton (Lab)
Following up on my noble friend’s point, looking at the finances of some clubs, you do wonder. Would the noble Lord, who has been in business himself, tolerate a situation where he only had five hours’ worth of reserves? Nottingham Forest last year spent something like £58 million on wages but had just £25,000 in cash reserves. I know that this is not uncommon across the world of football, but is that a highly desirable state of affairs? Is that not something that we should focus on? Is it not why we want good financial sustainable regulation? That is why we have got to this point where both sides of the Chamber have accepted the need to have a football regulator.
Lord Markham (Con)
The noble Lord may be looking down the wrong end of the telescope. It is not that they have got only £25,000 in cash. You have to look at the whole balance sheet. The fact that they have a load of players who are worth a lot of money, who they could sell, means that they are fine financially. There are loads of companies out there today in positions of net debt. Most FTSE 100 companies have debt as a vital part of their balance sheet. You would be saying to them, “Oh, you haven’t got much money in your account, you’re in a net debt position”, when the value, when you look at all the assets too, means that it is in the FTSE 100 and is a very successful company. That is an example of why the whole area of us as politicians trying to get involved in setting criteria worries me. We will put things forward that are well intended but have unintended consequences. We will come on to this in later debates on the Bill.
I will finish. I hope that noble Lords understand that the reason why we have gone over time is that we have had a good discussion. It has been helpful in terms of the questions that have been asked. I would be pleased if the Minister could say why we would not want those measures of success as part of the criteria.
Lord Goddard of Stockport (LD)
The simplistic argument is, “Well, I can just sell a player”. Actually, you cannot just sell a player. We have a one-month window in January and the end of the season. If it is mid-October and that happens, you cannot sell a player. What do you do then? That is the point. You cannot run a football club on a shoestring because it makes them competitive. That is not the name of the game. The noble Lord’s argument seems to be that if we give them all the money, they will not try their hardest anymore. That is fanciful; it is not true. Football clubs need to be sustainable. They need to be able to pay their way. I could not buy a car if I could not afford the deposit. I could not buy a Rolls-Royce tomorrow saying, “I’ll give you the deposit, but I don’t have it with me today, so give me the car and, when I do quite well, I’ll give you the money”. That is not how life works. Football is a business like every other business. The noble Lord seems to want it to run in a way that is foreign to every principle of business.
Lord Markham (Con)
Speaking as a former chief financial officer of a FTSE 250 company, I would say that, in those examples, if you found yourself in a situation where you could not sell a player until the next window, that would be very poor financial management by the CFO, who would probably get sacked pretty darn quick if they led their cash flow into those sorts of situations. In extremis, if you needed to do that, the bank would lend the money against that because there are assets on the balance sheet that they can borrow against. Every FTSE 100 company is set up in that way. They meet their cash requirements by looking at their assets and raising debt where they need to against them.
Lord Watson of Invergowrie (Lab)
My Lords, I am not sure whether the noble Lord has sat down. I just want to make a few comments on some of the points that have emerged in a very interesting debate. The noble Lords, Lord Hayward and Lord Maude, talk about success—
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
Is it an intervention?
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, it might be for the convenience of the House for the noble Lord, Lord Markham, to make it clear now whether he has not completed his remarks, in which case it would be appropriate for the noble Lord to wait a moment, or if he has sat down.
Lord Markham (Con)
We have had a good debate. When the Minister replies, can she explain why it is not felt appropriate to have these measures of success to get the overall financial wealth of the game? I will now sit down.
Lord Watson of Invergowrie (Lab)
I thought that the noble Lord had indicated that he had finished. On success, which the two noble Lords that I mentioned talked about, the whole question seems to me to be totally subjective. As the noble Baroness, Lady Brady, said, what is success for one club is not success for another. I suggest that for at least half the clubs in the Premier League, success is not being relegated rather than winning anything.
Baroness Brady (Con)
Just to clarify, I said that what sustainability is for one club is different from what it is for another, not success.
Lord Watson of Invergowrie (Lab)
That is interesting. Someone in the debate said that we should have financial sustainability and success. I think that in this setting the two, if not interchangeable, mean very similar things.
The noble Baroness, Lady Brady, and others, talked about the competitiveness and the jeopardy. As you can hear, although I am an AFC Wimbledon season ticket holder, I do not come from south London. When I lived in Scotland, my club was Dundee United. They were Scottish champions in 1983. Next season, Aberdeen were Scottish champions. There has been no team but Rangers or Celtic as Scottish champions in the 40 years since. That is a low bar, perhaps, but in fact only two clubs have won the Premier League more than twice in the 32 years of its existence. It is all very well to talk, as the noble Lord, Lord Markham, did, about Bournemouth beating Manchester City. Yes, it is always possible, but a club such as Bournemouth could never aspire to winning the Premier League. Only a very small number of clubs could realistically—
Lord Watson of Invergowrie (Lab)
I am going to come on to that in a minute. Only two clubs have won the Championship more than twice. Three clubs have won it once. If you ask people how many times Liverpool has won the Premier League they will probably say four or five. No, it has won it once, the same as Leicester City and Blackburn Rovers. Of course there is jeopardy; many clubs can be very competitive within a game, but winning the league is something different.
I know that noble Lords have talked about selling television rights and said that it is a very attractive league across the world, and I accept that. However, we have to tone it down a bit on the competitiveness of the Premier League, because there are not really all that many clubs that can aspire to become its champions. That is not to disparage it, but it is just a fact of the past 32 years.
Lord Hayward (Con)
Will the noble Lord accept that since 2000 the four major leagues in Europe—Spain, Italy, Germany and England—have effectively produced the same number of different champions in each case, either six or seven?
Lord Watson of Invergowrie (Lab)
Yes, I can accept those figures. I accept the noble Lord’s general premise, although I am not sure about Spain. I do not think that more than two clubs have won La Liga; actually, the two Madrid clubs and Barcelona have won it.
The noble Lord, Lord Moynihan, talked about comparing England with France and Germany. I am not sure that is a fair comparison because in Germany the clubs are fan- owned. No club can have more than 49% ownership—51% is owned by the members of those clubs. There is not a direct comparison there. Yet Germany has been disproportionately successful in European competitions over that same period.
I want to move on to something else that my noble friend Lord Mann talked about— the opposition of many on the Opposition Benches. Unless I misinterpreted my namesake, my noble friend Lord Watson seemed to say that he was not in favour of the regulator having the powers that the Bill suggests. On the question of the role of the state, I thought that my noble friend Lord Mann was going to say that the Taylor report, which followed the terrible events of Hillsborough, was driven by the then Prime Minister, Margaret Thatcher. Quite right—I do not think anybody would object to that. There are cases where state intervention is appropriate and the only answer. If it had just been decided that we would hope all clubs produced all-seater stadiums for safety reasons, we would still be waiting for some of them.
That is one of the issues that we will probably come to later. The other one is the question of who is a fan. It is not for today, but it is very important to define what a fan is. The noble Lord, Lord Jackson, talked about Peterborough and how Posh fans are spread right across the fen-lands and beyond. If you are defining a fan, it really has to be a season ticket holder, because otherwise you cannot pin them down. Manchester United and all the big clubs have fans across the world. You could not possibly consult them. I am sensitive that noble Lords will not necessarily agree with that. What about somebody who cannot afford a season ticket or who is not physically able to go to a match? I accept that, so we have to try to pin that down, and it will be one of the most difficult aspects of the Bill, because if we are going to take the views of fans into account, we have to have a means of corralling them and then taking those opinions. At this stage, I do not see how we can do that beyond season tickets.
My noble friend Lady Taylor talked about the sustainability and the success of English football, not just the Premier League but right down the system. The noble Lord, Lord Goddard, talked of Stockport County. They sunk right down to level 6 in the National League North after going through some very traumatic periods, but have been able to come back up to level 3. My noble friend Lord Mann talked about AFC Wimbledon; in nine years they came from, basically, parks football to being back in in the Football League. It is natural that we tend to concentrate on the Premier League, but there has to be some understanding that the clubs below them are important. I am being opportunistic, but the Labour Government have talked about fixing the foundations. In any sense, when you look to go forward, you must have strong foundations. The foundations of English football are right down at the grass roots. I am not talking about the amateur level.
Lord Jackson of Peterborough (Con)
The noble Lord references Amendment 10 tabled by the noble Baroness, Lady Taylor of Bolton. Will that amendment not potentially embed in primary legislation an economic concept of moral hazard? It is an economic term: a situation where a party has an incentive to take risks because it does not have to bear the full costs of those risks. That is going to be on the face of the Bill for the new regime, and will be directed by the new regulator. Is that not the case?
Lord Watson of Invergowrie (Lab)
We will have to see how that comes out in debate. I am not quite sure what the import of that amendment is. That is one of the issues about the role of the regulator. Noble Lords, particularly on the other side of the Chamber, are seeking to give him or her greater powers or influence than intended in the Bill. The noble Lord, Lord Moynihan, said at one point that we do not need a regulator because nothing is wrong. There is something wrong, because the Premier League and the English Football League have been unable to reach agreement on the disbursement of the funds from the top level to levels below. That is one of the problems in the system at the moment.
Baroness Brady (Con)
There is a deal in place agreed by all parties on how funds are distributed; 16% or £1.6 billion is distributed. It is also important to note that the Premier League has more title winners in the last 15 seasons than La Liga, the Bundesliga and Serie A, and the fewest number of titles won by one club than any other top European league over the same period, which shows it is competitive. That is why it is the best league in the world and the most valuable, and that is what we have to protect, because without that broadcast revenue the whole pyramid suffers.
Lord Watson of Invergowrie (Lab)
I know the noble Baroness has experience with one of the major Premier League clubs but, in a sense, she has made my argument for me. The other leagues are less competitive, but I am just saying that if only four clubs can win the championship twice in 32 years, it is not spread very wide, and I would like to see it spread more widely, as many other people would—no doubt including those at her own club.
Lord Markham (Con)
I think the noble Lord misunderstands what I meant by competitive. It is not just which teams can win the Premier League overall and, as the noble Baroness showed, more teams can win here than anywhere else. It is the competitiveness of every single game, because the value is that you have so many games that people all around the world want to pay to watch, so they are interested in watching all the games. Brentford might not win the league, but they know they are going to be competitive against Man City and Liverpool and Arsenal, and they are the games that people want to watch. When we talk about competitiveness, it means that every single game is competitive and that is what the viewership wants to see, and drives the value up of the rights.
Lord Watson of Invergowrie (Lab)
That point was made earlier. I would not say every game is competitive, but I take the noble Lord’s point. I do not want to say any more at this stage because it is important that we get some clarity on how we go forward after this initial debate, because there are many important sections of the Bill that we need to look at in detail. The regulator will have a role, and we have to use this to make sure that it is absolutely clear. Some of the issues raised by noble Lords are legitimate, and until we can have our debates on each of these, we cannot quite see what shape this Bill and the role of the regulator will have. I thank noble Lords for the points made, and I think there are a lot of issues that we will follow up.
Lord Sentamu (CB)
My Lords, if we do not get up to Amendment 36, we have a big job ahead of us, so I am going to be very brief.
Take the BBC. The director-general, the chair and the board really try to work hard to meet its objectives. It is there to entertain, to inform, to educate—and those objectives live in the same organisation. I do not know why, in the same way, the regulator cannot see its job as one of sustainability and success as well as growth.
Lord Addington (LD)
My Lords, when trying to sum up these several hours of debate, I felt at times that we were dancing on the head of a pin. Sustainability —what actually does it mean? What do the Government think it means? That is the one question I would give to the Minister. Does it mean sustaining a successful Premier League? Well, I would hope so. Is sustainability making sure—remember, this Bill encapsulates it—that those five tiers of professional football are functioning? That is what is in this Bill—five tiers of professional football. That is what has allowed the resurrection of teams which got it wrong—there was somewhere to go.
Making sure that that is sustainable means that the fans want something. I hope I never cross the noble Lord, Lord Mann, on this subject because there was a great deal of fire in the belly there; my noble friend Lord Goddard might have got close at times, but I think we will give the noble Lord that one on points. The fans want something and are hugely emotionally and physically invested in this structure. That is what is behind the Bill. Football is not another business; it is not even another sports business. It is not—and may all that is holy be thanked—WWE. It is not something that we will throw away; it is embedded in the identity of much of our society. I say that as a rugby player. The noble Lord, Lord Hayward, is my friend—I will say yes to him and “sir” when he is refereeing, but only then.
So it is that that comes through. The question here is about the word “sustainability”. What do the Government envisage it is? Let us get it out here now. Where will this be backed up? Where will it be shown so that we can know what is going on? Pepper v Hart is clearly not enough here. If we can get that, we can move on, but we must remember that we do not want the Premier League to be damaged, because it provides the money for the other good things to happen. That is the balance we must achieve—or at least get close to.
We cannot guarantee that it will be the best league in the world for ever. Will there be government intervention to make sure that it is successful? That would be a strange position for many noble Lords who have spoken.
Baroness Brady (Con)
The point is that the government regulator should not make it less successful by over- regulating, mission creep and making it so difficult to keep it competitive that it ends up having a detrimental effect.
Lord Addington (LD)
My Lords, we come back to semantics, definition and interpretation. How do you interpret success? Is it by lack of regulation or by intervention? I do not think FIFA and UEFA would be terribly happy if it was felt that it was possible for a regulator to interpret success.
I hope that the Minister, who will have better access to this information than anybody else here—at least, I really hope she will—will be able to say what sustainability is, where does it go and what is the Government’s vision? That is what has happened here.
The Bill is about keeping five tiers of professional football functioning, with an escape route when it goes wrong, if we want to be terribly mercenary, for the top clubs. It gives a chance to rebuild and come back. That is difficult—Leeds have done it briefly; the noble Lord, Lord Mann, is smiling at me—but that is what is behind the Bill. It is not just about the Premier League, it is about the whole thing. I hope that the Minister will be able to correct—or rather, clarify—these points.
Lord Parkinson of Whitley Bay (Con)
My Lords, this has been a long but I think helpful debate, particularly towards the end when the more conversational changes that Committee allows exposed some fundamental differences, if not in party politics then in political philosophy and outlook. It is very valuable that we start our scrutiny of the Bill by reminding ourselves of the differing views and hopes of not just your Lordships in Committee but the many fans whose hopes ride on the job that the regulator is being asked to do and the way in which it is being asked to do it. The noble Lord, Lord Addington, said that it felt at times like matters of semantics, but it is important to make sure that the words in the Bill are carefully chosen and that the Government’s intentions behind each of those words are properly probed. I look forward to hearing more from the Minister about the Government’s intentions for the regulator and the way it will and will not carry out its duties.
I do not want to dwell too long on the comments of the noble Baroness, Lady Taylor of Bolton; I do not want to be accused of playing for time, as they do in football. However, I want to reassure her of the spirit in which those of us on these Benches are scrutinising this important Bill. As she said, and as my noble friend Lord Moynihan and others said, the Bill has enjoyed cross-party gestation and support. I made that very clear in my comments at Second Reading. It arises from the fan-led review led by the former Conservative MP, Dame Tracey Crouch, which was introduced to another place in the last Parliament. It has been changed by the new Government, as is their right, and we want to make sure that when it gets to the statute book it does so in the right shape and form. My noble friend Lord Moynihan noted that there are 340 amendments already tabled, and more than 100 of them are in the names of the noble Baroness, Lady Taylor, and the noble Lord, Lord Bassam. I think it is a strength of this House that we will look at each amendment and give it the airing it needs, and that we scrutinise the Bill and read the Bill documents as carefully as my noble friend Lord Hayward has done. I know that your Lordships will not demur from that.
The noble Baroness, Lady Taylor, set out clearly and powerfully the case for her Amendment 10, supported by the noble Lord, Lord Bassam, and the noble Baroness, Lady Grey-Thompson, particularly in the exchanges with my noble friend Lord Markham. I hope that that helped bring some clarity, both to the argument the noble Baroness was advancing and counterarguments from across the House. The exchange on her amendment chimed with our concern that “sustainability” is too imprecise or insufficient a term to stand on its own. She gave a practical and useful example of the way in which the Bill might expand on how we guarantee the sustainability of football and football clubs. I look forward to the Minister’s reply.
The noble Lord, Lord Bassam, was seeking a cure for amnesia, understandably. I never had the pleasure of being the Bill Minister for this Bill, but he will remember from our many exchanges when I sat on the other side of the House that I was looking forward to the Bill coming to your Lordships’ House. He will also remember that, as a Minister, I had the pleasure of taking a number of Bills through and faced keen scrutiny from him and other Members on the Opposition Front Bench, carrying out, as was their right, the Opposition’s duty to scrutinise government legislation. I hope that he remembers, as he does not suffer from amnesia, that I was always open to ways of improving Bills, including those I took through as a Minister. If he thinks I am being too careful or conscientious in my scrutiny, it is only because I learned from the best.
This is important because, as my noble friend Lord Maude of Horsham said, the Bill brings about an unprecedented intrusion by the state into a sport and an industry that is a resounding success story. My noble friend extolled the benefits of inertia, and I agree. We want the regulator to be carefully constrained, but we want it to be respected and able to fulfil its duties with authority. That is why it is important that we make sure it is not backward looking, nor that it seeks simply to preserve football as it is today in aspic, but can demonstrate to football clubs and to fans around the world that it shares their aspirations for the future of the game.
My noble friend also struck an almost Schumpeterian note by reminding us that sustainability, particularly in this complex ecology of the football pyramid, has sometimes been delivered through new clubs, new tournaments and new successes emerging from the ashes of previous failures, so sustainability can be delivered in ways that may feel turbulent as we go through them. I thought that was a useful point. We want to ensure that we avoid the unwitting or avoidable failures, such as the noble Lord, Lord Goddard of Stockport, so powerfully set out in the example he gave, and to make sure that the clubs that matter so much to their communities are protected—they are not, as the noble Lord, Lord Addington, said, like just any other business; they have a social purpose, which we have already well considered—but it is the nature of sport that there are winners and losers. We also have to bear that in mind as we look at the regulator and the way it will carry out its work.
We could probably save ourselves a lot of time if we heeded my noble friend Lord Hayward’s referee’s whistle and just accepted his rulings on everything. I am glad that he had gone through the impact assessment so carefully. I agree that there should be more references to success than to Bury, for instance, in the impact assessment and some of the accompanying documents.
The noble Lord, Lord Watson of Wyre Forest, was right to warn about the inadvertent danger of sending the message that a sport loved by 1.5 billion people around the world is not sustainable without a new law, a new regulator or the intervention of politicians. My noble friend Lady Brady pointed out in both her speech and her interventions that sustainability can mean different things to different people and that, as something with no end state, it is very difficult to define. I think that is why we have given it so much attention in our debate on this first group.
The noble Lord, Lord Birt, was very helpful in saying that sustainability is a necessary but not sufficient term. My amendment would strike out the words, not because I disagree with them but because I do not think they are enough. The way he put it was right: the regulator must not stop football developing.
The noble Lord, Lord Mann, made a powerful case for adding the word enjoyment. I enjoyed not only the way he did it but also his powerful reminder of the necessity of government and state intervention in the past in football, particularly in relation to the disasters and terrible incidents that he rightly reminded us of, which we want to avoid happening again.
I was struck by the compromise from the Cross Benches from the noble Lord, Lord Londesborough, and his suggestion of “financial sustainability and success”. I wonder whether the Minister will set out her thoughts on that, as well as on the point that my noble friend Lady Evans of Bowes Park made about growth. This is something, after all, that chimes with the words of the Chancellor of the Exchequer and the work of the Government more broadly. We want to ensure that the regulator is a growth-focused one that helps the growth not just of the game but of our economy.
This has been a long debate, but in debates on the Online Safety Act, which I had the pleasure of taking through your Lordships’ House, we spent a lot of time talking about having a declaration of purpose at the beginning of the Bill—the noble Lord, Lord Stevenson of Balmacara, pressed me hard on it from the Opposition Benches. I remind your Lordships that we made that change and put it in the Bill because I thought it was important for the regulator to be given a clear message from Parliament and in legislation about what its role should be and how it should do it. I was glad to make that change.
The noble and right reverend Lord, Lord Sentamu, reminded us in his analogy with the BBC of the Reithian principles, which we also inserted into the Media Act—again a Bill that I took through. I was happy to amend it to make sure that that Act also reflected important statements of intent and ways of working. So I make no apology for having invited the Committee to spend some time thinking carefully, as we embark on our scrutiny of the Bill, about the role of the regulator and the message that we send through the Act of Parliament that we pass about the way it should do it.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank noble Lords for raising the amendments in this group. This discussion has arguably gone into extra time, although I am assured that we have not got to the point of a penalty shoot-out—although that might be one way to arrive at a conclusion, given that I no longer intend to take up the refereeing option from the noble Lord, Lord Hayward, having heard very clearly what he said.
It is clear that the enthusiasm for talking about football demonstrated at Second Reading remains strong. I am not surprised, however, given the time we have spent on this group, that my noble friend Lord Watson of Wyre Forest appears to have contributed on the next group. I will respond to his points then.
Before I get into the substance of the amendments we have discussed this afternoon, I want to make a general point that was made succinctly by my noble friend Lord Bassam: it is clear that the party opposite has very unfortunately caught an element of collective amnesia. It appears to have forgotten that it was a Conservative Party that was in government and brought forward a very similar Bill just a few months ago—a point made elegantly by my noble friend Lady Taylor. All serious parties—I include the Conservatives in that—had a commitment to introducing an independent football regulator as part of their manifesto.
Notwithstanding the length of the debate, I thank all noble Lords for their contributions. The noble Baroness, Lady Evans, made an interesting point about growth that has not been substantially covered by the notes I have. I would welcome further discussion on this point with her and am happy to meet to discuss it further.
Taking each amendment in turn, unfortunately, I have to disagree with the principle of Amendment 1 in the name of the noble Lord, Lord Parkinson, and of Amendment 4 in the name of the noble Lord, Lord Maude of Horsham. The fan-led review, led by Dame Tracey Crouch, laid bare the facts of English football today. The review is the justification for the Bill that the noble Lord, Lord Hayward, asked for, and the basis of the Bill that the noble Lord, Lord Jackson of Peterborough, asked for when he asked what problem we were trying to address. I thank the noble Lord, Lord Goodman, for highlighting Dame Tracey Crouch’s point that the game is both a success and fragile at the same time—a point reflected, in my view, in the contribution from the noble Lord, Lord Ranger.
A number of noble Lords, including my noble friends Lord Watson of Invergowrie and Lord Mann, gave other examples of where the state has intervened in football. Although, as a number of noble Lords, including the noble Lord, Lord Parkinson, said, it is undoubtedly hugely successful in many ways and has grown substantially since the formation of the Premier League in 1992, and our football is a global export that we should be proud of, the game’s financial model is broken. Too many clubs are in financial distress, fans are not being listened to, and just a few years ago top clubs attempted to break away from the Premier League to join a European super league. That move undermined the very principles of football in this country. The Bill is designed to combat these issues, identified by the previous Government.
I thank the noble Lord, Lord Moynihan, for Amendment 3 and for his contribution to this debate, not least for highlighting the cross-party support for an independent football regulator. In response to his point on hybridity, I think we will come on to this in a later group, but this is a matter for the examiners, not the Government. I am happy to discuss this and others points in the debate on the relevant group, which I believe is the eighth group. We will potentially come to that at some point in the near future.
Unfortunately, the Government do not agree with the intent of Amendment 3 to narrow the purpose of the entire Bill specifically to financial sustainability. The purpose of the Bill is sustainability, as already defined in Clause 1. I highlight to noble Lords that they will find the Government’s definition if they turn from page 1 to page 2 of the Bill. I hope this answers the query from the noble Lord, Lord Addington, about the Government’s intent in this regard. It is about a continuation of service—to continue to serve the interests of fans and contribute to the well-being of the local communities that regulated clubs serve.
I listened with interest to the contribution from the noble Baroness, Lady Brady, and all noble Lords will recognise her passion and expertise. I welcomed the passionate description from the noble Lord, Lord Goddard of Stockport, of what the Bill is about. It is about those fans and the communities. Of course, financial sustainability is an important part of this. If a club suffers financial collapse, it cannot continue to serve its fans and community. I cannot agree with the noble Lord, Lord Moynihan, that this is exactly the same as any other financial club, a point echoed by the noble Lord, Lord Addington.
However, there is more to it than this. If a club’s balance sheet remains healthy but it ups sticks, moves 60 miles away and changes its name, badge and shirt colours, that is not a continuation of service either. Clause 6 sets out the regulator’s objectives, breaking down the overarching purpose of the Bill into its component parts. That is where noble Lords will see the club financial soundness and systemic financial resilience objectives, alongside the heritage objectives. That is the right place for them, and we believe this structure appropriately conveys the regulator’s aims and priorities.
The noble Baroness, Lady Brady, asked whether all clubs in a league would have to adhere to the same rules. The regulator will be proportionate and adaptive in its approach, rather than taking a one-size-fits-all approach that requires all clubs, regardless of their level, to adhere to the same approach.
Moving to other amendments, I thank my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton for Amendments 10, 53 and 63, which raise interesting points about how much funding is required by individual clubs in the pyramid. On Amendment 10, the Government understand that the intent is to explicitly define sustainability in Clause 1 as the ability for a club to meet its financial commitments for at least the next six months.
This amendment would also effectively seek to alter the purpose of the Bill by adding to the definition of sustainability in relation to English football as a whole. As I have already stated, we believe that sustainability is already appropriately defined in Clause 1. I have no doubt that my noble friends’ intention was to define the financial soundness of a club as per the regulator’s objective in Clause 6. However, here we do not believe that it is necessarily appropriate to define general financial soundness in this way. We believe that there are circumstances in which the ability to meet financial commitments for six months may be an appropriate measure, but it is a blunt one and may not also and will not also be the case.
It will be for the regulator to set out exactly what it considers constitutes financial soundness. We think this is the right approach. However, the Explanatory Notes to Clause 6 clarify that:
“‘Financial soundness’ is a measure of a club’s expected ability to continue meeting its liabilities and debts in the future, even in the face of changing circumstances … This will involve an assessment of a wide range of factors and circumstances relating to a club’s long-term financial sustainability and resilience”.
I hope my noble friends are reassured as to the benefits of this approach.
The Government also recognise the good intent behind Amendment 53, which is to clarify that the regulator should be concerned with the financial resilience and sustainability of English football. I hope I can reassure my noble friend that, in our view, the desired intent is already achieved by the wording of the regulator’s objectives in Clause 6, and the purpose of the Bill in Clause 1.
Care was taken in the exact choice of the wording. “Financial resilience” feels appropriate in relation to the wider football system, as an established concept regarding the ability of the system to withstand shocks. “Financial soundness” feels more appropriate when referring to individual clubs, as an established concept regarding the financial health of organisations. “Sustainability” feels appropriate when referring to the overarching purpose of the Bill to ensure a continuation of service. To repeat “sustainability” in this objective could risk confusing these concepts and how they interact. I again point all noble Lords to the Explanatory Notes, which provide more detail on these various objectives and, I hope, provide some reassurance on the points raised.
Amendment 63 seeks to ensure that the financial position or soundness of regulated clubs is not diminished relative to other, non-regulated clubs. In line with its objectives, this regulator will be tasked with protecting and promoting the financial soundness of regulated clubs. Therefore, I hope my noble friends will agree that it is not necessary to place this additional requirement on it to not adversely affect financial soundness.
Amendments 4A, 7A and 62 are in the name of the noble Lord, Lord Maude of Horsham, and Amendments 2, 209, 226 and 231 are in the name of the noble Lord, Lord Hayward. In response to the surprise from the noble Lord, Lord Markham, that this is included, I understand the desire to ensure that the success of English football is protected and would like to be explicit that we believe this is achieved in the Bill already. As previously stated, the Bill is largely the same, not least in the part we have been discussing this evening so far, as that published by the previous Government, in which the noble Lord served.
As part of its secondary duties, the regulator must have regard to avoiding impacts on important outcomes in football. This extends to domestic sporting competition, the competitiveness of our clubs against international clubs, and investment into football. Actively pursuing these outcomes will remain the responsibility of the industry rather than the regulator, but the regulator will avoid unduly harming them while it strives for sustainability.
On Amendments 2, 4A and 7A specifically, if, as part of the purpose of the Bill, the regulator were required to protect the success as well as the sustainability of English football, it would not be afforded the flexibility needed to solve the clear and present issues within football currently. As someone who at Second Reading admitted to supporting Oxford United—who, sadly, lost their most recent games—I feel that success would be a hard ask of any regulator.
Similarly, my noble friend Lord Mann mentioned enjoyment. I know that most noble Lords will appreciate that sometimes that enjoyment can be quite painful as well.
Baroness Twycross (Lab)
Yes, suffering—all noble Lords will suffer for their football clubs as well, at times.
Lord Markham (Con)
I think the Minister did not quite understand. She was talking about success in terms of success of teams. The point about success that the noble Lord, Lord Hayward, and I were trying to make was about TV viewership, which drives the media rights value. I have not seen that anywhere else in the Bill, and I would be grateful if the Minister could say where it is addressed.
Baroness Twycross (Lab)
I might have been being flippant, so I apologise to the Committee. After the length of time we have been discussing this, I came up with some flippant remarks. That was not to undermine the noble Lord’s point.
Much of the success of English football has come from investment, and we do not believe the Bill will in any way deter this. Nor do we believe that the regulator will detract from the noble Lord’s point about what might be measures of success. Indeed, a stable, more certain regulatory environment is likely, in the Government’s view, to attract investors with a more long-term, prudent approach to stewarding and growing these community assets.
These amendments would require the regulator to bring into scope anything that relates to the growth of English football. This would include things such as broadcasting revenues—which the noble Lord referred to—transfer fees and sponsorship deals, alongside many other areas. Not only would this dramatically widen the scope but the regulator would be required to become actively involved in these areas, potentially causing unintentional harms when looking to advance these worthy objectives. I am sure noble Lords will agree that this is not a space we necessarily want to have the regulator interfering in.
Lord Hayward (Con)
May I just seek clarification? She has covered a very wide-ranging debate as quickly and reasonably as possible, and I have no criticism of the manner in which she has done that. The key debate has been around the word “sustainability”. I think that, earlier in her reply, she said that it was defined at some point. The powers to operate are in Clause 1 and there is no definition in Clause 2. If she has given clarification at some point, I will check it in Hansard, but I am seeking clarification as to whether there is, within the Bill, “sustainability”. For that purpose, the powers identified in Clause 1 do not define it, and looking under key definitions in Clause 2, it does not appear to be there, either.
Baroness Twycross (Lab)
I draw the noble Lord’s attention, and other noble Lords’ attention, to the first line on page 2. Even if it does not have the word “definition”, it is quite clearly a definition. It says:
“For the purposes of this section, English football is sustainable if it … continues to serve the interests of fans of regulated clubs, and … continues to contribute to the economic or social well-being of the local communities with which regulated clubs are associated”.
Lord Parkinson of Whitley Bay (Con)
I am very grateful to the noble Baroness for her remarks and I agree with my noble friend Lord Hayward that she has covered a wide-ranging debate very reasonably. It was useful to get some of the thinking in the Government’s mind behind the way that Clause 1 is set out, and she was right to draw attention, as she did at the end, to the way Clause 2 tries to expand on this. As she knows, we have amendments down to look at that a bit further.
I am sorry that she repeated the points about amnesia. The reason I rose again to speak at some length before her concluding remarks was to reiterate the cross-party gestation that the Bill has had and the interest that is there. She mentioned that her notes gave her little to say on the points that my noble friend Lady Evans of Bowes Park raised about growth. After a debate of this length, there was time to get a few additional notes, so I hope she might be able to write to my noble friend and the rest of the Committee on that. But I am grateful for what she said. I will go back through the official record and look at the points that noble Lords have raised in relation to Clause 1. With that, I beg leave to withdraw my amendment.
Lord Moynihan
Lord Moynihan (Con)
My Lords, I rise to speak to Amendments 5 and 24 standing in my name. In the spirit of cross-party support for this Bill, I thank the noble Lord, Lord Watson of Wyre Forest, for moving my amendment so eloquently. Should the Minister be in complete agreement with him, I think we could curtail this debate immediately and place the wording on the face of the Bill, since what I was looking for was exactly what he sought—namely, to insert
“within the rules laid down by UEFA, FIFA and the International Olympic Committee, relating to the autonomy of sport from government influence and control”.
Since there surely can be nobody who does not want to see us continue to play in UEFA competitions and the World Cup, to make that clear on the face of the Bill, as the noble Lord, Lord Watson of Wyre Forest, spoke to, is important.
Why is this being raised? It is being raised because UEFA has already—before we even got to Committee—raised specific concerns about the Government’s proposal to establish an independent football regulator, emphasising potential government interference in football governance. UEFA made four key objections, as I understand it. I have not had sight of the letter, but perhaps the Minister could confirm that in her response. First, it talked about the autonomy of football governance. UEFA insists that football should be self-regulated without external government influence. As I understand it, in the letter from the UEFA general secretary, Theodore Theodoridis, he stated that there should be
“no government interference in the running of football”.
The second point that he made was about the impact on UEFA competitions. UEFA warned that government interference could lead to the exclusion of English federations and clubs from European competitions, including the Champions League and the European Championships. This concern was highlighted in communications to UK officials, where UEFA emphasised the risks associated with the proposed regulator’s powers.
The third concern that UEFA expressed was on the regulatory powers and the competitive balance, which was referred to in earlier debates this afternoon. UEFA, as I understand it, is apprehensive about the proposed regulator’s backstop powers, which we will come to at a later stage of the Committee’s proceedings. Those are powers to intervene in funding discussions between the Premier League and the English Football League. UEFA argues that such intervention could disrupt the competitive balance and hinder amicable solutions within the football ecosystem. This is interesting; the point was made earlier about the comparison between the German system and the system that we have here. The reason I made that comparison was that Germany has possibly got the most regulated football in Europe in terms of what they call the Sonderweg, which translates as the “special unique past”. It is based on financial regulation and measures, including the 50-plus-one rule.
The point I was making was that the insolvency levels and the financial position of clubs within Germany and the UK are broadly similar, so it is not the regulation that impacts on that. UEFA has therefore concluded, comfortably within its own rules, that Germany, under its regulation, satisfies UEFA’s criteria. However, it raised a fourth point about licensing and club ownership. The proposed regulator would have had the authority to implement a licensing system for clubs and influence club ownership decisions based on the UK’s trade and foreign policy. That was the specific point withdrawn—removed—from the original Bill, and UEFA made it clear that it feared this could lead to fragmented governance across Europe and undermine the independence of football clubs.
These concerns that UEFA has brought forward are very serious. They would have a significant impact on our ability to play in the Champions League and the European Championship—indeed, if we apply the same logic to FIFA, in the World Cup as well. The preservation of the autonomy of football governance is therefore incredibly important. I hope we all agree that in introducing a football regulator nothing should jeopardise the autonomy of football governance and that we are within the rules and regulations set out by UEFA, which are comprehensive, as well as within FIFA’s. There should be nothing that could allow a regulator to overreach that boundary and thus disrupt the sport’s established structure.
Baroness Taylor of Bolton (Lab)
I agree that we want to see our clubs competing at the highest level, and the national team as well. Earlier, the noble Lord said that the level of regulation in France, and indeed in Germany, was much tougher than anything that we are going to have in the Bill. But those countries have not got into difficulties, given the regulation that they have, so I do not really see why we should either.
Lord Moynihan (Con)
My point was that that is not the case. I do not want to go back into our debate on the first group, but the financial stability in the English system is no different. It is very similar to the financial stability in both the French and German systems. The levels of insolvency are, broadly speaking, the same. It is therefore not the level of regulation that is creating financial stability. If it was, the argument that we needed more regulation to create financial stability would hold water, but in practice it does not.
My point on this set of amendments is simply that if we all agree on this legislation and the role of the regulator, which is not comprehensively defined in the Bill, despite its length—the Minister has said, rightly, that we do not know the details of how the regulator will use its powers in any given situation—the one thing we can be sure about is that we do not want that regulator ever to use its powers in contravention of the UEFA and FIFA guidelines, by which we would have admission to play in European competitions and the World Cup. Should that be the case, there should be no difficulty in placing in the Bill that the whole operation of the regulator should be
“within the rules laid down by FIFA, UEFA and the International Olympic Committee, relating to the autonomy of sport from government influence and control”.
I added the International Olympic Committee because the same principles of autonomy apply, albeit that the British Olympic Association does not enter a men’s football team at present. It certainly enters a women’s football team and would wish to continue to do so. The Bill would enable, by secondary legislation if necessary, the Government to include the women’s game within the scope of this Act, as it would then be. I am thus also looking to have protection of
“the autonomy of sport from government influence and control”
in the Bill for the International Olympic Committee. For those reasons, I put these two amendments before the House. I beg to move Amendment 5.
Lord Maude of Horsham (Con)
My Lords, I am grateful to my noble friend Lord Moynihan for the way in which he has introduced and moved his Amendment 5. My Amendment 6, which also carries the name of my noble friend Lady Evans of Bowes Park, has a similar effect. It would deal with the consequences if the Bill is not amended in a way that protects against those consequences. It is another way of getting at the same point—the same danger, risk and jeopardy that English football is potentially in if this is not dealt with at a very early stage.
On this business of English football having its own autonomy and not being subject to influence or control by government, we know that there are countries where football is an important activity and where national teams take part in international competitions. But in some of those countries, the boundary between where the state ends and the Government begins is sometimes unclear. It may be contended that in these circumstances, given the undoubted influence and control over English football that will come if the Bill is enacted in its current form, there will be state intervention, for sure. Is that the Government? It will be contended that this is an independent regulator.
None the less, it is a regulator appointed by Ministers in the Government. Its powers will be defined in secondary legislation drafted by the Government and if there is mission creep and scope creep, which some of us fear is almost inevitable, that will come about because of government decisions. This is a real issue; it is not scare- mongering. UEFA has written on these concerns, so when it is argued that this cannot really matter because Germany has regulated football, the fact is that that has been done in a way that prevents those concerns.
UEFA, which matters for these purposes, is not content at this stage that this jeopardy does not exist, so it has to be dealt with. The sooner that the Minister can give us some comfort that she understands how serious this is and the political danger the Government would be in if they—by lack of proper care and attention to these risks—allowed this malign effect to come about. It is very important to indicate at the earliest possible stage, which is really tonight, in this debate, that a provision which deals with this risk will be incorporated into the Bill by way of government amendment. I think that would be a great comfort to all of us.
Lord Bassam of Brighton (Lab)
My understanding of the exchange of correspondence was that UEFA’s primary concern was that the scope of the legislation in the Bill may go beyond financial concerns. It was entirely happy with the regulator being concerned about the finances of football, and rightly so. I do not quite see the fear that lies behind this set of amendments. Although the noble Lord is right that we need early clarification, the regulator’s purposes are clear: they are about ensuring sustainability and success, and all the rest of it, of our brilliant game. I think UEFA was just seeking clarification that it was tightly constrained around the notion of football finances.
Lord Maude of Horsham (Con)
I am grateful to the noble Lord. I am a bit of a Brighton supporter myself. Tottenham is my first love; Horsham is my second; Brighton comes a very close third. I hope the letter from UEFA will be published so that we can see in exact detail what is said and therefore satisfy ourselves that the concerns will be dealt with comprehensively and finally so that there is no lingering anxiety.
I totally understand the point raised by the noble Lord, Lord Bassam. I wish I could be as happy as he is that there is no risk of subsequent mission creep, which is exactly the concern that UEFA raised. Some of us have raised that, in the Bill as currently drafted, there is scope for precisely the kind of mission and scope creep that UEFA seems to have identified. That is why it is so important at this stage that it should be dealt with and for it to be finally laid to rest that this concern need not be a concern.
My noble friend Lord Goodman spoke about the political risk for the Government if they come to be the people who have enacted a Bill which inflicts savage damage on English people’s expectations that their clubs will be able to participate in the Champions League, the Europa League and even the Europa Conference League, which West Ham so spectacularly won. It has to be dealt with quickly, cleanly and effectively, so that we no longer need to have sleepless nights over this.
Baroness Fox of Buckley (Non-Afl)
My Lords, I welcome this group as a point of clarification and reassurance, as has been asked for. I would expect the Minister to accept this, because she has been at great pains to stress that this is intended—I do not doubt her good faith—as light-touch regulation motivated by the best of intentions. But I think that there is a real problem with this Bill that could potentially destroy football, so I want that worry at least to be taken seriously.
The examples given by the noble Lords, Lord Moynihan and Lord Maude, were in relation to UEFA and FIFA and what damage could be done. I understand that, but I think this is a point of principle. It is really important that the Government state at this point that they believe that the Bill is not to be used as a vehicle for government interference in football. That is what they agree with, so why not put it in the Bill?
Should I just be having a moment of paranoid delusions? I spent as much time reading the amendments last night as noble Lords spent on the first group, possibly longer—i.e. it took me a long time. They are, in many instances, the vehicle for what can be described only as a wide range of political hobby-horses for people who believe that this Bill and the regulator should be asked to do things that are extraordinarily contentious, political and have absolutely nothing to do with football. The fact that they are deemed in scope of the discussion on this Bill is nerve-wracking. Consequently, this group seeks—very importantly—to state as a matter of principle that the Government should not interfere in the autonomy and independence of football in England and Wales, and English football particularly.
I want to stress, and I said it at Second Reading, that this not just because of any technical matter; it is because football came from and remains at its heart a grass-roots part of civil society. The last thing it needs is an overbearing political hand that will try to shape it into the image of the particular Government of the day. The particular Government of the day might be one that the Government trust; it might be one that many football fans trust, but imagine if it was not? We do not want the political fashions of the day to dominate football—to destroy football. I think the Minister will agree and therefore accept these amendments willingly, because it will reassure us that we are not all being paranoid about it. It will reassure football fans that the Government are doing it in their best interests rather than trying to use football as a hobby-horse to push a particular political agenda.
Baroness Evans of Bowes Park (Con)
My Lords, I want to ask the Minister to follow up on something she said in her wind-up speech at Second Reading. She said that, that week,
“the Minister for Sport had a productive discussion with UEFA and they committed to continuing to work together”.—[Official Report, 13/11/24; col. 1908.]
Obviously, it was just a reference, but I wonder whether she might be in a position to give more detail about that conversation, whether some issues raised in the letter have now been dealt with, and what continuing conversations might entail. As she mentioned it quite briefly at Second Reading, it would be great to get a bit more information if she can provide it to us. If she cannot do it now, could she perhaps write to all noble Lords to give us the latest on the discussions that have been ongoing?
Lord Jackson of Peterborough (Con)
My Lords, I support the amendments from my noble friends Lord Moynihan, Lord Maude and Lady Evans of Bowes Park. The important thing we are missing is the sweeping enabling powers in the Bill; I think there are 42 powers and a number of Henry VIII powers.
The Prime Minister said on 17 September in response to UEFA:
“I don’t think there’s any problem with the rules, because this is a truly independent regulator. But as you’d expect, we’re talking to UEFA, and I’m sure we’ll find a way through this”.
I reiterate the view of my noble friend Lady Evans and ask for an update from the Minister.
I am not sure if the Prime Minister has actually read the Bill. If he did, he would surely concede that particularly in Clause 11, “Football governance statement”, there are very wide-ranging powers. For instance, Clause 11(3) states:
“The Secretary of State may revise any football governance statement”,
while Clause 11(1) states:
“The Secretary of State may prepare a statement”.
In paragraph 28 of the Explanatory Notes, there are significant powers that are open to future interpretation in a court of law. This is an unprecedented situation, but the notes state that
“guidance is intended to aid the IFR in interpreting the intention of legislation and to inform the detailed development and implementation of its regime. IFR guidance to the industry should give clubs greater information about the specific requirements of the regime, including how the IFR will operate and what is expected of clubs”.
With the best will in the world, that is a very pervasive, far-reaching, enabling power for the Secretary of State and Ministers in the department to exercise. If I can beg the forgiveness of noble Lords, I am slightly sceptical. I am not quite taking the side of FIFA and UEFA, but I have some empathy with the concerns they have about mission creep and a movement from financial issues into the minutiae and technical, granular operation of different football clubs. That is why my noble friends and I are raising this issue. I hope and expect the Minister to address those concerns.
Lord Goddard of Stockport (LD)
My Lords, I have been in this House for 10 years this year. For eight of those years, I was on committees for secondary legislation and primary legislation. It is a little bit rich for the Conservatives to start complaining about Henry VIII powers, when I spent most almost 10 years trying to stop Ministers from across the previous Government taking Henry VIII powers at every single opportunity. I think people need to put this into perspective.
I hear what the noble Lords, Lord Moynihan and Lord Maude, are saying. I believe they are saying it with the right intentions and from the heart. The noble Lord, Lord Bassam, has opened the tin a little bit by saying that the conversation going on between the Government and UEFA is about finances but not about this.
So is there an element of sabre rattling? I do not know, but we on these Benches would like clarification from the Minister—this can be clarified quickly—on whether any of these three amendments are true, can be true or can be dealt with in the Bill. If they can, we can put this to bed quickly, but, if they cannot, there is some mileage in considering the alternatives, which are the last things that anybody wants. I do not want Stockport County not to be able to play in the Champions League in 30 years because of an oversight in this Committee one night.
Finally, can we end this love-in with Brighton & Hove Albion? You beat Manchester City once; you did not win the World Cup.
Lord Bassam of Brighton (Lab)
The noble Lord, Lord Jackson, made a point about Clause 11. I have read it and I have also read the previous Clause 11. As far as I can see, they are absolutely identical. Perhaps the noble Lord, Lord Parkinson, can help us, because he would have been in the DCMS at the time. Was it the case then that Ministers sought assurances from UEFA and FIFA that there was nothing in the Bill’s powers that would have offended them? If that is the case, and if Clause 11 is so important in the argument of the noble Lord, Lord Jackson, this argument is probably a bit of a non-argument in the end, because we have had that clarification and assurance through the exchange of letters that took place in September this year.
Baroness Fox of Buckley (Non-Afl)
I think this is important. The last two contributions have just reminded me. I do not care what was in the previous Government’s Bill, which, to be honest, I would have stood up and argued against at that time as well.
Lord Bassam of Brighton (Lab)
I entirely accept that the noble Baroness would have done that, but I was more concerned about the argument coming from the Official Opposition.
Baroness Fox of Buckley (Non-Afl)
I agree, but I was going to appeal to us myself to try to tackle the Bill—which is so important in many ways—with at least a little of the spirit of what is in the best interests of football, rather than what is in the best interests of the political footballs of political parties. That is just an appeal—it might not work—because Henry VIII powers, for example, are anti-democratic and illiberal whoever uses them. I do not therefore want not to be able to criticise them in case somebody thinks that I am on the side of the Tories or that I am anti-Labour. That is not the point, surely.
Lord Jackson of Peterborough (Con)
I will briefly respond to the noble Lord, Lord Bassam. I take on board the Maude doctrine, which is that, had we had the opportunity to have scrutiny and oversight of the Bill at the appropriate moment, I would have made exactly the same points to my own Government when they were in power. So, with all due respect to the noble Lord, he is flogging a dead horse by keeping on saying that this was a Tory Bill. We are today considering a Labour government Bill on its merits and its efficacy, which is why we are debating it.
Baroness Brady (Con)
My Lords, I support Amendment 6. I clarify for the noble Lord, Lord Bassam, and the noble Baroness, Lady Taylor, that there is no state regulator in France or Germany—all the regulation there is football-led—so this is something completely different.
I will raise with the Minister the alarming letter that UEFA sent the Secretary of State. In it, the warnings are spelled out very clearly, as are the concerns about “governance interference” in football. It points out that it has very “specific rules” that guard against state interference in order to
“guarantee the autonomy of sport and fairness of sporting competition”.
It states:
“If every country established its own regulator with similarly broad powers, this could lead to a fragmented, inefficient and inconsistent approach to football governance across the continent and in essence hinder the ability of UEFA and other bodies to maintain cohesive and effective governance standards across Europe”.
It goes on to say that
“it is imperative to protect and preserve the independence of the FA in accordance with UEFA and FIFA statutes”.
It warns against anything that could compromise
“the FA’s autonomy as the primary regulator of football in England”
or the ability of domestic leagues to set
“their own season-to-season financial sustainability rules”.
As the noble Lord, Lord Moynihan, said, it gives stark warnings about the backstop power and licensing. UEFA expresses significant concerns about the backstop and stresses the importance of preserving collaboration and voluntary agreements in football governance, while cautioning against overreliance on regulatory backstop powers that could disrupt the sport’s balance and stability.
It says that the backstop threatens
“the balance of power within football governance”
and that
“mandating redistribution which affects the competitive balance in the game and wider European competition would be of concern to us”
and would
“prevent amicable solutions being found”.
UEFA says that the backstop in the current Bill should be “carefully reconsidered”.
However, despite those warnings from UEFA, the Government have made the backstop even wider and broader in scope, to now include parachute payments, which are fundamental to competitive balance. They have removed the incentives for a football-led deal, which goes specifically against the advice of UEFA. So it appears that the Government have ignored that letter and its warnings. UEFA spells out that
“the ultimate sanction would be excluding the federation from UEFA and teams from competition”.
No matter how small the Minister may say the risk is, the inclusion of this amendment will help to ensure that the IFR does not act in a way that enables such unintended consequences for football fans. That would be a huge relief.
We should be careful not to empower this regulator without fully addressing the concerns of the international governing bodies in advance. If we create even a small but ever-present risk of intervention in the future, that could put the Government, the regulator and our competitions in an invidious position down the track, especially in circumstances where the interests of English football may not align with UEFA or FIFA—for example, in the event of future disagreements on the football calendar. I therefore urge the Minister to give assurances that every single issue raised in the letter has now been dealt with to UEFA’s satisfaction, including its concerns on financial distributions and independence from government. This leverage, once granted, cannot be taken back.
It is imperative that nothing in the Bill gives the regulator powers to interfere with the rules that already govern football—which, by the way, is one of the most governed and regulated industries around. We have to comply with FIFA rules, UEFA rules, Football Association rules, Premier League rules and EFL rules—and now we have the IFR rules. We will be tied up in more red tape than a company applying for a post-Brexit import licence.
So will the Minister ask the Secretary of State to allow a full copy of the letter she received from UEFA to be put in the House of Lords Library and the Commons Library for every single Peer and MP to be able to see it, read it and be aware of its nature and tone and of the consequences it spells out, so that every Peer in this House can take that into account when they consider why this amendment is so important and so necessary?
Lord Watson of Wyre Forest (Lab)
My Lords, I continue to be humbled by the gentle kindness and grace with which Members of this House help relatively new Members understand the list of amendments in Committee on Bills. I am particularly grateful to the noble Lord, Lord Moynihan, for helping to steer me back on course. To reciprocate the kindness, I say that I enthusiastically support his amendment and that of the noble Lord, Lord Maude.
I apologise to my noble friend the Minister for adding to her confusion. She withheld comfort on that first debate in relation to the clarity I was seeking on whether English football teams and England will be able to play in European and international competitions at the end of the Bill. I say to her that now is the time: she can end my confusion, give the clarity that this Committee deserves and end the ambiguity by saying that England and English football clubs will be playing in international tournaments, because these important amendments are trying to get that reassurance to every football fan in England tonight.
Lord Birt (CB)
I agree that that reassurance is essential, but the only way to get it is not through publishing the letter but through knowing that UEFA and FIFA have agreed that we would be compliant.
Lord Markham (Con)
On that point, I think that is the only way. We all agree that this would be such a big risk. I looked it up before the debate, because this is not just the equivalent of us scoring an own goal, it is like a hat-trick of own goals, so I looked at whether there has ever been an example of a hat-trick of own goals. I found out that the most own goals ever scored in a match was 149. We may go close even to that. There is a real point here, and it was very well made by my noble friend Lady Brady, but I really want to unpack it.
What we are talking about here is a lot more than what the noble Lord, Lord Bassam, was saying about the pure financial sustainability of clubs. The concern of UEFA is:
“A Member Association may … be suspended if state authorities interfere … in such a significant way that … it may no longer be considered as fully responsible”.
The Premier League has thought very carefully about how it wants to bring in such things as parachute payments in order to, as we were talking about before, have competitiveness right the way through the game. It is to encourage those clubs—again, I have spoken to clubs about this—to invest, even though they might be in the bottom half of the table, because if they get relegated, they have that safety net. Without that safety net of parachute payments, they would not invest, so they would not be competitive.
What we are talking about here is that if we start to alter those parachute payments and the regulator starts to get involved in that, that is fundamentally altering the competitiveness of the game, so interfering in a way that I feel that UEFA, given the comments it is making, is absolutely going to say that we are overstepping the mark. To my mind, the only way to overcome that, while it is helpful to have these amendments, would be to have a meeting with UEFA—I know meetings have been had—and having a letter from UEFA clearing it, saying that this is something it is happy with and that it will not cut across it. If we do not do that, there will be a fundamental danger of what I think all of us would agree would be the biggest own goal of all.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to my noble friends Lord Moynihan and Lord Maude of Horsham for their amendments in this group and for the way they set them out. I support the reasons behind their amendments.
Amendment 5, moved by my noble friend Lord Moynihan, would add a critical provision ensuring that the autonomy of sport from government influence is respected, in accordance with the established rules of FIFA, UEFA, and the International Olympic Committee. The purpose of Clause 1, as stated, is
“to protect and promote the sustainability of English football”,
and my noble friend’s Amendment 5 would provide the necessary framework for achieving that purpose, while upholding international standards. FIFA, UEFA and the International Olympic Committee have clear rules regarding the autonomy of sports organisations and their independence from government control. Failing to adhere to these principles risks sanctions from these bodies, including the very serious sanctions that noble Lords across the Committee have set out, such as the exclusion of national teams or clubs from international competitions. My noble friend’s amendment would ensure that the Bill operates within these very clear and well-established boundaries, safeguarding England’s participation in international football.
Amendment 6, from my noble friend Lord Maude of Horsham, is crucial, as it would directly protect England’s participation in international football tournaments such as the Euros and the World Cup. Again, FIFA and UEFA have stringent rules regarding government interference in football governance. The test here, as the noble Baroness, Lady Fox of Buckley, my noble friend Lord Jackson of Peterborough and others set out, is not for the Minister to imagine what she or the present Government may do, but what future Governments might do with the powers afforded them by the Bill, including the very sweeping secondary powers that it sets out.
Baroness Twycross (Lab)
I genuinely welcome these amendments and appreciate the sincerity of the concerns noble Lords may have about the possible ramifications were the regulator to operate outside of governing body rules, including the potential ramifications for domestic teams playing in international competitions. The noble Lord, Lord Parkinson, noted that this threat might be alarming to fans. It behoves us all in your Lordships’ Committee not to spread unwarranted alarm and I hope it will be useful if I am able, in response to this debate, to reassure noble Lords—and, through the debate, fans—that we do not believe that there is any risk from the Bill as it stands to our domestic teams playing in international competitions. I reassure the noble Baroness, Lady Fox, that we definitely have the interests of fans at heart, and I say to my noble friend Lord Watson that I welcome his comments; I am not confused and nor should noble Lords be.
On Amendments 5 and 6, I assure the noble Lords, Lord Moynihan and Lord Maude of Horsham, and my noble friend Lord Watson that there is no intention that the regulator will fall foul of UEFA’s, FIFA’s or the International Olympic Committee’s rules, or that the regulator will take any action that would lead to English club or international sides being unable to play in certain competitions, such as the European Championships.
The Government have worked closely and consulted with UEFA, FIFA and, in particular, the FA throughout the development of the Bill, and will continue to work with them as it progresses through Parliament. The noble Baroness, Lady Evans, raised remarks I made at Second Reading. I can confirm that the Minister for Sport recently held a very positive and constructive meeting with UEFA, in which she reiterated that we will continue to work with it as the Bill progresses. We have listened to previous concerns and have responded by removing a clause from the previous Bill which required government foreign and trade policy to be considered when approving takeovers. In response to the noble Lord, Lord Birt, I hope I can provide assurance, in that my understanding is very clear that they have confirmed that they do not now have concerns about the Bill as it stands.
Lord Parkinson of Whitley Bay (Con)
Noble Lords are listening carefully to the Minister’s words, and she says it is her “understanding”. Is it the Government’s clear view that UEFA and FIFA are happy? She said also that it is not the intention of the Bill that this would take English football into areas that might cause conflict, but I think noble Lords were probing not the intention but the risk that it might do so. Perhaps she is able provide something further in writing, but noble Lords are seeking certainty and precision in her response.
Baroness Twycross (Lab)
There is nothing in the Bill that conflicts with English clubs or the English national side competing in international games, as the rules of the international bodies stand currently.
Baroness Brady (Con)
Have UEFA told the Minister that, or is that her understanding?
Baroness Twycross (Lab)
As I said, UEFA had a meeting with the Minister for Sport. My understanding from that meeting, at which I was not present, is that this was confirmed. It has not raised other concerns. If any noble Lord knows of other concerns that it has raised directly with them, please get in touch afterwards.
Lord Maude of Horsham (Con)
We are listening very carefully to this, and it is really important. I have absolutely no doubt about the honesty of the Minister’s —or the Government’s—intentions and sincerity. The concern is that stating that it is not the intention that the regulator would do anything, or that the Bill would have any effect that would conflict with these international football bodies, is not quite as reassuring as it is meant to sound. The concern has always been the unintended effects, and the fact that, for all their good intentions, she, the Government and indeed the Prime Minister cannot bind future Governments. The regulator is meant to be independent, so there is scope for activity. Unless it is explicitly excluded in the primary legislation, there will continue to be a doubt, whatever good words we hear either first or second hand. To put it beyond any doubt, it is essential that this is in the Bill.
Baroness Twycross (Lab)
I can only repeat that I know that the Minister for Sport is clear that she had a positive and constructive meeting with UEFA, and that we will continue to work with it. The only other point I was aiming to make on this matter, rather than repeating what I had already said, was that when the Government say that we want to keep the Bill within its current scope, this is clearly partly to avoid mission creep, with the unintended consequence that we might then stray into areas that are problematic. When we debate subsequent groups, please note that it is front and centre of our minds that we are very clear that this Government will do nothing to jeopardise the ability of English clubs or the England team to play in international competitions, whether they are European, world-level or at the Olympics. I hope that noble Lords accept that there is no intention to do anything that will jeopardise that. The advice we have had is that this will not be the case. The engagement with UEFA is essential, and it is aimed at ensuring that there are not any unintended consequences that would damage the ability of English clubs or national teams to compete in UEFA, FIFA or Olympic competitions.
This legislation does not impose undue third-party influence on the FA, and therefore does not breach FIFA or UEFA statutes, which the FA has confirmed. In any case, there is an additional safeguard already in place in the Bill, in that the regulator must have regard to its duty to avoid any effect on sporting competitiveness of regulated clubs. For the avoidance of any doubt, and to ensure that there is no possibility of any clauses that may concern these sporting bodies, we have already taken action. As previously noted during the debate, we have removed a clause from the previous Bill which allowed government foreign policy and trade considerations to be considered when approving takeovers. The regulator will be fully independent from Government and tightly focused on the financial sustainability of the game.
On Amendment 24 in the name of the noble Lord, Lord Moynihan, I say that we are extremely confident that no powers or potential actions taken by the regulator would be in breach of the rules, and thus preclude England’s national teams from competing in international competitions. We are mindful of UEFA’s governing principles around undue third-party influence, and this has shaped how we are setting up the regulator.
I am proud that this is a Labour Government Bill that we are taking through this House, as was noted, with agreement from the previous Government. This legislation will not impact the intention for our teams to play in UEFA competitions. For the reasons I have set out, I am unable to accept the noble Lords’ amendments and hope that they will not press them.
Baroness Brady (Con)
Just before the Minister sits down, can she confirm if she could, and would, place in the Library the letter that the Secretary of State received from UEFA, so all Peers have a chance to read it? I know the Minister stated that this was not alarming, but I think the majority of people would find it alarming.
Baroness Twycross (Lab)
The noble Baroness refers to my point about this not being alarming. I do not want fans to be alarmed by our discussion. It was a private letter from UEFA; there is no intention for it to be published. I assure noble Lords that this Government will not do anything to jeopardise the FA’s membership of UEFA or the participation of English teams in UEFA competitions.
Lord Parkinson of Whitley Bay (Con)
I am a little disappointed by the Minister’s reply to my noble friend. An important point to bear in mind is that we are not probing just the Government’s intentions, and the Minister has been very clear that it is not the Government’s intention to put in peril English clubs’ participation in international tournaments. However, the risk is that the independent regulator—ironically, as it is more independent from Government and able to do things—could take us into areas that do jeopardise that. The Government have made some changes to the Bill to try and satisfy concerns raised about its independence from Government, and we will touch on those, but I know that they are trying to help. Can she address the distinction between the Government’s intentions and actions, and what the Bill does in bringing about an independent regulator that can, through its actions, inadvertently lead to some of the jeopardy raised by noble Lords?
Baroness Twycross (Lab)
As per the FA articles of association, the FA is established to promote and govern the game of association football. This Bill will not affect the FA’s ability to do that independently without undue influence, so it will not breach UEFA and FIFA statutes as they are currently drafted. The FA gave all evidence to this effect to the Committee in the other place, during the passage of the previous Bill.
Lord Moynihan (Con)
My Lords, I am very grateful to the Minister for what I am sure is a completely genuine and committed response to the many points that have been made. However, I hope she will understand that it worries this Committee to hear that fans might be alarmed by something, so we must not show it to them”.
Baroness Twycross (Lab)
That is not what I said. My point was that this conversation and this debate may be alarming, and I believe it is unduly alarming to fans, although nothing in this Bill would preclude us from international games, whether that is English clubs or the national team.
Lord Moynihan (Con)
I am sorry, but the Minister was very clear in her response to my noble friend that the publication of the letter might cause alarm, and that that was one of the reasons why it was not to be published. If I misunderstood, I apologise to the Minister, but I would simply say that, if there is no alarm from the letter, why not publish it? Why not place the letter in the House of Lords Library so that we can review it?
Football Governance Bill [HL]
Monday 2nd December 2024
(1 month, 2 weeks ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Amendment Paper: HL Bill 41-II Second marshalled list for Committee - (28 Nov 2024)
Lord Kennedy of Southwark (Lab Co-op)
My Lords, before we start today’s Committee, I point out to the House that this is day two of five days on the Football Governance Bill. We need to make significant progress on the groups today.
Clause 1: Purpose and Overview
Amendment 7
“(3) For the purposes of this Act, English football is sustainable if it—(a) continues to meet the needs of present fans without compromising the ability of future generations of fans to enjoy and benefit from the club, including through the club continuing to operate a team in club competitions, in a way that represents the unique heritage of the club as recognised by its fans, and respects the interests of these fans;(b) continues to contribute to the economic and social welfare of the communities with which regulated clubs are associated, including, but not limited to, direct or indirect positive effects on the income of local businesses, cultural enrichment, or the reputation of the local area.”Member’s explanatory statement
This amendment intends to create a more precise definition of the sustainability of English football.
Lord Parkinson of Whitley Bay (Con)
My Lords, Amendment 7 begins this group of amendments on this important Bill. It would expand the definition of,
“the sustainability of English football”.
On day one, we had a useful debate—although it was longer than the Committee Whip might have wished—about the purpose of the Bill and the limits of sustainability. As the Bill is drafted, the only definition of
“the sustainability of English football”
is, as the Minister pointed out to us in our debates on the previous groups, Clause 1(3)(a) and (b). Paragraph (a) states that English football is sustainable if it,
“continues to serve the interests of fans of regulated clubs”,
and paragraph (b) specifies that it must continue,
“to contribute to the economic or social well-being of the local communities with which regulated clubs are associated”.
That is all we have to go on in the Bill. The criteria for the success of this important and novel Bill therefore rest upon these two simple lines.
Our contention is that these brief and rather vague statements of intent are not sufficient to act as the foundations on which the success, or otherwise, of this Bill and this new regulator are to be judged. The actions of this regulator will have significant consequences for the whole football pyramid. It is vital, therefore, that we ensure that it has the necessary legislative tools and the clarity of message from Parliament to set it up for success. To do that, it must have in statute a strong set of conditions against which its actions and its regulatory work can be assessed. This echoes the fruitful discussion we had on our first day in Committee about the underlying purpose of the Bill.
However, my Amendment 7 is about much more than this. It is about setting a precedent. If we do not establish from the outset the frames of reference and the standards to which the regulator will have to be held, that does not set it up for a successful future. It is surely the duty of this Committee and of Parliament more broadly to hold public bodies to higher standards than these two rather short and insubstantial lines we have in the Bill at the moment. That is why I look forward to my noble friends Lord Maude of Horsham and Lord Markham setting out the case for their Amendments 12 and 13, and I will say a bit more once they have done so.
The Deputy Chairman of Committees (Lord Haskel) (Lab)
I have to inform your Lordships that, if Amendment 7 is agreed, I cannot call Amendments 7A to 15 because of pre-emption.
Lord Maude of Horsham (Con)
My Lords, I rise to speak to my Amendment 12 in this group. Before I do so, I think it important to express mild regret at what the noble Lord the Government Chief Whip said before we started our proceedings today. This is an incredibly important Bill, which, for the first time, imports into our much-loved national game a costly system of regulation. It is a very long Bill. There are numerous amendments being tabled, mostly by Members on the government side. We know that the House of Commons these days gives scant scrutiny to important Bills. It is therefore incredibly important that this House in Committee gives the Bill the detailed scrutiny that is required. If the five days that the Government have rather meagrely assigned to this Committee stage are not enough, I hope they will be quick to extend the proceedings so that we can give proper scrutiny. Much hangs on this. The more we have debated the detail of the Bill, the more issues have arisen, giving rise to greater concerns—
Baroness Jones of Moulsecoomb (GP)
I was here last Wednesday, waiting quite a long time for my amendments to come up in group 3, and I sat through an awful lot of what I felt was hypocritical stuff from this side of the Chamber, given that this was a government Bill under the last Government. Not that much in it has changed, yet there was a lot of discussion on this side. Listening to that was agony, so I am quite keen to get through the Bill. Of course we should debate it, but not at the sort of length that is, I would say, rather self-indulgent.
Lord Maude of Horsham (Con)
I empathise with the noble Baroness’s pain, but this is what legislative scrutiny is about. It is about looking in detail at what is proposed and ensuring that we do not pass into law measures that will inflict damage on something that is both an incredibly important economic activity but also a source of great pleasure to millions in this country and more than a billion worldwide. So I hope the noble Baroness will suffer less and we will move as quickly as is appropriate in these circumstances.
We debated last time whether the ambition for football to be sustainable was sufficiently ambitious for the state of English football, and I think many of us in different parts of the House concluded that it was not so. However, if the Government insist that sustainability is all that is going to be sought then it is important that we define what is meant by sustainability in a way that does not circumscribe the mindset and the approach of the regulator that is going to be established.
Football is a very successful industry and activity. As we have heard, it remains the case that the Premier League is the most successful league in the world and the Championship is the sixth most successful in Europe, and we need to make sure that we do first do no harm but, secondly, because we know that there is no such thing as steady state any more, if it does not continue to grow and improve then it will be going backwards. So it seems right that, in addition to the addition suggested in my noble friend Lord Parkinson’s amendment, we should look at the four elements that I propose should be added to the definition of “sustainability”.
First, it should continue
“to be globally competitive in relation to audience and quality”.
That is important because you cannot take anything for granted. The success of English football has been earned, but it has been harder over a period so we need to be extremely careful; this is a precious asset and we need to be concerned all the time with competitiveness. The costs that are proposed to be imposed on English football through the creation of this regulator—both the costs to be recovered through the levy and the compliance costs for clubs of accommodating themselves to this regime—will in themselves be a blow to competitiveness, so there needs to be at least an equal and opposite concern to offset that. Competitiveness is going to be incredibly important in relation to audience and quality.
Secondly, it should continue
“to attract significant domestic and foreign investment”.
My own club, Tottenham, has invested hugely in a world-class new stadium; other clubs need to do the same. A huge amount of investment will be required in upgrading stadia around the country. They are extremely expensive commercial assets that are of great importance to their local communities as well. They are community assets that tend to attract in their wake, in their slipstream, other regeneration investment into the communities, often some of the most disadvantaged communities in the country. It will be extraordinarily important that the regulator has in mind at all times that the return on those big investments that will be needed should not be imperilled by the way that the regulator itself operates.
Lastly, it should continue
“to grow economically in terms of commercial revenues”.
All these are fragile. None of these revenue streams—from broadcasting or from the asset and enterprise values—can be taken for granted. The success of English football has to be earned, every day of every week of every season there is, so this will be very important.
Given these approaches, I cannot feel that anyone will quarrel with these being elements that the regulator should think about and seek at all times to prioritise. What is the objection to them appearing in the Bill, since that shows the importance that Parliament attaches to these considerations? That can in some way help to make a difference to the way in which the regulator is set up, because much of that is left unclear. Much of it will be at the discretion of the board and its chair, yet to be appointed, of the regulator. This Committee should have no difficulty in supporting having these factors placed squarely on the face of the Bill. I hope, therefore, that the Minister will take this away and think carefully about whether it would a be way of improving a Bill that currently leaves much to be desired.
Baroness Evans of Bowes Park (Con)
My Lords, I support Amendment 12 in my noble friend’s name and have added my name to it. As he rightly said, this amendment aims to broaden the definition of the sustainability of English football for the purposes of the new regulator, to ensure that it has a duty to consider a much more extensive list of factors that are important for the continued success and growth of the game—obviously, issues that we discussed at length last week—in deciding its approach and exercising its powers. If the Minister will not look at expanding the purpose of the regulator to include growth, for instance, as I set out last week, this is an important amendment to ensure that we expand the definition of sustainability and create a balanced framework within the regulation to provide protections while enabling growth.
A framework that provides sustainability while encouraging investment and maintaining stability will preserve the success of English football and ensure the continuation of innovation and investor confidence. As my noble friend said, we cannot take the success of the English game for granted, so it is important that the Bill ensures that successful elements of the current model are given due prominence—perhaps we are being a bit blasé in thinking they will just continue, no matter what—in the concerns of the regulator going forward.
English football’s depth and current comparative advantages come from achieving the right balance of oversight with competition, aspiration and financial support—a combination of elements that the regulator must be mindful of when considering the sustainability of football over the longer term. I really hope that in the light of our discussions last week, and the concerns we are raising again today, the Minister can see and accept that a narrow set of sustainability metrics could, inadvertently, be very damaging. If she will not look at changing the purpose of the Bill, I very much hope that she will look at expanding the definition of sustainability in this clause, so that we can cover all the elements that we are all, I believe, in support of saying are important in today’s game but simply do not appear in the Bill as it stands.
Lord Jackson of Peterborough (Con)
My Lords, I support the amendment in the names of my noble friends Lord Maude and Lady Evans of Bowes Park, for the simple reason that it is very helpful to the Government. We had the good fortune to meet the shadow regulator last week; it was a very informative and interesting meeting and, clearly, it is starting from scratch.
Given that the Bill has many wide-ranging and permissive powers that are given via statutory instrument to Ministers, it is important that on its face—in primary legislation—there are proper framework guidelines for the regulatory and legislative regimes for the regulator to go forward with. Given that last week the Government were quite firm in setting their face against growth parameters, which are pretty important, given that the Premier League is one of the most successful business outfits in the whole world—in fact, the most successful sports league in the world—I cannot really understand why the Government believe that this is mutually exclusive to supporting fans and putting into the Bill a commitment to fans, even though they are, as we learned previously, not defined.
Baroness Brady (Con)
My Lords, I refer the Committee to my interests, which are declared on the register. I support Amendment 12 in the name of my noble friend Lord Maude, especially proposed new Clause 1(3)(f). This would set a clear success metric for the IFR that it should incentivise
“industry-led agreements on the distribution of”
the Premier League’s broadcast revenue. This is absolutely critical for the future collective success of the football industry.
We already know that UEFA has written an alarming letter to the Government which said, among other things:
“Mandating redistribution which affects the competitive balance in the game and wider European competition would be of concern to us”
and
“would … prevent amicable solutions being found”.
This is why UEFA says that the backstop should be “carefully reconsidered”. I understand and respect that this is what Ministers genuinely believe they have done in relation to the backstop powers, which we will discuss in much greater detail later. However, I profoundly disagree that the backstop provides any such incentives.
I draw noble Lords’ attention to the fact that earlier this year Dame Tracey Crouch, the chair of the fan-led review, called the backstop powers “nuclear … coding” never to be reached for. However, the Football League chair disagreed, and said he fully intends to use the mechanism and that it is entirely logical. To extend the analogy, in the Bill the Government are doling out nuclear weapons to football authorities. They are doing so in the belief that these weapons will somehow create space for diplomacy. However, the evidence is already very clear. In the real world, one side is ready to press the button and launch its missiles. The powers clearly do not place the incentives in the right place. If they did, we would already have a new agreement and the football bodies would not have been driven so far apart.
This is why I have tabled amendments to rebalance the backstop, so it can create proper incentives and space for good-faith negotiations and diplomacy. The fact that the Bill has led one party to believe it can launch a successful first strike is proof that these powers have manifestly failed in their purpose already. That is why I am so supportive of my noble friend’s amendment.
Lord Watson of Invergowrie (Lab)
I have a couple of questions for the noble Lord, Lord Maude, but first, the noble Baroness, Lady Brady, said that the amendments provide clear metrics. I do not think they do; they are very subjective, particularly Amendment 12. What is
“globally competitive in relation to audience and quality”?
Regarding the phrase
“continues to attract significant domestic and foreign investment”,
what is “significant”? I do not think it is helpful to include words like that.
For what it is worth—my noble friend the Minister probably will not like this—I think paragraphs (e) and (f) of Amendment 12, tabled by the noble Lord, Lord Maude, make sense, because we can clearly see what they mean. I would say the same of the Amendment tabled by the noble Lord, Lord Parkinson. Amendment 7 is rather rambling and unclear and is not suitable for inclusion the Bill. We need something clear that can be measured, rather than words like “substantial”, which could mean anything or nothing.
Lord Hayward (Con)
My Lords, the noble Lord, Lord Watson, just used two words which are of significance: “subjective” and “clear”. The problem with the Bill as drafted, judging from the lengthy debate we had last Wednesday and today’s proposed amendments, is that we are trying to provide clarity in relation to very subjective words, not least of which is “sustainability”, which is used several times. All these amendments are about looking at ways of making things clear, so that the football regulator can operate in some form or another.
The noble Lord was present throughout the debate last week, and during that debate I spoke about the threat to which the noble Lord, Lord Maude, has referred: that other sports and organisations will overtake our system—the Premier League and the other leagues—unless it is able to modernise and change as time goes on. What worries me genuinely about the Bill as drafted is that it almost implies ossification. It is an immovable process, because “sustainability” is just not clear.
Let us look at what we have seen in the past few days in terms of sport. This weekend the Middle East hosted a Grand Prix, a cricket tournament and a rugby tournament, so let us look at what might happen elsewhere. Equally, the Champions League, as was referred to in a previous debate, is changing and expanding. This Bill arose from a government reaction—an overreaction, probably—to the threat of a European super league whereby a set of clubs would be in a league of their own, never challenged. Quite rightly, the nation’s fans—not just this nation but a whole series of other nations—rose up and said that that is utterly unacceptable. Despite that, some clubs still believe that that is the right way to go. The Champions League has extended and we have the UEFA Conference League, et cetera. They are involving more and more British football clubs, and I welcome the success.
In referring to the football results of the past few days, I apologise profusely to my noble friend Lady Brady. But the success of the Premiership was identified in the fact that, albeit only briefly, Brighton & Hove Albion were second in the Premier League. That does not imply an unchanging, rigid position; it implies that the Premiership and the league system can develop. I was listening to the commentary on Liverpool v Manchester City—I apologise to any Manchester City fans for referring to yesterday’s game—and it was striking that, before the game, Radio 5 Live observed that there were more foreign correspondents covering that match than were covering the Liverpool v Real Madrid game only four days earlier. That indicates the very success and potential our system has—as long as it is reasonably developed and allowed to progress.
I have doubts, to be honest, about my noble friend Lord Parkinson’s amendment, because I do not think it goes far enough. I welcome that of my noble friends Lord Maude and Lady Evans, because it gives the Bill a better perspective and tries to provide clarity beyond the merely abstract word “sustainability”, and to develop some other aspects to which the football regulator should refer.
When I spoke last week, I was highly critical of the impact assessment, and I continue to be so. I know that it is largely based on the impact assessment prepared for the previous Bill, so I do not criticise the Minister; I criticise my colleagues in the previous Government just as much. However, I said that the impact assessment was intended to justify the current Bill, and that is made clear in paragraph 17:
“This Impact Assessment (IA) provides evidence and analysis to support the government’s case for intervention”.
In other words, it is providing support specifically for this Bill. It does not look at a range of other issues, which my noble friend Lord Goodman identified when he quoted from Tracey Crouch’s original report, relating to the overall success of the football industry in this country.
I believe that we need to provide greater clarity and greater indications of what we are trying to protect, develop and allow to go forward. Although last week I criticised the total lack of reference to “success” in the impact assessment, and I stick by that, I was very pleased, in part, to receive the letter from the Minister, page two of which has a section entitled “Proportionality and promoting success”. That is the attitude I want to see reflected in the Bill, in whatever phraseology we choose.
Lord Addington (LD)
My Lords, it might be an appropriate time for me to make a few comments on the Bill. Amendment 12 suggests that the regulator will be able to have a very positive input into the marketplace. I do not know how it will achieve the aim of attracting significant domestic and foreign investment. Let us face it, our Premiership and our football structure have no divine right to be the most popular show in town, end of story. We all agree on that, but this Bill is about the fans and what they want from their domestic game. They want it to be there, and they do not want it disappearing off to Europe, or the top names disappearing off to Europe and the structure going.
If the Minister can point us to where we will have limits, and to the encouragement of involvement, we will all be able to move on a bit, but the “sustainability” factor is actually making sure that our domestic structure is there. I do not know how much else we can do without massive intervention by the state. Are we going to say, “You are not going to pay any tax on your revenue”, which means the state has no involvement anyway?
Lord Maude of Horsham (Con)
The noble Lord asked, perfectly sensibly, in relation to my Amendment 12, whether I am expecting the regulator to positively intervene to promote growth. No—my concern is that the mindset of the regulator has to be not to damage the sector, and not to impose regulation and intervention in such a heavy-handed way that it actually reduces competitiveness and the attractiveness of the sector to investment. It is really a warning shot to the regulator, to make sure it does not harm what is already there. There will be some harm, because additional costs will be imposed on English football simply as a result of creating the regulator, but that has to be as limited as possible.
Lord Addington (LD)
My Lords, it depends on whether by harm you mean spending any money on regulation. Yes, making sure that there is any structure of regulation is a harm, but it is a necessary harm, because the Bill is not just about the top guys in the Premier League. It is about the entire structure, five leagues down, and should possibly go even further. It is about making sure that there is something below that, so that if things go wrong in your competitive league—and they will; the big boys will eventually lose, or at least they should—you have the capacity. That is something that we have all embraced, and I hope the regulator allows that to happen.
Lord Markham (Con)
My Lords, I will speak to my Amendment 13. I echo the points made by my noble friends Lord Maude and Lord Jackson: if the Chief Whip had stayed and heard the debates last week and this week, he would have found real experts and real, passionate supporters—dare I say fans—scrutinising the Bill and making sure there is real health and success there. I believe we would all be doing this whatever colour of Government had introduced it.
Last week, if noble Lords recall, we were left scratching our heads somewhat about how there was some sort of aversion to the use of the words “growth” and “success” in all this. That is what we are trying to address in Amendments 12 and 13, both with a similar purpose. To answer the noble Lord, Lord Addington, this is vital because the pyramid structure and the health of all clubs depend on the health at the top of the Premier League, because the redistribution of that money funds so many of the other clubs and is allowing the Championship to be the sixth-richest league in the world as a result.
I really do not understand the Government’s reluctance to engage in these types of measures. There are precedents in other regulators. Everyone knows about the Bank of England’s inflation target, but also within its targets is a target to facilitate the international competitiveness of the UK economy and its growth in the medium to long term. Other regulators such as Ofcom, Ofgem and Ofwat have a growth duty to look at innovation, infrastructure and investment, competition, skills, efficiency and productivity, trade and environmental sustainability. It is very clear that other regulators are being asked to consider these other measures of overall success in their objectives.
Why does it matter? Like other noble Lords, I think the meeting we had with the shadow regulator last week was very helpful. It is undoubtedly true that the intentions of all the people there are very good. Like all of us, they are trying to make sure that the game we love is protected, but the shadow regulator’s thinking on sustainability is very much in the mould of a bank regulator’s. The main method it sees achieving sustainability is to insist—as the FCA does with banks—that a certain amount of money is put on deposit to give a buffer, a certain comfort, to clubs. Numbers have been bandied around—it may be £20 million or so per club in the Premier League. Those are large numbers; £400 million will go out of the game because it will be held in aspect. That amount of money has a real impact. If the regulator has only a one-dimensional objective on sustainability, it will always be weighted towards putting more and more money aside as a buffer. However, if it has other objectives in its definition of sustainability, it will take other factors into account.
I think noble Lords know that all the successful companies we see today, such as the magnificent seven that people talk about—the Googles, Microsofts, Facebooks and Teslas of the world—had an early start-up stage when there was heavy investment and their costs far exceeded their income. We absolutely see that in football clubs. The story of Brighton was mentioned earlier, and I happen to know a thing or two about it. I think we would all agree that it is a fantastic success story. For years and years, that success was reliant on Tony Bloom, the owner of Brighton, putting his hand in his pocket to invest more in players than the club’s income. He believed that, just like in any start-up company, you have to make that investment. That will build success, and from that you will manage to get promoted and get to a more and more sustainable position. He was able to achieve that.
Not every club can achieve that because, as we all know, not every club can get promoted. But the danger is that if the regulator’s only dimension is sustainability, it would look at business plans such as Brighton’s and say, “Hang on, they’re going to run a deficit if they stay in that league. That doesn’t sound very secure. How are we going to guard against that? We’ll make them put a certain amount of money into escrow as a buffer”. That will undoubtably dampen innovation, which is exactly the opposite of what we want. We all know that the beauty and the strength of English football are in the fact that clubs can get promoted and go on to do wonderful things, and we all know of plenty of examples.
Unless a regulator has more than one dimension—more than one club in its locker—it will only ever look at the sustainability angle and put more and more money aside. That is where I am coming from with Amendment 13, which is similar in intent to Amendment 12. It is from my knowledge of selling TV rights and of what people are really looking for. It is all about TV viewership, sporting competitiveness, the income that is generated and match attendance. To the point from the noble Lord, Lord Watson, those things are all clear and measurable; they are all things that a regulator should want for the health of the game.
I hope that when the Minister answers, she will let us know why we would not want to follow the lead of the regulators of the Bank of England, Ofwat, Ofgem or all the others, and give this regulator more than one dimension. I know the Minister really wants to see the health of the game and that everyone has good intentions. That is why this debate is so good—we all want what is best for the game. Widening the basket of measures that the regulator seeks to achieve can be only good for the health of the game.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to my noble friends Lord Markham and Lord Maude of Horsham for speaking to their amendments and for setting out the case for them. Before the Minister responds to them and to my Amendment 7, which I moved at the outset, I should say that I am not precious about my amendment vis-à-vis those of my noble friends in this group, Amendments 12 and 13.
The noble Lord, Lord Watson of Invergowrie, said that he did not like my wording and found it rambling and insubstantial. I take no offence; I simply took the wording that the Government used in the Explanatory Notes and sought to put that in the Bill. If he finds that rambling, it may be that the Explanatory Notes are as well.
Lord Watson of Invergowrie (Lab)
The point I was making was that the wording was appropriate for the Explanatory Notes but not for the Bill.
Lord Parkinson of Whitley Bay (Con)
I thank the noble Lord. My noble friend Lord Hayward said that he did not much like it either, but it is helpful that my amendment has been grouped with the other amendments, which are seeking to give a bit more precision than the two short lines that are in the Bill. As I said in moving my amendment, my contention is that they do not go far enough to define what “sustainability” means in practice, which will be important for the regulator looking at it.
I am grateful to my noble friends, particularly my noble friend Lord Markham, whose Amendment 13 proposes a few tangible benchmarks through which sustainability can be measured. It suggests inserting criteria, including increasing TV viewership, increasing match attendance, improving international sporting competitiveness and increasing the overall income generated. They are all very tangible and specific. I hope that the noble Lord, Lord Watson, will prefer them and I look forward to hearing what the Minister has to say about them when she responds.
Criteria such as those would provide a far more accurate and reliable understanding of the sustainability of English football. As my noble friend Lord Markham said, we all want to make sure that we are helping to deliver that with this Bill and to give the regulator the clarity that it needs to uphold it. The Premier League’s television exports alone were worth £1.4 billion in 2019-20. If the Government are serious about growth and supporting the success of Great British success stories, the regulator must ensure that that growth trajectory goes only upwards. By basing the standards of sustainability on objective metrics, such as those that my noble friends Lord Markham and Lord Maude have tried to set out, football would surely benefit, and the regulator would have the clearer frames of reference that I think we are looking for.
As my noble friend Lord Hayward said, there is competition from a growing number of countries that are snapping at our heels. As the noble Lord, Lord Addington, reminded us, there is no divine right for football to continue to exist in the way that it does in this country. My noble friend Lord Hayward pointed out some of the sporting fixtures that have happened this weekend. I enjoyed the Qatar Grand Prix, although I thought that the 10-second penalty for Lando Norris was rather disproportionate, especially since no safety car and no virtual safety car were deployed. I mention that not to take us on to another sport but to point out the difficulties that happen when a regulator—in this case, the Fédération Internationale de l’Automobile—makes curious or contentious decisions.
Through the amendments in this group, we are seeking to give a clarity of purpose to the regulator, so that it can focus its important work on delivering the sustainability of English football in a way that matches what the Government have set out in their Explanatory Notes. For all the differences that have been expressed, I think that we are all united on that. But it is important that we give this extra precision and clarity, and I look forward to hearing what the Minister has to say.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank the noble Lords, Lord Parkinson of Whitley Bay, Lord Maude of Horsham and Lord Markham, for tabling their amendments and for the thorough discussion we have had. I look forward to the ongoing discussion on many of the points raised as we debate the Bill.
We do not think that the Bill, which is largely the same as the previous Government’s version, is flawed, as the noble Lord, Lord Jackson of Peterborough, suggested; nor do we think it leaves a lot to be desired, as the noble Lord, Lord Maude, suggested. We also do not think that it is an overreaction of the nature that the noble Lord, Lord Hayward, suggested. Indeed, we think it is what fans are looking for and what will bring sustainability to the game. I will get on to the definition of “sustainability” shortly.
Amendment 7, tabled by the noble Lord, Lord Parkinson of Whitley Bay, adds further detail to the definition of the sustainability of English football. I am pleased that he noted the definition on page 2, which does indeed define sustainability in the Bill. All the aims of the amendments are laudable. However, I assure the noble Lords concerned that the detail that has been added, in particular by Amendment 7, is largely implicit in the current definition of the sustainability of English football. So, while the noble Lord might suggest that the definition is, in his words, short and unsubstantial, I would argue that it is sufficient. The wording is that which was adopted in the noble Lord’s Government’s iteration of the Bill.
Lord Jackson of Peterborough (Con)
I hear what the Minister says and I am grateful. However, she will have read the Delegated Powers and Regulatory Reform Committee report dated 22 November. We know that sustainability is not explicitly defined. We know that fans are not explicitly defined. As was said on our first day in Committee,
“the meaning of English football is deliberately left unclear on the face of the Bill … The answer will emerge only after the Bill is enacted, when the Secretary of State makes regulations to fill in the definitional gap left in the meaning of ‘specified competition’. As a result, the remit of the new regulator is presently unclear”.—[Official Report, 27/11/24; cols. 720-21.]
Does she not agree that this is why it is important to tighten up that situation—that lacuna—in the Bill, so that the regulator has a firm sense of direction in how it proceeds?
Baroness Twycross (Lab)
That is a matter that I am sure we will discuss at greater length when we come to a longer discussion on secondary legislation, but I am happy to talk to the noble Lord outside this Chamber at further length.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to the Minister for her reply. There were two things that I scribbled down as she said them. The first was that the definition—the extra detail of sustainability—is implicit in the Bill. That really gets to the nub of the debate we have just had. We think leaving it implicit for the regulator causes some problems. If the wording—albeit not to the preference of the noble Lord, Lord Watson of Invergowrie—is something that the Government are happy to set out in the Explanatory Notes, why can we not make it a bit more explicit in the Bill to give the regulator more clarity? That is what the amendments in this group have sought to do, and the Bill would benefit from being made more explicit rather than left in the implicit way that the Minister set out.
The Minister also said that the regulator is being set up to deal with football’s sustainability problem, and that football has no growth problem, at least at present. Our concern is that seeking to address the former problem in the way the regulator goes about its work, particularly if it is left to do it implicitly, risks football’s continuing success in the growth category and in other ways. That is why we have given this such detailed scrutiny. However, I am grateful to her for her response, and I beg leave to withdraw my Amendment 7.
Lord Parkinson of Whitley Bay (Con)
My Lords, in moving the amendment, I shall speak also to my Amendment 9. Amendment 26 tabled by the noble Lord, Lord Addington, also touches on many of the issues that concern me and motivated me in bringing my amendments; I look forward to hearing him set out the case for it later in the debate.
My amendments in this group probe the Government’s definition of a football fan. In any other context, the exact definition would perhaps be academic, but fans have had an important role in the process that has led to this Bill. As the Minister and many others have said, the Bill seeks to put fans’ interests at the heart of this legislation. It was, after all, the fan-led review chaired—refereed, if you like—by my former honourable friend Dame Tracey Crouch which led to the Bill in its former iteration under the previous Government and which continues to inform the work that the new Government have taken forward in the Bill that they have brought before your Lordships. It was the fans’ voices in that process that were so important, and which began the path to where we now find ourselves.
We on these Benches agree with the Government that fans must be consulted and that they will have an important and ongoing role to play not just in the future of English football but in the operation of this new regulatory regime, but we cannot empower fans, or listen to their views, if we cannot say who they are. Through Amendment 8, I put it to the Government that both clubs and the new independent football regulator should seek to serve the interests of both “current and prospective” football fans. This expands the point that we have made about growth and making sure that the Bill is not simply seeking to preserve football in aspic.
In his Reflections on the Revolution in France, published in November 1790, Edmund Burke wrote:
“Society is indeed a contract … it becomes a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born”.
That may be a high-falutin’ way of putting it, but it is the principle that underlies my Amendment 8. Football must not be governed as a game merely for the fans of today, nor should it simply seek to preserve the game in a form that fans of the past have enjoyed; it must also continue to be a game for the future. That is surely what the Government mean by the sustainability of football which, as the noble Baroness said in the debate on the previous group, is the key concern of this Bill.
We on these Benches feel that prospective fans—whether they be literally unborn, as Burke would point out, or those who are not yet alive to the joys of the game—should always have their interests served by clubs and the new regulator as well. Only if we are seeking to serve the interests of prospective fans as well as existing ones will we truly secure a sustainable future for English football.
My Amendment 9 similarly seeks to expand the definition of the communities whose interests are served by the Bill. The purpose clause in the Bill seeks to serve only “local communities” with which regulated clubs are associated. I was keen that the Committee should probe the inclusion of that word, “local”. We had the right reverend Prelate the Bishop of Manchester with us for earlier deliberations in this Committee. I am taken to understand that not everybody who is a fan of Manchester United or Manchester City lives in the city of Manchester. If a large group of people from London or another part of the country were to follow Manchester United or Manchester City during a period of success for one of those clubs, would it be right for those clubs or the new regulator merely to serve the interests of local communities in Manchester, or should they consider the interests of fans who follow those teams and who have a stake in them no matter where in the country they are based?
Lord Knight of Weymouth (Lab)
One reason why I have been interested in this Bill is the European Super League proposals that previously happened—the possibility of clubs’ owners deciding that they are going to play two or three games in the United States or two or three games in the Middle East. By defining “local”, are we not ensuring that there is some protection against the aspiration that some owners may have to meet the needs of fans who might be numerous in the Middle East or the United States, but we want regulated clubs to be looked after here in Britain?
Lord Parkinson of Whitley Bay (Con)
That is the question I am trying to probe with this amendment. Are the interests of fans of, say, Manchester United or Manchester City really served only if, as the Bill currently defines it, English football is contributing to the economic or social well-being of the “local communities” with which regulated clubs are associated? Surely Manchester United is associated also with Weymouth, for instance, or other parts of the country where people might choose to be a fan of that club, even if they have never lived in Manchester.
As I set out at Second Reading, I am not the world’s biggest football afficionado, but I know that people do not have to be born in a specific town or city to feel an affinity to, pride in or excitement from certain regulated clubs. I am interested in whether the sustainability of those clubs should also serve people in Weymouth and people across the country. The noble Lord makes an important point about the growing tension with growing the international following of football, but, as we have heard in previous debates, that, too, is a good thing. It is an important part of the soft power of the United Kingdom. It brings inward investment and greater glory to the UK. That is a separate point from the amendments, which look at the work of the sustainability—
Lord Moynihan of Chelsea (Con)
I interrupt to comment on the proposal from the noble Lord, Lord Knight. It is quite extraordinary. Are we little Englanders who think that our only role is in this country? There is a vast amount of soft power created by what is probably the UK’s most successful industry, so it is really odd that the noble Lord claimed that there are major problems with it. If there are major problems with our most successful industry, we are in trouble.
Lord Knight of Weymouth (Lab)
I do not think anyone is talking about banning; it is about preserving our Premier League and some of our domestic competitions, and it is for fans of clubs in those leagues who want to follow their team, home and away, and their ability to do so throughout the fixture list of that league. Clubs such as Manchester City, Manchester United, Liverpool, Arsenal—and West Ham, I am sure—go on tour overseas pre-season to meet the needs of fans who are overseas, and maybe mid-season for all I know. Our teams are playing too many games. It is not sustainable for them to play the number that they are at the moment, but there are opportunities pre-season for fans from around the world to visit.
I love them coming to this country. When I am at the Emirates Stadium and I see all the banners from fans from all over the world who have come to see Arsenal it is a great joy, but we need to be constrained in the regulatory purposes of this to preserve our Premier League and domestic league competitions.
Lord Goddard of Stockport (LD)
Noble Lords need to understand exactly what the previous speaker was talking about. It is about preserving our leagues. The fan base of a club is not 200,000 people in South Korea or 20,000 people in New York. The fan bases of these clubs are in this country. The unintended consequence of what is being proposed could occur very quickly, easily and suddenly.
I am quite appalled by the number of noble Lords in this House who have two or three football clubs. You should have one football club; it is the club you support. I do not have a second or third club. I have one club; I am indeed suffering for that pleasure at the moment, but I have one club, through thick and thin.
What is to stop someone setting up a supporters’ group for my club somewhere else, without honourable intentions but with the intention of doing my club some difficulty or harm? That is what muddies the waters and it is where you get all this involvement. The supporters are local supporters. The other supporters can be supporters but, if local groups are going to be set up, they should be there for 12 months or two years. We need to know their history and regulatory rights. They are not being set up by football clubs, because that is another way that this could be done—to set up your own shadow group that plays lip service to this.
Noble Lords know that football supporters have robust views, and chairmen who really understand that tend to meet them regularly. Lots of Premier League clubs do that; they go and meet their supporters—working-class people in areas and towns, who will give them their honest views, which the clubs usually do not like. United is now increasing the prices for all tickets, which is not going down well with all the United fans, but there is still a 10 or 15-year waiting list for a season ticket. That is why the club can do that, but it is not really supporting the fans.
Let us just bring it back from this existential conversation about Burke and the father of the son. Does that go into politics—“I was a Conservative so my son’s going to be a Conservative”? That is changing—we all know it is—and it is a reasonable evolution. If you are the son of a miner, you might end up a Conservative Minister. That is great, that is the opportunity that this country offers, and it should be the same with football supporters.
But football supporters support their own club and are very wary about suddenly involving any number of supporters, because the numbers then become detrimental to doing what we are supposed to be doing here, which is protecting the pyramid. It seems that these debates are all leading in one direction: “Leave the Premier League alone, let it run football, and the rest of you can have the crumbs off the table”. That is the feeling I am getting from these conversations, and that is wrong.
Lord Finkelstein (Con)
I have a slight fear that I may be intervening in the intervention on an intervention on the answer to an intervention, but still. Among my interests is that I am a director of Chelsea Football Club and director of its foundation. I also had the honour to be a member of the fan-led review committee.
I urge that the Bill and the debate should define “fans” as widely as possible. I am afraid that I think the noble Lord is completely wrong, certainly as far as my club is concerned. We have hundreds of thousands—indeed, millions—of fans all around the world. We care deeply for them and I am very much engaged in our fan mechanism, in involving them. I am committed to the principle of fan engagement that the Crouch committee laid out. We want to talk to our fans all over the globe and we have an interest in prospective fans, not only current fans.
Of course, the fans who attend Stamford Bridge, which is where Chelsea play at home—I feel that I have to explain that—are very dear to us and play a core part in the definition of who a “fan” is, but they are certainly not the only fans. It would be a mistake for the regulator to start its work thinking that that is how the Bill considers it.
Lord Wood of Anfield (Lab)
Regulators do not define who fans are. Regulators define fans for the purpose of consultation in pursuit of their duties. I am a Liverpool fan. Wherever I go in the world—whatever I am doing—I always find the local bar, and there are lots of Liverpool people there to support the team when a game is on, and I make lots of new friends. Liverpool as a club should of course take those fans seriously in its commercial thinking, its tours and other long-term strategy, but the idea that the regulator should consult with the San Diego Liverpool chapter when it is considering issues to do with implementing the Bill is ridiculous. I do not think San Diego-based fans will want that either. The club should take those interests into consideration. We are talking about the connection between a regulator and the pursuit of its duties, and the issue of protecting communities.
Lord Finkelstein (Con)
Is the noble Lord saying that he thinks the club should not ask those people as well as other fans? If he thinks that, why should that not be part of the definition of the “fan” under the Bill?
Lord Wood of Anfield (Lab)
I did not say anything about what the club should do. We should not tell clubs what to do about their conception of their own fans. I am talking about the relevant categorisation of what “fans” means for the purpose of the regulator pursuing its duties.
Lord Lisvane (CB)
My Lords, it would be useful to determine who has the Floor.
The Deputy Chairman of Committees (Lord Geddes) (Con)
My Lords, it might be convenient if we get to the stage of the amendment being moved, and then we can have such a general debate.
Lord Parkinson of Whitley Bay (Con)
I am very grateful to the Deputy Chairman of Committees and to the noble Lord, Lord Lisvane, for trying to bring us back to the point.
This underlines the importance of the debate we need to have in this group. I was tempted to intervene on the noble Lord, Lord Wood of Anfield, but seeing as it was an intervention on me, I do not think that I could have done.
We do not need to focus so much on consulting fans of Liverpool in San Diego. I am interested in the opening clause of the Bill and whether the interests of fans of Liverpool who are based in Weymouth, Whitley Bay or Walthamstow should be taken into account at the moment when we are defining “sustainability”. The Bill currently says:
“For the purposes of this section”—
referring to Clause 1(3)—
“English football is sustainable if it … continues to contribute to the economic or social well-being of the local communities with which regulated clubs are associated”.
Liverpool do great work not just on Merseyside but for fans across the country and we need to have a useful debate about the inclusion and the limiting factor of the word “local” there because there is a domestic point to be made. But, as the intervention from my noble friend Lord Moynihan of Chelsea pointed out, I think we should also avoid looking like little Englanders and being too restricted simply to the domestic benefits here. There is a large group of fans in Thailand, Japan or South Korea, where I was over the summer and where people came up to me and asked which team I supported and wanted to talk about football. I am sure noble Lords across the House have had the same experience when travelling overseas—whether we have places such as Anfield in our titles or otherwise, it is one of the first questions we are asked.
It is a source of pride for this country that a sport we invented and export is something that 1.5 billion people across the globe enjoy watching and can take some of the social and economic benefits of. Through my Amendment 8, I am simply testing whether “local” really ought to be the limiting factor here. I think there are two stages that would be helpful to consider: across England—and, indeed, perhaps the United Kingdom—and across the globe more broadly. I think it would be helpful at this point if I let the debate continue to move by now moving Amendment 8.
Lord Birt (CB)
I am sorry, but I hope it is appropriate for yet another Liverpool fan to intervene in this debate. I think we have to segment the fan base and that is essentially what is happening, so I wonder how much we are really disagreeing with one another. As I said at Second Reading, my grandad was brought up 200 yards from Anfield; my father had to walk to the match; and when I was young, I had to take a train and a bus. We all know about those intense fans that live locally. They are chiefly the fans who go by train to away games and love the game and it is a critical part of their whole life. Any organisation which segments its fan base is going to pay a great deal of attention to that cohort.
But we live in different times from my grandfather and my father. Television changed all of that and created a fan base for a high proportion of clubs, not just those in the Premier League, right across the country. In more recent times, in the satellite age, the fan base is truly global. Any organisation benefits from a dialogue with its customers, and the fan base broadly defined is the customer and it is that fan base that provides the investment into the game. It provides the investment at local, national and global level, chiefly through the agency of television rights. Any sensible organisation—whether it is the regulator, the leagues or the clubs—should engage with the full complexity of that fan base. Like any good business, you talk to your fans, you listen, you learn, you adapt and you grow and that is surely what, in one way or another, I hope most of us could agree with.
When the league made the bad mistake that we all know about of saying there would be a closed shop in Europe, the fan base, broadly speaking, rose up in 24 hours and it was knocked out of the equation. I happen to think it would be a mistake for the Premier League to play “home games” in another country, because it antagonises the fans who have the most intense feeling. But we do have to talk to and be informed about the totality of the fan base, whether local, national or global.
Baroness Taylor of Bolton (Lab)
I totally agree with what has just been said about segmenting the fan base. I do not support a team that has the wide support that Liverpool has, but I was once at a football match in Buenos Aires where I was asked by local people which team I supported. When I mentioned Bolton Wanderers, just about everybody around me said instantly “Nat Lofthouse”, so these things travel. I accept that, but when we are talking about this Bill and about consulting fans on ticket pricing, the club’s heritage or moving grounds, then it is the locality that is in question, and we should not lose sight of that.
Lord Hayward (Con)
My Lords, I shall first pick up the comment from my noble friend Lord Moynihan of Cheslea. Whether it was an intervention on an intervention, I intervened from a sedentary position, and he heard my comments in relation to friendlies. I was not denying what he was saying; I was expressing support to the extent that pre-season friendlies take place to a substantial amount already and they achieve, to use the word currently in the Bill, an element of sustainability because they provide income from matches all around the world. The noble Lord, Lord Wood, commented earlier on. If ever there was an indication of the strength of support for a football club in another part of the world, all anybody has to do is type in “Liverpool” and “Melbourne cricket ground” to watch a full 100,000-plus Liverpool supporters singing their anthem at the start of a match. That is the extent of the support that our clubs have around the world, and it provides substantial income to the club. There are not many as large as Liverpool, but there is support right around the world.
Lord Maude of Horsham (Con)
My Lords, the complexity of this debate—it is structurally complex as well as dealing with complex issues—illustrates how important it is that we explore these issues, because in every debate that we have another layer of the multifaceted success that is current English football becomes exposed and illuminated.
My noble friends’ amendments suggest that the regulator should be required to consider future fans as well as current fans and to take into account all fans not just fans in the locality. The truth is that, 20 years ago, there would not have been support across the world, particularly for the major clubs. However, as the noble Baroness, Lady Taylor, just said, this is not limited to the top level of clubs. This is a moving scene. Globalisation, for all its critics, has not come to an end; this is more of a global village than it was. Top-level football in England is much more international than it was in terms of the background of footballers who play here, and that is unlikely to become less so. As more and more of the world’s population have access to a variety of television channels, there will be more. We can only expect the degree of global interest and support for English football clubs to grow. This is a moving scene, and we should be clear that if we are going to have this regulator, the regulator should think in those terms and to be aware of it.
Of course, there will continue to be an incredibly important local fan base for every club. I was a Tottenham supporter when I lived in Oxfordshire, when I lived in Warwickshire, when I lived in London and now when I live in Sussex. My son, who is also a Tottenham supporter, feels it so strongly that he bought a house five minutes away from the marvellous Tottenham stadium, so he has now become a local supporter having been a distant supporter. This will continue to be the way in which support for football clubs develops, and it is important. My noble friend does us all a service by raising the point and developing the complexity of the issues that we are dealing with here and that we might, if we do not get this right, be putting in jeopardy.
Lord Watson of Invergowrie (Lab)
My Lords, I will speak primarily to Amendment 17A in my name. Before I do so, I want to reflect on some of the contributions that we have heard, largely on the last group of amendments but spilling over into this one. I am a bit concerned that, while the Bill is about the regulator of English football, several noble Lords have said that it would be appropriate to extend it beyond the confines of England.
I understand the economic arguments for that. I think it was the noble Lord, Lord Moynihan of Chelsea, who asked: are we really saying that we do not want English football equivalents of American football teams coming here? I saw American baseball at the London Stadium this year and thoroughly enjoyed it. But I do not care about their leagues. I do not care what effect it has on their leagues or their fans; it is up to them.
I do care about the effect of sending games abroad, as other noble Lords have said, and playing competitive matches: not touring matches, as my noble friend Lord Knight said, but competitive matches in other countries. That would be, to put it mildly, a very slippery slope and it would impact on something that the noble Lord, Lord Hayward, said in the last debate about comparing other sports. There is a very worrying trend of other sports—such as the grand prix that took place at the weekend—being funded to outrageous extents by foreign, often repressive and undemocratic Governments, to ensure that sports go to their countries. I do not want to see that sort of magnet placed in the way of football clubs in this country.
Lord Hayward (Con)
Can I clarify what the noble Lord has just said? He described the sporting events in the Middle East over the weekend—which were cricket, rugby and motor-racing—as “worrying”. Receiving literally millions of pounds of income for a football club or other sport in this country—is that really worrying?
Lord Watson of Invergowrie (Lab)
It is absolutely worrying. These countries have the right to do what they like with their money, but we have a right to say, “I don’t really wish to engage with that”, because we become tainted if we do that to an unlimited extent. That is a slightly different argument from that of playing competitive matches in other countries. That surely is something that we all agree would be bad for the future of English football. There are plenty of ways of bringing money in from all sources—if clubs want to do that, it is up to them—but playing matches outwith this country is surely not where we want to go.
That impacts on the whole question of fans and my amendment, which is: what is a fan? I do not know whether my amendment is the way we should define it, but I think it is the narrowest definition of a fan that I have heard so far in relation to this Bill. How do you define the Liverpool fan in San Diego? What does she or she have to say about what is happening in the Premier League? They may watch it on television and that is fine. They may express a very definite preference for one club, and they are entitled to do so. But they do not have a vested interest in the club in the way that someone who pays their money to go and see a match does.
I will repeat the point that I made last week. Some people are unable to afford the price of tickets, particularly in the Premier League—although I have to say in all honesty that I bought a theatre ticket last week, which cannot really be equated with the cost of a Premier League football ticket. But the other question is whether some people are physically unable to go. It may be somebody who has been going since they were 10 years old; they reach the age of 70 and find they are no longer able to go. I would sympathise with that.
However, we have been talking in the Bill about the regulator ensuring consultation with fans. You cannot consult somebody if you do not know where he or she lives. There has to be a list somewhere of the people you are going to consult. You cannot just open it up online and say, “Anybody with an interest, let us have your view by email”. That is not consulting—or at least consulting properly. So people who have bought into the club by having a season ticket: that is a reasonable way of saying, “These are the only fans we can genuinely define”. You can put them in a box and say, when it comes to consultation, “That’s the group of people because they have put their names in”.
They do not go to every match, of course. I often laugh when I read the football results and they show the attendance. I do not mean any disrespect to Arsenal, but I will use them as an example. They are going rather well at the moment, but they were not going well five years ago in the latter days of the Arsène Wenger period. You would see a match the Emirates Stadium and it was perfectly clear that there were almost as many empty seats as filled seats, yet the next day the papers would say the attendance was 100 short of capacity. That means the club is saying, “Ah, now, but we’ve sold those seats. Season ticket holders have bought them but they’re not very happy at the moment so they haven’t come”. My argument is, “Okay, that’s fine, but the key to the attendance is the word ‘attend’. If people don’t go, there’s not an attendance”. Still, the point is that these people have made a financial commitment to the club, and that is a basis on which to go forward.
That is why I disagree with the other amendments in this group, particularly Amendment 26 from the noble Lord, Lord Addington, and Amendment 17 from the noble Lords, Lord Markham and Lord Parkinson, which refers to those
“who have an interest in seeing the club succeed”.
That is so vague; we have to have some way of pinning it down. If there is a better way of doing that than through season ticket holders, I am open to that suggestion and I will consider it. But, until then, I believe that is the only basis on which we can do it. I also want to see it in the Bill.
Baroness Brady (Con)
Suppose we base it on season ticket holders. If you take a club such as Bournemouth, whose capacity is 11,000-ish, it will probably have 4,000 season ticket holders—but they would not represent all the views of every Bournemouth supporter in the whole world.
In relation to supporters around the world, if a supporter gets on a plane from Sweden to watch Bournemouth play, are they a supporter or not? Some 5% of inbound flights to the UK involve taking in a Premier League game—I mean, the Premier League could run a successful airline. Putting that point to one side, though, it would be impossible for a regulator to try to rank supporters of the club in order of priority. We all know, respect and love our season ticket holders, but not everyone is lucky enough to get a season ticket—particularly if you are a Bournemouth supporter, because the capacity is only 11,000-odd.
Lord Watson of Invergowrie (Lab)
On the noble Baroness’s last point, I do not want the regulator to be doing this. That is why I want it in the Bill. This is not an issue where there can be any subjectivity. There has to be something tight.
Bournemouth may have season ticket holders in Sweden, I do not know, and if they come, they come. If they do not come, though, they are still a season ticket holder, so they are entitled to be consulted. But, if there is no financial commitment, I just do not understand how you can possibly meaningfully take the opinion of someone who just says, “Yeah, I’ve been at a couple of Liverpool games, I always watch them on TV and I’ve bought a scarf”. I am open to suggestions as to how we might pin this down better, but pin it down in the Bill we must.
Lord Mann (Lab)
My Lords, when it comes to taking opinion, I would rather not complicate things, but the divides that appear to be there are rather false ones, talking about issues that are not contained in the Bill but are contained on other issues.
I currently chair a supporters’ group that has branches all over the world. It has members—some season ticket holders, some not—who attend football. I am quite satisfied that the Bill says that supporters’ groups of different kinds should be consulted on issues that are of relevance to them.
I have a slight liking for “current and prospective” in the amendment from the noble Lord, Lord Parkinson, but possibly for different reasons from him, and I am not sure it can be encapsulated in statute, so I do not warm to the wording, even if I do to part of the meaning.
There is a danger at the moment that football, especially the Premier League and the higher echelons of the Championship, is full of people who are more like me, rather than young children. Season ticket waiting lists in the Premier League are prodigiously difficult to get up. There are long queues and many children are in them, which is a dilemma. Unless stadiums get bigger and bigger, which I would encourage, how do we get in the next generation of fans? If you do something as absurd as a team in Manchester has done and make it £66 for a child, in the long term you will probably lose competitive advantage. But the family and the children are losing something which is quintessentially British and English: being able to support their local team and occasionally go.
Lord Addington (LD)
My Lords, I hope I might be allowed to say a few words about my amendment in this group, if everybody is okay with that.
I asked for a definition of “fans” because I had a nightmare, and this discussion featured largely in it. A fan is a self-selecting person who has made a commitment. If there is another definition out there, save it, please.
Lord Addington (LD)
They have made a financial commitment or signed a pledge—I do not know, but they have made a commitment. They have said that they are a part of this and there is no compulsion; they have made a decision. That is why I felt we should have this in the Bill.
Apart from anything else, this is British law we are talking about, and the English leagues. I do not know why we are bothering discussing what people in South Korea or San Francisco are doing, because we can only deal with what is in our own legal framework. If they join a group over here and make a financial or long-term commitment, maybe then they are consulted. But it is here in the UK that you have to make a commitment; it is about the local base. These people are committing to something which is located in a place. That is why I tabled this amendment. My noble friend got to the guts of it when he said that it is an emotional commitment.
We need some guidance on what the Government are going to say. You are not going to keep everybody happy, clearly, but let us at least know why we are unhappy, and we will see what we can do about it at another stage if that is appropriate. That is what my amendment is for, and I hope we can reach that point with all rapidity.
Lord Goodman of Wycombe (Con)
My Lords, I declare an interest of a kind as a season ticket holder at Wycombe Wanderers, who are still top of League One, as they were when I spoke at Second Reading. Therefore, I would count as a fan under the definition in Amendment 17A, spoken to by the noble Lord, Lord Watson of Invergowrie. However, I want to describe a group of people who would not count, as I think it casts some light on our proceedings as to what the regulator might say and the Government’s view.
Last year, a Spanish-language YouTube channel, La Media Inglesa—I hope I am pronouncing it correctly; it is apparently the largest football YouTube channel—wrote to every single EFL club asking why Spaniards should support their club. Wycombe Wanderers were the only club to reply in Spanish. As a consequence, 100 Spanish supporters turned up to see Wycombe play Derby County at Adams Park, then again for a game against Sheffield Wednesday, and then again to Fratton Park for a game against Portsmouth—and so on, and so forth. They greatly enlivened the proceedings by waving their scarves, chanting loudly and showing commitment—to pick up the word just used by the noble Lord, Lord Addington—to their team.
The point we are trying to get to the heart of is not exactly who we think is a fan, but what the regulator’s view will be and what the Government believe the regulator’s view might be, given that “fan” is not defined in the Bill. There is obviously common sense in the approach just taken by the noble Lord, Lord Mann, among others. He suggested that, logically and intuitively, there must be some sort of difference, in respect of interest in the ownership of the ground and the prices of tickets, between fans who live in the broad locality and fans—however committed—who travel to the ground from a great distance away.
That is precisely what we need to hear a view about from the Government Front Bench. What I suspect the Minister will say—knocking the issue back across the Benches—is that these are matters for clubs to decide for themselves. If that is the Government’s view, then the Minister in due course should tell us.
Lord Markham (Con)
My Lords, I rise to speak to my Amendment 17. What we have seen today, and I am glad that the Chief Whip has been here to witness it, is a passionate and informed debate. Perhaps it will give him an understanding of why the debate may be lengthier than one might have hoped. Not surprisingly, 15 or 20 noble Lords have spoken and we have probably had 21 or 22 different definitions of what a fan is—so none of us underestimates what a complicated area this is, but what we are all united in is that it is vitally important and, as such, it should be in the Bill. That is what we are asking the Minister to reply on.
I am probably biased, but I happen to think my Amendment 17 tries to take those different aspects into account, saying that fans are
“individuals who … identify with the club, engage with the service the club provides, and have an interest in seeing the club succeed”.
Bringing in the service that the club provides is trying to take into account that wider commitment and interest in it. I completely agree with the noble Lord, Lord Mann, that the most dedicated version of that is the season ticket, but we also know that there are massively long waiting lists for season tickets. Does that mean that people who are on a waiting list or people who cannot afford a season ticket somehow count less? That is why my wider definition talks about people who engage with the services of that club to try to take that into account.
I think we all agree with the noble Lord, Lord Watson, in his amendment that giving the independent regulator a definition to work to is vital, because this is at the core of what a club is. In any consultation that a club has to undertake, it needs to be clear who it is consulting with.
Lord Moynihan of Chelsea (Con)
My Lords, I rise to speak against Amendment 17A, tabled by the noble Lord, Lord Watson, and in favour of Amendment 17, tabled by the noble Lord, Lord Markham. The noble Lord, Lord Watson, has clearly thought very carefully about this and I agree with a great many of his nuances and analyses of what a fan is. I also agree with much of what the noble Lord, Lord Mann, said, although not about the localism.
Why are we talking about San Francisco or South Korea fans? It is because, surely, the purpose of this Bill is to sustain and continually improve the commercial and financial success of football, not to introduce some more nebulous—indeed, I would say suspicious—metric that we could conjure up on social grounds or whatever. If we are here explicitly to damage the commercial and financial success of football, let us admit it—but, if we are not, let us then look at the consequences and implications of that.
What is a fan? Can it only be a season ticket holder? The noble Lord, Lord Goddard, said about fans, “These are working-class people”. As an unregenerate member of the middle classes since childhood, I sort of resented that, but let us go with it. I am sure that the noble Lord, Lord Watson, is a champion of the working classes, but how many of the working classes can afford a season ticket? When I was 10 years old, I would jump on a number 11 bus and go down the King’s Road to Stamford Bridge. I only got there once a month maybe, by not having a gobstopper or a Barratt sherbet every day and saving up the five bob it cost me to get into the ground. I could not afford a season ticket. Fine, you could say that I should not be consulted, either, any more than children of 10 should be allowed to go on social media.
When I was an undergraduate of 21, I could not afford a season ticket but I was a fervent Chelsea fan. Later, I became a season ticket holder. Did I suddenly become worthy of consultation because I had managed to get a job that helped me afford a season ticket? Then when I moved abroad for a couple of decades, to study and work, did that disqualify me from being a fan? Then when I came back and got a season ticket, was I suddenly qualified to be a fan again? It is nonsense. If we are thinking about the commercial and financial success of this industry, we should follow the commercial and financial logic: my noble friend Lord Finkelstein was quite eloquent about that just now.
Baroness Jones of Moulsecoomb (GP)
My Lords, as I sat through the whole of this fascinating debate, I thought I might as well throw my penny’s worth in on the issue of what a fan is. I am a football fan. I do not have a season ticket. I was on a list for a season ticket for many years until Arsenal moved stadium, when they scrapped the waiting list and you had to start again. The only way I show my fandom, really, is to listen or watch matches whenever I can and get into arguments in pubs with people from other teams. Just saying.
Lord Jackson of Peterborough (Con)
My Lords, very briefly, I support my noble friend Lord Parkinson’s excellent amendment. I think it is unarguable that in the last hour we have demonstrated why we need that amendment, because no one agrees what “local” means. I think that is a very important point. This whole debate reminds me of Humpty Dumpty in Alice’s Adventures in Wonderland, when Humpty says:
“When I use a word, it means just what I choose it to mean—neither more nor less”.
We do not really know what “local” means. My noble friend Lord Moynihan of Chelsea talks about the importance of international fans. I say to the noble Lord, Lord Watson, that I fundamentally disagree with Amendment 17A because I think it is socially regressive and would lock out many people. It would actually go against my noble friend’s Amendment 8 in terms of getting new generations of fans involved: not everyone can afford a season ticket.
Lord Watson of Invergowrie (Lab)
I accept that, and I hope I made that clear earlier—but how do you consult the other people? You do not know who they are.
Lord Jackson of Peterborough (Con)
The noble Lord asks a very reasonable question. I actually pray in aid the amendment from the noble Lord, Lord Addington, because, for all his frustration with this debate, his Amendment 26 has at least tried to answer the question of what a fan is and what “local” means, and therefore I am quite predisposed toward that amendment. My only problem is that it absolves this House and Ministers from solving the problem, by kicking it into the long grass, so to speak, of the independent football regulator. So I agree with that amendment, but the noble Lord’s amendment is too restrictive.
When I was a child, I used to go to Charlton Athletic, the Valley, which in the good old days had a 66,000 capacity. Because I was a Charlton fan, vicariously, through my father, does that mean I could not be a fan of Millwall, which is in almost the next borough, the London Borough of Southwark? Could I not have been a fan of Crystal Palace, in the London Borough of Croydon? Could I not have been a fan of Leyton Orient, in the London Borough of Waltham Forest? You get into a rabbit hole of really difficult decisions if you do not properly talk about what is “local”.
I will finally finish by reminding your Lordships that, at Second Reading, I mentioned the importance of supply chains, because although fans are important, so is the wider football community. That includes businesses, commerce, supply chains, the people who sell the hot dogs and the prawn sandwiches, the people who provide the footballs, and the people who do the advertising, etcetera. We are dancing on the head of a pin, because—with all due respect to the people in the Box—the Bill is not well drafted. We have a responsibility to point that out. For that reason, I implore the Minister specifically to support my noble friend Lord Parkinson’s Amendment 9.
Lord Evans of Rainow (Con)
My Lords, I will make a point on Amendment 17A of the noble Lord, Lord Watson, about the complexity of what we mean by “fan” and indeed “season ticket holder”, because there are so many options to be a season ticket holder. You can be a season ticket holder for Premier League clubs, just for those Premier League games. You also have cup games, like the FA Cup and the Carabao Cup. There are also Champions League tickets. If you cannot get a season ticket, as an individual you can apply for those individual cup games. If you wish to become a forwarding member for £20, you are in the position to receive a ticket from a season ticket holder. It spreads up; the number of season tickets available is very complicated indeed for cup games.
Not only that, but you also have corporate tickets. Corporations can buy a whole suite of tickets for their employees and also for their clients. To establish somebody who would go as a guest of a corporate individual or who had been forwarded a ticket further complicates it. The point I am making is that it is not straightforward. It is very complicated—there is not just one season ticket holder at any club.
Lord Parkinson of Whitley Bay (Con)
My Lords, this has been a lively debate. Even before I moved the lead amendment in it, a lively debate had been engendered. It is an important one, because fans are sown throughout the Bill. There are various points at which the regulator, the Government and others have to consult fans, so it is important that, as we proceed through Committee and look at the Bill line by line, we are clear about and understand who the fans are that the regulator, the clubs and the Government need to consult, where they reside and where they do not, and how their views will be ascertained.
I am grateful to the noble Lord, Lord Watson of Invergowrie, for the clarity with which he put this in speaking to his Amendment 17A in this group. There has to be something in the Bill, and it has to be something tight; otherwise we will continue having this sort of nightmarish debate, as the noble Lord, Lord Addington, foresaw, and which has been borne out a bit this afternoon. Each time fans are mentioned, we have to decide—as the noble Lord, Lord Mann, put it—what is relevant to them in this instance, and whether this is something that affects them. The fan-led review that led to the Bill would mean that fans take a view on all of the matters that the Bill sets out in each of its clauses.
I am not along—and your Lordships in this Committee are not alone—in confronting the inherent difficulties involved in trying to attempt to define a fan. My noble friend Lord Jackson of Peterborough previously mentioned the Delegated Powers and Regulatory Reform Committee of your Lordships’ House, which has pointed out the importance of trying to put this definition in the Bill. It is so central to what the Bill tries to achieve that its omission is really very striking.
The European Club Association, in its Fan of the Future report, has also pointed out that
“The anatomy of a football fan has evolved significantly”.
Its research highlights the role of social media, the decline in linear television viewing and the diversification of football content distribution, to give just a few examples. Those factors have fundamentally altered the way that people access information about football and watch their favourite team play. Indeed, 70% of respondents to the association’s survey said they consumed some form of football content online. All of that points to a trend of an increasingly international fan base for English football—a point that noble Lords have borne out repeatedly in the debate on this group. We, the clubs and the regulator will have to grapple with that trend, which I am sure is only growing, if we are all to meet the fan engagement requirements set out in the Bill.
There was a lively debate on consultation and the limits thereof, geographical and otherwise. I should probably state for the record that I do not necessarily believe that fan consultation should include fans from South Korea and all over the world or, as the noble Lord, Lord Wood of Anfield, put it, Liverpool fans in San Diego. There are obviously practical and burdensome difficulties here. I also acknowledge the point made by various noble Lords that fans who are more directly affected by their club, either from living in its vicinity or through its work, have an especially special bond.
I was struck by the comments the noble Lord, Lord Birt, made about the gradation that clubs already make between types of fans. However, as we refer to fans again and again throughout this Bill, it is important that we try and specify what constitutes a fan, and not leave it so vague. This issue requires clarity for our future deliberations in this Committee, and I would be grateful if the Minister could provide it when she responds. Before she does, I want to say a few words about Amendment 17, tabled by my noble friend Lord Markham. This amendment attempts to provide that clarity and specificity by seeking to define what constitutes a fan. If the Minister does not like Amendment 17’s definition, then it is important she provides an alternative.
I am also interested in the solution the noble Lord, Lord Addington, has proposed with his Amendment 26. In essence, his amendment requires the regulator to tell us what it counts as a fan when it conducts its duties under the Bill. It is important for fans, for clubs and for everyone that this is clarified. The noble Lord’s nightmares were well spent if during those night-time hours he formulated the ideas that led to Amendment 26, which has been helpful.
I also want to touch on Amendment 17A, tabled by the noble Lord, Lord Watson of Invergowrie. This amendment, again in the spirit of helpfulness, tries to define a fan as somebody who holds a season ticket for a regulated club. I do not doubt the noble Lord’s intent here; season ticket holders are some of a club’s most stalwart supporters. However, as the debate on this group has shown, that definition is restrictive, limited and problematic. Thousands of club fans may not be fortunate enough to hold a season ticket: it may be too expensive; they may live at the other end of the country; they may find themselves on a waiting list—as the noble Lord, Lord Mann, noted; and they may find themselves behind corporate interests, as my noble friend Lord Evans of Rainow has set out. All of those things could prevent fans from becoming season ticket holders. It would not be right to say that those people are not fans, or that they are not the sort of fan who needs to be consulted on the future of their club or who would have an interest in it. Therefore, although Amendment 17A’s definition is a helpful attempt, it is not quite the answer.
I am grateful to the noble Lord, Lord Mann, for his tentative and cautious interest in my amendment on current and prospective fans. I hope that he agrees that it is important that we have a definition of a fan in the Bill to avoid this sort of confusion as we go through the debates on later clauses. I know that he chairs a fan group for Leeds United. Would every Leeds fan feel that they were represented by the group that he chairs? Would they all agree with what he says? I am not sure that that is necessarily the case. Fans come in different shapes and sizes, and they have many views, but we need some clarity as we go through our debates to understand in each instance where and whom the regulator, the Government and the clubs themselves must consult.
Lord Mann (Lab)
I hope that not all fans agree with my supporters’ group, because we have a very distinct approach from other fan groups. My point is that there is a range of groups and that different fan groups have different perspectives, interests and ideals. Therefore, to attempt to define them in the Bill is so complex as to be impossible. That is why it is sensible to take the approach that the Government are taking: one that has some flexibility built in.
I will not go into great detail on the different kinds of fan groups. I believe that West Ham has nine, and you could argue about how many we have because there is the question of whether some are really fan groups or not. That is the complexity—and they have different perspectives.
Lord Parkinson of Whitley Bay (Con)
I will not prolong the discussion any further; it is important that we hear from the Minister instead. As we do so, I hope that we hear from her on the tension between the need for flexibility, which I understand, and the need for clarity so that the duties on the clubs, which are successful businesses, and on the regulator, which is a powerful new body, are also specified. We need that so that everybody, when they follow the Bill when it becomes an Act of Parliament, is clear on what they have to do, whether they are speaking to the fan group of the noble Lord, Lord Mann, or another about each of those duties.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Parkinson of Whitley Bay, Lord Markham and Lord Addington, and my noble friend Lord Watson of Invergowrie for tabling these amendments and for the thorough discussion on this group. There is an amendment in a group specifically on clubs playing overseas, which I will come back to during a later stage in the Bill’s progress. I have been told by my noble friend the Chief Whip that I should not comment on gobstoppers, as tempting as it is to do so.
I am glad that we all agree on the importance of fans to the game. The Bill also recognises that importance. As noble Lords are aware, it is based on the fan-led review, so it should have fans at its heart. I suspect that we will never get full agreement on how we should define a fan or group of fans—we have seen that in the debate on this group. However, I welcome the point made by the noble Lord, Lord Birt, that—to paraphrase—there is quite a lot of agreement on this element, so noble Lords are at risk of debating something that, when it comes down to it, many of them will agree on.
The noble Lord, Lord Parkinson of Whitley Bay, tabled an amendment that would look to add further detail to the definition of the sustainability of English football. I reassure him that both prospective and current fans would be considered in the existing requirement. As he will be aware, this is in line with the Bill introduced by the previous Government in which he served. Football would not serve the interests of fans if the game were unattractive or unwelcoming to new fans. As the Explanatory Notes to this clause clarify, continuing to serve the interests of fans
“means meeting the needs of present fans without compromising the ability of future generations of fans to enjoy and benefit from the club”.
Amendment 9, in the name of the noble Lord, Lord Parkinson, looks to remove the specific reference to “local” communities from the definition of the sustainability of English football. One of the best things about football in this country is that it fosters community. I welcome the passionate defence of local fans made by the noble Lord, Lord Goddard of Stockport. This is something that noble Lords from across your Lordships’ House recognised and spoke passionately about at Second Reading, and we wish to protect it.
The local area surrounding clubs can often develop communities and economies dependent on the football club. It is important to recognise that not all communities are grounded in the local area. As noble Lords have mentioned, they can be online, far-reaching and even international. These communities are also important, as was highlighted by the noble Lords, Lord Goodman of Wycombe, Lord Maude of Horsham, Lord Hayward and Lord Moynihan of Chelsea.
The noble Baroness, Lady Brady, mentioned international flights. I understand that such is the Norwegian enthusiasm for football that weekend flights are scheduled to allow fans to travel to watch UK games. However, as communities become less rooted in the local area or directly related to the club itself, it would be harder for the regulator to control or even predict how its actions may influence their economic or social well-being. We do not want the regulator to be set up to fail because it cannot feasibly meet its statutory purpose. If the regulator were required to consider more detached and far-reaching communities, it might never be able to completely deliver a sustainable English football.
We should also remember that it is often the local communities that are most vulnerable and can suffer most directly from any crisis at a club. As my noble friend Lady Taylor of Bolton made clear, the locality matters. We have seen in places such as Bury and Macclesfield the hole that is left in the local community, including the economic impacts, social impacts and job losses. None the less, the regulator must of course consider the impact of its actions on the wider community of fans. That is why the Bill’s purpose, as drafted, includes English football serving the interests of fans, with no requirement that those fans are “local” to their club.
The noble Lord, Lord Parkinson of Whitley Bay, appeared to conflate how fans and communities are defined. I want to be very clear that, while Clause 1(3)(b) specifies “local communities”, Clause 1(3)(a) does not specify that it applies only to local fans. So, the noble Lord’s points on Manchester United fans in Weymouth would still be considered in this definition of “sustainability” as it pertains to fans.
On Amendment 17 in the name of the noble Lord, Lord Markham, I understand that its intention is to set in the Bill a definition of what makes someone a football fan. His amendment draws on the Explanatory Notes. I welcome the perspective of the noble Lord, Lord Finkelstein, as a member of the committee on the fan-led review. For a definition of a fan to be in primary legislation, there is a significant risk of unintended consequences that it will end up being either so loosely defined that it lacks precision or too narrow that important and passionate fans are excluded from engagement. I know that noble Lords from across the Committee would not wish to exclude any passionate fan from the engagement that the regulator intends clubs to carry out. This is because the make-up of a fan base will differ from club to club. It is this diversity that makes English football so special.
In our view, there is also likely to be the need for clubs to be able to consult different groups of fans on different issues. For example, on ticket prices, we would reasonably expect that clubs may wish to focus on consulting regular, match-going fans. However, on stadium relocations, we might expect them to consult a broader group of fans from across the community. From my engagement with Members from across your Lordships’ House, I know that there are many different views on the definition of a fan. Indeed, there are probably as many definitions as there are Members in this debate, if not many more. Therefore, although I understand the desire for more clarity, I am extremely reluctant for the Government to provide a specific definition that would be limiting.
The Government do not see themselves as the arbitrator of who counts as a football fan; instead, it is something that fans and clubs themselves will be in the best position to understand and discern. The regulator, once established, will be able to provide guidance for clubs on how to best consult fans, rather than be bound by an inflexible and potentially unhelpful definition. This will ensure that clubs have an appropriate framework in place that allows them to meet and consult fans regularly on key strategic matters and supporter interests, utilising pre-existing fan structures and other engagement mechanisms.
As Amendment 17A in the name of my noble friend Lord Watson of Invergowrie demonstrates, there are multiple ways in which others may define a “fan”, all of which would capture vastly different groups. At some clubs and on some issues, the definition as set out in the amendment may be sufficient, but for others there could be large numbers of dedicated fans, including the noble Baroness, Lady Jones of Moulsecoomb, who would not be captured if the club considered only season-ticket holders. I agree with the noble Baroness, Lady Brady, that this would be too narrow. For example, it would mean that those unable to attend matches as a season-ticket holder due to reasons of finance or health, or due just to their lack of luck in a ballot, would be excluded from the consultation. My noble friend Lord Mann noted the waiting list for season tickets. As a Labour Government who think that financial criteria should not exclude people of limited financial means, we feel strongly that the emotional commitment highlighted by the noble Lord, Lord Addington, should take precedence over any financial ones. This demonstrates the need for nuance and discretion in the definition, which clubs and the regulator are in the best position to arrive at.
On Amendment 26, the noble Lord, Lord Addington, is right that the regulator would have an important role in ensuring that clubs understand and meet the fan engagement requirements placed on them. The Government agree, and they expect that the regulator will need to produce guidance to provide more detail and information on who to engage with, and how, to meet these conditions. However, it is important to understand that, for the most part, individual clubs will be in the best position to understand the demographics of their fans, with significant variation between clubs. There is a risk that the amendment could inadvertently place a limit on fan engagement and limit clubs to meeting only those who are members of an official fan body. Many fans will not be part of a formally constituted body; that does not mean that they should not be represented. For example, if a club is seeking to move ground or make changes to home shirt colours, a wide range of fans should be consulted and not just a formally constituted body. The Government have designed the legislation to allow for a bespoke approach to fan engagement shaped by the regulator’s guidance, an approach that the previous Government also supported.
However, although many clubs will be best placed to discern who they should engage with, if it is felt that a club is misusing this to select only agreeable fans or to exclude another group, the regulator can and should intervene. As is made explicit in paragraph 272 of the Explanatory Notes, the regulator can take action in such instances and will be able to specify how any representative group of fans should be engaged or informed. As I said at the start of my response, I am delighted that there is so much support across your Lordships’ House for fans being at the heart of the Bill and the debate. It is a theme that we will no doubt return to on many occasions, and I look forward to future discussions. However, for the reasons outlined, I am unable to accept the amendments from my noble friend and the noble Lord and ask that they do not press them.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to the noble Baroness for her response. In relation to my Amendment 8, I have been in her position of having to explain why, while agreeing with the spirit of an amendment, the Government are not minded to put it in a Bill. However, if she says that the Bill is about current and prospective fans, as my amendment seeks, why not say it in the Bill? I hope that between now and Report she might reflect a bit further on that.
Regarding my Amendment 9, the Minister said that I had conflated the issue with fans. After the slightly confusing debate that we had, it is not unreasonable that she thinks I might have done. Perhaps it was unhelpful to have grouped these amendments together and to have had one debate on them. However, I am clear that Clause 1(3)(b) relates to communities and not to fans. The question that I am asking is whether, as we work towards the sustainability of English football, we should limit our ambitions to the economic and social well-being of local communities that stand to benefit rather than our community more broadly? For the sake of clarity, I wanted to de-conflate those. I am not sure that we have quite cracked this matter but, for now, I beg leave to withdraw my amendment.
Lord Bassam of Brighton
“(c) meets environmental sustainability requirements set out in subsection (3A).”
Lord Bassam of Brighton (Lab)
My Lords, Amendments 11 and 15 relate to sustainability—not the notion of sustainability that we have been addressing to date when considering this Bill but environmental sustainability.
We seek here to get something on the record about how we feel the regulator should approach this issue. Every sector, every industry, should consider environmental sustainability and football should not be an exception. The Government, quite rightly, have commitments to achieve net zero on carbon emissions. It is impossible to divorce environmental issues from issues of financial sustainability and there are numerous ways in which one could substantiate that. It would be negligent to exclude environmental sustainability from the regulator’s remit. It is a moot question whether this needs to be in the Bill, but it should certainly be part of the regulator’s thinking. Existing regulation in the world of football has failed to change sufficiently the culture of professional and semi-professional clubs.
With limited financial and staffing resources, nearly every club outside the Premier League has failed to make any notable progress on environmental considerations. There are some clubs, the first among them being Forest Green Rovers, which, notoriously, have a very good reputation in promoting sustainability. Others include Swansea City and Norwich City—which has recently been in the Premier League. It is the Premier League clubs—16 of them—that have, to their great credit, led the way in the football pyramid. We feel that it is necessary to encourage other clubs to do the same.
Obviously, Premier League clubs have more resources than clubs lower down the pyramid, but they should not continue to be an outlier in promoting more sustainable environmental practices. To noble Lords who might question whether football should have a role in this, I simply say that the Financial Conduct Authority has regulatory principles which include minimising environmental impacts. There is an environmental policy statement and an environmental management statement, which complies with ISO 14001. It covers issues such as energy, emissions, water usage, minimising waste, recycling, paper use, methods of business travel, digital services and ICT. Football clubs and how they manage the resources that they have at their disposal have an impact on our nation’s desire to head towards net zero by 2050, and that is what the amendment speaks to.
I hope that clubs adopt environmental good practices as Arsenal and Brighton & Hove Albion do, such as including free travel in their ticket pricing to encourage more people to get on to public transport. Clubs such as Tottenham, Wolverhampton Wanderers and Chelsea have similar strategies. This should be common practice across the football industry. Whether it is in the Bill or part of the regulator’s remit, the environment is simply too important for us to leave to chance. There is a role for football to play in leading the way, as it does in many other fields of social interaction, such as promoting good race relations, tackling misogyny and dealing with other social issues. I beg to move.
Baroness Jones of Moulsecoomb (GP)
My Lords, I rise to speak to my 10 amendments in this group on environmental sustainability. I want to support almost everything that the noble Lord, Lord Bassam, has just said. If you are talking about sustainability, which is what we have been talking about for two days on this Bill, you cannot avoid environmental sustainability, because it will have an impact on the financial well-being of football, and every other business. At the moment, most clubs do not think very hard about this. Forest Green Rovers are fantastic; Liverpool are doing their bit; but, by and large, there are little tweaks that clubs are doing, which makes them feel good—or perhaps they cannot imagine doing anything more, I am not sure.
We know the climate is changing; we know that the weather is changing; we know there are more floods and more droughts; so it is very short-sighted not to include environmental sustainability when you are worried about the future of clubs and their financial sustainability. Football is at risk from climate change, as are many other sports. Flooded pitches lead to cancelled games, lost revenues and disappointed fans, and droughts demand expensive irrigation. As Carlisle United discovered, a flood can lead to the kind of jump in insurance premiums that could put you out of business. So fans need the confidence that these growing risks are being prepared for and that they are not going to have a detrimental impact on clubs’ finances. The Minister kindly gave me a meeting on this, although we did not quite agree, so does she agree that climate change will have direct impacts on the financial sustainability of football and, if so, how is that recognised in the Bill? At the moment, of course, it is not.
My Amendment 103 requires the football regulator to include an assessment of football’s resilience against climate change in its “state of the game report” because, if the report does not consider environmental sustainability, it can give only an incomplete picture of the state of the game. Amendments 127, 131, 154 and 166 introduce climate and environment management plans as a mandatory licence condition for clubs. As the noble Lord, Lord Bassam, said, it should be mandatory across all businesses, and these environment management plans would set out the clubs’ environmental impact and what is being done to mitigate it. Above all, they would also require clubs to identify the impacts that climate change is having and will have on the club and make plans to manage those risks.
Football, of course, also contributes to climate change and environmental damage; hundreds of thousands of single-use plastic cups and utensils are used every single matchday; fertilisers, herbicides and millions of litres of water are used to keep the pitch green; and cities and towns are choked up with traffic on match days. The definition of sustainability in the Bill, as it stands, allows all this to continue unabated. It would even allow clubs to damage the environment even more, as long as they keep on serving fans and making a contribution to the community.
It really is an own goal for the planet, but football clubs actually caring about the planet do not have to cost the earth. Forest Green Rovers, who have been described as the greenest football club in the world, are focused on sustainability across their business. Solar panels provide about 20% of the club’s electricity needs; the club organises coaches to away games, not planes; they have cut out single-use plastics in favour of reusable or refillable options; the pitch is organic and harvests rainwater for irrigation. This is a club that is at the top of their table, fit for the future and a role model that other clubs could aspire to. Liverpool, who are, regrettably, also at the top of their table, have their Red Way initiative, which is about environmental sustainability.
My amendments will lay the groundwork for greener pitches and truly sustainable sport, embedding environmentalism throughout the football regulator’s remit. Amendment 55 adds climate and environment to the football regulator’s objectives. At Second Reading, the Minister suggested that the football regulator must be focused on the financial sustainability of clubs. The Bill already lists safeguarding the heritage of English football as an objective, so why not safeguard the environment as well? Amendments 60 and 66 require the football regulator to act in accordance with the net-zero targets in the Climate Change Act and secure the long-term environmental sustainability of football.
If the football regulator cannot set sport on an environmentally sustainable footing, football’s long-term viability is at risk. Amendment 144 would have clubs consult their fans about climate and environmental issues facing the club. Sustainable football should not just be a luxury enjoyed only by vegans and eco-entrepreneurs. While Forest Green Rovers are showing what is possible, this Bill is an opportunity to embed best practice throughout the sport. I really hope that the Government can move on this issue.
Baroness Fox of Buckley (Non-Afl)
My Lords, I rise to oppose this whole group of amendments.
Baroness Fox of Buckley (Non-Afl)
It is good to get a laugh before you start. I genuinely worry about the overreach summed up in this particular group that, for example, requires football clubs to operate
“in a way that will achieve net zero greenhouse gas emissions by 2050”,
or
“materially reduce their negative impact on the natural world and all species that inhabit it”.
That is just from Amendment 15.
We already know the potentially costly and devastating impacts such green policies can have for organisations and individuals, let alone the barriers on development and growth that they can pose. Imposing such regulatory requirements on football clubs seems ill-advised and could be financially draining. I appreciate that, as we may have heard from the response to my initial remark, the noble Lords, Lord Bassam of Brighton and Lord Addington, and the noble Baroness, Lady Jones, and many others, will not agree with me politically, but my main reason for speaking is that this group exemplifies what happens once the Government open the floodgates to political interference in football by adding, for example, equality, diversity and inclusion as a mandatory part of what the regulator must inspect in football. If EDI is in the Bill, others will argue “Why not ESG or net zero?” and mission creep will start in a dangerous way. Such politicised interventions threaten to make the game of football secondary to political priorities and jeopardise clubs’ autonomy.
We have already heard from a number of contributors about a kind of league table of worthy green clubs. Do not get me wrong: if football owners, or chairs, or the fans decide they want that to be the priority, that is up to them. But it should be nowhere near the role of a regulator to decide. We have already heard about the case of green multimillionaire Dale Vince, who is the major shareholder and chair of Forest Green Rovers; we have heard him lauded. Certainly, Forest Green Rovers are the world’s first all-vegan football team; they are also the world’s first carbon-neutral football club; but I note that, at the end of the 2023-24 season, they were relegated back into non-league football, coming 24th out of 24. It is not a scientific correlation, I am just noting it.
Also, does having green credentials benefit fans, who we keep being told this Bill is designed for? Note the controversy over Forest Green Rovers’ home strip. The traditional black and white stripes were swapped for a lime green shirt and black shorts, in line with sponsorship from an eco-friendly, EV-supporting, green YouTube channel, despite what the fans wanted. So the Green Army was not necessarily kept happy by the green politics of the chair of the club. I simply raise this because, if a club wants to go green and fans want their club to be more environmentally friendly, that is fine. But the regulator should have absolutely zilch to say on it and certainly no power to impose it.
Lord Deben (Con)
My Lords, I had no intention of speaking in this debate until I heard that last speech. I will, first of all, remind the Committee of my interest, because the company which I chair helps quite a number of people in football to meet the sustainability needs that we have.
Lord Moynihan of Chelsea (Con)
I am not aware of any reputable scientific body that makes the claims the noble Lord has just made.
Lord Moynihan of Chelsea (Con)
I absolutely say that the central prediction of all the major bodies is that there will be no major problem faced from climate change by 2050. If, indeed, the noble Lord or any other Peer wishes to controvert me, could they please quote such scientific evidence? By the way, they should also take into account, for example, the recent statement from the winner of the 2022 Nobel Prize for Physics, that climate change theories are a scam. I am not saying that, and I would not go so far as to say that, but could they address that? If they could please point to a central prediction that contains the sort of apocalyptic predictions just made by the noble Lord, Lord Deben, I would be very interested. I will say no more at this point.
Lord Deben (Con)
There is no scientific society of any major country that does not say that climate change is the biggest material threat to mankind. All of them say and support the view that by 2050, we need to get to net zero if we are to have any possibility of keeping within a 1.5 degree increase in temperature compared with pre-industrial periods. All of them say that, if we do not do that, the effects upon people will be enormously damaging. You only have to look at what has happened with just a 1 degree increase: the recent floods in Spain, for example, the wildfires and the rest. What my noble friend says is not true and it is very dangerous, because that kind of attitude is what allows people to get off the hook.
Baroness Fox of Buckley (Non-Afl)
I do not want to get into a fight among Tories, but I want to clarify my position. I disagree with both noble Lords, in some ways. My point is that I want football clubs to focus on football and not to have rows like this. This is precisely the thing I am objecting to: the introduction of at least in some ways contentious political or scientific matters. I simply say that this should not have anything to do with the regulation of football. That is all, and that is the reason I oppose it—not because I am taking a particular view on climate change or net zero.
Lord Addington (LD)
My Lords, I have the last amendment in the group, which seems to be where my amendments are occurring today. I think we should have somebody at each club who addresses this issue. I am with the noble Lord, Lord Deben, on this; it is an undeniable thing. You could probably quote one person who has said, “No, it isn’t”, but you cannot list everyone else who says that climate change is real without being here all week. They will then disagree about its extent, but they will not disagree on the fact that it is real.
There should be somebody at each club doing exactly these things to make sure that the business is sustainable, and to address the various problems. If it is just one person, as was suggested, it is simply a question of saying, “Please pay attention: can we raise the issue and see what is going on?” This could be someone who is managing the flood risk; the fact that grounds are being flooded is unarguable. Someone should be saying things such as, “What is the least damaging type of cup?” All of these issues will be important at different levels to different groups, but they are important. If other regulations are coming up to deal with this, you would be an absolute fool not to bring them into your plan.
The noble Lord, Lord Deben, is probably right on this, and it is nice to see him on the Bill.
Baroness Brady (Con)
My Lords, like the noble Baroness, Lady Fox, I rise to strongly oppose the idea of adding environmental sustainability to the regulator’s remit, as this group of amendments seeks to do. I do so not because this issue is unimportant: of course, it could not be more significant for us all. My objection is both practical and principled, because barely has the ink dried on this revised Bill, and already we are seeing a litany of attempts to extend the regulator’s scope. This, I am afraid, is what many of us who work in football are so worried about. We are the first major country to introduce a government regulator for football, and immediately there is pressure to have it solve every challenge on the spectrum.
Let me remind noble Lords: this Bill already gives enormous power to the regulator. It can decide who can own a football club; how the club can spend its money; how it should organise itself as a business; how it must engage with its supporters; in what circumstances it can move location; the approach it should take to equality, diversity and inclusion; the overall flow of money; and even the continued existence of key competition tools throughout the ecosystem. However, even that does not seem to be enough. Today it is environmental sustainability; tomorrow it will be something else. We already have amendments tabled to mandate specific kinds of corporate social responsibility; to add the women’s game to the IFR’s scope; to meddle with free-to-air listed events; to require regulator consultation on political statements made by clubs; and even to govern football clubs’ relationships with sports betting.
It is a well-known phenomenon that all regulators significantly expand their scope and size over time but, if we start before it has even begun, imagine what this regulator would look like in a decade. Where will it end? I do not expect it to be anywhere positive for our currently world-leading football pyramid.
The Premier League and its clubs, as well as many EFL clubs, are already taking substantial action on environmental issues, as all responsible businesses should do. We already have comprehensive environmental regulations that apply to all businesses, as well as the aggressive targets of a country reaching net zero. In addition to serious and often innovative action to reduce their own carbon footprints, many clubs also campaign and donate substantial resources to environmental campaigns.
Premier League clubs also do a huge amount to help other clubs in this regard. Let me give one example: the Premier League has put in place a brilliant programme to provide grants of up to 70% of the costs associated with installing modern LED floodlights at stadiums across the National League system and women’s football pyramid. This has already helped dozens of community clubs both to lower their running costs and to minimise the impact they have on the environment, but it is fair to point out that Premier League clubs make these sorts of voluntary contributions while facing already unprecedented financial demands. Again, I will give one example.
The Budget increases to employers’ national insurance contributions will cost Premier League clubs an additional £56 million annually. That is an extraordinary new burden—more than £0.25 billion over the rest of this Parliament. This new bill also comes on top of the £1.6 billion in pyramid support that we already provide, as well as our significant investment in youth development and community programmes, and the constant need to maintain expensive infrastructure and build new facilities. The Government want us to spend even more on grass-roots pitches and, through the Bill, they may force us to give even more to the well-funded Football League.
All of this is before Premier League clubs can focus on their most basic and fundamental requirement—of which the Bill takes so little account—to keep their own teams strong and competitive on the pitch. Let us remember that that is what the fans really care about. It is our ability to do that which underpins the overall health and sustainability of English football.
We must not compel this regulator to interfere in areas far beyond its core purpose, adding yet more cost and complexity to what is already a set of implementation challenges. Every additional requirement we add dilutes its focus and risks its effectiveness, so this group of amendments surely cannot adhere to the basic principles of good regulatory design. Effective regulators need clear, focused remits. They need to do specific things very well, not everything poorly. Let us not undermine this regulator’s clarity of purpose before its work even begins.
Lord Evans of Rainow (Con)
My noble friend Lady Brady makes some very powerful points. Any business sector would not argue against or disagree with best practice in terms of the sustainable aspects of their business. In football, you need only look at the quality of the hospitality element and the work that goes on there or the maintenance of the grounds and pitches.
Carlisle United has been mentioned several times. The river is in the centre of town and it floods regularly, but that is a matter to do with the location of the club and the river in that city. This comes to my other point about the historic nature of football clubs and their grounds. Many of them were built in the Victorian period in the centre of cities. The noble Baroness, Lady Jones, talks about sustainability and transport, but it is very difficult for many clubs—Premier League and other league clubs that are located in the centre of towns—to do the things that the noble Baroness is proposing to insert into the Bill.
I will just give a quick example of sustainability, and that is Old Trafford. It is situated between Manchester docks and a railway line, in Trafford Park. The carbon footprint of Trafford Park has significantly reduced over recent decades, and Manchester United and other clubs throughout the league have reduced their carbon footprint, because that is the right thing to do. It is good business practice and therefore we do not need these amendments, because the football clubs themselves know the benefits of offering good-quality hospitality and good performances on pitches.
Some of your Lordships will remember the summer of 1976. It was a sign of global warming, perhaps, but the quality of football pitches in 1976 was terrible. The grass did not grow and the technology of the day did not enable pitches to survive that drought. The technology is there now and it is sustainable. Football clubs have the power, technology and wherewithal to cope with climate change but, if they are located close to a river in the centre of town, there is really only one solution, which is to move that football club.
Lord Maude of Horsham (Con)
My Lords, in the slightly unexpected but spirited exchange between my noble friends Lord Deben and Lord Moynihan of Chelsea, I have to say that I incline more to the view of my noble friend Lord Deben on the merits of the case about around climate change. I am not remotely sceptical about climate change, the threat that it poses or the need to take urgent action to combat it. I am, however, sceptical about its place in this Bill and for it to be a strong consideration in the role of the to-be-established regulator of English football.
The reality, exactly as my noble friend Lord Evans just outlined, is that some football clubs are already more vulnerable to the effects of climate change than others. All football clubs will have to invest in adaptation measures to combat the effects of climate change, because there will be malign effects whatever is done. As my noble friend Lord Deben said, they are already being experienced.
I also take the view, and have done for a long time, that businesses which value their brand and reputation have a commercial interest in ensuring that they get ahead of the curve on issues of this kind, because their customers—who, for these purposes, are the fans and supporters—care about these matters. People identify very strongly with their football clubs and with the values that they embody and represent. They want to see these institutions being successful, as obviously all football clubs intend, but they are very aware of the need for them to be responsible and to move towards their own zero-carbon position. I do not want this regulator to spend time and money—not their money but the football clubs’ and therefore the fans’ money—doing things that are not necessary, because all football clubs want to be successful, so they will be addressing this already.
Lord Goodman of Wycombe (Con)
My Lords this series of amendments raises an issue that will come back again and again during Committee, which is a clash of priorities. I will introduce it by again reading out a section from Tracey Crouch’s original report, in which she refers to
“the fragility of the wider foundations of the game. It is both true that our game is genuinely world leading and that there is a real risk of widespread failures and a potential collapse of the pyramid as we know it”.
In other words, we are being told, on the one hand, that football is so financially troubled that we need a state regulator to guide it and, on the other hand—in this series of amendments and others to come—that we must load the regulator with additional responsibilities.
As my noble friend Lady Brady said, these amendments relate to climate change, but we will have more on fan safety, the regulation of women’s football, the expansion of the regulator to other leagues and others on environmental sustainability. On and on they will come. There is a fundamental tension between loading the regulator with these responsibilities and the state of football as the Crouch report described it and as the Bill attempts to address.
There may be other ways of meeting these environmental objectives. I will avoid being drawn into the adverse exchanges between my noble friends Lord Deben and Lord Moynihan of Chelsea. There may be other ways in which clubs that lead on environmental action can help clubs that do not. As matters stand, the regulator, were these amendments to come into force, would be imposing on clubs that have, for better or worse, not thought about these matters at all, requirements that would affect how fans come to the games, how they treat their pitches and how they deal with litter—all matters for which they are completely unprepared.
If the Government are correct in stressing—as they have done throughout in talking to Peers; the Minister has been generous in doing this before and during the Bill—that they do not want the regulator to have a heavy touch, I look forward to the Minister explaining the other ways there might be to encourage clubs to take responsible environmental action besides accepting these amendments to the Bill, which might have effects we do not expect or want on clubs that are in financial difficulties—the very basis, after all, on which the Bill has been brought forward.
Lord Markham (Con)
I join in with the sentiments expressed by many other noble Lords. I made the point at Second Reading that, however well intentioned, noble Lords came up with seven new commitments they wanted the regulator to be involved in. This all starts from the premise that we believe it should be a light-touch regulator and the unintended consequence is that each one, however well intentioned, can add another burden, as so ably explained by my noble friend Lady Brady. I, like others, am fearful of adding something new to the Bill.
I would like to explain a slight difference. In her response to the first group, the Minister talked about mission creep regarding how we were trying to expand the sustainability argument to other objectives of the regulator; for example, to some of the income-generating TV advertising. The key difference here is that we were trying to talk about the action the regulator takes—the measures the regulator might take to force clubs to put down a deposit to cover their sustainability requirements, and whether the regulator should have wider criteria beyond financial sustainability regarding the wider benefits of the game. Those sorts of things are appropriate because they look at what the regulator is responsible for and its objectives. Thing that put new burdens on the clubs come into a different category. They come into the mission-creep category, so to speak, which I, like other noble Lords, are reluctant to add in.
So, although I support the points made by other noble Lords, I would make that distinction. When talking about things the regulator might do that might impact clubs we should make sure that the regulator looks at the wider benefits of the game but we should not look to add extra burdens on clubs, however well intentioned.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to the noble Lords, Lord Bassam of Brighton and Lord Addington, to the noble Baroness, Lady Jones of Moulsecoomb, to all noble Lords who have contributed to the useful discussion on this group of amendments, and to the noble Baroness, Lady Taylor of Bolton, for her Amendment 15, which the noble Lord, Lord Bassam, and the noble Baroness, Lady Jones, spoke to on her behalf.
We recognise the importance of environmental sustainability and the target to reach net zero greenhouse gas emissions by 2050. It was, in fact, as noble Lords know, the previous Government who introduced and passed the law to ensure that the United Kingdom reduces its greenhouse gas emissions by 100% from 1990 levels by 2050. In recent scrutiny of and debate on other legislation before your Lordships’ House, we on these Benches have discharged the duty not just of the Official Opposition but, importantly, of sparking several debates on environmental sustainability and protection.
