Wednesday 13th November 2024
(1 year, 11 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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 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 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.
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.
Wednesday 27th November 2024
(1 year, 11 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-I(a) Amendments for Committee (Supplementary to the Marshalled List) - (26 Nov 2024)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.
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?
Monday 2nd December 2024
(1 year, 10 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-II Second marshalled list for Committee - (28 Nov 2024)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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
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)
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.
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.
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.
Monday 2nd December 2024
(1 year, 10 months ago)
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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.
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.
Wednesday 4th December 2024
(1 year, 10 months ago)
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This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
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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
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.
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 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.
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 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.
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.
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.
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.
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.
Wednesday 4th December 2024
(1 year, 10 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-III Third marshalled list for Committee - (3 Dec 2024)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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 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.
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)
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.
Monday 9th December 2024
(1 year, 10 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-IV(a) Amendment for Committee (Supplementary to the Fourth Marshalled List) - (6 Dec 2024)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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 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 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.
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 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 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.
Monday 9th December 2024
(1 year, 10 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-IV(a) Amendment for Committee (Supplementary to the Fourth Marshalled List) - (6 Dec 2024)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.
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 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.
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.
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.
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.
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.
Monday 16th December 2024
(1 year, 10 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-V(a) Amendment for Committee (Supplementary to the Fifth Marshalled List) - (13 Dec 2024)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.
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 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 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, 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 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 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 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 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.
Monday 16th December 2024
(1 year, 10 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-V(a) Amendment for Committee (Supplementary to the Fifth Marshalled List) - (13 Dec 2024)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.
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 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.
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.
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.
Wednesday 18th December 2024
(1 year, 10 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Amendment Paper: HL Bill 41-VI(a) Amendments for Committee (Supplementary to the Sixth Marshalled List) - (17 Dec 2024)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
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.
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 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 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.
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.
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.
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.
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 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.
Wednesday 18th December 2024
(1 year, 10 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-VI(a) Amendments for Committee (Supplementary to the Sixth Marshalled List) - (17 Dec 2024)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
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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 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.
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.
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 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.
Wednesday 15th January 2025
(1 year, 9 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 41-VII Seventh marshalled list for Committee - (13 Jan 2025)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
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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.
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 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.
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.
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 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.
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.
Baroness Twycross
Member’s explanatory statement
This amendment corrects an erroneous cross-reference.
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 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 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.
Tuesday 11th March 2025
(1 year, 7 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 59-I(a) Amendments for Report (Supplementary to the Marshalled List) - (10 Mar 2025)
17:03 - Division on Amendment 4 - Ayes: 224 / Noes: 267 - Amendment 4 disagreed.
18:01 - Division on Amendment 7 - Ayes: 203 / Noes: 257 - Amendment 7 disagreed.
18:37 - Division on Amendment 8 - Ayes: 181 / Noes: 234 - Amendment 8 disagreed.
19:36 - Division on Amendment 13 - Ayes: 8 / Noes: 168 - Amendment 13 disagreed.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Lord Sentamu (CB)
My Lords, at the end of the day, the purpose of this first amendment is simply to increase financial sustainability and to require the Secretary of State to do a number of things. The Bill as it stands clearly and simply states the purpose, review and key priorities:
“The purpose of this Act is to protect and promote the sustainability of English football”.
I for one would be content not to put in finance and many other things, because that opens a big can of worms. The Bill then spells out clearly in Clause 2 how to achieve that particular purpose. This amendment would truncate a big piece of work that has been done.
So I still support the idea that the purpose of this Act is to protect, promote and sustain English football. That is a wonderful way of doing it. The amendment would reduce it to financial sustainability and the Secretary of State having powers to do this, that and the other. This particular Bill is really about the independent regulator; do not suddenly introduce the Secretary of State in the purposes. So I would not like to support or go with this amendment, because it is not as careful and clear as the purpose we have at the moment.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I thank the noble Lord, Lord Parkinson, for tabling his amendments, and for his kind words and his engagement on this Bill. I extend those thanks to all noble Lords from across your Lordships’ House for their engagement, and for the time and input that I have benefited from over the last few weeks and months.
I will start with Amendment 2. I reassure the noble Lord that, although the Bill does not specify the requirement to consider both prospective and current fans, this is implicit within the existing requirement. Football would not serve the interests of fans if the game were unattractive or unwelcoming to new fans. The regulator is also inherently future minded, with the requirement to focus on sustainability and the long-term protection of the club and its heritage assets. Future fans are therefore already required to be in the regulator’s mind when it makes its decisions. This is also reflected in the Bill’s Explanatory Notes.
Lord Markham (Con)
From this side, I would like to join the recognition from all noble Lords about the social value that clubs bring. I need only to look at my six year-old, who is barely ever not wearing his Cole Palmer shirt, to know that it is much bigger than just an economic interest. Clubs fully understand that, and I think that point was made very well by all noble Lords—the particular examples from my noble friend Lady Brady were very well made.
Clubs realise that they are the leaders in their field, and I think we have all seen countless examples of them doing it again and again. In terms of getting the balance right, though, we shall talk later—the noble Lord, Lord Pannick, made the point as well—about wanting to make sure the regulator is light touch. I think the Government get that right in their Amendment 32—again, I think we all agree on the intentions—but the amendment from the noble Lord, Lord Addington, may go slightly to the other side of the fence. However, I think we have a united gathering, for want of a better word, around the Government’s amendment. From our side, we very much welcome that, and welcome the continued work of the clubs on the social front as well.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Addington, for raising this issue on Report and giving us the opportunity to discuss it further. I also thank him for his very kind words and, not least, for his persuasive arguments over the past few weeks. I am grateful to him and to the noble Lord, Lord Goddard, for their time on many occasions. I am also grateful to noble Lords from across the House, irrespective of whether they agree with the government position, although I feel that there was a general consensus.
I think that what we are all agreed on across your Lordships’ House, including the Government, is that clubs play a vital role in their local communities. It is a key part of what makes football our national game as well as our local anchor. However, as I previously stated in Committee, we believe that the noble Lord’s amendments would expand the scope of the regulator too far and are potentially overprescriptive, as the noble Lord, Lord Pannick, expressed much more elegantly than I can.
The regulator should be focused on areas of critical need, addressing genuine market failures rather than regulating on issues that the industry can solve. There are many different ways a club can make a difference and serve its local community. We have heard some fabulous examples throughout the Bill’s passage through your Lordships’ House, including a number we have heard today, such as that of West Ham during the pandemic, mentioned by the noble Baroness, Lady Brady, and my noble friend Lady Taylor of Bolton mentioned the charity work of her team, Bolton Wanderers.
This is why we are confident that government Amendment 32 strikes the right balance. We want to encourage clubs to continue their great work in their local communities without restricting the manner or form in which they achieve it. For example, clubs could match their community outreach initiatives to the size and resources of their clubs and to the specific communities’ needs and issues, which may vary. This could include the bespoke training for charities and community groups envisaged by the noble Lord, Lord Addington. Like him, we agree that the regulator can shine a light on this vital work carried out by clubs up and down the country and therefore encourage more outreach. That is why we have brought forward the government amendment, which would require clubs to report on the actions they are carrying out.
Government Amendment 32 would mean that the regulator includes clubs’ community contributions in its corporate governance code and adds criteria for what constitutes corporate governance for football clubs. I welcome support for the government amendment from my noble friends Lord Bassam and Lady Taylor, and the noble Lord, Lord Addington, who have co-sponsored the amendment. This is very much in the spirit of co-operation and discussion that we have had over the past few weeks. It will be explicit in the Bill that a club’s contribution to the economic and social well-being of its local community is part of its corporate governance. That will ensure that clubs outline how they contribute to their local communities in their corporate governance statement.
In answer to the noble Baroness, Lady Fox of Buckley, we do not think this is heavy-handed or overregulation; this is, as the noble Lord, Lord Maude of Horsham, said, what good clubs already do. If they were not contributing to their local community, they would, however, be expected to explain the reason for that in their statement. Their report would be published online to allow for public scrutiny so they can be held accountable for their actions or inaction. We believe this will encourage transparency and, as with the approach to corporate governance more widely, this will in turn encourage greater action in this space.
Above all, this approach will allow flexibility for each club to comply in accordance with their resources and size and in a way suited to their own community’s needs. Additionally, when the regulator publishes its corporate governance report on clubs, best practice can be shared with the industry. The approach will also ensure that we do not step on the toes of the likes of the FA, which already spearheads good social and community initiatives across football.
I hope that I have reassured the noble Lord that we are taking appropriate action to ensure that this important issue is captured without giving without rise to scope creep. For these reasons, I urge the noble Lord to withdraw his amendment, and I commend government Amendment 32.
Lord Addington (LD)
Well, my Lords, there were hints of normal service being resumed at the end of that. It just goes to show that we have to look at what we are actually trying to achieve here. If good clubs do it anyway, why should they be hamstrung by doing it when bad ones do not? That is something I would say: a bit of basic fair play. Also, the idea of light-touch has been spoken about very much in this debate—it is one of the mantras—but I just received information from the EFL saying that it is worried about this, because what does “light-touch” mean? Does it mean doing virtually nothing? The noble Baroness shakes her head, but we will possibly drag that out during the course of the Bill. I have heard Lords debates in which “light-touch” was described as being asleep at the wheel and only paying attention when there is a disaster.
I would hope that the careful use of regulation, encouraging people to do the things they should, is something we do not shy away from. The good ones do it—bravo—but let us make the rest join in. I hope that we can take this principle forward in this Bill and other pieces of legislation. Just because somebody is good does not mean to say that everybody will be. I do not know how many pieces of legislation have that principle running through the middle of them like a stick of rock. I beg leave to withdraw my amendment and look forward to supporting the government amendment when it is moved.
Lord Parkinson of Whitley Bay (Con)
I was always in the habit of complying with the Freedom of Information Act and, in this instance, my advice to the noble Baroness would be to give us as much as she can about UEFA’s concerns. It is very clearly a matter of concern here in your Lordships’ House. I hope the matter can be settled. Maybe the noble Baroness can say a bit more about the correspondence that she has had with UEFA but, if not, I hope that my noble friend Lord Moynihan will continue to pursue this important issue.
Baroness Twycross (Lab)
My Lords, I had been slightly unnerved by the tone of the debate up to this group. I now feel myself in much more comfortable territory—under attack and revisiting the issue of international competitions.
I understand the intent of the amendments from the noble Lord, Lord Moynihan, to put beyond any doubt that the Bill and the regulator will not breach UEFA or FIFA statutes. I would like to thank him for his time, both in writing and in meeting myself and officials. However, I would like once again to reassure your Lordships’ House that these amendments are not necessary. At the very least, they are trying to solve a problem that does not exist; at worst, they attempt to create an issue that does not exist.
I would be a brave and foolish Minister if I proposed legislation that risked us being banned from international competitions. UEFA has again confirmed in writing with the Secretary of State, just last month—and, as the noble Lord, Lord Goddard of Stockport, and other noble Lords, including my noble friends Lady Taylor and Lord Bassam highlighted, the FA confirmed directly to noble Lords, including the noble Lord, Lord Moynihan, just yesterday—that the Bill, as drafted, does not breach 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. The extent of its statutory powers and duties will simply not allow it to do so. I know that there have been requests to see the letter that UEFA has sent to the Government that was leaked to the media last year. I wrote to UEFA, following the conclusion of Committee, asking whether they would be content for me to release the letter, but they replied that they would rather that communications be kept private. It is important that I respect this request to ensure that the Government can continue to have honest and constructive conversations with our stakeholders.
I turn to the issue of the FOI. This is—
Lord Pannick (CB)
I would be grateful if the Minister could throw any light on what a freedom of information request should state.
Baroness Twycross (Lab)
As if I planned this seamlessly, I was just coming on to the FoI request. In my view—this is not what I got from the Box note—this is a lesson on how to get an FoI request rejected, unless rejection was actually the intent. I hope the Benches opposite will bear with me as I explain. The FoI request referred to by the noble Lords, Lord Moynihan and Lord Parkinson, was an extremely broad request for all correspondence ever to the department from UEFA. In the response, the requester was advised to narrow his request to a particular timeframe for the department to be able to respond. In my humble view, that sounds perfectly reasonable. I understand that such a letter has not yet been sent in, but, clearly, the responder may choose to accept the advice from officials.
Turning to the specifics of the amendments themselves, much as I do not want to see the noble Lord, Lord Pannick, lose the opportunity for future litigation, I am afraid that, rather than protecting English football, his amendments would have serious unintended consequences. The amendments would see a regulator established by an Act of Parliament in this country take a position of deference to a private international organisation. That would not only undermine the sovereignty of Parliament but leave English football in a very weak position.
The noble Baroness, Lady Brady, raised concerns, both today and on the fourth day in Committee, that the Bill compounds the problem of UEFA’s and FIFA’s ongoing leverage over Premier League clubs, creating a regulatory environment that could become fundamentally unstable. While I do not accept that that is currently the case for the Bill, amending current drafting, to fix in statute that the regulator must fall in line with whatever rules those organisations set, would surely create such an issue. The result of these amendments would be a concerning loss of autonomy and independence for the regulator and, in turn, for English football as a whole. For those reasons, I ask the noble Lord, Lord Moynihan, to withdraw his amendment.
Lord Moynihan (Con)
My Lords, I am very grateful to noble Lords for their contribution to this debate. I will attempt to respond to the comments that have been made.
I attended the meeting yesterday, and I was very attentive to what was said. The first question was about UEFA, and the first thing said in response by Joanna Manning-Cooper, who represented the FA at the meeting, was that UEFA has been
“happy since the start of the journey”.
I wrote that down; that was precisely what she said. I have to say to noble Lords that the correspondence that was sent in September last year to the Secretary of State reflected five pages of unhappiness about the potential of this legislation as far as UEFA was concerned. It is inconceivable, to any noble Lord who has read that letter, that that could possibly be seen as UEFA’s happiness since the start of the journey.
I make that point because I would never have started with the strength that I have had on this subject in Committee, and today, unless I had read the letter. I was sent two different copies of the same letter from two different sources; it has been widely distributed. Everything that I said in my opening remarks reflected the content of that letter and the very real concerns that UEFA had.
I am surprised that the Government have not published that letter, and I believe that they should have done so, because it is simply not true to say that UEFA has been happy since the start of the journey. It is also disingenuous to say that the request that was made was so wide as to have taken a great deal of time, when everybody knows precisely what correspondence was requested. The Written Question placed by James Wild was: please provide an electronic copy of correspondence from UEFA
“on the proposal to introduce a football regulator”.
That is specific; it is not wide in its remit. Everybody knows which letter we are talking about. It is disingenuous to say that it would take three and a half days for a civil servant to go through all the letters that UEFA has sent on the subject of the introduction of a football regulator, when this Bill has been only a year in the making, including the time that the Conservative Party spent on it. As I said, I would not have taken the view that I had—including when listening to the meeting yesterday—if I had not also registered very significant surprise at the comment that the Bill will take no powers away from the Football Association.
Lord Pannick (CB)
My Lords, the defect of imprecision is unfortunate, but it can be cured by secondary legislation, which is far preferable to the serious risk that the Bill would be hybrid.
Baroness Twycross (Lab)
I thank noble Lords for their contributions to the group. It is an issue that we have discussed at length throughout the Bill’s passage through this House. I for one thank noble Lords who suggested that it would be helpful if we could progress the legislation so that we get the regulator in place.
On Amendments 6 and 82 from the noble Lord, Lord Moynihan, I understand his desire to have upfront clarity in the Bill as to which competitions will initially be in scope of the regulator’s regime. However, again, the noble Lord may be trying to solve a problem that potentially does not exist. There is no doubt as to which competitions are in scope of the regulator’s regime at this point, and which will not be. By delegating this to secondary legislation, we are following the precedent established by other similar sport-related legislation. Without wanting to seem ungracious, this includes the Safety of Sports Grounds Act 1975 and the Football Spectators Act 1989, the latter of which the noble Lord, Lord Moynihan, will be very familiar with, as he was the Bill Minister in the other place during its passage.
The approach that the Government are taking is both reasonable and the result of extensive, evidence-based consultation with all key stakeholders in the industry. The delegated power ensures that the competitions in scope can be amended in a timely manner and ensures that the scope of the regime remains relevant. It future- proofs for future innovations and protects against circumvention by ensuring that clubs and competition organisers cannot simply reconstitute, rename or establish new domestic competitions to avoid the regulator’s regime.
The Government’s intended scope for the regulator is well known; it has been a subject of policy development process over many years, both by this Government and the previous Government, which has involved extensive consultation with the clubs and leagues that will be in scope. Any changes to the scope in future would be based on clear evidence and proper consultation as part of a published Secretary of State assessment. The requirement to consult before future uses of the power is set out on in the Bill. Any changes would be subject to the appropriate parliamentary scrutiny under the affirmative procedure.
On Amendment 85 from the noble Lord, Lord Parkinson, this is a standard provision in many Bills, including the Media Bill, which I note he was the Minister for. To future-proof this legislation, regulations have to be able to be made in a timely way; getting bogged down in lengthy parliamentary proceedings could undermine the Government’s ability to keep the regulatory framework up to date and ensure that it remains effective. This is of no benefit to anyone, including the industry. This comes back to the perceived issue of hybridity that has been mentioned by a number of noble Lords today.
As I set out in Committee and in our memorandum, the policy intent being the top five tiers of men’s English football has never been in doubt. Throughout the development of the policy over the past three years, there have been countless opportunities for all affected and interested parties to make representations on this scope. This amendment would serve no purpose other than to delay the implementation and effect of the regulator. It would be set up, incurring a cost, but unable to act while crucial regulations establishing its scope were bogged down in years of process.
I have set out very clear reasons for the approach taken on defining the scope of the regime and will not take up your Lordships’ time further relitigating this issue. For those reasons, I urge the noble Lord to withdraw his amendment.
Lord Parkinson of Whitley Bay (Con)
My Lords, I thank my noble friend Lord Moynihan for the forensic way he set out the case for his Amendment 7. The example with which he illustrated it—one he has used throughout the passage of this Bill—is certainly one that captured my attention, coming from Whitley Bay. It is causing some concern across Tyneside and among Newcastle United’s many fans across the world. I would be failing in my Geordie duty if I did not take this opportunity to wish the team the best of luck for the Carabao Cup this weekend.
I understand that the Minister cannot speak for a regulator that is to be independent and that does not yet exist, but I hope she will be able to say a bit about the implications of the Bill, such as the one that my noble friend Lord Moynihan set out. It clearly has some very serious consequences, not just for Newcastle in the example he has given but potentially for other teams in the future. I look forward to hearing what she says.
I want to say a little about my two amendments in this group, Amendments 46 and 47. As we said in Committee, among the many changes the Government have made to the Bill, compared with the Bill that the previous Government brought forward in the previous Parliament, was one we understand the case for. In the earlier version of the Bill, there was a provision stating that the regulator must have regard to the Government’s foreign and trade policy when making determinations for the owners’ test. This is an example of a concern that UEFA raised. That has been reported publicly, and the Government were very clear when they made the change to the Bill now before us that it was in response to concerns by UEFA that this undermined the independence of the regulator and that if it was to have regard to the Government’s foreign or trade policy, it would be too close to the Government’s view, in the eyes of UEFA.
I can understand the rationale for making that change, but in Committee I expressed some concerns about the unintended consequences of that and the potential loopholes. I gave the example that if there were to be two potential foreign owners of a club, one from a friendly nation and one from a nation with which this country does not enjoy friendly relations—we can all think of some examples that would spring readily to mind in the troubled world we face today—we would all be clear on which way we would like to see the independent regulator come down, even if the Government are not able to direct it, or if it is not able to have regard to the Government’s foreign policy.
My Amendment 46 would insert a provision highlighting
“whether the individual is reasonably believed to be, or have been, involved in terrorism related activity”.
I am sure that noble Lords would not want such a person to be an owner or director of one of our prominent football teams.
Amendment 47 sets out a number of agencies—the National Crime Agency, the Security Service, the Serious Fraud Office and others—that the new regulator may consult in carrying out its test. I have watered down my amendment from Committee to say “may consult”, not “must consult”, in the hope that this will find some greater support from the Government. I understand the reasons for the change that they have made to the Bill, but I do hope that the noble Baroness will be able to look at these ways in which we might be able to tighten up the potential for a loophole, so that we can avoid seeing the sorts of people that none of us want to see taking control of English football clubs.
Baroness Twycross (Lab)
My Lords, I thank the noble Lords, Lord Parkinson, Lord Moynihan and Lord Fuller, for tabling their amendments, as it provides me with the opportunity to restate the Government’s position on these points and provide some clarification. I join the noble Lord, Lord Parkinson, in wishing Newcastle good luck in their forthcoming match. We can agree on some things in your Lordships’ House.
I start with Amendments 7 and 28, in the name of the noble Lord, Lord Moynihan. Before I go into a bit more detail, I would like to clarify whether incumbent owners or officers could be tested. Indeed, they can be tested. The regulator can test incumbent owners or officers where it has grounds for concern about their fitness or, for owners only, the source of their wealth—but, I repeat, only where there are grounds for concern. It is vital that we have a strong definition of an ultimate owner in order to give transparency to fans and hold owners to account. The Government are intent on providing the regulator with the tools to identify the ultimate owner as accurately as possible.
On the point from the noble Lord, Lord Moynihan, point on precedent, this is why the Bill’s drafting takes its lead from the precedent of other Acts using “influence or control”, including the Companies Act’s “persons with significant control” regime, and the economic crime Act’s “beneficial owners” regime. We are confident that we have the correct definition to achieve the Bill’s aim. It 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. In fact, without this definition, ultimate owners could circumvent regulation. It is fundamental that clubs have suitable custodians in order to secure the future of clubs and, most importantly, to protect the game that fans hold so dear. For these reasons, I hope that the noble Lord can understand the importance of the definition.
I turn now to Amendment 28. As I outlined in Committee, I agree that it is important that the industry has certainty as to what the regulator will consider significant influence by owners. That is why the Secretary of State’s guidance will be produced in good time in order to give this clarity. I want to make it clear that the Bill’s provisions that define “owner” in Clause 3 and Schedule 1 come into force on the day the Bill becomes an Act. That means that the obligation for the Secretary of State to produce this guidance comes into force on that day.
We have taken on board the valuable points the noble Lord raised in Committee. After looking at this again in detail, we stand by our position that the intent of this amendment is met without needing to change the Bill. We do agree that, before guidance is produced, clubs should not be expected to identify those who meet the definition of an owner by exercising significant influence or control. I would therefore like to provide greater reassurance that the scenario the noble Lord is concerned about should not be an issue. I can commit that the Secretary of State’s guidance will be produced before clubs are required to identify their owners who meet the definition of having significant influence or control to the regulator.
In response to the point from the noble Lord, Lord Pannick, on why we have not defined “significant influence and control” on the face of the Bill and are putting it in guidance instead, this approach is based on precedent. As I mentioned, the Companies Act also sets out the definition of “significant influence or control” in guidance rather than legislation. The Secretary of State’s guidance will give clarity to owners about who meets the definition.