My noble friends Lord Gascoigne and Lord Roborough tabled an amendment to the Water (Special Measures) Bill to make provisions for nature recovery and nature-based solutions. We also supported and helped to pass an amendment to the Crown Estate Bill to require the Crown Estate commissioners to assess the environmental and animal welfare impacts of salmon farms on the Crown Estate.
I am very proud of those demonstrations of our commitment on these Benches to the protection of the environment and I am sorry that the Government did not support the sensible provisions brought by my noble friends Lord Gascoigne and Lord Roborough on the water Bill. But I am not persuaded by the amendments in this group because I am not convinced that they are the proper responsibility of the new independent football regulator. I worry that additional requirements—in this case on environmental sustainability—will place a further burden on football clubs.
Amendment 15 in the name of the noble Baroness, Lady Taylor of Bolton, supported by the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Jones of Moulsecoomb, requires clubs to operate
“in a way that will achieve net zero … by 2050 … materially reducing negative impact on the natural world”.
Amendment 55, tabled by the noble Baroness, Lady Jones, adds an environmental sustainability objective to the list of objectives for the independent football regulator under the Bill.
These are important and noble causes, but they will be, as this debate has highlighted, very costly duties that some of the clubs, particularly in the lower leagues of the football pyramid, might not be able to discharge. This speaks to the tension that the noble Lord, Lord Goddard of Stockport, mentioned in our debate on the previous group about making sure that we are thinking about clubs of all sizes and at both ends of the leagues with which the Bill is interested. There is a great difference between their financial and administrative ability to discharge some of the duties the Bill will place upon them. The clubs in the lower leagues of the pyramid are significantly smaller than those at the top and have far fewer available resources.
Even with the Bill’s efforts to help with the financial flows throughout the football pyramid, we should be mindful of the concern about whether these clubs will be able to cope with these further regulations, particularly, as my noble friend Lady Brady pointed out, in light of the additional burden placed on them by the Government’s new taxes on employment through expanding the scope and rate of national insurance contributions. Given the additional costs to football clubs from measures such as that and the other measures we will look at in the Bill, such as the industry levy, the costs of compliance with the financial regulations and so on, I fear that these amendments mean further regulatory burden on clubs at both ends of the spectrum.
It is important to note, as noble Lords have reminded us, that clubs and leagues have already voluntarily adopted and embraced elements of environmental and sustainability governance rules. In February this year the Premier League clubs met and agreed a Premier League environmental sustainability commitment. That means that each club in that league has agreed to:
“Develop a robust environmental sustainability policy”
by the end of the current season,
“designate a senior employee to lead the club’s environmental sustainability activities”,
and
“develop a greenhouse gas … emissions dataset … by the end of the 2025/26 season”.
My noble friend Lady Brady set out some of the other excellent work that has been done on a voluntary basis, but with enthusiasm, by clubs in the Premier League.
Baroness Twycross (Lab)
I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, the noble Lord, Lord Addington, and the noble Baroness, Lady Jones of Moulsecoomb, for raising the very serious issue of environmental sustainability and how it relates to the regulator. These are issues of considerable concern, not least with the shocking storms we have seen recently and the change to weather patterns over the past few years. The impact of the climate emergency on all aspects of our lives is very real.
In response to these amendments, I would like to make clear that the Government are absolutely committed to environmental sustainability. One of the Prime Minister’s five national missions is to accelerate the transition towards clean energy and ensure the UK fulfils its legal obligation to reach net-zero emissions by 2050. As a huge part of our national life, all sports, including football, have an important role to play in this transition. The Government expect authorities across this sport and across all sports to be working together to advance environmental sustainability.
A point made eloquently by the noble Lord, Lord Deben, is that we have to be able to justify the view we take now to future generations. This is true. The noble Baroness, Lady Jones of Moulsecoomb, made an interesting point on placing this requirement within the Bill. However, while I entirely support her views, we do not feel it is right to add environmental sustainability to the purpose of the Bill. As the noble Lord, Lord Goodman of Wycombe, highlighted, this Bill is acting only where industry has shown it is not capable of resolving matters itself and statutory regulation is the most effective way of tackling any market failures.
I would, however, be happy to discuss further with the noble Baroness how we can use good examples of football clubs already acting on the climate change emergency and spread best practice. What I would stress, when noble Lords are discussing something so important both nationally and internationally, is that noble Lords are still debating the very purpose of the Bill. The areas specified in the purpose of the Bill are based only on issues that English football has clearly shown itself to be unable to self-regulate and to risk clubs being lost to their fans and local communities.
By contrast, football has already demonstrated the ability to take action on the environment: for example, the Premier League’s new minimum standard of action on environmental issues across both the clubs and the league. I welcomed the examples given by the noble Baroness, Lady Brady. The noble Baroness, Lady Jones, and my noble friend Lord Bassam described some interesting measures when describing the work of Forest Green Rovers, but this is clearly only a starting point on which future initiatives must build. Football authorities must take more proactive steps to accelerate their own environmental initiatives. However, it is within the gift of leagues, clubs and other authorities across the game to do so without government intervention.
We must also be wary of scope creep and unintended consequences. The addition proposed in Amendments 11 and 15, in the names of my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, would potentially add burden and cost to the regulator, as well as potentially limiting its ability to carry out its main objectives. Therefore, while I acknowledge the importance of this issue, as I have set out, we do not feel it is right to add environmental sustainability to the purpose of this Bill.
I look forward to further discussions on how we can best promote environmental sustainability within the game. However, for the reasons I have set out, I hope the noble Lord will withdraw his amendment.
Lord Bassam of Brighton (Lab)
My Lords, I think it has been of great value to have this discussion and debate on the notion of environmental sustainability in the football industry, which is a very responsible industry actually. I take heart from the examples that the noble Baroness, Lady Brady, gave of the Premier League’s initiatives and those from the noble Lord Parkinson.
It seems to me that this is an important issue for football. All the other regulators seem to have an environmental purpose as well. I have looked at the Financial Conduct Authority, Ofcom and even the Pensions Regulator, which you might think is a million miles away from being a regulator interested in sustainability. They all have environmental statements and purposes as part of their work.
I think the football business is making progress in this space. I want to see it making more progress, perhaps with a more level playing field. It seems unfair that some clubs leap ahead and leave others behind. Forest Green Rovers, although a small club and in the fifth tier of football, has led the way for some years and I think it only right that we encourage other clubs to do the same, whether that is through the regulator or by applying environmental legislation more generally.
I look forward to the invitation to have some more discussion on this point but, for now, I beg leave to withdraw the amendment.
Lord Addington
“(c) meets the social responsibility duty.”Member's explanatory statement
This amendment includes the social responsibility duty as part of the definition of English football sustainability.
Lord Addington (LD)
My Lords, my name is to amendments in this group which will undoubtedly be accused of a bit of creep from the mission on the Bill. Having said that, what inspired this creep was Clause 1(3)(b), which says that football is sustainable if it
“continues to contribute to the economic or social well-being of the local communities with which regulated clubs are associated”.
There are two issues. The most substantive amendment is Amendment 245 and I apologise for the paving amendment, but it is the way I could get the matter discussed.
Nothing has the reach of football in our society. It is seen as a local totem in which we seem universally to be interested—I speak as a follower of an oval-shaped ball, not a round one, so with a bit of envy—so there is the ability to go forward and make changes. We might hear about the good contributions made by certain clubs. They do things within their own environments that are of benefit to their communities. I thought, “Why don’t we use football as a basis for helping the rest of the voluntary sector?” The voluntary sector tends to be dependent on itself: amateur sport, music and drama and the likes of environmental schemes where people put their hands in their pockets to go out to do things that have a social benefit.
Let us face it: we are taking on a Bill here because football, at least tiers of football, are in a mess, but we think they are important so we want to keep them. I do not think it unreasonable that they should help voluntary groups. In Amendment 245 I suggest that these clubs, which are great institutions with local kudos and power and structure, should undertake the very small duty to train people to run those local groups. Okay, it may not be about football, but it is about the local community. I suggest not that the clubs do it for those groups, but that they train them in how to do it themselves and be the treasurer, secretary or chairman. Noble Lords might disagree with that list, but these things contribute to the whole of society. It will also enhance the position of the football club. Unless it is done in a mean-spirited way, it will be something that reaches out.
Also, it is a fact that all groups like to sit in darkened rooms and talk about themselves to themselves. My amendment would force clubs to look out of that room to somebody else and appreciate that other people will help them. When I said that to the Minister in one of our meetings, she said that football manages to sit in a darkened room and does not talk to most other groups, but we will let that one fall. We can get something that helps groups that help society to run. The difficult bit for an amateur as the treasurer is to be constructive with a balance sheet, or as the secretary to figure out how to run a DBS check: “What am I legally supposed to do with it?” People will say that other groups do this, but nothing has the centralised pull of football. My amendment is a probe. Its wording is very general. This expertise might be pulled together. Sports have governing bodies that will run this, but most other organisations do not have that structure. I just cannot resist the image of the local am-dram group finding itself sitting beside the local rugby union team for the same class. It appeals to me somehow, but they all have the same problems, and they all have the same virtue that they are local, running it for themselves, and they benefit the community. I hope that we have at least some support for this idea and this structure.
The other amendment is about encouraging professional football clubs to get people to play football. It is an odd thing, but it struck me earlier: that is not really what the Bill is about. Perhaps the Government do not want it to be about that, but I would have thought that getting people to play football—getting the benefits of exercising as opposed to just watching—might sit reasonably well with the Bill. Certain clubs might have schemes that do good things, but why do we not bring them together and find out which ones work best? Football does some of this, because it has competitions and gives awards for who runs the best community scheme. I know because I have attended them, and I thank the EFL for doing that. I do not think that making sure that clubs take on some role in the community is unreasonable, as a reward for the amount of time we are putting into make sure this structure is sustainable. There are certain limitations here, and I have accepted that those should be put forward if these ideas are accepted, but we may just be pointing to good practice. I hope we will do this.
Baroness Taylor of Bolton (Lab)
My Lords, the noble Lord, Lord Addington, makes a good point about football clubs needing to be outgoing and outward looking, able to offer advice to other charities or organisations locally and to encourage football. The vast majority of clubs do that. Perhaps there is insufficient evidence about best practice or not enough sharing of it, but the vast majority of clubs have a good outreach programme, and that is much valued by local communities.
I rise to say a few words about Amendments 151 and 165, which are about the corporate responsibility of clubs in general. The noble Lord touched on some ways in which they can have an impact. We have just talked about the environmental sustainability that is necessary, and the Minister has given reassurances on that point.
I want to mention, in particular, the need for football clubs to increase diversity, include underrepresented groups and eliminate discrimination, which I am afraid exists in many areas of business, from boardrooms to employment records. Local football clubs have a big impact on their community and can lead the way in showing what can and should be done. We need to know what is happening in our clubs, and therefore a reporting mechanism on these areas would be important and of assistance.
We have seen some changes, for example, in the gender diversity of people employed by football clubs. We see many more women taking up roles, but there is a long way to go. It would be good if we could encourage better governance at football club level on all these issues. I agree with what has been said about not having mission creep, and some of these areas are covered by parts of employment law, for example, but we have to look to the long term to improve the good governance of football clubs. Yes, we can encourage best practice, as the Minister said earlier, but there is more to do.
Baroness Grey-Thompson (CB)
My Lords, I speak to Amendment 165 to which my name is attached. I declare my interests; I am chair of Sport Wales, I sit on UK Sport and I am a trustee of the Foundation of Light.
I start by thanking the Minister for answering my question from Second Reading on what would happen between the Privy Council and Senedd regulations with this Bill. I am not a season ticket holder, although I do spend a lot of time watching the Welsh women’s football team—good luck to them tomorrow night—and Thornaby FC women’s team.
Like the noble Lord, Lord Addington, I believe in the power of football to change lives. I realise that most of the amendments that I have my name to in this Bill will be considered out of scope, but I do share the noble Lord’s concern over academies. My 2017 duty of care report, commissioned by the then Sports Minister Tracey Crouch, has some answers on that which have not yet been taken up.
This is important in relation to understanding the communities of which football clubs are part. We have talked a lot about the big clubs tonight. Thornaby Football Club, which is very low down in the leagues, decided earlier this year to cancel the women’s and girls’ team. The community came together, people stepped in—partly due to the Women’s Sport Collective—and the team was saved.
This, to me, is the power of football at its best. There is a lovely interview online with a young girl called Lily, aged seven, who was asked what she thought about women’s football being cancelled. She indignantly said, “If girls want to play football, you can’t just not let them”. For me, the impact that these amendments would have all through the game is important; it sets an important tone.
In the original review, Dame Tracey Crouch said that equality standards were a non-negotiable part of the regulator. We have seen this in other sports. The code for sports governance, launched in 2016 by the sports councils, which covers over 4,000 organisations, has made a materially positive impact on the world of sport.
I believe that club governance should include these equality standards, because they link back to accountability and integrity. I can speak only for the Foundation of Light. I am biased, but it runs incredible programmes in communities as lots of foundations do. We are lucky that we have a good link to, and support from, the club. The aim of the foundation is to involve, educate and bring people together through football in Sunderland, south Tyneside and County Durham, and to improve education, health and well-being
This has a significant impact on the community. It is important that we can measure this impact in relation to the community it represents, to help develop and refine these programmes and get to those who they can have the most impact on. This is an important part of what we should be looking for in relation to football, to be able to make a real difference at the grass-roots level.
Baroness Brady (Con)
My Lords, I rise to speak against this set of amendments, which would add corporate responsibility requirements to the Bill. Before I do so, I want to say how much I respect and understand where the noble Lord, Lord Addington, is coming from. As a shareholder in the Premier League, I commit to him that we will meet with him to think about ways in which we can work together to deliver some of the aims that he spoke so passionately about, because we are all in agreement that they are important.
I want to make sure there is no misunderstanding in this House of the extraordinary social impact that football clubs already have in their communities and what drives this activity. Let me share some perspective on what football clubs already deliver. The Premier League provides over £500 million annually to support lower league clubs, fund youth development and invest in community facilities. We support every single football league club to provide its own community programmes, too. This is not a peripheral activity; it represents the most comprehensive community investment of any business sector in Britain. I cannot think of any other sector that voluntarily shares such a huge proportion—over 16%—of its central revenues in such a way.
The Premier League Charitable Fund’s £110 million three-year budget supports half a million people annually through targeted community programmes. Significantly, 45% of this activity takes place in our country’s most deprived communities. This April, the Premier League announced additional funding of £33 million per season from 2025-26 to further enhance this work.
The scale of impact that this work has is remarkable. Through the Football Foundation, Premier League funding has enabled over 70,000 grants to improve grass-roots facilities, supporting nearly 70,000 community teams last season alone. The Premier League Primary Stars programme reaches 84% of primary schools across England and Wales; that is 19,000 schools and over 18 million student interactions since 2017.
These are not isolated initiatives. More than 100 club-connected charities work daily in their communities. Programmes such as Premier League Kicks create opportunities for young people at risk of anti-social behaviour. Premier League Inspires develops personal skills and positive attitudes in young people aged 11 to 25. This work touches every aspect of community development.
Football has naturally evolved its social contribution without regulatory compulsion or diktats. What other business sector can demonstrate this level of sustained community investment? What other industry has built social responsibility so fundamentally into its operating model? Premier League clubs—indeed, all football clubs—understand their role as community institutions and deliver accordingly.
The Bill’s purpose is to address specific issues around what I think the Government mean by financial sustainability and governance. Adding layers of corporate responsibility requirements would not only duplicate existing good work but risk distracting the regulator from its core purpose. We have seen in other sectors how regulatory mission creep can undermine effectiveness. We must not let that happen here again.
Football clubs are not just businesses that happen to do some good work in their communities. They are the beating heart of those communities, woven into their very fabric across generations. When a child steps on to a Premier League-funded pitch in a deprived area, when a struggling student finds inspiration through Premier League Inspires, and when a disabled young person discovers the joy of playing football through a club foundation, these moments represent something profound about football’s role in our society.
Premier League clubs understand their power and their responsibility deeply. They live it every day through their actions, their investment and their commitment to their communities. I do not believe any regulation could ever mandate or compel this level of social impact; it comes from an authentic and deeply felt understanding of football’s unique place in our national life.
Let us keep the regulator focused on its vital purpose and trust instead in football’s consistent commitment to social good: not because rules demand it but because it is already so fundamental to what makes English football so special.
Baroness Fox of Buckley (Non-Afl)
My Lords, that eloquent and passionate explanation of football at the heart of community sums up for me the tension when we are talking about this Bill. Football exists as a positive force in society and in communities. We do not want to kick the life out of it by turning it into a box-ticking exercise that imagines the only way football clubs will help a community is if they have a regulator breathing down their neck, saying, “You must be corporately socially responsible”. Noble Lords must not make me repeat that.
I had concerns in general when I read the details of all these amendments. For example, Amendment 165 calls for environmental sustainability requirements and increasing diversity and inclusion requirements. I will not repeat the points that I made earlier and will make more fully when I speak to my Amendment 155, opposing the imposed duties of EDI and so on. I want to look at one aspect of discrimination that I think is hidden. It is focused on in Amendment 247, which says that regulated clubs
“must facilitate football training for young women and girls”,
and Amendment 90, which says that the independent football regulator
“must include facilitation for both sexes and separate development pathways”.
Lord Hayward (Con)
My Lords, I shall return to the spirit of the amendment from the noble Lord, Lord Addington, and the other amendments in this group. As my noble friend Lady Brady has said, the Premiership funds, in one form or another, enormous amounts of good work, but, as I have discussed with both my noble friend and representatives of the Premiership, it totally fails to identify the work that it does.
Until the Premiership sets about aggregating, in one form or another, all the contributions that different foundations make—whether in relation to football training, the disabled, the young or whatever it may happen to be—it will continue, quite rightly, to face the pressures that the amendments I have referred to attempt to address. Until the message is got across about the sums of money that my noble friend Lady Brady identified, certain attitudes will not change within the football world more broadly. The social work that is undertaken is so substantial, as my noble friend has said, that it will help to change other attitudes and enable progress to be made in all sorts of different ways that the amendments attempt to tackle.
So I do not necessarily support the amendments being accepted into the Bill, but I strongly support the message that is included in them. I ask the Premiership to get its act together in some form or another and convey the good work that my noble friend has just identified so that people understand that it is attempting to change attitudes, and in that way it will actually change attitudes.
Lord Goddard of Stockport (LD)
I support the noble Baroness, Lady Brady, in what she and the previous speaker have said and in all the work that she does. It is all there in the Deloitte report on the Premier League. The Premier League has missed a trick; the pages of the report show where the money goes and how it is spent, and it is all very laudable. Premier League football clubs, independent of the Premier League, do great schemes as well. Manchester City’s City in the Community started in 2003 with no funding from the football club, apart from one officer and that was Alex Williams, an England goalkeeper, who has just retired after doing 20 years at City in the Community. That is an example of the social responsibility of football clubs.
The reasoning behind these amendments, even though they may be just probing amendments, is that those things that can be given can be taken away. If football clubs in the Premier League fall on hard times and things have to stop being done, they may stop doing the things they do not have to do, and that effect will invariably come down to the poorest parts of the pyramid.
All we are trying to say with these amendments is: let us acknowledge the social responsibility that the Premier League has and the Premier League football clubs deliver but let us give the regulator the ability to ensure that that carries on. My noble friend is not being prescriptive and saying, “You should all pay that much”, but he wants to ensure that, to avoid unintended consequences, football clubs do not suffer in the event that some Premier League clubs or the Premier League itself cannot deliver those benefits in future years. I have no reason to think that will happen, because the Premier League is getting bigger and going global and more money is coming in, but that is the point of the fan-led review. How many football clubs did the review show were one match away from disaster? That why we are looking for a regulator. Sometimes the unintended consequences are too dire, especially for smaller clubs.
Lord Markham (Con)
Like others, I have a dilemma, in that I am mindful that the noble Lords, Lord Addington and Lord Bassam, and the noble Baroness, Lady Taylor, are well intentioned and, on the whole, I agree with what they are trying to do. However, like others, I feel that there is the danger of mission creep. This is another area—we will be speaking about others later tonight, and over the next few days there are other areas that we will be adding—where each one on its own might not feel like a lot, but if we add layer upon layer, we move far away from the original intention of being a light-touch regulator and towards one that becomes overbearing.
It has been an education, probably for all of us, to hear, as my noble friend Lady Brady was saying, about the good acts that the Premier League is doing with local communities through local football clubs. There is probably more that can be done to make sure that the awareness of those, as the noble Lord, Lord Goddard, was saying, is enhanced and greatened.
Generally, the idea, as my noble friend Lady Brady was saying, of having a meeting with the noble Lord, Lord Addington, and the Premier League to see how that can be more fostered, encouraged, known about and channelled is probably the right way. Where things are working, I much prefer the use of the carrot than the stick.
Lord Parkinson of Whitley Bay (Con)
My Lords, this has indeed been a good and very valuable debate. The issues which amendments in this group address are in a slightly different category to some of the additional duties and areas into which amendments in other groups have sought to take the work of the regulator and the scope of the Bill because, as the noble Lord, Lord Addington, said in opening, nothing has the reach of football.
These amendments speak to sustaining the future of the game and making sure that clubs can continue to do the work in their communities which noble Lords have spoken about passionately from Second Reading onwards. Particularly, the noble Lord’s Amendment 247 is about making sure that they are facilitating
“training for young women and girls”
and that the valuable work done in recent years is extended there. Like others, I was struck by the powerful contribution from my noble friend Lady Brady, who said that these are responsibilities which are authentic and deeply felt by clubs. She gave examples, drawing particularly on her experience in the Premier League. I agree with the points that my noble friend Lord Hayward and others have made: perhaps that work ought to be better known and the clubs should blow their trumpets more loudly, not just those in the Premier League but clubs at every level that are doing important work.
It might be helpful to flag to the Committee that the Premier League and the EFL already have rules in place regarding corporate responsibility. Section K of the Premier League’s handbook has a whole host of rules including, to name a few, a safety certificate and medical facilities, ground rules and regulations. Those are but some of the requirements already placed upon clubs. The noble Lord, Lord Addington, rightly highlighted the work done by the EFL through the awards that it presents to clubs that are doing valuable work in this area.
Amendment 151 from the noble Baroness, Lady Taylor of Bolton, the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Grey-Thompson, seeks to impose additional reporting obligations on the executives of football clubs. While transparency in this important area is an admirable goal, it is important to bear in mind proportionality and, again, to echo the concerns that have been raised about adding to the duties of clubs and their executives in other areas, clubs, especially those lower in the league structures, already face significant financial and administrative pressures. Requiring more and more reports on a growing list of matters could strain their limited resources and have an opposite effect to that by which noble Lords are motivated when they bring their amendments. We have to bear in mind that a one-size-fits-all approach to corporate governance would fail to recognise the diversity which we should be mindful of in the financial ecosystem of football.
Amendment 165 from the noble Baroness, Lady Taylor, aims to compel clubs to adhere to certain corporate codes beyond those which the Bill would currently mandate. As we keep reminding ourselves, football clubs are not merely businesses; they are community institutions with unique identities and relationships with their supporters. While it is a useful idea, we also have to be careful of imposing rigid corporate structures designed for companies in other sectors, which could risk alienating clubs from their communities. We have to find ways to ensure the sort of good governance that the noble Baroness seeks without overburdening clubs with corporate obligations that could conflict with the broader role that they play—and always have played, as the noble Lord, Lord Addington, my noble friend Lady Brady and others have reminded us this evening. Like others, I favour encouraging that work to continue voluntarily, but it would be valuable for a spotlight to be shone more brightly on the work being done, not just at the top end of football but all the way through.
The noble Baroness, Lady Grey-Thompson, thanked the Minister for answering the very good question that she raised at Second Reading about what would happen in the event of conflicts between the Privy Council and Senedd Cymru. I had a quick look again at the Minister’s helpful letter of 27 November and I do not think it was covered in that. My apologies if I have missed the answer that the Minister gave the noble Baroness but, if it was not in that letter, could it be shared with other noble Lords? It was a very technical question but an interesting one, at least to me, so it would be useful if the Minister is able to share that with the rest of us. But with that, I look forward to her response.
Baroness Twycross (Lab)
I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, the noble Lord, Lord Addington, and the noble Baroness, Lady Grey-Thompson, for raising these important issues around corporate and social responsibility and duties to facilitate training. It has been an interesting debate and I had particular sympathy for the points raised by the noble Lord, Lord Goddard of Stockport. I will, however, take their amendments in turn.
First, on Amendments 14 and 245 from the noble Lord, Lord Addington, the Government acknowledge football clubs’ central importance as community assets and their role in communities. However, this amendment would expand the scope of the regulator beyond sustainability and the Government do not believe that social responsibility is an issue where statutory intervention is necessarily justified. We believe that the regulator should be tightly focused on areas of critical need, addressing genuine market failures as exposed by the fan-led review. What is more, mandating how clubs should approach community funding could discourage their pre-existing work, crowding out some of the great initiatives already taking place.
On Amendments 90 and 247 from the noble Lord, Lord Addington, opportunities for training at amateur and community level and for women are vital. They support the next generation of English football and are crucial in getting more women into football. I speak as someone who was not allowed to play football as a girl in school, so I strongly believe in those opportunities being available. The Government are committed to supporting these opportunities. This is why we are continuing to fund the work of organisations such as Sport England and the Football Foundation and welcome work already being done by the game itself, as highlighted by the noble Baroness, Lady Brady. However, such training opportunities, and the women’s game more broadly, are not within the intended scope of the regulator.
On the regulator’s role in relation to whether it should require clubs to facilitate training for young women and girls, the regulator has a tightly defined scope: to promote financial sustainability and resilience in English football. The regulator will also be focused on the men’s game at the outset; women’s youth training is therefore beyond its core remit. However, the Government acknowledge the importance of football training to the future of football and are committed to funding organisations such as Sport England and the Football Foundation. The football industry also understands its importance, as was noted during the debate, funding numerous initiatives through the Football Foundation and the Premier League Charitable Fund. It is therefore the Government’s belief that the regulator would be an inefficient way to support women’s youth training. Further collaboration with the industry is, in our view, the most effective way to invest in England’s football future.
The noble Lord, Lord Addington, made a point about whether we should require the regulator to facilitate amateur and community training and development. That is an appealing proposal, but the regulator has a tightly defined scope in its objective—to promote financial sustainability and resilience in English football—therefore training and development in this regard is beyond its core remit. However, the Government acknowledge the importance of football training, as I have highlighted, to the future of football. In our view, collaboration with the industry and funding through the spending review is the most effective way to invest in English football’s future. I am happy to discuss both those points with noble Lords outside the Chamber before our next Committee date. As with the noble Lord’s other amendments, the amendment under discussion would expand the scope of the regulator beyond sustainability and into areas in which the Government do not believe that statutory intervention is justified.
On Amendments 151 and 165 in the name of my noble friends Lord Bassam and Lady Taylor, corporate responsibility is an important part of any business, and it is no different for football clubs. However, this addition to the mandatory licence conditions would impose more prescriptive burdens and regulations on clubs. On the content of the proposed condition, we do not feel it is right to add environmental sustainability and the societal impact around clubs to the purpose of this Bill. As I set out, the regulatory scope will focus on issues that football has clearly shown it is unable to address through self-regulation and which would pose a threat to the continued operation of football clubs.
On equality, diversity and inclusion, it is right that football clubs should be more transparent about what action they are taking on this issue. That is why we have included equality, diversity and inclusion in the corporate governance condition, which will mandate clubs to report on what action they are taking on this issue. We expect the regulator to produce guidance on the specifics of what this will entail, in consultation with the industry. We do not think it is right to put such detail on the face of the Bill.
The noble Lord, Lord Addington, and the noble Baroness, Lady Grey-Thompson, highlighted player welfare and the duty of care. The Government will discuss player welfare with the leagues, the FA and the PFA to drive action on this issue. We will continue to urge competition organisers to work together to develop a consistent programme of support which allows academy players to access an offering of independent support and advice when required. This is very important.
Many, if not most, clubs already have a positive impact on their local community, a number of examples of which have been provided. We do not believe that the regulator should be attempting to micromanage clubs in this area. However, relevant safeguards are in place in the Bill to stop a club harming the heritage and community of the club.
While I understand and strongly endorse the intention behind the noble Lord’s amendment, for the reasons I have set out I am unable to accept it. I therefore hope that the noble Lord will withdraw his amendment.
Lord Addington (LD)
My Lords, the noble Baroness, Lady Brady, made that the most positive rejection of an amendment I think I have ever received; I thank her for that commitment. Although I would have preferred it, as my noble friend Lord Goddard put it, to be something that “must” happen, the Premier League saying that they will do this is a pretty good second.
It would be good to arrange a discussion and to say that the outreach work beyond football could go to groups who do not normally think that football has anything to do with them. Some groups already do this, and that is the essence of running voluntary groups. It would be a very big step forward and, if the Premier League are prepared to do it, more power to their elbow.
I understand the idea of focus. I did not mention the amendments in the name of the noble Baroness, Lady Taylor, because I knew she would do a better job herself. I do not think we have quite captured in this Bill the social responsibility inherent in football’s role. We should have another look at this issue, because we may just be encouraging others to do the heavy lifting.
There is something about football. It has a nationwide pattern of facilities which can reach all these local communities. There are very few who would not be reached by football. It does not reach everywhere—some places in the countryside may not be affected by a local club’s activity—but it reaches most people, including virtually all the major population centres.
I hope that we can go away and have a little think about how to give a few more nudges to these positive responses. Having said that, and in thanking all those who took part in the debate, I beg leave to withdraw the amendment.
Football Governance Bill [HL]
Monday 2nd December 2024
(1 month, 2 weeks ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-II Second marshalled list for Committee - (28 Nov 2024)
“(3A) Notwithstanding the purpose of this Act, the IFR must have due regard to the potential economic harms of overregulating English football.(3B) As part of fulfilling its duty under subsection (3A) the IFR must assess the effects of its activities on the financial position of regulated clubs and submit a report to the Secretary of State within six months in the first instance and annually thereafter which must be laid before Parliament within 28 days of their receipt of the report.”
Lord Jackson of Peterborough (Con)
My Lords, this amendment, on the potential harms of overregulation, goes to the heart of this whole Bill. What we are discussing in this Committee is not just the role of a new regulatory body but the future of English football in its totality. The Bill introduces a complete overhaul of the entire system of English football. It creates an entirely new organ of state apparatus, which will no doubt introduce copious amounts of onerous rules and regulations that clubs and leagues will be forced to comply with—in addition to the already stringent rules that the leagues impose on clubs themselves.
The Premier League has a handbook on its rules and governance procedures that is 768 pages long. Contained within this vast document are reams of rules, regulations and duties relating to matters such as club finances, tests for the prospective owners and directors of clubs, the disclosure of relevant interests by club officers, requirements for directors’ reports, and so on. Under rule E.22, the league has the power to impose financial penalties, and under E.37 it can deduct points from clubs which violate those rules. All the things that the Bill seeks to address are already covered by the Premier League.
It is not just the Premier League that does this. The EFL already has an established financial regulation department, aptly called the club financial reporting unit, which monitors and ensures financial regulations that EFL clubs must abide by. The EFL can and does hand out penalties to clubs that fail to meet its standards. For example, in May 2023 Wigan Athletic FC was deducted four points, beginning the 2023-24 season on minus eight. That was because the club failed to comply with the EFL’s requirements that the club deposit 125% of its forecast monthly wage bill into a designated club account. In fact, in that season there were 15 disciplinary and enforcement proceedings against clubs by the EFL for breaching its rules. That existing self-regulation has clearly been effective. Despite some high-profile cases of failure, the vast majority of the time the current regulations do serve their purpose.
Since 2012, when the financial rules were strengthened, only six Football League clubs have gone into administration and only seven football clubs have been completely liquidated since 1945—these are remarkable numbers. Compare that to the finance industry, whose insolvency figures dwarf that of football. In the 12 months to September 2024, there were approximately 500 insolvencies in the financial services sector alone, according to the Insolvency Service’s official statistics. We talk about breakaway leagues, and yet we must not forget that the European super league was stopped in its tracks by the fury of the fans and the power of the current league regulators of football. Is that not a clear example of the self-regulation of the sport working very effectively?
It is not clear at all that self-regulation has failed. I put it to your Lordships’ House that English football is one of the great success stories of private regulation. The leagues already impose their own rules, which hold clubs to account for their actions. They have robust mechanisms for punishing those clubs that do not act appropriately, and the evidence of the success rate of football clubs proves that that has indeed worked. So I ask the Minister: why strangle the flourishing industry that is professional football?
I also point out that that seems to be the view of the Prime Minister. As my noble friend Lady Evans of Bowes Park noted at Second Reading, the Prime Minister himself said at the recent investment summit that
“the key test for me on regulation is … growth. Is this going to make our economy more dynamic? Is this going to inhibit or unlock investment?”
He went on to say that
“where it is needlessly holding back the investment we need … we will get rid of it … we will make sure that every regulator in this country, especially our economic and competition regulators, takes growth as seriously as this room does”.
There we have it. The Prime Minister himself understands that regulation and overregulation are fraught with economic danger. If he realises the risks of regulation inhibiting investment in that arena, does he also recognise the risks of regulation and overregulation within football?
It seems we are suffering from, as Harold Demsetz termed it, the Nirvana fallacy. This is where people look at private solutions and seek to discover discrepancies between the ideal and the real. If discrepancies are found, they deduce that the real is inefficient. Their usual yet unfortunate response is that the only possible solution must surely be more regulation, more rules and more state diktats. But when we are considering whether this new regulator will actually improve outcomes for football, we cannot merely have reference to the supposed limitations of self-regulation. We must look at what this independent football regulator will become.
For that, it is particularly instructive to examine the recent report on the Financial Conduct Authority by the All-Party Group on Investment Fraud and Fairer Financial Services. That report has found that the body that regulates the entire financial sector in this country is
“an opaque and unaccountable organisation”
that is
“incompetent at best and dishonest at worst.”
The noble Lord, Lord Sikka, who is not in his place, stated that the FCA was “complacent, conflicted and captured”.
Among the litany of failures that the report identified is one that is typical of regulators of all stripes: the culture of the organisation. The APPG found that the entire professional culture of the regulator was defective, and that
“errors and inaction are too common”.
The APPG has lined up a vast array of whistleblowers, who have shed light on the problems that the FCA faces. That report is backed up by the Institute of Economic Affairs, which points out that the FCA has been able to decide its own burden of proof and then levy fines running into billions of pounds, and all without proper accountability.
I will not reiterate the entire report for the Committee, but I was not surprised at all when I read it. The behaviours and the failures as described by the APPG are all too common when it comes to state-run bodies that seek to enforce their rules on to other private entities. They are too often encouraged to go further than necessary—mission creep—and then do not act when they are supposed to.
Why would this regulator be any different? Why would the independent football regulator break the mould and challenge these hitherto proven truths? I see no reason why the IFR would improve football in this country in any way. Previous state-run regulators have clearly failed, and I have no doubt that this regulator would potentially do the same. I therefore feel it is an absolute bare minimum to require the independent football regulator to have due regard to these risks of overregulation, as enunciated in my amendment. That should not be a contentious point.
I hope that the Minister can give me cast-iron assurances that the regulator will be ever watchful of the damage that it could very well inflict on football clubs and leagues. I ask her to guarantee absolutely that the IFR would be a light-touch regulator and not delve into the minutiae of each club’s finances and everyday operations. I want her to reassure the House that not one penny of a club’s income will be wantonly redistributed to another club, which would be tantamount to asking one private business to give its own earned assets to another private business. As I described last week in Committee, that would be a moral hazard. This is a matter of profound principle that I simply cannot disregard.
For the avoidance of doubt, I say again that this is a poorly drafted Bill. It was poorly drafted under the previous Administration, and it is worse now—but at least we have the opportunity to address its worst deficiencies and improve it in Committee. I hope that the Government and this Committee understand the dangers of the path that we are heading down, and that all possible efforts should be taken to shift us away from the constant move towards more regulation and to protect our nation’s proudest cultural export from the ever-encroaching arms and dead hand of the state.
Lord Moynihan (Con)
My Lords, I will speak for the first time today to support my noble friend’s amendment, because it is important to set this Bill in context.
I, for one, am not in favour of the financial regulation in the Bill. I have a degree of support for many of the amendments that came out of the Tracey Crouch review, and the propositions on fan-led change are reasonable for the Premier League to consider. What worries me is that we are introducing—the only country in the western world to do so—the imposition of regulatory control over one of our major sports. Even countries such as Russia and China, which have sports laws, recognise the overall authority of the International Olympic Committee, FIFA and UEFA. They do so in recognition that they would not be able to host or to participate in their sporting events if they did not accept that overall authority.
On the first day in Committee, it was clear that the Government were not prepared to countenance putting the important rider in the legislation that we would do nothing that would threaten the role and playing of our clubs in European competitions and the World Cup—and, if we include women’s football, in the Olympic Games too, but that is a matter for a latter amendment. I am concerned about the imposition of regulatory control, being the only country that does this, because, as was rightly pointed out by my noble friend, this does not in any way generate growth. On the contrary, it proposes a whole series of measures that will restrict the competitiveness of the clubs in the Premier League, which, in turn, will mean that the waterfall of financial support that comes through to all professional football in this country is lessened, not increased.
I speak from the position of somebody who has had the privilege of being involved in sport for 30 or 40 years. When I was interested in becoming a Member of Parliament, I wanted to go to Moscow as an athlete for the Olympic Games. Had we legislated that the athletes could not go, I would not have been permitted to go. As it was, I led a campaign for the athletes to go against the boycott that my then Prime Minister, Margaret Thatcher, strongly supported. I felt that, under the autonomy and independence of sport and the vital principle that sportsmen and sportswomen should not be political pawns, it was right for the competitors, who wanted to go, to compete in Moscow, however much they may have opposed the Soviet invasion of Afghanistan, as indeed I did. I recognised that to use sportsmen and sportswomen as the only way to demonstrate opposition to the invasion of Afghanistan by the Soviet Union was wrong, when people could buy tickets for Aeroflot in Piccadilly and go to watch the Bolshoi in Leningrad, and while trade and diplomatic relations continued.
Lord Maude of Horsham (Con)
My Lords, I am happy to support the amendment moved by my noble friend Lord Jackson and the eloquent case that he made for it. I wholeheartedly endorse the remarks of my noble friend Lord Moynihan.
As we go further into this Bill and debate it further, it becomes clearer that this was a Bill conceived in a fit of absence of mind; it has come about almost by accident. There were some concerns about Bury Football Club going into administration. There were concerns about the European Super League being proposed—an idea that was almost literally dead on arrival not because of a regulator or primarily because of political intervention but because of a fan revolt. The system as it was worked. It was the deep commitment of fans to the current arrangement, the current competitive leagues and all of that. Their anger and dismay at this were reflected in the British clubs which had committed to it, including my own. They abandoned it as if it was suddenly realised that this thing that they were holding was red hot and that the sooner they got rid of it the better. This was working. Yet there was a casual threat made by the then Prime Minister, reacting—as a populist will often do—to popular anger with a threat to introduce legislation. It is more and more evident as we go further that the Bill we are now considering at length, with its deficiencies and its threats, is the result of that.
I want to consider, for a moment, the case that my noble friend Lord Jackson made about overregulation. I have been involved, at various stages of my long and chequered career, in trying to counter overregulation. The first time was nearly 40 years ago when I was Margaret Thatcher’s Minister for Deregulation. Later, I chaired a deregulation task force at the request of my noble friend Lord Heseltine, the then Deputy Prime Minister. I then chaired periodically the coalition Government’s better regulation Cabinet Committee, or whatever we called it. I have been involved in this a lot and spent a lot of time looking at the effects of overregulation, who the beneficiaries are and which organisations suffer because of it.
One of the conclusions that I reached very early on was that it is not the big businesses that suffer most but the smaller ones. A bit of a theme in how we have been debating this Bill is the sense that “All of the resentment and all of the difficulty with this is coming from the Premier League”, and that somehow we are trying to defend it. I have to tell your Lordships that the clubs that will feel the least of the burden of overregulation, the compliance costs, are the big clubs, because they are big machines. They are serious businesses. They have the personnel and infrastructure and can draw on resources to deal with the unexpected effects of regulation. They will have a machine that will accommodate it. It will be uncomfortable and unnecessary and it will have costs, but they will not be threatened by it. The clubs that will really feel the burden are the small clubs. They do not have these big machines and are not equipped with armies of lawyers and accountants and the rest of the panoply of resource that is required to deal with this totally new form of regulation that is suddenly being thrust upon them.
This is something we need to think about very carefully indeed. One might not want there to be bad effects, but so many of the debates we have had on this Bill have been about the threat of unintended consequences.
Lord Hayward (Con)
I thank my noble friend for giving way. He has made an important point in relation to small companies, and is it not confirmed by an article in this morning’s Times, which says that the Financial Conduct Authority’s “over-regulation … harms small companies”? That is exactly the point he is making: it is small companies that are affected, rather than large ones.
Lord Maude of Horsham (Con)
I am grateful to my noble friend for drawing your Lordships’ attention to that. It is absolutely the case. When Governments consult with a sector, the people they consult with tend to be the big ones. I spent a lot of time thinking about this and trying to work out how to deal with it in previous contexts. If you run a small company, business or operation—a small football club—you are far more concerned with getting on with whatever the next thing is on your agenda. You have got relatively few people around to do the work. Big companies have a machine that is set up to deal with all this, so the point that my noble friend makes is entirely right.
The point behind this amendment is incredibly important, and my noble friend has done a great service in raising it in the vivid way that he has. We have to consider this, because once you create an independent regulator, you have created something that is supposedly independent, and it is much harder to come back. Later in these debates, we will come to my noble friend Lord Goodman’s proposed sunset clause. That would be some kind of constraint because the threat or certainty of there being a proper, serious review after a given length of time will focus the minds of the regulator. But without that, without the kind of amendment that my noble friend has tabled, I think we stand in great danger.
Lord Birt (CB)
My Lords, absolutely nobody is going to support the idea of overregulation. I spent my whole career, however, in a highly regulated industry: broadcasting. The BBC was the result of a regulatory regime imposed over 100 years ago, and ITV was heavily regulated, with enormous benefits as a result. We have the best broadcasting system in the whole world, so good regulation makes things better. I agree that we do not want to see overregulation.
The strongest part of this Bill is that it tries to ensure that every club is well managed, and that is to be welcomed. Let us recognise that that has not been the general picture, and there is no club that I know of that has not been badly managed, including my own, at some point in its history. Somebody else gave the example that, for a few hours this weekend, Brighton were number two in the Premier League. That is absolutely 100% down to the fact that they have been exceptionally well-managed in recent years.
In my career, I encountered many boards of clubs at every level and, frankly, it was an extremely mixed picture. We name no names. Some of them I encountered were very well-managed, some were managed by rogues and many by people who had a bit of money—not enough money—and were attracted to football for the wrong reasons but completely and utterly lacked any ability to manage a club properly. The great strength of this Bill, in demanding proper boards and financial probity, will bring, I hope, a great improvement to the generality of English football down the leagues and have strong, competent boards wherever you look.
I cannot resist one short story. I know of a Prime Minister—I will not name who the Prime Minister was, but it is not the person you think that I am thinking of; it is somebody else—who was invited to a match and to have lunch beforehand. The Special Branch at Number 10 looked at all the other guests, and every single one of them had a criminal record. That is a true story. That is what we want to put an end to. We want good, strong boards and prudent financial management.
What is the justification for that intervention? It is all the things we have already mentioned. These clubs are not just normal commercial assets; they are deeply embedded in their communities; they have their own heritage; they have their own history; they are culturally important. That justifies appropriate and proportionate regulation and intervention.
Having said lots of nice things, I do have profound reservations about the mechanism for establishing fund flow down the pyramid, but that is a matter for later in our deliberations.
Baroness Brady (Con)
My Lords, I rise to speak in support of Amendment 16, tabled by my noble friend Lord Jackson. The amendment would require the regulator to take into account the economic risks of overregulation and report against this risk. I am sure this is an approach that will interest all parts of the Committee, especially, as my noble friend Lord Jackson reminded us, as the Prime Minister himself recently made such a high priority of reducing the impact of regulatory burden on British investment and growth.
We should consider the Prime Minister’s words carefully. He spoke of breaking free from the trap of excessive regulation, of removing needless barriers to investment, and of ensuring that regulators take growth far more seriously. Yet, here we are again, at risk of creating a new regulator without proper safeguards against exactly these risks. Indeed, the Department for Business and Trade this year published a report on smarter regulation, which described the problem in stark terms:
“Good regulation allows our markets and societies to function. However, there is strong evidence that points to our regulatory culture acting as a drag on our ability to generate economic activity, innovation and to attract investment. The regulatory environment is often confusing and sometimes features of it appear to exist for the benefit of the regulators, rather than the industries who they regulate, consumers or Britain as a whole”.
We must take care to guard against our regulatory culture having a similarly damaging impact on British football.
As other noble Lords have pointed out, the Premier League represents one of Britain’s most successful exports, contributing £8.2 billion annually to our economy and more than £4 billion to the Exchequer, while supporting more than 90,000 jobs. Already, we are seeing concerning signs in the Bill: undefined ownership tests: parallel regulatory requirements; unproven intervention powers; and sweeping powers to redistribute Premier League revenue. Each adds complexity and risks that could deter the very investment that we need.
The Premier League competes globally for capital, for talent and for attention. Excessive regulation could quickly diminish its appeal to serious investors, with knock-on impacts for the pyramid which relies on the Premier League. As the chief executive of the Premier League has said in relation to this Bill, we must not wound the goose that lays English football’s golden egg. It is that egg that supports so much of the good work that we discussed earlier and the football pyramid as a whole.
The Prime Minister pledged to “march through the institutions”, ensuring regulators take growth seriously. Yet this Bill creates a regulator with no equal duty to consider success, economic impact or growth alongside the very vague notions of soundness and resilience, which, as I said earlier in this Committee, have no clear end state. We can have both effective regulation and economic dynamism, but only if we build in appropriate safeguards from the start. Without them, we risk creating exactly the kind of bureaucratic barriers to investment that the Prime Minister has correctly identified as holding Britain back.
Lord Hayward (Con)
My Lords, I rise to support the amendment in the name of my noble friend Lord Jackson. I will concentrate particularly on both the impact assessment and what my noble friend Lord Maude was referring to: the impact on small businesses. Following on from the comments of the noble Lord, Lord Birt, when I made my comments at Second Reading, I emphasised that my concerns are not that there are no problems; the question is how we actually tackle the problems that exist in the industry while not damaging the success.
I have made a number of references to the impact assessment, and I quoted from it earlier today. On page 8, paragraph 17, it states:
“This Impact Assessment (IA) provides evidence and analysis to support the government’s case for intervention”.
I am concerned after reading the impact assessment that, as my noble friends Lord Jackson and Lord Maude identified, the impact is not on the big companies. Anybody who has sat on the side of an industry, as I did when changes were made to licensing law, for example, knows that it is not the big companies that are affected by such changes. They have the resources. It is the small companies that are confused, concerned and lost. They do not have a specialist to deal with the minutiae of a clause. I was the chief executive of the British Beer and Pub Association at the time, and it was an enormous task to guide smaller companies through the issues they faced. For me, the impact assessment dramatically underestimates the impact that small companies face in these circumstances.
I will come back to other elements later, but I am particularly concerned—and am referring to page 53 onwards—about the identified benefits that are supposed to accrue to the industry. The costs are dealt with, but I must admit that I am not convinced. On the indirect benefits, paragraph 225 comes up with a wonderful sentence:
“These indirect benefits are extremely difficult to quantify, given the range of variables that will affect the profitability of individual football clubs. Therefore, these are not quantified in the appraisal”.
Paragraph 227 says:
“These benefits are extremely difficult and speculative to quantify and therefore are not quantified in the appraisal”.
The noble Baroness, Lady Taylor, will no doubt be relieved that I have not entered into any word counts on this occasion.
On accruing benefits for the community, paragraph 233, on page 54, states:
“The model states that the results of this contingent valuation survey of football users and non-users shows that people positively value the club they support/their local club and would be willing to pay an annual subscription to support it”.
I find myself at a loss to believe that my noble friend went round the streets of Wycombe or any other community and asked, “Would you be willing to pay X sum to support the club?” The suggestion that large parts of any population are
“willing to pay … to support”
their local club is really stretching credibility far.
This comment was made as a result of some work undertaken by Ipsos, an organisation for which I have high regard and with which I deal on polling. But the next paragraph, 235, refers to the following:
“DCMS guidance states that a lower bound”—
I am not sure whether the authors intend “bound” or “band”—
“95% confidence interval of willingness to pay (WTP)”.
That is rather like talking about turnout at a general election by asking people whether they are going to vote. I checked with a pollster this morning, and the mean answer given is 80%. The turnout at the last election was 60%, so there was an error of a quarter or a third, depending on whether you go upwards or downwards. To suggest that you can quantify the willingness of a community and people in the street to pay to support their local club stretches the bounds of credibility.
But on page 56 we have a breakdown, in detail, of the willingness of each region of the country to pay a sum to support its local club. There has been infinite reference to the fact that the support for clubs crosses from one place to another. Therefore, if you are contributing in the north-east or in London you may not be willing to pay to support a specific club. It is not surprising that London is identified as the place where people are most willing to supply most money, but it does not say whether the sums involved include a season ticket. Many of the people who answered the question will have thought, “Well, I actually pay in the form of a season ticket already and therefore I am contributing”.
What is depressing about the impact assessment is that it goes into such detail in relation to the benefits that will be gained from this legislation, but there is no attempt to identify what the clubs will have to pay. I am not talking here about the Premier League clubs; I am talking about the small clubs. In her response to the points that I and others raised at Second Reading, the Minister said that the costs would be proportionate. But no figures are given. I find it barely credible that such detail can be provided to identify how much people from each different area of the country are willing to pay, but there is no calculation of the cost for a small club.
That is where the important issue—the questions raised by my noble friend Lord Jackson—arises. People can concentrate on Premier League clubs, but we are talking here about regulating over 100 clubs. People do not realise that the impact will be on the small clubs. The Government need to be honest before this legislation passes, and to identify the probable burden for each of the small clubs, because without that information it is not appropriate to pass into law a football regulation Bill.
Lord Goodman of Wycombe (Con)
I rise to support the amendment of my noble friend Lord Jackson and to speak further to the points raised by my noble friends Lord Maude and Lord Hayward about large clubs, small clubs and financial burdens.
We are presumably all agreed that large clubs are better able to bear the cost of regulation than smaller ones. My noble friend Lord Hayward referred a moment ago to 100 clubs, but if some noble Lords have their way, it will be more than 100 clubs. We have already heard today, as we will hear as the Bill develops, proposals to tack on to the Bill corporate social responsibility, net-zero obligations and so on. There are amendments tabled to tack on to the Bill specifically the National League North and National League South. I am sure that the Minister would resist any such amendments, in the same way that the Government will resist most of the amendments that come forward. But as my noble friend Lord Moynihan pointed out at Second Reading—if he did not, I am sure other noble Lords did—the Bill is shy about saying which leagues will be covered by the regulator.
The Government have made it very clear that it will be the pyramid—the top five leagues—but the point is that at any future date the Government might change or, heaven help us, the Minister might move on and be replaced by someone else. At that point, the Government could bring forward by regulation changes to the scope covered by the regulator in order to bring in the National Leagues North and South, or other leagues. Even more small clubs would then be covered by the regulator and have to bear the costs. My noble friend’s amendment is a wise, precautionary one, not only in dealing with the measures the Government are proposing to bring within the scope of the Bill, but as a hedge against other leagues being brought within the scope of the regulator in the future.
Baroness Taylor of Bolton (Lab)
Can I just suggest to Members opposite who are making their point that they might look at Amendment 72, in my name and that of my noble friend Lady Grey-Thompson? It is called “Support to clubs”, which very specifically gives advice on how smaller clubs might be helped.
Lord Markham (Con)
I thank noble Lords and I think the point about Amendment 72 was well made. Why I believe this is so critical is that when we have been talking about big clubs the feeling almost is that they are going to look after themselves and somehow we do not need to worry about the Premier League. But, as we have all said, the clue is in the word “pyramid”. The fact that the Championship is the sixth-richest league in the world—richer than Portugal, Belgium and the Netherlands—is because of the money passed down from the Premier League. Fundamental to the health of the whole game, all the network and all the clubs is the health of the Premier League.
As my noble friend Lord Maude was saying, I am afraid that the more that I look into this Bill and the more I understand it, the more worried I become. As we have said before, if the only objective of the regulator is the survival of clubs, as the shadow regulator mentioned, the only tool it has in its locker is to get them to deposit cash as a cushion. I do not think there is any other mechanism. Again, I would be delighted if anyone else can come up with another mechanism and I will sit down and hear it. I really would be delighted.
But the only measure is to say “Okay, we want to be sure that there is no chance at all of you getting into financial difficulties, so put this money aside”. There have been figures of £20 million a club—£400 million—but, as noble Lords have said, maybe the bigger clubs are better able to cope. I bet the top eight or so—the Liverpools, the Manchesters, the Tottenhams et cetera—will be better able to cope. It will be the smaller clubs, especially the ones that are just trying to break in—such as Brentford and Brighton, which have now broken in, but as they were trying to get there—are the ones which will be disproportionately affected.
It is not just the Premier League clubs because, of course, we would be talking about clubs right the way down the pyramid having to make deposits to make sure that there is less risk of them getting into financial difficulties. Of course, the further down the pyramid you go, the more of a hardship that becomes. Let us understand it more. The shadow regulator was talking about his concern about dependence on rich owners and what you can do about that.
We can give two examples recently from my club, Chelsea. I think everyone would say that Matthew Harding was a very reputable business guy, had very good intentions and was an absolutely stand-up person. He was tragically killed in a helicopter crash. No one could have expected that. The club was in financial difficulties and had to be sold. What would the regulator’s answer to that have been? Probably, “Oh, you were dependent on a rich owner. You have to deposit more money in case, God forbid, they die in a helicopter crash”. Our next owner, Roman Abramovich, was very well regarded for about 18 years and was absolutely fine. Then Russia invaded Ukraine and, all of a sudden, he was no longer a reputable owner. What could the financial regulator have done about that? Well, clearly, it has to look at all the owners and think “Ooh, what could happen in your circumstance? Could your country end up doing something bad on the world stage? Deposit more money”.
It goes beyond that. Lots of noble Lords have said, “What do we want? We want better management of our clubs”. Are we asking the financial regulator to assess managers and say “Oh, I don’t think you’re very good”, or “I don’t think your business plan is very good”. What can a financial regulator do if they do not like the management of the club? They cannot sack them. What can they do if they do not like the business plan very much? They can say, “Well, please try better, please make it a bit better”. The only thing they can absolutely do at the end of the day is say “I don’t like your management very much, I’m not very confident in them, and I don’t like your business plan very much, so I’m going to ask you to put more money on deposit”.
Then you get into a situation where I guess you follow that through to its logical conclusion and some clubs are going to have to put a lot more on deposit than others, because the regulator has decided, you know, “I don’t like the cut of your jib”, for want of a better word. What sort of situation are we going to get into there? We can see as we peel back the onion that this is fraught with more and more difficulties. You are asking the regulator to opine on each club, each business plan, each set of owners and each set of management and say, depending on all that, how much money a club should set aside—with only one criterion for success for that regulator: that that club financially stays in its place and never gets threatened with going bust. There is only one criterion, so every time we are going to have an ever-increasing ratchet to de-risk every club, and the only mechanism to do that is to get them to put more and more money on deposit.
Again, please, I would be delighted. I know the Minister cares about football and the welfare of the game, so I would be delighted if someone could come up with another tool on how the regulator can try to manage sustainability. He could not come up with one the other day, so maybe we should ask him.
Lord Birt (CB)
Is it not far more likely that the regulator will simply insist on having a good-quality, conventional board—I know from the noble Lord’s experience that he will know what that looks like—with a mix of skills, a proper CFO and a real sense of financial accountability and risk management? That is the direction of travel a regulator is likely to take. I am sure the noble Lord would agree from his experience that that tends to lead to strong institutions—and that is not a description of many football clubs at any level.
Lord Maude of Horsham (Con)
Before my noble friend responds to that, he is on a very important point here about the remedies that are available to a regulator where they have concerns. The noble Lord suggests that you put in some great and good, experienced, splendid people, and they will make it all better. We have rightly heard a lot from the noble Lord opposite about Brighton & Hove Albion. If a visionary owner had a view of how you could, by investing in the right way, in the right kind of players and the right methodologies, have a different approach to managing and developing a football club, what would a great and good, wise and sage board have said? It would have said “Ooh, very difficult”. Board members would have pursed their lips and sucked their teeth and possibly stopped there being this great success story.
What would a regulator have done? They would have said, “This all looks very risky. How can you justify this great vision you’ve got?” Would they, as my noble friend suggested, say “Well, you’ve got to put more and more money on deposit as a hedge against possible failure”? What are you then going to say to fans when they say, “Well, why aren’t you investing in the players that we need to create the success?” This is why so much of this is of concern. It goes back to the point we made earlier about sustainability. It is all about downward pressure. It is putting a cap on aspiration, vision, excitement, ambition and the possibility of having these great romantic stories of huge success. Is that really what we want the future of English football to be?
Lord Markham (Con)
I genuinely thank noble Lords for their interventions. We are trying to unpack and fix a tricky problem. I completely agree with the suggestion from the noble Lord, Lord Birt, about better boards; of course that is a good idea, but how does the regulator make that happen? Will it be given the powers to force people off boards? I have not heard that; I have not seen that anywhere in the Bill. I fully support recommending a stronger board, but how do you make it happen? The only remedy I see for this in the Bill, and which I keep coming back to, is that clubs have to deposit more money as a sort of punishment.
On the visionary business plan at Brighton, which really was visionary, a regulator at the time could have thought, “That looks a bit risky”—and it probably was a bit risky—“so how do I guard against that?” They could have wondered, “How much does this chairman know about football? He is a poker champion; that is brilliant. He believes in the stats. But he is probably not your conventional person, who you would be going to and asking for more money as a deposit”.
This is what we all keep coming back to. If the only remedy is that the clubs put more money aside—
Baroness Brady (Con)
I thank my noble friend for allowing me to intervene. My understanding of the Bill is that the ultimate sanction the regulator can have is to withdraw the licence from the football club. If a football club loses its licence, it ceases to be able to play. It is put in a very difficult situation whatever the remedy: it either complies wholeheartedly with whatever remedy it is told by the regulator to put in place, or it loses its licence and cannot play in the league. Surely that cannot be right.
Lord Markham (Con)
Again, I hope the Minister will answer this point. This is what the shadow regulator was explaining to us last week. What is the one thing you can do short of that? You can look to de-risk the situation, particularly if your only criterion is sustainability at that club; in other words, it survives by you saying, “You have to put money on deposit”. That is exactly the model they were taking from the financial regulator and the banks; that is what I see as the whole problem.
It is fundamental. As my noble friend Lord Jackson’s amendment suggests, we could make sure that it is aware of the burdens of regulation, or, as some of the earlier amendments proposed, it could be about broadening the definition and objectives of the regulator so that it has other criteria at stake. I truly believe that, unless we widen it out—it is only one-dimensional—we really are going to harm the great game.
Lord Mann (Lab)
My Lords, I appreciate that it is a little unconventional to speak to the amendment, but I would like to make a few comments to the mover of the amendment and the Minister. The case was made that this is all about small clubs. I have met very many clubs outside of the Premier League and discussed this issue with them. They have raised many issues and changes that they would like to see, some of which might be controversial in the football world or in government but not in relation to this regulation Bill. I have not yet come across any club outside of the Premier League that has said that it is worried or opposes this Bill—not one. Perhaps the Minister might like to reflect on that.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to my noble friend Lord Jackson of Peterborough for moving his Amendment 16. It has been well worth having a debate on this on its own because his short and simple amendment, if inserted into the Bill, would represent a vital step towards ensuring that the regulation of English football was both fair and economically responsible. It would require the independent football regulator to consider the potential economic harms of overregulation.
As my noble friend so eloquently established, overregulation is an issue that can choke off investment and disrupt growth in many industries. It can also, as my noble friend Lord Maude of Horsham powerfully reminded us by invoking the example of Brighton and Hove Albion, prohibit the visionaries and the innovators who help to drive industries and sectors forward. None of us wants to see that harmful effect happening in the case of this new regulator and the example of football.
Lord Mann (Lab)
I was a member of that group and heavily involved in that work. Will the noble Lord reflect on the fact that all of its recommendations request that the regulator, the FCA, regulate more toughly and more appropriately, not less and more weakly, including the cases involving football that I am personally very involved in? That was a case for more and stronger regulation, not less.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the noble Lord for his intervention and for mentioning that. The point remains that it would be beneficial for us to look at that report on the way in which the FCA is doing its work to see whether it is doing what Parliament asked it to do when it was set up and to see whether we agree with the points that the all-party group, of which he is a member, made in its recent report.
As a number of noble Lords from across the House have said in our debate on this group, the amendment simply requires the regulator to have regard to the risks inherent when regulating a large industry such as football. I am grateful to my noble friends Lord Moynihan and Lord Maude of Horsham for the benefit of their considerable expertise and to my noble friend Lord Hayward for going so forensically through the impact assessment published by the Minister’s department.
My noble friend Lord Jackson’s Amendment 16 represents another guardrail for the regulator to use to focus its attention when exercising its functions. It would complement some of the other amendments that I have tabled and which we have been looking at. Such simple insertions of text into the Bill may be criticised as unnecessary, but they are important. The language that we use when establishing in law new public bodies and new regulators is of supreme importance. It creates a starting point from which that body will grow or change and be investigated by all-party groups and Select Committees. What that starting point looks like and how it is clearly defined has the potential to shape its future trajectory. We are looking at a regulator we hope will do its work very successfully for generations to come. Surely, we want that trajectory to enable future growth and innovation—future visionaries—and to remain free from mission creep and expansion into areas which we do not want to see it moving in.
The proposed model of regulation in the Bill will require the frequent submission of reports and financial plans. These will, as per the licensing conditions and as per our debate on this group, all have to be approved before a regulated club is granted a licence and are a condition for it maintaining that licence. The monitoring and collection of that information will naturally require a large number of staff to help comply with the new regulation. Added to the costs of the levy, this could have damaging effects on regulated clubs—damaging effects, as my noble friend Lord Maude of Horsham and others powerfully set out, that would be felt most keenly by those at the lower end of the pyramid.
That is also particularly evident in the provisions in the Bill that require clubs which are no longer regulated, by virtue of their relegation, to continue to comply with the duties set out. Part 5, for instance, states that some of these duties will be applicable for up to 10 years after the club has been regulated. This ratchet effect means that clubs could still be required to submit a whole host of information to the regulator, even when they have diminished resources because they have dropped below the lower limit of the regulatory ambit envisaged by the Bill. I hope that we can all see the potential for harms here and the risks of those harms growing.
I am grateful to the noble Baroness, Lady Taylor of Bolton, for drawing the Committee’s attention to her Amendment 72. We should all take a careful look at it in light of the debate that we have had. We will touch on it when we come to that group later on, but I appreciate that it is an attempt to make that sort of regulatory burden easier on clubs. When we come to it, I will ask her more on how her amendment envisages the regulator potentially paying some money to clubs. I will be interested to hear her set that out, but that is for another group.
Football is not only an extremely popular pastime but a vital part of our economy, and the financial health of clubs has to be protected, as my noble friend Lord Jackson’s Amendment 16 seeks to do. By mandating a thorough assessment of the financial implications of the new regulator’s regulatory actions, his amendment would guarantee that clubs’ sustainability would never be overlooked in the pursuit of regulation or reform.
The requirement for regular reports to be submitted to the Secretary of State and laid before Parliament would add to the Bill’s parliamentary oversight, which it currently lacks. It would enhance the transparency of the new regime that we will be bringing in through this law and allow for prompt corrective action, if needed. That is an approach which aligns perfectly with Conservative values, but one which I hope would garner support from every corner of your Lordships’ House. As my noble friend Lady Brady has reminded us, the Prime Minister has recently spoken, to my mind encouragingly, about the risks of overregulation and the need for growth. I hope that these points will resonate with the Benches opposite and with the Minister too.
My noble friend’s amendment seeks to safeguard the future of football while maintaining accountability to Parliament. I know that he would have tabled an amendment such as this if we were still in the last Parliament. If I had found myself at the Dispatch Box opposite, I would have been responding to it. I must say that I would have looked very favourably on it. I think it seeks to strike the right balance between regulation and the economic vitality and viability of football clubs. I hope the Minister will look favourably on it as well.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank the noble Lord, Lord Jackson of Peterborough, for tabling this amendment. I also particularly welcomed the personal account of the noble Lord, Lord Moynihan. I thank all those who contributed, including the noble Lord, Lord Maude of Horsham, who has considerable expertise in regulation. The description from the noble Lord, Lord Birt, of the benefits of regulation, including a strong board and what advantage that might bring, was particularly helpful.
In response to the noble Lord, Lord Goodman, we will cover the scope of specified competition in the next group, so your Lordships’ Committee will come to that shortly.
The amendment seeks to add an explicit requirement for the regulator to have “due regard” to the potential economic harms of overregulation and to report on this. It is an important point to be aired, and I welcome the opportunity to respond to the concerns the noble Lord has. I absolutely agree that overregulation is something to be avoided. It is why the regulator’s general duties and regulatory principles provide sufficient safeguards to prevent this.
The regulation ensures that the regime is proportionate. In particular, Clauses 7 and 8 emphasise the need for the regulator to act in a way that avoids, as far as reasonably possible, adverse effects on investment and competitiveness, and that it should act proportionately.
The noble Lord, Lord Jackson, asked about overregulation and was echoed by the noble Baroness, Lady Brady. The regulator’s general duties require it to have regard to how regulation might affect, among other things, financial investment in English football. Its regulatory principles clearly state the importance of advocacy and the need for the regulator to engage with stakeholders. It must act, as I said, in a proportionate manner. All these measures provide a safeguard against overregulation.
The noble Lords, Lord Hayward and Lord Maude, asked about burdens or potential costs on small clubs and the risk of disproportionate burdens. In addition to the explicit regulatory principle guiding the regulator to be proportionate, the entire system has been designed with this proportionality in mind. For example, the licence conditions placed on clubs will vary depending on their unique circumstances. Where clubs are smaller or lower-risk, the regulator’s requirements will reflect this. This means that the regulator will not impose unnecessary burdens on smaller or already well-run clubs.
Baroness Brady (Con)
A comment was made about there being no concern for costs outside the Premier League. However, Mark Ives, the general manager of National League, said:
“We are concerned about the costs … The expectation of how much it is going to cost clubs at a National League level is a huge concern—it may be a small amount of money, but it is a lot to the clubs. We are worried about mission creep within the Bill and the additional bureaucracy. There is a lot of duplication of work, such as the licensing system—there’s an expectation for clubs to do two lots of licensing”.
Dagenham & Redbridge chief executive officer, Steve Thompson, said:
“We are worried that the Bill will be so onerous. Some National League clubs work on two or three people and some volunteers … It does really worry me that some of our small clubs will not survive with the regulation and the reporting that is required”.
There may be a proportionate cost, with clubs in the Premier League from the top down paying proportionately but, whatever the cost, there is concern throughout the leagues.
Baroness Twycross (Lab)
The noble Baroness raises a particular concern. I am not suggesting by any means that people will not need time to get used to and understand the burdens or costs on smaller clubs but, as I felt I had outlined, I hope that, with enough clarity, the licence conditions—that includes the costs placed on clubs— will vary depending on their unique circumstances. I am sure we will have further opportunities to discuss that as we go forward. Hopefully we can give your Lordships’ Committee and the clubs some reassurance on that point.
Lord Hayward (Con)
To follow up on the Minister’s comments and the observations made by the noble Baroness, Lady Brady, given the detail that is included in the impact assessment on every other category of cost and benefit, and even though I find some of the calculations dubious, to say the least, at the next sitting of this Committee can we have a clearer indication of the likely proportionate costs which will fall on clubs at different levels in the pyramid, rather than some broad, general observation that it will be proportionate?
Baroness Twycross (Lab)
The noble Lord will be aware that a lot of this detail is being worked out by the shadow regulator. I can ask for that detail. I cannot give the noble Lord explicit clarity on that tonight but I will endeavour to get a clearer answer for him before the next sitting. That may, however, not include the level of detail that he requests.
To return to the amendment in question, the duties in Clause 7 are fairly novel for a statutory regulator. These bespoke duties acknowledge the specific market features that are key to the continued success of English football, such as investment and competitiveness.
Lord Moynihan (Con)
The Minister just referred to competitiveness. Some 14 clubs in the Premier League are multi-club ownership structures. Will the regulator be able to take into account the financial strength or otherwise of other clubs in the ownership structure of those 14 clubs? For example, with Jim Ratcliffe and INEOS at Manchester United, in providing a licence to Manchester United, will the regulator take into account the financial strength or otherwise of Nice and Lausanne—two other clubs which INEOS has an interest in—or is the regulator specifically and only to look at the English clubs? If it is the latter, is there not a risk of capital flight away from Manchester United in those circumstances if, for example, a significant bond was to be required by the regulator to be put up for Manchester United?
Baroness Twycross
If I correctly understood the noble Lord’s point, I do not believe that clubs should be concerned about that particular instance. We will be discussing licences and licensing conditions in a later group so, with your Lordships’ indulgence, if we could wait until then, that would be appreciated.
The amendment would also require the regulator to submit a report on its effects on the financial position of regulated clubs. I reassure the noble Lord that the Bill already includes comprehensive reporting requirements on the regulator—for example, the “state of the game” report and the regulator’s annual report to the Secretary of State, which must be laid before Parliament. These reports would of course be expected to include an assessment of the regulator’s own impact on the market. In our view, the intent of this amendment is therefore already achieved in the Bill.
The noble Lord, Lord Moynihan, asked whether we are risking jeopardising English clubs’ involvement in international competitions. As I reiterated during the last debate, the Government are confident that the Bill and the regulator will not breach the statutes of UEFA and FIFA. This Bill will constitute the business regulation of football clubs in this country; it will not constitute interference in how the FA, or any international body, governs the game. For the reasons I have laid out, I hope the noble Lord will withdraw his amendment.
Lord Markham (Con)
The Minister will be aware that I made quite a few points on how the only thing a regulator can really do—the only shot in its locker—is to put in more deposits, and on the impact that would have on clubs in terms of that safety net. I perfectly understand that she may not be able to answer that question now but I would welcome a follow-up in writing, and perhaps we can arrange a meeting on it.
Baroness Twycross (Lab)
I am happy to meet the noble Lord to discuss it further.
Lord Jackson of Peterborough (Con)
I thank the Minister for her answer and I thank my noble friends and others for an excellent debate on my amendment. I hesitate to single anyone out, but the contributions of my noble friends Lord Maude, Lord Moynihan and Lady Brady showed their great expertise in different aspects of football, sport and regulation over the years. I make particular reference to the granular and forensic demolition of the impact assessment by my noble friend Lord Hayward, and the issue of the impact on small clubs that was alluded to by my noble friend Lord Goodman of Wycombe.
To come back to the noble Lord, Lord Birt, I see this amendment as complementary to good governance, because it is a pretty light-touch amendment. It is really a permissive oversight power—we will come back to it, of course, on Report—with timely regulatory audit and a sense check. The Minister may need to think about whether accepting this amendment, perhaps on Report, would detract from the substance of the Bill.
Football is full of amazing stories. I want to finish with a story about my own local team, which goes to the heart of the debate on this amendment, which is the nature of entrepreneurial endeavour in football—risk and reward. Darragh MacAnthony, a property entrepreneur, bought Posh, Peterborough United, at the age of 30, the youngest owner in the league, in 2006. In August 2007, he put a note in the programme at a football match which said, “I will deliver back-to-back promotions from League Two to the Championship by 2009”. He did it, with the help of my friend Barry Fry, who, of course, noble Lords know. The point is that I have to ask, looking at the Bill and at all its onerous implications in terms of regulatory impact, would Darragh MacAnthony have put his business on the line to buy Posh, to keep Peterborough United afloat and make it flourish as it has done for the last 18 years, had the Bill been in place? I very much doubt that he would.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
Does the noble Lord wish to withdraw his amendment?
Lord Jackson of Peterborough (Con)
Thank you; I appreciate being kept on my toes by the noble Baroness, Lady Morris. With that in mind, and notwithstanding anything I have said, we will ventilate these issues on Report. On that basis, I beg leave to withdraw the amendment.
Lord Moynihan
Lord Moynihan (Con)
My Lords, Amendment 18 covers the issue of the scope of the Bill, and particularly women’s football. The Clause 2 stand part debate will focus specifically on the concerns that the Delegated Powers and Regulatory Reform Committee has raised for the consideration of your Lordships.
As regards the women’s game, I seek clarification from the Minister. There is, as noble Lords know, a delegated power in the Bill that allows, at any time in the future, the Secretary of State to amend the scope of the Bill and include women’s football. At present, women’s football is not covered, mainly because of the future of women’s football review, which recommended that women’s football be given a chance to self-regulate. However, it noted that the market shares some similar problems with the men’s game, and, given that the policy intent was that the regulator should not regulate women’s clubs—
Lord Bassam of Brighton (Lab)
I am mindful of the fact that the noble Baroness, Lady Grey-Thompson, is not here. She and I, and others, have an amendment specifically addressing the issue of the place of women’s football. Would the noble Lord withdraw his amendment this evening so that the noble Baroness could at least be here to take part in that debate? I know it is very close to her heart and I am trying to save us from having two debates.
Lord Moynihan (Con)
I appreciate that. I will considerably curtail, so I do not need to come back to repeat what I have just said, and simply put a number of very brief questions. Unfortunately, that was not of my doing, as the noble Lord knows, and the powers that be will no doubt look rather more closely at future amendments to make sure that there is no overlap.
I simply ask the Minister one question: what specifically would need to happen for the women’s game to be added into the proposed regulatory framework? I will leave it to the noble Lord, Lord Bassam, and others, to explore in more detail questions surrounding the ownership of clubs, which regard both women’s and men’s participation as equally important, and therefore the fitness of directors tests, et cetera. To assist the process of speeding up matters in your Lordships’ Committee this evening, I will not ask any further questions on that but will leave it to the noble Lord, Lord Bassam, and the noble Baroness, Lady Grey-Thompson, to consider that in greater detail.
I turn to the Delegated Powers and Regulatory Reform Committee, which is absolutely relevant to Clause 2—unless the noble Lord, Lord Bassam, has identified a further group of amendments that we can tie this in to. Clause 2 is really important, because it gives the Secretary of State significant powers through secondary legislation. As the Minister knows, the Delegated Powers and Regulatory Reform Committee is a highly respected Committee in this House, and we have a senior member of that committee present this evening. I declare an interest, having served on that committee.
There was real concern that the meaning of English football as defined in Clause 2 was left unclear in the Bill. We covered that briefly at an earlier stage but, to cut to the point, their comment was:
“The policy intent has always been that”
the clubs in scope of the regulator’s remit
“should currently be the top five leagues of the men’s English football pyramid only”.
Given that, it is somewhat concerning that there is so much scope given to change that in secondary legislation, without the opportunity we would have of considering the benefits, or otherwise, of any significant changes to the Bill, which would be really significant. Therefore, it was not surprising that the Delegated Powers and Regulatory Reform Committee stated:
“The argument that something should not be fixed in primary legislation because it might need changing in future would be an argument against having any primary legislation”.
That is a fairly powerful point for that committee to make in the context of this Bill—indeed, of any Bill brought before your Lordships’ House.
The committee continued:
“The current system of leagues works well. If it were enshrined in primary legislation, it could still work well and, if it ceased to do so, the primary legislation could be amended. Primary legislation is constantly being amended”
to be
“fit for purpose”.
So I very much hope that the Minister will take careful note of the advice offered by that committee. It is very rare that we would ignore that committee or reject the most important recommendation that it has made. It makes a very strong point there. This is an enabling Bill. Clause 2 gives wide-ranging remits to consider the inclusion of women’s football to the Secretary of State—not, by the way, to the regulator. Equally, it is clearly a Bill about the men’s game, which brings forward clear primary legislation on the role of the regulator in the context of the men’s game.
That being the case, I see no reason why this legislation should not be very clear about its purpose and not leave it open to secondary legislation, which gets far less attention in your Lordships’ House. We know that from both sides of the House, whoever has been in Government: it is easy to slip through secondary legislation. We cannot deal with it clause by clause; we either accept it or reject it and we do not have a Committee stage on it.
The two powers vested in the Secretary of State under Clause 2 are of such importance that I very much hope that the Minister will take away the points I have just raised and give further consideration to putting the Bill’s intent clearly within it, rather than leaving it to future secondary legislation. I beg to move.
Lord Addington (LD)
My Lords, I will speak very briefly. I appreciate that with legislation it is always better to have what you want on the face of the Bill. The women’s game needs more attention here, as this is something that deals totally with the top five leagues of the men’s game. It is also true that with a little bit of will, we could amend it. However, we are sitting here thinking about what would be best for the development of women’s football. When the Minister comes to respond, I hope she will give us a better steer on what they regard as that future. It is a growing sport that has outstripped everybody’s idea 20 years ago of where it would be, and we need to discuss what is happening there. My gut instinct is to resist this for the women’s game, but my legislative experience says we should have a definition here.
Lord Markham (Con)
I am scratching my head a bit on this. I am with the noble Lord, Lord Addington, in that I would like to see the women’s game included. However, I accept that there is a debate to be had around that, so there could be an argument for having that as part of secondary legislation. What I do not understand that there could be a debate about is whether the Premier League or the EFL should be included. I do not understand for one moment why you would not have that on the face of the Bill. I do not think any of us would debate for one second the thought of somehow having all these discussions and not including the Premier League or the EFL.
I will freely admit that I am not very well versed in this, but my understanding is that, if it was mentioned on the face of the Bill, that does something about the hybrid nature of the Bill and would mean there are greater consultations and involvements that we would have to have—maybe some other noble Lords can help me out here—with those bodies that are impacted by the Bill. If that is the case, and if it is absolutely obvious to everyone here that of course the Premier League and the EFL are going to be involved in this, and probably some others as well—maybe the noble Lord can help me with this in a minute—I think there are consequences from not having it on the face of the Bill. That means it is not getting the proper involvement that you would expect, having the Premier League and other impacted bodies such as the EFL as part of this.
Again, all of this is an education for me and I think my noble friend Lord Goodman might be about to stand up to help me on this. But, if not, maybe the Minister could answer that, because it seems so obvious to everyone here that of course it is going to include the Premier League and the EFL. Why would you not have that on the face of the Bill?
Lord Bassam of Brighton (Lab)
My Lords, I rise to speak to my amendment about the inclusion of the National Leagues North and South. I accept that my amendment is defective; I think the Committee on Statutory Instruments has declared it as such. However, I will use this opportunity to raise the question of where down the pyramid the regulatory process should stop.
Some of the teams in the National League North and National League South are quite substantial. Scunthorpe United is quite a big club and has a turnover somewhere in the region of £5 million to £6 million a year. Torquay United has a turnover of probably £2 million or £3 million a year. Even Maidstone, another former league club, has a turnover of between £2 million and £3 million a year. These are small but substantial businesses. They probably employ no more than 10 or a dozen staff—Scunthorpe probably employs more than that, looking at its accounts—but we expect other parts of the business world to be regulated by health and safety or environmental legislation, by financial conduct rules and regulations, and so on.
It is not smart to leave those two leagues out of consideration, because one of the things we should worry about is predatory ownership. We have seen some of that in the past, to the detriment of clubs in the lower leagues. The Bill is about making sure that the clubs in the lower leagues are properly protected. We have heard a lot from noble Lords on the Opposition Benches about the Premier League and how they believe that the regulatory regime may be damaging to the Premier League, but it is the plight of clubs lower down the pyramid that has sparked the most concern over the years and has been the motor for both major political parties to seek a football regulator.
I make that point because at some stage, we will need to have the National League North and National League South clubs in the regulatory framework. It seems odd to regulate one of the National League’s divisions, but not the other two. I wonder about the cliff-edge effect of having clubs coming up from both those leagues into a system of regulation. That does not necessarily seem to be the right way to do things; it would be better if they were all captured by the same framework.
The Minister made the point at Second Reading that regulation would be appropriate at each level of the pyramid—that has to be right—and that teams in the National League do not require the same degree of regulation as teams in the upper leagues. That is a sensible and proportionate way of looking at things. These clubs are already used to regulation; they are regulated by other regulators.
There is a case that we need at an early stage in the life of the regulator—I accept it may not be now—to have a report, or perhaps a section in the “state of the game” report, that looks at this issue. There may well be some unintended consequences and some cliff-edge issues, and if we do not get regulation right for these clubs, which could be vulnerable to predatory takeovers, some of them may well suffer as a consequence. None of us in the Committee wants to see that happen—I certainly do not, based on my experience as a Brighton & Hove Albion Football Club fan in the 1990s, when we were nearly destroyed by a predatory takeover. We very nearly went out of the league and out of business, and it took us a decade to recover our position.
Lord Goodman of Wycombe (Con)
My Lords, I will follow my noble friends Lord Moynihan and Lord Markham in their references to the Delegated Legislation Committee.
I hesitate to disagree with anything my noble friend Lord Moynihan says in any way, but he described me as a senior member of the committee, and I am afraid that this is not accurate. I am, in fact, the most junior member of the committee, having arrived only very recently, but certainly in time to consider this Bill. When I joined the committee, I found that it was very worked up about the rise in secondary legislation, as it set out in its key document, Democracy Denied?, published in 2021—I will come to the significance of that date in a moment. It criticised the use of Henry VIII powers, disguised legislation and skeleton legislation, saying:
“The abuse of delegated powers is in effect an abuse of Parliament and an abuse of democracy, and this report will, we hope, be a prompt to strengthen Parliament in the coming years”.
I find myself in an awkward position here with my own Front Bench, because in 2021 a Conservative Government were in office. The committee clearly feels that this tendency for skeleton legislation, Henry VIII powers and so on has carried on from 2021 to the present.
My noble friend Lord Moynihan will remember that at Second Reading, he drew attention, as I did, to Clause 92(3), which states:
“The Secretary of State may by regulations amend …the definition of ‘football season’”
and
“the definition of ‘serious criminal conduct’”.
Such is the exquisite moderation of the committee that we did not follow that matter up in the report, but we did concentrate on the issue, raised by my noble friend Lord Moynihan, of the leagues not named in the Bill. He has read out the relevant sections of the report, and I have no intention of reading them out again.
However, I reinforce the closing point made by my noble friend Lord Markham and put it to the Minister in the form of a question. Can she confirm or deny that if the leagues in the pyramid were to be named in the Bill, the Bill would therefore become hybrid? She is nodding, and she will doubtless amplify on that nod when she responds to the debate, but that is a very important point. If that is the case, did the Government refer to that in their discussions with the committee clerks when they were drawing up the report?
Lord Goddard of Stockport (LD)
My Lords, nobody faint, but on this issue I fully support the noble Lord, Lord Parkinson. I bear the scars of Democracy Denied? It was an excellent report that it took us quite a long time to bring through. The Government cannot have it both ways. We say that the purpose of the Bill
“is to protect and promote the sustainability of English football”,
yet it does not explain what English football is.
That is the nub of this. We spent hours on the first part of that, but the second part we seem to want to leave to the Government, because it is seemingly easier to amend delegated powers than primary legislation powers. That is not the point. What is in the tin should be on the front of the tin. It should name what it is doing, which is the Premier League and the Championship. It could go down the tiers and include leagues north and south. You would then have a full list of what this legislation is covering. It is probably just bad drafting, and no more than that. This could be done very simply. Everybody would then understand what the Bill is about.
Lord Parkinson of Whitley Bay (Con)
I will speak to my amendments in this group, and I want to extend the point that the noble Lord, Lord Goddard of Stockport, has just made, as it is a very important one.
I appreciate this may have been a painful experience for the Minister, the Bill team and others. We have spent our first two days in Committee looking at Clause 1 and the definitions of “the sustainability of English football”. However, as the noble Lord said, the lack of precision in the Bill in that regard is what has elongated our debates over the last two days in Committee and so concerned the Delegated Powers and Regulatory Reform Committee of your Lordships’ House. It bears repetition to draw the Committee’s attention to paragraph 3 of the committee’s report, published on 22 November:
“The fundamental purpose of the Bill is to ‘protect and promote the sustainability of English football’. One must go through a series of definitions only to find that the Bill does not, after all, provide the definition of English football. Ultimately, the meaning of ‘English football’ depends on regulations to be made in due course by the Secretary of State”.
That is why we have had some rather tortuous debates on the opening clauses of the Bill, and why we are concerned to ensure that this Committee brings the focus we need to the deliberations on this important Bill.
Lord Maude of Horsham (Con)
My Lords, I want to pick up exactly the point that my noble friend on the Front Bench has eloquently started to unpack. It is my fault, but I had not thought about this aspect of hybridity until it was developed this evening. It seems that we have two mischiefs compounding on each other here. The Government are relying on secondary legislation to do something that could just as well be in the Bill, and the committee of which my noble friend is a very distinguished member—although whether junior or senior is not for me to judge—dealt with the Government’s purported reasons for not putting any of these things in the Bill in lapidary and devastating style. They knocked each of them down with casual ease.
The one reason, of course, that the Government did not put forward to the Committee, which the Minister—all praise and honour to her—has accepted as the principal reason, was that to identify the five top tiers in the pyramid in the Bill would have risked making it hybrid. However, the reason why we have a hybrid Bill procedure is quite specific. It is because, if you have a Bill that as well as having general effect has an effect on specific private interests, those private interests are entitled to a way of making their specific concerns directly clear to Parliament.
I remember 40 years ago, as a Whip in the other place, taking through the then Channel Tunnel Bill, which was a hybrid Bill, and a very Herculean effort it was, although it was well worthwhile. It was incredibly important that the private interests—many were affected by it—had the right to make their concerns known. Here we have one technique of putting something into secondary legislation which could easily be put in the Bill, and that is something which generally, in your Lordships’ House and in the other place as well, is generally deprecated.
Even worse is when the reason for putting it in secondary legislation is to suppress the ability of private interests—in this case, really important private interests, right the way down to the National League. There are way more than 100 clubs which, according to the Government, make up English football, which is an incredibly successful and important economic interest. We know, because the Government have said it, that those multiple private interests are the intended target for this legislation. So you have a parliamentary or legislative technique, which is to be deprecated in the first place, being used to frustrate a legitimate right of private interests, which have been identified by the Government as the proposed target for this Bill. Each of those two things on its own should be deprecated, but added together they should give the Government serious pause.
I sympathise with the Minister. She probably did not ask to be put in charge of this Bill and it must have looked like it was going to be quite straightforward, because my party’s Government mistakenly came up with the idea in the first place. It must have seemed like it would be a bit of a doddle to take it through; I am sorry for her that it has not turned out like that but, in every debate we have, something else comes up.
We are not playing games. We are talking about something really serious and important, which affects a lot of people’s lives and economic livelihoods. We are seeing more issues arise; as every layer is peeled away, something else emerges that gives us serious pause. So I urge the Minister to take this back to her department and colleagues and say that it is time to look at it again.
Baroness Twycross (Lab)
My Lords, before I respond on this group, I would like to say that I am absolutely delighted to be taking this Bill through Parliament. If somebody had asked me even six months ago if I thought I was going to have an opportunity like this, I would have doubted them, so please do not feel sorry for me in any form. I am delighted to be taking forward this Bill. I thank the noble Lords, Lord Moynihan and Lord Parkinson of Whitley Bay, and my noble friend Lady Taylor of Bolton, for their amendments to Clause 2.
I will start with Amendment 18 in the name of the noble Lord, Lord Moynihan. It is the Government’s view that the current definition of “team” is sufficient and that the definitions in Clause 2 already work as intended. Which clubs are regulated will be determined by which competitions are specified in secondary legislation, as noble Lords have noted. If those are initially men’s competitions only, as the Government currently intend, only clubs that operate men’s teams will be regulated. Restricting the definition of “team” in statute to men’s teams would not only limit the Secretary of State’s ability to bring the women’s game into scope in the future if it were deemed necessary but send the wrong message to all those girls and young women who play football about the value we place on their contribution to the sport.
The noble Lord, Lord Moynihan, asked what would need to happen for us to see women’s football brought into scope in the future. As he referenced, the Government do not believe that the case for statutory intervention has yet been met in women’s football. It should be given the time, space and opportunity to grow and self-regulate. If in the future it becomes clear that women’s football is suffering from a sustainability problem that the industry authorities have been unable to address, the Secretary of State will be able to conduct a formal review. This will of course include consultation with all appropriate parties. Based on that review, women’s football could be brought into scope.
Amendment 19 is in the name of the noble Lord, Lord Parkinson. I understand his desire to have upfront clarity in the Bill about which competitions will initially be in scope of the regulator’s regime. However, the amendment would significantly undermine the regulator’s ability to react to changes in the structure of the football pyramid in a timely manner.
The noble Lord, Lord Markham, questioned why we do not, for example, name the Premier League when it is obvious that it would be included. Names change, and we have seen the restructuring or naming of leagues, such as in 1992, when the First Division became the Premier League, and in 2015, when the Football Conference was renamed the National League. In such a scenario, failing to amend the scope in a timely fashion could result in the legislation becoming ineffectual and the regulator being undermined.
Lord Parkinson of Whitley Bay (Con)
Before the Minister comes on to that important point, could she say a bit more about what circumstances would need to change for the National League North and the National League South to be brought into scope in the Government’s view? The noble Lord, Lord Bassam, made a powerful case about the size of many of the clubs there and the very valid point, which I meant to echo in my contribution, that those are precisely the sort of teams the Government and their predecessors were both very concerned about in the thinking that led to the Bill—the sort of teams that play such an important role in their communities, that are sometimes more precarious than those at the top of the pyramid, and that, if they went under, would leave such a hole in their communities.
Baroness Twycross (Lab)
I am slightly confused because the noble Lord is going from being proportionate to now appearing to want us to bring in further—
Lord Maude of Horsham (Con)
My noble friend just needs to know why. I hope that the Minister will forgive me for saying so, but that is not a satisfactory response. The problem here is that there seems to be no rationale other than saying it is reasonable and proportionate. On what basis? What is the basis for saying that? Why is the line drawn there? It feels completely random; you could just as easily draw it one up or one down. But if there has been a decision, and clubs up and down the country now have to prepare themselves for the likelihood that the Bill will go through and they will become regulated licensed entities, it is important to know why the line has been drawn in this place.
Baroness Taylor of Bolton (Lab)
I am very grateful to my noble friend for giving way. Was it not said at some stage during the consideration of the predecessor Bill before the election that it would be a good idea if the regulator was up and running and got some experience of the regime being introduced before considering extending it?
A few minutes ago, we heard that Members opposite thought that this would be too great a burden on smaller clubs. So perhaps it is a good idea to consider when the time is right and what experience the new regulator will have.
Baroness Brady (Con)
It was the smaller clubs, as well as us, that said it would be a burden to them. I read out what the National League’s general manager said about his clubs and their concerns.
Baroness Twycross (Lab)
I will address the issue of why the regulatory regime is currently intended to be limited to the top five tiers of football and not to include the National League North and the National League South. The issues we are concerned with arise most typically and markedly in the professional game where the financialisation of clubs is greatest. We recognise that the top five tiers is not necessarily a perfect proxy for the professional game, since some semi-professional and professional clubs can move between these leagues. However, we consider it the most appropriate and proportionate place to draw the line and the place where it would not result in some clubs in the league being subject to regulation and others not. We do not currently believe that extending the scope beyond the top five tiers would be proportionate to the burden on smaller clubs below the National League.
On Amendment 19—and apologies if I am repeating parts of my speech, because it is some time ago that I was actually on my script—in the name of the noble Lord, Lord Parkinson, I understand his desire to have upfront clarity on the face of the Bill.
Turning to Amendment 21, I thank my noble friend Lady Taylor for putting forward this amendment. As I am sure my noble friend is aware, the Secretary of State would have the ability to specify competitions that are in scope of the regulator and we believe that the top five tiers is a sensible and proportionate place to draw the line.
In relation to the points on hybridity, questions of hybridity are for the examiners, not for the Government. If the amendment is made, there will be a process to be followed that will decide whether the Bill is hybrid and needs to go through the hybrid procedures. Initial advice is that the Bill would be thought to be hybrid and I understand that, following the tabling of Amendment 19 in the name of the noble Lord, Lord Parkinson, and Amendment 21 in the name of my noble friend Lady Taylor, issues have been raised about their hybridity.
The noble Lord, Lord Goodman, asked whether we had discussed with the Delegated Powers and Regulatory Reform Committee ahead of the process. We would not discuss committee reports with clerks before they draw them up.
I know that noble Lords want to continue to work constructively on the Bill—
Lord Goodman of Wycombe (Con)
I think my question was, in advance of the committee considering the Bill and the Government giving their reasons to the clerks for objecting to the Bill, why did they not then raise the matter of hybridity? Is it the Government’s position that raising the matter of hybridity just is not their business? If it is their business, why did they not raise it?
Baroness Twycross (Lab)
It is for the examiners, not the Government, to decide whether or not there is hybridity.
Lord Maude of Horsham (Con)
But it is for the Government to decide whether to incorporate something in a Bill that might make it hybrid. She has clearly taken advice which concluded that putting the explicit leagues on to the face of the Bill would make it hybrid. So there was clearly a decision based on that advice to exclude the specificity from the Bill and put it into secondary legislation. I repeat my noble friend’s question: why was that reason not given to the committee?
Baroness Twycross (Lab)
The primary reason, as I understand it—and it was clearly the previous Government who drafted the iteration of the Bill and the stage of the Bill that we are now at in our discussions is identical to the previous Government’s Bill—was that naming the leagues would mean that, if there was any change in the names of the leagues, there would be an issue in terms of the legislation, as I have outlined previously. I am happy to write to noble Lords on this point.
Lord Parkinson of Whitley Bay (Con)
I am sorry; I know this is frustrating. But this is a really important issue for the Bill and I think there is some confusion. During the debate on this, the noble Baroness very helpfully nodded to give a sense to the question—
Lord Parkinson of Whitley Bay (Con)
Let me just ask the question and then the Minister can clarify. Did she nod to agree to the suggestion that, if we had put the names of the leagues—which I seek to do in my amendment or which the noble Baroness and the noble Lord, Lord Bassam, seek to do in their Amendment 21—on the face of the Bill, this would make it a hybrid Bill, and the reason they are not in the Bill is to stop it being a hybrid Bill? That is what I think we think she was nodding to agree to earlier.
In the speech she has just given, she dismissed my amendment on the grounds that sometimes the names of the Premier League and the EFL and the National League change and that is the reason for doing it. That is a rather different answer from refusing to put it on the face of the Bill because it would make it a hybrid Bill. If allowing those leagues, those clubs, to have access to Parliament to make the arguments about the effects on their private interests and their business is the reason that it is not on the face of the Bill, I think they and this Committee need to know that.
Baroness Twycross (Lab)
I apologise hugely if my nodding at one point during the noble Lord’s comments meant that other things were inferred. It has reminded me of the dangers of nodding, whether you are nodding to indicate that you understand a point, or that you agree with a point. I was nodding was because in the explanation of this group of amendments that I received from officials earlier today, they made it clear that following the tabling of Amendments 19 and 21, issues have been raised about hybridity. That was the point at which hybridity was raised with me. I hope noble Lords will accept my writing to them to clear up any other issues that might have been raised. I know they want to work constructively on the Bill to make sure that we put in place as soon as possible an effective and proportionate regulator that safeguards the future of our national game, which was a manifesto commitment by the three main parties. I look forward to discussing these amendments further, ahead of Report.
Baroness Taylor of Bolton (Lab)
Will my noble friend just clarify that this section of the Bill is identical to the one that was introduced pre-election?
Lord Parkinson of Whitley Bay (Con)
With respect to the noble Baroness, Lady Taylor, that point is by the by. I had not appreciated the hybridity question until my Amendment 19 was tabled and the clerks advised me about it, as I am sure she had not in relation to her Amendment 21. It raises some fundamental questions. It is unfortunate that we have come to debate them at this late hour, and I am grateful to the Minister for undertaking to write to the Committee about this; I hope she will be able to do that before our next meeting.
We need to understand this point, because it is a further instance of democracy being denied—the limiting effect it has not just on the ability of both Houses of Parliament to scrutinise legislation, but on private citizens making representations to Parliament about the direct effect on their companies, businesses, clubs and organisations. I asked the Minister about Clause 91, which seeks to deny the right to use the hybrid powers so that they can make their views known directly. If we are going to go down the route that seeks to close this off not just in the Bill—in primary legislation—but in secondary legislation too, we need clarity on this before we go much further.
Baroness Twycross (Lab)
As I said, I will write to noble Lords on this point, noting that I know they want to work constructively on the Bill. I have a few more points to cover, so if I could continue without interruption, I will reply to anybody in writing if we need to.
On Amendment 25 in the name of the noble Lord, Lord Parkinson, I understand that delegated decisions of such importance as the scope of regulation should be made only after proper consideration and in consultation with all key stakeholders. This is exactly what has been done over several years of development of the Bill. It was carried out by the previous Government, in which, as has been noted, the noble Lord served, although I accept that we are bringing forward this legislation, so it is the Labour Government’s Bill now.
The initial intended scope of the Bill is built on a strong evidence base and extensive consultation with the industry, including a White Paper. Therefore, the Government do not feel it is necessary to require additional consultation before the first regulations are specified in scope in secondary regulation. This would impose unnecessary burdens on the industry and the Government and risk significantly delaying the regulator being able to implement its regime.
On the question that Clause 2 stand part of the Bill, I thank the noble Lord, Lord Moynihan, for giving notice of his intention to oppose this. As is standard procedure, the Bill sets out the key definitions used in this legislation. These are required to ensure that there is legal clarity throughout the Bill and to prevent confusion when looking to practically implement this legislation.
Lord Moynihan (Con)
My Lords, in thanking the Minister for her response to these points, I am more convinced than ever that having a probing amendment that Clause 2 should not stand part of the Bill has been borne out by the exchanges that we have had this evening.
First, there are clearly too many powers that have gone into secondary legislation and those powers delegated to the Secretary of State now have a completely different light on them. The question of hybridity is absolutely relevant. If we do not know what we are talking about within the Bill because it is potentially hybrid, and we cannot put on the face of the Bill the government plan—which, incidentally, was the same as the previous government plan—to enshrine the top five leagues of the men’s game in legislation, then we have a serious problem.
My concern is amplified by the fact that the Delegated Powers and Regulatory Reform Committee was clearly unaware of the exchanges that have taken place this evening or, indeed, of any briefing that could have been given to the committee by the Government; it clearly did not happen. So it is not surprising that in its report it stated:
“It is not clear why a monopoly granted by secondary legislation would be less significant than one granted by primary legislation”.
The answer to that is quite clearly one of hybridity.
Therefore, in not pushing my amendment this evening, I nevertheless request that the Government write not only to members of this Committee but to the Delegated Powers and Regulatory Reform Committee, setting out in some detail their response to the exchanges that have taken place this evening, so that these issues can be addressed with clarity. Frankly, it is not surprising that, without that clarity, the committee commented:
“The argument that something should not be fixed in primary legislation because it might need changing in future would be an argument against having any primary legislation”.
The committee does not make comments such as that flippantly but it would make them in the absence of a full understanding of the reasons behind the Government’s position as to why they have not put the top five leagues from the men’s game in legislation. That applies to Amendment 19 as well as Amendment 21.
I very much hope that in my not pressing Amendment 18, the Government will take it away and give due consideration to what has been said this evening and write to the Delegated Powers and Regulatory Reform Committee with an updated view. I beg leave to withdraw my amendment.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
I call Amendment 19 in the name of the noble Lord, Lord Parkinson of Whitley Bay.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am not willing to not move Amendment 19 yet. Given that the House is about to resume and be adjourned, it might be more helpful to degroup it and leave it as the first amendment that we return to when the Committee resumes. I appreciate that this is unusual, but I do it to try to be helpful. If the Minister can write on the points about hybridity, which she has kindly undertaken to do, then this is the point at which the Committee will resume when next it meets, so that we can return to this fundamental point. So I am not willing to not move Amendment 19 and I suggest we resume the House now.
Football Governance Bill [HL]
Wednesday 4th December 2024
(1 month, 2 weeks ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-III Third marshalled list for Committee - (3 Dec 2024)
Lord Kennedy of Southwark (Lab Co-op)
My Lords, before we commence Committee, I remind noble Lords that we need to make substantial progress on the Bill. This is now the third day in Committee, so there should be substantial progress today.
Clause 2: Key definitions
Amendment 19
“(3) For the purposes of this Act a “specified competition” includes—(a) the Premier League,(b) the English Football League, and(c) the National League.(3A) The Secretary of State may by regulations made by statutory instrument amend the competitions specified in section (3).”
Lord Parkinson of Whitley Bay (Con)
My Lords, I rise in that spirit to move Amendment 19. In doing so, I thank the Committee for indulging my request not to take it at the end of business late in the evening on the previous day in Committee but to start with it today.
We began a very important debate on this matter on Monday evening, but it came well past 10 pm and got rather confused, so I thought it would be helpful if we return to this amendment to look at the issue again with cooler heads, particularly in the light of the letter which the Minister undertook to write and which she has very helpfully circulated to those of us who were in Committee on Monday. I thank her very much for doing that and for turning it around since the previous day of our debate.
I will not repeat the arguments that I made about the issue at hand in my Amendment 19, which is about including specific competitions in the Bill, but I will briefly remind the Committee—particularly for the benefit of those who were not here on Monday evening—that I was sceptical of the Government’s arguments for why the leagues in scope should not be put in primary legislation. The arguments that the Minister advanced on Monday, and in her letter this morning, related to the need for legislative agility and the requirement for the Government to retain the ability quickly to alter the relevant competitions should they change, or should the names of the leagues change slightly, as she set out on Monday.
As I said then, and as the Delegated Powers and Regulatory Reform Committee of your Lordships’ House has said in its report on this Bill, codifying the leagues in scope in the Bill does not preclude the possibility of making future alterations. The second part of my Amendment 19 would allow the Secretary of State to alter by statutory instrument the leagues in question, if they should change in future. That is the same method of alteration as currently set out in the Bill, so the pace at which those changes could be made, should the Government require them, is unchanged. What would be different is the starting point. My amendment would give competition organisers and football clubs the certainty they need, and surely deserve, to start planning their financial matters and regulatory compliance, since they would know from the outset whether they would be included in the scope of the Bill.
The other reason for returning to this matter today is so that we can talk properly about hybridity. This is fundamental to the Bill; it came very late in our debate on Monday, and the questions that it throws up require some answers. I do not think that the Committee was particularly satisfied with where we got to on Monday, so I hope we can make more progress today.
I have been advised by the Clerk of Legislation that my Amendment 19 could make this Bill hybrid. I believe the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Taylor of Bolton, have been similarly advised about their Amendment 21. However, this Bill is, to all intents and purposes, already doing hybrid things; it is just not doing them explicitly.
The Government are clear about who they want to target with this Bill, and have said so in their Explanatory Notes and in comments outside this Committee. However, they do not want to say so in the Bill because that would afford those clubs and leagues the opportunity to petition Parliament directly about this new law which directly affects their organisations. If putting the leagues that the Government have publicly stated that they wish to see regulated into the text of this Bill makes it hybrid, should we not confront that question and refer it to the Examiners?
As I have mentioned before, the Government did not previously use the possibility of hybridity as an argument against placing the leagues in scope in the Bill. That might have been because they were not aware that doing so would make the Bill hybrid. I was certainly not aware of that until I was alerted to it by the clerks after I tabled this amendment. I think that was also the case for the Minister, who said on Monday,
“in the explanation of this group of amendments that I received from officials earlier today, they made it clear that following the tabling of Amendments 19 and 21, issues have been raised about hybridity. That was the point at which hybridity was raised with me”.—[Official Report, 2/12/24; col. 1018.]
The Minister made it clear on Monday that that was the first time she was aware of the issue. I do not doubt her sincerity, but I was a little surprised when she said it, because the email I received from the Clerk of Legislation alerting me to it was copied to her noble friend the Government Chief Whip. He was certainly aware on 26 November—that is, last Tuesday—that this raised questions of hybridity. I do not know what discussions they had in the light of the email that he received, but it would be helpful to know.
That is rather incidental. The fact is that we are all now apprised of this issue and understand that the Bill is seeking, by not putting the leagues on the face of the Bill, to deny private businesses and much-loved organisations the right to petition Parliament about the impact this Bill has on their affairs—as is their right when a Bill is designed in a way that would affect certain groups more than others.
On Monday, I drew the Committee’s attention to Clause 91(5), which establishes that secondary legislation made under the Bill once it becomes an Act of Parliament to allow the Secretary of State to specify the leagues in scope is to be treated as if it is not hybrid. It is important to draw noble Lords’ attention to that again. It says:
“If a draft of an instrument containing regulations under this Act would … be treated for the purposes of the Standing Orders of either House of Parliament as a hybrid instrument, it is to proceed in that House as if it were not a hybrid instrument”.
That appears to demonstrate that the Government were aware, in at least some regard, that there are hybrid implications to this Bill.
We have special provisions relating to hybrid legislation for a reason. They are intended to protect private interests from being unjustly affected by the laws that we pass here. It is disagreeable to skirt around these rules by pushing potentially hybrid provisions into secondary legislation, and to tuck away at the end of a Bill measures to do the same in relation to secondary legislation brought by it. On Monday, the noble Lord, Lord Goddard of Stockport, and others reminded us of the report of your Lordships’ Delegated Powers Committee entitled Democracy Denied? I raised concerns on Monday that this would be another instance of the democratic rights of those organisations being restricted, if we were to proceed in this way.
I was keen that we return to this matter at the start of today, our third day in Committee, because I want us to ensure that, when the Bill becomes law—as all parties want—it has been scrutinised as thoroughly as it should be. I am conscious that we can do our duty here as legislators to examine the consequences for football. But, with some honourable exceptions—such as my noble friend Lady Brady and the noble Lord, Lord Triesman, on the Benches opposite, to give just two examples from across the Committee—not many of us in your Lordships’ House know as much about the implications of the Bill for football as football organisations themselves would be able to say if they could petition Parliament.
I am grateful for the opportunity to return to this question of hybridity. I am grateful to the noble Baroness for her letter to us. I hope that she will respond to the concerns raised both today and on Monday, and I look forward to her response. I beg to move.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I take the opportunity to rise early on this group to establish the Government’s position on an issue the Committee clearly cares about. The Committee debated Amendment 19 at length on Monday evening and asked me to write on the points raised. I was not confused, and I do not feel that the Committee was sitting unusually late for discussions on important legislation. I also do not think that the leagues are confused about which leagues this legislation will apply to. I have since written to the noble Lords, and a copy of that letter has been placed in the House Library.
I also want to put this rationale on record and reassure noble Lords that this power is both reasonable and the result of extensive evidence-based consultation with all key stakeholders in the industry. This power ensures that the competitions in scope can be amended in a timely manner, and it ensures that the scope of the regime remains relevant. It future-proofs for future innovations and protects against circumvention.
On the noble Lord’s point, I note that the previous Government included an equivalent provision in the Media Act 2024—the noble Lord himself brought that provision before your Lordships’ House. I hope this provides the explanation that he was after. We have now debated the amendment at length, and I have clearly outlined the Government’s rationale for the power. I hope the noble Lord opposite is now able to withdraw the amendment so that we can continue progress on the Bill past Clause 2, and I look forward to continuing discussions on this matter ahead of Report.
Baroness Brady (Con)
My Lords, I refer the Committee to my interests, which are declared in the register. I defer to other noble Lords who have experience of the technicalities of hybridity and parliamentary procedure, but I hope it is helpful and illuminating in this context to raise the issue of consultation with clubs. We are creating legislation that will profoundly affect 116 unique institutions, from Premier League clubs through to the National League community clubs. But it is important for everyone to understand that the consultation with these affected businesses by the current Government has been remarkably limited—almost unbelievably so.
Just seven Premier League clubs—mine was one of them—were granted a brief half-hour meeting with the Secretary of State over the summer. Following this cursory engagement, significant decisions were made that could fundamentally affect the future of English football, most notably with the inclusion of parachute payments within the backstop mechanism. I say again: seven clubs out of 20 have been seen for just half an hour since the Government took office and before they made that seismic decision.
This is particularly concerning given that fundamental issues still remained unresolved. We still lack any clarity on UEFA’s position regarding state interference, for example. This clearly creates profound uncertainty for clubs competing in, or aspiring to, European competition, as well as our national teams. We do not know what the ownership test will look like. This causes significant uncertainty for potential investors as to whether they are able to own a club.
I have listened with real interest to this debate on hybridity. Can the Minister help my understanding here? Can she confirm that, if my noble friends are correct and hybridity is a live question for the Bill, this would give clubs at all levels a real opportunity to present their specific circumstances to Parliament? For example, would it mean that National League clubs could explain their concerns about the regulatory burden and the concerns of the many that they say “would not survive” this regulation? Would it mean that Premier League clubs could have more than half an hour to detail the very serious implications for them, and the risk that we may harm the competitive balance of the Premier League, which we have all agreed that none of us wants to do?
That would be especially important, given that the impact on Premier League clubs is very different from that on other stakeholders in the Bill, as the Premier League is the only party that provides funding to any other part of the football pyramid. The backstop is clearly designed as a mechanism to gain direct access to, and apportion, Premier League revenue and no one else’s. It would allow the IFR to do this even if it was against the Premier League clubs’ will, or even without the clubs’ agreement, even if it was to have a detrimental effect on the clubs and the overall competition that it removes revenue from.
I have spoken to many of my colleagues across the whole football pyramid. We are all alarmed about, and puzzled by, the lack of discussion on the Bill with Ministers. Does the Minister agree that we all want to get the detail of the Bill right, and can she see any downsides to providing meaningful opportunities to hear from all clubs across the football pyramid affected by the legislation?
Lord Markham (Con)
I must admit that, probably like other noble Lords, I am scratching my head over this. As the Minister said earlier, it is very clear that the leagues know who we are talking about here and that a large section of the Bill is talking about the whole arrangement, and in Clause 6 about the distribution agreement, the pyramid, the parachute payments and all that. There are only two instances where that counts, in the payments from the Premier League to the other leagues, so it is very clear that we are referring to Premier League and English Football League clubs. I do not think there is any doubt about that at all. As I was taught as a kid, if it walks like a duck, looks like a duck and quacks like a duck, it is probably a duck.
I am pretty sure that this is a hybrid Bill already. I am not an expert, but I cannot see why it is not a hybrid Bill because, as the Minister just said, it is very clear to everyone which leagues we are referring to. The argument that somehow we could not change things if things changed, or if league structures changed, just does not stand up. Just as we are going to nominate which competitions we are talking about under secondary legislation, we could do exactly the same if there was any change in the format of the leagues. The Minister wrote in her letter about trying to stop people gaming the system, but we have a very easy way to stop them gaming the system. It is set up there already—you can change it in secondary legislation, just as the Government intend to do in defining the competitions involved in the first place.
I cannot see any reason why we would not call it as it is. It is as if we were somehow trying to stop the clubs having the proper amount of consultation. As my noble friend Lady Brady just said, it is clear that there has been very little consultation to date. The clubs themselves have said that there was very little consultation. The people here who are members of those clubs probably know more than anyone else about this.
I believe that we are all united in this Committee in wanting the best for football. That comes through very clearly in every conversation we have had. I know that colleagues from right across the spectrum want what is right for football, and I know that the Minister wants what is right for football—so why not give clubs the opportunity to be properly consulted and have proper input on something that is going to profoundly affect the whole game?
Lord McLoughlin (Con)
My Lords, I will very briefly support my noble friend Lord Parkinson’s Amendment 19. I do so as chairman of the Delegated Powers and Regulatory Reform Committee, although the noble Lord, Lord Rooker, chaired the relevant meeting in my absence. My noble friend’s amendment addresses a serious issue. I would have thought that, given the committee’s report on this, the Government would have at least considered the arguments and sought to alter them.
As noble Lords have noted, our committee’s eighth report highlighted that this Bill, as drafted, does not make the fundamental definition of English football clear. The committee was concerned because this Bill leaves us wanting. It leaves us with no definition in primary legislation of what it seeks to address; it is a Football Governance Bill that does not define what part of football it will govern and leaves such a key part of the definition of the Bill to come later in secondary legislation. As my noble friend has pointed out, certain parts of it say that the secondary legislation, if it were to be hybrid, should be ignored as hybrid. That gives a very wide-ranging power which we should be cautious about.
The memorandum explains that
“the rationale for regulatory intervention is based on market failures in the professional men’s game, and problems or harm that most typically and markedly arise in clubs of a certain size and type (typically professional clubs)”.
It then gives four different reasons why the Bill does not explicitly state that it intends to regulate the top five tiers of the professional men’s game. These reasons have been covered by other Members, so I will not go over them.
The Government argue that they need to define the scope in secondary legislation to allow them to change it in future. However, should they need to amend which leagues are in scope, they could still amend primary legislation to alter those leagues by statutory instrument. There is no change to that in my noble friend’s amendment. We have seen hybrid Bills before. I took one through the other place as Secretary of State for Transport, dealing with a rail link from the West Midlands to London. They are more complicated, but people know how to do them and know what regulations need to be abided by.
This amendment is not asking us to decide whether the Bill is hybrid; the Government are being asked to accept that there is inherently a form of hybridity in this Bill regardless, and that they must therefore allow it to go before the Examiners to see what they find. The Government should give very careful consideration to what the amendment says.
Lord Moynihan (Con)
My Lords, my noble friend Lord McLoughlin has made an incredibly important point. While I do not think that this is the moment for us to test it, we should give due consideration to whether this ought to go before the Examiners after Committee and before Report, particularly because the Minister has today said that the leagues are not confused about which leagues this legislation applies to.
We are grateful to the Minister for writing to us today. She stated in her letter that:
“The initial intended scope of the top five tiers of Men’s English football is built on a strong evidence base and extensive consultation with all key stakeholders”.
Nothing could be clearer about exactly who this Bill is meant to refer to. Yet, in this whole long Bill, there is no reference to the five tiers of men’s English football and we have no idea whether the Secretary of State will ultimately keep to that or not. We are going through legislation about which we have no clarity to whom it refers. That is, if not unprecedented, extremely rare. It is important that we heard from my noble friend Lord McLoughlin, not least because, to repeat what his committee said in its report:
“The argument that something should not be fixed in primary legislation because it might need changing in future would be an argument against having any primary legislation”.
I urge the Minister to listen carefully to my noble friends and to make sure that the Government at least place what we are talking about in the Bill, so that we know which clubs it refers to and where the onerous powers contained in it for the potential state-appointed regulator will fall. Without that, we are talking in a vacuum.
Baroness Taylor of Bolton (Lab)
My Lords, one of the amendments in question is in my name and that of my noble friend. I am surprised that Members opposite think that the previous Conservative Government would have introduced a hybrid Bill. I remind the House that this Bill is almost identical to the one they introduced and I am surprised that they thought that that might be hybrid. That Bill was discussed in another place at quite some length, but this question was not raised. As I understand it, the Bill would not have received a Second Reading had it been deemed to be hybrid at that time, so I do not think there is any question that this Bill is hybrid now. It can be made hybrid only if one House or the other passes an amendment that makes it so.
Lord Goodman of Wycombe (Con)
To follow that point directly, I raised the original question of hybridity following an intervention by my noble friend Lord Markham, at which the Minister nodded. The Minister has since written to us, and I am grateful for her letter setting the situation out. I want to respond to what has been said in the following way. The noble Lord, Lord Bassam, who is in his place, has at various times produced a copy of the Bill as it was under the last Conservative Government and pointed out, as the noble Baroness just said, that the two Bills are, in certain respects, almost identical.
Lord Bassam of Brighton (Lab)
The Bills are 95% identical. That is why we are somewhat surprised that noble Lords opposite are so opposed to its content. There is only one fundamental policy difference in it.
Lord Goodman of Wycombe (Con)
I am grateful to the noble Lord for intervening, because it buttresses the point I want to make. The Minister made it very clear on Monday that she was not aware of the hybridity issue that would arise were the leagues to be named in the Bill until that afternoon. It is evident, therefore, that someone in the department, as my noble friend said from the Front Bench, was aware of the hybridity issue under the last Government and under this one. I raise this as a member of the Delegated Powers Committee; when we received the view of the Government about why the leagues were not named in the Bill, the hybridity issue was not mentioned. It seems to me intuitively quite wrong that so important and real an issue should not have been named when the communication was made between the Government and the committee.
I am told that, procedurally, the people who speak on the Government’s behalf to those who brief us on the committee about the Bill are not obliged to tell the committee about the hybridity issue. If there is something as important as the hybridity issue, should the committee not be made aware of it somehow? I am grateful to the noble Lords opposite for raising the point about the Bill being much the same under the two Governments, as it is germane to the point I want to make.
Lord Mann (Lab)
My Lords, in one of the quaint ways that the Commons has of occasionally putting people, for whatever reason, on obscure committees, I found myself for 15 years on the hybrid Bill committee —one of the more obscure joys of life. I should just say that it was not the noble Baroness, Lady Taylor, who put me on it.
Lord Mann (Lab)
There are vast numbers of Bills that could in theory be called hybrid Bills but are not, such as the Great British Railways Bill. It is a nonsense argument, and there are millions of football fans waiting to see some change made.
The thing that triggered the origins of the Bill, with Boris Johnson and others, was a European super league. If Parliament ever attempted to say that the clubs that tried to form a breakaway European super league have a specific hybridity status—in relation to the people, having voted for manifestos that wish to stop this, being able to do so—the whole concept of how we make rules of law would come into question. This Bill is not hybrid and could not be hybrid, in exactly the same way that vast numbers of other Bills which have an impact on various private businesses are not hybrid. I think many noble Members realise that.
Lord Goddard of Stockport (LD)
The noble Baroness, Lady Taylor, has hit the nail on the head. We did a bit of research as well; the question of whether this is a hybrid Bill was asked in the other place, and it confirmed that it is not, so it comes to us with that confirmation. The letter from the Minister is really helpful, in that it clarifies that position for these Benches, and we will be happy if the mover withdraws the amendment.
The best thing would be to retire this amendment gracefully today, bring it back on Report and if need be, force a vote on it and let people decide. This is endless. The Chief Whip said, “Let’s be brief”. We are now 30 minutes in, rehearsing the rehearsal of last week’s four hour debate.
The noble Baroness, Lady Brady, said that seven Premier League clubs met the Minister. I presume that the Minister invited all the Premier League clubs to that meeting; they would not have been selected. If only seven bothered to turn up, again, that gives you a clear—
Baroness Brady (Con)
I can confirm to the noble Lord that only seven were invited. They were selected.
Lord Goddard of Stockport (LD)
To be helpful to the Committee, could the noble Baroness, Lady Brady, give us the names of the seven clubs? That might shed some light on what is going on here. There seems to be an illusion that the Premier League was suddenly born out of the ether, and then provides for all. Players such as Ryan Giggs, Phil Foden and Alan Shearer do not just suddenly materialise; they come up from the other divisions. I get what the noble Baroness is trying to do, and I respect her position, but you have to look at this in a holistic way. This is about a regulator regulating for the five divisions, and if it is not blindingly obvious to anybody what those five divisions are, they may be sat in the wrong place.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to the noble Lords who have taken part in this debate. It has been worth while having it again, painful and irritating though it may be. I am sorry if that upset the Minister—it certainly was not my intention to do so. I did it because this issue matters.
By the Minister’s own admission on Monday, she did not know about the issue of hybridity until it was raised with her on Monday. Does she think that a few hours’ consideration, along with all the other matters we gave attention to in Committee on Monday, and a few minutes’ debate in Committee late on Monday evening, is sufficient to dispose of an issue as fundamental as this?
As I said in my opening remarks, the Government Chief Whip knew about this issue at the same time I was alerted by the clerks, on 26 November, almost a week earlier. I am grateful that he stayed to listen to our debate on this group. Maybe he, if not the noble Baroness, can tell us what discussions he had in light of that issue being raised with the usual channels on 26 November. This is about engagement with the people, organisations and businesses that this new law will profoundly affect. I was shocked to hear what my noble friend Lady Brady said about only seven hand-picked clubs being given just half an hour of—
Baroness Brady (Con)
As requested, I will clarify who the seven invited clubs were: West Ham, Crystal Palace, Brighton, Liverpool, Spurs, Everton and Brentford.
Lord Parkinson of Whitley Bay (Con)
I am grateful to my noble friend for providing that information to the Committee. As I am not the world’s greatest aficionado of football, I will leave it to others judge whether that is a representative spread of the beautiful game, but I am interested to hear from the Minister the rationale by which those clubs were selected. I would like to know whether she was present at the half-hour meeting with those clubs and, if she was not, how much time she has given to engaging with clubs before bringing this legislation before your Lordships’ House and asking us to pass it.
As my noble friend Lord Markham set out, the changes the Government have made to the Bill since the last Parliament—on backstops and parachute payments—make this a substantively different Bill. I disagree with the noble Baroness, Lady Taylor of Bolton: this is not a virtually identical Bill; there are some substantial differences in policy terms, to do with parachute payments and so on. I think she would agree that those affect certain leagues and clubs more than others, and engage the question of hybridity and to what extent this Bill is targeting certain groups differently from others.
As with the amendments of the noble Lord, Lord Bassam, and the noble Baroness, my Amendment 19 was a probing one to see whether we could provide clarity in the Bill for those whom it will regulate, so they know from the outset what they must do and that they must comply with it. Like the noble Baroness, the first I knew was when we received the advice from the Clerk of Legislation explaining that this would make the Bill a hybrid one.
It is worth saying that I agree with the noble Lord, Lord Goddard of Stockport, that the previous Bill, when it was in Committee in another place, was not a hybrid Bill and it was right to conclude that. The question is, if we give that explicit information to the English Football League, the Premier League and the National League, so they know that they are going to be covered by this law—which the Government, in their Explanatory Notes, say they will: something they are happy to say outside the House but are not happy to say in the Bill, because that would afford them the right to come and speak directly to Parliament—then it is a question well worth pausing on, and I make no apology for returning to it today.
I am proud of the way your Lordships’ House scrutinises legislation; we go through things sometimes slowly, more slowly than Governments would wish— I have stood on the other side of these Dispatch Boxes and share the pain the Government Chief Whip and the noble Baroness are feeling today. This is a shining example of the importance of your Lordships’ House and the excellent advice we receive from its clerks. Thanks to that advice, two successive Lords’ Ministers for this Bill have been alerted to the fact that it could become a hybrid Bill if it is said in it what it is trying to do. That is an important point to have returned to in Committee, and I would like to understand from the Minister why, when we pass this law, we should not tell the people it is going to affect that it is going to affect them.
Baroness Twycross (Lab)
My Lords, I welcome the opportunity to respond to the debate. I have already outlined the Government’s position on an issue that the Committee clearly cares about. I can confirm to the noble Lord opposite that I am clear that this position is correct and, if the noble Lord is concerned that I am upset, then I am slightly surprised. I am more concerned that the noble Lord thinks we should still be confused about matters on which I have written an extensive letter to noble Lords earlier today. The House debated Amendment 19 at length on Monday evening and asked me to write on the points raised. I have done so, and a copy of the letter has been placed in the House Library. I do not really want to repeat my explanation of when a Minister might have to nod; however, I will do so if that is raised again.
I hope we can work through any residual concerns swiftly so that your Lordships’ House might be able to lend its scrutiny, which I agree is important, to the other very important parts of the Bill. I understand the noble Lord’s desire to have in the Bill upfront clarity as to which competitions will initially be in scope of the regulator’s regime. However, as I explained on Monday night, and in my letter, there is a sound policy rationale for the approach taken in Clause 2.
Lord Parkinson of Whitley Bay (Con)
Does the Minister recognise that my Amendment 19 seeks to allow that to happen? In its second part, it keeps the provision for the Secretary of State to make, by regulation, amendments if the name changes. I take on board the point she made on Monday and that she repeated in her letter about the policy intent here, but my amendment, if she accepted it, would allow that to continue to happen. It would also give the clarity from the outset to the leagues that are going to be regulated.
Baroness Twycross (Lab)
As I previously explained, I do not think that the leagues that are likely to be regulated by this legislation in the first instance are in any doubt, but I will answer the noble Lord’s point about why we are not going to put the top five leagues in the Bill and take a power to amend it. I believe I have set out very clear reasons for the approach taken on defining the scope of the regime. The Bill delivers the effect intended, closing any loopholes that would allow avoidance of the regime, while allowing for agility in responding to any potential changes in the structure of the football pyramid. This is a clear, simple procedure that can be consistently applied to the competitions initially designated as being in scope, as it can to any future competitions.
We have heard from numerous noble Lords opposite about their concerns over the number of delegated powers in the Bill, and I hear those. I have set out why specifying the leagues in scope in the Bill is a potentially flawed approach and open to avoidance. At best, this approach leads to superfluous or unnecessary provisions in drafting. At worst, it could undermine the entire regulatory regime. That is why the approach in the Bill that the Government have taken, and that the previous Government took, is the right one. For that reason, I am unable to accept the noble Lord’s amendment and hope he withdraws it.
Lord Parkinson of Whitley Bay (Con)
I am sorry to hear that from the Minister; it does not give us much more than we had in the debate on Monday. I thank her for restating it, but I do not think it has engaged with the point that my amendment seeks to provide, which is allowing that flexibility to answer all the policy questions that she has set out, but also giving the clarity in law to the leagues that will be regulated by the Bill. As far I can see, the only material difference between accepting my Amendment 19 and proceeding in the way she wants to is that it would allow those leagues to petition Parliament and make their voices heard more clearly. That would be a good way of hearing from those who will be affected by this law.
I was struck by the sage advice from the noble Lord, Lord Goddard, who is acting as referee on this matter. This is something we will have to return to, and I am grateful to the clerks who alerted me to it. We will have to think about the question of hybridity and the right of football clubs and leagues to make their views known on this legislation, as the Minister and I have both just come to understand. The Committee has, through the course of this and Monday night’s debate, been able to begin considering it, and we should continue to consider it between—
Lord Bassam of Brighton (Lab)
If the noble Lord insisted on this being included in the Bill, what would his response then be to further proceedings on the Bill?
Lord Parkinson of Whitley Bay (Con)
I am interested in making sure that the Bill passes. I have been very clear from Second Reading onwards that we want to see it pass, that we want a regulator to be set up and that we want football to be protected and well governed. However, we want it to be done in a way that is not unduly burdensome, is proportionate and genuinely protects what is a hugely enjoyed pastime, a vital export and a group of hugely successful businesses for this country.
Thanks to the noble Lord’s Amendment 21 and my Amendment 19, we are given the opportunity to pause and consider whether we can have deeper and more fruitful conversations with those leagues and clubs to make sure that we get this legislation right. That is a question worth pondering with greater patience than I think we have seen from the Government Benches so far. I will certainly continue to consider it, and I hope that other noble Lords will do so too. For today, and in the interest of making further progress with our Committee deliberations, I beg leave to withdraw.
Lord Parkinson of Whitley Bay (Con)
My Lords, in moving Amendment 20, I will speak also to my Amendment 22. These amendments, while technical in nature, address some important issues underpinning the Bill: the preservation of integrity, clarity and fairness in football governance across the whole nation, alongside the safeguarding of competition and community interests.
My amendments are necessary on the basis that the English football pyramid is littered with examples of English teams playing in Welsh or Scottish league systems, or vice versa. I understand that Cardiff City FC has played in the English football pyramid for 104 years, famously winning the FA Cup in 1927, and, more recently, reaching the FA Cup final in 2008. Its participation in the English football pyramid does not make Cardiff an English club—at least, it would take a very bold person to say that to a group of Cardiff fans.
Similarly, in the case of Wrexham AFC, as I am sure that many noble Lords are aware and have been aware for longer than I have, Wrexham has been in the English football system even longer than Cardiff, having joined an early English football league known as the Combination as far back as 1890. It is, proudly, the third-oldest professional association football team in the world. Although the club has suffered from financial hardship down the years, Wrexham has recently had new life breathed into it by its purchase four years ago by the Canadian actor Ryan Reynolds and the American actor Rob McElhenney. The attendant publicity from the docuseries “Welcome to Wrexham” had a significant impact on the club’s renown, leading to it acquiring a new, global fanbase, without precedent for a team that was in the fifth division at that point. I had the pleasure of visiting its Racecourse Ground when the club was supporting Wrexham’s excellent bid to become the UK City of Culture for 2025. I saw how rooted the club was in its community and the great work it was doing on behalf of the whole wider area.
I hope that those two historical examples provide instructive and relevant information on the point that I intend to make. It is foreseeable that, if the Bill is read on its simple meaning, it could apply only to English clubs. That could lead to a grave lacuna whereby the regulator is instructed to regulate English clubs only but not all football clubs in the English football pyramid. I know that that is not the intention, but with my probing amendments, I hope to seek clarification on that point.
We do not want a case where Swansea AFC, Cardiff City, Wrexham AFC, Newport County, Llansantffraid and others could be in a unique position where they play football against regulated clubs but are themselves unregulated. I have added my name to the amendment tabled by my fellow Northumbrian, the noble Lord, Lord Beith—I believe he was born in Cheshire, but his 42 years representing Berwick-upon-Tweed makes him a Northumbrian in my eyes—who is seeking reassurances for a team closer to home for us both. I hope that the Minister will be able to allay the concerns that he has raised through his amendment as well and set our minds at rest on this important matter. I beg to move.
Lord Beith (LD)
My Lords, I am grateful to the noble Lord for his introduction to what I am going to say about Berwick Rangers. I declare an interest as having for some years been the honorary president of Berwick Rangers Football Club, which has existed for 143 years. During virtually the whole of that time, it has played in Scottish leagues, despite its stadium being in England. My amendment is there simply to secure clarification, which I am confident the Minister can give—although clarification would not necessarily survive subsequent amendment of the parts of the Bill to which I shall refer.
It appears to me that none of the regulatory provisions applies to a team in a competition that has not been specified by the Secretary of State. Under Clause 2(3), the Secretary of State does not have power to specify a competition in which the majority of the teams are not English teams. Thus, the Secretary of State could not designate the Scottish League, or the Lowland League or the Scottish Cup, in all of which Berwick play or have played.
Furthermore, Clause 15 makes it clear that operating licences are required only for a club operating a relevant team, which is defined in Clause 2(1) as a team participating “in a specified competition”. That would not apply to Berwick Rangers, because competitions in which they play could not, under the Bill, be specified. However, references in the same clause to a club with a stadium in England does raise in people’s minds the question about whether the Bill could be extended to Berwick—which would not be the Government’s intention, I am quite sure. Not only do they not seek to extend the Bill to Berwick Rangers, I do not think they are trying to move into the world of Scottish football, which, as the noble Lord, Lord Reid is well aware, is quite distinct in many respects, some of them desirable, some of them perhaps less so.
It has been the privilege of Berwick-upon-Tweed to play in Scottish football for almost the whole of its existence. Indeed, it has led to occasions on which we have played Glasgow Celtic, when I was able to welcome the noble Lord, Lord Reid, who came with the team for that fixture. We have played Glasgow Rangers on a number of occasions, defeating them in 1967 and holding them to a draw in the Scottish Cup on another occasion. To have a club playing such distinguished teams is obviously an asset to a town and, if there is any regulatory structure to be put in place, it should be the same one as for other teams in the Scottish league in which they play.
Berwick’s notable history is a very powerful case for making sure that any legislation deals properly with it. I am confident that the Government have no intention of causing us problems in this respect, but it would be helpful if the Minister could give us some clarification and would keep the matter in mind if there is any redrafting of this part of the Bill.
Lord Watson of Invergowrie (Lab)
I just want to make a point that has emerged in this short debate—or has become obvious to me in it. The first thing is to say to the noble Lord, Lord Parkinson, that I take issue with his characterisation that England is “littered” with clubs from Wales. There are only four. There is another one at level 6, Merthyr, but that is not the point I want to make. I am concerned, looking at Clause 2, that subsection (3) refers to
“teams that are members of … or … participate in”
competitions being
“exclusively or predominantly English teams”.
However, Clause 2(4) says a team
“is an ‘English team’ if the ground at which the team customarily plays its home matches is in England”.
These are contradictory because, as we have heard, there are two Welsh clubs in the Championship, one in League One and one in League Two. So I think perhaps on Report there will have to be an amendment, which I am happy to bring forward if it is helpful to the Minister.
I also take the point that the noble Lord, Lord Beith, makes about Berwick Rangers, who made a contribution to Scottish football over many years. I was sorry to see them drop out of the Scottish League and I hope that they will soon be back. But they do play in Scottish football still at a lower level. It is unusual; UEFA, the governing body for European football, is very strict on clubs not playing their matches in another country. The practice of Welsh clubs playing in the Welsh FA Cup and representing their teams and cities in Europe was stopped by UEFA. Now it is only the much smaller Welsh clubs that are able to do that, because UEFA said that clubs had to choose which jurisdiction they were playing under. The only other example I can think of within the UK is Derry City. For reasons that might be quite obvious, since Derry is right on the border of the Republic of Ireland, they play in the League of Ireland, not the NI Football League.
Lord Addington (LD)
I will make one small and quick point. We talked about this being for fans and the traditions of the game. These accepted historical changes to the structure are something that most people involved in football accept. I hope that when the Minister replies she will accommodate them. If not, a small amendment would be appropriate.
Lord Harlech (Con)
My Lords, I support all the amendments in this group. I spoke at Second Reading on issues affecting Welsh clubs and it is a pleasure to speak to this group of amendments.
The New Saints perhaps offer a different Welsh perspective from those that we already have heard. TNS FC, known for a brief period as “Total Network Solutions” after a sponsorship from a local IT firm, are a Welsh professional football club that play in the Cymru Premier League but is based completely in England—in Oswestry, Shropshire. I declare an interest as that is where I was born. TNS are the most successful club in the Welsh league structure, with 16 league titles to their name. Recently, they became the first side playing in the Welsh system to qualify for the group or league stage of any European competition after reaching the league phase of the UEFA Conference League. They play in the Welsh league because the club was formed in the village of Llansantffraid, on the Welsh side of the border, in 1959, later merging with Oswestry Town, based in Shropshire, in 2003.
TNS FC sit at the pinnacle of Welsh domestic football, while occupying the peculiar position of being a club based in England. Does the Minister not agree that it would be unfair that TNS would be the only club playing in the Welsh top division to be regulated? Would it not create a difficult situation for Welsh football if a club with Welsh roots, playing in the Welsh league but geographically situated in England, had to comply with regulations that other teams in their league would not, perhaps creating a competitive disadvantage?
Lord Parkinson of Whitley Bay (Con)
I thank noble Lords for their support for this group and apologise to the noble Lord, Lord Watson of Invergowrie. “Littered” was probably not a well-chosen word. I meant it in the sense of an adorable litter of puppies that enhance the joy of all of us. I am grateful too to my noble friend for giving another example in the shape of TNS. They seem to be the football league equivalent of him—both a Shropshire lad and a man of Harlech. I am grateful to the noble Lord, Lord Beith, for setting out his Amendment 23 and hope that the Minister can allay the concerns that have been raised on behalf of all these clubs and others in similar situations.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Parkinson of Whitley Bay and Lord Beith, for their amendments to Clause 2 and the opportunity they present for me to clarify this matter.
Amendments 20 and 22 in the name of the noble Lord, Lord Parkinson, would allow the Secretary of State to include in the regulator’s scope competitions that are not exclusively or predominantly made up of English teams. This would mean the loss of an important protection that, as currently drafted, ensures Welsh football competitions could never be brought into scope. The noble Lord will be aware that sport is a devolved matter for Senedd Cymru, the Scottish Parliament and the Northern Ireland Assembly. Therefore, if intervention of this nature was deemed necessary within Welsh, Scottish or Northern Irish football, it would be for their respective legislatures to take forward.
While I am on the subject of Welsh football, I take this opportunity to congratulate the Welsh national team, who qualified for the Women’s Euros last night. It is the first time in their history they have qualified for a major tournament. This is a fantastic achievement and one I am sure your Lordships will want to join me in celebrating.
Baroness Twycross (Lab)
On Amendment 23, I understand the aim of the noble Lord, Lord Beith, to ensure clubs are not inadvertently captured by the regulator’s regime or left out—for example, where they are based in England but compete in the Scottish league system. I reassure him that the Bill already sufficiently protects against this risk. Only clubs competing in competitions specified by the Secretary of State will be subject to regulation, and the Secretary of State can specify only English competitions. Therefore, clubs such as Berwick Rangers, which is part of the Scottish pyramid, cannot be subject to the scope of the regulator as long as they do not play in English competitions. Conversely, clubs playing in those specified English competitions, including Welsh clubs, will be regulated.
I am happy to meet noble Lords to discuss this further if that would be helpful but, for the reasons I have set out, I am unable to accept the noble Lords’ amendments. I hope that they will not press them.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the noble Baroness. As she could hear from the cheer, I think we all associate ourselves with the congratulations that she offered to the Welsh women’s team. It is marvellous news. I thank her for the reassurances. As the noble Lord, Lord Addington, said, these are some of the quirks of our history that we celebrate through football, which we play across these islands. I am grateful to the noble Baroness for the clarification she has set out and I beg leave to withdraw my amendment.
Lord Moynihan
Lord Moynihan (Con)
My Lords, in moving my Amendment 27, I will also speak to my Amendments 28 and 29. These amendments seek to omit reference to the “influence” a person can have over the activities of a club being considered for a licence to operate as a professional football club in England.
Walking through this maze of state-imposed regulation on professional sport, for the purpose of the amendments I assume that the Government intend to allow the government-appointed regulator to determine who is a fit and proper person to be granted a licence on the question of their “influence” over a club’s activities. If we try to seek clarity in the Bill, we are immediately referred to Schedule 1, where, in keeping with this hydra of a Bill, we are once again left totally in the dark. It says, at page 83:
“The Secretary of State must prepare and publish guidance about the meaning of significant influence or control for the purposes of this Schedule”.
So the Bill continues to blindfold parliamentarians before they take the knee and kick off their important scrutinising role, which is the central purpose of your Lordships’ House.
Perhaps the best way to seek clarification from the Government is to work through a specific example. Newcastle is majority owned and financially controlled by the Saudi sovereign fund, the PIF. The PIF became the majority shareholder and de facto owner of the club, with 80% of the shares acquired in October 2021. The chair of the PIF is Crown Prince Mohammed bin Salman, son of Saudi Arabia’s King. MBS, as he is known, runs the Saudi Government.
For once, the noble Baroness, Lady Taylor, cannot pray in aid that this is an inherited Conservative Bill, because in the Conservative Bill there was a protection against the Government-appointed regulator investigating whether, for example, the Crown Prince and chair of the PIF was a fit and proper person to exercise control over Newcastle through his chairmanship of the PIF. The current Government deleted the very protection that the Conservative Government put in the Bill that required the regulator to,
“have regard to the foreign and trade policy objectives of His Majesty’s Government”.
This removal was a direct result of UEFA’s insistence to the current Prime Minister that this protection politicises sport. When faced with expulsion from the European Championship in 2028, which, incidentally, is to be hosted in the United Kingdom and the Republic of Ireland, and asked to jump, he said “How high?” and deleted the protection, clearly without the Government considering the consequences. This is a classic example of the need to beware of unintended consequences.
When the Prime Minister heads off to Saudi Arabia this month to promote trade and relations with Saudi Arabia, what will he say when the Crown Prince asks, “As I exercise influence over the PIF and since the PIF owns Newcastle, am I to be subject to detailed investigation by the regulator as set out in your Bill, and is there anything the regulator will not take into account about me as a ‘person of influence’ over the future of Newcastle United?”
Sadly, I can assure the Committee that for anyone who has read the Bill, the answer to Newcastle fans is that, unlike under the Premier League or UEFA rules, the Crown Prince is to be subject to investigation by the regulator. That is exactly what the Government intend the regulator to do, because they have removed the one protection it had. So let the Prime Minister be in no doubt that the answer he has to give to the Crown Prince and the PIF, which is investing billions in global sport and encouraging full British co-operation with the growth of boxing, golf, the International Olympic Committee’s Esports and tennis, to name just a few recipients of Saudi influence in global sport that is celebrated by many professional sports in this country, all of whom benefit from it.
When the Minister comes to answer, the Committee is looking for simple clarity. Yes, the regulator has full rights to use his or her many powers to investigate and opine on the suitability or otherwise of any owner who exercises a degree of influence over, for example, Newcastle United. That is just one example of such detailed and intrusive investigation which exists solely in the powers of the proposed regulator but nowhere else in football—not in UEFA, FIFA, the EFL or the Premier League. The intrusive investigation which this phrase leads to will be replicated across the Premier League unless we accept my amendments.
We have a clear understanding of the first meaning of an “owner”, which is those who control or exercise control over a club, and shareholders are a good example. However, to understand the second phrase, the concept of “influence” over a club, we need to understand what the Government mean by “influence”. What is deeply disturbing is that, from other parts of the Bill, it is clear that the definition conflicts with the approach to ownership of the government regulator, the Premier League, UEFA and the EFL, all of which would be conflicted with the government regulator’s role. I predict that it would be mired in litigation for years to come and lead to capital flight by current owners in the Premier League and other leagues, so I owe it to the Committee to explain briefly why.
The starting point is whether there is a difference in the definition of an owner between what is in the Bill and in the Premier League’s rulebook. If there is a difference, what will this mean in terms of whether a newly identified owner would have to go through a test or whether they would still be defined as an incumbent owner who, incidentally, will have to go through extensive new tests under this legislation?
This Bill tells us that the regulator must identify an “ultimate owner” as opposed to companies that have ultimate control. How is this defined in the Bill and what does it mean? At what point in the process must the ultimate owner be identified? For example, can he or she be identified for a provisional licence? I would argue that they have to be. If new individuals are identified, will they have to go through the full owners and directors tests as new prospective owners or will they be treated as incumbents?
Lord Markham (Con)
Before I speak to the amendments in my name, I start by thanking my noble friend Lord Moynihan. This is yet another example where, as we understand this Bill further, we see more and more complexities and unintended consequences which will have a profound impact on the sport that we all love. Those points were very well made by my noble friend, and I look forward to the Minister’s response to them.
My amendments are trying to be helpful and practical, given the complications set out by my noble friend around how you determine who is an owner or who has influence on it all. At the very least, as proposed in Amendment 30, the regulator must inform who it considers to be counted as an owner. I hope noble Lords would agree that that is a fairly sensible move, given that such a person might not consider it themselves but might be deemed to have influence.
Just as we require a certain competence from officers, Amendment 177 suggests that owners should be subject to a similar assessment.
We are all mindful of the numerous situations we have seen where there is a timeliness to the acquisition of a club, particularly in the context of rescuing a club or where there are certain deadlines, as happened in the case of Abramovich and Chelsea. Amendment 186 states that the regulator must make a decision about an owner or an officer within one month. Officers can be critical to the running of a club as well, so we need timeliness there.
My two further amendments, Amendments 188 and 189, propose that where the regulator is seeking to act retrospectively—as has been pointed out, this gives it the power to reopen the issue of ownership and officers—there needs to be a high bar before it is allowed to go in; otherwise, before we know it, it could be investigating and unpicking the officers and owners of every club. Once again, this is a massive example of just how overbearing we are in danger of setting up this regulator to be.
Amendment 188 says that the regulator can investigate the current owners only if it believes that there is a reason for them not being suitable. It is trying to put an evidential burden or barrier on that. Similarly, Amendment 189 is about trying to determine the fitness of current officers only if it already has information in place suggesting that those current officers are not fit. Otherwise, if we add up all the multiple hundreds of officers of the hundred or so clubs, we would be setting up a whole logjam of investigations, which I would hope that all noble Lords think does not best serve the interests of those clubs or football as a whole.
Lord Jackson of Peterborough (Con)
My Lords, I support the amendment in the name of my noble friend Lord Moynihan and I commend him on his comprehensive demolition of the Government’s case. I have fundamental problems with this clause, as it stands, in respect of ownership. As my noble friend rightly says, it goes way beyond the admonitions and existing legislation of, say, the various Companies Acts. It is much more draconian and prescriptive than anything we have seen in company law. It is quite sensible, and not ignoble, for all Governments to take a value judgment on who is a fit and appropriate person to be a company director and to trade and take part in commerce. We all understand and support that, but what we see here is very oddly drafted legislation. It seems to me that it may be a reaction to the trade policy clause that existed in the original Bill, which was withdrawn.
At the same time, the Bill is extremely opaque, permissive and open-ended in the power that is bestowed on the Secretary of State. Looking at the schedule, I am very uncomfortable about giving those sweeping powers, not least because there is a differential between the “significant influence”, as contained in the schedule, that a director or a person involved in a football club may have and what we read in Clause 3, which is just “a degree of influence”. What does a degree of influence mean?
It is not all a case of the Saudi royal family and Newcastle United. We are talking about 116 clubs. Is “influence” popping into the dressing room at half-time and saying, “Great match, guys; here’s a beer”? Is it saying, “If you play better next year, my company might sponsor you more favourably”? It may seem ridiculous to use those examples, but this wording is so unclear—so opaque and permissive—in asking to give Ministers very significant powers that we need to think carefully, again, about whether it is appropriate to let it remain in the Bill.
For that reason, I strongly support the eloquent and comprehensive case made by my noble friend Lord Moynihan and, in passing, of course I support the amendment from my noble friend Lord Markham. This is a bad clause. It will give rise to very big risks of litigation. Ministers should think carefully about whether it remains in the Bill and we should think again, perhaps on Report.
Baroness Evans of Bowes Park (Con)
My Lords, Norwich City were very fortunate to have Michael Wynn-Jones and Delia Smith as majority shareholders for the past 26 years. They have been fantastic custodians of the club. They joined the board when Norwich were in a perilous financial position and helped steward the club through the highs and lows of six promotions, six relegations, two play-off finals and 15 managers. Of course, Delia was not averse to some direct fan engagement with her “Let’s be ’avin’ you” rallying cry, which we all know and love.
In October, Norfolk Holdings, a group led by the principal owner of the Milwaukee Brewers, assumed majority control of the club, so a new chapter has begun. While Michael and Delia have relinquished control, they remain committed fans, as they always have been. I know that all Canaries are extremely grateful for their unwavering commitment to the club.
Baroness Fox of Buckley (Non-Afl)
My Lords, in the debate on an earlier group we heard some dilemmas around the fact that, for example, Welsh teams such as Wrexham might not be in scope of the Bill. It is possible that Rob McElhenney and Ryan Reynolds will be relieved to discover that they might not be. Those following Wrexham’s progress will know that they spend a great deal of time complaining about the ridiculous regulatory framework that the football club has to negotiate. It is not football regulation but every other—as they say—bonkers regulation that means they cannot build. There are many hoops that they have to jump through.
This is slightly important because, when we have this discussion about suitability and fitness, we constantly see it as scrutiny because we are wary of charlatans. Everybody that has ever been involved in football is anxious about types of owner who might not have football at their heart, but the reality is that many owners of football clubs and many people with influence over them love the game and are nothing but great influences on the clubs. That is obviously why Rob McElhenney and Ryan are well-known heroes worldwide now. But there are also corporate interests that can be just as beneficial and important.
One reason why this is so tricky, why it needs to be clarified and why I am glad to see these amendments in this group is that any discussion about suitability and fitness that gives so much intrusive and overbearing power to a regulator has to be queried to understand exactly what it will mean. The last question from the noble Baroness, Lady Evans, was important: what happens if there is a clash?
Outside of football, the debates on who is suitable to run what are subject to all sorts of subjective and sometimes malicious trouble, caused by people who do not have the best interests of the clubs at heart. If noble Lords have ever spent any time with football fans, they will know that many do not think that their club’s owners are suitable or would pass any suitability test—as I will tell you over a pint. It might well be the gripe of the day.
My point is that the Bill has to be reined in, in terms of how much power has been given to make decisions that are not straightforward or scientific. Until we recognise that there is a danger of unintended consequences, the Minister might—not through any desire to—open a can of worms that will be damaging to many football teams.
Baroness Brady (Con)
My Lords, I rise to speak about ownership definitions and tests proposed in the Bill, and particularly to support Amendments 27 to 29 tabled by my noble friend Lord Moynihan.
Although everyone can support proper scrutiny of football club ownership, I have concerns that the current provisions create unnecessary complexity and uncertainty. It is important that we are clear about the purpose of the Bill in this respect. As my noble friend’s amendments demonstrate, the Bill proposes a new definition of ownership that goes beyond current football tests, introducing the concept of influence. This goes beyond the football authority definitions, which focus only on control. Yet the Bill provides little detail about how this extended scope will work in practice or what problems it aims to solve. It will apparently be for the Secretary of State to decide what is meant by “influence”.
Equally concerning is the lack of clarity regarding existing owners. As has already been asked, do the Government envisage using these new powers to retrospectively challenge current ownership arrangements? If not, why create a broader definition than the existing tests? If they do, this represents an extraordinary intervention into private property rights that demands much greater scrutiny.
The Premier League has significantly strengthened its owners tests, including in relation to the Abramovich case, and sanctioned individuals. What evidence suggests that parallel tests, with differing criteria, would improve outcomes, rather than creating uncertainty and potential legal conflict? Without such clarity, we risk creating a framework that deters responsible investment, while failing to address any real problems in football governance.
Let me be clear about another point. As my noble friend Lady Evans pointed out, the EFL is, I believe, very happy to give up its own ownership test to the regulator because it views the exercise as costly and time consuming—that is its right. But the Premier League fully intends to maintain its own ownership tests—why should it not? It is a fundamental right of a members’ organisation to determine its own composition, and the Premier League really is a membership body. We have only 20 clubs, not 72, and it is a fundamental part of how we drive forward the Premier League, grow in international markets and make collective decisions about the future of the game, together with the FA.
Determining who can come into the group is therefore a key part of how we collectively run the Premier League as equal shareholders. I would argue that we have one of the most sophisticated ownership tests in world sport. Yet the Bill would introduce a parallel test, and it would do so without defining its contents. Naturally, this creates immediate uncertainty.
The Bill is troubling, too, on detail. The planned test, which will be for the regulator to create and define at some stage in future, would appear to include more subjective elements than the Premier League’s existing criteria. That would be very strange. Surely it would be quite a good idea if prospective investors and owners could know with confidence, from the outside, whether they qualified to buy a football club. I would be grateful if the Minister could answer a simple question: is the test provided for in the Bill going to be a subjective or an objective test? It obviously cannot be both. As my noble friend Lady Evans said, the practical implications run deeper. What happens when the regulator approves an owner, but the Premier League does not, or vice versa? Can the IFR force the Premier League to take in an owner that it does not want? The Bill makes no provision for resolving such conflicts. Instead, I worry that it creates the perfect conditions for prolonged litigation—exactly what proper regulation should avoid.
Of course, all this uncertainty is likely to be very damaging to investment. Put yourself in the shoes of an investor examining Premier League football as a potential opportunity. They now face not one ownership test but two, both with different criteria. One test is not even defined in legislation. Either could result in rejection. Both could trigger lengthy legal challenges. What serious investor would begin spending the millions of pounds required to explore a transaction in football —on the investment bankers, the lawyers, the due diligence, the regulatory compliance, the tax advisers and the rest of it? Why would we want to introduce such fundamental uncertainty?
I worry that, without far more clarity in the Bill, we risk deterring the very kind of responsible, long-term investors that football needs and wants. I urge the Minister to carefully consider these points. At a minimum, we need clarity on: how conflicts between tests will be resolved; exactly how and why the IFR’s test is intended to be materially different from the existing tests; what provisions exist for managing litigation; why the definition of ownership is wider than that used by the football authorities today, and what the implications are; and, above all, how investment confidence will be maintained.
The goal of proper ownership scrutiny is, of course, completely correct, but we must achieve it through clear, workable mechanisms and not parallel systems that create uncertainty and confusion.
Lord Bassam of Brighton (Lab)
My Lords, I enter this debate from a slightly different angle—and I make no apology for that. My concern is linked more to what I might describe as preventing another Wimbledon, or to “Wimbledon-proofing” the legislation. That is what the amendments that we have in this group attempt to assert.
This is important, because Wimbledon was a warning shot across football when it happened—when Wimbledon Football Club was transported 61 miles away from its home community to Milton Keynes. Only one other club has had to move further than that, and that was Brighton & Hove Albion when we were shunted inexplicably—well, rather explicably, in the end—to Gillingham to play our home games. I know that I could go on about that for a long time, but I want to prevent that sort of thing happening in future. As part of the determination of suitability, we are trying to get a commitment—and perhaps the Minister can help us—that issues related to where the home ground is will be an important part of the test as to whether a person is a fit and proper person to become an owner of a regulated club. That is what our Amendment 182 seeks to clarify.
Fans need that long-term security. They need to understand that the people who take ownership of a much-loved community asset are there for the longer term and have a longer-term interest in the community and its football club. We need that because the majority of clubs most likely to be affected by this legislation are those smaller clubs with which there is a great affinity and community bond. I hope that the Minister can assure us that one of the relevant considerations when looking at a new owner will be their commitment to ensuring that the ground stays pretty much where it is and that fans are consulted about any changes to be made to it.
Lord Jackson of Peterborough (Con)
I read with interest the noble Lord’s Amendment 182. The wording says of the commitment to the home ground
“with said commitment to be codified in such form as the IFR may determine”.
Does he agree that it could undermine any existing contractual relationship and bring uncertainty into the business activities of that club, were this amendment to be adopted?
Lord Bassam of Brighton (Lab)
I do not think that it would. It is designed to stop owners disposing of the assets. I will give the noble Lord the example of Brighton, because what happened there is very instructive. Back in the 1990s, it was taken over by some rogue owners —Bellotti, Stanley and Archer. Apart from becoming local hate figures, they sold the stadium before they had anywhere else to locate the football club. Then they tried to blackmail us politicians in Hove Council and Brighton Council—we were not a unitary at the time—into providing them with a completely unsuitable site for relocation, with no planning permission and no business plan at all. That was wrong, and it destroyed that club for a period of time. It has taken us a long time to recover from that. It has taken the support of fans and the good will of good local politicians to rebuild Brighton into the excellent and well-run club that it is today. Now, I would say that, wouldn’t I? But it is the truth, and that was the situation.
This amendment is quite personal to me. I did not go on marches, protest or do what I could as the leader of the council to see that position undermined. I would hope that the noble Lord opposite, as a supporter of Peterborough, would have a similar passion for his club. That is the reason for this amendment. We want to make sure that we provide fans with that security and knowledge and understanding of the importance of that commitment.
Lord Addington (LD)
My Lords, briefly, if we are talking about influence, it is reasonable that we know what it means. As the noble Lord, Lord Bassam, has said, this is an example of why we have this Bill. There have been rogue owners, and one of the traditional ways they come in is by looking for a property deal on the site. It is important to remember that as an example of what happens when you get this wrong. We need to balance these two points together. I hope that, when the Minister comes to answer, she will at least start to shed light on how we will seek to do this.
Lord Mann (Lab)
My Lords, I have talked to quite a number of major new investors in English football and have not found one who opposes the general principle of having a regulator. They are quite relaxed about it, yet they are the major new investors. I think one reason is that, when people invest, they often find some hidden nasties that had not been disclosed about the investment and its finances. That extra element of transparency is not necessarily a discouragement to investors; it can be an encouragement, particularly to reliable, long-term investors.
If you talk to a random selection of football fans, one case that will always quickly crop up is the Glazers buying Manchester United, not with their own money but with leveraged buyouts. I am rather more benign about the Glazers, because their intentions were always very open: they were borrowing money from reliable sources and attempting to make a profit. I would not be too comfortable about that if it were my club, but it cannot be denied that what they did was clear, transparent and out in the open. Anybody who thinks that there are not people today who the fans believe are generous and beneficial owners who have put lots of their own money in, but who have in fact borrowed the money from sources that are not public, are being rather naive, because that is still a model through which people buy football clubs. Football clubs are easy to move money in and out of and speculative investment has proven over the last 20 years, particularly in English football, a reasonable bet and may continue to be so. Indeed, the whole case of the Premier League is that it will continue to be so, so the regulation being proposed is not necessarily an anti-business case.
There is another interesting aspect that does not come to light because we do not know about it. I hear from current and recent professional players about the impact and influence of agents. Are there now agents who are sufficiently powerful in the game, with the corporate entities they have created to own footballers and, more critically, footballers’ rights, that their unseen investment in a club could have an influence in ways that the wider public, including the fans, do not know about? It seems to me, from a fan perspective, that that is a problem for the health of the game. On balance, the good, long-term investor who could make good money —that seems to be a rational motive—will be in favour of this element of transparency and not against it.
Lord Evans of Rainow (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Mann, with his very pertinent points on agents and fans. I rise briefly to support my noble friend’s Amendment 27 and to make a point about owners being fit for purpose, fans’ interests and consultations and unintended consequences. Along with other noble Lords, I spent last Friday afternoon with the shadow regulator. I asked whether they were aware of how unpopular they could be. I used the example that has already been used of Newcastle United, which has a new owner and a sovereign wealth fund, and the fans are excited because of the potential that brings. That is great, but what would this regulator make of the new ownership? Compare and contrast that with the previous owner, Mike Ashley.
Noble Lords will be aware of what Newcastle fans thought about Mike Ashley: in their eyes the team was underperforming and he was not investing in the club and its players. However, he was probably being prudent and working within the constraints of the rules of the game, and the regulator might have judged him to be a perfectly fit and proper person to run and own that club. I ask noble Lords to imagine a situation where the regulator says to a sovereign wealth fund owner, a country such as Saudi Arabia, “I do not believe you are a fit and proper person to take over and own this club”, but the fans think it would be wonderful. The regulator could end up in a situation with literally tens of thousands of protesters going down to Manchester from clubs like Newcastle.
As the noble Lord said, Brighton and Hove Albion supporters are very passionate, and he clearly did a good job there as a council leader. However, we know that fans will travel all around the country to support their team and we could end up with the unintended consequence of the regulator denying the potential of an owner to buy a club based on his set of rules and regulations, but tens of thousands of fans would disagree and we could have a situation where they would go down and protest. That could be one of the unintended consequences, so perhaps the Minister could let the House know whether the Government have thought of that.
Lord Watson of Invergowrie (Lab)
My Lords, I support Amendments 182 to 184 in the names of my noble friends Lady Taylor and Lord Bassam. I do so, as my noble friend Lord Bassam said, specifically in relation to Wimbledon—not AFC Wimbledon, at which I happen to be a season ticket holder, but Wimbledon, the previous club, which has now been moved 60 miles up the M1 to Milton Keynes. I want to focus on the situation prior to that happening, and that is why these amendments are relevant.
Ironically, in one of the debates on the Bill last week I talked about state intervention and mentioned the Taylor report. It was that report, published in, I think, 1991, which said that our grounds at the top level must be all seated. Wimbledon’s ground was too small and too cramped, with houses round about it, for that to be done, so they moved from there to a ground share with Crystal Palace, ostensibly on a short-term basis—it turned out that they would be there for more than 10 years, but that is not really relevant to this. The point is that the owner eventually sold the ground from under the fans to a supermarket chain, and subsequently sold the club to Norwegian owners. The point is that the fans were nowhere consulted in any of this, although they made their views clear. But the point is that the home ground is key to any football club and there has to be the long-term commitment to that.
My noble friend Lord Bassam talked about going up to Milton Keynes. The previous owner of Wimbledon FC wanted to move it to Dublin. That was a serious proposal. Thankfully, it came to nothing, of course. On this issue of whether a club can move, that is why the regulator is important. It is maybe lost in the mists of time that, when Wimbledon FC were about to be moved, the FA and the Football League opposed it, and the FA, totally wrongly, set up a commission, which gave the club permission to move to Milton Keynes. It was famously said that retaining the club in Wimbledon would be
“not in the wider interests of football”.
Well, 25 years later, Wimbledon FC, now in Milton Keynes, gets crowds of about 6,000 and AFC Wimbledon, the new club, gets crowds of about 8,000—so noble Lords can work out what is in the wider interests of football from that.
My concern is about the commitment to the club’s ground. It is important that, unless we can get a long-term commitment for when ownership is going to change, there is no reason why any ground could not be sold off, with a new owner claiming, “Well, I’ve had such and such an offer from a supermarket chain, I can’t possibly turn it down. I’ll build a new ground some time in the future, but I don’t know when”. That is why the word “codified” in Amendment 182 is particularly important. It needs to be nailed down, because the importance of the home ground cannot be overstated in terms of the investment of fans into their football clubs.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am conscious that the noble Baroness, Lady Grey-Thompson, has not been able to be with us today to speak to her Amendments 187A and 187B; I know she has a commitment to chairing some Welsh sports bodies, which I know the Committee will understand and support. I just wanted to draw the Committee’s attention to the two amendments that she tabled, which have been grouped together with the others that we have debated here. As her explanatory statement sets out, they aim to provide a route for the regulator
“for other individuals and groups of people, who may have more inside knowledge than the average fan, to act as whistleblowers and raise any concerns they have about the suitability of an owner or officer”.
It is regrettable that the noble Baroness has not been able to be here to set out the case more fully, but I am sure that noble Lords will pay attention to that and consider those amendments as well.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Moynihan and Lord Markham, in her absence the noble Baroness, Lady Grey-Thompson, and my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton for the amendments in this group. It is absolutely right that clubs have suitable owners, a point made by the noble Baroness, Lady Evans of Bowes Park, among others. That is why a new statutory owners’ and directors’ test is a key element of the regulatory regime.
In response to the point made by the noble Lord, Lord Moynihan, the current tests have proven ineffective. They result in a drawn-out process that still allows unsuitable owners into the system. We have seen numerous instances of unsuitable owners and officers causing harm to clubs and detriment to their fans—that stops now. The definitions ensure that those who are responsible for clubs can be identified and tested. They cannot hide behind complex ownership structures to avoid this, as existing tests currently allow. My noble friend Lord Mann made a strong case for strong tests, and my noble friend Lord Watson of Invergowrie added his own experience of Wimbledon.
The noble Baroness, Lady Evans of Bowes Park, asked a number of questions around the owners’ and directors’ tests. In response, I will say that football authorities can still conduct their owners’ and directors’ tests if they choose to do so, but the regulator’s test is set in statute. Any owner who fails the regulator’s tests will be removed and any prospective owner must pass the regulator’s tests before taking ownership, no matter the results of the league’s tests.
Given the importance of this issue, I welcome the opportunity to clarify the Government’s position further. I start with Amendments 27, 28, and 29 from the noble Lord, Lord Moynihan. The definition of an ultimate owner is an important part of the Bill, and we are confident that we have the right definition that achieves the Bill’s aim. The current drafting takes its lead from the precedent of other Acts that use “influence or control” together, including the Companies Act “persons with significant control” regime and the economic crime Act “beneficial owners” regime. This ensures that an individual who exerts significant influence over a club, more than that of any other owner, can still be identified as the ultimate owner, even if they do not have formal legal control.
Lord Moynihan (Con)
That is an exceptionally helpful and clear answer; now she has given us the Government’s view on what “significant influence” means. Why, then, do the Government not put that in the Bill, rather than simply say that at some stage in the future it will come forward under secondary legislation?
Baroness Twycross (Lab)
The Government’s view is that we do not need to put it in the Bill.
Lord Moynihan (Con)
It is absolutely critical to achieve the clarity that the noble Lords, Lord Mann and Lord Watson, have been talking about, and I agree with them completely. What is needed is clarity for investors. It is absolutely essential that it goes in the Bill; it is critical to the definition of ownership and to the whole regulatory framework that is being placed in a hugely lengthy enabling Bill. The clubs and owners at the EFL and the Premier League need clarity. The Minister has very kindly given the Committee clarity on the definition, as she sees it, of significant influence, so what is there to resist in terms of placing it in the legislation so football clubs can consider it in detail?
Baroness Twycross (Lab)
I am happy to meet with the noble Lord and discuss this further, but in our view this is not required in the Bill but will become clear from the work of the regulator. We think this will be clear in practice.
This is also a term and a part of the Bill that was within the iteration of the Bill laid before Parliament by the previous Government, notwithstanding the noble Lord’s right to object to the Bill that his Government may have laid before Parliament.
Lord Moynihan (Con)
I am sorry to intervene again on that, but that is actually not correct. The one area of the Bill that is actually different from the previous Bill is the requirement on the regulator to have regard to the foreign and trade policy objectives of the Government, which is why we used the example of Newcastle. The Minister has not answered the very clear question: as chairman of the PIF, does the Crown Prince, who exercises control over the PIF, now exercise control over Newcastle, and as a result would be captured by the regulatory requirements of the Bill and not by the Premier League requirements?
Baroness Twycross (Lab)
My Lords, earlier, I said that I was not confused. I am now slightly confused, because noble Lords were very clear earlier in Committee that any issue with the legislation that might lead to UEFA objecting to it was problematic; now, the Government have removed a part of the Bill that was problematic and objected to by UEFA, that risked us being able to compete as a country in leagues within overseas competitions. So, I am slightly confused on that point, but as I said, I am happy to meet the noble Lord.
The other point is that the Companies Act guidance on this is long and complicated. In our view, it has more detail than is appropriate for the Bill, and I assume that the previous Government took the same view.
Lord Moynihan (Con)
Can I clarify this point once and for all? Anything—not just the clause on the Government’s foreign and trade policy objectives—that could put a stop to our entry into European competition or World Cup competition should not appear in the Bill. I have argued consistently that anything that would cause the independent bodies regulating international football—UEFA and FIFA—to stop our clubs competing in international tournaments should be resisted at all cost. UEFA intervened and said that the clause to which we were just referring was a political clause and should be removed from the Bill, and the Prime Minister immediately removed it—but the moment you remove it from the Bill, there are unintended consequences.
Baroness Twycross (Lab)
We cannot pre-empt or direct the regulator, which will make objective decisions on a case-by-case basis. However, I repeat that I am very happy to sit down with the noble Lord to discuss and go through the unintended consequences that he appears to be concerned about. I will move on.
I turn to Amendment 30 tabled by the noble Lord, Lord Markham. When a club applies for a provisional licence, it has to submit a personnel statement setting out its owners, ultimate owners, officers and senior managers. The regulator will then approve the personnel statement, subject to any modifications, once it is satisfied that it is accurate. The club must then publish it, and this must be updated on an ongoing basis to ensure that it stays accurate. This, therefore, already provides clarity to the club, owners and fans as to who the owners, ultimate owners, officers and senior managers are.
A core part of ensuring that clubs have suitable owners and directors is the fitness test, which Amendment 177 seeks to expand. Let me be clear: the individual fitness test criteria for owners—honesty and integrity, and financial soundness—have been carefully designed. They are based on precedent and are specifically relevant to whether someone is suitable to be an owner of a football club. This amendment seeks for an owner’s competence to be assessed too. We do not believe that this would be relevant in the regulator’s assessment of someone’s fitness to be solely an owner. Some owners are hands off, and so their competence is not strictly relevant. If an owner also meets the definition of an officer, the regulator will be able to test them as both an officer and an owner. Therefore, as an officer, their competence would be assessed. However, an owner simply having a financial interest in the club does not mean that they make decisions that an officer would about how it is run on a day-to-day basis.
I turn to Amendments 181 and 183 in the name of my noble friend Lady Taylor of Bolton on the information that must be provided as part of a prospective owner’s application. I agree with the intention of the amendments —that the regulator will need information about an individual’s fitness in order to make an assessment—which is why Clause 28(2) already does that. It gives the regulator the ability to require information from an individual about their fitness. In fact, the Bill goes even further: it recognises that information about an individual’s fitness may come from, or be corroborated by, another source. That is why the Bill establishes information-sharing gateways with organisations such as the National Crime Agency. Specifically on Amendment 183, there is a risk that this amendment incentivises applicants to submit large volumes of unrequested information to the regulator, which could make it more difficult for the regulator to process applications efficiently.
The Government recognise and support the intent behind Amendments 182 and 184 in the name of my noble friend Lord Bassam of Brighton: to ensure that football continues to be played in a club’s home ground and that owners are committed to this. However, in many instances, neither clubs nor club owners own their home grounds. This amendment would therefore place a requirement on prospective owners to commit to something that may not be in their control. The Bill already has a number of comprehensive home ground protections to safeguard against inappropriate sales or ill thought-out relocations, including duties on the club itself about selling the club’s home ground or relocating from it—an issue that my noble friend highlighted effectively today. Under the current proposals in the Bill, the regulator can hold senior managers to account if they are responsible for breaching these duties.
Amendment 186 from the noble Lord, Lord Markham, and Amendment 187 from my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton concern the timelines and deadlines for testing prospective owners and officers. I absolutely agree and understand that timely decision-making about the suitability of new owners and officers is highly important. Without deadlines, we have seen league determinations drag on, unable to reach a decision and leaving clubs in limbo. We believe it is important that the regulator has the time to conduct tests with an appropriate level of scrutiny, but it also needs to make decisions in an appropriate time- frame to ensure that clubs are not unnecessarily impacted in what is a fast-paced industry—I think all noble Lords can agree on that. That is why the regulator will be bound by a statutory timeframe, as well as by its objectives, general duties and regulatory principles.
We are confident that, with these existing provisions, the regulator will already conduct tests as quickly as reasonably practicable. However, putting a specific deadline in the Bill would restrict the flexibility for this deadline to be amended in future. That is why we have proposed that the determination period, including the maximum amount of time by which it can be extended, will be set by the Secretary of State in secondary legislation. This will ensure that the regulator is bound by it but that there is still flexibility for the deadline to be amended in future. I hope noble Lords agree that future-proofing is a key consideration for this and any other legislation.
In the spirit of the debate, although the noble Baroness, Lady Grey-Thompson, is not in her place, I will speak briefly to Amendments 187A and 187B in her name. They concern whistleblowing on the suitability of an owner or officer, as the noble Lord, Lord Parkinson, highlighted. I share the noble Baroness’s desire to ensure that concerned parties can blow the whistle on unsuitable owners or officers. However, I assure noble Lords that there is no need to amend the Bill to allow this. It is already open to anyone, including all those listed in Amendment 187A, to share relevant information with the regulator. Therefore, we do not see the need to create a separate obligation in the Bill for individuals to report information to the regulator.
The noble Baroness, Lady Evans of Bowes Park, raised a number of pertinent issues covered by the subjects raised in Amendments 188 and 189 in the name of the noble Lord, Lord Markham. They seek to ensure that the regulator can test an incumbent owner or officer on their fitness only if it is in possession of information that gives it concern about whether the individual would meet the applicable fitness criteria. The Government very much agree with the intent behind these amendments, so I would like to reassure the noble Lord that the intent of these amendments is already delivered in the current drafting of the Bill. Clauses 34(1) and 35(1) give the regulator the powers to test incumbent owners or officers on their fitness if the regulator
“is in possession of information that gives it grounds for concern about whether the individual meets those criteria”.
If the regulator is not in possession of such information, it will not be able to test an incumbent owner or officer. The definition of an incumbent is clearly set out in Clauses 34(3) and 35(2). For the reasons I have set out, I will be grateful if the noble Lords do not press their amendments.
Baroness Evans of Bowes Park (Con)
I am very grateful for the Minister’s very clear answer on the Premier League and the regulator’s suitability test clashing. She said that the regulator is statutory and therefore would override the Premier League saying that it wanted someone the IFR did not. It may be a very unusual situation, but does it therefore follow that, if the Premier League decides through its test that an owner is unsuitable but the IFR decides that they are, the IFR can, in effect, impose an owner on a club? The Minister answered half of my question, and I am very interested to hear about the other half. If she cannot answer now, can she write to me?
Lord Hayward (Con)
Before the Minister sits down, perhaps I could make a comment. The Minister has been very helpful in offering meetings to discuss a whole range of issues that arise, which we greatly appreciate, and to write beforehand. On one thing which she touched on—I will obviously have to read Hansard very carefully to check, because she moved on fairly quickly—was why companies legislation was not acceptable for the Bill. I just register that I would like when we meet to discuss this more fully. She referred to Companies Act legislation being very lengthy, but I am not clear on why, if it is acceptable in general Companies Act legislation, it is not acceptable here. We can discuss that, but I just wanted to register it at this point so that when we meet, it is a subject for conversation.
Baroness Twycross (Lab)
I am happy to go into more detail on that point when I meet the noble Lord and I will ask my officials to contact him to set up a meeting.
Lord Moynihan (Con)
I thank everybody who has participated on this set of amendments. I heard a somewhat surprising answer from the Minister just now and I hope that it might be clarified. My noble friend Lady Evans put the question to the Committee as to which regulator takes precedence. My clear understanding of this Bill is that, through the licence procedure, the regulator we are setting up will take precedence over anything that the Premier League may choose to do. Indeed, that would be part of the contract of the licence issued by the proposed regulator, and that would take priority over, for example, the suitability and fitness tests, the degree of political interference or whatever the league might wish to do on the licensing of a club. However, I heard the Minister perhaps giving a somewhat different answer and, again, I would be grateful for clarification. A meeting is gratefully accepted and I look forward to meeting with the Minister, but, more importantly, these specific points need to be covered in writing to all members of the Committee, because I think there is wider interest than among just those whom she has kindly and graciously offered to meet.
I am sorry she did not respond to my noble friend Lord Parkinson’s question about Qatar. For the record, I am a great believer that sport is a catalyst for change. You know, when you win the right to host the World Cup, that you are shining a torch into the inner recesses of that country, which few other opportunities do. It means the world’s press and the football fans of the world are very conscious of what is happening in your country.
There is no doubt that hosting the World Cup in Qatar had significant influence on important social and employment changes that took place in that country. The fact that the ILO had an office there, worked there beforehand with the Government, was pushing for changes and continues to be there, is a great example. It is the only country in the Middle East that has that office. It is a great example of the power of sport for good and the power of sport for change. So I am sorry the Minister did not respond to that point, because I think it is an exceptionally important one.
I regret to say that I have not been persuaded by the Minister’s defence of retaining influence on the face of the legislation and yet not defining it, saying that it is for secondary legislation. It is one of many, many things that are for secondary legislation. For example, once the regulator identifies the owners and ultimate owners at the stage of the licence application, the regulator can, as the Minister said, make use of its powers under Clause 34 to determine the suitability of those owners. That includes whether the owner meets the individual fitness criteria and whether they have a source of wealth connected to serious criminal conduct. Serious criminal conduct is an extremely important concept that needs defining. If we look further towards the back of the Bill, it comes under “minor definitions” and will be for the Secretary of State to come forward with secondary legislation to define what he means by serious criminal conduct.
Lord Markham
“(5A) The IFR must give a notice to all persons it considers to be an officer of a club for the purposes of this section informing them that they are considered as officers under this section.”Member’s explanatory statement
This amendment requires the Regulator to inform every individual that it considers an officer of a club.
Lord Markham (Con)
This looks at the tests around the officers and I start by saying that we are all united in the Chamber in wanting good management in place, so the officer tests involved here, I think we would all agree, are well intentioned, because it all comes down to good managers. However, at the same time, I think we are quite aware that a lot of the things we are talking about here are beyond the directors and Companies Act tests that are in place. We are extending to a new category of officer, or senior manager, and we are putting new responsibilities on them. The amendment tries to be quite simple. First, the Bill is not clear who an officer is. It talks about having one or more club affairs that they are responsible for. So, first, we are trying to get clarity by letting those people know who they are.
That is important because we are talking about having some pretty serious and quite intrusive checks on them. Again, those are well intentioned—there are amendments coming up later in Committee where we will go into what those checks should be—but they are quite intrusive; they are looking at your criminal record and whether you have been involved in any court or tribunal. Maybe they are all very good tests, but I think people should be aware of them, because they might not be certain that they are actually an officer of a club. So, again, this is making sure that they are aware of it before they take something on.
Thirdly, and probably most importantly, not only are we giving them director-style responsibilities but we are potentially putting even wider-reaching penalties on them, of 10% of club revenue or £75,000, which many people would say is quite a deterrent. I am not talking about the big clubs. A lot of this refers to clubs that are pretty small, maybe run by a handful of people and for which a £75,000 penalty is pretty big. At the very least, they need to be aware that they are taking on those sorts of responsibilities and that should be outlined. That is what Amendment 31 tries to do.
Regarding Amendment 179, again, we talk about one of the tests being financial soundness. I think that we would all agree that, around an owner, that is right in terms of their financial soundness. I would like an officer or senior manager of a club to be financially sound too, just for their own good sake, but that does not necessarily make them a good or bad manager. They are not personally putting money into that club. Therefore, whether or not they have run up a lot of debts is not relevant to their ability to carry out the duties that we would want them to undertake.
Many of the 116 clubs are quite a bit smaller and often depend on people working on a voluntary basis. Those people suddenly having all their finances investigated and it being determined whether they are deemed sound or not, when we are not asking them necessarily to contribute any money to those clubs, is not proportionate. It might deter people who could probably be very helpful in the running of that club. I beg to move.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Markham, for these amendments. I agree that it is important for transparency and accountability to fans and officers that it is clear who a club’s officers and senior managers are. That is why this is already an integral part of the Bill. When a club applies for a provisional licence, it must submit a personnel statement. In that personnel statement, the club must set out its officers and senior managers, which the regulator will approve once it is satisfied that it is accurate. The club must then publish it and keep it updated. Therefore, this already provides clarity to clubs, officers and fans as to who has a role in the running of their club.
On Amendment 179, it is essential that clubs have suitable officers. The regulator has a key role to play in this. It is officers who exercise a significant level of direct control over the day-to-day operations of the club. These can include financial decision-making. That is why it is vital that the regulator ensures that these decision-makers are financially sound. It includes assessing the personal finances of anybody where they have held a position of responsibility. This will help to identify any concerns or irregularities that would impact on their ability to act as a suitable custodian of a football club. For example, I am sure that noble Lords will agree that if a club’s chief financial officer has bankrupted companies in the past, that is a relevant fact for the regulator to consider. Ultimately, these tests should help to prevent fans suffering the consequences of poor leadership and financial mismanagement, as has often been the case to date.
I hope that such clarity gives reassurance to noble Lords on these points. For the reasons I have set out, I would be grateful if the noble Lord did not press his amendments.
Lord Markham (Con)
I thank the Minister for her replies. While we understand financial soundness in the context of a chief financial officer, in terms of the senior managers, as referred to in the Bill, we are talking about non-financial duties. I think that most people who run a club would say that the chief operating officer or the person responsible for the actual operations of the ground on the day is a key person. I am sure that they would be drawn into this definition and so would have all their finances investigated. Do not get me wrong: we want people as far as possible to be in a financially good position but, as I mentioned before, their personal finances are not necessarily relevant to whether they can be a good operating officer who can run the club very well on match days, with all the decisions involved with that. My fear is that we will deter people who are sometimes the backbone of the running of a lot of the smaller clubs from wanting to take on that sort of role because they know such intrusion will take place.
Those are the things that I am talking about. I absolutely get it when it is a financial director—the Companies Act and directors’ responsibilities cover that for finance directors. People who are not finance directors but who may be very involved in the operations are where the concern lies. I hope that we can cover this in more detail later on, but at this point I beg leave to withdraw my amendment.
Baroness Taylor of Bolton
Member's explanatory statement
This amendment is a consequential amendment following on from the above
Lord Parkinson of Whitley Bay (Con)
I think anyone in Committee anyone can move an amendment, so I am very happy to move Amendment 33. I am curious as to why the noble Baroness has not moved it and perhaps she can set out why, as it is a sensible one and I was intending to speak in support of it.
Amendments 32 and 33 sought to ensure that the chief executive of the new independent football regulator could be appointed by the whole board and not just by the chairman of the board. That would seem a sensible improvement in terms of collective decision-making and an additional safety valve to ensure that the appointment of the chief executive was not a politicised move. I know that a number of noble Lords have significant board experience and may have views on the merits of this.
I was also keen to come in because the amendment allows us to ask the Minister for an update on the appointments, because we are scrutinising this Bill not knowing who the chairman of the new regulator will be or the board. I understand that the deciding panel met to sift applications for the non-executive roles on Monday—I do not know whether she can confirm that—and that people who have applied have been asked to hold the 17, 19 and 20 December for interviews. Can she say now or in writing whether that is still the timetable on which the Government are operating? That would be helpful, because when we took the Online Safety Bill through, we knew who held the regulatory roles at Ofcom and could have some dialogue with them. Anything more that the Minister can say, now or in writing, about the timetable by which these important figures are appointed might aid the discussions that we are able to have in parallel to the scrutiny of the Bill about the people who will be taking forward these important roles.
I beg to move Amendment 33, so that the noble Baroness can have time to respond. I do not know whether the noble Baroness, Lady Taylor, wanted to say why she was no longer in favour.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Parkinson, for the opportunity to respond to the amendment. The Government recognise the intent behind it, which is to ensure that the decision on the appointment of the chief executive of the regulator has the appropriate input and scrutiny. I reassure my noble friends and others that the Bill already suitably achieves this.
As per paragraph 5 of Schedule 2, the chair must consult the other non-executive members of the board, as well as the Secretary of State, before appointing the chief executive. The chief executive will have the responsibility of appointing a portion of the board—namely, the executive members. For this reason, I am sure noble Lords can see that it would be circular and impractical for the entire board to collectively appoint the chief executive.
I am happy to discuss this at greater length but I hope this reassures the noble Lord. I would therefore be grateful if he could withdraw the amendment.
Lord Parkinson of Whitley Bay (Con)
Is the Minister able to say any more on the timing of appointments? If not, I would be very happy for her to write. The processes to appoint the chairman and the board members began before the election. As I understand it, that process has continued but the Government extended the window of applications for people applying to be the chairman. That closed. I believe the sift took place on Monday, and people are being asked to hold dates next week and beyond for interview. Is the intention to try to make an announcement while the Bill is before your Lordships? Might we know who the new chairman and board members are, or has the timeline slipped?
Baroness Twycross (Lab)
Whether we get the result while your Lordships are debating the Bill is a moot point, given the length of time we are taking to get through Committee. The noble Lord is correct, though: the timetable for the interviews is the same, and they are intended to take place on 17, 19 and 20 December.
Lord Parkinson of Whitley Bay (Con)
In which case, I beg leave to withdraw the amendment.
Baroness Taylor of Bolton
Member’s explanatory statement
This amendment creates an objective test for whether a proposed IFR director has a conflict of interest, rather than leaving it for the person appointing that director to determine whether the director being appointed has a conflict of interest.
Baroness Taylor of Bolton (Lab)
My Lords, this amendment tries to probe what might happen and what protections there may be in cases of conflicts of interest in respect of members of either the board or the expert panel. My noble friend Lord Bassam and I have tried to be somewhat specific in our amendments about where conflicts of interest might apply. We have talked about consultants and organisations that might derive half of their income from one of the organisations that might be involved in a competition.
I hope that that can lead the Minister to talk about some of the difficulties that might arise if we do not get the right people in these positions working with the regulator. It is extremely important that anybody in this capacity is independent. We do not expect them not to have any interest in football but we do expect them not to have any financial interest that might at some stage create a conflict. If anybody is employed by a club or an organisation that is dependent on money from one of the leagues then difficulties could arise. Given the framework that has been established, which could be very robust and could help the regulator very clearly, we need to make sure that there are not conflicts of interest that could cut across this new regime.
Lord Addington (LD)
My Lords, these amendments seem quite reasonable. It would be interesting to see whether conflicts of interest at this level are addressed. I hope the Minister has a nice succinct answer that means we can all go away and move on to the next group. Having said that, I shall sit down and allow her to give it.
Lord Parkinson of Whitley Bay (Con)
My Lords, again, there is good sense behind the amendments that the noble Lord and the noble Baroness have tabled in this group. They address a critical issue about ensuring transparency and fairness in the governance of our beloved game.
Amendment 34 seeks to introduce an objective test to determine whether a proposed director of the new independent football regulator has a conflict of interest. Under the previous framework, the decision was left in the hands of the appointing party, leaving the process vulnerable to subjective interpretations and, potentially, political interference or favouritism, which I am sure we all want to strive to avoid. By introducing an objective test, the amendment would remove that ambiguity and ensure that potential directors are rigorously vetted before they take office. That is an important suggestion that would uphold the values of fairness and accountability in football.
Amendment 35 would take that further by requiring all directors of the independent football regulator to not only undergo this rigorous vetting but publicly declare any potential conflicts of interest. This would be a vital step in increasing transparency and holding accountable those who wield the new powers the Bill brings about. We on these Benches all agree that the integrity of the sport must be upheld through adherence to ethical standards and think that the amendments are an important step in that direction. The chief executive officer of the independent football regulator will be given the task of maintaining a register of these declared interests, ensuring full transparency and accountability in football governance.
Similarly, Amendments 43 and 44 would extend this principle to members of the expert panel, ensuring that they too declare their interests. Again, the independent football regulator’s chief executive will be responsible for maintaining a register of interest for the expert panel, providing an additional layer of transparency. By implementing these measures, we would reinforce the importance of ethical conduct and accountability across the regulator’s board and its expert panel, both of which will be key to the fair and transparent governance of football under the new regulatory regime.
Finally, Amendment 331, which would expand the nature and definition of a conflict to include a situation where the perception of a conflict may arise, also has some merit. Perception is often just as important as reality in maintaining trust. By introducing non-exhaustive examples, the amendment would ensure that we address conflicts of interest in a comprehensive and forward-thinking manner.
I am grateful to the noble Baroness and the noble Lord for tabling the amendments, which represent a robust and progressive framework for managing conflicts of interest in the governance of the sport. They would introduce clear, objective tests, require declarations of interest and ensure transparency through the form of the public registers, all of which are important. I look forward to hearing what the Minister has to say.
Baroness Twycross (Lab)
I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton for tabling these amendments. The Government acknowledge the intent behind them, which is to fortify the Bill’s provisions for dealing with conflicts of interest. It is essential that the regulator can deliver its regime, free from undue influence and vested interests.
I reassure my noble friends that the Bill already sufficiently makes certain that the regulator will be free from conflicts of interest. This is supported by public law principles and non-legislative measures that are already in place. As with all public bodies, members of the regulator’s board will be subject to the Cabinet Office’s code of conduct for board members of public bodies, which sets out clear requirements regarding the appropriate disclosure and management of conflicts of interest. It includes a responsibility on board members to openly and honestly declare any interests that could give rise to actual or perceived conflicts. Any breach of these requirements would be a breach of the member’s terms of appointment.
The Bill also places an additional onus on the appointer to check for conflicts that have not otherwise been declared, both at the point of making the appointment and on an ongoing basis from time to time. In addition, paragraph 16 of Schedule 2 requires members of the board to declare their interests in any matters which fall for consideration by the board, and for this declaration to be recorded.
On Amendment 331 in the name of my noble friend Lord Bassam, the Government are confident that the existing definition of conflict of interest is appropriate and will capture the correct issues. The expansion of the definition proposed by my noble friend would also see perceived conflicts explicitly forbidden. We believe this is disproportionate and goes beyond the normal interpretation of conflict of interest. For example, almost all noble Lords here support a football club. In an extreme interpretation, that alone could be a perceived conflict. All in all, we are confident that the Bill, supplemented by public law principles and non-legislative measures already in place, provides comprehensive safeguards to identify and manage conflicts of interest appropriately. For these reasons, I am unable to accept my noble friends’ amendments and ask my noble friend to withdraw her amendment.
Baroness Taylor of Bolton (Lab)
I am grateful to the Minister for emphasising that the potential for a conflict of interest is there and potentially quite significant. I accept that we all have an interest. If an interest in football was a perceived conflict then we would all be in great difficulty, but I think it is important to emphasise that we are talking about potential financial conflicts of interest. I am grateful to the Minister for putting that on the record. I beg leave to withdraw the amendment.
“6A No person may be appointed to the Board if that person currently has any broadcast or media interests or any role in a television or media broadcast which relates to football.”Member's explanatory statement
This amendment prohibits any person who currently has any interests or roles in a television or media broadcast that relates to football from being appointed to the Board.
Lord Parkinson of Whitley Bay (Con)
My Lords, I will also speak to my Amendment 40. This flows from the discussion we have just had about financial conflicts of interest but looks at the broader issues of a person who has a current broadcast or media interest, or any role in a television or media broadcast relating to football, being appointed to the board of the independent football regulator. It seeks to prevent conflicts of interest relating to those who take part in television, radio and podcasts that are linked to football.
The concern here is that any person with that sort of involvement in such media or broadcasts would have, by the very way that they carry it out, publicly held opinions about the game that they would be expressing frequently and sometimes in a live environment where questions could be put to them. We would not want to see people with vested interests that might conflict with the proportionate and reasonable exercise of the regulator’s functions put in a position where their thinking about how they carry out their duty is scrutinised in that forum and in that way.
As my noble friend Lord Markham pointed out on a previous group, this is a new regulator that will have enormous power to determine the specifics of the rules and regulations that football clubs will have to abide by. That includes the levy rules set out in Clause 53, which states that the amount the regulator will be able to charge clubs is to be determined in rules established by the regulator. Again, the details are not set out in the Bill but are to follow. There are some limits on what that levy could be, but the exact amount that will be charged and how that levy will be scaled to take account of the different financial situations of clubs are to be established and amended by the future board of the new regulator.
So the level of intrusion into the affairs of clubs is not entirely settled by this Bill. It will be decided by the people who are appointed to run and oversee this regulator. That is why we will be interested to know who these people are in due course. We wish all those who have applied to take on these important roles good luck in their efforts to be the inaugural holders of their posts. However, it is very clear that the board and, specifically, its chief executive will in very large part set the direction of the regulator, its tone and the means by which it goes about its work.
That is why it is important that we make sure that nobody can be appointed to the board, particularly in the first cohort, who has any conflicts of interest or who might be swayed once in office. Of course, in doing that we do not want to preclude anybody who has experience of the operation of football clubs or great knowledge of the game being appointed to the board. Those sorts of skill sets will clearly be needed. If we have people who have been involved in the running of football clubs, they may be quite powerful and important people to speak out against excessive regulation and mission creep. I hope that through this amendment we can have a debate about the public-facing elements of their role and the way they go about it.
Baroness Taylor of Bolton (Lab)
I am not sure the noble Lord has made his case for why somebody who has an interest or a role in television should not be a member of the board. I am sure that there are commentators who may say things from time to time with which the noble Lord may disagree, but that is irrelevant. We are talking about people who have a degree of expertise about the game, and I cannot see why somebody whose job it is to comment on the game of football cannot have a role in this.
Lord Parkinson of Whitley Bay (Con)
I am happy to say a bit more. This is a probing amendment, and I am keen to hear the views of others. My concern is about how public facing a figure this new regulator is to be. I am mindful of comparisons with debates on legislation that I have taken through. We benefited in the scrutiny of the work of Ofcom and the new online safety regulatory regime from having the noble Lord, Lord Grade of Yarmouth, here in your Lordships’ House. He attended and sat through all our debates in Committee and on Report but did not speak because he felt that it was important that he heard the views of Parliament but did not actively participate in the debate about the regulatory regime that Ofcom would be following once Parliament had given it its instructions. The self-denying ordinance that he applied and the rules of debate in your Lordships’ House made it easier for him than it might have been had he been a commentator on television or frequently appearing on television and in media interviews and being asked about the work.
I am sure we want to see the regulator held accountable publicly as well as to Parliament, and I look forward to our debates on later groups about how we ensure greater accountability to Parliament for the work that it does. I am sure that fans will have strong views about the work of the regulator, just as they do about how referees conduct their duties during matches. However, I wonder whether somebody who is taking on this role, potentially one with a large and unlimited salary, should be combining that with ongoing media interests in which they have a commercial interest in adding to the drama and to public debate about the game. I will be grateful for the Committee’s views on that matter.
Lord Berkeley of Knighton (CB)
I imagine that this could be a rather tricky area, for the reasons we have just heard. I can see that someone who has great expertise —an ex-international, for example—would be useful on a board and may be asked occasionally to comment, which would not mean a great deal of compensation or money. I am sure the noble Lord does not want to see those sorts of people excluded.
Lord Addington (LD)
My Lords, Amendment 36 seems to be taking a sledgehammer to a nut. If you have some expertise and you are commentating, you may well be qualified to be in that role. There is a balance to be struck here. The Minister might ask, “What would be an unacceptable position within the media that would exclude you from this role?” If you are a senior executive with Sky, in the current situation, that would exclude you, but what if you happen to be a commentator, say, for a local paper dealing with your own local team, and possibly going on further? Would that exclude you? I would be interested to know if the Minister or the Government have an opinion on this, because there is clearly a balance here, as the noble Lord has just pointed out.
Lord Markham (Con)
This is exactly why we want to have these sorts of debates in Committee. Funnily enough, I put my name to this amendment. As noble Lords know, when I talk about media interests, I do so as a former director of a pay TV company. I was thinking about media interests less in relation to broadcasting and more that—the noble Lord, Lord Birt, will know this—when you are making sports media rights bids, all information is good information. You would then be party to a lot of privileged, and maybe even inside, information.
I agree that there is a balance to be struck, because these are exactly the sort of people you want involved in the regulator as well; but if they have a current role that involves them bidding for media sports rights, that would probably rule them offside—if you will excuse the pun. Again, that is exactly why we bring issues such as this to Committee to discuss.
Lord Birt (CB)
There is a potential conflict on both sides. There are many different roles in media but obviously, it is a single role that might be filled here. I would feel very uncomfortable if someone were sitting in both camps, were I to be in the decision-making capacity ever again in a broadcast organisation.
Lord Londesborough (CB)
My Lords, I shall address Amendment 40 in the names of the noble Lords, Lord Parkinson and Lord Markham.
Before I do, I have remained silent for the last few days, taking in what has been said. I have a problem with Amendment 40, which I will come on to in a moment, but I want to reflect on the role of the regulator and the CEO. We are now on day three in Committee. It is important that both sides—I am trying, as a Cross-Bencher, to act as an honest broker—work productively and do not lose sight of what the majority of us want, which is to establish a new regulator with a clearly defined remit that does not stray into areas of overregulation or overreach.
That is not to say that issues such as environmental sustainability, CSR, women’s football or player welfare are not important; they are, but if we do not focus tightly on the core responsibilities of the regulator, I fear we are going to end up with a very complicated Bill that lacks pragmatism and leaves the regulator, whose salary I will come on to in a moment, in a pretty unworkable and unpopular role, at increasing expense to the football clubs in terms of the licence fees. I am thinking here particularly of the clubs in tiers 3, 4 and 5.
I would like to bring back a bit of financial perspective to this debate. Remember, financial sustainability is really what brought us here. Yes, there is fans’ engagement, but we have rather lost sight of that. The Premier League is the richest and most-watched league in the world, a fantastic creator of jobs and a multibillion-pound generator of exports. However, we have warning lights flashing on our dashboard that we ignore at our peril.
Total debt across the Premier League is fast approaching £4 billion—not the £2 billion that one of your Lordships mentioned on Monday—and that figure comes from the University of Liverpool. Losses across the Premier League are running at close to £1 billion per annum, per season. As we have heard, typically, 16 to 17 of its clubs generate losses, while in the Championship 80% of clubs have negative equity, and not one of those clubs generates an operating profit outside of player trading.
Having said that, I appreciate that we need to strike a balance and not interfere unnecessarily. I have listened carefully, this week and last week, to the noble Baroness, Lady Brady, among others, when she spoke about the danger of overreach and the need to be careful that we do not kill off the ambition, aspiration and calculated risk-taking of clubs—in other words, that we do not kill off the excitement and jeopardy of the game, which of course involves financial risk. That is a really important point.
Taking that into consideration, we need to be disciplined and define the parameters of the IFR with an eye on realism, pragmatism and effectiveness. The Bill runs to 120 pages, with 99 pages of Explanatory Notes. We have 340 amendments, which, thankfully, are reducing—and I think we are still on page 4. That is not a great advert for productivity.
Anyway, that is enough background from me. I return to Amendment 40. We are going to need a CEO of the highest calibre for the regulator, and that CEO is going to have to show great leadership skills and profound and relevant domain experience. Capping his or her salary at £172,000 per annum will simply make the recruitment of a high-calibre CEO that much more difficult. I appreciate that we need to control costs, but that is not the area in which to do it.
Lord Hayward (Con)
I echo the comments of the noble Lord, Lord Birt, about a conflict of interest. I take the point made by the noble Lord, Lord Addington: making small or one-off contributions because you have been asked to, given that you hold that particular role, is very different from having a specific and clear role in the media. There would be a conflict of interest if you held both positions and were contributing on a regular basis. I cannot see that it would be perceived by the average fan as acceptable to have someone who held both positions.
My noble friend Lord Parkinson has included in his amendment the word “currently”. I assume that he would accept someone giving up one role specifically to take up another—I think that is what he is referring to—but I certainly take the view that any substantial media interest would be utterly unacceptable for someone in these circumstances. Millions of football fans would take the view that they were pro a particular point of view at any given point.
I share the view of the noble Lord, Lord Londesborough, on salaries, particularly because it is always dangerous to put a salary in legislation. What happens if you have inflation? First, you have to change the primary legislation, and there is no indication of inflation adjustment in the amendment.
Those are small observations, but I agree with the noble Lord, Lord Birt, and the direction of my noble friend Lord Parkinson’s amendment—that there should not be a prima facie case of conflict of interest in these circumstances.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Parkinson, for tabling these amendments and thank all noble Lords who have contributed to what I thought was a very thoughtful discussion. As with the previous discussion on this matter, the Government would like to reassure noble Lords that the Bill already sufficiently makes certain that the regulator will be free from conflicts of interest, irrespective of sector. This is supported by public law principles and non-legislative measures already in place. As I said previously, the Bill requires members of the board to declare their interests, and this declaration is to be recorded.
Taking Amendment 36 first, we are confident that there are comprehensive safeguards to root out and manage conflicts of interest appropriately. For example, a board member would not be permitted to take part in any discussion relating to a matter if they had a significant direct or indirect interest in it. Failure to declare an interest would also be a breach of the board member’s terms of appointment. In response to noble Lords who asked me for a definitive view, my view is that beyond these comprehensive existing provisions we do not think it is necessary or appropriate arbitrarily to rule out specific sectors or sector interests such as television, broadcast or media.
On Amendment 40, we acknowledge the importance of the regulator offering value for money. It will be required to lay its annual accounts before Parliament and the Comptroller and Auditor-General for scrutiny. The regulator will also be subject to pay remit guidance in the same way central government departments are to ensure pay rises are justifiable. This will ensure value for money for taxpayers. However, having a maximum salary in legislation risks the regulator being unable to attract the right talent, potentially leaving it without the skills and expertise it needs to deliver its objectives—a point the noble Lord, Lord Londesborough, made very succinctly. We agree with the point around the need to control costs. A fixed salary in legislation is also inflexible to inflation and market changes, and it could become rapidly outdated, as the noble Lord, Lord Hayward, pointed out. For these reasons, I am unable to accept the noble Lord’s amendments and ask that he withdraw or not press them.
Lord Parkinson of Whitley Bay (Con)
I am very grateful to the noble Baroness for that response and to noble Lords who took part in the debate. This is a strength of the Committee stage—I can see the furrowed brows with the opinions being weighed up and I am grateful to noble Lords who have engaged with the probing amendment I tabled in this way. I hope, if nothing else, it has been useful to the Secretary of State who, as we know from the Minister’s responses in the previous group, is soon to make her decision about who ought to chair this new regulator and who should be on the board. I hope that the points that noble Lords across the Committee have made will be taken back and inform her deliberations.
I take on board what the noble Baroness said and indeed the point that the noble Lord, Lord Londesborough, raised about the need to make sure we are paying enough to attract the calibre of person that is going to rise to the task ahead of them. On pay and salary, I am grateful as well to the Minister for what she said and was struck particularly by what she said about pay restraint. I know from my ministerial experience that, when public bodies want to push for pay rises above what would be normal in the private sector or across the economy more generally, then that comes to Ministers. If there is that sort of oversight and check and balance in the system to ensure that the regulator’s salary costs are not spiralling as quickly as we feared, then that would be a good thing. With gratitude to the Minister and to all who took part, I beg leave to withdraw my amendment.
“6A “(1) Any person appointed to the Board must agree to appear before any relevant Parliamentary Committee.(2) A relevant Parliamentary Committee is any Committee of the House of Commons, or House of Lords, or of both Houses, which has notified the Secretary of State, in writing, that they have assumed the function of scrutiny of football regulation.(3) Any person appointed to the Board may not take their position unless they have been approved by a resolution of each relevant Parliamentary Committee.”
Lord Parkinson of Whitley Bay (Con)
My Lords, as well as moving my Amendment 37, I will speak to my further amendments in this group, Amendments 38 and 123. In the letter which she kindly sent to the Committee earlier today, the Minister displayed her familiarity with and affinity for Erskine May and, even if I did not have unbridled delight as to the contents of the letter, I was pleased to see this reference to one of our great constitutional experts and authorities on legislative procedure.
In that spirit, I would like to quote another revered expert on constitution matters, the great AV Dicey, who expounded that:
“The principle of Parliamentary Sovereignty means neither more nor less than this, namely, that Parliament … has, under the English constitution, the right to make or unmake any law whatever; and further, that no person or body is recognised by the law of England as having a right to override or set aside the legislation of Parliament”.
In more recent times, the Constitution Unit at University College London has set out particularly relevant arguments for the importance of parliamentary accountability. In its 2023 briefing Parliamentary Scrutiny: What is it and why does it matter? the unit rightly said that:
“Government accountability to parliament is central to our democratic system”.
I think this all demonstrates that the right of Parliament to oversee and hold public bodies to account must be upheld dearly as well.
This new regulator, which we are bringing about through this Bill, will at the start of its existence have recourse to public funds. It is crucial that any body which has funding streams derived from the taxpayer at any point should be accountable to and scrutinised by Parliament. That is what Amendment 123 requires.
Amendment 37 seeks to ensure that any person who is appointed to the board of the regulator must be approved by a parliamentary committee, and Amendment 38 requires the chief executive to appear before a parliamentary committee at least once a year if they have been so invited. This ensures that anyone who is going to be holding any formal position in this new regulator can be scrutinised by parliamentarians before they can be appointed.
Following on from the debates in the two groups that we have just had about conflicts of interest, it may be that rather than setting it out in the Bill, as the probing amendments sought to do, the parliamentary oversight that we could bring about this way might be able to give us the reassurances we seek that the people who are given these awesome new responsibilities are doing so without conflicts of interest or the pressures on them that we wish to resist. I beg to move.
Baroness Brady (Con)
My Lords, I support this group of amendments, which I think are very helpful because they will help to tease out one of the real challenges at the heart of this Bill—how to achieve the right balance of proper oversight with the absolute necessity of delivering regulatory independence. We should, of course, acknowledge the natural instinct to ensure democratic accountability of any new regulator. Given the cultural and economic importance of football to our nation, Parliament should rightly maintain some oversight of how this new body exercises its considerable powers.
The question “Who regulates the regulator?” is beginning to be asked more and more often, not least in relation to the many clear failings of UK regulators, and rightly so. However, I believe we must also tread with real care here. Football’s international governing bodies, UEFA and FIFA, have clear provisions against state interference in the game. While their primary concern has historically been direct government control of national associations, they could well choose to interpret these provisions more broadly. We have already seen their willingness to act even in response to the mere creation of this regulator, and we have seen the Government’s instant removal of a clause in this Bill relating to foreign and trade policy. This tension means we must achieve a delicate balancing act: too little accountability and we clearly risk regulatory overreach; too much involvement of the state and our democratic institutions and we risk creating leverage that could be used against English football’s interest.
I have already spoken about some of the risks here. If Select Committee oversight and IFR responsibility to both bodies was seen as political interference, it could feasibly create that leverage we have warned about whereby clubs participating in European competition, or even England’s tournament participation, is put in jeopardy. We have already seen concerning signs of how these tensions might play out. In just a short time since this Bill’s introduction, we have witnessed numerous attempts to expand the regulator’s scope from environmental sustainability to ticketing prices and kick-off times to corporate responsibility requirements. I am concerned about how this pressure might intensify with direct parliamentary oversight.
Members of the other place, responding quite correctly to constituents’ concerns, might press the regulator to intervene in broadcast arrangements or ticket allocations, or elements that go to the heart of competition tools that should be reserved for the leagues. Select Committees could demand action on issues far beyond the regulator’s core financial sustainability purpose. Each intervention, however well intentioned, risks creating exactly the kind of state interference that could threaten English football’s international position.
We have seen this pattern in other sectors: regulatory mission creep that is driven by political pressure and external events. Football’s unique international framework makes this dynamic particularly dangerous. Every expansion of scope and political intervention creates new vulnerability to UEFA and FIFA leverage. I would be grateful if the Minister, when she responds, could explain how the Government intend to manage these competing demands. How will they maintain appropriate accountability while preventing political pressure from expanding the regulator’s remit? How will they ensure that parliamentary oversight does not become a backdoor for state intervention in football’s affairs? What safeguards will protect against the regulator being drawn into issues that should remain matters for the football authorities only?
Finally, I would be grateful if the Minister could confirm whether this issue has been directly discussed with UEFA and, if so, what its view is on how the IFR’s independence should be preserved in this respect. It seems clear that without comprehensive assurances on every single aspect of the IFR and how it will operate, we risk inadvertently subjecting English football to permanent external control. The irony of creating this leverage will be quite incredible. In seeking to protect our game through regulation, we must not end up permanently compromising its independence and losing control of English football for ever.
Baroness Taylor of Bolton (Lab)
My Lords, when the noble Baroness, Lady Brady, started speaking, I thought that we were going to have a first. She started off by agreeing with the noble Lord, Lord Parkinson, on some points that I would agree with him on. Then she went totally against that and said that a Select Committee might be too interfering. I point out to her that the Select Committee that covers DCMS has, for many years, talked about the problems in football such as ticket pricing and the timing of matches. That has not impinged in any way on any international arrangements.
We have to make a clear distinction between Parliament and the Executive, because we are not talking about state control or government control. What we are talking about in this amendment is a proper accountability for any regulator. As I mentioned at Second Reading, I have the privilege of chairing the Industry and Regulators Committee of this House. We had a report about who regulates the regulator, so it is strange that the noble Baroness should use those words. This is not about regulating the regulator; it is actually about holding regulators to account. Both Houses have a very important role to play in making sure that regulators are held to account by Parliament.
I go further: if some of the regulators had been held to account more closely by Parliament in recent years, we would not, for example, have the crisis that we have today in the water industry. There has been a failure of Parliament to hold regulators to account.
My Amendment 89 is not grouped with these amendments but covers very similar points and the same principle. I hope that the Minister will give us an assurance that Parliament will have a role to play in holding all regulators to account, including the independent football regulator.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to follow the noble Baroness, Lady Taylor of Bolton. Her words are born of great experience—not just the dark arts of the Whips’ Office, I know, but many years of speaking up for her constituents in the other place. I think she ended up agreeing with my noble friend Lord Parkinson of Whitley Bay.
I support this amendment because of my experience of four years on the Public Accounts Committee in the other place. I had the great privilege of serving under the excellent leadership of the noble Baroness, Lady Hodge of Barking, who was a superb chairman. That is not to take away from the work of Meg Hillier, who recently did an excellent job in that role.
My point is that the noble Baroness, Lady Taylor, mentioned the division between the Executive and Parliament. Our worry on this side, and the reason we put forward this amendment, is that we see too many powers being vested in the Executive and Parliament having too few.
Lord Hayward (Con)
Since my noble friend is referring to a letter that was addressed to me, I assure him that in the debate on another amendment I shall return in far greater detail to this letter, not least because the first heading of the letter refers to “Exact cost”. I never asked for exact costs. I preferred to use the word “probably”.
Lord Jackson of Peterborough (Con)
Your Lordships and I can rely on my noble friend’s forensic interrogation of the letter and the Bill generally. I know that we will come back to this issue.
I mentioned proportionality and a final example is the framework document, which has a strange description on page 2 of the letter. It says:
“DCMS as the sponsor department will agree a ‘framework document’ with the Regulator”.
It will be up to a parliamentary committee to look at what the point of that framework document is and whether its delivery by the regulator is efficacious. We need to know about the accounting officer. We need to know about the role of the National Audit Office and how it will intervene and work with the department, the regulator itself and any parliamentary committee. The levy, the proportionality and the cost are all areas where Parliament has a very important role to play.
I think we have reached the turning point in trusting regulators to discharge their duties without appropriate and close examination by legislators. That is our job and the job of those elected in the other place. Because the weather has changed for regulators, we no longer implicitly trust them to be full of experts and to do their job effectively. As my right honourable friend the former Prime Minister Rishi Sunak said, “In God we trust, everyone else bring data”. I am not just looking at the right reverend Prelate when I say that. The serious point is that we need to see that the regulator is doing its job. We cannot rely on just undertakings and assurances. We need the proper statutory function of a committee to oversee the work of the regulator. On that basis, I warmly support my noble friend’s excellent amendment.
Lord Moynihan of Chelsea (Con)
My Lords, it is a pleasure to follow my noble friend Lord Jackson and to support the three amendments tabled by my noble friend Lord Parkinson. I spoke a few days ago about how the Premier League became so successful, so popular and such an enormous contributor to the soft power of this country around the world, as well as to our finances in the many billions of pounds of taxes it pays. I spoke about the very delicate nature of entrepreneurial activity and the danger that comes from overregulation.
As noble Lords will know, I am not keen on the whole idea of this regulator—particularly one that is given so many powers in such an enormous Bill. But there is only one thing worse than a regulator given many powers and that is one given untrammelled and unscrutinised powers. Therefore, if we are to have this regulator, it is absolutely crucial that there is sufficient scrutiny of what it does.
We know that regulators like to regulate. People who are attracted to the idea of supervising other people like to get really involved and talk about what they would like to happen and how they can make that happen. They want to have the powers to make it happen—and preferably without scrutiny. I do not know how many Members of this Committee have had the experience of many years of scrutiny by regulators who decide, “You’re a wrong ’un and we’re going to go after you”. The process becomes the punishment.
And as many noble Lords have asked already this evening and earlier, who is going to come into this game? Who is going to apply their entrepreneurial flair if they believe that an untrammelled and unsupervised regulator is going to be able to second-guess everything they do, consider their fitness and will be able—from what we were told earlier—to reach into their funds and, through the backstop, extract them for whatever purpose, unchallenged, unsupervised and without any scrutiny. I submit to noble Lords that these amendments, if we are to have a regulator, are absolutely crucial for the regulator’s good functioning and for the future success of this wonderful part of our economy.
Lord Goddard of Stockport (LD)
On these Benches, we broadly support these measures. It is a pleasure to follow the noble Lord, Lord Moynihan of Chelsea, because he speaks his mind and I like that. There is no ambiguity in what he is trying to say; he just says it. That, to me, is refreshing.
In supporting the amendments from the noble Lords, Lord Parkinson and Lord Markham, with respect, we do not need Erskine May or Burke. It should be common sense to us that the regulator must be accountable to Parliament. We are the heart of democracy and the social fabric of the country, and we are funding it. So, if there were an overwhelming reason why the Government did not want this, I would find it unfathomable; the regulator should be accountable.
The noble Baroness, Lady Brady, was passionate in what she said, and I understand the pitfalls she can see coming, but this is really about regulation and accountability. That is the fine line that we draw. We are not overregulating but we need that accountability. I suppose it is about scope and the number of times we may be calling people, and which Select Committees can call them. I would suggest it should not be just any Select Committee; it should be pertinent to the business.
The Government will ask that the amendments be withdrawn today, but could they commit that this will be somewhere in the Bill? Without an agreement that the regulator will be held to account by Parliament and will report to Parliament, this group of Peers—the small and happy band that we are—will be less than supportive of not supporting this, if that makes sense.
Baroness Evans of Bowes Park (Con)
My Lords, building on what was just said—this comment is not particularly for the Government but is perhaps a reflection for both Houses—as this will be a completely new regulator, there should potentially be a committee of both Houses, unusual though it may be, with representatives from both sides. It might be quite useful for a committee to be set up to look at this regulator, not least because of all the issues we have been discussing, as it is something completely new.
Baroness Taylor of Bolton (Lab)
I am grateful to the noble Baroness for giving way. The Industry and Regulators Committee, with outside organisations such as the Institute for Government and others, has looked at what might be appropriate going forward. There is a real concern that we do not have a drumbeat of accountability for all regulators, so some new mechanism might be appropriate, potentially even in the way that the noble Baroness suggests.
Baroness Fox of Buckley (Non-Afl)
My Lords, perhaps I could have a clarification. The noble Lord, Lord Parkinson, said that he had lots of experience of regulators. He referred to the Online Safety Act and Ofcom and his dealings there. I found it incredibly unhelpful to be constantly told by Ministers at that time that something was not up to them, it was up to Ofcom, even when we were making a decision about what the Ofcom regulator was going to do.
There are times when it feels as though Governments of any political stripe can outsource authority to a regulator. They tell the regulator what to do and then, when you try and hold somebody to account, the Government say, “Oh no, it’s the regulator that makes that decision”. So it actually removes any accountability. I am very keen on a mechanism for accountability and I am very anxious that, when we constantly stress that they are independent, arm’s-length regulators, that can be a way of avoiding any kind of political accountability.
However, I am also sensitive to the issues raised by the noble Baroness, Lady Brady, about the kinds of things you can imagine happening if there is accountability at Select Committee level. I want accountability and I can take on board what the noble Lord, Lord Jackson, said about the forensic way that Select Committees can hold people to account. That sounds very positive. But it depends which one it is and who is on it. I can imagine the political fads of the day. You can imagine a Select Committee saying, “Why aren’t you doing more on”—my favourite topics—“EDI or the environment?” or “Where’s your environmental target? You’re not doing enough on that, are you?”
We have to be quite precise about the principle. On the one hand, there is the very important principle of parliamentary accountability. On the other, we also have to ensure that that does not become political interference, because it could. There could be a kind of pressure from Parliament for the regulator to adopt political priorities rather than football priorities.
Lord Markham (Con)
We have had three days of debate and it is fantastic that we have an outburst of consensus. On all sides of the Committee, we seem to agree that we are putting a lot of trust in this regulator. We have had long and thorough debates about what its objectives should be. I come back not to Erskine May or other writings but to the Gorbachev and Reagan saying, “Trust, but verify”, which I always remember. There is consensus around the Committee about how vital parliamentary scrutiny is for what we think is such an important role. I hope that, when the Minister responds shortly, she will take on board the consensus view of the Committee and respond positively.
Lord Parkinson of Whitley Bay (Con)
I will briefly encapsulate some of what we have heard and respond to the point of the noble Baroness, Lady Fox of Buckley. She is right: it was a chastening experience to stand at the Dispatch Box as a Minister and repeatedly have to say that something was a matter for the independent Ofcom, the independent Arts Council, the independent board of the BBC, or the Betting and Gaming Council. There are good reasons why many of those organisations are independent of government, and that independence should be carefully guarded. However, given the additional role that Ministers in this House have, and in providing parliamentary scrutiny, the distinction that the noble Baroness, Lady Taylor, makes between the Executive and the legislature comes to the heart of it.
I am grateful to my noble friends on these Benches for expressing some of the concerns that they would raise if they were on a parliamentary committee overseeing the work of this regulator. As the noble Baroness, Lady Fox, reminded us, the concerns could go in all directions, and that is the beauty and importance of parliamentary accountability. This is an important regulator doing hotly anticipated and important work, and I am grateful for the consensus, which my noble friend Lord Markham points out, on the need to find a way to make sure that it can continue to be accountable to both Houses of Parliament.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Parkinson of Whitley Bay, for tabling these amendments, which relate to the transparency and accountability of the regulator. The discussion was interesting, and I found my noble friend Lady Taylor’s expertise on this matter particularly helpful to our debate. I look forward to discussing this further with her.
The noble Lord, Lord Goddard of Stockport, raised some interesting points. I stress that the Government recognise that it is vital that the regulator is transparent and able to be held accountable by Parliament and others. A number of provisions in the Bill already ensure this. The exercise of the regulator’s functions will be reviewed in the regulator’s annual report. The Secretary of State and Parliament will be able to scrutinise these reports, which will be laid before Parliament. The regulator’s chair and non-executive directors will be required to go through the public appointments process, as is appropriate given the weight of the role and responsibility for other appointments to the regulator. The chair of the regulator will already be subject to pre-appointment scrutiny with the relevant parliamentary Select Committee. However, as far as I am aware, there is no precedent for board members to be expected to go through such an extensive process as the chair is expected to, and neither has the relevant parliamentary Select Committee sought this. We therefore do not think that such a requirement is proportionate or necessary.
The regulator will be expected to work alongside the parliamentary process, which already allows committees to compel witnesses to attend. If a committee wished to invite a relevant member or the chief executive to appear before it, the Government would certainly expect them to fulfil this. These amendments would set an unprecedented and rigid approach to committee invitations that we do not feel is appropriate to place on the regulator. It would also not be appropriate for the Government to dictate to parliamentary committees who should appear before them—that is surely a matter for committee members themselves to determine.
Almost all of Amendment 123 dictates various actions in relation to parliamentary committees: who should appear before them, what they should scrutinise and when they should do so. I am sure the noble Lord agrees that parliamentary committees are quite able to take these decisions themselves and do not need the help of any legislation to do so. On the expert panel, the legislation already sets out a number of requirements to publish decisions and reasons for them. For these reasons, I am unable to accept the noble Lord’s amendments and ask that he withdraws Amendment 37.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the Minister for that response. I recognise many of the lines she uttered; I have uttered those and similar on previous Bills. For me, the most important contribution was that of the noble Baroness, Lady Taylor, who has given greater thought to this over a long time.
The Minister is right: it is not for the Government to tell parliamentary committees whom to call as a witness and how to do it. But there is a growing concern that there are so many ways in which the Government have devolved power to powerful regulators that can accrue—in the way that the Bill achieves—new powers or go in new directions through secondary legislation that does not get the sort of scrutiny that we are giving the Bill at the moment. Perhaps some broader mechanism needs to be found for looking at the work of not just this regulator but regulators in general. As I say, that was a feeling that gnawed at me when I stood at the Dispatch Box opposite. We will probably not crack the answer as we look forward to a well-earned dinner break, so, with gratitude to the Minister, I beg leave to withdraw the amendment.
Football Governance Bill [HL]
Wednesday 4th December 2024
(1 month, 2 weeks ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-III Third marshalled list for Committee - (3 Dec 2024)
Baroness Taylor of Bolton
Baroness Taylor of Bolton (Lab)
My Lords, Amendment 39 is grouped with Amendments 41, 46 and 48. This is a pretty straightforward amendment, simply seeking to change in the Bill the word “may” to “must”.
For context, the Bill as it stands says that a non-executive member of the board “may” be removed from office in certain circumstances. That is clearly appropriate and something that we should expect. Similarly, the Bill says that an executive member “may” be removed in certain circumstances. Again, that is something that we should expect and is totally appropriate.
However, the circumstances in which such a removal can take place are actually rather serious. They are laid out quite clearly as being when the person is
“guilty of serious misconduct … has a conflict of interest … has failed to comply with paragraph 6(4)”,
which is about information on conflicts of interest, and
“is unable, unfit or unwilling to carry out their functions”.
I think we would all agree that, whether we are talking about a non-executive or executive member of the board, we need to take such issues seriously.
That is why I ask the Minister why it is only “may” be removed and not “must” be removed, because these circumstances would seem to justify removal. If anybody falls foul of the items identified here, there really has to be a presumption that they will be removed, and so the word “must” might be more appropriate.
Lord Addington (LD)
My Lords, the difference between “may” and “must”—or may and shall—is a pretty old parliamentary debate, but the noble Baroness has something here. I read through the amendments and thought, “It’s pretty clear. How could they stay if they’d done these things?” It will be interesting to hear the Minister’s response. I know that “may” probably means “must” in certain circumstances, but if we could just have it clarified, we might get through this very quickly. It is very worth while having it clarified in this case.
Lord Hayward (Con)
My Lords, I understand the point that both the noble Lord, Lord Addington, and the noble Baroness, Lady Taylor, are making, but I am always hesitant to say that something “must” happen. I speak here as someone who spent many years as a personnel/human resources director, acting as the final stage of appeal in disciplinary matters. As the noble Lord implied, I know that there is a debate in legal fields, because nowadays lawyers generally do not like being bound by something that tells them that they “must” act in a certain way.
It does not seem to be appropriate to insert “must”. The noble Baroness said that there would be a presumption—and I think so too. As the noble Lord said, these are very serious offences, but until one is confronted by a set of circumstances, I hesitate to bind anybody to a certain decision. There may be special circumstances where one is found guilty of only one of the categories and circumstances, so I am not convinced that “must” should be inserted in place of “may”.
Lord Jackson of Peterborough (Con)
My Lords, I want partly to echo what my noble friend Lord Hayward said. Given that the individuals concerned will be non-executive directors of a de facto non-departmental public body, they would be covered by the existing code of conduct for non-departmental public bodies, which I think dates from June 2019. It may have been updated by the previous Government; I do not think that the current Government have looked at it. Equally, they are governed by the Nolan principles, with which we are all very familiar—I am as familiar as anyone else, having been a special adviser and currently being a non-executive director of two non-departmental public bodies.
My point is about the restrictive nature of this wording. This is quite an unusual situation, where the individuals responsible for bringing disciplinary issues to the attention of the appropriate authorities in the independent football regulator will have no leeway whatever under this legislation. If it passes the threshold of criminal activity in civil law, legal representatives—the judiciary, magistrates and others—would have no leeway on this. Therefore, you would circumscribe the existing internal procedures.
Those of us who have a role in non-departmental public bodies know that there is a proper process. You would have a verbal warning. I also have a master’s degree in human resource management and have been an HR manager in my time—there are almost as many of us in this place as there are lawyers.
Lord Jackson of Peterborough (Con)
Okay, maybe not. My point is that employment lawyers are very wary about something as definitive as this, which involves disciplinary procedures. The noble Lord, Lord Addington, made a very valid and fair point that, at the very least, we need to know the potential scenarios and circumstances that may arise. That would allow us, without any concern, to accept this in the Bill. At the moment, it is overly restrictive, and it could give rise to unfairness and onerous intervention directly by Ministers. On that basis, at the very least, we need to have more information about this before Report. Like my noble friend Lord Hayward, I feel deeply uncomfortable about having such prescriptive wording in primary legislation.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful for the thought that noble Lords have given to the amendments in this group and to the noble Baroness, Lady Taylor of Bolton, and the noble Lord, Lord Bassam of Brighton, for tabling them so that we can consider them. As the noble Lord, Lord Addington, rightly said, one of the first things that people do when they receive a new government Bill is to go through it and look for the “mays” and the “musts” and consider why they have been put there and what the counterargument would be if the other word were used.
I am grateful to my noble friends Lord Hayward and Lord Jackson of Peterborough, who have brought their professional and personal backgrounds and their qualifications to the scrutiny of this. Like them, I think that we must be careful of being too prescriptive here and of limiting the role of the professionals we are appointing, particularly as this is an independent regulator. We want it to act independently and have a bit of professional discretion. However, the noble Baroness and the noble Lord, Lord Bassam, have an important point that motivated them to bring the amendments, which would limit the discretionary ability of both the independent football regulator and its chief executive officer in cases of misconduct or where an individual is not able to perform his or her duties, whether they are a non-executive director, an executive director or a member of the expert panel.
Clearly, if this new regulator is to enjoy the support of fans and the businesses and clubs that it regulates, it must uphold and be seen to be upholding the very highest standards. It is good to pose the question of whether this discretionary power should be written in the Bill as it is. The discretionary power as written would allow the independent regulator the ability to keep an individual in place, even in cases where he or she is guilty of misconduct, has a conflict of interest, has failed to provide appropriate information to the chief executive or is unfit, unwilling or unable to carry out his or her functions. That is quite a serious list of reasons, so I can see why the noble Baroness, Lady Taylor, and the noble Lord, Lord Bassam, have posed this question to the Committee. While I share some of the scepticism that my noble friends have set out, I am more sympathetic than might be expected.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank my noble friend Lady Taylor of Bolton for introducing the amendments in this group. The Government acknowledge and understand the intent behind these amendments, which is to fortify the Bill’s provisions for dealing with conflicts of interest and unsuitable board and panel members.
It is essential that the regulator can deliver its regime, free from undue influence, vested interests and misconduct. I reassure my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton, who is not in his place, that the Bill, supported by public law principles and non-legislative measures already in place, already sufficiently makes certain that the regulator will be free from conflicts of interest and misconduct.
Amendments 39 and 41 relate to the board. As with all public bodies, members of the regulator’s board will be subject to the Cabinet Office’s Code of Conduct for Board Members of Public Bodies, which the noble Lord, Lord Jackson of Peterborough, raised. I can also confirm that they will be subject to the Nolan principles. The code of conduct sets out clear requirements regarding the appropriate disclosure and management of conflicts of interest. This includes a responsibility on board members to openly and honestly declare any interests that could give rise to actual or perceived conflicts. Any breach of these requirements would be a breach of the member’s terms of appointment. Requirements on good conduct more broadly are also outlined in this document.
The Bill also places an additional onus on the appointer to check for conflicts that have not been otherwise declared at the point of making the appointment and on an ongoing basis from time to time. In addition, paragraph 16 of Schedule 2 requires members of the board to declare their interests in any matters which fall for consideration by the board, and for this declaration to be recorded.
I think I reflect the views of the noble Lord, Lord Hayward, when I say that, in the Government’s view, these amendments would represent an unacceptable constraint on the discretion of the chief executive and the Secretary of State to take the appropriate approach to managing issues with members of the board, such as conflicts of interest, on a case-by-case basis as circumstances dictate.
Amendments 46 and 48 concern the expert panel. I reassure noble Lords that, in the Government’s view, the Bill already sufficiently makes certain that the regulator will be free from conflicts of interest. The Bill places an onus on the chief executive, as the appointer of panel members, to check for conflicts that have not otherwise been declared at the point of making the appointment and, as with other processes, on an ongoing basis from time to time. In addition, paragraph 29 of Schedule 2 requires members of the panel to declare their interests in any matters which fall for consideration at a meeting of a committee they are on, and for this declaration to be recorded. In our view, these amendments would put in place too much of a constraint on the discretion of the chief executive to take the appropriate approach to managing issues with panel members, such as conflicts of interest, on a case-by-case basis as the circumstances dictate.
All in all, we are confident that the Bill already contains comprehensive safeguards to ensure the suitability of board and panel members. Therefore, I would be grateful if my noble friend would withdraw her amendment.
Baroness Taylor of Bolton (Lab)
My Lords, I am grateful to the Minister for outlining the provisions that she thinks adequately cover this point. However, if discretion still exists on issues such as being guilty of serious misconduct, then I have a concern. I am not sure that there should be discretion in a case of a serious misconduct. Maybe the point she raised about conflicts of interest and that conflicting with other parts of the Bill covers it, but I have this fear that, if there is discretion, the chief executive of the independent football regulator might be put under pressure by others. That can be a serious concern in any organisation. In a sense, I think these amendments would protect people from having to use discretion. If somebody was found guilty of serious misconduct, that would elevate the issue again.
Lord Hayward (Con)
I am particularly interested in what the noble Baroness just said about the pressure being imposed on a chief executive. If, having looked at a case in detail and correctly in terms of procedure and the like, he then gives way to pressure from elsewhere —it may well be political pressure of one form or another—would you not call into question whether you have the right chief executive in the first place?
Baroness Taylor of Bolton (Lab)
Yes. That is why we need to protect the chief executive or anybody else by not giving them this kind of discretion, which might leave them open to any kind of pressure. I am not sure it would be political pressure; it is quite likely to be internal political pressure with a small “p”, rather than political in the way that we discuss things. I ask my noble friend to consider this a bit further because, given the categorisation, there is a potential problem. I know she has taken an interest in this so, on that basis, I will withdraw the amendment.
Member's explanatory statement
This amendment limits the number of members of the Expert Panel.
Lord Parkinson of Whitley Bay (Con)
My Lords, I rise to move Amendment 42 and to speak to Amendments 45, 47 and 49, which are grouped with it. I am grateful to my noble friend Lord Markham who has put his name to them. These amendments seek to provide greater guidance on the operation of the expert panel that will be established under the Bill to ensure that those who are involved in the panel and its work are limited in number, do not have any broadcast interests, are limited in pay and must exercise their functions transparently. These amendments reflect our commitment to ensuring robust, transparent and impartial governance for football to safeguard the integrity of the game. I will speak now to Amendments 42 and 45 and say a bit more about Amendments 47 and 49 in my winding speech.
Amendment 42 would limit the number of members on the expert panel to no more than 20. The Bill already specifies no fewer than six, but the amendment would insert the words “or more than twenty”. It is in our view a sensible and pragmatic measure. Governance structures function best when they strike a balance between having diversity of experience and opinion and having operational agility and efficiency. By setting this range between six and 20, we think we can help to ensure that the panel is large enough to encompass a breadth of expertise while avoiding the pitfalls of having an unwieldy and bureaucratic decision-making body.
We have heard about a lot of the similarities between this Bill and its predecessor that was looked at in another place in the previous Parliament, but this is another instance where the Government have decided to make some changes to the Bill. When I was going through it comparing the previous version to this one, this change perplexed me more than others. When the Bill before the previous Parliament was introduced by the Conservative Government, we capped the membership of the expert panel at 20. Will the Minister explain the policy rationale behind making this change to the Bill and removing the cap?
In football governance, clarity and focus are surely paramount, so this amendment that in effect takes us back to the previous Bill is, as noble Lords might expect, in keeping with Conservative values of efficient, streamlined and effective governance and will ensure that the expert panel is equipped to make sound decisions without succumbing to the inefficiencies of an excessively large committee. I hope these arguments will resonate with noble Lords whatever their political allegiances.
Amendment 45 echoes the debate we had previously on conflicts of interest relating to the chairman of the panel and would prohibit individuals with current media interests relating to football serving on the expert panel much in the same way as my Amendment 36, which we looked at earlier. I do not think we need to rehash the philosophical arguments behind that. I hope that the Minister will dwell a little on the need to make sure that we ensure impartiality for members of the expert panel just as much as we would for the chairman.
Football is a sport that attracts passionate commentary and debate, particularly across the media. While, as we heard previously, live perspectives are invaluable in their own right, the work of the expert panel must remain beyond reproach. Again, I worry slightly that people with active media roles could risk stumbling into conflicts of interest or, at the very least, the perception of them, which could undermine the important work of the panel and its credibility.
Lord Markham (Con)
I thank my noble friend for introducing these amendments, which are also in my name. As in previous groups, he set out some of our concerns, particularly where there are media interests involved—by media interests we are speaking very much about involvement with media rights and, as we discussed earlier, inside information and conflicts.
Amendment 49 is all about the transparency of the process. The real value of an expert panel is that there are a lot of complicated issues. If anything, the last three days have shown us that this is a highly complex area and that we would be asking the expert panel to opine on a large range of issues. The strength of that panel will be its breadth.
One area of particular concern to me is the example I gave before about clubs which are in what you might call the start-up phase—for example, Brighton, as they were a few years ago, when they invested heavily in players as part of a well-reasoned plan to get promoted. I am concerned that a regulator, with its sustainability hat on, might say that that is not very sustainable.
However, I would expect and hope that the expert panel had a range of views. While some may be more of the button-down accountant-type who would have concerns about that, I would hope that others would be of a more entrepreneurial nature and would understand what these aspiring clubs were trying to do, and so give that balanced view. To me, that is exactly what a good expert panel should be doing. On transparency, being able to hear those minority views and take them into consideration overall is an important dimension to all of this.
We have plenty of good examples of this. In the Monetary Policy Committee you have so-called hawks and doves, and a lot of information is often gained by not just the majority view in the vote but the dissenting voices. You see similar things in Supreme Court rulings, where you have minority opinions. It is about trying to bring that sort of richness to this, so that we have a range of expert views, which we will all benefit from. That was very much the thinking behind Amendment 49. I look forward to the Minister’s views.
Lord Hayward (Con)
My Lords, I will make one or two comments in relation to this group of amendments. First, Amendment 42 seeks to set an upper limit. I strongly support that, whatever the number happens to be. Many years ago—not that many—I drafted the changes in legislation in relation to parliamentary boundaries for the Commons. Over the years, we had seen a steady drifting up, with ever-more Members of Parliament, as the Boundary Commission decided to duck a decision here or a decision there. Ultimately, we set a figure for the total number of Members of Parliament. I will not go into detail as to whether I think the figure is right now, but I had watched it drift ever upwards.
The debate about this House has included very heavily the question of the numbers that there should be in it. I am a strong believer that there should be a limit, and that the limit should be very substantially below where it is now. The numbers have just drifted up and up, because some people have appointed too many people into this House. I am therefore in favour of having a limit on the panel, because I can see the risks of not having one. I do not mind whether it is 20, or whatever it may happen to be, but I am in favour of some upper limit on any public panel in these circumstances.
I am not going to comment on the next two amendments, on the basis that I have done so already in previous conversations, but I will refer to Amendment 49. I agree strongly with the principles outlined in it. We are talking about a public body here. We are saying that the football clubs, which are regulated and licensed, must be open to comment from their fans. If the football clubs must be open to comment and scrutiny from their fans then surely the regulator and the expert panels must also be open to that same public scrutiny. It is not acceptable for people who are on that sort of panel to hide behind an overall decision. It would therefore be important to go down this sort of route.
I made an intervention on the noble Baroness, Lady Taylor. I do not think I misinterpreted what she said earlier—I apologise if I did, because she is not here at the moment. When I asked her about strong or weak chief executives, she expressed concern that the wrong chief executive might be in the position. If there is, and he is leading a weak panel, then people could hide behind it. I am strongly in favour of a public display of decision-making in that process.
I would not necessarily agree that the amendment has perfect wording. For example, in proposed new sub-paragraph (2)(d), whether or not you have “the reasons why” is another matter. However, one category that is not in here is the question of timescale, which has come up in other elements of our discussion. It must be right that, throughout the process of regulation, there should be timescales imposed. It is all too easy for people to drift on decisions, whatever they happen to be, and put them back and back.
We are talking here, as we have identified, about a very competitive industry, competing not only in the football world but in other worlds as well. To maintain the position of our competitive pre-eminence within that field, we need to ensure throughout that regulators abide by timescales. I therefore suggest that, on Report, not only in this amendment but elsewhere, there should be timescales involved, as well as the other classifications that are identified.
Lord Jackson of Peterborough (Con)
My Lords, I rise to support the three amendments in the name of my noble friend Lord Parkinson.
On Amendment 45, it is very important that we have Chinese walls around media interests and that we preclude, if possible, any potential conflict of interest. We are not talking about a corner shop; we are talking about very serious big business and huge amounts of money for broadcasting rights. The information that will be contained within this regulator and the expert panel is phenomenally important in terms of its commercial confidentiality. Therefore, it is appropriate to put in the Bill a protocol which precludes the possibility of any interference from those who have a vested interest in media, and particularly in the workings of the expert panel.
We can look at models across the world whereby you have to keep secret from many people confidential information that is market-sensitive and may affect stock and share prices. Some of the information in the United States’ Securities and Exchange Commission would fall into that category. This is not quite as lucrative, but it is very big business. Therefore, we need to protect individual clubs that do not have economic heft, and bigger clubs that may be affected by a leak of information or inappropriate use of information from the expert panel.
Amendment 47 strikes a balance on the ability to pay an expert the appropriate amount of money. You want someone who has accumulated knowledge, skills and experience of football on the expert panel, but you do not want to pay them more than, for instance, the Prime Minister is paid. You want to have a set amount, and I think it is appropriate to put it in the Bill, in primary legislation. We know that £91,346 is pretty much two and a half times the average salary. It is a decent amount of money for the services that will be provided by the members of the expert panel.
The amendment I support most strongly is Amendment 49 because, as Judge Louis Brandeis, a Supreme Court judge in 1913, said, daylight is the best disinfectant. That was not said by a British historian, as people think, but by a Supreme Court judge. He was absolutely right about this in all the ways government is conducted. This gets the balance right, because there will be Chinese walls between different functions within the independent football regulator. This is light-touch transparency. It would not divulge the intricate proceedings of the expert panel within the IFR, but it would allow people to make a value judgment on how key decisions had been reached and who had made them. There would be accountability and transparency, as you would know not only who was making a case but the reasons why they did not support a decision. It is right that we would not include detailed minutes of the deliberations of the expert panel, because that would not be in the interest of the game and good governance, but it would be important to understand how decisions were made.
If you put that together as a complementary mechanism, with parliamentary oversight and scrutiny of the independent football regulator as a whole, it is a very useful amendment for making sure there are key checks and balances. It would make sure that certain clubs are not dominating and certain other clubs are not being pushed out, and that everyone has an opportunity to have empirical evidence, data and proper facts put before the expert panel. Ultimately, the panel will be accountable, first, to the IFR, then to Parliament and then to the wider public, including the fans.
I am not saying that the IFR is exactly the same as the Securities and Exchange Commission, but, for those reasons, I think there is a framework here that can be used to make sure that we deliver a decent and effective IFR—but in a fair and equitable way that is open, transparent and, above all, accountable to the taxpayers and people of this country.
Lord Addington (LD)
My Lords, I will speak briefly. The middle two of these amendments are effectively a rehash of arguments we have already had—fair enough, so I will not comment on them. But, on the first one —about the numbers on the panel—and Amendment 49, what are the Government’s plans? Do they have any idea what would be a top number, or have they ever given this any consideration? That would be helpful to know—20 would seem to be a reasonable figure.
On the transparency of decision-making, the Government must have some idea, at the very least, about reporting, because it is almost impossible not to have some plan for reporting. If they have a standard or are thinking about one, it would help if we heard it now.
A couple of these amendments are well worth discussing, particularly the one on transparency. But I suspect that the Government have a plan for this—if they do not, they should have—and I look forward to being reassured by the Minister.
Lord Parkinson of Whitley Bay (Con)
My Lords, at the beginning, I said I would speak to my Amendments 47 and 49 in my winding-up speech, but I said what I wanted to say about them then, so I shall not elaborate on them now. I am grateful to my noble friends Lord Hayward and Lord Jackson of Peterborough in particular for their support, and obviously to my noble friend Lord Markham, who signed the amendments.
To pick up what my noble friend Lord Hayward said, this is not intended to be perfect wording—this is a probing amendment. He is absolutely right to refer to adding timescales as an important matter of consideration. My noble friend Lord Jackson gave another argument in our useful discussion about the dangers of having somebody with a current live media interest serving in different capacities in these roles. If they are privy to sensitive information about the leagues and clubs, which are multi-million pound businesses in many cases, a careless word or an evasive answer in an interview or on a TV show panel could give the game away—all too literally.
I simply reiterate the questions that I put to the Minister in my opening speech: whether she sees a role for a cap on salaries at all, and whether the Government intend to publish their expectations for remuneration, even if they do not set out a figure. We would be grateful to hear an explanation of the reason for the change between the last Bill and this one, on the removal of the upper limit.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Parkinson of Whitley Bay, for tabling these amendments on the expert panel. The regulator’s independent expert panel will be responsible for making various important decisions across the regulator’s regime when and where it is appropriate. It is important that the panel has a range of expertise and experience to reflect this. The number of members of the expert panel is to be determined by the chief executive officer in response to the operational need. The Government do not want to restrain the effectiveness of the expert panel by introducing an arbitrary cap on the maximum number of its members. In our view, the regulator needs the flexibility to react in the event of high workload for the panel. The regulator would still need to deliver value for money, and has a regulatory principle encouraging this, so we do not believe that the CEO would appoint and maintain an unnecessarily large panel.
The Government acknowledge the intent behind Amendment 45 and other similar amendments to fortify the provisions in the Bill for dealing with conflicts of interest. It is essential that the regulator can deliver its regime free from undue influence and vested interests. I would like to reassure noble Lords that the Bill, supported by public law principles and non-legislative measures already in place, already sufficiently makes certain that the regulator will be free from conflicts of interest. For example, the Bill already places an onus on the chief executive officer to check for conflicts of interest at the point of making an appointment to the expert panel, and on an ongoing basis from time to time. In addition, the Bill sets out that the chief executive officer must ensure that the expert panel has the relevant range of skills, knowledge and experience.
It is possible that this amendment would limit the ability of the chief executive officer to do this, as it would restrict the pool of potential members of the expert panel. This, in turn, could hinder the IFR’s ability to fulfil its objectives. All in all, we are confident that these are comprehensive safeguards to examine and manage conflicts of interest appropriately. As noble Lords discussed earlier in relation to the composition of the board, we do not think it is appropriate to arbitrarily rule out specific sectors or sector interests.
I thank the noble Lord, Lord Parkinson of Whitley Bay, for Amendment 47. The Government very much appreciate the importance of ensuring that the regulator offers value for money. The regulator will be required to lay its annual accounts before Parliament and the Comptroller and Auditor-General for scrutiny. The regulator will also be subject to pay remit guidance in the same way as central government departments ensure that pay rises are justifiable. This will ensure value for money to taxpayers and operational flexibility for the regulator. Having a maximum salary in legislation would leave the regulator potentially unable to adapt to inflation and market changes. This could leave it without the expertise necessary to make critical decisions that allow the regulator to effectively deliver its remit.
Finally, I thank the noble Lord, Lord Parkinson of Whitley Bay, for tabling Amendment 49 on the transparency and accountability of the regulator. The Government very much agree that it is vital that the regulator is transparent and able to be held accountable by Parliament and others. Therefore, there are already a number of provisions in the Bill that ensure this. The exercise of the regulator’s functions will be reviewed in the regulator’s annual report. The Secretary of State and Parliament will be able to scrutinise these reports, which will be laid before Parliament. On the expert panel, the legislation already sets out a number of requirements to publish decisions and the reasons for them.
On this point, it is important for noble Lords to focus on the fact that transparency in decision-making is hugely important, but it is also really important that individual panel members can act without fear or favour, and that ultimately the regulator as a whole stands behind the decisions it makes. In my view and the view of the Government, it will also be necessary, in some instances, for details to remain private for commercial, personal or other sensitive reasons. For the reasons I have set out, I ask the noble Lord to withdraw his amendment.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the Minister for her responses to the points raised here. I am a little perplexed by the answer she gave on operational need, and her dismissing the argument for having an upper limit to the panel. It is not a party-political point. I said earlier that I was perhaps most perplexed by this change from the previous Bill to the current iteration. This is not a partisan point; there must have been some further thinking by the Bill team that worked on both versions, but I am confused as to what operational needs might mean that a panel of 20 could not do it. I will take that away and reflect on it and, if she has anything further to say, I am sure that in one of the meetings we have or in a future letter she can set it out.
On the salary point, I take what the Minister says about not carving it in stone and being limited to inflation, but there are other ways around it, such as pegging it to an equivalent salary in an equivalent profession. There might be ways around doing it so that there is flexibility for salaries to increase as inflation demands without them spiralling in a way that could undermine the work of the panel. In dismissing all these amendments as a group, we could end up in a situation with a potentially infinite number of panel members being paid a potentially infinite sum of money, so we are keen to probe where the limits of good sense are. We might come back to this issue with a bit of further thought, but in the meantime I am grateful and I beg leave to withdraw my amendment.
Member’s explanatory statement
This amendment removes the Secretary of State’s power to provide the IFR with financial assistance.
Lord Jackson of Peterborough (Con)
My Lords, every time I see a new enabling power, I think it cannot get any more egregious, but this is probably the best of the best so far—or the worst of the worst, as my noble friend Lord Hayward says from a sedentary position.
Lord Hayward (Con)
My Lords, I will correct my noble friend on one point in his introductory speech. He talked about the cost burden falling on the taxpayer. This is a Bill where the burden does not fall on the taxpayer; it falls on the football clubs. At each step, however many there may be, depending on debates on hybridity and the rest, we must remember who will finish up paying for this. It is a group of football clubs, their fans, their staff and their players.
I raised the question in Committee:
“The Government need to be honest before this legislation passes, and to identify the probable burden for each of the small clubs”.—[Official Report, 2/12/24; col. 996.]
The Minister committed to write to me in response, and she has done so. Earlier, I intervened on my noble friend Lord Jackson and cited a particular instance, the head bullet point in the Minister’s response whose heading is:
“Exact cost of the Regulator”.
I did not ask for the exact cost; I asked for a probable cost. With respect to my noble friend Lady Brady, my target throughout this has been the small clubs—the Wycombes, the Wigans and those sorts of clubs. They are not as well resourced as those in the Premier League and do not have international competitions that they may or may not be in. It is crucial that the small clubs have some idea of what they are going to be asked for.
According to the letter, the impact assessment, to which I have referred previously,
“provides a reasonable estimate of these costs”.
If it is “a reasonable estimate”, it will probably be possible to work out reasonably what the costs to the small clubs are. The Minister has used the word “proportionate” on different occasions. The calculation could be done only on revenue, turnover or staff. It is improbable that it will be staff; it will therefore be revenue or turnover. If you have a fixed number of clubs and already know the revenue and turnover of each of them, you can work out what the costs will probably be. I will continue to press throughout Committee and Report until we get an indication of what the costs are. It is not as if they are not available.
I am sorry that the noble Baroness, Lady Taylor, is not here. On this occasion, I have done not a word count but a page count. The impact assessment is 76 pages long and, on a conservative assessment, 29 pages provide projections of costs and benefits. I could have extended it more substantially than 29 pages, but on a small conservative estimate there are whole pages of graphs with options and alternatives. The noble Lord, Lord Jackson, referred just now to £140 million. That is not the top option but the “reasonable estimate”, to use the words of the Minister. It could be much higher.
If there is an analysis of potential costs on 29 pages of the impact assessment, it is a very short step to do a calculation of the impact on each club. When I say it is a short step, it is in the impact assessment itself, but I am asking for the costs to the clubs. Page 58 starts progress down that route. It says:
“Costs to the National League (organising body)”.
In other words, it has already gone part of the way there. On the next page, we read:
“Costs to National League clubs”,
and there are several paragraphs thereafter. So, the Government have already gone down the route of looking at the potential costs not only to the National League but to National League clubs.
If the previous Government felt that it was possible to ask an opinion poll company, Ipsos MORI, which I cited the other day, to do research on potential regional benefits and contributions that people might perceive from having a regulator, it should be possible for this Government to do research on what people might pay—to come back to my point about the revenue and turnover of these clubs, all they have to do is turn to Deloitte. Is that a company that we have never heard of? No. Deloitte is cited in the impact assessment on different pages. It talks about Deloitte’s research into football clubs on the back page:
“Deloitte analysis of club finances”.
That is all that has to be done.
The Government are so keen to display their research in terms of finances and costs that they have not only produced an impact assessment but “impact assessment key points”. What is the first title? “Cost methodology”. We are talking about something which the Government have gone a long way down already in the necessary assessments.
I will not challenge the figures—I may do so on another occasion. Taking the figures that are available, it is a very short step for the Government to say, “This is what it will cost for clubs of these sizes to operate and pay for the levy”. But I would add one important caveat, and it may be one of the two reasons why the Government do not want to identify the sums involved.
Lord Markham (Con)
My Lords, I thank my noble friend Lord Jackson for his Amendment 50, which looks to protect the taxpayer. I particularly support my noble friend Lord Hayward’s as ever forensic analysis, which really focused on the burden to the smaller clubs. These things easily get out of control and, as my noble friend mentioned, £140 million in anyone’s book is a lot of money, and that is just the central case—it is not even the highest example.
I will speak to my two amendments in this group: Amendments 171 and 253. Amendment 171
“restricts discretionary licence conditions to include only internal financial controls”.
Interestingly, this was the drafting of the original Bill that was brought before the other place before the general election. We have heard many times in the Chamber how this Bill is substantially the same as the original one. However, this time round there is a key change in the wording: instead of “internal financial controls”, the word “financial” has been taken out, so now it is just “internal controls”. I think we would all agree that there is a world of difference between looking at the financial management of a club, which is something that we would understand, particularly with regard to the sustainability argument, and why that might be in the remit. Removing “financial” from that, all of a sudden, so you are just looking at the internal controls of a club, is obviously a massive moving of the goalposts, if I may say so.
In trying to understand the thinking behind it, I looked at the Explanatory Notes. In those, it mentions that, broadly speaking,
“Internal controls refer to the system of policies and processes established by the management of a club that allow it to continue operating in an effective, orderly and efficient manner”.
That may seem innocuous, but it goes once more to the whole issue of mission creep. The Bill does not define internal controls—and remember that we are talking about 116 clubs, and we are saying that a regulator is suddenly going to have powers to explore those internal controls.
Again, the Explanatory Notes say that those internal controls are looking to make sure that the club is being run
“in an effective, orderly and efficient”
way, and that they help a club to operate in such a way. First, is that the role of a regulator, to get involved in the internal controls of every club, as to whether it is running efficiently? Suddenly, we seem to have appointed a management consultant on steroids, who will be looking into the cost of each club and opining on it. Surely that is not the sort of thing we want to do for 116 clubs.
Then, what does that bring in? Why not the IT department of a club? I think we would all agree that digital information technology comes into the definition of the effective, orderly and efficient operation of a club. So, are we now asking the regulator to do that? Maybe we should be hiring Capgemini, IBM and whoever else to start to get into it.
Suddenly, we start to see this mission creep. Then, we realise that the other parts we are trying to bring in, on having protection for clubs and the taxpayer in Amendments 50 and 253, become all the more important. Not only have we now got the concern that this regulator will be looking into every nook and cranny of the internal controls of a club, but who will be footing the bill for all of this? There is a blank cheque that either the taxpayer or the clubs are going to have to foot. I think we would all agree that we probably do not want either of them to do it, but as this is set up here and now, the regulator has absolutely been given the remit to do that.
In my Amendment 253, I am trying to make sure that at least this does not fall on the taxpayer; I think we would all agree that we do not want that. I must admit that I do not feel particularly comfortable about that, because I do not want it falling on the small clubs—or any of the clubs for that matter—but I am absolutely sure that I definitely do not want the taxpayer to be funding a regulator to look into the internal controls of 116 clubs and whether they are effective. However, I do not think that we want the clubs to have to do that either.
It is a long-established principle that the regulator is paid. I am familiar from my old media days with Ofcom being funded by the broadcasters, and that has to be appropriate, because we do not want the taxpayer to do it. However, what sort of control do the clubs have over this? All of a sudden, the regulator says that it is going in and to look at every single nook and cranny of their internal control to opine on whether they are efficient and effective—and the really good news is that they are going to pay for all of it as well. Is that really what we want from a regulator? I do not think it is. We started off with a very small mission and, suddenly, the regulator is looking into the internal controls of 116 clubs. I really do not believe that this is what we want.
That is why, in my amendments, I am first trying to return the regulator back to internal financial controls, which we can see a role for. Secondly, I am making sure that this does not fall on the taxpayer. However, if this falls on the clubs, we need to think about how we can give them some sort of control to avoid them having to pay a blank cheque for all of this.
Lord Birt (CB)
Most of what the noble Lord said would be done during an audit. All of these companies will have audit, and almost everything he mentioned will be conducted by the auditors. Plainly, it would be completely duplicatory for that to be done twice over. The issue is whether the regulator would have access to the audit. I agree with the noble Lord about the need to avoid cost, and wherever the cost falls, audits—as I am sure he knows—are ever more expensive, because the obligations on auditors are increasing the whole time. There is a lot at stake here.
Lord Markham (Con)
This is another example of the benefit of getting different brains on the committee. I absolutely hope that that would be the case, but it is probably a question for the Minister to answer. It is definitely logical.
Lord Addington (LD)
My Lords, I will make some brief comments. As I read the Bill, the Secretary of State providing some finance might be necessary, particularly in starting up. One of the things we do not want is an underresourced regulator blundering around making mistakes. A bad regulator is the worst outcome you can have, and that is usually because it lacks resources. When the Minister responds, can she give us some idea about when the power to give extra money would be used? This being done badly would be the worst result.
When the noble Lord, Lord Markham, talked about regulation, I am afraid I kept thinking about Fulham and Al Fayed. Are your internal control structures right? Are you doing something wrong? The damage that could be done by bad organisation immediately catches in the back of my throat. The regulation will not be straightforwardly financial; it is also about reporting structures, the care of your workforce, et cetera. Surely that should be covered by the Bill. These are questions about where you draw the line. If we have a regulator, does it regulate the whole thing? I think it has to; it cannot be just financial. If these are socially important structures—this is what we keep coming back to—we have to look at this question.
The noble Lord, Lord Hayward, has a point about the costs involved. I hope that we will get an answer when the Minister responds—at least a rough ballpark figure—because it will clarify what we will do. Those of us who approved the idea of a regulator think that it has to be properly resourced and that it has to cover the whole thing. I hope that the Minister can give us a little more guidance about what will happen and what the Government’s thinking is at this point, because they should have an answer by now.
Baroness Brady (Con)
My Lords, my understanding from the Premier League is that the Government’s estimated cost of the regulator is £10 million a year, and the Premier League considers that to be very low. We have heard a lot about how the regulator has been based on banking regulation, but the FCA costs £762 million a year and Ofcom costs £127 million a year.
It is worth noting that there are two critical but unrealistic assumptions in the impact assessment. First, it assumes perfect compliance, and, secondly, it focuses solely on ongoing compliance costs, such as information-gathering and engagement with the regulator and supporters. It does not account for the potential costs associated with, for example, licence conditions enforcement action that may arise through the commitments procedures. I completely agree with the noble Lord, Lord Hayward.
In earlier debates in Committee, I read out what Mark Ives, the general manager of the National League, said:
“We are concerned about the costs … The expectation of how much it is going to cost clubs at a National League level is a huge concern—it may be a small amount of money, but it is a lot to the clubs”.
He went on to say that many clubs in the National League are run by volunteers. We should give the clubs an idea of what it will cost, so they can work that into the budget. Each club should know whether it will be fully funded and fully staffed, so it can do the right job.
We have heard throughout Committee that the powers will be extended. The more that the powers are extended then the more complicated the Bill will be, the more staff they will need and the more costs there will be. Each club has to pay that cost because it has to have a licence. The way that you discharge the cost of the regulator is to add it to the licence. All 116 clubs, even though they are not listed in the Bill, will need to obtain one of those licences to operate.
Cost is a huge concern. It appears from what has been said that the Premier League would be picking up the majority of that cost. There is a big difference in the Premier League between those at the very top and those at the very bottom; they have very different pressures on their finances. I can only endorse what my noble friend Lord Hayward said and urge the Minister to give us an indication.
Lord Mann (Lab)
I am curious. There have been a lot of detailed discussions over the last three years with the Premier League and with Premier League clubs—I was involved in many of them. The Premier League was suggesting—it was not the only one—that for people in the Premier League, and the Premier League as an institution, a model of self-regulation would be a lot better. It would be helpful to know what costing the Premier League has built into its model of self-regulation, as it was certainly thrown around as an alternative for quite some time.
Lord Moynihan of Chelsea (Con)
My Lords, I support all three amendments in this group, particularly Amendment 253. I am delighted to follow the noble Lords, Lord Jackson, Lord Markham and Lord Parkinson, in their advocation of these amendments. I declared my interests on Monday, but this evening I have a fairly massive conflict of interest. I do not believe that I am alone in the Chamber in having been forced not to watch Chelsea breach all the principles of equity by beating Southampton 5-1 as we sat here. The poignant thrust of this conflict would be if my football friends started telling me that my staying away from Chelsea matches is good luck for the team. Therefore, it is not without anguish that I stand before your Lordships.
I go back to my earlier warnings about the dangers of regulators. Such dangers are stark in the clauses that we seek to amend and in the amendments themselves. The questions that your Lordships have raised in the debate boil down to what it will cost overall. That is what clubs will be asking, and then they will be asking what it will cost them. The third question that will come to the mind of the clubs—except those luckless ones in the Premier League—is around what they are going to get. We will talk about that in a minute but, to go back to what it will cost overall, we have heard over and again that we have no idea. There are estimates, which are clearly—
Lord Mann (Lab)
I have met plenty of clubs that have given an estimate of the likely cost, including across the Premier League. There is no ambiguity around the kind of sum that many Premier League clubs are citing as to what they expect the cost to be.
Lord Moynihan of Chelsea (Con)
I thank the noble Lord for that intervention but the fact remains that they cannot know what it will cost because, for a start, we do not have any certainty about what clubs will be in the scheme. We have been told what it might start at, but the Minister has said that she will not—
Lord Mann (Lab)
There have been extraordinarily levels of dialogue between the Premier League and the Government over a long period on this. The suggestion that the Premier League does not have some idea of the likely potential cost and has not spoken to clubs in relation to that is simply nonsense. I have spoken to clubs which have given specific estimates of what they anticipate it will be. Whether that is accurate or not, the idea that those figures have not been discussed at length is something of a fantasy.
Baroness Brady (Con)
I am sorry to intervene on the intervention, but I have not seen the noble Lord at any Premier League meetings; I have been to them all. I can assure him that we have never had a discussion about the potential costs, because we have never known what the potential costs are; no one has told them to us. We have looked at the impact assessment and that has given us a vague estimation, but to suggest that we have had a long, detailed discussion and debate, and that we understand and know what the costs are, is not correct.
Lord Moynihan of Chelsea (Con)
I thank the noble Baroness, Lady Brady, and the noble Lord, Lord Mann, for his intervention. He seemed to think I was talking about Premier League clubs. I was not. I was saying that the Minister had said that she did not want to specify in the Bill which clubs were going to be regulated, so the club does not know whether it will be regulated, and it certainly does not know how much it will cost it. The noble Lord might shake his head, but that is a fairly obvious point. We do not know who will pay. We also do not know what it will cost. I believe the noble Lord, Lord Hayward, talked about an estimate of £10 million—I beg your pardon; it was the noble Lord, Lord Markham.
Lord Hayward (Con)
If I might clarify for my noble friend: the noble Baroness, Lady Brady, referred to £10 million; I was quoting from the impact assessment, which says that £140 million over 10 years is the mid-point the Government are operating to.
Lord Moynihan of Chelsea (Con)
I beg the noble Baroness’s pardon for not attributing the £10 million figure to her. The fact is that we know that is ludicrous, because the cost of other regulators is way more than that.
I will make some headway. What will it cost overall? We do not know what the overall cost will be or what it will cost individual clubs. To talk a little bit more about that, imagine you are a local entrepreneur. There is a club in a little bit of trouble. They come to you and say, “You always wanted to own a football club. Why don’t you take over our club and then you can have one of those back-to-back league promotion successes that you’ve dreamed about and you’ll be famous in your community?”. You say, “Well, I’ve got a few bob. I don’t know how much, but yeah, okay, I’ll consider it”. It is one of those clubs that a noble Lord opposite talked about on Monday. I think the numbers cited were a turnover of £2 million and seven employees. You are invited to take over this club and bung in some of your money. You may not have a lot, but you may think you have enough. Then you say, “What’s going to happen?” My concern is that when you are told there is going to be a regulator that will tell you who to have on your board and all that, you will say, “Forget about that; as an entrepreneur, I don’t play that particular game”. But let us say you swallow that. Then you say, “How much is this regulator going to cost me?” The answer: “Dunno mate”. You ask, “Well, what could it be?” The answer: “Dunno”. So you turn your back and go off to sponsor the local cricket club or something like that. It does not work if you are not absolutely clear about what the cost will be.
Lord Markham (Con)
I ask the noble Lord this given his experience of consulting in a lot of entrepreneurial and start-up situations. I know that he has done lots of these types of moves. Clearly, when you invest in a start-up business or a club you will have business plans. They might be good or bad business plans, but they are normally based on an investment and an expansion. In this case, given that the regulator can say no to those business plans and that investment once it gets into it, I assume your investment proposition would suddenly be up a creek. I would like to hear the noble Lord’s opinion on what that will do to the investment proposition.
Lord Moynihan of Chelsea (Con)
The noble Lord, Lord Markham, makes a very good point. If some local worthies approach you and ask, “Will you invest in this club?” and you say, “Well, I’ve got to figure out what it’s going to cost me”, and they then say, “You’ve also got to figure out whether your plans are going to be acceptable to the regulator”, again, you would turn your back. Entrepreneurialism is the heartbeat of the economy, as several noble Lords have said in this debate over the past few days. This regulator proposal just turns entrepreneurs away from wanting to invest.
Lord Mann (Lab)
It would be helpful if the noble Lord could give examples of entrepreneurs wishing to invest in football who he has spoken to. I have spoken to a lot of entrepreneurs, including people who have invested smaller amounts in smaller clubs and larger amounts in Premier League clubs. They know exactly what they are anticipating and what they are going into. Of course, as part of their business plan, they are factoring that in. There is a figure, there is a concept, and investment has not gone down in the past 18 months. Indeed, further major investment in major clubs in English leagues is likely to happen soon. What is going wrong if they are all running away? Can he give a single example?
Lord Markham (Con)
I posed the question, and I can give an example of that. I have mentioned to noble Lords before that I have experience of the Brighton situation and know the board and the set-up there quite well. Brighton is a perfect example, and it is a shame that the noble Lord, Lord Bassam, is not in his place, because he is very familiar with it. It was a club without a stadium or good training facilities. An owner, Tony Bloom, came in and invested a lot of money in it, with a plan predicated on investing in players and doing a lot of analysis to get the best ones from around the world. It was absolutely a start-up scenario where he was heavily investing, and part of that was the concept of being able to yo-yo in terms of having parachute payments. He cited to me the example of West Bromwich Albion, which at that time had been promoted and relegated and promoted and relegated, but each time, because they had the parachute payment, they were able to become more sustainable.
Suddenly you get a situation whereby someone is thinking, “I want to do another Brighton like Tony Bloom, but I do not know what my cost base will be. I do not know whether the regulator is going to stop me going on with my plans because it thinks I am unsustainable or make me deposit a large sum of money as a financial buffer. I do not know whether my parachute payments, which are part of my plan, are then going to be taken away. Suddenly I’ve got a hell of a lot more risk involved”. I can only believe that that is going to dampen enthusiasm to invest in the first place. That is a very real example.
Lord Moynihan of Chelsea (Con)
I thank my noble friend. I apologise to the Committee for going over my allotted time, but I hope that it will appreciate that a great deal of that time was taken up not by me but by entirely welcome interruptions by other speakers.
In the interests of trying to move this on fast, I will stop talking about this issue of “What is it going to cost me?”, important though it is to have far more understanding of and far more limitations on the regulator’s ability to charge, and will move on to that of “What I will get?”. As soon as it becomes possible for a club to get money out of this arrangement, suddenly you have discussions about parachute payments and backstops; you have supplicants; you have lobby, lobby, lobby. It is called crony capitalism, state capture, rent-seeking. These are the dangers that you get when you involve the Government, and although we are calling it a regulator, this is a governmental action. It is essential that we limit the amount of money that that regulator has to play God with football in this country.
With those problems, it goes beyond just stopping the regulator spending beyond the levy amounts, as I understand Amendment 253 to say. We need to ensure that the levy amounts in the first place are suitably parsimonious and as little burdensome as possible to the clubs. I appreciate what the noble Lord, Lord Addington, had to say, but let us not be too free with other people’s money. I am sure it is not popular in all parts of this House to quote the great Baroness Thatcher, but she had the great remark, “You can spend other people’s money until pretty soon there isn’t any more”. Let us think about the impact.
Baroness Blake of Leeds (Lab)
I understand that the noble Lord received a number of interventions, but I think he is reaching the limit of his time. I would be grateful if he drew his comments to a close.
Lord Moynihan of Chelsea (Con)
I would almost have concluded in that space of time.
Once the method for determining the levy is agreed and the amounts are fixed, most surely the regulator should be prevented from spending any more than that. I thank noble Lords for their attention.
Lord Parkinson of Whitley Bay (Con)
My Lords, the noble Lord, Lord Mann, is right that we have had extensive discussion on the issue of cost, but if there has been lengthy dialogue on this point then it is because the answers have not been forthcoming in the way that the Committee has wanted.
I am particularly grateful to my noble friend Lord Hayward, who is doing an invaluable service not just for this Committee but for the smaller clubs on whose behalf he has spoken this evening, and in the way that he has gone through the impact assessment to try to get to the bottom of the cost implications for them in particular. I am glad that he will continue to keep at this important point, and I hope he gets some better and more detailed answers from the Minister as he does so.
My noble friend mentioned a letter that the Minister had sent him. Again, she has been kind in responding in writing to individual points that noble Lords have raised, but I ask her to share those letters with the whole Committee when the team sends them through. I think they are coming through to the individual noble Lords who have raised those points but they are not always being shared, and it would be a benefit to the whole Committee if we could all see those letters when they come. However, I am grateful to her, as I know those noble Lords are, for the speed with which she is responding in writing to the points that they have raised.
I am grateful to my noble friends Lord Jackson of Peterborough and Lord Markham for tabling their amendments in this very important group, which concerns the state funding of the regulator. That is a big issue that is worthy of debate, and I support the way that they have drafted them. I put my name to my noble friend Lord Markham’s Amendments 171 and 253, but I am happy to associate myself with my noble friend Lord Jackson of Peterborough’s Amendment 50 as well, which was the one that began this group.
My noble friend’s amendment seeks to strip away the broad powers that could be granted to the Secretary of State to provide financial assistance to the independent football regulator as she sees fit, subject to conditions deemed appropriate by her. Amendment 50 from my noble friend is an important amendment in seeking to safeguard the integrity and independence of the independent football regulator. We would like to think that one of the core purposes of the new regulator is to serve as a neutral body overseeing the governance and financial management of football clubs in this country. By granting the Secretary of State the power to provide it with financial assistance, there is a real and present risk that the independent football regulator’s independence could be compromised.
As with any independent regulator, it is crucial that the independent football regulator operates free from any external pressures, particularly from the Government. The role of the regulator should be to assess the game on its own merits without any concern about political influence or the priorities of the Government of the day. If we were to allow the Government to fund the regulator, we would be introducing the potential for at least the appearance of government influence over the regulator’s work and its activities.
Even if that influence were not overt or immediate, the mere existence of government funding could lead to the perception, and possibly the reality, that the regulator would become beholden to future Governments. That is a danger we must seek to avoid, as it would erode the public’s trust in the new regulator, undermine its effectiveness and hamper its impartiality. The Government have rightly made much of the changes they have made to the Bill in order to guarantee the independence of the regulator in the eyes of international bodies that have paid attention to the Bill, so I am sure that is something they want to avoid in this instance as well.
I hope the Minister will agree that the provision as it stands is concerning in the way that it gives the Government the power to impose conditions on how the regulator uses its funds. The consequences of that are worth considering. The Government could impose restrictions or directives on the work of the regulator, such as mandating certain areas of focus or influencing the scope of its investigations. It could lead to the independent football regulator neglecting crucial issues or, even worse, aligning its work with the agenda of the Government of the day. That sort of shift would diminish the regulator’s ability to act in the best interests of football clubs, players, fans and the broader football ecosystem which the Government and all of us are mindful of protecting.
The existence of that sort of conditional funding could set a dangerous precedent for other regulatory bodies. If government assistance became contingent on adhering to political agendas or priorities, then the independence of other regulatory bodies could be called into question, further eroding public trust in oversight.
I would like also to support my noble friend Lord Markham’s amendments in this group, Amendments 171 and 253. Amendment 171 restricts discretionary licence conditions to include only “internal financial controls”. In Clause 22, the Government allow discretionary licence conditions to relate to “internal controls”. It is important that, in a Bill such as this, the Government recognise the details of the Bill and make clear that the provision refers to financial controls as opposed to solely internal ones.
As my noble friend set out, “internal controls” is broad and open to wide interpretation. Without his amendment, the regulator could potentially impose conditions that extend beyond the presumably intended focus on financial oversight. That surely creates a risk of the sort of regulatory overreach that the Committee has been very concerned about, whereby the regulator might intervene or interfere in areas unrelated to the core objectives of this Bill, such as operational decisions or non-financial activities within football clubs.
If we were to insert “financial” as my noble friend suggests, we would ensure that the discretionary licence conditions relating to internal controls are focused exclusively on financial governance. This refinement would make the regulator’s powers more precise, ensuring that its interventions are effective, proportionate and fully aligned with its mandate to oversee the financial health of football clubs. We have heard, repeatedly and rightly, that the financial sustainability of English football is what the Government are most concerned about and what has led to the Bill that is before the Committee.
The non-financial resources threshold requirement as outlined in the Bill is designed to ensure that clubs have adequate resources, financial and otherwise, to operate sustainably, but the specific mention of internal controls as part of this framework needs to be carefully defined to prevent unintended consequences. Without this amendment, the regulator could use its powers to impose conditions on internal controls that have little or no connection to financial matters. That could include operational areas such as staff management, logistical decisions or club culture, none of which falls under the regulator’s core responsibility to ensure financial sustainability.
By explicitly tying internal controls to financial matters, my noble friend’s amendment reinforces the Bill’s focus on financial governance, while respecting the operational independence of football clubs. They are of course complex organisations operating in—
Lord Watson of Invergowrie (Lab)
I thank the noble Lord for giving way. I have bit my tongue for the last hour as I have watched the charade from the Benches opposite, all using up their entire allocation while interrupting each other, repeating themselves and slapping each other on the back. This is meant to be a debate. I raise it when the noble Lord is standing up not because I disagree with the fact that they are serious about what they are arguing. But had Mr Sunak waited until November and not called his election in July, the noble Lord, Lord Parkinson, would have been here with the same Bill in front of him, other than the issues that we heard have been changed so far—not the issues that we have been discussing for the last two hours or so. They would have been exactly the same. He would have been defending that Bill and now there is confected displeasure, if not outrage, with the way that the Bill is. Is that not hypocrisy?
Lord Parkinson of Whitley Bay (Con)
I am happy to use the time before the Committee to return to this issue but, as my noble friends behind me have said repeatedly, and as I have agreed to each time they have, I know that they would have been raising these points with me had I been at the Dispatch Box opposite. I know that because they were already raising them with me when I had the privilege of being the Minister, and I would be in the position of seeking to persuade them of the merits of the Bill. But I have also been clear, from Second Reading and all the way through, that we want to see this regulator established. We want to see it doing its work and doing so effectively, but we also see before us a Bill that is different, because of the election that was called and the result that happened.
We are interrogating particularly closely the changes that the Government have made to the Bill, of which there are many, and we have more concerns on these Benches, from my colleagues behind me, than we did before the election about the way we do it. As I have said before, the result of the election also puts us in a position on this side of the House to fulfil the duty that the noble Lord, Lord Kennedy, and the noble Baronesses, Lady Twycross and Lady Blake, dutifully fulfilled before the election: of making sure that government legislation is properly scrutinised. I make no apology for the fact that—
Baroness Twycross (Lab)
I have never filibustered a Bill to which my party had committed in a manifesto and to which all parties had committed. While the noble Lord is correct that I would scrutinise legislation when I was sitting on those Benches, I have never sought to filibuster a Bill to which my party had committed and which my party had laid before Parliament, intending to filibuster it to the point of getting us stuck in treacle.
Lord Parkinson of Whitley Bay (Con)
My Lords, I much regret the tone that the noble Baroness has adopted and what she says. That is not what we are doing. I sat here and bit my tongue, like the noble Lord, Lord Watson of Invergowrie, when I saw the Government Chief Whip asking one of his Back-Benchers not to move an amendment in order to try to proceed.
One of the great strengths of this House is the way in which we go through Bills in detail. We unearth issues, as we did in the debate on the group that we started today’s debate in Committee with. Neither I, as the prospective Minister in this House for the Bill in the last Parliament, nor the Minister opposite me was aware of the issues about hybridity until we got into the weeds of the Bill as we have in this Committee. That is the strength of the work of this House. I do not call that filibustering; I call it legislative scrutiny and, as we look at the workings of this House and the way it does that, we should do that with great pride.
I do not want to be distracted from the matter at hand by points that have been raised opposite. I want to address the amendments in this group so that we can carry out that duty. I associate myself with the amendments that my noble friends have tabled. I was speaking about my noble friend Lord Markham’s Amendment 171, and I agree with it.
Baroness Twycross (Lab)
My Lords, I thank the noble Lords, Lord Jackson of Peterborough and Lord Markham, for these amendments. Before I go through them and respond to the debate, I stress that I will make sure that all letters that have been sent to Members in the course of the Bill so far are placed in the Library as soon as possible, if that has not already taken place.
Ensuring that there are appropriate financial processes and limits in place for the regulator is extremely important, and I welcome this opportunity to discuss the matter in more detail. Amendment 50, in the name of the noble Lord, Lord Jackson of Peterborough, would entirely remove the ability of the Secretary of State to provide the regulator with financial assistance where appropriate. The Government acknowledge that the intent behind this amendment is to ensure that the regulator provides value for money for football fans, Parliament and the wider football industry. The regulator will be levy funded, and its regulatory principles include using its resources in the most efficient, expedient and economic way—this is what we expect.
The noble Lord, Lord Hayward, asked about costs to smaller clubs. It will be for the regulator to determine the methodology for the levy. However, the Bill requires it to take into consideration the financial resources of a club and the league a club plays in when determining how to distribute the levy charge across clubs. This should ensure a proportionate levy, where no club, big or small, will be asked to pay more than what is fair and affordable. I appreciate, however, that the noble Lord has not yet been satisfied by my response to this, and I look forward to discussing it with him in further detail when we meet.
Lord Hayward (Con)
I thank the noble Baroness for the offer to meet. Can I clarify that her implication is that all clubs in a division will be charged the same fee? I am not absolutely clear from what she said whether there will be a varied fee for different clubs in the same division, and this is not clear in the impact assessment either.
Baroness Twycross (Lab)
It is for each league a club plays in, but, as the noble Baroness, Lady Brady, made clear, there would be differences between the resources available to each club within a league. It is intended to make sure that each club has a proportionate levy placed on it, as well as taking into account which league a club might be playing in. So it is intended to be proportionate overall but also proportionate to the resources of an individual club.
The regulator’s budgets will be approved annually, and it will produce an annual report that will be laid before Parliament. However, on the points raised by the noble Lord, Lord Addington, exceptional and unforeseen adverse events may mean that it is necessary for the Secretary of State to provide financial assistance to the regulator. Paragraph 36 of Schedule 2 allows for this when considered appropriate. It also allows for the Secretary of State to cover any shortfall during the period between establishing the regulator and the levy being fully in effect—that was noted during the debate.
The noble Lord, Lord Jackson, asked how much the independent football regulator will cost and questioned whether the taxpayer would have to pay. To answer his question fully, I stress again that the regulator will be levy funded. However, there will be a period before clubs are licensed, and before the levy can be charged, when the Secretary of State will provide funding. These initial costs can all be recouped by the Exchequer once the regulator’s levy is up and running. We cannot know the exact cost of the regulator until the legislation has been passed and the organisational design has been finalised by the chair and the board. The noble Baroness, Lady Brady, noted that some of the additional potential purposes that noble Lords have discussed in relation to the regulator could scale up or scale down some of those costs, so it is not possible to have an exact figure at this stage.
On a power allowing the Secretary of State to cover any shortfall, there is an equivalent power for the Secretary of State to provide financial assistance to, for example, the Small Business Commissioner in the Enterprise Act 2016. Entirely removing the ability of the Secretary of State to provide this financial assistance could mean that the regulator is unable to continue to operate and fulfil its objectives, which would have significant knock-on impacts on the game.
On Amendment 171, in the name of the noble Lord, Lord Markham, it is important that clubs have appropriate non-financial resources in place. This will ensure that clubs are able to make good decisions about running the club, as well as meet relevant rules and regulations and report their finances accurately. The regulator will be able to attach discretionary licence conditions relating to non-financial resources in three areas: risk management, financial reporting and internal controls—and only in these three business-critical areas.
The term “internal controls” is explained in the Explanatory Notes. It refers to the system of policies and processes that a club has that allow it to operate in an effective, orderly and efficient manner. This includes controls to ensure complete, accurate reporting, compliance with rules and regulations, and financial management.
To confirm the assumption of the noble Lord, Lord Birt, on the matter of not duplicating with regard to audit, we would assume that existing audits would be used as part of this process.
These are all areas crucial to ensuring financial sustainability, and that is exactly why the regulator needs to be able to attach discretionary licence conditions relating to these areas to ensure that clubs do in fact have appropriate non-financial resources. It would not be appropriate to limit the regulator unnecessarily here to internal financial controls only. The regulator can attach licence conditions only if they advance one or more of its operational objectives. I reassure noble Lords that the regulator will not have free rein here; financial sustainability will still be at the heart of any licence conditions.
Finally, I thank the noble Lord, Lord Markham, for his Amendment 253. The Government completely agree that the regulator should not be able to borrow money. That is why it is already prevented from doing so in paragraph 35(2) of Schedule 2. There is no need for this restriction to be duplicated elsewhere in the Bill. Additionally, the regulator would currently use penalty receipts to fund litigation costs. The noble Lord’s amendment would prevent this. It would mean that litigation costs would have to be passed on to all clubs through the levy, as opposed—
Lord Hayward (Con)
Sorry, I was just waiting for the Minister to conclude her paragraph. Can I just ask her to clarify the intervention made by the noble Lord, Lord Mann? He said—I am paraphrasing and am happy if he corrects my phraseology—quite clearly to the Committee that figures have been given to clubs as to what they were likely to pay. Is that correct, or is the noble Baroness, Lady Brady, correct, having been present at all the meetings with the Ministers, that no figures have been given to any clubs?
Lord Mann (Lab)
Figures have been given by the Premier League to clubs and clubs have been happy to cite those figures.
Baroness Twycross (Lab)
To respond to that point, my understanding of what my noble friend Lord Mann said was that it related to the Premier League giving information to the clubs, rather than explicit information being given by the Government.
Lord Hayward (Con)
In which case, can the noble Lord, Lord Mann, provide the Committee with the details of the figures and the dates when they were provided?
Baroness Twycross (Lab)
I am not sure whether it is my responsibility as a Minister to ensure that that happens.
Baroness Twycross (Lab)
Perhaps noble Lords would allow me to continue, as it has been quite a long evening. I am getting close to the end of my response to the debate on this group.
I turn to the issue of litigation costs being passed on to all clubs through the levy, as opposed to being taken from financial penalties of non-compliant clubs. It does not seem fair or proportionate, particularly for those clubs that have complied with regulations, for the costs incurred as a result of those that have not complied to be charged to all clubs. For the reasons I have set out, I therefore hope that noble Lords will not press their amendments.
Lord Jackson of Peterborough (Con)
My Lords, just to concede the point from my noble friend Lord Hayward, he is absolutely right about the cost being accumulated and passed on to clubs. I did not make it clear that, effectively, the point I was making was that this is an open-ended financial commitment for the IFR, rather than another way of ignoring the cost on the clubs. The point I was making is that it is axiomatic that, if you have a clause that says there is unlimited cash available to a body, it will take advantage of that and there will be carte blanche.
At this late hour, I just leave your Lordships with my observation of Parkinson’s law—not my noble friend Lord Parkinson of Whitley Bay but C Northcote Parkinson. He wrote an essay in 1955 for the Economist, saying that
“work expands so as to fill the time available for its completion”—
or, in public services and government, the number of people grows regardless of the work to be done. The point I am making is that if you give an unlimited blank cheque to this body, you are encouraging mission creep and encouraging that body to move into ultra vires areas, not just regarding transitional costs but on a long-term basis in the Bill. For that reason, we need to come back to this and maybe redraft the Bill.
Incidentally, I found the Minister’s answer quite helpful and informative, for which I thank her. I know that it has been a long evening. We have had an eruption from mount Watson—the noble Lord, Lord Watson of Invergowrie—and all I would say is that it is a constitutional principle that no Parliament can be bound by its predecessor. We are in a new Parliament with a new Government and a new piece of legislation, and we are doing our job of scrutiny and oversight. With that in mind, I beg leave to withdraw the amendment.
Football Governance Bill [HL]
Monday 9th December 2024
(1 month, 1 week ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Amendment Paper: HL Bill 41-IV(a) Amendment for Committee (Supplementary to the Fourth Marshalled List) - (6 Dec 2024)
Lord Kennedy of Southwark (Lab Co-op)
My Lords, as we begin day 4 of Committee on the Football Governance Bill, we have an ambitious target today and I urge all noble Lords to work together to achieve it. I particularly draw the Committee’s attention to the front page of today’s lists from the Government Whips’ Office and all the reminders about speaking times, which were agreed by the House last year. I remind the Committee of that and we expect noble Lords to work together to make progress to that ambitious target; we need to get to it today.
Lord Harris of Haringey (Lab)
My Lords, before my noble friend sits down, the rubric states quite clearly the expectations that there are on Members of the House. Those are of course maximum time limits, not targets to be aimed for, but the document also says that Members
“should not summarise or repeat at length points made by others, and if speaking more than once a Member should not repeat points they have already made”.
I have already sat through a couple of hours of this Committee and heard that done repeatedly. Will the usual channels intervene if people deviate from the subject or are repetitious, and therefore ask them to sit down?
Lord Kennedy of Southwark (Lab Co-op)
I thank my noble friend for that. I hope that we will not need to intervene, but the Whips on the government Bench will certainly intervene if necessary. I ask all noble Lords to read the points on Committee stage, which were agreed by the House. We do not want repetition; we want proper scrutiny, with progress made today on the Bill. We have a number of groups to get through, but it is perfectly achievable in the time.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
My Lords, I suggest that we now begin.
Clause 6: The IFR’s objectives
Amendment 51
Lord Hayward
Lord Hayward (Con)
My Lords, Amendment 51 stands in the name of my noble friend Lord Maude of Horsham. He has asked me to move it because he is, unfortunately, unavailable on this occasion. Perhaps I might observe that, out of the 300-plus amendments, some 120-plus of them come from the Government’s own Back Benches.
This amendment deals with an area which I have touched on on a number of occasions during debate on the Bill’s clauses and subsections: the financial impact that it will have on the different leagues. They are not named in the Bill, but we all know which ones we are talking about.
I am particularly interested to be talking to Amendment 51 on the basis of the Prime Minister’s own Damascene conversion—if I can refer to Syria as being the place in the public eye at the moment—to avoiding, where possible, impositions on the private sector by regulation. He commented on that in his speech last Thursday. It would appear that he is now of the view that regulation should be kept to a minimum, or that the Civil Service—I specifically exclude the civil servants advising the Minister, who have been very helpful throughout—is providing a “tepid bath” of steady decline. I think those were the Prime Minister’s words. Other Ministers have then been sent out to clarify on the matter, one of whom today described it as an attempt to take the approach of a start-up. Well, my noble friend Lord Markham has identified how to aim to start up and the funding needed when one actually takes that approach, which may not be conducive to the overall approach outlined in the Bill for football regulation.
Lord Jackson of Peterborough (Con)
My Lords, I will speak to my Amendment 57 in this first group. I am delighted to see the noble Lord, Lord Harris of Haringey, in his place and I appreciate his cameo role in this Committee. I had not noticed him here for most of the deliberations of the Committee, but we welcome him anyway.
This is a probing amendment to press the Government on how much intervention they envisage the regulator pursuing in the internal financial affairs of clubs. It is a probing amendment because we on this side seek to solicit from the Minister more precise details, which are not in the Bill, about how much she and the Government envisage the independent football regulator having a part to play in the technical minutiae of the finances of each club.
Because of the nature of the Bill and the wide-ranging powers under its Henry VIII clauses, we simply do not know the degree of interference in those 116 clubs. For instance, will a club be required periodically to enunciate its liquidity requirements on a quarterly, half-yearly or annual basis? What debt cap rules will they have? What player acquisition and sales issues will the regulator become involved in?
Importantly, there are also the decisions taken by the boards of the 116 football clubs around land and property, which are covered elsewhere in the Bill but relate to this amendment—where they play and what contractual arrangements they may have with landowners on a rental, leasehold or freehold basis. Will the regulator be prescriptive about which banking arrangements, and with which organisations, each club is free to enter into?
These are important issues. This Committee’s effective scrutiny requires more insight from the Government into the regulator’s intentions regarding financial regulation, not least because other non-departmental public bodies already have significant powers and the capacity to intervene directly in what are, in effect, small and medium-sized enterprises and significant, big businesses turning over large amounts of money. There are the Financial Conduct Authority, the Competition and Markets Authority and His Majesty’s Revenue & Customs, and local authorities have widespread powers to intervene in the everyday activities of the clubs contained within their local government areas. There are also various companies Acts, such as the Companies Act 2006 and that of 2016, that are within the bailiwick of the interface between government and football clubs.
As we asked on the sweeping powers over raising finance, and since the Bill does not expand on this, is Parliament not being asked to write a blank cheque to allow the Government to regulate as they wish? Not just the Premier League but clubs in other leagues are most concerned about this because of the nature of this legislation. Will the Minister address the concerns of each of those clubs about the powers of the regulator potentially to interfere in each club’s everyday financial affairs?
Baroness Brady (Con)
My Lords, I refer the Committee to my interests declared in the register. I support Amendment 71 tabled by my noble friend Lord Markham, which raises a crucial point regarding the backstop mechanism. We must be clear at the outset about what this mechanism governs and, critically, what it does not.
First, it is vital to understand that the backstop is categorically not about the fair apportionment of collective football revenues. Each party—the Premier League and the EFL—has its own central broadcast revenues. Indeed, the EFL has just secured a landmark five-year domestic broadcasting deal worth nearly £1 billion, increasing its central revenues by 50% from next season. This is testament to the Championship’s growing competitiveness and appeal.
I will not dwell on the fact that many of its recipients are incredibly wealthy—I believe there are nine billionaire owners in the Championship, along with many other extremely well-funded ownership groups—but I will dwell on the fact that, despite its very healthy income, the EFL does not give any money to the National League. It gives no funding to the leagues directly below it. It is the Premier League that supports the National League. Far from some sort of neutral arbitration to allow all parties to share with each other, the backstop is in fact a mechanism for the forcible redirection of billions of pounds of Premier League revenue only. In other words, this is one set of private businesses handing over money to another competing set, even if they do not want to give more than the £1.6 billion they already do and it damages their ability to compete.
The critical point, therefore, is that this backstop mechanism represents a completely unprecedented and untested intervention in what are the private commercial rights of Premier League clubs only. It impacts uniquely on Premier League clubs. The gravity and novelty of such an intervention demands the most careful consideration. Crucially, the backstop introduces a major and radical change in the Bill: the inclusion of parachute payments. This decision was taken without adequate consultation with Premier League clubs.
I mentioned earlier in Committee that just seven out of 20 clubs were invited to a 30-minute meeting on the Bill with the Secretary of State between the Government taking office in July and the decision, which was taken in October. It is no surprise that this lack of consultation has produced such a reckless decision. There simply cannot have been an appropriate understanding by the Government of its potential consequences.
Parachute payments are not a financial convenience; they are a cornerstone of the Premier League’s competitive balance. Without them, clubs cannot plan for long-term investment, or the stability required to maintain the intense competitiveness that is the hallmark of the Premier League and a significant driver of its global appeal. Parachutes are also—this is an often-overlooked point—a key part of the financial incentives for Championship clubs to invest in that league, knowing that if they reach the promised land, it will not all be undone with one bad year.
To fundamentally alter this system risks undermining the very factors that have made the Premier League such a global success and one of the UK’s greatest soft power assets. Potentially harming the magic ingredient of the Premier League’s competitive balance threatens to destabilise long-term commitments, jeopardising investment in lower-league stadiums, academies and community programmes. I believe it would fundamentally undermine the Championship, too.
We should also consider the concerns raised by UEFA. It has warned that the backstop mechanism could disrupt the balance of power in football governance and negatively affect the competitive equilibrium in both domestic and European competitions. UEFA has urged the Government to carefully reconsider their approach, emphasising that mandating redistribution in this way risks deterring amicable solutions and the very investments that underpin the success of English football.
This unprecedented intervention into private commercial rights must be carefully scrutinised. It very obviously has a differential and disproportionate impact on the clubs within the Premier League. It is also clear that the consequences of this seismic and deeply flawed intervention have not been fully understood. We do, as UEFA has said, need to reconsider this critical issue.
Lord Markham (Con)
I rise to speak to my amendment to Clause 71 on financial redistribution, and to add to the very valuable points made by my noble friend Lady Brady.
What the Bill seeks to do—which I have not seen in relation to any other regulator in the UK—is to give the regulator unprecedented powers to take money from one part of the sector or certain companies and give it to another. In any other field, this would be unheard of. Can you imagine the FCA saying, “I think HSBC should give some money to Barclays”? Can you imagine Ofwat saying to Severn Trent, “Thames Water is having a bit of a hard time, can you help it out”? Can you imagine Ofcom saying that Sky should help ITV out where advertising revenues are going down? That is unheard of among regulators.
I value the days in Committee as there is such knowledge around the House, so I would love it if any noble Lord could come up with an example of where a regulator has got the power to take away money from a part of the sector or company and give it to another. I would love to hear it.
Lord Goddard of Stockport (LD)
On the noble Lord’s point, can he explain to me what happened to the banks when the financial crash came and they ran out of money, or the money was disappearing? Who stepped up then and financed all the banks? The Government did. That was an example of rebalancing and ensuring that the money supply could keep going throughout—that is why they did it.
This Bill will ensure that the rest of the pyramid can survive and carry on. One document I read today says that in 2022-23,
“20 members of the Premier League and five … in the EFL … received 92% of the distributable”
wealth—£3 billion—while
“the other 67 professional clubs”
got £245 million. Is that fair?
Lord Markham (Con)
That goes right to the heart of this conversation. I can point out loads of industries where there are only one or two top companies. Think of the share of the search revenue that Google has. Is that fair? Is it the role of a regulator to get involved and say, “Oh, Google, you should give some money to Bing, because it’s not doing that well”? That is exactly my point.
The noble Lord made a point about the banking sector. The Government stepped in there because they felt that there were wider consequences for the whole economy. They stepped in; they did not say, “Barclays, you should give some money to HSBC”. What we are talking about here is fundamentally different. It is a different set of regulatory powers that I do not think anyone has seen—
Lord Bassam of Brighton (Lab)
We are talking here about a fundamentally different thing: the football pyramid and its sustainability. That is what this Bill is about. The question from the noble Lord, Lord Goddard, was entirely fair. Is it fair that the top 20 Premier League members and the top five clubs in the Championship get 92% of the television revenues generated, when it is the whole of the football world, in a sense, that helps generate those revenues? I do not think it is fair, and I want to hear the noble Lord, Lord Markham, comment on its fairness or otherwise.
Lord Markham (Con)
Is it fair that Federer, Djokovic and Murray earned so much in their time? Did Wimbledon not need all the players to take part for it to be so valuable? Is it fair that Verstappen has won the championship four or five times in a row and is earning far more than everyone else? That is about sporting competitiveness—or competitiveness in anything. It is not the role of a regulator to start to redistribute income; I believe fervently that we will then get the law of unintended consequences.
My noble friend Lady Brady talked about parachute payments. This weekend was a perfect example of why the Premier League is the most popular league in the world. Crystal Palace held Man City to a draw. Can you believe that Crystal Palace—fourth from the bottom, right on the edge of being relegated—would have invested that much in players if they knew that, if they got relegated, they would lose all that money and face almost financial ruin in the Championship without it? I do not think so. I think a regulator would have said, “Oh, Palace, it’s not very sustainable having all that money when you could go down”. That would fundamentally alter the competitiveness of those games. That is the value of the Premier League. People will tune in, because they know that it will not be a walkover between Palace and City in this example; they know that it will be a competitive game.
Countries all over the world are prepared to pay more money than anyone else to see these games because they are competitive. Take the Bundesliga or the Italian or Spanish leagues: there are two or three top clubs and then a lot of also-rans, so it is not competitive in the same way. That is the danger we face here. By allowing regulators to redistribute income, on the basis that it is not fair that the top clubs are getting more, you will alter the whole competitiveness of the structure. Again, we say that it is not fair, but is it fair that the Championship is the sixth wealthiest in the world, while the Premier League is the wealthiest? Why is that? First, it gets a lot of payments down from the Premier League as part of voluntary arrangements. Secondly, it is because of how the whole of football has been set up for clubs to be promoted: money is being invested to give them a chance.
We have all said many times that this is our number one industry worldwide—there is no doubt whatever about that. We then have the second tier, which is number six worldwide. There is nothing else like that, and I believe we are at risk of putting that whole system under threat if we meddle in these ways.
Lord Pannick (CB)
I declare an interest, having acted recently for Manchester City in relation to the charges by the Premier League. I put it to the noble Lord that the system he and the noble Baroness, Lady Brady, portray of Premier League clubs having the normal activity of a commercial company that can to do what it likes is simply incorrect. The Premier League itself imposes considerable restraints via financial fair play on what companies can spend and how they use their money. It does that because this is a sport, and the effectiveness of the sport depends on competitive constraints. What the regulator may or may not do is simply an aspect of that. The world that the noble Lord portrays simply does not exist.
Lord Markham (Con)
I thank the noble Lord. He makes a very strong point, which is that the current system of regulation for Premier League clubs, and the EFL doing it for its clubs, seeks absolutely to set up that competitive environment and those financial fair play rules. My point supports what the noble Lord said: there already is a system of checks and balances, which is working well and making sure that our English Premier League is the first in the world and the Championship is the sixth. Why do we need a regulator coming in between that?
I perfectly accept that there are certain things that the regulator is important for, such as the breakaway league, but is it really the best place to start to have financial distribution from one club to another? That is why I brought this amendment forward. We are fundamentally asking a regulator to do something that we have not asked any other regulator to do in the whole of the economic environment. I thank noble Lords for their interventions; they have added to the debate. I look forward to discussing this further.
Briefly, my other amendments, Amendments 126 and 130, again try to ensure that we do not get mission creep, that we are quite clear about the information the regulator should be asking for from the clubs, and that we cannot set up a regulator that is allowed to go on a complete fishing trip in a lot of these areas. The amendments would set out what information the regulator can ask for from clubs and what they should provide in their strategic business plans, so that we are all clear about that without an endless list that goes on and on. Again, I speak in the context not just of the large clubs; a lot of these are very small clubs, without a large amount of resource to reply to lots of information requests. We need to be quite clear about what we are asking the regulator to do.
I hope this has contributed to the debate. I hope noble Lords will reflect on the fact that we are asking the regulator to do more than we do in any other sector—in our most successful sector too—and whether that is wise.
Baroness Evans of Bowes Park (Con)
My Lords, I speak in favour of these amendments, which would enhance the regulator’s approach. I particularly support Amendments 51 and 52, in the name of my noble friend Lord Maude. The language change may appear subtle—to replace “protect and promote” with
“monitor and where necessary intervene to safeguard”—
in the IFR’s objectives, but the implications for the regulator’s behaviour would be important.
The Minister has said several times in our previous debates that she believes the regulator’s approach should be proportionate. That is welcome, but I am concerned that the current wording of the objectives does not fully support that intention. We have discussed overregulation at length, and the potential for it is clear, particularly as we do not have a counterbalancing growth or success duty to guard against such an approach.
It is important to remember that most clubs, at all levels of the game, are well run. There is no justification for an overly risk-averse set of financial rules that can dampen investment and threaten our hard-won global leadership position, or for infrastructure investments that drive long-term value to be second-guessed. We can guard against such unnecessary interference and regulatory creep. My noble friend Lord Maude’s suggested wording could provide an underpinning for a more proportionate approach. It would recognise that most clubs manage their affairs responsibly and that football’s existing structures in the main work effectively, but would allow for targeted regulatory intervention for genuine issues that have been identified and where it becomes very clear that IFR action is necessary.
The systemic resilience objective requires particularly careful consideration, as we must set an appropriately high bar for macro-level interventions that may fundamentally change how football works. Changing this objective to one to intervene where resilience is “substantially threatened” would properly frame the backstop power as a true emergency brake. As the Minister herself said, it should not be a routine tool.
This matters hugely. As we have heard already in discussions in Committee, the football pyramid depends hugely on the Premier League’s commercial success. Constant intervention risk in a readily available backstop would create exactly the kind of uncertainty we do not want to see that could damage long-term investment. We must make sure that the backstop power genuinely is an “in case of emergency only” tool.
The commercial confidentiality provisions tabled by my noble friend on the Front Bench are equally important. As we know, football clubs compete internationally for players, commercial partnerships and broadcast value. Forcing the detailed disclosure of business strategies or commercially sensitive information could damage clubs’ ability to operate effectively in these markets.
This group of amendments is about ensuring that the regulator enhances rather than inhibits what makes English football successful: genuine competition, where well-run clubs can thrive through strong management, innovation and calculated ambition. Once again, we are talking about a set of changes that could provide the regulator with a lighter-touch, proportionate model of regulation. I hope the Minister will give them some serious consideration.
Lord Addington (LD)
My Lords, it might be convenient if I say a few words now. I remind the Committee that many of the people taking part today do not like regulation. I have heard that—a lot. I have a bad short-term memory because I am dyslexic, and I have got the message very clearly, so can we just leave it there?
The aim of the Bill is to create a sound framework for football. Even if you do not think those at the top are in trouble, everybody is agreed that, periodically, the other bits look as though they are going to collapse and fall away, or will have to be replaced, as well as all the little local dramas going on. That has been going on for decades, and we have all heard it.
We are going to have a regulator. The worst type of regulator is one that stands back and does not intervene until it is too late, and has to go in with a heavy hand. We want a regulator that we know will intervene and, as I put it at Second Reading, bite hard enough to leave a scar; a body that will actually do something and let people know that there will be consequences for not complying with the regulation. That is what the Bill is about—and what it has been about since the first version. I hope that we can progress on the line that we are trying to make the regulator work properly, and that we do not have too much repetition of points that have already been made.
Lord Hannan of Kingsclere (Con)
My Lords, I support my noble friend Lord Markham’s Amendment 71. It was criticised from all the other Benches on grounds of fairness. I just want to interrogate slightly what the critics mean when they say that this regulator will make things fairer.
We are famously a fair-minded people—you can always appeal to a Brit’s sense of fair play—but the word can be ambiguous. Does it mean equity, merit or need? Suppose that the noble Lord, Lord Bassam of Brighton, and I were to buy a cake together, and he spent £3 on it and I spent £2. What would be the fair distribution? Would it be a 60:40 distribution—in other words, dependent on what we had put in? Would it be 50:50? Would it depend on which of us looked hungrier—in other words, based on need? Sometimes these things are all merged together.
I find that, in politics, the word is a kind of boast; it is used to mean, “Look at me: I am a nice, caring person”. It is a way of signalling your decency: “Mirror, mirror on the wall, who’s the fairest of them all?” When applied to this particular case, we are in danger of entering into a kind of Atlas Shrugged world, where we politicians and state regulators decide what is fair, rather than leaving it to those most involved.
The noble Lord, Lord Addington, says that we want a regulator that can bite and leave scars. I would rather not have the scars. I would rather have our extremely successful football system unscarred. He added that it existed for decades without regulation, which I think tells us something. I accept that we have lost that argument and will get some kind of regulator, but I appeal to the Government, at least on the other amendments in this group.
The Minister, at Second Reading and again at the start of Committee, repeatedly said that she wanted the scope of the regulator to be restricted, and I do not for a second doubt her sincerity. We also have heard lots of people on all sides already trying to extend its scope—not to limit and circumscribe it but quite the opposite. Indeed, if we look down the list of some of these amendments, we see that, even before it has come into law, people are saying that it needs to apply to women’s games, we need regulations on diversity of ticket holders, and so on.
Lord Parkinson of Whitley Bay (Con)
My Lords, I speak to Amendments 51 and 52 in the name of my noble friend Lord Maude of Horsham—I am grateful to my noble friend Lord Hayward for moving Amendment 51 on his behalf—and to Amendment 57 in the name of my noble friend Lord Jackson of Peterborough, and then Amendments 71, 126 and 130 in the name of my noble friend Lord Markham. To those final three, I have also added my name.
The amendments in this group seek to restrict some of the wider powers granted to the new independent football regulator in the Bill as presently drafted. Amendments 51 and 52 would alter the fundamental objectives of the regulator. As drafted, the Bill states that the objectives of the regulator include
“to protect and promote the financial soundness of regulated clubs”,
and
“to protect and promote the financial resilience of English football”.
In essence, that is both a specific objective, directed at clubs themselves, and a general objective, which applies to English football as a whole. Leaving aside the important question of what constitutes English football—which we have already debated but not yet had much success in ascertaining—and indeed the question of what the Government mean by “financial soundness” and “financial resilience”, my noble friend Lord Maude of Horsham has sought through his amendments to probe the Government’s intention to set the regulator’s objective as being to protect and to promote. In place of those words, my noble friend proposes the alternative description,
“monitor and where necessary intervene”.
His amendment thus addresses the core question of how activist a regulator we want. I am grateful to my noble friend Lord Hannan of Kingsclere for underlining that point in his contribution. I look forward to the Minister’s response both to the amendments and to that that core argument. That is, I think, what Members of the Committee have been probing in this group.
Clearly, as drafted, the Bill sets the independent football regulator an active objective to protect and promote English football. That objective is necessarily continuous and seemingly proactive. It could be taken by the regulator to require constant involvement, giving rise once again to the concerns that the Committee has raised about excessive activity and mission creep. By contrast, a lighter-touch duty to monitor the financial soundness of clubs and the financial resilience of English football could allow clubs to get on with their ultimate objective of winning competitions without the overbearing and excessive involvement of this new regulator. I was struck that my noble friend’s amendment is explicit that the regulator’s objective would involve active intervention only “where necessary”. That is a helpful formulation and discipline when drafting legislation.
The question these amendments pose to the Committee, therefore, is whether we want an active, interventionist and potentially overbearing regulator, which might run the risk of getting in the way of our world-class football clubs; or a vigilant, diligent but ultimately careful regulator, which has a duty to stay its hand and intervene only when necessary. I have stretched from teeth to hands in extending the metaphor used by the noble Lord, Lord Addington; I agree that the regulator must have teeth and must be seen to have them. We would like to see those teeth bared from time to time, and to hear them gnashing but, like my noble friend Lord Hannan of Kingsclere, I would rather not see the scars from those teeth on world-class and highly successful businesses and clubs too often.
We have to strike the right balance to make sure that we have a regulator that commands the respect that it needs to, without biting too often and too damagingly. I look forward to hearing the Minister’s thoughts on where to draw the line, both in the legislation and the words that we have, and on what the Government hope the Bill will bring about for the regulator.
Amendment 57, tabled by my noble friend Lord Jackson of Peterborough, places a prohibition on the regulator from intervening in the internal financial affairs of regulated clubs. His amendment allows us to consider an important issue, on which a number of noble Lords touched. I know that my noble friend feels very strongly about the possibility of this regulator hampering the ability of clubs to operate as the successful businesses that they are at present, so I welcome his attempt to see whether there is a sensible way of placing some restrictions or limitations on the role that the regulator might play.
As I made clear from Second Reading onwards, we support the establishment of this regulator. We recognise that specific market failures have been raised and recognised, both by fans during the fan-led review and by the previous Government’s work, which helped to inform this Bill’s precursor. The ability of the regulator to have at least some role in regulating the finances of clubs will, I hope, allow it to attempt to address the problems that have been identified. However, we again want to make sure that it does not do so in a way that damages the successful businesses that they are.
Amendment 71 is in the name of my noble friend Lord Markham, and I put my name to it as well. It seeks to prevent the regulator from transferring funds from one private club to another. Mindful of the Government Chief Whip’s entreaties, I do not wish to repeat my noble friend’s argument, so I merely pose a question to the Minister: are there any circumstances in which she and the Government feel that a transfer would be appropriate? If there are no circumstances that she can envisage and set out, what are the problems with embracing my noble friend’s amendment?
I will also say something about my noble friend’s Amendment 126, which seeks to strike out Clause 16(3)(c). That provision of the Bill allows the regulator to require clubs to provide any “such other information”, as the regulator decides in its rules, when those clubs are applying for their provisional licences. Once again, those rules are not set out in the Bill, but are to be determined at a later date so, as clubs are planning their financial affairs for the near future and beginning their preparations for the licensing regime that will be ushered in once the Bill gains Royal Assent, they will not know what information they will be required to provide to the regulator. All we have in the Bill is a vague requirement that they must produce a “personnel statement” and a “strategic business plan”, but there is no further information here and paragraph (c) seems to allow the regulator to request anything that it may choose. That is a distinct lack of clarity for clubs, and I would be grateful for the Minister’s view on whether we can add to that clarity by being more precise.
Finally, Amendment 130, also in the name of my noble friend Lord Markham, would prevent the regulator from requiring information that is not specified in the Bill to be included in a club’s strategic business plan. The current drafting of the Bill grants the regulator a concerningly wide power to require clubs to include
“such other information as may be specified by the IFR in rules”.
This is yet another example of a lack of clarity in the Bill, and I am grateful to my noble friend for highlighting it. Where there is a lack of clarity regarding the regulator’s duties, there is uncertainty for the party that is to be regulated. It seems regrettable that the clubs should not get the clarity that they need about their duties under this part of the Bill but must wait until the regulator has published its rules in due course. Can the Minister give us a flavour of the kind of information requirements that the Government think that the regulator might be likely to include in its rules? Is that something that the Government have discussed with those who are preparing the regulator’s work in this area? Can she elaborate on this for the Committee’s understanding? I am grateful to her and to noble Lords who have spoken on this group.
Lord Pannick (CB)
My Lords, it is important to remember that Premier League clubs are already extensively regulated by the rules of the Premier League. The problem is that those rules are made by the 20 Premier League clubs themselves. They are also regulated, as all football is regulated, by UEFA. I gave the example a few moments ago of financial fair play. The virtue of the Government’s proposals surely is that the regulation will be by an independent person. That is what is required. The defects of all the proposed amendments in this group would be simply to confine the discretion of the independent regulator to respond to circumstances as they arise.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I thank the noble Lords, Lord Maude of Horsham, Lord Jackson of Peterborough and Lord Markham, for these amendments, and the noble Lord, Lord Hayward, for introducing this group. I particularly welcome the contribution of the noble Lord, Lord Pannick, which reminds us of why we are here.
Starting with Amendments 51 and 52, tabled by the noble Lord, Lord Maude of Horsham, I understand that their aim is to clarify that the regulator should only intervene where necessary and in response to substantial risks. I assure the noble Lord that this aim is already appropriately achieved by the Bill. As the noble Lord, Lord Addington, said—and apologies if I paraphrase this incorrectly—this is about ensuring a sound financial basis for football. It will be for the regulator to identify risks to a club’s financial soundness or the financial resilience of the system and to act accordingly. It would be disproportionate and unreasonable for the regulator to intervene where it did not think that the benefits of doing so would outweigh any costs imposed. The Explanatory Notes to this clause make clear that, in the advancement of its systemic financial resilience objective, the regulator
“will identify, monitor and if necessary take action to mitigate systemic risks in order to protect the aggregate financial sustainability and resilience of English football”.
However, we reject the notion that the regulator should be able to act only once risks have become so severe that they substantially threaten the system. The noble Lord, Lord Goddard of Stockport, mentioned the banking crisis; the amendment under discussion could be argued to be equivalent to a financial services regulator noticing sub-prime lending and credit default swap trading in 2007 but not being able to intervene until Lehman Brothers collapsed in 2008. Instead, the regulator should be able proactively to mitigate risks when they are identified. We believe that “protect and promote” appropriately conveys this, to ensure a future forward-looking regulator. However, I reassure your Lordships’ House that this does not mean that the regulator will be placing undue restrictions on clubs, pre-empting risks that have not yet materialised.
Turning to Amendment 57 in the name of the noble Lord, Lord Jackson of Peterborough, I am afraid that the noble Lord’s amendment is at odds with the aims and objective of the regulator. It undermines the very intention of a Bill that had the support of all three main political parties at the election less than three months ago. Indeed, the shadow Secretary of State in the other place has stated:
“I genuinely think that this is an excellent Bill”.—[Official Report, Commons, 23/5/24; col. 244.]
We are looking to set up a predominantly financial regulator. Stopping the regulator from taking any action relating to a club’s internal finances would defeat that purpose. The regulator’s statutory mandate is to deliver its objective; it will achieve these aims using only the powers given to it in statute, such as the licensing regime and the owners’ and directors’ test. The regulator would, therefore, not become involved in the club’s finances, unless it thought that the action would lead to it delivering its objectives. Its powers place clear limits on the extent to which it can require things of clubs.
Lord Markham (Con)
I want to make sure I properly understood the answer to the question on the circumstances in which the Minister would say it was appropriate to take money from one club and give it to another. The Minister answered that the Bill was not seeking to do that because it was looking at the movement of money between competitions. But if you take more money from the Premier League to give to the Championship and other clubs, by definition the clubs receive less money, so that is what happens there. I am not sure that saying money is coming from the competition, not the clubs, is an answer; the money is coming from the clubs. I was not sure about the Minister’s answer. When you change the payments between the Premier League, that directly impacts the clubs and the money they receive.
Baroness Twycross (Lab)
My understanding is that the amendment would prevent money going from club to club. The model is around distribution between leagues or competitions, as the noble Lord suggests. There is already a situation in which the Premier League recognises that some financial redistribution is needed. I refer the noble Lord to previous discussions about why the regulator and financial redistribution of some type are required within the football pyramid.
Amendments 126 and 130 relate to the regulator being able to state in its rules any further information that is required to accompany the application for a provisional licence or the strategic business plan. The regulator will be independent, and it will be the expert. We need to give it the flexibility to implement its regime as it considers appropriate. This includes being able to request additional information in a club’s application if necessary to satisfy itself that the club will meet the test for a provisional operating licence. This will be set out up front in the rules, so clubs will always know in advance what is required of them when submitting an application or a strategic business plan. For the reasons I have set out, I am unable to accept the noble Lords’ amendments, and I hope they will not press them.
Lord Hayward (Con)
My Lords, I find the Minister’s answer interesting, but I will start by making a comment in relation to my noble friend—I do address him as my noble friend—Lord Addington’s remarks regarding regulation. The concerns we have on these Benches are in relation not to regulation per se but to regulatory creep and regulatory definition. The first few clauses in the Bill in one form or another either cover inadequately or do not cover the question of regulation.
My first amendments related to sustainability and the breadth of that comment. The Minister has just made her observations in relation to “targeted”, “prioritised” and “proportionate”. We are trying to establish precisely what the regulator can operate to, more clearly than we have in the Bill as it stands. It is not clear, and the net result is, as we know and as has been observed by any number of Members across this House, that we watch regulators use regulatory creep one after another after another.
The Minister used the words “proportionate” and “targeted”. Is the regulator going to have exactly the same interpretation of “proportionate” or “targeted” as the Minister? No. By definition there are no minds alike, and therefore they will be different. In this set of amendments we are trying to find out precisely how the regulator should operate. Without that clarity, the Bill gives the regulator what I regard, and I think many people on this side of the Committee particularly regard, as undue breadth of self-interpretation. The noble Lord, Lord Pannick, referred to the Premier League and the payments that are made. I agree with parts of the comments that he made, but we have here a unique operation whereby the Premier League makes payments to other clubs in other divisions and to those facing threats of relegation so that the whole system does not fail.
The noble Lord, Lord Goddard, identified the banking crisis. Under those circumstances, Governments worldwide intervened in all sorts of ways in all sorts of businesses. That is not comparable with trying to regulate a sport, and a highly successful sport as it is. What is significant and interesting is that although the Premier League passes money downwards, the Championship does not. It receives money and could easily pass money down, but fails to do so. Therefore, one is looking at a complicated position in terms of regulation and the impact it will have, in a way that has been eloquently identified in a number of contributions from the noble Baroness, Lady Brady, from her understanding, unique in this Chamber, of the operation of both the Championship and the Premier League.
I will continue to seek clarity, as I am sure others will, on what is intended behind the work of the regulator. That is what we are here to do, and we should do it step by step as we look at each clause and subsection. Having made those comments and noted what the Minister said, I beg leave to withdraw the amendment.
Lord Blunkett
“(d) to ensure regulated clubs have a clear, appropriate governance structure with a board consisting of executive and non-executive directors enabling decisions to be taken collectively.”
Lord Blunkett (Lab)
I rise to move Amendment 54 in my name and that of the noble Baroness, Lady Grey-Thompson, and to speak to the associated Amendment 159, which relates to Schedule 5 and the role of the regulator in relation to the code of practice.
I hope we will not spend an hour on this group. Having sat through parts of the first two days in Committee, I have heard exactly the same arguments this afternoon as I heard on the previous groups, including on the definition of football, what we mean by competition and even what fairness is. Well, I know that fairness is not the argument about whether the noble Lord, Lord Bassam, pays his due share towards a piglet pie at Brighton’s football ground.