Turning now to Amendments 42, 43, 44 and 45 in the name of the noble Lord, Lord Fuller, I think it was a bit cheeky and that one should take a slight exception to the notion that Delia Smith is just a cook. I would argue that she is, through her professional career, arguably also a highly successful businesswoman. Leaving that point aside, however, the requirement to notify is there for a reason. Keeping unsuitable owners and officers out is a core part of the regulator’s regime. We want the regulator to block these individuals from entering the system, and not to have difficult, costly battles to remove them after the fact. So it needs to know who a club’s respective new owners and officers are before they buy or join the club. Put simply, the regulator needs to be able to gather the information that it needs to test them and work with them and the club to ensure that they submit a proper application in good time. It will help the regulator prepare to act quickly when it receives the application.
Clause 27 plays another important function. If a person has, for whatever reason, become an owner or officer of a club without the regulator first having found them suitable, they still have to notify the regulator as soon as possible after the event. Without this provision, there could be untested, unsuitable individuals in the system that the regulator was unaware of.
I move now to Amendment 46, in the name of the noble Lords, Lord Parkinson and Lord Markham. We agree that it would not be right for money related to terrorism to find its way into our clubs. The Bill, as already drafted, already stops that through its provisions on serious criminal conduct. Serious criminal conduct includes offences listed in Section 41 of the Counter-Terrorism Act 2008. That is an extensive list of terrorism-related offences, ranging, to name a few, from membership of a banned organisation to encouraging terrorism to offences related to funding terrorism. Serious criminal conduct, including these terrorism offences, is considered under the ODT “source of wealth” and “honesty and integrity” tests. The club licensing regime lets the regulator block funding that is connected to serious criminal conduct. That is why we are confident that the Bill appropriately and thoroughly deals with terrorism-related activities.
Finally, I turn to Amendment 47, also in the name of the noble Lords, Lord Parkinson and Lord Markham. I am pleased to have another opportunity to highlight the information-sharing agreements that the regulator can and will use to its advantage. I absolutely agree that the regulator may need to work closely with other organisations and stakeholders when exercising its wider functions. I am grateful to the noble Lord for the discussions we have had on this point.
The Bill establishes a gateway for the regulator to share information with a range of organisations, including HMRC, the National Crime Agency and the Serious Fraud Office. It also creates a specific gateway for HMRC to share information with the regulator and empowers the Secretary of State to create other such gateways by regulations, as needed. The regulator may already consult whoever it needs to in order to make robust decisions. The regulator will seek information and expertise from relevant organisations to help it to stay live to both national and international concerns. The shadow regulator is already building a strong relationship with the NCA and law enforcement to ensure that the regulator is in a strong position to gather and receive the information it needs. We are confident that the Bill adequately empowers the regulator to gather such information. For the reasons I have set out, I would be grateful if the noble Lord could withdraw his amendment.
Lord Moynihan (Con)
I turn first to the noble Lord, Lord Goddard, and his comment that by accepting this amendment, we would be watering down the regulation. On the contrary, if you look at the regulatory requirements of FIFA and UEFA, the FA, the Premier League or any of the other national governing bodies in football in Europe—which I have done—it is not a matter of watering down. This makes a much more intrusive additional layer of regulation which does not exist in any of the other countries. I simply put it to the noble Lord that there must be a reason for that. There is a good reason why, to the detailed regulation which exists in FIFA, UEFA, the FA and the Premier League, it is unnecessary to add this additional layer.
My noble friend Lord Parkinson on the Front Bench mentioned the exchange that took place over the clause having regard to foreign and trade policy objectives of the Government. It was a classic example of when UEFA said “Jump” and the British Government’s position was “How high?” I fear that if you take the FA out of the equation, which has happened now, we will see far more work for lawyers in the future than the noble Lord, Lord Pannick, anticipates. His point, however, on this amendment was perceptive and accurate. If the legislation is not changed this evening, it is incumbent on the Secretary of State at a future opportunity to make it absolutely clear in his consideration, which he will undertake, to make sure that there is clarity on that.
As far the Companies Act is concerned, I simply say to the House that there is no requirement whatever for the Secretary of State to take it into consideration when opining on this subject. If there is, it should be written into the Bill. Once again, as I have mentioned before, there are 31 different areas where we are going to wait to hear the detail of the competitions, the clubs and exactly what “influence” means—this is all for the future. This is in many respects a shell Bill, but using “influence” over has the impact that I have mentioned in the example of Newcastle, and I am very concerned about it.
I ask the Minister to write to me if she would, because I appreciate that she will not have had time to respond to the concerns that have been expressed with regard to the owners of Newcastle, not just with regard to the club, but to the response to this Bill when enacted in their investment in the Newcastle area, over and beyond their financing of the club. As I understand it, those rumours that are circulating are well grounded, but the Minister will no doubt be able to tell me. This is meant to be a growth Bill: all regulators are meant to grow the businesses that they regulate, but I fear that this will have exactly the opposite effect, and I think Newcastle may be on the receiving end of that. If we do not change the Bill to remove the “influence” over as a key criterion of control, we will have made an error, and for that reason I wish to test the opinion of the House.
Baroness Twycross (Lab)
I thank noble Lords for their amendments. On Amendment 8, in the name of the noble Lord, Lord Maude, I understand the desire for the scrutiny of the appointment of the regulator’s chair and I am grateful for the thoughtful speech he made outlining the reasons behind the amendment. Getting the chair right, both now and in the future, will be pivotal for the success of the new regulator. I will not go into names or press speculation. I understand that progress is being made on the appointment. I am not involved in that, so I will not comment further.
The chair, as the public leader of the regulator, must be a competent and strong individual, free from any vested interests. I assure noble Lords from across the House that the existing public appointments process is robust, run in accordance with the Governance Code on Public Appointments, and one that Parliament can and should have faith in.
As per Cabinet Office guidance, parliamentary Select Committees can already carry out pre-appointment scrutiny hearings and offer their views to the Secretary of State. The chair of the regulator is subject to that scrutiny. The Secretary of State will, of course, weigh any committee’s views carefully, as the Cabinet Office guidance already sets out; this will be the case for the future.
However, the Governance Code on Public Appointments sets out that Ministers have the ultimate responsibility for appointment decisions for which they are accountable to Parliament. It is not common for Parliament to hold a statutory right of veto over such public appointments and we cannot see a reason to set that precedent with this regulator. In response to my noble friend Lord Bassam of Brighton, our view is that this amendment would represent a veto.
Amendment 10, in the name of the noble Lord, Lord Parkinson of Whitley Bay, seeks to place a cap on the number of members of the regulator’s expert panel. The regulator’s independent expert panel will play a vital role in making various important decisions across the regulator’s regime, when and where it is appropriate. It is essential that the panel has a range of relevant expertise and experience to reflect the diversity and complexity of decisions that may come before it.
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 fetter the effectiveness of the expert panel by introducing a cap on the maximum number of members of the panel as this amendment seeks to do, however sensible that level may appear to noble Lords. The regulator needs the flexibility to react in the event of high workload for the panel. The regulator will be required to deliver value for money and has a regulatory principle underpinning this. We do not believe that the CEO would appoint and maintain an unnecessarily bloated panel.
Finally, I turn to government Amendments 9 and 11. In Committee, my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton, among others, emphasised the real importance of protecting the regulator from conflicts of interest. The Government are in complete agreement that the independence of the regulator must be protected, including against vested interests. Although the Bill already makes provision for managing such conflicts of interest, we have tabled government amendments to strengthen these protections even further and beyond any doubt.
The amendments require the regulator to establish and maintain a system whereby the members of the regulator’s board and its expert panel must declare their relevant interests, and a record of these interests must be kept and maintained. This will ensure that all board and expert panel members declare relevant interests from the outset of their appointment and on an ongoing basis. This is good practice not only for transparency but to help the regulator manage any conflicts and to insulate its decisions from potential vested or competing interests.
I hope that those reasons have reassured your Lordships’ House and that noble Lords will not press their amendments. I will move government Amendments 9 and 11 in due course.
Lord Maude of Horsham (Con)
My Lords, I am grateful to noble Lords for their contributions to this important debate. On the comments made at the outset by the noble Lord, Lord Bassam, I am open-minded about whether the Bill should contain what is effectively a veto or whether it should accord with the more usual practice. As I said, if the Minister were to give an undertaking that she would come back with an amendment framed in those terms at Third Reading, I would be willing not to press this amendment to a Division, but I have not heard that commitment from her, which is a disappointment.
We heard from the noble Lord, Lord Rooker, who is obviously scarred by his personal experience. I simply remind him that hard cases make bad law, and his sounds like a particularly hard case, for which he has my sympathy.
The noble Lord, Lord Addington, seemed to be recommending—arguing, really—that there should be no pre-appointment scrutiny at all, let alone whether it should be in the Bill. Therefore, he is presumably urging the Minister to withdraw the commitment she has made that there should be pre-appointment scrutiny. On the substantive point he made in arguing that scrutiny would turn the regulator into a political football, the reverse is actually the case. It is important that the regulator should be genuinely independent, and my experience of observing these scrutiny procedures is that Select Committees are particularly concerned to test the capability of the nominee to exercise genuine, robust independence. Rather than turning the nominee into someone who is overly influenced by the scrutiny, it is to test whether they are capable of withstanding it. That is the consideration.
I am grateful for all contributions, but in the absence of the quite modest commitment I have requested the Minister to make, I want to test the opinion of the House on Amendment 8.
Baroness Twycross
“Declaration and registration of interests of members of the Board
6A (1) The IFR must establish and maintain a system for the declaration and registration of relevant interests of members of the Board.(2) In this paragraph “relevant interest”, in relation to a member of the Board, means a financial or other interest that may be relevant to the IFR’s exercise of its functions under this Act.”Member’s explanatory statement
This amendment requires the IFR to establish and maintain a system for the declaration and registration of relevant interests of members of the Board.
Baroness Twycross
“Declaration and registration of interests of members of the Expert Panel
23A (1) The IFR must establish and maintain a system for the declaration and registration of relevant interests of members of the Expert Panel.(2) In this paragraph “relevant interest”, in relation to a member of the Expert Panel, means a financial or other interest that may be relevant to the IFR’s exercise of its functions under this Act.”Member’s explanatory statement
This amendment requires the IFR to establish and maintain a system for the declaration and registration of relevant interests of members of the Expert Panel.
Lord Parkinson of Whitley Bay (Con)
My Lords, I thank the Minister for the two government amendments in this group. They reflect amendments I tabled in Committee. The first reduces the frequency with which the Secretary of State may revise the football governance statements, bringing it more in line with the parliamentary cycle rather than every three years. The second removes the Secretary of State’s power to amend the definition of the football season. This always seemed a disproportionate power. Why a Cabinet Minister ought to define a football season is a point that has bemused many football fans. I am grateful to the noble Baroness for Amendments 24 and 87, which she has brought forward on those points.
Like other noble Lords, I applaud my noble friend Lord Ranger of Northwood for his passionate speech in favour of his Amendment 27, which seeks to require the regulator’s annual report to include a review of the impact of its activities on ticket prices. The important argument here is not that the regulator should dictate ticket prices to clubs. I recognise the point that the noble Lord, Lord Hogan-Howe, made about how clubs often try the patience of their fans, but it is a commercial decision for clubs to take. There is a distinct possibility that the activities of the new regulator may force clubs to increase ticket prices further.
This is different from the point that the noble Lord, Lord Bassam of Brighton, made in pointing to the duty already in the Bill. The regulator will charge a levy to clubs. It will bring in higher compliance and legal costs, and many clubs will have to hire extra staff to comply with the new legal duties. That is all acknowledged in the Government’s impact assessment. When we couple that with the Government’s job tax, the increase in the minimum wage and the impending duties in the Employment Rights Bill, we can see that football clubs will be facing significant cost pressures over the coming years.
Inevitably, the only solution for many clubs—here I am thinking not predominantly about Premier League or Championship clubs but about clubs in League Two and the National League, which are the smaller and less well-off clubs—will be to hike ticket prices to offset these new and increased costs. It is clear that we need this assessment of the impact of the regulator’s actions on ticket prices. If Parliament is to give its assent and create this regulator, I think it owes it to fans to make sure that the impact of that cost is properly accounted for.
The noble Baroness, Lady Fox, my noble friend Lord Ranger and others have reflected on the fact that fans have very high expectations of this Bill and this regulator. They hope that the Bill, including the provisions in Schedule 4, will allow them to benefit from lower ticket prices, but I fear that the reverse is likely to be the case—higher costs leading to higher ticket prices for fans. I hope that my noble friend Lord Ranger will pursue his point on behalf of football fans across the country.
I am pleased that my noble friend Lady Brady has retabled her very sensible amendments to ensure that the regulator publishes guidance, not just to its functions under Clauses 21 to 25 but to its functions under the whole Bill. The regulator needs to translate the somewhat abstract powers and duties set out in the Bill into a more detailed and cohesive explanation of the rules it will be producing to support clubs in understanding precisely what will be expected of them. If it does that clearly, that may go some way to mitigating the costs that the new regulatory regime will impose on them. My noble friend’s Amendment 25 is a very simple one, but its impact would be helpful to all clubs facing these new regulations.
To the noble Baroness, Lady Jones of Moulsecoomb, the right reverend Prelate the Bishop of Sheffield and my noble friend Lord Gascoigne, I must regretfully say that I cannot support them on the amendment they have spoken passionately about. As I set out in Committee, we worry about the propensity for mission creep here. They have very wisely chosen to put their initiative behind Amendment 13, which is the more modest of the two and reflects an Act of Parliament that has already been passed with duties under it. While we cannot support the noble Baroness’s Amendment 13, neither will we oppose it if she presses it to a vote.
With renewed thanks to the Minister for the government amendments in this group, I look forward to her response.
Baroness Twycross (Lab)
I am not sure I have many original thoughts either, although I will try to address the points raised during the debate, starting with Amendments 12 and 13 in the name of the noble Baroness, Lady Jones of Moulsecoomb. I thank her for these amendments.
I am really comfortable with her absolute determination—as is her right—to raise environmental issues in every single way at every point of our deliberations in your Lordships’ House. The noble Baroness is right that we need to limit our impact. I note that she has support from the noble Lords, Lord Hogan-Howe and Lord Gascoigne, demonstrating her incredible ability to forge unlikely—some might say unholy—alliances with very noble aims. I apologise to the right reverend Prelate; I am not referring to him in that sweeping statement.
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 that the UK fulfils its legal obligation to reach net-zero emissions by 2050. I agree with the noble Baroness, Lady Jones, and other speakers, including the right reverend Prelate the Bishop of Sheffield, that as a huge part of our national psyche, all sports, including football, have an important role to play in this transition.
The Government expect authorities across the sport to be working together to advance environmental sustainability. However, we do not feel it is right to add environmental sustainability to the regulator’s objectives or general duties. The bar for statutory intervention in any market should be very high. That is why the regulator’s focus should be on the problems that football has clearly shown itself to be unable to properly address through self-regulation.
By contrast, football has demonstrated the ability to take action on the environment. You only have to look at Forest Green Rovers as a brilliant example of a club taking action on environmental issues lower down the pyramid. At the highest level, the Premier League’s new sustainability pledge, involving a new minimum standard of action on environmental issues across both the clubs and the league, is another good example. This is only a starting point upon which future initiatives must build. Football authorities must take more proactive steps to accelerate their environmental initiatives. However, it is within the gift of the leagues, clubs and other authorities across the game to do so without government intervention.
This Amendment would also constitute scope creep, as highlighted by the noble Baroness, Lady Fox—something that I know noble Lords all agree we should be wary of, not least with the additional burdens it would impose on the regulator and the industry. Therefore, I hope the noble Baroness will not press these amendments.
Amendment 25 in the name of the noble Baroness, Lady Brady, seeks to bind the regulator to produce guidance on every aspect of its functions. In our view, this is disproportionate and would be a significant burden on the regulator. We are not aware of a precedent for any regulator being required to publish guidance about every single aspect of its functions. In many cases, it would be unnecessary and not relevant to clubs or competition organisers. This would involve engagement and consultation with clubs, adding significant burdens to them. The regulator will, where necessary, produce guidance in consultation with relevant stake- holders, in line with its duties and principles. I therefore hope the noble Baroness will feel sufficiently reassured to not move her amendment.
On Amendment 27 in the name of the noble Lord, Lord Ranger of Northwood, regarding ticket prices, the annual report is clearly a vital mechanism for the regulator to be held to account. I understand the desire to ensure that this report is comprehensive and covers necessary detail. It was really helpful to have his explanation of the intent of his amendment. I recognise how important ticket prices are to fans and recognise the noble Lord’s determination to raise this important issue on behalf of fans.
Ticket pricing is ultimately a matter for clubs. That is exactly why this Government have made it explicit in the Bill that clubs must consult their fans on ticket pricing as part of their fan engagement. This is the way to ensure that fans can have their voices heard on such an impactful issue; the annual report is not the most effective place to achieve this. The regulator may well choose to look at ticket pricing as part of the “state of the game” report. However, as it is a commercial decision, the regulator will not intervene, aside from ensuring that clubs consult their fans.
Baroness Twycross
Member’s explanatory statement
This amendment requires the IFR to have regard to the desirability of exercising its functions in a way that avoids any adverse effects on the financial growth of English football.
Tuesday 11th March 2025
(1 year, 7 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 59-I(a) Amendments for Report (Supplementary to the Marshalled List) - (10 Mar 2025)
21:52 - Division on Amendment 27 - Ayes: 43 / Noes: 120 - Amendment 27 disagreed.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Lord Markham (Con)
This amendment is trying to avoid that and do it the other way around. Our trade agreements are in place already and well-known. We are asking the football regulator to do many things, but I would not expect it to know, because of the large levels of foreign ownership, how its decisions might disproportionately affect some segments versus other segments and how that could trip over some of the World Trade Organization agreements or other such bodies. That is what we are trying to protect against. Hopefully, it is not even relevant, but again it is trying to ensure that we do not sleepwalk into something that is thoroughly unintended. This is a simple precautionary amendment to avoid such unintended consequences.
So, as I say, we must all recognise that our existing trade agreements are not just beneficial but vital for our future growth. The Government have repeatedly said, quite rightly, that growth is their number one mission. All we are trying to do with this amendment is make sure that we do not inadvertently trip up on one of those and the regulator has one of those unintended consequences, because clearly none of us wants to see that happen.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Moynihan, for his amendments. There is much on which we agree, but, unfortunately, I cannot agree that these amendments in this group are required. Good investment, which comes in many forms, has helped make English football the global success it is today, and this Government are absolutely committed to continuing that. Of course, this regulator will not discriminate against foreign investors or act unfairly against anyone else—nothing in this Bill allows it to do so. This amendment is not needed to prevent that. Not only is it unnecessary but, as noble Lords will appreciate, it would be highly unusual to bring a broad range of treaty obligations directly into our domestic law in such a sweeping way.
This Government take our international obligations very seriously and the Bill complies with our treaty commitments. But, if foreign investors have concerns about the regulator’s decisions, there are mechanisms within our treaties to allow them to raise these concerns at the international level and, if necessary, to bring disputes. That is the appropriate forum, not our domestic courts. Let me be clear once more: we are confident that the Bill complies with our international obligations. Nothing in it requires or even allows the regulator to make discriminatory or unfair decisions.
Finally, I was slightly surprised to see the last part of this amendment tabled by the noble Lord, Lord Moynihan. We have carefully ensured the regulator’s independence from government and ensured that UEFA is content with the Bill as drafted, so I was not clear why the noble Lord wants to require the regulator to consult the Treasury and DBT on a wide range of occasions and risk undermining the regulator’s independence. This would be concerning, especially given how much time the noble Lord has spent discussing UEFA and FIFA throughout the passage of the Bill through your Lordships’ House, and I am sure the risk would be highly concerning for many others in this House. That is why I urge the noble Lord to withdraw his amendment.
Lord Moynihan (Con)
I am grateful to my noble friend from the Front Bench and the Minister for their contributions, and for the intervention, although I regret that I was not in a position to answer it, because I had already attempted to set the scene before the House managed to resume in full.
My amendment was not about UEFA. The purpose of the amendments this evening was about explicit statutory acknowledgement to reinforce clarity, reduce the legal uncertainties and prevent inadvertent breaches, demonstrating transparency, foresight and collaboration between the relevant government departments. It was to simplify what I anticipate will be, potentially, a legal minefield and to make sure that, if we did that in the legislation, we would avoid many of the issues that were going to, potentially, follow as a result of this legislation.
In parentheses, one of the problems that will follow comes from the intervention from the noble Lord: namely, UEFA is now out of this loop. UEFA is only a stepping stone: the running of football in the United Kingdom is through its member, the FA, and the FA, as we have debated and concluded within the House this evening, has no role within the financial regulation of football in this country. That is the first time that has happened anywhere in Europe. In Spain, it is fully at the heart of the financial regulation of that country, and indeed was party to working with government in order to follow a model that the Premier League has instituted here in the United Kingdom.
It is a dangerous path to move away from the autonomy of world sport. I will not go into this again, but I am trying to do a service to the noble Lord who has intervened this evening, because I know he has been an assiduous attender in Committee. It is a dangerous path: if you legislate to run sport and have financial management of sport and you ignore in practice the role of the governing body, which is the FA, you set up potential legal complexities that would otherwise not arise. That is why I have put forward these proposals: simply to give additional protection to those legal challenges that could arise as a result of this legislation and to move the amendments before the House.
Baroness Twycross
“(i) persons on whom it may impose requirements or restrictions, namely clubs, owners, senior managers and other officers of clubs, and competition organisers, and(ii) other persons who may be affected by its decisions, including players and fans;”Member’s explanatory statement
This amendment amends the regulatory principle in clause 8(b) so that the IFR should co-operate, and proactively and constructively engage, with persons who may be affected by its decisions.
Baroness Twycross (Lab)
This group contains a number of government amendments to the regulatory principles. I am grateful to noble Lords from across your Lordships’ House for the engagement we have had over the past few weeks both in Committee and in meetings. It has been helpful.
First, on Amendment 17, we all know that football without fans is nothing. It has always been the intention that the regulator would engage with fans and any others impacted by the regulator’s decisions, where they are relevant. It is vital to the Government that the essential value of players and fans to English football is demonstrated both in the legislation and the regulator’s engagement. I thank my noble friends Lady O’Grady and Lord Watson of Invergowrie for their engagement in ensuring that that value is reflected in the legislation, as well as my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, and the noble Lord, Lord Addington, for their support for this amendment. This amendment will clarify that intent and make it explicit in the Bill. It will both reflect the essential nature of players and fans to English football and ensure that the regulator is directed to engage with both groups.
Turning to Amendments 18 and 19 concerning light- touch regulation, I thank the noble Lord, Lord Pannick, for tabling his amendment and for his extensive discussion of this issue with me and officials. We agree wholeheartedly that light-touch regulation should be the aim of the regulator. It should have a bias—against unnecessary intervention, against excessive burdens on the industry, towards co-operation and engagement before intervention, and towards proportionate interventions that deliver real benefits. That is why I have tabled Amendment 18 to clarify the intention that the regulatory regime should be light-touch.