What is this all about? It is quite right that we in this House should scrutinise, raise legitimate argument and challenge a Bill of this sort, but I say to the Premier League, and to those who are, by the very nature of the debate over the last three Committee days, involved in taking the briefings: overdo this and you will do so at your peril, because at some point millions of fans out there might learn what is going on with the filibuster taking place in this Committee and, when they do, they will be very angry.
The Premier League, with its money and its brilliant legal and lobbying support, needs to just reflect on whether this filibuster and what is being done in this Committee is benefiting it. I think not—sometimes overdoing it can be really detrimental.
Baroness Fox of Buckley (Non-Afl)
My Lords, I have no idea whether there is filibustering going on, nor whether everybody on this side of the Committee who I have not spoken to is in the pockets of the Premier League, but I feel there is a kind of gaslighting going on. I take the Bill seriously. I have read as much as I can. Nobody in the Premier League has come anywhere near me, should the noble Lord want to know, nor written my speeches or talked to me.
It is just not fair. There is a lot in the Bill to get one’s head around and to try to speak to. If there is repetition going on in this debate, it is people on the other side constantly saying that anyone scrutinising the Bill must have been got at by the Premier League. That is certainly not true of a wide range of us.
Lord Blunkett (Lab)
I say to the noble Baroness, Lady Fox, that if you do not have the hat on, you are not wearing it. It is not an individual I am talking about.
I would like artificial intelligence or GPT to do a word count of exactly what the Benches opposite have said over and over again over the last three days in Committee. I started to do that again this afternoon. There were the same phrases, the same arguments and the same resentment all over again about the idea that we should regulate.
Bear in mind, this whole issue came out of the report of a former Conservative Sport Minister. It was subject to a White Paper by the previous Conservative Government in February 2023, and legislation was then drawn up by the Conservative Government. After all that further scrutiny and debate outside, we are now debating it under a Labour Government—ho, ho, ho.
Let us be clear: get this wrong and it will not be the Premier League that loses out; it will be a pyramid, which by its very nature is built from the bottom. Without the rest of the EFL and beyond, we would not have a Premier League. You could ring-fence the 20 clubs, which is what some of them would like; I am sure it would be fantastic for the noble Baroness, Lady Brady, to know that West Ham would never be relegated. I would love Sheffield Wednesday to never be relegated ever again. In fact, I ought to declare a reverse interest: my family and I sponsor a member of the Sheffield Wednesday squad, Callum Paterson. My only resentment is that the manager does not put him on the field often enough. There we are, Saturday after Saturday—and, these days, Sunday after Sunday—seeing competition working and seeing the struggle that is going on.
Lord Knight of Weymouth (Lab)
My Lords, I shall speak to Amendment 157 in my name; I am grateful to those who have added their names. It seeks to add to the governance requirements for licensed football clubs that there should be at least two independent non-executive directors appointed to their main board. The remit for these directors should follow the definition set out in the UK Corporate Governance Code developed by the Financial Reporting Council. I thank the Arsenal Supporters’ Trust for its support for me in putting this amendment together.
As your Lordships know, independent non-executive directors bring independent expertise, scrutiny and accountability to a board, and would have a key role to play in upholding the principles of the Bill around financial sustainability and supporter engagement. I had a quick look and noted that Brighton & Hove Albion Football Club have several independent non-executives; West Ham are reported to have a couple; Liverpool have solely Kenny Dalglish; and Arsenal have simply the noble Lord, Lord Harris of Peckham.
I think we should have more than just the one. The appointment of independent non-executive directors, and their role in advising and scrutinising a club’s financial position, can be an effective check and balance. It is likely to mitigate the need for an independent regulator to intervene regularly, as more issues will be successfully addressed through the accountability that independent non-execs provide.
They can also safeguard the interests of the association’s stakeholders and membership, as the code sets out. In this case, that means supporters. The UK Corporate Code sets out how independent non-execs have a role in overseeing effective engagement with stakeholders. In the case of football, this would of course be adopted to cover supporters and would really help to develop progress on the requirement for effective fan engagement by providing independent senior voices who would play a key part in ensuring effective dialogue with fans.
In that vein, the DCMS requires all national governing bodies for sport to appoint independent non-executive directors to their boards, as set out in the sports governance code. So I ask the Minister to set out provision for independent non-execs on the face of the Bill, or give us reassurance that the regulator itself will bring forward requirements around this issue in the governance code that it will produce.
Lord Markham (Con)
I would like to support absolutely these amendments. I say for the record—and I am sure that I speak for all contributors to these debates—that I am making these points because I care deeply about football and about what is best for football. I think these amendments absolutely do that.
I have many examples of sitting on boards as an independent non-exec director; they are absolutely the sort of people we want, making sure that a club is putting forward appropriate business plans that are sensible, and sometimes taking a risk—risk appetite is in these amendments—but with the right approach to doing so. Having that balance on the board, of owners, supporters and independent, wise heads, has got to be a sensible thing. With that in mind, I offer my support for the amendments.
Baroness Grey-Thompson (CB)
My Lords, I rise very briefly to speak to Amendments 54, 156 and 157. I apologise to your Lordships for not being here on the previous day of Committee but, as chair of Sport Wales—I declare my interest—I was chairing a meeting of Welsh governing bodies of sport.
In my time involved in sport, I have sat on a number of different sports bodies, including British Athletics, where intimate knowledge of the sport is really helpful, and the Olympic Park London Legacy Development Corporation, where wider knowledge of a range of sports makes a difference. I put my name on these amendments because I sat for two years on the board of Yorkshire County Cricket Club and was interim chair for nine months. As part of that, I was challenged occasionally on whether I knew the laws of cricket and how dare I put my name forward for this. But I was not there as an independent non-executive to umpire a game; I was there to bring good governance to the county.
Bringing that jigsaw of skills is really important. As the noble Lord, Lord Knight, mentioned, there is a sports governance code. Olympic and Paralympic sport have benefited greatly from having this. It is about bringing that expertise, accountability and scrutiny. For me, it is about setting the tone for the whole pyramid of the game, and how that feeds up to the Premier League. If we do not get this right for the pyramid, we do not get it right for the sport. I look forward to hearing the Minister’s response to these amendments.
Lord Reay (Con)
My Lords, I wish to speak briefly to Amendment 249, laid down by the noble Lord, Lord Mann, and Amendment 156 from the noble Lord, Lord Bassam. Regrettably, I was not able to participate at Second Reading, for which I apologise. I declare an interest as an enthusiastic football fan and supporter of West Ham United since the days of Bobby Moore and Geoff Hurst—which dates me a bit.
Clause 20 of this Bill introduces corporate governance duties with regard to equality, diversity and inclusion. Amendment 249 from the noble Lord, Lord Mann, would create an additional duty on football clubs to produce an annual report detailing the club’s diversity and inclusion strategy. This sounds in theory like a good thing. The problem here is that the Football Association’s idea of diversity and inclusion seems to be to promote some forms of diversity while silencing—even excluding—others.
The current approach at the FA punishes and excludes one particular group: women who object to male inclusion in the women’s game. Noble Lords have previously spoken in this House about the 17 year-old girl who was disciplined and suspended for asking a male player on the pitch in a women’s game, “Are you a bloke—a male player in a women’s game?” She was suspended. That is not inclusion.
Amendment 156, in the name of the noble Lord, Lord Bassam, proposes that the corporate government statement must include a club’s plan to improve the diversity of season ticket holders, staff and senior managers. The FA’s investigations unit helped Newcastle United Football Club collect personal information about a lesbian fan which resulted in her suspension by the club from attending matches because someone at her club did not like her social media posts. This behaviour by the FA and the club is not inclusion.
Both examples show intolerance of what are called gender-critical views—that is, the ordinary scientific and common-sense understanding that there are two sexes, that human beings cannot change sex and that sex matters. Those are mainstream views and they are critical to ensuring fairness and safety in sport. People who hold and express them are protected against discrimination and harassment on the basis of belief by the Equality Act 2010, but the FA is punishing female players and fans for expressing these views.
Through its partnership with Stonewall, the FA has made its campaign one of intolerance, disallowing the expression of any views other than the mantra of “trans women are women”. When diversity and inclusion is defined by more tolerance, I shall welcome it. If we compel English football to pursue more of this so-called diversity and inclusion, it will be at the further expense of women and girls.
What is the solution? The solution is to stop talking in vague terms about diversity and inclusion and have the courage to talk about the groups who need to be included: women and girls, gay men and those who are disabled. Let us have less of the thought-policing and more genuine inclusion. Until we can do that, we must oppose the further imposition of vague diversity and inclusion requirements, because they are anything but inclusive.
Baroness Brady (Con)
My Lords, before I speak to Amendment 156 in particular, I want to address a point made by the noble Lord, Lord Blunkett. There have been 51 clubs in the Premier League since its inception, and there are no permanent members of the Premier League. The Premier League is responsible. It works in a way that looks after the entire pyramid, with its £1.6 billion voluntary redistribution, and it is that money that powers the entire Premier League.
I have spent 32 years—almost all my career—working in professional football across the Football League and the Premier League. My suggestions for amendments are, in a way, to assist the Government to make the Bill work better and avoid the unintended consequences that we all fear and keep warning about.
Amendment 156, tabled by the noble Lord, Lord Bassam of Brighton, concerns inclusion and diversity among season ticket holders in the corporate governance statement. I want to say at the outset that diversity is undoubtedly a critical issue in any industry, and football is no exception. Clubs across the pyramid should and do strive to be welcoming and inclusive spaces for all. However, with respect to the noble Lord, the amendment makes a profound and dangerous error. It proposes to involve the regulator in micromanaging some of the most fiercely prized and deeply personal relationships that football clubs hold: their connection with their season ticket holders.
Season ticket holders are the beating heart of football clubs. They are not just customers; they are custodians of the club’s heritage and identity. They represent generations of loyalty, support and community spirit. To suggest that the club should be required to actively manage and engineer the diversity of this group fundamentally misunderstands the organic and deeply embedded nature of these relationships. It risks turning something sacred and delicate into a crude tick-box exercise. For what purpose? To satisfy an external regulator’s misguided notion of progress. I cannot stress enough how risky that would be. It is yet another sign of the scope creep and dangers that lurk in the Bill.
I am not saying that football does not have a role to play in promoting diversity and inclusion—it absolutely does, and clubs up and down the country are already leading by example in the brilliant work that they do every day in this regard. But these initiatives arise from the clubs themselves, born out of genuine commitment and not fear of regulatory overreach. That is how to foster real, lasting change—not by imposing quotas or forcing clubs to meet arbitrary targets but by working with them to build on the good will and trust that they already share with their communities.
Lord Goddard of Stockport (LD)
I hear what the noble Baroness says about diversity. This weekend, a West Ham player, Antonio, had a terrible car accident and is in hospital now. If you had seen some of the vile and disgusting comments on social media about the player and the club, you would begin to understand why we need diversity.
I have just looked it up, and the dictionary says that diversity is
“the practice or quality of including or involving people from a range of different social and ethnic backgrounds and of different genders, sexual orientations”,
and that
“equality and diversity should be supported for their own sake”.
I do not have that rosy picture of football supporters. I lived through the 1960s, 1970s and 1980s and heard the chants at various football grounds, which we cannot now repeat in this Chamber. Things are getting better and more acceptable, but it has not gone away. We need diversity to be brought to the fore.
As for the idea that we can just let the clubs do nothing and let this evolve, that just will not happen. We need to make statements. We need, via the regulator and via some of these amendments, to enshrine things in a regulator’s role. What is wrong with having a diversity report that a football club would produce once a year? It is not a tick-box exercise; it stops comments being made about certain footballers about gender, colour, creed or whatever. The more we can introduce that and embed it into football, the less vitriolic nonsense we will get. You still hear it, even on Sky, when they then say, “If you heard anything you shouldn’t have heard, we apologise for that”. That is what you get as an answer—but it needs stopping. These kinds of amendments are needed to enshrine in the regulator the ability to say to clubs, “You will give that report and commit to doing all those things around what diversity means”.
Baroness Brady (Con)
I thank the noble Lord for his comments about the West Ham player, Michail Antonio. It was a real shock to me on Saturday when I received a call from the police about his car accident, but I am pleased to report that he has had an operation and is recovering well. I take the opportunity to thank all the NHS staff and all the emergency services, including the air ambulance and the firefighters who cut him free from his car.
I agree with the noble Lord that the comments footballers are subject to is a terrible shame. It is absolutely horrific and that is a problem with social media. Clubs themselves do everything they can. At West Ham, we have the highest standard of equality and diversity; you cannot be awarded any higher standard than we have. We take it very seriously and that feeds down through our entire club. I thank him for making those comments. Football is trying to deal with those things, but there could be help from other places. We know about the Online Safety Act and that could really help.
Baroness Young of Hornsey (CB)
My Lords, I support Amendment 157. I declare an interest as a Premier League season ticket holder. I apologise to the Committee for not having been present during previous debates on the Bill, but I have endeavoured to keep up with its progress.
This part of our discussion seems to overlay lots of different and very complex issues, piling them all into one or two amendments. As I speak to Amendment 157, I will try to focus on governance and having independent, non-executive directors on boards, which is absolutely essential when looking at this issue. As the noble Baroness, Lady Brady, has pointed out, there is this idea of football clubs being not just a business or a commercial entity, as other commercial entities are. They are also considered to be community assets, so there is a wide range of stakeholders involved in the promotion, adoration, despair and all the other emotions that go with being a football fan. As has been rightly pointed out, it almost defines something about England.
It is therefore important to try to ensure, as far as possible without being too prescriptive, that we have independent non-executive directors on boards because of the accountability. At the moment, I think many fans feel that there is no accountability. I take on board a lot of the points made about how progressive and determined clubs are to counter the horrible things that happen online and elsewhere, but clubs have also not been terribly successful in changing the faces that sit around those boardroom tables. If we look at reviews such as Sir John Parker’s review of ethnic diversity on boards, there has been some improvement in some sectors. I would gladly be persuaded by those who know better if it is the case that diversity has been increased around those tables.
That is just one part of it. To me, this feels like a move for basic good practice. We have the Nolan principles and we have guidance from the Institute of Directors. All those kinds of guidelines need transparency and people to speak up for them who do not have an interest in a particular way on those boards.
Lord Bassam of Brighton (Lab)
My Lords, I have not had the chance yet to speak to my amendments but I am grateful to other noble Lords for participating in the debate and making their comments and views well known. I am slightly disturbed that the noble Baroness, Lady Brady, has rather overinterpreted my Amendment 156. I was not aware that I was in favour of imposing quotas, but it is an interesting point.
Amendment 156 is there simply to raise the issue of ensuring that in corporate governance, football clubs are obliged to improve the diversity within the club, not just among season ticket holders but among staff and senior managers. We have made great progress through football and its barrier-breaking approach to the world of sport over the last 30 or 40 years. I can remember some pretty unpleasant scenes at football grounds when I first started watching football seriously. Gladly, those have become much less frequent but there is a real and genuine issue about representation, particularly of black players then not getting opportunities in off-field representation at all levels of management.
I have received a useful briefing today from the Black Footballers Partnership, which points out exactly that. Only two of the current 92 league managers are black, despite black footballers making up 43% of the players. The Black Footballers Partnership data shows that despite achieving 14% of all FIFA pro licences and one in four of UEFA licences, black players secure only 4% of the coaching and other managerial roles. There is clearly something not right there.
It is important that clubs are obliged to think through some of these issues. Quotas may or may not be the way to do it but we have opportunity here for football to think about improving the levels of diversity, not just in football management but in all management positions and other roles within the clubs. As the noble Baroness, Lady Brady, said, clubs have led the way and have played a really startling and dynamic role over time.
With this amendment—and I am grateful to those who have signed it and spoken to it—I am trying to get football to begin thinking more widely about diversity in its broadest sense so that in the future it is just part and parcel of how it should be. I guess the noble Lord, Lord Hannan, would think that this is regulation creep, but I do not see it that way; I see it as setting standards for the future. Football has a proud reputation, and it is one it should build on.
In this amendment, we are seeking to encourage football to build on its reputation, because that is what needs to be done to make the world of football more inclusive and better reflect the society in which it is located. If we can do that, I think the values of football—competition and solidarity—will be much better represented. It would add to the fairness and equity that is there within a very competitive game.
Baroness Fox of Buckley (Non-Afl)
My Lords, I think the motivation behind the amendment of the noble Lord, Lord Bassam, and the intervention by the noble Lord, Lord Goddard of Stockport, posits diversity as something you cannot possibly be against. Of course, we are all against prejudice—I hope—and that seems very commonsensical. In fact, the noble Lord, Lord Bassam, made the point that he tabled this amendment so we could have a proper discussion about diversity.
The problem for me is that diversity, in the context of governance of organisations, is already established across a wide range of organisations. I am afraid it has not been for the good of those organisations. I will address the problems of diversity as a bureaucratic intervention, especially in the hands of a regulator, and why I think it will not be good for football. That does not mean I am implicitly on the side of people who are racists or not interested in equal rights or fairness.
It is important that we have some perspective here. We might note that there are 64 different nationalities represented in the Premier League, as well as a myriad of religious denominations. For players in all the different football teams across the league, that is surely proof of meritocracy—rather than box-ticking diversity schemes—that provides the riches of talents, that is colour-blind and that is not interested in people based on their characteristics.
I also think we have huge diversity in fanbase, and it has not needed a regulator to organise schemes to ensure that English football is loved by hundreds of millions of people of all shapes and sizes, ethnicities and socioeconomic backgrounds across the globe. Meanwhile, female fans, players and popular momentum are propelling women’s football into the limelight. Therefore, I do not think that football is an example of a pale, male, stale institution that is waiting for a regulator to sort it out.
Both the amendments I am concerned about, Amendments 156 and 249, mention the clubs’ employees and monitoring and reporting on staff diversity. But I think we need to take heed of some of the negative lessons from other workplaces, particularly the public sector. Whatever the intention, too often an over-preoccupation with diversity is less likely to create more fairness for staff but does create an explosion of jobs for human resources—HR—apparatchiks, who manage the diversity and inclusion schemes that we set up.
It is worth noting that Britain has one of the largest HR sectors in the world. It is one area of growth that somebody somewhere might be proud of, although I am rather in despair at it. According to the British Labour Force Survey, there was an 83% increase in HR jobs between 2011 and 2023. As journalist Lucy Barton pointed out, that means that HR workers currently outnumber NHS doctors three to one. Let that sink in. A lot of this growth is due to job creation in relation to EDI demands. I do not think we should go ahead with these amendments on diversity and inclusion but, if we do, I propose some sort of cost-benefit analysis. The salaries needed for the hours and hours of paperwork that the regulator will be checking that the clubs do could be incredibly financially burdensome—even crippling—on many clubs.
Lord Mann (Lab)
My Lords, I am a little bewildered by the direction of the debate. Some of these amendments have been put to tease out the issues. My general commentary would be rather different from that of the noble Baroness, Lady Fox, who seemed very unkeen on the tremendous work being done across football by the clubs, which I commend. Indeed, I do not just commend it; I can quantify it. I reference my entry in the Register of Lords’ Interests as the Government’s adviser on anti-Semitism, then and now. I am particularly impressed by the first ever programme of anti-Semitism training in football, which was launched two years ago. There were a few eyebrows at first, with people asking, “What is this?” In two years, two-thirds of English football has volunteered to be trained. Significant numbers are having their academies trained and some are having players, the board and staff trained. It is particularly interesting and valuable that the biggest single piece of training in the city of Leeds—ever—was the training of Leeds United stewards under this programme.
I am delighted that Liverpool Football Club will be one of many clubs starting in the new year. The list of engagements on this in the first quarter of next year is quite formidable—but there is space for more. This is a success in football, because of what it said to the small number of Jewish players, Jewish staff and Jewish fans: you are valued here.
Just last week, I was at Leyton Orient, where the Jewish supporters’ group sponsored the match against Bristol Rovers. Leyton Orient outperformed anything they had done this season as a response. There will be the first-ever Hanukkah events at Fulham Football Club and at Leeds United Football Club. Other new groups are being formed. Other groups have existing events around Hanukkah and Holocaust Memorial Day. This is a positive, and it is not to the exclusion of any other group. Indeed, we find that other small groups of people who perhaps do not see many people like themselves in the stadium, on the pitch or in the club also welcome it. I have seen clubs embrace that as well. If I was running a club, which I have no desire to do—sometimes I would like to influence one or two of the footballing decisions, but would not we all?—then I would want my club to do that and welcome it. I would call it a good business plan.
On the whole question of diversity, one of its weaknesses and the reason why I tabled an amendment, just to tease out what the Government think—not because I think this is a good regulation necessarily but it should be good club business—is that there is a deficit in the number of black players getting into the better coaching and managerial jobs. That is clearly to the detriment of our national game. Their talent is not being used. How that is captured and by whom is, of course, important, but from a business point of view it is a competitive disadvantage if a large group of participants in the game are then not getting into the coaching and managerial side even vaguely relative to the numbers who participate as players. It is clearly a weakness, and whichever clubs are best at addressing that will have a competitive advantage. I am interested in teasing out and listening to the Minister on how we can help football to grab that.
I say to the noble Baroness, Lady Fox, that the overall picture is that football is full of EDI officers. I have had the pleasure of meeting many of them over the last two years —indeed a majority in English football. They are excellent people doing brilliant work. They are out doing work in the community as well, supporting young players from a range of backgrounds. They are a key strength in the clubs and in the clubs’ business plans, as well as in the communities. They should be commended. The more we can encourage that by whatever means, the better we will be doing our job.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Mann. He is a man of great good sense and pragmatism. In fact, I could have agreed with most of what he said but, unfortunately, on this occasion I will not agree with his amendment.
First of all, I will go back to the amendment from the noble Lord, Lord Blunkett, which I agree with. It is very sensible, and the Minister would be wise to accept it. But his preamble was simply wrong. It presupposes that external forces are exerting inappropriate pressure on this side to make cases in their favour, which is completely untrue. I say that because we on this side are merely going through the proper process of scrutiny and oversight, which is our job, to test the efficacy or otherwise of the Bill. Remember: we had a general election, and we have a new Administration, a new Bill and a new Opposition. Therefore, we are quite within our rights to challenge the Bill on its face.
I pray in aid figures from the past few years about the number of Committee days given over to various Bills in this House. The Parliamentary Voting System and Constituencies Act 2011 had 17 sitting days. We have six. The Children and Families Act 2014 had 12 sitting days, and the Localism Act 2011 had 10. There are a number of examples. Much as I hugely respect the noble Lord, Lord Blunkett, I respectfully disagree with him.
I move on to the specific issues of, particularly, Amendment 156 from the noble Lord, Lord Bassam, and Amendment 249 from the noble Lord, Lord Mann. These are two quite insidious amendments; I find them quite Orwellian, actually. It is not that we do not trust local football clubs to do the right thing in terms of community outreach, working with their community and improving equality and diversity, but noble Lords are being asked to put those powers into a regulator that will develop a national template. Whether, therefore, you are Bristol Rovers, Brentford, Brighton and Hove Albion or Bradford City—to use some alliteration—you will be told what you have to put in place in terms of your EDI policies, which I do not think is right. It nationalises corporate philanthropy and community outreach. It is also a displacement activity, because it presupposes that that work is not already being done.
Lord Burns (CB)
My Lords, I support Amendment 54 with regard to the governance of clubs. I am sorry that I could not take part at Second Reading, but I have been present for a significant part of Committee. I have been a season ticket holder at either Sunderland or QPR for most of my life, and I now have three season tickets at QPR for myself, my son and grandson—I fear what I have done to both of them, but that is another problem.
In 2005, I undertook a report for the Football Association on its governance. Quite a number of important proposals that I made were carried out, but I am afraid that some were not. I sometimes think that, if they had been, there would have been for the Bill that we are having to spend so much time on now.
As far as experience goes, I was a member of the board of QPR for a few years and I have been the chairman of a bank. For me, there are some interesting similarities between football and banking: both are rather risky activities. The risks in football are about the performance of the team, the loss of value of players, either because of form or injury, and the risks involved in promotion and relegation. From my observation, and experience at the time, the biggest risk to clubs is overreaching; it is about taking too much risk. They are very often funded by owners or directors. Things go downhill and the directors then want their money back, if it was in the form of loans, which forces clubs into selling players at a loss.
The banks have a prudential regulator and I accept that there is a clear need for some body that has oversight for football as well from the point of view of prudential regulation. The point was made earlier that it is no good coming along once problems have emerged. You need systems and processes in place that monitor areas of activities where risks lie.
I am a great supporter of requirements of good governance in all kinds of organisations. I have sat on many boards, and I have seen good boards and not so good boards. There is a great deal of difference. It is significant to me that, when I was involved in banking and dealing with financial regulators, they placed great emphasis on the quality of the board in overseeing what was going on and particularly the risks it was undertaking. It seems to me to follow naturally that there should be the same requirement for the football regulator with respect to clubs.
I add—it is not for today—that I looked at the requirements and some of the governance issues that have been suggested for the regulator, but I am not sure all would pass the standards of good governance. For example, the exclusive role of the chairman in choosing the chief executive seems slightly odd for a body that has non-executive directors as well as a chairman. But I very much support this amendment.
Lord Evans of Rainow (Con)
My Lords, I rise to question Amendment 156 in the name of the noble Lord, Lord Bassam, and the noble Baronesses, Lady Taylor of Bolton and Lady Grey-Thompson. It is a great pleasure to follow the speech of the noble Lord, Lord Burns, because it is a reminder to us of how much experience we have here, from a board director of a Premier League football club to regular supporters and, in the noble Lord’s case, the holder of three season tickets. I pay tribute to him and his long-suffering son and grandson.
The point that I want to make about Amendment 156 is about season tickets. I do not think anybody in your Lordships’ House would argue against diversity in staff and senior managers. The noble Lord, Lord Mann, made the good point that about 40% of Premier League players are from a BME background, but that that does not continue into senior management. That has been the case for a long time and there is clearly more work to do on that.
However, the first part of Amendment 156 talks about
“the diversity of season ticket holders”.
When I saw that, I was worried about the law of unintended consequences. How on earth do you sort out that issue? For season tickets for my team there is something called supply and demand. There are several options for having a season ticket at Manchester United, as there are at other Premier League clubs, but how do you work it out? There is a waiting list, because of supply and demand. Several thousand people are waiting to become season ticket holders, so can the Minister advise the Committee how this amendment would be looked at?
There are a limited number of seats at a ground: in the case of Old Trafford, there are 75,000 seats and a waiting list of 10,000. I have had a season ticket for many years. Recently, they changed where you could sit at Old Trafford. I was unsure for a while whether I would have a ticket for where I moved to. I was told that there was no guarantee that I would have a ticket, which, as you can imagine, was quite distressing for somebody who had been a season ticket holder for many years. As it turned out, I was lucky enough to have a ticket, in the way that several thousand were not.
There is also the option of a league match ticket book. That enables me to go to Premier League games only. There is the cup option—the FA Cup, the Carabao Cup and the European Cup options. There is also a ticket forwarding membership of £20. I mention that because, if you are looking at diversity, you may not be able to get a season ticket holder, but if you want to go and see a Premier League club, becoming a member gives you access to get a ticket. It might not be your favourite Premier League game against your local opposition or any other club in the Premier League, but anybody could apply, become a member of their local club and should be able to get a ticket for a cup game. It may not be a Saturday or a Sunday; it may be a midweek game. Diversity is in evidence at Premier League clubs. For example, accessibility for disability has been there in many clubs for many years. When I sit there before kick-off at Manchester United, I see significant diversity around me. What surprises me is the people who fly around the world to see their team play, as they do for so many other Premier League clubs.
The Premier League is the best premier league in the world for a good reason. It attracts diversity by that very principle. I would be interested in how the regulator would ensure diversity of ticket holders. I say yes when it comes to staff and senior management—I do not think anybody could disagree with that. However, it is complicated, and so much to do with this Bill is the law of unintended consequences. You cannot tell people who have been on waiting lists for many years that they cannot become a season ticket holder because of some diversity report from a regulator.
Lord Moynihan (Con)
My Lords, I support Amendment 54, tabled by the noble Lord, Lord Blunkett, and Amendment 157, tabled by the noble Lord, Lord Knight. I shall speak also to Amendment 249, tabled by the noble Lord, Lord Mann, which has a lot to commend it.
Before I comment briefly on those three, I want on the record to thank the Minister. We met this morning. We are fortunate in this Committee to have a Minister who is patient, engaging, professional and, unquestionably, inclusive in her approach to many different amendments and many different views that are expressed throughout this Chamber. When she consistently says how much she is enjoying this, some of us might question that, but there is no doubt that if she is, she deserves to, because she has the respect of the Committee and certainly my respect for the way in which she has engaged with us.
I echo the comments of the noble Lord, Lord Blunkett, for whom I have many decades of respect. I was completely in agreement with 50% of what he said today, but I caution him in labelling a large number of Members of this Committee as purely spouting the views of the Premier League, trying to talk this Bill out or, more importantly perhaps, breaching the admonition from the noble Lord, Lord Harris of Haringey, that because both Front Benches supported the Bill, we should not scrutinise it. He will know that for many decades I have been a passionate and independent voice for sport. My own deeply held view is that the autonomy and self-regulation of sport worldwide, be it in the International Olympic Committee, FIFA, UEFA or any number of international sporting bodies, are essential to the success of sport and ultimately those who participate in it.
Lord Pannick (CB)
I point out to the noble Lord that the whole point is that this regulator is independent. Obviously, it is influenced strongly by government decisions, but it is independent. Surely, many of the concerns that the noble Lord is expressing—as, indeed, is the noble Baroness, Lady Fox—are answered by the appointment of a sensible regulator who will act in a proportionate manner.
Lord Moynihan (Con)
I only wish I could say to the noble Lord that that is what we have in front of us. Had we had the opportunity to sit with him and explore each and every clause as we have gone through this, we might have been able to say so, but that is not the case. This is not light-touch regulation. This is not even regulation that you find in the Companies Act.
Let me give the noble Lord a quick example; I risk admonition for repeating a point that I made earlier, but I will make it very quickly indeed. When you give powers to the regulator to explore not just the controlling influence of a football club but those who “significantly” influence a football club, those are very different roles. You have “controlling” in the Premier League; you have “significant influence” in the Bill. Significant influence can reach back as far as the Crown Prince, who has significant influence over the PIF, which owns Newcastle, whereas, by definition in this Bill, he does not control that club, nor would the Premier League investigate him on that basis.
So it is reasonable to accept the noble Lord’s premise—I wish it were true that this is light-touch regulation—but, in reality, this is incredibly intrusive, highly detailed regulation. It goes further than the regulation I put in place in 1990 when I was the Minister responsible for water privatisation and we were setting up Ofwat. That was light-touch regulation in comparison with this extraordinarily detailed Bill. That is the most important point driving my concern about unintended consequences—what some people call the “mission creep” of regulation.
I turn to the amendments. Given that we are going to have a Bill for the reason that the noble Lord, Lord Blunkett, said—there is all-party support for having legislation of this kind—we may as well get it right. There is real merit in looking at the amendment from the noble Lord, Lord Blunkett—backed so eloquently, as ever, by the noble Baroness, Lady Grey-Thompson—which would
“ensure regulated clubs have a clear, appropriate governance structure with a board consisting of executive and non-executive directors enabling decisions to be taken collectively”.
I hope that it would not be just regulated clubs. I hope that all clubs in all sports would do that, because the benefits of having both executive and non-executive directors is well known to those of us in sport—not least in the British Olympic Association, which I had the privilege of chairing.
The noble Lord, Lord Mann, has widespread support in this House for the work he has done on anti-Semitism and anti-Semitism training. I am glad that he tabled his amendment, because it gives us an opportunity to thank him on behalf of sport and on behalf of football. That work has been absolutely critical; I say this not just as a fellow Leeds fan but because, across sport as a whole, it is vital that we put equality, inclusion and diversity right at the top of what we do.
We are expected to do that outside football. I have an interest to declare as the chair of Amey, which has some 13,000 people. Almost the first thing that I did as chairman was set up an ESG committee immediately beneath the board and chair it so that I could ensure inclusion and diversity were right at the heart of our policy and were in the DNA of everybody who worked in that organisation. I do not believe that that is different from sport and I do not believe that that is different from football.
So, if we are to have legislation—which, as noble Lords know, I regret—let us get this right and listen carefully to what the noble Lord, Lord Blunkett, said in the first 50% of his speech, and to the noble Lords, Lord Knight and Lord Mann. There is real merit in the Minister taking this away and thinking about what we would expect to see from the regulator in this context.
Lord Hayward (Con)
My Lords, I was not intending to speak in this debate, but I am afraid that some of the comments that have been made have obliged me to do so.
However, before I come on to the amendments and the comments made in the speeches, I would just like all your Lordships to look around you. We are talking about equality, inclusion and diversity. What proportion of this Chamber is disabled, non-white, gay or lesbian? The answer is: very, very few. It is a compliment to the noble Baroness, Lady Brady, that she is a great example of what women can achieve at the top of the football tree, and that we have a female Minister responding. But I stand here, as I said in my first speech to this Chamber, as the founder chairman of the world’s first gay rugby club. It celebrated its 29th anniversary only just under two months ago and will celebrate, I expect, its 30th anniversary next 1 November.
I find it utterly unacceptable to suggest, as has been suggested, that we should not tackle the question of trans individuals in society. I am proud that I did a podcast the other week with a member of my club, who himself has undergone the process of moving from female to male. He is proud of having done it. There are issues that we have to address in society, as well as issues that we have to address in sport. I believe that on occasion it is appropriate to put things into legislation as an “encouragement” to people to behave in a certain way. It is all very well saying, “Well, we have the right policies and we’ll do it all right”, but I come back to this point: look at this Chamber.
I have not taken any guidance, as Lord Blunkett suggested, from the Premier League, and in fact, on a previous occasion in Committee, I made the point that actually the Premiers League, for all its right efforts, was not messaging correctly. I believe that that is the case here. In rugby we have had openly gay World Cup final referees and a captain of the Welsh rugby team, but we have no openly gay, top-level professional players at the moment, as far as I am aware. But football is behind the times despite the best encouragements from individuals, and it is therefore well worth while asking the question of the Minister and of the regulator, “How are you actually going to tackle these issues?”—because issues they remain.
I will conclude on the observation in relation to Rainbow Laces. Rainbow Laces has been adopted by sport throughout as a means of messaging to people as to how they should behave to other minority groups. They must continue to do so. It is not a political gesture; it is a gesture on behalf of society as a whole to other parts of society. I believe we have achieved so much, but we could achieve so much more.
Baroness Fox of Buckley (Non-Afl)
Maybe the noble Lord and I can have a fruitful conversation outside this debate. For today’s purposes, does he understand that in a discussion about inclusion and diversity, women are concerned about women’s rights and women’s equality? Among women footballers and the parents of young girls they are encouraging to get involved in women’s football and training and so on, there is great discomfort, as the tennis guru Judy Murray said at the weekend. Will he acknowledge that this has nothing to do with individuals? It is to do with the political approach. At the moment, women do not feel included or represented in football because this issue is put to one side, and therefore everyone talking about EDI and all the rest of it is just a slap in the face.
Lord Hayward (Con)
I understand the concerns and am quite happy to take a conversation with any Member of the House outside this Chamber. I do not want to prolong the debate this afternoon. I have made my comments. I hope that the regulations we follow in relation to this regulator coincide with company legislation, because that seems to be the appropriate route to go down. I will no doubt continue at a later stage. I think it is important above all to send out a very clear message from this Chamber about what we believe we should achieve—not necessarily legislate—in relation to equality, inclusion and diversity.
Lord Pannick (CB)
My Lords, in opening this debate, the noble Lord, Lord Blunkett, expressed the hope that we would not take another hour dealing with this group of amendments. We have taken well over an hour. I find this debate very odd because we all seem to agree that equality, diversity and inclusion are of enormous importance in football. The noble Baroness, Lady Brady, rightly spoke of the great efforts that West Ham in particular has made and the great results. Many other clubs have done the same. I would be astonished if a Bill dealing with these matters did not require the independent regulator to look at equality, diversity and inclusion and to have broad powers across the scope of football to do so.
Lord Hannan of Kingsclere (Con)
My Lords, I assure the noble Lord, Lord Blunkett, who knows how much I respect him, that I have had no contact at any point with the Premier League, unless you count occasionally buying a ticket to one of the member clubs. Far from filibustering, my intervention on the previous round was the first time I had spoken since Second Reading, and I kept it to about four minutes. I opposed this Bill very strenuously when it was proposed in the previous Parliament. I am sure he will allow that it is not exactly the same Bill. It has been beefed up in various ways, and those ways need scrutiny.
One of the ways in which it has been beefed up, even short of the amendment from the noble Lord, Lord Bassam, is in strengthening the EDI provisions. I have to stand back and ask whether it is proper for a regulator to tell private clubs what kind of people should be their ticket holders. Is there not a basic principle of proportionality and property here that says it is in your interest to have as many ticket holders as you can, and it is in their interest, if they are interested, to come? Does that intersection of who wants to come and how much they are prepared to pay not represent the right place in a free society? We are not some autocracy where we impose values on free-standing organisations.
In our present mood we sacralise the values of EDI but tomorrow it may be something else, and that would be equally wrong because there is such a thing as freedom. There is such a thing as a private space, and that is an essential building block of a free society. The noble Lord, Lord Bassam—he will correctly me if I get this wrong—says it is shocking that only 4% of senior management positions are held by black people. According to the 2021 census, the proportion of black people in the UK is 4.0%. In other words, without any intervention, without anyone telling them what to do, we happen to have an exactly representative number. But even if that were not the case—even if, as the noble Lord, Lord Bassam, was saying, there is a much higher proportion of black players in Premier League clubs—surely that is meritocracy. Why would it be the business of government to try to bring that number into line with the population?
Lord Bassam of Brighton (Lab)
Does the noble Lord not think it is rather odd that in a sport where something like 43% or 44% of the players are black, very few of those players make it through into management positions in those same professional leagues? Does he not think there is something slightly amiss there?
Lord Hannan of Kingsclere (Con)
The figure that is out of whack with the population is the number of players, not the number of managers, which is exactly in line with the population as a whole. The noble Lord may have a problem with that. I do not have a problem with that because it is plainly meritocratic. Clubs are interested in winning, so they pay people who are going to produce the results that they want on the pitch. If their fans are not happy with it, they stay away. That is how the system works and why, frankly, I think the whole Bill is wrong. I realise I have lost that argument, but we are not some insecure South American junta that has to tell private clubs what to do and appoint commissars over sport.
I do not want to be accused of filibustering this one, and I have gone just over three minutes, so I will finish by saying that if we are to have this wretched regulator, let us at least make it as proportionate and as in line with the rest of our law as possible, on which note I will support the rest of the amendments from the noble Lord, Lord Blunkett, because it seems quite sensible to bring any regulator into line with the usual standards of corporate governance.
Lord Parkinson of Whitley Bay (Con)
My Lords, we did not quite give the noble Lord, Lord Blunkett, the debate of under an hour that he hoped for, but I note, for the benefit of the Government Chief Whip when he comes to read the Official Report, that this group is composed entirely of Labour Back-Bench amendments. We have heard the arguments and motivations for tabling the amendments advanced by noble Lords who did so; we have tested their arguments and examined the intended and unintended consequences. That is the work of this Committee, and I am glad we have done it. We had a fruitful and useful debate with quite a lot of agreement between noble Lords about their anxieties and some of the problems that we want to solve, but also some shared anxieties about the problems that might flow from the way in which the noble Lords who tabled the amendments propose doing so.
I start on a point on which I think we all agreed and add my strong support for the amendments in the names of the noble Lords, Lord Blunkett and Lord Knight of Weymouth, and those who signed them, including the noble Baroness, Lady Grey-Thompson, about independent non-executive directors. They are sensible and constructive amendments. One reason we have been moving quite slowly in this Committee is perhaps, as is often the case, that the Government have listened to the debate and rejected all the amendments tabled so far, urging noble Lords to withdraw them and saying that they are not necessary. Amendments 54 and 157 are good amendments on which to break that trend; there was clear support for them from across the Committee, including the Cross Benches. I hope that, even if the Minister is not willing to accept the amendments as drafted, she will in this case look at how we can strengthen the oversight of the work of clubs through the work of independent non-executive directors.
I am particularly grateful to the noble Lord, Lord Burns, for his contribution and the support he gave to amendments we have previously discussed about the independence of the chief executive and the way in which they are appointed. There is some valuable stuff there for the Government to take away. It is very much linked to the broader debate we have had about diversity. If we can get the non-executive leadership of clubs right, then, as well as improving the scrutiny and accountability of the work of those clubs, we will add to their diversity—not just the diversity of the personnel sitting on the boards but the diversity of thought and the open-mindedness to make sure that the clubs are continuing the work that noble Lords have rightly pointed to. That includes making sure that they continue to be open, inclusive and growth-focused, concerned with attracting new fans to football and making sure that talented people, whoever they are and whatever their background, are able to rise as far up the football pyramid as their talents will take them. I hope the Minister will look favourably on Amendments 54 and 157.
Like other noble Lords, although I appreciate the motivations behind the other amendments in this group, particularly Amendment 156 in the name of the noble Lord, Lord Bassam of Brighton, I am worried about some of the consequences that might flow from it and the way he proposes it. That is not to disagree with what other noble Lords have said about the important issue that he raises, or to lose sight of the huge progress that has been made. I was not around in the 1960s, 1970s or 1980s, of which the noble Lord, Lord Goddard of Stockport, rightly reminded us, but the behaviour of football and football fans and clubs in those decades was often not to the credit of this nation. We should be very proud of the strides that football has made, voluntarily, through the work of its fans and the people who operate the clubs, in being a more inclusive and welcoming environment open to the talents of everybody.
I know why the noble Lord has probed this area. He wants the work that is undeniably still needed to build on that to continue. Like other noble Lords who have probed it, I worry about some of the practicalities and where his amendment, as worded, would take us. There is a material difference between monitoring the diversity of a workforce and the diversity of a fan base and season ticket holders, as I think the noble Lord would acknowledge. I would particularly be concerned about asking fans and ticket buyers to disclose quite sensitive information that they do not presently share with the football team of their choice about their religion, ethnicity, sexuality and so forth. I am not quite sure how, for season ticket holders, that work would build on things.
Amendment 249, tabled by the noble Lord, Lord Mann, gives me the opportunity to echo the thanks that my noble friend Lord Moynihan expressed to him for his work on tackling anti-Semitism, not just in football but more broadly. I was in Downing Street when he first took on the role as the Government’s independent adviser on anti-Semitism, so I have seen the work that he has done in a number of spheres to tackle prejudice in that area.
Noble Lords will undoubtedly agree that diversity and inclusion in the workplace can be of benefit not just to staff but to an organisation corporately. The noble Lord, Lord Mann, expressed that this was a probing amendment to see what the Government’s view was and to highlight some of the work that football does. He is right to do so, particularly on that last element, because clubs across the football pyramid have a number of strategies and are doing great work in this area through their own volition. Arsenal, for example, have had a diversity, equality and inclusion plan called Arsenal for Everyone since 2008. Arsenal did that by themselves; they did not require a regulator to force them to publish a plan.
Article 27 of the UEFA club licensing regulations, which detail the standards that clubs must meet before they can participate in a UEFA competition, contains social and environmental sustainability conditions. It states that:
“The licence applicant must establish and implement a social and environmental sustainability strategy in line with the UEFA Football Sustainability Strategy 2030 and relevant UEFA guidelines, for at least the areas of equality and inclusion, anti-racism, child and youth protection and welfare, football for all abilities, and environmental protection”.
That is a wide-ranging list of good causes for it to encourage people to think about. There is not exactly a lack of corporate governance requirements in this area already placed on clubs, and noble Lords have pointed to a number of highly commendable initiatives to build on our work here.
I was in your Lordships’ House on Friday when the noble Lord, Lord Mann, spoke in the archiepiscopal debate that we have in the run-up to Christmas, led by the most reverend Primate the Archbishop of York. He warned against the temptation to reach for the legislative lever in every instance to drive forward good work. This is an area where a lot of great work is already being done, to the credit of people in football. I would be wary about measures that are too restrictive or prescriptive that would cut against that.
I will not go into the details of the lively debate that my noble friend Lord Reay and others had, other than to note that these are issues which are not party political; they were raised at Second Reading by the noble Lord, Lord Triesman. My noble friend Lord Hayward’s intervention reminds us not just of his long-standing and pioneering role in championing inclusion in sport but of the fact that these are complicated matters that sport and so many parts of society are grappling with. I do not think that writing something into this Bill in the way that is envisaged would help that, but I am very grateful for the opportunity to have had a detailed debate on this. It has been useful, and I look forward to the Minister’s response.
Baroness Twycross (Lab)
I thank my noble friends Lord Blunkett, Lord Bassam of Brighton, Lord Knight of Weymouth, Lord Mann and Lady Taylor of Bolton for tabling these amendments. I thank the noble Baroness, Lady Grey-Thompson, for the role she has played in supporting some of the amendments. It has been useful to have the discussion. The debate is a reminder that, at times, players are often at the brunt of quite a lot of unpleasantness, not least on social media.
I am sure that noble Lords across the Committee will join others who have spoken about the dreadful accident that took place at the weekend involving Michail Antonio, and wish him a speedy and full recovery. I cannot imagine what it was like to take the phone call that the noble Baroness, Lady Brady, had to take. Our thoughts are with him and his family and colleagues.
Good corporate governance is the bedrock of any well-functioning business, and there is agreement on this across the Committee. However, the Government believe that this has been lacking at some clubs to date, and that is why it will be an important part of the regime.
I begin with Amendment 54, in the name of my noble friend Lord Blunkett. While I agree with the intention, I assure my noble friend that ensuring regulated clubs have good corporate governance is already well provided for in the Bill; for example, the mandatory licence condition requiring clubs to report against a new corporate governance code for football clubs. We do not feel it is appropriate to add this level of specificity to the regulator’s objectives. As my noble friend made clear, good governance protects fans and owners. Good corporate governance will contribute to a club’s financial soundness, which is already captured within the objectives in this clause.
Amendment 156, from my noble friend Lady Taylor of Bolton, and Amendment 249, from my noble friend Lord Mann, concern equality, diversity and inclusion. I strongly agree with the principle of these amendments that clubs should be more transparent with regards to equality, diversity and inclusion. However, I believe that Amendment 249 is not necessary. As part of the corporate governance statement mandatory licence condition, all licensed clubs will already be required to report on what action they are taking on equality, diversity and inclusion. The Bill specifically includes equality, diversity and inclusion in its definition of corporate governance. We therefore expect to see recommendations about equality, diversity and inclusion in the regulator’s corporate governance code.
On Amendment 156, as I have outlined, clubs will already be required to report on what action they are taking on EDI. My noble friend Lord Mann mentioned important examples of where clubs are already taking action. I agree with the comments made by the noble Lord, Lord Moynihan, on my noble friend’s contribution, particularly as it relates to anti-Semitism. I also agree with many of the points raised by the noble Lord, Lord Hayward, in his contribution.
Reporting on the diversity of staff and senior managers would be typical of how these types of transparency measures work. However, regarding the point on season ticket holders, we do not feel that it is the regulator’s place to act here. As a financial sustainability regulator, the regulator’s interest in equality, diversity and inclusion is that it contributes to good corporate decision-making, which in turn makes clubs more sustainable.
I agree with the noble Baroness, Lady Brady, that, beyond this, it is not for the regulator to get involved in the diversity of a club’s fan base. A club might like to take note if its fan base does not represent its local area. Some examples of clubs reaching out to communities have been mentioned by noble Lords in the course of the debate. There are already actions being taken on fan diversity by clubs, competition organisers and wider stakeholders.
In response to the points made by the noble Baroness, Lady Fox, we think that EDI reporting is a good thing. A lack of basic good corporate governance threatens the sustainability of football clubs. We have seen in the past crises at clubs that may have been avoided with some simple improvements to how the club was run. That is why the regulator will introduce a new football club corporate governance code. The regulator will work with the industry to design the code and will support clubs in applying it, in addition to encouraging best practice.
The requirement for clubs to publicly report against this code is designed to increase transparency, scrutiny and accountability. Clubs will have the flexibility to interpret the principles of the code and explain how they have applied them to suit their individual circumstances. We are clear that the regulator will not prescriptively micromanage each club’s board. That is not its role, and would cause a significant burden to the regulator itself and to clubs.
Amendment 157, in the name of my noble friend Lord Knight of Weymouth, seeks to add a further limb to a club’s corporate governance reporting by explaining how it meets the standard of the UK Corporate Governance Code in relation to the appointment of non-executive directors. I thank him for raising this issue and the noble Baroness, Lady Grey-Thompson, for illustrating why a range of skills—what she referred to as a jigsaw—helps in delivering good governance.
Lord Blunkett (Lab)
I am grateful to my noble friend and I hope to be able to converse with her before Report, purely on the grounds that if you do not have a governing body that consists not only of non-execs, which I note my noble friend Lord Knight’s amendment alluded to as well, but also officers who are the executive directors of a board then it is difficult to progress. There has been unanimity today from all sides of the Chamber in relation to the direction of travel.
We are now two and a half hours or more in, so I will have to follow my own strictures in being very brief. I make it clear that I accept that scrutiny is crucial.
On diversity, I say to the noble Baroness, Lady Fox, that there is a real difference between woke gesturism and downright silliness and a genuine commitment to equality, diversity and inclusion. We must be able to make that distinction, and the noble Lord, Lord Hayward, did so very well. I have to say to him that I had aspirations when I was very young to be the first blind football manager, but it was pointed out to me that I might be better being a referee so that when people shouted, “Get a guide dog!”, I could say, “I’ve got one already”.
It is nice that the noble Lord, Lord Goddard, raised the issue of Michail Antonio, and I am pleased that I had alignment with the noble Baroness, Lady Brady, on this. Michail Antonio once scored a crucial goal with a dislocated collarbone, and we will never forget that. I wish him well. I beg leave to withdraw the amendment.
Lord Markham
(d) to promote the growth of English football (referred to in this Act as “the growth objective”);(e) to promote and protect financial investment in English football (referred to in this Act as “the financial investment objective”).”Member's explanatory statement
This amendment creates two new objectives the IFR must promote.
Lord Markham (Con)
I hope that this proves to be a quicker debate, because I would hope that what we are talking about here are not controversial measures but measures that go to the heart of the regulatory framework we are trying to establish. It is a shame that the noble Lord, Lord Addington, is not in his place. Although we are supportive of the principles of regulation, as my noble friend Lord Hayward said, we are trying to make sure that that regulation is set up in the right way.
Our debates in Committee stage so far have all been about the first few pages of the Bill, which are about the regulatory framework and objectives; the point of my Amendment 56 is that if you only have an objective of sustainability, it is one-dimensional and that is not good for the game. I will freely admit that I have spoken to a Premier League club which wrote to me about that—Brentford—and I hope that noble Lords would agree that Brentford is exactly the sort of club we should listen to in this sort of debate, because it is a club that has come through the divisions and is seen as a well-run model club—and one definitely not guaranteed its place in the Premier League. So it has an important contribution to make to this debate.
The letter that Brentford wrote to me and to local MPs says: “a regulatory framework that prioritises stability above all else would be disproportionate. It could mean the regulator financially constraining some Premier League clubs more than others. For Brentford, a club that has risen against the odds to the Premier League, such restrictions risk stifling our ability to grow and compete with larger, established clubs”. That is why I tabled this amendment, to expand the regulator objectives. Otherwise, there is the danger exactly as written in the letter, which I am happy to share with all Members here and which has also been sent to local MPs.
The exact concern of Brentford’s chairman is that, if the regulatory framework is just based on financial sustainability, it risks entrenching the closed-shop nature of the top clubs and will restrict the ability of the Brentfords of the world to compete. From its point of view, having an objective that promotes the growth of all English football, protects financial investment in the game and means that you know you can reap the rewards from investing in a club is very important. Amendment 56 seeks to add this, and is, I hope, uncontroversial, because who would not want to promote growth? We know that that is the Government’s number one objective, and it is fundamental to the Bank of England’s remit and a lot of other regulators also have growth objectives.
In the new clause proposed in my Amendment 58, subsections (1)(a) and (1)(b) refer to the “financial soundness” and “resilience” of clubs and aim to ensure that the regulator takes into account the whole financial picture of clubs, looking at their assets and liabilities—their whole balance sheet—and their ability to meet any future liabilities. In other words, we want a holistic picture of their sustainability. Funnily enough, that is akin to what the Chancellor announced in the Budget about government spending and so-called “persnuffle”—or PSNFL—which looks at assets and liabilities to make sure you have a rounded picture of the health of the Government’s, or the country’s, finances. Amendment 58 tries to encourage a similar approach to looking at the overall wealth of a club and its overall balance sheet strengths.
Proposed new subsection (1)(c) looks to make sure that the heritage of English football, which we all agree is vital to all this, is rounded out in its definition, while proposed new subsection (1)(d) looks at all the things that are key to the health of the overall game. It would make sure that the regulator, when it looks at how it acts in this space, looks at the overall health of the game—the growth of football in terms of TV viewership, matchday audience, fan engagement, number of clubs and number of fans. I shall not repeat the arguments that we made earlier, but noble Lords will be aware that these are the key things—that media rights go to the heart of the value and TV stations around the world pay to back those media rights, for the health of those sorts of objectives that we would like to see it have.
That is why, in introducing this amendment, I am trying to make sure that we have a much more rounded definition, going to the heart of the framework of what we hope the regulator would look to do and have in place. I hope that noble Lords will be able to support what I hope is a very sensible objective and will take on board the concerns of the Brentford chair—if it was only one-dimensional and looking at financial sustainability alone. I hope that the Minister will be able to take those points away for further consideration. I beg to move.
Baroness Brady (Con)
I support Amendments 56 and 58, tabled by my noble friend Lord Markham, which together propose critical enhancements to the objectives of the regulator. These amendments seek to establish clear and ambitious goals for the regulator, while ensuring that its powers remain proportionate and carefully defined.
Amendment 56 introduces two new objectives for the regulator: to promote the growth of English football and to promote and protect financial investment in the game. These objectives are not just desirable; they seem to me to be essential, if we are to preserve the vibrancy, competitiveness and international appeal of English football.
The Premier League is the crown jewel of global football. Its growth and success have been driven by significant financial investments, made in good faith and with the legitimate expectation of stable and predictable regulatory conditions. Without that certainty, clubs would not have been able to commit to the infrastructure, youth development or community programmes that are now the pillars of our game. Yet, as currently framed, the regulator’s remit is heavily focused on constraints, restrictions and redistribution. While these may be important, without taking growth into account, they risk creating a chilling effect on the investment that has driven English football to its current heights. To constrain without also providing balance is to risk stagnation or, worse, managed decline.
Amendment 58 complements this by providing detailed definitions of these new objectives. It outlines what growth means in practical terms: increasing TV viewership, matchday attendance, fan engagement, the number of clubs and the number of fans. These are good proxies, in my view, for the growth of football and ensuring that the regulator’s actions are aligned with the long-term health of the game. Although promoting growth and protecting investment are vital, I listened carefully to the Minister’s argument that a growth duty or purpose could in fact be scope-widening. I believe that she indicated that it could place the regulator in conflict with the broader European framework of football governance. This would risk significant repercussions—but only, of course, for those clubs competing in European competitions.
This is one of the tensions at the heart of the Bill. You could have proper balance in the regulatory regime’s design, so that it is de-risked, light-touch, pro-growth and business-friendly and protects this highly successful industry—but, in doing so, you potentially risk the future of a smaller number of clubs which may, one day, be barred from European competition. Alternatively, you could do what the Government have done, and you therefore risk setting up the regulator to be harmful to growth, overly intrusive, risk-averse and dampening to investment—but, in doing so, you are more likely to be compliant with UEFA, although no one has been able to provide a cast-iron guarantee on that.
In supporting these amendments, I urge Ministers to take this opportunity to refine the objectives of the IFR to set it firmly on the path to success. We need to create objectives that support football’s future without overextending the regulator’s reach or compromising the autonomy of competition tools, which must rightly remain the domain of the competitions themselves. I hope that, as we deepen our scrutiny of the Bill, we can find a better balance.
Lord Jackson of Peterborough (Con)
My Lords, I support my noble friends’ amendment, for the obvious reason that, from the beginning of our discussions, we have not substantially defined in the Bill what we mean by “English football”, other than by alighting on the word “sustainability”. We also have not defined what we mean by the “heritage of English football”. That was specified in the impact assessment—in fact, it says on the first page that we do not know what the heritage of English football is.
This is a very helpful amendment from my noble friends Lord Markham and Lord Parkinson of Whitley Bay, because it at least gives us and the regulator an opportunity to have a firm understanding in the Bill, among all stakeholders in all leagues, of what we mean by the heritage of English football. It is important that it means the tangible and intangible elements that define the unique historical identity of English football. I am surprised that the Government, for whatever reasons, have decided not to adopt that in the Bill and have left it to—
Lord Watson of Invergowrie (Lab)
I am a bit surprised, because the Benches opposite have, on several occasions, accused us on this side of trying to extend the reach of the regulator. The noble Lord asked: what is English football? In the Bill English football covers the top five levels—that is the definition. Personally, I think it should go to level six, but it is at level five. It is clear what it means by English football.
Under subsection 1(d) of the proposed new clause, Amendment 58 seeks to increase “the number of clubs”. I do not see how you can increase the number of clubs without it taking in other levels beyond those in the Bill. These amendments seek to extend the role of the regulator, which is rather inconsistent from those opposite.
Lord Jackson of Peterborough (Con)
As usual, the noble Lord makes a very pertinent and astute point. I disagree with it, because what we are seeking to do is further define what is in the Bill. There is a lack of definition—there has been since we discussed the issue in relation to Clause 1 a week or so ago. That is the difficulty.
The general point the noble Lord makes is also pertinent, because we are still deciding whether this is a hybrid Bill. It is important that we define English football, because if we do not properly define it, there will be an issue of hybridity. According to the Minister’s letter, as I understand it, it is still only provisionally being ruled as a hybrid Bill, and there is no definitive position.
The point that I was making was that we need a proper framework. The new clause proposed by the amendment would add that definition to the Bill. It would therefore make it a better and more holistic Bill. At the moment, there are significant concerns about the Bill’s enabling powers and Henry VIII powers, and the new wording would go some way—were it to be adopted by the Minister; I live in hope that it might be on Report—to ameliorate that issue. For that reason, I support the amendment moved by my noble friend Lord Markham.
Lord Wrottesley (Con)
My Lords, I start by offering sincere apologies for not being able to contribute at Second Reading. I am afraid that I had to attend a close friend’s funeral. I did, however, manage to be in the Chamber for the latter part of that debate. I have watched the debate back on Parliament TV, updated myself via Hansard and, where able, attended most of the Committee. I also apologise if parts of what I say might have been more appropriate for Second Reading, but I feel that your Lordships may deserve a bit of background on why I feel privileged to offer some reflections to the Committee on this matter. This may, mercifully, be the only substantial contribution that I make on the Bill.
I declare my interests, as set out in the register, specifically having around 12 years of direct experience in sports governance, but also make an admission. First, I have been a lifelong Chelsea supporter and, as an excepted hereditary, I have of course passed that unfortunate affliction down to my sons and even to my nine year-old daughter who, yes, plays football—although she confessed the other day to having considered the unthinkable: supporting Manchester City. Given Chelsea’s recent form, though, I hope that she will now revert to her inherited team.
I support my noble friend’s amendments that try to define the objectives of the regulator, as well as others that have already sought to address the actual purpose of the Bill. Where I hope we will eventually get to is that something can be financially sound, resilient and sustainable, and grow and be successful. We have already discussed that if sustainability is the sole rationale and motivator for this legislation, sustainability could have a far lower bar and be an inhibitor to growth and success. Given the context of being one of this country’s greatest exports, the success of the English Premier League and now the English Football League is not solely dependent on their sustainability. There is much more to it. I suggest that they are successful not simply because of their sustainability, or unsuccessful because of the lack of it. They are deemed successful because of a whole host of factors, be that results on and off the pitch, financial sustainability, fan engagement or community outreach, to name but a few. Are growth and success not things that we should ask clubs, leagues and all stakeholders to strive for? What enables them to be successful and what should we try to support through the Bill?
In my view, and as we have heard from other noble Lords, the UK is globally successful in the game of football, and the Premier League, the EFL and other successful domestic leagues have grown to a position of global prominence because of various factors, including the game’s heritage and the English language—the lingua franca of football, as indeed it is with most global sports. Football is successful in the UK because of the pro-business environment in this country, which encourages foreign investment into our game and, ironically, is potentially threatened by aspects of the Bill.
We must also credit the consistently strong leadership of the Premier League, its global appeal through strong marketing and its willingness to embrace expertise from abroad in players, coaches and support staff. Some of your Lordships might remember that this pursuit of excellence and diversity was strongly criticised in the first few years of the Premier League’s existence. It was seen as a threat to homegrown player development and that talent progressing up the pathway to the national team—an attitude that I think we can all now agree has been shown up by the recent successes of our national teams.
More broadly, football’s success relies on this country’s position in the world and, yes, the crucial part played by our strong domestic marketplace, characterised by the role that a fiercely loyal fan base has in supporting the leagues and their teams. Above all, it is the ability of so many of the clubs in the UK to build brands around themselves—some of them mega-brands—that has led to five of the top 10 best-supported clubs in their global reach being from the UK, with just one from Germany, one from Italy, one from France and two from Spain. The bottom UK-based team in that top 10, Arsenal, has over 40 million followers on Facebook alone, with a fan base that extends far beyond these shores.
All these factors are more complex and, frankly, equally as important as some of the simpler definitions contained in the Bill. Growth and success are what the Bill should seek to preserve, enable and maybe protect, rather than inhibit. To repeat: the Bill should be about preserving and promoting growth and success, not just ensuring, for instance, sustainability.
Do we measure success simply by sustainability or should we seek a broader, more detailed and more accurate set of definitions—a higher bar as a North Star for this Bill, as suggested by my noble friends Lord Markham and Lord Parkinson in their Amendments 56 and 58? This could be a subtle but fundamental tweak to what this Bill is trying to achieve.
Lord Parkinson of Whitley Bay (Con)
My Lords, I will speak to both amendments in this group, to which I have added my name. I am very grateful to my noble friends who have spoken to them, particularly my noble friend Lord Wrottesley, who brings many years’ experience of sports governance. The Committee is grateful to have had his insights. These two amendments attempt to expand the objectives of the regulator under the Bill. These objectives will be fundamental guiding principles by which the regulator will have to abide and will inform its operation from its conception.
Amendment 56 introduces two new objectives into Clause 6. The first is a growth objective and the second a financial investment objective. The growth objective is not intended to encourage a more activist regulator, to reassure the noble Lord, Lord Watson of Invergowrie. We do not want to see the regulator take further action than necessary; we want it to have the growth of the sport constantly in mind so that, when it carries out its other duties, it does not restrict the ability of clubs to look forward and plan for the future. I take his point about our wording on the number of clubs; we want to see the growth of football, so if new clubs spring up and enter the pyramid then he and I would jointly welcome that objective. However, I take the point that this would create more work for the regulator and the regulatory regime. As he will see from our wording in proposed new paragraph (d), what we have suggested as metrics
“includes, but is not limited to”.
It is an attempt to point to some metrics for growth, but if there are better ways of doing it then we are certainly open to hearing them.
By trying to focus the mind of the regulator on growth, we would ensure that, when it is drafting its rules or working on the levy or financial thresholds it may set, it will always have regard to how its work and rules will allow clubs to grow. We mean not financial growth but growth in every aspect. That is why Amendment 58 tries to expand on the meanings of the growth objective and gives a number of examples in the legislation. As it sets out, that objective would include the
“continued … expansion of all aspects of regulated clubs and specified competitions”.
We want clubs to be able to increase their revenues so that they can continue to invest in the future of the game, not just for their own sake but for the whole pyramid, and help the regulator achieve its financial sustainability objective. We also want them to increase their match-day attendance, TV viewership, fan base and more.
The focus on growing the fan base relates to an amendment to which the Committee has already given some thought, which called for the inclusion of current and prospective fans in the stated criteria for the sustainability of English football. In a similar vein, this amendment is trying to stress the importance of expanding the fan base of English football and appealing to future supporters as well as current ones.
I will also address the inclusion of a financial investment objective, as my noble friend Lord Markham set out in moving his amendment. This would seek to ensure that the regulator always considers the impact of its actions on the security of future investment in English football. As all noble Lords will know, professional clubs in this country would not be the world leaders they are today or command the fan base that my noble friend Lord Wrottesley set out without significant investment. This amendment does not attempt to place any restrictions on the regulator but, as with the growth objective, seeks to keep it on the straight and narrow so that it exercises its functions only ever in a manner that genuinely benefits football.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Markham, for Amendments 56 and 58. I look forward to reading the letter to which he referred when it is forwarded to the Committee.
On Amendment 56, while we appreciate the intent of the amendment and agree that English football should continue to be as successful as it has been, we do not believe the amendment is necessary to safeguard this. The growth of English football over the past 30 years and the financial investment in it have been widely regarded as a huge success and have turned it—as has been noted by a number of noble Lords across the Committee—into a global export. However, in pursuing such growth and investment, systemic issues have grown throughout English football which justify regulation. Some noble Lords have suggested that football’s growth is evidence that regulation is not needed, but these two things are not mutually exclusive. English football is both successful and fragile, with issues of sustainability throughout the pyramid.
We have discussed the reasons why the game needs regulating at some length, so I am not going to go through them again, but the main aim of the Bill is to address these issues to ensure financial soundness and resilience of clubs and to safeguard the heritage of English football—all things that football has shown itself unable to do. On growth and attracting investment, on the other hand, football has already shown itself to be incredibly good at both those things and does not need, in our view, a statutory regulator to promote them. Indeed, as is clear from its articles of association, “promoting” the game is one of the objectives for which the FA is established.
Noble Lords have raised concerns about breaching UEFA and FIFA’s statutes. In my view, stepping on the FA’s toes here is exactly the sort of thing that might risk that. That is why we do not believe that the regulator needs primary objectives to actively pursue growth and financial investment. However, the Bill already makes provision to safeguard these features. As part of its general duties, the regulator must have regard to the desirability of avoiding impacts on important outcomes in football—domestic sporting competition, the competitiveness of our clubs against international clubs, and investment into football—rather than a general growth objective.
The bespoke and novel duties in Clause 7 acknowledge the specific market features that have contributed to English football’s growth and will be key to its continued success. Much of the success of English football has come from investment and exciting competition, and we do not believe the Bill will in any way deter this. Indeed, a stable and more certain regulatory environment will be more likely to attract investors. These amendments would require the regulator to bring into scope anything that relates to the growth of English football. This would include things like broadcasting revenues, transfer fees, sponsorship deals and many other areas. Not only would this dramatically widen the scope but the regulator would also be required to become actively involved in these areas.
My noble friend Lord Watson of Invergowrie highlighted that these amendments would broaden the scope of the regulator. We cannot on the one hand warn against scope creep and over-intervention in a successful free market and on the other hand call for a statutory regulator to be tasked with growing the market. Regulators exist to address specific problems that the market cannot address itself. Football has a sustainability problem and not a growth one.
On Amendment 58 specifically, the additional detail in subsection (1)(a) to (c) in the noble Lord’s proposed new clause is already included in the Explanatory Notes which cover heritage. Explanatory Notes provide illustrative detail about the intention behind legislation and not drafting intended for the Bill. As the noble Lord will appreciate, the purpose of Explanatory Notes is to provide additional illustrative detail. However, this kind of detail is not appropriate for the face of the legislation, because good legislation should be clear and concise, and the current drafting is in line with that ambition.
I want also to draw noble Lords’ attention to the letter I sent to the noble Baroness, Lady Evans of Bowes Park, on this same topic of a growth duty. A copy of that letter was also placed in the House Libraries. For the reasons I have set out, I hope that the noble Lord will not press his amendments.
Lord Markham (Con)
I thank noble Lords for their contributions, and the Minister for replying. Before I come to address what has been said, I thank my noble friends for their contributions and especially my noble friend Lady Brady for her point that there are concerns about UEFA competitions as well that we are seeking to address in this.
Although I did not hear anyone say that these were not desirable objectives, I heard two reasons not to introduce them. First, the Minister said that we are already successful on investment and the Bill will not deter it. I am afraid that is where there is a fundamental disagreement, because the Bill introduces new aspects to this. It gives the regulator responsibility to make sure clubs are sustainable and says that the regulator can look at this through things such as the parachute payments and the solidarity payments. That fundamentally changes the investment proposition in clubs. The letter from the Brentford chair makes the point, as have others, that clubs would be much less likely to invest in new players and in resources if they did not have the safety net of parachute payments if they were to go down. That will directly affect investment in clubs via the change in the laws that we are talking about and the responsibilities of the regulator to look only at sustainability. It is the same for solidarity payments. We are changing the playing field and moving the goalposts, so we cannot expect everything to go on as normal. That will inevitably affect the investment proposition, so it will impact the amount of money we see going into the game.
That comes on to the second point that was raised about why we should not introduce these amendments: that we are somehow trying to expand the regulator’s duties, which goes counter to everything we have said so far about it being light touch. That is not what we are trying to do. We are trying to make sure that the regulator will have more than one objective when it looks at the measures it can take. If it has only one objective, about sustainability, we hope it will interpret it broadly, but I could make all clubs sustainable tomorrow by saying that all the Premier League money should be distributed. That would do it. It would give everyone loads of money, it is completely sustainable and the regulator could say, “That’s fantastic, job done”. But we know it would fundamentally harm the whole structure and the whole environment.
I do not think for one moment that a regulator would be as unwise as that, but the main point of what we are trying to do is to set out what we believe are the right objectives. As I mentioned, the Government have done that with the Bank of England and given it growth objectives alongside inflation objectives. They have done it with Ofwat and with Ofgem. They have given all of them their regulatory requirements and a growth objective. We are trying to make sure that the regulator is wise in any measures it puts in place by always having other objectives that are for the good of the game. That is not increasing its reach; it is just making sure that it has more than one objective. I hope this is something we will be able to talk about further.
Lord Hayward (Con)
Was my noble friend as surprised as I was by the Minister’s use of the phrase that the Bill should be clear and concise? Is not the problem we have been trying to tackle precisely that there is a complete lack of clarity in a Bill that is anything but concise?
Lord Markham (Con)
Yes, and I thank my noble friend for exactly that point. It is about the clarity of the objective. The most important thing we can all do as legislators is set down what we think the regulator should do. That is why we spent three days trying to work out exactly what we want. It is fundamental to everything we are trying to do. That is why it is taking time. I hear reasons such as, “It’s not necessary”, but why not make it an objective? If the regulator is going to do it anyway then fair enough, but why not be sure that it will take growth and success as its key North Star in all this? With that, I beg leave to withdraw the amendment.
Lord Markham
Lord Markham (Con)
My Lords, I hope that this one will be simpler. A lot of the amendments in this group are just trying to make sure that there is more specificity; I go back to my noble friend Lord Hayward’s previous point about making sure there is absolute clarity on what we want the regulator to do. Amendment 59 would take out
“so far as reasonably practicable”
because we want to make sure that there are no areas of greyness. We think that these are things the regulator must do.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to my noble friend Lord Markham for setting out the amendments in this group and, in his absence, my noble friend Lord Maude of Horsham. He tabled some of these amendments but, as we heard earlier today, is unable to be with us to speak to them.
This group of amendments concerns the general duties of the independent football regulator. Its role is to ensure the long-term sustainability, fairness and competitiveness of football in the UK; that is vital. The regulator is entrusted with overseeing the interests of clubs, players, fans and other key parties in the sport, so its role is invaluable. It is critical, therefore, that we lay out clearly and concisely, if we can, its duties and responsibilities.
The amendments in this group seek to provide the independent football regulator with a clear and effective framework in which to carry out its responsibilities, and to strike the right balance between governance, competition and the continued growth of the sport.
I speak in support of Amendment 61, which would introduce a duty for the new regulator to advance the growth objective. The whole Committee can agree on wanting football to flourish, expand its reach, and continue to thrive both on and off the pitch. That is the intention of Amendment 61 and the growth objective. Football’s growth, in participation and in financial sustainability, is critical for its future. The amendment before us would ensure that the regulator’s actions remain firmly aligned with advancing football’s expansion, ensuring that the sport continues to thrive and serve the interests of all involved, from grass roots to the professional game.
Amendment 59 proposes removing the phrase
“so far as reasonably practicable”
from Clause 7. This would complement Amendment 61 by strengthening the regulator’s mandate. By removing what is superfluous and ambiguous language, we would help to ensure that the regulator is not constrained by excessively cautious qualifiers. Instead, it would be given a clearer, more explicit duty to act decisively in line with its core responsibilities, including the imperative of promoting growth in the football sector. In the previous debate, we proposed additional wording that the Government did not need; here, we are seeking to help concision by striking out terms that we think are ambiguous and superfluous.
Amendment 61A, tabled by my noble friend Lord Maude of Horsham, highlights the importance of the independent regulator in working within existing competition structures where they are already operating effectively. The new regulator should not interfere unnecessarily with systems that are working well and delivering positive outcomes. Instead, it must focus on enhancing and supporting those structures, ensuring that they remain adequate and capable of meeting the needs of the game. That would prevent the duplication of regulatory functions and ensure maximum efficiency.
My noble friend Lord Maude’s Amendment 64 seeks to safeguard the integrity of football competitions by ensuring that the football regulator avoids actions that could undermine the important work and effort of competition organisers. His amendment would set a useful boundary between the regulator and the autonomy of clubs. Additionally, it would ensure that the independent football regulator does not conflict with the existing rules set by competition organisers. These protections are important for preserving the competitive spirit of football, which drives both the sporting and commercial success of the game. By ensuring that the regulator respects the frameworks that are already established, these amendments would permit football to evolve without unnecessary disruption and foster an environment where the sport can flourish at all levels.
My noble friend Lord Markham’s Amendment 67, which I have signed, seeks to ensure that the independent regulator avoids actions that could undermine competition. That competitive spirit is fundamental to football’s success, both in the excitement engendered among fans and the drive for clubs to grow and innovate. This amendment seeks to ensure that regulatory actions do not unintentionally harm what is such an essential element of the sport.
Finally, Amendment 69 seeks to strengthen the clarity and focus of the regulator’s mandate by ensuring that it operates consistently with the objectives outlined in Clause 6. Clause 7(3) states that the regulator must have regard to its regulatory principles, the “state of the game” report, the football governance statement and any guidance published. Curiously, though, it does not state that the regulator must have regard to its objectives under Clause 6. If the objectives are to mean anything, surely the Bill should try to create a duty for the regulator to have regard to those objectives in exercising its functions. I am curious as to whether that is a gap that we could close here.
The amendments in this group work together to provide the new independent football regulator with a clear, direct and effective framework for fulfilling its duties. They seek also to set out distinct boundaries and make sure that the regulator’s powers do not encroach on the competitive spirit of the clubs. I hope the Minister thinks that, in doing that, they strike the right balance between regulation and freedom. I look forward to her thoughts on this.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Markham and Lord Maude of Horsham, for tabling these amendments and the noble Lords, Lord Markham and Lord Parkinson, for speaking to the amendments in the absence of the noble Lord, Lord Maude.
I start with Amendment 59, in the name of the noble Lord, Lord Markham. The regulator’s purpose is to protect and promote the sustainability of English football. To deliver this, the legislation sets out three clear objectives: club financial soundness, systemic financial resilience and heritage. It absolutely follows that we would expect it to always act with that purpose and those objectives in mind.
This amendment would have consequences for both the regulator and the industry. The result is that the regulator could face considerably more risk of legal challenge, even if it acted reasonably and in good faith in a way that it intended to advance its objectives. If the regulator always had to prove that any action it took was directly compatible with its purpose and would advance an objective, this would introduce a considerable burden on the regulator and the cost would ultimately be paid for by industry and, potentially, indirectly by fans. We are confident that Clause 7 as drafted appropriately constrains the regulator to act in line with its purpose and objectives without introducing unnecessary, costly and restrictive procedural burdens.
I turn to Amendment 61, also in the name of the noble Lord, Lord Markham. As set out in the previous group, we appreciate the intent of amendments on this topic and agree that English football should continue to be as successful as it has been, but we do not believe that a growth objective is necessary to safeguard this. The sole aim of the Bill is to address issues that football has shown itself unable to resolve to ensure the financial soundness of clubs and the resilience of English football, and to safeguard the heritage of English football. As with the previous amendments in group 3, this amendment would dramatically widen the scope of the regulator, which is not something the Government wish to do. In order to satisfy the duty that this amendment proposes to always advance growth in every action it takes, the regulator would end up intervening on issues that affect growth, rather than effectively solving the problems it has been set up to tackle.
On Amendments 61A and 64, in the name of the noble Lord, Lord Maude of Horsham, we are confident that the Bill is already clear that competition organisers will not be unduly restricted in how they manage their competitions. The regulator has a clear regulatory principle to co-operate constructively with competition organisers and to recognise the wider footballing context, including existing competition-specific rules. Let me be clear: the regulator will not be deferring to the leagues or their rules, but it is in no one’s interests for there to be conflict. The regulator will not be standing in the way of clubs’ ambitions. Provided they do so prudently, we have always been clear that clubs will be able to invest, spend and take calculated risks. This is reflected in the legislation.
On Amendment 67, in the name of the noble Lord, Lord Markham, while I understand the desire to explicitly protect the financial interests of the leagues, this amendment is unnecessary given the existing statutory duties including in the Bill. As I mentioned, the Bill already requires the regulator to consider the competitiveness of regulated clubs, alongside any potential adverse effects on financial investment. Clearly, these things impact on the competitiveness and success of the leagues themselves. Additionally, where we consider it relevant to specific functions of the regulator, there are explicit requirements for it to consider the potential impact on the finances of the leagues. For example, as part of the backstop process, the regulator has a specific duty not to choose a proposal that would place an undue burden on the commercial interests of either league.
Finally, on Amendment 69, in the name of noble Lord, Lord Markham, I reassure the noble Lord that the desired intent is already achieved by the wording of Clause 7(1). This states that that the regulator
“must, so far as reasonably practicable”,
advance the regulator’s objectives when exercising its functions. To meet this duty to advance its objectives, the regulator would have to have regard to its objectives, so the intent of the amendment is already achieved.
For the reasons I have set out, I am not able to accept these amendments and ask that noble Lords do not press them.
Lord Markham (Con)
I thank the Minister. I will not go around the same loop again. A lot of this is again around the growth and success objectives . We rehearsed those arguments quite well in the previous groups. However, I would question a new point that the Minister made: that, somehow, they would open up the regulator to legal challenge. I am not sure that I agree with that. I do not believe that the growth objectives that Ofwat, Ofgem, other regulators and the Bank of England have open them up to any more legal challenge. It is just saying that it is a criterion and trying to make sure that in any decisions they make, they have more than one objective that they are seeking to fulfil. I will not go beyond that and rehearse the arguments, but I thank the Minister and beg leave to withdraw my amendment.
Lord Mann
“(d) adverse impact on women’s football.”
Lord Mann (Lab)
My Lords, Amendment 65 is not about whether women’s football should be covered by the Bill; it is about something quite different. I will very briefly illustrate it with an issue that would arise at a regulated club, the National League Solihull Moors Football Club, should this Bill go through. I do not know whether the issue has been resolved and, in a sense, that is rather incidental to my point.
The issue, from what I have ascertained, is that Solihull Moors has a women’s football team as well as a men’s football team and, because of that, with a licence, it would be regulated under the men’s football team. The women’s football team would be quite separate, but the women’s football team plays in the same complex as the men’s team. Also, the business had been structured with a set of community interest companies that were required to break even. The one that the women’s football team played on did not break even, which led to them being thrown off their pitch. However, the facility had been part-funded by the Football Foundation.
That is a particular comment on Solihull Moors, but also a real example from this year. Using it as an illustration, in that situation, where funding has been received and a women’s club has been, as some claim, thrown off so they are not able to play on a facility, is this an issue for the regulator? It should be. The regulator could, for example, look at whether the moneys that were given by the Football Foundation should be repaid. While it is a small issue in monetary terms, if you are a women’s football club and you are thrown off the pitch, it is a big issue. So the reason for tabling this amendment is to see whether this kind of situation is covered. If it is not, I suggest it requires an amendment similar to or the same as the one I have tabled. I beg to move.
Lord Markham (Con)
My Lords, I rise in support and to give an example of a similar unintended consequence. This is around the 3 pm kick-off on Saturday games and not allowing those to be televised. Again, that was set up exactly because Premier League games, if they were televised, would impact the attendance of the Championship League and other EFL games, because they knew that people would be watching those games instead. Within that regulatory framework, they had a view on the impact of how that one competition could impact the other competitions.
In a similar way, what the noble Lord, Lord Mann, is trying to do is to add, in proposed new paragraph (d), the impact on the women’s game and make sure that it is one of the considerations taken into account. Without it, you could be taking action around the men’s games in the competition that has those unintended consequences—so I support it.
Lord Addington (LD)
My Lords, the amendment from the noble Lord, Lord Mann, is one of those that reflects real life. Anybody who has set up any club of any structure at any point knows that, if you are working between two bodies—I have seen it very much at junior level between rugby and cricket clubs—their interests seem suddenly to contradict each other under a new set of circumstances. I hope that the Minister will have a reassuring answer about the flexibility and ability of the regulator to intervene and try to find a way forward, because this is a real problem that will occur every now and again. It is probably not a structural thing, but “Is the flexibility there?” is a genuine question. I do not think any of us wants one of our regulators to suddenly start having a negative effect.
My Amendment 70 in this group basically says that support should be available for the women’s game. We have already covered this issue at some length, so I will not go much further than to say that we should not exclude giving the women’s game some help, because it is developing and going forward, and it is very important to the foreseeable future of developing elite-level sport in this country. We should address that by having another look and asking what the capacity is.
I see that the noble Baroness, Lady Taylor, is ready to speak to her amendment. Can we find out what flexibility there is and what the regulator is seen to be doing to handle these not quite down-the-line situations, where there are positive outcomes that we hope would be facilitated by it?
Baroness Taylor of Bolton (Lab)
My Lords, I will say just a word, because Amendment 72 in my name and that of the noble Baroness, Lady Grey-Thompson, is included in this group. We have, to a certain extent, discussed this already, because this reflects on the kind of support that clubs would get were they to seek a licence, get a provisional licence or try to comply with the regulations that will be there. The Minister was very reassuring when we discussed this previously, but I hope that, at some stage during the passage of the Bill through either House, we can get a little more detail on how this may work in practice.
Baroness Grey-Thompson (CB)
My Lords, I have put my name to Amendment 72, but shall comment briefly on the amendments in the names of the noble Lords, Lord Mann and Lord Addington.
We need to be clear that this is a regulator for the men’s game, not the game of football. I am really excited to see the growth of women’s football; it has a massive impact on society. Some 80% of women are not fit enough to be healthy, and football is one of those sports that connects and is changing the relationship between girls and physical activity and sport. I was at the Wales v Northern Ireland women’s game the other week and the groups of teenage girls coming to support in a way that they might not support the men’s game, and the little girls dressed in their Welsh kit and goalkeeper’s kit, was a really beautiful sight to see.
But the women’s game needs to be protected and nurtured, and I do not want to see any unintended consequences of regulation or anything that makes it harder for women to be involved in what is an incredible game. I am meeting the Minister this week, and this is one of things I will be discussing with her.
Lord Goddard of Stockport (LD)
My Lords, I will be very brief. In my view, these are proper probing amendments about unintended consequences—such as with Solihull—and the need to support women to get to the elite level, as well as the points made by the noble Baroness, Lady Grey-Thompson. This is not about having an argument or asking the Government to rethink anything; these are truly probing amendments asking the Minister and those who work on the Bill to look at these points and make the Bill better. I am so thankful for the support of the noble Lord, Lord Markham, in that. This group gets to the nub of an issue that can be dealt with very quickly.
Lord Moynihan (Con)
I will pick up on the point made by the noble Lord, Lord Goddard, and refer to the amendment in the name of the noble Lord, Lord Mann. My understanding is that the regulator cannot take the women’s game into account, even where, in theory, the accounts may relate to both. Indeed, on the face of the Bill, as I read it—I look forward to the Minister’s clarification—it would be possible for clever accounting to move money and, indeed, even financial exposure, across to the women’s game and therefore exclude it from the consideration of the regulator. I hope I am wrong in that. I can see that there would be ample opportunity for approaches to the accounts and the financial strength of clubs to be manipulated in a way that I am sure was not the intention of the Government or the regulator. The Minister will no doubt clarify that when she comes to respond.
This goes back to the possibility of amending the scope of the Bill in the future. In other words, as the noble Baroness, Lady Grey-Thompson, said, this is exclusively a men’s regulator. I was a bit concerned about the language in the report to Parliament and to the Delegated Powers and Regulatory Reform Committee, which was prepared by the department, recommending that women’s football be “given a chance” to self-regulate. That is rather a condescending phrase to the sport. Therefore, it is not surprising that a number of people in the sport have been rather concerned that the women’s game has not been given equal opportunity. UEFA has brought in solidarity payments for the Women’s Champions League clubs to support the growth of the women’s game. That is not the case in the UK. I can completely see the arguments that people like Kelly Simmons have made: if the benefits of the regulator are as strong as the Minister has expressed to the Committee, then it could enhance and expand club licensing criteria to raise standards in women’s football—the performance of women’s football as well as medical and welfare provision.
If the Bill offers so strong a benefit to the sport as the Minister makes out, it is unfortunate that the women’s game should be put to one side and simply told it is being given a chance to prove itself and, in due course, might see the benefits that the Minister says exist in this Bill for football. That is my biggest concern. I think it is a concern felt by many in women’s football; I see the noble Baroness, Lady Grey-Thompson, nodding in assent.
It is important for the Minister to address both the role of the regulator in relation to what a football club does to promote women’s football and the wider implication that many in women’s football feel: that they are being somehow excluded from the great benefits we have regularly heard about in Committee from the Minister about the game as a whole.
I hope the Minister will respond to both those points; that would be helpful to the Committee. If they are not positive responses, then this will perhaps be something we should return to at a later stage, to make sure that the women’s game is not disadvantaged by the introduction of the regulator.
Baroness Brady (Con)
My Lords, I rise to speak on Amendments 65, 70 and 72, which focus on ensuring financial support for the women’s game and protecting it from many adverse impacts resulting from the Bill.
While I respect the intention behind these amendments, I believe that they are not strictly necessary. I want to underline the significant commitment that many Premier League clubs already have to the women’s game. A vast majority of Premier League clubs operate women’s teams—including West Ham, which had a fantastic 5-2 win yesterday. We do that not as an obligation but as a genuine commitment to growing and professionalising women’s football. We all want our women’s teams to succeed, thrive and contribute to the broader success story of English football.
The truth is that not one WSL team makes any money—actually, not one even breaks even. They all lose between £1.5 million and £5 million a year, so they are currently wholly reliant on the men’s teams playing in the Premier League for their funding. The Premier League’s commitment is not just rhetorical; it is backed by meaningful action. Premier League clubs have provided substantial financial support and shared their expertise, facilities and resources. A recent example of that is a £20 million interest-free loan, which was made available to the women’s NewCo to help build a robust foundation for future growth, alongside a co-operation agreement with the Premier League to assist with growing, commercialising and attracting investment to the women’s game. The Premier League also invests £6 million in over 70 emerging talent centres across the country, to bring brilliant and diverse talent into the women’s and girls’ game from the widest possible range of backgrounds.
Lord Hayward (Con)
My Lords, I will follow on from a comment by the noble Baroness, Lady Brady, on the contribution made by the men’s game and men’s clubs to the women’s team in the same club.
The noble Lord, Lord Addington, and I worked with others to ensure that the women’s rugby tournament was brought to this country next year. We are pleased to say that we were successful in doing that, but it needed assistance from the Government and it received a grant.
The Minister has, on a number of occasions, referred to the levy being proportionate, and I have been critical of her on this. It is important that an indication is given as to whether money paid by a football club—let us take West Ham as an example—to support the women’s club will be taken into consideration by the regulator when assessing what payment should be made overall to the levy. There would be a serious danger that, if that money is included in the regulator’s assessment of what is proportionate, football clubs will, quite naturally, reduce the amount of money that they give to the women’s game.
Lord Parkinson of Whitley Bay (Con)
My Lords, like others, I am grateful to the noble Lord, Lord Mann, for moving his Amendment 65, which probes an important area and a potentially concerning consequence. I am grateful for the example that he raised of Solihull Moors and look forward to the reassurances that I hope the Minister will give. However, even if she gives those reassurances, the noble Lord’s amendment is modest and I wonder whether there is a case—belt and braces—for us to make an amendment saying that the regulator should work in a way that does not have an adverse impact on women’s football. That feels sensible, even if the Minister does not share the concern about the specific instance that her noble friend has raised.
Like others who have spoken, we on these Benches are full of praise and excitement for the role that women’s football and women’s sport more generally play in our society. The noble Baroness, Lady Grey-Thompson, spoke powerfully about the inspiration that it is to many young women and girls, the transformative impacts that it has on their health and so much more. I am pleased that we have come such a long way from the days of old, when women were banned from playing professional football—a ban that was lifted only in 1971, but the effect of which can still be seen and has reverberated through the development of the women’s game for generations.
The FA took on the administration of women’s football only 30 years ago, in 1994, and the Women’s Super League became a fully professional league only in 2018. But, as noble Lords have pointed out, recent years have seen some striking, powerful and inspirational examples of the growth in the women’s game and, hearteningly, in the interest and appreciation that it is getting right across society. Correspondingly, there has been an enormous increase in the attention that it has garnered, with 77,000 fans attending the women’s FA Cup final last year. I know that all noble Lords fondly remember the astounding victory achieved by the Lionesses in the 2022 European Championship.
However, there is a concern, as has been expressed in this debate, that regulating women’s football now might not be the right moment in the development of the women’s game and women’s clubs. The Raising the Bar report, led by Karen Carney, stated:
“Given its stage of development, continued growth of matchday, broadcast and sponsorship revenue—with a view for the women’s game to become independently sustainable—is the right way to incentivise continued long term investment by clubs”.
Women’s football is obviously, and regrettably, not at the same stage of development as the men’s game—the men’s game had such a significant head start in terms of the professional apparatus around it—and the relative losses incurred by clubs are not in the same ballpark. Thus issues with financial stability are not comparable. There is recognition of that, although there was some surprise and, at Second Reading, a number of noble Lords from across the House rightly mentioned the women’s game as an area for us to be mindful of, so it was helpful to have had this debate.
Another issue is the level of investment that women’s football requires. As my noble friend Lady Brady pointed out, for women’s teams to come closer to the men’s game, significant financial investment will be needed. We are therefore right to question whether that is best served by and encouraged through this regulatory regime. However, I note the paradoxes that my noble friend highlighted in making that point and applying it to the women’s game, while conceding the argument in relation to the men’s game. I therefore understand why, at present, women’s football might not be included in the scope of this new regulatory regime.
However, it is useful to have had this debate and it would be useful to understand the Government’s intent here. Perhaps the Minister can explain the means by which the women’s game might be brought closer to the men’s game and how, if that happens and it falls into some of the same mistakes that we have seen in the men’s game, the women’s game might be captured by this regulatory regime. On the flipside, if the men’s regime learns from the women’s game and is able to regulate itself better, would that mean that there will be a lightening of the regulatory burden or are we past the point of no return for the men’s game? It would be interesting to hear that.
Like my noble friend Lord Moynihan, I slightly regret the wording of giving the women’s game a “chance” to regulate itself, but I am sure from looking at the Government’s accompanying notes that it is not meant pejoratively.
Amendment 72 from the noble Baroness, Lady Taylor of Bolton, sits slightly uneasily with the others because it is not just about the women’s game, but she explained why she has tabled that amendment and why she hopes to hear a bit from her noble friend the Minister. What she is seeking here is a welcome addition; it is only right that the regulator should be required to give assistance to clubs that are seeking licences. One of the themes that has been drawn out by many noble Lords in our scrutiny so far is the issue of how clubs will be able to adjust to these new licensing requirements. If the regulator does not implement this scheme in the correct manner, clubs will suffer, so it is only right that it should provide assistance to clubs to allow them effectively and efficiently to understand the new requirements that the Bill and its regulatory regime bring about. I will listen with interest to the Minister’s response to her noble friend on that and the other amendments in this group.
Baroness Twycross (Lab)
I thank my noble friends Lord Mann and Lady Taylor of Bolton, the noble Lord, Lord Addington, and the noble Baroness, Lady Grey-Thompson, for tabling these amendments, including on the important issue of the women’s game.
I reassure noble Lords that we are completely aligned on our commitment to women’s football. As I have said previously in your Lordships’ House, I was not allowed to play football when I was at school. I could not be more delighted that my nieces can not only play football but take for granted that they can, and that they are encouraged to do so. I am as excited at the growth in women’s football as is the noble Baroness, Lady Grey-Thompson. I asked a number of questions similar to those that noble Lords asked, so I hope that the answers I have had, which form a large part of my speaking notes tonight, will provide them the reassurance that I was provided when I asked those questions in preparation for your Lordships’ Committee.
At present, the regulator will not cover women’s football. In answer to the question from the noble Lord, Lord Moynihan, the regulator will not be concerned with women’s teams’ accounts even where they are affiliated to men’s clubs. However, it is empowered to obtain and consider information from a club’s wider corporate group. I reassure the noble Lord that clubs should not be able to circumvent requirements through creative accounting in the manner that the noble Lord described as potentially being an issue.
The regulator will be concerned only with the sustainability of the clubs which will be within the scope of its regime. Women’s football is in such an exciting place and we really do hope that it will be able to grow and succeed in a sustainable way. Indeed, the wider football ecosystem already provides financial support to the women’s game—a point made eloquently by the noble Baroness, Lady Brady.
The FA has a 2024-28 women’s and girls’ football strategy, which states that by 2028 it will
“secure significant additional funding and investment to support women’s and girls’ grassroots football and pyramid”,
among other things. In addition, as the noble Baroness, Lady Brady, said, the Premier League has provided a £20 million interest-free loan to the Women’s Professional Leagues Limited to help build strong foundations for the women’s game.
Lord Moynihan (Con)
Can the Minister clarify what she has just said? Is she saying that the regulator would not be able to intervene in the example given by the noble Lord, Lord Mann, in introducing his amendment?
Baroness Twycross (Lab)
On the example of Solihull, the response I made related specifically to the point that the noble Lord, Lord Moynihan, raised about the creative use of accounting being used to avoid things. My understanding is that it is empowered to obtain and consider information regarding the club’s wider corporate group where it has reason to do so. It might be worth me getting further clarification from officials and ensuring that a letter outlining that is placed in the Library so that all noble Lords are clear on that point.
Lord Mann (Lab)
That would be highly useful of the Minister, and I thank her.
Baroness Twycross (Lab)
The Government will continue to support the FA and Women’s Professional Leagues Ltd as the women’s game forges its own path. We completely understand the desire to see appropriate protections put in place for women’s football. As I said, I have a historical vested interest in that I was not allowed to play football at school, and none of us wants to see issues like those at Reading, where the women’s team suffers as a result of issues at the affiliated men’s club. My noble friend Lord Mann gave the example of Solihull Moors, which was also cited by the noble Lord, Lord Goddard.
At present the intention is that this will be a regulator for the men’s game, and we have already discussed the reasons for that. Asking the regulator to then consider its impact on the women’s game could constitute a widening of that scope. I am confident that this is something that the industry authorities governing the women’s game will be able to tackle through their own rules for women’s clubs with affiliated men’s teams. They deserve the time, space and opportunity to do so.
I apologise if some of the language in the Explanatory Notes came across as clunky or inappropriate. I am confident that that was not the intention of those drafting them.
The Government’s position is in line with the recommendations of Karen Carney’s independent review of domestic women’s football, which was published in July 2023. The review recommended that the women’s game should be given the opportunity to self-regulate rather than moving immediately to independent statutory regulation, and the Government support that recommendation.
On Amendment 72 in the name of my noble friend Lady Taylor of Bolton, I agree that the regulator should help clubs to comply with regulations as much as reasonably possible. It is in everyone’s interest for clubs to become compliant quickly and with as little additional burden as possible. That is why provisions for a collaborative approach are already in place. The regulatory principle in Clause 8(b) encourages the regulator to,
“so far as reasonably practicable, co-operate, and proactively and constructively engage, with … clubs”.
The regulatory principle in Clause 8(c) also encourages the regulator to be proportionate.
For the reasons I have set out, I am unable to accept the amendments in this group and I hope that my noble friends and noble Lords will not press them.
Lord Mann (Lab)
I look forward to receiving the letter from the Minister. I will say—and officials may be listening in—that if we had a situation where a football club had a licence and was being regulated by the regulator, and that football club then threw its women’s team off their pitch so that they could not play, the regulator would look particularly stupid and impotent, and doubtless would be suggesting that the Government and Parliament may need to amend the law. I hope this matter can be looked at to see whether there is a way in which we can get around that without giving extra powers to the regulator, so I look forward to receiving that letter and I am sure other noble Lords do as well. I beg leave to withdraw the amendment.
Football Governance Bill [HL]
Monday 9th December 2024
(1 month, 1 week ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-IV(a) Amendment for Committee (Supplementary to the Fourth Marshalled List) - (6 Dec 2024)
Baroness Brady
“(d) differential impact on regulated clubs participating in, or seeking to qualify for, competitions organised by international football bodies.”
Baroness Brady (Con)
My Lords, Amendment 67A in my name addresses a critical oversight in the Bill. It is intended to properly recognise the clearly differential impact of regulation on certain clubs, specifically those participating in or seeking to qualify for competitions organised by international governing bodies. This amendment is essential to ensuring that the unique challenges faced by Premier League clubs, especially in the context of UEFA and FIFA, are properly understood and accounted for.
I begin with the elephant in the room: UEFA’s refusal to endorse this regulatory regime. We know that UEFA has explicitly raised objections to the Bill’s provisions, warning that mandatory redistributions and other aspects of state interference risk breaching its rules on the autonomy of sport. This is no small matter. UEFA and FIFA hold significant leverage over clubs competing in their competitions, and they have made it clear that this leverage could be exercised if the Bill’s provisions conflict with their frameworks. Premier League clubs that qualify for European competition—clubs that have spent years building their competitiveness and investing in their success—are now being placed in an unenviable and unique position. They face the very real risk that this regulatory framework could put them in conflict with UEFA and FIFA, creating ongoing uncertainty and jeopardising their ability to compete on the European stage.
The consequences of such a conflict are potentially catastrophic, not just for the clubs involved, although it affects them uniquely, but for the reputation and stability of English football as a whole. The differential impact of the Bill in this respect is stark. Premier League clubs, particularly those involved in UEFA competitions, are the only entities at risk of disqualification due to regulatory conflicts. They are also the only clubs that must navigate both domestic regulation and the additional compliance burdens imposed by UEFA licensing. This small class of clubs is being asked to shoulder very specific, disproportionate burdens and risks that directly affect their operations, financial stability and competitive standing. Let us not forget that these clubs are the financial engine of the football pyramid. They generate billions in revenue, attract international investment and support grass-roots football through solidarity payments. Yet the Bill places them in a uniquely precarious position, where their ability to operate and succeed could be undermined by regulatory uncertainty and conflict with international governing bodies.
Unlike lower league clubs, Premier League clubs that aspire to European success operate under the shadow of UEFA’s and FIFA’s leverage. This is not a temporary issue; it is a permanent dynamic. UEFA has already made it clear in correspondence, which the Government has refused to publish, that certain provisions in the Bill could jeopardise compliance with its framework. This gives UEFA and FIFA ongoing leverage over Premier League clubs, creating a regulatory environment that could become fundamentally unstable.
The Bill compounds this problem by failing to address how the regulator would navigate these international conflicts. While it empowers the regulator to impose unprecedented interventions, such as backstop powers over financial distributions, it does so without requiring the regulator to consult or co-ordinate with UEFA or FIFA. This omission leaves clubs caught between competing regulatory demands with no clear resolution mechanism.
The potential consequences of these conflicts go beyond individual clubs. If Premier League clubs are disqualified from European competitions, or face ongoing regulatory uncertainty, it would damage the Premier League’s reputation, diminish its global competitiveness and, ultimately, reduce the revenues that flow down the pyramid. This is not scaremongering. It is a very real risk, uncovered by this Committee, which this the amendment addresses.
The amendment also speaks to a broader issue of fairness. Premier League clubs are being disproportionately impacted by the Bill, including the backstop, because they are the only funder of other leagues in the pyramid. Yet their unique position and vulnerabilities are not adequately reflected in the legislation. By explicitly recognising the different impacts on clubs participating in international competitions, we can at least begin to address this imbalance and ensure that the Bill does not inadvertently harm the clubs but helps drive the success of English football. If we are to create a regulatory framework that commands trust and confidence, we must acknowledge these differential impacts openly and honestly. The amendment is a vital step towards that goal.
This amendment is not about special treatment for Premier League clubs. It is about recognising the unique challenges they face, ensuring that regulation does not create more problems than it solves. By acknowledging the differential impacts on clubs participating in international competitions, we can create a regulatory framework that is fair, proportionate and fit for purpose. I urge noble Lords to support this amendment, to ensure that the Bill reflects the realities of modern football and the global stage on which our clubs operate. I beg to move.
Baroness Evans of Bowes Park (Con)
My Lords, I want briefly to support my noble friend’s comments and amendment. We have already set out our concerns about UEFA and FIFA’s objections. The Minister has suggested that our concerns are somewhat misplaced. Given the comments that have just been made, our concerns have unfortunately not been allayed. The fundamental issue is that, rightly or wrongly, the letter from UEFA and FIFA was in the papers; we have seen concerns that were raised.
Unfortunately, for whatever reason, the Minister has not been able to fully explain to the Committee exactly what has been said. She said that constructive conversations have happened. That is great news and we are all pleased to hear it but, up to this point, she has not been able to give us any detail to match the concerns that we have seen in this letter. Does she feel able today to give us a bit more detail and some categorical examples of where FIFA and UEFA have said that they are now happy with the Government’s position and happy with the Bill as it is? We could balance that with what we have seen in the papers and the press from the letter, and what we have heard in some—I am sure—well-intentioned comments from the Minister about what has been said, but with nothing tangible to back it up.
Does she have any correspondence with UEFA or FIFA, or any more tangible evidence that she can give us, to help us with the words she has been saying, which, I am sure, reflect conversations she may have had in meetings? This would give us some more tangible evidence that the issues that my noble friend has raised will not come to pass. Until we have that, we will have to return to this and, I am afraid, press the Minister for any more information she can give us.
Lord Addington (LD)
My Lords, as the noble Baroness just said, could we have the answer tonight as to what the state of play actually is? If we get some assurance that, “Providing we do not do X and Y, which we hope is not the intention of the Bill, we are fine”, then this will get put to bed. If the Minister can see some way of assuring us, even if it had to be on Chatham House terms or something, that would help, because we do not want there to be a problem. If we can get that assurance out there, this issue will go away. Let us face facts: it just would not exist.
We want there to be a competition. Presumably, Europe wants the Premier League there. The reason why we have this Bill is about Europe. It was because of fans protesting that they were going to lose their competition and their traditions to Europe, and politicians saying, “We’ll intervene”, which most people agreed with. If we can get an assurance that there is something solid that means we would have to do something radically different to turn this bad scenario into a living nightmare, that is fine. We cannot guarantee the future; we can deal only with the Bill in front of us. If the Minister can give us those assurances she will have my full support.
Lord Moynihan (Con)
My Lords, over the weekend, I and colleagues from across the Committee wrote to the Minister and sought to be very specific about the points that have just been raised by the noble Lord, Lord Addington, and my noble friend Lady Brady. It would be helpful to the Committee—I mentioned this to the Minister this morning too—to put on record the specific concerns that could lead to differences of opinion between the two regulatory frameworks: the regulatory framework we are seeking to put into legislation and the regulatory framework that already exists within UEFA and in FIFA. Indeed, if the answer to all the points that I will raise is that there is no conflict, the Committee will be satisfied and so will I.
I would be grateful if we could have specific clarification on UEFA and FIFA’s position concerning the regulatory powers contained in the legislation. Given the extensive scope of the Bill’s powers and their potential impact on clubs and national teams participating in UEFA or FIFA competitions, I would be grateful if the Government could confirm whether UEFA and FIFA have been consulted on each of the following categories of powers: whether UEFA has specifically approved the proposed regulatory framework, particularly the revenue distribution backstop powers; the licensing framework and powers; the IFR’s independence; the IFR’s accountability mechanisms; the Secretary of State’s broad-ranging powers; the delegated powers; the financial oversight mechanisms; and the interaction between IFR rules and UEFA/FIFA regulations. If there are any areas where UEFA or FIFA has or will, in response to this request, express reservations or express modifications then I would be grateful if the Committee could be informed.
Have the Government commissioned expert legal advice on these issues? How has this impacted on the design of the legislation? How will potential conflicts between UEFA/FIFA regulations and these various powers be resolved, especially regarding revenue distribution arrangements, competition participation rules, financial monitoring requirements, the licensing system, and the extensive rule-making powers granted to the IFR? This clarification is essential for ensuring the smooth implementation of the new regulatory framework and avoiding any potential conflicts with existing football governance structures.
As my noble friend mentioned, as reported in the press, in a letter from UEFA to the Secretary of State, UEFA warned against “government interference” in football. It points out that it has very “specific rules” that guard against state interference to
“guarantee the autonomy of sport and fairness of sporting competition”.
The Bill, however, gives the regulator and the Government the following powers over football in England. I would very much welcome confirmation from the Government, not today but in due course, that in the meeting the Minister of Sport had with UEFA— referred to by the Minister on an earlier Committee day—the Minister brought these powers to the attention of UEFA and it confirmed that they do not amount to “government interference”.
Baroness Taylor of Bolton (Lab)
My Lords, I was not going to intervene, but the noble Lord has said time and again that the Bill may jeopardise British clubs competing in Europe. Can the Minister clarify that in Italy the legislative decree 9/2008—the Melandri law—and in Spain the royal decree law 5/2015 both deal with the distribution of audio-visual rights, and both insist on a significant amount of distribution to lower clubs? I have not heard that clubs from Italy or Spain have been refused participation in European competitions.
Lord Harlech (Con)
My Lords, I support in the strongest possible terms my noble friend’s Amendment 67A. After the backstop issue, this is the most important issue in the Bill. For the fans of some teams, the ability to play in Europe and their clubs’ fortunes there are more important than what happens with the national side. We are being asked to consider something so fundamental that we cannot do it with this proposed legislation unless the Government publish the letter and any subsequent conversations that they have had with UEFA. Otherwise, we cannot really take into account the full ramifications of what the Bill may do.
The noble Lord, Lord Addington, summed it up best when he said that it was the risk of the breakaway league that caused the Bill to come into consideration in the first place. I humbly request that the Minister shares with the Committee everything that UEFA has said in relation to the Bill.
Baroness Fox of Buckley (Non-Afl)
My Lords, earlier there was a tetchy mood in which it was suggested that some of the contributions were simply time-wasting—and the word “filibustering” was used. When I was listening to the noble Lord, Lord Moynihan, I could see eyes rolling and people thinking that he was reading out an endless list and just time-wasting. But I think he did the Committee a great service by doing that, because he reminded us of the enormity of the powers that the Bill is affording a regulator. The noble Lord, Lord Pannick, who is not in his place, earlier made the point that it is just a regulator and that it is independent, and said, “What is your problem with this? We can trust them—they won’t do anything malign”. But this House and Parliament are telling that independent regulator what powers it has and determining what political interventions it can made. At least some of us have been concerned less about the financial situation but about the creeping politicisation of the number of powers that have been given precisely because it will not be a light-touch independent regulator, as I am sure the Government want it to be. That list was therefore very important.
It is our responsibility to make sure, first, that no unintended consequences come from the Bill and, secondly, that the Government are absolutely transparent about every single thing, including letters from UEFA. They should tell us what they fear and what the risks are. People keep talking about grown-ups in the room in politics. If we are going to be grown-ups, we want to know straightforwardly what the Bill risks. The idea that the only opposition to the Bill is from people who are ideologically opposed to regulation per se is malign. It is not true. Some people may be—but it is because of football that we need to know these things, and that is all.
Lord Markham (Con)
I thank my noble friend Lady Brady because, as has been mentioned, we have highlighted what is probably the number one issue. In all the time that we as noble Lords have spent here, we have shown that everyone cares. We are spending all this time here because we care about football massively and because what we are seeing here is, if noble Lords will excuse the pun, probably the biggest own goal. Everything behind the Bill is well intended but, if we get ourselves into a situation where we are suspended as an association, that will set football back decades. It is very real.
UEFA says that it is concerned and that:
“A Member Association may … be suspended if state authorities interfere … in such a significant way that … it may no longer be considered as fully responsible”.
My noble friend Lord Moynihan set out a long list of all those things. I want to set out one simple example. In the backstop, the regulator is given the power to decide on one league’s proposal over another league’s proposal. By definition, it is picking one side versus the other. That means, axiomatically, that those associations are no longer responsible for the decision; one of them must lose out, so one of them cannot be responsible for it. I cannot see any way in which that does not trigger what UEFA is saying—that the association is then no longer fully responsible because the decision has been taken out of its hands.
I hope that the noble Baroness, Lady Taylor, is correct that examples from Italy and Spain show that this is fine—again, I am grateful for her contribution because nothing would make us happier than that being the case—but the noble Lord, Lord Addington, is right that it is binary at this point. The Minister can give us an absolute assurance so that this goes away. We all hope that this gets killed as an issue and that we need never mention it again but, unless the Minister can give that absolute assurance, we are in a world where this does not go away; it is going to come back and hang on because there is risk. I am sorry to put it as bluntly as that but, unless the Minister can give a 100% yes, the lingering danger here is such a big own goal, as I mentioned before. We really need to take this opportunity to kill this as a subject right now.
Again, I thank my noble friend Lady Brady for bringing this issue up; I really hope that the Minister can clear it up once and for all.
Lord Addington (LD)
My Lords, I just want to clarify my position. I did not want an absolute yes; I wanted a probable yes in the most civilised world. Going forward, that is what I was looking for, because we cannot let UEFA dictate our sovereign law to us, can we?
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to my noble friend Lady Brady for her Amendment 67A and for the passion and clarity with which she set out her reasons for it; I am also grateful for her undoubted expertise in this area, as in so many others that we are examining in this Committee. This is a very important point, as my noble friend Lord Markham echoed. A number of clubs enter teams in international competitions, and these international competitions have their own requirements and rules by which the clubs who take part in them have to abide.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank the noble Baroness, Lady Brady, for tabling this amendment, which gives us a further opportunity to have a discussion on international competitions. I understand that the intent of the amendment is to ensure that English clubs can continue to participate and compete successfully in international competitions. That is something we all want. As we have discussed at length previously, the Government are confident that nothing in this Bill as drafted will jeopardise the participation of our clubs in international competitions.
The noble Baroness, Lady Brady, raised a point on UEFA statutes. As I have reiterated previously, in the strongest terms, we have engaged extensively with UEFA in the development of the Bill. As has been confirmed by the FA, we are confident that the Bill as drafted will not breach any of UEFA’s statutes. The regulator will be operationally independent of this Government and any future Government, and will not exert an undue influence on the FA’s ability to govern the game. This was confirmed by the FA itself in oral evidence given to the House of Commons Public Bill Committee on 14 May this year, during the passage of the previous Bill, introduced by the last Government. Both Ministers and officials have engaged regularly with the FA, UEFA and FIFA about the Bill, and they will continue to do so as the Bill progresses and beyond.
Baroness Evans of Bowes Park (Con)
Obviously that is great, but the Bill has changed since then, particularly around the backstop provision. The noble Baroness on the Labour Bench was talking about before this new Bill came into effect: does that still stand? Has there been an update from the FA on that, because some of the provisions in the Bill have changed?
Baroness Twycross (Lab)
I understand that the FA’s position on this point has not changed.
We completely agree that, in the course of regulating, the regulator should not unduly harm the ability of regulated English clubs to compete against their rivals and to succeed in those competitions. This is why Clause 7(2)(a) already relates to avoiding effects on the sporting competitiveness of one regulated club against another. This would cover the “differential impact” to which the noble Baroness’s amendment refers.
Clause 7(2)(b) also relates to avoiding
“adverse effects on the competitiveness of regulated clubs against other clubs”.
This includes against international competitors, as the Explanatory Notes clarify. These provisions already achieve the aims of the noble Baroness’s amendment to minimise impacts on competitiveness, and in fact do so more holistically, recognising that competitiveness matters beyond just the relatively small proportion of clubs competing in, or vying for, European football.
On the points made by the noble Lord, Lord Moynihan, while I remain confident that nothing in the Bill as drafted would jeopardise the participation of English clubs in international competitions, I do understand his concerns. On UEFA and FIFA, we are speaking to the relevant authorities and will give noble Lords the reassurance on the specific points raised by the noble Lord in the coming weeks before Report.
For the reasons I have set out, I am unable to accept the noble Baroness’s amendment and hope that she will withdraw it.
Baroness Brady (Con)
My Lords, I thank the Minister for her response and other noble Lords for their contributions. However, I am deeply concerned about the assurances offered. While the Minister again claims that UEFA is comfortable with the Bill, the assertion is at odds with what we know. UEFA has explicitly raised objections to aspects of the Bill, including the risk of state interference breaching its rules. The correspondence exists, yet the Government refuse to publish it. If UEFA is so comfortable with the Bill, why the lack of transparency? Why not share its position openly with the House?
The Minister may be interested to know that, a couple of days ago, I spoke to Mark Bullingham, the CEO of the FA. He told me that only UEFA itself, not the FA, can confirm whether the Bill breaches its statutes, and that he believes that it will not give that confirmation because it will not want to give up its leverage. That is deeply worrying.
This amendment does not create complexity; it adds clarity. It ensures that the regulator considers the unique and unavoidable fact that Premier League clubs operate under dual compliance requirements—domestic regulation and UEFA licensing. Ignoring this reality risks leaving clubs exposed to significant conflicts with the governing bodies, which creates confusion and the instability that the Minister says the Bill seeks to avoid.
The claim that Premier League clubs are not disproportionately impacted is demonstrably incorrect. Only Premier League clubs are subject to UEFA licensing requirements, only they face the prospect of disqualification from European competitions, and only they are exposed to the dual pressures of domestic regulation and international oversight. They also fund the competition and the pyramid. This is not about prioritising one group of clubs over others; it is about recognising that their unique position requires tailored consideration.
The Premier League is not just a league; it is global powerhouse and the financial engine of our football pyramid. The risks of conflict with UEFA and FIFA are real, and they are uniquely borne by Premier League clubs. This amendment does not create division; it addresses it. It ensures that the regulator has the tools and the mandate to navigate these challenges fairly and effectively. I urge the Minister to reconsider her position as we progress towards Report and to reflect on the broader consequences of dismissing these concerns. But, for now, I beg leave to withdraw the amendment.
Lord Hayward
“(2A) The IFR must publish an annual statement to report on how it has considered, measured and performed in relation to its general duties under 7(2).”
Lord Hayward (Con)
My Lords, in the absence of my noble friend Lord Maude, I rise to move Amendment 68. I intend to speak more fully later, but I welcome the group as it stands because the amendments in it cover the issues that will arise soon after the completion of this legislation. I beg to move.
Lord Ranger of Northwood (Con)
My Lords, I rise in support of this group of amendments, particularly my Amendment 328 in which, in short, I seek to assess the impact of the Bill and the independent football regulator on the Premier League.
When I spoke at Second Reading, I highlighted my view from the perspective of a fan of football because football is so much more—it is more than a business; it is a love, a passion, for billions around the world. In Committee, there has been much debate about the potential impact on the game, which is so loved and successful, from the implementation of an independent regulator which may inadvertently temper both the game’s passion and its commercial success. I now put on my business head and shall explore how the regulator means to measure its impact on the clubs it will regulate.
First, what data will the regulator require to report on its effectiveness and on how it is impacting football, particularly the Premier League? Secondly, how will the regulator report to the Secretary of State on how this global industry is operating in many different environments? When we start to explore that question, a further question should come to our minds: are we actually talking about football or something different?
My love for Tottenham Hotspur Football Club remains undiminished despite the testing of my resolve almost every weekend—and last weekend was no exception. However, I ask noble Lords to look further than what occurs on the pitch. My club, like many, has and will continue to invest heavily not just in players but in infrastructure. I must congratulate our chairman Daniel Levy on building a truly world-class stadium in Tottenham, but please note that I did not say “football stadium”, for the Tottenham Hotspur stadium is much more. It has been built to exacting specifications so that it can also host American National Football League games with an entirely separate pitch built underneath the football pitch—a real feat of engineering—and completely different changing rooms have been incorporated into the stadium to meet the exacting requirements of the NFL squad sizes and their expansive kits. More than 120,000 spectators watched NLF games at the Tottenham Hotspur stadium during 2019, 2022 and 2023, and thousands more will this year, which means that already 12 of the NFL’s 32 American teams have played in the new stadium.
But this is not all. We have also welcomed Beyoncé, Guns N’ Roses, Lady Gaga and many other world-class stars. World title boxing fights have been hosted, and we have F1 DRIVE London, the official Formula 1 karting experience. When I walk up towards this gigantic modern-day Colosseum that sits on White Hart Lane, I see the Premier League logo proudly attached to the facade but, alongside it, the Formula 1 and NFL logos—probably with space for a few more. The club quite rightly states on its website:
“Tottenham Hotspur Stadium has become a new sports and entertainment destination for London, bringing a boost of circa £344m to the local economy every year”.
Tottenham is widely regarded as a well-run football club, with owners firmly focused on delivering a sustainable business operation and quality entertainment—I will not talk about trophies.
Baroness Brady (Con)
My Lords, I support Amendments 68, 89, 120 and 121, which focus on ensuring accountability and transparency and are critical to protecting the Premier League and safeguarding its unique role in the football pyramid.
This Bill introduces a radical new framework for the governance of football, one that includes significant regulatory oversight and redistribution mechanisms. We are the first country ever to do this, and I am worried that we may well suffer from first-mover disadvantage. There are profound changes in this Bill that will impact every level of the game, and it is essential that the Government and the regulator are held to account for the consequences of these measures. Regular reporting is not just a bureaucratic necessity; it is a vital safeguard to ensure that the interests of all stakeholders, particularly those of the Premier League, are protected.
If we are to introduce a regulator with such extensive powers, it must be held accountable for the full range of consequences its decisions may have. The competitive balance of the Premier League—its very dynamism and unpredictability—is central to its global appeal. This, in turn, drives its ability to attract world-class players, managers and investment, generating revenues that flow down the football pyramid. Yet, without baselining these measures or requiring the regulator to report on its impact in these areas, we risk implementing a system that could inadvertently undermine the Premier League’s success.
Similarly, international competitiveness is a crucial factor for the Premier League. It is the most watched and admired league in the world, representing a unique soft power asset for the UK. The ability of Premier League clubs to compete at the highest level in Europe has been a driving force behind their commercial success, as well as their capacity to support the wider game through solidarity payments and grass-roots initiatives, all of which are voluntary. However well-meaning, if the regulator’s interventions dampen investment or create uncertainty, this international competitiveness could be severely compromised, and yet somewhat incredibly there is no requirement in the Bill for the regulator to monitor or report on this.
Investment is another area where the absence of reporting requirements is deeply concerning. Premier League clubs operate in a highly competitive global market for players, sponsorship and broadcasting rights. Long-term investment decisions, whether in infrastructure, youth academies or community programs, depend on regulatory certainty and stability. If the regulator’s actions lead to a chilling effect on investment, it would have profound consequences not only for the Premier League but for the whole football ecosystem. Again, there is no provision in the Bill to track or report on this impact, leaving us blind to the unintended consequences that could arise.
The amendments before us, particularly Amendment 68, in the name of my noble friend Lord Maude, seek to address these gaps. They recognise that we cannot introduce such a transformative regulatory framework without ensuring that it is judged against the metrics that matter most: competitive balance, international competitiveness and the ability to attract investment. Unless we retain these qualities, we will end up with a much smaller, less well-funded and far less successful football pyramid. The question of stability in a rapidly declining ecosystem becomes somewhat irrelevant.
We must ensure that we have a clear understanding of whether this legislation is achieving its aims or instead introducing unintended and potentially harmful consequences. For example, if the redistribution mechanisms introduced by the regulator begin to destabilise clubs’ financial planning or deter investment, we must know about it quickly and transparently. If the regulator’s powers are being applied unevenly or disproportionately, we need to be able to challenge and rectify that. If the Premier League’s unique role in funding the pyramid is being undermined by these changes, we surely need a mechanism to address that impact.
I encourage the Minister to consider the spirit of these amendments and, between now and Report, consider ways that the accountability and transparency mechanisms can be considerably strengthened.
Lord Markham (Con)
My Lords, in speaking to Amendment 120 and following on from the point that my noble friend Lady Brady made, I hope to put some meat on the bones of what we would be asking the regulator to produce in its annual report.
Right now, all that the Bill says is that we are asking it to produce a summary of the activities undertaken during the year and for any other information that the Secretary of State sees fit. The whole purpose of our debates over the last few days is to make sure the regulator is fit for purpose in its objectives and that its performance is then measured against those objectives. My amendment—non-controversial, I hope—is about trying to hold the regulator to account. It seeks to add that the regulator should look at and report on clubs’ compliance against directed action, regulator finances, enforcement action, their performance against their own objectives, how much time it has taken to grant licences to clubs and any salaries above £100,000. It is quite a simple list that seeks to hold the regulator to account and get clarity on what its performance has been for the year, so it can then improve performance going forward.
Lord Hayward (Con)
My Lords, I will briefly follow on from the noble Lord, Lord Ranger, and the other contributions. The transitory nature of sport is such that, when the noble Baroness, Lady Brady, stood up to speak, West Ham were leading 2-0, but by the time she sat down they were leading 1-0—VAR had intervened. I pay credit to the noble Baroness for being here and paying such attention to the detail of the Bill, given the interest she declared, and which we are all aware of, in relation to West Ham.
The series of amendments here all deal with the reporting duty after the Bill has been passed and at the point of implementation. As others have indicated, it is key that there is a clear understanding, not only for the regulator or government but for the fans, who are key to the Bill—the whole idea of the Bill is about involving the fans—that the regulator is obliged to explain to the fans precisely why he has done things and that he recognises the impact of his actions on fans, clubs and players. At all levels, it is necessary that we have that information and understanding—and rapidly.
Lord Parkinson of Whitley Bay (Con)
My Lords, I do not know whether the noble Baroness, Lady Taylor of Bolton, is proposing to speak to her amendments in this group.
Baroness Taylor of Bolton (Lab)
The amendment in this group that I tabled has been covered by some of the earlier discussions we had and some of the assurances that the Minister gave.
Lord Parkinson of Whitley Bay (Con)
I look forward to her noble friend the Minister’s response to it, if she feels she has anything to add to it in this group.
The debates that we have had on this group, which concerns reporting requirements, cast my mind back to the debates we had during the passage of the Online Safety Bill on testing the duties for Ofcom to report back on how it would operate the new regulatory regime that the Act set up. My noble friend Lord Ranger of Northwood talked about future-proofing and emerging technologies, and this is an opportunity, through the reporting, to make sure that the changing technology and new areas of work are not just in the mind of the regulator but brought back before Parliament for some consideration.
My noble friend Lady Brady—I pay tribute to her being here for the consideration of the Bill, particularly this evening—described the first-mover disadvantage. Notwithstanding the points that the noble Baroness, Lady Taylor of Bolton, mentioned about the Italian and Spanish legislation—and I will certainly look at the extent to which that has lessons for us—what we are doing here is on a scale not done by any other jurisdiction. We want to make sure, as we are doing it, that it is working and that it is brought back before Parliament for proper consideration.
I am grateful to noble Lords who have brought amendments in this group and spoken to them. My Amendment 121 in this group is simple and technical. The Bill states that the regulator
“must arrange for a copy of every report under this section to be laid before Parliament by the Secretary of State”.
The wording of the amendment and the original wording of the Bill may seem very similar, but the substantive difference here is that we think that the duty should fall on the Secretary of State to lay the report before Parliament, not on the regulator. The Secretary of State is directly answerable to Parliament, whereas the independent football regulator, at least in the way that the Bill currently envisages it, is not. Surely it is therefore the Secretary of State’s responsibility to ensure that Parliament is fully informed of the actions of the regulator and to present the relevant documents to Parliament for scrutiny.
That would not be interfering with the regulator’s independence. Ministers already do this on behalf of other independent regulators: they are not carrying out the regulation but they bring documents before Parliament on the regulators’ behalf. Indeed, they are often asked about the way that regulation works, in addition to the power of Select Committees to call people who work at the regulators directly before them.
My amendment would also standardise the wording of the Bill. For example, Clause 11(6) states:
“The Secretary of State must lay any football governance statement, or any revised statement, published under this section before Parliament”,
and Clause 13(6) states:
“The Secretary of State must lay any guidance, or revised guidance, published under this section before Parliament”.
If the Bill envisages elsewhere that the onus is on the Secretary of State to lay documents before Parliament, I do not understand why it does not do so also in Clause 14. I am curious to probe the logic in the drafting to see why there is that discrepancy and whether we ought to change it.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Hayward, for moving Amendment 68 on behalf of the noble Lord, Lord Maude of Horsham, and all noble Lords for their thorough discussion of it and the other amendments in this group. The amendment, along with Amendment 89 from my noble friend Lady Taylor of Bolton, seeks to place additional reporting requirements on the regulator to increase transparency and accountability.
On Amendment 68, I understand the desire to ensure that the success of English football is protected and that the regulator monitors, evaluates and can be held accountable for its impact on the factors set out in Clause 7. However, the impact of the regulator in these areas should already be reviewed in both the “state of the game” report and the regulator’s annual report. This is true also in respect of Amendment 89. The annual report that the regulator will be required to produce and lay before Parliament at the end of each financial year will be on the exercise of its functions. The Secretary of State may also direct the regulator on what that annual report must include; they could, for example, already require the regulator to report on each of the specific aspects, including those in my noble friend’s amendment.
It is absolutely right that the regulator can be made to report on specific aspects of its performance and that these can vary from time to time, depending on the activity of the regulator and the state of the industry. We strongly expect that the regulator’s annual report would naturally include how well it had fared in advancing its objectives, but rest assured that if the regulator did not naturally report on this, the Secretary of State could direct it to.
Lord Parkinson of Whitley Bay (Con)
Does the Minister accept that if the Secretary of State decided that was not necessary but Parliament wanted to hear it, as the Bill is drafted, it is the Secretary of State who wins that? This is decided by the Executive and not by the legislature. Does she not think there is a role for Parliament to be a bit more assertive in what it would like to hear, rather than relying on a Secretary of State who shares its wishes and is willing to facilitate that?
Baroness Twycross (Lab)
I assume that if the relevant parliamentary committee felt that it was not getting the information it required, it would have quite an interesting evidence session with the regulator. It would be a very brave Secretary of State who did not include the information that Parliament wanted in an annual report of that nature or ask the regulator to do that. I can see the noble Lord shaking his head. I am not convinced that anything I could say on any of the points raised would satisfy him so, with respect, perhaps I could move on to other points.
Lord Parkinson of Whitley Bay (Con)
The Minister is accidentally proving my point. This is the frustration of parliamentarians when we ask questions and do not get what we want from an Executive. She is right that there is a role for Select Committees here, but I worry that the Secretary of State may not need to be that brave to avoid asking for these things. We are just keen to probe how Parliament can be a bit more precise in making sure it gets what it wants, but I will let her continue.
Baroness Twycross (Lab)
I suggest that noble Lords might discuss this at further length with the shadow regulator. As noble Lords will be aware, they have made themselves available and I am sure that, as the Bill progresses, they would be happy to have further conversations.
I turn to Amendment 120 from the noble Lord, Lord Markham. As I touched on earlier, the annual report is a vital mechanism for the regulator to be held to account. I therefore understand the desire to ensure that this report is comprehensive and covers the necessary detail. It will be in the power of the Secretary of State to specify any required contents, which are not, as Amendment 120 would ask for, all listed in the Bill. This is so that a much more adaptive approach can be taken, year by year, and so as to not constrain the issues that should be covered in the report.
With regard to Amendment 121, I reassure the noble Lord, Lord Parkinson of Whitley Bay, that the annual report will be laid before Parliament so that it can be scrutinised. If it is not, the regulator will be in breach of its statutory obligations; therefore, the intent of this amendment is already achieved.
Moving on to Amendment 122 from my noble friend Lord Bassam of Brighton, I thank him for raising this issue and am sympathetic to his viewpoint. Women’s football was discussed in the previous group of amendments and, as I outlined, the Government support the recommendation of the independent review of women’s football, published in July 2023. It set out that the women’s game should be given the opportunity to self-regulate, rather than moving immediately to independent statutory regulation. We appreciate, however, that this situation may change and that women’s football might need to be brought into scope down the line to safeguard its future.
As is clarified in the Explanatory Notes, the Secretary of State will already keep under ongoing review whether it is appropriate to amend the specified competitions. Clause 2(5) already requires the Secretary of State to carry out a formal assessment, including consultation, before doing this and to publish and lay its results before Parliament. The assessment can be triggered at any point so if any change in circumstance occurs, the Secretary of State is able to react. We therefore think that the principle of this amendment is already catered for and do not believe it is right for a clause with a specified timeline to be added to the Bill.
The Government recognise the intent behind Amendment 328 from the noble Lord, Lord Ranger of Northwood. It is vital that the regulator is transparent about the burden that its regulatory activities may have on clubs and competition organisers so that it can be held accountable. From the start, we have been clear that we wish to establish a regulator for football that will take a proportionate approach to regulation. We do not wish to introduce a regulator that will impose onerous and burdensome requirements on the clubs. That is why the regulator will have a statutory requirement when exercising its functions to have regard to the desirability of avoiding impacts on features such as competitiveness and investability. We expect that the impact of the regulator on the market, including on regulated clubs and the leagues, will be reviewed in both the “state of the game” report and the regulator’s annual report.
I reiterate: the Secretary of State and Parliament will be able to scrutinise these reports. We believe that this ongoing accountability is more appropriate than a one-time review by the Secretary of State six months after the Act has passed. It would not be fair or indeed helpful to evaluate the regulator’s performance or impacts after just six months of a brand new regime. For the reasons I have set out, I hope that the noble Lord will withdraw his amendment.
Lord Markham
Member’s explanatory statement
This amendment requires the IFR to use its resources in the most efficient, expedient and economic way.
Lord Markham (Con)
My Lords, I have got up a number of times today to say that a particular amendment is not controversial and I hope it will be an easy one for the Minister to agree to. I have not been correct yet, because the Minister has not agreed to any, but I think that with this one I am on to a good thing. Everything that I am trying to do here is to make sure that what is written down in the Bill really does happen.
To take the exact wording on the regulator’s regulatory principles, in a number of places it says that it “should” use its resources
“in the most efficient, expedient and economic way”.
We are saying no, it must. It “should”, as far as is reasonably practicable,
“co-operate, and proactively and constructively engage”
with clubs, owners and competition organisers. Again, we are saying no, it must. There can be lots of good intentions, and lots of times when you can say that someone should do something. My mum told me that I should eat my greens. I cannot say that I always did. In all these instances, it is about making sure that the wording that the Minister and her team put in the Bill means that things really do happen.
Again, we suggest that the regulator “must” act in a way that
“recognises the specific context of football and the fact that clubs are subject to rules, requirements and restrictions”;
it “must” act consistently,
“recognising the differences between clubs and competitions and the differences between the circumstances affecting clubs”;
it “must” act in a way that
“recognises the responsibilities of owners, senior managers and other officers of clubs in relation to the requirements placed on clubs under or by virtue of this Act”;
and it “must” act
“as transparently as reasonably practicable”.
Again, we are just making sure that everything that the Minister has put down by way of the wording of Bill must happen, not just should happen. I think, this time, I am backing up exactly what the Minister would like to see happen. There are also a couple of other sensible amendments from others that fans should be consulted and engaged with in all this, which I also hope would get a resounding yes from the Minister. I look forward to hearing her response in terms of making sure that what she would like to happen really does happen. I beg to move.
Lord Watson of Invergowrie (Lab)
My Lords, I speak to my Amendment 78, and I would like to begin with a quote, that
“there is no reference to players as a group the regulator should co-operate with … There is not a single mention of players, even though they are the main employment group within the regulated clubs. This means that the decisions that the regulator makes could have a tangible impact on their employment. For example, if the regulator exercises its powers to withdraw approval for a competition or refuses a licence to a club owner, there would be a direct consequence on the contracts of and conditions for players … Just as with fans, the professional game could not exist without players, so will the Minister explain why players are not mentioned in this part or elsewhere in the Bill?”—[Official Report, Commons, Football Governance Bill Committee, 16/5/24; col. 129.]
Those are the words of the then shadow Sports Minister, Stephanie Peacock MP, on 16 May, when the original version of this Bill was in Committee in another place. For that reason, I know that I am pushing at an open door here, because Stephanie Peacock is of course now the Minister for Sport.
As shadow Sports Minister, Stephanie Peacock not only robustly argued in favour of her amendment but then forced the matter to a vote, which, as is always the case with opposition parties in Committee in the other place, was lost. Therefore, it was both surprising and disappointing to myself and a number of others to find that this Bill—amended only in minor ways from the Tory Bill—did not include mention of players. Ms Peacock’s amendment in May this year included five categories of people and organisations to be added to Clause 8. I have taken out four of those so as to focus on much the most important: namely, the players.
Jock Stein, one of the greatest managers ever, once said, “Football without fans is nothing”. He was right, of course. As evidenced in 2020 during the pandemic, all games at the top level in England were played behind closed doors, and I defy anyone to say it was worth the effort. We all know it was driven shamelessly by the financial aspect of it, but as an experience it was, exactly as Mr Stein said, nothing.
Important as fans are—I am very much one of them—it was shown to be possible to play matches without them. Try doing the same without players. The players are not simply another stakeholder group in football, and it is fatuous, not to say insulting, that they should be categorised as such. Decisions made by the regulator have the potential directly to impact their careers and their contracts, as Stephanie Peacock said. It should not be left up to the regulator to decide whether they need to engage with them or not. In essence, this is, I believe, an employee relations issue rather than a football issue, as is the need for players to be viewed as distinct from other stakeholder groups.
The PFA—Professional Footballers’ Association—represents a very high proportion of the professional players in the Premier League and the English Football League. You might think that young men earning millions of pounds each season would not feel the need to join a trade union. You might, but according to the PFA, membership among Premier League players is close to 100%. Based on my experience as a full-time trade union official, that is remarkable in any sector of employment. But for such wealthy individuals to have calculated that there is benefit to them in becoming part of a union and working collectively, and having people work on their behalf, is astonishing. To suggest that players and their trade union should not be a group of people that the regulator should—to quote Clause 8—“proactively and constructively engage” with is frankly a nonsense.
The absence of players and their representatives constitutes a clear and obvious lacuna in this Bill so, with respect, I say to my noble friend, please sort it.
Lord Shamash (Lab)
My Lords, Amendment 80 in my name seeks to include football supporters’ trusts on the face of the Bill to ensure that they are consulted on all matters relating to fan engagement as set out in the Bill. It is not intended to restrict the regulator, as the Bill states, or to restrict other fan groups being involved.
I declare an interest in that I am currently a director of Manchester United Supporters Trust and was its former chairman over the past decade. It is a very substantial trust with over 100,000 members, and initially came into being in 1998 in opposition to the Murdoch bid for the club, followed by the bitterly opposed leveraged takeover by the Glazer family in 2005. However, in the last decade, the trust has developed a constructive relationship with senior management which delivers fan consultation and representation for supporters. Supporters’ trusts are uniquely equipped to perform this role, and every club would benefit from engaging with such a body.
Currently, there are 149 supporters’ trusts across the football pyramid: 16 in the Premier League, 18 in the Championship, 20 in League One, 15 in League Two and 80 in non-league football. Most, if not all, trusts are registered with the FCA and operate under the Co-operative and Community Benefit Societies Act 2014.
I invite my noble friend the Minister to accept this amendment on the basis that supporters’ trusts provide an existing substantive platform for fans to have a voice in club decisions. It is a structure that should be utilised to the benefit of football as a whole. It is an existing and vibrant structure that I envisage the independent regulator would welcome working with from the outset.
It is important for the Committee to appreciate the many facets of supporters’ trusts and how they contribute to football as a whole. Invariably, the trusts are democratically elected, operating, as I have said, under FCA-approved constitution and rules. They help to ensure the interests of the wider fan base and community they represent. This is vital in sustaining the contact with fans and in the case of smaller clubs.
Trusts often emphasise local community values and initiatives. The trust can help to maintain strong ties with the local fan base, fostering a sense of belonging and identity. This is relevant to the Premier League as well as non-league clubs. Many clubs have charitable foundations that, in my experience, work closely with their trusts. Foundations work with local schools, using their links with the club to assist teachers in their roles. Many also support local food banks.
Trusts, by raising funds through their membership and donations, can contribute to the financial health of the club. This can be particularly beneficial in the smaller clubs that face financial difficulties, as has been seen in recent history, where trusts have been instrumental in saving their clubs.
Trusts invariably advocate for transparency in club operations, hoping to make club management accountable. This can, of course, lead to better governance practices and more ethical decision-making. The Bill, of course, very helpfully and constructively sets out the criteria which clubs and fan groups have to take into account. Supporters’ trusts wish to focus on the long-term sustainability of their club rather than short-term profits, which is often the case for the owners of clubs. This perspective can lead to more responsible management of resources. Where supporters’ trusts are represented on club boards, they can influence strategic decisions, ensuring that the fan perspective is included in the governance, which, of course, is crucial.
All fans can join trusts, and this can promote inclusivity within the club, assuring that the fans, regardless of background, have the opportunity to participate in club activities and governance. As has been seen in times of crisis, such as financial troubles or ownership disputes, trusts can mobilise fan support to advocate for the club’s best interests, potentially influencing outcomes in the interests of supporters and the club as a whole. An obvious recent example was the attempt by a few clubs, including Manchester United, to establish a closed European super league.
Overall, supporters’ trusts enhance the governance of football clubs by fostering a more inclusive, accountable and community-oriented approach. Therefore, with great respect to my noble friend the Minister, I urge that this amendment be accepted.
Lord Mann (Lab)
My Lords, my Amendment 81 stands in contrast to my noble friend’s amendment, which is very exclusive in suggesting that the only format of supporters’ group should be the trust format. In this country and, indeed, across the rest of the world there is a huge range of different kinds of football cultures and football groups.
I should declare an interest, of course. Although I have no pecuniary interest whatever—I own no shares, and I receive no dividends or payments—I have the joy, or the pain, of being able to discuss with my many thousands of members the trials and tribulations of Leeds United Football Club. A number are in this Chamber even this evening—more than one.
However, there are different kinds of fan group. If the Government—or, at a later stage, the House—wish to see the regulator having to liaise with fan groups, then in essence there is a range of choices. It could be randomised—whoever the regulator chooses, but that seems neither appropriate nor efficient. It could be, as my noble friend suggests, exclusively for the trusts, or it could be, as I am suggesting, any fan group that has some kind of democratic structure. The reason for a democratic structure is that you are then representing somebody rather than representing yourself.
Lord Moynihan (Con)
My Lords, it is a privilege to follow the noble Lord, Lord Mann, not least because I am a member of his supporters’ group. We also have another supporters’ group, for Leeds United. Members of Parliament in both Houses are parties to the WhatsApp group. While the public-facing position regarding the manager is always one of support, it cannot always be said that those on the WhatsApp group speak in such gentle and supportive terms of the manager after one or two defeats.
That aside, I support the noble Lord, Lord Watson. He made an extremely important point, and it was wise to pray in aid the Minister in another place regarding his Amendment 78. If we are to have a regulator, surely, in terms of financial regulation and the overall financial role, we cannot just ignore the players, let alone the fact that they are right at the heart of the game.
The total wage bill across Europe’s big five leagues—England, Germany, Spain, Italy and France—was £13 billion in 2022-23, up from 12.3 billion in the prior season. We all know that, in certain circumstances, players are brands in their own right. Many boast bigger social media followings than their clubs. Sponsors know this, investors are taking note and the clubs know it.
Only this week in the Financial Times, the IMG sports and entertainment president, George Pyne, stated:
“The players are the most valuable asset in the sport … With social and digital media, commercial opportunities today are more valuable than they might have been 10 years ago because these players are now brands in themselves”.
It is a people business; it is relationships that matter, and relationships with the players are central to the success of any football club. The noble Lord, Lord Watson, is right. If we are to have a state-appointed regulator, that regulator, in looking at the finances of the club and taking an overall view of it, must engage with the footballers and listen to their representations.
Baroness O’Grady of Upper Holloway (Lab)
It is a pleasure to follow the noble Lord, and to support the amendment in the name of the noble Lord, Lord Watson. Your Lordships may expect a former TUC leader to advocate the principle of workforce engagement and consultation, but it was over a decade ago that the noble Lord, Lord Heseltine, in his report No Stone Unturned, talked about the value of what he called “shop-floor wisdom”.
It is not just a case of fair access. In my experience, there have been many positive examples of where shop-floor wisdom has made for much better decision-making. The workforce and their representatives are what I would describe as the canaries in the mine. They can see when organisations are heading for trouble from the inside, they have good ideas about how to make industries stable, sustainable and fair, and their ideas deserve to be heard. Nowhere is that more relevant than in football. When club owners and managers tell the regulator a particular story, players and their representatives can provide a crucial quality check.
They may agree with the owners; they may not. But the new regulator would benefit from hearing the workforce perspective. I have heard a lot about finances in this debate. I offer just a gentle reminder that, if you were to ask any fan, they would say that true wealth is created on the pitch. Like Labour and, indeed, across this House, the PFA proudly believes in the unifying power of football in society, and it is a guardian of those values. Players must have a right to a voice: a right, enshrined in law, to be consulted on equal terms.
Lord Addington (LD)
My Lords, I have had my name down as a supporting figure on three occasions. I just cannot resist, with this talk of “should” and “must”. It does sound awfully like “may” and “shall”, which is something steady to go back to. My question for the Minister is: is there any difference legally between the two words? If there is not—in certain circumstances, there is not—can we just hear that?
On the amendments, I start with the amendment from the noble Lord, Lord Watson, which I supported. Yes, you should consult your players. They are your primary asset; they are what the fans come to watch. It would seem sensible; that is why I am in support. I realise that I might be backing two horses in the same race by putting my name to these two amendments, but the fact is that various fan groups need some interaction with the regulator. How that is done is incredibly important.
To return to the players, without them you have no product. You have no financial resource; you have nothing to come behind. Not consulting them is ridiculous, to be perfectly honest. Many people will tell me that they are overpaid namby-pambies or whatever. I do not agree, but people will tell you that. The fact is that every time you run around as a professional athlete, you are risking your career, or risking it being shortened. Every time you are told to play that extra game when you are not quite ready for it yet, or you are a little bit tired, you are risking your career and your professional value. You may be playing injured, for instance. We should hear from this group. They have short, often very productive careers.
Often, though, they do not. What we tend to do in this debate is think about the Premiership, but we are talking about the entire structure, going down. Many people are just making a living—sometimes a good living—for a short period of time. We must make sure that they are consulted as well. The entire structure going down is something that we are in danger of forgetting repeatedly in this Bill. So I hope that the Minister will give us some clarification here. Players must be consulted and there must be a way of talking to the fans. Is this just another one of the hardy perennials of Parliament going down the “may” or “shall” route? Does the wording change in the lead amendment make any difference?
Baroness Brady (Con)
My Lords, I support the amendment from the noble Lord, Lord Watson. I wholeheartedly agree that footballers are at the heart of football. Without them, we certainly could not achieve anything at all. The relationship with players is absolutely vital to football clubs. West Ham was one of the very few clubs during the pandemic where I and my footballers took a 30% pay cut to ensure that all other staff were paid in full and that nobody lost their job; that is part of the spirit and it is why footballers really must be consulted.
I also support Amendment 86, which would introduce vital principles to guide the regulator’s approach. These principles reflect a sophisticated understanding of how football actually works and what makes it successful. The existing principles in Clause 8 of the Bill appear largely defensive and process focused. In essence, they tell us that the regulator should use resources efficiently, co-operate with stakeholders and act proportionately. With respect, I would argue that these are descriptions of basic administrative competence, not meaningful regulatory philosophy. No one would argue for inefficiency or disproportionality, and that is really the test of whether these are real, consequential principles.
More concerning is what these principles admit. They say nothing about preserving what makes English football successful; nothing about maintaining the competitive tension that drives our game’s appeal; and nothing about enabling the responsible ambition that has created the world’s most watched sporting competition.
Let me begin with the fundamental point that I believe is captured by this excellent amendment: the need for clearly identified harm and least-intrusive measures. Football thrives on calculated risk taking and sporting ambition. A regulator consistently intervening without clear necessity will suffocate the very qualities that make our game exciting. This is not about weakening regulation; it is about making it effective.
Consider how successful football regulation actually works. The Premier League has developed sophisticated mechanisms for maintaining financial sustainability while preserving competitive tension. When issues arise, they are typically best addressed through existing structures that understand football’s unique dynamics. This amendment would ensure that the regulator works with those proven systems rather than creating unnecessary parallel requirements.
The principles around competitive tension and ambitious ownership are particularly crucial. The Premier League’s success rests on maintaining genuine competition, where any club can succeed through good management and investment. Aspiration can happen because clubs are empowered and incentivised to take measured risks in pursuit of sporting achievement. The amendments focus on commercial autonomy and innovation, reflecting another vital truth: football’s success comes from constant evolution. The Premier League leads the world precisely because it enables responsible innovation in everything from broadcasting arrangements to community engagement. Overly prescriptive regulation risks spoiling this competitive advantage that we have developed.
Most importantly, these principles would ensure that the regulator maintains proper focus by requiring clear evidence of harm and demonstration that the existing structures cannot address issues. We would avoid unnecessary intervention while maintaining proper oversight. This would help us enhance, rather than inhibit, what makes English football successful.
Lord Wrottesley (Con)
My Lords, I rise briefly to seek clarity on a key point that does not seem clear in some of noble Lords’ amendments, in particular Amendment 79 from this group. From what I can tell in reviewing the Bill and debates around it—I beg your Lordships’ and particularly the Minister’s indulgence if I have missed something and this has been adequately addressed—we have not yet defined a fan. I make my sincere apologies, but I need to point out this abundantly obvious fact. Amendment 79 is a one-word amendment.
Lord Goddard of Stockport (LD)
Can I help the noble Lord? The debate on defining sustainability was about three hours on the first day and, on fans, about two and a half hours on the second day. I think we have done both of those subjects to death, for hours and hours.
Lord Goddard of Stockport (LD)
We may not have got to a conclusion, but what about repetition? Here we go again. We have had the discussion; the Minister gave us her answer; we move on. But we have not moved on because, two days later, it is brought up again—and again and again.
This is the frustration that some people are having. I understand the need to examine and tease out but, if we do not like the teasing out, we cannot keep going back every day to keep teasing out. We will never finish; that is the problem with it. We have had an enormous debate on sustainability and on fans.
Lord Hayward (Con)
I rise to make one point of clarification. I support the amendment from the noble Lord, Lord Watson, and would be very pleased if the Minister indicated her support for it, because I have been having discussions about whether we should table further amendments on players in other parts of the Bill—but I will wait on the interest.
The noble Baroness, Lady Brady, referred to players and touched on the question of staff. It is not only players who should be included; there should also be references to staff because, after all is said and done, any football club employs not only players but large numbers of staff. Both players and staff should be covered by any amendment.
Lord Parkinson of Whitley Bay (Con)
My Lords, it is telling that so many noble Lords from both principal sides of your Lordships’ House have tabled amendments about the regulatory principles established by the Bill, which have been gathered in this group. The noble Lord, Lord Watson of Invergowrie, has assembled an impressive coalition of support for his Amendment 78. He secured the support of my noble friend Lady Brady, his friend the noble Baroness, Lady O’Grady of Upper Holloway, and the present Sports Minister, Stephanie Peacock. The Minister keeps reminding us of things that were said in the last Parliament and arguing that we should be bound by them, so I hope she will demand the same consistency from her honourable friend and will pay heed to the support that Amendment 78 has secured.
I think the noble Lord, Lord Watson, is right that this seems a clear and obvious lacuna in the Bill. I do not think we have had a professional footballer in your Lordships’ House. We have professional cricketers and Olympians and Paralympians, and we have noble Lords with interesting and considerable experience, but he has given voice to a group of people who have not yet been spoken up for in this Bill. Perhaps noble Lords can think of one. I cannot, so maybe it is a suggestion for his noble friend.
Lord Watson of Invergowrie (Lab)
I am slightly embarrassed, but there has been a former professional footballer on the Labour Benches. He is now deceased. He was certainly here in the early 2000s. I shall find out his name.
Lord Parkinson of Whitley Bay (Con)
I thank my noble friend and the noble Lord for rightly recalling him. It is right that he and professional footballers are getting the attention they deserve. I look forward to the noble Baroness’s response.
I have risen to speak to my amendments in this group—Amendments 74, 75, 76, 82, 84 and 85—as well as to express my support for Amendments 73 and 83 in the name of my noble friend Lord Markham and Amendments 86 and 87 in the name of my noble friend Lord Maude of Horsham.
My Amendment 74 focuses on the meaning of the word “expedient”. I know the noble Baroness, Lady Taylor, did not like it last time I mentioned a dictionary definition. The noble Lord, Lord Goddard, reached for his dictionary earlier in today’s Committee, so I hope she will not mind me doing so. I think it is important in this instance because in the Cambridge English Dictionary the word “expedient” is defined as,
“helpful or useful in a particular situation, but sometimes not morally acceptable”.
I was quite struck by that definition. I am not quite sure why a regulator, a public body, should be using its resources in a manner that is sometimes improper or immoral, and I think it is worth scrutinising the choice of that word and the message it might send to the independent regulator.
Our choice of language matters, particularly where legislation is concerned. The words in front of us in the Bill, as well as those uttered by the Minister from the Dispatch Box opposite, can be called upon in a court of law and relied upon to explain decisions and decide appropriate courses of action. The regulator will be deriving its power from this Bill and will be operating according to the principles set out in Clause 8, so it is an absolute necessity that the language in the Bill is clear and well chosen, and I do not think “expedient” meets that test.
A number of the amendments in my name and that of my noble friend Lord Markham in this group are very simple. As the noble Lord, Lord Addington, highlighted, they change “may” or “should” to “must”. I echo the points that he made, and that the noble Baroness, Lady Taylor of Bolton, made when she had an amendment making the same change earlier in the Committee. When moving that amendment, she noted that it was pretty straightforward, and I would make the same observation about our amendments today.
In seeking to make these straightforward changes, we are asking the Government why the less rigorous words “may” and “should” have been used in these instances. That is important to ascertain because of the significance of establishing the regulatory principles in the Bill. The first principle is that the regulator should use its resources in the most efficient—“expedient” as presently set out—and economic way. However, any public body that will be taking funds from the public purse, which this regulator will in its initial period, must be required to use its resources in the most efficient and economic way possible. The word “should” gives a degree of leeway here. I am sure that the clubs that will be paying the levy would not be happy with the regulator using the money they are giving it in an inefficient and uneconomical manner, so Amendment 73 attempts to tighten the phrasing here and remove that leeway.
My Amendment 75 would change the “may” to a “must” in paragraph (b). This would mean that the Bill required the regulator to co-operate and engage with the relevant parties. That amendment is complementary to my Amendment 76, which would leave out the words
“so far as reasonably practicable”.
Again, that amendment is about tightening up the wording of this provision to give the regulator strict instructions rather than looser intent.
I have put my name to Amendment 79 alongside those of the noble Baroness, Lady Taylor of Bolton, and the noble Lords, Lord Bassam of Brighton and Lord Addington, which would also amend paragraph (b). The amendment would add fans as one of the parties with which the regulator must co-operate and would therefore standardise this paragraph with other portions of the Bill.
My other amendments in this group—that is, Amendments 82, 84 and 85—would all change a “should” to a “must”. Amendment 82 would amend paragraph (d) so that the regulator must acknowledge the unique sporting context of football. That is particularly important for regulated clubs since, as the Bill rightly points out and as my noble friend Lady Brady and others have been keen to stress, football clubs operate in a very different environment from other businesses. The top clubs in the English football pyramid will have teams in both national and international competitions, so the rules and regulations they will already be required to follow must be taken into account by the new regulator.
My Amendment 84 states that the independent football regulator must hold officers of a club responsible for the actions of the club where appropriate.
Amendment 85 says that the regulator must operate transparently. Transparency, of course, has a wide range of benefits. The Institute for Government, in its report The Benefits of Transparency, argues that:
“Collating and publishing government data can also help improve the performance of government services, through the monitoring of key metrics and by increasing access to data across government”.
The Institute for Government also points to benefits relating to improved efficiencies, accountability and value for money. Given all this, surely the Bill’s language should seek to require this new regulator to operate with that sort of transparency as well.
I will not enter into the debate that we had over the rival Back-Bench Labour Amendments 80 and 81 from the noble Lords, Lord Shamash and Lord Mann—although the noble Lord, Lord Addington, in true Liberal Democrat fashion, has signed both. I am interested in the Minister’s view as to whether, between those two, she has a preference in consulting supporters, trusts or elected representatives of football club supporters’ groups. I will not reopen the question of the definition of fans, but I am interested in whether she has a preference between those two amendments.
Baroness Twycross (Lab)
My Lords, I thank the noble Lords, Lord Markham and Lord Parkinson of Whitley Bay, and, through them, the noble Lord, Lord Maude of Horsham, and my noble friends Lord Bassam of Brighton, Lord Watson of Invergowrie, Lady Taylor of Bolton, Lord Shamash and Lord Mann, for these amendments. This has been a wide-ranging debate.
I particularly welcome the intervention by the noble Lord, Lord Goddard, and the clarity that he provided. I have noted a number of noble Lords coming back and asking me similar questions to those that we have we had in previous groupings. I will endeavour to continue to give the same answer when required, but it was helpful for the noble Lord to point out that at times we are having a circular and repetitive discussion.
Amendments 73, 74, 75, 76, 82, 83, 84 and 85 in the name of the noble Lords, Lord Markham and Lord Parkinson, intend to reword the regulatory principles. They seem fundamentally driven by the desire to ensure that the regulator is held more strongly to the principles. However, we are confident that the current wording of the Bill, which has not changed since the previous Conservative Government laid this Bill before Parliament, is more than sufficient to ensure that the regulator operates in an appropriate way and strikes the balance between steering the regulator’s approach and not impinging on its adaptability and independence. By laying out explicitly in the Bill the principles by which the regulator should exercise its functions, we are already making a clear statement about the importance of these stated factors. However, these are intended to be principles, not duties, and the drafting reflects that.
In relation to the questions from the noble Lord, Lord Addington, on the difference between “must”, “should” and so forth, we do not agree that the regulator must be required to do these things at all times and in all cases but rather that some flexibility is important. To give an example, if the regulator were enforcing against a club, it might not be appropriate or possible for the regulator to constructively engage and co-operate with that club, as principle (b) encourages it to do. By having these principles as “should” and not “must”, that flexibility is achieved.
Lord Moynihan (Con)
I appreciate that the Minister is trying to make progress and is moving through a large number of amendments. To refer back to Amendment 78, tabled by the noble Lord, Lord Watson, the Minister said that she looked forward to a further discussion at a later stage. Could she state whether she agrees with the idea that the regulator must engage with football players and their representatives? I think the mood of the Committee went a bit further than just having hopeful discussions in future, and that this was something that really should be considered to be placed in the primary legislation. Could she be a little more explicit? I know that she was sympathetic, but does she agree that that is an issue that should now be looked at in the context of the legislation?
Baroness Twycross (Lab)
The noble Lord might need to be content with my sympathy at this stage. I genuinely look forward to future discussions on this point.
Overall, the Government have been clear that the regulator should take a participative approach to regulation, meaning that it would co-operate constructively with the regulated industry where possible. There are some parts of the Bill—this is one of them—that directly relate to the people or organisations being regulated, rather than to stakeholders across the game more widely. The intention of the regulatory principle in question is to guide the regulator to co-operate constructively specifically with the regulated industry where possible, as this co-operative approach might not otherwise be explicit. We think that to list every possible stakeholder, or possible interpretation of fans or fan groups, that the regulator “should” ever engage with during the course of regulation, could be onerous on participants and the regulator. However, I am happy to meet my noble friends to discuss further how we can reassure fans that they will be consulted where appropriate. For supporters and their relevant representative groups it is clear that the regulator should be acting in their interests. There are several places where this is formalised through specific consultation requirements; for example, in relation to Clause 45, the prohibited competitions clause.