We carefully considered the best way to deliver this aim, including whether to use the term “light-touch” in the Bill. We believe the regulatory principles should be as clear and specific as possible. Each time the regulator acts, it should be clear whether it has met the Bill’s requirements; that is, whether it has had regard to the principles. That is why our new principle in Amendment 18 centres around a test of necessity and whether the same outcome could be achieved in a less burdensome way. These, like the existing Clause 8(c) test of proportionality, reflect concepts that are well understood in public law and will give clubs, leagues and the regulator appropriate legal certainty.
“Light-touch”, by contrast, is not typical legislative drafting. That could make it difficult for both regulator and regulated to be 100% certain of their legal positions. As debates in Committee made clear, one person’s “light-touch” regulation is another’s “overreach”. Allowing a margin of discretion is a less novel concept, but we none the less have concerns about its legal certainty.
In our view, the wording “necessity”, “consideration of alternatives” and “proportionality” are clear tests that will let both regulator and regulated act with confidence. That is what our regulatory principles and government Amendment 18 deliver. I can assure the House that the principles in Clause 8, including our Amendment 18, enshrine a light-touch approach in law.
Finally, on government Amendment 20, this minor drafting change seeks to clarify the regulator’s responsibility under this regulatory principle. Although it will not materially change the effect of the principle, an obligation for a public body to have “regard to” is well precedented and understood by the industry.
For the reasons I have set out, I hope that the noble Lord, Lord Pannick, will not move his amendment. I beg to move government Amendment 17.
Lord Watson of Invergowrie (Lab)
My Lords, I would like to say a few words on Amendment 17 just moved by my noble friend the Minister. I tabled an amendment in Committee to try to ensure that the players appeared in the Bill, as originally they did not.
I very much welcome the fact that my noble friend has listened to the representations, not just by me and my noble friend Lady O’Grady but by the Professional Footballers’ Association and others, who have made the very reasonable case that, with the insertion of a reference to players as a group in this section, the regulator is expected to,
“so far as reasonably practicable, co-operate, and proactively and constructively engage”
with players. In effect, they become statutory consultees of the IFR, which is only appropriate because there is of course no football without the players. I very much welcome the wording that the Minister has come forward with; it meets my concerns and those of others.
The other part of this is the fans. I also put forward an amendment in Committee proposing that the fans should be defined in some way. I have had discussions with my noble friend the Minister. It was always going to be difficult. I assume that it will soon become the job of the regulator to define what a fan is. I still hold to the belief that you need to have some address for a fan if you are going to consult them. That is why I proposed in Committee that season ticket holders should be the best way of deciding who the fans are for consultation purposes, but I accept that it has not been possible to reach any kind of consensus on that.
I welcome the wording in this amendment. Again, I commend my noble friend and the Government on listening to representations and coming up with wording as a result.
Baroness Twycross (Lab)
My Lords, this group and the discussion we have had reflect the value of the style of debate that we have in your Lordships’ House. I welcome the opportunity for us to work with noble Lords from across the House to refine the Bill. We thought the Bill was good when the previous Government had it; we thought our version was very slightly better; and we have the possibility of sending an even better version to be considered in the other place.
In starting my response to the comments made during this short debate, and with appropriate and due impartiality, I am very happy to pass on my best wishes to Liverpool FC—I will not comment on the score. Whichever team anyone supports, I think all noble Lords can agree that without players we would have no game. On that basis alone, it is right that they are included. I thank the noble Lords and my noble friends who have signed the Government’s amendment on that, and who took time to talk us through where it should sit within the Bill.
A lot of the discussion relates to definitions—whether about a light touch and what that means, or about fans and who they are. I want to say a little more about fans. The Government do not see themselves as the arbitrator of who counts as a football fan. That is something that fans and clubs themselves are in the best position to understand and discern. The makeup of a fan base differs from club to club; this diversity is part of the reason why the English football pyramid is so special. This is why the Government have introduced this legislation to protect English football by making it more sustainable and to help put fans back at the centre of their clubs, amplifying their voices on the issues that matter to them.
On the question from the noble Lord, Lord Evans of Rainow, about how the regulator will engage with fans, it will do so on a case-by-case basis. I would be happy to arrange for the noble Lord to speak to the shadow regulator team to provide him with more information about how it might do that. The regulator, once established, will be able to provide guidance for clubs on how to best consult fans. This will ensure that clubs have an appropriate framework in place that allows them to regularly meet and consult this group on key strategic matters and supporter interests.
The noble Lord, Lord Pannick, asked the key question about whether the regulator will have to ask itself whether intervention will address some substantial mischief, is likely to achieve some substantial benefit and is required because a similar outcome could not be achieved by a less burdensome means. That is our understanding. If that is the noble Lord’s understanding of where we are going with this amendment, that understanding is correct.
The noble Lord, Lord Birt, spoke about the risk of both underregulation and overregulation. This is about balance; we have added a new regulatory principle to achieve this aim, but we still think this will mean that the regulator will be effective. This is key, as both the noble Lord, Lord Birt, and the noble Lord, Lord Addington, made clear. The first part of this new principle of considering
“whether the requirement or restriction is necessary”
directs the regulator towards a light-touch approach to intervention as a whole, acting only where it needs to. I do not think we are a million miles away from where the noble Baroness, Lady Brady, thinks we should be, and I am happy to meet with her again to talk this through a bit further should she find that helpful.
The second part of the new principle ensures that any intervention that is considered necessary is as light-touch as possible by directing the regulator towards the least burdensome mechanism available in the specific circumstances of the outcome sought. Amendment 18 facilitates the regulator to take a different approach to clubs, alongside the proportionality principle, to ensure that each action taken by the regulator is the least burdensome it can be. We have not chosen to call that light-touch in the regulation, but it is intended to be light-touch. With that, I commend Amendment 17 to the House.
Baroness Twycross
“(ba) it should, before it imposes any requirement or restriction on a person, have regard to whether the requirement or restriction is necessary and whether a similar outcome could be achieved by less burdensome means;”Member’s explanatory statement
This amendment includes a regulatory principle that the IFR should, before it imposes any requirement or restriction on a person, have regard to whether it is necessary and whether a similar outcome could be achieved by less burdensome means.
Baroness Twycross
Member’s explanatory statement
This amendment makes a minor drafting change to the regulatory principle in clause 8(d).
Lord Markham (Con)
Given the late hour, I will speak briefly in support of these amendments. As the noble Lord, Lord Birt, quite rightly said, the value of the global rights is now greater than the value of the domestic rights. Of course, it is the rights money that affords the best players in the world. We have put out this stat before: the Premier League has 44% of the best players in the world, which makes it the most exciting, which creates a virtuous circle and grows the rights. It is entirely proper that the global appeal should be recognised in the “state of the game” report. We wholeheartedly support the amendments.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Birt, for his amendment. I am grateful for the huge amount of time and effort that the noble Lord has put into considering how we could all further improve this legislation. I also thank him for the amount of time he has given to discussing it with my officials and me over many weeks.
This amendment would see the regulator having to provide an overview of English football’s global appeal in the “state of the game” report. The report is focused on the issues affecting English football so far as relevant to the exercise of the regulator’s functions. The issue that this amendment intends to capture will likely already be captured in the “state of the game” report, as it could impact the regulator’s objectives and duties. We have purposely left the required content of the “state of the game” report broadly to the regulator’s discretion to ensure flexibility and independence. It would not be possible to list every issue worth including, as the list would be too long and doing so would remove the regulator’s ability to prioritise issues and to adjust them over time.
Amendment 22, requiring an updated “state of the game” report if the backstop is triggered, could place a significant burden on the regulator, and might slow the process down significantly. In our view, three months would definitely not be long enough to update a review of English football, given the breadth and depth of relevant issues it must cover. The regulator has to identify the analysis needed, request it from parties, let them respond, analyse it and consult on findings before publishing.
We also have to consider the significant burdens this amendment would place on the regulator, but particularly on smaller clubs. Furthermore, an updated “state of the game” report would be required solely if an application to trigger the backstop was put forward, regardless of whether that application was accepted. Ultimately, a three-month delay in the backstop process, with the burden on both the regulator and the industry to engage with a rushed updated review, would likely be disproportionate to the benefits. I therefore hope the noble Lord will withdraw his amendment.
Baroness Evans of Bowes Park (Con)
When the backstop first has to happen, the “state of the game” report is critical as part of the process. Is the noble Baroness now saying that for any future triggering of the backstop, the “state of the game” report is not part of that process? We thought she had said that it was always part of the triggering process. I may have completely misunderstood, so if the noble Baroness could clarify that, it would be really helpful.
Baroness Twycross (Lab)
The issue is whether there would automatically be a “state of the game” report simply because of a request to trigger the process. Once a “state of the game” report is in existence, it may or may not be necessary for it to be updated if somebody triggers the process. In our view, the automatic triggering of an updating of the “state of the game” report is disproportionate. There would already be a report in place. We absolutely intend for a “state of the game” report to be in place before an initial process is triggered. Clearly, it would have to be written within the relevant timeframe in the legislation.
Lord Pannick (CB)
May I suggest to the Minister that five years is an awfully long time between “state of the game” reports? That may be the defect here. The game can and does change immeasurably within a period of five years. Perhaps the Bill team and the Minister could consider, when the Bill goes to the other place, whether it might be more appropriate to have a more regular update on the “state of the game” report, perhaps every three years.
Baroness Twycross (Lab)
I will take that point away and return to this issue with noble Lords. My view is that it does not necessarily need to be more frequent, but we can discuss that further.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Addington, for his amendments in this group. As the Minister for Gambling, I acknowledge the importance of monitoring the impact of gambling sponsorship in football. Indeed, the noble Lord has raised this with me on a regular basis. I absolutely agree that, where gambling advertising and sponsorship appear in relation to football clubs, they must do so in a socially responsible way. The cumulative impact of gambling advertising, specifically around football, is, as I said, raised with me frequently.
I have already set the gambling industry, relatively recently, a task to raise standards to ensure that gambling advertising more widely is both proportionate and appropriate. This work will be monitored closely. It is fair and reasonable for the Government to challenge the sector to make self-regulatory improvements first. In our view, this can deliver positive change more quickly. The Premier League has already made a decision to ban front-of-shirt sponsorship by gambling firms by the end of next season, and many clubs, as highlighted by my noble friend Lady Taylor, already do not take sponsorship or advertising by gambling firms.
All major sports have also published their gambling sponsorship codes of conduct, which set minimum standards for gambling sponsorships within sport. We will work with sports bodies to undertake a review of the implementation and impact of the codes of conduct to ensure they are effective. This review will provide key evidence to inform the most appropriate next steps. However, we do not believe the regulator should have a specific role in commercial matters such as advertising and sponsorship, which are rightly decisions for clubs.
It is important to recognise the vital revenue that many clubs currently rely on via advertising and sponsorship from gambling firms, as highlighted by the noble Baroness, Lady Fox of Buckley. We have to be wary of scope creep that sees the regulator straying into matters that should be reserved for the industry and stepping on the toes of industry authorities such as the FA and other regulators that have a remit over this area of policy.
On Amendment 29, current drafting already requires fan engagement on clubs’ business priorities and strategic approach. Discussion of a club’s overall approach to sponsorship could reasonably play a role in these consultations. We do not, however, think it appropriate for the regulator to require specific fan engagement on gambling advertising and sponsorship specifically, especially as it would not be relevant at all clubs, such as those with no gambling sponsors.