For decisions materially impacting players, I recognise that the game is nothing without players, as I said earlier; it is absolutely right that the regulator works with them on matters that impact them. As I mentioned, the specific regulatory principle in question is intended to steer the regulator to co-operate with the regulated population. This does not include players, as they are not themselves subject to the regulator’s regime. This would be not an appropriate place to include players, or indeed any other stakeholder group. However, I understand the desire among noble Lords to ensure that important stakeholder groups are appropriately acknowledged in the Bill.
I am sure we will revisit this topic ahead of Report and in future debates. With that said, and for the reasons I have set out, I am unable to accept the amendments in this group. I hope that noble Lords and my noble friends will not press them.
Lord Markham (Con)
I thank the Minister. I thought we had an uncontroversial set of amendments with a great deal of consensus around the issue of players and fans. I thought that we almost had the ball in the back of the net. We had some sympathy from the Minister, who said she was looking forward to discussing this further; unfortunately, we did not quite get a yes. I hope we can firm that up as we continue to press for a goal as the Bill approaches Report. There was a large degree of consensus in the Chamber that we definitely “must” include players and fans, rather than just “should”. I hope we are able to pursue that further as the Bill progresses. With that, I beg leave to withdraw my amendment.
“(2) The IFR is subject to the Freedom of Information Act 2000 and the Equality Act 2010.”
Lord Parkinson of Whitley Bay (Con)
My Lords, I have the only amendment in this group. Amendment 88 is intended merely as a probing amendment to give us the opportunity to ask the Minister what the Government’s policies will be with regard to the other legal requirements that will be placed on the regulator. I am simply seeking some clarifications here, which I hope she can give.
The amendment states that the independent football regulator must be bound by the Freedom of Information Act 2000 and the Equality Act 2010. I note that Schedule 12 addresses these issues by inserting the name of the independent football regulator into the respective Acts of Parliament, but I am seeking clarification principally on how the Government will put in place concrete plans of action to ensure that the regulator abides by both those Acts.
I must admit that I have not read from cover to cover Sir Tony Blair’s memoir A Journey, published in 2010, but there is one passage that I have read and re-read with relish. It is brief so, mindful of the entreaties of the Government Chief Whip but noting the fans of Sir Tony on the Benches opposite, I will quote it:
“Freedom of Information. Three harmless words. I look at those words as I write them, and feel like shaking my head till it drops off my shoulders. You idiot. You naive, foolish, irresponsible nincompoop. There is really no description of stupidity, no matter how vivid, that is adequate. I quake at the imbecility of it. Once I appreciated the full enormity of the blunder, I used to say—more than a little unfairly—to any civil servant who would listen: Where was Sir Humphrey when I needed him? We had legislated in the first throes of power. How could you, knowing what you know have allowed us to do such a thing so utterly undermining of sensible government?”
I was struck by that passage. It bears returning to. There are lessons there for a Labour Government with a large majority and seeking to legislate in new ways to reflect on. But this is the law of the land and these are important Acts of Parliament. I would be grateful if the Minister could clarify what actions the Government will take to ensure that the regulator acts with the transparency required under the Freedom of Information Act, notwithstanding Sir Tony’s views on it now, and the Equality Act 2010. I beg to move.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Parkinson of Whitley Bay, for this amendment to ensure that the regulator must comply with the Freedom of Information Act and the Equality Act. This is, of course, very important. That is why, per the consequential amendments outlined in paragraphs 4 and 9 of Schedule 12, the regulator will already be subject to these Acts. As a result, this amendment would duplicate this requirement that is already in the Bill and is therefore not necessary. As the noble Lord will be aware from his time as a Minister, legislation should be clear and concise where possible. His amendment would lengthen the Bill to duplicate an existing requirement. On that basis, I hope he will feel able to withdraw it.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the Minister. As I say, I was mindful that it is in Schedule 12, but she did not give much additional information on how the Government will seek to work with the regulator in making sure that it is adhered to. However, I appreciate that that is for the regulator. I am grateful to her for those reassurances. I have not yet had the pleasure of reading the former Prime Minister’s memoir from cover to cover so, with Christmas coming, I note that my wish list is still to be filled. I beg leave to withdraw my amendment.
Lord Addington
“Televising of football matches of national interest(1) The Communications Act 2003 is amended as follows.(2) After Section 299 (categorisation of listed events) (2)(d) insert—“(e) the Independent Football Regulator, established by the Football Governance Act 2024, in relation to televising of football matches between licensed football clubs.””Member’s explanatory statement
This amendment adds the IFR as a statutory consultee on the listing of sporting events for free-to-air coverage.
Lord Addington (LD)
My Lords, my noble friend Lord McNally tabled two amendments about making sure that terrestrial television carries football matches.
When we talk about the quality of football that makes the nation treasure it, access is an important factor. We have had many arguments about what should be covered by free-to-air services. What should be on there? The “crown jewel” events. We are talking about something that we have had for a long time, because there are certain events that will not be hidden behind a pay wall. Seeing one or two of these primary gems makes sure that you have a better connection with the rest of the game. I hope that we will make sure that we continue to get them.
Lord Watson of Invergowrie (Lab)
My Lords, I support the noble Lord, Lord Addington, in Amendments 91 and 92. I support his view on having free-to-air services for certain sports. My main reason is to expose those sports to the next generation—the youngers coming through. He mentioned rugby—which is not as available as it used to be, certainly not compared with when I was young—but this applies to other sports, including cricket specifically, as well as golf and boxing, which all now have very restricted free-to-air viewing. You wonder what that does to the current generation of children, who may want to be exposed to the sport, but cannot because their parents, for whatever reason, do not have subscriptions to the various channels.
Of course, the regulator will not cover Scotland—perhaps it will have its own regulator following this—but, currently, the Scotland men’s national football matches are available only on YouTube. You could say that that is equivalent to free-to-air viewing, but it is not in any way how international football should be presented. The whole question of how sport is made available to future generations—although it is not really for our debate today—is one that we need to think about very seriously.
Lord Moynihan (Con)
My Lords, I say simply that, while some very good arguments have been put forward, we have to be very careful here. The whole question of listed events that the noble Lord, Lord Addington, and I have been engaged on for many decades, let alone a year, is a complicated and difficult issue.
Currently, the Secretary of State has to opine as to whether listing an event meets the criterion of having “special national resonance”. That, in its own right, is a difficult thing for the Secretary of State to opine on. The noble Baroness, Lady Grey-Thompson, will recall that, only five years ago, the then Secretary of State made a famous speech on listed events where she put forward the idea that whenever a men’s event was listed, the women’s equivalent should be too. That brought into play a whole series of complex questions, which were important but certainly set the hares running among the people who were focused on listing events.
This is complicated further by virtue of a generational change. Young people increasingly access, and are comfortable accessing, all forms of media to watch the sporting events that they wish to see, sometimes in ways that do not necessarily follow the rules. The changing media landscape, certainly for young people, means that the listed event question may even become obsolete. I am not saying that it will but that is the sort of question that is now being posed as a result of the different patterns of media accessed particularly by young people, as opposed to our generation. I am being courteous to the noble Lord, Lord Watson, when I say that, because he looks a good deal younger than I am.
In that context, I would hesitate to push the amendments in the name of the noble Lord, Lord McNally, as valuable as they are, to further consideration in this Bill. However, it is important and probably timely that we now look at the whole question of listed events separately because they are vital to many sports. Equally, in the context of football, and without the wider issues that I have sought to bring to the Committee’s attention, we may be too focused on one sport and not considering the wider implications of what should and should not be listed in today’s media landscape.
Lord Goddard of Stockport (LD)
My Lords, I agree with the noble Lord, Lord Moynihan. The amendment is probably badly worded, but I am sure the inference is about the England football team rather than league clubs and football teams. I was lucky enough to watch England win the World Cup in 1966. I was 14, and it was on television. After that match, loads of people who did not particularly like football began to play football. Geoff Hurst, Martin Peters and Bobby Moore—I thank the noble Baroness, Lady Brady—show the power of that. Geoff Hurst still goes around inspiring people, even now in his later years in life. If you are speaking of putting people on committees, you could ask for no finer a person than Geoff Hurst.
If we are talking about free to air and it is a national team, that is where you will get more of an audience—to see England play live, rather than having to pay to watch it on any of the paid-for channels. The noble Lord is right: it sits with the golf, the cricket and all the other important sports. But football is our national sport, and our national football team should be live on air, especially major competitions.
Lord Hannan of Kingsclere (Con)
My Lords, in introducing this amendment, the noble Lord, Lord Addington, used the phrase “hiding behind a paywall”. I wonder whether that is really a fair description of paying for something. When I got my phone, it was hiding behind a paywall: it was not given to me free; I had to shell out for it. I need a new car at the moment; my heap of junk of a Nissan has collapsed. The new one is hiding behind a paywall, and I have to pay for it. I had to pay for my dinner tonight; it was hiding behind a paywall.
There is an assumption here that there is no such thing as private property or free contract and that everything ought to be somehow at the disposition of regulators or of state officials. That is not how we got here. If you do not respect the fundamental ability of sporting clubs or indeed broadcasters to do what they think is in their best interests, you end up with suboptimal outcomes. This is a very neat demonstration of why, once you create these regulatory structures, they expand and expand—because people airily demand things and feel very virtuous in demanding them without any thought for the practicalities of the people who have to implement them.
Baroness Brady (Con)
My Lords, I oppose Amendments 91 and 92 because they try to make the regulator a consultee on listed events and would place a duty on it to have regard to the desirability of making more domestic games free to air. I have huge respect for the noble Lords, Lord Addington and Lord Goddard, and their colleagues, and I know that these amendments relate to a manifesto commitment made by their party, but I hope it is helpful to talk a little about how football’s broadcast economy works in practice.
The Premier League’s domestic broadcasting rights are contracted through to 2029. Of course, they represent far more than a simple commercial arrangement: they form the foundation of English football’s entire economic model, and their thoughtful and innovative packaging is a hugely important part of the Premier League’s success. The substantial revenues they generate enable the Premier League to provide £1.6 billion of support to the wider pyramid, representing 16% of central revenues, of which—I think the noble Lord, Lord Watson, may like to know—£25 million goes to funding the PFA. That is why it keeps its joining fee at £20 and its subs at £150.
The sophistication and complexity of broadcasting arrangements is enormous and a huge source of competitive advantage for English football. Each broadcasting slot and each package of rights exists within an intricate ecosystem where values are fundamentally interdependent. These are not discrete assets that can be easily separated; they form a carefully balanced whole that has taken decades to develop to create value and appeal. Forcing certain matches to be free to air would not just affect those specific fixtures; it would fundamentally undermine the value proposition of every broadcasting package.
Premium broadcasters invest based on exclusive content that attracts subscribers. Remove that exclusivity—even partially—and decouple certain packages from each other and the entire model becomes unsustainable. The consequences that would cascade throughout football are significant. A significant reduction in broadcast values would not just affect Premier League clubs but immediately impact the entire pyramid through reduced solidarity payments, youth development funding and grass-roots investment. The damage to football’s economic ecosystem would be profound and potentially irreversible.
Of course, this sort of intervention would create exactly the kind of seismic instability the regulator is meant to prevent. In an attempt to increase access to certain matches, it would risk destabilising the very mechanism that funds football’s broader development and sustainability. The Premier League’s success in maintaining the growing broadcast revenues, which benefit the entire game, comes through very careful and innovative management of these arrangements. While I respect my noble friend’s motivations and good intentions here, I must strongly oppose the expansion of the scope of the IFR in the way proposed.
Lord Parkinson of Whitley Bay (Con)
My Lords, my Amendment 265 falls in this group. I am grateful to the noble Lord, Lord Bassam of Brighton, who has tabled it with me. I know he shares my gratitude to the public service broadcasters with which we have discussed this matter.
Our amendment and the two in the name of the noble Lord, Lord McNally, to which the noble Lord, Lord Addington, spoke, all attempt to bring protections for the listed events regime into the scope of the Bill, or at least to give us the opportunity to have the debate that my noble friend Lord Moynihan rightly says is needed and perhaps even overdue. In saying that, I am very mindful that we were likely to have had that debate in the exchanges on the now Media Act earlier this year, had the general election not intervened and had the then Bill not gone through the abbreviated processes in wash-up. I think my noble friend is right and that the noble Lord, Lord McNally, would have agreed, had he been here, that these issues deserve some consideration.
The amendment that the noble Lord, Lord Bassam, and I have brought forward is intended to probe the Government about how they plan to protect digital on-demand rights for the listed events regime. While live television viewing of events is currently included in the regime, there is nothing to stop clipped videos of digital on-demand rights from going behind a paywall. My noble friend Lord Hannan of Kingsclere would certainly have enthusiastically taken part and would have made some very interesting points in the debate we could have had on the listed events regime. This is in the context of public service broadcasters that are broadcasting things that have been deemed particularly important for the public to see in a way that is different from the commercial suppliers, which can provide so many other things to people in the differing ways that they do.
Baroness Twycross (Lab)
I thank the noble Lords, Lord McNally and Lord Parkinson of Whitley Bay, for tabling these amendments, and the noble Lord, Lord Addington, for moving the amendment at the start of the debate on this group. Amendments 91 and 92 in the name of the noble Lord, Lord McNally, raise an important issue that I welcome the opportunity to discuss.
The Government are keen to ensure that sporting events are made available to the public as widely as possible. That is why we have the listed events regime. From the start, there have been strong voices from a number of areas that the regulator must have a tightly defined remit and must not intervene in areas where it is more appropriate for the football authorities and other bodies to take the lead. I am sure the noble Lords will agree that the bar for statutory intervention in any market should be high, a point made by the noble Lord, Lord Moynihan, although with different words. That is why we have ensured that the regulator’s remit is focused solely on tackling the specific market failures that carry a risk of significant harm to fans and communities but which we believe the industry cannot solve through self-regulation.
I sympathise with the noble Lord’s desire to see more matches free to air and understand the frustration of fans who do not always have access to watch their team. I have particular sympathy for the point made by my noble friend Lord Watson of Invergowrie about the access of young people to sport. However, we do not feel it is right to expand the regulator’s remit by including it as a body that must be consulted on which free-to-air football matches are broadcast and to have to take into account the desirability of promoting more football matches becoming listed events. This widened remit of considering broadcasting and commercial decisions would prove a distraction from the key responsibility of the regulator to ensure the financial sustainability of football clubs and would widen the scope of the Bill.
Turning to Amendment 265 in the name of the noble Lord, Lord Parkinson, I was slightly surprised that the Opposition were so keen to debate this amendment now given that it is contingent on Amendment 263, which we will come to later in Committee. Nevertheless, in the spirit of good will, I will respond.
As we face a changing media landscape, we must account for alternative forms of content and ensure the scope of the backstop is not restricted only to television broadcasting rights. This amendment intends to ensure that it is clear that a wide variety of content is in scope of the definition of “relevant revenue”. However, the existing drafting of the Bill has already been chosen carefully to ensure that we encapsulate alternative media sources. The current definition of “relevant revenue” already covers all sales or acquisitions of rights to exploit the broadcasting of football matches, which would apply to revenue produced by online content as well if that online content used footage from broadcast matches. Therefore, the concern underlying the amendment is suitably addressed by the current drafting of the Bill. For the reasons set out, I am unable to accept the noble Lords’ amendments, and I hope that they will not be pressed.
Lord Addington (LD)
My Lords, that was not the most positive response I have had to an amendment, but it was worth raising the idea of the listed events and certain things being culturally important. I will take away what the Minister has said and look at it, but it is about the principle that certain things are a little more important and reflect well on the actual product. It can be regarded as a little bit of advertising for those people who are taking some money.
If we cast across to other sports, I hope that people will bear in mind the experience of England Rugby. At one point, it was selling its home games, which meant that fans saw England only when they were away—that was the situation a number of years ago. There is a certain point beyond which you are cutting off people and interest, and possibly the expansion of the rest of your market. Yes, things hide behind paywalls if you have not got the money to pay for it or, as often happens in the modern broadcast world, you discover you bought the wrong bit. Having said that, I beg leave to withdraw the amendment, although I reserve my position about looking at it again.
Lord Evans of Rainow
“Requirements on Football Agents(1) The IFR must use its powers under this part to ensure that any person who is licenced by the Football Association to provide football agent services (“a football agent”) must—(a) always act in the best interests of their client Players, Coaches or Clubs and in accordance with their fiduciary duties;(b) abide by article 16 of the FIFA Football Agent Regulations relating to their conduct;(c) respect and adhere to the statutes, regulations, directives and decisions of the competent bodies of FIFA, the IFR and the Football Association;(d) avoid conflicts of interest while providing their Football Agent Services;(e) ensure that their name, FIFA licence number, FA registration number, signature, the name of their client Player, Coach or Club and any other information as may be required by The Association from time to time appear in any contracts resulting from the provision of their Football Agent Service.(2) Any football agent must, upon request, cooperate with the relevant body of the Football Association, or with the IFR, with respect to any type of information.(3) A football agent must submit to the Football Association and the IFR any agreement with a Player, Coach or Club other than a Representation Agreement, including but not limited to agreements relating to Other Services within 14 days of execution.(4) Within 14 days of payment of a fee related to any agreement entered into with a Player, Coach or Club other than a Representation Agreement, a football agent must submit confirmation of receipt and proof of receipt of such payment to the Football Association and the IFR.(5) For the purposes of this section, a person is a football agent if they provide football agents services.(6) For the purposes of subsections (1) and (5), “football agent services” means football-related services performed for or on behalf of a Client, including any negotiation, communication relating or preparatory to the same, or other related activity, with the purpose, objective or intention of concluding a Transaction.”
Lord Evans of Rainow (Con)
My Lords, my Amendment 93 would place new requirements on the independent football regulator with regard to football agents. There is nothing new about agents. They have a role to play in the football league, but they have a disproportionate influence now on players, clubs and the league.
Premier League clubs spent a combined £409 million on agents and intermediaries in the 12 months to February 2024, according to the Football Association report last week. Most of this money is leaving football. FIFA is trying to implement some clear and fair rules to the transfer system, including regulations on agents, for the sake of transparency, accountability and better redistribution across all levels of the game. FIFA president Gianni Infantino has said that more money should be going to
“the clubs that trained and developed the players signed”.
He called on Governments and lawmakers to join him and
“play an active role in ensuring the funds generated in transfers are kept within football and are shared with clubs from all around the world, as they are absolutely key for current and future generations of footballers”.
It appears to be a glaring omission, therefore, that we have this 125-page Bill to regulate football, yet agents are not mentioned once. This cannot be right. There exists a set of Football Association regulations that license agents, which are based on the FIFA Football Agent Regulations. These were approved by the FIFA council on 16 December 2022 and sought to provide a balanced legal instrument to protect the effective functioning and integrity of football transfer systems. The importance of this system cannot be overestimated. Without a properly functioning transfer market, clubs would not be able to obtain the world-class talent they so desperately require; players would not be able to climb the ladder and progress their career, which would instead stagnate; and fans would suffer, too, as they would not be able to enjoy the dynamism and excitement that transfer windows bring to the game or see new faces play in the team that they so love.
However, those FIFA regulations have faced legal challenges in the German courts. On 24 May 2023, the district court of Dortmund placed an injunction demanding that FIFA suspend a number of provisions of its football agent regulations for any transfer that was linked with the European Union. The FIFA circular that was sent to the relevant national associations, of which the FA was one, said that the ruling was
“inconsistent with … judicial decisions in other European countries”.
Consequently, large parts of the FA’s own regulations were suspended in December last year.
This amendment seeks to rectify the situation without creating regulatory overlap with the FA by codifying the regulations that had to be suspended. It therefore would not double up on the licensing rules that the FA and FIFA have already set out, but would instead complement those rules. Under this amendment, the regulator would have a duty to ensure that anyone who is licensed by the FA to carry out football agent services abides by Article 16 of the FIFA regulations. That article establishes the rights and obligations of agents. It ensures that agents act in good faith, comply with reporting requirements and uphold the values of the game. Unfortunately, the provision that required agents to comply with Article 16 was one of those that was suspended.
This amendment would also require agents to co-operate with the FA and the independent football regulator whenever those bodies should require, and to ensure that they operate with full transparency.
I believe it is only right that these rules should be reintroduced, so that is what my amendment seeks to achieve. I would be most grateful if the Minister could commit to reviewing the requirements placed on football agents and inform the Committee of what action the Government plan to take to ensure that agents are held to the same standards by this regulator as clubs and leagues will be.
Baroness Brady (Con)
My Lords, I support this amendment, which seeks to address one of the most significant and unresolved issues in football governance: the regulation of football agents. The amendment is not just about imposing stricter rules on agents; it is about protecting the financial stability of English football and ensuring that the resources within the game are directed towards its growth and long-term health.
In the last five years, Premier League clubs alone have spent a staggering £1.65 billion on agents’ fees. This represents an extraordinary extraction of wealth from the game. It is money that could otherwise be invested in stadiums, academies, community projects, et cetera. The agent market is riddled with dysfunction. The incentive structures are fundamentally misaligned, with practices such as dual representation creating inflationary pressures on transfer market fees and wages. Without reform, the unchecked escalation of agent fees will continue to threaten the financial stability of clubs, and limit the growth and potential of the industry.
While the amendment addresses a critical issue, it also highlights a broader concern: the lack of meaningful engagement from the Government on how to support English football beyond the confines of the Bill. The Bill creates significant new regulatory obligations and risks for damage within football, particularly for Premier League clubs, without addressing the areas where government action could help the game thrive. Let me be clear: the amendment provides an opportunity to have that conversation. It forces us to ask why the Government have not engaged with clubs on how to help clubs grow and succeed while addressing the inefficiencies in football or the opportunities we have to grow with government assistance.
For example, on access to talent, since Brexit English clubs have faced significantly restricted access to international talent compared with competitor leagues. Reforming these laws could reduce player acquisition costs, improve competitiveness and enhance the financial health of the pyramid. On tax incentives for investment, football infrastructure is a national asset. Other countries, such as France and the US, recognise this through targeted tax incentives for stadium development and training facilities. Yet here in the UK we have no similar framework to support clubs to make these long-term investments. These are areas where constructive government engagement could make a real difference. Yet, instead of addressing these opportunities, the Bill focuses on imposing new obligations without offering the tools to support growth or mitigate the unintended consequences. Premier League clubs would really welcome engagement on these potential growth opportunities.
Turning back to agents, the lack of effective regulation has been an ongoing issue for decades. The Premier League has already attempted to address this through initiatives such as its 2017 review into intermediaries, which identified serious problems, including the lack of qualifications, excessive influence, and weak enforcement mechanisms. While clubs are willing to take bold unilateral steps, including banning dual representation, these measures were ultimately not implemented, because FIFA launched its own reform process. However, FIFA’s efforts have stalled due to the legal challenges my noble friend mentioned, and its proposed cap on agents’ fees has been deemed unlawful in the UK. Without primary legislation, meaningful reform remains out of reach.
The amendment is therefore timely. It provides a legislative framework to ensure that agents act in the best interest of their clients, comply with FIFA regulations and disclose key information about their activities. These measures would not only bring transparency but reduce the inflationary pressures caused by the current dysfunctional system. Whether the Bill is deemed the appropriate place for action or not, I hope the Government will engage with clubs and leagues on how to pursue much-needed reform in a way that safeguards competitiveness.
In this respect, this amendment also serves a broader purpose: it highlights the imbalance in how the Government are approaching the Bill. Clubs are being asked to shoulder significant new regulatory burdens, yet there is little or no discussion about how the Government could support them in other critical areas. Whether it is addressing the dysfunction in the agent market, widening access to talent or incentivising infrastructure investment, so much more could be done to help English football grow and succeed.
This amendment addresses a pressing issue that has gone unregulated for far too long. The influence of agents on the game and the resources extracted through their fees cannot be ignored. At the same time, this amendment is a reminder of the broader need for the Government to engage with football on how to support growth and sustainability, not just impose new obligations. I urge the Minister to take this opportunity to engage meaningfully with clubs and leagues, not just on the regulation of agents but on the wider opportunities I have mentioned, to ensure that English football remains the most dynamic and competitive league in the world.
Lord Moynihan (Con)
My Lords, I support both my noble friends who have spoken to this amendment.
We spoke earlier about the importance of taking into account the players—the noble Lord, Lord Watson, raised that. Agents push, not least to increase the opportunities for the players to earn money, and one of the biggest problems and the reason why we should engage with players—for example, with the Club World Cup coming up—is that further strain is placed on the elite players. Agents are directly involved in that market; they go right to the heart of the financial stability of the game.
The agent market is central to the infrastructure of professional football. If we are to have a regulator, it is inconceivable that it should not consider the impact of agents, which some see as heavily dysfunctional and others see as beneficial if regulated—FIFA has gone through huge challenges recently in terms of the overall regulation of that market.
The regulation is difficult enough, but it is impossible not to regulate football as is proposed under this legislation without the regulator taking into account the impact of agents on the financial stability of the clubs. That is the key point. To a great extent, the financial stability of clubs relies on the good working of the agent market.
I hope that when the Minister comes to respond, she will reflect on that and on the importance of this amendment, and that she will look to see whether advice, even, can be given to the regulator to ensure that this is fully taken into account, to ensure a smooth functioning of the professional football market and, above all, the financial stability of the clubs.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to my noble friend Lord Evans of Rainow for tabling his Amendment 93 and giving us the opportunity to discuss the duties of, requirements for and obligations on football agents. As my noble friend established, there is no mention of agents anywhere in the Bill—it is another group, as with the useful debate we had earlier on professional players, where the Bill is perhaps more silent than it ought to be. I will not put my noble friend on the spot and ask him, as I did on that group, whether there ever have been professional football agents in your Lordships’ House—I suppose that may be a bit more likely than professional footballers. It seems I have exhausted his parliamentary, historical and sporting knowledge in this instance.
This has been a helpful area of consideration for us. As my noble friend Lady Brady set out very clearly, football agents are one of the areas that absolutely require greater consideration when we consider the regulation of English football. Attempts to bring them under the scope of FIFA and of the Football Association’s regulatory frameworks have been somewhat successful but have not been fully implemented, for the reasons my noble friend mentioned.
The role of a football agent is one of significant influence. Agents negotiate contracts, secure endorsements and guide careers. In many cases they hold the futures of young and often vulnerable players in their hands. It is therefore imperative that agents act in the best interests of their clients. My noble friend Lord Evans of Rainow’s amendment enshrines that important principle, requiring agents to abide by fiduciary duties and to avoid conflicts of interest. Such measures are not only common sense but consistent with the values of fairness and accountability that underpin so much else of the Bill.
Article 16 of FIFA’s Football Agent Regulations already sets out high standards for agents’ conduct, but adherence to these standards has been inconsistent. By incorporating them in our domestic legislation in the way that my noble friend’s amendment suggests and through the powers of the new independent football regulator, we would send a strong message that, in this country, we expect the highest standards and are prepared to enforce them.
My noble friend’s amendment also addresses transparency—another important issue. Requiring agents to disclose agreements and payments would ensure that all interested parties, including clubs and governing bodies, can scrutinise transactions. This is particularly important when vast sums of money are at stake and public confidence is on the line. Greater transparency is not just good for governance; it is essential to maintaining the very credibility of the sport.
This amendment would involve additional burdens on agents—my noble friends Lord Evans and Lady Brady were quite candid in saying that in their speeches—but we must remember that these are people who operate in an industry where the stakes are extremely high. Professional football is a multi-billion-pound sector with far-reaching economic and social implications. It is not unreasonable to expect those operating in it to meet rigorous professional standards; of course, that is what the Bill seeks to do for clubs and other parties in the sector. If the Government are willing to take the steps that they are taking to regulate clubs and competition organisers, why would they not be willing to do so with agents? I ask that neutrally because it is a worthwhile area for us to probe.
Moreover, this amendment would uphold individual responsibility by demanding ethical conduct from agents. It would reinforce accountability by ensuring that the regulator can scrutinise agents’ practices effectively and would protect the integrity of the market, creating a level playing field for clubs and players. This amendment is about protecting the players, many of whom are young people stepping into a world of vast financial opportunity but also, of course, of significant risk. By holding agents to these high standards, we would ensure that players are not exploited or misled, enabling them to focus on their careers, fulfil their potential and delight fans of football for many years to come.
I share the anxiety that my noble friends set out in terms of the behaviours that we have seen in this area. There have long been allegations of financial misconduct or bungs by agents acting in English football. An agent and senior club manager exposed by the Daily Telegraph investigation in 2016 were later suspended by the FA, having been charged with bribery—a very serious offence—so the independent football regulator must do all that is possible to avoid the corruption of the beautiful game and serious crimes such as this.
There is also the matter of fraudulent transfers, such of that of Ali Dia. In November 1996, Dia’s agent famously convinced Graeme Souness, then the Southampton manager, that he was the cousin of the FIFA World Player of the Year and Ballon d’Or winner, George Weah, which led to Dia signing a one-month contract with Southampton just a few days later. Dia played only one match in his short spell at the club: he came on as a substitute in a league game but was then himself substituted. He was subsequently released just 14 days into his contract. Dia’s teammate for that one game, Matt Le Tissier, is quoted as saying:
“He ran around the pitch like Bambi on ice; it was very embarrassing to watch”.
These are the sorts of scenarios that we want to avoid—scenarios through which clubs are defrauded and players are exploited. This is a sensible amendment to help ensure the integrity of football, which is very much in keeping with the spirit of the Bill and many of the measures that are already in it. I hope that the Minister looks favourably upon it and gives it the consideration it deserves.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Evans of Rainow, for his amendment, which was an interesting contribution to this Committee. The noble Baroness, Lady Brady, eloquently outlined the costs to the game. The actions of some football agents are clearly a concern, with both the Government and FIFA publicly recognising it as a serious issue. The noble Lord, Lord Parkinson, gave a number of specific examples.
FIFA has recognised the need for the better international regulation of agents and proposed reforms on this to its member associations. The Government agree with the fan-led review that a global, game-wide solution, led by the industry, is preferable to statutory regulation of agents through the independent football regulator. Trying to address this issue unilaterally could simply push global talent to other markets, so a multilateral solution is preferable. If there is reform, the Government will work with the FA to ensure that any future regulation is fit for purpose. For these reasons, I hope the noble Lord will withdraw his amendment.
Lord Evans of Rainow (Con)
I am most grateful to the Minister for her response. I am somewhat disappointed by talk of a unilateral approach, given that FIFA is calling for other countries and authorities to work with it, but perhaps we can revisit this at a later date. I beg leave to withdraw my amendment.
Baroness Taylor of Bolton
Member's explanatory statement
This amendment requires the State of the Game report to include, in its overview of issues affecting English football, factors related to the community and social impact of regulated clubs.
Baroness Taylor of Bolton (Lab)
My Lords, there are quite a lot of amendments in this group, so I should say at the outset that I am trying to get assurances from the Minister on two specific points. They relate to the “state of the game” report, on which I know a lot of work has already been done.
The first assurance is that the report will be as comprehensive as possible. My colleagues and I have listed a number of items that should be included. Some are issues that we have already discussed. Some are very significant, such as community, social impact, how well managed clubs are, an assessment of the distribution arrangements, issues around women’s football, multi-club ownership, player welfare, equalities and social inclusion. All those things should be encompassed by the “state of the game” report, and, without going into any one of them at this stage, I hope we can agree that this report should be as comprehensive as possible. It is important that the regulator has independent and substantial information on which to make judgments. That is the first point that I raise with the Minister and on which I seek her assurances.
My second point concerns the timing of the report. As I said, I know that a lot of work has gone on to prepare for the report. The Bill suggests that it should be out as soon as possible, but gives an 18-month deadline. One amendment in this group seeks to reduce that to 12 months. Given the amount of attention on the Bill, that it has been in the pipeline for so long and that people are aware of these issues, a 12-month timescale should be appropriate. I hope the Minister agrees that the report should be published as soon as possible.
There is also the question of how often we should have this report. The Bill suggests five years and my amendment suggests three. It suggests that the report should be presented to Parliament. This is not a controversial area, but some reassurances would be beneficial, so that everybody is clear where we are going forward.
Lord Addington (LD)
My Lords, the “state of the game” report is one of those things that has been almost universally welcomed. It will look at this very big and complex industry, with a very successful top and struggling foundations—that is how the industry appears to many people.
My name appears on this amendment alongside that of the noble Baroness because of things such as social impact. We are doing this because it is reckoned to be an important subject that matters a lot to people, and we keep being told that it is a big business—the biggest invisible earner going. If we get a report that is too narrow, we will not be looking at this huge social impact and what goes on.
Many of the things that we are talking about here are out of scope of the main operation of the Bill, but they should be looked at somewhere. The women’s game is one that comes to mind, along with players, which these amendments propose would feature here. If we are not going to look at such things in the Bill, we should look at them in the “state of the game” report.
It is a huge subject that we are talking about here; we have taken on something that is quite brave. If we do not find out how it is functioning and what is going on, we will be missing a trick. I would hope that we would do this as soon as we can—having slightly more frequent reports, at least at the beginning, would not be a bad idea. The “state of the game” report is a huge opportunity for gathering a great deal of very useful information.
Lord Moynihan (Con)
I support many of the points that the noble Baroness, Lady Taylor, has raised under Amendment 94. I see that the Chief Whip is in his place; he will be pleased to note that nine of the amendments that we are considering now came from the Labour Benches, and that we have reached page 6 of the Bill.
The noble Baroness made the important point that Parliament should receive and debate the “state of the game” report. I am perfectly happy for the regulator, if we are going to have one, to present the report. However, in presenting the report, full attention needs to be paid to factors relating to the community and social impacts of regulated clubs and the women’s game. It is impossible when looking at this overall—and the Bill says that:
“A state of the game report must include … an overview of the main issues that the IFR considers to be affecting English football”,
—not to consider the development in the women’s game. It is a central part of English football, as cited in the Bill.
There is one other area at which we need to look at a later stage, on which I have no intention of detaining the Committee this evening. The regulator is looking at English football clubs and the game in England, but 14 Premier League clubs are in multi-club ownership, which stretches far beyond our shores. That is much more than in any other league in Europe. That has significant impacts on the financial regulation of the game. It provides greater bargaining power in commercial contracts and increases significantly the brand reach of those clubs, while allowing for the pooling of resources. There is flexibility with player transfers and loans. Certainly, within the English game, there is prohibition control over the management of more than one club, and UEFA states that you cannot have one controller covering two or more clubs in the same European competition. All these are actually central financial issues, and they have to be considered in any assessment of the health of the game in England.
I am concerned—I hope the Minister can respond and help me with this—that, if the regulator is prohibited from looking at the impact of multi-club ownership, there is a huge amount of important material when it comes to understanding the financial health of the game in England that would be outside the remit of the regulator. If I am wrong on that, no doubt the Minister will say that the regulator is absolutely entitled to look at each and every aspect of the multi-club ownership that takes place, principally in the Premier League. I will not detain the Committee by going further, but I simply table the fact that I think it is an essential and central point in any state of the game report and of the work of the regulator moving forward, and I would appreciate any clarity that the Minister can throw on that this evening.
Baroness Brady (Con)
My Lords, I rise to speak to Amendment 101 in my name. It seeks to address a fundamental imbalance in how we will assess the health of English football under this new regulatory framework. The Premier League has become the world’s most successful sporting competition through a sophisticated balance of sporting merit and commercial innovation. Every weekend, millions watch matches where any team can beat any other, where promoted clubs can dream of European football and where calculated ambition is rewarded. This competitive drama has created extraordinary value that benefits the entire football pyramid, yet this Bill creates a concerning issue in how we will measure success. While the regulator must produce a state of the game report, its content focuses almost entirely on identifying problems and assessing risks. There is no requirement to evaluate how a regulatory intervention might affect the very qualities that have made English football successful.
This amendment would require the regulator to assess and report on three areas: first, competitive balance and sporting merit, the foundation of football’s appeal; secondly, our international position, crucial given the growing competition from other leagues and competitions around the world; and, thirdly, our ability to attract investment, which is essential for maintaining the quality that drives broadcast value and pyramid funding.
Without proper assessment of the competitive matrix, how would we know whether regulation was inadvertently creating barriers to sporting achievement? Without tracking our international position, how could we identify whether intervention was damaging our ability to attract global talent? Without measuring investment impact, how would we spot whether regulation was deterring the responsible ambition that drives football growth? If the state of the game report is to be as Ministers have described it—the definitive evidence base of football’s health that will drive the regulator’s whole agenda—it is crucial that the report considers both the risks and the success factors. We cannot protect what we do not measure. We must not allow these protective regulatory principles to become completely meaningless.
The amendment would create crucial feedback loops. It would allow Parliament and stakeholders to identify early-warning signs if regulation begins to damage football’s essential qualities. It would provide evidence to enable the regulator to adjust its regulatory approach if unintended consequences emerge. Most importantly, it would ensure that we protect proper oversight while preserving what makes English football so special. Without this amendment, we risk creating a regulator focused solely on managing decline rather than protecting success.
I would be grateful therefore if the Minister could explain why, in her view, the state of the game report should not assess regulatory impact. Will she also explain how Parliament will otherwise be in a position to judge whether this world-first and intrinsically risky regulatory approach is going to be able to maintain English football’s success, growth and vitality?
Lord Markham (Con)
I rise to speak to my Amendment 104, but I start by saying that I agree with the thrust set out by the noble Baroness, Lady Taylor, that we want this to be a comprehensive report. We all agree that we need a common factual basis on which to try to agree onward action. As such, I agree that this needs to be the first thing that the regulator does. With that, I am sympathetic towards the quicker timeframe. Obviously, I am mindful that we need to give it a certain amount of time so that it can do the report properly; six months is probably unrealistic as a quick proposal but 12 months should be enough time. Beyond that, given how quickly things move, every three years is a reasonable frequency.
Before I come on to Amendment 104, I admit that I am a bit concerned by Amendment 95, which asks the regulator to report with its assessment of how well each club is managed. It is one thing working with each club and looking at its plans; having to report on that is almost like a different level of burden of proof when it comes to the evidence needed. I am sure the regulator will be nervous about putting this down in black and white without having a strong evidential base. When you are trying to do that across 116 clubs, it creates a duty that is probably burdensome on the whole industry. It would result in a whole host of Deloittes, KPMGs and PwCs of the world going into every club, all 116 of them, to try and find assess how well they are run.
I turn to my Amendment 104. Key to this is football financial health. We all agree that it is critical to everything that we have been talking about—to sustainability and to the whole pyramid payment system and how much money is going at the top end. Every time I have proposed something, I have thought it was not controversial, and have said so many times over the last few days. I have then been—“upset” is too strong a word—mildly disappointed that it was not taken up by the Minister. I hope that asking the regulator to write in the “state of the game” report a section on football financial health is a no-brainer. Even though we are getting towards extra time, and into stoppage time, I hope we can have one thing chalked up that the Minister is happy to take away and agree to tonight.
Similarly, on the state of fan engagement, one thing that united the whole Chamber earlier was when we were talking about how fans should be consulted in all this. I hope that including a section on fan engagement in the “state of the game” report would be considered as close to a no-brainer as you would hope to get.
Lastly, proposed new paragraph (f) looks at the operation of the current regulators and an assessment of how well the independent regulator performs. That comes on to a clause later with the subsidiarity principle, and we are asking the independent regulator to, for want of a better term, contract out different functions where a current regulator—the FA, the Premier League or whatever—is better placed to do that. That is the general principle that we hope to get established. However, for it to be able to do that, the football regulator in the “state of the game” report first needs to report on the functions of the current regulators and how well they fulfil them.
Again, late into stoppage time, I hope these will be seen as quite sensible and uncontroversial measures. I look forward to hearing the Minister’s views on them later.
Lord Moynihan of Chelsea (Con)
My Lords, we are, I hope, on the home straight, to take a metaphor from another sport. I rise to support an amendment in this group, to say nothing about some others, and to oppose some others.
I take my thoughts from a reflection on Hong Kong and its enormous success as an economic entity for many decades before, lamentably, we had to lose it to the Chinese—with the current appalling situation that we now see in Hong Kong. Why was Hong Kong so successful? It is generally acknowledged that Sir John Cowperthwaite took an attitude of benign neglect to its success. He arrived in Hong Kong, he was urged to govern, and he said, “No, I’m going to step back because it’s doing very well without my interference”. He assiduously prevented reports being written about Hong Kong.
I am very much in support of the amendment tabled by my noble friend Lady Brady because it seeks to limit the report, and I say nothing about the various timing amendments, which I do not feel qualified to discuss, but I did say at Second Reading that this Bill was a Christmas tree and, unfortunately, people like to hang baubles on Christmas trees: “Let’s look at women’s football”; “Let’s look at the environment”; “Let’s look at so many things”—it is irresistible when you have a Christmas tree. What is wrong with having a report on these interesting, important things? We go back to Cowperthwaite: if you have a report, people feel urged to do something about it. If you say, “My report says that there’s something wrong here, or that more could be done there”, then that moves on to the impetus to interfere more and more.
There are two attitudes in this House to what is going on in football in this country. There is the attitude that we know best and that we say what is fair—fairness seems to be the prime objective among many speakers. There are others who are saying, “Why are you wanting to interfere with what is working so well?” I applaud the noble Lord, Lord Addington, for defying the injunction not to repeat ourselves, since he repeated himself earlier this evening in claiming that there was this catastrophic situation in the lower orders of football. I do not see it. Football is thriving. Others said the same when the point was made before—but good on him for defying this attempt to suppress deeply held thoughts, even if spoke twice.
No actions have no consequences. Attempts in these amendments to put more and more into this Bill will be detrimental to the great sport of soccer in this country.
Lord Parkinson of Whitley Bay (Con)
My Lords, I will briefly say a few words about my Amendments 106, 108 and 109. Given the hour, I will not speak at length. As with the other amendments in this group, these concern the “state of the game” report. I am grateful to all those who brought amendments in this group and who have contributed to it.
My Amendment 106 is attempting to address a very similar point as does Amendment 105, tabled by the noble Baroness, Lady Taylor of Bolton, and the noble Lord, Lord Bassam of Brighton. Both amendments are attempting to reduce the period in which the regulator will have to publish the first “state of the game” report. As the noble Baroness noted, my amendment changes this from 18 months to six months, whereas theirs looks to change it to 12 months, but the reasoning behind both is the same. The sooner we understand the state of the game under this new framework, the better we can refine and improve the regulator’s role. I think that the sooner that happens the better, but I am not precious about the precise time.
Amendment 108 in my name requires the “state of the game” report to be published every four years to allow for a full and proper reappraisal of the issues facing football. The original draft of the Bill, when it was introduced by the previous Conversative Government, set the period for republishing the report at three years, and the current version sets it at five. With this amendment, I am trying to probe the Government as to why they have made the change that they have in this instance, and I would be grateful if the Minister could say.
With Amendment 109, again, I am trying to probe the Government’s intent. The Bill includes numerous references to consultations with fans, but it does not include any reference to engagement with fans on the draft “state of the game” report. I am curious as to the reasoning behind the drafting. If the Government believe that fans should be consulted elsewhere in the Bill, why not in this instance and with this provision?
I will not speak at length to the other amendments in this group that the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Taylor, have tabled, but I am grateful to them for their thoughts in doing so.
I will touch on Amendment 103, because I am conscious that the noble Baroness, Lady Jones of Moulsecoomb, is not here to mention it. Her amendment deals with the question of environmental sustainability. That falls very much into the category of the baubles on the Christmas tree that my noble friend Lord Moynihan of Chelsea would be very sceptical of. While football has a role to play in tackling climate change, the regulator must ensure that its focus remains on football governance. In the noble Baroness’s absence, I wanted to make sure that her amendment was noted, and if the Minister has anything to say on it, I am sure that she will be grateful to read it back.
Amendment 104, in the name of my noble friend Lord Markham, and to which I have added my name, attempts to expand the scope of the “state of the game” report. This requires the regulator to include an assessment of the overall financial health of football, an assessment of the current state of fan engagement and an overview of the current regulatory functions that are carried out by existing football bodies. We think that these additions are crucial. Financial health is the bedrock of football’s future, and fan engagement is its very soul. We must also respect and leverage the expertise of existing bodies, such as the FA, in ensuring that the regulator complements, rather than duplicates, their efforts.
The amendments tabled in this group reflect the wide-ranging interests and challenges facing English football. On these Benches, our priority is to ensure that the Bill creates a framework for governance that is robust, focused and effective. We must protect the integrity of the game, empower clubs to succeed and respect the fans who are its beating heart. I hope the Minister will seek to do that too in her response.
Baroness Twycross (Lab)
I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton and the noble Lords, Lord Parkinson of Whitley Bay, Lord Markham and Lord Addington, and the noble Baroness, Lady Brady, for tabling these amendments and for the discussion of them. I will take them in turn.
I turn first to Amendment 94 in the name of my noble friend Lady Taylor of Bolton. While I understand the intent behind this amendment, we do not consider it necessary and believe the Bill already covers this issue, and I hope that this reassures her. The positive social impact of regulated clubs in their communities features in the very definition of the sustainability of English football in Clause 1, so we fully expect that the regulator will naturally cover these areas in the “state of the game” report.
I turn to another of my noble friend Lady Taylor’s amendments in this grouping, Amendment 100. While the areas that my noble friend highlights, such as environmental sustainability and ethics, are important, they are not within the remit of the regulator and therefore will not be in scope of the “state of the game” report. In so far as the other areas are relevant to the regulator’s functions under the Bill, it already has the power to report on, for instance, a club’s general financial sustainability.
Baroness Taylor of Bolton (Lab)
My Lords, I am very pleased there is such agreement about the importance of the “state of the game” report. The Minister has given some elements of reassurance, but on others I wish she could have gone a little further.
Because of the late time, we have not discussed in depth all the elements we were talking about. The noble Lord, Lord Moynihan, mentioned multi-club ownership, which I think we will come unto at a later stage.
The one point I cannot agree with that has been said is that football has benefited from benign neglect. Benign neglect of good governance in football is the reason we are here today.
But there has been progress here. I am glad everybody accepts that this report will be important. On that basis, at this stage, I withdraw my amendment.
Football Governance Bill [HL]
Monday 16th December 2024
(1 month ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Amendment Paper: HL Bill 41-V(a) Amendment for Committee (Supplementary to the Fifth Marshalled List) - (13 Dec 2024)
Baroness Brady
Baroness Brady (Con)
My Lords, I refer the Committee to my interests as declared in the register. This group of amendments includes Amendment 110 in my name which addresses a concern about potential political interference in football’s new regulatory framework.
The Bill creates an unusual—and, I believe, likely to be unnecessary—requirement for football governance statements every three years from the Secretary of State. This is not merely a question of frequency; I believe that the expectation created for this statement may raise questions about regulatory independence and broader international implications, which we have discussed in this Committee a number of times.
As I and other noble Lords have pointed out, UEFA and FIFA maintain strict provisions against state interference in football. We have already seen UEFA’s general secretary express serious concerns about various aspects of this Bill. In that context, we are obliged to ask whether creating a requirement, or even an expectation, for regular political statements about football governance risks providing these bodies with an additional point of leverage over English football’s development. UEFA has been clear that it is watching the implementation of this framework very closely, including in relation to possible scope creep and stepping over the line, so it behoves us to consider carefully the possible practical implications of such a mechanism and to question its necessity.
Every three years, the Secretary of State may make a statement about football governance. The Minister may say that there is no obligation here, and that it is just providing for the possibility. However, it seems inevitable that putting this expectation into statute creates a very strong likelihood that these statements will then be made. What will they say—that everything is fine, or are they more likely to look at more areas that the regulator can examine and then expand into, as we have seen with this Bill so far?
As the general secretary of UEFA spelled out in a letter sent to me last week:
“UEFA has previously shared its concerns about the creation of an Independent Football Regulator … as normally football regulation should be managed by the national federation. It is essential to ensure that the establishment of this structure fully adheres to the principle of sports autonomy, thus preventing any risk of political or governmental interference in the legitimate and appropriate functioning of recognised sports governing bodies. The IFR’s mandate must be clearly defined and strictly limited to the long-term financial sustainability of clubs and heritage assets”.
Despite these repeated warnings, it seems reasonable to assume that the expectation of a football governance statement will create not just inevitable domestic pressure for political intervention but opportunities for international bodies to question the regulator’s independence. There may be a whole range of wider issues going on with international governing bodies at the time of the football governance statement—for example, negotiations on the football calendar or the future of competition formats. With these football governance statements, we seem to be creating an unnecessary risk that the statements, almost irrespective of their content, may be deemed to constitute political interference. English football will not be served well by such a dynamic.
My amendment would align the statement cycle with the other five-year regulatory timeframes in the Bill, reducing the frequency of these potential pressure points. However, this is about not just timing but protecting football’s independence while maintaining proper oversight. I look forward to hearing from the Minister on how necessary these statements are.
Professional football requires long-term certainty for investment. In my long experience, stadium development can take up to 10 years to plan and execute. Academy investment needs at least a five-year horizon. Infrastructure projects require stable planning frameworks. Yet we seem to be risking the creation of a system where policy could shift every three years in response to short-term political steers, with each statement also potentially triggering questions about regulatory independence. I worry that these regular political statements could create permanent pressure for intervention beyond the regulator’s core purpose.
I would be very grateful if the Minister could give us the Government’s perspective on these important questions. What is the rationale for creating this unique pressure point for political intervention? How does the Minister believe that it will support long-term investment, especially given the international oversight concerns? What protections exist or could exist against scope creep through these regular statements? How will the Government manage UEFA and FIFA concerns about state interference in relation to this? I beg to move.
Lord Maude of Horsham (Con)
My Lords, I rise to support my noble friend’s amendment, and to question whether it is wise for the Government to include this clause in the Bill. It says:
“The Secretary of State may prepare a statement”,
and then it goes on. A Secretary of State can prepare a statement of anything at any time. It requires no statutory permission in a Bill to enable this to happen, but the effect of putting this in the Bill is, precisely as my noble friend has explained, to raise the spectre that UEFA, in particular, will see this as further evidence of political and government interference in football, which is a big concern for it. The Government have so far tiptoed around the edge of the concerns that UEFA has, but we know that the consequences for English football, if they go on to the wrong side of that line, will be severe.
Lord Pannick (CB)
My Lords, I repeat my declaration of interest, having spent much of the past three months representing Manchester City Football Club against disciplinary charges brought by the Premier League.
I pay tribute to the noble Baroness, Lady Brady, who has long been a friend of mine. She has unrivalled experience of being employed by Birmingham City Football Club and, for many years, West Ham United Football Club, and has achieved great success at both those clubs. I respectfully suggest, though, that here she protests too much. Clause 11(2) contains a very important restriction on what a football governance statement may do. It
“may not contain any policies that are inconsistent with the purpose of this Act or with the IFR’s objectives”.
The second protection is in subsection (6):
“The Secretary of State must lay any football governance statement, or any revised statement, published under this section before Parliament”.
Those are very considerable protections.
We listen to concerns that companies that own football clubs need long-term planning, but surely any company is subject to changes of government policy over the years. There is no protection whatever against those and the consequences thereof. I see absolutely no reason why football clubs should be protected by more than the three-year period stated here.
Lord Hayward (Con)
My Lords, before I start my comments on this clause, I thank the Minister for meeting me last week to discuss a number of issues—they did not include this clause, but I appreciate the opportunity to discuss other issues with her. My concern about this clause comes from the very first words of the Bill, which say that it is to:
“Establish the Independent Football Regulator”—
an independent regulator, not one circumscribed by a government Statement as laid out in Clause 11.
I disagree with the noble Lord, Lord Maude, who said, if I heard him correctly, that this was unique. It is not. Sadly, my mind goes back to a previous occasion when the Government wanted to circumscribe an independent regulator. I remember the debate clearly, because the late and great Lord Judge made a massive contribution to it, scything through the then Government’s arguments about why they should have a Statement in relation to an independent regulator. The independent regulator to which I refer is encompassed in the Elections Act. The previous Government said, “Ah, we’ve got an Elections Act. We don’t really like what the Electoral Commission is doing, so we’ll put in a nice little clause which requires the Government to make a Statement”, which, in effect, circumscribed the Electoral Commission. What is fascinating about that set of circumstances, which Lord Judge and I—and the Liberal Democrats and the Labour Party—criticised comprehensively, is that the wording in Clause 11 is remarkably similar to that in Section 16 of the Elections Act. In fact, Clause 11(5) of the Bill is almost identical, word for word, to new Section 4A(7) of PPERA inserted by that section.
I said just now that people on other Benches spoke against the Government imposing some form of Statement on the Electoral Commission as
“‘not fit for purpose and inconsistent with the … role as an independent regulator’”.—[Official Report, 6/2/24; col. 1604.]
We are talking here about the same wording. Those were words from the Liberal Front Bench—the noble Lord, Lord Rennard. The Labour Front Bench, in the form of the noble Lord, Lord Khan, said that
“this statement is unnecessary and the Government have provided no evidence for why it is needed … There was cross-party agreement that the commission’s independence is vital”.—[Official Report, 6/2/24; col. 1602.]
I could go on quoting the noble Lords, Lord Khan and Lord Rennard, making the point that a regulator is independent if it is independent, not because it is circumscribed by a set of conditions as set out in Clause 11. I recommend anybody to look at the relevant amendments to the Elections Act 2022, where the wording is virtually identical. The Government then wanted to circumscribe the Electoral Commission. I would not be surprised if the officials discussing this Bill when it was in draft under the previous Government said, “Oh, we’ve got a good basic tenet; we’ve even got a set of words which we can lift, virtually verbatim, and it’ll circumscribe the independent regulator”.
I opposed the Government’s imposition of that statement in the Elections Act, because I believed it circumscribed what should have been an independent regulator. When the then Opposition forced a vote on it, I sat where the noble Lord, Lord Bassam, is now and abstained, because I refused to support the Government imposing on an independent regulator a provision which is virtually word for word that set out in Clause 11. I therefore strongly support the amendments and oppose this clause standing part of the Bill.
Lord Parkinson of Whitley Bay (Con)
My Lords, I will speak to my Amendment 111, which is part of this group, and pick up some of the points that my noble friends have raised in the debate.
My Amendment 111 states that the Secretary of State should not be permitted to revise a football governance statement simply because there has been a “significant change” in government policy on football. The reasoning for this comes from much the same place as my noble friend Lady Brady’s Amendment 110: both try to prevent the possibility of frequent changes in the Government’s policies for the regulator. If the Secretary of State took up every opportunity that the Bill allows to alter the governance statement—it could be every three years, after every general election and after every change in government policy—we could see this governance statement being altered rather frequently, every few years, with effects on the stability of football.
How would clubs have the certainty they need to plan their investment? As my noble friend Lady Brady said, football clubs plan their infrastructure and stadium developments over periods of 10 to 15 years or more. The talent pipeline, which is needed to develop the players of the future, requires much more than five years of careful thought and investment. To do all this and deliver the sustainability of English football, clubs need to know what the policies of the regulator will be over the long term. They need to know what the regulator will require of them.
My noble friend Lord Hayward reflected on a broader point in his remarks. The Government have been at pains to stress the importance of the independence of this regulator. I do not doubt their intention, but how will that independence be maintained when there could be regular and changing political statements setting out the policies to which the regulator will have to adhere? We need some assurances that these governance statements will not interfere with the operational independence of the regulator. To do that, it seems much more sensible that the Secretary of State should not be able to revise these statements on a whim or because the department’s Secretaries of State are changing with the regularity that we have seen in recent years.
I hope the Minister will address the points that have been raised and look favourably on these amendments. I look forward to her reassurances.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank the noble Baroness, Lady Brady, and the noble Lord, Lord Parkinson of Whitley Bay, for their amendments. Clause 11 permits the Secretary of State to publish a statement on government policy related to football governance. The statement is non-binding, but the regulator will be required to have regard to it when exercising its functions.
On Amendment 110, in the name of the noble Baroness, Lady Brady, we believe that, given the fast-paced nature of football and the changing regulatory landscape, every three years is a suitable time to pass before the Secretary of State can amend this statement. This decision was reached following consultation with other regulators.
There is no duty on the Secretary of State to amend or publish a statement every three years, unless there is reason to. I understand the noble Baroness has concerns that this could present an opportunity to exert political influence on the regulator and thus a risk to the regulator’s independence. Although this is a standard provision for most economic regulators, I recognise the intent behind the amendments, to reduce the risk of interference.
The noble Lords, Lord Parkinson and Lord Hayward, raised concerns that this clause might limit independence. The football governance statement cannot be used to direct the regulator’s day-to-day operations, so it will not impinge on the operational independence of the regulator. The Bill has been brought forward as a result of the policy of this and the previous Government. As the noble Lord, Lord Pannick, made clear, the regulator’s statutory scope and powers would remain unchanged and it would be under no obligation to act in accordance with any statement. We want to ensure that the regulator remains free of any undue political interference; this drafting, as with the previous Government’s version of the Bill, achieves that.
The noble Baroness, Lady Brady, and the noble Lord, Lord Maude of Horsham, raised concerns around UEFA’s position in relation to this clause. As I have reiterated previously, we have engaged extensively with both the FA and UEFA in the development of the Bill. As has been confirmed by the FA, we are confident that the Bill as drafted will not breach any UEFA statutes. The regulator will be operationally independent of the Government and will not exert an undue influence on the FA’s ability to govern the game. This was confirmed by the FA itself in oral evidence given to the House of Commons Public Bill Committee on 14 May during the passage of the previous Bill introduced by the last Government.
Baroness Brady (Con)
I thank the Minister for her response and assurances about the purpose and scope of the football governance statements, and I thank other noble Lords for their contributions. I remain concerned about the potential for these statements to introduce unnecessary political pressure points and raise questions about regulatory independence. I appreciate the intent to use them as an optional tool for accountability and transparency. However, I respectfully request that the Minister and the Government reflect on the points raised in the debate, particularly regarding the implications for long-term investment and the risk of creating permanent leverage for international bodies, such as UEFA and FIFA, that will disproportionately affect Premier League clubs playing or aspiring to play in European competitions.
I want to pick up on the comment about Spain made by the noble Baroness, Lady Taylor, which the Minister mentioned. That legislation concerns a very specific clause which was due to the dominance of Barcelona and Real Madrid. They sold their own rights and retained all the money, which collapsed the entire Spanish football system. That legislation is very different from the binary process of the backstop and allows for 10% of the revenues to be redistributed—as an aside, the Premier League is already distributing 16%. The clause is very specific and very different from this first-ever government intervention into British sport. The interaction between the statements and the broader regulatory framework must be very carefully managed to ensure that English football is not placed at a disadvantage in global competitions and subjected to unnecessary uncertainty and potentially harmful leverage.
I am also grateful for the Minister’s reassurance about scope creep and the need to respect the regulator’s independence. The Minister mentioned the FA’s appearance in front of the Select Committee; she will know that that was before this Bill was published. I suggest that it would be good for the Minister to speak to the FA again. There is room for further clarity on how these statements, if they are necessary at all, will be framed to avoid triggering concerns about state interference, particularly in light of UEFA’s clear reservations. I again ask the Minister to publish the letter UEFA sent to her, which, by all accounts, was very alarming.
With those points noted, I will withdraw my amendment, but I hope the Minister will continue to engage with stakeholders on these important issues. I beg leave to withdraw.
Baroness Brady
Baroness Brady (Con)
My Lords, in moving Amendment 12 I will also speak to Amendments 113 to 115 in my name and Amendments 116 to 119 in the name of my noble friend Lord Parkinson. These amendments address what is in my view a weakness in the Bill’s approach to regulatory guidance and consultation. They are important amendments because they go to the heart of how this new regulator will operate in practice.
The Minister has reassured us that this will be a collaborative regulator working closely with football; that is very welcome. Yet, unfortunately, the Bill requires the production of guidance only for the imposition of discretionary licence conditions. For every other major regulatory function, including some of the most significant interventions ever proposed in British sport, there is no obligation for the regulator to explain how it will act via guidance. Nor, indeed, is there any requirement to consult those affected as it produces that guidance.
I welcome my noble friend Lord Parkinson’s suggestion of a code of practice to guide the regulator’s approach in a number of important areas. Perhaps I can highlight just three crucial areas where I believe we need more clarity. The first is financial sustainability, the regulator’s core purpose. Despite extensive debates in this Committee about what financial sustainability means, or should mean, in practice, the regulator would have no obligation to define how it will assess soundness or resilience in guidance or what system it will use to make it work.
That means that a club such as my own, West Ham United, seeking to make long-term investment decisions, would have no clarity on how they might be judged. Worse than that, there is no requirement to consult with the industry on what these vital definitions should look like. Ministers have described the regulatory model as light touch. One of my amendments seeks to ensure that this is indeed the case when it comes to financial regulation, asking the regulator to publish guidance on the financial outcomes it wishes to see from clubs.
Secondly, there is the owners’ and directors’ test. This vital mechanism, critical to attracting responsible investment, is not written into the legislation. It is left—albeit with some considerations in the Bill—to the regulator to develop. Again, there is no requirement to consult clubs, leagues or potential investors on its design. I do not think it unreasonable to ask: how can English football expect to attract responsible, long-term investment without requirements for regulatory transparency or co-operation that would undoubtedly result in higher-quality and better-informed regulation?
Thirdly, and perhaps most concerning, is the backstop power over financial distributions. This unprecedented mechanism could fundamentally alter football’s financial flows, yet the regulator does not need to explain how it will approach such decisions or consult on its methodology. Billions of pounds are at stake, along with the very existence of the key competitive measures, tools, structures and incentives that currently underpin the English pyramid’s success. It is the most extraordinary of interventions, yet there is no requirement for even the most ordinary of procedural safeguards.
This absence of guidance risks creating real uncertainty. The Premier League recently agreed a new domestic broadcasting deal running through to 2029. Clubs are making infrastructure investments over similar timelines. As I have already said, academy and stadium developments require five to 10-year horizons. I must emphasise that it puts football clubs in a really difficult position to be able to make major commitments without any real clarity on how they will be regulated.
We have a real lack of a clarity on a range of areas in the Bill, compounded by uncertainty as to how the regulator will go about regulating in practice. My amendments in this group do not seek to constrain the regulator’s authority in any way. They seek only to ensure that its powers are exercised transparently and intelligently. They would simply require the regulator to provide guidance across all its functions and consult appropriately on its development. This is a minimal yet clearly critical requirement.
I hope and expect the Minister to say that it is her clear intention that this regulator will be collaborative. If that is the case, I think it is fair to ask: why not go the extra step and enshrine that approach in the Bill? What justification exists for allowing such significant powers to be exercised without clear guidance or consultation?
In conclusion, I encourage the Minister to examine these vital improvements and consider them clearly. Transparency and collaboration should not be optional extras. They should instead be the cornerstones of this new framework. I beg to move.
Baroness Evans of Bowes Park (Con)
My Lords, I will speak briefly in favour of this group of amendments. I particularly support those that would introduce a requirement for the IFR to consult those affected as it produces guidance. Consultation with key interested and impacted parties, particularly the leagues, is critical.
The IFR is an entirely new regulator operating in an entirely new regulated space with no real international experience to draw on. As I highlighted at Second Reading:
“The Explanatory Notes themselves acknowledge that football ‘was previously not regulated by statutory provisions’, and explicitly state that ‘the new regime and the distributions provisions in particular are unique and unprecedented’”.—[Official Report, 13/11/24; col. 1850.]
A duty to consult on key areas, such as those set out by my noble friend Lady Brady, to ensure that unintended and potentially damaging consequences are avoided as the regulator begins its work and develops its guidance, is surely a no-brainer.
At our recent meeting with the shadow regulator, and in various responses from the Minister during Committee, the desire and expectation of the regulator to work in a collaborative and proportionate way have been repeatedly reiterated. Several amendments in this group simply put that consultative approach firmly and squarely on the face of the Bill. I hope the Minister can look favourably on them.
Lord Pannick (CB)
My Lords, I too hope very much that the Minister and the department will look favourably on these amendments, for the reasons given by the noble Baronesses, Lady Brady and Lady Evans. They seem to be absolutely essential for reasons of efficacy and to give confidence to those who will be regulated that they and others will be properly consulted. I would be very surprised to be told that the regulator would not intend to do so. If that is right, it is surely essential, as in other legislation, that this is put in the Bill so that there is no doubt about it and so that the confidence that is absolutely essential is promoted.
Lord Addington (LD)
My Lords, this amendment about the bodies that will be regulated has a fair bit of common sense behind it. I am sure the Government will have done great work on consultation and making sure there is communication between the bodies that will be being regulated and the new regulator. If the Minister can tell us how this is being done, some of my worries will be removed. Also, stating where that information will be provided would very much help. If not, it has to be in the Bill somewhere.
Lord Parkinson of Whitley Bay (Con)
My Lords, I will speak to my amendments in this group and say a little about the amendments tabled by my noble friends Lady Brady and Lord Moynihan.
The amendments relate to the guidance the new independent regulator will be required to publish. My noble friend Lady Brady and I agree that the Bill, as drafted, should be strengthened to ensure that the regulated clubs have the information they need to meet the requirements of the new regulator.
My Amendment 116 would require the independent football regulator to issue a code of practice for competition organisers and licensed clubs. The regulator would be required to consult the FA, each competition organiser and each club in preparing this code. The overriding point of all the amendments in this group, I think, is to support clubs and competition organisers in complying with the requirements of the new regulator. We cannot expect the regulator to be effective unless it is doing its work in a clear way. These amendments would help to deliver that clarity.
I will not speak at length on this point as it is a simple one. We seek clarity from the Government more than anything else. Will the Minister give the Committee an assurance today that the regulator will produce a code of practice for regulated clubs and competitions? Might there be a way of publishing a draft code of practice while the Bill is being considered? That was certainly very helpful when we looked at the new regulatory regime brought in through the Online Safety Act, although I appreciate that, in that case, Ofcom had more of a head start than the shadow regulator does here—but it would be helpful if that were feasible.
My Amendment 117 delivers much the same result as the sensible amendment in the name of my noble friend Lady Brady. Again, we want to give clubs and competition organisers a fuller picture of the independent football regulator’s plans for the future, so they can prepare for the impact it will have on the game. Again, I hope the Government will look favourably on this amendment and the point that lies behind it.
Lord Moynihan (Con)
My Lords, I will speak to my Amendment 119A in this group. Noble Lords will recall that, on many occasions, I have been active on the appointments made by the DCMS, in particular when it came to the consumer protection Bill in your Lordships’ House and the non-declaration of the CEO of Seatwave, which was an online European ticketing marketplace that was then to be sold to Ticketmaster. The announcement of the individual concerned to the DCMS board made no mention of that, and nor was there any declaration in the House, despite the fact that Seatwave was subject to very significant criticisms about ticket touting and the impact on consumers.
I took an interest over the weekend to look in more detail at some of the appointments that have been made, to satisfy myself and the Committee that they were wholly independent of government. Could the Minister provide the Committee, in due course, with a comprehensive answer on the process that has been followed to date for each and every appointment to the senior levels of the shadow football regulator, including when and how the legal requirements for Civil Service recruitment have been implemented, namely that selections must be based on merit and on fair and open competition? Departments and agencies can develop their own recruitment approaches, but how has the governance code on public appointments been followed, including integrity, merit, openness, diversity and assurance? Who has been on the appointment boards and how many appointments have been made from outside DCMS officials?
What would help the Committee to understand the question of the degree of true independence of the proposed football regulator is to know how many of the Bill team and the paid advisers to the DCMS are going on from government to join the shadow regulator and, in due course, the full regulator. Are the shadow regulator contracts in any way tied to appointments to jobs with the full regulator? If so, how many and whose?
My probing amendment does not question in any sense the integrity or competence of the candidates concerned. But I went on LinkedIn this weekend and had the opportunity to read, as a result of a connection on LinkedIn, that one of the most senior appointments made was based, in part no doubt, on the outstanding work that was done by that individual on football governance while doing their PhD. I will give one quote from that—and, again, it is not in any way impugning the integrity or professionalism or the outstanding nature of this somewhat long PhD. With this quote, I was a bit concerned about whether the independence of the appointments was truly up to the standard we would wish to see:
“Granting an authority the power to legally regulate the football industry, compelling all English football clubs to comply with the established economic framework or risk being unable to use their football facilities, thereby prohibiting the club from playing in any football competition, either domestic or international, would transfer economic power back from the clubs and leagues to the regulatory authority, reversing the process initiated by the creation of the EPL in 1992”.
That is a fairly major statement that counterbalances the Premier League’s autonomy and would question the true independence of the proposed independent regulator.
I have not had the opportunity to read the whole thesis. I look forward to doing so, and to reading any other public documentation through LinkedIn. I think it is incredibly important that, if we are going to have an independent football regulator, that regulator has to be truly independent. All the appointments need to be made on merit, bringing in the very best people in regulation from across the country, and indeed possibly from abroad, to fulfil those important responsibilities and posts. I would be grateful if the Minister could give us the confidence that that is exactly what is being pursued.
Baroness Twycross (Lab)
I thank the noble Baroness, Lady Brady, and the noble Lords, Lord Moynihan and Lord Parkinson of Whitley Bay, for putting forward these amendments.
On Amendments 112, 113, 114, 115 and 117, in the name of the noble Baroness, Lady Brady, we clearly agree that producing guidance will be a really important part of the regulator’s work. It will help to clarify the practicalities of the legislation and ensure that clubs’ owners and competition organisers know what is expected of them and what to expect from the regulator. However, while I recognise the intent of the approach proposed, I disagree to some extent with the approach to guidance that the noble Baroness, Lady Brady, has suggested we take. Amendments 112, 113, 115 and 117 would require the regulator to produce guidance on all aspects of its functions. This is likely to be a disproportionate and needlessly burdensome requirement that would likely end up being more unhelpful than helpful.
There is little benefit in issuing guidance on issues that are self-explanatory or that do not have a direct impact on the industry. I will endeavour to find some examples of that type of guidance to meet some of the queries from noble Lords—for example, on every one of the regulator’s operational or administrative functions, excessive guidance would make it harder and more burdensome for clubs to understand and comply with the system, not easier, and National League clubs would potentially struggle to sift through reams of guidance to get to what was relevant to them. We expect that the regulator will publish guidance on all relevant parts of its regime, as appropriate. It is in everyone’s interests to maximise the industry’s understanding and compliance.
On Amendment 114, in the name of the noble Baroness, Lady Brady, the regulator is already required to publish guidance on how it will use discretionary licence conditions, including the outcomes it seeks to achieve. We believe that this requirement is sufficient, and it will be for the regulator to determine what that guidance should look like and how best to aid the industry without unduly burdening it.
I turn to Amendments 116 and 118, in the name of the noble Lord, Lord Parkinson. Amendment 116 would require the regulator to prepare and issue a code of practice for all competition organisers and licensed clubs. We do not believe that a code of practice for all clubs would allow for a proportionate, tailored approach to regulation, where what is required of a club should vary depending on the club’s specific circumstances. The regulator’s current approach of bespoke regulation will address the unique challenges and risks faced by clubs better than a list of one-size-fits-all recommended measures, and its guidance, as per Clause 12, should already help clubs to understand what is required of them and to comply.
On the points raised by the noble Baronesses, Lady Brady and Lady Evans of Bowes Park, on Amendment 118, the regulator is already required to consult such persons it considers appropriate when publishing guidance. We strongly expect that this will include the FA, competition organisers and regulated clubs, since those persons will all be directly relevant to and affected by that guidance. However, we have not taken the approach in this Bill of listing every person the regulator should consult for every piece of guidance issued. To do so would, in our view, be counter to the operationally independent and agile regulator that we are trying to establish.
There may be times when different levels of consultation are necessary, or with different stakeholders. The regulator is best placed to draw the line between comprehensive consultation and needless bureaucracy, and to ensure that the correct groups are consulted on a case-by-case basis. On the specific consultation requirements in the Bill, including on guidance, the regulator has a regulatory principle that it should co-operate and proactively and constructively engage with clubs, owners, officers and competition organisers. I hope that that gives the noble Baroness, Lady Brady, some confidence around the collaborative points she raised. This amendment would require the regulator to consult on minor revisions to guidance, needlessly creating an administrative burden for the regulator and those consulted.
Finally, Amendment 119, in the name of the noble Lord, Lord Parkinson, and Amendment 119A, in the name of the noble Lord, Lord Moynihan, relate to the Secretary of State guidance in Clause 13. Amendment 119 seeks to extend the period that the Secretary of State cannot amend guidance on the regulator’s functions from three to five years. While the regulator must have regard to the Secretary of State’s guidance, as an operationally independent body it will not be obliged to follow it. The industry and fans alike have been clear that they do not want to see excessive ongoing government involvement in football. That is why the Secretary of State may not revise this guidance any more frequently than every three years. The Secretary of State must consult both the regulator and anyone else they consider appropriate before publishing or revising any guidance, and must lay the guidance before Parliament. While I appreciate the concerns of undue influence, extending this to five years, when there may be an issue that needs clarificatory guidance before then, would be sub-optimal.
On Amendment 119A, I agree that the regulator should be independent and free from government influence. I do not have the level of detail that the noble Lord, Lord Moynihan, requested. However, I am confident that appointments will be made on merit. I will write to him with additional detail following the debate. Secretary of State guidance on this point would be unnecessary. The employees of the regulator will already be independent from the Government, like other regulators in the country. Independence has been at the heart of the regulator’s design, with it having sole discretion over its operational decisions. The aims of this amendment are therefore already achieved by the Bill’s current drafting.
I have noted the points from across the Committee on the amendments in this group and I am happy to discuss these further ahead of Report. However, for the reasons I have set out, I hope the noble Lords will not press their amendments.
Lord Addington (LD)
I take it that we have a consensus that there should be some way to find out what the regulation is and the reactions to it. Will the Minister give us an assurance that it will be published somewhere we can find it? That is the real point.
Baroness Twycross (Lab)
Perhaps the noble Lord could clarify whether he means once the regulator is up and running. I assume so. It would be very unusual for that to not be the case, but I will confirm that and get back to him, I hope, in the course of the evening.
Baroness Brady (Con)
My Lords, I thank the Minister for her response and for the points raised. I note her desire not to put any major burdens on the regulator, but I worry about the major burdens that that in turn puts on the 116 football clubs that this regulation affects.
I respectfully push back on the notion that the amendments are not necessary or that the IFR’s flexibility would be somehow unduly constrained by requiring proper guidance and consultation. Perhaps the Government could look at it another way: amendments of this sort could actually enhance the regulator’s ability to act effectively by building trust and clarity from the outset. That is really what the football clubs want: clarity.
The Minister points to collaboration, yet the Bill imposes no duty to consult on key areas such as financial sustainability, the owners’ and directors’ tests or the backstop powers. Without clear consultative frameworks, football will face uncertainty and investment decisions could stall. Football is a global business and investors require regulatory predictability. These amendments are not about adding bureaucracy but about ensuring that clubs, leagues and investors understand how regulatory powers will apply—that is what this is about.
Instead of creating unnecessary delays, the amendments, or amendments like them, would prevent regulatory uncertainty, providing everyone with a clear framework for guidance. Reactive and unclear regulation is likely to create much greater delays and generate a higher workload for the regulator and the clubs. I remain concerned that the existing provisions do not address the scale of the regulatory powers that the Bill is creating. The regulator will oversee billions of pounds in football revenue, critical tests of ownership and sustainability of the entire pyramid. We are the first country to do this and, in my view, these very wide-ranging powers demand the highest levels of transparency and consultation. Football deserves a regulator that collaborates in practice, not just in promise.
That said, I am somewhat—I repeat somewhat—encouraged by the Minister’s recognition of the importance of these issues, as reflected from all sides of the Committee. I hope that we might continue to engage on how best to embed these principles within the framework of the regulator. I will reflect further on her response and I hope we can consider how these concerns might be addressed as the Bill progresses. For now, I beg leave to withdraw the amendment.
Lord Markham
“Delegation of regulatory powers to competition organisers(1) The Secretary of State may by regulations direct the IFR to delegate some of its functions under this Act to specified competition organisers.(2) For the purposes of subsection (1) the IFR may only delegate a function to a specified competition organiser if it is satisfied that the competition organiser—(a) would discharge the function delegated under subsection (1) with the same degree of stringency as the IFR;(b) would discharge the function delegated under subsection (1) with regard to the IFR’s objectives under section 6;(c) would discharge the function delegated under subsection (1) with regard to section 7(2);(d) would not alter or disregard its obligations under this section.(3) If the IFR is satisfied that the specified competition organiser meets the conditions set out in subsection (2), and the Secretary of State has directed the IFR to delegate a function under this Act, the IFR must abide by the Secretary of State’s direction.(4) If the Secretary of State is not satisfied that the IFR has taken all reasonable steps to comply with the direction to delegate a function under subsection (1), then the Secretary of State may take such action as is deemed necessary to ensure the IFR does comply.”
Lord Markham (Con)
I hope noble Lords will see this as another constructive measure that is in keeping with many of the issues on which there has been broad consensus in the Committee. The principle behind the amendment is delegating regulatory functions to the competition organisers where they are considered best placed to discharge them.
Many noble Lords have said that the competition organisers already regulate their own competitions to a large degree. We are all aware of the fit and proper owner test and of financial fair play, to mention just a couple of areas. We would all agree that competition organisers have extensive experience in this space, having been doing it for a number of years. If they were discharging a lot of the functions and the regulator was also discharging them, there would be the danger of duplication. Again, I think most noble Lords want the regulator to be light touch and low cost, particularly as all the costs are coming out of the pockets of the clubs.
I hope that this will be seen as a sensible move. The regulator would be asked to look at each area of responsibility and to decide which of the competition organisers might be best placed to carry it out. If the regulator thinks that, in delegating some of those powers, the current Premier League or EFL owner tests are insufficient, there would be nothing to stop the regulator saying that, on top of competition organisers’ existing processes, it would like them to add X, Y and Z. That would be entirely appropriate and would give the competition organisers the opportunity to prove themselves.
Given that the regulator would have overall responsibility, it would always have the opportunity to take the powers back if it thought the competition organisers were not up to the job. Amending the Bill in this way would be seen as a sensible move. It would send a good signal to football that we want to work with it in setting up the new regulator. We have all heard the Minister say that she does not want to increase the burdens on the independent regulator—in fact, she made that point in responding to the last group—so here is a way to reduce the burden we put on the regulator and to delegate it to a local level, where others are felt best placed to carry out the functions in a collaborative way. I beg to move.
Lord Pannick (CB)
The noble Lord, Lord Markham, puts his case very powerfully but I for one am not persuaded, because the delegation of functions to competition organisers would frustrate the very purpose of independent regulation. The whole purpose is that regulation is done by the independent regulator. As I said in considering the previous group of amendments, it is of course vital that the regulator consults those affected and takes into account their concerns and expertise. But to delegate the responsibility to those who are being regulated, or to the competition organisers, would be an abdication of regulatory responsibility.
Lord Maude of Horsham (Con)
My Lords, I support the amendment of my noble friend Lord Markham and strongly disagree with the noble Lord, Lord Pannick. We constantly hear that the purpose of the Bill is for the regulator to be agile, to be as light touch as possible and not to impose unnecessary additional burdens on football. Every million pounds spent on the cost of running the regulator, as well as the additional compliance costs for football clubs themselves, means there is less of the pie to be distributed under the redistribution parts of the Bill.
Surely one of the key ways in which we can do our best to avoid that cost burden being excessive is to avoid duplication. The reality is that the competitions, the leagues, already exercise a self-regulatory function—not regulating themselves but regulating the clubs that are members of the leagues. That is in their nature: there are conditions of belonging to those leagues that they rightly enforce, and they are going to be obliged to carry on doing that anyway. It is possible that not all of them have done that perfectly, and that not all of them will continue to do it perfectly in the future, but it is also possible that the independent regulator will not do its job perfectly. We should consider that possibility at this stage of consideration of this really important Bill, given that many clubs—not just the Premier League clubs but right down through the pyramid—have concerns about the costs, imposition and impact that creating the regulator will involve. When we move on to the next group, we will be looking at the really big, crunchy part of the Bill that covers the regulator’s operating licensing powers.
If we are to be sensitive to these genuine concerns of football clubs—which, by and large, have been pretty successful over the decades—this is a good way of showing it. If this amendment is passed and accepted by the Government and goes into the Bill, none of it says that the powers have to be delegated to any particular competition organiser; but at least giving the possibility of avoiding this overburden of new regulation, cost and impositions on something which is already very successful would be a very good signal for the Government to send.
I hope the Minister when she responds to this amendment will not rule it out out of hand but will take it away and say that we should now be looking for ways to address some of these genuine concerns. This would be a very good way of doing it.
Lord Goddard of Stockport (LD)
My Lords, I rise to comment on the amendment of the noble Lord, Lord Markham, which, on the face of it, sounds sensible, obvious, simple, light touch and low cost. I rise also to defend the noble Lord, Lord Pannick, for pointing out the blindingly obvious biggest bear trap of the entire Bill up to now: delegating the power of the regulator to the very people it is trying to regulate. It would seem to any right-minded person that this is the least sensible thing to do. Being concerned about the power of the regulator but trying to persuade us that it could give some of its powers up to someone else to help them along the way defeats the object of having the regulator.
Lord Maude of Horsham (Con)
Before the noble Lord sits down, there are two groups which, if the Bill goes through and is enacted, will be subject to regulation. There will be the competition organisers, of course, but the biggest burden will be on the clubs themselves, and that should be our principal concern. If the competition organisers, who would themselves be overseen by the regulator, are able to discharge the regulatory functions effectively without creating a whole new panoply of compliance and enforcement mechanisms and apparatus, surely that is worth looking at and considering.
Lord Goddard of Stockport (LD)
There is some merit in what the noble Lord says. The noble Lord, Lord Addington, and I met Rick Parry and some people from the EFL this week and they are quite content with this. They do not see this as an onerous burden on them. They are looking forward to the regulator, a level playing field and a real chance for them to progress, so they are not going to oppose this resolution.
Lord Hayward (Con)
My Lords, in relation to consultation, on which several comments have been made during the discussions on this and previous groups, it is worth bearing in mind, when the Minister tells us that there will be wide consultation in whatever circumstances, what my noble friend Lady Brady said on day one of Committee. She said that the Government had consulted seven Premier League clubs, which did not include Manchester City. They consulted those seven clubs for about as long as it took Spurs to score four goals against Southampton yesterday. It was hardly serious communication and consideration. That is what worries so many of us: we are listening to a series of comments that sound reasonable in themselves—and I have sympathy with what the noble Lord, Lord Goddard, said—but I would believe it if there had been a very clear indication at previous stages of the Bill that there had been consultation with the interested parties.
Baroness Brady (Con)
My Lords, I support Amendment 124. I think it introduces a sensible and proportionate idea: that the independent football regulator should have the power to delegate certain functions to competition organisers, such as the Premier League, the EFL and the National League, where it is appropriate. First, I want to consider the position of the leagues themselves, especially the Premier League and the EFL, both of which already play central roles in the regulation and operation of English football. These organisations are not merely administrative bodies; they are sophisticated, well-sourced entities with established systems for financial monitoring, licensing and governance.
For example, the Premier League currently performs all the UEFA licensing for clubs on behalf of the FA, demonstrating its capability to operate efficiently and effectively under stringent regulatory frameworks. It also has robust financial monitoring mechanisms in place, which ensure that clubs comply with obligations relating to profitability, sustainability and long-term planning. As I mentioned earlier in Committee, the Premier League also invests significant resources and time in performing its owners’ and directors’ tests to a very high standard, and intends to continue to do so.
Simply duplicating all these existing structures within the IFR would be inefficient and burdensome, as the White Paper that led to the Bill rightly acknowledged:
“The Regulator may wish to allow concurrent systems, or delegate responsibilities to industry bodies, in certain circumstances. It would manage this in a way that is coherent and simple for all involved, especially clubs”.
Unfortunately, however, no sensible delegation power currently exists in the Bill, so I commend my noble friends Lord Markham and Lord Parkinson for addressing this issue and allowing for this conversation. This amendment would align perfectly with that principle expressed in the White Paper. It would be a smart, almost unarguable step to take: delegation would allow the regulator to focus its resources, especially in the early years of its life, on areas where independent oversight is essential, such as addressing market failures and managing systemic risks. At the same time, it would give the regulator the option of leaning on existing processes or information systems where they are already successfully implemented.
Delegation would also address an important practical reality. The workload facing the IFR will be immense. I am not surprised that the EFL wishes to offload some of its costs to the regulator, and that is its right. In its early years, this regulator will have to establish itself, build capacity and gain the trust of stakeholders across the ecosystem. That is a big burden. Allowing it to delegate certain functions, with appropriate safeguards, ensures that it can deliver its objectives without being overwhelmed by administrative tasks that others are well placed to manage.
However, this clearly cannot be done on blind trust. The amendment includes what seem to be important safeguards: the IFR must ensure that any competition organiser meets the same degree of stringency, aligns with its objectives, and adheres to its regulatory principles. This would seem to protect the integrity of the regulatory framework, while avoiding unnecessary duplication and, therefore, unnecessary cost.
More broadly still, this amendment raises an important question that we must address about the future role of the Football Association. While the fan-led review’s position was that the FA’s current governance arrangements make it unsuitable to house the IFR at present, it also envisaged a scenario where one day this might change. As the review noted,
“the FA might at some point be a suitable location for IREF … However, the Review has concluded that this is not appropriate at this time”.
This amendment raises the possibility of the delegation of certain functions to the FA, as part of its reform journey. If the FA continues to modernise its governance structures and demonstrate the capability to take on certain functions, it could play a much larger role in football’s regulatory framework.
Indeed, I encourage the Government to consider including the FA in the scope of this clause as such, because it should meet the same rigorous criteria that the leagues have to. Delegation to football bodies could be tied to a broad review of football governance a few years into this regime. This review could assess not only the progress of the IFR but the readiness of the FA and other football bodies to take on greater responsibilities. This will ensure that the IFR can be a dynamic institution, evolving in response to the needs of the game and empowering existing bodies to step up, where it makes sense. I believe that all stakeholders, including the most ardent supporters of the fan-led review, as well as those worried about the unintended consequences of this delegation, could support this kind of sensible amendment.
Finally, but most importantly, in a letter sent to me by the general-secretary of UEFA only last week, he said:
“UEFA appreciate the background of the Football Governance Bill discussions and proposals, and we were encouraged by the intent of the original Fan Led Review which stated that this regulatory area should be returned to The FA in time. UEFA supports The FA and UK policymakers in ensuring that this is still the case”.
The FA told me, also last week, that it has recently told DCMS that
“the FA is willing to take on delegated powers from the IFR, if there are services that the regulator believes we can operate and deliver effectively”.
I ask the Minister: is it still the case, as UEFA and the FA seem to believe, that the Government intend the future delegation of powers to be handed back to the FA at some point? If it is, surely this is an amendment that the Government could and should support.
Lord Sentamu (CB)
My Lords, I have spoken only once—about my little club, York City—but I have attended all the Committee debates. First, I think that York City will find it puzzling if, for the first time that there is an independent regulator, the same Act will say that some functions will be delegated. That is a confusion. Down the road, that might be thought about, but we want to see this person—man or woman—who will be the independent regulator doing the job. If it becomes an impossibility or too burdensome, it is at that stage that you delegate. But to say in the Bill, right at the beginning, that certain functions will be delegated, maybe to some powerful clubs, will be a confusion.
Secondly, no one would want to be an independent regulator. If I had the ability to do so, I would tie down the job, because, otherwise, it muddies the water. What we have not teased out a bit more, unfortunately, are the amendments from the noble Baroness, Lady Brady, on consultation—that is the key bit. I hope that the Government will think through those amendments, because, without consultation, the little club of York City would think that somebody wants to swallow it up.
Remember that all football clubs are like tribes. They will defend their colours and their game. The only way to deal with tribes is to make sure that they are consulted. I think this amendment is unhelpful at this stage. Let us see what happens with the kind of regulatory power that is created. This independent person must actually be independent.
Lord Parkinson of Whitley Bay (Con)
My Lords, I want to say a little about Amendment 124, which my noble friend Lord Markham has outlined and to which I have added my name. I am sorry that we have not yet fully convinced noble Lords across the Committee in favour of it, but it might be helpful to clear up some of the confusions which have arisen.
We are proposing delegating these duties not to clubs but to competition organisers. In doing so, we seek to avoid the sort of confusion that the noble and right reverend Lord, Lord Sentamu, has just highlighted about duplication in the regime. As noble Lords have pointed out, there are already football bodies which have a regulatory role—the Football Association, the Premier League, the English Football League and, indeed UEFA. They will retain many of those functions. As the noble Lord, Lord Pannick, knows well, Manchester City’s dispute with the Premier League is because of its powers to make some of the rules for the competition to which it relates. We are trying to avoid the duplication of regulatory functions. If an existing competition organiser has processes in place to carry out these functions effectively, why could the Secretary of State not direct the regulator to delegate them to these competition organisers and bring them closer to the clubs that are playing in that competition of their own free choice?
Lord Pannick (CB)
The noble Lord emphasises that the purpose of the amendment is to allow for delegation of powers to competition organisers, not to clubs. But the noble Lord will know that the Premier League, which is a competition organiser, simply consists of the will of the 20 clubs.
Lord Parkinson of Whitley Bay (Con)
The 20 clubs have competed to get into it. It is a changing 20, based on the ability of clubs to take part in that competition.
Similarly, it might be more appropriate for functions to be carried out by other competition organisers at other levels of football, if there are sufficient safeguards for them to do so in a way in which the Secretary of State feels is appropriate.
In our amendment, we have tried to reflect these safeguards to make sure that the same regulatory standards apply to the bodies to which functions are delegated. Subsection (2) of the new clause proposed in Amendment 124 says that a function can be delegated only if the regulator is satisfied that the competition organiser would discharge the function with the same degree of stringency as the regulator itself and that it would meet the objectives established by Clause 6 and discharge the function with regard to the negative outcomes as outlined in Clause 7(2).
We are where are because there are elements of football which have not been good at self-regulating in a way that has pleased fans. More than one political party has been concerned enough to bring this Bill before your Lordships’ House. Are we saying that we have reached a point of no return? If the competition organisers and other football organisations get their house in order and meet the standards set out in this Bill which the regulator is trying to do, will there never be a situation in which we will be able to delegate some of these functions back down to the level of competition organisers? This would mean a much more light-touch, organic form of regulation, which I think is what a lot of noble Lords in the Committee would like to see. That is the thinking behind the amendment and on which I would be interested in hearing an answer from the Minister.
Lord Maude of Horsham (Con)
Picking up the point that was made by the noble Lord, Lord Pannick, particularly focusing on the Premier League, we have discussed in previous debates on this Bill the league’s concerns that the burdens of new regulation and compliance costs fall more heavily on smaller clubs than on big ones. Looking at the effect of this, my concern is how this amendment would operate if it were to be incorporated in the Bill. I would expect the Secretary of State to be looking in the first instance at the lower leagues, as that is where the pain will really be felt of imposing new burdens.
Lord Parkinson of Whitley Bay (Con)
My noble friend makes an important point. It may also be in the lower leagues that we see the examples of better behaviour. The Secretary of State may then feel that it is right and proper to delegate some of these functions to the competition organisers for the clubs in the lower leagues.
Baroness Twycross (Lab)
My Lords, before I respond to the points that have been raised, I want to respond to the point raised by the noble Lord, Lord Addington, in the previous group, in relation to the regulator’s guidance. I can confirm that the regulator’s guidance will be published. Clause 12(5) of the Bill states:
“The IFR must publish any guidance”.
I also want to clarify a point raised by the noble Lord, Lord Hayward, because I am concerned that if I let it lie then, at a later date, somebody may suggest that it was accepted. It was that only seven clubs had been met with. I stress to your Lordships’ House that this Bill is the culmination of almost five years’ work which started in 2019. Officials have had extensive regular engagement with key stakeholders, including with the clubs which will be subject to the regulation. All clubs have had a number of formal opportunities to share their views, particularly as part of the fan-led review and the football governance White Paper. Over this five-year period, DCMS has had hundreds of meetings with clubs, leagues, fan groups and other stakeholders. No club that has requested a meeting has not had one. I hope that clarifies that point.
Lord Hayward (Con)
While I understand the Minister citing a series of meetings that have taken place over a number of years, we are now talking about a Bill which has been introduced by this Government with changes from the previous Bill. Some of those changes have already been debated, and some have not. Surely, it behoves the Secretary of State and any Minister within a Government to have slightly more than a half-hour conversation with seven members of the Premier League when we know that they are going to be the most affected clubs in terms of cost burdens.
Baroness Twycross (Lab)
The noble Lord and I may need to agree to disagree on the level and extent of the consultation. The culmination of consultations between officials and the various meetings that have taken place constitute very sound consultation. I was concerned that it might appear to your Lordships and to people externally that only seven clubs had been met during the whole course of the design of a new regulator, which I think all noble Lords would agree would be highly unusual and undesirable. I may return to that point; noble Lords may raise it again in Committee. I look forward to further discussion of what constitutes consultation.
I thank the noble Lord, Lord Markham, for his Amendment 124, which creates a mechanism for the regulator to delegate its function to the competition organisers. I understand that some noble Lords believe that the regulator should act as an overseeing body, only acting through the leagues and only stepping in once the leagues have failed to address a problem or, in some instances, not wishing the regulator to exist at all. Without wanting to disappoint noble Lords, including the noble Lords, Lord Maude of Horsham and Lord Hayward, the noble Baroness, Lady Brady, and others who support this amendment, I am afraid that the model of regulation is not one that we are proposing and nor is it the model that the previous Government proposed. Notwithstanding the points that have been raised repeatedly, this is now this Government’s Bill and we are very proud to bring it before your Lordships.
The fan-led review laid bare the issues with industry self-regulation, and this is an amendment where it is important for your Lordships’ Committee to reflect on the fact that football has had ample opportunity to get this right. We are legislating only because the leagues do not have the incentives and governance structures to address these problems adequately.
I agree with the point made by the noble Lord, Lord Goddard of Stockport, that this amendment could be argued to represent a bear trap. I also agree with a number of points raised by the noble Lord, Lord Pannick, and the noble and right reverend Lord, Lord Sentamu. As has been demonstrated, compliance with current competition organiser rules has not proved an effective way of ensuring sustainability of the game. That is precisely why a new bespoke regulator is required, with the powers, incentives and agility to act where competition organisers are unable to.
However, I want to reassure the noble Lord that the regulatory system is already designed in such a way that the regulator should not need to intervene if the required standards are already being met. If clubs are meeting their threshold requirements naturally—for example, through their compliance with the industry’s existing rules—then the regulator will not need to apply discretionary licence conditions. There is also the more formal
“Commitments in lieu of … discretionary licence conditions”
mechanism, where leagues will be given an opportunity to address specific identified financial problems so that the regulator does not need to attach a licence condition.
Beyond this, however, we do not believe that the regulator should delegate functions to the leagues—there would be a significant issue of accountability. In a case where a function was delegated and serious failings happened, accountability would then be hard to ascertain. We also do not think that a power for the Secretary of State to direct the regulator would be appropriate. Not only could that constitute undue political influence on the regulator but it would also open the door to continuous lobbying by competition organisers for regulation to be delegated to them. What is more, the amendment would allow the Secretary of State to give this direction and for regulation to be delegated back to the industry without any prior parliamentary scrutiny.
On the points raised by the noble Baroness, Lady Brady, about the FA’s willingness to take on delegated functions, my department continues to have discussions with all stakeholders, including the FA, on a range of issues. It is encouraging that there is willingness in the industry to tackle the problems of financial sustainability. However, as the fan-led review clearly showed, the industry has not proved able to take forward the reforms needed at this time due to the governance and constitutional arrangements in place, as well as lacking the expertise required to deliver the regime we have been discussing. An independent body free of industry influence is needed; now is not the time to delegate functions. However, as with all aspects of the Bill, the Government will keep under review the effectiveness of the regime to deliver regulation. For these reasons, I am unable to accept the amendment, and I hope the noble Lord will withdraw it.
Lord Parkinson of Whitley Bay (Con)
I thank the noble Baroness. Is she saying therefore that we are, in essence, past the point of no return in relation to some of the competition organisers? I take what she says about the discretionary licence conditions that are available to the regulator that give it a bit of leeway with those that get their house in order, but if football were to get its act together, does she not foresee a circumstance in which some of the functions that are going to be given to the new regulator could be given to organisers, whether at the direction of Secretary of State, or by the choice of the regulator?
Baroness Twycross (Lab)
I agree that statutory regulation should exist only where it is necessary. In our view, the regulatory system is already designed to be proportionate so that intervention can automatically scale up and down as needed. Clubs that are already well run and are lower risk should not face additional requirements. We want standards in the industry to improve, and if this were to happen and the market was derisked, I would expect the regulator to be less involved and less noticeable. I want also to stress that the regulator will not stop the leagues imposing their own competition rules so long as they do not conflict with the regulator’s regime. However, this is not an amendment which we feel would serve the sector well, and that was why I asked the noble Lord to withdraw it.
Lord Markham (Con)
I thank noble Lords; it has been a genuine exchange of views. I am also glad that it gave an opportunity for the noble Lord, Lord Hayward, to make a positive point about Spurs over the weekend—and that there was a positive point available to be made about Spurs.
I genuinely appreciate the constructive challenge that we have had in this debate. I feel that there has been a bit of a misunderstanding, however. When we say that we are asking for delegation, as in contracting out the function, it is not abdication, because the independent regulator will always be ultimately responsible for that decision. It always has the final say. It is just trying to adopt the policy, which I think many of us believe in, in terms of devolution or subsidiarity—call it what you want—but it is another form of trying to make sure that the power is as close to the coalface as possible, at the same time always giving the opportunity for the regulator ultimately to make the decision. As my noble friend Lady Brady said, this point was absolutely envisaged in the White Paper. The FA and UEFA welcome it, and I must admit that I cannot see why we would not want those who are closest to it to have responsibility first.
Again, I want to clear up that I am not talking about the clubs; they are different from the competition organisers. The clubs and the Premier League, for instance, have very different views, as we have seen recently on financial fair play. The amendment is about giving those regulatory bodies—such as the FA, the Premier League and the EFL—an opportunity, where they are best placed to do it, to make those decisions themselves. If the regulator does not agree with that, ultimately it always has the final say.
I hope we will be able to return to this, because I hope it would demonstrate the collaborative approach that all noble Lords and the Government are trying to bring. I know that it is what we have all said many a time in this debate as well. At this stage, I beg leave to withdraw the amendment.
Lord Parkinson of Whitley Bay (Con)
My Lords, I rise to oppose the question that Clause 15 stand part of the Bill—and, indeed, Clauses 15 to 25. I do that not because I disagree wholeheartedly with this huge swathe of the Bill but because it provides opportunity to ask some questions about the nature of the licensing regime, which these clauses relate to. I hope that the Minister will be able to answer those questions and assuage some of the concerns that lie behind them.
I want particularly to discuss how the Government plan to deal with the possibility of clubs seeking to leave the licensing regime en masse. What would be their response if football clubs simply wished to be unlicensed? If several clubs opted out of the regime and established a rival competition, how would that work in practice?
We have touched on this a little but not in great depth and, when we have, the Minister has said that the Government’s solution and the design of the Bill for clubs that attempt to skirt around the legislation and operate in an unregulated competition would simply be to use the delegated powers in Clause 2(3) to make such a competition a specified and regulated one. There would be a sort of game of cat and mouse if that scenario played out. The Minister has argued that allowing this to happen in delegated powers allows for greater agility, but it is worth pondering just how much agility it really can deliver. A statutory instrument made under Clause 2(3) is subject to the affirmative procedure as per Clause 91. It therefore must be laid before both Houses of Parliament and approved by a resolution of both Houses. There is therefore a limit on how swiftly the Government would be able to make such regulations and have them approved by Parliament.
It is worth also drawing attention to how this new licensing regime will interact with the existing licensing requirements from league organisers and UEFA. How do the Government envisage the regulator working with those bodies, which already license clubs, to prevent duplication of regulations and unnecessary further burdens?
Amendment 173 in this group, which stands in the name of my noble friend Lord Markham, would remove the power of the Secretary of State to amend discretionary licence conditions by statutory instrument. This provision of the Bill is yet another example of where we do not have sufficient clarity or certainty for clubs and of the open-ended powers for the Secretary of State. Once again, we see a scenario in which the clubs will have to abide by rules but without the requisite certainty to enable them to plan effectively for the future. Today, we are debating the discretionary licence conditions in the Bill, but allowing the Secretary of State to amend the conditions specified in the Bill on a whim, if he or she wishes, surely defeats the purpose of putting them in the Bill in the first place.
Lord Bassam of Brighton (Lab)
My Lords, I will speak to Amendment 128, which gets to the nub of what the licensing regime should be looking at. It would require a personal statement to identify a club’s ultimate owner and that owner’s source of funds. It is really quite an important amendment because clubs, and fans in particular, have the right to know where the club’s money is coming from.
This is prompted by things that have happened to clubs in the past, when it has been quite clear to the outside world that clubs do not have the means—because their owners have failed to provide any detail or background on their own finances, despite having given assurances—to identify where their funding is coming from. I cite the case of Dr Tony Xia, who became the owner of Aston Villa back in 2016. He was approved as an owner by the football authorities, yet it later turned out that he had neither the money nor the resources. The club ended up just a week away from being unable to meet its tax liabilities.
Following the 2021-22 season, a survey of 92 clubs looking at data on wages and cash reserves revealed that many clubs, up to a senior level, were very close to not having the reserves that would ensure that they could meet their liabilities, pay wages and so on. Some clubs are very good at this—West Ham United is one of them and, apparently, Plymouth Argyle was one of the most financially secure that season, along with AFC Wimbledon and Tottenham Hotspur.
If we are seeking transparency through the licensing regime, it is clear that we will need to understand who the owner is, where their funding is coming from and how much that will kick in to ensure the safety and security of clubs for the benefit of their fans.
Lord Maude of Horsham (Con)
My Lords, I have a concern with the whole of this part of the Bill and the way in which operating licences will be required and the adjudication made upon them. This part of the Bill is nine very dense pages of text, backed by three or four schedules. At various stages, it includes such dark phrases as:
“An application must be accompanied by … such other information and documents as may be specified by the IFR in rules”.
I used to be a lawyer, a long time ago, and I am reasonably accustomed to reading Bills and Acts, but when I start to read through this part of the Bill I can feel my lifeblood draining away. What of the owner or board of a small club looking at what will be required of them?
I noted that in the Minister’s winding up of the last debate she said that well-run clubs have nothing to worry about, which was meant to be reassuring. It does not matter how well-run a club is; it will have to comply with all this, and it will have to set itself up with lawyers, consultants and accountants to draw up a strategic business plan. A lot of clubs will not have a strategic business plan. That does not mean that they are badly run, but they will have to prepare such a plan. A strategic business plan is a document containing the proposed operation of a club: its estimated costs, how those costs are to be funded, the source of such funding and other information as may be specified by the IFR. That does not get done spontaneously or arise automatically.
The reality is that this is a very demanding regime intended to be put into law and enforced by the new regulator. I wonder whether there has been sufficient consideration given to putting in place a halfway-house system of regulation. Think about how companies are regulated: it is a requirement that, if you set up a limited company, designed to limit the personal liability of owners of the company, it is registered with Companies House. By law, certain listings are required and a certain amount of information has to be made public, including the filing of accounts. However, you do not have to get consent from a regulator to set up a company; you just have to register that it is in existence and subject to the laws that apply to it.
As we know, the state of football is pretty strong, stable, vigorous and successful compared with football in other, similar jurisdictions to ours. Have we given sufficient consideration to whether it might be good to take time, before we require small clubs up and down the country—which are not necessarily finding it easy to get through from week to week, month to month and year to year—to submit to this horrendous set of requirements just to get a licence to get on to the field of play in the first place, before they even set about winning a match, to go back to the drawing board and construct a regime that would require clubs to register in the same way that a company is registered, subject to rules and requirements for disclosure and transparency, and to changes being registered. That would reduce hugely the burden on clubs and would start to introduce the kind of consistency which, for reasons that I totally understand, is being sought.
I oppose the whole of Part 3 and its accompanying schedules—I am not even going to think about the plethora of regulations, guidance and further verbiage that will come out of it—standing part of the Bill.
Lord Addington (LD)
My Lords, it might be convenient for me to say a few words on this. Primarily, I am drawn to the amendment from the noble Lord, Lord Bassam, for the reasons he gave. We have heard that this is a wonderful, successful league. Bits of it are but, unfortunately, those are the bits at the top. Most of the cultural capital, I am afraid, is in the less glamorous clubs with less successful balance sheets.
We have a situation where we want to maintain the whole of the football structure: five leagues. This has proven to have—let us say—attracted financial irregularity; I think it was described as “chancers and fantasists”. We have to do something to stop this or we will start to have more disasters that mean something to the fan base.
The amendment from the noble Lord, Lord Bassam, starts to address this. I hope that the Government are far more in tune with that amendment than with some of the others in this group.
Baroness Grey-Thompson (CB)
My Lords, I rise briefly to speak to Amendment 128. We are getting to the crux of what this regulator should be about: making sure that there are sensible financial decisions, and that risks are mitigated so that they do not jeopardise clubs’ futures.
Clubs in the EFL are expected to lose around £450 million this season and are reliant on owners to fund the shortfall. If this funding is not forthcoming, it can lead to financial trauma. Only 66 of the 92 clubs that filed accounts for the 2021-22 season included data on wages and cash reserves. Nottingham Forest spent £58,606,000 on wages but had just £25,000 in cash reserves—five hours’ worth of reserves. Surely that cannot be acceptable.
Lord Moynihan (Con)
My Lords, I will speak to the amendments standing in my name in this group. I apologise to my noble friend Lord Maude if I address some of the plethora of regulations, conditions and verbiage concerned. I am proposing a number of amendments that I hope will facilitate and ease the position that the Government face in this context.
I turn to my Amendment 169A. It is unclear from my reading of the licensing section of the Bill whether the IFR is expected to produce a detailed and granular set of financial rules that would be applied in a blanket way to a large class of clubs or leagues; examples include the specific liquidity ratios, the debt-to-equity ratios, operating cash-flow metrics and size of financial buffers. Or will the IFR take an entirely bespoke approach, where every club will have DLCs—discretionary licence conditions—applied according to their own circumstances? That would drive a coach and horses through the competition organiser’s ability to provide a level playing field and maintain competitive balance. The third option is that the IFR could take an outcomes-based approach whereby it produces some high-level guidance with clear outcomes that clubs must achieve and league rules sitting underneath, giving effect to these principles and outcomes. For example, the IFR could have a series of outcomes relating to working capital, transitionally financed balance sheet health, resilience, protection of assets, et cetera. Leagues could colour in these outcomes into rules.
My own strong preference is for the third option. This amendment, which characterises the third option, is designed to create space for that conversation and, hopefully, allow the Minister to say that, where existing sustainability rules are in place and working, there will be an opportunity for that kind of league-led approach at all levels within an overall regulatory framework. Therefore, my recommendation is an outcome-focused, light-touch regulation, with step-in powers where issues are identified. That is why I have drafted Amendment 169A.
I turn to my Amendments 167A, 168A and 168B. The current test for attaching and varying a discretionary licence condition sets an extremely low bar for the IFR. For example, it seems to me that the test could be met in the case of a club that is already meeting the threshold requirement, on the basis that a discretionary licence condition somehow contributes to the club continuing to meet it.
The DLC test is even vaguer as regards the systemic financial resilience objective. The DLC needs only to advance that objective. While not necessarily the intention, this risks a very unpredictable, wide-ranging and open-ended power that could have a serious impact on club finances. It is also an issue that can be easily mitigated, while still allowing the IFR to meet its objectives. Again, I seek simplicity on behalf of the clubs. I am really concerned that here the detail is so great that it will swamp some clubs.
In the current drafting, potentially the only check on endless interventions, by way of DLCs relating to the systemic financial resilience objective, will be either the IFR’s discretion—in other words, the IFR deciding it has done enough for now—or the IFR being forced to have regard to avoiding adverse effects building up as a result of excessive intervention. Neither of those seems adequate to mitigate the significant risk to English football at all levels. I acknowledge that there is discretion for the IFR to not act in this way. However, I do not think there should be an option to do so, given the very significant risks to English football that would come with the powers being used in this way.
Lord Bassam of Brighton (Lab)
I listened carefully to the noble Lord and, bizarrely, in preparing for the Bill, I looked at the accounts of a number of the small league clubs the noble Lord seeks to protect with this. They all have to have properly audited accounts. The clubs I looked at—they are in the National League, the National League South and the National League North—have turnovers that vary between roughly £10 million a year and £400,000 to £500,000. They are properly set-up companies that have to file reports with Companies House, et cetera, and they all go through an audit process. It seems to me that, in any event, they will supply to their auditors many of the things the noble Lord seeks and asks for. If they did not, they would not be complying with a proper audit.
Lord Moynihan (Con)
The noble Lord, Lord Bassam, has made some important points and, of course, everything I have said is based on the fact that those clubs will be following that. They are basic conditions that any organisation, not least a football club, should follow. All my amendments—I have studied them carefully—seek to make it easier to ensure that the clubs follow those procedures and that the uncertainties and vagaries in the current drafting of the Bill are clarified, making it easier and more efficient for clubs to meet their obligations as companies and football clubs in the professional leagues.
Lord Pannick (CB)
The noble Lord, Lord Parkinson, posed a number of questions about the operation of Part 3 in relation to licensing functions. I will add one further question, to which I do not necessarily expect an answer today. Pursuant to UEFA regulations and delegation from the FA, the Premier League currently licenses clubs for the purposes of their participation in UEFA club competitions. I declare an interest as a season ticket holder at Arsenal Football Club—I realise that some of the other clubs supported by noble Lords would not have an interest in this matter for various reasons. My question is: will this function of the Premier League be affected by Clause 15 or any of the other clauses in Part 3?
Lord Wood of Anfield (Lab)
My Lords, I will speak to my Amendments 168 and 169, which connect with some of the themes raised by the noble Lords, Lord Pannick and Lord Moynihan. One of the most sensitive areas of this regime is the imposition of discretionary licence conditions on clubs. The purpose of my Amendment 169 is to say that the regulator can introduce such conditions only after being satisfied that the conditions would
“not be met by the club complying with all rules, requirements and restrictions which … will be imposed by a competition organiser”.
Essentially, this does not go as far as full delegation to leagues such as the Premier League—I agree with the noble Lord, Lord Pannick, on the broad criticism of that—but would introduce in one specific area what might be thought of as a limited principle of subsidiarity for the imposition of discretionary licence conditions.
The main purpose is to ensure that the regulator observes the norm of good regulatory co-operation—with not just the Premier League but all the leagues—by looking first to the adequacy of league arrangements in response to specific problems that will be the most politically and competitively sensitive, before stepping in and intervening with club-specific conditions attached. Why? It is because subsidiarity is a good principle of regulation where it is not inconsistent with the application of the intent of the law; also, I believe that it will foster the habit of regulatory co-operation more generally—not just on discretionary licence conditions. It will avoid duplication and confusion in regimes, and it will equip the regulator with a bit more political protection when it comes to the charge of political interference, because it can say, “We’ve looked to the leagues to step in first before stepping in”.
In the case of the Premier League specifically—let us face it, that is where the rubber hits the road on this issue most of all—it gives it, first, a chance to maintain system-wide and league-wide governance integrity before club-specific rules arrive, rather than risking the intervention of the regulator, leading to fragmentation between clubs. Secondly, it allows differences in application, inside the Premier League, of the general IFR rules in ways that account for differences in risk, finance and strategy, which we have heard discussed many times in Committee.
An example is capital buffers. The regulator will want to require cash reserves, and in the case of the Premier League, you want to take account of those areas where there are genuine differences from lower league clubs—differences in player registration rights, meaning players are more liquid assets, for example. The Premier League could design league-wide rules that are sensitive to these different conditions. The amendment does not say that Premier League rules would trump regulator rules, but where there are concerns, the regulator would look first to the Premier League to modify league-wide rules that respond to the concerns before the regulator directly intervenes.
Another scenario might be an issue of liquidity management inside a Premier League club. This amendment would point to the regulator first looking to the Premier League to take steps such as enhancing its monitoring systems, developing new metrics, et cetera, before it goes to individual licence conditions. This, again, would ensure that the league could retain the integrity of league-wide rules, rather than Premier League clubs having individual regimes as and when they trip up over certain rules.
What if the regulator wanted to intervene with a specific club as a matter of urgency? It could still do this. What if the regulator thought Premier League rules were inadequate to the task and insisted on imposing a licence condition that cut across and undermined league rules? Ultimately, it could still do that too; in fact, it may think that was the right thing to do. But what the amendment would do is introduce a prior stage that looks to the leagues to make league-wide governance adjustment first. In the name of good regulation, that seems to me a sensible, limited amendment.
Baroness Brady (Con)
My Lords, I rise to offer my support to the amendments tabled by the noble Lord, Lord Wood, and by my noble friend Lord Moynihan. These amendments take quite different approaches, but they seem to be driving at the same thing: a desire to clarify and improve the financial licensing section of the Bill. In my view, they highlight a really important principle—that the IFR should adopt an outcomes-focused, light-touch approach to developing its regulatory framework, and that it should work closely with football to do that.
These amendments would, in my view, be a vital step towards achieving a good balance in football regulation, one that safeguards financial sustainability by targeting clubs that have problems, which are clearly critical, while also respecting the unique responsibilities and expertise of the competition organisers. The current drafting of the Bill leaves critical questions unanswered about the regulators’ approach to financial regulation.
It is currently unclear whether the IFR will take a blanket, rule-driven approach that imposes granular financial requirements such as specific liquidity ratios or debt-to-equity thresholds across all clubs or, alternatively, whether it will adopt an entirely bespoke approach, applying discretionary licence conditions to every single club—all 116 of them—according to their unique circumstances and business models. If the IFR did the latter—it is entirely open to the IFR, because that is how ambiguous the Bill is—it would significantly undermine competition organisers’ ability to maintain a level playing field. Those licence conditions would necessarily need to be confidential to protect commercially sensitive information. For example, my club, West Ham United, would have no idea whether other comparable clubs were operating under similar conditions or not. That is a recipe for competitive chaos.
These amendments would mean that the IFR would need to take a far more balanced path to an outcomes-based approach, setting high-level principles and objectives while allowing leagues to implement their own rules to achieve those outcomes. Of course, they would be able, and must be able, to take a targeted approach to clubs getting into difficulties, stepping in at any time if those rules were deemed systemically not to be working, or if there was urgent concern about a single club or group of clubs. A more outcomes-based approach would ensure that the IFR focuses on the “what” rather than the “how”. By defining clear financial outcomes such as on balance sheet health, resilience, transitionary finance and asset protection, the IFR could establish a framework that addresses financial risks while avoiding unnecessary micro-management of clubs.
There is no reason why financial licensing should not follow this proportionate, targeted model, particularly as competition organisers such as the Premier League and the EFL already have sophisticated financial sustainability rules in place. If another competition organiser, perhaps one that has had less success in enforcing financial rules, wishes to give up this area completely to the IFR, that would be its right, but let us not forget that competition organisers have a deep understanding of their clubs’ financial dynamics. They already operate robust systems to monitor and enforce financial sustainability; for example, the Premier League has detailed profitability and sustainability rules, which are strictly adhered to, while the EFL has its own financial monitoring requirements tailored to the unique challenges faced by its clubs.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to comment on this part of the Bill. I rise to support the amendments in the name of my noble friend Lord Moynihan and the clause stand part notice of my noble friend Lord Parkinson of Whitley Bay, and to develop some of the points raised by my noble friend Lady Brady.
I begin with Amendment 128 in the names of the noble Lord, Lord Bassam, and the noble Baroness, Lady Taylor. I feel that there is no balance in it; that it creates an imbalance in terms of its impact on smaller clubs. While I have problems with the whole clause, I think this is the most difficult and onerous part, in its capacity for gold-plating and regulatory overreach. I also think it cuts across existing primary legislation, such as the Proceeds of Crime Act. What we are potentially seeing in these very loosely worded and wide-ranging powers—
Lord Bassam of Brighton (Lab)
Is the noble Lord really saying that it is onerous for the regulator to know from a club who the owner of that club is, what the source of the funds might be or that the owner has funds that enable them to properly operate a football club?
Lord Jackson of Peterborough (Con)
I think that is a fair question, but the amendment that the noble Lord is inviting the Committee to support today is what I might call a dangerous dogs amendment. It is basically reacting—legislation by anecdote or by the lowest common denominator. You find one bad apple in a barrel and you smash the barrel up and throw the apples everywhere. This will have a big impact on clubs.
I pray in aid the financial guidelines 17/6 that the Financial Conduct Authority put out in 2017 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The road to hell is paved with good intentions. That was about stopping people laundering money—fair enough. What it has actually resulted in is dozens of people in prominent positions, such as local councillors, Members of Parliament, judges, chief executives of local authorities—even Members of your Lordships’ House—not being able to open bank accounts, and their sisters, their wives, their husbands and their brothers not being able to open bank accounts, because of onerous, overzealous regulation.
I am not saying that the IFR would necessarily develop in that way, but some of the most innocuous wording in primary legislation can sometimes give rise to that kind of gold-plating. It began, of course, under the anti-money laundering and counterterrorism regulations that we all supported. My point is that the sins of some clubs should not be visited on all clubs. My noble friend Lady Brady is absolutely right that if we do not have an objectives-based strategy, if we do not have a focused strategy for dealing with the most egregious issues, we will have a universalist approach of assuming that all clubs will be owned by dodgy owners—drug traffickers, people smugglers; I exaggerate for effect. There is the perception that that is the case and, of course, it is not the case at all. I say to noble Lords: be careful what you wish for.
On Amendment 173 in the name of my noble friend Lord Markham, I have very serious issues with this clause, because it fails on its own merits, in many respects, because it is not commercially flexible. If we are going to give a power, under Clause 22(5), for the Secretary of State to vary the licence conditions—and I have big problems with “add”—which are already settled, we will want to do that quickly and in an efficacious manner. We will not be able to do that using the affirmative resolution in this House and the other place, because we cannot move quickly or make decisions quickly to respond to commercial change.
I am also very worried about the limited sanctions available in terms of mission creep. Clause 22(6) says:
“The Secretary of State may make regulations under subsection (5) only if requested in writing to do so by the IFR”.
Again, mission creep is almost built in there. Then, in Clause 22(7):
“A request under subsection (6) must explain why the IFR considers that the making of regulations under this section is compatible with the purpose of this Act”.
The question is: is a Secretary of State likely to refuse that? Probably not. There is not really a built-in self-policing mechanism in the Bill, and it is because of the wide-ranging powers and the permissive nature of this wording that I have problems.
The provision fails because it is too onerous and too draconian. However, it also fails on the other side, in that it cannot work quickly enough to address the specific club-based issues that the licencing condition variation is needed for. For those reasons, I ask the Minister to consider Amendment 128 carefully. This is a sledgehammer to crack a nut, and it invites the independent football regulator to exercise its powers ultra vires, which is not in the best interests particularly of smaller clubs.
Lord Markham (Con)
I rise to speak to my Amendment 173, but first I echo the words of many other noble Lords. I support the outcomes-based approach the noble Lord, Lord Wood, is trying to achieve with his amendment, and I think there is broad support for that.
To pick up on the debate between the noble Lords, Lord Maude and Lord Bassam, on strategic business plans, and to give a bit of detail by way of background, the information one needs to provide for an audit is necessarily backward-looking, looking at the last year for which accounts have been provided. A strategic business plan, by its very nature, is forward-looking. I would be very surprised if smaller clubs with, say, a turnover of £500,000, do that as a matter of course. Lots of small businesses and shops have that sort of turnover, and I am sure they are not doing it either. I am not saying it is not desirable, but it could quite quickly turn into a consultant’s paradise if every single club, including the small ones, suddenly had to produce three-year or five-year business plans. They would have to resort to consultants to do that, which would become burdensome.
This brings us to another problem that we have talked about a number of times. Noble Lords have heard me talk about liquidity issues. By trying to solve the sins of one or two clubs, we are in danger of putting a burden on all of them, particularly if we are asking clubs to deposit money as part of a liquidity ratio to ensure they have a safety net. That will inevitably take money out of football. I had a meeting with the Minister and her team last week, and I thank her for that. We had a very good conversation about exactly this point, and what she promised was a proportionate, sensible approach.
That brings me to my Amendment 173. We are having very sensible conversations, in general, based on the desire of all noble Lords to do what is best for football. However, the problem is that whatever happens here, the Secretary of State has the ability quite easily to change everything. So, in response to everything we discuss, such as ensuring that the licences required are proportionate, the Secretary of State can easily say, “Well actually, we want a more muscular approach”. All the debates over the last five days and counting, the meetings and the various consultations could quickly be set aside because a different approach is wanted. That is my concern.
It does not matter where we have got to in the conversations we have had over the past few days: they will suddenly count for nothing if the Secretary of State can completely change the rules, raise the bar and change the discretionary licensing conditions. I would like assurances from the Minister. How do we safeguard against the fact that these—in my opinion, very good—debates could suddenly be set aside because in a few years’ time, a Secretary of State wants to take a completely new approach, which could be entirely disproportionate?
This has been a rigorous and constructive “two plus two equals five” process, as I call it, as we try to agree on an approach to checks and balances. None of us will be totally happy with how it turns out, but we have all had constructive input into to it. However, all of that could be quickly set aside by a future Secretary of State being able to change the approach.
Lord Pannick (CB)
Under Clause 22(6), the Secretary of State may make the regulations the noble Lord is concerned about only if requested in writing to do so by the IFR, so the Secretary of State does not have complete discretion. We would be creating a new system which may reveal defects and omissions in its operation, so surely it is sensible to have a power to amend it if defects become manifest.
Lord Markham (Con)
I thank the noble Lord. Of course, we want to have the flexibility to react to such situations. This issue comes up in various other contexts, such as government statements. There are lots of points where the Secretary of State can vary the approach. The question is: how do we get the checks and balances right? However, I think there is basic agreement on this issue, and I would like to hear the Minister’s views.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Markham, Lord Parkinson of Whitley Bay and Lord Moynihan, and my noble friends Lady Taylor of Bolton, Lord Wood of Anfield and Lord Mann for tabling the amendments in this group. I also thank all noble Lords for their contributions. I will take each of the amendments in turn before responding to the noble Lords, Lord Markham and Lord Parkinson, and their opposition to the entire licensing regime standing part of the Bill. I will endeavour to get the noble Lord, Lord Pannick, a response to his question in the near future; I do not have the detail he requested today.
Amendment 128, from my noble friend Lady Taylor of Bolton, and Amendment 129A from the noble Lord, Lord Moynihan, relate to owners. The first seeks to make identifying an owner’s source of funds a prerequisite for a provisional licence. I absolutely agree that it is crucial that the regulator has oversight of an owner’s funding, so it knows how a club expects to fund its activity and the source of this funding. I hope my noble friend will be reassured that this is why a club is already required to provide such detail as part of its application for a provisional operating licence.
When a club submits its application for a provisional operating licence, this must include a strategic business plan. Among other things, this must contain detail about the club’s operating costs, how these costs are to be funded and, crucially, the source of such funding. This will enable the regulator to scrutinise the source of the funds. On the point made by the noble Baroness, Lady Grey-Thompson, importantly, a club must set out how much it plans to spend and how it will fund that cost. Furthermore, if the regulator has concerns at any time—even before it has received its provisional operating licence—about the source of an owner’s wealth, it can test that owner. Should it find that an owner’s source of wealth is connected to illicit finance, that owner will be found unsuitable.
I also agree that it is important that the industry has certainty as to what the regulator will consider “significant influence” by owners. Of course, what is meant by “significant influence and control” would need to have been set out in guidance before clubs and the regulator can consider who meets this definition. That is why I can assure noble Lords that the Secretary of State’s guidance will be produced in good time, in order to give this clarity.
Noble Lords should note that the provisions in Clause 3 and Schedule 1 that define “owner” come into force on the day the Bill becomes an Act. That means that the obligation on the Secretary of State to produce this guidance comes into force on that day, whereas the licensing provisions and other provisions which rely on the definition of “owner” will be commenced later, by regulations.
I turn to Amendment 132, from my noble friend Lord Mann. Although the risk of clubs going into administration will be greatly reduced, it may still happen. The regulator revoking a licence would be the ultimate punishment and would be used only in the most extreme of circumstances. I assure my noble friend that the regime is designed to avoid the situation his amendment aims to provide for, and that ensuring that a club has a plan for adverse shocks is at the heart of the regulator’s financial regulation regime. This might include a plan to keep the club going if, for example, an owner can no longer continue to fund it. We have spoken to many football clubs while developing the Bill, and know that the well-run clubs already do this.
Turning to Amendments 167A and 168A to 168C, from the noble Lord, Lord Moynihan, I understand his intention that the regulator should identify a clear risk before acting. The amendments are not necessary to achieve the aim in relation to his points on discretionary licence conditions, as was explained to the Premier League when it suggested these exact amendments prior to introduction. The regulator can attach discretionary licence conditions only if the conditions contribute to a club meeting the threshold requirements, or if the conditions advance systemic financial resilience.
The regulator is bound by its general duties, meaning that it must have regard to its regulatory principles and must act reasonably and proportionately. In effect, that means that the regulator can attach a discretionary licence condition only to address a risk it has identified. I assure the noble Lord that the regulator cannot take any action that is meaningless or does not advance its objectives. If a club feels the regulator is doing that, it can appeal any action through the appeals regime.
Ultimately, these four amendments all seek to raise the threshold for intervention and limit when and how the regulator can act. For every discretionary condition, the regulator would have to demonstrate that there was no possible alternative to achieve the aim than to impose that specific condition. This would be an unacceptably high bar, fettering when the regulator can act. In practice, we think the risk of legal challenge could lead to an excessively risk-averse regulator, afraid to act swiftly or at all.
I thank my noble friend Lord Wood for Amendments 168 and 169 and for his genuinely constructive approach to scrutinising the Bill, which I very much appreciate. I note that the noble Baroness, Lady Brady, also expressed concern on the points he raised. My noble friend has met with officials and me regarding these amendments and I hope that those meetings were useful. We believe these amendments would severely limit the regulator’s flexibility to meet its objectives and ensure clubs reach their threshold requirements. The regulator should not take its lead from the competition organisers. Of most concern is the blurred accountability that this approach would introduce. The fan-led review laid bare the significant issues with self-regulation, and that is why we are introducing an independent regulator.
That said, the system is designed so that the regulator should not need to intervene if the required standards are being met. If clubs meet their threshold requirements naturally—for example, through their compliance with the industry’s own existing rules—the regulator should not need to apply discretionary licence conditions. The model in this legislation is the right one, with clear accountability, and where discretionary licence conditions are not applied in a one-size-fits-all way but reflect each club’s specific circumstances.
My noble friend Lord Bassam raised the basic requirement for clubs to have a sustainable business plan. I agree with him that that is important. That basic requirement, as well as the requirement for clubs to engage with their fans and ensure that their owners and officers are suitable custodians, are light-touch, appropriate measures that should already have been in place.
On Amendment 169A, from the noble Lord, Lord Moynihan, the regulator is already required to publish guidance about how it will use discretionary licence conditions, including the outcomes it seeks to achieve. That will give upfront clarity to clubs and competition organisers. However, the Government do not believe that the level of detail in the noble Lord’s amendment is appropriate for the Bill. He and I would agree that we are not in-depth experts on football finances—had I looked ahead in my speech, I perhaps would not have said that, and I apologise. I am not an in-depth expert on football finances, the inner workings of football clubs or how football clubs operate; I will allow the noble Lord to make his own conclusions on the extent to which he is. The regulator will employ experts in this sector who will have far more knowledge of these areas than we do. They will also have a stronger evidence base on which to base their actions, informed by things such as the “state of the game” study and consultation with the industry itself. That is why we have required the regulator to publish guidance on discretionary licence conditions and why we think it should be left to do this independently. We do not want to unintentionally hamstring the regulator with overly prescriptive requirements for the guidance it must produce.
In response to the point made by the noble Lord, Lord Moynihan, if the regulator agrees with him that it should include detail on financial shocks, liquidity and debt management, it will include this.
I turn next to Amendment 173, from the noble Lord, Lord Markham. The Bill outlines the specific types of discretionary licence conditions that the regulator may attach to a club’s licence to address its financial or non-financial resources or to improve systemic financial resilience. It is possible that, as the industry evolves, these types of conditions might not remain adequate to address the new or different financial risks faced by clubs, and there might be more effective ways to address them. That is why it is crucial that there is a mechanism in the Bill to enable the types of conditions available to the regulator to be updated. This amendment would deny the regulator this flexibility and potentially make the regime unable to adapt to changing economic circumstances. It is vital that the regulator has appropriate the tools to regulate football effectively, both now and in the future.
I reassure the noble Lord, Lord Markham, that the Bill does not give the regulator or the Secretary of State free rein to make changes. The Secretary of State can amend the types of discretionary licence conditions that can be attached only if requested in writing to do so by the regulator—a point highlighted by the noble Lord, Lord Pannick. The regulator would have to provide clear reasons and consult stakeholders ahead of making a request.
Lord Jackson of Peterborough (Con)
On that specific point, in Clause 22(8), the language is quite permissive and wide-ranging regarding who the IFR considers it appropriate to consult in respect of wide-ranging powers, particularly those to add or remove an item from primary legislation. Can the Minister confirm that the guidance that the Government will publish will tidy that up and make it tighter on who the IFR has to consult before it would write to the Minister seeking to vary the licence conditions?
Baroness Twycross (Lab)
We discussed in one of the previous groups why the legislation does not currently have specific people that have to be consulted every time. I commit to write to the noble Lord to clarify the specific point he raises. The regulator would have to provide clear reasons and consult stakeholders ahead of making such a request. The Bill has not stated every single person the regulator would have to consult every single time, but there are principles at play around how the consultation would need to take place.
Lord Jackson of Peterborough (Con)
I thank the Minister but she will agree that the guidance could, for instance, include groupings of particular types of people who would be key stakeholders and would need to be consulted, because this would obviously be quite a wide-ranging intervention by the IFR.
Baroness Twycross (Lab)
I will write to the noble Lord on that point. I hope it will give noble Lords some reassurance that Parliament would also be able to scrutinise any change, as regulations would need to be made by the affirmative procedure.
We do not believe that Amendments 174A and 174B, in the name of the noble Lord, Lord Moynihan, would be helpful to the regulator, as we explained to the Premier League prior to introduction. The addition of a minimum six-week period would mean a total minimum of eight weeks once you include the minimum period for making representations or giving a commitment in lieu. That would mean an eight-week delay, during which the regulator would not be able to impose a financial condition, which might mean that the regulator would have no choice but to sit idly by while the issue identified at the club gets worse. That would be contrary to the regulator’s objectives and principles and is therefore not considered acceptable by the Government. Slow action has been a common feature of industry self-regulation. We will not allow it to become a feature of the independent regulator’s regime.
The regulator already has a regulatory principle to proactively and constructively engage with the regulated industry, including competition organisers. This means that regulatory intervention at one of their clubs should never come as a shock to a competition organiser. Once the regulator has given notice of its intention to attach a financial discretionary licence condition, the competition organiser will have a minimum of 14 days to propose a commitment in lieu. To be clear, this is a minimum; the regulator may well decide to specify a longer period, but, equally, if the situation was sufficiently serious and urgent, the regulator should not be prevented from acting without delay. The minimum period of 14 days therefore strikes the right balance.
Amendment 174B only adds further burden and confusion to the process of applying financial discretionary licence conditions. The regulator is required to follow the procedure set out in Clause 23, except in very limited circumstances. This includes urgent circumstances where the regulator considers that the issues are so significant and urgent that the condition needs to be imposed immediately. Under those circumstances, burdening the regulator with a requirement to go through the process of commitments in lieu when it has already acted under urgency and has its own regulation in place is not acceptable. This would also leave clubs in an ongoing state of uncertainty, where an existing financial licence condition might be replaced with a different competition organiser requirement. This would be unnecessarily complicated, confusing and burdensome.
Lord Parkinson of Whitley Bay (Con)
My Lords, this has been a fruitful and helpful debate on what will be one of the key issues with which we will all have to grapple once the regulator is established. I thank the Minister for engaging with the questions I raised in the spirit of the probing nature of my amendments that began this group.
The answer that the Minister gave was that the agility and speed in the system comes from the ability to seek an injunction in the courts, at least in the first instance, then from the secondary powers and the designation that the Secretary of State allows. That might be more welcome to the ears of the noble Lord, Lord Pannick, and the rest of his profession than it might be to football clubs, but it is a helpful clarification, and I am grateful to the Minister for giving it.
This underlines the importance of getting the regulatory regime right and making sure that the regulator does its work in a way that commands the confidence of football clubs, so that they do not seek to get around the law or wish that there were ways for them to do so. With gratitude to the Minister and to the noble Lords for speaking to their amendments in this group, I will not oppose the clause standing part.
Lord Markham
Member's explanatory statement
This amendment requires the Regulator to set out its rules regarding licences no later than one month after passage of the Act.
Lord Markham (Con)
I shall speak to Amendments 125, 133 and 135. Hopefully, this will be a fairly uncontroversial, simple set of amendments, which try and set out clear expectations on timing.
I am very aware that, while there is uncertainty as to what the discretionary licensing regime may be, that has an unsettling effect on both clubs and potential investors into the sector. We would all agree that this is not something that we want. We want everyone to know what the rules of the game are, so they can either get on with doing whatever they need to do to apply to those licensing conditions and/or, if they are looking to invest in the game, so they can have that degree of certainty as to what the rules of the game are going to be, so as not to have that potential chilling effect on any new investment.
Amendment 125 tries to give the regulator a time limit of one month from the passage of the Act. I am very aware that there is a shadow regulator in place at the moment, so I hope that this is something that the shadow regulator is working on in the meantime. That is why I think that a one-month deadline is quite doable in that sense.
Related to that is Amendment 135, which says that once a club has put a discretionary licence application in, it will receive a reply from the regulator within one month. Again, I am very much assuming that these things are not a binary process. I would expect the club to be in liaison with the regulator as it put this application in and be receiving advice as it did so—so a one-month timeline at the end of that is quite relevant.
It is for us to set some expectations on the regulator in the Bill. In Clause 17(9), the regulator gets to set its own timing for it all, so it is quite appropriate that we are saying that, given the uncertainties placed on clubs, we expect these sorts of reasonable timeframes. Again, I am quite happy that we decide what those appropriate timeframes might be through our discussions on this, and there may be arguments to vary that slightly—but one way or the other, it is quite important that we set out what those timings and expectations should be.
Finally, Amendment 133 tries to give more time for how long provisional licences last. We want to try and avoid a cliff-edge situation whereby clubs are suddenly in the provisional licensing regime and then do not get beyond that. We would all then have a set of circumstances which I do not think any of us have really planned for, in terms of what would happen and whether the club would have to stop taking part in the competition at that point. Amendment 133 tries to give a bit more time around the provisional licence, increasing it from three years to four.
The main reason for these amendments is to make sure that these things are considered and that there is a good debate on what the appropriate timeframes are. It is reasonable that we put down what those timeframes should be, so clubs get as much certainty as possible in this. I beg to move.
Lord Pannick (CB)
My Lords, I am very sympathetic to the purpose of the noble Lord, Lord Markham, in relation to his Amendments 125 and 135. Perhaps I may respectfully suggest to him and to the Minister what may be more palatable than what his amendments suggest. Amendment 125 is rightly concerned that the rules for a provisional operating licence should be made speedily. Everybody must know what the rules are. The amendment would require that these rules be made no later than the period of one month beginning with the day that this Act is passed. If the noble Lord is going to bring the amendment back on Report, I respectfully suggest that it would be more acceptable to say within one month from the date when the Act is brought into effect. The noble Lord will know that under Clause 99(1) and (2), Part 3—with which we are concerned—comes into effect not when the Act is passed but at a later date when regulations are made.
In relation to Amendment 135, the noble Lord is rightly concerned that the IFR should make the decision whether to grant a regulated club a provisional operating licence speedily. He lays down a period of one month from when the application is made. The amendment would allow for an extension of only two weeks. It is an absolute rule, subject to a two-week extension period. I respectfully suggest that that is far too confined. It is normal in a provision of this sort to allow for the period to be extended if there are exceptional circumstances. It is not difficult to envisage cases where, rightly, the IFR cannot take the decision within a period of one month plus two weeks.
For example, the IFR might reasonably take the view that it needs answers from the club to questions of detail, which it puts to the club, and the club may not provide those answers, or be able to provide them, within the period of six weeks for which the noble Lord’s amendment allows. I understand and I share the concerns at the root of Amendment 135, but it really needs to have an exceptional circumstances provision.
Lord Addington (LD)
My Lords, looking at these amendments, I think that a little bit of agreement is breaking out that certainty and getting things done quickly are required in the Bill. The noble Lord, Lord Pannick, may have made drafting suggestions on the hoof, and we are lucky to have him to fulfil that function for us, but something that clarifies and addresses the issues raised here would probably be helpful. If there is something that we have all missed and it is hiding somewhere, that is great, but we need those answers.
Lord Parkinson of Whitley Bay (Con)
My Lords, I have added my name to the amendments in this group, and I certainly agree with what the noble Lord, Lord Pannick, has suggested in relation to Amendment 125. We are grateful to him. The noble Lord, Lord Addington, is right that we are seeking to make sure that we get the right balance with this group of amendments. We are keen to close the unfortunate gap that the Bill currently poses, which is that, if it passes without amendment, nobody will know what rules the regulator might yet specify or the period in which it might specify them. We need a bit more clarity for those preparing to be regulated and wanting to do so in this way would be useful. With gratitude to the noble Lords who have done the work of the Committee and suggested ways in which to improve on this ahead of Report, I look forward to hearing what the Minister thinks.
Baroness Twycross (Lab)
My Lords, I thank the noble Lord, Lord Markham, for tabling these amendments, and the noble Lords, Lord Pannick, Lord Addington and Lord Parkinson of Whitley Bay, for what has been a short but constructive debate. If the noble Lord, Lord Pannick, was, as was suggested by the noble Lord, Lord Addington, making changes on the hoof, I hope that he will accept that I am not going come up with a response on the hoof, but I will endeavour to look into the points that he raised and will get back to the whole Committee subsequently.
Starting with Amendment 125, I understand the desire for quick implementation, and the desire to make sure that clubs are given clarity on what is required of them as soon as possible. However, we believe that the regulator should not have an arbitrary deadline imposed on it to make rules relating to the application of provisional operating licences. The regulator should be able to conduct an effective consultation with clubs regarding the rules around this clause, and that should not be rushed. The regulator is already encouraged to be expedient, including in its regulatory principles, though I note that in a previous debate the noble Lord, Lord Parkinson of Whitley Bay, raised some concerns around the definition of “expedient”, which we are still looking into. Beyond this principle of being time-efficient, the regulator should not be subject to arbitrary, tight deadlines that would serve only to limit its operational flexibility.
Lord Markham (Con)
My Lords, I thank noble Lords for their contribution, including the noble Lord, Lord Pannick, for his helpful suggestions. Having some certainty on the timeframe is quite valuable; the major concern is that while uncertainty is out there, you will get clubs and potential investors holding back on investment. Addressing that is the main intention behind these amendments. I hope that, as we progress further, we can look at some of those helpful suggestions so we can get the balance right. I beg leave to withdraw the amendment.
Lord Mann
“(e) setting out all financial arrangements with external agents or other intermediaries involved in contacts or recruitment, or both.”
Lord Mann (Lab)
My Lords, I again refer noble Lords to my interests in the register relating to this debate. I was in a meeting with the chair of the supervisory board of one of the more successful German football clubs discussing regulation. I asked him if there was one thing that could be done to improve football from regulation inside England what it would be. His advice was that the best thing that could be done—which is not actually available to us in this House as an amendment—would be to tax football agents in the UK through the British tax system.
Why might the head of a major football club—a competitor—wish to see that happen? If that happened—or if anything else threw into question the transparency of football finances, particularly in relation to the acquisition and departure of the key asset players—behaviour would be modified. I recall discussions with people who gave graphic detail of how, in the olden days—but not old enough for me not to have seen it happen—there was the notion of “cash in the boot”. A player would be signed to a team, suddenly and unexpectedly, and would play a few games. In doing so, cash would be handed over. I do not think that; I know that. I will not cite examples even though I could—it would not be fair to do so—but that was not uncommon.
In the modern game—today’s game—the amounts of money are much greater. One has seen situations where football clubs get into financial problems, usually because of relegation from the Premier League, and do not seem to know who owns their assets. There is a myriad of situations. That includes contract details—I can think of some in the recent past, where the fans, sponsors and others were rather bemused to find that certain players were able to go, at no fee, to play for other teams because of a clause in the contract that most people were unaware of.
My Amendments 129 and 248 seek to deal with the specific problem of how agents behave. There are examples I could cite where, pre transfer, players have been sold or bought for significant amounts of money and, literally at the very last moment, they suddenly change agents. I will give a hypothetical example, rather than shine too much specific light. Let us say that a player is sold for many tens of millions, and they have a single agent. The day before their transfer documents are signed, they then change agency. The agent then sues the player for their loss—for the cut that they would have got—even though the agents’ fees are very significantly higher than the worth of the individual agent. Why would anyone choose to do that? If you are a purchasing club and you are competing with others for a prized asset, you might well be prepared to pay more money and whatever requirements there are. But why would a selling club do that? What would the advantage be? The answer is there is zero advantage to a selling club—none—or, potentially, a disadvantage. If there are £15 million or £20 million in agents’ fees, that amount of money might come in to your club. So what is the motivation?
One of the things that has bedevilled football across the world, not just English football, has been people taking a percentage. I have spoken to people who have been offered money to give statistics on 12 and 13 year-olds in their own club—a cash-based suggestion that would accumulate over time, should the player get to a level of being worth lots of money. That is the minutia, but the major cases will involve major financial transactions. Fans are often perplexed by certain purchases and the amounts of money spent on players. They say, “What is going on here? This player does not appear to be worth quite that amount of money, or indeed anything near it. It must be because of bad football decisions”.
I put it to the Committee that perhaps the transactions are determined not always by football decisions but by loans. Most fans can cite times they have been bemused when their club has loaned a player in and paid a very large amount of money to do so, even though no one has ever heard of them before. The player then disappears a year on, and no one ever hears of them again. Why would you pay £1 million or £2 million to loan a player who no one has heard of, who has no track record and who then has no future track record?
The taxman has an interest, which is why, if I were able to do so and it would have been within the rules of this Committee, I would have proposed that taxing agents via the UK tax system would be the best answer. While that does not give public transparency, it seems that it would mediate behaviour. However, these two amendments seek to allow the regulator—not the general public—to be able to see and assess what is being paid and what is in the contracts. That would not be in a public way, but in a private way—and that would modify such behaviour.
If we are interested in competition in the sport, taking out externalities that have nothing to do with the business of the sport is in the interests—including the business interests—of the industry and the sport. Shining a light so that people do not feel it would be appropriate to do their decision-making based on how much they receive as a reward for their wisdom in, say, selling a player would be to the health of the game. Anyone in the Committee who thinks that does not happen, and has not happened, is being extremely naive. Anyone who thinks that this happens only at the lower end—the non-league, with a bit of cash in a back pocket—is also being naive.
Because of the way the football business has worked, there is a lot of money to be made, and people have managed to find ways—legally—of making additional profits for themselves, particularly out of the movement of the key asset players. These two amendments seek to allow at least the regulator to see exactly what is going on. Indeed, this is important in the critical situation where, say, a club does not own the assets that everyone thinks it has, because it has managed to sell them off in advance to some third party and therefore cannot cash in on them. There are examples that I am very familiar with, where clubs have gone insolvent because of that. In some way, this power needs to be in the Bill, unless the Government could be persuaded that HMRC would be a better decision-making body and have all football agents’ transactions in this country taxed through the UK tax system. I beg to move.
Lord Goddard of Stockport (LD)
My Lords, I was getting overexcited listening to the noble Lord, Lord Mann, because we have lives outside this Chamber, and for my sins, I go in the Dog and Duck every now and again, where, somehow, people find out that I am involved with this Bill. My pint goes flat before I have had a chance to drink it, because they ask, “Well, why do you not get this sorted?”
One of the main questions that comes across is: “What are you going to do about the agents?” I did not think that that was really grating with supporters, but it is—from the top right to the bottom. I know because I support Manchester City, which used to be at the top, and I look after, where I can, Stockport County, who are reasonably not near the bottom any more.
Supporters are human beings. They work hard and pay their money to go to watch the football. Nothing grates more than when they find out how much agents get for doing these deals. As has been said, there is confusion about player ownership. Do two or three people own a player? Does a company own a third of that player? If we wish to sell that player, does that mean we need the permission of those other people before we can sell him? Is that value for the club? Those issues need teasing out.
I am attracted to the idea of an agent having to pay UK tax, which would really add some clarity to the Bill. To be honest, supporters do not quite get it. I am not saying that I am above them or anything like that, but they see it as nebulous. They want to know what practical things the regulator can do for them as football supporters. If the Government were fleet of foot, they would put agents’ fees at the front of the Bill and say that any agent of a UK footballer should pay tax in the UK. That would be universally supported by all supporters.
Baroness Taylor of Bolton (Lab)
My Lords, I agree that many of us who are concerned about football could talk all night about football agents and the concerns that many people have about them.
I want to talk about another amendment in this group. The Marshalled List says that this grouping is miscellaneous. The combination of topics that we are discussing in this section is rather strange. I want to say a word about Amendment 150 in my name, which concerns the concept and practicality of assets of community value. We would like to make this a condition of the licensing system. It is really important that fans have the reassurance that their ground is not going to be sold underneath them and all the assets of the club traded by someone who does not have the footballing interests of the club at heart. I am always surprised that more clubs’ grounds and assets of this kind are not deemed to be assets of community value. That would be part of the protection of clubs’ heritage but also—perhaps as importantly—significant in protecting clubs from rogue owners.
I have a particular interest in this because of what happened to Bolton Wanderers a few years ago. Thankfully, because of the actions of the fans and the supporters’ trust, the stadium, the pitch, the circulation area, the seats, the stands, the Premier Suite, our car park and the fan zone were protected when the local authority accepted that they should be assets of community value. It meant that those assets were protected. It was particularly important at the time because we had gone through the experience of having an owner whose main concern was not the footballing future of Bolton Wanderers but the assets. A rogue owner of that kind can do immense damage, so this protection is extremely important. I urge that consideration be given to making it a condition of the licensing that football assets are designated as assets of community value.
Lord Bassam of Brighton (Lab)
My Lords, I will speak to two groups of amendments within this group. Amendment 167 in my name and that of my noble friend Lady Taylor is about the removal of rogue owners. In a sense, this amendment poses the question: what is the point of a regulator that identifies bad practice and rogue owners but does not have clear powers and mechanisms to replace them? Our amendment seeks to incorporate within articles of association provisions that would oblige owners to give up their shares and make sure that those shares were given over to a new beneficial owner, subject, of course, to the usual checks.
Our argument is that the Bill must adequately address enforcement of the fit and proper owner test to enable the regulator to force an owner to sell their shares or force a director to resign from the board. In doing that, the regulator would be able to ensure that clubs have sufficient reserves to meet ongoing operational costs if an owner is disqualified.
At some point, it might be advantageous to consider having a central sinking fund in place to help cover interim costs. In the licence criteria, the regulator might also want to insist that clubs include in their articles of association a mechanism for the resignation of a director in those circumstances. That is important because we do not want situations such as Aston Villa found in 2016. In the mid-1990s Brighton & Hove Albion had owners not only who were deeply unpopular but who were not there because they had the best interests of that club at heart. More accurately, they were asset-strippers who eventually, without providing an alternative, sold the ground to a series of companies that set up a retail park. One of the saddest moments of my life was going to the last game there. We all knew what was going to happen to that site. It was going to end up as a Toys “R” Us. I have nothing against Toys “R” Us, but there were plenty of other sites in Brighton where it could have happily located.
I turn to Amendments 205, 208, 210 and 259, which are about protecting domestic competitions. Currently, the Bill does not require clubs to prioritise domestic over European or worldwide competitions. We feel that clubs should be property consulted before changes are made to competitions. The Bill should ensure that the regulator can designate European or worldwide competitions as restricted and not to be prioritised above domestic competitions. This would prevent clubs establishing a new entity to inherit the existing club’s identity and players—for example, the Man Cities of this world leaving the Premier League and calling themselves City Blues for the purposes of entering a restricted competition.
This is important because the ecosystem of competitions has been under pressure in the last few years. For instance, earlier this year moves were made to prevent replays in FA Cup matches. I think it would be fair to summarise that that was against the will of most clubs and largely for the convenience of the bigger clubs playing in European competitions. There is nothing wrong with them playing in Europe; it is very welcome and important for the success of our Premier League. We want to make sure that this carries on being the case, but the abolition of FA Cup replays went against the vast majority of clubs’ interests and has undermined the beauty of the competition in the sense that, periodically, replays provided much-needed funds for clubs in the lower leagues. It has also restricted the opportunity for lower-league supporters to see the bigger clubs when they enter the competition. It is important that the regulator has an interest in this and that we provide clubs with the certainty and security that they will be consulted about competition changes.
Lord Evans of Rainow (Con)
My Lords, I will speak briefly on Amendment 129 in the name of the noble Lord, Lord Mann. It is relevant to Amendment 93 which, your Lordships may recall, requires the new regulator to regulate football agents. My motivation for that amendment was to try to keep transfer fees within football. As I mentioned, it is very important that the grass-roots clubs that develop the players of the future get their fair share.
The amendment tabled by the noble Lord, Lord Mann, setting out all financial arrangements with external agents and other intermediaries involved in contracts, recruitment or both is an interesting one. My only question is: how will this work in practice? How will the regulator deal with highly confidential multi-million-pound transfers? The noble Lord mentions it being private and confidential and therefore not public, but potential leaks could affect these deals. What would the regulator do? How would he operate? How would he stop or block those transfers? The Premier League still has the best players. We still want to attract the best players. It is vital that we get this right to avoid the trap of unintended consequences. It is so important to protect the international reputation of the Premier League.
My amendment was tabled to ensure that no matter where the transfer comes from, that money stays within football. However, we would have to be careful about how that happened in practice.
Baroness Grey-Thompson (CB)
My Lords, regarding Amendments 150, 152 and 164, I will not repeat what has already been said about community assets. I will speak just to my Amendment 248A, which probably counts as a miscellaneous amendment. It is a probing amendment, strong concerns having been raised by the Supporters Trust at Reading. It seeks to insert a new clause, after Clause 51, on ticket pricing, meaning that regulated clubs would have to adhere to the following rules: dynamic pricing strategies being prohibited, concessionary tickets being mandatory and ticket prices for away fans being kept at the level set out in regulations by the Secretary of State. It is a simple amendment, but I suspect that it will not be universally supported.
I understand why clubs want to use dynamic pricing and how it can be used very successfully, but this amendment seeks a more fan-inclusive approach. The Supporters Trust at Reading quoted the Early Day Motion tabled in September 2024, when 19 of the 20 2024-25 Premier League clubs increased their ticket pricing. Abolishing or reducing concessionary tickets would be very bad news for older or younger fans who felt the effects of the cost of living crisis harder than most. Also, Fair Game has said that the constant rise in ticket prices has priced long-standing fans out of the game and that there should be proper consultation with supporters to address their concerns.
I do not seek to open the debate on what a fan is, but this amendment is about giving consideration to how fans can be engaged in discussions about ticket pricing. I am expecting many noble Lords to tell me that this is too interventionist and that it will limit clubs too much, but I am interested to hear the Minister’s response.
Lord Addington (LD)
My Lords, going through this long list of amendments, I think that we can all agree that “miscellaneous” is a good description of this group. On what is a competition, I added my name to one of the amendments, but probably should have added my name to the one about heritage. Is it a ground part of the heritage, is it part of the structure, is it what is going on? I should have put my name to this and look forward to the Minister’s reply. If we do not include this, we are missing an important part of why this Bill is justifiable.
Lord Moynihan (Con)
My Lords, I support the probing amendment tabled by the noble Baroness, Lady Grey-Thompson, although not necessarily the wording of it or the outcome. It is related to something that the noble Baroness and I have worked on for a long time and which is covered in my miscellaneous Amendment 258A. It binds the noble Lord, Lord Bassam, and me to the same cause. There is still a major problem of abuse in the ticket market for football, not least for membership cards. Last season alone, in February one club had to cancel more than 30,000 membership cards. They were all in the hands of the touts. This is a massive problem now.
When we started to campaign to sort out the secondary ticket market, it was much smaller. Fifteen years ago there were some 120 professional touts. Now there are subscription groups which get together using bots to get hold of tickets, place those tickets on the secondary market and sell them illegally. Viagogo is, regrettably, used as a speculator—a ticketing lobby. From that, those tickets are sold abroad illegally with, quite often, information hidden behind the icons. This goes against the terms and conditions set by the clubs, which do a huge amount of work across football to make sure, especially at sold-out matches, that tickets do not get into the wrong hands.
Lord Markham (Con)
In speaking to my Amendment 332, I will follow the words of some other noble Lords and say that I find it quite confusing that we have so many disparate amendments grouped together.
My Amendment 332 would stop the Secretary of State being able to define a season. I hope that someone—maybe the Minister or the noble Lord, Lord Pannick—will tell me that I have read this wrong somehow, or that it is not the intention at all, but I think we would all agree that, when it comes to regulatory or government overreach, trying to define a season and when it should start and end is not the role of government or a regulator. I hope that this is quite an easy one to clear up, because I would be very surprised if that is the intention behind it. The relevant Clause 92(3)(a) says that:
“The Secretary of State may by regulations amend this section so as to change … the definition of ‘football season’”.
It would be very welcome if that could be clarified; otherwise, I suggest that we might want to delete it.
Lord Pannick (CB)
My Lords, I will comment very briefly on the subject of football agents, which was raised by the noble Lord, Lord Mann, and supported by the noble Lord, Lord Goddard. I declare an interest: my son Joel Pannick is a football agent—I am very proud of my son—who works at Base. My perspective of football agents is that there are still abuses; they need to be regulated and they are regulated. The era of unregulated bungs no longer exists to the extent so vividly described by the noble Lord, Lord Mann.
Let me say why I want, in the interests of balance, to inform this Committee of what the position is. Football agents are now licensed and they have to pass a demanding examination. They are regulated by FIFA and the FA. I should mention that the scope of the regulations was the subject of legal challenges in the last year, and those legal challenges partially were successful. It is the case that HMRC adopts a far more vigorous approach to this topic than it used to, and rightly so; it keeps a close eye on payments and receipts. The noble Lord, Lord Mann, is absolutely right that there are many agents who are not subject to HMRC because they are based abroad, but those based in this country certainly pay tax, and in many cases a great deal of tax. I thought I would just mention those factors in the interests of balance.
Lord Parkinson of Whitley Bay (Con)
My Lords, like the noble Baroness, Lady Taylor of Bolton, I always balk when I see a group described as miscellaneous, or even worse in this case, “misc”. On the failure to give new names to the groups that have been degrouped, it is always helpful to have a go at giving us a theme. But I am grateful to the noble Lords who have covered a wide range of very important issues in this group.
I wanted to say a few words about my noble friend Lord Markham’s Amendment 332, to which I have added my name. A number of noble Lords raised in previous debates the concerning example of the delegated power for the Secretary of State to decide what and when a season is. I am glad we have had opportunity to discuss that on its own. This delegated power seems to be egregious. I am not quite clear why the Secretary of State should have a say on what constitutes a football season. I am not even sure why this delegated power is necessary—apart from granting the Secretary of State more powers over the game, there does not seem to be any particular advantage to her in granting herself this rather curious power. I would be interested to hear the Minister’s response. I wonder whether UEFA has a view on this measure. Would it not regard the Secretary of State being able to intervene in the definition of a season as political interference? If the Government have had discussions with UEFA on this point, I would be grateful to know.
I do not think the noble Lord, Lord Mann, actually got round to speaking to his Amendment 153 in this group, which relates to modern slavery—such are the pitfalls of a miscellany—but I wanted to highlight that one and congratulate him on bringing it forward. I am sure all noble Lords would agree that everyone has a duty to prevent this abhorrent crime. I was very proud to work at the Home Office when my noble friend Lady May of Maidenhead brought through the Modern Slavery Act 2015, which has made large headway into cracking down on this abhorrent behaviour. Since then, both the Premier League and the English Football League have released an annual anti-slavery and human trafficking statement, as have all the participating clubs. As the Minister knows, I am wary of increasing the scope of the regulator, but I would be interested in hearing how she thinks this new regulatory regime will operate within the law that we already have to tackle modern slavery and what she thinks of the amendment from the noble Lord, Lord Mann.
I am grateful to the noble Lord, Lord Pannick, for his comments on football agents. Whether they are more or less popular than lawyers, I will leave to others to decide—and indeed whether the existing regulation that is brought about by UEFA and others he mentions is, in this case, sufficient and not a requirement for further regulation, as we see in some of the other behaviours in football. I leave all these, and the miscellaneous other issues that noble Lords have raised, to the Minister to respond to.
Baroness Twycross (Lab)
I thank noble Lords across the Committee for the thorough debate on this group. If the group is called misc or miscellaneous, that does not diminish the significance of the concerns raised.
I will take each amendment in turn. First, I thank my noble friend Lord Mann for his Amendment 129. While it is right that the regulator should have all relevant details of the club’s finances when assessing it for an operating licence, we do not believe this detail is required to be provided in the Bill. The personnel statement should detail any key individuals working specifically at the club in question and should not include external individuals. However, any relevant financial arrangements can be included within the strategic business plan, or the financial plan, if the regulator deems this necessary.
My noble friend Lord Mann and the noble Lords, Lord Goddard of Stockport and Lord Evans of Rainow, raised concerns about agents and their fees. A different perspective—it is always helpful to get a rounded perspective—was raised by the noble Lord, Lord Pannick. In response to the broader point regarding agents, as was noted, FIFA has recognised the need for the better international regulation of agents and has proposed reforms. FIFA’s member associations, such as the FA, will retain the ability to introduce stricter requirements on agents than those stipulated in FIFA’s regulations. The DCMS will work closely with the FA to ensure that any national regulations for agents are fit for purpose. The Government are working with the FA and FIFA to track the implementation of these regulatory reforms, which are due to begin next year.
Amendments 150 and 164, in the names of my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton respectively, concern assets of community value. Home grounds are often the most important assets that a club owns. That is why the Bill has prioritised key protections to prevent them being sold, used as collateral or relocated without the necessary considerations. “Asset of community value” status is another mechanism that a number of clubs and supporters’ groups have obtained for their home grounds.
Lord Bassam of Brighton (Lab)
My Lords, if I may ask the Minister to give way very briefly, I raised the issue of the abolition of FA Cup replays in the context of consultation. Had that been in the future, would there have been an obligation on the FA to consult which the regulator could have enforced? The shape of that competition is very germane and important to football fans across England and Wales, and it seems to me that it is a significant issue that ought at least to be part of the regulator’s consideration.
Baroness Twycross (Lab)
My noble friend raises an interesting point. The issue of the FA Cup replays would rightly be outside the scope of this regulator. The sporting calendar and the rules of specific competitions are matters for the football authorities to manage in consultation with the appropriate stakeholders. I am not sure whether that reassures my noble friend, but we can maybe have a longer discussion about it at another point.
On Amendment 242A from the noble Lord, Lord Moynihan—apologies if I am going over paragraphs that I have already covered—the intention behind this amendment is to make sure that clubs are not overburdened with requirements to notify the regulator of every event that ever happens. We do not want this either, nor is it in the regulator’s interest to receive a flood of unnecessary information. As the clause sets out, the notification requirement relates to material changes in circumstances. It will be up to the regulator to set out what it considers to be material in guidance, which we expect it will produce on this. The regulator will already have burdens in mind when setting its guidance and enforcing this duty on clubs, given public law principles and its regulatory principles. We want the regulator to receive the information and updates it needs to regulate effectively. By raising the bar for when clubs are required to notify the regulator of changes, the proposed amendment risks doing just that.
Amendment 248, from my noble friend Lord Mann, would introduce a new requirement for regulated clubs to register with the regulator all player contracts, transfer fees and other fees annually for the previous 12 months. I reassure my noble friend that, where this information is relevant for the regulator to understand a club’s finances, it can already obtain it. All clubs will be required to submit financial plans which detail, among other things, their revenues and expenses. These plans should capture details about player contracts and transactions where this information is relevant to the regulator understanding a club’s finances. Furthermore, the regulator has extensive information-gathering powers. Should it need greater oversight of the detail set out in this amendment, the regulator can already request this information, and it would not have to wait 12 months to get it. Therefore, I am confident that the Bill already delivers the intent of the amendment.
I am also grateful to the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Moynihan, for Amendments 248A and 258A respectively, which focus on ticket prices. I understand that the noble Baroness intends to address the recent rise in clubs removing concession pricing on tickets and other such changes that have left some fans priced out of match attendance, and she highlighted concerns raised by fans from Reading. Fans are justifiably concerned, and I am exceptionally sympathetic to that. I am equally grateful for the attention by the noble Lord, Lord Moynihan, to ticketing and the issue of resale. These are huge issues that matter to fans, which is exactly why the Government have made it explicit that clubs must consult their fans on ticket pricing as part of their fan engagement. This also includes engagement on other operational issues, which is intended to capture many of the issues the noble Lord has made in his amendment. It is also important to note that any unauthorised resale of tickets for designated football matches is already addressed in the Criminal Justice and Public Order Act 1994. Many clubs take this exceptionally seriously and work with police and relevant authorities on it. However, the regulator should not be seen as a vehicle to fix all of football’s woes, especially those that are well within the gifts of clubs, leagues and the FA to address. On the noble Baroness’s amendment in particular, it would also not be appropriate for the Government to dictate prices or concession categories, and there is limited precedent for such an interventionist approach on commercial decisions.
Lord Moynihan (Con)
Before the Minister leaves that amendment, could she very kindly advise the Committee whether the Government intend to meet their expected deadline of a consultation exercise on the abuse of the secondary ticketing market by the end of this year?
Baroness Twycross (Lab)
If I may, I will clarify that in writing after this session to ensure I give the right response. I am not trying to avoid it; I will ensure I give the Committee a response.
Amendment 332 is from the noble Lord, Lord Markham, and the noble Lord, Lord Parkinson of Whitley Bay, also spoke to it. I appreciate that noble Lords may not welcome the use of delegated powers to amend the definition of “football season” in the Bill. However, to future-proof the Bill against any changes to the footballing calendar, we feel that the Secretary of State needs this power.
It is unlikely, but possible, that a specified competition might be organised in a unique way in the future, for which the current definition may not be suitable. For example, I am sure that noble Lords remember the impact of the 2022 World Cup on the domestic calendar. It is not beyond the realms of possibility that similar changes may occur in the future that impact the efficacy of this definition.
Lord Moynihan (Con)
I am now trying to be helpful, especially in the presence of the noble Lord, Lord Pannick, who will be able to opine on this suggestion. The reason why the Secretary of State has this power, as set out on page 46 of the memorandum to the Delegated Powers and Regulatory Reform Committee, is that a specific competition may be played over two calendar years. That is the current definition. If it were not to be played over two calendar years, we would not be able to proceed with the definition of “football season” set out in the Bill.
We have been looking for simplicity here. Instead of Clause 92(1) defining a “football season” as
“beginning with the day in a particular year on which the first match of any specified competition is played, and … ending with the day in the following year on which the final match of any specified competition is played”,
a simpler way would simply be to delete “in a particular year” and “in the following year”. Then we would all understand that we begin on the day on which the first match is played and end on the day on which the final match is played. We thus would not need secondary legislation through a draft affirmative resolution for the Secretary of State to come back to both Houses of Parliament, as this simple amendment could clarify it all and remove the Secretary of State from this onerous task.
Baroness Twycross (Lab)
I am not sure that the Secretary of State would find it onerous, because it is not intended to be used very often. However, the noble Lord makes an interesting point and I appreciate that he made it in the spirit of being helpful.
This is not a power for the Secretary of State to dictate to the industry what a season is; it is the opposite. The power as currently defined in the Bill will ensure that the definition can flex to changes in the industry. It will also be subject to the affirmative parliamentary procedure, so I hope noble Lords will rest assured that the House will be able to scrutinise any changes. I am happy to continue to discuss that further with noble Lords after Committee.
Lord Parkinson of Whitley Bay (Con)
I think it would be helpful if the Minister took this away, discussed it and maybe checked whether a solution like the helpful one my noble friend Lord Moynihan suggested might be possible. That would remove one of the delegated powers that the Delegated Powers Committee has raised concerns about.
I was struck by the answer the Minister gave to the intervention from the noble Lord, Lord Bassam, reassuring him about various matters of gameplay that are not within the scope of this regulator. The timing of the season seems to sit closer to things that she reassured him are not the job of the new independent football regulator to look at than to delegated powers for the Secretary of State. I hope she will take this away and continue discussions ahead of Report, because that feels like a very straightforward and sensible suggestion.
Baroness Twycross (Lab)
I was getting to the point where I was offering to take it away, so I think we are in violent danger of agreeing. On the question of the House being able to scrutinise any changes, I think we will return to this issue later, before Report.
Amendment 259 is from my noble friend Lady Taylor of Bolton. I understand that concerns have been raised about the ways in which rules are made in the industry today, including in recent legal cases. However, the Government’s view is that the amendment as drafted is not appropriate. The scenarios listed in Clause 55(6) could well be time sensitive and urgent. They may require immediate action from both competition organisers and the regulator. It would not be right to burden the competition organiser with a requirement to consult every member club for the purpose of informing the regulator of changes to the regime on an issue that may not affect them all. We would, of course, expect competition organisers to be carrying out appropriate consultation on their own rules. However, we are wary of the regulator mandating and prescribing how the leagues develop their rules.
I will finish on the two government amendments, Amendments 320 and 330. They both correct erroneous cross-references and make no change to the content of the Bill.
For the reasons I have set out, I hope that the noble Lord will withdraw his amendment.
Lord Mann (Lab)
My Lords, I am very reassured by the Minister’s clear words about the powers of and information from agents. Despite the valiant efforts of the noble Lord, Lord Pannick, we may be on the same side here, because I am in defence of British agents. With the complexities of football, there is nothing to stop anybody getting a legal cut from a transfer fee. The more transparency that is thrown on that, the more money is kept in the game.
The irony is that probably the main source of my information is agents. A second source is players and a third is owners and investors. The power of the agencies is often greater than that of the clubs themselves. That is the direction of travel. Therefore, it will be beholden on the regulator to ensure that at least there is maximum transparency. If a club wishes to give £1 million to another club in, say, Sicily for a player no one has ever heard of and who has played for two or three minutes, that is obviously a good business decision. The more out in the open that is, the healthier future the game has.
After that genuinely helpful reassurance from the Minister on my amendments, I seek the leave of the Committee to withdraw Amendment 129.
Lord Markham
Lord Markham (Con)
My Lords, I hope this will be a nice, quick and simple group ahead of dinner break business. Clause 17 refers to awarding or refusing a provisional licence. I think we all agree that, if a provisional licence were not agreed, it would have serious consequences for a club, which would not be able to carry on playing or start a season, for example. That would have serious consequences on the fans, as well. All this amendment seeks is to give clubs sufficient time to respond. Generally, in serious situations, 14 days is not enough time to respond fully, so the suggestion is to give clubs a month in these circumstances. I beg to move.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Markham and Lord Parkinson of Whitley Bay, for their amendments. Apart from Amendment 148, which I will turn to shortly, they all seek to extend to a month the minimum period for clubs, individuals and competition organisers to make representations to the regulator on a number of issues—far longer than the 14 days that the Bill sets out.
The 14 days set out in the Bill for representations is the minimum to ensure that the individual concerned has a fair amount of time to prepare and present any representations to the regulator, though it is not an absolute. The regulator may choose to specify a longer period if it thinks it is appropriate. However, the 14-day minimum also means the regulator can respond quickly to urgent issues without an extended delay if necessary. We do not think it is appropriate to introduce unnecessary delays into the regulator’s regime that would slow down decision-making and leave clubs in an extended period of uncertainty. A 14-day period for representations is not uncommon among other regulators such as the FCA and CMA.
Turning to Amendment 148 specifically, I understand that the intention of the noble Lord, Lord Markham, is to ensure that, if the regulator is looking to revoke a club’s provisional licence, the club will have an opportunity to make representations. I reassure the noble Lord that this is already captured by Clause 18(4), which says that, if the regulator considers that a club has not met the full licence test, it needs to give the club notice. This must include
“inviting the club to make representations about the proposed action”,
be that to extend the provisional licence period or to revoke the provisional licence. To be clear, the regulator would look to revoke a provisional licence only if the club had persistently and without excuse failed to take reasonable steps to meet the requirements for a full licence. This is a high bar. Therefore, the club will have had sufficient opportunities to take remedial action even before the opportunity to make representations under Clause 18(4). The club will also be able to appeal a decision to revoke a provisional licence if it believes the regulator has acted unfairly. This is yet another way in which the regulator can be held to account and decisions can be scrutinised.
I will close with the question that Clause 18 stand part of the Bill. I understand that the rationale of the noble Lord, Lord Parkinson, in tabling the clause stand part notice is the same as that which we already discussed in relation to the earlier group on licensing. I am happy to provide further detail on Clause 18 in writing if the noble Lord wishes it, but, as I set out earlier, we do not believe there is a credible risk that clubs will refuse en masse to participate in the regime. Clubs at all levels of the game have welcomed this regime.
Lord Markham (Con)
I thank the Minister for her response. The main thing is not only having a sensible conversation but making sure that the regulator is aware that, where there are circumstances in which more than 14 days are required, it demonstrates that flexibility. I beg leave to withdraw the amendment.
Lord Bassam of Brighton
(d) the home ground threshold requirement (see paragraph 6).”Member's explanatory statement
This amendment makes it a threshold requirement (which a club must comply with to obtain a full licence) to meet certain requirements (as inserted by amendment 147) relating to the club’s home ground.
Lord Bassam of Brighton (Lab)
My Lords, I hope I can deal with this group of amendments fairly quickly. It is again a disparate group, but the main theme is fan consultation and the requirements on a club. The amendments seek to alter the fan engagement threshold requirement by requiring a club to have structures and processes for effective engagement with their fans.
It is vital that there are proper requirements to ensure that a club applying for a licence, for instance, has a suitable home ground for a minimum period of 20 years. This would help prevent owners using much-adored home grounds as bargaining chips and collateral to strengthen their financial muscle against the wishes of fans. The clauses that we seek to insert would incentivise clubs to protect their home grounds as part of their heritage and their history.
Amendment 142 concerns ticket prices. This is important because we are in a situation where clubs pretty much have a free hand in raising ticket prices. Let us take the recent example of Manchester United, which has, in effect, doubled the price of some tickets and removed discretionary or reduced ticket prices for younger supporters—my noble friend Lord Shamash could say more about that than me. The amendment would insert ticketing prices as a relevant matter for consideration in the process of regulation.
That is the spirit and intent of the amendments. I am looking for some reassurance from the Minister that fans will be properly engaged in clubs’ consideration of these issues, that there will be proper processes and ways of ensuring that their voices are heard and that issues such as ticket pricing in particular, and playing in prohibited competitions and so on, will be something the IFR can look at, comment on and, in some situations, determine.
Baroness Brady (Con)
My Lords, I rise to speak in response to these important amendments, all of which seek to strengthen the Bill’s provisions for consulting fans. We should pay tribute to noble Lords who have long championed the role of supporters in football, particularly those who have been involved in supporter trusts and similar bodies for many years. Their passion and their advocacy are no doubt one of the reasons that fan voices are becoming even more central to the governance of our national game.
I support the intent behind these amendments. Fans are the lifeblood of football. They invest not just their money and time but their hearts and identities into their clubs. Ensuring that their voices are properly heard, and heard with respect, is not just a moral imperative but essential for the long-term sustainability and integrity of football. The Premier League clubs recognise this too. In recent years, they have made significant progress in embedding fan engagement into their governance structures. Through its fan engagement standard—the first of any league to introduce such a standard—clubs are held to account for how they involve their supporters in decisions that matter to them. Fan advisory boards are now mandatory at every Premier League club and provide supporters with direct access to senior executives, enabling meaningful input on issues such as ticketing, matchday operations, club identity and community programmes. These initiatives represent a significant cultural shift. They create a platform for genuine dialogue between clubs and their supporters, ensuring that fans’ perspectives are considered at the highest levels of decision-making.
While I support the principles underpinning many of these amendments, I also feel it is important to raise a note of caution. Specifically, I want to raise the risks of the IFR being overly prescriptive when it comes to fan engagement and consultation. Clubs are not one-size-fits-all entities; each has its own unique character, fanbase and operating environment. For example, the dynamics of a global club with millions of international fans will differ significantly from those of smaller community clubs, many of whose supporters live within a few miles of the ground. Let us take, for instance, the idea proposed in some amendments that clubs must prove that a majority of their fans support certain decisions. While the intent is admirable and builds on the FA’s and many clubs’ approach to heritage assets already, we must acknowledge the practical difficulties of legally mandating such approaches.
How does a club definitively determine what constitutes a majority? Should a global fanbase have the same weight as local season ticket holders? What happens when opinions are divided? Would the IFR reverse a decision if, down the track, it was found that the wrong methodology had been used? These are complex questions without any easy answers. We should be careful not to create a compliance culture that detracts from the spirit of good engagement. It is really good to make this aspirational on both sides. For fan engagement to work well, the club has to feel confident, be open and get out of its comfort zone; the fans must enter into the debate in a constructive and open-minded spirit too. The difficulty will come if the IFR is drawn into micromanaging fan consultation and adjudicating on individual decisions, therefore inadvertently feeding an adversarial approach between fans, groups and clubs.
Now that might sometimes be appropriate, but I strongly believe the IFR will often be best to focus on ensuring that principles are upheld, leaving the specifics to clubs and their supporters. I also want to make the point that many of these new structures and processes for engaging fans, such as the fan engagement standard and fan advisory boards, are still new; they need time to bed in.
There are some brilliant examples of good practice already; for example, clubs bringing fan advisory board members into their clubs and having them spend time with football, commercial and operational teams so that they can understand the realities of life inside the club. But it is too early to say what the best approaches or designs of these processes will be. We should encourage more thoughtful approaches that allow these structures to mature and evolve, with periodic reviews to assess their effectiveness. A rush to codify overly detailed requirements risks stifling this organic progress and creating unintended consequences.
Lord Shamash (Lab)
My Lords, I am a very happy Manchester United fan. The last few minutes of yesterday’s game were bliss; they reminded us of what happened in 1999 when we won the treble.
I rise to talk again in relation to supporters’ trusts. I have been pressing this; I pressed it in debate the last week and, indeed, at Second Reading. The supporters’ trusts should be there on the face of the Bill. As I mentioned last week, there are 149 supporters’ trusts in the pyramid. Nearly all of them are recognised by the FCA and they operate under the Co-operative and Community Benefit Societies Act.
I ask my noble friend the Minister: why reinvent the wheel? We have a structure that works; it works very well indeed. I would ask that my amendment, “including supporters’ trusts”, be accepted. We understand—we are not trying to be prescriptive—that there will be other fan groups and people who might like to become involved in communicating with the club, but, having supporters’ trusts that exist throughout the UK, it would be a very sensible and easy move to make. I hope this amendment will be accepted.
Lord Mann (Lab)
My Lords, there is nothing wrong with supporters’ trusts, but working-class fans have other models as well, historically and currently; that voice also needs to be heard. Supporters’ trusts are one model and should be empowered, but they are only one model for football.
I have eight amendments here more or less doing the same thing. There is an issue here, which the noble Baroness, Lady Brady, alluded to and spoke to, with the fan advisory boards. There is a fundamental choice here, and I would advise the Government to be careful with the politics of this. Some clubs are choosing the fans to go on their fan advisory board; it is not the fans choosing the representation but the clubs. That is one model, but it is many miles away from the Crouch review. It is the total opposite of what fans would hope to see. The fans in this country have not gone for the German model and demanded comparative boards, 50% et cetera, supervisory boards, and that kind of power in relation to the clubs.
I have helped to establish a range of Jewish supporters’ groups. These are Jewish supporters who want no more than to be meeting up with other Jewish supporters of their club—full stop. But they do hope as well to be able to give the occasional bit of advice, sometimes very productively and positively, to their club—if the club does not refuse, as one has, to recognise a large group of Jewish supporters who simply want to be themselves—and, if there are any issues, they want to be listened to. It might be about the provision of kosher food, or ticketing policy, or that there are a lot of fixtures on a Friday night and people are finding it difficult to be religiously observant and still be able to go. It might be to do with giving advice on issues relating to racism within the stadium. On issues like these, this is a group that should be listened to; it is not a group that should have the power to tell a club what to do.
But the idea that fan advisory boards should be chosen by the club is anathema to fans. Fans are perfectly capable of choosing their own representatives. Let us think about what will happen if this Bill goes forward and the regulator has powers, but clubs can still say to fans, “No, we will choose who the fan voices will be. We will pick persons 1, 2, 3, 4 and 5. They will be there under our criteria. You, the fans, will have no say”. What will happen is that conflict will emerge, and the Government will not come out of the conflict well. The perception will be that the Government had the chance to ensure this.
Let us think about a supporters’ trust, made up of people giving of their free time to organise. As a member, you elect whoever to be your representatives, and they are then your representative; it is not the club coming in and saying, “No, we will pick Lord Shamash because we love Lord Shamash. If he is elected, that is all well and good because he represents what we would like to see in Manchester United”. That would be an invidious position for anyone to be in. I hope the Minister can give some reassurance that the fan voice on those big issues—moving the ground, changing the colour, changing the name—will actually be a fan voice. If it is not, then government and Parliament will become unpopular at some stage.
Lord Jackson of Peterborough (Con)
My Lords, I want to respond very briefly to Amendment 224 in the name of the noble Lord, Lord Mann. He made a wonderful peroration, but I am not sure it bore much relation to the amendment that he has laid down. Of course, none of us wants clubs to hand-pick fans who will be nodding dogs— ersatz fans who will go along with the corporate line of the football club. We do not want that.
I am not sure if this is a probing amendment for Ministers to consider before we get to Report, but it is a lock. It locks in and fetters the discretion of football clubs to make decisions that might be existential for the future of that club; in other words, diversifying activities, and not just in terms of the freehold. Clause 46 specifically mentions—
Lord Mann (Lab)
I thank the noble Lord for giving way. If it was proposed that Peterborough was to be moved to King’s Lynn, or to Norwich, should not the Peterborough fans have the right of veto on moving their club out of their town?
Lord Jackson of Peterborough (Con)
Perish the thought. There are many Peterborough fans who do not live in the city of Peterborough but in the Fens; they may not be too displeased at going to King’s Lynn—not that I am in any sense proposing that. He alludes to the Posh. The Posh have been able to develop a number of commercial activities over the last few years. Darragh MacAnthony, the owner, started out in 2007 as a very rich man. Now he is just a rich man, because of his love for Peterborough United.
The point is that that club has been able to stay afloat financially because the board of the club, backed—disproportionately I would say—by the fan base, has supported the diversity of activities. The noble Lord’s amendment and Clause 46 as written would lock out the possibility of many clubs and boards making decisions to protect their long-term financial sustainability.
I respectfully say to the noble Lord, for whom, as he knows, I have huge respect—particularly for the great work he has done on kicking out anti-Semitism in football—that that is a different issue from regulated fans and setting up fan organisations. This amendment would be quite prescriptive for clubs, and it would not be in their long-term interests, particularly those teetering on the edge of financial instability and unsustainability. For that reason, I hope the Minister will consider these issues when she responds to the noble Lord’s amendment and others.
Lord Watson of Invergowrie (Lab)
My Lords, I will speak to my Amendment 138A on what consultation means. The wording—
“leave out ‘consults’ and insert ‘meets regularly with’”—
is taken from the Explanatory Notes. On page 44, paragraph 271, under the heading “fan consultation”, they say the following:
“This mandatory licence condition … requires clubs to regularly meet with a group which the IFR considers representative of the club’s fans, which could be a group elected by the club’s fans”.
Throughout these debates, many noble Lords have quoted the Fair Game document, which refers to fan engagement as a communication process, and to a range of formal and informal face-to-face processes being part of that. That is what I am trying to get across here. It is important that clubs meet regularly with the fans and do not just consult. To consult could mean anything. It is not exclusive—of course, it could take various forms—but they must meet regularly. I hope that ultimately, the Government will accept that. It remains to be seen, but I will return to this issue on Report because it is very important.
I will comment on some other issues that noble Lords have raised, particularly my noble friend Lord Mann, who I usually agree with. I did not really take to his dismissive comment in response to my noble friend Lord Shamash. My noble friend Lord Mann said that it is all very well having supporters’ trusts, but you need organisations with working-class members. I do not know much about the Manchester United Supporters Trust, but I am sure it has working-class members.
I am a member of two trusts and have been for some 20 years. One is in Scotland—my old club, Dundee United; I pay £15 per year for that. I am also a member of the AFC Wimbledon trust, called the Dons Trust. I pay the princely sum of £10 per year for that. For that reason, I think there are more than a few working-class fans. I think that my noble friend Lord Mann was suggesting that supporters’ trusts price some fans out. I do not know if that is the case, but I would not have thought so. By definition, you would think that would be rather pointless.
Lord Mann (Lab)
My noble friend has misinterpreted my comments. Supporters’ trusts—I have been heavily involved in one as well—have all sorts of members, but there are other kinds of organisations that have never had the objective that supporters’ trusts have. That is the point: there are different types of organisations. Some purely want to go and watch football and not take on the more significant interests and structures that supporters’ trusts have.
Lord Watson of Invergowrie (Lab)
I thank my noble friend, and I fully accept that point; I have misinterpreted what he said. He seemed to be suggesting that trusts were different from other supporters’ groups. There are a wide range of groups and that is exactly the way it should be.
I am afraid I cannot go along with my noble friend’s Amendments 139 and 140. I am not opposed to them per se, but he seems to be distinguishing between fans and elected representatives of club supporters’ groups. Surely, these are the same people: you cannot be an elected representative of a supporters’ group if you are not a fan.
Lord Addington (LD)
It is nice to have a little fan club.
My amendment may be making the ultimate pedant’s point, but the Bill says that a relevant thing that cannot be interfered with is the name of a team operated by a club. My amendment refers to the name of the club itself. Is my point covered by this? I do not know. If it is, tell me where and I will be terribly happy.
The main point is that we will be still talking about who a fan is this time next year unless the Government make a decision and come up with something solid. It affects how the regulator operates and who they exclude. The Government may well have to decide who they are going to offend, but please let us do it, because otherwise fan involvement will mean nothing.
Lord Maude of Horsham (Con)
I would like to make a short point, but it is an important one that has barely got a mention. Football clubs have a very strong interest in consulting their fans. The fans are their customers. The truth is that, if you look across the gamut of clubs all the way down the pyramid, the composition of those fan bases will be very different. Broadly speaking, the higher up the pyramid you go, the more dispersed the fan base will be. Famously, almost none of Manchester United’s fans actually live in Manchester.
Lord Maude of Horsham (Con)
I am sorry that we did not have a proper exchange, because I was looking forward to that.
The reality is that the revenue that local community clubs get is predominantly gate money—match day revenue. As you go up the pyramid, a greater proportion comes from commercial sponsorship and merchandise; and then, when you get to the Premier League, pretty much half or more is broadcasting revenue.
I am indebted to my noble friend Lady Brady for this. More than half of the Premier League’s revenue from broadcasting is international—that took me by surprise. The next-largest part is commercial—sponsorship, merchandise and so on—and the smallest part is the matchday revenue. The point is that all this comes from the good will of fans, either directly from their pockets or because of their engagement and commitment. Tottenham happens to have a very large fan base in South Korea because our captain is South Korean. Our biggest sponsor is an Asian insurance company. Why is it supporting Tottenham? It is because there is a huge fan base in Asia.
After all, as we know—although we are sometimes shy of saying this in these debates—the Premier League is the goose that lays the golden eggs that then cascade down through the pyramid, to a much greater extent than in any of the football pyramids in other European countries. Therefore, the way in which clubs consult will be very different—but the suggestion that they need a regulator to enforce upon them the duty to consult their fans is to ignore this really important point: it is in their interest to keep their fans, wherever they are, on board. If ever there were a vivid illustration of that, it is when the European super league proposal came up. It was killed not by politicians, a regulator, your Lordships’ House or the other place but by fans.
Lord Markham (Con)
I will speak briefly to my Amendments 238 and 241. I agree with noble friend Lord Maude that it is absolutely in the clubs’ best interests to make sure that they are consulting their fans on this. If we are going to put things down, though, I will speak to two essential points.
A football club shirt is more than just the colours; it is the design as well. Any football supporter would know that the blue and white hoops of QPR are quite different from the stripes of Brighton—fans could maybe be involved in that. I remember with some humour that one Brighton design was a bit like a Tesco bag and the fans used to wear an actual Tesco bag. That probably cost the club a lot of money in lost shirt sales. But, generally, the fans have a role in that and in the name of the club—my Amendment 241 is on this—which I think most people would agree is fundamental.
Lord Parkinson of Whitley Bay (Con)
I am glad that the Government Chief Whip has been here to see the lively debate on all sides of the Committee, including on his own Benches, on this group. He will have noted that only two of the 19 amendments come from the Opposition Benches. So I am very glad that he has been able to join us for this lively discussion as we head into dinner.
I will not elaborate on the points that my noble friend Lord Markham made on his two amendments, to which I added my name, other than to say that I wholeheartedly agree. Given that the Government are already looking at club colours, I am interested in why this is not extended to home shirt design, which my noble friend mentions in his Amendment 238.
On my noble friend’s Amendment 241, the name of a club is hugely important. It is not uncommon for clubs to change names. I gather that Bournemouth began life as Boscombe St John’s Lads’ Institute and Arsenal started as Dial Square, in the Dial Square workshop, and then became Royal Arsenal, I think because of a local pub called the Royal Oak, and Woolwich Arsenal—
Lord Parkinson of Whitley Bay (Con)
I think that is an informal one from fans of other north London clubs. But clearly the names of clubs do matter, and we would be interested in whether the Government agree with that.
Given the time, I will address the other amendments in this group as a whole. They attempt to require clubs to consult a whole host of different supporters’ organisations, community trusts and fan groups. I share the concerns raised by my noble friend Lord Jackson of Peterborough that, if clubs are required to consult numerous different groups—chosen through various methods and representing countless, and often competing, interests—it will be difficult for clubs to know to whom they are to listen. What opinions will they have to take on board and whose interests will win out? There is also a concern about whether this could lead to divisions forming among supporters’ groups of differing views, as they seek to influence the activities of a club in a manner that they would like.
I am concerned by what the noble Lord, Lord Mann, said about football clubs picking the people who sit on their fan groups. That sounds like having a House of Parliament entirely dominated by the Executive—but that is for another Bill. The concern about this one is the old adage that too many cooks spoil the broth; that is, if we tried to have too many people vying to influence the views of a club, it would be difficult to differentiate the differing sounds and, perversely, fans’ voices would be drowned out in that cacophony. So a simpler approach might be required for fan engagement.
Trying to have a better answer to the question of who fans are, as we have said previously, runs to the heart of all this. But I agree with what my noble friend Lord Maude said: clubs are well advised to take on board the views of fans. They listen to them because they are the lifeblood of the clubs, and they make their views known pretty volubly.
Baroness Twycross (Lab)
I thank noble Lords for their continued engagement on these important provisions of the Bill. I appreciate that I am one of the very few things standing between noble Lords and the dinner break, but I want to give a proper response and, I hope, the reassurance that my noble friend Lord Bassam of Brighton is looking for. We must not forget that, at the heart of all of this, it is the fans who matter the most. Football is nothing without them, and the fan engagement threshold requirement has been designed to reflect this. As the noble Baroness, Lady Brady, said, fans are the lifeblood of the game.
My noble friend Lord Bassam’s Amendment 138 seeks to make it explicit that clubs must have the appropriate structures in place to engage effectively with fans. I hope noble Lords can take comfort that this is already implicit in the Bill. The Bill already asks for all clubs, in order to meet their fan engagement threshold requirement, to have adequate and effective means to consult and take the views of fans into account. It would therefore not be possible for a club to meet this bar without also having the appropriate structures and processes for effective engagement with its fans.
On my noble friend Lord Watson of Invergowrie’s Amendment 138A, it is important to avoid fan engagement becoming a box-ticking exercise for clubs. The intent is to ensure that dialogue can be constructive for both parties. This is why the threshold requirement requires a club to consult fans on the relevant matters. Consultation goes beyond just a meeting, which might lead fans to have only a passive role at their clubs. Instead, we expect clubs to seek input from fans on issues, with that input directly feeding into the decision-making or a club’s understanding of an issue.
I do, however, reassure my noble friend that the expectations on clubs will be proportionate to club resources and the demographics of the fan base. I hope that other noble Lords, including the noble Baroness, Lady Brady, also feel reassured by that point. This will not be the same as the statutory consultation, and we expect that the regulator will provide more detail about what consultation should look like in practice. This will allow for a bespoke approach to be taken across clubs.
My noble friend Lord Watson raised points around making fan engagement more explicit. The intention of the regulatory principle is not to list every possible stakeholder the regulator should ever engage with during the course of regulation, however important that stakeholder might be. That could be a slippery slope to an enormous list that risks—
Lord Watson of Invergowrie (Lab)
I understand my noble friend’s point about every stakeholder, but can she name a stakeholder more important than the fans?
Baroness Twycross (Lab)
My noble friend is quite clear, as are we, that the fans are central—I made that point earlier. However, making an explicit list for every single type of consultation that the regulator should have could mean that an unintended consequence would be that we missed off important stakeholders. The intention of the principle within the legislation is to encode a participative approach into the regulator’s regime. We believe that the regulator will be more effective if those being regulated participate constructively; that is to say, they are brought in and are pulling in the same direction. It is already clear from the very purpose of the Bill and its origin that the regulator will be regulating in the interest of fans and communities. As part of this, it should of course engage with them and representative groups, as appropriate.
On Amendments 160 and 163, from my noble friend Lady Taylor of Bolton, I reassure her that, where there are concerns that a club is not meeting the fan engagement standards, the regulator is empowered to gather information and look further into the situation. As it is a licensing condition, a breach of these requirements will qualify as a relevant infringement; if deemed necessary, the regulator can take enforcement action. The regulator will have the ability to receive evidence from fans when considering whether a club is meeting its licence condition or any other concerns in the regulator’s remit, but it will not adjudicate all consultations.
Lord Bassam of Brighton (Lab)
My Lords, I think this has been one of the better debates on the football regulator. It is about one of its core purposes and, as the Minister has just said, it all flows from the fan-led review and putting fans at the heart of our football business.
I thank the noble Baroness, Lady Brady, for her contribution. I well understand the mix of commercial pressures and the way in which that can collide with what might be seen on the face of it as being fan interests. It is a difficult balance that one has to try to secure in this legislation. I think the legislation does that, but who or what is a fan or a supporter is a difficult question, and they may not be the same thing all the way through. The noble Baroness raised the question of who it is relevant to consult over some of the issues. I think we are heading in the right direction with further clarity. I hope that the regulator can try to work its way through some very difficult issues here.
I am very happy with the responses that the Minister has given, and I think other noble Lords will share that sentiment. I beg leave to withdraw my amendment.
Football Governance Bill [HL]
Monday 16th December 2024
(1 month ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-V(a) Amendment for Committee (Supplementary to the Fifth Marshalled List) - (13 Dec 2024)
Lord Foster of Bath
“(f) gambling advertising and sponsorship.”Member's explanatory statement
This amendment requires clubs to consult fans on gambling advertising and sponsorship.
Lord Foster of Bath (LD)
My Lords, I begin by apologising that my involvement in the Product Regulation and Metrology Bill has prevented me from attending earlier sessions of your Committee’s deliberation. But I am very conscious that the fan-led review, which in a sense led to the Football Governance Bill, found that many fans raised severe concerns about the level of gambling advertising and sponsorship in sport. This is especially notable because it was unprompted, yet nothing in the Bill addresses these concerns. It should, and that is why I am moving Amendment 143 and speaking to Amendment 255. In doing so, I declare my interest as chairman of Peers for Gambling Reform.
Gambling in the UK is worth £15 billion a year and with it comes gambling harm, which is a major problem in our country. It is worth reflecting that over half of the gambling industry’s profits comes from those already suffering harm from gambling. Official statistics show that millions of people, including a horrifying number of children, are impacted by gambling. The Department of Health says that there could be more than one gambling-related suicide a day. Gambling advertising, marketing and sponsorship encourage more gambling, more profit for operators and more gambling-related harm. It is a serious public health issue.
The previous Government’s White Paper on gambling included no meaningful measures to address it. Nothing was offered to tackle the relentless bombardment of gambling messages, costing the industry over £1.5 billion a year, which has grown exponentially since the liberalisation of advertising in the Gambling Act 2005.
Speaking from the Dispatch Box just a couple of years ago, the noble Lord, Lord True, said:
“My personal view, as a sports fan, is that I am sick and tired of gambling advertising being thrust down viewers’ throats”.—[Official Report, 27/1/22; col. 446.]
His view is supported by a huge percentage of the population, including football fans, over half of whom believe that all gambling advertising, marketing and sponsorship should be banned.
Research evidence backs the call for action. A group of academics recently highlighted the unprecedented number of young people being exposed to gambling adverts. They concluded:
“it has become quite clear that the gambling products being offered and the ways in which they are promoted are harmful to individual and family health and damaging to national life”.
Despite proposing no action, the White Paper itself even acknowledged that gambling marketing can encourage people to start gambling, to gamble more, or to resume gambling after stopping.
Of particular worry is the entrenched link between gambling and football. It has raised concerns about not only the welfare of fans—especially the younger ones, who I will come to in a minute—but the opportunities for match fixing and corruption. Though rare, such incidents serve as a stark reminder of the risk posed by financial incentives tied to betting. It must surely be questionable that some of English football’s gambling sponsors do not even operate here. For example, Nottingham Forest’s primary shirt sponsor this season is a gambling operator that targets customers in China, where gambling is illegal. Surely that sort of thing should not be allowed.
Again, of particular concern is the way young and impressionable fans, who idolise players and clubs, are inundated with gambling logos. These are emblazoned on kits, around stadia and in programmes—as well as on TV, radio and online. It has normalised the idea of betting and makes it seem like a harmless activity.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a great pleasure to follow the noble Lord, Lord Foster. I commend him on his leadership of Peers for Gambling Reform, of which I am a member. I apologise that I have not taken part at Second Reading and earlier parts of Committee. The Bill was being covered for the Green group by my noble friend Lady Jones. I am pleased to share with your Lordships’ House that her hip operation on Friday went very well and she should be back soon after Christmas. In the meantime, noble Lords get me instead.
The noble Lord, Lord Foster, has outlined the arguments, which I think are unassailable, for both amendments. I am particularly taken with Amendment 255, to prevent gambling advertising and sponsorship in football, because that will take us to where we need to go.
I declare a recent meeting with the group Gambling with Lives, particularly Liz and Charles Ritchie, who were bereaved following the gambling suicide of their son Jack in 2017. As the noble Lord, Lord Foster, said, we are seeing increasingly awful levels of harm, particularly among young people. There has been a doubling of the number of young people aged 11 to 17 with problem gambling, and 44 % of people who exhibit problem gambling are at high risk of thinking about suicide.
It struck me, listening to the Committee earlier today, that a phrase was used a great deal: fans are the lifeblood of the sport. Surely that is an illustration of the fact that the health of fans should be a matter of great concern to football clubs. The Lancet commission on gambling declared very explicitly only a month or so back that gambling has to be treated as a public health problem, and public health solutions are needed. That means protecting people from the gambling messages bombarding them.
I will quote a couple of statistics from 2021-22. There may have been a slight improvement since then, but not very much. During a single televised match, 3,500 gambling logos can appear. On “Match of the Day”, a gambling brand was visible up to 89% of the time. This can be described only as a bombardment and, as the noble Lord said, the consultation very clearly showed the views of fans.
We have also seen real progress from the Big Step campaign, which has been commended and is another illustration that campaigning works. But people are having to devote their lives to this cause, because the Government and the clubs are not doing the right thing. This, surely, is a place where the Government should step in to act.
Baroness Fox of Buckley (Non-Afl)
My Lords, the noble Lord, Lord Foster, and the noble Baroness, Lady Bennett of Manor Castle, will be unsurprised to know that I oppose these two amendments, which I will do briefly.
If the gambling industry is pouring money into football, I would say that that is a good thing. Anti-gambling commentators talk as if this were drug money coming from the Mafia. The whole tone is moralistic. We have already heard mention of match-fixing and cheating, as though it is all incredibly sordid and terrible. But let me just remind the Committee that betting firms are legitimate businesses. What, so they use their sponsorship to increase their market share—what is wrong with that? Is all football sponsorship beyond gambling to be forced to pass an ethics test—some kind of purity test? This is football, not some puritan revival movement.
Let us be honest: lots of football clubs need and appreciate this sponsorship money. It is all well and good that the Premier League has collectively agreed to withdraw gambling sponsorship from the front of clubs’ match-day shirts. That is a voluntary measure—it is up to it—but the truth is that, as we have ascertained in these debates, the Premier League can afford such lucrative virtue signalling, as I consider it. For the lower-tier and lower-league clubs and for the EFL, however, such sponsorship money is often invaluable. The Bill aims to help clubs become more financially sustainable, so the last thing it needs is external parties or legislators turning off one financial tap. This would mean that some cash-strapped clubs would face ruin if deprived of such revenue.
The Bill has been put forward in the name of fans and, whatever my reservations, I do not doubt that people have the fans at the heart of their discussions, whichever side they are on. But I remind noble Lords that millions of fans are less bothered about what logo appears on a player’s shirt or on advertising boards than they are about the quality on the pitch. There is more than a whiff of nanny state when they are patronisingly told by anti-gambling advocates that the ban would be for their own protection. It seems that anti-gambling campaigners do not trust fans to make their own decisions and make the right judgments about how they spend their own money.
Writing on this issue, Jon Bryan—who is an excellent commentator on the whole issue of gambling, which he posits and reminds us is a pleasurable leisure activity—says that it also undermines any notion of fans’ agency. The notion is put forward that, as soon as fans see a logo on a football shirt, they will rush off and place a bet, as though they are being groomed and just one punt away from addiction. This treats adult fans as children, and it is infantilising. It is often posed—
Lord Watson of Invergowrie (Lab)
On that last point, is the noble Baroness aware of the amount of in-game gambling that takes place through television and, of course, mobile phones, where the betting companies encourage fans watching matches to bet during the game on who will get the next corner, whether somebody be sent off, whether there will there be extra time in a cup tie and so on? Is that not interfering with the normal cut and thrust of the game in a way that is potentially dangerous, not least—I would like her to answer this point—to young people, particularly children?
Baroness Fox of Buckley (Non-Afl)
First, I would make a distinction between children and adults. Secondly, as somebody who is from a large, football-obsessed family, I am more than a little aware of all the encouragement that football fans have to put on a bet. But not all of them do when they are encouraged and, what is more, even if they do, they do not necessarily become problem gamblers, which is what is being posited. It can be something that they enjoy.
Lord Foster of Bath (LD)
This is not a case of me positing anything—I hope the noble Baroness accepts that. The figures I quoted are from the Gambling Commission and the Government.
Baroness Fox of Buckley (Non-Afl)
I have some figures, but I wanted to put forward a counter to these amendments without going into the details. I have spoken on this on many occasions in this House and I have written about it. I have figures, and we can swap our statistics. But I wanted to argue that it is proposed that allowing advertising of any sort around football, and allowing gambling to be associated with it, normalises gambling—but that is a slightly odd argument because gambling is a normal activity. The vast majority of people who put a bet on do so without a problem: it is part of their private leisure pursuits, which they enjoy. It is completely within the realms of spending money that they probably should not spend—it is Christmas and I have done a lot of that over the last few days when shopping. One makes choices and spends money that one probably should not spend, but it does not have to be turned into some kind of problem. It is our choice, and there should be some perspective about the threat.
The Gambling Commission does not give credence to the idea that gambling problems are completely out of control. Despite a lot of noise and rhetoric, there is no evidence that there has been an overwhelming increase in problem gambling since advertising was made legal by none other than Tony Blair’s Government in 2007.
Lord Goddard of Stockport (LD)
I do not disagree with the noble Baroness’s principles or beliefs when she talks about the nanny state and it being up to individuals, but where does she sit on smoking? Smoking was acceptable and everybody smoked, and sponsorship in sport was rife, with motor racing teams and darts competitions named after cigarettes. People do not smoke any more; society has changed. Unless you take positive action, you do not get that change. There is nobody in this Chamber now smoking; there is nobody in the hospitals smoking; there is nobody inside or outside football grounds smoking. That is a great thing. It is called taking responsibility for society. I wonder what the cost of gambling is to the NHS and the various other bodies that have to pick up the pieces of our individual choices and liberties. Those liberties are your own until they affect me and you, and him and her, and the NHS; it then becomes my responsibility to say something about it.
Baroness Fox of Buckley (Non-Afl)
I was on my last sentence, but I will now make it two sentences.
The noble Lord says that nobody is smoking now. It happens to be the evening of the Terrace Club’s Christmas bash. That is the House of Lords smokers’ group, and I can assure the noble Lord there are quite a lot of them smoking, cross-party, including from his own party. They are drinking and smoking, and every party is represented. It is in the hut round the back, by the way, in case anyone wants to pop out. There are quite a lot of people who smoke still.
Smoking advertising was taken out of sports, and a number of sports nearly collapsed—darts and snooker had a real problem. The funny thing is, guess who came in to save them? The gambling companies came in and saved those working-class, grass-roots, rank-and-file sports. Good on them, I say. The working classes were grateful at the time, and they did not all become problem gamblers as a consequence. They enjoyed the sport.
Baroness Brady (Con)
My Lords, these amendments seek to address gambling sponsorship in football, and include proposals to ban sponsorship entirely. This is a significant issue. I acknowledge the genuine concerns that many have, including the noble Lord, Lord Foster, about the role of gambling in sport. However, I would like to provide some context and explain why I believe that further interventions in this area are not required at this time.
The Gambling Act review has recently and comprehensively considered the role of gambling sponsorship across all sports, including football. The Government’s response reflects the extensive engagement and evidence gathered during that process. As part of this, the Premier League has already taken significant, proactive, voluntary steps to address concerns, demonstrating its commitment to act responsibly.
Most recently, the Premier League and its clubs have led the way, not just within football but across all sports, by taking the voluntary step to move away from gambling sponsorship on the front of shirts. This was a key ask made of us by the DCMS, and we agreed. This is a significant decision, and one that I do not believe any other major sports organisations have taken.
The impact of this step on clubs is, frankly, quite painful. Contrary to what the noble Baroness, Lady Fox, said, most clubs cannot afford to do it, but they have done it anyway because they have been asked to. The typical difference between gambling and non-gambling shirt sponsorships is around 40%. For some Premier League clubs, this decision will mean a reduction of around 20% of their total commercial revenues. For clubs in the bottom half of the Premier League table or those newly promoted, the financial hit will be especially pronounced in the short term, and comes on top of the £250 million hit to Premier League clubs over the Parliament, as I have already mentioned in this Committee, following the Budget’s rise in employer national insurance contributions. The pressures are acute, but the Premier League clubs took this decision, fully aware of the difficult commercial consequences, because it was the right thing to do and was aligned with what the Government asked of us.
Furthermore, the Premier League has led the way in driving forward the development of an all-sports code of conduct, published earlier this year. This sets out standards on gambling partnerships, including the critical issue of awareness and responsible gambling messages, that all clubs and sports organisations will adhere to. The code reflects the seriousness with which football in particular is addressing this issue, and provides a strengthened framework for responsible engagement with the gambling sector.
It is important to acknowledge the vital role that gambling sponsorship plays in supporting clubs across the football pyramid. For many clubs, particularly those outside the Premier League, gambling sponsorship represents a significant source of revenue. That is the reality we all need to be conscious of, especially in the context of the Bill, which focuses on financial sustainability. Noble Lords may be aware that the EFL has a much greater reliance on gambling sponsorship, including its title sponsorship deal with Sky Bet. The Premier League itself has never had a gambling sponsor. This demonstrates that the issue is not uniform across football and that heavy-handed interventions may well risk disproportionately affecting clubs lower down the pyramid.
The Premier League’s voluntary decision to phase out gambling on front-of-shirt sponsorship is just one major step, but it is proof that football is taking this issue seriously. It shows that football can lead the way on responsible change, even when it causes difficulties for clubs, without the need for heavy-handed interventions. We must properly address concerns about problem gambling and the need for responsible behaviour and stringent regulations. Football must clearly be part of the solution, as it wants to be, just as all sport needs to act responsibly. However, I argue that the Premier League in particular has already shown important leadership here, taking proactive and voluntary steps that, as far as I am aware, no comparable organisation has yet replicated.
In the light of the progress already made, I respectfully suggest that football does not require further statutory intervention in this area. We have shown—but of course we must collectively continue to show—that we can be relied upon to make progress on this vital issue.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am very grateful to the noble Lord, Lord Foster of Bath, for his vigilance on this topic, as he always showed when I stood at the Dispatch Box opposite. I know he will be particularly vigilant as the Minister holds the responsibility for gambling. I am sure that she will be glad to have the chance to talk about something directly in her portfolio, in addition to the work that she has been doing on the Bill.
I am pleased to hear that the hip operation of the noble Baroness, Lady Jones of Moulsecoomb, went well, and even more pleased that she missed my disobliging comments about Arsenal this evening. That is the team she supports, so it is probably just as well that she was not here to hear them.
Of the two amendments of the noble Lord, Lord Foster, I am more taken with Amendment 143, which seeks to require football clubs to consult their fans on gambling advertising and sponsorship. I am mindful of the example of Wonga, a payday loan company rather than a gambling firm, and Newcastle United. It was an important reminder of the discomfort that fans feel when they are forced to wear the logo of companies and others of which they might not approve when they buy the football strips of the team they support.
Engaging fans on sponsorship is worth while, particularly where the companies are ones about which clubs know that fans have views. The noble Lord set out the growing concerns about the prevalence of gambling in sport and its potential to influence fans, particularly younger and more vulnerable groups. If we can strike a better balance between the immediate commercial needs of clubs and the long-term interests of the fans who support them then that is worthy of our consideration.
I am struck too by the points that my noble friends and others have raised about the importance of sponsorship deals on the finances of football clubs—particularly those in the lower leagues—to maintain their financial stability, which is such an important point underlying the Bill. Although Amendment 143 has much to commend it, the consultation must be a genuine and two-way conversation between clubs and fans to address the importance of investment in the sport and the good work that many are doing.
The second amendment in the name of the noble Lord, Lord Foster, Amendment 255, seeks to prevent regulated clubs and competitions promoting or engaging in gambling advertising or sponsorship altogether. In doing so, it rather overrides the open-minded consultation of his first amendment. I think this goes too far: an outright ban on gambling advertising and sponsorship would, in my view, be too blunt an instrument for addressing the complex issue of gambling and the broader questions of sponsorship in football.
I am grateful to the noble Lord for tabling both amendments and the fact that we can consider them side by side in this group. I look forward to hearing what the Gambling Minister has to say about them.
Lord Addington (LD)
My Lords, I totally agree with my noble friend on this one—both noble friends, actually. I am afraid that if you want to see a country where gambling advertising and gambling problems are linked, you just have to look at Kenya—especially at the young. There is a chronic problem there, and it is doing enormous damage. Football has enormous reach and enormous power; it will reach out to you, and it reaches out to the most impressionable. I hope that the Government take some action here, showing a way forward that at least reduces the harm.
I know that the noble Baroness, Lady Brady, means well with her point about the front of the jersey, but it is a team game. People run up and down; the back is still there.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank the noble Lord, Lord Foster, for these amendments. As Gambling Minister, I acknowledge the importance of monitoring the impacts of gambling sponsorship in football. Slightly bizarrely, I think this is the first opportunity I have had to discuss gambling in your Lordships’ House. I am confident, from working through the measures in the White Paper, that it will not be the last, but I acknowledge the noble Lord’s long record of campaigning on the issue of gambling harm.
I also thank the noble Baroness, Lady Bennett of Manor Castle, and join others across your Lordships’ House in wishing the noble Baroness, Lady Jones of Moulsecoomb, a speedy and good recovery. We look forward to the noble Baroness working with us while the noble Baroness, Lady Jones, is recovering from her operation.
Starting with Amendment 255, the Government do not believe the regulator should have a role in commercial matters such as sponsorship. This is outside the scope of the regulator and commercial decisions are, rightly, decisions for clubs. Further, what constitutes the promotion of gambling could be interpreted extremely widely, with significant consequences for clubs and the sport more widely. This might mean players not being able to take part in competitions that have gambling sponsors.
All major football bodies have published their joint gambling sponsorship code of conduct, which sets minimum standards for socially responsible gambling sponsorships within football. The Government will closely monitor the implementation of the codes of conduct to ensure they have a meaningful impact. I note the points made by the noble Lord, Lord Foster, about children and young people. I am happy to liaise with him and other noble Lords on this further as the codes of conduct are implemented.
On Amendment 143, I agree that where gambling advertising and sponsorship appear, it must be in a socially responsible way. Both the noble Lord, Lord Foster, and the noble Baroness, Lady Brady, mentioned that the Premier League has already made a decision to ban front-of-shirt sponsorship by gambling firms by the end of next season. That is welcome. The noble Lord, Lord Foster, referred to around 40 clubs that have already taken action on gambling sponsorship. As I set out in my speech at the GambleAware conference on 4 December, I really want to see the gambling industry further raise standards to ensure that levels of gambling advertising do not exacerbate harm.
I apologise to the noble Lord if my response to his question was not clear. We are trying to address volume across different companies, where even if one company has only a small amount, the collective volume can become quite significant. That is a specific issue we have asked the gambling industry to look at. Where there is volume across the piece, individually it might not be excessive but together it might represent a significant amount of gambling advertising beyond what is deemed acceptable. This work will be monitored closely.
Lord Foster of Bath (LD)
My Lords, it has been a short but interesting debate that has raised many issues. I do not think now is the time for me to go through them all. Suffice it for me to say that the noble Baroness, Lady Fox, basically said that gambling is a matter of personal choice. That is a view she is entitled to take. The vast majority of people have come to the view that gambling, like alcohol, tobacco and drugs, is a public health issue. That means there is a need for a degree of intervention in that activity. I, and Peers for Gambling Reform, have been debating what the level of that intervention should be.
I am certain that gambling advertising, marketing and sponsorship lead to more harm in this country. We know that there is more than one gambling-related suicide every single day, and that should be of deep concern to us all. Collectively, we need to take more action than is currently being taken. That is why I hope we will have the opportunity to bring amendments such as this back at a later stage and to continue the debate then. At this stage, I beg leave to withdraw the amendment.
(f) the club’s political statements and positions.”
Lord Parkinson of Whitley Bay (Con)
My Lords, my Amendment 145 seeks to add to Schedule 4 a consideration of a
“club’s political statements and positions”
in the part of the new regime that concerns the fan engagement threshold requirement. I and my noble friend Lord Markham, who has added his name to the amendment, have sought to do this in as neutral a way as possible, reflecting the fact that political statements and positions are rarely one-sided. They are usually complex matters with a number of competing and conflicting views.
We have seen in recent weeks the case of Crystal Palace’s Marc Guéhi, who twice amended his rainbow-coloured captain’s armband with expressions of his Christian faith. Plenty of people would say that rainbow armbands supporting gay rights and written expressions of Christian faith are not irreconcilable things. The problem in his case is that his expression of his religious faith fell foul of FIFA and FA regulations banning
“any political, religious, or personal slogans, statements or images”
on players’ kit or equipment, while the other was deemed an acceptable form of political expression.
During the last World Cup in Qatar, we saw the great dismay among LGBT+ fans when the FA chose to suspend its advocacy on their behalf while the tournament was taking place in Qatar. I am very proud that my right honourable friend Stuart Andrew, the former Sports Minister and now the shadow Secretary of State, wore the one love armband—which a number of fans and others were very keen to see worn—when he went to cheer our national teams on in the World Cup. Although, as a Welsh-born man representing an English constituency, I think he found it just as difficult having to reconcile deciding for whom to cheer in the England v Wales match that he saw.
We have seen many other examples of this being a growing area of concern for fans, clubs and those who have to navigate these choppy waters. Whether it is taking the knee, the decision about when to hold a minute’s silence and over what, the singing of certain anthems and songs or the decision to light certain stadia up in yellow and blue in support of Ukraine but not white and blue in support of Israel after 7 October, these are very difficult matters for clubs to decide. They should be able to decide them for themselves, but the amendment my noble friend and I have brought forward asks them to discuss these matters with their fans, to try to take on board their views, to take them with them and indeed to encourage them to think about these matters and perhaps change their mind.
In doing so, the amendment asks the Government to recognise that religious or philosophical belief is itself a protected characteristic under the Equality Act 2010, so is worthy of our consideration when we are looking at supporting diversity in football, and that diversity of thought is really important if we are to grapple with these very thorny questions as a society.
The amendment also seeks to ensure that football clubs remain genuinely independent and free from external political pressure that might distort the relationship between them and their supporters. If we are to safeguard the integrity of football as an independent sport, we cannot allow it to be co-opted into political campaigns, whether from the Government or from any other political group. The duty to consult fans on political statements and activities is a safeguard which ensures that clubs will remain true to their roots, focused on the sport and not caught up in advancing political crusades or day-to-day rows.
I hope Minister will look at our amendment with the neutral consideration we have tried to give it in the way we have worded it. I beg to move.
Lord Jackson of Peterborough (Con)
My Lords, I rise to speak to my Amendment 244 and to support Amendment 145, moved by my noble friend Lord Parkinson of Whitley Bay. My amendment seeks to formalise a duty which will prevent clubs, players and employees of clubs publishing political statements that bring division and conflict into a game that should be about generating unity.
We have seen over previous years multiple instances of virtue signalling, such as taking the knee before matches after the Black Lives Matter protests, and the wearing of certain armbands—as my noble friend has said—and laces, which are the latest attempt to campaign. I would say that it is a small “p” political campaign. I may differ somewhat from my noble friend Lord Hayward on this, so it is probably a good thing that he is not in his usual place.
Politics is not just about party politics. It is about the pernicious influence of political campaigning affecting—infecting—football, our national game. I remember the dark days of the 1970s, when a number of London clubs were perceived to be involved with the rise of the National Front and its racist politics. That gave rise, of course, to instances of football hooliganism. That was not a party-political issue, but it was a political issue. We do not want to go back to those dark days when, for instance, Millwall was associated with football hooliganism and some elements of racist behaviour.
I am not even sure that these initiatives work. The figures quoted a week or so ago in Committee show that 43% of players in the Premier League are Afro-Caribbean or Black African. They have achieved that through their skills, their abilities, their resilience and their physical fitness, not because they wore multi-coloured boot laces. UEFA already bans political statements such as these, but it has not been successful in implementing and enforcing such rules. The Government could really take a lead on that.
If the Government are so keen to have a regulator to enforce numerous other rules, many of which overlap UEFA’s rules, surely it is only right that the regulator impose rules on political statements and attempts to impose political views. My noble friend is quite right: we have seen recently the unpleasant behaviour of fans cheering on pro-Palestinian extremists; and of course, we have the ongoing debate, discussion and rivalry between Celtic and Rangers in Glasgow. That is very much a political issue.
Article 16 of UEFA’s own regulations, entitled “Order and Security at UEFA Competition Matches,” prohibits
“the use of gestures, words, objects, or any other means to transmit a provocative message that is not fit for a sports event, particularly provocative messages that are of political, ideological, religious or offensive nature.”
My own bugbear is bad language, particularly in front of children and young people. It is terrible, unacceptable, for grown men to be swearing and using really unpleasant language. However, do we really want to add into that mix the poisonous disputes of politics and political issues? I do not think we do.
Why do we not try to replicate, and perhaps enforce, UEFA’s rules in the Bill? We must remember how divisive such actions have been with supporters and fans. No one likes to be told what they should believe or how they should act. Fans themselves are diverse; they do not need to have these views forced down their throats—such as the preachy proselytising of Gary Lineker on any number of fashionable so-called progressive causes, or a pretentious new Jaguar advert which does not actually feature a Jaguar car.
Fans want to watch a football match and support a team; they do not want to be in the middle of a political bunfight. Fans turn up to watch their favourite team play, not to see a session of Parliament. For those reasons, the Minister should give consideration to this amendment. It would save us from further discord and conflict, which we do not need. Fundamentally, we have to trust the clubs themselves to do the right thing by their fans, their players and their boards and deliver good policies organically, rather than enforcing these kinds of initiatives, which have been proven not to work necessarily.
Lord Moynihan (Con)
My Lords, I agree with the noble Lord, Lord Jackson. What he said was exceptionally perceptive and wise. Look at Marcus Rashford, for example, who exploded on to the football scene in the UK in 2016, aged just 18, and scored on his Manchester United and England debuts, before becoming one of the country’s most exciting prospects. He became a household name at the same time and was recognised with an MBE for his work off the field, campaigning on child hunger, which he faced growing up in Wythenshawe in Manchester. He challenged the then Government in 2020, imploring Ministers to offer free meals to needy children in the school holidays.
The position for international sports federations—and, indeed, for clubs in this country—is to recognise that a balance needs to be struck, which is what my noble friend Lord Parkinson was arguing for. The balance to be struck in the Olympic movement is recognising that the IOC Athletes’ Commission opposes using athletes for political propaganda or campaigns, while providing the opportunity for them to exercise their views and opinions in official media settings or on social media accounts, which are so powerful. Surely this is not a subject for the regulator; this is a subject for clubs and the organisers of the competitions in which they play.
Lord Addington (LD)
My Lords, I make a brief reminder here that objections have been raised to all sorts of things. I remember when it was the poppy on jerseys in a football match. Apparently, a political statement is one that you either do not understand or do not agree with. I ask the Government, and indeed all noble Lords, to be very careful about this. These amendments are trying to exclude things that might be positive and good, because there will always be somebody who disagrees with them. All I will say is: tread very carefully here. Remembering the dead of World War I and World War II would not be seen as an overt statement in this country, but apparently it is elsewhere.
Baroness Fox of Buckley (Non-Afl)
My Lords, very briefly, I am so glad that these amendments were tabled, because it gives us a chance to reflect. The statement that to determine what is right and wrong between different countries and cultures is very complicated so it is easier to say that it has no place in the game seems fair enough to me. Politics is complicated. We find it complicated in this place, even though we are the legislators and the politicians. Once you start introducing it into football, you can get into a real mess.
I am also not sure about a few things, so I want to share some confusion. One difficulty is that, for example, we heard from the noble Lord, Lord Hayward, last week that he does not consider the rainbow armband to be political, but I think that it is highly ideological and political. Last month, the FA dedicated a 35-minute video to the Rainbow Laces campaign, showcasing an activist-heavy panel that included its women’s talent and senior game EDI consultant coach developer. That title gives the game away before we go anywhere.
Guess what? That particular individual used to work for Stonewall before being brought into football. I hope that we in this House understand that Stonewall is at least a highly contentious political organisation which is now at the heart of defining what is considered to be inclusive football. The problem with this profusion of rainbows on laces, pitch flags, ball plinths and all the rest of this branding is that any objection on the basis of politics leads to an accusation of being insensitive to lesbian and gay people or being homophobic. Indeed, it is the very opposite. I think that trans ideology is discriminatory against lesbians and gays because it does not understand same-sex attraction. If noble Lords are lost and are thinking, “Oh God, what is she going on about?”, that is fine. It is a political matter and nothing to do with football. I worry when football managers and teams get embroiled in this.
I was unsure about this amendment. I am usually the kind of populist democrat who says, “Vote on everything; go and have a vote”, but I did wonder when the noble Lord said, “See what the fans say—don’t put out a statement unless they agree with you”. Maybe it is because I am from a Celtic family—although some of them support Spurs. I hope that noble Lords can get their heads around this. Celtic’s fan base has gone completely bonkers on the Israel-Gaza question. It is like a Hamas support group on tour. The irony is that their sloganeering in support, as they would see it, of the Green Brigade and all the rest of it—their support for Gaza resistance—has put them completely at odds with Celtic’s owners and the board, although the Celtic Trust, the shareholders’ group, agrees with them. It has split the club. But everyone should keep out of this. Let them sloganise away, but do not get involved one way or another. Make the political point.
However, I cheered when Crystal Palace put out an official statement after the 7 October pogrom. I thought it was great that at last somebody had come out and condemned the murders and hostage-taking. We have seen what has happened to Israeli teams, which have been subjected to anti-Semitic attacks, one of which almost brought down a Government on the continent. We know what is going on. I am interested that football is getting involved in this. I have already commended those Spurs fans who have started a grass-roots campaign in support of Emily Damari, the last remaining British hostage. I want Spurs fans to chant this young woman’s name at the ground. Her uncle Rob is a Crystal Palace fan. As he pointed out, they may not have the grass-roots campaign, but at least Palace put out a statement.
I am into all this. I genuinely do not want to say that we should sanitise football clubs of all political discussion. It is impossible. It is not going to happen. I do not want the Government interfering in it or a regulator being involved. I do not want people being in a situation where they fail, or refuse, to acknowledge that they are putting forward, for example, EDI policies. These are politics in disguise, although they will not admit it. Politics is complicated. Let us keep it out of football. The fans will be political just because they are stroppy like that.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Jackson of Peterborough and Lord Parkinson of Whitley Bay, for tabling these amendments, and all noble Lords who have contributed to the debate. These amendments seek to add a requirement for a club to consult fans on any political statements or stances.
Amendment 244 in the name of the noble Lord, Lord Jackson of Peterborough, would additionally mandate fan approval of any political statement or political activity made by the club, its players or any other staff. This includes fan approval in relation to the issuing or wearing of items of clothing with political connotations. As the noble Baroness, Lady Fox of Buckley, outlined, what we view as political is disputed. It is not the place of a statutory regulator tasked with sustaining the stability of the game to limit or add approval processes for political speech or action or, indeed, to determine what is defined as political in the first place.
On Amendment 145, tabled by the noble Lord, Lord Parkinson, clubs may wish to consult their fans in this regard as part of their regular fan engagement. However, this is not something that the regulator will require of clubs. The Bill is intended to ensure that fans have a voice in key decisions regarding their club, but we need to make sure that this is proportionate. That is why we have not listed every possible issue that clubs should engage with their fans on in minute detail.
As has been mentioned, it is notable that many sporting personalities have used the attention that sports receive to campaign on issues that concern them. The noble Lord, Lord Moynihan, highlighted Marcus Rashford as an example. To be clear, we do not want to inhibit free speech. Instead, as is the case now, fans are equally able to use their own freedom of expression to protest political statements or actions made by their club. As well as potentially constraining freedom of speech, these amendments would not improve the regulator’s ability to deliver its objectives. I therefore ask the noble Lord to withdraw his amendment.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the Minister and to all noble Lords who have spoken on this group for their considered thoughts. Like the Minister, we do not want to inhibit free speech. The difficulty is in questions of an acceptable political gesture or article of clothing conflicting with the free speech of those who take a differing view. That is where it is important for clubs to be mindful of the wide range of views that are out there and to have an earnest conversation with their fans and with society more broadly.
The noble Lord, Lord Addington, is right to mention the poppy. Sadly, it is already an article contested by some—we have crossed the Rubicon that he warned us to be wary of. The noble Baroness, Lady Fox, alluded to the sectarianism that there has been for a long time in certain football clubs. This is not a new matter but one which is growing and where there are new, more complicated areas of contention. I agree with the sentiment that a number of noble Lords expressed that it is important to get politics out of football.
I hope that the Minister will reflect further on this ahead of Report. I am grateful to noble Lords for their thoughts and beg leave to withdraw my amendment.
Lord Parkinson of Whitley Bay (Con)
My Lords, I rise to move my Amendment 146 and speak to my Amendment 237. I am grateful to the noble Lord, Lord Addington, for adding his name to them. These amendments are identical in nature, seeking to change “crest” to “badge” in the two instances where it is used in the Bill. These were the first amendments that I tabled on this Bill. They are short and simple but very important.
I appreciate that heraldic terms can seem confusing to the uninitiated, but if we cannot get this right in your Lordships’ House, where all Members are armigerous, where can we? It might be helpful to start with a brief glossary. A full heraldic achievement consists of many elements. The most common and obvious of these is the shield or escutcheon. On these, or on a diamond-shaped lozenge for women, is borne the coat of arms, the design of which is particular to the person or institution which bears them. We are surrounded by many splendid examples of these in your Lordships’ Chamber. Noble Lords might have found their eyes hovering over them from time to time during some of our longer debates, as mine sometimes do. If noble Lords’ eyes start to wander during the debate on this group, I will take that as a sign of focus rather than distraction.
Sadly, the stained-glass windows which were designed for your Lordships’ Chamber by Augustus Pugin were lost during the Second World War. The replacements installed in 1950, sadly not illuminated now because of the late hour, show the coats of arms of Peers who lived between 1360 and 1900. The armorial bearings running beneath the Galleries are of various sovereigns from Edward III and Lord Chancellors from 1377 onwards.
What first catches the eye when it drifts in our debates is the escutcheon bearing the coat of arms, but other elements can be seen. As Peers, we are entitled to supporters—figures or objects placed either side of a shield; very often these are animals, real or imaginary, such as the lion and unicorn in the royal coat of arms, but they can be figures as well. My late noble friend Lady Thatcher, for instance, had as supporters an admiral of the Royal Navy to commemorate the victory in the Falklands War during her celebrated premiership and Sir Isaac Newton, who, like her, was born in Lincolnshire, in recognition of her earlier career as a scientist.
Lord Moynihan (Con)
My Lords, in the interests of the noble Baroness, Lady Blake of Leeds, the noble Lord, Lord Mann, and me—passionate Leeds supporters—I feel that my noble friend Lord Parkinson seems to have made an error. The first Leeds United badge, which actually began life in 1908, 11 years before the formation of the club we know and love today, was originally used by Leeds City Football Club—the team that preceded Leeds United. It was based on the coat of arms of the city of Leeds and it featured three owls. In some variations, it included the Latin motto “pro rege et lege”, which translates as “for the king and the law”. The team colours, blue and yellow, also came from the city’s crest. In 1965, came the owl badge. It was considered by some to be more representative of the team known as the Owls, Sheffield Wednesday—which my noble friend did not mention; he mentioned only Sheffield United—than of Leeds United FC, despite three owls featuring on the crest of the city of Leeds. The badge would have donned the shirt of a little-known youngster by the name of Billy Bremner.
On behalf of the noble Baroness, Lady Blake of Leeds, the noble Lord, Lord Mann, who is sadly not in his seat, and me, and taking only one minute of the Committee’s time, I needed to correct my noble friend Lord Parkinson on his lack of knowledge of this rather important issue of a recognised badge for Leeds United.
Lord Parkinson of Whitley Bay (Con)
My point was that the 25 badges and clubs that I listed are those which have been granted through delegation by the College of Arms to the English Football League. There are many splendid but unofficial badges used by teams elsewhere in football.
Lord Addington (LD)
I will take that advice.
I put my name to Amendment 237, because I thought that it was about an identification symbol. That is what heraldry is all about, except that we do not use it any more to define who is going to belt who over the head in the middle of a medieval battlefield. All I can say after listening to the speech on this amendment is that I have learned much, but I am not sure when it will be useful.
Baroness Twycross (Lab)
My Lords, I am very grateful to the noble Lord, Lord Parkinson of Whitley Bay, for these amendments, which address changes to club heritage assets and what should be safeguarded by the regulator. I if may say so, this debate could be used as the definition of a lordly debate.
The Government understand that the amendments in the name of the noble Lord seek to avoid a misuse of any heraldic terms. I am grateful for the historic background that he gave in what was one of the Committee’s more unusual contributions, but one from which we all learned a great deal.
This specific clause is intended to work in tandem with the FA heritage protections, with the regulator acting as an enforcement backstop to the FA’s rules. The FA’s heritage protections use the term “crest”, and therefore this amendment would risk the regulator being out of step with the rest of the industry. However, I stress to the noble Lord that officials have liaised with the College of Arms on this. We are keen to ensure that the Bill does not incorrectly signal that the regulator would ever override the separate process of the College of Arms. We have engaged and will continue to engage with the College of Arms to ensure that it is content. This may be something that we return to upon further discussions with the college and the FA. I acknowledge the intent of these amendments but, for the reasons that I have outlined, ask the noble Lord, Lord Parkinson, to withdraw his amendment.
Lord Parkinson of Whitley Bay (Con)
I am very grateful to the Minister for the way that she has engaged with this and her promise to look at it further. She is right that this is a very House of Lords issue, but I was alerted to it by comments on social media from those who watch your Lordships’ proceedings, so it is both an ancient and a very modern issue, and one about which people feel very strongly.
I am glad that the Minister has begun dialogue with the College of Arms. Just because others are getting it wrong, it does not mean that we should get it wrong in legislation. For the reasons that I have set out, I think that we can nudge towards the present legal position in the Bill. I am grateful to the Minister for that and will certainly take her up on the offer to discuss this further between now and Report.
In my research I was pleased to learn that a football first appeared in heraldry as far back as 1604, when the Clarenceux King of Arms at that time granted arms and a crest to Sir William Jordan, who was briefly a Member of Parliament for Westbury. Noble Lords may be as surprised as I was to learn that a football appears in the 17th century grant given to him. His crest is
“A football or encircled by a scroll inscribed PERCUSSA RESURGO”—
“Struck, I bounce back”. That message of resilience is perhaps one to cheer us on as we consider these amendments in Committee. I beg leave to withdraw my amendment.
Baroness Fox of Buckley
Baroness Fox of Buckley (Non-Afl)
My Lords, I asked for this amendment to be degrouped because I wanted to ensure that the issue of equality, diversity and inclusion reporting was treated separately and as an important issue in its own right in the Bill. I thought that would mirror the way the Government have treated the same topic. I had problems with the original Bill that the Conservative Party introduced when in government. I was ready to oppose it, but in a fairly limited way. When the Bill came back with the new Government, things had been added. One of the announcements the Government made was of the importance of adding EDI—equality, diversity and inclusion—and that they were bolstering that in the Bill. I immediately became concerned. As we have all noticed, we have discussed it quite a lot already, but there is always more to say.
I want to establish something: it is admirable that corporations, institutions and football clubs are today keen to try to make themselves more welcoming places for minorities and for everyone. They should not employ any discriminatory practices that prevent people being able to participate equally—in this instance as fans, in employment or at any level of staff, management or players. The only thing that should matter is merit rather than prejudice; that should be the key principle. To be clear, my objection to the regulatory requirement for EDI reporting being added to the original Bill was not because EDI is some righteous vehicle for fairness in football governance but rather because EDI is a bureaucratic process—I would even say a bit of a virtue-signalling racket. It is expensive, ineffective and often counterproductive, and it opens the door to political interference by the state in football, something that a number of us are worried about.
On effectiveness, I remind the Committee that the Post Office won awards for its diversity and inclusion policies. The Post Office also had a modern slavery statement, a carbon reduction plan and a very worthy statement of corporate social responsibility. All the while, senior management at that same Post Office allowed its own sub-postmasters to be treated in the most inhumane, unfair and possibly unlawful manner. You can tick all the good governance boxes in the world and have award-winning EDI schemes on the books, but it does not equate to good governance.
To be less cynical, most employers mean well when they decide to implement EDI measures, but they can be so desperate to be seen to be doing the right thing that they rush into initiatives that do not work even on their own terms. Research by the Chartered Institute of Personnel and Development, the CIPD, has found a worrying number of business leaders who say that they did not do any research before launching their EDI schemes.
Talking of research, I urge the Minister to look at the government-commissioned report of the inclusion at work panel. It was convened by Kemi Badenoch when she was Equalities Minister and Business Secretary. In case that allows anyone to dismiss the report as some kind of biased Tory report, the panel comprised a range of private and public sector experts. It was advised on by a renowned Harvard University professor. It really is just research. The report concludes that EDI practices are often polarising and counterproductive, and can even be unlawful. For example, in pursuit of a more diverse workforce, overzealous employers have used so-called positive discrimination even though it is illegal under the Equality Act 2010. I am worried that this is the kind of thing that will happen in football.
I remind noble Lords of the case that I mentioned very briefly in the debate on an earlier group in relation to the Royal Air Force. In 2022, hoping to meet its diversity targets, it overlooked eminently qualified white applicants for female and ethnic-minority recruits. This was then found to be unlawful, and those candidates who were passed over received financial compensation.
I remind the Committee of the case of Linzi Smith, who was reported to the police, a victim of surveillance and barred by her beloved Newcastle United Football Club for holding legal views and expressing them, not at a football ground but on social media. Her football club and the Premier League have disciplined her, and she is now banned from attending football. It is an atrocious case.
I also draw attention to a compelling new study released by Rutgers University, which has found that EDI training often sows divisions and resentment in organisations, and that EDI practices can lead to perceptions of prejudice where none objectively exists. For example, it can happen when prioritising EDI schemes, then sending employers on endless training sessions and workshops, and telling them—depending on their race, sex, disability or whatever—that they are either victims or oppressors. Guess what: this fosters and exacerbates conflicts and resentments.
What is heralded as an effective solution to bigotry and prejudice seems instead to be fuelling the very problems that its advocates claim to want to solve. Therefore, I ask the Minister to pause and think before adding this to the Bill, to avoid opening up a hornet’s nest of division in football clubs.
After all I have said, we should not be surprised to discover that things are moving pretty quickly and we could be behind the times. In America, US corporates and organisations are now realising that what they call DEI rather than EDI is causing real problems; they are starting to realise that they should get out of it. Richard Lowry, editor-in-chief of the National Review, recently wrote that one of the most important events in America this year, outside the presidential election, was the intellectual collapse of what was described as the “DEI fad”.
The Wall Street Journal and various other American newspapers have noted some of this. Walmart, America’s largest private employer, is just the latest company to abandon DEI. It announced that, from 25 November, it was rolling back a slew of initiatives related to DEI. This has included winding down programmes providing assistance to suppliers that are 51% owned by women, minorities, veterans or members of the LGBTQ+ community. It is also phasing out the phrase “DEI” in its corporate messaging, and says that it will no longer give priority treatment to suppliers based on race or gender diversity.
According to the City Journal, Boeing, the aircraft manufacturer, has dismantled its global equality, diversity and inclusion department as it oversees a broad revamping of the company’s workforce. It is now emphasising hiring on merit, while truly caring for people, regardless of arbitrary one-dimensional identity or affinity group labels. It says that that is the way to go.
This is not just me going on about EDI; this is major corporates across the world, which have tried this stuff and said that it has been a disaster. You can also look at Harley Davidson, the car maker Ford, and the farming goods company tractor today. They have all rejected EDI goals, targets, report writing, quotas and so on. We have also seen consumer boycotts that have forced brands such as Bud Light and Target to retreat from EDI-inspired marketing campaigns. That seems to me to indicate that maybe a pause is required.
I now want to come back to football.
Baroness Fox of Buckley (Non-Afl)
I am glad that you agree.
Football can learn from other people; and, as we are importing EDI from the corporate sector and the university sector, we should see where it has been a disaster there before we impose it on football.
Most people in football, for obvious reasons, are not experts in EDI. You can imagine a situation where a football team is basically told that the regulator could punish them if they do not live up to the EDI requirements stipulated in the Bill. They will do what every organisation does in this situation. They will think, “We don’t know anything about critical race theory; we don’t know anything about decolonising; we don’t understand this stuff, so what should we do?” Of course, they outsource the work to the experts, who know. Third-party outsiders are brought in house. They are the kind of professionals who know all about EDI. Those professionals are not necessarily motivated by fair-minded, pragmatic goals. They are often activists: individuals or organisations committed to what I consider to be a political ideology—something like critical race theory. Look at how the diversity industry has wrought havoc on all levels of the public sector in this country: universities, museums, the Civil Service. This is a real source of contention. It does not matter what side you are on; it is causing divisions.
What began as an attempt to remove barriers for historically disadvantaged groups has grown into a thriving grievance industry. We have seen that one of the slogans of EDI is to bring your true, authentic self to work. My attitude is that you should leave it at home. The only thing you should bring to work is your professional self.
I commend the Secretary of State for Health, Wes Streeting, for making the point that your political views, if you are, for example, a hospital doctor, should stay at the door of the hospital. We are not interested in your true, authentic self. But of course, all the people are coming in and saying, “I have to express my true, authentic self as a doctor and tell you everything I have ever thought about Israel and Gaza”. That is out of EDI. That is where it came from. Your own Health Secretary has rather courageously pointed out that that that should be discouraged, if not disciplined.
This part of the Bill will oblige clubs to employ expensive pen-pushers with a particular expertise in writing reports, all because of the mandatory inclusion reports. These reports will not write themselves. We heard earlier from the noble Lord, Lord Maude, who is not in his place. He was talking about the challenges of writing complicated business plans. You have to get all the lawyers in. Let me tell you: to write an EDI report, you also have to learn a new language. It is a completely different world. They will be paying people to write this stuff.
It does not come cheap. The cash-strapped clubs facing financial strain—an issue we are keen to do something about—will now have to find the money to pay all these EDI directors. By the way, the assistant director of EDI community services in one local council was earning £103,000. These guys are not cheap. Which council was that person working for? Birmingham. It has gone bankrupt. This is what happens. You can waste money and your priorities can get completely distorted.
I do understand, by the way, that many football clubs have big EDI departments. The Premier League is like so many big well-endowed organisations and corporations, which very often have huge EDI sections—it is a growing industry. I disapprove of that, but that is up to them; I just do not want it to be regulated. But legally requiring smaller clubs to publish their inclusion strategies—explaining how their strategic plans will fulfil the EDI requirement, with annual equality reports and so on—seems to me to be taking their eye off what should be important. It inevitably steers organisations away from their actual purpose: winning games. Diversity training cannot become as important as football training. Encouraging clubs to demonstrate their EDI credentials could be an indulgent and dangerous distraction from what they should do and what they can do best.
Lord Jackson of Peterborough (Con)
I rise to support my noble friend Lady Fox of Buckley, and I was pleased to sign the amendment. Noble Lords should remember that the corporate governance statement is not a voluntary part of Schedule 5; it is a mandatory licence condition and a threshold requirement. A club simply cannot progress in the licensing process unless it abides by this rather pernicious sub-paragraph of Schedule 5.
My noble friend Lady Fox made an excellent case in saying that this should be removed from the Bill; it is disappointing. We have heard many times from the Government Benches—including the Minister and the Chief Whip, who is no longer in his place—that it is hypocritical for us on these Benches to criticise the provisions of the Bill, given that the previous Conservative Government introduced the original Bill. But noble Lords will now know that I refute this suggestion because I personally would have opposed many aspects of the Bill. I think it is a terrible Bill, frankly, and would have opposed it under the previous Administration.
The Benches opposite cannot make that charge on this particular aspect of the Bill, because this is a brand new inclusion by the current Administration. I am not sure why the new Government thought this was an important measure. It is disappointing that there are no Labour Back-Benchers supporting their own Government on one of the most contentious aspects of the Bill, although I concede that the hour is late.
There are already a whole host of measures that clubs and leagues take to progress inclusion and diversity. We had debates previously, a week or so ago, which made the point that this is covered, comprehensively, by the Equality Act 2010. It is also covered by a number of employment Acts, such as the Trade Union and Labour Relations (Consolidation) Act 1992, which would prevent direct and indirect discrimination without the heavy-handed nature of this provision. Because it is going to be set down in primary legislation as part of a corporate governance statement, it will very quickly become not just statute law but case law, so it will be a de facto tablet of stone—irrevocable, a settled document.
That worries me, because we know there is a huge amount of bureaucracy—and I can say this as a former human resources specialist. There are, per capita, more HR specialists in the UK than practically anywhere in the European Union and the developed world. That means there will not just be this corporate statement; there will be the bureaucracy of impact equality assessments, people specs, job specs, race action plans, EDI plans, LGBT plans, et cetera. This is what it will become. It will be about a divisive attempt to segment and disaggregate different fan groups. I think that will be deeply regrettable. Therefore, I think it will give rise to anger and resentment—the very opposite of the sense of cohesion, belonging, unity of purpose and community pride, which surely are the raison d’être of football.
As an example, Peterborough United—Posh—posted a single photo on its Facebook page of a Pride flag. I do not have a problem with a Pride flag. I treat gay and lesbian people with respect. They are football fans; they can come and go as they wish. I make no value judgment on that. But it gave rise to an absolute deluge of negative comments on the Facebook page, and it set fans against each other. It was seen, cynically maybe, as virtue signalling by Posh. It was a kind gesture, but it backfired, I am afraid.
The Bill claims to have the interests of the fans at its heart, and the Government claim the same. It strikes me as incredibly bizarre that they have no clue what the fans actually want. Is there any quantitative or qualitative data to back up whether this provision is needed in the Bill? Football fans are not interested in EDI. They want their clubs to be run properly; they want the teams to deliver high-quality football. They actually believe in fairness and decency, not tick-box virtue signalling.
Finally, there is the issue of cost to the clubs. Policy Exchange, the think tank, has highlighted its recent annual report, Politicising Business, the enormous cost that EDI can place on clubs. It has analysed the cost of the new EDI rules that the FCA brought in for firms that it regulates in December 2023. It estimated that the new rules will incur a one-off cost of £561 million, and ongoing costs of up to £317 million a year to businesses—that is over £500 million for firms simply to improve their diversity and equality policies, which are already embedded in existing legislation. Surely this cost will be prohibitive.
Finally, I ask: what are the objectives? What are the key performance indicators? What does success look like? What does a cost-benefit analysis look like? This is about appearing virtuous and will result in conflict and discord. I do not believe that it should be in the Bill. We should trust clubs to do the right thing and to treat people both properly and fairly.
Lord Moynihan of Chelsea (Con)
My Lords, the hour is late and I found my brain somewhat pounded into stupefaction by the thoughts of the noble Lord, Lord Parkinson of Whitley Bay. I found myself, perhaps disloyally and strangely, in agreement with the thoughts of the noble Lord, Lord Addington, on that matter. In this state of stupefaction, I am concerned about the serried ranks on the Government Benches waiting to jump on any mistake that I might make, so I hope that they, or perhaps their ghosts, will forgive me for any. I shall make just three quick points because the noble Baroness, Lady Fox, and the noble Lord, Lord Jackson, have said it all. I could perhaps just say what they said, but I shall try to make three very quick points, in view of the lateness of the hour and the evident but brave tiredness of the ranks in front of me.
My first point is that EDI is, believe it or not, for those who desperately believe in it and think it is tremendously important and essential to have in the Bill, a passing fad. It is a fashion. It is not even a fashion that we came up with: it is a fashion that we imported from America. My wife was, for many decades, a fashion designer in New York and she would point out to me how the colour would be decided in New York and the next year it would be copied in London. The line, the cut, the theme of fashion would be decided in New York and a year later would arrive in London. So it is with all these moral panics that, for the last decade we have seen arise, one by one, be taken very seriously and gradually fade away.
The noble Baroness, Lady Fox, talked about how, even now, American academia having become obsessed with it for many years, everybody is getting bored with it because it actually turns out to be a bit of a disaster. One by one, all these moral panics will disappear and, in coming decades, people will ask, “Why on earth did they think that way? What on earth told them to do that?” There is, as the noble Lord, Lord Jackson, said, no academic evidence. The academic evidence that companies such as McKinsey used to make hundreds of millions or more out of companies for selling these lines has been shown to be disreputable by careful academic analysis. I know; I used to work for McKinsey. There were 800 people around the world when I worked there; there are now 46,000 and the numbers grew on stuff like this, without any really valid academic basis. It is a passing fad and I hope we will not allow it to become implanted into football just at the time that it is beginning to fade.
My second point is that it crowds out useful activity. I spent decades advising chief executives of the largest companies in the world as to what they should do, and the one thing that I and so many others like me advised them on was focus: do not allow yourself to get distracted. But noble Lords who have been here during this Committee will remember that I have frequently described the Bill as a Christmas tree. What we have heard is everybody trying to hang baubles on the Christ1mas tree.
Baroness Brady (Con)
My Lords, I will address the amendment tabled by my noble friends which seeks to remove equality, diversity and inclusion requirements from the corporate governance code outlined in the Bill.
First, I acknowledge a concern that I believe underpins this amendment: the sense that EDI has, in some cases, become a compliance-driven exercise, where box-ticking and slogans replace meaningful action and real change. I recognise the frustration with the rise of what some see as the EDI industry, where jargon-laden initiatives create more paperwork than progress and risk alienating those they seek to engage. I share those concerns.
I know from my experience in football and the wider business arena that real change does not come from bureaucratic edicts or tokenistic gestures. In the end, change comes from understanding people and the barriers they face, the biases they encounter and, above all, the opportunities they need to succeed. For me, EDI must be about more than processes; it must be about outcomes.
This is where football, and particularly the Premier League and its clubs, is showing how it can be done and done well. The Premier League’s equality, diversity and inclusion standard, or PLEDIS, is a good example of an enabling framework that empowers clubs to embed EDI in their operations while avoiding the pitfalls of bureaucracy. I am very proud to say that West Ham United have been awarded the highest level of PLEDIS you can get.
PLEDIS is not a blunt tool; it does not impose rigid, one-size-fits-all rules. Instead, it provides clubs with expert guidance and a structured framework to identify their own unique challenges and set meaningful goals. For example, clubs are supported to collect and analyse data so that they can understand where underrepresentation exists, whether in senior leadership, academy coaching staff or community programmes. Clubs are helped to develop tailored plans based on their specific circumstances, whether that means increasing female representation in the boardrooms or improving accessibility for disabled fans. PLEDIS helps to bring about a genuine culture of learning and development. We have held some really good educational sessions about unconscious bias, cultural awareness and inclusive leadership.
I am not saying that everything the Premier League does is perfect, but we have tried collectively to develop a system that avoids the pitfalls of bureaucracy and instead empowers clubs to take ownership of their EDI journey. You need some outside help and challenge for it to work effectively. You need external expert support to ensure that clubs are not left to navigate this work alone and to help clubs turn principles into action, with practical advice rather than burdensome mandates. The key to success in EDI is not just to measure compliance but to drive cultural change. That is what the Premier League approach aims to achieve. I believe that PLEDIS almost always continues to be used when clubs are relegated to the Football League, because clubs find it so valuable.
Consider too the impact of initiatives such as the Premier League’s No Room For Racism campaign. Although public facing, this work is backed by systemic efforts within clubs to tackle discrimination, create pathways for underrepresented groups and hold those in power accountable for progress. The Premier League has developed great programmes to develop more black coaches, bring more South Asian players through the talent pipeline and help black players on the path to becoming club executives.
All this matters, and I fully agree with my noble friend Lady Fox that it cannot be about box-ticking. It is about ensuring that every player, coach, staff member and fan feels that football is for them. When implemented correctly, EDI does not create diversion or resentment; it fosters unity by ensuring that everyone has a fair chance to participate and succeed.
I have a lot of sympathy for my noble friends who worry about the potential for overreach or missteps in EDI, and my noble friend Lady Fox is right that poorly conceived and implemented EDI policies will be burdensome and ineffective. But now that EDI has been put into the Bill, my approach will be to work with the football regulator to ensure that it is done thoughtfully, innovatively and with that laser focus on outcomes. Football clubs will have nothing to fear from embracing this work. EDI done well is not a threat; it can strengthen clubs by ensuring they reflect the communities they serve and are able to attract diverse talent, and will fundamentally make their clubs better places for everyone to work.
This does not have to be a binary choice between rigid mandates and doing nothing. The best path forward is an enabling framework supported by expert guidance and underpinned by meaningful accountability. Clubs should be encouraged, not coerced, to embrace this work; it can and it should be aspirational. I urge the Government and the regulator to consider how these requirements can be implemented with that spirit in mind.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to the noble Baroness, Lady Fox of Buckley, for bringing this amendment and for giving us opportunity to look at the new additions that the Government have put in the Bill. As my noble friend Lord Jackson of Peterborough reminds us, this is one of the areas in which the Bill has changed from the Bill that was before the previous Parliament. He did not like the other one either, but I think that it is clear that he likes these provisions even less.
While I am highly supportive of efforts to improve equality of access for people in football and indeed in all sports—when we last looked at these issues, I spoke about the progress we have made in tackling the horrendous racism and homophobia that blighted football for a long time—I share some of the concerns that my noble friends, including my noble friend Lord Moynihan of Chelsea, have raised about enshrining in law what are clearly shifting sands. As the ever-changing acronyms and the ever-expanding rainbow of colours on flags and lanyards show, this is an area that continues to change, and we must not allow the noble aim of opening up access for people and treating everybody with equal respect to be pegged to a certain moment in time in the way that it is done. I am mindful too, as my noble friend Lady Brady has just reminded us, of the enormous strides that clubs have taken to drive improvement in this area, and we congratulate West Ham on the recognition that they have won for their work on that.
We must be very wary of what is a mandatory requirement in the Bill, in the way that the noble Baroness’s amendment focuses on, and the clear cost and burden that will impose on the clubs that have to comply with it. My noble friend Lord Jackson of Peterborough spoke about those costs and burdens, and he was right as well to worry that, with the work that is done in this area, we sometimes inadvertently bring about division rather than diversity as we pit various groups of people against one another in what sometimes feel like informal hierarchies of grievance.
I share some of the concerns that my noble friends have raised, and I am grateful to the noble Baroness, Lady Fox, for honing in on this further requirement that the Government seek to impose on clubs. I hope the Minister will respond to the points that they have raised.
Lord Addington (LD)
My Lords, all I can say about this is that I may not have disagreed with every single word that the noble Baroness, Lady Fox, said, but I certainly disagreed with her tone.
Baroness Twycross (Lab)
My Lords, reflecting the point from the noble Lord, Lord Addington, I am afraid that the noble Baroness, Lady Fox of Buckley, and I fundamentally disagree on this area of the Bill, but I am glad of the opportunity for your Lordships’ House to debate this issue and thank her for the amendment, as it allows me to clarify why the Government have added this provision.
The Government believe that equality, diversity and inclusion are key elements of good corporate governance. This is not about moral panic, as described by the noble Lord, Lord Moynihan of Chelsea, or virtue signalling, as described by the noble Lord, Lord Jackson of Peterborough. I appreciate that the noble Lord, Lord Moynihan of Chelsea, will have a different view on the research from the likes of McKinsey, but it has shown that diversity on boards and in organisations promotes better governance, decision-making and transparency—arguably, the noble Lord’s point about its growth as a company might demonstrate that it could have a point. All this, in terms of better governance, decision-making and transparency, contributes to improved financial sustainability. The noble Baroness, Lady Brady, highlighted the value of considering EDI within the corporate space.
This relationship between diversity and better corporate performance is recognised also by the Financial Reporting Council and the Association of Chartered Certified Accountants. The industry is already taking action in this space, and I welcome the expertise of the noble Baroness, Lady Brady, in this area and her example of PLEDIS, but for a regulator that will be introducing a corporate governance code and requiring clubs to report against it, it is only right that such a code also covers EDI. The regulator will look to co-operate with other stakeholders, draw on the expertise of the sector and add to industry initiatives. I am sure that they will want to engage with the noble Baroness, Lady Brady, on this point as well.
As with fan engagement, this will be a statutory baseline, so clubs that already champion equality, diversity and inclusion will not have any additional burden placed on them other than having to periodically report on these things. Under the corporate governance code, clubs will simply be required to explain how they are applying the code and what action they are taking on equality, diversity and inclusion. That is not onerous, but it is a very helpful transparency measure. This transparency will only be a good thing, and I am afraid that if noble Lords disagree with that, we are simply of very different minds on this issue.
Lord Jackson of Peterborough (Con)
Before the Minister sits down, may I ask, given that this is a specific difference from the previous Bill, what specific football-related research was commissioned by the Government that led them to believe that it was imperative to add this provision to the new Bill? If that question is too difficult to answer now, perhaps the Minister will write to me.
Baroness Twycross (Lab)
My Lords, it is getting late and I have just dropped all my notes. This is not actually about football per se; it is about good governance. The regulator will be concerned with sustainability. As a sustainability regulator, its interest in equality, diversity and inclusion is that it contributes to good corporate decision-making, which, in turn, makes clubs more sustainable. This is why the regulator will encourage good EDI in clubs by requiring them to report on what action they are taking to improve EDI. That transparency will only be a good thing. I therefore hope that the noble Baroness will withdraw her amendment for the reasons I have given.
Lord Moynihan of Chelsea (Con)
Before the Minister sits down, may I offer to send her the academic study headed, “Study linking ethnic diversity with performance by McKinsey questioned by academics”? I am very happy to send her this. It completely rebutted the McKinsey finding that she quoted. It would be very useful were she to understand that that has been rebutted, so that she might not be quite so keen on the ideas she wishes to espouse, and we could come together on that point.
Baroness Twycross (Lab)
The noble Lord is very welcome to send this to me, but I am afraid that, as somebody who used to work in governance myself, I am quite committed to the concept that good governance should also include good EDI.
Baroness Fox of Buckley (Non-Afl)
My Lords, I thank all those who joined in with this short debate. To the noble Lords, Lord Jackson and Lord Moynihan, and to the noble Baroness, Lady Brady, I emphasise that, despite what anybody says, they are not my friends, even though they call me their friend. I do not mean that in any rude sense. I know that the noble Lord, Lord Addington, has decided that he has taken against my tone. I do not know what I have done wrong there. I did not think I had a tone: I just made a speech. I just want to clarify that they are not my friends, but they spoke brilliantly well and interestingly on this issue.
It is very important to draw the Government’s and the Minister’s attention to new evidence that has emerged. I know the Minister did not mean to say this, but it is not advisable to say, “I have worked in this, and I am committed to this view”, given that circumstances are changing and new evidence is emerging all the time. It would be better to be open-minded. I made the point about the Post Office, and it is a good example. The Post Office won those awards for EDI and good governance at the same time as the Post Office scandal.
I definitely do not want to micromanage freedom of speech—and I do not think that the Government have any intentions of doing that through this part of the Bill—but to say that this is not the appropriate time to raise trans inclusion is not true. The truth of the matter is that it is through EDI policies that the issue of trans has become so controversial for women in women’s football. I have not raised this just because I am trying to shoehorn it in; that is the basis on which it happens.
Before I formally withdraw because of the time, I finish by saying that I absolutely do not think that football clubs should sit back, do nothing and not care about the fact that they are inaccessible to anybody or should put up any barriers to anyone getting involved in football. Most football clubs are at the heart of their community, and they do not need to fulfil all these schemes to involve a wide range of people. Every small football club I know is going way beyond anything that any EDI pen-pusher could imagine to involve the socially excluded from the local area. They are the heart and soul of local areas. My concern is that they will end up spending too much time writing reports and not doing that. That is my concern about EDI: it is an industry, so it is not helping to include anyone or create any diversity and so on. It has become a politicised, dangerous threat. I beg leave to withdraw the amendment.
Member’s explanatory statement
This amendment permits the Regulator to restrict funding for clubs which may be linked to conduct harmful to the interests of the United Kingdom.
Lord Parkinson of Whitley Bay (Con)
My Lords, in moving Amendment 170, I will speak also to the other amendments in this group in my name, Amendments 194, 196 and 197. These all relate to foreign interference in football clubs, a topical issue today, given the debates that have taken place in another place on Chinese espionage and the Government’s tardiness in introducing a foreign influence registration scheme.
Amendment 170 in my name seeks to expand the scope of the regulator’s role in varying a club’s licence conditions. As drafted, the Bill is clear that the regulator may vary a club’s licence conditions to restrict its acceptance of funding which the regulator reasonably suspects to be connected with serious criminal conduct. This is a very significant power and an important one—none of us wants to see funding connected with serious criminal conduct in football. By the same token, I hope the Government would agree that funding that the regulator reasonably suspects to be linked to conduct harmful to the interests of the United Kingdom should have no place in football either.
There is an important point here, as those involved in funding football in this country might be involved in perfectly legal activities internationally, which, while legal elsewhere, may harm our national interest. I hope the Minister can explain why, if the regulator is equipped to make a judgment about criminal conduct, it would not be able to make a judgment on conduct that is harmful to the national interest as well.
Amendment 194 seeks to expand the terms of reference for the regulator’s determination of whether a person has the requisite honesty and integrity to own or run a football club to include whether an individual is a member of a proscribed terrorist organisation. The principle behind this amendment is that proscribed terrorist organisations have no place in football. I am sure that all noble Lords in the Committee agree with that.
The Government may argue that this amendment is not necessary but, given the number of foreign owners of clubs and the many appointments of international officers in the football sector, it would give the regulator the power it needs to protect football from people who are found to be members of proscribed organisations. Sadly, it is far from inconceivable that somebody resident in the UK might be found to be a member of such a proscribed group. In those circumstances, surely the Government would want the regulator to have the tools to end their involvement in football swiftly. What assessment have the Government made of the risk of people who are members of proscribed terrorist organisations being involved in football clubs in this country? Have the Government looked at this and deemed it unlikely? Have Ministers come to a view about an acceptable level of risk? If the risk is greater than zero, can the Minister explain why the regulator should not have a power such as I have set out?
I accept that proscription is not always of the same utility in relation to different terrorist networks or to the work of lone wolves. I would be happy to discuss a broader criterion, perhaps looking at a reasonable belief that someone is involved in terrorist-related activity, to capture that. I think there is a loophole that we ought to try to close in our scrutiny of these provisions.
Amendments 196 and 197 relate to Clause 37. They seek to ensure that the regulator can carry out its duties effectively, responsibly and in close co-ordination with key public bodies that can assist its work in this area. Amendment 196 would require the regulator to consult a range of bodies, namely the National Crime Agency, the Security Service, the Secret Intelligence Service, the Serious Fraud Office, His Majesty’s Revenue & Customs and the Sports Grounds Safety Authority.
The regulation of football clubs cannot be divorced from our wider national interest. Football is more than a sport. It is a vital part of our national culture, economy and global reputation. We know it is a sector that can attract bad actors, financial mismanagement and, in some cases, criminality. Whether it is safeguarding clubs from fraud, tackling money laundering or ensuring that stadia meet safety standards, the regulator will need the insight and expertise of these key agencies in doing its work. This is about equipping the regulator with the best possible advice. I hope that the Minister will look at that with some care.
Finally, Amendment 197 would replace the mandatory “must” with the discretionary “may” in relation to the regulator’s engagement under Clause 37(3). This minor adjustment carries significant practical implications. Its purpose is to avoid placing an excessive legal burden on the regulator to consult in circumstances where it may not be necessary or proportionate. By providing discretion, we would give the regulator the flexibility it needs to prioritise its resources and respond to situations on a case-by-case basis. This amendment would not weaken the regulator’s responsibilities; rather, it allows for common sense to prevail. It reflects our commitment to safeguarding the integrity of football while ensuring that the regulation is not heavy-handed. I beg to move.
Lord Jackson of Peterborough (Con)
My Lords, I support my noble friend Lord Parkinson’s excellent amendments. They are straightforward, sensible and in keeping with recent developments whereby the previous Administration established in primary legislation quite strict rules about the takeover of British businesses by foreign entities. Soft power and the global kudos and prestige of football cut both ways. They could be used by bad actors, foreign countries and state-owned entities in those countries for nefarious and possibly criminal activities such as money laundering.
Therefore, the Government would be wise to take on board the concerns that some of us on this side of the Committee have. In that respect, Amendment 196 is sensible, because we have a regime which looks at foreign entities’ ownership of UK interests. It would be irresponsible to disregard the intelligence and information provided by the agencies mentioned, particularly the National Crime Agency and the security services, in making a reasonable, fact-based decision about the efficacy or otherwise of ownership.
Given that ownership runs through this Bill quite prescriptively at a micro level, in terms of very small clubs, it is only sensible for the Government to consider how big strategic ownership decisions would be affected by this Bill. In that vein, it would be wise for the Government to consider accepting these amendments.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Markham, Lord Moynihan and Lord Parkinson of Whitley Bay, for tabling these amendments. I will take them in turn.
On Amendment 170, in the name of the noble Lord, Lord Markham, I understand that the intention behind the amendment is to allow the regulator to block a club from accepting funding that it reasonably suspects to be harmful to the interests of the United Kingdom. I agree that it is important to protect clubs from harm; that is what the Bill as a whole seeks to do. The intention of having this power, as set out in the Bill, is to protect English football from illicit finance and keep it out of the game. Illicit finance is inherently unsustainable.
However, I caution the noble Lord as to the implications of a football regulator discerning what is harmful to the interests of the United Kingdom and then blocking such funding. This is not something that a regulator can determine. They can make evidenced-based decisions on facts in a clearly defined framework. It also must be noted that there are protections in the Bill that go beyond protecting against serious criminal conduct to protect against wider harm. For example, the owners’ and directors’ test will look at the fitness of a club’s owners and officers, including any criminal history and investigations and whether the individual has been prevented from entering the UK. This seeks to protect English clubs from unsuitable owners or officers making decisions that may endanger their club. This, in conjunction with the power to restrict funds suspected to be connected to serious criminal conduct, will help to ensure that clubs are protected from harm.
I turn to Amendments 194, 196 and 197 in the name of the noble Lord, Lord Parkinson. On Amendment 194, I reassure the noble Lord that the intent of his amendment is already achieved within the current drafting. When assessing an owner’s or officer’s fitness, the regulator must have regard to any criminal convictions and proceedings, including those included in Schedule 1 to the Serious Crime Act 2007. Membership of a proscribed organisation is an offence under the Terrorism Act 2000, and that offence is included in paragraph 2A of Schedule 1 to the Serious Crime Act. Consequently, the current provisions in the Bill deliver the intent of this amendment. I hope that he is reassured by that.
On Amendment 196, I agree that it is vital that the regulator has access to information when assessing the suitability of owners and officers. The regulator may need to work closely with other organisations and stakeholders when exercising its wider functions. That is why the Bill establishes information-sharing arrangements with a range of organisations including the National Crime Agency and the Serious Fraud Office and why it adequately empowers the regulator to gather information, including from other organisations, to assess suitability. However, to require the regulator, as the amendment would, to always consult multiple organisations, even when this is not necessary to its ability to make an assessment, would be disproportionate. It would lead to slow decision-making, impacting on growth and investment. It would be a wholly unnecessary burden on clubs. As part of the fitness test, officers will be assessed on their competence, specifically their qualifications, experience and training.
Amendment 197 would give the regulator discretion as to whether to consider these matters when assessing competence. General public law obligations would still require the regulator to act consistently and fairly when testing officers. However, this amendment would give officers less certainty about what they will be tested on.
Finally, on the amendment from the noble Lord, Lord Moynihan, the whole point of the owners’ and directors’ test, which has been carefully designed, is to ensure that club custodians are suitable for assessing an owner’s fitness—this is absolutely crucial. It is right that any owner passes the tests set out in the Bill, so it would not be fair, appropriate or responsible to exempt certain types of owners from testing, but that is precisely what this amendment seeks to do. This amendment intends that owners with diplomatic status or who are Heads of State, Government Ministers or high-ranking officials of foreign Governments would not be tested. I do not need to tell noble Lords about some of the people this could exempt from testing. That means that the regulator could not consider any personal finances or criminal history, no matter how egregious. Instead, it would have to ignore these matters, so the regulator could be letting unsuitable owners in. This could be incredibly risky for the club, and any incumbent owner captured by this amendment could also never be tested, even if concerning information subsequently came to light.
Suitability should be based purely on an impartial assessment of the criteria set out in the Bill. This will ensure that the test can be applied consistently, remain fair, transparent and robust, and focus on whether an individual is suitable to own a football club. For the reasons I have set out, I would therefore be grateful if the noble Lord would withdraw his amendment.
Lord Parkinson of Whitley Bay (Con)
As the Minister spoke, I wondered whether the staff and relevant board members of the regulator will have the requisite security vetting to be able to consider some of the matters that they might need to in this area. One reason I was keen that they engaged the appropriate authorities was to make sure that things which are, by nature, highly classified and sensitive can be provided to them so that they can give advice. If the Minister is not accepting my amendment to open the channels of dialogue there, is she able to say anything, now or later in writing, about the vetting that staff and others at the regulator would receive?
I am conscious that immediately before we came into this Committee, the Minister’s noble friend the Lord Privy Seal moved the Motion to appoint members to the Intelligence and Security Committee. We make sure, rightly, that people who are suitably qualified are able to look into this area of our laws. I wonder whether she can just say a little, now or later, about the vetting and assistance that staff will have?
Baroness Twycross (Lab)
I could talk at great length about this, but instead, I reassure noble Lords that I can confirm that staff will be able to engage with all relevant authorities on such issues.
Lord Parkinson of Whitley Bay (Con)
I appreciate that it is late. If the noble Baroness could put some of what she might have said in a letter, that would be useful. It is unfortunate that we are reaching what is a rather serious subject at what I know is a late hour with very few people left in Committee, but it would be helpful to hear a bit more about this as we ponder the issue further ahead of Report.
Baroness Twycross (Lab)
I would like to make it explicit that they will have the relevant clearance to deal with this issue.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the noble Baroness for that. If there is more she is able to say, I am sure that other noble Lords who are not able to be here and who take an interest in these matters would appreciate that.
The noble Baroness said that the regulator is not really equipped to decide what is harmful to our national interest. That is why, in our version of the Bill, we had the provision on taking into account UK trade and foreign policy. I know the reasons why the Government have taken that out of the Bill—because of the concerns UEFA and others raised about political independence—but I worry that, in doing so, we might lose something about our national interest which is quite important. That is why I was seeking to reinsert that criterion into the consideration. We might come back to that issue once she is able to say anything more that she wishes to, and once other noble Lords who are interested can join the discussion on this point.
Given the hour, and with gratitude to the noble Baroness for all her answers today, I beg leave to withdraw my amendment.
Football Governance Bill [HL]
Wednesday 18th December 2024
(1 month ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Amendment Paper: HL Bill 41-VI(a) Amendments for Committee (Supplementary to the Sixth Marshalled List) - (17 Dec 2024)
Lord Markham
Member's explanatory statement
This amendment removes the ability of the IFR to restrict a club’s overall expenditure.
Lord Markham (Con)
My Lords, I shall speak also to Amendment 173A in the name of my noble friend Lord Moynihan and Amendment 173B in the name of my noble friend Lord Hayward.
The amendments in this first group carry on from our discussion on the licensing regime on the previous day of Committee. The amendments rightly deserve their own group since they relate to the specific financial conditions that clubs will be required to abide by as part of their licensing conditions. My Amendment 172, which is in the name also of my noble friend Lord Parkinson, would remove Clause 22(3)(c). That provision permits the regulator to restrict the overall expenditure of a regulated club. We do not believe the regulator should be able to attach a discretionary licence condition which places an overarching restriction on a club’s expenditure. This is surely an overreach of the regulator’s financial powers. The point has been made on many occasions, not least by the Minister, that the aim of this Bill is to ensure the financial sustainability and resilience of football clubs. How would telling a club how much money it may spend aid it in achieving that goal?
The key thing here is not expenditure but profit. Spending £50 million on a player might sound like a lot, but if that player is worth £60 million, I think we would all call that good business. An expenditure cap could stop that happening. If the goal is financial sustainability, surely the focus needs to be on profit or cash, not on expenditure. It is almost like a manager of a football club saying, “Look, it’s not just good enough that you go out and win today. We want you to score in the first half, then the other team can equalise and then we need you to score the winner in the last couple of minutes of the game”. It is trying to micromanage and overengineer. No one can ever do that.
Lord Moynihan (Con)
My Lords, I rise to speak to Amendment 173A standing in my name on the Order Paper. Here, we are referring to Clause 32, and it is the Secretary of State who will be taking a power beyond this Bill, not even by positive resolution but by using a much lighter negative resolution procedure, to determine the time period for the approval of new owners and offices. I quote from the Government’s memorandum to the Delegated Powers and Regulatory Reform Committee, which states that
“the contents of the IFR’s suitability tests may likely change, compared to when the Bill is introduced … Once the contents of the IFR’s tests are set in statute, the Government will be better placed to set the time window in regulations”.
This is, after all, an important clause which addresses the scope of powers to attach or vary discretionary licence conditions. I would have thought that the consultation period should be very specific and placed on the face of the Bill. There is a risk here that the regulator may not consult the clubs in the leagues and just hurry the process through, which I am sure is not the intention, but why on earth not put it on the face of the Bill—not only which clubs and leagues are affected—which is not part of the Bill, as we have previously debated?
The very least the Government can do on this occasion is amend this clause, given the scale of these powers, and change the scope of the manifold discretionary licence conditions that the Government, not the regulators, are imposing on football clubs here. They must consult them. It seems eminently sensible that they should consult them, and I would have thought that the Minister would be the first to say that they will consult them. If they will, I cannot understand why we would not put that in the Bill.
My amendment says simply that, before submitting a request under subsection (6), the regulator must consult, first, the clubs; secondly, “each specified competition organiser”; and, thirdly, such other persons as the regulator considers appropriate. The consultation, as it stands, is not specific enough and risks the regulator not consulting the clubs and leagues on this issue. I really do believe that there would be every intention for the regulator to do so, so let us just clarify that in the Bill so that there is no danger that the regulator would avoid that possibility. I hope my amendment gains the approval of the Minister when she comes to wind up.
Baroness Evans of Bowes Park (Con)
My Lords, I speak in support of Amendment 173B, tabled by my noble friend Lord Hayward, who I hope feels better soon. It introduces a number of key principles for the governance of capital buffer requirements that the IFR could potentially impose. This amendment fills an important gap in the Bill. I am also supportive of other amendments encouraging the IFR to adopt an outcome-focused approach, allowing the leagues to develop detailed financial rules within the overall statutory framework, as this will help to preserve the competitive balance with the design of common rules for all clubs. I am sure that the Minister will agree that this approach reflects the light-touch model that she has been describing.
As we heard in our debate on Monday, the Bill allows for a more interventionist approach for the IFR with individual clubs, through its discretionary licence conditions. In these cases, it is important that some clear parameters are set out in the Bill to ensure that any capital buffer requirements that may be developed are workable, proportionate and reflective of football’s realities.
Football clubs operate in vastly different financial contexts, even within the same pyramid. At one end, a relatively modest capital buffer of, say, enough to cover six months of operating costs might have saved a club such as Bury, for instance. But, at the other end, the challenges faced by Premier League clubs are of an entirely different scale. For a Premier League club relegated to the Championship, or indeed a club expecting but then failing to qualify for the Champions League, I understand that the financial shock can amount to as much as £90 million to £100 million.
Crucially, the way these clubs manage such risks is fundamentally different from clubs in lower leagues. At this level, as we have heard, clubs do not rely on cash reserves alone. Instead, they utilise a range of financial tools, including player trading, which is a core part of football’s economic model, as well as secured credit facilities—often backed by guaranteed revenues—and parachute payments, which I know we will discuss later and which help with the transition on relegation.
Without explicit reference in the Bill, there is a danger that the IFR might impose overly rigid liquidity requirements that would privilege clubs with access to unlimited working capital—I am thinking, for instance, of those backed by sovereign wealth funds—while unfairly disadvantaging others. This amendment would ensure that capital buffers reflect the real-world financial tools that clubs use to manage risk, including non-cash assets, as I have just described.
The single most important liquid asset for football clubs towards the top of the pyramid is their players. As I am sure my noble friend Lady Brady can tell us, player trading is often one of the first mechanisms that they turn to when managing financial shocks—yet the Bill provides no clarity on how the IFR will treat these assets. Even when player liquidity is recognised, valuation of these assets is critical. Under current UEFA financial fair play rules, players developed through academies are often valued at zero, for instance, based on book value, rather than their actual market worth. The purpose of UEFA’s rules is different, but, if copied by the IFR for the purposes of capital buffers, for instance, this could penalise clubs such as Crystal Palace, Southampton, West Ham or Arsenal, which have brought through many talents into their first teams in recent years.
This amendment therefore seeks to ensure that the IFR adopts sophisticated valuation methodology, including proper independent valuation of players and, in particular, a proper recognition of the value of academy players. Without these safeguards, the IFR risks undervaluing clubs’ most significant assets, forcing them to meet capital buffer requirements that are, in practice, unnecessary.
We have heard many times in this Committee that the competitive balance is the lifeblood of football, but poorly designed capital buffer requirements could easily and accidentally disrupt this balance. We must avoid this outcome, so I hope that even if the Minister is unable to accept the level of specificity in Amendment 173B, she will recognise that this area of the Bill is a source of anxiety for clubs. I hope she will agree that the principles within this amendment are important and that it is the Government’s intention that the IFR pursues a tailored approach, informed by guidance, that will protect the competitive balance and investability of the English game.
Lord Pannick (CB)
My Lords, I declare again my interest as counsel for Manchester City Football Club in recent disciplinary proceedings brought by the Premier League. I offer my support to Amendment 173A from the noble Lord, Lord Moynihan. We discussed the principle of consultation on Monday evening. I repeat that, in my view, consultation with clubs and specified competition organisers is vital to ensure that they have confidence in the operations of the regulator. It is also vital to ensure that the regulator is operating, as he or she would want to do, in a fair manner. I very much hope that the Minister will give consideration to that and bring an amendment back on Report, in relation to Amendment 173A and earlier provisions of the Bill.
I am far less keen, I regret to say, on Amendment 172 from the noble Lord, Lord Markham, which seeks, as I understand it, to remove from the Bill the discretionary licence condition relating to restricting the clubs’ overall expenditure. I suggest that it is important to see the limits of that power of the regulator, because Clause 22(4) provides that this discretionary licence condition
“may not impose restrictions on expenditure of a particular kind or a particular transaction”.
As I understand it—the Minister will say whether or not this is correct—the regulator would therefore not have the power, using the example given by the noble Lord, Lord Markham, to say, “You can’t buy a particular player for £50 million”, as that would be outside the scope of Clause 22.
It is not difficult to see that there may be circumstances —one hopes that they would be very rare indeed—where the regulator takes the view that its objective under Clause 6
“to protect and promote the financial soundness of regulated clubs”,
which is what it is there for, would be damaged if it did not have a power to restrict in exceptional circumstances a club’s overall expenditure.
Lord Addington (LD)
My Lords, I am beginning to wish I had jumped up before the noble Lord, Lord Pannick, because I have come to a similar conclusion.
For every success story in football, if you look you will find a failure. It is often the case when people come forward and buy themselves the dream team, then something goes wrong. You will find that especially in the lower levels. There are stories of those clubs, with Bury et cetera copping out, that have more expenditure going out on wages than they have coming in from revenue. If the regulator does not have the power to stop that speculative spending in certain circumstances, it is being denied a basic power over one of the biggest problems that has led to instability, particularly in the lower parts of the game. After some of the discussions we had on this, I really cannot see how we can support the lead amendment here and still have the central thrust of the Bill.
How will the regulator assess the slightly strange finances of investing in people who are always one trip away from being worth nothing? One accident on a training field and your principal asset is worth nothing. How is that taken into account and balanced, which would require a level of expertise? Does the Minister have examples of where information will be gathered to make a sensible assessment on this?
On speculative purchases, we have heard about deals with agents, et cetera, on other parts of this Bill; it is important to bear in mind how these are done. If the Minister has information on how that information will be gathered and those assessments made, I would be very interested to hear it.
Lord Moynihan of Chelsea (Con)
My Lords, I hope the Minister will bear in mind that the repeated statements “For every winner there is a loser”, “The Premier League is in terrible danger” or “Football is in terrible danger” just ignore the fact that football is tremendously successful in this country. If for every winner there is a loser, there would have been no progress in the last 20 years. There has been progress and enormous success. We now have the greatest football league in the world. The statement that “Your biggest asset is only one accident on a training ground away from being worth nothing” completely ignores the fact that all football assets—all players—are insured. If, God forbid, your best player was injured irrevocably on the training ground, you would receive an enormous insurance payment, so it is just not true. The actual commercial realities of what is going on in football in this country seem to be completely mis-stated so often in this Chamber. I hope that the Minister will take heed of the tremendous success that private enterprise, unfettered by an onerous regulator, has created in the world of football in our country.
Lord Markham (Con)
I will sum up on a couple of new points. I always welcome comments from the noble Lord, Lord Pannick, because his forensic brain is really helpful in making sure we get to the bottom of what we are talking about. I have only just had a chance to look up Clause 22(4); this is about the regulator’s ability to restrict expenditure. It says that the regulator
“may not impose restrictions on expenditure of a particular kind or a particular transaction”.
That can be open-ended, unless the particular kind or particular transactions are defined somewhere; they could refer to anything. I do not know if the Lord, Lord Pannick, is aware of what they refer to, but perhaps the Minister could follow up on that, either now or in writing.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank the noble Lords, Lord Markham, Lord Moynihan and Lord Hayward, for tabling these amendments, and the noble Lords, Lord Markham and Lord Parkinson of Whitley Bay, for giving notice of their intention to oppose the question that Clause 22 stand part of the Bill. Like other noble Lords, I wish the noble Lord, Lord Hayward, a swift recovery and hope to see him back for the next day of consideration by this Committee.
I will start with Amendment 172 in the name of the noble Lord, Lord Markham. It is vital that the regulator has the appropriate tools to address systemic financial risks that might arise. Indeed, in recent years clubs have faced a number of systemic risks, such as during the Covid-19 pandemic, when many clubs faced financial difficulties, some of which are still felt by clubs today.
The ability to restrict clubs’ overall expenditure may be the most appropriate and effective tool in certain circumstances. The noble Lord, Lord Markham, asked about limiting expenditure, which is already used within football. Some leagues already have rules limiting expenditure on wages and limits on permissive losses. I reassure him that the regulator is further constrained when taking action here. First, we have made it absolutely clear that the regulator has the ability only to restrict overall expenditure. It cannot place restrictions around specific transactions or types of transactions, to micromanage spending in that way.
Furthermore, the regulatory principles enshrined in the Bill in Clause 8 include the principle that the regulator should act proportionately. We would expect this to be reflected in any discretionary licence condition that the regulator sets. Restricting overall expenditure might be the most proportionate and least interventionist or burdensome response to these risks. Without this tool, it might have to apply a different response that may be more restrictive or less effective.
I turn to Amendment 173A in the name of the noble Lord, Lord Moynihan, to which the noble Lords, Lord Pannick and Lord Addington, also spoke. While we appreciate the intent, we are confident that clubs and competition organisers would already be captured under the current wording in the Bill, of persons the regulator “considers appropriate”. As I have outlined in previous debates, the Government do not believe it is necessary or appropriate to put an exhaustive list of stakeholders in the Bill. I appreciate that the noble Lord, Lord Moynihan, has a different view, but we feel that the regulator will be best placed to determine which persons are appropriate to consult depending on the decision in question. However, I look forward to further discussions with him on this point.
The regulator is required to consult anyone it considers appropriate. Failing to do so would be a breach of its statutory obligations and could result in legal challenge—
Lord Moynihan (Con)
I was not for a minute suggesting that there should be an exhaustive list that should be consulted; I was simply highlighting three very specific groups of people who should be consulted, which I think the Minister agrees with. There should be no doubt in the minds of the Committee that if you simply list clubs and competition organisers and then say “such other persons as the regulator considers appropriate”, you capture everything she has just said and make it very clear that the regulator will approach and consult clubs and competition organisers—which is the whole purpose behind this clause and surely one that has her full support. Why not simply clarify it in a very simple additional nine words?
Baroness Twycross (Lab)
I hear what the noble Lord says and look forward to further discussions with him on that point, but we feel that the regulator will be best placed to determine which persons are appropriate to consult.
Lord Pannick (CB)
I am sorry to keep on at the Minister about this, but can she really think of any circumstances in which it would be appropriate for the regulator not to consult the competition organisers and the clubs in this context? If the answer to that is “Of course not”, let us put it in the Bill and make it clear.
Baroness Twycross (Lab)
I recognise the strength of feeling on this point and look forward to discussing this further as we proceed through the Bill’s progress in this House.
Amendment 173B is in the name of the noble Lord, Lord Hayward, and the noble Baroness, Lady Evans of Bowes Park, spoke to it in his absence. Its intention is to place procedural requirements around the regulator’s use of capital buffers as part of a liquidity requirement. First, I reassure noble Lords that the model of financial regulation is about making clubs more financially resilient.
The noble Lord, Lord Markham, raised an issue that has been discussed previously in this Committee, where owners tragically die and the issues this can cause clubs, which is that clubs will have to submit detailed financial plans, including contingency plans. This could include what the club would do in the event of a financial shock such as the sudden loss of an owner.
If the regulator has concerns about the level of financial risk exhibited in a range of scenarios, it can place discretionary licence conditions on clubs in limited areas. That does not necessarily mean that owners will have to put funding in up front. If the regulator does reach for liquidity requirements, there are already safeguards. Indeed, the amendment seeks to require the regulator to have regard to a number of considerations, but in each case the Bill already requires this.
When assessing whether to attach the discretionary licence conditions needed to meet the appropriate financial resources threshold condition, the regulator will already be fully informed of the club’s financial position because clubs have to submit a financial plan, which would already include detail of any existing liquidity buffers. Consideration of proportionality and existing financial rules is covered by the regulatory principles in Clause 8(c) and (d). Again, consideration of the impact on competitiveness and investment is covered by the regulator’s duties in Clause 7(2). Therefore, this is all already accounted for.
Lord Markham (Con)
I thank the Minister for her response and thank noble Lords for all the contributions to the debate on this amendment.
On Amendment 172 and the expenditure cap, the Minister referred to league rules on permitted losses, and that is exactly the point I am trying to make: permitted losses are different from expenditure. I completely get why you might have rules trying to prevent permitted losses, but with permitted expenditure you can spend a lot and still make a profit, and that is a good thing. Maybe we can explore further whether Clause 22(4) allows clubs, despite everything, to still spend money on players. As per the example I gave earlier, I am not quite sure that it does, but again, it would be good to consult or work on that later.
On Amendment 173A, tabled by my noble friend Lord Moynihan, as pointed out by the noble Lord, Lord Pannick, I do not think any of us could envisage the regulator not consulting the clubs and the competitions, so it seems sensible to have that in the Bill. Again, I hope the Minister will be able to look at that.
On Amendment 173B and my noble friend Lord Hayward’s point about capital buffers, this really is an area of huge concern. The Minister said, “Well, if you’re reliant on an owner, maybe they need to provide more examples of how they could cater for that financial shock if they were to die”. The trouble is, as with so many clubs at that stage, that was exactly the Brighton and Brentford model—they were reliant at that stage on the owners bankrolling them behind what was a very sensible plan. But if, God forbid, something had happened to them during that stage, clearly, they would have gone, and if they had been asked to put aside some money as a buffer against that, that would have made their plan much harder to achieve. I know it is the view of both clubs that they may well never have embarked on those plans in the first place, because it was tough enough to begin with, and having to set some money aside makes the hurdle even higher. So again, I would appreciate it if we could return to that issue.
The last point about this clause overall, which goes right to the point the noble Lord, Lord Addington, made, is that there is a fundamental difference here. He said that for every success there is a failure, and that we have to stop that speculative spending. With Brighton and Brentford, it absolutely was speculative spending. With any team that invests in players ahead of their revenue, that is speculative spending. That is the excitement of the league and of the game: there are no guarantees of success behind any of that. But if we seek to restrict that, we are seeking to restrict the whole competitive element of the game we love: football.
The reality is that we cannot point to many failures; I think there have been two since the war. I do not want any failures, but are we really trying to prevent any club trying to embark on those success stories— I hope we are seeing it again now with Wrexham, who have come very far—because we want to protect against any failures whatsoever? That is the fundamental difference we are talking about here.
We have seen examples of asset stripping, and I absolutely agree that we want to guard against it. But owners wanting to put in a lot of money in order to really get behind a club, invest in players and gain promotion—to me, that is the fundamental spirit of the game we all love. I therefore hope that we will be able to return to that issue, but at this stage I beg leave to withdraw the amendment.
Lord Bassam of Brighton
(c) respects and promotes the protection of human rights and prevents modern slavery (as set out in section (Human rights and modern slavery considerations)).”Member's explanatory statement
This amendment requires an individual to respect and promote the protection of human rights and prevent modern slavery in order to meet the individual ownership fitness criteria.
Lord Bassam of Brighton (Lab)
My Lords, our Benches at the back here have three amendments in this group. They cover modern slavery, human rights and slave ownership. The purpose behind the amendments is to flesh out from my noble friend the Minister how the independent football regulator may approach some of these issues.
As we have heard on a number of occasions during debates on the Bill, football clubs are more than just businesses. They are community institutions; they have values, and they have provided some of the best examples of taking on social issues over the last few decades. We are trying to establish whether there should be a test that mandates having robust human rights due diligence and the ways in which owners can be held to account and prevent harm. State ownership and those two issues are inevitably bound up. We will recall from the ownership debates that circulated around Newcastle United when it was taken over some years ago the considerable concern expressed.
In updating the individual ownership fitness criteria to include reference to human rights and modern slavery, we have taken account of Amnesty International’s proposed amendments to the previous Premier League test. The United Nations Guiding Principles on Business and Human Rights, which the UK was the first country in the world officially to implement through a national action plan, requires all states and businesses to prevent, address and remedy human rights abuses where they occur.
It is our contention in putting these amendments forward that we need to have a view on state ownership but also on the role that the IFR may play in trying to establish thresholds and principles around such issues as modern slavery and human rights, because these things are important. They are important to football fans; they are important to the moral and guiding principles behind our businesses, and, more generally, we should use the opportunity of having a regulator for football that has a view on these issues when it comes to judging the merits—or otherwise—of those who seek to own important institutions such as football clubs. I beg to move.
Lord Jackson of Peterborough (Con)
My Lords, there is no doubt that the amendment means well. It is laudable that we encourage football clubs and the football community to take seriously these important issues around human rights and modern slavery. My concern is about the wording, because I believe that the inclusion of such an amendment in the Bill in respect of the appropriateness of an owner will give rise to unnecessary litigation. Let us remember that the amendment does not distinguish between an individual and a football club. If it were to do so, it would be more sustainable in terms of developing policies around human rights and combating modern slavery. However, it does not do that. It is nebulous in its wording, and I think the drafting would cause grave difficulty because it references individuals—the owner, in essence—meaning that there will be problems down the line in how the amendment is interpreted.
It is a value judgment as to whether an individual respects human rights. What does that actually mean in primary legislation? How do you measure it? What is its objectivity? What does success look like in terms of respect? The wording is very loose and would be very difficult—
Lord Bassam of Brighton (Lab)
Our wording mirrors the wording in Clause 28, which says:
“A person may not become an owner of a particular regulated club unless”,
so I do not think that the wording is the point here.
Lord Jackson of Peterborough (Con)
I understand the point that the noble Lord makes, but I am reading the amendment that he has tabled. The third word is “promotes”. What does that mean in terms of an objective criterion for how an individual would promote human rights, and for how he or she would protect the human rights of those involved in football and the club that they were involved with? The amendment is an example of potential regulatory overreach. Seeking to enforce it would be a straightforward prima facie case of ultra vires actions, because it would be unenforceable.
Having said that, I have great sympathy with the noble Lord’s Amendment 200 on state ownership of football clubs. We will have a good debate on that. However, on Amendment 178, the noble Lord is gilding the lily. Although he has good intentions, it is not a workable amendment. It would damage the interests of football clubs and be difficult for the regulator properly to enforce.
Baroness Butler-Sloss (CB)
My Lords, I support Amendment 178. Indeed, I have come in specifically to speak on the issue of modern slavery and I declare an interest as a co-chair of the modern slavery parliamentary group and vice-chair of the Human Trafficking Foundation.
I profoundly disagree with what the previous noble Lord said about individual ownership fitness criteria in relation to modern slavery. Under the Modern Slavery Act 2015—Section 56, I think—it is wrong to have a supply chain that operates on the exploitation of those who provide the goods for a company. So, if you have an individual owning a company who makes his money on the exploitation of people in the supply chain, it should not be all that difficult to discover it. That is absolutely where the regulator should be promoting modern slavery issues when he looks at the individual fitness of a person who wants to take over a club.
I see the point on human rights, although we have the Human Rights Act and it is fairly clear under that Act what the rights are of various people that might be impinged by an individual who did not have appropriate fitness criteria. I can see—
Lord Jackson of Peterborough (Con)
I thank the noble and learned Baroness for most generously giving way. If we have statutory sanctions already in place to deal with this behaviour, whether it is the Human Rights Act or the Modern Slavery Act, surely she is proving my case that this is regulatory overreach. My point is that we do not need further legislation when it is already covered by the existing legislation.
Baroness Butler-Sloss (CB)
I do not want to deal with human rights. I have come here to deal with modern slavery. I disagree with the noble Lord. The problem is that Section 56 is voluntary and not mandatory. Consequently, companies are not obliged to follow what happens. In a 2019 review led by Lord Field of Birkenhead, of which I was a part, we picked up the fact that it was not mandatory. Consequently, if the regulator does not have to think about modern slavery, he would not have to look to see whether or not an individual taking over a club is making his money in a wholly inappropriate and extremely wicked way. Because it is not mandatory, it is important that someone else looks at it. If it were mandatory, I would entirely agree with the noble Lord.
Lord Pannick (CB)
Is it the case that the reason it is not mandatory is that Parliament did not think it should be? Therefore, the question is: why should it be imposed in this context and not generally?
Baroness Butler-Sloss (CB)
Section 56 says that it is utterly wrong to have companies that make money by exploiting people down the chain—consequently, it is wrong. But, for reasons I do not know but can guess, the last Government, who put in place this very good bit of legislation, presumably did not want to offend businesses. I understand that there are problems in making it mandatory but, if somebody is making money that they are going to put into a football club by exploiting other people down the chain, that is something we should not want our clubs to be involved in.
Lord Scriven (LD)
My Lords, I was unable to join your Lordships at Second Reading and have decided to add my name, and speak, only to amendments on areas where I have relevant knowledge. I speak as somebody who has for a number of years been a co-chair of the All-Party Parliamentary Group on Democracy and Human Rights in the Gulf, and also led the first ever debate on sportswashing in your Lordships’ House in March of this year. Therefore, I will speak in favour of the amendments I have added my name to—Amendment 185 and in particular Amendment 193 from my noble friend Lord McNally, who cannot be here in his place today. I also strongly support Amendment 200 on state entities.
It is interesting listening to the noble Lord, Lord Jackson of Peterborough, and other noble Lords talk about human rights and the Human Rights Act. Let us be clear. What the regulator will be doing here is having a statutory responsibility for ensuring that a takeover of a club takes into consideration human rights issues. Under the Human Rights Act an individual can bring a case based on their feeling that their human rights have been undermined. If you are in Saudi Arabia, Qatar or the UAE, you cannot bring that case as an individual whose human rights have been undermined, particularly when it comes to a state entity potentially taking over a football club. That is what these amendments are about. Rather than just financial issues, when it comes to a takeover of a club, as a statutory point of principle human rights should be looked at by the regulator independently to decide whether a potential director is a fit and proper person to be able to take over and manage an English football club. That is what this debate is about.
It is interesting that certain issues in the Bill are specific, such as money laundering, so the Government have accepted that the regulator can look at specific issues. These amendments ask that another area specified in the Bill should be human rights abuses carried out not just in the UK but elsewhere in the world, particularly when it is a state entity or an individual linked to a state entity. The reason why this is important is that the concept of sportswashing, where sports clubs are bought particularly to try to influence soft power, is really taking hold. The previous Government understood that when it came to taking over media in this country. There was an issue to do with how state-entity organisations, including their potential human rights abuses, actually stopped takeover of the media.
I am sure that the Minister, when it comes to arguing the Government’s case if they are not minded to do this, will look at the Global Human Rights Sanctions Regulations 2020 as the cloak of respectability, where the powers already exist for this to be looked at. Well, let us be clear. These were introduced with the aim of holding individuals and entities accountable for human rights abuses. However, these regulations are not proving efficient in stopping foreign Government entities from owning Premier League clubs, or any league club. The Newcastle deal, where the Saudi Public Investment Fund took over Newcastle, happened 15 months after these regulations came into force.
These regulations target individuals and specific entities, not entire Governments or sovereign wealth funds. This is a critical loophole which we can see in the case of Saudi Arabia’s Public Investment Fund, which now owns Newcastle United and operates a state-controlled entity that presents itself as independent of government. As a result, it evades direct scrutiny under the sanctions framework. There is also a lack of transparency with these regulations, because decisions about who we sanction are not clear and are at the whim of an individual Minister. That is why I believe there should be the provisions in the Bill laid down in Amendment 200 and the other amendments which I put my name to.
The Global Human Rights Sanctions Regulations lack the reach and enforcement power to prevent foreign state entities linked to human rights abuses owning English Premier League clubs. That is why these amendments are required. Otherwise, I believe that our national game, football, will potentially remain a platform for authoritarian regimes or individuals who have committed human rights abuses and will be used as a sportswashing exercise that will tarnish their own reputations and image and not defend our national game.
Baroness Grey-Thompson (CB)
My Lords, in speaking to Amendments 178, 185 and 199, I draw attention to my interests in the register. I thank my noble and learned friend Lady Butler-Sloss for her contribution to the debate this afternoon.
Among the detail of what a regulator may or may not look like, we spent some time noting para football and how it can change and improve lives, and almost change the world. I would imagine that modern slavery is something that we would want to try to impact. Major games, such as the Olympics and the Paralympics, have made strong commitments in this area, as well as around trafficking. Their success is up for debate, but surely football and sport should try to leave the world a better place, and so I believe that these amendments are important.
Briefly, Amendment 199 is about the ownership of clubs. We have debated Reading and Aston Villa at length. This amendment merely seeks to strengthen the owners’ and directors’ test.
Lord Pannick (CB)
My Lords, I think a very strong case has been made this afternoon by the noble Lords, Lord Bassam and Lord Scriven, the noble and learned Baroness, Lady Butler-Sloss, and my noble friend Lady Grey-Thompson to require the regulator to assess whether a prospective owner of a football club respects and promotes the protection of human rights and prevents modern slavery.
I am very sympathetic to the principle. I am just concerned about the practicality. Is it really practical to expect that the regulator is going to have the expertise, time or ability to conduct a general assessment of whether a particular person—who may, for all I know, be based abroad—is generally respecting human rights and preventing modern slavery? This is going to take an enormous amount of time and money, and I fear that it would distract the regulator from the more day-to-day, prosaic functions that Parliament will be asking it to perform. I would be pleased to hear from the noble Lord, Lord Bassam, how this is going to work in practice, because I am very sceptical.
Lord Scriven (LD)
Does the noble Lord accept that it already takes place for certain individuals and entities with regard to the regulations that I pointed out, and that the Government already have a system in place to do this for takeovers? The issue is that there are gaps, which is why it needs to be in this Bill, particularly around football and state entities.
Lord Pannick (CB)
I entirely accept that there are detailed regulations, in particular in relation to money laundering, but that is a far more specific area, where there is a government system and a whole army of people with expertise to assess those matters. The question is whether we wish to make it a function of the independent football regulator to have a whole department that is concerned with this. I see the force of the principle, but I remain sceptical about it in practice.
Lord Moynihan (Con)
My Lords, this is one of the best debates we have had in Committee to date. I am equally sympathetic to the points made by the noble and learned Baroness, Lady Butler-Sloss, and the interventions of the noble Lord, Lord Scriven, and the concern about the practicality of this, but none of that is covered in Amendment 200, which is in this group.
Let us just assume, hypothetically, that a state-owned entity acquiring a football club in England has an excellent human rights record and no problems with modern slavery. Under Amendment 200, it would be banned from owning a club in England because it is state-controlled. All the points that have been made are relevant and important, but Amendment 200, in the name of the noble Lord, Lord Bassam, is very specific and states that:
“No state-controlled club may be granted an operating licence”.
There is no reference to human rights abuses or to any of the important issues regarding the supply chain, which have been mentioned. It simply states that a foreign-owned, state-controlled company cannot own an English football club. If we pass this amendment, immediately we would then have to divest the Abu Dhabi United Group of its majority ownership of Manchester City and Saudi Arabia’s Public Investment Fund of its ownership of Newcastle United, to mention but two cases.
How have the Premier League and UEFA addressed this to date? They have focused on the word “control”. When the Premier League addressed the Newcastle ownership test, it received “legally binding guarantees” that the state of Saudi Arabia would not have control over Newcastle United in the event of any deal. However, the Bill goes much further. It grants powers to the regulator that are not just about control. An individual has to be considered who has
“a higher degree of influence”
over the ownership of a club. The control test that UEFA and the Premier League currently use, which is a tough test that takes up a lot of time and energy, is overridden by a requirement in this legislation—for the first time in sport—to test whether an individual has a higher degree of influence. There can be no doubt that the Crown Prince of Saudi Arabia, as chair of the PIF, has a very high degree of influence over that board —he appoints it. Indeed, a Minister from that board has been appointed to be chairman of Newcastle.
If we go forward and accept Amendment 200 as it stands, what would we be saying to football, to Newcastle, to the Qataris—who might want to acquire a company, which there has been much speculation about, not least in this Committee—and to Abu Dhabi in relation to Man City? It would drive a coach and horses through the current ownership of the Premier League. It would be a very serious decision by the Government to take state control over who owns the football clubs in this country.
I say that because it comes down to the degree of state influence that is behind the regulator. The Government have said:
“Regarding the scope of the tests, we recognise the trade-offs involved, and are aware of the range of corporate structures behind clubs”,
and they specifically mention here sovereign wealth funds. They go on to say:
“We are designing the legal scope of the tests with these challenges in mind”.
They call them challenges, to be faced down at the request of government. We would have an open back door in the Bill if we accepted the amendment in the name of the noble Lord, Lord Bassam, straying into foreign policy in a way that we do not currently do. We have plenty of legislation elsewhere on the statute book allowing the Government to intervene if they felt they needed to in a certain circumstance.
The Government have therefore further confirmed the scope of the regulator. To me, it is incredibly important that the regulator is not given so many powers as to require it to have direct influence. I lost an amendment on Monday night, when I asked for that at least to be defined and for consultation to go out to find out what “significant influence” means in this context. I think that is extremely important.
I have a question for the Minister. I cannot find an answer as a result of the debates we have had so far, but football needs an answer and probably needs it now. Is it the Government’s position that the Crown Prince, Mohammed bin Salman, should be able to own Newcastle United under the definition of ownership in the Bill? It is a very simple question, with a yes or no answer. If yes, why have Ministers deliberately constructed a Bill that will quickly put him through the ownership test of significant influence, and why did the Minister confirm on Monday that she wanted incumbent Heads of State to be tested? If no then surely the Government should say so, and we should have that as part of an open debate.
I hope that, if that question is answered this evening, there will be no doubt in future about what the Government intend, not least following the Prime Minister’s visit to Saudi Arabia last week and his offer to go to a football match with the Crown Prince. It is only reasonable for Saudi Arabia and the Crown Prince to know whether he is expected to divest himself of the interest in Newcastle United or not.
Lord Addington (LD)
My Lords, I welcome my noble friend Lord Scriven to this debate and congratulate him on making those points. When it comes to the modern slavery amendments—to take on the point from the noble Lord, Lord Pannick—if other people are looking at this, surely the regulator should be able to take their opinion. Surely that would be a reasonable step. If the Bill does not allow that, I am sure we could do that quite easily.
On state ownership, I put my name to Amendment 200 because I thought that at the very least we deserved an answer. The previous Government’s Back-Benchers did not like the Telegraph under control and, let us face it, more people have heard of Newcastle United than they have the Telegraph.
This is an important point. Are we happy with a cultural asset being in the hands of a foreign power, regardless of the fact that we have a reasonably good relationship with it on most things? It is not all things, as we do not like certain things about it. That is a real question, and the Minister is being asked a series of real questions. I hope that at the end of this we will know whether these points are worth pursuing at other stages of the Bill. These questions really should be answered, and I look forward to the Minister’s response.
Lord Parkinson of Whitley Bay (Con)
My Lords, we have indeed touched on the matter of foreign ownership elsewhere in the Committee’s discussions. I am very glad we have had the opportunity to have a proper debate on it this afternoon, and I agree with my noble friend Lord Moynihan that it has been a very good one.
Of course, there are, and have long been, a number of clubs in English football with some element of foreign ownership, whether through individuals or investment vehicles. Many of them have been very generous funders of the sport and in certain cases have turned clubs around for the better, with huge benefits to their communities. But there is a fine line to tread here between maintaining that inward investment and openness to the world, and preventing malign interference.
I am glad that the noble Lord, Lord Scriven, has been able to join the Committee today. I enjoyed the debate he brought on sportswashing, to which I responded. We touched on some of these matters, and my view when speaking from the Dispatch Box opposite, which I still share, is that there is a distinction to be made between news organisations, which provide information to the populus, and sports organisations. As my noble friend Lord Moynihan has pointed out on previous groups, sport has always succeeded in rising above politics and has often been a forum in which people can raise complicated issues and foster dialogue between countries that may not be able to talk about things directly quite so easily.
The amendments in the names of the noble Lord, Lord Bassam, and the noble Baroness, Lady Taylor of Bolton, address modern slavery once again. I am conscious that we had Amendment 153 on modern slavery from the noble Lord, Lord Mann, in that rather strange miscellaneous group the other day, so I will not repeat what I said about the issue then. But I am interested in and broadly supportive of the issues they are raising and very glad to have heard the contribution of the noble and learned Baroness, Lady Butler-Sloss, who has done such important work in this area. I am glad we have been able to return to the issue of modern slavery and let other noble Lords add their voices to what we said when we were debating Amendment 153 on Monday.
As someone from Tyneside, I must add my concern about the implications of Amendment 200 from the noble Lord, Lord Bassam, which, among other things, would prevent clubs being owned by sovereign wealth funds. I think he accepts that if we were to accept his Amendment 200 the way he has worded it—he alluded to the Public Investment Fund of the Kingdom of Saudi Arabia’s investment in Newcastle United—it would have the consequence that Newcastle might not be granted an operating licence and so would have to withdraw from the Premier League. I have to say that he would not be very popular on Tyneside if that were the case.
It would be very helpful to have some clarity from the Minister about how the regulator will deal with clubs that currently have foreign owners or foreign sovereign wealth fund investment, and how it might approach prospective owners from abroad in the future. Like others, I would be very keen to hear her answer to the questions that my noble friend Lord Moynihan has raised and repeated so powerfully today.
During the course of this Committee, the Prime Minister has visited the Kingdom of Saudi Arabia. He was there just before it was announced as the host of the 2034 World Cup. He has invited the Crown Prince to come and watch a football match here in the UK when he next has the opportunity to visit. I would be interested to hear whether they discussed football and some of the issues we have discussed today, or indeed the thorny question of whether the Bill would bring the Crown Prince and the Public Investment Fund of Saudi Arabia into scope in the way that my noble friend Lord Moynihan has suggested.
Baroness Twycross (Lab)
I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, as well as the noble Lords, Lord McNally and Lord Scriven, and the noble Baroness, Lady Grey-Thompson, for the amendments in this group. It has been a really thoughtful discussion around issues of note.
I particularly welcomed the opportunity to hear from a number of noble Lords who have not spoken previously on the Bill but who have contributed their expertise, including the noble and learned Baroness, Lady Butler-Sloss, and the noble Lord, Lord Scriven. Their expertise led to a thoughtful debate. A number of noble Lords had interesting alternative perspectives as well. That included the perspective of the noble Lord, Lord Pannick. It is right that we discuss these significant issues as we discuss what the role of the regulator should be.
On Amendments 178, 185 and 193, it is absolutely right that clubs have suitable owners. That is why the new statutory owners’ and directors’ test is a key focus of the regulatory regime. A core part of this is the fitness test, which these amendments seek to expand. The individual ownership fitness test criteria are based on precedents specifically relevant to whether somebody is suitable to be an owner of a football club.
I would like to reassure my noble friend that much of what the amendments seek to achieve is already delivered within the current drafting. If an individual has had legal—whether civil or criminal—regulatory or disciplinary action of any kind brought against them, and that action has a bearing on their honesty or integrity, the regular must take that into account. This could then be used to find them unsuitable under the tests in this legislation.
The noble and learned Baroness, Lady Butler-Sloss, spoke specifically on modern slavery in relation to current legislation. I welcome the comments from the noble Lord, Lord Pannick, around keeping the regulator focused on issues that it can deal with effectively. Offences under the Modern Slavery Act are included in Schedule 1 to the Serious Crime Act, so the regulator will have to consider them in particular when determining whether an owner meets the fitness criteria.
If there are concerns about what is covered in the Modern Slavery Act, there are more appropriate places to discuss this, perhaps outside the Committee. I would be very happy to talk to noble Lords and the noble and learned Baroness outside the Committee to give them some reassurance on the points they have raised.
Any human rights violations that have given rise to legal, regulatory or disciplinary action against the owner in any forum can be considered, and so are egregious actions committed outside the UK that would have been criminal if carried out here. I assure noble Lords that these are things the regulator would—
Lord Scriven (LD)
There is a specific issue with the Gulf states. If people are potentially put to death for being gay in a state, would that debar a state entity or an individual in that Government from owning an English club? It is a clear question.
Baroness Twycross (Lab)
I am going to come on to state ownership later in my speech, if the noble Lord would be happy to wait.
Lord Scriven (LD)
No, I would like an answer to this specific question, because the Minister gave a specific commitment with regard to what is in the Bill. I put a specific question based on what could happen, and on the laws of the land of a Gulf state. I wish to know: if that takes place, would someone who is related to that state through a state entity not be able to own a Premier League club in this country?
Baroness Twycross (Lab)
I would be grateful if the noble Lord allowed me to take away that specific example. I will write to him and to the Committee and place a letter in the Library, so that they have a detailed response on that point.
These are all issues that the regulator will take very seriously. Where the amendments before us today go further than existing drafting, this introduces elements that we do not believe are necessarily relevant to an owner’s suitability. They would require the regulator to make a subjective and potentially speculative judgment on whether the individual has engaged in any activity that would risk bringing the game into disrepute. Where a potential dispute relates to things like criminal history, the regulator will already have to consider these things. But “disrepute” is a vague term; could it arise through an owner’s conduct in their personal life, or their political views? In the Government’s view, it would put the regulator in quite a difficult position, making a value judgment on what constitutes disrepute, which would undermine the principle of a reasoned, evidence-based test.
Turning to Amendment 199 in the name of the noble Baroness, Lady Grey-Thompson, the test is supported by the regulator’s information-gathering powers to ensure its determination is evidence-based. These powers will help the regulator tackle unco-operative individuals or organisations that do not provide the information. However, let me be clear: if the regulator does not have enough evidence to make its determination, the individual will be found unsuitable.
I understand the noble Baroness’s concerns about restrictions on an owner’s funds. I want to reassure her that the test requires an owner to submit financial plans and demonstrate sufficient financial resources to run the club. As part of this, we expect that the regulator will consider things such as the liquidity of those resources and their availability to actually be used to fund the club. The regulator will also need to be satisfied that the owner does not have wealth connected to illicit finance. To do this, it can conduct enhanced due diligence on the owner’s source of wealth. This would identify any links to criminality, corruption and money-laundering. We believe, therefore, that the intent of the noble Baroness’s amendment is delivered in the current drafting of the Bill. I hope she takes reassurance from this, but I am happy to meet her to discuss this if my explanation has not satisfied her.
I turn to amendment 200 from my noble friend Lord Bassam of Brighton, which the noble Lord, Lord Moynihan, also spoke to. This Government are not making a judgment on different forms of ownership. We recognise that good ownership can take many forms, and it is investment from responsible owners that has been a driving factor in the success of English football. Banning any one particular kind of ownership would not, in our view, be in keeping with the flexible and proportionate approach to regulation we are proposing. I believe that this approach has broad support across the Committee. Prospective owners with state backing will be assessed against the same set of criteria as any other prospective owner, on a case-by-case basis. I hope that answers the question about Newcastle from the noble Lord, Lord Parkinson.
Lord Moynihan (Con)
I apologise for intervening on the Minister’s speech, but I did ask a very specific question, which I think she has answered but I would be grateful if she could make it clear to the Committee. Through the higher degree of influence test, which we have debated and understand, and which is unique to this regulatory framework, will the Crown Prince of Saudi Arabia be subject to an ownership test—yes or no?
Baroness Twycross (Lab)
Any owner, with state backing or otherwise, will be assessed against the same set of criteria as any other prospective owner, on a case-by-case basis.
Baroness Twycross (Lab)
Yes. Prospective owners with state backing will be assessed against the same set of criteria and, by requiring new owners to undergo the regulator’s test, we better mitigate against harm to clubs by preventing unsuitable custodians ever becoming owners. Giving the regulator the power to test incumbent owners where there are concerns about their suitability ensures that any unsuitable owners can be removed.
The noble Lord, Lord Scriven, raised a comparison with the legal position on media organisations. Although football clubs up and down the country are vital community assets, they are not the cornerstone of our democracy that free media is. Investment from responsible owners has been a driving factor in the success of English football, which is why we are putting in place a stable regulatory environment that will continue to attract investors with a long-term prudent approach to growing football clubs as important community assets. What is important, in our view, is that owners are suitable, and the approach to testing owners set out in the Bill ensures just that.
This has been a hugely useful debate and, although I will have to come back on a number of points, I hope my response has provided some reassurance. But, for the reasons I have given, I would be grateful if my noble friends and other noble Lords would not press their amendments.
Lord Bassam of Brighton (Lab)
My Lords, I will of course happily withdraw the amendment in my name and that of my noble friend Lady Taylor and the noble Baroness, Lady Grey-Thompson. I have a few points to make in response. Generally, this has been a useful and valuable debate. We have had reassuring clarity from the Minister on the issues of concern.
The noble Lord, Lord Pannick, asked a practical question about how this would work. There is already an issue, in a sense, for the regulator to deal with. Under Clause 28(2)(a)(iv), the regulator will have to look for—and will certainly want to know—the source of funding. I can only assume that that is because we do not want the funding of our football clubs to be in any way under suspicion and/or linked to criminal activity, particularly human rights abuses and modern slavery. In Clause 28(2)(b), there is a fairly wide power for the independent football regulator to require information. Clearly, there are practical questions in carrying out inquiries and investigations into the source of funding that owners will offer up, but this is just one of those issues that will undoubtedly be tested over time.
I disagree with the noble Lord, Lord Jackson of Peterborough, that putting amendments forward like this is tantamount to regulatory overreach. If we were not concerned about issues such as modern slavery and human rights abuses, we would be selling the world of football short.
Lord Jackson of Peterborough (Con)
Surely the noble Lord will concede something. Proposed new paragraph (f) in Amendment 185, which he signed, mentions
“whether A has been complicit in … non-crime hate incidents”.
We are talking about the ownership of a football club. What does complicit in a non-crime hate incident even mean in the context of a strategy to deal with human rights and potentially preventing someone, via primary legislation, owning a football club?
Lord Bassam of Brighton (Lab)
I would hope that we would be concerned by things like hate incidents—those are important considerations. I certainly do not want my football club to be associated in any way with that, and I know the club itself does not. I am sure that goes for most clubs up and down the country.
I am grateful to the noble Lord, Lord Scriven, the noble and learned Baroness, Lady, Butler-Sloss, and the Lib Dem Front Bench for their support. I take most of the comments made by the noble Lord, Lord Moynihan, as being broadly positive, in terms of what we were trying to achieve with this little group. The issues are important, and I assure the noble Lord, Lord Parkinson, that I have no great desire to become massively unpopular with Newcastle United fans. I am probably a bit unpopular because Brighton seem to beat them regularly anyway.
Lord Bassam of Brighton (Lab)
But clearly, we should we look at these issues. State ownership is an issue we should keep under careful consideration. The Minister has said that all forms of ownership will be scrutinised in a similarly robust way, and we should be satisfied with that. So, having heard what was said, I am happy to withdraw my amendment.
Lord Markham
Lord Markham (Con)
My Lords, I hope that Amendment 180 will be much simpler, because is a bit niche and, dare I say it, anoraky in nature, for which I apologise. It would amend Clause 27 by removing subsection (7).
This subsection states that where a prospective owner or officer does not inform the regulator of their intention to become an owner or an officer
“as soon as reasonably practicable”,
that person must inform the regulator as soon as it is reasonably practicable. We probably understand the issue there. Not to mince my words, it is a slight tongue- twister. It is a bit confusing and nonsensical. In essence, it says that if someone has not told the regulator in the period when they were meant to, they must do so later
“as soon as reasonably practicable”.