On Amendment 53, what constitutes the promotion of gambling could be interpreted extremely widely, such as players not being able to take part in competitions that have gambling sponsors. Clearly, this would, or could, have significant unintended consequences for clubs and the sport more widely.
On Amendment 23, a review of gambling advertising and sponsorship in football should not, in our view, be the responsibility of a regulator with a specific remit of the kind intended by this legislation. As I have set out, the Government are already taking action in this space in conjunction with the industry and governing bodies in football and other sports. This will review the implementation and impact of the codes of conduct to ensure they are effective. If further action on sponsorship and advertising is needed, we will take it, but for the reasons I have set out I hope the noble Lord will withdraw his amendment.
Lord Addington (LD)
I thank the noble Baroness for her response. However, it seems to be, “Yes, something should be done—at some point in the future, we will definitely do something”. I do not really think that we can carry on like that. We have to try to do something as quickly as possible, because the combination of the smartphone and the universal web means that the temptation to gamble is constantly with us. It is something that we have not addressed properly. Most of our regulation is designed for a day before the smartphone, so I hope that we will do something now.
As I said, a series of amendments was put down to give a series of options for the Government. The Government have decided not to bite. So I give fair notice that I will be pressing Amendment 53 when the time comes, but I beg leave to withdraw Amendment 23, standing in my name.
Baroness Twycross
Member’s explanatory statement
This amendment changes the minimum frequency of revised football governance statements from every three years to every five years.
Baroness Twycross
“(b) any emblem or crest of a relevant team operated by the club;(ba) the predominant home shirt colours of a relevant team operated by the club;”Member's explanatory statement
This amendment adds a reference to a team’s “emblem” alongside “crest”, to avoid confusion with the heraldic use of the term “crest”.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Parkinson, for his passion for heraldry and the interesting discussions we have had on this topic in Committee and afterwards. The Government absolutely agree on the importance of this legislation being able accurately to protect club heritage. That is why officials have worked closely with the College of Arms, and I thank it for its engagement. In doing so, we have ensured that the legislation remains in step with both the FA’s heritage guidelines and heraldic terminology. The Government have tabled Amendments 30 and 49 to expand the references from “crest” to “crest or emblem”, and the noble Lord has my commitment that we will add additional clarity in the Explanatory Notes which accompany the Bill. We will include language to the effect of the noble Lord’s Amendment 80 in the Explanatory Notes.
Turning to government Amendments 48 and 79, I would like to thank my eagle-eyed noble friend Lord Bassam again for raising awareness of the consistency of drafting in Clause 46. We absolutely agree that it is best for language to be consistent where possible. That is why we are bringing forward this amendment to align drafting. I would like to reassure noble Lords that this change has no impact on the policy; none the less, it is a change we are welcoming. I beg to move.
Lord Parkinson of Whitley Bay (Con)
My Lords, for reasons I cannot fathom, our debates on heraldry always seem to come late in the evening. But I am delighted to see that it is commanding such interest from the Government Benches this evening. I take that as great encouragement.
I thank the Minister and her officials, who have taken a number of meetings and had a number of conversations on a subject that might seem recherché but is important not just to me but to the College of Arms and, indeed, to many who have been following the Bill. As I set out in Committee, this point was raised on social media; in a very new medium, an ancient problem was highlighted.
Some might think that the use of correct heraldic terminology is trivial, but it is my firm view that it is not. Not only should we generally aim for precision in the language we use in legislation but where the provisions of the Bill, and indeed the actions of the regulator, may intervene in the activities of a body as venerable as the College of Arms, we need to ensure that we get it right.
I welcome the good will that is reflected in the fact that the Government have brought forward some amendments, but I am afraid we have not quite got there yet, which is why I have risen to speak to my Amendment 80. To briefly summarise what I set out in Committee, the problem in government Amendment 30, which the Minister has just moved, is the term “crest”—which some will take to be the badge part of a coat of arms but is in fact what appears above it. The word “crest” is repeated in the explanatory statement to Amendment 30, where the Minister has said:
“This amendment adds a reference to a team’s ‘emblem’ alongside ‘crest’, to avoid confusion with the … use of the term ‘crest’”.
It is better to avoid that confusion by not using it, hence the amendment I brought in Committee suggesting that we should properly call it a “badge”. We are repeating the incorrect term, which is the problem that I and the College of Arms have been raising with the Government.
During the meetings we have had, we have been trying to land this point with the Government but have not quite been able to get there. I am aware that correspondence was had with the Minister’s department only today, following up the points. I know the college welcomes what she is going to put in the Explanatory Notes, as do I—that is very helpful—but it is looking for a saving clause that simply asserts, or reasserts, the authority of the Kings of Arms over armorial bearings. That is the sticking point that I hope we might yet be able to resolve on this matter.
As I understand from the College of Arms, the department’s argument is that the regulator does not approve the content or substance of a proposed club badge but merely decides whether it went through the required process of consultation under the Bill. The department argues, therefore, that there is never any risk of the regulator straying on to the college’s turf since the regulator is not involved in the question of what a badge consists of or looks like. The Government argue that that is why nothing is needed. Rather perversely, they argue that a saving clause would create the impression that there is a conflict here, but that misses the point. When taken as a whole, the Bill does create approval for a badge, which it incorrectly calls a crest, albeit via consultation with fans and others. The Bill creates a mechanism for the approval, and indeed disapproval, of a badge—mistakenly called a crest—in statute. That cannot fail to create a sense that, at some level, the badge that has gone through the process has achieved some kind of authorised status.
In Committee we discussed the examples of problems that may occur. In lots of local authorities, a football club uses the same or a similar coat of arms as the local authority. If there were to be a conflict between that local authority and that club about the proper use of it, the College of Arms would be asked to step in and adjudicate. So there is a risk that the Bill unwittingly encroaches on the Crown’s prerogative in regard to heraldry. This is not the same as trademarks, but in the case of coats of arms we are talking about the Crown prerogative, which surely limits the extent to which parallel clauses for other parties are required.
What the College of Arms is asking for, and what I am suggesting in my Amendment 80, is not unusual. There are plenty of examples of saving clauses in other legislation; for instance, Section 33 of the Immigration Act 1971. My Amendment 80, which the college hopes to see put on the face of the Bill, not just in the Explanatory Notes, would follow the well-established precedent of protecting with absolute certainty the rights of the Kings of Arms.
All of us who have come into your Lordships’ House have taken our first steps in this Chamber following, slowly and reverently, the footsteps of the Garter Principal King of Arms, an office that has existed since 1415. We went to see him at the College of Arms, to seek agreement for our very names and titles. We have sworn an oath of allegiance to the sovereign that it is his solemn duty to proclaim at the moment of accession. So I hope that we can give him a few moments of our attention, even at this late hour and at this late stage of the Bill.
The saving clause that I have proposed, drafted in general terms, will not create the impression that the regulator will be involved in considering the substance of designs—or anything else, for that matter. I believe it is a simple but important amendment, which I very much hope the Minister will be able to accept. Happily, if there should need to be a Division on my Amendment 80, it would not come tonight but on day 2. I hope that, if she is not able to give that reassurance now, she will be able to take it away, reflect on it further—particularly in the light of the correspondence that I know she and her department have had today—and avoid the need to divide on this.
I am very grateful for the time and attention that the Minister has given, and for the improvements that we have had already. This final insertion really is the matter that would allay the concerns of the College of Arms and, therefore, my concerns as well. I beg to move.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Parkinson, again for his engagement on this matter and for his amendment.
We genuinely do not think that this matter is trivial but we do believe that the language in the noble Lord’s amendment would be a redundant addition to the legislation; we do not think that it is required. This is because, aside from the terminology used regarding the club emblems, the regulator’s powers are not expected to interact with the College of Arms and, therefore, the powers of the Kings of Arms.
Indeed, the regulator will ensure that fans have been properly consulted on proposed changes, but it will not be for the regulator to approve designs, only the process of clubs working with fans. This is rightly for other organisations, including the College of Arms, but also the Intellectual Property Office and other bodies.
As the regulator has no role in what the crest or emblem looks like, nor whether it infringes on any trademarks or copyright, it is implicit that the relevant body’s decision will supersede any related action by the regulator. There are many instances where the regime has been designed specifically not to conflict with existing powers and processes, such as law enforcement investigations or HMRC business requirements. However, it is unnecessary and unconventional practice for all parties that may work on parallel issues to the statutory body to be listed.
I hope that, through the changes we have made, and through further explanations in the Explanatory Notes, the noble Lord will be reassured that the sanctity of the College of Arms will be preserved. I am happy to meet him to discuss this further but, for the reasons that I have set out, I hope that he will withdraw his amendment. I hope that noble Lords will support these government amendments. I beg to move Amendment 30.
Monday 17th March 2025
(1 year, 7 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 59-II Second Marshalled list for Report - (13 Mar 2025)
15:57 - Division on Amendment 31 - Ayes: 182 / Noes: 237 - Amendment 31 disagreed.
16:47 - Division on Amendment 52 - Ayes: 196 / Noes: 229 - Amendment 52 disagreed.
17:00 - Division on Amendment 53 - Ayes: 74 / Noes: 339 - Amendment 53 disagreed.
17:37 - Division on Amendment 57 - Ayes: 183 / Noes: 234 - Amendment 57 disagreed.
18:56 - Division on Amendment 58 - Ayes: 175 / Noes: 207 - Amendment 58 disagreed.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Lord Parkinson of Whitley Bay (Con)
My Lords, although I am mindful of the rules of debate on Report, I am sure that noble Lords will understand if I preface my remarks with a short, two-hour encomium to Newcastle United, congratulating them on their victory in the Carabao Cup, their first domestic trophy in 70 years—that is longer than the living memory of any of my relatives. That is an area on which I know the Minister and I are in full agreement. I am mindful that other noble Lords were present at Wembley yesterday and hoping for a different result, so I shall not go on about it, other than to say that I hope that anyone who had the pleasure of being on the London Underground yesterday was as delighted as I was to see all the lads and lasses there with smiling faces and will join me in sending hearty congratulations to the Newcastle fans, who have waited so very long for this moment.
The Government’s new corporate governance provisions have, I think it is safe to say, received considerable attention during our debates on this Bill. My noble friend Lord Jackson of Peterborough has just set out the concerns of many on these Benches very powerfully, and the noble Baroness, Lady Fox of Buckley, has echoed them and added her own concerns.
I have been very clear throughout the passage of the Bill that we on the Opposition Benches are not persuaded by the changes the Government have made to the Bill, compared to the version we put forward in the last Parliament. As I said in Committee, we do not believe that the additions the Government have made in this area are necessary either. The Bill already has strong corporate governance requirements, mandating a corporate governance statement as part of the licensing process, and that is in addition to the rules already enforced by the Football Association and competition organisers.
Regardless of whether one believes that prescribed EDI policies would improve the operation of clubs and football in this country—and as we can see from the short debate we have had again today, that is by no means a settled view—clubs already have to comply with similar rules and, in many cases, voluntarily go further. The noble Lord, Lord Bassam, alluded to some of the work they do, and my noble friend Lady Brady mentioned it in more detail in our debate in Committee. Mandating further policies and action to promote equality, diversity and inclusion is, therefore, a clear example—we think—of unduly onerous regulation which has little to do with financial stability. The Minister has been clear throughout our scrutiny that this is intended to be a sustainability regulator.
Our concern is that placing new EDI duties in the Bill and, therefore, tasking the regulator with concocting rules to that end would increase the risk of mission creep, which we have all been very concerned about. We are clear that this will end up meaning more, not less, regulation. At a time when the Prime Minister is promising to clear out the regulatory weeds, and the Chancellor is writing letters to regulators asking them to promote economic growth, we should be aiming for fewer regulatory burdens, not more.