I hope that this provision is a fairly simple one to tidy up. Again, I think we all understand the good intentions here, but I would be grateful if the Minister could clear that up. I will leave it to my noble friend Lord Moynihan to raise his amendments.
Lord Moynihan (Con)
My Lords, I will be equally brief in proposing my Amendments 187ZA and 187ZB. The drafting of the Bill states that if the regulator takes too long to determine applications for new owners and officers, then the applicants are treated as not suitable under Clause 32(5), through absolutely no fault of their own. This is not aligned with practice in other regulated sectors. It could have an impact on that person wider than purely their involvement in the club and be detrimental to clubs that have only one potential new owner, who is deemed unsuitable purely because the regulator ran out of time.
The change that I propose to Clause 32(5) would reverse the consequence of excessive delay, addressing the inherent unfairness in the current drafting. This is aligned with how statutory time limits on mergers work, for example. If the CMA fails to make a decision within a specified timeline, the merger is automatically allowed. These are clarifying amendments; I very much hope that the Government will see benefit in improving the legislation by accepting them.
Baroness Brady (Con)
My Lords, I refer the Committee to my interests as detailed in the register. I support Amendments 187ZA and 187ZB, tabled by my noble friend Lord Moynihan, which propose a sensible and very necessary adjustment to the presumptions under- pinning the ownership test.
These amendments address an important issue in the Bill, ensuring that the ownership process is fair, reasonable and aligned with best practices in other regulated sectors. As my noble friend has said, as it stands, Clause 32(5) means that if the independent football regulator fails to determine an application for a new owner or officer within a set timeframe, the applicant will be automatically treated as unsuitable. This is a really problematic approach. It assumes that any delay is the fault of the applicant or reflective of their unsuitability when, in reality, delays can occur for many good reasons. Quite often, they are entirely outside the applicant’s control or, indeed, the control of the selling club.
Simple cases can, of course, be done quickly, but acquisitions of football clubs can be complex undertakings. Applications for ownership done well involve a detailed examination of financial records, governance structures and regulatory compliance. Imposing arbitrary deadlines does not speed things up; it just risks poor decisions being taken on very consequential issues without all the facts. Indeed, taking time to get it right is in the best interests of all involved: the club, the fans and the broader football ecosystem. To penalise an applicant simply because the IFR runs out of time is neither fair nor proportionate.
The Premier League allocates significant resources to operate its own owners’ and directors’ tests. I have spoken to it about this issue and, of course, so has DCMS. It has told me that the league sees no benefit whatever in arbitrary deadlines and has explicitly told the Government that unless this is staffed and resourced intensively, the IFR will almost definitely hit the deadline in a range of cases. Of course, this will be compounded by the fact that the Premier League will be running its own process without a statutory deadline, meaning the IFR would be ruling people to be unsuitable for no good reason while the league would still be performing its test. This is a recipe for chaos and, I am afraid to say, litigation.
This presumption of unfitness if a statutory deadline is not met could have significant unintended consequences. Let us imagine a scenario where a club is on the brink of critical ownership transfer—perhaps its survival depends on transferring the ownership—and the only prospective buyer is deemed unsuitable purely because the IFR failed to meet its deadline. In the last Committee debate, the Minister said:
“Although the risk of clubs going into administration will be greatly reduced, it may still happen”.—[Official Report, 16/12/24; col. 54.]
For a club to go into administration because the regulator has not met its deadline would be unfair, and catastrophic for its supporters. Even if it did not result in immediate administration, it could leave the club in limbo, unable to secure necessary investment and potentially sliding into financial difficulty or worse.
This issue is not confined to the immediate impact on clubs. There are also wider reputational and practical implications for prospective owners and officers. Being deemed “unsuitable” by default could carry consequences far beyond football, affecting their credibility and standing in other sectors. That is not how a fair and just regulatory process should operate.
The amendments before us propose a simple but important correction. By reversing the presumption, they would ensure that applicants were not unfairly penalised for delays that were outside their control. Instead, if the IFR fails to make a determination within the specified timeline, the applicant would be treated as suitable by default. As my noble friend Lord Moynihan said, that is much more aligned with practices in other regulated sectors. For example, in merger control, if the Competition and Markets Authority fails to make a decision within the statutory time limit, the merger is automatically allowed. That ensures that the time limits are meaningful but that regulatory delay does not create unnecessary barriers or unfair outcomes.
It is important to emphasise that this amendment does not undermine the integrity of the ownership test. The IFR will still be able to make a determination based on the suitability of the applicant, but it will no longer have the ability, in effect, to penalise applicants or clubs because of its own delays. It would, in truth, be far better not have a timeframe at all, for the reasons I have outlined. However, if there is to be one, we must reverse the presumption and place incentives in the right place.
I hope the Minister will recognise the value of these amendments, and the much greater fairness and reduced risk they would bring to the process. It is a small but crucial change that will help ensure the ownership process operates in way that is both reasonable and just. I urge the Government to give the amendments the consideration they warrant.
Lord Pannick (CB)
My Lords, I support the noble Lord, Lord Moynihan, and the noble Baroness, Lady Brady, in this matter. It cannot possibly be fair to have a regulatory system in which, if the regulator does not perform and reach a decision within the specified time, for reasons that are not the responsibility of the applicant, the application fails. That is plainly unjust and, as the noble Baroness, Lady Brady, says, it is contradictory to the approach adopted in competition law, where the regulator has short time limits and must comply with them. The alternative is to have a more open-ended system, whereby the regulator can take more time if it is necessary to do so in exceptional circumstances.
Baroness Blake of Leeds (Lab)
My Lords, I start by thanking the noble Lords, Lord Markham and Lord Moynihan, for tabling these amendments. I will start with Amendment 180, in the name of the noble Lord, Lord Markham. The regulator needs to know who a club’s prospective new owners and officers are before they can buy or join the club, so they can be tested.
Although clubs, owners and officers are required to pre-notify the regulator, there may be occasions where someone becomes an owner or officer of a club without having first notified the regulator. In these circumstances, it is vital that the regulator is notified after the event—precisely what this amendment would remove. That is because, if the regulator is not aware that someone has become an owner or officer, the regulator will not know to test them. This risks clubs having unsuitable owners or officers in place.
I turn now to Amendments 187ZA and 187ZB, in the name of the noble Lord, Lord Moynihan. I will not deviate to talk about Leeds United at this point, although we always find reasons to do so in our general conversations. I am grateful for his comments and for those of the noble Baroness, Lady Brady, and the noble Lord, Lord Pannick. Clearly, I think we come down to the issue of timely decision-making on the suitability of new owners and officers, and we recognise that this is important for clubs’ financial sustainability.
It is a fact that, without deadlines, we have seen league determinations drag on, unable to reach a decision. That is why the regulator will be subject to a statutory deadline when it tests the suitability of prospective new owners and officers.
We believe that Amendment 187ZA would undermine the regulator’s tests. It would require the regulator to deem an owner or officer suitable to take up a position at a club if the deadline had been met, and the regulator had otherwise been unable to make a determination. This means that it would have to approve an applicant it did not know was suitable.
Amendment 187ZB would then allow that owner or officer to remain at the club until such point as the regulator found them unsuitable. This creates very concerning outcomes. If the end of the time limit resulted in an automatic pass, this could incentivise prospective applicants to stall and withhold information. More worryingly, as I set out, it would also mean that new entrants were approved even if the regulator was not confident that they were suitable—which is something that we simply cannot have.
This risks owners and officers who should never have been allowed to take up positions at clubs in the first place to potentially do considerable harm to clubs, which is why the statutory deadline must result in an automatic negative determination if reached, because this is the only way to ensure that suitable owners and officers become custodians. If the end of the time limit resulted in an automatic affirmative determination, this would incentivise prospective applicants to stall, as I have already outlined. It would also mean that new entrants would be approved if the regulator was not confident, and I hope that noble Lords will understand that this is not an acceptable position to be in. That is why—
Lord Pannick (CB)
Does the Minister accept that the current wording of the clause means that the application fails even if the delay is due entirely to the incompetence of the regulator or the failure of the regulator to have an efficient system for dealing with applications? Surely that cannot be right.
Baroness Blake of Leeds (Lab)
I understand the noble Lord’s comment but I really believe we are covering our tracks in this. We are improving the situation where the regulator works to avoid the situations that he outlined. I will add that this also provides certainty to the industry and, most importantly, it will incentivise the prospective person to promptly provide information to the regulator to allow it to make its determination. With those comments, I hope that noble Lords will not press their amendments.
Lord Markham (Con)
I thank noble Lords for this debate and the Minister for her response. While my amendment was anoraky by nature, I think we would all agree that the other amendments tabled by my noble friend Lord Moynihan are quite serious. As the noble Lord, Lord Pannick, mentioned, this is something that happens in all other regulatory environments, and other regulators manage to cater for that in exactly the same situation.
What my noble friend Lord Moynihan is suggesting is not, if the deadline has passed, that an owner is deemed suitable for ever. They will be deemed suitable only until the regulator is able to get round and opine. It would be a pretty silly thing to do for an owner to drag their feet and be awkward, for them to be allowed to do it only to be removed a few months later. That would be a big waste of money for them, and it would be completely illogical for an owner to try to game the system in that way.
So I am afraid that do not quite understand, and I think other noble Lords share in this. I ask the Minister to go back and think more on that, because it has got to be the right case. As the noble Lord, Lord Pannick, pointed out, in a situation where the regulator is not able to pass judgement through their own incompetence, it is the owner, who might be perfectly suitable, who loses out. So I would be grateful if we could consider that further—but at this point I am happy to withdraw.
“(1A) In making a determination under section 28 or 34, the IFR must also have regard to the foreign and trade policy objectives of His Majesty’s Government in the United Kingdom.”
Lord Parkinson of Whitley Bay (Con)
My Lords, in moving Amendment 190 I will speak to my further amendments in this group, Amendments 191, 195 and 198. I will also speak to Amendment 204, which is in the name of my noble friend Lord Markham, to which I have added my name as well.
The amendments in this group focus on the criteria that the regulator will take into consideration when determining the suitability of a potential owner of a regulated club. My Amendment 190 is intended as a probing amendment, to tease out the reasonings behind the Government’s removal of what was Clause 37(2) in the previous version of the Bill. While the wording of this amendment is exactly the same as that of the subsection that was taken out when the present Government introduced their version, I want to be clear that I am not necessarily arguing that I want to see it reinserted. My intention here is to use this opportunity to understand why the Government took it out, and to ask the Minister a few questions for the sake of the Committee to elaborate on the Government’s position.
The Government have said that the previous requirement for the regulator to have regard to the foreign and trade policy objectives of the United Kingdom and its Government was one of the main concerns that UEFA had with the previous version of the Bill, and that removing the provision has pacified it. But has it fully pacified UEFA? We have not yet had sight of the letter from UEFA to the Secretary of State, which the Committee has heard about a number of times. My noble friend Lady Brady sent her own correspondence to the noble Baroness, Lady Twycross, on 2 December, asking her to publish that letter and to place a copy in the Library so that the Committee can see it, but I do not believe my noble friend has yet received a response. It would be very helpful for the whole Committee to be able to see that letter, so we can be reassured about what exactly UEFA has said in that regard.
At present, it is not clear whether this provision was the only part of the previous Bill with which UEFA was not content or whether there are further parts of the Bill currently before us with which it is still unhappy. It would be useful to know how strong UEFA’s opposition was to the old provision on trade policy and so on. Did the Government remove it because UEFA threatened to exclude England from European competitions if, and only if, it remained in the Bill, or was UEFA’s opposition weaker and focused on other aspects of the Bill? I would be grateful if the Minister could elaborate on that for the Committee, and I hope that my noble friend Lady Brady will receive a response before Report.
My Amendment 191 would insert the word “relevant” to Clause 37(2)(c). This requires the regulator to consider whether a prospective owner or officer has been party to any civil proceedings in a court of law. The intent of including “relevant” here is to give a more precise wording, and indeed a bit of leeway. Our concern is that the current wording permits a wide range of court proceedings to be considered by the regulator—for example, divorce or child custody would surely be a civil proceeding. Making this simple change would focus the scope on civil proceedings which are directly related to somebody’s ability as an officer or owner of a regulated club.
I seek through Amendment 195 to prevent the regulator amending the considerations relevant to owner and officer determinations. This follows the theme that we have carried through this Committee of ensuring maximum clarity for clubs which are going to be regulated, and ensuring that the powers granted to the regulator by Parliament are not expanded in future. To allow that would be to grant the regulator a blank cheque to demand more and more requirements as it wishes.
The last amendment in my name in this group is Amendment 198, which would remove the provision stating that the regulator may not refuse ownership of a regulated club because of a prospective owner’s connection with the Government of a particular territory. I am sure we can all think of particular countries or territories at present which would indeed be grounds for immediate disqualification—this perhaps flows from the debate we had on group 2. For instance, at present, connection with the Government of the Russian Federation would surely be an open-and-shut case—would the Minister not agree? We want to ensure that the regulator is independent of our own Government, of course, but I do not see why the regulator should be prohibited in law from considering factors such as this in the determinations that it makes.
Amendment 204, in the name of my noble friend Lord Markham, prevents the regulator prohibiting multi-club ownership models. There are currently a large number of Premier League and English Football League clubs which are owned by individuals or consortia that own other clubs. There has been some controversy in this area, I gather, but we should be alive to the benefits of the model—one of which is a reduction in financial risk. It gives the ultimate owner of a club greater protection from one of their clubs being relegated or suffering a slump in revenue. Because there is a common owner, other clubs in the multi-club model can act as a buffer to absorb losses in one of the other clubs. There is, consequently, less risk of that owner facing difficulties and having to sell the club or, even worse, that club going into administration. Multi-club ownership models can absorb financial risk, thereby aiding the regulator to achieve the goals we want to see it achieve in regard to financial stability Surely the regulator should not prohibit this. I beg to move.
Baroness Brady (Con)
My Lords, I support Amendment 191, which seeks to add the word “relevant” to Clause 37(2)(c). This would be an important adjustment that would bring additional clarity and guidance to the IFR, as it develops its ownership test. The clause currently requires the independent football regulator to consider
“whether the individual is or has been a party to proceedings (other than criminal proceedings) in any court or tribunal”.
This is a strikingly broad provision. It would allow any civil proceedings, regardless of their nature or relevance, to count against someone in an ownership determination; it may even be that the individual in question seeking ownership has brought the civil action or tribunal that, as a result, is likely to disqualify them from owning a football club. It is a very concerning approach. Amendment 191 would provide a much-needed safeguard against unintended and disproportionate outcomes.
Let me take this opportunity to ask the Minister again the question I asked earlier in Committee—it is quite a fundamental question. Is the ownership test provided for in this Bill going to be subjective or objective? That was not made clear by the Minister when I asked the question before, so I would really like clarity—surely it cannot be both. Without this clarity, we risk creating an ownership framework that is open to arbitrary and inconsistent application, which would undermine investor confidence and, ultimately, the credibility of the regulator.
This concern is particularly acute when we consider the clause as it stands. Most successful businesspeople who have lived rich and varied commercial lives will have been involved in civil proceedings at some point, somewhere in the world. These could range from contractual disputes to regulatory disagreements or employment tribunals, and very often instances where they were not at fault whatever but had to defend their interests or bring such cases themselves. Are we seriously suggesting that such proceedings should disqualify them from passing an ownership test?
This is not a hypothetical concern. Civil proceedings can be entirely routine and, in many industries, reflect the complexity of modern business rather than any moral or professional failing. The absence of the word “relevant” means that such cases could be treated as a disqualifying factor, even when they have no bearing whatever on the individual's ability to responsibly own or direct a football club. This is not aligned with practice in any other regulatory sectors and will create an entirely unnecessary barrier to investment.
Clarity on the scope and purpose of the ownership test is essential for not just the regulator but the entire football ecosystem, including investors, leagues and clubs. Noble Lords have already highlighted serious issues with the current drafting, not least the lack of definition of “significant influence”. On the very unclear situation of Newcastle United, the Minister confirmed that the Crown Prince would be subject to the owners’ test, and the issue of significant influence would mean that this is the case. At least that situation was clarified and he knows where he stands.
Amendment 191 provides an opportunity to address at least one aspect of this mixture of problems by narrowing the scope of Clause 37(2) to focus only on what is genuinely relevant. This small change would provide greater clarity, fairness and confidence for all stakeholders in football. I encourage the Minister to reflect on this issue and the broader issues around this element of the Bill. As we move towards Report, it would be helpful to hear how the Government intend to address the now quite numerous concerns about the scope and application of the ownership test in the Bill.
Baroness Taylor of Bolton (Lab)
My Lords, I will say a few words about one of the amendments, but first want to follow up on what the noble Lord, Lord Parkinson, was saying about multi-club ownership. He was suggesting that multi-club ownership could alleviate risk. I see the point that he was making, but we have to be clear that it can also generate risk. This is an ongoing conversation that many people in football are having. We have to consider its prevalence and the fact that it is increasing, but there are questions about how it could distort competition and lead to complications with loan deals or the sale of players. This is a big question that will loom over us in the future. It is not just a one-way issue, as perhaps the noble Lord was suggesting.
I want to say a couple of words about Amendment 201. Clause 37 says very clearly that in determining whether it considers that an individual has the requisite honesty et cetera, the regulator should have regard to whether the individual has been convicted of a serious criminal offence. Amendment 201, in my name and that of my noble friend Lord Bassam, goes somewhat further and says:
“No individual with an unspent serious criminal conviction, whether or not in England and Wales, shall be permitted to own a controlling stake in, or serve as a director for, any regulated club”.
That is a clear statement of intent about the serious nature of some of the issues that have arisen about specific clubs in recent times. I ask the Minister to tighten up on this, take the prospect of owners with serious convictions very seriously and say that it should be a bar to ownership and not simply something that has to be taken into account.
Lord Moynihan (Con)
My Lords, I too will speak to Amendment 204 on multi-club ownership, as the noble Baroness, Lady Taylor, has made some important points and it would be helpful for the Committee to understand the position of the Government. It can alleviate risk. It is also highly complex and can make it very difficult, in terms of due diligence, for the regulator to look at an English club under this legislation without taking into account the financial exposure that a multi-club owner could have in another country with other clubs.
This is a growing trend; it is not new. A significant number of Premier League clubs and six EFL Championship clubs form part of a wider multi-club model, a structure first explored exclusively in Europe by ENIC, now the majority shareholder of Tottenham Hotspur. The rationale underpinning multi-club ownership aspirations, which underlines just how complex the situation can be, ranges from player recruitment and development efficiencies to knowledge sharing, resource synergies and brand penetration.
Furthermore, accruing interest in clubs that compete in the continent’s top leagues—those that hold higher bands and therefore score more points in the governing body endorsement system—is seen as a means for Premier League and EFL clubs to access a more eligible foreign pool of players. Having interests in multiple clubs is not a phenomenon unique to the UK; it pervades the European game. UEFA reports that clubs with cross-ownership relations account for more than a third of the top division in each of Belgium, France and Italy, in addition to England. Integrity of competition, reconciling the model with football’s rulebook, has become a complex issue for UEFA. At the centre of sport is competition, so if the same person, either a natural or a legally based entity, was to have control or influence over two rivals, there would be a risk to the integrity of competition whenever those rivals competed.
To mitigate that risk, football’s governing bodies have introduced rules to preserve the independence and integrity of competition between its clubs. At a domestic level, approximately two-thirds of European national football associations have rules directly limiting or restricting multi-club ownership. The famous article 5 of the regulations of the UEFA Champions League, on the integrity of the UEFA club competitions, stems from the governing body’s concern, which started back in the late 1990s. Article 5 regulates common ownership by prohibiting the same individual or legal entity having control or influence over more than one club playing in the same UEFA club competition. That notably includes the ability to exercise, by any means, a decisive influence on the decision-making of the club concerned.
With that brief explanation on top of the important points made by the noble Baroness, Lady Taylor, I would be very grateful if the Minister could confirm that she is completely comfortable with article 5 and will instruct the regulators not to impose any conflicting regulations in this area.
Baroness Blake of Leeds (Lab)
My Lords, I thank the noble Lords, Lord Parkinson of Whitley Bay, Lord Addington, Lord Markham and Lord McNally, who I am sorry to hear is not available today, and particularly my noble friend Lady Taylor of Bolton, for the amendments in this group.
Starting with Amendment 190 from the noble Lord, Lord Parkinson, I do not agree that the foreign and trade policy objectives of the Government have any bearing on suitability. Suitability should be based purely on an impartial assessment of the individual’s fitness, whether they have a source of wealth connected to serious criminal conduct, and their financial plans and resources.
Lord Parkinson of Whitley Bay (Con)
I am sorry to intervene so early, but the noble Baroness has said something quite stark. The policy of the United Kingdom is very clear in relation to the Russian Federation at the moment. Roman Abramovich was sanctioned because of the UK’s very clear position and the ownership of Chelsea was changed for a brief period. The Department for Culture, Media and Sport owned it on behalf of the nation and oversaw the sale. I understand the Government’s stated reasons for taking this out of the Bill, but should the regulator not be able to take into account the foreign policy issues of the day on something as important as this?
Baroness Blake of Leeds (Lab)
The noble Lord has pre-empted the further comments that I was going on to make. I can address this here. Clearly, in the example that is given regarding Russia, anyone connected to a state that is subject to sanctions would not pass the test. That is a straightforward way of picking up some of the concerns that he has raised.
The intention with all this is to ensure that the test can be applied consistently and remain fair, transparent, robust and focused on whether an individual is suitable to own a football club. Furthermore, the Government have been clear that the independence of the regulator is vital. That is the point I want to stress here and that is why the Government have removed the requirement for the regulator to have regard to His Majesty’s Government’s foreign and trade policy objectives when assessing an owner’s suitability, which is the precise requirement this amendment seeks to include.
Turning to Amendment 191, I thank the noble Lord, Lord Parkinson, and assure him that the intent of his amendment is already achieved in the Bill as drafted. The Bill sets out a number of matters the regulator must take into account when considering an owner or officer’s fitness as part of the owners’ and directors’ test. One of these is whether the owner or officer has been party to civil proceedings. As with all public bodies, the regulator must take into account all relevant matters and must disregard irrelevant matters when it comes to making decisions. That means that the things listed in Clause 37(2) will affect the regulator’s decision only if they are relevant in a specific case. That picks up on the issue of relevance.
In other words, the regulator must treat these things as potentially relevant to its decision, but it must consider the specific facts and context in every case. The noble Baroness, Lady Brady, also picked up on the issue of relevance. For example, the regulator will not be concerned with whether an owner or officer has contested a speeding ticket. However, it will be concerned if a civil court has found that an owner or officer has acted in a seriously dishonest way or if they have a track record of civil cases that cast significant doubt on their integrity. The test is designed to allow the regulator to make a holistic evidence-based assessment of suitability, taking the context into account, as I have mentioned previously.
I turn to Amendment 192, tabled by the noble Lord, Lord Addington, and Amendment 201 in the name of my noble friend Lady Taylor of Bolton. On the latter, I completely agree that an unspent serious criminal conviction is likely to affect whether an individual is suitable to be a club’s custodian. That is why the regulator is already required to take any criminal convictions into account when assessing an owner or officer’s suitability —it does not have a choice: it has to. I reassure my noble friend that we take her comments seriously and are grateful for the way in which she expressed them today.
The Bill does not set out exhaustive details on every element of the fitness test as to what constitutes a pass or fail. Instead, it allows the regulator to make a holistic assessment, which, crucially, is able to take into account any context and relevance. We believe this approach is key. If someone’s criminal history makes them unsuitable, the regulator can fail them on that basis. By comparison, the binary nature of the league’s current tests leads to a less sophisticated assessment of suitability. That is why this test takes a different approach. I reassure noble Lords that the Bill as drafted already requires the regulator to consider any unspent serious criminal convictions, and we fully expect the regulator to treat these as very significant factors in its assessment.
I turn now to Amendments 195 and 198 in the name of the noble Lord, Lord Parkinson—
Lord Goddard of Stockport (LD)
Can the Minister help me? She said she would comment on the amendments. What are her comments on Amendment 192, tabled by my noble friend Lord Addington, which would require the Bill’s propriety test to include equality, diversity and inclusion? We had a long and wide-ranging discussion on that the other night, and the Government made it clear that they supported including equality, diversity and inclusion in the Bill. I would like some clarity. The propriety test seems fixated on criminal charges and litigation.
Baroness Blake of Leeds (Lab)
I am sorry that we have not had a fuller discussion on that, but I thank the noble Lord, Lord Addington, for his amendment and I agree that equality, diversity and inclusion are significant factors which the regulator has a duty to highlight. Equality, diversity and inclusion are not named criteria in the fitness test, and I do not believe they should be. If an individual has behaved in a seriously discriminatory and harmful way that rises to the level of a criminal offence, and which results in a civil lawsuit or regulatory or disciplinary action, the existing test will capture this. We believe that this is the appropriate threshold. It would not be proportionate to require the regulator to assess individuals’ commitment to equality, diversity and inclusion.
I will return to the point the noble Lord, Lord Parkinson, made regarding a blank cheque, and pick up on his Amendments 195 and 198. The Bill sets out a list of matters the regulator must consider when assessing an owner or officer’s honesty and integrity as part of the fitness test. Those are the relevant matters when assessing an individual’s honesty and integrity, and they are based heavily on precedent—namely, the Financial Conduct Authority’s fit and proper person test. However, as we have discussed before, football is a changing industry and the regulator must be able to adapt to this. Matters may emerge in the future that are crucial to assessing an individual’s fitness.
The purpose of the owners’ and directors’ test is to ensure that clubs have suitable custodians. That is why it is vital that the regulator be able to consider other matters. This sort of discretion is well precedented; indeed, the FCA has more discretion when conducting its fit and proper tests. However, we want to make it explicitly clear that it would not be appropriate for the regulator to add any matters which would allow it to determine an individual’s suitability solely based on their connection with a Government. That should not be what determines whether an individual is suitable or not.
Turning to Amendment 204 from the noble Lord, Lord Parkinson, nothing in the Bill prohibits an owner owning more than one club. I thank the noble Lord, Lord Moynihan, for his comments on this issue. Concerns about multi-club ownership are to do with conflicts of interest and competition, which is why the leagues and UEFA have rules about multi-club ownership. Clubs competing in these competitions will be required to abide by any applicable rules.
Turning finally to Amendment 202, from the noble Lord, Lord McNally, I agree that it is crucial that clubs be protected from unsuitable officers, which is why the Bill gives the regulator the powers to disqualify any unsuitable officer from being an officer at any regulated club, up to and including for life. That, I am sure noble Lords will agree, is a very strong tool that has powerful ramifications. It means that all clubs will be better protected from unsuitable officers, but it should be used carefully.
There are scenarios where the regulator must find an officer unsuitable—for example, if an officer lacks the requisite qualification, experience or training to take up that specific officer role at the club—but it should not automatically follow that they are deemed unsuitable for any officer role at the club. Indeed, there may be other officer roles that they are suitable and qualified for, but this amendment would ban that. It would mean that the regulator would have to disqualify them from being an officer anywhere. This we cannot and should not accept. That is why it is important that the regulator has the power to disqualify unsuitable officers but is not always required to do so. For the reasons I have set out, I hope the noble Lord will be able to withdraw his amendment.
Lord Pannick (CB)
Could the noble Baroness say something about the UEFA letter which expresses its views on the Bill? Will she assure the Committee that a copy of this letter will speedily be sent to the noble Baroness, Lady Brady, and a copy put in the Library so that we know what it says?
Baroness Blake of Leeds (Lab)
My understanding is that we will not be sending it, but I am sure there will be further clarification on this point.
Lord Pannick (CB)
Can I ask why? This is a letter from the sports regulatory body that governs European football. Surely the Committee is entitled to know what its views are on the substance of the Bill we are debating.
Baroness Blake of Leeds (Lab)
We have already covered this point. We are talking about a private letter to the Government. That is my understanding of the situation. I do not feel qualified to comment further at this stage.
Lord Parkinson of Whitley Bay (Con)
It is a private letter that has convinced the Government to change the Bill in the way that we are debating here, so I hope the noble Baroness will take that away and hear the repeated request from the Committee to see this letter. It has persuaded them to take out the provision that I am probing with my Amendment 190 and every time we return to this matter, the Committee gets a bit more confused about why the Government have done it and what may or may not be in that letter. I appreciate what she says but I would be grateful if she could let us see it.
I apologise for intervening so early. What the noble Baroness said subsequently was very helpful. Also, the example I gave was not a helpful one because Roman Abramovich was sanctioned and if a person becomes sanctioned, as the noble Baroness went on to say, that individual would indeed be covered. To give her another, necessarily hypothetical example, if an unsanctioned citizen of the Russian Federation, connected to the Russian Government and supportive of their illegal war in Ukraine, wished to become an owner of a football club in this country, the combination of taking out this provision about allowing the regulator to have regard to the foreign policy objectives of the Government of the United Kingdom and the refusal to accept my Amendment 198, which covers links to foreign Governments, means that the regulator would not be able to prevent that person—a Russian citizen connected to the Government of the Russian Federation—becoming an owner of a club? Does she not think that is an unfortunate consequence of the changes the Government have made to the Bill because of this UEFA letter which we have not seen?
Baroness Blake of Leeds (Lab)
With regard to the UEFA letter, I refer noble Lords back to the comments that my noble friend Lady Twycross made previously. To clarify, we did not in fact say that the letter was the reason for changing the Bill; we said that UEFA’s views more generally were the reason for change. With that, I think I can leave that there. I also want to make the point again that anyone subject to sanctions would not pass the test.
Lord Parkinson of Whitley Bay (Con)
But somebody who is not subject to sanctions but who is connected to a Government whom the UK is in dispute with would not be covered because of the removal of this provision from the Bill. I am happy if the noble Baroness wants to write on this, but this is an important matter because this is a change to the Bill. I understand the Government’s stated reasons for changing it—we do not want to see football teams in this country unable to take part in international tournaments and we want to make sure that the regulator is independent of government—but I worry that by making the change in the way that we have and by not adding in the additional safeguard such as the one I am proposing through my Amendment 198, we open ourselves to a situation where somebody connected with a foreign Government cannot be taken into account by the regulator. If she is happy to commit to write on that, we would be grateful.
Lord Addington (LD)
We have gone through this several times. If there could at least be some private way in which those people involved in this could see this letter, it would be of assistance, because this is becoming a hardy perennial that is getting in the way of progress.
Baroness Taylor of Bolton (Lab)
I think everybody is thinking about the previous examples we have been given, but would not the example that the noble Lord, Lord Parkinson, just gave us of the non-sanctioned Russian individual be covered by the other considerations and the holistic attitude that my noble friend the Minister was telling us was the basis of the approach of the regulator?
Baroness Blake of Leeds (Lab)
I thank my noble friend for her helpful comments. I am not able to comment further at this moment. I think the detail is probably beyond this discussion and I recognise the comments about going round and over things again.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the noble Baroness but it would be helpful if we could have something in writing on this. As I say, I gave a poor example in the case of Roman Abramovich, but the hypothetical example is one that I would be grateful for an answer to. That would be appreciated. But I am grateful to her for what she said and the reassurances she gave on some of the other amendments that I have tabled in this group on civil offences and so on. I take on board the points that the noble Baroness, Lady Taylor, raised about multi-club ownership. I recognise that this is a live and lively debate in the sport. What we were trying to test with Amendment 204 was that the regulator should not be restricted on that basis alone. But with gratitude to the noble Baroness and eagerly awaiting the letter that will follow, I beg leave to withdraw my amendment.
Lord Parkinson of Whitley Bay (Con)
My Lords, I will speak only briefly to Amendment 206 as it is quite simple. It seeks to prevent clubs which are relegated to a competition which is not regulated by the new independent football regulator being subject to the prohibitions of Clause 45.
Currently, any club that is relegated will have to continue to abide by these rules for a period of 10 years. Clause 45 has a similar provision applying the rules in that clause to relegated clubs for five years. It seems unfair that a club that is relegated to a league or competition below the scope of the new regulatory regime should have to abide by the rules set out in the Bill for such a long period. Surely a fairer approach would be either to shorten the period or, as my amendment suggests, to remove it altogether.
Clubs that no longer operate a team in a regulated league will, by virtue of their relegation, receive lower incomes and potentially lose players. The financial situation they face will not be commensurate with the duties placed on them by the Bill, and retaining these long time periods seems to render the principle of specifying competitions, as the Bill does elsewhere, less meaningful. Why specify certain competitions if clubs playing in leagues that are not specified would still be subject to duties in the Bill? I beg to move.
Lord Addington (LD)
My Lords, we need an answer about why these things are carried on for so long, because there are administrative burdens. If we want these clubs to survive and come back, we could probably make a case for two things. One would be an intermediate regulator, which I do not think would be terribly popular with certain sections of this Committee, and the other is deciding when you can come out of this, because there are duties that are probably an appropriate burden for a professional structure. A good few clubs have gone in and out of this structure, but there is a certain level at which you are not receiving income, you are not receiving support and you have become a part-time asset to the community. Surely there is some point at which there is a cut-off. A better definition of the Government’s thinking on this might be helpful.
Baroness Taylor of Bolton (Lab)
My Lords, I just want to say a word about Amendment 207. It talks about a club that is not a regulated club but bears a very similar resemblance to one that is in things such as the name, the shirt colours and things of that type—almost an imitation of another club in order to get some support, finance or whatever. It may seem that this is highly unlikely, but I have a nightmare scenario where the super leagues that are being proposed do not take off, and therefore people try to create an artificial super league by, for example, having a team called “Manchester Blues” or “Liverpool Reds” getting into competitions with clubs abroad as an imitation of the super league that has been proposed and rejected. I want some assurance that should that nightmare scenario come about, there is some provision for being strict about what can and cannot happen.
Baroness Twycross (Lab)
My Lords, before I speak to this group, I want to be clear about who the regulator will test and clarify an earlier point I made. I will ensure that all noble Lords who participated in the second group have their attention drawn to this clarification and apologise if I caused any confusion.
Schedule 1 to the Bill sets out details on who meets the definition of an owner. The Secretary of State will also set out guidance on one of the criteria for ownership, “significant influence or control”. An incumbent individual simply meeting the definition, including if they exert significant influence or control, does not mean that the regulator is required or obliged to test them. It may test an incumbent owner if there are grounds for concern about their suitability. The criteria for suitability are clearly set out in the Bill. This applies to any type of owner, be it a state owner or otherwise.
The key point I must stress—it goes for Newcastle United or any other club, although as someone who lived for a number of years in Newcastle I am particularly keen to reassure Geordies—is that the regulator will be operationally independent of government. It is not for the Government to prejudge the regulator’s assessment of who meets the definition of owner, whether there is concern about a particular owner or the outcome if the regulator tests a particular owner.
Finally, I want to reassure your Lordships’ Committee that this Government are unashamedly pro-investment, which will drive our growth mission. We want good, long-term investors into the UK, and foreign investment is key to this. I hope that noble Lords find this clarification helpful.
Lord Moynihan (Con)
I thank the Minister for that. I think it is self-evident from her comments that once you remove the foreign and trade policy objective and put in place the significant influence test, you have a massive problem in the Bill. That massive problem is that it is self-evident, as has been discussed many times during the proceedings, that the Crown Prince—as chair of and in control of the PIF, with significant influence over it—would automatically come within the scope of significant influence as defined so far in debate on a number of occasions. I have no problem with that, and I do not think that the noble Baroness, Lady Taylor, has any problem with that. If that is the case, so be it, and let us be honest about it. If it is not the case, “significant influence” is meaningless, and we should come back to it on Report and simply delete “significant influence”, which, incidentally, goes far further than any other regulator in Europe.
We have control tests that are applied by UEFA, by the Premier League and across football. We do not have this significant influence test, and that is what is causing the problem. You remove the foreign and trade policy objectives and apply a significant influence test. The Minister was very clear in response to me on Monday that the Crown Prince would be absolutely full and central in any clear interpretation of that test. For the first time, she has put the definition of significant influence into the long grass as she said that it would come back in secondary legislation, that the Government do not actually know what it means and that she cannot give an answer to that in Committee or when we return on Report. But it is critical, because it comes to the very hub of political influence: what is the status of the Crown Prince? What is the status of Abu Dhabi? What would be the status of the Qataris if they wanted to buy a club in the Premier League, or indeed in any other league? My recommendation is that, given the uncertainty in the response that the Minister has just given and the absolute clarity on Monday evening and earlier this afternoon on the yes/no answer, we leave it for the time being and return on Report and analyse this in depth.
Baroness Twycross (Lab)
I felt I was clear, but I accept that the noble Lord has a different view. I look forward to ongoing discussions with him before and on Report. My comments related to a previous group, so I apologise to noble Lords who were not there to hear the context of my comments.
I will now move on to my remarks on this group, which—
Lord Moynihan (Con)
I shall just say this, as it is so central to our proceedings this evening. Just for the record, on Monday evening the Minister said:
“Finally, on the amendment from the noble Lord, Lord Moynihan, the whole point of the owners’ and directors’ test, which has been carefully designed, is to ensure that club custodians are suitable for assessing an owner’s fitness—this is absolutely crucial. It is right that any owner passes the tests set out in the Bill, so it would not be fair, appropriate or responsible to exempt certain types of owners from testing … This amendment intends that owners with diplomatic status or who are Heads of State, Government Ministers or high-ranking officials of foreign Governments would not be tested”.
That was in response to my probing amendment. She went on:
“I do not need to tell noble Lords about some of the people this could exempt from testing. That means that the regulator could not consider any personal finances or criminal history, no matter how egregious. Instead, it would have to ignore these matters, so the regulator could be letting unsuitable owners in”.—[Official Report, 16/12/24; col. 140.]
In other words, all those people I have just mentioned are subject to the tests set out in the Bill, and that would include anybody who was chair of a sovereign wealth fund that had invested in football in this country. That is what we will return to on Report. I do not think it is appropriate to lengthen the discussion this evening, as it has been well aired, but it is fundamental to removing that clause from the legislation in terms of opening up a can of worms now for the Government in identifying exactly what the suitable ownership test means.
Baroness Twycross (Lab)
Like other noble Lords, I want to move on, but I shall repeat two sentences that I referred to earlier. Simply because an incumbent individual meets the definition, including if they exert significant influence or control, does not mean that the regulator is required to test them. It may test an incumbent owner if there are grounds for concern about their suitability. Now I think we should move on. I do not feel that is a can of worms, but I appreciate that the noble Lord has an alternative view.
Moving to the group under discussion, I thank the noble Lord, Lord Parkinson of Whitley Bay, and my noble friend Lady Taylor of Bolton for speaking to the amendments. On Amendment 206, in the name of the noble Lord, Lord Parkinson, the aim of the clause, as he knows, is to stop the possibility of clubs leaving to join a closed-shop breakaway competition, as several clubs attempted with the European Super League in 2021. While I appreciate the aim of the noble Lord’s amendment, the clause has been carefully drafted to ensure that there is no possibility of circumvention. That is why the duty also captures formerly regulated clubs, so an owner cannot remove a club from the specified competitions in favour of joining a new break- away competition.
It is unlikely that clubs in the sixth tier of English football or beyond will attempt to join a prohibited competition, so we do not think the risk that the amendment aims to cater for is a material one. What is more, if these clubs sought to join a competition that had been prohibited by the regulator, that would undermine the heritage and history of the club and should also be condemned—so it is no bad thing that the duty would capture them as well.
On Amendment 207, in the name of my noble friend Lord Bassam of Brighton, which my noble friend Lady Taylor spoke to, I acknowledge the intent to protect the clause from any risk of circumvention. However, we do not believe it is necessary to extend the scope of the clause to the new clubs or entities that are created to take on the identity and players of a formerly regulated club in order to participate in prohibited competitions. We believe this is a remote risk. Even if a club could convince its players to do this, convince its fan base to follow them and work through the legalities, the FA’s existing requirements around the registration of clubs and players would offer sufficient protection. For the reasons I have set out, I hope noble Lords will not press their amendments.
Lord Parkinson of Whitley Bay (Con)
I am grateful to the Minister for her answers to the amendments in this group and for the clarification she gave on the comments on a previous group. I take what she says about breakaway clubs, but the point is for how long the provisions will still apply to clubs that drop out below the bottom level of this regulation through relegation, and why it lasts for so long. She has spoken before, rightly, about making sure that this is a proportionate regime. If you are a club that has been relegated to such a low tier and are unlikely to come back in, it feels like a very long time to have to continue to comply. That is the point that I was probing there. I might take that away and think about it further. If she has anything further to add on reflection, I would be very happy to receive that in a letter or pick it up in the discussions that we will have between now and Report—but that was part of the thinking there.
The noble Lord, Lord Addington, is right: the suggestion of another or an intermediate regulator would not be popular in all parts of this Committee, so I will let that issue rest.
My noble friend Lord Moynihan’s suggestion on the question of influence and foreign ownership is one that is perhaps better for us to talk about in our discussions between Committee and Report. I cannot be the only Geordie who is a bit confused and concerned about the implications for Newcastle United and I look forward to speaking to the Minister about that. But, for now, I beg leave to withdraw the amendment.
Baroness Taylor of Bolton
Member’s explanatory statement
This amendment expands the duty to notify the IFR of a potential disposal of a home ground to include a potential disposal of any specified properties.
Baroness Taylor of Bolton (Lab)
My Lords, Amendment 219 relates to Clause 46 and the question of the disposal of home grounds, and the kinds of approvals that are going to be required. I have just three points to make. First, are the words “home ground” sufficient? We suggest that we should say “specified properties”. This relates very much to what I was saying the other night about assets of community value. I said that when my own club, Bolton Wanderers, made its ground an asset of community value, it covered not just the ground itself, the pitch and the stands but the concourse. We have to talk about whether it should cover a training ground and even advertising hoardings, car parks and the fan zone. If we simply say “home ground”, will that cover an item such as a fan zone? That is why the amendment I have tabled suggests that we should have specified properties. They may be different in the case of different clubs, but a home ground is more than just what is on the pitch or even within the boundaries of the stadium. That is something that I hope the Minister will consider.
My second point is that this should relate to the assets of a club being used as security for a loan by the owner. There is clearly potential danger there if the loan is called in but the owner does not have the wherewithal to cough up the money that he has borrowed. Could that situation jeopardise the heritage of a club if it is vulnerable because it has been given as security? That is a valid consideration.
The third point is the need to make sure that fans are fully consulted and engaged in any discussion about the disposal of the specified properties. Often, when we are talking about which properties might be involved, it is the fans themselves, especially if there is a fan zone, who have a clear vested interest. We have talked on the Bill about moving five miles. In any circumstances, the fans have to be involved and, therefore, I hope the Government will consider the amendments that we have tabled.
Lord Goddard of Stockport (LD)
I support the noble Baroness, Lady Taylor of Bolton, and the noble Lord, Lord Bassam of Brighton, because I have walked this tightrope. When I was leader of Stockport Council, we had to financially advise and support Stockport County on several occasions. In the end, in 2013, we acquired the freehold and leased it back to the new owner of Stockport County, Mark Stott, for 250 years. That enabled him to get investment in and get the football club moving back into the league and climbing the divisions. That is where we start from: the position of the club and its value as a loan against something.
If we can get local authorities and other people to get hold of the freeholds, that will save Toys-R-Us from being built on certain football grounds on the south coast and give the clubs real opportunities to move forward. So we should support the amendments. We should also probably be thinking about how we can strengthen that in future. There is more involvement in the community value and the asset to a town and area of a football club, so we could be a bit more imaginative about how we protect that, rather than just arguing over how we should cover a loan against the ground.
Lord Parkinson of Whitley Bay (Con)
My Lords, I will say a few quick words about my amendment in this group. I am grateful to the noble Baroness, Lady Taylor, and the noble Lord, Lord Bassam, and other noble Lords for their amendments in this group. My Amendment 236 would introduce a new duty encouraging clubs to consult the Office for Place before making any decisions regarding their home ground or the construction of a new one.
I know that the Government have proposed to wind up the Office for Place, but I wanted to draw attention to its work, and in particular the excellent work of its interim chairman, Nicholas Boys Smith, and the board and staff who were working in Stoke-on-Trent. I think a lot of us share the disappointment, because we saw the Housing Minister after the election tell the BBC that the Office for Place would be kept. But, following the Budget, I understand that the Government are proposing not to keep it. I did think it could play an important role here, as it has in so many other areas of public policy.
My amendment offers a clear benefit in terms of promoting meaningful engagement and ensuring that football clubs consider the broader social and cultural impacts of their decisions. That is a theme that noble Lords touched on when introducing their amendments in this group. I think we all want to see clubs take a more holistic and responsible approach when planning changes to their home grounds, helping to preserve the heritage of these much-loved sites while ensuring that development is in the best interests of both the club and the community in which it is rooted.
In light of the need for more thoughtful and inclusive decision-making, my amendment tries to strike the right balance between promoting consultation with an expert body, fostering collaboration and ensuring that long-term planning for home grounds is done responsibly. I appreciate the points that noble Lords raised in their amendments and look forward to the noble Baroness’s response to them all.
Lord Harlech (Con)
My Lords, I rise briefly to support the amendments from the noble Baroness, Lady Taylor of Bolton. They sound very reasonable to me. We need to avoid the situation of groundless clubs. Coventry City come to mind. They had some very awkward years and some equally awkward ground sharing. We want to avoid groundless clubs and ground-sharing clubs. Avoiding stadiums being used as security for loans taken out by owners is incredibly helpful. I very much hope that the Minister will support that.
I also support the amendment from my noble friend Lord Parkinson of Whitley Bay. I declare that I am a member of Historic Houses and tend to bang the drum a little about heritage and aesthetics. To give a personal example, my local team are Shrewsbury Town. They had this amazing stadium, Gay Meadow, on the banks of the River Severn. They had a chap or chapette in a coracle who would go out into the river when the ball was kicked into it. Like many other clubs during the 1990s and 2000s, they moved to a sort of identikit shopping centre stadium. I guess it has some practical advantages, but it is pretty soulless and is like so many other stadiums. So I hope the Government can listen and take this into account. We have some amazing stadiums in this country. If we are going to get a club to move, let us move them to a better home, not a worse one.
Lord Watson of Invergowrie (Lab)
My Lords, I would like to say a few words in support of my noble friends Lady Taylor and Lord Bassam, some of whose amendments I have signed. I also want to pick up on the point that the noble Lord, Lord Harlech, has just made. He mentioned Coventry, who moved to Northampton, which is about 35 miles away and obviously not at all convenient for fans. My noble friend Lord Bassam’s club, Brighton, moved to Gillingham, which is, what, 70 miles away?
Lord Watson of Invergowrie (Lab)
Some 72 miles and a few chains, I am sure.
Even a club such as Bristol Rovers, who were obliged to move to Bath, which is only about 15 miles away, had to play there for 10 years until their new stadium was built—and even then, I think they ended up sharing with a rugby club.
Amendments 227 and 233 are really “the AFC Wimbledon amendments”, because they refer to that club in which I have an interest, which I have stated on a number of occasions in consideration of this Bill. On the figure of five miles, it may not surprise noble Lords to know that, when Wimbledon FC were obliged to move because their ground had been sold from underneath them, they went to Crystal Palace, which is about six and a half miles away. It still was not convenient for a lot of the fans.
It has been said that, when Wimbledon moved to Crystal Palace, the crowds increased. Factually, that is correct—and I see the noble Lord, Lord Moynihan, nodding—but they increased because there was a far greater ability for visiting fans to go to Crystal Palace. It was not at all unusual for Wimbledon FC to play home games where their own fans were very much in the minority. So that was not a benefit—okay, in financial terms for the club it was, but it is not a system that anybody would advocate.
My final point is to reinforce Amendment 234, about taking reasonable steps to ensure that the club’s fans do not consider arrangements for any change to be unsatisfactory. That should be a very basic consideration. I think it is in the Bill, but it is helpful to have that stated quite clearly and I hope that my noble friend will take that on board and, if she is not able to accept it today, which I would not expect, that we might come back to this to get something more solid on Report.
Baroness Twycross (Lab)
I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton and the noble Lord, Lord Parkinson of Whitley Bay, for tabling these amendments regarding home grounds. The noble Lords, Lord Harlech and Lord Goddard, gave powerful examples of why home grounds matter and what they mean to fans, as did my noble friend Lord Watson of Invergowrie, particularly in relation to relocation. As somebody who grew up within hearing distance of Oxford United’s Manor Ground, I can empathise with the feelings of fans when grounds move —although inevitably they do sometimes, and often successfully.
I will talk first to Amendments 219 to 223, 227 to 230 and 233 and 234 in the names of my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton. Starting with Amendments 219 to 222 and Amendment 230, home grounds are clearly often the most important asset of a club and that is why this legislation has carved out specific protections to safeguard against risky financial decisions or sales of the ground. This does not mean that other assets such as training grounds or office space are not also important to the club, but there is a specific consideration necessary for the home ground. I reassure my noble friends that there are protections in the Bill to safeguard against owners stripping a club of its assets or making reckless mortgage decisions against clubs. They include the enhanced owners’ and directors’ test, which will look to ensure that owners are prepared to be appropriate custodians of their club and its assets.
The regulator will also have oversight of the financial plans and balance sheets of the regulated clubs, ensuring that the club is not putting itself in a risky position unnecessarily. We would expect that this would include what assets remain in the club’s ownership and any plans to dispose of them. If it were to become evident that an owner was looking to asset strip the club or deliberately worsen its financial position, the licensing regime gives the regulator power to place licensing conditions on the club. The regulator could also take enforcement action if those conditions are breached or if the financial plan that the club has submitted has not been followed.
I turn to Amendment 227. I will not repeat the same points made previously as they are both similar to other amendments in this group. However, on the second sub-paragraph proposed by this amendment, with changes to the ownership or use of the home ground as collateral, the potential adverse outcomes are entirely financial. They do not impact the heritage of the club, nor would they necessarily relate to a relocation. If there is reasonable prospect of a change leading to relocation, Clause 48 sets out the parameters for any home ground relocation. The regulator would need to be satisfied that the move does not undermine the financial sustainability of the club or significantly harm the heritage of the club. This means that the regulator will be able to look at things such as location.
However, the Government have deliberately not set a fixed distance or considerations. This is to further allow for a bespoke approach to be taken at all clubs to make sure that the impact of a relocation can be mitigated if one is deemed necessary. Amendment 223 seeks to expand the scope of the duty to gain the regulator’s approval to include all substantial changes to specify properties or the club’s home ground. Given the addition of the specified properties, this amendment could include any significant changes to property, such as a hotel owned by the club. This is a significant expansion of scope and could be onerous and resource intensive on the regulator. In such a case as a hotel, the amendment could feasibly lead to a full consultation and approval process for substantial changes such as building an extension. This would not be an appropriate or efficient use of the regulator’s time or resources.
Instead, such substantial changes to either the home ground or other assets can be addressed via other areas in the Bill. For example, we expect all clubs to consult and have regard to the views of fans on the specified relevant matters. This includes home grounds and business priorities, among other issues. We would also expect any substantial changes to the home ground or other assets to be captured by the club’s financial plans. The regulator will therefore be able to have oversight and react to any concerns.
Baroness Taylor of Bolton (Lab)
My Lords, I have listened very carefully to what the Minister said. I am very grateful to her for saying that she will consider some aspects further, because I think there is an issue here, especially in how we define a home ground. We may want to return to this at a later stage. In the meantime, it proves why every club should have its grounds designated as an asset of community value; we then would have the protection that we are seeking in this amendment. I am grateful to the Minister for what she has said and for saying she will consider parts of this again. On that basis, I am happy to beg leave to withdraw my amendment.
Lord Wood of Anfield
“48 Duty on competition organiser not to arrange matches away from home grounds(1) A specified competition organiser must notify the IFR where the organiser considers that there is a reasonable prospect of the organiser entering into arrangements whereby a match between two teams operated by regulated clubs might be played at a ground that is not the home ground of either team.(2) A notification under subsection (1) must be given as soon as reasonably practicable after the organiser considers the duty under that subsection to have arisen.(3) The organiser must obtain the approval of the IFR before it enters into the arrangements mentioned in subsection (1).(4) The IFR must grant approval for the organiser entering into those arrangements if the IFR is satisfied that the arrangements—(a) would not harm the financial sustainability of the competition or of English football,(b) would not cause significant harm to the heritage of the competition or of English football, and (c) have the approval of UK-based supporters including those of the clubs involved.(5) The IFR may not grant approval in any other circumstances.(6) The IFR must, as soon as reasonably practicable after the organiser has sought approval, decide whether to grant approval under subsection (4).(7) The IFR must notify the organiser of its decision to grant, or not to grant, that approval and give reasons for its decision.(8) In this section “home ground”, in relation to a regulated club, has the meaning given by section 46(10)(a).”
Lord Wood of Anfield (Lab)
My Lords, I will be brief, partly because dinner is fast approaching and partly because this is an amendment to probe the Minister’s response to a good existing clause, Clause 48. This clause is about preventing home matches being relocated. The amendment is to probe whether the provision is sufficient to meet widespread fan concerns about possible exceptions.
There is increasing discussion about domestic football games being moved overseas. We have seen statements from the chairman of my own team, Liverpool, and broadcasters such as NBC are talking about relocating Premier League games abroad. The FIFA working group is reviewing its policies to allow this. There are all sorts of stories, rumours and plans afoot to possibly allow Latin American domestic games to be played in the United States. There is historical evidence showing that the Premier League once proposed an additional 39th game to the season, which would not be played at the ground of a Premier League club. We also see countries such as Saudia Arabia that have intervened—let us put it that way—in sports properties, buying them and moving them around, for golf and boxing. There is reason to think that this is not a very remote possibility.
The Bill sets out to prevent clubs relocating matches away from home stadia without the approval of the regulator. I hope that enjoys widespread support; it is welcome and important. The point of my amendment is to probe the idea that the clause is not quite as watertight as it should be. The concern is that the current wording is based on the relocation of matches which are already designated as home matches. What happens if the competition organiser allocates games directly, before the season’s fixtures are issued, to Riyadh, Los Angeles, Singapore, Paris or wherever? They could claim that no home game is being relocated and say, for example, that weeks 10 and 20 are weeks in which games are played elsewhere. What if the 39th game proposal, so widely reviled by fans, is revived? That is not about the relocation of a home game; it is an extra game.
The new clause addresses this by placing a requirement on the regulated competition organisers to seek approval from the regulator before moving a domestic game overseas. That way, there is no longer a need to define what a home game is to bring it in scope, and it ensures that as part of the assessment of this request to relocate a game, the regulator must specifically consult UK-based fans of the clubs involved in the relocation. Importantly, this does not rule out the relocation of a game; it requires any additional fixture that is part of a competition to be subject to consultation in the way specified in the Bill.
I would welcome the Minister’s observations on this amendment and her assessment of two questions. First, what happens if the competition organiser allocates games directly to an overseas location? How will the existing clause protect against that? Secondly, what happens if the competition organiser creates a new format, such as another 39th game that cannot easily be defined as a home game? The amendment tries to cover those extra, niche cases. With that in mind, I beg to move.
Lord Addington (LD)
My Lords, I am assuming that this is a probing amendment. Other sports—not British sports—do this, such as American football. Is it the Government’s intention that the regulator will make sure that such games are played at home? If the Minister can say that that is the intention, we are all comparatively happy; if not, we have a real problem.
Lord Harlech (Con)
My Lords, I rise in support of the amendment from the noble Lord, Lord Wood of Anfield. If all football fans were surveyed—more than the 20,000 to 30,000 that responded to Dame Tracey Crouch’s report—this would be one of the issues they cared about most. I hope the noble Lord, Lord Mann, will not mind me putting words in his mouth, but if he were here, I think he would say in his Yorkshire tones, “Home should mean home.” The Government must do everything they can to ensure that.
Baroness Twycross (Lab)
I thank my noble friend Lord Wood of Anfield for tabling Amendment 235. Clause 48 has been designed to prevent clubs unilaterally moving their home ground with no regard for the vital role it plays in the club’s history and identity, as well as its financial position. In essence, it is intended to capture instances such as Wimbledon’s move to Milton Keynes and is a really important protection in the legislation. The Government believe that this protection must remain in the Bill to enable the regulator to deliver its key objectives and ensure that home grounds have the appropriate safeguards in place. This amendment, however, seeks to address a slightly different but related issue of competition organisers relocating matches elsewhere. Many of the current instances of this are, for example, play-off matches at Wembley, which have become a key part of English football heritage in and of themselves.
However, I am aware that my noble friend wants this amendment to address situations in which a match could be moved outside England and Wales. Noble Lords will be aware that FIFA is currently reviewing its position on overseas league matches. I do recognise the point the noble Lord, Lord Harlech, made—although I would not presume to paraphrase my noble friend Lord Mann—and how significant this would be for supporters. FIFA has committed to looking at how it might impact supporters, as well as players and a number of other valuable considerations. While the industry is still considering its position on this matter, and many clubs have spoken against the proposals, we do not think the regulator should have a specific power to directly address this. However, the regulator will ensure that clubs consult fans on any changes to match days, including moving the location. The Government will remain in conversation with the relevant governing bodies on this developing issue.
I am happy to continue conversations with noble Lords who have a specific interest in this issue before we get to Report. But for the reasons I have laid out, I must ask my noble friend to withdraw his amendment.
Lord Wood of Anfield (Lab)
I thank the Minister for that reply. I also thank her—I did not before—and her officials for the generous way she has spared time not just for me but for lots of other Members of this House over the last few weeks. It is really appreciated.
I understand what the Minister says, and I also understand that FIFA is currently revising its proposals. We have spent a lot of time worrying about provoking FIFA, and I understand why there is sensitivity there. The requirement to consult fans on moving matches assumes that there is already a scheduled match that needs to be moved. My amendment is about two problems that there are in fact technical ways around. So, that issue is still a live one. There will be more discussion about this, and I know the Minister is going to be as generous with her time as she has been already, so with that in mind—
Lord Bassam of Brighton (Lab)
I urge the Minister to give this some more thought, because it is a pertinent and powerful core issue, and we should all be grateful to the noble Lord, Lord Wood of Anfield, for raising it. As the noble Lord, Lord Harlech, said, fans worry about these things; they do not want to see “home” meaning something completely different. That is why we should have something in the Bill on this topic.
Lord Wood of Anfield (Lab)
I thank the noble Lord, Lord Bassam, very much. My two teams are Liverpool and Tonbridge Angels of the National League South. One is an internationally competitive team—and the other is Tonbridge Angels; but place is crucial to both teams. If you are a fan of Liverpool from Los Angeles or Singapore, the place of Anfield and the locality and the community relationship are absolutely part of what it is you support. Home and away fixtures are a routine part of how the Premier League competition is conducted. That is why this is essential, not just to large clubs but to small clubs across the country.
Lord Goddard of Stockport (LD)
This issue has arisen before. The FA Cup is the oldest cup competition in the world, yet one club that held the title did not enter it the following season in order to play a match in the world championships in South America. Does the Minister think the regulator would have the power to prevent that happening in future? It is the kind of thing regulators should be looking at.
Lord Wood of Anfield (Lab)
I am grateful to the noble Lord. That is a very live issue as well, but I do not want to expand my amendment to that.
I am conscious of the time, so with those caveats, and with thanks to colleagues who have intervened, I beg leave to withdraw my amendment.
Lord Bassam of Brighton
(f) the amount which the IFR estimates is necessary to fund appropriately for that period the Central Fund established pursuant to Section (Central Fund).”Member’s explanatory statement
This amendment adds another factor which must be considered (namely the amount required to fund the Central Fund - see amendment 254) when determining the amount of the levy.
Lord Bassam of Brighton (Lab)
My Lords, we can probably dispose of this one relatively quickly. All that we seek is some reassurance, on the record, that the levy raised by the IFR will not overburden smaller clubs. We are trying to get some assurance that the levy will be relative to the income of the clubs and that any other levy that the IFR might want to raise for a central fund of any sort would also closely reflect the ability of the clubs concerned to fund that. It has to be relative to their income, strength and viability. That is the purpose of the amendments in this group, and I am keen to get that on the record.
Lord Maude of Horsham (Con)
My Lords, I have some concerns about what the noble Lord advocates in this amendment. He advocates setting up a central fund in one of his other amendments, and the purpose of that is not clear, unless it is to provide a mechanism, in effect, for redistributing the levy funding the operation of the regulator, presumably from bigger and better-off clubs to smaller clubs. That will dilute the incentive that should exist for the regulator to constrain its size, cost and degree of interventionism because of the effect on smaller clubs.
This comes back to the sense that the rich, big or better-off clubs are somehow there to be plucked in terms of the redistribution of funds down through the pyramid—already, 16% of the revenues of the Premier League goes down into clubs through the pyramid. My concern throughout the consideration of the Bill has been that, if the regulator is set up in too large a manner and exercises its powers as regulators have an inbuilt tendency to do—they increase their scope and degree of intervention—that will have a cost.
A primary aim of the Bill and of setting up the regulator is to “improve” the distribution of money down through the pyramid, but the more the regulator does, the larger it is and the greater the extent of its activity, the less there is to distribute. If it is not strictly controlled, it will become self-defeating. If the purpose of the central fund that the noble Lord advocates is, in effect, to increase that degree of redistribution from bigger clubs to smaller clubs, as it seems to be, the effect would be to exacerbate the concerns that a number of us will have about the direction of travel and the inevitable tendency for a regulator of this kind to increase its scope, size, interventionism and, inevitably, cost.
I have given notice of my desire to oppose that Clause 53 stands part of the Bill, on the basis that the power to impose a levy will damage football. If the Government are so concerned to have this regulator, they should raise the money for it themselves and not have the regulator able, in a very uncontrolled way, to impose a levy—potentially very large amounts of money, as the impact assessment makes clear—on the very activity of the sport that we love, inflicting damage on it that would run counter to the intention of the Bill.
Lord Bassam of Brighton (Lab)
My Lords, I will try to put the noble Lord’s mind at rest. Most regulators are financed by the industries that they regulate, and the noble Lord knows that; he knows a lot about regulation. Given that there may be, from time to time, a need to strengthen the capacity of clubs lower down in the pyramid to operate, comply with regulations and all the rest of it, it is not unreasonable for the IFR to have the ability and capacity to exercise a levy.
The Premier League is generating considerably large sums of money and, although the distribution down the pyramid looks extremely generous in raw number terms, it is worth being reminded that some 92% of the revenue generated ends up being maintained by the Premier League and those five clubs in the Championship that receive parachute payments and the rest. There is a lot of money here, and we need to make sure that the regulator has the capacity to intervene in a way that is entirely fair. Later amendments deal with some of this issue, but we should have that at the front of our minds when we consider this.
Lord Parkinson of Whitley Bay (Con)
My Lords, we look forward to hearing what the Minister says about the amendments in this group, although I think, as my friend Lord Maude of Horsham pointed out, we are all listening with different hopes and expectations about what she may say.
Briefly, my Amendment 256 in this group specifies that the regulator must consult the Chancellor of the Exchequer rather than His Majesty’s Treasury in the abstract. It seeks to ensure a clearer line of accountability and strengthen the governance structure for decisions relating to the levy. The Chancellor might well delegate this responsibility, but she should be accountable in law and the Bill ought to point to her as the Minister at the head of that department and not anyone else at the Treasury. I look forward to the noble Baroness’s responses to the amendments in this group.
Lord Addington (LD)
My Lords, very briefly, it is probably important to remember that a lot of this is about making sure that we preserve our football league. If a different Government had not intervened, we would have a European Super League and the Premier League would not be there. That is what happened.
We must remember that the preservation of those top five leagues is intrinsic to the Bill. If we want that to carry on, some money will occasionally have to be raised to support their structure so that it is more stable. The noble Lord’s amendment is reasonable. There may be a reasonable answer about why it does not have to go in, but I agree with the concept.
Lord Maude of Horsham (Con)
What the noble Lord says is simply not the case. When the European Super League was proposed, what stopped it from happening and what made the clubs drop it like a red-hot potato was the fact that the fans reacted with fury. Admittedly, the rather populist Prime Minister of the time responded to the fan fury by uttering threats, but it was not the politicians, the Government, your Lordships’ House, the other place or a fantasy regulator who stopped it; it was the fans who stopped it, and we should have absolutely no illusion about that.
Lord Addington (LD)
My Lords, that might be the noble Lord’s interpretation, but, ultimately, it is government that makes law.
Lord Markham (Con)
My Lords, just to be clear for the record, no law was passed in this instance. In a matter of days the clubs quickly withdrew from the competition because, as my noble friend mentioned, it went down like a lead balloon and fans were up in arms. The Government were nowhere near it. That was a perfect example of where the clubs and the fans regulated themselves.
Lord Moynihan of Chelsea (Con)
My Lords, I have a very strong recollection of this because I wrote an article the day after the proposal came, which was published, like many articles at the time, and I remember that the very next day the proposal was withdrawn. It had nothing to do with the Government. By the way, I was not a politician at the time; some would say I am not one now, but it had nothing to do with Governments or Parliaments.
Lord Bach (Lab)
My Lords, this is the first time I have spoken in Committee. I am rather late to it but I spoke at Second Reading. On this matter of history, it is not usual that I come out in support of a previous Conservative Prime Minister, but the truth is that once the fans showed their feelings—I agree that they did—the then Prime Minister, within a short number of hours or certainly days, quickly came up and took over the issue, as it were, on behalf of his Government. That was well done and, along with the fans’ disagreement, it had a profound effect on the clubs, some more reluctantly than others, which withdrew from that mad scheme.
Lord Shamash (Lab)
My Lords, I specifically remember this as it involved Manchester United. It is propitious that the noble Lord, Lord Johnson, has arrived as it was his brother, the then Prime Minister, who said “I would drop a legislative bomb on this proposal”. Do your Lordships remember the language? That is precisely what happened and it killed it dead.
Baroness Blake of Leeds (Lab)
We have interventions on interventions here and we should move on.
Baroness Twycross (Lab)
My Lords, before we have any further interventions, I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, as well as the noble Lord, Lord Parkinson of Whitley Bay, for their amendments. I also thank the noble Lord, Lord Maude of Horsham, for his contribution on this group, which sparked a lively debate, and for giving notice of his intention to oppose the Question that Clause 53 stand part of the Bill. It is useful to remember why we are here, but my comments will focus on the amendments in this group. It is imperative that the regulator can raise the funds necessary to deliver its regulatory functions, so I thank my noble friends and the noble Lords who have raised this important issue.
Turning first to Amendments 250 and 254 in the name of my noble friend Lord Bassam, I want to reassure him that the existing drafting in Clause 53(3) is comprehensive, in the Government’s view, and provides the necessary mechanism for raising these funds. Clause 53(3) also acts as an important constraint on what the regulator can charge clubs for. We believe that the amendment would risk bypassing this safeguard. We also want to be clear that, under the existing drafting, any such central fund could not be used as a form of lifeboat fund to prop up clubs in distress. It is the Government’s opinion that a zero-failure regulator, as implied, would create moral hazard and encourage the very risk-taking that the regulator is trying to address.
On Amendment 252 in the name of my noble friend Lady Taylor of Bolton, the Government acknowledge the importance of any charges on clubs being transparent and proportionate, and offering value for money. These values should be at the heart of any public body. This must be achieved while maintaining the regulator’s operational independence and flexibility, which is why it would not be appropriate to prescribe an exact methodology in legislation for charging the levy. Doing so would remove the regulator’s ability to explore other, possibly more effective and proportionate, methods of charging. The Bill already requires the regulator to have regard to clubs’ financial resources and position in the pyramid. I am confident that this will be sufficient to ensure that the levy is fair and proportionate. I hope this will give my noble friends reassurance that these costs will not be burdensome to clubs.
Amendment 256 in the name of the noble Lord, Lord Parkinson of Whitley Bay, would require the regulator to consult with the Chancellor of the Exchequer specifically, as opposed to the Treasury, when making, amending or replacing levy rules. Consulting with the Treasury on levy rules is standard practice for a regulator, and this approach has been agreed with the department. The Chancellor, as head of the Treasury, will have full oversight of the Treasury’s response to the consultation. The Chancellor is accountable for the decisions of the Treasury and any consultation with the Treasury is likely to have the approval of the Chancellor. Therefore, the Government’s view is that the existing requirement to consult with the Treasury is sufficient to ensure value for money.
Finally, on whether Clause 53 should stand part of the Bill, this clause will allow the regulator to charge a levy to licensed clubs that covers the regulator’s running costs. This follows the precedent of other regulators such as the FCA, the CMA and Ofcom.
Baroness Brady (Con)
I thank the Minister for allowing an intervention. Has there been any further development on the cost of the regulator? I know that we have asked the question on numerous occasions, but we have not had a reply. It would be very good for clubs to know what the Government expect the regulator to cost. The Minister mentioned the FCA; that costs £762 million a year. I hope it will not be that much.
Baroness Twycross (Lab)
I was going to come on to that. I anticipated that if the noble Lord, Lord Hayward, was here, he would ask me that question. If I can carry on through my speech, with the noble Baroness’s permission, I will address that later in my remarks.
We think it only fair that industry should cover the cost, as opposed to taxpayers. Football is a wealthy industry, and the cost of regulation would represent just a tiny fraction of its annual revenue of over £6 billion. However, this legislation puts robust checks and balances on the regulator. It will be limited to raising funds to meet a set of tightly defined costs that are necessary for regulatory activity only. The regulator will not have a blank cheque; it will be subject to numerous safeguards, including annual auditing by the National Audit Office, and its annual accounts will be laid before Parliament. This will provide the necessary transparency and scrutiny to deliver value for money.
Clause 53 also requires the regulator to have regard to a club’s individual financial position and the league it plays in when setting the levy charges that a club must pay. This should ensure a proportionate approach where no club, big or small, is asked to pay more than what is fair and affordable. As noble Lords are aware, the regulator will be the one that decides on the methodology and, ultimately, the cost of the levy.
I understand, however, that there is a clear desire, as expressed by the noble Baroness, Lady Brady, the noble Lord, Lord Hayward, and other Members of your Lordships’ Committee, to have a much better understanding of how the costs may be borne at different levels of the game. I will endeavour to provide more clarity on this issue. Therefore, after further discussions with the shadow regulator, I will write to noble Lords to provide further clarity on costs ahead of Report. I will also place a copy of this letter in the Libraries of both Houses and would be happy to meet noble Lords or take any questions.
This is a complex issue and we cannot fetter the discretion of the regulator. The letter, when it comes, cannot therefore be considered a definite estimation of costs. It will merely be illustrative, in an attempt to be helpful to this Committee and provide your Lordships’ House—and the clubs that will be regulated—with some clarity and reassurance before we get to Report.
For the reasons I have set out, I am unable to accept the amendments in this group. I therefore hope that noble Lords will not press them.
Lord Bassam of Brighton (Lab)
My Lords, I am more than happy to withdraw my amendment and grateful to the Minister for the assurances that she has given about the levy. I just say to colleagues on the Opposition Benches: it is worth reminding ourselves that we are talking about the regulation of only 116 different football entities. This is a small regulator, at the end of the day, so we should not be overly worried about its eventual costs. I think the costs will be, in relative terms, small—nothing at all by comparison with the FCA. Some of the clubs regulated, such as Gateshead, employ only three staff. If you are an Ebbsfleet staffer, you are one of just six, whereas Arsenal employs more than 500 full-time backroom staff. That is why we need to be certain that the levy raised is proportionate to the size of the club. Proportionality should be at the core of the regulator’s consideration when setting its levy. Having said that, I beg leave to withdraw the amendment.
Football Governance Bill [HL]
Wednesday 18th December 2024
(1 month ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-VI(a) Amendments for Committee (Supplementary to the Sixth Marshalled List) - (17 Dec 2024)
Lord Markham
“(c) any interest charged under paragraph (b) may not exceed the rate of inflation, as measured by the Retail Price Index, plus 2 per cent.”Member's explanatory statement
This amendment limits the rate of interest the Regulator may charge on unpaid levies.
Lord Markham (Con)
My Lords, I rise to move Amendment 251 in my name and to speak to Amendments 257 and 258 from my noble friend Lord Parkinson.
Amendment 251 seeks to place a limit on the rate of interest the regulator may charge on any unpaid levies. I think all noble Lords have agreed that we want to keep the regulator fees and cost burden on clubs as low as possible, so having a reasonable rate of interest seems helpful. The proposal is that we take the formula the Government currently use for tuition fees, and which is proposed for the tobacco levy, which is the RPI rate plus 2%. I am not absolutely wedded to that figure, but we believe there should be a figure we can all agree on.
Amendment 257 from my noble friend Lord Parkinson would remove the provision whereby the regulator does not have to consult on changing the levy if it considers the change to be minor. We understand the intent behind that provision, but all sorts of discussions could then be got into about what is minor and what is not, so it is probably easier just to establish that it be properly consulted on if there is a change.
Amendment 258 is pretty straightforward. It seeks to establish that if the regulator plans to change the levy rules, it gives six months’ notice before the chargeable period begins. We have said a number of times that we want clubs to improve their financial budgeting and planning, and this would help them to do that. With those simple changes, I beg to move.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank the noble Lords, Lord Markham and Lord Parkinson of Whitley Bay, for their amendments concerning the levy. On Amendment 251 from the noble Lord, Lord Markham, setting the rate of interest charged on non-payment of the levy is an operational decision for the regulator, which needs the flexibility to charge interest at a rate that deters non-payment. A rate that is too low could increase the incentive for non-payment and jeopardise the regulator’s ability to carry out its functions. The level of interest charged would be subject to the same consultation requirements as the levy itself. This will ensure a firm but fair level of interest.
Amendment 257, in the name of the noble Lord, Lord Parkinson of Whitley Bay, would require the regulator to consult every regulated club and others such as the Secretary of State and the Treasury on minor changes to the levy rules. These would be immaterial amendments or replacements to levy rules, such as correcting mistakes. Going out to gather the views of all clubs feels like it would be a disproportionate burden on clubs and on the regulator. For material changes, the Bill already requires the regulator to consult as appropriate. No club, especially those in the National League, wants the administrative burden of unnecessary consultation.
Finally, on Amendment 258 in the name of the noble Lord, Lord Markham, requiring the regulator to publish its levy charge six months before the chargeable period would create an operational challenge. The regulator would have to estimate a levy charge having only half a year’s costs to base it on. This could lead to inaccurate levy charges, which could see the regulator underfunded or clubs needlessly burdened. The current requirement of charges being publicised as soon as reasonably practicable strikes the right balance, we feel, between adequate notice for clubs and operational flexibility for the regulator to ensure an accurate and appropriate levy charge.
I therefore hope that the noble Lord will withdraw his amendment.
Lord Markham (Con)
I thank the Minister for her reply. As I say, these are not major things, but I must admit, I am a little surprised. The Government rightly see fit to set interest rates on all sorts of other things they deal with, such as student loans, tobacco and vapes, so it seems strange that they do not have a view on what should be an appropriate rate for the regulator to charge. I am not aware of that happening in other parts of the government network.
On the final amendment, this is about the regulator behaving responsibly if it is going to change things. Here, there seems to be a pattern. We had a debate earlier about what happens if the regulator does not approve someone as being fit and proper within the right time period. Again, the Government were saying the regulator might not be able to do it, so that person is automatically deemed not fit and proper. All noble Lords would probably agree that we need the regulator to be a bit more on its game than this. We should be a bit tougher and say that there is no reason why it cannot work out its rules on a change to the levy and give clubs six months’ notice. If the regulator is asking clubs to be financially disciplined, it should be doing the same.
I pose those as things for the Minister to consider but at this point, I will happily withdraw my amendment.
Lord Bassam of Brighton
Member's explanatory statement
This amendment is one of a series of amendments which mean that it is not only a specified competition organiser which can trigger the mediation process regarding the distribution of revenue.
Lord Bassam of Brighton (Lab)
My Lords, this is the first of a number of amendments in a very large group—enormous, in fact—but they all have at their core an impact on the way in which the independent football regulator could make financial distribution decisions.
I will run through some of the more important ones briefly. Amendment 260 would mean that it is not only a specified competition organiser that can trigger the mediation process. Amendment 261 would provide for competition organisers to obtain consent before determining the distribution of revenue and would require the IFR to be satisfied that the distribution proposals comply with its general principles which are contained in Section 62(2).
Amendment 267 would oblige the Secretary of State to consult people who represent the views of regulated clubs and the views of fans of regulated clubs before making regulations which specify the source or description of relevant revenue. Amendment 268 would amend the definition of distribution agreement. Amendment 269 is also part of this series and would mean that it is not only a specified competition organiser which can trigger the mediation process regarding the distribution of revenue.
Amendment 276 seeks to provide that a competition organiser can apply to the IFR to trigger the resolution process if there has been a change to rather than any reduction in the revenue received by a competition organiser. Amendment 284 would require any notification that a competition organiser gives to trigger the resolution process regarding distribution revenues. Amendment 293 would insert an amendment to trigger the resolution process. Amendment 318 would narrow the circumstances in which the independent football regulator may revoke a distribution order where the competition organisers have agreed a distribution agreement to circumstances where that distribution order complies with Section 62(1)(a) or (b) or Section 62(4)(a) on the principles in general set out in that section.
Why are these amendments necessary? It is principally because we require a degree of flexibility for the regulator. We want to ensure that the regulator can trigger a mediation process and impose its own deal if the parties fail to reach agreement by mediation. Currently, it seems to me that the regulator will be presented with a binary choice, and neither of those choices might be perfect.
At the moment, the deal is primarily controlled by the Premier League. Overall, 88% of broadcast revenue goes to the Premier League and 7% of the remainder goes to clubs who get parachute payments, meaning that the remaining 5% is split between the next 138 clubs in the pyramid. I accept the case that has been powerfully made by the noble Baroness, Lady Brady, that the Premier League is a great league, that it produces incredible and impressive revenues and that those revenues have worked to solidify the excellence of the league and improve the quality of the clubs, the entertainment on offer and the players who are available to it.
However, it seems to me that we ignore at our peril the rest of the pyramid. Currently, for every £1,000 that goes to a Premier League club, just £313 goes to a Championship club and, if you take it down to a National League South club, it gets just 14p. Yet, if you look at the attendance figures, 45% of football fans, roughly speaking, go to a Premier League match and the remaining 55% go to games in the Championship, League One, League Two, National League, National League North and National League South, so there is a case for better distribution. I am not saying what that distribution should be—that is obviously a matter for which the regulator will be responsible—but the regulator needs to be able to make that decision based on the best possible circumstances. So these amendments are designed to facilitate that and to allow the regulator to act freely, working with football industry bodies and ensuring that they have the best possible information.
That is why my amendments seek to generate some flexibility and why a distribution deal must pass parameters set by the regulator, so that the gap between the various levels of football can perhaps be narrowed. It was never intended to be as wide as it is today. Initially, the gap between the Premier League and the Championship level was a lot narrower, and then again between the Championship and Leagues One and Two. It is the important development of football TV rights that has allowed the Premier League to become as rich as it has and to pay the wages that it can pay. International comparisons put the Premier League way ahead of any similar leading leagues.
We have a strange situation where some 64 clubs in the top four divisions have gone into administration since the start of the Premier League. That is clearly an unhealthy situation and a better distribution deal that is properly regulated would begin to address some of the gaps and some of the disparities. That is the spirit behind these amendments.
Baroness Evans of Bowes Park (Con)
The noble Lord will be well aware that the EFL has just signed a very great deal with Sky, with revenue coming in, and I do not believe that that money is distributed down the pyramid either. One hopes that the Championship and the EFL will continue to improve and get better deals. Does his amendment include the fact that perhaps that league needs to start looking to distribute and that if its income starts to increase, as we all hope it will do—we have heard that it is the sixth-richest league anyway—it is not just the Premier League that needs to be involved in this but the EFL itself? At the moment, it does not distribute any of the income from the money that it gets in from broadcasting. Perhaps it needs to look at distributing some of its income down the leagues as much as the Premier League does.
Lord Bassam of Brighton (Lab)
My Lords, the noble Baroness makes a compelling point. It is the case that the EFL is dominated by the Championship clubs. The noble Baroness is absolutely right that the EFL has secured a beneficial deal. It is not for me, her or anyone else in this Committee to say what the right sum of money is. I am merely pointing out that the distribution has changed over time. The available money for distribution has grown as the game has become more successful as a product unique to England and Wales, and it is for the IFR to get the distribution right. The point that the noble Baroness makes is that we should not be arguing the case for either the EFL or the Premier League; we should be arguing the case for football, because it is all of football that we want to see benefit, so that the pyramid truly acts as a pyramid and acts well in strengthening the national game.
Lord Markham (Con)
My Lords, before I address the amendments in this group, I want to echo the comments made by the noble Lord, Lord Bassam. With 44 amendments in this group, it really is hard to get your head around them all. Although they are given the broad title of “Regulatory powers”, I do not think that is conducive to good debate.
Lord Bassam of Brighton (Lab)
Many of the amendments are consequential. I have highlighted the main points for the benefit of the Committee and that was my objective so that it would get the message.
Lord Markham (Con)
I appreciate the noble Lord’s efforts to do that. It was not specific to this group. There have been a number of examples which have been unwieldy, to say the least.
I turn to Amendments 260, 269 and 293 in the name of the noble Baroness, Lady Taylor. They alter the backstop method to enable the regulator to trigger the resolution process. The current drafting permits only the competition organisers to trigger it. That is quite a profound change, if you think about it. To date, we have been saying that the regulator should step in only as a last resort if the competitions cannot reach an agreement among themselves. What we are saying here is that the regulator can step in—I guess, in theory even if the competition organisers have agreed—if it feels for some reason it is not quite happy with the agreement. That seems quite a shift away from the principles we were talking about earlier. Our concern would be that we are suddenly setting up a role for a quite muscular regulator which can interfere maybe not at breakfast, lunch and tea but quite a bit of the time, to say the least.
Amendment 276 in the name of the noble Lord, Lord Bassam, states that the leagues can trigger the resolution process if there has been a change to revenue received by other leagues, as mentioned. Again, I think we could get into situations where a five-year deal has been put in place and a league is suddenly trying to reopen the deal. I am delighted that the Championship has a good Sky deal. Do we think that gives cause to reopen the deal? That would be a concern there. I am always a great believer that a deal is a deal is a deal. You live by that deal for that time and when it comes up again, that is the time to negotiate. Amendment 264 from the noble Baroness, Lady Taylor, and the noble Lord, Lord Bassam, again makes provision for multiple competition organisers to trigger the backstop and mediation process.
In all of these, there is a general concern that instead of the backstop being the backstop, as it is called, it becomes almost the first stop and the first resort. It goes to the concern that noble Lords have mentioned many times that while we start with the principle of a light-touch regulator, very quickly we get into a scenario of a pretty heavy-touch, muscular regulator. That would be our concern.
Amendment 261 provides that competition organisers must obtain the regulator’s consent before entering into a distribution agreement. Again, this adds another level of complexity. If the competitions have agreed between them, why do they need to get the consent of the regulator? It goes far beyond the original intentions of the backstop per the Dame Tracey Crouch report, in which she referred to it as the nuclear option, and how that would be the only case it would come up in. Instead, through these amendments, we would be setting up a lot of situations in which it would be the first resort.
While I understand that the intentions of the noble Lord, Lord Bassam, are noble—as ever—I feel that this is another circumstance of mission creep and unintended consequences, where we would end up with a very muscular regulator. Those are our concerns.
Lord Addington (LD)
My Lords, I am not very bothered by having a muscular regulator; I want an efficient one that gets things done and looks after the lower clubs. There is a disagreement between us that has been there all through this Committee.
I regard the series of amendments from the noble Lord, Lord Bassam, as a smorgasbord from which we should select something that is actually going to get us to have a look at what is going on. There are lots of options and I have put my name to one of them. Making sure that we get the regulator right and get money going down to preserve something we regard as good is the primary objective. It is not just to take money off the Premier League; it is to make sure that the structures below survive.
If the Government think these amendments are not the right way to progress, hearing why from the Minister would be sensible. Nobody is quite happy with the backstop power in the regulation structure at the moment. Everybody is a little bit upset about it. People who were happy are now not happy. The Premier League and EFL are having great fun not talking to each other or disagreeing. I have no real objection to a slightly more muscular approach. I do not think it is a light touch that is required; it should be efficient.
Baroness Brady (Con)
My Lords, the amendments in this group cover a wide range of issues relating to the backstop. While I understand the intentions behind many of these amendments, I fear that they collectively risk making an already contentious and divisive mechanism even more complex and counterproductive.
I respect that Ministers believe they have designed a balanced mechanism that places incentives in the right place, but I think what we will come to unpack is that that is wholly mistaken. I believe this Committee will see that this backstop has not and will not incentivise industry-led agreements, which is supposedly its overreaching policy purpose. I believe we will see that it will not result in a balanced, pragmatic solution that will be good for football.
It will instead drive posturing, game playing and the development of extreme and damaging solutions. We will see that this backstop is legally untested and uncertain, and it could sink football and the regulator into a legal and political quagmire that could drag on for years. Worst of all, we will see that this backstop has already poisoned, and will continue to poison, the well of football bodies’ relationships, when we all need to work together for our continued collective success.
I will briefly address some of the amendments in this group. The proposal to expand the scope of the backstop to include multiple parties all at once—for example, the National League, or potentially the FA and, even in the future, the women’s game—is concerning. This risks creating division where none currently exists. The Premier League, far from being at odds with these stakeholders, has made intensive and carefully considered efforts to support them, just as it has with the EFL.
Just a few months ago, the Premier League announced a £12.6 million package for the National League system over three years, a substantial increase on previous arrangements. For the women’s game, the Premier League has provided significant financial assistance, including a £20 million interest-free loan to help the new Women’s Professional Leagues Limited in its formative years.
These are examples of proactive, voluntary agreements that demonstrate collaboration rather than conflict. This set of amendments would encourage all stakeholders to start competing, simultaneously claiming the Premier League’s revenues, fracturing relationships and introducing adversarial dynamics where none currently exist.
This is not the way to build a sustainable and co-operative football ecosystem. Indeed, I will make a prediction: it is far more likely that the National League will seek to trigger the backstop in relation to the EFL, which does not provide any financial support to the leagues below it. The idea of the IFR triggering the backstop mechanism independently is particularly troubling. The purpose of the backstop, as described in the Bill, is to act as a last resort when the parties fail to reach an agreement; it is not supposed to be a front- stop. Allowing the IFR to bypass this voluntary process would undermine its very purpose and disincentivise genuine negotiation.
The idea that any change—not even a reduction—in revenue received by one party could automatically trigger the backstop is, frankly, unworkable. Revenue distributions in football are dynamic and fluctuate according to complex interrelationships. The amounts change every year, almost always upwards. A mechanism that automatically treats any change as a potential trigger would, with the greatest of respect to the noble Lord, Lord Bassam, be absurd. It would trigger perpetual uncertainty, which is the last thing that football needs.
Finally, and more positively, the suggestion that the IFR could impose its own settlement deserves careful scrutiny. I have tabled my own, slightly different amendments to that effect, which will be debated in a later group. I fully agree with noble Lords that the binary mechanism in the Bill is unworkable for football. However, with respect, I am not sure that this particular amendment would place incentives in the right place. To allow the IFR to impose its own settlement only where both parties’ proposals are inconsistent with the IFR’s objectives would allow parties to offer unrealistic proposals. It would mean they could anchor with a very extreme demand, knowing that the IFR would be forced to step in and create a compromise. This would further entrench division.
What is striking about the amendments in this group is that they demonstrate a fundamental dissatisfaction with the mechanism in the Bill from all sides of the House, as well as the main competition parties involved. The Premier League has raised serious concerns about the divisive nature of the backstop, while the EFL has, I believe, inspired the amendments in this group. It too sees significant flaws in the process as designed. This really should give the Government significant pause for thought.
Let us not forget that English football’s success has been built on collaboration and solidarity. UEFA has made this very point about the deficiencies of the current Bill’s mechanism. A backstop requires thoughtful, proportionate regulation that respects the autonomy of its stakeholders. These amendments, and indeed the existing backstop mechanism, would disrupt that delicate balance. I urge the Government to reflect carefully on whether the backstop as designed is fit for purpose. It should be fostering co-operation, not driving division. If that requires revisiting the mechanism, we should do so without hesitation. Football’s future really does depend on getting this right.
Lord Maude of Horsham (Con)
My Lords, I want to pick up one particular word that my noble friend Lady Brady raised: divisive. There is no doubt that this Bill has turned what was intended to be a backstop—a last resort or nuclear option, however it was described—into something that can be used pre-emptively. Some of the amendments proposed tonight—which would make it more aggressive and interventionist, and more able to be used pre-emptively—have behind them the sense that this is bound to be aggressive, antagonistic and adversarial. I want to contest that.
The truth is that, wherever a club is in the pyramid of English football, it has an interest in the whole pyramid being strong. There is no benefit to the Premier League in keeping lots more money to itself and weakening the rest of the pyramid, because it depends on the pyramid; its strength is drawn from all the way through the pyramid. It is really important that we try to take ourselves away from the sense that there is a finite pie of limited size and so we should work out how to enable different parts of it to get more for themselves.
English football—the whole pyramid—has seen tremendous growth. It had the huge challenges of the pandemic, but it survived and came out strong. As we have repeatedly said, the Premier League is not just the most successful football league in the world but the most successful sporting league in the world. The Championship is the sixth most successful and richest league in Europe. It is strong and it will grow more, but it will not do so if the whole mindset behind how this is constructed just puts one set of interests against another. The aim should be to ask how we grow the pyramid further and encourage the different parts of it to work together and see the mutual benefit, to make two plus two add up to five, rather than—as I fear the danger is in how this is constructed—add up to three. I urge the Government to take this away and look again at how it is constructed.
Lord Goodman of Wycombe (Con)
My Lords, it is relatively late in the evening and we have debated a lot of clauses and amendments, but I agree with my noble friend Lord Maude that this debate is at the heart of the Bill, at least as far as the Premier League, the Football League and the clubs themselves are concerned, I suspect. What will really get them going in relation to the Bill is not, for better or worse, net zero, diversity or any of those things but the money; it is what happens to the money and the success or failure of their clubs.
When the Minister responds, she will make the best case she can for what is in the Bill—for the backstop—and I understand that. However, when we finish Committee and go on to Report, and when eventually the Bill passes, the debate will not be over; it is just beginning. Once the Bill is passed, as I assume it will be, my noble friend Lady Brady will continue to make her case broadly for the present arrangements and the noble Lord, Lord Bassam, will be back to make his case for what my noble friend Lord Markham called the front-stop, while the Government will defend the backstop—and so the debate will go on.
One of the lobby groups that has an interest in the Bill said of it that the debate is over. I found that a remarkable statement, given that this House presumably has a duty to scrutinise legislation and the Bill has not even been down to the other place yet. My point at this stage is that the debate is not over. It will not be over in Committee, on Report or after Third Reading; it will just be beginning. I ask noble Lords to bear this in mind when we come back, later in Committee, to consider clauses that seek to review the Bill as a whole.
Baroness Twycross (Lab)
I thank my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton for their amendments on this important topic. I thank my noble friend for outlining why distributions are so important to the football pyramid. I will aim to take the amendments in a sensible order, with logical grouping where possible. In appreciating comments on the size of the group, I note that there is a logic to this, as outlined by my noble friend, and I say to the noble Lord, Lord Markham, that I do not think we have skimped on debate during Committee—though I agree with the noble Lord, Lord Goodman, both that the hour is getting late and that it does not feel like the debate has finished or will finish any time soon.
I acknowledge the probing intent of the amendments and it is really helpful to have this debate. I know that subsequent groups will go into this a bit more as well. I agree with the noble Lord, Lord Addington, that it is important that we do our absolute best to work through the issues that noble Lords have raised and to get the regulator right, which was the point that he made.
I reassure my noble friends that we agree on the importance of regulatory intervention on distributions— I appreciate that not all noble Lords have exactly the same view of this. Amendments 260, 269, 270, 293, 295 and 288 would broaden the powers that the regulator has to intervene by allowing it to trigger the back- stop process. I understand the intention behind the amendments, but we must maintain the backstop process as a last resort, to be triggered by the leagues only if they cannot come to an agreement themselves.
Baroness Evans of Bowes Park (Con)
The noble Baroness keeps saying that, and I understand that it is what we hoped was going to happen, but I do not think that anyone in this Committee believes that it will be a last resort. From the briefings that all noble Lords—including, I am sure, the Minister—have had from all sides, we know that the backstop is likely to be triggered very early on by the regulator. I really hope the Minister can move from what we hoped might be the position to where I think we are, whether we like it or not, and look at these processes on the basis of what is likely to happen. This could be one of the first things that the regulator has to deal with.
We have heard concerns about the nature of the conversations and the way that those might set up leagues against one another. I know that the Minister would hope that it was a last resort, as I think we all did, but I urge her to accept that if we are being genuinely honest—and other noble Lords may have heard differently from the various leagues we have all been speaking to—it seems to be a view that this is likely to happen. It would be much more helpful for our discussions if we could stop saying, “It’s a last resort”, and accept that it is very likely to happen quicker than we all wanted.
Baroness Twycross (Lab)
I appreciate that the noble Baroness, Lady Evans, may take a different view and I completely understand people’s concerns that it will be a front-stop—as a spoiler alert, and with apologies to my noble friend, I am not going to accept these amendments; we will come to that in a moment. However, we genuinely think that the model we have established is very similar, apart from the possible inclusion of the parachute payment—for want of a better word; it is not the phrase used in the Bill, but that escapes me for a moment—should the “state of the game” report suggest to the regulator that it needs to allow that to be taken into account.
My view is that the model we have presented should incentivise the leagues and the parties to come to an agreement themselves, and that opportunity to do so does not go away once the regulator is established. That is the design of the model and an essential part of it, as it was in the previous iteration of the Bill, so this is absolutely intended as a backstop process. We can go on to debate that in later groups as well as in this group. I am happy to do that and to meet people individually to go through why we think this will be a backstop and not a front-stop whereby the minute the regulator sets off in motion, everybody will claim that they want to have the backstop triggered.
However, there are things that the regulator will need to take into account if somebody asks for the backstop process to be triggered. It is not the necessarily the case that the regulator would have to accept that that process was set in motion. The whole model is designed around the principle of trying to get people to come to an agreement themselves. It is really important to ensure—
Baroness Brady (Con)
I thank the Minister for giving way. If she was right, we would have a deal in place by now. This has been the model for two years, so it is definitely a barrier to conversations. There is a view that whatever the Premier League agrees with the Football League, that, in effect, becomes its insurance policy. It then triggers the backstop and goes straight to the regulator, knowing that it will never get less than it has been offered and could get more. We will be in a perpetually revolving door of triggering mechanisms that will never give any club any certainty of its income, which will be very dangerous and very bad for football.
Baroness Twycross (Lab)
It is important for us to go through how the regulator’s backstop powers and power of last resort would work. I appreciate that the noble Baroness is entirely right that an agreement has not come into place, and that might be—or might not be—because of people waiting to see what form the regulator takes and the exact iteration of the wide range of views we have heard tonight and on previous occasions.
If, under the Government’s intended model for the backstop, the relevant leagues cannot reach an agreement, they can apply to trigger the backstop—the noble Baroness is quite right on that. If certain high thresholds are met, of which the regulator must be satisfied, the backstop can be triggered, but let me go through what would happen first: the relevant leagues would enter a period of mediation and, if there was still no agreement, they would move to a final proposal stage.
Baroness Brady (Con)
I thank the Minister for allowing me to intervene. Rick Parry went before the Select Committee and said he would trigger the backstop in any event—even if he got more money from the Premier League in the meantime—because there is no risk to the EFL in the backstop.
Baroness Twycross (Lab)
I am not going to comment on what people did or did not say in that committee meeting at this point. The backstop would be applied only if certain high thresholds were met. The regulator will be an independent regulator and it will have strict measures to meet—high thresholds which it must be satisfied of if the backstop is to be triggered. If there is still no agreement, the parties will move to a final proposal stage and, at that point, the regulator would convene an independent expert panel and invite final proposals from both relevant leagues with accompanying analysis, and the independent expert panel would choose the most appropriate proposal. This model incentivises both parties to compromise, as unreasonable proposals would not be chosen.
The whole model, which is almost identical in every detail to how the previous Government were planning to do this, is intended—
Baroness Evans of Bowes Park (Con)
The Minister keeps coming back to the previous model. I think most of us here thought the previous model was nuts, and we still think it is nuts. We never discussed this in the House, so to keep saying that is quite insulting to quite a lot of us who always thought this was a bad idea. We are trying to engage with the Minister now about why we think it is a bad idea, and we would really like her to talk about the detail rather than keep saying, “Well, it was your Government”. Honestly, I would never have voted for this beforehand and, in my ex-position, that would have probably been quite a bad thing, but I am sorry, I would not have done so. I would like the Minister to focus on what we are talking about rather than keep using those issues to deflect from getting into the detail.
Baroness Twycross (Lab)
I am not sure how many times I have said that this evening, but it is really not very many. I am trying to establish that this model has been worked on and discussed for some time. I appreciate that noble Lords in this House did not get the opportunity to discuss it under the previous Government. It is a model that has been worked through, with examples from different organisations. It encourages compromise and tries to get people to reach a deal that everybody can work through and which meets the criteria of the regulator.
Lord Moynihan (Con)
A model which creates tension does not get it right. We have already heard from Rick Parry that he would trigger it immediately. This is a model that does not work. We are trying to say to the Minister that Committee is an opportunity to take it away and rethink it. It really does not stack up to be a successful model for the future of English football.
Baroness Twycross (Lab)
Simply because one individual says that they would want to trigger it does not mean that the regulator would view the condition as being met.
Lord Maude of Horsham (Con)
With respect to the Minister, it was not just a random individual; it was a really significant player in the whole scheme of what we are talking about here.
Baroness Twycross (Lab)
I appreciate the noble Lord’s point, but if the EFL triggers the backstop or makes a proposal in bad faith, it could end up worse off if the Premier League’s proposal is more reasonable, so this does not encourage the EFL or Premier League to be confrontation or divisive. I am sure we will come back to this at a later stage, probably this evening, but definitely when we come back in the new year on Report.
I am really happy to sit down with noble Lords and talk this through, but I will continue to use my speaking notes for some time and then, I hope, give some reassurance that we are considering this carefully. I am always happy to meet with noble Lords, as is the team that has been working on this. As noble Lords are aware, a number of the officials working on this have been doing so right the way through from the fan-led review, so this is a really good example of the consistency of advice both to this Government and the previous Government, notwithstanding the fact that not everybody here liked the Bill’s previous iteration.
To return to my speaking notes—although I am fairly sure I have got slightly out of order now—we think that this approach encourages future collaboration. We might need to agree to disagree on that point and come back to that debate.
Baroness Brady (Con)
The Minister says that she believes that the mechanism will deliver collaboration. For my benefit, please could she name a single example of a binding final offer process working in UK regulatory terms, and its use in the UK to deliver the outcomes she is talking about?
Baroness Twycross (Lab)
The Competition and Markets Authority has used it.
The process proposed by this group of amendments, excluding Amendment 260, would allow the regulator to intervene at its discretion and would require it to take into account the potential use of any revenue distributed. It is the Government’s view that this is regulatory overreach and a fundamental change to the intent of the process as drafted.
The other amendments from my noble friends Lord Bassam and Lady Taylor seek to change the structure of the backstop process from a two-party mediation and final proposal/order process to one that could apply to any number of relevant parties. I understand the overall intent of these amendments and have chosen to address them as a group to ensure that that intent is understood comprehensively, and that the Government’s position is in turn communicated coherently.
To clarify, the Premier League, the English Football League and the National League can all apply to trigger the backstop process. Any of the specified competition organisers can submit an application to trigger the process, and simultaneous instances of the backstop process could be triggered to cover the relationships between each of the leagues. The process is inherently designed as a two-party process. Fundamentally, distribution agreements are agreed between two individual leagues and the process is designed to facilitate these agreements. As the final offer process is set up and designed between two parties to facilitate a decision between two proposals on the basis of relevant principles, it would not be effective for the regulator to engage in this process with more than two parties. This is also, in part, why it would not be appropriate for the regulator to make a third offer. Without the incentive of the two-proposal process, parties are likely to stay at polarised positions, rather than find areas for compromise. However, when the two proposals submitted are the only choices, the pragmatic decision is to submit the most reasonable proposal possible. This is the incentive we wish to create.
I now turn to Amendments 292, 296 and 314, tabled by my noble friends Lord Bassam and Lady Taylor of Bolton. While there is a slight difference between “special” and “compelling”, we are satisfied that the bar is set sufficiently high with the use of “special”, which is the more usual terminology in these sorts of provisions. There is likely to be no tangible difference in outcomes, and therefore these amendments would be minor, insignificant changes to the wording of the Bill. As such, the Government believe the current drafting is sufficient. This is also the case for Amendment 264. While we understand the intent behind this amendment, we are content that the current drafting in the Bill sufficiently captures all revenue relevant for consideration during the backstop process. The proposed drafting change would not capture any revenue sources not already captured by the existing wording.
I turn now to Amendments 261, 262, 276 and 315. Amendment 276 seeks to significantly broaden one of the conditions by which the backstop process could be triggered. Condition 2 is specifically designed to be triggered by a material reduction in relevant revenue, as this poses a significant threat to the financial sustainability of the pyramid. Amendment 315 would, if the distribution process was ended due to incomplete or inconsistent proposals, require the regulator to issue a distribution order based on its expert panel’s own proposal, rather than ending the process. This would prevent the regulator ending the final proposal stage without an order, even if both leagues have chosen not to submit proposals.
These amendments, and the others referenced, would increase the likelihood of an enforced rather than an agreed solution. The Government’s preference is for an industry-led solution. It is our view that the regulator should have a role in facilitating the final proposal process only where no agreement can be reached on distribution, and that the process should be the least interventionist it can be while remaining effective. This approach encourages future collaboration and prevents the leagues relying too heavily on the regulator in the future.
I turn now to Amendments 284 and 286. While I agree that the state of the game report is a usual source of information to be considered as part of the distribution agreement process, it is our position that these amendments are unnecessarily prescriptive. As it stands, the Bill does not make specific reference to the report being included as a potential question for consideration. However, the existing drafting does not in any way exclude consideration of the state of the game report, and the regulator must have regard to it as part of its general duties. I would expect the state of the game report to be considered by both the leagues applying to trigger the backstop process, and the regulator, given its relevance. However, to include this expectation beyond what is already set out in primary legislation would be inflexible.
Turning to Amendment 267, while the Government understand the broader intention to involve fans in as many areas of the Bill as possible, it would not be appropriate for the regulator to be mandated to consult a group which is neither directly financially involved nor a governing body. This is not to say that fans should not make their views known to the regulator, and there will be many instances, such as in the state of the game consultation, where we expect the regulator to be able to consider a number of perspectives. This includes the views of fans on the financial situation in English football. Furthermore, the proposed drafting requiring consultation with representatives of regulated clubs is duplicative, given that the Bill as drafted already requires the consultation of the leagues.
Finally, Amendment 319 seeks to remove the provision that explicitly outlines that leagues can come to an alternative agreement at any time in the backstop process. The ability of leagues to come to an agreement independently has been protected in the legislation itself intentionally, to highlight that an industry-led solution is both preferred and encouraged. We believe this explicit protection will encourage the leagues to reconsider at every step of the process whether regulatory intervention is necessary, ideally bringing them closer to an independent agreement that works for all of football.
I hope that my responses have reassured my noble friends and other noble Lords that the Government’s approach is appropriate and provides the necessary protections, and that my noble friends will not press their amendments.
Lord Bassam of Brighton (Lab)
My Lords, the noble Lord, Lord Markham, rumbled me early on in his comments when he worked out that these were probing amendments; that is what they were intended to be. The group is disparate—I did not author it; it was what we were handed. It has been useful because it has enabled me to hear from the Minister how she sees the regulatory arrangements working as far as distribution is concerned, and the extent of the regulator’s flexibility.
I did not make this observation in my opening remarks but I think—the Minister covered this point—that the “state of the game” report will be critical when the regulator gets to grips with the distribution. The distribution of the revenues will be most important, because that is designed to make the game sustainable, to make sure that clubs do not go into administration, that we do not have clubs paying more than they actually earn in revenues, and so that clubs do not get to the point where they cannot properly trade. That is the most important thing for me.
Although I appreciate that my amendments would appear to some to be a bit of regulatory overkill, I think the point was made that we need to make sure that the regulator can do its job properly. The Premier League should not be at all threatened by the powers that the regulator has. Given the amount of money there is in the game and the continuing success of the Premier League—and, for that matter, the Championship —the regulator should be able to get our national game to the point where it is much more financially in balance and there are not the big gaps and distortions in revenue distribution throughout the pyramid.
I thank the Minister for what she said. Obviously, I shall study it very carefully. I think it unlikely that I shall return to these issues on Report, but obviously I will look at it very carefully before we come to that point. I beg leave to withdraw the amendment.
Lord Markham
“(2) In this Part, revenue received by a specified competition organiser is “relevant revenue” if—(a) it is revenue received as a result of the sale or acquisition of rights to exploit the broadcasting of football matches included in a competition organised by the specified competition organiser, and(b) it is not revenue that the specified competition organiser distributes to a club by virtue of a team operated by the club being relegated from a competition organised by the specified competition organiser.”Member’s explanatory statement
The amendment prohibits parachute payments from being included in the distributions of revenue resolution procedure.
Lord Markham (Con)
Amendment 263 is in my name and that of my noble friend Lord Parkinson. Going on from the last debate, it talks about probably one of the most important elements in the whole make-up of the financial payment system: parachute payments. The amendment seeks to remove from the regulator the powers to impact or change those parachute payments.
The reason for that is that parachute payments are a very common feature—I understand that just about all European leagues have parachute payments—and that is for a very simple reason. Any club that gets promoted is automatically in a situation where financially, it has a lot less money than other clubs in the Premier League or whichever higher division it is—parachute payments happen right the way through the pyramid—and they need to invest. They need to do that if they are to have any opportunity, any chance, to compete. If they do not invest, it is pretty likely that they will get relegated again straightaway, and any games that they take part in will be pretty uncompetitive and not very interesting to watch. But how do you get them to invest when they know that there is a decent chance that they will get relegated straightaway and go back to a situation where they have a lot less income?
Of course, as I say, the common mechanism that all the leagues across Europe seek to put in place is the safety net of a parachute payment, so that clubs know that for a period of time—three years—they have that safety net, particularly in years one or two, because in the third year it falls away quite quickly from that.
However, it is not just as a key measure for promoted clubs. Right now, if you are a Wolves fan and you are sitting second from bottom, what do you want them to do? You want them to sack their manager—they have done that; it cost them quite a bit to do that in terms of pay-offs and attracting a new manager—and you want them to invest in the January transfer window to get more players, to give them a chance of staying up for the rest of the season. That is the absolutely normal thing that you would expect them to do.
That is what you want the whole Premier League to be doing: you want the teams to be really fighting to survive and competing in every game. That is what makes the game so interesting to watch. A lot of the fun towards the end of the season, when you know—maybe not this season—that Man City is going to win it again, or whatever, it gets really interesting around the bottom of the league. Why is it interesting? It is because those clubs still invest. So Wolves will no doubt invest in this window and a lot of the bottom clubs, which might be looking over their shoulder, worried about relegation, will invest. They will do that because they have the safety net of the parachute payments.
Baroness Brady (Con)
My Lords, I support Amendment 263 in the name of my noble friend Lord Markham, which seeks to exclude parachute payments—the financial lifeline provided to relegated clubs—from the definition of “relevant revenue” under the backstop. This amendment is essential to addressing the profound risk created by the current drafting of the Bill.
Parachute payments are not just a feature of football finance, they are a key part of the scaffolding that delivers the competitiveness, the investability and the financial sustainability of the English football ecosystem. Without them, relegation would become a financial free-for-all—a cliff edge that would devastate many clubs and their communities. Parachute payments are designed to manage the significant financial shock of relegation, where clubs can lose enormous amounts of revenue almost overnight, yet their overheads stay the same.
I speak from some personal experience here. At West Ham United, we have known the daunting realities of relegation. Without parachute payments, the response in 2011 would have been wholesale disinvestment, a disorderly fire sale of players, job cuts, and a complete halt to critical investments in infrastructure. That is exactly how clubs start to spiral. Parachute payments do not come close to eliminating the pain of relegation but they provide some breathing space to make difficult but measured adjustments.
Yet this Bill places the very existence of parachute payments on the table, making them a part of the binary backstop process that pits two competing visions of football finance against one another. This is an intolerable risk. The EFL has been explicit that its proposal in this process would be for massive reductions in parachute payments, based on the argument that the financial gap between the Premier League and the Championship should be closed. But this argument fundamentally misunderstands the problem. The central issue here is not the gap itself, which reflects the commercial realities of two very different leagues, but whether clubs can transition effectively between those levels, between those two leagues.
Here the evidence is clear. Parachute payments work. If they did not exist, you would simply have to invent them. Crucially, parachute payments do not lock up promotion opportunities. Look no further than the examples of Luton Town and Ipswich Town from each of the last two years. Well-run, innovative clubs have every chance of success in the Championship, which is a highly competitive and appealing league.
Parachutes are not a significant distortion but a significant stabiliser, providing clubs with the tools to manage transition responsibly and sustainably. The EFL’s proposal is essentially to level down the Premier League to meet the Championship; to stretch out the bottom half of the Premier League. But that would destroy the top-to-bottom competitiveness that makes the Premier League the most watched and admired league in the world. Enabling such a proposal, as this Bill now does, expressly privileges the Championship over the Premier League. That is an astonishing position to take. It risks reducing the quality of the game at the top of the pyramid and undermining the ability of clubs to compete both domestically and internationally.
Let us also consider the impact on investment. Investors are rational. They are drawn to football because of its structures, parachute payments central among them, that provide clear pathways for responsible investment and sustainable growth. Without parachute payments, the Championship clubs become less investable. Why would anyone seriously invest in a club that cannot make the financial journey to the Premier League without risking complete collapse on relegation? The logic of the previous Bill was that, if there are challenges with parachute payments—challenges that the Government’s state of the game review may or may not identify—these can be addressed through increased solidarity payments. The exclusion of parachute payments in the previous Bill meant that the very existence of parachute payments was not placed at risk. It recognised the critical value of parachute payments to protect their role in managing these vital transitions. But now parachute payments are suddenly on the table. It is a hugely significant change of policy.
I know that the Minister would prefer that I should refrain from pointing this out, but the process by which this expanded backstop mechanism has been introduced has been alarmingly inadequate. As we know, the Secretary of State held just one 30-minute meeting with seven hand-picked Premier League clubs between July and October. The backstop was one of the many things that were discussed at the meeting, but at no time during the meeting were we given any warning that this decision was even being considered, let alone added to the Bill. Those seven clubs wrote to the Secretary of State following the meeting, which was five or six months ago, and we still have not had a reply. We also know that UEFA explicitly advised Ministers to reconsider the previous mechanism before parachute payments were even included. But, instead of narrowing the scope, the Government have significantly broadened it. I ask again: why? Parachute payments do not create financial irresponsibility. They are its enemy. They do not distort competitiveness; they enable it.
If you are Championship club newly promoted into the Premier League, you need to know that you can invest in your team to give you any chance to be competitive and to stay there. Clubs invest when they are promoted only because they know that they can rely on the parachute payment to cover some of the investments they have made in order to be competitive in the Premier league. Those investments are almost always in transfer fees and players’ wages. Clubs need that parachute to cover those things if they are relegated. If you do not have a parachute payment to soften the blow, you know that you cannot make the necessary investment in your team and in transfer fees when you get into the Premier League to try to stay there. You know your team will not be competitive enough, because you know that, if you are relegated without a parachute payment, you will face the real risk of administration.
Parachute payments help soften the blow. Without them, you cannot cut your overheads in any way, because there is no cause to terminate players’ contracts—that is part of the PFA agreement. So this means that, if you get promoted into the Premier League knowing you cannot contribute to the competitiveness of the Premier League—the idea that on any day any club can beat any other—you are going to affect the competitiveness and the global appeal of the Premier League, as my noble friend Lord Markham said, but, most of all, you are going to damage your own club.
Parachute payments do not reward failure. They allow clubs to recover, rebuild and stay financially sustainable. Frankly, I think that is the whole purpose of Bill. So I urge the Government to reconsider and to protect the stability of the football ecosystem, protect the ability of clubs to manage the transition between leagues responsibly, and protect the investment in both the Premier League and the Championship, which make English football the global success story that it is today.
Lord Maude of Horsham (Con)
My Lords, it is a pleasure to follow my noble friend Lady Brady, who speaks with passion and deep expertise. I support this amendment.
I suspect I am not the only football supporter sitting in your Lordships’ House who had never heard of parachute payments until I started to get my head around the Bill. It took me a little time to get my head around the concept. I have listened very carefully to, and interrogated, the arguments for it, and understand them. The essence seems to me that it is simply a fact—an irrefutable fact and not readily to be changed—that there is a huge gulf in the financial rewards that come to a club in the Premier League compared with one that is in the Championship. One might regret that, but the only way you could possibly change it would be, as my noble friend said, by levelling down and reducing the competitive tension that there is in the Premier League.
The arguments that my noble friends Lord Markham and Lady Brady made about how parachute payments can narrow the gulf between Premier League and Championship are powerful and compelling. But the truth is that, without the ability for clubs that have been promoted to invest to become competitive, you would not have the competitive tension within the Premier League that is part of what makes it so successful. We have said repeatedly, but it bears repeating, that the Premier League is the goose that lays the golden eggs that reward the rest of the pyramid. If we damage that, we inflict damage not just on the Premier League but on the whole of English football, and that is what we have to be incredibly careful of.
There is a high degree of mobility within the Premier League. I say this with regret as a supporter of a club that is always regarded as in the top six but is languishing —temporarily, I hasten to say—in 10th. It is, as we know, the hope that kills you, not the despair. Nottingham Forest were promoted two or three seasons ago and are now fourth in the Premier League, in a Champions League spot—there is strong mobility. Could they have done that without the confidence to be able to invest and to grow the team and the players? This is part of the magic of it, and to suggest that this is somehow a game and a racket and that it should be put in jeopardy is not to understand the magic of a degree of competitiveness that exists in English football all the way through the pyramid.
This is something that the clubs and leagues have themselves come up with, and it is something that works. The idea—frankly, this thought applies to quite a lot of what the Bill is about—that what has worked and been proven to work will somehow suddenly be improved by the introduction of a state regulator might turn out to be true, but all the evidence of history suggests that it will not.
Baroness Evans of Bowes Park (Con)
I support Amendment 263 and declare an interest as a supporter of Norwich City, who, over a number of seasons, endured the pain of relegation and then the joy of promotion on a regular basis. So, unlike my noble friend Lord Maude, I am well aware of the benefits of parachute payments, although unfortunately not for a few seasons now.
As we have heard, parachute payments are a critical foundation for the competitiveness of the Premier League. They help clubs manage the financial impact relegation from the Premier League can cause and give a degree of stability at a time of significant challenge to allow them to adjust to their new financial and footballing reality. That is true of all clubs. Well-run clubs like Norwich City could not have survived, even with the benevolent owners they had, without the benefit of a parachute payment. A parachute payment does not, however, in any way ensure that clubs continually go up to the Premier League, as, unfortunately, the last few seasons for Norwich City have shown.
I am sure a number of noble Lords will have seen the letter from Cliff Crown, chairman of Brentford FC, who said:
“For Brentford FC the parachute payment model provided an essential safety net, enabling us to invest in the team and infrastructure when we secured promotion. This support was pivotal in ensuring we could compete effectively and establish ourselves in the Premier League.”.
Like other noble Lords, I am concerned that the Bill as it stands may inadvertently incentivise bottom-half Premier League clubs and Championship clubs seeking promotion to significantly curb their investment over time, given the greater risk relegation would undoubtedly present. As my noble friend Lady Brady said, relegation would become a real financial cliff edge that would see clubs lose enormous amounts of revenue overnight, while having to continue to cover the costs predicated on their involvement in the Premier League. If that were to happen, the competitiveness of the Premier League would be severely weakened, and I believe the Championship would be significantly weakened too, undermining the very attributes that attract the revenues that sustain the game.
I urge the Minister to look again at this issue and to carefully consider the concerns raised in our discussions today. In particular, if she has not already done so, I urge her to talk to the clubs whose first-hand experience of the stabilising effects of parachute payments surely must be central to any discussion of this issue. I really hope that their experience will not be dismissed out of hand.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Markham, for this amendment and all noble Lords who have taken part with a degree of passion that shows their commitment to the game and to the legislative scrutiny process.
First, I acknowledge that all noble Lords—I include myself in this—agree that parachute payments are a significant part of football’s financial landscape. I reassure noble Lords that the Government recognise that they play an important role in supporting the survival of relegated clubs. I agree with the noble Baroness, Lady Brady, that they can provide a lifeline. However, the regulator needs to be able to consider all relevant revenue sources as part of the backstop process to get an accurate picture of the proposal’s impact on financial sustainability. That is why parachute payments have not been excluded in this Bill’s definition of relevant revenue.
We believe that allowing the regulator to make a more informed decision, rather than restricting what it can consider, will only help to achieve the best possible outcome for the future of the game. Notably, parachute payments will be reviewed as part of the process only if the regulator deems them a relevant consideration. The current drafting does not require that parachute payments be considered; it allows them to be so only if they are deemed relevant by the regulator. So, if it agrees with the point made by the noble Lord, Lord Markham, based on the state of the game report, it will act accordingly. What that means in practice—
Baroness Evans of Bowes Park (Con)
The Minister talks about the state of the game report, which I completely agree is going to be extremely important, but the fact of the matter is that the backstop could be triggered before the state of the game report is published. From what I remember, it is quite a long time before it needs to be published. It could be that both leagues—the EFL and the Premier League, or whoever—will trigger the backstop before that, so parachute payments will be included. Unfortunately, the state of the game report may have no impact whatever on an initial decision by the regulator. The timescales simply do not work. I am not expecting a particular answer today, as the Minister can well say that she is not in charge of the regulator, but it is important to note that the timing of these things does not necessarily tie up, so unfortunately, reassurances like that are not really reassurances.
Baroness Twycross (Lab)
Clearly, it does not need to wait for the state of the game report to decide whether they are relevant. The approach we have adopted in the Bill means in practice that if the regulator has clear evidence, whether from a different source or from the state of the game report, that parachute payments are causing sustainability issues to the wider pyramid, it will now be able to address them. In our view, this was a potentially serious gap in the legislation that we feel has now been rectified. I stress “potential”.
Baroness Brady (Con)
What the Minister said would be fine if the regulator was making a balanced determination, but because the Government have created a binary process whereby one proposal can be accepted, it could choose to abolish them. The Government have created that risk, and it is an intolerable risk.
Baroness Twycross (Lab)
We went through in quite a lot of detail how the backstop mechanism would be triggered. I know we have more to come, as the noble Lord, Lord Maude, said, but in my view, it is not unreasonable for the regulator to be able to consider them. However, the regulator does not need to consider them.
On the point raised by the noble Baroness, Lady Brady —clubs and planning, and how they can deal with their financial future if parachute payments could change as part of the backstop process—while the Government understand the desire to ensure that regulated clubs have as much time to adjust to change as possible, we acknowledge that significant time has already passed without a financial distribution agreement. Ensuring a timely and satisfactory agreement is in the interests of football and the wider public. The backstop process is a built-in transition period specifying that parachute payments cannot be reduced within one year of the distribution order coming into effect.
We understand concerns around the future of clubs that may already have factored parachute payments into their forward-looking financial planning before a potential order that could lower payments had been issued. We would expect the leagues to maintain effective communication with clubs throughout the backstop process, which, alongside the built-in transitory provision, will mean that clubs should have ample time to adjust if parachute payments are deemed in scope. There will not be any sudden reduction in payments without warning. I feel that that should provide some reassurance to noble Lords and to the clubs.
On the definition of relevant revenue, football is a fast-paced industry, so it would be erroneous to assume that the definition of relevant revenue might not need to change. If broadcast revenue ceases to be the primary source of revenue stream in the game, the definition would need to be amended to ensure the process remained a viable regulatory intervention. Furthermore, there are already significant safeguards in place to ensure that this power is not used incorrectly. For example, consultation with the regulator, the Football Association and specified competition organisations is required before the power can be utilised.
With noble Lords’ indulgence, I want to say a bit about the consultation process. On a number of occasions it has been stated in your Lordships’ House that there has been insufficient consultation. Particularly in response to a point raised by the noble Baroness, Lady Brady, I want to put on the record that this Football Governance Bill is the culmination of years of work, including a huge amount of consultation. During that time, there has been extensive regular engagement with key stakeholders, including clubs that will be subject to the regulation. All clubs have been provided with a number of formal opportunities to share their views, particularly as part of the fan-led review and the formal consultation process on the football governance White Paper, where all 116 clubs in the top five leagues at the time were invited to give their views on the proposals. Over that period, DCMS Ministers and officials have had many hundreds of meetings with clubs, leagues, fan groups and other stakeholders from across football, and we continue to engage with the industry now, so this number is constantly growing.
Clubs have had five years to write to or meet DCMS to make their position known. No club that has requested a meeting has not had one. Indeed, some Premier League clubs were recently invited to meet officials and turned down the invitation, which I stress is their right. We have met and continue to meet a range of clubs, at all levels of the football pyramid, that will be subject to regulation.
The leagues have a role to play here. We would expect them to support their clubs in their understanding of the development of the regime and in their engagement with the Government, as well as to keep their clubs updated on any engagement that the leagues have had with the Government. Indeed, this is what has been explicitly asked of us at times by some of the leagues. Richard Masters, the CEO of the Premier League, Rick Parry, chair of the EFL, and Kevin Miles, CEO of the Football Supporters’ Association, have all praised the Government’s constructive approach to engagement with the clubs and the leagues.
This is not the end of the process or of the consultation. There are still lots of opportunities for clubs to have their say as the legislation passes through Parliament and work continues to establish the regulator. Even once the regulator is established, its approach will be advocacy first, aiming to work constructively with clubs on an ongoing basis to resolve issues wherever it can.
I have asked for an answer to the noble Baroness’s question about the response to the letter, and I will have to revert to her after the debate. Given the lateness of the evening, I have not been able to get a response on that.
Baroness Brady (Con)
Is that the letter I sent on 2 December about UEFA or the letter that the seven clubs sent to the Secretary of State to which she is going to reply? Maybe the Minister can tell me that afterwards.
It is a statement of fact that the Secretary of State has met only seven clubs for half an hour. I am not talking about other officials. I have to say that there was zero consultation on including parachute payments in the Bill. There may have been other meetings, but between the two Bills that was a significant change that has caused lots of difficult conversations within the leagues.
The Minister said that there was no deal in place. There is a deal; it has been in place between the Premier League and the EFL since 2018, and it has a three-year notice period—just so she knows.
Baroness Twycross (Lab)
I will have to get back to the noble Baroness on the letter she said was sent by the Premier League following that meeting. Officials have not been able to get in touch with the correspondence team given the lateness of the evening, but we will endeavour to chase that up tomorrow.
I am aware that there is a deal in place. One of the issues raised during the debate this evening has been the inability to reach a new deal. I hope that, at some point soon, the various parties will come to an agreement without us having to trigger the backstop. My main point was that simply referring to one meeting maybe gave the wrong impression of the extent of the consultation. I have spoken to officials who themselves have had more than 100 meetings with the Premier League. To me, that sounds like ongoing dialogue rather than consultation. However, we may need to pick that up outside this Committee.
Lord Jackson of Peterborough (Con)
In the spirit of trying to be helpful, and given that Clause 56 is a Henry VIII clause, would the Minister look favourably, potentially on Report, at bringing forward a government amendment which tightens up the wording of Clause 56(2)? Very strong feelings have been enunciated today by my noble friends around parachute payments. It is incumbent on the Minister to acknowledge that and perhaps come back on Report with government amendments that reflect that.
Baroness Twycross (Lab)
The noble Lord may not be surprised to know that I am not going to commit to doing that. We believe that the model in the Bill is the correct one. I am happy to meet the noble Lord and others to discuss this before Report, However, on the basis of the arguments I have made this evening, I urge the noble Lord, Lord Markham, to withdraw his amendment.
Lord Markham (Con)
I thank all noble Lords for their contributions. We can all agree that everyone spoke with passion on this point. We are passionate because we know it really matters.
I am grateful to the Minister for her acknowledgement of the importance of parachute payments. They really are critical. I echo the point made by my noble friend Lady Brady that, since parachute payments were brought into this, my understanding is that there has been only a 30-minute meeting with the clubs, where this was barely brought up. I urge the Minister to consult more with the clubs.
Baroness Twycross (Lab)
I asked officials to draw up the words that I said on consultation because, night after night, group after group, it has been said to me that there has been insufficient consultation on the Bill. I went back and asked whether I could stand up and say that there has been sufficient consultation on the Bill. What consultation happened? When has it happened? How has it happened? Who has it been with? I am confident there has been a huge amount of consultation on the Bill and I will continue to state that when I am asked. I will follow up things that people feel have not been followed up, but any club that wanted to have a meeting has had one, and some have said they did not want one. I will sit down and allow the noble Lord to finish, but I am not going to accept that there has not been sufficient consultation.
Baroness Brady (Con)
I am sorry to intervene, but I want to say again that on the specific issue of parachute payments there was no consultation with either the Premier League officials or the Premier League clubs that attended that meeting before this went into the Bill. I am not saying that there was not consultation on other areas, but this is a significant change to the Bill that had zero consultation with the Premier League or Premier League officials.
Lord Markham (Con)
It may be that it should be a matter of fact and we can find out one way or the other. The question is: how much consultation has happened specifically on the parachute payments? Obviously, they have been a recent introduction. My understanding from my noble friend is that there was just that 30-minute meeting, at which this was barely raised. I would be grateful if the Minister could ask her officials directly.
Baroness Twycross (Lab)
I will intervene again, and I thank the noble Lord for giving way. Labour tabled an amendment on this in opposition, so I am surprised that there seems to be so much surprise that the Government have now put this in the legislation. I accept that perhaps it was not noted at the time.
Baroness Evans of Bowes Park (Con)
The Minister will also know that Labour tabled a lot of amendments, many of which we are also now pushing, but are told they are not going to be considered. So, yes, but equally perhaps the Minister might like to look through all the amendments tabled by her colleagues in the Labour Party in the other House and see whether she is now prepared to accept them all.
Lord Markham (Con)
I hope we can move constructively on this point. I welcome the Minister’s undertaking to give clubs as much time as they request. I appreciate the amount of time the Minister has given all of us in all this. It feels that that may be a point worth taking forward, particularly on parachute payments.
To my mind, the biggest proof on all of this is the fact that 51 of the 92 clubs in the whole pyramid have been in the Premier League at some point. That is way over half. That speaks to how fluid the system is and how much it is working. Over half the clubs have spent some time in the Premier League. To me that speaks volumes. That is the biggest concern I have. We have a system that works; we have competition throughout the pyramid. The real fear from all my noble friends who have spoken on this, and why we speak with such passion, is the fact that we endanger all of that. I will withdraw my amendment.
Lord Markham (Con)
This goes to the principle of the redistribution amendments in the group. We have had two debates on this; I hope this will be the hat trick, so to speak, because it is talking about the general principle of whether the regulator should be involved in the redistribution of revenue. This goes to the whole of Part 6—Clauses 56 to 60—and stands in my name and that of my noble friend Lord Parkinson.
As noble Lords have heard me say before, what it comes down to is that no other regulator—and I am still ready to stand corrected—is given powers to take money from one part of the system and give it to another. The FCA cannot take money from Barclays and give it to NatWest; Ofwat cannot take it from Severn Trent to go to Thames; Ofcom cannot move money from ITV to Channel 4. No other regulator can do that. It is unheard of. But that is what we are proposing here.
Lord Markham (Con)
No, I do not agree that is the point of the Bill. That is the fundamental difference. I would totally agree that there are certain protections about the European super league, about moving home grounds, as in the case of MK Dons, and about fit and proper owner tests. I would agree they are very good roles for a regulator to play. What I do not agree with is giving a regulator unparallelled power to take money from one part of the sector and give it to another.
What are we trying to do here? Is the English Football League impoverished? Does it have so little money it cannot run itself? We know the answer to that is no. It recently had a very good Sky deal. The Championship is the sixth-richest league in the world. That point has been made before. We are saying that Belgium, the Netherlands and Portugal, which are very good footballing nations, and all the other leagues in the world apart from the top six, all manage to live on less money than the Championship. But we are saying we need to fix that. That is what I do not understand. We are trying to say we will give unparallelled power to try to fix a situation that has had unparallelled success and makes the Championship the sixth-richest league in the world. We cannot argue that is because clubs do not have enough money to be viable in that. If that was the case in the Championship, how do the Portuguese league, the Belgian league, the Netherlands league and all the other leagues cope? This is not an area I believe the regulator should be intervening in. There is no market failure there.
What I have heard noble Lords speak about a lot is fairness or narrowing the gap. Well, I am sorry, but competition and sport are not about fairness, not about trying to narrow the gap or level down. We are not trying to equalise. The whole point of sport is that it is the most competitive thing out there. There is nothing more competitive than a game of sport. That is the whole lesson. It is not about trying to equalise. It is about winning and losing. What football has done is create that very successfully, with great fluidity. As I mentioned in the last debate, over half of clubs at some stage have succeeded in getting into the Premier League. This is something that is working. I do not see any evidence of market failure. So why are we asking the regulator to get involved in all this?
I truly believe we will endanger the whole game and the whole income. Noble Lords have heard me say before: let us maximise the size of the cake before we argue how we distribute it. I fear here that by trying to equalise and level down, all we will do is make the games less interesting, the league less competitive, which will mean fewer people watching, less TV rights money and the result being less money to distribute. That is why I do not believe this is the role of the regulator to take, and this is why I feel strongly that all those clauses that seek to give this unprecedented power should be removed.
Lord Maude of Horsham (Con)
My Lords, I find my noble friend’s arguments very persuasive, and I will ask just one question. I do not know what the answer is, so others who know much more about this will correct me if I am wrong. My understanding is that no one made the Premier League make the already unprecedentedly large distribution from it down to the EFL. There was no regulator or Prime Minister threatening legislation that forced that to happen. It was because the Premier League saw it as in its interest to have a strong pyramid. It did not see this as “us against them”; it wanted competition within the pyramid but not between the segments and the different layers. I therefore question the idea that you somehow have to force a better distribution when it is plainly in the Premier League’s interest—and the way it has historically behaved illustrates that it understands that it is—to commit, through a voluntary agreed distribution, to the money trickling and cascading down through the pyramid. That illustrates that this is not necessary.
The danger is that the money that is creamed off by the regulator to sustain it—and is drained off from the clubs to comply with its demands—will mean that there is less to distribute. That money is already efficiently and pretty fairly distributed by agreement, so I am persuaded by my noble friend’s arguments that this part of the Bill is not only unnecessary but potentially very harmful.
Baroness Brady (Con)
My Lords, I rise to speak to Amendments 271, 307 and 316 in this group. My noble friend Lord Maude is right: the Premier League’s distribution outside our ecosystem is the highest amount of money of any other sporting competition in the world, and no regulator has forced the Premier League to do that.
My amendments seek to embed principles into the backstop mechanism. My aim in doing so is to ensure that it operates in a way that is proportionate, legally defensible and fit for purpose. At the heart of the amendments lies a simple but critical idea: any intervention by the IFR on this issue must be guided by clear, fair and transparent principles.
The backstop mechanism in its current form lacks sufficient criteria to direct the IFR in exercising its powers. It dictates that the IFR must choose the proposal that is “more consistent” with its principles. But what are those principles? The first is to “advance the IFR’s objectives”, and we have already discussed at great length how nebulous those objectives are. The second is not to place any “undue burden” on the parties’ commercial interests. The third is to ensure that relegated clubs have a one-year transition for any changes to parachute payments. That is it. There is no other guidance for the regulator in making this enormous and binary choice. This is quite incredible, and it creates huge risks, not only for the clubs and the leagues but, more importantly, for the very integrity of the regulatory process itself.
Let me begin with a fundamental principle of protecting property and contractual rights. It is vital to understand that the revenues subject to redistribution under the backstop are not collective funds but revenues generated solely by the Premier League and the Premier League clubs. So the backstop is not a neutral act; it is interference in the property rights of Premier League clubs only.
Under Article 1 of Protocol 1 in the Human Rights Act—A1P1—any interference with those rights must therefore be justified on clear and compelling public policy grounds, and adhere to principles of proportionality and necessity. There are concerns that this crude mechanism, with so few transparent criteria, is legally challengeable under A1P1, even more so now as a result of parachute payments being included, and that is not a good thing; it is in everybody’s interests for this backstop to be legally defensible. But without robust principles to guide the IFR’s decision-making, any determination risks being challenged, leaving the IFR open to judicial review and the entire system mired in uncertainty and delay.
A1P1 case law also emphasises the principle that less intrusive measures must be considered before more significant interventions are imposed, so this is also enshrined in my proposed amendment. The backstop mechanism, as drafted, establishes a binary process that compels the IFR to choose between two competing proposals, but it provides no framework for the IFR to tend towards the least intrusive option, particularly in relation to respecting the Premier League’s property rights as the sole funder of financial redistribution. That is a very dangerous oversight.
Without explicit guidance to the IFR that it should tend towards the least intrusive measure, particularly in its treatment of Premier League revenues, there is a real risk that the backstop could lead to legal overreach. Including this principle in the Bill would provide the IFR with a clear steer, reflect the unique role of the Premier League as the funder of any distribution order and ensure that the mechanism operated in a way that respected property rights.
The principle of good faith is another cornerstone of these amendments. The binary nature of the backstop mechanism incentivises brinkmanship rather than genuine negotiation. These amendments seek to create a framework that rewards constructive engagement and discourages posturing. Without this principle, the backstop risks becoming a tool for division rather than collaboration.
Another critical safeguard in the amendments is the requirement that any backstop decision must not force clubs into breaching their own league’s or UEFA’s existing financial rules and covenants, including profit and sustainability rules or the IFR’s own licence. A sudden and drastic redistribution could reduce Premier League clubs’ revenues, which in turn could destabilise their own business plans, which in turn leads them to breach the profitability and sustainability rules in their own leagues. That would lead to fines, sanctions or even points deductions for Premier League clubs. It would be a remarkable irony if a mechanism intended to promote sustainability instead penalised clubs for failing to meet their own financial obligations.
Finally, let me address the amendment tabled by my noble friend Lord Maude, which would ensure that the backstop could not be used as a first resort. The IFR must first regulate clubs in the EFL to ensure that they are financially responsible and not conveniently reach for the Premier League’s revenues before it has even sought to impose those controls. If the IFR cannot deliver sustainability through its own regulatory tools, what confidence can we have in its ability to manage a redistributive mechanism fairly or effectively? My noble friend’s amendment rightly prioritises the use of all other tools before triggering the backstop.
These amendments would provide the IFR with the steers that it will desperately need to navigate one of the most consequential issues in football. Without these amendments, or something very similar, the backstop risks sinking into a legal and political quagmire. We should all be aligned in preventing that outcome, so I hope the Minister will listen carefully and sympathetically to these arguments.
Baroness Twycross (Lab)
I thank the noble Baroness, Lady Brady, and the noble Lord, Lord Maude of Horsham, for these amendments, and the noble Lord, Lord Parkinson of Whitley Bay, for giving notice of his intention to oppose that Clauses 56 to 60 stand part of the Bill.
I will start with Amendments 271 and 316, from the noble Baroness, Lady Brady. I thank her for clearly stating some of her core concerns about the backstop process through these amendments and hope to reassure her that the existing drafting of the Bill already addresses her concerns without the need for this additional clause. First, I will cover her concern regarding the explanation of suitable alternative regulatory solutions when I address subsequent amendments. On her other concerns, current drafting of the Bill already requires the regulator to trigger the process only if its ability to advance its objectives would be threatened if it did not. Final proposals are already required to advance the regulator’s objective of ensuring financial sustainability and resilience. They also have to ensure that they do not place an undue burden on the commercial interests of either league. We have been mindful of property rights when designing the backstop, which is why the process can be triggered only in specific circumstances and why, even when the high threshold for triggering the process is met, commercial interests must still be considered. We consider this to be a suitably high bar to ensure that the regulator takes adequate consideration of regulated clubs’ property rights and commercial interests.
I understand that the noble Baroness is especially concerned about the issuing of a distribution order that may force clubs into non-compliance with the league’s own internal rules. We would expect the regulator’s decisions to be internally consistent in terms of advancing its objectives, so we cannot see a scenario where the regulator would issue a distribution order that required a club to become non-compliant with its licence conditions. However, there may need to be some adaptation by regulated clubs and competition organisers to renew the regulatory landscape.
If a distribution order issued to ensure the financial sustainability of football put a club at risk of breaching a league’s rules, we would expect competition organisers to work with the club in question and the regulator to understand the decision and its impact. Just as we may expect adaptation by clubs transitioning from unregulated to regulated, we may also expect to see the adaptation of competition organisers.
The amendment implies a scenario where a distribution order results in clubs becoming non-compliant with existing financial regulations. The regulator is already required, as part of its decision on whether to trigger the process, to consider whether the lack of arrangement has arisen as a result of bad faith. Therefore, we are confident that the existing drafting of the backstop proposal process is sufficient to ensure that the regulator already considers the factors outlined in this amendment.
I turn to Amendment 307. While I understand the desire to ensure the proposals chosen at the final proposal stage of the backstop process meet the objectives of the regulator, I believe that the existing drafting already suitably addresses this concern. Final proposals are already required to advance the financial sustainability and resilience of the football pyramid, under existing Clause 62(2)(a). I do not think that the proposed change in wording would lead to significant altered proposals or subsequent distribution orders; therefore, I do not consider that the change is necessary.
I turn to Amendment 288A, from the noble Lord, Lord Maude of Horsham. I understand the desire to ensure that the backstop process is triggered only as a last resort, as this is how the process has been designed and is intended to be used. However, one of the existing conditions that must be met for the regulator to trigger the process in response to an application is that its ability to deliver at least one of its objectives would be jeopardised if the backstop was not triggered. We would expect that, as part of the assessment under this condition, the regulator would review whether existing financial regulations and other regulatory tools could be utilised to better effect instead.
While in service of the same goal, the wording of this amendment is unnecessarily restrictive, requiring the regulator to exhaust all possible other regulatory approaches, and it adds a regulatory burden by requiring the consideration of an expansive array of approaches without prioritisation. This forces the regulator to spend additional time and resources considering options unlikely to resolve the conflict in question. We believe that the current wording already allows the regulator to make its own considered assessment of relevant options before triggering the process.
I now turn to the clause stand part debates and will respond to the noble Lord, Lord Markham. Part 6, of which Clause 56 is the first clause, relates to financial distributions and the backstop mechanism in its totality. I understand the desire on both sides to apply appropriate scrutiny to a part of the Bill that could significantly impact the future financial landscape of football. I hope that, throughout the debate on the backstop process on this and future Committee days, I will be able to demonstrate that the approach taken in Part 6 is the most proportionate and effective approach possible.
These backstop powers have been introduced to help ensure that an agreement can be reached between the leagues in regard to the distribution of revenues from the selling of TV broadcast rights. An agreement of this nature is vital to ensure the future financial sustainability of the football pyramid. The process has been designed to incentivise reasonableness, encourage industry solutions and tackle any bargaining imbalance between leagues. The design of the process is a final offer mechanism, a process that has been shown to incentivise negotiation. It achieves this by removing the ability of the negotiating parties to rely on the third party, in this case the regulator, to design a solution for them. We do not want football to become reliant on the regulator to decide its agreements.
Lord Moynihan (Con)
I have listened very carefully to the debate and to what the Minister has said. I understand that UEFA asked the Government to carefully reconsider the backstop mechanism, since when it has become much wider in scope and more likely to lead to the most extreme outcomes. I wonder whether she has discussed it with UEFA. Can the Minister update the Committee on the outcome of those discussions?
Baroness Twycross (Lab)
I have had no direct meetings with UEFA, but the Minister for Sport in the other place has. I cannot confirm what was said in the meeting, but I will endeavour to establish whether this was part of the discussion. What did or did not happen at that meeting has not been part of my conversations with people, but I will endeavour to find out. I suspect I will not get an answer to the noble Lord tonight.
Lord Moynihan (Con)
Will the Minister kindly write to the Committee? This is very important indeed. The backstop has been introduced into the Bill and UEFA has expressed very serious concerns about it. Unless this can be resolved, it could threaten the existence of English clubs playing in UEFA competitions. I hope that this has been high on the agenda of discussions between UEFA and the Government. Having listened carefully to what the Minister has said, all I ask is that she write to the Committee, or early in January inform the Committee, on how UEFA has responded to this significant expansion of the effect of the backstop, which it was originally very concerned about.
Baroness Twycross (Lab)
To be clear, I do not speak for UEFA. It is an international organisation that is able to speak for itself. I am not aware that UEFA raised issues about the backstop specifically in the meeting with the Minister for Sport, but I will endeavour to find out. I understand from the expression of the noble Lord, Lord Moynihan, that he may have more information about UEFA’s concerns than I do. However, without expecting this to be an ongoing dialogue, I will endeavour to establish the information that he requested.
Lord Moynihan (Con)
I asked whether it was raised in the letter from UEFA, which sadly the Committee cannot because it is private correspondence, but it is right at the heart of this legislation. If it was raised in the letter, or in subsequent correspondence, would my friend the Minister kindly confirm that to the Committee? It would help us in our deliberations moving forward.
Baroness Twycross (Lab)
UEFA raised no concerns about the backstop in its most recent meetings with DCMS and the Minister for Sport, including those held since the Bill has been introduced. I hope that reassures the noble Lord on this point. As I say, I do not speak, will not speak and cannot speak for UEFA; I speak for the Government.
Ultimately, the clause is about creating transparency, which sets the tone for the rest of the backstop process. Clause 59 introduces high statutory thresholds that must be met in order for the backstop to be triggered. In particular, it sets out that the regulator must have reasonable grounds to suspect that its ability to advance at least one of its objectives would be jeopardised if the backstop was not triggered. As stated, an implicit part of this consideration would include an assessment of whether other regulatory tools could be utilised to better effect instead.
The regulator can consider what the distributed revenues will be used for and, if the basis for the backstop application is that there is no distribution agreement in place, whether this has arisen as a result of bad faith. This helps to incentivise the leagues to try to reach an agreement in good faith before turning to the regulator, and ensures that the backstop is used only where absolutely necessary. The regulator must make its decision within 28 days, although it can extend this by a further 28 days if absolutely necessary. Once the regulator has made its decision, it must notify the relevant leagues of its decision to ensure transparency throughout the process.
As we have made clear, the Government’s strong preference is for a football-led solution to issues around financial distributions. As such, the mediation stage outlined in Clause 60 grants the relevant leagues an opportunity to reach an agreement before the regulator delivers a solution as part of the final proposal stage. The mediation stage has been designed to facilitate meaningful negotiation and compromise between the parties. To this end, it encourages the leagues to appoint a mediator they both agree on, but ensures that the regulator will appoint somebody with the appropriate skills and experience if they cannot. The leagues can end the mediation process for multiple reasons, most notably if an alternative agreement is reached. However, the mediator can also end the process if it is not producing meaningful good-faith negotiations or if it reaches the 28-day deadline.
I thank noble Lords for their amendments and the well-natured debate on this important part of the Bill. I hope my reasons have reassured noble Lords and that they will not press their amendments. I ask that these clauses stand part of the Bill.
Lord Markham (Con)
I thank noble Lords for their contribution to this debate, and again I thank the Minister for her response. I noticed that she went into the detail of the backstop mechanism but I did not hear in that the more fundamental point about why she believes that the regulator needs to be bestowed these unparalleled powers to redistribute income where there are no examples of market failure. In fact, there are the examples of the very healthy Premier League and Championship, which are respectively the first and sixth richest leagues in the world—and all the result, as my noble friends pointed out, of a voluntary agreement and distribution between them all.
However, the whole prospect of the backstop happening is creating the reverse. As I understand it, those negotiations have stopped. Of course, it is entirely rational from the EFL’s point of view to stop them, because why reach an agreement when suddenly you are going to have more negotiating leverage because you have a regulator which will come in? So, again, it is perfectly rational behaviour on the part of the EFL to reach the best agreement it can with the Premier League but then instead of finally agreeing with it, appeal to the regulator in case it can get more because it has already banked what it has got from the Premier League and there is only an upside to doing that. So I am afraid that I believe this whole mechanism will actually create more friction and more disputes, rather than less, and will mean that it is less likely to reach a voluntary agreement. In addition, as I mentioned before, I still have not heard why we feel that the regulator needs these powers in the first place when we have a successful situation in place already.
As a result of that, I believe that these powers will endanger the whole size of the cake that is available for distribution. It will endanger the success and the revenue gained from that, which will result in a loss to everyone. We will definitely return to this on Report but at this stage I beg leave to withdraw.
Baroness Brady
Baroness Brady (Con)
My Lords, Amendments 280 and 281 in my name seek to reinsert the ability for the Premier League and the EFL to agree distribution arrangements for longer than five years without triggering the automatic availability of the backstop mechanism. These amendments are essential to restoring common sense, legal certainty, aligned incentives and, crucially, to restoring trust between football’s governing bodies.
When I first read the revised Bill, I thought I must be mistaken. “Surely”, I thought, “no Government would propose that two consenting parties mutually agreeing a long-term financial arrangement should be actively disincentivised from doing so by the automatic availability of a dispute mechanism”—and yet, astonishingly, here we are. Removing the freedom of football stakeholders to agree arrangements for more than five years by mutual consent cannot possibly be about fairness, transparency or sustainability. This is purely a device enabled by an active decision of the Government to turn the backstop into a ratchet. It ensures that no long-term agreement between the Premier League and the EFL, no matter how mutually beneficial, can ever provide genuine stability or be truly relied upon.
Lord Parkinson of Whitley Bay (Con)
My Lords, I rise to speak to Amendments 280 and 281, which my noble friend Lady Brady has set out admirably. She established the case for her amendments very well and raised a number of points that I hope the Minister will answer.
These amendments work in tandem to allow competition organisers to contract out of the backstop. Under this amendment, leagues would be able to agree a period for which a distribution agreement would last. Of course, they may not reach such a deal. In that case, the applicable period would be five years—the period that is currently the default in the Bill. Allowing leagues to have a greater flexibility to negotiate the length of time for which an agreement has to be in place before it can be renegotiated would establish better principles in the backstop. Surely, we should not preclude leagues from acting cordially, if they are able to, and agreeing a period for distributions. I fear that the Bill, as the Government have presented it, might discourage constructive working relationships where they may arise.
I am conscious that this is the last opportunity I will have to intervene on this final group before the Christmas Recess and I want to thank noble Lords across the Committee for the hard work they have put in. I know that noble friends on my side of the House are missing Christmas parties and wedding anniversaries this evening, and noble Lords across the House have been doing similar. Everyone is here because they care very deeply about the future of football—even if, like football fans, they disagree volubly on some of the details.
In particular I thank the Minister, who has responded to pretty much every group. Today was the first day that she did not, and even then she had only a brief time off the pitch. She has taken many interventions, she has been generous with her time outside the Chamber as well and she has written us a number of letters. I know we have asked her a few more questions and she will be writing to us further, but, in the meantime, I wish her and all noble Lords across the Committee a very merry Christmas and express my thanks to everyone for their work in scrutinising the Bill.
Baroness Twycross (Lab)
I thank the noble Baroness, Lady Brady, for her amendments and for her introduction to what was, thankfully, at this time of the night, with apologies, a very short debate—so far.
These amendments are intended to allow leagues to reach an agreement to extend the time that must pass before the backstop can be triggered. While I entirely understand the desire for negotiations to be a league-led process, the timeframe outlined in the Bill has been chosen to ensure that the regulator can intervene in cases where an agreement has not been reached for a significant period. We believe that it is the correct amount of time to get a good view of how potential agreements have affected sustainability, while ensuring that a new agreement is reached in a timely manner. Crucially, many noble Lords have talked about certainty in the regime. We consider that five years provides enough certainty to all parties.
Finally, we have concerns that allowing industry to come to a different timeframe could lead to an element of coercion towards much longer agreements, nulling the presence of the power. The Government’s view is that the five-year timeframe is critical to the effective functioning of the backstop as a regulatory intervention.
For the reasons I have set out, I am unable to accept the amendments and hope that the noble Baroness will withdraw Amendment 280. But, first, I also wish all noble Lords a very happy Recess. I genuinely look forward to continuing the debate in the new year and thank the noble Lord, Lord Parkinson, for his kind words.
Baroness Brady (Con)
My Lords, I thank the Minister for her response and for engaging with the points raised in this debate. However, it will not surprise her that I remain completely unconvinced.
This decision does not deliver certainty: quite the opposite. It enshrines short-term thinking and locks football in a perpetual cycle of instability, with both sides forever negotiating under the shadow of the backstop. As I said, it is a recipe not for certainty but for fractiousness and mistrust.
The Minister also referenced the nature of football’s landscape as the reason to limit agreements, but I am not sure that can be right. I urge her to think again. This new backstop is the Government’s gamble that the Premier League has achieved escape velocity and can absorb anything that even its own Government can throw at it. However, the Premier League is not a cow to be milked. It is a national treasure to be protected. English football deserves much better. I am sure that we will be discussing this issue again on Report, but, for now, I beg leave to withdraw my amendment.
Football Governance Bill [HL]
Wednesday 15th January 2025
(6 days, 7 hours ago)
Lords ChamberRead Full debate Football Governance Bill [HL] 2024-26 Read Hansard Text Amendment Paper: HL Bill 41-VII Seventh marshalled list for Committee - (13 Jan 2025)
Lord Birt
Lord Birt (CB)
My Lords, I rise to move Amendment 295A and to speak to my other amendments, 297A through 297G. While I have, of course, had expert help in the drafting, the approach in these amendments is entirely my own. They are my response to discussions I have had within football and right across this House about the single most radical measure in the Bill: the process for determining fund flow down the football pyramid.
I have already made clear my conviction that the precious and unparalleled role that football clubs play in their communities justifies regulation. Fans should be listened to, and they deserve protection from the occasionally bad, if generally well-intentioned, stewardship of owners and management who take ill-considered risks and lose control of their finances—the overwhelming reason why clubs fail and falter.
I wholeheartedly welcome the provisions in the Bill for promoting good and prudent management. They should have a major and beneficial—indeed, radical—impact on English football. I believe, however, that the precise mechanism set out in the Bill for determining fund flow carries severe risk and could adversely impact the whole of the English game. I note the cogent reservations about the mechanism set out in the EFL’s own briefing paper from last November. I note, too, that the Bill’s progenitor, Dame Tracey Crouch, described the backstop mechanism as the “nuclear equivalent for football.” She observed, quite rightly, that in a nuclear conflict, he who pulls the trigger may not be the winner.
The backstop is an inappropriate measure to resolve issues between two groups who live cheek by jowl and whose membership is interchangeable every 12 months. Next year, any club might find itself sitting on the other side of the table. The essential task of establishing an appropriate flow of funds down the leagues is to balance two public goods, and “balance” is the key word: on the one hand, to maintain the extraordinary success of the Premier League; and on the other, to share sufficient of the fruits of the Premier League’s success to encourage the healthy operation of the whole of the football pyramid and to ensure that any well-managed club can rise to the very top.
Why is the Premier League the world’s most successful sporting league? It is because 40% of the world’s best footballers play in it—twice as many as in any other league. In its squad, Liverpool has nine players, from all over the globe, who captain their country. I mention only Egypt, the Netherlands, Scotland, Brazil and Japan. Premier League players are trained to extremely high levels of fitness. Their skills are honed and developed by the most expert professional support staff available anywhere. Game by game, they are schooled in ever more sophisticated tactics by the world’s best managers.
Ian Graham, the pioneering data scientist who had such a profound impact on the modern Liverpool football club, tells me that all the top Premier League teams are now far stronger than any national side anywhere in the world. So—and this is the absolutely critical point—week after week, fans and viewers all over the globe experience not just the best football in the world, but the best football the world has ever seen. That is the core reason why the Premier League attracts such high revenues and why we must do nothing to threaten that.
The second reason for the Premier League’s success is that English football is so competitive: 51 clubs have played in the league since its inception and only six clubs have survived the whole journey so far from 1992. It might surprise noble Lords to be reminded that Man City are not one of them. Three seasons ago, Nottingham Forest were in the Championship. This day, they are second in the Premier League, and the only team to beat Liverpool in the league this season—unfortunately, a game at which I was present. Eleven seasons ago, Luton were playing in the Conference Premier League. Over 10 years, they rose up through League Two, League One and the Championship to the Premier League. Most impressive of all, in 2008, Leicester were in League One. Eight years later, they won the Premier League, 10 points clear of Arsenal in second place. Plainly, therefore, the necessary balance of which I spoke has been struck: sufficient funds have been flowing down the football pyramid to enable well-managed clubs to prosper, and that must continue.
Currently, around £500 million each year flows down from the Premier League to the rest of the football pyramid, which is hardly parsimonious; but I entirely accept that a regulator must bring conceptual clarity and rigour to this critical arrangement. I have sympathy, for instance, with the EFL’s unease about the balance between parachute and solidarity payments. The current process set out in the Bill for setting the precise quantum of fund flow is, however, unlike anything I have experienced in a long and varied career. It would be divisive, and it could be destructive. It is likely to lead to both sides gaming, not to rational, evidenced negotiation aimed at achieving the necessary balance I have identified.
The core process set out in my amendment embraces the valuable concept in the Bill of a state-of-the-game report; requires the regulator to appoint a heavyweight, experienced commercial arbitrator; allows both leagues first to meet each other alone to discuss their response; and then proposes that the two sides convene under the chairmanship of the arbitrator to try to reach an agreement. If they fail to reach agreement, the arbitrator then determines the settlement according to the detailed and comprehensive criteria set out in these amendments —criteria notably absent from the Bill as it stands.
Keeping everyone in the room and talking is key. Arbitration is a proven process for crafting a solution that balances the interests of all sides, for a substantial and neutral person in the room encourages constructive dialogue and discourages posturing. Moreover, arbitration is likely to foster tailored solutions consistent with the complexity of football’s ecosystem.
Perhaps most importantly, unlike the nuclear and binary final-offer process proposed in the Bill, arbitration is widely used in commercial contexts where relationships are of critical importance. English football would surely benefit more from collaboration and dialogue than from conflict and division. Moreover—and this is no small matter—the criteria set out in these amendments are rooted in public law principles and neutral considerations of sporting competition, thus making it far less likely that the regulator’s decisions would be challenged in the courts.
I do not make these proposals lightly. I hope all sides of the House will see the benefits that this approach would bring. Above all, I hope the Minister will not reject this approach out of hand, but rather, agree to reflect on it and to consult with the key parties before we move to the next stage of this important Bill. I beg to move.
Baroness Evans of Bowes Park (Con)
My Lords, I have added my name to amendments in the next group that also propose changes to the resolution process, to which I will speak shortly. However, if the Minister is favourable to the proposed arbitration approach of the noble Lord, Lord Birt, as set out in these amendments— as opposed to those I have added my name to—and would be willing to accept and reflect further on the noble Lord’s proposal, I will be fully in support of that as I believe that his model is unquestionably preferable to that in the current legislation.
The intent behind the noble Lord’s approach is the same as mine—as he eloquently set out, to avoid the divisive approach currently contained in the Bill that could lead to both sides simply facing each other down, and instead to propose a mechanism that would ensure a tailored solution to the distribution of revenues that balances the interests of all sides and encourages constructive dialogue and collaboration to the benefit of the game and clubs at all levels.
As the noble Lord, Lord Birt, set out in his remarks, arbitration is a proven process; it is widely used in a range of commercial contexts and would lend itself effectively as a mechanism for helping to determine the revenues that flow through the football pyramid. In appointing an independent, experienced arbitrator to oversee the process and work with a set of detailed published principles, the regulator itself would remain one step removed, which the Minister has referred to in previous comments. I very much hope that she will look favourably on this well-considered and credible proposal.
Lord Addington (LD)
My Lords, the amendments in front of us seem very appealing on the face of it, but I wonder why we have not got there already. If the Minister has some idea about the process that led to the position that we have, which does not seem to have been universally popular, I would be grateful to hear it—and I think the Committee would benefit from that.
Lord Markham (Con)
I wish all noble Lords a happy new year, because this is the first time I have been here. I wish that my noble friend Lord Parkinson was joining us here instead of being in the Caribbean, from where he sends his best wishes. I really appreciate the time, effort and work that the noble Lord, Lord Birt, has put into this, although I am not sure about his statistic that 40% of the best players worldwide play in the Premier League. I would be interested in understanding where that statistic comes from, particularly as there seemed to be a Liverpool bias in that statistic.
The point behind all this, as the noble Lord said, is that a redistribution power gives unprecedented power to a regulator—unlike any other regulator in the country. As noble Lords have heard me say before, you do not see the FCA giving money from one bank to another or Ofwat giving from one water company to another. This has to be at odds with what the Sports Minister said just today—that they were looking to put in place a light-touch regulator. Instead, they are giving the regulator more powers than any other regulator in the country, which feels as if it is going in the opposite direction. The amendments in the second group seek to address that by suggesting that maybe we should not have those redistribution powers. But given a scenario in which we have those powers, the noble Lord has tried to set out a thorough and well thought-out process that is designed to foster compromise and avoid gaming. That is my concern about this.
I particularly appreciate the amendment on the criteria for settlement, which would make sure that there is a wider set of criteria in all this—looking to the competitive nature, audience appeal and continued investment. Without that, you are really just asking the expert panel to go back to the original objectives of the Bill, which are very simple and talk only about the financial resilience of the league, safeguarding heritage and financial soundness. There is a very easy way in which to achieve all those things, pointing the expert panel to saying that whichever suggestion gives the most money is going to achieve that, without having any other objectives. We could say, “Hang on a moment; going with the one that gives the most money does not at all take into account the appeal of the Premier League or the competitive nature of it all—it just makes sure that it is financially sound by giving it as much money as possible”. That cannot be right, but that is what we are setting up the regulator to do, if those are the only criteria and measures that it has to guide by. That is why I appreciate the wider set of measures set out in the amendment, which is very much a guide to how to do that, similar to the amendments tabled by my noble friend Lord Parkinson, which are in my name as well, on having a financial investment duty on the regulator in deciding any final proposal.
I also support Amendment 297F, which is about putting in place a proper appeals process. It is about getting as sensible, thorough and transparent a process as possible, and I look forward to hearing from the Minister how the Government would look to take on board these sensible provisions.
Lord Moynihan (Con)
Before the Minister responds, I thank the noble Lord, Lord Birt, who sat through many hours of Committee and held his council until this moment, when he has made some very forceful and powerful points geared specifically towards having a co-operative, thoughtful and collaborative response to mediation. The legislation at present is not like that; it is divisive and nuclear, to use two of the words that the noble Lord used. This is one area where there can be agreement across the Committee, and I hope that there will be agreement from the Minister that we can return on Report to look at this, so that we can be more in line with other regulatory mechanisms for mediation. None is as divisive and polarised as the one in the Bill, and I very much hope that the support will be universal for the noble Lord, Lord Birt. I am grateful to him for the thought that he has given to this.
Baroness Taylor of Bolton (Lab)
Will the noble Lord acknowledge that you can have mediation only if both sides are willing to participate? What we have seen from the Premier League in recent years is that it is not willing to do that.
Lord Moynihan (Con)
I disagree with the noble Baroness on that. Through the history of the backstop powers and the parachute payments, this has been subject to consistent and constructive negotiations. Some negotiations are tougher than others; there is no doubt that in recent months and the last couple of years there have been examples of both sides failing to reach an agreement. I do not believe that putting this regulatory pressure into a binary system is going to resolve that. Yes, negotiations are tough and are frequently going to lead to detailed iterations before a satisfactory position is reached—but the last round of negotiations in particular was very close to reaching an agreement. I do not believe that the imposition of regulatory pressure is going to resolve that beneficially for the future of the Premier League, or indeed the EFL, at all.
Lord Bassam of Brighton (Lab)
My Lords, before the noble Lord completely finishes his point and before we get to the Minister, from whom I think we all want to hear on this, does he accept that there has not been any progress in negotiations for 18 months? That is a very long time. The Premier League has to come somewhere close to where the EFL is if there is to be some sort of progress, and there has been no progress in that time—so I am not sure that the noble Lord is right.
Lord Moynihan (Con)
I am equally keen to sit down so that we can hear the Minister respond. I was party to the letter from the EFL and to the reply from the noble Baroness, who set out clearly the steps taken during these negotiations, and it is simply not true to say that over the past 12 months no progress has been made. I hope that the noble Lord will agree that the proposal made by the noble Lord, Lord Birt, is a far more efficient, professional and collaborative way in which to make progress, and I very much hope that the Minister will echo that in her response.
Lord Pannick (CB)
My Lords, my response to the noble Baroness, Lady Taylor, is that the experience in litigation over recent years is that a requirement on parties to acrimonious disputes to mediate does often ensure a consensual settlement of disputes that seemed unable to be resolved—the formal process of mitigation. I declare, as I always do, my interests as counsel to Manchester City in disciplinary proceedings. I am a season ticket holder at Arsenal. I am interested to hear that the noble Lord, Lord Parkinson, is in the Caribbean; I had intended to go to the Emirates Stadium tonight to see Arsenal play Tottenham Hotspur, but I decided, on the basis of their recent form, that it would be far more entertaining to listen to the noble Lord, Lord Birt, and other noble Lords.
I just make two points about the amendments from the noble Lord, Lord Birt. I agree that they deserve close attention and I look forward to hearing from the Minister. The first is on Amendment 297A, on the appointment of a mediator. The noble Lord proposes that the person to be appointed must have held high judicial office. I say to him that, based on my experience, the best mediators are not necessarily those who have been judges. A mediator is not deciding anything; a mediator needs empathy and the ability to build a relationship of trust with the warring parties. I therefore respectfully suggest to the noble Lord that he may want to think about that point.
The second point that I raise with the noble Lord and the Committee is on his Amendment 297F. If I have understood his scheme correctly, there is a mediation stage, then there is an arbitration stage and then the ability for either party who is dissatisfied with the arbitration to take the matter to the Competition Appeal Tribunal. I point out to noble Lords that it is customary, where there is arbitration, that the power to take a matter that has been consensually arbitrated to a court or tribunal is very limited. That is the whole point of arbitration; it is to reduce the possibilities of further lengthy and expensive proceedings. The Arbitration Act, in most circumstances, limits the ability to go to court or to another tribunal thereafter to very specific and limited grounds. Again, the noble Lord may want to give thought to that.
Lord Hayward (Con)
My Lords, during the Second Reading debate, I made a contribution in relation to this specific issue and I disagreed with some of my colleagues. I indicated that I had worked for many years as a negotiator on behalf of management, on behalf of some of the largest corporations in this country. I negotiated with trade unions. It is easy to talk about mediation, arbitration and swing arbitration, which is in fact what is proposed in this Bill by the Government, but they all tackle an issue in different ways.
I am impressed by the arguments from the noble Lord, Lord Birt. I said at Second Reading that I was not averse to the proposal, but I wanted to see what the alternatives were. I will listen to the Minister with care, because I think it is important that one addresses the different forms of mediation and arbitration that are available to two sides, whether they are, in my case, management and trade unions, whether they are industrial organisations or whether, in this case, they are particular bodies that have an interest in coming to an agreement.
That is my observation, but I put one specific question to the Minister. According to press reports, the Chancellor is meeting regulators tomorrow to emphasise to them that they should prioritise growth. Given that so much of our debate has been about maintaining the growth of the football industry while tackling issues, I just seek clarification as to whether the shadow regulator has been invited to that meeting with the Chancellor. If so, is he going?
Baroness Brady (Con)
My Lords, I refer the Committee to my interests as declared on the register. I want to address a comment made by the noble Baroness. The assertion that the Premier League has made no substantial proposals during negotiations is not true and not borne out by the facts. The Premier League has put forward multiple comprehensive proposals alongside detailed financial models and heads of terms, which were also provided to DCMS. Each was designed to significantly increase solidarity contributions while ensuring financial controls that the additional funding encouraged sustainability and not wage inflation.
I am informed that the EFL did not keep its clubs fully apprised of the proposals made by the Premier League, nor did the EFL at any stage recommend the Premier League’s proposals to its member clubs or recommend to its board that they may be accepted. So there has been progress, and offers have been made by the Premier League that have not been put by the EFL. It is categorically wrong to suggest that any delay is wholly or in part because of the Premier League.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I thank noble Lords who are here for this debate, especially those who have missed football matches to take part in a game for the greater good of football—that is something we all agree on, whether or not we agree with the exact form of the regulator or whether we have amendments on which noble Lords may have a different view from me and the Government.
Before I address the amendments in this group, I would like to make a brief clarification regarding a comment that I made in Committee on 18 December. It pertains to an issue that comes up in the next group, but I felt it important to clarify it at this point of the debate. In response to a question from the noble Baroness, Lady Brady, regarding whether there was a similar final offer mechanism in use in the UK and how it has delivered the outcomes that this model intends to achieve, I said that the Competition and Markets Authority had used a final offer mechanism. While the CMA does have a similar final offer mechanism, it was incorrect for me to say the process had been used, as the Digital Markets, Competition and Consumers Act only received Royal Assent on 24 May 2024, so the new regime has only just come into effect and has not yet been used by the CMA to come to a determination. We are clear, however, as the previous Government were clear, that this is an evidence-based model developed in tandem with leading economists, which has successfully achieved intended outcomes in other jurisdictions. I hope that through this evening’s debate I can reassure noble Lords that this is also the correct model for use in this case. As I mentioned, the model is discussed in considerable depth in the next group.
I note the question from the noble Lord, Lord Hayward, and I will seek clarity before the end of the debate. If I do not get it, I will come back to him on that particular point. Like him, I noted the request from the Chancellor on that point.
Moving on to the specific group that we have just debated, I thank the noble Lord, Lord Birt, for his amendments and insightful contributions. I also welcome his broad support for the principle underpinning the Bill around the independent football regulator. His knowledge and expertise are hugely beneficial in supporting the House to scrutinise this legislation. It was also helpful to have a reminder of the movement and the fluidity within and between leagues. That is an important point for your Lordships’ House to note and remember. The noble Lord, Lord Birt, has played an important part in the development of football broadcasting in this country and, as we have heard today, has a number of really valuable thoughts around this issue. That is also apparent in the thorough scrutiny that the noble Lord’s amendments provide on the design of the backstop process. It is important for us to examine why the Government believe that the backstop process remains the model that we should rely on when we come to setting the independent football regulator to work.
To reflect on the concerns of the noble Lords, Lord Birt and Lord Markham, and the noble Baroness, Lady Evans of Bowes Park, among others, I first restate that the intent behind this mechanism is not to create a heavy-handed regulatory intervention. There is a mediation process built in and we agree with the noble Lord, Lord Pannick, that this is an important step. To respond to the noble Lord’s specific concerns, the intent is to provide a last-resort process, only to be triggered if the leagues cannot come to an agreement themselves. It is genuinely intended to be a backstop. It cannot take place until mediation has concluded.
A number of noble Lords questioned why government intervention in this space is even necessary. A clear distribution agreement is in the interest of both the public and of football. Indeed, the Premier League recognises that financial redistribution is needed to ensure the vibrancy and sustainability of the football pyramid. As the noble Baroness, Lady Brady, has outlined on a number of occasions during Committee, that is why it already voluntarily distributes its revenues to lower leagues.
The EFL and the National League are important talent pipelines to the Premier League. Similarly, the Premier League is an important financial supporter of various programmes across the lower leagues. The football pyramid is a mutually beneficial structure, but only when a suitable distribution agreement or order is in place. The mechanism would not be necessary if the industry were able to come to a new agreement. I want to reassure noble Lords that, should the leagues choose to come to an independent agreement without the backstop, the regulator will not need to get involved and will not do so. One of the leagues has to apply to trigger the regulator’s process. It has to meet a high threshold, so leagues cannot unilaterally trigger it. This is not regulatory overreach into corporate agreements. If a voluntary corporate agreement is made between the leagues, then there is no role for the regulator. It is an alternative route by which a suitable deal and distribution scheme can be put in place, should the leagues require it. We recognise the value of preserving the competitiveness of English football. This process is designed to ensure its long-term financial sustainability and not to force a regulator-designed agreement on an industry.
Taking the points made by the noble Lord, Lord Birt, sequentially, I want first to address Amendments 295A and 297A. We acknowledge and respect the amendments’ intent to ensure that the mediator has the appropriate legal expertise to mediate successfully a complex financial and legal agreement alongside preventing potential conflicts of interest. I am not going to repeat the points made by the noble Lord, Lord Pannick. I agree with the sentiment expressed by the noble Lord, Lord Birt, that the mediator should be a relevantly qualified individual. However, we think that adding these specific requirements would disqualify potentially qualified and appropriate candidates and limit both the leagues and the regulator in their selection of potential mediators. As drafted, these principles for hiring may be too prescriptive and could lead to an inability to appoint a mediator if no suitable candidate were found who met all the conditions.
Amendment 297B seeks to add a formal arbitration mechanism to the backstop by providing another forum for negotiation before a final decision is made by the regulator. I must reiterate the point that the leagues have not been able to agree a new deal under an existing agreement since 2019. The addition of another negotiation step after the mediation stage would require not only the hiring of another formally qualified arbitrator but the introduction of a new set of statutory timelines. These new timelines, by which various crucial decisions must be made, would make the backstop process functionally unusable from a timing and resources perspective. It is also unclear what formal arbitration would be likely to achieve after a mandated and guided mediation process. The leagues can already come to an alternative agreement at any stage in the backstop process. This ability is explicitly protected in the Bill, so this added arbitration step would add complexity and would potentially—or even likely—delay the process.
On Amendments 297C and 297D, the introduction of a determination process would fundamentally override the final offer stage of the existing process, representing a significant shift in government policy towards a different type of arbitration process and moving away from the final offer mechanism. The process outlined in the amendment would offer the arbitrator greatly increased discretion regarding the design of the final proposals, requiring them only to consider evidence presented by the parties rather than to accept the design of one of their proposals. While we are sympathetic to the desire for the regulator to be required formally to consider expert analysis, systemic implications and the practicality of the proposals, allowing a third party to propose their own form of determination would remove entirely the incentive which the original process is designed to create. With a third-party decision-maker introduced to the process, it is likely that competition organisers would simply dig in to an inherently adversarial position rather than move closer to a middle ground and allow the third party—the arbitrator—to decide for them. It is our view that this amendment would increase reliance on the regulator and move us further from an industry-led solution.
Amendment 297E seeks to ask the regulator to provide more detailed information about the implementation of their decisions. This would include outlining transitional arrangements and compliance requirements, alongside outlining when orders can take effect. Again, I am sympathetic to the sentiments expressed by the noble Lord, as minimising adverse unintended impacts on business should be a top priority for the regulator when implementing a decision. The Bill requires distribution orders to include a summary of the questions for resolution, a copy of the final order, information detailing the reasons for those decisions and information on potential consequences of non-compliance. We would also expect the regulator to stay in constant communication with the leagues throughout the implementation process.
Amendment 297F would add to the ability of the leagues to appeal decisions made as part of the backstop process to the Competition Appeal Tribunal. Regulatory decisions made as part of the backstop process are already considered “reviewable decisions” open to appeal under the existing appeals process outlined in Part 9 of the Bill. Functionally, therefore, this amendment only makes more explicit a process that could already be triggered under existing clauses.
Finally, I turn to Amendment 297G, which would require the regulator to publish guidance on their decision-making and implementation processes and for them to keep this guidance under review for potential update in future. While we are not opposed in principle to the idea of regulatory guidance and the backstop, there is already provision in the Bill for guidance to be prepared by the regulator at their discretion and in consultation with such persons as they consider appropriate. In addition, the amendment would lock the appointment of a mediator behind the publishing of the guidance. In practical terms, this would significantly affect the timeliness of the process and open a window of opportunity for the process to be stalled by the leagues via extended consultation. We are keen for the leagues’ views on the process to be heard and taken into account by the regulator, but we are also conscious that football has already gone quite long enough without a suitable new arrangement. To reiterate, a timely, satisfactory agreement is in the public interest, as it is vital to the continued sustainability of the game. I repeat that I am always happy to engage with any noble Lords and other stakeholders on this point and to go through how the process might work, as I have already done with the Bill team. For the reasons I have outlined, I must reject the amendments from the noble Lord in this instance and ask him not to press them.
Lord Birt (CB)
I am genuinely grateful to the Minister for her long, detailed and considered response. It gives me hope as I hope it gives hope to other noble Lords across the Committee. In going into the detail, the Minster registered how complex these issues are. This must be capable of being improved. Some of the doubts that exist on all sides of the Committee should be further considered to be sure that all these considerations are truly reflected at the next stage of the Bill when we come back to this matter, as we definitely will.
I am also very grateful for the broad support for this approach from right across the Committee, including from the noble Baroness, Lady Evans of Bowes Park, and the noble Lord, Lord Markham. I did not divine the 40% figure myself—as noble Lords know, there are a lot of data scientists operating in football. I am sure that it is highly arguable, but, intuitively, it rings true for me, not least because the Premier League has far greater resources than any other league, so it would be surprising if that did not result in it having by far the highest proportion of the world’s best players. If there is one key performance measure here about the appeal of British football, it is that we have the best players in the world playing in it. That is something we cannot forget. We cannot afford to reduce that percentage, whatever it is.
I am particularly grateful to the noble Lord, Lord Moynihan, who has made many excellent contributions to the Bill. Above all, I am very pleased that the noble Lord, Lord Addington, retains an open mind about the possibility of improving this important part of the Bill. I ask the noble Baroness, Lady Taylor of Bolton, and the noble Lord, Lord Bassam, to please read the amendment as written, because it is designed to avoid the very situation that they stood up to complain about. It is designed to bring mediation, collaboration and consideration, and, at the end of the day, binding arbitration. It has everybody in the room. It has not worked these last couple of years because the right people have not been in the room in the right circumstances. I want a resolution in the interest of the whole of football and I firmly believe that the approach set out in my amendment is far more likely to deliver it than the potentially divisive process in the Bill as it stands.
Lord Markham (Con)
My Lords, I rise to oppose the proposition that Clauses 61 to 64 should stand part of the Bill and I am grateful for the support of the noble Lord, Lord Birt. I will also speak to my Amendment 310, which is also in the name of my noble friend Lord Parkinson, who unfortunately cannot be with us today. I appreciate that there is quite a bit of overlap here with the debate we have just had, so I will try to keep this concise.
For me, the main thing about all of this is, what are we trying to solve here? We all agree that we have a very successful league—the most successful in the world. I love the statistic that 40% of the best players play in it. I would say that even more of the best managers are there when you look at it.
I looked up the solidarity payments and compared the 14% that the Premier League pays with the UEFA figure—in terms of the solidarity payments it pays to clubs not in the European competition but in the leagues —which is 5%. So we have a situation whereby the Premier League is paying almost three times the amount, creating a very successful situation. Of course, a lot of the reason for that is because it realises there is a great degree of fluidity, as per the statistic that the noble Lord, Lord Birt, mentioned earlier and which I have mentioned previously. The fluidity means that over 50% of the 92 clubs at some stage have been in the Premier League, and by definition have fallen out again. So, it is in all of their interests to make sure that the whole structure of football is successful. The fact that the Premier League pays 14% in solidarity payments, far more than UEFA and other leagues, shows all of that.
The statement has been made that we need to step in here as a regulator because there has not been agreement for years. As soon as it was known that a regulator was going to come on to the pitch, so to speak, it is not surprising that you do not get an agreement at that point. If I was the English football league in that, it would be entirely logical to think, “Hang on a moment, if a regulator comes in with powers in this space, that is going to give me more leverage” So, clearly, under that circumstance, it is rational for me to hang on because I am likely to get a better deal under that situation. I cannot get a worse deal than the one the Premier League has already suggested, so why not hang on for the regulator to come into the picture? So, to my mind, it is not surprising that we have not had an agreement as a result. It is actually because of the offer of the regulator that this has not happened.
So my main question about all of this is, what are we trying to solve here? It is not clear to me that there is a problem. In fact, I would suggest the opposite. I do not believe that this is the time to give unprecedented powers to a regulator which no other regulator in the country has, as I mentioned before. The regulator’s only criteria are to promote the financial soundness, financial resilience and heritage of English football. There is nothing else: nothing to do with its success, its audience appeal or the rights money it gets in, just those very narrow objectives. To fulfil those, it is always going to look to the mechanism which redistributes the most amount of money, because those are the narrow criteria it has been given. So I believe that that really gives us a danger of setting in motion a set of unintended consequences.
Given that I accept that there is a small chance those points will not be agreed by the Minister, I will move on to the other amendments we have added. My Amendment 310 states that, when making a determination under Clause 62, to which a final proposal to accept is made, the expert panel must have due regard for Section 7(2), which establishes the negative outcomes that the regulator must take all efforts to avoid. I must say that in all of this I actually prefer the amendments made by the noble Lord, Lord Birt, to any of these following ones that we put down. I am mentioning them in terms of completeness, but my first choice is that the regulator does not have the powers to redistribute at all. If it does, my second choice is that it adopts an approach similar to the one set out by the noble Lord, Lord Birt, which is a very well thought through process. I will speak to all of my amendments with that context in mind.
As I said, Amendment 310 tries to make sure that the expert panel takes into account the unintended consequences set out in Section 7(2), making sure that the expert panel has a duty to consider the impact on the leagues and on the competitiveness of English football, which is what makes it exciting and the best in the world.
I also support Amendment 304 in the name of my noble friend Lady Brady, which deals with precisely the issues that have been identified: the binary nature of the final proposals process. My noble friend’s amendment is simple and very reasonable. It permits the committee of the expert panel to include elements of both final proposals when making a distribution order. This will prevent the regulator simply choosing one proposal and ignoring the other, thereby achieving a real compromise while at the same time ensuring that the regulator is not imposing its will on the competition organisers. Amendment 304 seeks to strike a balance and better meets the aims set out in the Minister’s letter of incentivising compromise. I urge the Government to support these amendments.
Lord Watson of Invergowrie (Lab)
My Lords, I had not intended to speak to this group of amendments, but the noble Lord, Lord Markham, has prompted me to do so. He said just now that he does not think the Bill or a regulator are necessary because his aim is— I am quoting him; I hope he thinks I am doing so accurately—“to make sure that the whole structure of football is”, and remains, “successful”.
Lord Markham (Con)
Noble Lords will remember that, in earlier debates, I said that there are many good things that the regulator should be set up to do, so I agree with that. The MK Dons is a very good example. The “fit and proper persons” test and the breakaway league are both very positive reasons to have it. An earlier proposal was that every club should have two non-executive independent directors, which, from memory —I cannot quite remember—had widespread support. All those sorts of things are good; it is the financial redistribution of the moneys that I believe is a step too far.
Lord Watson of Invergowrie (Lab)
I thank the noble Lord for that, but I do not thank him for mentioning MK Dons, which, as a supporter of AFC Wimbledon, strikes a bit of a raw nerve with me. But I understand the point he was making.
I come back to the noble Lord’s argument about making sure that the whole structure is “successful”—yes, I want that. As a supporter of a club in League Two, I want to make sure that more of the money available in the game filters downwards. I do not even want it to be contained within the Championship; I believe that the Championship has a disproportionate amount of the revenues that come from the Premier League.
I do not believe in parachute payments. All the money, including the parachute payments, should be spread throughout the three divisions below the Premier League—I have argued that before in your Lordships’ Committee in earlier debates. We are told that clubs are disincentivised to get promoted to the Premier League if they cannot have some guarantee. But, from memory, I can think of some clubs who are in the Premier League for the first time and have established themselves after several years—Brentford and Brighton are obvious examples—without having parachute payments to get there. Bournemouth have been in for some time; although they dropped out for a season, they came back again. For this season, somebody mentioned Nottingham Forest, who are second place; they have been in the Premier League for 25 years or so. Ipswich have made it after a similar gap.
I do not think that the parachute payments are anywhere near as essential as has been suggested. However, the money used for parachute payments, if it is spread more equitably, particularly down to League One and League Two to a greater degree, would enable the structure of English football to be successful in the way that the noble Lord, Lord Markham, suggested.
Lord Markham (Con)
The noble Lord, Lord Watson, referred to Brighton and Brentford. I have spoken to the chair of Brentford and the CEO of Brighton. Both say that without the parachute payments—that safety net—they would never have invested in the players when they got promoted. If they were relegated without the parachute payments, they would have faced real financial difficulty. So it was the safety net of the parachute payments that gave them the confidence to invest in players, which then allowed them to have a strong enough team to stay up. I think that they would argue—in fact, they have argued this; it was in the letter that I circulated from the Brentford chairman—that the parachute payments were fundamental to their success in the Premier League.
Lord Pannick (CB)
My Lords, I cannot support the noble Lord, Lord Markham, on this. We undoubtedly have a very successful Premier League. Two questions arise from that. The first is whether the Premier League clubs have an obligation to provide some of their financial riches to clubs lower down the pyramid. It seems to me that the answer to that is undoubtedly yes. Those clubs, some of which are in a perilous financial state, are vital to their communities, and the pyramid is vital to the success of the Premier League, so they do have an obligation. The noble Lord, Lord Markham, said, very helpfully, that he agrees.
If that is right, the second question is whether the amount of money that the Premier League should provide downwards should be determined exclusively by the 20 clubs of the Premier League. The answer to that, in my view, must be no, of course not. There must be an independent, qualified person who assesses how much is appropriate, in all the circumstances, for the Premier League to provide downwards.
Baroness Brady (Con)
My Lords, I will speak to Amendments 302, 303 and 304 in my name, which would deliver two improvements to the backstop mechanism: a funder preference model and the ability for the regulatory panel to select elements of both parties’ proposals. These changes are intended not only to mitigate the extreme risks inherent in the current model but to enable a balanced, effective and generous approach to Premier League funding for the football pyramid.
I reiterate that Premier League clubs, and the league itself, are not opposed to regulation per se, and there are versions of the Bill, and indeed the backstop, that could be made to work. I say that notwithstanding the fact that the Premier League already shares its revenues more generously than any other major football league. The current voluntary approach to the distribution of our revenues has helped make the Championship the sixth richest league in Europe. The Premier League and its clubs are not afraid of doing the right thing. I believe that we would back ourselves to be fair, generous and innovative in addressing the needs of the pyramid. While we may not like it and believe it to be unnecessary, we are not remotely frightened of a regulator that is empowered to determine the right answer.
However, that is not what the Bill enables. The reality is that this untested idea is just not the right way to achieve the Government’s aims. As drafted, this backstop poses intolerable risks to the Premier League, its clubs and the wider football ecosystem. At its core, the backstop represents an unprecedented and untested intervention in what has historically been a voluntary and collaborative arrangement for revenue distribution. Far from coming up with the right answer, the pendulum arbitration model forces the IFR to choose one proposal in its entirety: either the Premier League’s or the EFL’s. This binary approach is not only crude but inherently adversarial. It incentivises extreme and divergent proposals, turning negotiations into high-stakes brinkmanship.
It is important to remember that this model does not simply decide funding levels; it also governs critical aspects of the football pyramid’s structure, such as merit rakes, the conditions of funding and even the existence or form of parachute payments, which we will return to in the next group. As I said in Committee before Christmas, this mechanism therefore periodically throws all the pieces of the pyramid into the air, with enormous uncertainty as to where they might land.
The inclusion of parachute payments in the backstop has only amplified these risks. We know that abolition or near abolition is not a hypothetical risk, because it is the clear position of the EFL. Make no mistake: its vision would fundamentally level down the Premier League, stripping smaller clubs of the tools they need to survive and thrive, and replacing aspiration with survival as the ceiling of ambition. This is why a proposal for a funder preference model warrants serious consideration.
My amendment would require the regulator to select the Premier League’s proposal so long as it meets all the regulatory objectives: in other words, so long as it delivers, in full, against the issues identified by the regulator. A funder preference model does not mean that the Premier League gets its way; it simply means that, as the sole funder—the people whose property rights are being interfered with—its proposal for meeting the sustainability needs of the pyramid would be given preference if, and only if, it delivers all the regulator’s objectives.
This approach would mitigate the risk of an extreme proposal being selected but only if the Premier League continues to step up to the plate. Importantly for the Government and the industry, it would also reduce the likelihood of prolonged legal challenges. Crucially, with parachute payments now included in the Bill, a funder preference model could still oblige the Premier League to adopt the parachute system if the “state of the game” report identifies challenges, but it would do so without the intolerable risk of the near abolition or the destabilising consequences that would follow. In other words, it would enable a balanced calibration of the parachutes rather than creating threats to them.
Also important is my amendment to give the panel the ability to combine elements from both proposals, rather than necessarily be obliged to choose one proposal or the other in its entirety. The noble Lord, Lord Birt, compellingly demonstrated the case for a more sophisticated approach, alongside proper principles and criteria to guide the panel in its decision-making. My amendment is different in that the IFR would be far less involved in designing a solution itself but it would also allow for more tailored solutions that address the needs of both parties. This seems far preferable to forcing the regulator into a binary choice.
The Premier League and its clubs’ track record demonstrate that it already has incentives to balance its own needs with the needs of a thriving, well-funded pyramid. The Premier League is not perfect but it has consistently stepped up to find the right answer for the whole game to the tune of £1.6 billion of funding over three years. We invented solidarity payments; no one forced us to. We created a stadium infrastructure fund that has helped over 1,000 community clubs. No one made us do it. We designed community programmes that have reached over 2 million young people. No one mandated it. We said that we would stand behind the pyramid and not let any club go to the wall during Covid. None did, because we stepped up to the plate and gave funding to the clubs that needed it. No one made us do that either.
We recognise our responsibility as a leader and steward of our national game. From that vantage point of stewardship, it is obvious that the backstop as currently designed is not the right answer for English football. It seems obvious to noble Lords right across this Committee too. As has been pointed out, not even the EFL likes this crude model. The unfortunate reality is that this particular backstop model seems to have no support—zero. We therefore need to change course. The Government should reconsider, especially as UEFA has asked them to, and work with football to come up with a much better and a far less risky solution for the whole game.
Lord Bassam of Brighton (Lab)
My Lords, I will speak to Amendments 308, 309 and 318. Before I say something critical about the comments made by the noble Baroness, Lady Brady, I would love to congratulate her on securing the services of Graham Potter—a good example of how Brighton & Hove’s generosity of spirit has extended down the Premier League. I hope that West Ham can build on our measure of bringing on talent.
The heart of our amendments in this group is Amendment 309, which seeks to qualify the way the regulator performs in this regard. Essentially, it would ensure that the financial gaps between the divisions in the pyramid are closed. It seeks to ensure that there is adequate compensation for player development and academies, and to provide for the welfare of players. It seeks to incentivise clubs to be well run and provide training for volunteers. The fifth element of the amendment is that the independent football regulator should address issues identified by the relevant “state of the game” report.
We do not set out a formula in our amendments but we say that the financial gap between the leagues needs to be addressed. Of course, in doing so, the football regulator will have to have regard to its “state of the game” report. The noble Baroness, Lady Brady, has made much play on several occasions of the generosity of the Premier League. There is no doubt that the Premier League is generous, but when one looks more closely at the figures and statistics, there is a limit to that generosity. Currently, the distribution of money coming from the Premier League is that some 92% of the revenue that it generates goes back to the 20 Premier League clubs, plus the five that are beneficiaries of parachute payments. Therefore, 92% goes to 25 clubs. That seems somewhat excessive. It means that just 8% of the distributable revenues from the English game, which amount to some £3 billion, goes to the other 67 professional clubs, which receive just £245 million. That gap has grown over the years. That is why we think it is right that the independent football regulator should give that gap some careful scrutiny.
The then Conservative Government commented in their White Paper that the parachute payment system
“can distort competition in the Championship and encourage greater financial risk taking by clubs that are not in receipt of them”.
That was a big and bold statement. It is worth reflecting on some of the research that has been done on the impact of parachute payments. Back in 2017, Dr Rob Wilson from Sheffield Hallam University, looking at that period between 2006-07 and 2016-17, concluded that clubs receiving parachute payment were
“twice as likely to be promoted to the English Premier League”
and “considerably less likely” to be relegated. That is a considerable distortion of the way in way in which the leagues operate. For that reason too, we think that the financial gap issue should be looked at more closely.
Obviously, it is right that there are solidarity payments, but the majority of those payments are concentrated simply in the parachute payment system. I therefore hope that the first “state of the game” report gives some close attention to that. It is worth observing too that, before the formation of the Premier League, domestic broadcasting money was allocated according to an agreed formula, with 75% being paid to the top-flight clubs and 25% to the other three divisions. I do not say that that is the right formula or that the 92% figure I referred to earlier is the wrong formula, but it is clearly an issue that need to be addressed.
In the last seven seasons, those clubs that have had parachute payments have managed to get back into the Premier League. In each of those seasons, two of the three promoted clubs received parachute payments. Looking at the Championship this year, the top three clubs are still in receipt of parachute payments. There is definitely a serious case to be examined.
We have heard a lot about the strength of the Premier League, and there is no doubt that it is the finest league in the world. I thought the statistics from the noble Lord, Lord Birt, were fascinating. They underline the confidence in our Premier League that exists in the football world. We want the distribution mechanism, as it works through, to be fairer and more equitable, and address some of the issues within the game. That is why we brought forward our amendments.
I conclude by making this observation: it is clear that the big divide in the consideration of this Bill is over the parachute payments. It is clear that noble Lords on the Opposition Benches are very much opposed to including them within the remit of the IFR. On our side, we think it only right that they should be brought into scope, and that was one of the major changes made between the previous Government’s Bill and our Government’s Bill. That is right, because it tries to ensure that there is some greater equity in the legislation. The noble Lord, Lord Pannick, put his finger on the issues, as did my noble friend Lord Watson.
I hope the Minister will give some consideration to the criteria point that we have raised in Amendment 309, if not in the Bill then certainly ensuring that it is carefully taken into consideration when the IFR is finally set up.
Lord Birt (CB)
To respond briefly to what the noble Lord just said, in my remarks I said that I think there is a case for looking at the weighting between solidarity payments and sustainability payments. That is exactly what I think the kind of measures that we discussed earlier would bring some clinical analysis to and come up with a considered answer.
Forgive me if I point out something else to the noble Lord. I am a lover of stats, and I have just looked up a stat, which is what proportion of Brighton’s revenues come from the Premier League. In the last year for which figures are published—so this will not be from this year—73% of the revenues of the noble Lord’s club came from the Premier League. He has to face the issue that if there were a material change in that, it would have an impact on the club and the Premier League and its appeal. This is about getting the right balance in all these things.
Lord Bassam of Brighton (Lab)
I agree that it is about getting the right balance—there is no disagreement between me and the noble Lord—and obviously I acknowledge the size of the support that Brighton & Hove Albion get. One should also put on record that our fans—I am a great fan, a season ticket holder and a 1901 Club member, for that matter—are incredibly grateful to Tony Bloom for the investment that he has put in. I do not entirely buy the argument that it is because of parachute payments. Back when Brighton were pressing for promotion in 2016-17, that was not foremost in anyone’s thinking, and I doubt whether it was foremost in Tony Bloom’s. But obviously we have to look at where the resource is spent, and that is why it is for the IFR to make that determination and to treat this issue with great care when it comes to a conclusion, based on the “state of the game” report.
Lord Goddard of Stockport (LD)
My Lords, for the first hour of the debate today, I honestly thought I was in a different Committee. The thoughtful amendments from the noble Lord, Lord Birt, and the reasoning behind them were more favourably reflected on by the Minister than almost any other amendment I have heard over seven nights. The helpful intervention from the noble Lord, Lord Pannick, about some technical issues, and his offer—probably to be accepted—of redrafting for a further thing, emphasise that we are drawing to a place where I think we can begin to make progress. Even the noble Lord, Lord Markham, was concise in his comments on those amendments in the spirit of trying to move the evening on, while still making the political points that he needed to make.
I was going to comment on the speech by the noble Baroness, Lady Brady, but the points have been made by the noble Lord, Lord Bassam, far better than I could: the Premier League does not have all the right answers, and it is about the pyramid and the lower clubs. This afternoon I met disability groups, women’s groups and other people concerned about the economics of football, and their real concern is whether they will ever see the benefits of whatever happens with this regulator, so that it does not just stay between the Premier League and the Championship. It is fine to say that the Championship is now one of the six best leagues in the world—that is to be supported—but below that are League One, League Two and the National League teams. We need to keep all those thoughts in our minds as we move forward.
Personally, I have absolutely no problem with the Premier League. It is a fantastic thing and I pay my money to watch it if I can—I wish I could have switched the fixtures around from last night to tonight, so that I would not have had to endure City throwing away a two-goal lead at Brentford. I could have missed that, listening to the enjoyment in here, but that is just the way the fixtures are thrown up, unfortunately.
What I am trying to say, clumsily, is that the regulator needs to be given responsibility. We can influence that responsibility by way of amendments in this and the other place, but it is very important that the Minister understands where those amendments are coming from, and for what reasons. I do not think that anybody in this Chamber does not believe that football deserves the very best governance and the very best people running it to keep its status as our national game. It is our national game, from Liverpool at the top right down to Southend and clubs at the bottom. Our group on these Benches just wants to ensure that we keep that focus, because you can lose it in the argument of the to and fro of the money, the percentages and how it is not fair. The fairness is not the point. The point is the 92 football clubs, which should be at the forefront of all our minds.
Lord Jackson of Peterborough (Con)
My Lords, I did not intend to speak on this group of amendments but, as with all the best Committees, you are sometimes prompted to contribute by the ebb and flow of the debate.
Just to respond very briefly to the noble Lords, Lord Pannick and Lord Bassam, of course we all want to see the best possible legislation. This is a scrutiny and oversight House, and we want to make sure the Bill is improved as it goes between the two Houses of Parliament. But we also do not want to respond merely to anecdote, whether it is the financial difficulties of a small number of clubs or the issue of the super league evolving as it did in 2021. I have gone on record as saying that the Bill is suboptimal—and that is polite. I would have said the same under a Conservative Government, and it bears repetition tonight. It was terrible then, and it is even more terrible under this Government.
I want to try to explain to noble Lords why, specifically on the issue of whether Clauses 61 to 64 should stand part, some of us have a philosophical issue. At the moment, I believe that although it can be quite robust and in many ways brutal, there is a self-correcting mechanism for the way football clubs are operated. There is a predisposition not to take inordinate risk in the future of small community clubs supported by the local communities in towns and cities across the country.
What slightly worries me is the concept of moral hazard, as we have discussed before, which is obviously quite an arcane economic concept. Incidentally, with respect to the noble Lord, Lord Pannick, I do not see that it is necessarily axiomatic that the Premier League has some moral duty, as businesses and as private entities with shareholders, to necessarily be a pseudo-charitable outfit and to provide for those in other leagues. The noble Lord might want to elucidate why he feels that is the case. Whether we believe it is a good or practicable idea is another issue.
Lord Watson of Invergowrie (Lab)
Is the noble Lord familiar with the concept of solidarity?
Lord Jackson of Peterborough (Con)
Yes indeed, comrade.
I suppose the significant point I am making is that not enough credence has been given to the efforts, which were very well enunciated by my noble friend Lady Brady, of the Premier League through very difficult times, economic downturns and, of course, Covid. At the moment we have that self-correcting economic mechanism to prevent smaller clubs making calamitous economic decisions that may end up with them closing, going into administration, et cetera—although of course, as we have seen from the figures, a relatively small number of clubs have been in that position.
Conversely, we are being asked to formalise in primary legislation a situation where we are putting in the hands of the IFR, along with very significant enabling powers, including Henry VIII powers, the right to redistribute wealth. It may be a simplistic argument but, as my noble friend Lord Markham said, it would be an unprecedented situation for a regulator to redistribute capital between entities. In other words, there will be no internal mechanism or sanction to prevent inordinate amounts of risk being taken. It would be a market distortion and there would be no disincentive for those clubs to make those decisions, as there is now.
That is the philosophical underpinning of why we support these clauses not standing part of the Bill. It does not mean that we do not care about community football clubs. We are being asked to vote not on a perfect piece primary legislation but on the Bill with 100 clauses that is in front of us today. For that reason, I support my noble friend’s contention that Clause 61 and others should not stand part of the Bill.
Baroness Evans of Bowes Park (Con)
My Lords, I have added my name to Amendments 302 and 304.
As I said in previous debates on the backstop, I have real concerns about the resolution process, and in particular the binding final offer arbitration model included. The Minister has repeatedly claimed, and said again today, that these powers are to be used only as a last resort, but we have heard from noble Lords across the House that this does not feel like the situation in which we find ourselves today. As has been identified by other noble Lords, the approach being legislated for in the Bill is unduly adversarial and pits two sides against one another rather than encouraging comprise and dialogue. As we have heard, the very existence of the proposed mechanism set out seems to have played a role in the breakdown of the latest round of financial negotiations, which is concerning and does not bode well for the future.
The Government would be unwise to dismiss and ignore this chilling effect, as the current backstop proposal threatens to undermine and damage relations across the football pyramid. The model just does not make sense. In any deal negotiation, if both sides are disappointed at the outcome reached, it is more likely that it has been fair and balances the two sides’ competing proposals. Yet, as we have heard, under the process set out in the Bill, rather than consider each proposal and determine the best approach—which may very well be a compromise between the two—the expert panel formed by the regulator must instead choose one of the proposals.
Amendment 304 gives the expert panel set up by the regulator to oversee the process the ability to combine elements of the proposals
“where it considers that this will result in an order which is most consistent with the principles in subsection (2)”.
This is a far more sensible approach. It does not mean that the regulator or its expert panel would be forcing a proposal on the two leagues involved. Rather, they can play a constructive role in facilitation and mediation to help achieve an outcome that both parties can agree with.
I really hope that the Minister will use the time between the end of Committee and the beginning of Report to discuss further some of the ideas that have been brought forward in this and, as I said in the previous debate, consult with the leagues and individual clubs again. A number of them have expressed concerns publicly about the process. I hope that she will think about tabling amendments that will be supported across the House at our next stage.
Baroness Twycross (Lab)
My Lords, I thank noble Lords for their at times passionate discussion on this group of amendments. I agree with the noble Lord, Lord Goddard, that it has been a good debate. All noble Lords who have taken part clearly believe in getting the best governance for our national game, which should be at the heart of discussions.
Let me be clear that the Government’s preference is for an industry-led solution. While we acknowledge that there is an existing agreement in place, if a new updated agreement cannot be reached, an industry-designed proposal, facilitated by the regulator, is the next best option. The model adopted by this Government for a backstop was in the previous Government’s Bill.
One of the dividing lines in your Lordships’ House is clearly on the rights and wrongs of parachute payments and their inclusion or otherwise in the scope of the regulator. This was referred to by, among others, the noble Baroness, Lady Brady, the noble Lord, Lord Markham, and my noble friends Lord Watson of Invergowrie and Lord Bassam of Brighton. I hope that we can all agree, not least because of the debate on this, that parachute payments are a significant part of football’s financial landscape. They clearly play an important role in supporting the survival of relegated clubs and the Government are clear on that.
However, the regulator needs to be able to consider all relevant revenue sources as part of the backstop process, to arrive at an accurate picture of any proposal’s impact on financial sustainability and the potential for distortion of the parachute payments. This is not to say that they must be included. It is to allow the regulator to include them if, having gone through the process with, for example, the “state of the game” report, it has arrived at the view that they should be included in the process.
Lord Markham (Con)
I thank all noble Lords, and I agree with the noble Lord, Lord Goddard, and the Minister that it was a good debate conducted in a good tone. I also thank the Minister for her helpful clarifying comments, particularly on Amendment 310 and the expert panel.
On the point raised by the noble Lord, Lord Pannick, I would like to make it clear that I think everyone agrees—I definitely do—that the Premier League should be paying over a share of its—
Lord Pannick (CB)
The noble Lord says “everyone”; he might like to have a conversation with the noble Lord, Lord Jackson.
Lord Markham (Con)
I will allow my noble friend to speak for himself, but I do not think anyone is saying that the Premier League should not be paying some of its money over, most of all because the Premier League voluntarily believes that it should be paying large sums of its money over because it is critical for the health of the whole game.
Lord Jackson of Peterborough (Con)
I fear the noble Lord, Lord Pannick, has misconstrued my comments. Perhaps it would be apposite to clarify that I was merely pressing him on the intellectual rationale for the assertions he made. That is a completely different issue from whether I agree that, being community minded, the Premier League should indeed disburse its funds generously to lower leagues.
Lord Moynihan of Chelsea (Con)
The noble Lord, Lord Watson, reminded us of solidarity. Does my noble friend agree that there is a great difference between legislative—which is to say coerced—solidarity, which some would call theft under the law, versus the voluntary and friendly solidarity that is already being shown by the Premier League? Does he agree that there is a fundamental difference between the two and that it is a subversion of the word to call it solidarity?
Lord Watson of Invergowrie (Lab)
The noble Lord is now making a distinction between solidarity and paternalism.
Lord Markham (Con)
That is precisely the point of this debate. I think everyone agrees that the Premier League should be paying money over, no one more than the Premier League itself. The whole question is whether it needs a regulator to enforce a set number. As my noble friend Lady Brady said, the Premier League is more generous than other leagues. As my figures showed, the Premier League pays over 14%, which is almost three times the level that UEFA pays over in its version of solidarity payments. The real point of the debate is whether we really need a regulator to determine it.
We have had a good debate on parachute payments. The noble Lord, Lord Bassam, made a particular point about Brighton and how it did not need them. It is a little known fact that that a job I never got, although I was through to the final round, was being CEO of Brighton many moons ago, when it was a Championship team and was pressing for the Premier League. I recall very well a conversation with Tony Bloom when he was interviewing me for that job. I still think he is a brilliant chair, and I cannot argue against Paul Barber, the CEO; given how good he is, I cannot deny that he chose the right candidate.
Lord Bassam of Brighton (Lab)
The noble Lord is obviously used to being a runner-up in these competitions.
Lord Markham (Con)
That hurts. Tony Bloom made clear to me that Brighton’s whole business plan depended on what he called “the yo-yo”. West Brom had just done it at the time: you get promoted and make some investment in new players. You then expect to go down and have the benefit of parachute payments to build more players up again, so you slowly get to the level, through the yo-yo, where you can be sustained.
Baroness Taylor of Bolton (Lab)
While the noble Lord is talking about parachute payments and the yo-yo, he used the figure of 14%. If you take out parachute payments, is the figure not an awful lot lower and actually near 4%?
Lord Markham (Con)
I am sure that we can get the absolute reference from the statto—the noble Lord, Lord Birt, will probably calculate it and tell us by the end of the debate. I think the figure is about 9%, but we can check that.
The point I was trying to make is that Tony Bloom, the chair of Brighton, and Paul Barber, its CEO, whom I have spoken to during this process, would say that parachute payments were a very important part of their business planning in giving them the confidence to invest, which allowed Brighton to stay up and thrive in the Premier League. There is a very good argument for them being there.
As much as I would like the regulator not to get involved in redistribution payments, I accept that it is likely that those powers will be granted. If we really narrow it down, the debate on this group and the previous one is all about the negotiation mechanism. That is where I appreciate so much the work that the noble Lord, Lord Birt, has done on this, because it is not a political point. I do not think anyone in the outside world would get into the intricacies of and care more broadly about the negotiation mechanisms that we are talking about, but what we are talking about is, as the Minister said, a theory behind binary choices and what will happen in terms of gaming. It is an untried theory that has not been done anywhere else, and it has been put forward. I thought the Minister said that it had not been done by the commission.
Baroness Twycross (Lab)
It has not been used by the Competition and Markets Authority yet, even though the previous Government gave it the powers to do so. It has been used successfully in other jurisdictions —for example, in Australia and Canada. I have other examples that may be in my speaking notes later in the evening, but I am happy to share them.
Lord Markham (Con)
That would be very helpful, because the main point here, and what I hope we can achieve between now and Report, is that we know that there is a small group of economists at the DCMS who have put together this mechanism. There are noble Lords here who have been involved in media sports rights deals and these sorts of negotiations who can add real value to this. There is a real opportunity between now and Report to engage with those officials to really get into those negotiation mechanisms, because this is what we have narrowed it down to and that is what this debate has been useful for. I hope we can use that time productively.
Baroness Brady
Baroness Brady (Con)
My Lords, I shall speak also to Amendment 312. These amendments would ensure that any distribution order affecting parachute payments is introduced with a three-year, rather than one-year, transition period, and that an order would come into effect only from the start of a new football season.
Before I give the Committee my experience of why that is so important, having spent 32 years running Premier League and EFL clubs, I want to make the point that I think there is a total misunderstanding in the Committee about parachute payments. Parachute payments are not about helping clubs get promoted into the Premier League; they are about helping Championship clubs that are promoted into the Premier League to have the ability to invest to give them a chance to stay in the Premier League. You cannot invest to stay and be competitive in the Premier League if you do not know that there is some sort of safety net to help you in the event of relegation. My Amendments 311 and 312 are, in my view, essential to safeguarding the stability and sustainability of English football, particularly for those clubs that face the challenges of relegation.
As I have said before in the House, parachute payments are not a luxury or a reward for failure. They are an essential tool that encourages the competitiveness, investability and financial sustainability of English football. Without them, relegation would create a financial free-for-all and a cliff edge that could devastate clubs, their communities and the broader ecosystem. Without them, newly promoted clubs cannot invest in their squads to ensure that they have any chance of remaining in the Premier League.
Baroness Taylor of Bolton (Lab)
Will the noble Baroness acknowledge that they distort competition in the Championship?
Baroness Brady (Con)
I do not say that they do or do not. I am saying that, if they were not there, you would have to invent them. If a club is promoted from the Championship to the Premier League and cannot invest in its team to stay in that league, it is automatically almost certain to be relegated. If an established club, such as those mentioned earlier, is relegated, without the parachute payment it will be in financial trouble. Some 50% of all administrations come as a result of relegation; that is why parachute payments are fundamentally important. They are designed to manage the financial shock of relegation, where clubs could lose significant revenues, almost overnight, while their costs remain fixed.
For a recently promoted Premier League club, squad costs alone average £115 million a year, with most player contracts running for three to five years. Relegation means that clubs face an average shortfall of £165 million over three years, even with parachute payments included in that equation. It is important to recognise, therefore, that they do not help clubs avoid a painful transition but soften the blow to a degree. Without them, the financial impact would escalate from being very painful to being catastrophic.
Lord Bassam of Brighton (Lab)
I remind the noble Baroness that parachute payments have not always been at the level they currently are. In 2010-11 parachute payments were something like £30 million; by 2020-21 they had escalated to £233 million, which is an eightfold increase. This was during a period in which player wages only doubled. The noble Baroness’s point about the need to ensure that there is no cliff edge around financial commitments to players is not entirely valid. Why did the parachute payments need to grow so rapidly and by so much during that period?
I do not argue against the principle of parachute payments; I recognise their importance and the need to soften the blow that is a product of relegation. But the noble Baroness must accept that they have a distorting impact on promotion bids by Championship clubs. Over the last seven seasons, 14 of the 21 clubs promoted were in receipt of parachute payments, where previously that was not the case.
Baroness Brady (Con)
As the noble Lord pointed out, wages have increased. Newly promoted Premier League clubs have an average wage bill of £115 million and transfer fees have gone through the roof. That is why the costs are fixed. If a club is relegated, it cannot terminate its players’ contracts; they are honoured, as clubs are obliged to pay those contracts. The parachute payment helps soften that blow. Parachute payments put restructuring responsibly at the forefront of clubs’ minds. Relegated clubs have to sell players, but they also have to buy players, reduce their wage bill and recalibrate costs to adapt to life in the Championship. What these payments really do is help clubs avoid wholesale disinvestment, panicked fire sales or, worse, administration.
Parachute payments work. They do not distort competition; they enable it. That is why versions of parachutes are used all over Europe and throughout the EFL system. Clubs such as Brentford, Brighton, Nottingham Forest and Crystal Palace have all demonstrated that well-run, innovative clubs can rise through the Championship without parachutes and build competitive, successful teams in the Premier League. Parachute payments are a stabiliser for relegated clubs, not a barrier to promotion.
Without these payments, the competitive balance, investability and appeal of both the Premier League and the Championship would be put at risk. Investors in the Championship recognise that parachute payments provide the essential scaffolding for strategic investment. These payments enable clubs to build towards promotion with confidence, knowing that there is a safety net. Parachute payments create the conditions for clubs to invest in players, infrastructure and long-term strategic plans, with the assurance that one challenging season in the Premier League will not unravel their progress and render all that investment worthless.
Lord Addington (LD)
My Lords, when it comes to parachute payments and what they imply—that is, the survival of a fall—I cannot help but feel that if we made what clubs were falling on a little softer, it would improve their chances. We have a situation here of deciding whether to cushion the fall or let clubs float down. Some combination of the two might be appropriate. Let us remember that no situation will remain as it is now; we cannot guarantee that consumption patterns and the way football is viewed will not change over time, because they already have.
So, what I would say about the noble Baroness’s amendment is that maybe the timescale would be easier if it was longer. What is the Government’s thinking about stability to allow this survival to come out? We do not want people being destroyed by it—the noble Baroness is quite right. Equally, having the “cosy club” of those who have tried and failed and come back up again is not that desirable. How you have a civilised or better way of getting out of that situation is something that we want to look at here. I do not know whether there is a right answer here, but we need to look at the way this happens and how those clubs are going to survive and continue as clubs. When I looked at this Bill, I thought that was the most important bit. You have the Premiership which makes lots of money and the rest of it which apparently we want to keep. How you square that circle is what we are talking about here. The Government’s thinking on this is what I would like to extract from this discussion.
Lord Markham (Con)
I will be brief because my noble friend Lady Brady made the points extremely well and we have debated parachute payments quite a bit already this evening. The only thing I would say is that they give clubs in the Premiership the incentive or the confidence to invest and in my understanding every European league now has some variation on that, because it is seen as a system that works. It is fundamental to the competitiveness of the Premier League. It underlies its whole audience appeal and broadcasters all round the world will make media sports rights payments to see such an exciting and competitive game.
It is known that we would prefer that parachute payments were not included but, if they are going to be included, the proposal to make a three-year safety net as opposed to a one-year safety net is very sensible. In the conversations that the Minister helpfully set up with her officials, I could tell that it was something they understood and were quite well disposed towards. The fact, as my noble friend Lady Brady, said, that contracts for players are for three years shows the importance of having that. So I hope that this is a sensible amendment that the Minister can speak to.
Baroness Twycross (Lab)
I committed earlier this evening to come back to the noble Lord, Lord Hayward, on whether the shadow regulator would join the Chancellor’s meeting with regulators tomorrow. My understanding is that the Chancellor’s invite has gone only to regulators who are currently operational. Therefore, the shadow football regulator has not been invited to the specific meeting to which the noble Lord referred. I would add, however, that I have heard many good points made on growth during the Committee stage of the Bill and look forward to returning to further discussions around that point on Report.
In relation to the group under discussion, I thank the noble Baroness, Lady Brady, for bringing her concerns regarding the future financial sustainability of relegated clubs to my attention with this amendment. I note the clarity from the noble Lord, Lord Markham, in relation to the Opposition opposing parachute payments being included in the Bill. As I made clear in my response to the previous group, the Government agree—and I hope this gives the noble Baroness some reassurance—that parachute payments play an important role in supporting the survival of relegated clubs. This point was also made by my noble friend Lord Bassam of Brighton, even though he had a different perspective from the noble Baroness, Lady Brady.
I highlight first that in the Government’s view it is not inevitable that the backstop would address parachute payments. They will be addressed only if they have been identified as a relevant question for resolution, which will happen only if they are proven to have a substantial impact on the sustainability of the pyramid.
The noble Lord, Lord Addington, asked some pertinent questions, not least relating to the survival of clubs. If parachute payments are deemed relevant for consideration, the Bill currently specifies that they cannot be reduced within a year of the distribution order coming into effect. This point was made by the noble Baroness, Lady Brady. This amendment would extend this period to three years, triggered at the beginning, rather than the end, of a season.
While I genuinely understand the core concern behind this amendment, we must balance the desire to ensure that relegated clubs have as much time to adjust to changes as possible with the need to ensure a new, timely, satisfactory agreement. We would expect the leagues to maintain effective communication with clubs throughout the backstop process which, alongside the existing year-long transitionary period, will mean that clubs have ample time to adjust if parachute payments are deemed in scope. There will be no sudden reduction in payments without warning.
Before I finish, I again urge the leagues to come to an agreement on a new package of financial support under their own steam, which is in the long-term interests of the game. However, for the reasons I have set out, I regret that I cannot accept these amendments and hope the noble Baroness will not press them.
Baroness Brady (Con)
My Lords, I am grateful for the contributions made by noble Lords on this group. To the noble Lord, Lord Addington, I say that, in my experience, if you cut some of the ropes on a parachute it certainly does not provide for soft landing; it results in a crash. That is what I think I am trying to help avoid here.
I thank the Minister for her response and I am sorry that we do not yet seem to agree. I want to emphasise again that, while the Government seem to believe they have prevented parachutes from being abolished under this legislation, they have literally created a Bill that allows the regulator to choose between only two proposals. One of the proposals is going to come from the organisation that called parachute payments “an evil that needs to be eradicated”. The Bill specifically enables the kind of system that the Minister says the Government do not want to see, and that really is an intolerable risk to the Premier League clubs, newly promoted clubs and relegated clubs.
It may be helpful to stand back and remind the House that this Bill principally seeks to address financial sustainability across the game. Yet, the removal or severe restriction of parachute payments would undermine that very goal. Around 50% of football administrations follow a relegation event. Take away parachutes or alter them without proper transition periods and that number will, sadly, undoubtedly rise. For the Premier League clubs at the lower end of the table, a one-year transition period will fundamentally alter all their risk calculus. These clubs invest heavily in players, infrastructure and youth development, knowing that the current system provides some financial security in the event of relegation. Remove that security and I call tell you that the calculation changes. Risk taking diminishes, investment shrinks and competitiveness suffers. That is exactly the same for newly promoted clubs. It is impossible to invest in your squad if you do not have that safety net, if it is not successful for you.
I continue to believe that these amendments are a necessary safeguard. Of course, much greater changes to the backstop are required, but a transition is a vital element to examine. These amendments would provide the time and clarity needed for clubs to adapt responsibly, protect the legitimate expectations of all shareholders and preserve the stability of the football ecosystem.
I urge the Government to give these measures further consideration, please, as part of a fundamental reconsideration of the backstop, just as UEFA has explicitly called for, to ensure that this Bill really can achieve its intended purpose of promoting sustainability across the game. I will withdraw this amendment today, but I say respectfully to the Minister that I really hope that she reflects carefully on my amendments.
Baroness Twycross
Member's explanatory statement
This amendment corrects an erroneous cross-reference.
Baroness Brady
“(ea) any decision made under sections 62 and 63;”
Baroness Brady (Con)
My Lords, Amendment 322 would enable scrutiny of backstop decisions through merits-based review by the Competition Appeal Tribunal. I will also speak to my consequential Amendments 324 to 326 and 333 to 335. Let me seek again to give noble Lords a picture of what I believe is at stake.
The Premier League represents a remarkable British success story, yet the Bill introduces a mechanism that could unravel three decades of innovative ecosystem building in a single regulatory decision. Every few years, a regulator will be forced to make a binary choice between two competing visions for English football. One vision, that of the Premier League, seeks to preserve the delicate balance that has made it the best and most compelling league in the world. The other, explicitly stated by the EFL, aims to fundamentally restructure football’s finances and systems, describing key stability measures as “evil” and seeking their “eradication”.
This is not some narrow funding dispute; what the Government may so far have failed to understand is that this is about the very architecture of English football. It could eliminate the financial scaffolding that enables newly promoted clubs to compete. It could destroy the stability mechanisms that give investors confidence to back ambitious Championship clubs. It could force smaller Premier League clubs to abandon investment and aspiration. This is why merit-based reviews matter profoundly.
Under the Bill, even the most extreme regulatory decision could be challenged only on narrow procedural grounds. Let us think about what this means: a panel could select a proposal that devastated relegated clubs, and those clubs would have no meaningful right of appeal even if that decision threatened their very existence. The Competition Appeal Tribunal would offer a better solution. It brings expertise in complex economic matters and an understanding of how regulatory decisions ripple through competitive markets. Its oversight would drive better decision-making, ensure genuine fairness and protect the investment that makes English football thrive.
This speaks to a broader principle: football is not a utility delivering water through pipes. It is a dynamic ecosystem where success depends on calibration of risk and reward, yet the Bill repeatedly treats football like a water company, relying on judicial review as the primary check on regulatory power—and we all know how well water regulation is going. This creates a fundamental mismatch.
We are asking a regulator to make complex commercial decisions that could reshape our national game, yet we deny affected parties any meaningful right to challenge those decisions on their merits. This occurs throughout the Bill on all sorts of matters relating to ownership, financial regulation, licensing and stadia. Almost nothing, including this multi-billion pound decision about the distribution of the Premier League’s own revenue, is subject to merits-based reviews. Let me say again: I do not oppose regulation. These amendments are a limited attempt to ensure that regulation can operate fairly and sustainably.
As I said earlier this evening, the Premier League has consistently demonstrated its commitment to the wider game through solidarity payments, infrastructure funds and community programmes that reach millions, to the tune of £1.6 billion every three years. During Covid, we ensured that no club went to the wall, but good stewardship is a two-way street, and this statutory regulator requires proper safeguards. Without merits-based review, we risk regulatory decisions that could inflict profound damage on the game we love. The backstop could become a weapon for levelling down, rather than building up, replacing aspiration with survival as the pinnacle of a club’s ambition.
English football is at an important juncture with this Bill. Get it wrong and we risk something precious: not just the Premier League’s global success but the entire pyramid’s vitality. This amendment provides one —and only one—essential protection against regulatory overreach. There are plenty more needed, but I urge the Government and other noble Lords to support it.
Lord Markham (Con)
My Lords, Clause 84 details the provisions that may be brought before the Competition Appeal Tribunal. However, as drafted the Bill does not include any decisions made under Clauses 62 or 63 for appeals that may be heard before the tribunal. Given the implications of these two clauses, relating as they do to the distribution of revenue, it is wholly inadequate that the determinations made under them are not subject to an external appeals process. Therefore, my Amendment 323, and the amendments in this group tabled by my noble friend Lady Brady, ensure that any decisions made by the committee of the expert panel relating to distribution orders are reviewable under Clause 84.
I do not dispute that the Bill already provides for distribution orders under Clause 62, and for reviewable decisions under Clause 81. The latter clause states that reviewable decisions are any decisions listed in the table in Schedule 10, and Schedule 10 does include decisions made under Clause 62. However, this relates only to internal reviews. Schedule 10 also states that any internal review of distribution orders is to be carried out by a different committee of the expert panel. Therefore, although the composition of the deciding and reviewing committees must be different, the review will still be carried out by the same body.
Therefore, the Bill currently gives competition organisers the right to appeal only to a component of the regulator. This cannot be right. The imposition of a distribution order under Clause 62 is surely the measure that most affects competition; requiring one league to distribute its money to another league will impact its competition ability. Surely, then, any distribution decision should be reviewable by the Competition Appeal Tribunal.
Baroness Twycross (Lab)
I thank the noble Baroness, Lady Brady, and the noble Lord, Lord Markham, for tabling these amendments. I recognise that the intent of the amendments in this group is to ensure that decisions related to the distribution backstop are appealable and subject to a merit standard of appeal, rather than being based on judicial review principles. I understand that this comes from a belief that a merit standard of appeal is necessarily preferable because it would allow the Competition Appeal Tribunal to opine on the merits of the case, rather than just on whether the correct procedure was followed, and thereby arguably offers better protections for affected parties. In this instance, I do not believe that this is the right process.
In truth, it means that a tribunal, which most likely has less technical expertise and background knowledge of the specific issues surrounding financial distribution in football than the regulator, will be able to substitute its own decision for that of the regulator’s. For example, if the regulator were to choose one of the two proposals as part of the backstop process, and make an order imposing that distribution arrangement, the Competition Appeal Tribunal could overrule this and choose the other proposal. Indeed, if we consider how this would most likely play out, the aggrieved competition organiser whose proposal is not selected would be very likely to lodge an appeal regardless.
These amendments would be tantamount to making the Competition Appeal Tribunal the ultimate deciding authority on the financial distribution arrangement in football. This would, in effect, mean cutting out the middleman and having the courts decide how much money should flow down the football pyramid. It is unclear to me why noble Lords, or indeed anyone, would think a court making this decision a better option, rather than the expert panel of the independent football regulator, or why this would necessarily lead to a more robust, more favourable or fairer outcome. It is simply the case that there are certain decisions better suited to certain standards of review.
We have engaged with legal experts and senior members of tribunals while developing the Bill. They agreed that the courts are not necessarily well placed to substitute the decisions of expert regulators on matters of technical regulatory judgment, and that a judicial review standard of appeal would be more appropriate for those types of decisions. This is also a common approach taken across other regulators. For example, the majority of decisions made by Ofcom are subject to appeal on judicial review standards.
By contrast, some of the possible enforcement decisions that the regulator can take under the Bill represent highly punitive actions. For these highly punitive, less technical and less market-specific enforcement decisions, a merits appeal is more appropriate. For example, we are of the view that courts are far better placed to opine on whether the severity of a punishment is appropriate to the infringement than on whether a certain distribution of revenue is better for the financial sustainability of English football. Ultimately, an appeals process should provide the appropriate opportunity to challenge whether a regulator is acting fairly and within its statutory remit. It should also be a focused and efficient process that does not excessively delay the final resolution of decisions or hinder the regulator in achieving its objectives.
While providing effective assurance of the regulator’s decision-making process and judgment, the appeals system should not unduly undermine the expert independent regulator. The Bill effectively balances these different considerations, including through the standard of appeal. The amendments tabled by the noble Baroness, Lady Brady, would also make every decision under Clauses 62 and 63 reviewable, subject to the statutory route of appeal to the Competition Appeal Tribunal. This includes minor and operational decisions such as the giving of notice or extending the period to submit proposals. For the same reasons I have already outlined—balancing fairness, efficiency and appropriate deference to the regulator—we do not believe this is necessary and it is not the approach we have taken in the Bill.
Amendment 326 would be contrary to Amendments 322, 324 and 325. The Competition Appeal Tribunal could not simultaneously review a decision on judicial review principles and on the merits. On Amendments 333, 334 and 335, as I have set out, we disagree with the intention to make every decision under Clauses 62 and 63 a reviewable decision on the merits. However, if that were the intention, additions to the consequential amendments of other Acts, or the Competition Appeal Tribunal rules, certainly would not be the way to do it. For these reasons, I cannot accept the amendments and I hope that noble Lords will not press them.
Baroness Brady (Con)
My Lords, I am grateful for the Minister’s response, although I confess that I remain far from reassured. The logic of the Government’s position appears to be that procedural correctness matters more than getting the right answer for English football. Consider what we are being asked to accept: a regulator with new, unprecedented powers to reshape our national game, yet its decisions can be challenged only if its ticks the wrong procedural boxes.
The Premier League drives investment throughout the pyramid. It enables clubs such as Brighton, Brentford and Nottingham Forest to climb through the lower leagues without parachutes and compete at the highest level because of the security they provide. It funds grass-roots facilities in every corner of Britain. It projects British soft power globally in a way that no other cultural export can match. Yet under this Bill a single regulatory decision could fundamentally alter the mechanisms that make all that possible.
The Minister suggests that a judicial review provides adequate protection, but what comfort is that to a relegated club facing financial ruin because a regulator chose to abolish parachute payments? What protection does it offer less well-established Premier League clubs forced to abandon investment because the regulator selected a proposal that makes relegation catastrophic?
Lord Moynihan
“Review: cost of complianceWithin six months of the day on which this Act is passed, the Secretary of State must lay before Parliament a review of the financial impact on regulated clubs of complying with the provisions in this Act.”
Lord Moynihan (Con)
My Lords, I am very pleased that the noble Lord, Lord Pannick, has just returned. He will be in an exceptionally good mood as his club has just gone 2-1 up with about a minute to spare before half-time. That will put him in a good mood to support my amendment.
Amendment 327 was tabled in the name of the noble Lord, Lord Maude, who is abroad on business and apologises for not being with us this evening. It is a straightforward, simple amendment, which I hope will have support from the noble Baroness, Lady Taylor. She and I have both been concerned about the potential financial impact of the Bill, particularly on clubs in the EFL. Pursuant to her earlier intervention, I am here not on the EFL side or the Premier League side but genuinely to look at the legislation and make sure that good legislation comes out of our deliberations.
One of the areas of particular concern is the cost. This is new; it is the first time it has happened not just in this country but anywhere in Europe for a sport. It is novel, and that word is used quite extensively in the Government’s impact assessment. It is important, therefore, to have an opportunity in Parliament to consider the costs of setting up the regulator and the initial costs of regulation. That is why Amendment 327 proposes:
“Within six months of the day on which this Act is passed, the Secretary of State must lay before Parliament a review of the financial impact on regulated clubs of complying with the provisions in this Act”.
That will give us an opportunity to consider whether it is massively inflated in comparison with the expectations set out in the impact assessment or if there are cost savings. I think the noble Baroness is about to intervene, so I am happy to give way.
Baroness Taylor of Bolton (Lab)
I am about to intervene. The noble Lord is somewhat optimistic in thinking that everything can be revealed within six months. I will make a broader point, which we are not specifically discussing tonight. The role of Parliament in holding regulators to account is where many of these considerations could usefully come in.
Lord Moynihan (Con)
The noble Baroness makes an important point but, in the context of this, I think her first point was even more relevant. Perhaps at a later stage, more than six months would be appropriate; maybe a year would be appropriate. Either way, it is appropriate that Parliament has a look at the costs of implementation, not least because there will be views among parliamentarians about where that burden should fall, and whether it should fall on some of the EFL clubs that might find it difficult to afford those costs of following this legislation. It is interesting that the French regulator who covers professional football confirmed yesterday that he has five staff to do the job that we are looking to cover with this substantial regulation. He also has 18 volunteers from the leagues, including the French FA, who make up their boards and committees to do the work that we have been considering so far in Committee.
The reason for moving this amendment is the concern about the uncertainty of the additional costs to be imposed on all 116 clubs as a result of the financial regulations set out in this Bill. I am not going to go into the details of questioning each and every figure, because that would be inappropriate, but I think it is worth looking at areas of the impact assessment that lead me to worry about the potential increase in costs that this could result in, not least because there is no estimate of litigation costs involved with the regulator, and we have heard that there is quite a lot of potential litigation that could be flowing as a result of the role of the regulator.
Initially, these litigation costs in the Bill will be funded through fines and interest as a first recourse, and that is set out Clause 96; but the further costs to cover litigation would come via the levy—in other words, come via the clubs themselves, and not be a burden on the taxpayer. That could lead to perverse incentives when it comes to the advocacy-first proportionate enforcement model. The legal costs should not be underestimated when you bear in mind that in the last financial year the Premier League had some £40 million-worth of legal costs alone. We should add to that the potential for legal costs associated with what we have been discussing this evening. I hope they do not come to fruition, but it is perfectly possible that they might, with parachute payments and the backstop.
In the context of trying to establish a cost base for clubs and the government regulator, it is really important that we look in detail at the impact assessment. It addresses costs in three buckets: familiarisation costs of £400,000 to £1.2 million, covering the one-off costs to business occurring in the first year of the appraisal period; compliance costs, which potentially go up to £35.8 million over the 10-year appraisal, which are the ongoing costs to business following the first year of the appraisal period; and then the operational costs, which are significantly higher. While these operational costs will initially be funded by the Exchequer before an industry levy is introduced, the costs will subsequently be clawed back from all clubs.
The role of the regulator and the work required by clubs is based on the belief that professional football in this country is in crisis and requires government intervention to sort it out. The legislation addresses what it has set out to be perverse incentives and misaligned owner motivations which have resulted in excessive risk taking in pursuit of sporting success and promotion. Those are quotes and they are meat to any lawyer immediately before this Bill is even on the statute book. Ultimately, the Government argue that this has resulted in market failure, despite the Premier League being the most successful football league in the world and the Championship the sixth-richest in Europe. However, the Government have ignored that and believe, as is clearly set out in the impact assessment, that government intervention is necessary to correct market failure.
There are complete sections on the problems that the Government believe have led to this market failure. Briefly, in 1.2.1 on page 9, the Government believe there is a perverse incentive for clubs to overreach financially. I anticipate that will be challenged. Paragraph 1.2.2 states that inequitable distribution across the English football pyramid has exacerbated poor financial and operational management. Paragraph 1.2.3 states that unsustainable financial management exists, in the view of the Government. Paragraph 1.2.4 covers poor operational management where financial mismanagement has been exacerbated by poor-quality operational management and decision-making at clubs. That is quite a statement to address towards professional football clubs in this country.
Paragraph 1.2.5 states that clubs will need to spend more to
“take into account the interests of fans/communities”,
which currently they do not sufficiently consider. But the impact assessment does not set out how much this is, or make costs, or rectify any of the other broken aspects of professional football that I have outlined this evening. It argues that the existing regulations have “proved ineffective” and it states that the
“free market will not rectify the football industry’s problems”.
In paragraphs 1.3.2 and 1.3.5, it says that
“market failure has large spillover impacts on society”,
which it does not cost.
In paragraph 1.7.5, the FA is blamed, with the Government concluding that,
“given the inaction of the leagues and the FA, the preferred option is to establish a new statutory independent regulator rather than industry self regulation or a light touch intervention”.
That is somewhat at odds with what the Minister was saying, because she argued quite strongly that light-touch regulation was what was sought—but in the impact assessment it is made clear that the Government favours having an independent regulator rather than
“industry self regulation or a light touch intervention”.
If it is not to be light-touch intervention and it is to be heavy intervention, that will incur significant costs, and it is not clear at all what those costs will be.
This is important, because the Government are rejecting in this document light-touch intervention on the French model for comprehensive state-controlled regulation, which will cost all clubs substantial internal costs and legal costs, potentially with the cost of lawyers and outside advisers for sure, to comply with the tasks outlined in the Bill, since all clubs will need to be licensed and meet in detail all the requirements in this lengthy and comprehensive legislation. To believe that this can be done for £40 million a year under preferred option 4 over the coming 10 years is, to be quite honest, fanciful. It ignores the legal costs and the club operating and compliance costs for all 116 clubs, and it ignores potential litigation costs. It beggars belief to believe that the total central estimate for familiarisation to the clubs and leagues associated with option 4 is £800,000, or £7,000 a club on average. The compliance costs outlined in paragraph 211 are estimated at £100,000 per annum for Premier League clubs and £60,000 for all remaining clubs. I do not see for the life of me how that is possible.
However, at least the Government have added the rider that familiarisation compliance costs “may be underestimated” and that
“this is a novel and high profile area”.
It certainly is that. So, the Government suggest,
“clubs may pay more attention and buy in high-end specialist advice”.
But high-end specialist advice does not come for £7,000 a club per annum.
However, all this is predicated on the most important paragraph, paragraph 289, towards the conclusion of the impact assessment, which states:
“The Regulator will be legally prohibited from intervening in football (e.g. spend on players) or commercial (e.g. ticket price) activities, thus limiting the potential risk of deterring investment”.
We have spent dozens of hours looking into the fact that there will be detailed and intrusive activities by the regulator—understandably, to fulfil the legal requirements of this Bill. Far from not being interventionist in football, the regulator will in fact be legally required to intervene in the running of all aspects of the financing of football, including external factors such as season ticket prices and other ticket prices, in its overview of the finances of all clubs. There is nothing on the finances of the clubs in this legislation that is exempt from the consideration of the regulator, if he or she should wish to look at that in the context of fulfilling their functions under the legislation.
What it should say, as I say, is that the regulator is legally required to intervene in the running of all aspects of football—and, if that is the case, there is a whole different scenario for the costs involved for all clubs. I am not talking about just Premier League clubs or EFL clubs—I am talking about all clubs. That is why I would hope that there would be an opportunity to review the costs at six months—or it could be year—because this is the first time this has ever occurred in sport in this country. It is indeed the first time that it has ever occurred in football in the European Union, or indeed in any international body that I know of.
The statement that I have just made underpins the whole cost structure and sits uncomfortably with paragraph 298 of the impact assessment, which provides for the regulator to enter business premises in conjunction with an investigation or an actual or suspected breach of a club’s licence conditions in any form with its powers of search and seizure and the power to require specified persons to attend an interview. Given the likely cost of this intrusive legislation, I believe it is important to write into the Bill a review of the financial impact on regulated clubs of complying with its provisions, so that football fans can regularly review the true costs of government-led regulation. I beg to move.
Lord Addington (LD)
My Lords, to follow up on the point from the noble Baroness, Lady Taylor, will the Minister tell us how the Government seek to enable Parliament, and indeed the Government, to look at how this is working when it comes in? There are provisions and, as the noble Baroness, Lady Taylor, sensibly put it, we are looking more at regulators, basically because of a failure of regulation—it has occurred in many fields. When you have a new regulator, you should review it. What is the process of review that the Government have in mind or going on? I hope that it is not a matter of waiting for failure.
Lord Hayward (Con)
My Lords, before I come on to the question of compliance costs specifically, I return to an answer the Minister gave me in response to a question I asked at the start of the debate this evening. It was on whether the shadow regulator would be present at the meeting with the Chancellor tomorrow. The response that the Minister gave—I hope I have it correct—was that the shadow regulator would not be present because the invitation was to existing regulators. I note that the Minister is nodding to that, so I presume that I have the phraseology broadly correct, and certainly the message correct. To be honest, I find that staggering. We have been told that the shadow regulator body— I was present at the meeting recently with the shadow regulator and his staff—should be up and running so that the regulator can take over a body that is already in full operation. We were told how many staff had already been recruited. We have been told persistently that this is light regulation.
I refer here to the fan-led review by Tracey Crouch. On page 15, paragraph 15 states that there are five important factors that should be pursued, including, in sub-paragraph (d),
“minimising burdens on clubs or an expensive system”.
Surely a shadow regulator that is going to hand over an up-and-running system and is going to operate a light-touch process of regulation should be invited to a meeting with the Chancellor to discuss precisely that issue. I am at a loss, as I think a number of people in this Chamber are, to understand why the shadow regulator has not been invited to that meeting. I am afraid that it indicates to me the attitude of the Government towards the role of the regulator in this process.
I now turn to the question of compliance costs. I do not intend to cover the issues that the noble Lord, Lord Moynihan, has covered so effectively, but I would like to cover a number of other issues. The noble Lord, Lord Moynihan, made reference to the fact that we were talking about all football clubs. The concentration throughout all our days in Committee has been overwhelmingly to do with the Premier League and the Championship. But when one is talking about the sorts of figures that the noble Lord, Lord Moynihan, was referring to—I have pursued persistently the honest assessment of what the actual cost is for a club, whatever it may be—the Minister has said persistently to me and others that the costs would be proportionate.
It is therefore relevant to remind this Committee what the turnovers of the small clubs are. I am quoting from Deloitte’s figures for the season 2022-23, which I understand are the last figures currently available. The average revenue for a club in League One is £9.8 million. The average figure for clubs in League Two is £5.5 million. Therefore, the categories of hoped-for costs identified in the analysis that the noble Lord, Lord Moynihan, gave earlier fall very heavily on a club.
I will cite a few examples. AFC Wimbledon’s revenue is £7.4 million, Crewe Alexandra’s £4.1 million and Northampton Town’s £5.1 million. I have looked for the figures for Stockport County, but I am sorry: I do not have them. I would give them if I could. If there are to be a series of compliance costs on top of all the other costs faced at the moment—not least national insurance contribution charges and the like—that will make a pretty big hole in the revenue of a club with a turnover of £5 million to £7 million.
The Minister has said that the burden would fall proportionately on the biggest clubs. In an earlier contribution, I said that when I was head of the British Beer & Pub Association I had the responsibility of steering the introduction of substantial changes in licensing legislation, which we did with the full agreement of government. The burdens do not fall proportionately on the biggest companies. They can employ a compliance officer or two but, in a small company or a small football club, you do not have a compliance officer so you have to turn to other people for advice. It therefore takes longer and costs more.
It is like anything in life. If you own a large number of flats as opposed to one home, and you take out insurance and are filling out a form, you know only too well that if you have done it once for one flat, it is just the same the next time. If you are dealing with one property, you do not know because you have never been confronted with the issues before and so you have to turn to other people for advice. The burden is not proportionate. There is a massive imbalance between big clubs with huge turnovers and the smaller clubs living completely hand to mouth.
I have quoted once already from the review. The point I want to raise was triggered by the presentation from the shadow regulator. When he was talking about staff, I believe he said that it had just recruited five people for IT systems. We are told, indicatively, that the regulator is likely to employ some 250 people—that is more than 10% of the total of DCMS’s staff, covering all the range of its departmental remit. Are five people needed for an IT system?
Then I actually looked at the review. There was reference earlier this evening to the question of clubs in terms of a few clubs. In fact, the review says:
“Many clubs are poorly run”.
It goes on to say of the regulator:
“The Review has … concluded that the new financial system should involve real time financial monitoring”.
That is what those IT employees are there to do. They are not there to operate the regulator, because you do not need that many for the day-to-day operations of a business of that size. It is about investigating the processes. When they go to a club and ask it to produce the information, it will say no, because it operates on a completely different system.
When I was first involved with boundary changes, we tried to get figures out of local authorities about the number of voters on an electoral roll. Noble Lords might imagine that the returning officers from different authorities would operate on identical systems. No: they were on four different computer systems. It took several years to get the accurate figures. This is precisely what will happen with the small clubs. They will be operating their own systems, when suddenly along will come the regulator to say that it wants the information, but that it wants it in its own computer system, not the clubs’. Sadly, the likes of Stockport County, Rochdale, or wherever it may happen to be, will be told that they must revise their IT system because they have to give the regulator the answers and the computer says no.
The compliance costs fall very heavily on the smaller organisations. They are not proportionate, and we should be honest about that.
Lord Jackson of Peterborough (Con)
I support the amendment that was so ably moved by my noble friend Lord Moynihan and added to by my noble friend Lord Hayward. The amendment is an easy win for the Government, because I cannot understand the rationale for any Administration not seeking to understand the ramifications of their own legislation in terms of the costs of a regulator and other associated costs within six months. Therefore, if the Minister is so minded, she might look more benignly and favourably on this amendment when we come to Report, because it makes sense.
The kernel of this amendment is a fundamental question. It is not a question of whether we trust the Government, because I think, in good faith, that the Minister no doubt truly and sincerely believes that her Administration will preside over a regulator with a light-touch regime. Unfortunately, for those of us who are more cynical, the history of regulators is that they expand. We go back to our old friend that I referenced some weeks ago, Parkinson’s law. It is not named in honour of my absent friend, who is sunning himself in the warmer climes of the West Indies as we labour in the salt mines of the upper House of our bicameral Parliament. No—not Stephen Parkinson, my noble friend Lord Parkinson of Whitley Bay, but Parkinson’s law enunciated in 1955, which is that the number of workers in public administration, bureaucracy and officialdom tends to grow irrespective of the amount of work to be done. That is a very important point.
I commend to noble Lords an excellent report by Policy Exchange, The Rise of the Regulators, which looks at the different philosophical underpinnings and reasons for regulators. It makes the point:
“Once in place, regulations create constituencies that benefit from their continued existence, perhaps because they shield them from competition, or help protect their market position. And those coalitions of interest are better placed and have stronger incentives to act in their own interest than the wider community is to act in theirs and”,
to
“secure an optimal group outcome”.
It notes that, in the 1970s, Professor George Stigler developed the concept that
“regulation is acquired by the industry and is designed and operated primarily for its benefit”.
We know that regulation is costly to British industry. The report says that the Federation of Small Businesses estimates
“the cost of regulation to the SME community in Britain to be £55 billion per year, or £10,080 per business; 88% of its member companies identified some aspect of the regulatory apparatus as a barrier to their operations”.
Furthermore,
“an imbalance of power or an insoluble divergence in interests requires the state to manage the relationship between individuals or groups of individuals by regulating behaviour. But the expanding regulatory bureaucracy is the policy instantiation of a more omnicompetent state—one which plays a larger role in the lives of citizens, and which therefore reduces the scope for freedom and personal initiative”.
Baroness Evans of Bowes Park (Con)
My noble friend makes a good point, and I am sure he has seen the comments by Mark Ives, the general manager of the National League, who said that it is worried that the Bill will be onerous. Some National League clubs work with two or three people and some volunteers. As he rightly says, these are the clubs most worried about the cost of compliance. I know that the Minister has talked about proportionate regulation but, for all of us, and as Mark Ives rightly pointed out, this is a serious concern for those clubs in the National League, the very ones that we want to protect and support.
Lord Jackson of Peterborough (Con)
As usual, my noble friend makes a sensible and accurate point. There is a big difference between a club such as Arsenal, which has several hundred full-time employees, and a club such as Ebbsfleet, which I think has five. The problem is that one will have a gap between pulling down the Premier League clubs by damaging investment and pulling up other leagues, which are going to aspire to the best in terms of professional support but will not have the resources so to do. That is the difficulty that the Bill imposes on those clubs.
It will be a big question as to whether the clubs in the smaller leagues will be able to afford the new compliance, risk and legal officers who will be, of necessity, required to comply with the responsibilities outlined in the Bill. The Minister has repeated time and again that the aim of the Bill is to improve the financial sustainability of football clubs. Yet, the Government’s solution is to slap these clubs with more costs. The shadow regulator should have been invited to the meeting because if the strategic objective of the Government is to drive growth, this is the wrong way of doing it. I am mindful of the time.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
With respect, I draw the noble Lord’s attention to the time.
Lord Jackson of Peterborough (Con)
I know we have had a busy and eventful seven weeks and we are almost there, if the noble Baroness will allow me just to finish. The Employment Rights Bill is coming down the line, which will be an extra cost to businesses of perhaps up to £5 billion a year. These are all issues that the Government have not taken into account. It is absolutely right and proper for us to make the reasonable request for the Government to look at the impact in the real world of these compliance costs, and I hope that the Minister is able to come forward with better news when we get to Report.
Lord Pannick (CB)
My Lords, the noble Lord, Lord Moynihan, and other noble Lords have made a powerful presentation of concern, which I understand, about the financial costs of regulation. It is a short point. It really is. The question is whether the amendment is a sensible way in which to address this matter. I suggest that if there is to be a review of the financial impact on regulated clubs of complying with the provisions of the Act, the best people to conduct that review are the clubs themselves and the leagues to which they belong. They can collate the material, assess the costs and provide a report to the Government, which they can publish. Everybody will be able to debate it. It is all transparent. There is absolutely no need, so far as I can see, to have a specific provision in the Bill that addresses this matter.
Baroness Fox of Buckley (Non-Afl)
My Lords, there stands a contribution that does not know how tedious, time-consuming and expensive it is to write reports. Now we are putting on the same people, whom we have just said are going to be drowning in bureaucracy, another report for which they have to compile all the information and write. That was my view.
Although that is a simple point, it should be in the Bill because it is an underestimated threat of the Bill. I have no doubt that the Minister and the Government do not intend—
Lord Bassam of Brighton (Lab)
I made this point at an earlier part of our considerations. Put simply, all these clubs are limited companies and are regulated effectively through an audit process, so all of the financial information that will be required will be accumulated as a process and a product of their annual audit. I do not see that as excessive.
Baroness Fox of Buckley (Non-Afl)
I will carry on and make my point and we will see whether we can agree. I am concerned about it being excessive, but if it is not, this proposed new clause will prove the noble Lord right and me wrong, and that would be fine.
I wanted to start with the way that fans have really gone along with the Bill because they see it as something that will save smaller clubs and keep them from going under. Everybody knows about Bury and other clubs such as Chester City, Hereford United and Halifax Town. One of the most compelling things about the need for the regulator and the Bill is this notion that we will be able to save unsustainable, smaller clubs from going under. That is what gives it its moral force. People can rail against the big bad Premier League in some ways, and I understand that the Premier League, with its fans in the Chamber, is all we have talked about. I am glad that in this amendment we have started to talk about those smaller, poorer clubs, because I am worried that they will suffer as a consequence of the Bill. The noble Lord, Lord Hayward, explained that very well, and I just want to just tease that out a little more.
It is not just about operational costs in terms of compliance in a direct financial way. It is also the amount of energy and time that is going to be taken to comply by these very poorly staffed clubs, which have, say, two full-time members of staff plus volunteers. We know that time is money. I remind your Lordships of the speeches that we heard earlier on in Committee. The noble Lord, Lord Moynihan, made an excellent one about what it takes to write a corporate governance plan. I try to illustrate what it means to comply with equality, diversity and inclusion policies—forget any ideological disagreement on that. It costs time and money. By the way, to fulfil the EDI plans, you have to send all your staff on training. For example, the Civil Service at the moment spends 1 million days of Civil Service time on its civil servants going on EDI training. That is an indirect cost. The paperwork needed to keep this regulator happy—by the way, under the terrifying threat that you could lose your licence if there is non-compliance—really needs to be taken into consideration. It is not just money; it saps creativity and life out of the club, which in a way is a slightly different cost.
Recently, David Riley, who has moved from his role as legal director at the Competition and Markets Authority to become head of legal at the IFR, posted the following, rather boastfully, on LinkedIn:
“The first job is to recruit a team of lawyers to work within the shadow regulator as the legislation progresses. These lawyers will play a central role in shaping the IFR legal function, and working with others to help the IFR prepare to deliver on its statutory objectives”.
I read that out to a group of football fans, who said, “Oh my God, that sounds terrifying! Imagine if you’re running a small football club”. If you are a smaller, cash-strapped club hearing this, it is immediately about lawyers policing your work. You have no in-house experience to cope, so you think you had better bring in experts, consultants and third-party bodies. Again, that can lead to eye-watering costs, let alone your independence being undermined. I am concerned about that.
I will quickly take a step back, because sometimes we can get trapped in the specifics of football and all the passions and emotions associated with the game. I remind the Committee that one reason why so many of us are worried about this Bill is because of examples of other regulators created by legislation leading to damaging unintended consequences.
In terms of proportionality, a few weeks ago the tech journalist and academic John Naughton wrote an article in the Guardian bemoaning the terrible toll that the Online Safety Act and its heavy-handed regulator Ofcom were having on smaller, community-driven online forums, even though the Act’s stated aim was to target big tech and harms. I never really agreed with the censorious assault on big tech anyway but, as I argued with the noble Lord, Lord Parkinson, when he was on the other side and taking the Bill through the House—just to show that I am not sectarian—there is always a danger that compliance costs associated with any regulator, in that instance with the Online Safety Act, will make it untenable for smaller platforms to bear the brunt of the law. As John Naughton explains, that is what is happening as we speak, leading to the potential closure of forums with benign purposes—his examples were those discussing cycling and cancer care.
Lord Birt (CB)
My Lords, I started the evening feeling extremely cheerful, but I do not feel as cheerful now as I did earlier. As so often in the past, the analysis by the noble Lord, Lord Moynihan, was very pungent.
Unlike many who have spoken, I am a strong believer in regulation. I do not think that there is anybody else in this Chamber who spent many decades, the whole of their career, in the way I did. We are talking about how successful British football is. I worked in another world-beating part of Britain, its broadcasting system, plainly over many decades simply the best in the world and a regulatory achievement of all Governments over the best part of a century. So I am a very strong believer in regulation. My doubt is whether the scale of regulation that is imposed in this Bill is remotely appropriate. I worked in a world of highly effective but light-touch regulation and I am sorry to say that this whole dialogue illuminates the fact that we are in danger of creating a system which is overcomplex and bureaucratic and will stifle a highly energetic and brilliantly successful part of the British economy.
We need something that is highly effective but much more light-touch than this sounds at the moment. Yes, cost is important, and all those who emphasise the impact on small clubs are quite right to do so, but beyond cost is the impact that over-stifling regulation could have on the system as a whole. We have debated real issues this evening. We debated the quantum of flow down the leagues. The noble Baroness, Lady Brady, made an impassioned and very compelling speech about parachute payments. The noble Lord, Lord Bassam, rightly emphasises solidarity. These are testing issues that need resolution. Of course, the quality of governance is much easier. It is about the world of compliance and financial prudence, which is a very important part of the Bill and can be done with a relatively light touch.
We have to get it down to something simpler and more effective. I come back to what I said earlier: the “state of the game” report should be analytically powerful and help to balance. I used the word “balance” earlier and balance is the right approach here on all these complex trade-offs. The last thing we need is binary: we do not need two proposals on the table and you choose one rather than the other on the toss of a coin. That is the quite wrong way to resolve the kinds of issues that have come up during the course of the evening. It is about getting the right people in the room, with the right kind of support, bound to come up with a solution.
So the Government need to think a bit harder about proportionate regulation. I say that not as somebody who is opposed to regulation but as somebody who strongly believes in it and has benefited from it through the whole of his career.
Lord Pannick (CB)
The noble Lord makes a thoughtful and instructive speech. Is he saying from his BBC and other broadcasting experience that light-touch regulation can be achieved by legislative provisions, or is it a matter of attitude? What is it?
Lord Birt (CB)
It is a matter of creating the right institutions. In the golden days of ITV and Channel 4, it was the IBA—a relatively small but highly effective organisation. The noble Lord does not want a long speech from me about what it achieved as an organisation, but it was extraordinary. Obviously, the BBC has had 100 years as the most successful broadcaster in the whole world. The light-touch governance through BBC governors was powerful and impactful and it worked.
I am not suggesting that you just import those models, but we need something that is not stifling and bureaucratic, in a dynamic environment where people can get round the table and sort out these issues.
Baroness Taylor of Bolton (Lab)
My Lords, I just want to pick up on some of the points made. It is right that we need a proportionate system and we have to be careful in what we do. But we cannot afford to be complacent about the state of British football today. Yes, the Premier League is doing very well at the moment, but we have to acknowledge the difficulties of many other clubs and the serious need for some change in the way in which many football clubs are run.
A report published on Monday this week from Professor Nick Lord and lecturer Peter Duncan in the department of criminology at the University of Manchester shows some of the dangers that Premier League clubs could face if we do not get the right financial structure, and how certain clubs could be, because of the complexity of their ownership, vulnerable to their funds being used for illicit purposes. I mention that because we do need regulation and we cannot be complacent and pretend that all is well even in the Premier League.
Lord Markham (Con)
I rise to speak to Amendment 329 in my name and that of my noble friend Lord Parkinson. I will speak very briefly, because Amendment 327, on costs, was spoken to extensively.
I think we all accept the need for a regulator. The points about broadcasting made by the noble Lord, Lord Birt, were points I am very familiar with as a former director of ITV and were very well made. On proportionality, we have talked a lot about Premier League clubs, but I would argue that when you have National League clubs who have two, three or four members of staff and an impact assessment that says they will need one member of staff for compliance on this, that tells me that we have the balance wrong. We are saying that a third of their staff need to be in compliance.
I would like to answer the point made by the noble Lord, Lord Bassam, who said that clubs should already have all this information because they are doing an audit. An audit is backward-looking over the year that has happened. What the regulator is asking clubs to do here is to write a three-year business plan, which is forward-looking.
Lord Bassam of Brighton (Lab)
The regulator is also encouraging clubs to put things right and offer remedies in their reports that have to be fair and proportionate.
Lord Markham (Con)
I can bore on this issue, as a former FTSE chief financial officer. An audit is backward-looking, and you have to have a going concern statement, which is the forward 12 months. It is nothing like the business plan requirements that the regulator is asking clubs to provide for three years going forward. There is no doubt that that will require clubs to employ consultants, accountants—you name it—so it will be a significant burden on them, and this is exactly the point we should be considering. When you think about it, if you are talking about one member of staff per national—
Baroness Taylor of Bolton (Lab)
The noble Lord is almost suggesting that clubs of whatever size should not have a business plan. One of the things we want to encourage and develop is sustainability. There has been complacency among many clubs at different levels, such that they have not made proper forward-looking plans. I do not think it is a burden on them to do so at the appropriate level and proportionately, as we were saying earlier, but it would help the sustainability of all football clubs if they were to look forward in that way.
Lord Markham (Con)
Speaking as a fully signed-up member of the anorak club, I completely understand the point about business plans, which I have always done in businesses I am involved in. I am talking about the reality of football clubs. There is no way I am going to argue that having a business plan is not sensible, but at the same time, suddenly putting business plan requirements on a club with a turnover of a couple of million and two or three members of staff is an expensive exercise. That is the context in which I am making this point, and it is why I think Amendment 327 is sensible. It would make sure that everything is set out, so that we go into this with our eyes fully open to the burdens and what we are expecting clubs to do.
Lord Jackson of Peterborough (Con)
My noble friend is making a powerful case. Will there not be a displacement activity element to this, in that all the money and resources you are deploying on compliance you are not, for instance, concentrating on women’s and girls’ football or new football academies and other outreach programmes? Because you have this heavy-handed encumbrance of compliance, you are not going to be able to deliver the initiatives in grass-roots football that you would otherwise deliver, particularly in the lower leagues.
Lord Markham (Con)
Obviously it would be for clubs to decide where they will resource that from, but it will come out of the resources they have. If it is one person for National League clubs—the impact assessment assumes that it will be five people for Premier League clubs—and you put that all together, you are talking about a staff of at least 500 involved in all these compliance activities. It was also said that the regulator will have some 250 members of staff. So, you will have 700 to 800 people working in the compliance domain, and that has to come out of the pot that is football today. That is a very relevant issue. I agree on the needs of the regulator, and I agree that business plans are always a good thing, but there is a certain proportionality here that we need to be mindful of.
I am mindful of the time, so I will move on to Amendment 329, in my name and that of my noble friend Lord Parkinson. It is consequential to an earlier amendment we tabled, Amendment 19, which sought to put the leagues under scope in the Bill. This amendment would simply ensure that the regulations that may be made by the Secretary of State to amend the competitions under scope would be subject to the affirmative procedure.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Moynihan, for opening the debate on this group and moving the amendment in the name of the noble Lord, Lord Maude of Horsham; and the noble Lord, Lord Markham, for speaking to the amendment in the name of the noble Lord, Lord Parkinson of Whitley Bay, which he signed. I have to say that, at points during the debate, I wished that I was in the Caribbean, but I will endeavour to respond.
The Government recognise the intent behind Amendment 327, in the name of the noble Lord, Lord Maude. I thank the noble Lord, Lord Pannick, for cutting to the chase on what has been a longer debate on two amendments than I anticipated. They raise reasonable concerns that need to be addressed, but we have debated these concerns at some length previously. However, the exchange on what light-touch regulation might mean was useful.
It is vital that the regulator be transparent about the burden that its regulatory activities may have on clubs, so that it can be held accountable. From the start, we have been very clear that we wish to establish a regulator for football that will take a proportionate approach across all its regulatory activities. My noble friend Lady Taylor spoke about proportionate regulation. I thank her for highlighting the research that she shared with me earlier this week. She made many points better than I could.
We do not wish to bring into being a regulator that will impose unnecessary, onerous and burdensome requirements on clubs, and neither did the previous Government. That is in no one’s interest. Noble Lords have spoken of concerns about smaller clubs in particular. I am concerned that this debate may lead to some of those clubs being unduly alarmed. If clubs have raised concerns with noble Lords, please encourage them to contact the department, where we are very happy to discuss in more detail any concerns that they may have.
The noble Lord, Lord Addington, asked how the Government see scrutiny playing out in practice. We already expect that the impact of the regulator on the market, including on regulated clubs and the leagues, will be reviewed in the regulator’s “state of the game” report and its annual report. The Secretary of State and Parliament will be able to scrutinise these reports. This ongoing accountability is more appropriate than a one-time review by the Secretary of State, six months after the Act is passed, not least because, as was highlighted during the debate, six months would be an unfairly short window in which to appraise the impacts of a brand new, novel regulatory regime.
The noble Lord, Lord Moynihan, made a number of points and cited the impact assessment. The costs in the impact assessment have been estimated using evidence gathered through industry engagement and from existing regulators, ONS datasets and other sources of information. The impact assessment has been prepared in the same way as all government assessments, in line with principles in the Green Book. It received a green rating from the Regulatory Policy Committee.
Ultimately, the costs in the impact assessment are indicative. It will be for the regulator to finalise its operating budget, which will be subject to scrutiny from Parliament and government to ensure it represents value for money. The estimated costs have been informed by approaches taken by similar regulators and reflect the complexity of the activities required to oversee a new legislative and regulatory regime.
The noble Lord, Lord Hayward, cited a headcount of 250 staff for the regulator, which is not one that we recognise. Indeed, it is well above the level that we would expect. I will have to pick that up with the noble Lord afterwards to establish how that figure was arrived at.
Lord Hayward (Con)
It was the indicative figure given by the previous Secretary of State under our Government.
Baroness Twycross (Lab)
That is a helpful clarification. The figure remains one that I do not recognise. I will go away and cross-reference with officials why I have now been told that it is not one that we recognise and is above the level we expect. I know I have committed to come back to noble Lords with a number of costs, and we can clarify that at the same point before Report.
I understand that Amendment 329 in the name of the noble Lord, Lord Parkinson, is a natural consequence of the noble Lord’s Amendment 19 in relation to the specified competitions, and it certainly would have made more sense to debate it then. Nevertheless, as we discussed at length previously, we understand the desire to have upfront clarity in the Bill as to which competitions will initially be in scope of the regulator’s regime.
However, as I explained during our previous debates on this issue, the Government believe the approach taken to defining the scope of the regime in the Bill is the right one. It delivers the effect intended, closing any loopholes that would allow avoidance of the regime, while also allowing for agility to respond to any potential changes in the structure of the football pyramid.
On the merits of Amendment 329, we completely agree that the Secretary of State’s power to define the competitions in scope and to amend this scope in the future should be subject to the affirmative parliamentary procedure. This will ensure that Parliament can scrutinise this important decision properly. That is why the Bill as currently drafted achieves this already in Clause 91(3)(a)(i). However, as we cannot accept the noble Lord’s Amendment 19, which was withdrawn, we cannot accept this consequential Amendment 329 either.
For the reasons I have set out, I hope the noble Lords will not press the amendments.
Lord Moynihan (Con)
I am very grateful to noble Lords who have participated in this debate. I think it has been one of the best debates we have had in Committee. I particularly highlight the contribution made by the noble Lord, Lord Birt, which is very relevant to the amendment. There is a huge difference in costs between light-touch regulation that is effective and appropriate and what he has identified in the 125 pages of this overcomplex and bureaucratic legislation —let alone the secondary legislation that will flow from it. If it becomes overcomplex and bureaucratic, it becomes expensive.
To get that balance right, which was an important point made by the noble Baroness, Lady Taylor, we need regulation. But football is regulated. The FA is the core regulator of both professional and amateur football in England. It has been absolutely absent from this debate. It has said nothing, to the detriment of its reputation as the national governing body of football in England. It is very sad that it has had nothing to say and no opinion. It is there to protect the autonomy of football and really should have come to the table and provided us with its thoughts. Indeed, I know that some noble Lords have written to the FA to ask it for a briefing on the Bill, and the FA’s response has been that it does not have a view on the Bill. We have no briefing. That is exceptionally sad.
Lord Pannick (CB)
Does that not tell the Committee something about the lamentable quality of regulation that the FA currently provides?
Lord Moynihan (Con)
Without a shadow of a doubt. My criticism is of the FA and its inability to be the core regulator for a professional sport. Indeed, in an earlier intervention this evening, the noble Lord, Lord Pannick, alluded to the fact that we need this Bill because we need a regulator to oversee solutions that would occur. I would have intervened on him, if I had not been eagerly awaiting the ministerial response, to point out that the FA should have been first and foremost in that role. It is sad and regrettable that it has not been.
I will briefly touch on other points that have been made. Of course, for the senior clubs in the Premier League this will be a burden, but less of a burden proportionate to the clubs that the noble Lord, Lord Bassam, and I are worried about in terms of cost. UEFA compliance is onerous, for example, and much of the compliance that UEFA imposes on clubs will need to be replicated. Clubs will need to look at it carefully to see whether there is overlap. My principal concern has been one shared with the noble Lord, Lord Bassam, at an earlier stage in this Committee: how much is this going to cost?
The amendment purely looks to try to resolve that question. There is an argument that it would not need to come before Parliament but can simply be published by the regulator, drawing on information from clubs. Indeed, the regulator will have to do that, but given the huge scope in potential cost that ranges from light-touch regulation to invasive regulation, along with the length of the Bill and the associated costs, it is appropriate that Parliament reviews that. Whether that is after six months or longer—as the noble Baroness, Lady Taylor, said—either way it is important. It is a one-off opportunity. After that, we will have the regulator reporting and the relevant reports coming towards Parliament.
The Minister, who has worked exceptionally hard and could not have been more helpful to Members of the Committee at all stages, said, having been handed a note from her Box—that has not been too frequent, which is to her credit as throughout this Committee she has relied very little on the Box for additional information—that the impact assessment has been based on similar regulators. There is no similar regulator in the world of sport, let alone the world of football. It is simply not possible to do that. The impact assessment is the reason I am so worried about the costs. It says:
“The proposed intervention is a bespoke, sophisticated and evidenced-based regulatory framework”.
The noble Lord, Lord Pannick, will recognise that phrase. That is exactly the quality of advocacy I would expect from him on any occasion—bespoke, sophisticated and evidence-based—but I might suggest that it does not come particularly lightly on the purse.
As a result, the costs associated with having that regulatory regime might be very considerable, especially when the very same paragraph states that the regulator, in the view of the Government,
“will be legally prohibited from intervening in football … or commercial … activities, thus limiting the potential risk of deterring investment”.
That is exactly the opposite of what the Bill sets out to achieve. Therefore, if these figures are based on that statement, they are erroneous and illusionary. They are fanciful pipe dreams. We really need an opportunity, therefore, to review the costs of regulation for all clubs six months after the Bill has been enacted. It would be very helpful to Parliament to see what those costs are at that stage and to reflect on them. For the time being, at least, I beg leave to withdraw.
Baroness Twycross
Member’s explanatory statement
This amendment corrects an erroneous cross-reference.
Lord Markham
Lord Markham (Con)
My Lords, I rise to move Amendment 336 and speak to my further amendments in this group. Those amendments are all taken together: indeed, Amendments 336, 338 and 339 are consequential to Amendment 337. Amendment 337 seeks that the Secretary of State must consult UEFA on the provisions and impacts of the Bill and confirm to Parliament that they have done so.
We will all recall that the issue of UEFA’s views on this Bill has cropped up on many occasions throughout Committee. That is not because we are chasing false leads but because there are very serious concerns, raised most notably by my noble friend Lady Brady, about whether UEFA is content with the Bill as it stands. The ramifications of its discontent, notably the disqualification of English teams and clubs from European competitions such as the Euros, are severe. I am sure that the Minister, or indeed the Prime Minister, would not want that on their conscience.
Of course, we do not fully know whether UEFA is discontented or in fact perfectly happy, because the Government still have not published the letter from UEFA to the Secretary of State. Indeed, the Minister has still not responded to the letter sent to her by my noble friend Lady Brady on this issue. While aspects of UEFA’s letter have been seen by news outlets—Sky and the Times have reported on some of its contents—the full views of UEFA have still not been made public. The only sources that noble Lords, and indeed the public, have been able to see to understand UEFA’s opinions are those we have seen in the news stories. This is highly concerning. From those news outlets, we know that the Minister’s comments that UEFA is happy with the Bill do not show the whole picture. Sky news reported in September last year that the letter from UEFA to the Secretary of State said there should be
“no government interference in the running of football”.
As I said earlier, it is disappointing that I am only able to quote that one line, which I found in the Sky news report.
What this demonstrates is that UEFA appears to still have concerns with this version of the Bill. The Government have indicated that their removal of the foreign and trade policy provisions has placated UEFA and that UEFA has no concerns at all about the financial regulations included in the Bill. I would like to be reassured that this is the case, but, alas, I have not heard anything that indicates this. That is why our Amendment 337 is so important. It would explicitly require the Secretary of State to consult UEFA on the provisions of the Bill and confirm that it does not have concerns before the Bill can come into effect. This will have to be confirmed to Parliament so that we are fully satisfied that there is no risk of our clubs being disqualified from the Euros or the Champions League.
Lord Pannick (CB)
I support the noble Lord, Lord Markham, on this. I find it quite extraordinary that the governing body of European football has written a letter to the Government relating to this legislation and yet we are not able as a Committee to see it and form a view. It is not my understanding that UEFA has specifically asked that the letter remain confidential. Indeed, it would be a very surprising attitude for the governing body of European football to take. We have discussed this on a previous Committee day, but I did not think we received a very satisfactory response. Could the Minister tell us whether UEFA has asked for its letter to remain confidential and, if not, why we cannot see it?
Lord Watson of Invergowrie (Lab)
My Lords, with all due respect to the noble Lords, Lord Pannick and Lord Markham, is it not rather disingenuous to suggest that UEFA might have some concerns with this legislation but is not willing to make them public? UEFA is not known for being shy and slow in coming forward when it is concerned about any aspect of football in any of its member countries, so I think we can be fairly certain that, if it had serious concerns—or indeed, any concerns—it would have made them public and we would know about them.
Lord Addington (LD)
My Lords, I find myself agreeing with both the noble Lords, Lord Watson and Lord Pannick. It would be good if we could know what has been said and, if there is no big objection, we could move on. It was suggested that we had to comply with UEFA’s rulings in our own law. That is patently absurd. But, if there is no problem, let us know about it. We have not been told that English clubs will be banned if this goes ahead, so presumably it is not that big a deal. Surely, finding out about it now would be sensible.
Lord Jackson of Peterborough (Con)
My Lords, I support the noble Lord, Lord Markham, and express my concern about the non-appearance of this letter. We have been debating whether there is a letter or what the letter says. We have been speculating on what it might or might not say for several weeks and several sessions of this Committee.
I have carefully read the Written Answer that the noble Baroness gave my noble friend Lord Moynihan on 8 January. She does not, interestingly, pray in aid any Cabinet Office guidance or recommendations on the release of so-called private correspondence that forms a part of government policy formation. She just says that
“it would not be appropriate to publish private correspondence with any stakeholders in the Library of the House”.
If it were an individual divulging personal information in the course of their letter to a Minister or a government department, that would be a separate issue. Noble Lords will be aware that, for instance, freedom of information is quite circumscribed as to what can be released in terms of impinging on someone’s privacy, or if it would interfere with an ongoing judicial case. This is not the case. This is not a private letter; this is a letter from a corporate representative body. It may not be a government body or a non-departmental agency in the UK, but it is a representative body of some standing with a rulebook which governs the practice of football in our country.
On that basis, at the very least it is incumbent on the Government to produce that letter. If we have overegged the pudding and, in respect of the backstop, UEFA has no qualms or serious misgivings about this legislation as a whole, and particularly the backstop, I for one am happy to be disabused of my cynicism. In the meantime, we, the media, noble Lords and others in the other place when this goes there will be suspicious unless that letter is produced.
So I respectfully implore the Minister to think again and place that letter in the Library of both Houses so that we can inform a proper debate on specific issues that are germane to this Bill: in other words, the attitude of an important and prestigious organisation such as UEFA.
Lord Moynihan (Con)
My Lords, an exceptionally important point was made about UEFA not being shy in coming forward. Indeed, we know that, as a result of UEFA representations, the Bill in its original form was changed. If it had such an influence, it is not unreasonable to ask to see a copy of the letter, which is clearly far beyond private correspondence. It is of public interest.
I return to the question that I put on 19 December, when I asked whether it was the Government’s intention
“to seek assurances from UEFA that the introduction of backstop powers to the proposed Football Regulator does not impact on the autonomy and independence of football’s governance as required by UEFA.”
The response was interesting:
“As set out during the House of Lords Committee Stage debate on 18 December, UEFA raised no concerns about the backstop in its most recent meetings with DCMS and the Minister for Sport”.
It does not refer to the letter. Therefore, can the Minister kindly confirm to the Committee this evening that there was no reference to the backstop in the UEFA correspondence? This was of such significance that, in its first introduction into the Committee proceedings, the Minister’s response to the Committee was that publishing the debate around the letter would worry the facts. That was the position. It was not the letter: it was the debate we were having around the letter.
I have just one very simple question, and then I will be much relieved if the answer is as I assume it will be, in the light of the answer given by the noble Baroness, Lady Twycross: that
“UEFA raised no concerns about the backstop in its most recent meetings with DCMS and the Minister of Sport.”
Can the Minister confirm that it did not raise the backstop in the correspondence it had with the DCMS, or raise any concerns referring to the backstop?
Baroness Blake of Leeds (Lab)
My Lords, I will start by responding to the amendments put down in the name of the noble Lord, Lord Markham, in this group, and I would like to thank him accordingly. We have not spent a great deal of time talking about some of the implications of the amendments, so I would just like to draw attention to those. The reason we will not be supporting Amendment 336 and the others in this group is that the changes put forward would severely hinder the setting up of the regulator and its ability to achieve its objectives as soon as possible after Royal Assent.
I emphasise again that my noble friend the Minister has stated that the Government have worked closely with and consulted with UEFA, FIFA and the FA throughout the development of this Bill and will continue to work with them as it progresses through Parliament, as indeed will the regulator once it is legally established, including through the FA’s observer role on the regulator’s board. This will ensure that no powers or potential actions taken by the regulator would be in breach of its own rules.
All I can say tonight is that we have debated this issue extensively on a number of occasions, and as my noble friend the Minister has set out previously, we are working with the relevant authorities to give noble Lords the reassurance they seek on the specific concerns regarding UEFA and FIFA statutes, ahead of Report. My response to the repeated requests about the letter has to be, again, that it is private correspondence and the Government do not share private correspondence with international organisations.
Lord Pannick (CB)
The noble Baroness asserts that it is private. Have the Government asked UEFA whether it has any objection to sharing this letter with the rest of us?
Baroness Blake of Leeds (Lab)
I cannot respond to that point, so apologies for that.
Lord Pannick (CB)
Will the Minister write to me and put the letter in the Library?
Baroness Blake of Leeds (Lab)
I shall certainly take away the noble Lord’s comments, and I repeat the response that I have had from the department in terms of the letter we have received.
Lord Moynihan (Con)
I am very grateful to the noble Baroness, Lady Blake. She knows that I admire her greatly, not least as a fellow Leeds supporter. The question is very simple. Would the Government be prepared to write to UEFA to ask its permission for the letter to be published?
Baroness Blake of Leeds (Lab)
All I can say, again, is that I shall certainly take that point back. I will not answer that point at the Dispatch Box tonight, but the views have been made very clearly by Members in the Chamber.
I shall move on to the other amendments. If the Secretary of State does not have the flexibility required to determine what the regulator’s powers are when they are commenced, this could lead to delays, confusion and inefficiency through the process of set-up.
The noble Lord, Lord Markham, has referred quite a few times to unintended consequences, which is something the amendments in his name could well lead to. As we all know, the commencement of legislation is a crucial and in many ways delicate process, and it will require careful co-ordination between the department and the regulator to ensure that the provisions are switched on at all times. With those changes, the regulator would likely not be able to make any progress at all with the set-up. Similarly, the delays that this change would cause would be likely to have an impact on areas such as the “state of the game” report, a necessary and vital report that the regulator will need to carry out as soon as possible.
Furthermore, we would have all the regulator’s staff on taxpayers’ money at this point, given that the levy would not yet be up and running, so they would be unable to work. That would mean that a longer period would have to be funded by the taxpayer, until it was recouped. I am sure that the noble Lord agrees that that would not be good use of money. For the reasons I have laid out, I am unable to accept the noble Lord’s amendments, and I hope that he can withdraw his lead amendment.
Lord Markham (Con)
I thank noble Lords for their contributions, and I thank the Minister. I think there was a shared view, bar the Minister, that there is an opportunity here to clear this up. It has been going on all the way through, and I must admit that, the more ducking and diving, obfuscation and avoidance there is, the more suspicious I become. We have a new reason today: for the first time, we are told that it is going to hamper the speed of setting up the regulator. The last time I looked, having a meeting with someone takes half a day or a day. It is going to cost a lot more to set it up. I am afraid that that just does not add up. Why do we not ask now? We do not need to wait until Royal Assent—why do we not show them what we are going to go through on Report? The Bill has not even gone through the Commons yet, so we could do this in parallel and it would not need to delay anything. I am sorry, but that does not really wash as a reason. That brings me back to the point that the only reason not to come clean about it all is that there is something they are trying to hide.
The other new reason is that the letter is private. The question rightly asked by the noble Lord, Lord Pannick, is whether we have asked UEFA whether it is private and whether it is willing to provide that letter. I feel sorry for the noble Baroness at this point, because maybe it was felt that this was one of the quieter parts of the Bill to take over from her fellow Minister. That was a bit of a hospital pass. But they do not even want to say whether they are willing to ask UEFA whether the letter is private. It is very clear: we can find out by asking whether UEFA does not want it to be published—that is a very quick question—or are the Government trying to stop it being published?
Lord Moynihan (Con)
I just make the point that the only reason we are pushing this so strongly is that if the regulation set by UEFA for European league and other competitions is at odds with what we are considering in this Committee with regard to the regulation that we are looking to put on the statute book, we will have a very real problem. We have the potential for English clubs not being able to participate in European competitions. That is why this is so important.
Lord Goddard of Stockport (LD)
Just to reply to that, let us be straight: is the noble Lord seriously alleging that the Government are holding back information that could exclude English football clubs from playing in Europe and the World Cup?
Lord Markham (Con)
I just think that this is very easy; it could be cleared up a minute. If there is nothing to hide and no concerns, just release the letter. Then we can say, “That’s fine; there are no concerns. Fantastic”. No one will be happier than all of us. What has been clear through all the Committee days is that we are all here, up to whatever hour at night, because we care about football. We are all football fans here; we have all declared our interests and our various season tickets because we care about football. That is why we are going on about this.
Lord Pannick (CB)
I just make it clear that I am not making any conspiracy allegations of any sort; I am simply and purely concerned, as I would be in other contexts, about basic transparency. There is a letter from a very important regulatory body in Europe and we are not allowed to see it. It is obviously relevant to the Bill that we, as the upper House, are discussing. Transparency demands, in my respectful submission, that we be allowed to see it—unless UEFA will not allow that.
Lord Markham (Con)
I thank the noble Lord. I think that the points are clear. We are clearly not going to get the resolution now. I think it will carry on as a running sore until the Government, I hope, put all our minds at rest. All the time that they do not, and all the time that they obfuscate, we will continue to be concerned because we know that, if UEFA is not happy, the consequences are, as my noble friend pointed out, pretty dire in terms of our clubs’ involvement in European competitions. I will withdraw my amendment at this stage, but I am sure that this will come back over and again.
Lord Markham
“(2A) The Secretary of State may only make regulations for Part 3 to come into effect at the end of a relevant football season.”Member’s explanatory statement
This amendment ensures the operating licensing regime does not come into effect during a football season.
Lord Markham (Con)
My Lords, I hope that this will be very simple and quick. All we are trying to do here is prevent the possibility of mid-season disruptions brought about by the implementation of the licensing regime. Clause 99 states that Part 3 will come into force on a day that the Secretary of State may by regulations appoint. The licensing regime therefore could be implemented at any date; there is no specification of when this should come into force. We want to ensure that, when the licensing regime is implemented, there should be as little disruption as possible.
The intention of this amendment, therefore, is to ensure that the Secretary of State cannot apply the licensing regime in the middle of a season. My concern is that the licensing requirements in Part 3 could be quite extensive. The information that clubs will have to provide to the regulator to obtain their licence is not only vast but, at this stage, quite unknown. Of course, the regulator will start to work on publishing its rules and requirements for the licensing regime, although we do not know when because the Bill does not include a timeline for the regulator to do so. However, I would hazard a guess that clubs will have to compile a large volume of information and documentation.
We know the requirements that are in the Bill at this stage. Clubs will have to submit a financial plan, a corporate governance statement, an annual declaration, and a personnel statement. They will have to ensure that they have the appropriate financial and non-financial resources, and meet the fan engagement threshold. If a club cannot comply with these requirements and therefore cannot obtain a licence—I am thinking of the smallest clubs in the National League, with just a few employees—then that club would have to cease operating teams in specific competitions.
If the regulations to implement the licences came in the middle of a season then a club could find itself in the position of having to drop out of the league half way through. The disruption that this could cause would obviously be enormous—not to mention the financial ramifications of such an event. By stating that the Secretary of State may implement operating licences only at the end of a football season, the potential for the disruption I have outlined would be significantly reduced. This safeguard is therefore required to ensure that the licensing regime, when it comes into force, causes less disruption than could otherwise be the case.
Lord Watson of Invergowrie (Lab)
The noble Lord may be surprised and not too pleased to hear that I support this amendment. It makes sense not to have in-season changes. This message needs to be got through to some Premier League clubs, including West Ham—I invite the noble Baroness, Lady Brady, to reply. Some clubs change their ticketing arrangements in the middle of a season, shutting out some fans—particularly children and seniors—from getting cut-priced tickets. This is apparently in pursuit of greater income. Manchester United are the main culprits. I understand that a group of fans from various clubs has come together to protest at these changes. It is wrong for this to happen in season, which is why it would be sensible for the Bill to incorporate an amendment similar to the one that the noble Lord, Lord Markham, has just moved.
Lord Addington (LD)
My Lords, I basically agree. There is a break at the end of the season. Most organised team sports change their rules and regulations in that break if they are going to do so. It might not need to be in the Bill, but it might be a Pepper v Hart type case; I say that timorously in view of the company I am keeping. If the Government can give us some indication that they will make major changes in the off-season, when players are exhausted and structural changes can be made—that is basically what it is for—then I would be happy because it is quite a sensible principle.
Baroness Blake of Leeds (Lab)
My Lords, I thank the noble Lord, Lord Markham, for tabling the amendment and other noble Lords for their comments. I will go through the reasons why we will not support the amendment. We understand that its intention is to avoid any burdens or disruptions for clubs that might be associated with mid-season licensing. This includes the risk, albeit remote, that licenses are refused mid-season.
However, the amendment would mean that the entirety of Part 3 could not be commenced until the off-season. For example, it could affect the ability of clubs to prepare and submit their applications early. If the regulator became operational mid-season, it could mean waiting for as long as eight or nine months before it could even begin to license clubs. We do not think this is right. Clubs should be able to prepare and, if they so wish, submit their applications early to avoid the regulator having to deal with a rush of 116 applications in the relatively short window between seasons.
Ultimately, if the Secretary of State does not have the flexibility required to determine when the regulator’s powers commence, it could lead to delays, confusion and inefficiency throughout the set-up process. We are, of course, prepared to continue the fruitful conversations we have already have and I look forward to more of them. Although I recognise the amendment’s helpful intent, I am unable to accept it. I hope that the noble Lord will withdraw it.
Lord Markham (Con)
I thank the noble Lords, Lord Watson and Lord Addington, for their support. I was hoping that the noble Baroness would say that this is just a very sensible, practical solution. I hope that the Ministers feel able to reflect on it at this stage, because it is a very practical step to make sure we can implement this correctly and not impact clubs mid-season. I am happy to withdraw at this stage.
Lord Goodman of Wycombe
“Duration and review(1) This Act expires at the end of the period of five years beginning with the day on which section 5 comes into force (“the initial period”), subject to the provisions of this section and section (Renewal and dissolution provisions).(2) The Secretary of State must establish an independent review panel (“the Panel”) no later than 15 months before the end of the initial period.(3) The Panel must—(a) carry out a review of—(i) the effectiveness of this Act, (ii) whether the IFR has remained within its statutory purposes, and(iii) whether the objectives of the Act could be achieved through less interventionist means,(b) prepare a report of the review, and(c) lay a copy of the report before Parliament, no later than 12 months before the end of the initial period.(4) The Panel must consist of—(a) at least one person with expertise in competition law,(b) at least one person with expertise in regulatory policy,(c) at least one person with expertise in football administration, and(d) at least one person with expertise in business regulation.(5) Where there is a change in the person holding the office of Secretary of State after the establishment of the Panel but before the report is laid before Parliament—(a) the new Secretary of State may by written notice dissolve the existing Panel,(b) where the Panel is dissolved under paragraph (a), the new Secretary of State must—(i) establish a new Panel within 28 days,(ii) ensure the new Panel meets the requirements of subsection (4), and(iii) extend the period for the laying of the report by up to three months if necessary to allow the new Panel to complete its work,(c) the new Panel may—(i) consider any work undertaken by the previous Panel,(ii) adopt any findings of the previous Panel that it considers appropriate, or(iii) conduct an entirely new review.(6) The new Secretary of State may only exercise the power under subsection (5) once in relation to the review required by subsection (3).(7) The report under subsection (3) must include—(a) an assessment of whether the IFR has—(i) achieved its objectives under section 6,(ii) remained within the scope of its original purposes as set out in section 1,(iii) avoided expanding its regulatory reach beyond its core functions,(iv) maintained proportionate intervention in the football industry,(b) an assessment of—(i) the regulatory burden imposed by the Act,(ii) the costs of compliance for regulated entities,(iii) whether the objectives could be achieved through less intrusive means,(c) an analysis of any instance where the IFR has—(i) exceeded its statutory powers,(ii) created additional regulatory requirements beyond those explicitly authorised by the Act,(iii) expanded its interpretation of its objectives beyond their original scope,(d) a specific assessment of whether market conditions still justify statutory regulation, and(e) a recommendation as to whether the Act should be—(i) allowed to expire,(ii) renewed for a further period with specific restrictions, or(iii) renewed without modification.”
Lord Goodman of Wycombe (Con)
My Lords, Amendments 341 and 342 have sunset provisions. I declare my interest as set out in the register as a senior fellow at Policy Exchange. I am mindful, of course, that this is the final debate on amendments this evening on this very substantial Bill of 100 clauses and 12 schedules, and we are near the end of seven sessions in Committee. I note what my noble friend Lord Moynihan said at the very start of these proceedings: it is rare for a Bill to have 340 amendments tabled even before it has commenced. I make the point in the presence of the Government Chief Whip that many of those amendments were tabled by the other side.
In that spirit of agreement, we can all agree that this is a very significant Bill. I am going to try to further that spirit and seek some consensus as I discuss these sunset provisions. We will see how I get on, mindful that in Committee it is unusual to push amendments to the vote but very usual to try to explore issues.
I begin by restating another view on which we surely all agree: as my noble friend Lady Brady has said many times, football is its own ecosystem with its own rules, governing bodies, leagues and codes of practice, into which the Government are about to appoint—as the previous Conservative Government wished to create before them—a new state-licensed regulator, without a licence from which teams in the pyramid will be unable to play in specified competitions. It is an arrangement of great interest to UEFA and FIFA; I will put it no higher than that at this point, following some of the debates we have had this evening.
I hope that it is also a statement of the obvious and not at all controversial to point out that regulators are in themselves controversial. On this side of the House, we tend to hear—as I have heard from my noble friends, and I am of course much of the same mind—that regulators are subject to mission creep and lobby capture. My noble friend Lord Jackson said earlier this evening that they are subject to Parkinson’s law.
I am not going to repeat those arguments because they have been exhausted at length, but I hope noble Lords will forgive me if I pray in aid someone who has recently made them quite forcefully. I am quoting from a BBC report. This person said that
“the regulators, the blockers and bureaucrats”
are part of “an alliance of naysayers”, which means that
“we can’t get things done in our country”.
The person who intervened in this way was of course no one less than the Prime Minister. I follow my noble friend Lord Hayward, who pointed out that it is disappointing to hear that the shadow regulator will not be included in the meeting with the Chancellor tomorrow. None the less, I was encouraged by what the Minister said about growth in her responses to an earlier debate. She will of course be aware that many of my noble friends have moved amendments seeking to put a growth objective in the Bill.
Regulators are also controversial, not only because in the view of some people they do too much and in the view of others they do too little. It is a frequent theme of noble Lords and of people in the other place that regulators do things in the wrong way. I defy any Member of this House to look at reports of committees of this House or the Public Accounts Committee into Ofwat, Ofgem, Ofcom and all these other regulators and assert that those committees are never critical of what those regulators do—they are often very critical indeed.
Consider the range and depth of the issues that the new regulator will be asked to consider. I will list 10 points that fans may possibly say after the regulator has come into existence and has bedded down for a while. Is it possible to imagine and believe that fans would say the following?
First, my club says it cannot buy the players it wants, or may have to sell players, because of the financial constraints the regulator has put in place.
Secondly, my club claims it cannot afford the levy and will have to sell players or raise ticket prices.
Thirdly, my club says it cannot afford the interest on unpaid levies and, again, it will have to sell players or raise ticket prices.
Fourthly—this is a theme that has come up a lot in these debates—the regulator will not let my club spend to get promoted as so many clubs have before.
Fifthly, the regulator has taken my club’s parachute payments into account in its calculations, but not the parachute payments of our local derby rivals. If that circumstance arises, I cannot imagine that it will go down very well.
Sixthly, my club, which plays in the Football League, says it is not getting enough money from the Premier League.
Seventhly, my club, which is a Premier League club, says it is now being forced to distribute too much down the pyramid and this is financially unsustainable.
Eighthly, the regulator is doing far too much on DEI. Alternatively—do you know what?—the regulator is doing far too little on DEI; it should enforce these provisions more rigidly.
Ninthly, the regulator should push my club much harder on ticket price consultation.
Tenthly, and most obviously, the regulator is not consulting sufficiently on any of these provisions.
Those are just 10 points; I could go on, but I will not. I have not even mentioned the words “significant influence”, which have been such a feature of these debates. There is a whole series of questions that fans might raise.
The regulator might sometimes be right and might sometimes be wrong, but one of the questions that we have to ask—it has been circulated in today’s debate and was referred to by the noble Baroness, Lady Taylor of Bolton, and the noble Lord, Lord Addington, on his Front Bench—is about parliamentary scrutiny. How will the regulator sufficiently be scrutinised? How can he be held to account by Parliament? The question is especially pertinent because we do not know what the remit of the regulator will look like in a few years.
In these debates, it has been suggested that the remit of the regulator should be increased and widened to include: the two top leagues in women’s football, National Leagues North and South, bodies that negotiate TV rights, player welfare, fan safety, net zero, climate change, modern slavery—we had a very interesting debate about that—DEI more broadly, and corporate governance and practice. I put it to noble Lords that it is not impossible that, in the other place, the remit of the regulator may be extended—or it may be extended soon in future years—which makes these scrutiny concerns even more pressing.
Let us ask ourselves what scrutiny Parliament will be able to undertake on the regulator. There will be an annual report. There will be the “state of the game” report, which we have debated at considerable length. I suppose that the DCMS Committee in another place can haul the regulator in. None the less, there is what has been described as a “lacuna in scrutiny” in relation to regulators. That is a direct quote from a report called Who Watches the Watchdogs?, which the noble Baroness, Lady Taylor, will recognise because it was produced by her Industry and Regulators Select Committee, which weighed the merits and demerits of setting up a new structure.
I mentioned Policy Exchange earlier because of the report alluded to by my noble friend Lord Jackson, The Rise of the Regulators, written by my colleagues James Vitali and Zachary Marsh. It focuses on what it calls the “democratic deficit”. Although finding an answer to this problem of the democratic deficit is a bit beyond my pay grade, I put it to the Committee that the sunset clause that I am proposing would have the effect, as well as being a sunset clause, of increasing scrutiny in a way that would be helpful. The amendment proposes an independent panel that would, within 15 months of the regulator being established, review how the regulator is getting on. This independent panel would contain at least one person with experience of competition law, at least one person with experience in regulatory policy, at least one person with expertise in football administration and at least one person with expertise in business regulation. The panel would review the regulator and ask whether the regulator had acted, within the scope of the original provisions, proportionately and reasonably in relation to cases of compliance and the regulatory burden, and would examine whether its objectives could be achieved by less intrusive means. The panel would then recommend whether the regulator expires, works further for a period with restrictions, or simply goes ahead as it is doing when the panel meets, without any further restrictions.
I make no apology for pressing the merits of sunset clauses. It would be a good thing for all new regulations to be subject to them. I have to confess to the Committee that it is very unlikely that the panel I am suggesting would recommend that the regulator expire. I will tell you why. It is because the panel would be selected by the Secretary of State, who I am addressing through the person of the Minister on the Front Bench. It is most unlikely that the Secretary of State would appoint a panel that would abolish the regulator. Frankly, this is not a perfect provision, but I am seeking consensus and trying to find a proposal that the Government might not consider automatically repugnant.
One should note, in relation to this new panel and any recommendation that it would make, that Parliament would take the final decision. If the panel decided in its view that the regulator should continue, Parliament would have a say in the final decision. If the panel recommended that the regulator be scrapped altogether, it could not do that without the consent of Parliament. There is an extra layer of parliamentary scrutiny. I am grateful to the Minister for writing to Peers on this side of the House about a sunset clause last year. However, I say very briefly that her arguments against it were somewhat misconceived, because they were basically predicated on arguing that, for some reason, the leagues would have reason for acting in bad faith and frustrating the regulator.
I reject that for a number of reasons, not least because it would be the independent panel, with members appointed by the Secretary of State, that would make the final decision. If the panel thought that the clubs or the leagues were being unreasonable, it would side with the regulator, not the leagues. It is perhaps also worth pointing out in parentheses that the clubs, the leagues and so on are going to be under considerable legal obligation as a result of this Bill and would not want to chance their arm lightly.
The Minister also argues in her letter that the sunset clause would incentivise the regulator to look for short-term solutions to long-term problems. Again, I find that hard to see, because the panel making the judgment would want to find the solutions that were best for football. If the regulator were suddenly making short-term decisions at the expense of long-term ones, I should expect the panel to be very critical of that.
Finally, before I take my seat, I say that this is Committee and these are probing amendments. There is a good case for a sunset clause, but it may be that other Members of the House will have other ideas of how parliamentary scrutiny might be strengthened other than by a clause. If they have those ideas, it would be useful to hear them. With that thought in mind, I beg to move.
Lord Norton of Louth (Con)
My Lords, I must begin by correcting my noble friend earlier who said we are all football fans. I have no interest in football, but I do have an interest in the legislative process.
In 2004, the Constitution Committee of your Lordships’ House published its report on Parliament and the Legislative Process. I was chair of the committee and indeed the drafter of the report. We recommended changes to the legislative process, including the introduction of post-legislative review. We proposed that Acts be reviewed within three years of their commencement or six years following enactment, whichever was the sooner. In 2008, the Government accepted the case for post-legislative review, committing to Acts being reviewed by departments three to five years after enactment.
Baroness Taylor of Bolton (Lab)
My Lords, I am afraid that, although the hour is late, I cannot resist saying a few words about the suggestion that we should have a sunset clause. I am somewhat surprised that the noble Lord, Lord Goodman, has presented what is a very bureaucratic way of going about getting some accountability here, and I fear that the sunset clause would be an incentive for non-co-operation. The noble Lord, Lord Markham, said earlier that he thought that some people might wait until the regulator was in place before they did certain things. If we had the sunset clause, it would be an incentive for those who did not want this kind of regulation to drag their feet and not co-operate. So that is not a good way forward.
I was also interested in some of the comments on the commencement amendments, which would also bring about a delay. I note that the suggestion is that after, I think, three years and nine months we should have this kind of review that was being suggested. I noted the noble Baroness, Lady Brady, saying earlier that there should be a transition period of three years, so we would be judging it on nine months if all the opposition amendments on this were carried, and that is not really satisfactory.
The simple fact is that football needs the Bill, fans need the Bill and we need to get on with it as quickly as possible. We need to give the regulator the powers that he or she needs to carry out the work that needs doing. We talk about football being a pyramid, and it is. The Premier League needs the whole of that pyramid. I could quote certain players who have been on loan at Bolton Wanderers and who now are doing very well at Liverpool, such as Conor Bradley—I am sorry that my noble friend from Everton is looking at me askance. The English national team needs football to be healthy at all levels. If we do not have proper involvement and proper facilities at all levels it will suffer as well. We have talked about the FA not taking its responsibilities seriously in terms of football governance, but there is a dimension here about the English national football team. We have to make some headway and get some things moving as quickly as we can.
The noble Lord, Lord Goodman, also mentioned accountability. What the noble Lord, Lord Norton, said about post-legislative scrutiny was also interesting. I chaired the modernisation committee in the other House in 1997. One of its recommendations was that there should be more post-legislative scrutiny. Both pre-legislative and post-legislative scrutiny give power to Parliament to get things right and to monitor exactly what it is doing. I am all in favour of that, but it does not need to be in the Bill.
What we do need is a proper drumbeat of accountability of all regulators to Parliament. The noble Lord, Lord Goodman, mentioned the report that the committee I chaired published, Who Watches the Watchdogs? One of the things we said in that report is that it would be to the advantage of everyone—industries, regulators, Government Ministers and consumers—if there was a proper drumbeat of regulation. A third of all regulators have never been called before Parliament. Another third has been called only when there is a crisis. That is not proper accountability. We need Parliament to take its responsibilities seriously and ensure that all regulators, including new ones, are held accountable by Parliament. That is a valid point, but we do not need new amendments. We need new action on the part of Parliament.
We need this Bill; the Premier League needs this Bill. I mentioned the research from the University of Manchester. Ironically, in the long term, this Bill might help to protect all clubs, including those in the Premier League. I hope we can make progress. It should be Parliament that holds regulators to account, not extra dimensions such as have been suggested.
Lord Hannett of Everton (Lab)
My Lords, I will refer to the comment by the noble Lord, Lord Norton, about not everybody being interested in football. As a long-suffering Evertonian, sometimes that is not a bad place to be, especially having seen Everton’s results tonight —but there you go; there is another day. I say to the noble Baroness, Lady Brady, regarding David Moyes, who has now returned to his spiritual home, that I hope some of his success at West Ham will rub off on Everton.
I have listened on a number of occasions to this debate and to some of the contributions and the experience that has been expressed. However, I am with my noble friend Lady Taylor—this is a time to move on and to enact the Bill, because this is what football fans want. As a football fan—a season ticket holder at Everton—I was delighted that support for the Bill was in the manifestos of all the main parties. From some of the contributions, you could sometimes be confused that that was the case. As football fans say, this is an important Bill. Noble Lords have on occasions appeared to forget how we arrived at this position. The fan-led review was based not on hot air but on the genuine concerns of football fans. The fans and the future sustainability of our beloved national game must always be at the heart of the House of Lords.
Noble Lords’ amendments—there have been too many to comment on individually, so this is a general observation—would in effect ensure, even before the independent football regulator gets off the ground, that those who oppose it would be seen to be working to ensure its demise. We know there are people who hold strong views about regulation, but there are occasions for regulation and this is one of them.
It could be said that this is another way, on top of the attempts through other means, to kill the Bill—to kill the regulator by the back door. That is not what fans want. I speak to fans from many different clubs who have been waiting for the Bill to pass.
In conclusion, I thank the Ministers for the way they have had handled this debate over many weeks, not only with stamina but with attention to detail. That is extremely uplifting.
Lord Addington (LD)
My Lords, I too do not think that these amendments are necessary. I agree with the principles the noble Lord, Lord Norton, laid out—I think the whole Committee agrees with them—but we do not need the amendments. The Minister can correct me if I am wrong but we have the “state of the game” reports, which are built in to look at the structure and success of this. We have a better vehicle for looking at what goes on than we have ever had before. If we decide to get rid of it, do we go back to what we had? Do we go back to having all those small clubs saying, “Nobody’s checking that we’re selling our ground for a nice development of flats”—the first thing raised with me 30 years ago about what is wrong with certain types of people who buy football clubs. That sort of decision is not new.
We have a successful Premier League—all power to it—but we have to look at the other divisions and the rest of football. We have the opportunity to do that and I hope we carry on. When the Minister replies, we should hear what the Government would do if the “state of the game” report suddenly said that we have got it wrong somewhere. I hope we will hear that and that we will carry on, because the underlying problem that brought this Bill forward was one event that actually, oddly, preserved the Premier League. If we go forward with this, we need a series of reviews—I have already raised this. Who Watches the Watchdogs? and all the reports concern themes in Parliament, as does post-legislative review. If we can bring this in and we have a vehicle for delivering it, this Act might actually something of a beacon for how we can achieve it.
Baroness Fox of Buckley (Non-Afl)
My Lords, I challenge the approach of the noble Lord, Lord Hannett, to this by saying that I support the amendment. I object to the way this is posed as a fans’ piece of legislation, that the fans want it, and that anyone who does not support or has any reservations about the Bill is not thinking about the fans.
The Bill is based on Tracey Crouch’s original fan-led review but there is a danger of a sleight of hand. I know it sounds populist—and I am keen on populism—to say that this is all about the fans. Actually, it was based on 20,000 online responses, so it is not necessarily all fans. There are fans across the leagues at all different levels who are finding out the detail of the legislation and some of them are quite shocked. The fact that the media are beginning to pick up on it is quite important.
I would like fans to have a proper opportunity to have a debate as the law is understood and rolled out, so that they can take things into consideration. I am not trying to insult fans. I am not trying to say they do not know what they are voting for. That kind of paternalism annoys me. But I sat through about half of this Committee, maybe less, for hours and hours, as others have and, despite some snipes about filibustering, I have found the contributions to be brilliantly well informed. There have been lots of layers of debate and lots of nuance from all the contributors. I say that because I thought I knew what was coming up in the Bill but I have had some genuine shocks about its political consequences.
Lord Pannick (CB)
My Lords, I hope that before Report the Government will carefully consider how best to ensure post-legislative scrutiny of the Bill. That is the issue being raised here. There are many ways of achieving it and I would welcome the Government thinking about it and discussing with noble Lords who have been expressing concerns how it is to be achieved.
I also hope that, before Report, the Government will give very careful thought to the comments made by the noble Lord, Lord Birt, earlier about the ways in which the Bill can be amended or implemented to ensure proportionate, light-touch regulation, which I think many of us around the Committee are concerned to achieve. It is a difficult thing to achieve, but it needs to be to be achieved and, if it can be achieved, I think that will alleviate many of the concerns that have been expressed in Committee.
Lord Hannan of Kingsclere (Con)
My Lords, I support my noble friend Lord Goodman’s amendments and the principle of a sunset clause.
“The delegation of particular tasks to separate bodies, while a regular feature, is yet only the first step in the process by which a democracy … relinquishes its powers”.
So wrote FA Hayek in chapter five of his magnum opus The Road to Serfdom in 1944. Think of how much truer it is today than it was then. By one account, we have had a new quango every week since the election, and it is a one-way system. They are never undone, and they are not undone because of the dynamic that, once an organisation like that exists and is in place, its primary purpose becomes the defence of its own existence and its own budget. That is why we have sunset clauses at all. It is the only way in which, realistically, you can put in a hedge in case the calculation on which you passed legislation or created a quango turns out to be false.
In this case, it may or it may not. The noble Baroness, Lady Taylor of Bolton, tells us that the legislation is terrifically popular and that the fans are demanding it and want immediate action; the noble Lord, Lord Hannett of Everton, says that it has been polled and everyone is in favour of it. That may be—I do not know, as I am not any kind of expert—and I am perfectly happy to accept the possibility. Equally, we should be cognisant of the figures that the noble Baroness, Lady Fox, cited: 20,000 people of the 2 billion who watch Premier League games is one in 100,000—someone will tell me if my maths is off. It may be that that is a self-selecting and unrepresentative sample.
It is certainly the case, as any pollster will tell you, that people are very bad predictors of how they will feel in a hypothetical situation. If people are asked for an opinion now, and polled in the abstract on whether they think there should be some regulation of football, they might think that it would be a way of preventing rogue owners driving clubs into bankruptcy and so it seems a good idea. But what happens if, two or three years from now, the regulator does what almost every other regulator in this country’s history has done and expands its remit well beyond the powers laid down and discussed in your Lordships’ House? What if fans are then looking at a regulator that is doing things that were never envisaged? There are regulators laying down rules on net zero and gender quotas—and we have already had demands for clubs to monitor the diversity of their season ticket holders and so on. Fans will realise that, hang on, this is not what they signed up for. What then will be the mechanism and check on this legislation?
The only way of doing that is to have some kind of automatic lapsing; in other words, to allow this House and the other House to come back and say either that the legislation is working, so it should be renewed, or that it is not working, so it should be allowed to lapse. This should not be a controversial proposal. I do not doubt for a second the sincerity of noble Lords on all sides who have argued that this is a popular and necessary Bill. If it is, they should have the courage of their convictions. If it is, there will be no question—for all the reasons that my noble friend set out at the beginning—but that the regulator should remain in operation or that the Minister will keep it that way.
We must allow for the possibility that we may have got this wrong. It costs very little and would satisfy all sides. It is something that ought to be able to command consent in this Committee and beyond. I hope that the Minister will give it serious consideration.
Baroness Brady (Con)
My Lords, before I speak to the amendments in this group, I want to address the accusation from the noble Lord, Lord Watson, that West Ham United has put its season ticket prices up mid-season. That is categorically untrue. We have the cheapest adult season ticket in the league, at £345. Since we moved into the London stadium, we have sold 35,000 season tickets for £99 to juniors. We have two “kids for a quid” games every year in the Premier League at the club. We are more than doing our bit.
Lord Watson of Invergowrie (Lab)
If I have got that wrong, I unequivocally apologise to the noble Baroness. I was reading an article about football supporters, including of West Ham, who were protesting about changes to season tickets. Maybe it is not within this season but next season, but there were fairly significant changes being put forward, and the argument was that children were not being given cheaper prices, which will stop them becoming regular fans at football matches. If what I said was wrong, I apologise.
Baroness Brady (Con)
I accept the noble Lord’s apology.
The hour is late, but as we debate this idea of a sunset clause, we should pause and reflect on what is truly at stake. We are all here during extra time because all of us—bar one, I think—love football. It is a cultural touchstone, an economic powerhouse and a source of immense national pride. At its best, football connects communities, inspires individuals and projects the best of Britain to the world.
The Premier League is only one part of English football. I operated in the EFL system for many years and know that it is hugely important to our pyramid, as is the National League. But the Premier League is special for our country: with its global reach, this fizzing, vibrant competition has an extraordinary ability to draw interest, investment and innovation into the game. It not only powers the football pyramid but supports £8 billion in gross value added to the economy, contributes over £4 billion annually to the Exchequer and supports more than 90,000 jobs. The Premier League’s influence extends far beyond the pitch, creating an affinity for the UK and showcasing our ability to create a product that the world wants to watch.
We all know the background and the well-made case for some sort of regulatory intervention, but with this particular Bill we are now at a crossroads. I am passionate about this and live it every day, so I can see the risks very clearly. But I also know that this is a well-intentioned piece of legislation with aims that we can all support. The reason we have been so forensic and questioning during Committee is that it genuinely has the potential to inadvertently damage the structures that have made English football the envy of the world. We are not imagining these deficiencies in the Bill, or the risks that could play out. This is why I am interested in the idea of assessing whether this legislation and the IFR have achieved their goals or inadvertently harmed the game we all love.
The Government have rightly made economic growth their overriding priority. In a time of global economic turbulence and domestic fiscal and productivity challenges, it is vital that we protect and nurture the UK’s most successful industries. Football is clearly one of these: a global export that not only generates revenue but enhances Britain’s soft power and investor appetite for the UK on the world stage. It is against this backdrop that I must express surprise at the puzzling reluctance so far of the Government to listen to the concerns we have been expressing.
At a time when the Prime Minister has asked all regulators to focus on growth—and has also apparently asked Ministers to cancel all anti-growth measures—here we are, about to create a regulator that has no growth duties or objectives. We even read in the newspapers that the Chancellor has told regulators this week that they need to go further and faster in stripping back unnecessary rules and creating an environment where companies can take risks.
But this new regulator will be principally charged with risk reduction and, effectively, a new form of taxation on specifically one part of football, the Premier League. This is a mandate that seems inherently restrictive, redistributive and therefore anti-growth. The signal this will send to global investors could be troubling. If we overreach in regulating one of the UK’s greatest success stories, what might that say about our ability to protect and nurture other industries?
Poorly executed regulation would not just chill investment in football; it would ripple out into broader perceptions of the UK as a place to do business. A sunset clause is an interesting idea. It is clearly important that we do not undermine the regulator from the get-go. We all want this to work. But it is important that an appropriate review and accountability mechanism is found, so that a future Government can assess whether this Bill is delivering the sustainability it promises or whether it is in fact creating regulatory uncertainty and systematic risk, and damaging investment—in which case, we would want to see urgent remedial action.
As I have said this evening, the Premier League and its clubs are not opposed to change. What we do ask, though, is for change to be thoughtful, measured and informed by the realities of what makes football so successful. This Bill has the potential to do some good, but it also carries significant risks that, I say to the Minister, deserve to be engaged with seriously and constructively.
Today, the Premier League is competing not only with domestic leagues but international competitions, other global events and new forms of entertainment in what is a rapidly changing media industry. The UK has created something so special in the Premier League. We should not stifle our ability to adapt in order to deal with these new threats. We should not be complacent when it would be so easy to be knocked off course. We should not gamble that the Premier League is now an unstoppable juggernaut, immune to even the unintended consequences of its own Government’s actions. Empires rise, but they also fall.
It has been said that the Premier League has become the goose that is laying English football’s golden egg. I would encourage all noble Lords to think about it that way, rather than as a cow to be milked or a magic money tree to be shaken. Above all, we should look after it. We should nurture it. Dare I say that perhaps we should even think about how we can help it, not hurt it? We should work together to ensures that it continues to be so successful. To do so, it is obvious that we need some sensible changes to this Bill, and I sincerely hope we can achieve them together as we move towards Report.
Lord Markham (Con)
It is late, so I am sure that all noble Lords will be pleased to know that I will keep my comments short.
Lord Markham (Con)
There we go—the biggest cheer of the night.
As this is the last debate of what has been an extensive process, I echo some earlier comments by thanking the Minister for all her time and involvement over all these days in Committee. I thank all noble Lords for what has been an extensive number of days’ debate. I hope that we may have one new convert as a fan, but maybe not. The debate has been so extensive over those days—as mentioned, there have been 380 amendments—and there is such extensive expertise around the Chamber. So many key points have been raised and there is an understanding that the consequences of getting this wrong are pretty extreme.
There seems to be consensus, as mentioned by the noble Lord, Lord Pannick, that there needs to be some sort of review and some mechanism for that. I must admit that I do not think that is the “state of the game” report, because that is written by the regulator. It is extremely unlikely that the regulator would say in that report, “In all of this, the regulator is pretty rubbish and should be reviewed”. That is probably an unlikely outcome from the “state of the game” report. This post-legislative review needs to be conducted by someone who is not at the regulator, because otherwise it would be marking its own homework.
I thank my noble friend Lord Goodman for raising this. A sunset is one very good way of looking at it, but we have had other suggestions as well. I ask the Minister to spend the time between now and Report thinking about how we are to get some sort of post-legislative review, to make sure that we get this all right. Lastly, I also ask the Minister to spend the time that we have to reflect on all the views expressed over the many hours and days of debate on this. I look forward to discussing her thoughts on them when we have the meeting in February.
Baroness Twycross (Lab)
I am grateful to all noble Lords for staying the course to debate this group. I am not going to use any footballing metaphors, because I think we have exhausted them during the Committee and clearly this is the final group. I want to stress that I am really happy to continue to meet noble Lords before Report to make sure that we can talk through concerns that they have raised ahead of the next stage in the progress of the legislation through your Lordships’ House.
I thank the noble Lord, Lord Goodman of Wycombe, for tabling these amendments, which have allowed a debate about what kind of scrutiny we might need for a new regulator of this type. I am also grateful to the noble Lord, Lord Norton of Louth, for waiting so late to contribute, particularly given his complete lack of interest in football. There is a real value in hearing from people who are interested in regulation and what makes good legislation when we look at something where there is a risk that noble Lords—or anyone looking at the legislation—might approach it from the perspective of themselves as a fan, rather than what we need to have, which is good legislation, a good regulator and effective regulation.
I am also grateful to my noble friend Lady Taylor of Bolton for her contribution. Her expertise has been recognised by other noble Lords as well. I am keen to reflect on these contributions and the points raised by the noble Lords, Lord Pannick and Lord Addington, ahead of Report. I will take the points about scrutiny and accountability away for further consideration. I will go through a number of points—unfortunately, I am going to keep noble Lords a little longer—but I want to reflect properly on the points that have been raised.
Going back to the amendments tabled by the noble Lord, Lord Goodman, unfortunately, while we completely agree that the efficacy of the regulator should be monitored and evaluated—and I am happy to discuss this point further with the noble Lord—I cannot stress enough how strongly we disagree with the use of a sunset clause in this context. I agree with my noble friend Lady Taylor that these amendments would create a perverse incentive for the regulated industry to deliberately act in bad faith from the outset in the hope that the regulator fails to achieve its objectives and is therefore scrapped. We do not want, through the design of the legislation, to encourage or risk encouraging any non-compliance or vexatious behaviour by clubs and competition organisers who might be setting out with the intention of frustrating the regulator. We want to create the right conditions so that clubs act in a sustainable way, and we feel that the approach adopted is the right one.
On the other points raised by the noble Lord, Lord Goodman, surely, we want a regime that creates incentives for clubs to comply and improve sustainability. Under the amendment, the panel would make the decision, but there would still be an incentive for industry to show that the regime is not working. I also had concerns about the noble Lord saying that this would not be a problem because the Secretary of State would appoint the panel. If the Secretary of State can appoint a panel, knowing that it is not going to act against what the Secretary of State might have already decided, that is not a good panel. Therefore, with respect, I cannot agree with the noble Lord’s comments.
Giving the regulator a deadline of five years would also create the incentive for it to become more interventionist. Knowing it will be judged on whether it was meeting its objectives within a fixed period, the regulator could feel compelled to pursue more severe short-term solutions; this would be an undesirable unintended consequence. In addition to introducing these perverse incentives on both sides, a sunset clause would create inherent uncertainty in the market, as default expiry of the legislation in five years’ time, unless regulations are made to the contrary, would leave the industry and investors unclear on what basis they should plan for the future. We do not want to leave the Government or Parliament open to persistent lobbying to trigger the sunset clause.
The noble Lord, Lord Goodman, raised the important issue of accountability. This is already built in through the “state of the game” report and the annual report. However, I do recognise the point made by the noble Lord, Lord Markham, that these are produced by the regulator, albeit that the “state of the game” report will be based on data from the industry. While I understand the noble Lord’s concerns, the Government believe that the current measures already ensure sufficient scrutiny of the regulator and that it can be held to account if necessary—for example, through the DCMS’s role as sponsor and the requirement for an annual report to be laid before Parliament.
Parliament’s Select Committees can also conduct inquiries into any aspect of the work of the regulator once it is established and take evidence on such matters. The Government believe, given the aforementioned risks associated with the sunset clause, that it would not be an effective way to ensure accountability. For the reasons I have set out, I hope the noble Lord will withdraw his amendment.
Lord Goodman of Wycombe (Con)
My Lords, I am very grateful to all those who have spoken in this appropriately sober debate, especially to my noble—and non-footballing—friend Lord Norton for coming in and sharing his expertise with us. I suppose it is scarcely surprising that those noble Lords who are sceptical of state regulation favour the sunset clause, and those who are supportive of it are not. The Minister did not fully answer the argument I put to her. I find it hard to see why a panel appointed by her, which could be trusted to be fair-minded rather than biased one way or the other, would deliberately frustrate the regulator if that panel of experts thought the regulator was right. But these are matters to which we may be able to return on Report.
In the interim, I will simply make two points. First, it is very encouraging to see that there is agreement throughout the Committee that there needs to be more effective post-legislative scrutiny. This point was made briefly but very forcefully by the noble Lord, Lord Pannick. My challenge to the noble Baroness, Lady Taylor, is this: if noble Lords do not like the sunset clause as a means of post-legislative scrutiny, let us come up with something else specific, rather than simply issue the general wish that things can somehow be made better.
Finally, a noble Lord said, “Fans want this”. Once again, I say that something like 33 million people watch football. Some of them will be unaware that this is coming down the tracks. I predict that many fans will find themselves in the position of the noble Lord, Lord Birt. I suspect that he has sat through more of this Committee than I have—and I have sat through a great deal of it—very quietly assessing what is going on. He is pro the principle of independent regulation, as licensed by the state, whereas I and many of my noble friends are either sceptical or opposed. But he has recognised, as we have dug more deeply into the weeds of this matter, that it is problematic.
I am sure we will return to these problems on Report. In the meantime, I beg leave to withdraw my amendment.