I shall say a few words about Amendment 34, which my noble friend Lord Markham outlined the case for, which relates to independent non-executive directors. We had a strong cross-party exchange on this topic in Committee, when amendments to the same effect were tabled by the noble Lords, Lord Knight of Weymouth and Lord Blunkett. They were evidently satisfied with the Minister’s response, so they have not brought them back, but I am glad that my noble friend Lord Markham has tabled his. I am very grateful to the Minister for taking the time to discuss this issue with both of us, as I believe she also did with a number of other noble Lords who raised it in Committee. She kindly copied us in to the letter she sent to the noble Lord, Lord Knight of Weymouth, about it, but I look forward to any further reassurances she is able to give on Amendment 34.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I join the noble Lord, Lord Parkinson of Whitley Bay, in his congratulations to Newcastle United, and I offer commiserations to Liverpool and its supporters. Good football is always a joy to watch, but only one side can win; I feel for those who put in all their effort and did not go away smiley-faced.
I want to address one of the points raised by the noble Lord, Lord Jackson of Peterborough, in relation to reports in the media this morning. The noble Lord should be mindful of the old adage that you should not believe everything you read in the newspapers. Your Lordships’ House has heard at length during the Bill’s passage that too many football fans have been left with nowhere to turn when faced with reckless owners, financial mismanagement and threats to their club’s very existence. That is why the Government remain absolutely committed to introducing an independent football regulator to put fans back at the heart of the game.
We had extensive discussion on the topic of equality, diversity and inclusion in Committee, when a number of noble Lords opposite aired their considerable concern over what is a very standard addition to almost all corporate governance codes. I am sure that the noble Lord, Lord Jackson of Peterborough, and the noble Baroness, Lady Fox of Buckley, will not be surprised to know that I do not agree with them. The Government have not changed our view that equality, diversity and inclusion is a key part of good corporate governance. Research has shown that diversity on boards and in organisations promotes better governance, decision-making and transparency, all of which in turn contribute to improved financial sustainability.
We heard in Committee about the vital work that the industry is already undertaking in this area. The regulator will look to work co-operatively with other stakeholders, to draw on the expertise of the sector and to add to industry initiatives through the code. As with fan engagement, this will be a statutory baseline.
The noble Lord, Lord Jackson, referred to the Green and Hand report, which was forwarded to me —I am very grateful to the noble Lord, Lord Moynihan of Chelsea, for that. I appreciate that the noble Lord, Lord Jackson of Peterborough, noted the findings of Green and Hand regarding McKinsey studies into the relationship between EDI and corporate performance. I recognise that the assessment refutes the link between ethnic diversity and financial performance. However, it remains my view that the relationship between diversity and improved corporate performance is well established and accepted beyond the studies of McKinsey alone. For example, both the Financial Reporting Council and the Association of Chartered Certified Accountants acknowledge this relationship. Clubs that already champion equality, diversity and inclusion will not have an additional burden placed on them, other than having to periodically report on these things.
My noble friend Lord Bassam of Brighton outlined a number of issues that remain within the game. 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—nothing more. As suggested by the noble Lord, Lord Addington, that does not feel onerous, but it is a helpful and transparent measure, in the Government’s view, and I refer noble Lords to the points made by the noble Lord, Lord Pannick. As I have said previously, the regulator is not going to prescriptively micromanage each club’s board, or set targets and quotas on EDI. That is not the role of the regulator, and would be a significant burden on both the regulator and clubs.
Turning to Amendment 34, in the name of the noble Lord, Lord Markham, I thank the noble Lord for this amendment and for his engagement on this, along with a number of other noble Lords. I particularly thank my noble friend Lord Knight, who has been a strong advocate on this issue and has met me to discuss it. I wrote to him about it, as the noble Lord, Lord Parkinson of Whitley Bay, mentioned, and I would be happy to lay a copy of this letter in the Library of the House.
As I outlined in the letter, we are fully in agreement with the principle of independent non-exec directors. We recognise that they can greatly improve decision-making, provide independent scrutiny and drive up corporate governance standards. This supports the regulator’s objective of better financial soundness, stability and decision-making for football clubs. However, while we agree with the principle, we do not feel it is right to include this detail in the Bill. We do not believe that the Government should be writing the corporate governance code, or making detailed recommendations on how a club’s board should operate. Indeed, no corporate governance code is written in primary legislation; this helps ensure flexibility and future-proofing.
We are setting up an independent, specialist football regulator, which will have in-depth knowledge of the unique challenges of football club governance. It will be for the regulator to then develop, consult on and ultimately publish this code. This approach enables consultation with industry, including clubs, which is essential to ensure that it is appropriate for the football industry and that it can be adapted in the future to reflect best practice. However, I again assure noble Lords that we fully expect the regulator’s code to include detail and guidance on independent directors. This is the norm for all corporate governance codes, and we do not expect the regulator’s code to be any different.
I think there is broad agreement on the importance of independent non-exec directors, and I thank noble Lords across the House for the interest shown in this issue. I hope that the reassurance I have provided will satisfy any concerns that INEDs will not be included in the corporate governance code. I therefore hope that noble Lords will not press their amendments for the reasons I have given.
Lord Jackson of Peterborough (Con)
My Lords, I thank all noble Lords for their contributions to this short debate, particularly the thoughtful remarks from the noble Baroness, Lady Fox of Buckley. I will briefly correct the assertion made by the noble Lord, Lord Bassam. I have not tabled an amendment that is against EDI; it is against a compulsory and costly duty enshrined by the corporate governance document in the Bill. That is a separate thing. I am disappointed that no noble Lords, except the Minister, actually engaged with the evidence that both the noble Baroness, Lady Fox of Buckley, and I have put forward.
There is one point that I would challenge the Minister on. Once again, despite being challenged in the letter from my noble friend Lord Moynihan of Chelsea, and by me today, she has yet to come forward with any alternative to the McKinsey study showing evidence that EDI improves the bottom line in business, let alone the football world. That is a very important issue.
The Minister was right when she said we have had a good and lengthy debate on this issue over many weeks, both before Christmas and this year. Notwithstanding that, I do not think she has answered the specific questions we have raised. On that basis, I would like to test the opinion of the House.
Baroness Twycross
“(ca) how the club contributes to the economic and social well-being of the local community with which it is associated,”Member’s explanatory statement
This amendment makes a club’s contribution to the economic and social well-being of its local community part of its corporate governance.
Lord Pannick (CB)
I will add just two comments, the first on Amendment 35 on the women’s game. It is plainly at a very sensitive stage of development and we would all wish to encourage that development. My concern is that including Amendment 35 might perversely deter some clubs from investing in women’s football, and that would be most unfortunate indeed.
In relation to Amendment 36, to which the noble Lord, Lord Parkinson, just spoke, this is an exceptionally vague provision: the idea that the regulator should have power in relation to discretionary licence conditions where there is
“conduct which it reasonably suspects to be harmful to the interests of the United Kingdom”.
This would be very difficult to apply and would lead to all sorts of probably legal arguments on what this means. In any event, it is a power that would be given on the basis of reasonable suspicion. That is most unfair to the clubs concerned, because there might be a reasonable suspicion that is not justified. As always, I declare my interest as a practising lawyer, partly in sports law, acting in particular for Manchester City in current disciplinary proceedings.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Parkinson, Lord Goddard of Stockport and Lord Moynihan, and the noble Baroness, Lady Grey-Thompson, for tabling amendments, and my noble friend Lord Grantchester for moving, in her unavoidable absence, the amendment tabled by the noble Baroness, Lady Grey-Thompson.
I welcome in particular the opportunity to discuss the women’s game and to set out the Government’s position on it, not least in relation to this Bill. I know that the noble Baroness, Lady Grey-Thompson, was keen to have a debate on the women’s game and frustrated that we did not have one at earlier stages, so I am sorry that she could not join us. However, I hope that I can give all noble Lords who have spoken in support of the women’s game the assurance that the Government really do want to see women’s football in this country thrive.
Recent years have seen incredible growth in the sport, catalysed by the amazing success of our Lionesses. I know that all noble Lords are hugely proud of their achievements. We understand why there is an interest in ensuring that women’s football is accorded some of the same protections that the Bill would deliver for the men’s game. As someone who was not allowed to play football at school, I am delighted that my nieces take it absolutely for granted that they are, so this is an area that I personally want to see grow and thrive.
My noble friend Lord Grantchester spoke passionately in favour of the women’s game. We agree with the independent review of women’s football that he noted, and which was expertly chaired by Karen Carney. As my noble friend stated, that review recommended that the women’s game should be given the time, space and opportunity to grow and govern itself. So, while there are some shared features, the problems facing women’s football and men’s football are not the same. The Government are in regular contact with the Women’s Professional Leagues Ltd. We are confident that it will be able to implement the structures, processes and regulations to drive the sport forward. Where appropriate, this can involve taking learnings from the men’s game and the regulator.
I reassure my noble friend that, as with all regulation, the scope of the regulator will be kept under review. As it is not intended in the first instance for the regulator to cover the women’s game, the “state of the game” report will consider only matters in scope of the regulator. However, if appropriate in the future and following proper consultation, the regulator’s remit could be extended to include women’s competitions via secondary legislation.
To expand slightly on why we are not at this point intending to regulate the women’s game, it is by its own admission at a different stage from the men’s game. It is still in a start-up phase, needing significant investment and growth to achieve its potential. The men’s game, by virtue of being a more mature commercial product, has no issue with growth or investment. Its issue is that it spends unsustainably, accumulates debt and cannot keep the massive revenues that it raises within the game. Therefore, neither the Government nor the women’s football industry believes that statutory regulation is the correct approach to helping women’s football at this stage.
The noble Lord, Lord Moynihan, alluded to issues that might be prevented. I will refer to the specific example of Reading Football Club. I do not want to assume that the noble Lord was referring to it as an example of where the regulator might have helped. Currently, the women’s game is not intended to fall within the regulator’s initial scope, so the regulator could not have directly prevented funding to Reading Football Club Women being cut. However, importantly, it would have been able to address financial problems at the men’s club, which may have averted the issue. So it is an indirect benefit, potentially. It would also have had access to information that it could have shared, only in certain specific circumstances, with the authorities in the women’s game. This might have allowed them to identify and react earlier to an issue and protect the women’s team. So we are confident that the authorities responsible for governing the women’s game will be able to implement the appropriate protections to prevent a future similar scenario to that which happened in Reading.
Amendment 36 would allow the regulator to stop a club accepting funding that it reasonably suspects to be harmful to the interests of the United Kingdom. I know that protecting football from wider harms is important to the noble Lord, Lord Parkinson of Whitley Bay, as it is for us all. I agree with the intent and thank him for his engagement on this. However, it is not for a football regulator to judge what is harmful to the interests of this country; indeed, this is what the UK’s financial sanctions regime is for. If there is an oligarch or bad actor with connections to a hostile state acting against UK interests, they can be sanctioned. That would automatically stop a club receiving funding from the party in question. Sanctions can be imposed for a whole range of reasons, including in the interests of national security.
Beyond this, the Bill already provides protections against wider harms. The owners’ and directors’ test, for example, will look at the fitness of a club’s owners and officers, including sanctions, and whether the individual has been prevented from entering the UK. This seeks to protect English clubs from unsuitable owners or officers. In conjunction with the power to restrict funds suspected to be connected to serious criminal conduct, this will help to ensure that clubs are protected from harm.
I thank the noble Lord, Lord Goddard of Stockport, for his Amendments 38 to 41 and his continued engagement on the Bill. I have written to the noble Lord on some of the points he raised on discretionary licence conditions and the commitments in lieu process, and I am happy to lay a copy of this letter in the House Library for other Members of your Lordships’ House to access as well. As I outlined in that letter, we feel that it is appropriate for competition organisers to have a formal opportunity to intervene on a financial issue if they could achieve the same goal in a more effective and less burdensome way. This commitments in lieu process encodes the light-touch and collaborative approach that we have discussed at great length in your Lordships’ House.
The Bill as drafted allows clubs ample opportunity to make representations about proposed financial discretionary licence conditions. As part of ongoing supervision by the regulator, clubs will be made aware of what potential action the regulator may take to improve the clubs’ standards. However, if a competition organiser proposes a commitment that the regulator believes would solve the issue in a quicker, more effective or more proportionate manner than the regulator’s proposed licence condition, the club should not be able to veto this.
I turn to Amendment 95 in the name of the noble Lord, Lord Parkinson. We understand the intention of this amendment, and we agree that the regulator should avoid any burdens or disruptions that may be associated with mid-season licensing of clubs, including the risk, albeit remote, that licences are refused mid-season. As currently envisaged, once the regulator is set up, it will make rules around how and when clubs need to submit their applications. The noble Lord’s amendment would prevent the entirety of Part 3 being commenced until the period between seasons. For example, if the regulator were ready to start preparing clubs for licensing in September in a given year, it would have to wait until the following May before it could do so. We want clubs to be able to prepare their application and engage with the licensing process early to avoid a rush and high burdens in the relatively short window between seasons. This amendment would prevent that.
By contrast, if commenced properly, there will be a substantial onboarding time for clubs, and the regulator will not have to process 116 applications in a short space of time. The noble Lord’s intention of avoiding mid-season disruption can be achieved through a careful commencement of Part 3. We intend to delay commencing the Clause 15(1) requirement on clubs to have a licence until all clubs have had the necessary opportunity to obtain one.
On Amendment 96 in the name of the noble Lord, Lord Moynihan, I understand that the noble Lord’s view is that the Secretary of State guidance on significant influence and control is integral in providing certainty for the industry, and that it must be produced in a timely manner. That is why, last week on Report, I committed
“that the Secretary of State’s guidance will be produced before clubs are required to identify their owners who meet the definition of having significant influence or control”.—[Official Report, 11/3/25; cols. 626-27.]
I would like to reiterate this commitment and reassure the noble Lord that it would be superfluous in this instance to make this amendment. Additionally, I remind the noble Lord that the House made its view on the definition very clear when it voted against Amendment 7. I hope he will agree that it would be an inefficient use of the House’s time to discuss this issue any further and will take reassurance from the commitment I have already made.
I turn finally to government Amendment 37. A number of noble Lords have raised concerns regarding consultation requirements and discretionary licence conditions. We are making a change to the consultation requirement that the regulator must satisfy before submitting a request to the Secretary of State, to amend the scope of discretionary licence conditions. We were confident that the previous drafting would have captured clubs and competition organisers, but we have listened to concerns across the House about this not being stated explicitly. Therefore, we have brought forward this amendment to put this beyond all doubt and address those concerns. As a result of this amendment, the regulator will now be required in legislation to consult all regulated clubs and each specified competition organiser in this process.
For the reasons I have set out, I hope the noble Lords will not press their amendments.
Lord Grantchester (Lab)
I thank all noble Lords who have spoken in this little debate on this group of amendments. Although I would have welcomed a little further development from my noble friend, I certainly understand her response. I also understand the comment from the noble Lord, Lord Pannick, to which I respond merely that if a men’s club does not believe in women’s football, it certainly should not invest in it. With that, I beg leave to withdraw the amendment.
Baroness Twycross
(a) all regulated clubs,(b) each specified competition organiser, and(c) such other persons as the IFR considers appropriate.”Member’s explanatory statement
This amendment requires the IFR to consult clubs and competition organisers, in addition to other persons it considers appropriate, before making a request to the Secretary of State to make regulations amending the types of discretionary licence condition set out in clause 22(1), (2) and (3).
Baroness Twycross
Member’s explanatory statement
This amendment corrects a drafting inconsistency in clause 46.
Baroness Twycross
“(a) any emblem or crest of a relevant team operated by the club, or(b) the predominant home shirt colours of such a team,”Member’s explanatory statement
This amendment adds a reference to a team’s “emblem” alongside “crest”, to avoid confusion with the heraldic use of the term “crest”.
Baroness Twycross
“(8A) If levy rules make the provision mentioned in subsection (8)(b), they must provide—(a) for the rate at which interest is charged not to exceed an annual percentage rate of 5% plus the Bank of England base rate,(b) that the IFR may charge interest at a rate determined by the IFR that is lower than the rate that would otherwise be applicable under the rules, where the IFR considers that appropriate, and(c) that the IFR may disapply a requirement for interest to be charged, where the IFR considers that appropriate.”Member’s explanatory statement
This amendment caps the rate of interest on late levy payments that the IFR may provide for in the levy rules at an annual percentage rate of 5% plus Bank of England base rate and gives the IFR discretion to charge a lower rate of interest or no interest in particular cases.
Baroness Twycross (Lab)
My Lords, I rise to speak to a package of government amendments: Amendments 51, 78, 86 and 88. I will speak to other amendments in this group in my closing remarks. The government amendments follow constructive discussions with the noble Lord, Lord Markham, who proposed an upper limit on interest that can be charged by the regulator on missed levy payments. Our amendments will impose a limit of the Bank of England base plus 5%. We believe this strikes the right balance between deterring non-payment and preventing undue burden. It also provides greater internal consistency within the Bill; the rate used for this upper limit is the same applied to missed financial penalty payments. With this amendment the regulator will maintain the discretion to set the interest for missed levy payments and could therefore set it lower than this cap or disapply it entirely. I hope this satisfies the noble Lord’s concerns on this issue, and I beg to move.
Lord Markham (Con)
My Lords, Amendment 52 seeks to reverse one of the more surprising changes to the Bill. The previous Conservative version stated that the regulator must consult on all changes to the levy rules. This seemed fair and proportionate. If the regulator is to change how it charges the levy or how much it wishes to charge, it seems pretty reasonable that those who will bear the burden of that charge are consulted.
The changes introduced by the Government provide that the regulator does not have to consult if it considers those changes to be minor. The issue is that the definition of “minor” is to be determined by the regulator. What would happen if the regulator tries to claim that somehow a change is “minor”, but other interested parties do not agree? Is there not the possibility here for the regulator to skirt around important consultations by simply claiming that the changes it is proposing are not significant enough to warrant discussion? The problem here is that this could create endless discussions about what warrants being termed “minor”. Surely it would be far simpler for the regulator just to consult on all changes, as was the case in the previous Bill.
Separately, it is welcome that the Government have accepted the principle that interest charged by the regulator on unpaid levy charges should be capped by the legislation. This was an amendment that my noble friend Lord Parkinson and I tabled in Committee. At the time, the Minister said that
“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”.—[Official Report, 18/12/24; col. 337.]
We disagreed with this assessment at the time. Although it is right that some flexibility is needed, it is not right that the regulator should be the one that sees fit to charge whatever it thinks is right. I am therefore very pleased that the Minister has changed her mind on that matter and brought a government amendment to this effect.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Parkinson of Whitley Bay and Lord Goddard of Stockport, for their amendments.
Amendment 52 from the noble Lord, Lord Parkinson, would require the regulator to consult every regulated club, as well as the Secretary of State, the Treasury and others that the regulator considers appropriate, for minor changes to the levy rules. As noted by the noble Lord, Lord Pannick, the Bill is currently written so that consultation is not needed for minor changes to levy rules. This is intended to allow the regulator to make immaterial amendments or corrections without excessive bureaucratic burden. In the Government’s view, the amendment would add a layer of unnecessary process.
There is no need—and, I imagine, no great desire—for clubs to be made aware of every typographical or grammatical error that the regulator wishes to correct. I note the points raised by the noble Lord, Lord Markham, in his support for the amendment, and I can assure noble Lords that clubs will be properly consulted on matters that affect them. For all changes to the levy rules that constitute material changes, the Bill already requires the regulator to consult, amongst others, every regulated club.
Moving to Amendments 55 and 56 from the noble Lord, Lord Goddard, I completely understand the intention behind these amendments. A right of approval for the regulator over relevant competition organiser rules would enable the regulator to clearly maintain authority on matters within its remit and to manage any potential duplication or conflicts. However, the Government are firmly of the view that competition organisers should be free to implement their own rules autonomously. As membership organisations, they should be free to set rules on their members in pursuit of their own objectives, which are likely to be broader than the regulator’s.
Overreach by the regulator into the rules of competition organisers risks the kind of scope creep that UEFA has warned against. We are confident that the regulator will be able to work with competition organisers to manage any interactions between their rules and its own regulatory system without the need for an approval or veto power. As a result, we do not think the regulator needs the power to require additional information from competition organisers here either.
On the specific points raised by the noble Lord, Lord Goddard, the regulator will put in place the necessary minimum standards for all clubs in scope with statutory powers to enforce and maintain these standards. This would be business regulation of football clubs setting the statutory baseline they must meet to operate as football clubs in this country. Beyond this, competition organisers are free to set membership requirements on their member clubs. If they wish to layer additional requirements or processes on top of the regulated statutory baseline, they will be free to do so, providing that they are consistent with the law. Of course, it would be in no one’s interests to have unnecessary duplication, so we would perhaps expect the competition organisers to focus on other objectives and leave sustainability in this regard to the regulator.
In light of these points, and others, raised, I hope that the noble Lords will recognise the risks associated with their amendments and will be content not to press them as well as to support the government amendments.
Lord Hayward (Con)
Before the Minister sits down, I refer her back to the answer that she gave to my noble friend Lord Markham and the noble Lord, Lord Pannick. When I was chief executive of the British Beer and Pub Association, I had notification from the Treasury about a change on tax rules that it considered minor. The Treasury expected it to go through with no contest, but the brewing industry went berserk because the Treasury was unaware of the implications of what it was proposing. That is precisely what appears to be the case regarding the comments from my noble friend and the noble Lord, Lord Pannick: it cannot be for the regulator to judge whether something is minor or major, because it may well be unaware of the implication of what it is doing for one club or another, or for a group of clubs in one form or another. I find the Minister’s answer surprisingly inadequate.
Baroness Twycross (Lab)
I am sorry that the noble Lord finds my answer inadequate. I am happy to give further reassurance to noble Lords by asking the shadow regulator for some examples of what type of change it may see as minor.
Lord Markham (Con)
I thank the Minister for her comments, but I think it is the feeling of a number of noble Lords, particularly the noble Lord, Lord Pannick, and my noble friend Lord Hayward, that it cannot be right in principle that the regulator gets to be judge and jury on what is or is not consequential, particularly as it does not have the full knowledge that the clubs might have. The regulator might think it is minor, but it might make a real difference to the clubs. Therefore, at this point, we are minded to test the opinion of the House when we come to Amendment 52.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Parkinson of Whitley Bay and Lord Markham, for tabling these amendments, and the noble Lord, Lord Markham, for speaking to them.
As discussed in Committee, the Government fully acknowledge that parachute payments are a significant part of football’s financial landscape. As the noble Lord, Lord Addington, made clear, this is part of the current landscape. However, it is precisely because of this importance that the regulator must be able to consider them as relevant revenue for the purposes of the backstop, especially if they are proven to be destabilising. How else could the regulator possibly make a fully informed and effective decision without a complete picture of football’s finances?
Amendments 57, 75, 76 and 84 all attempt to remove parachute payments from consideration under the backstop. They also remove the power for the Secretary of State to amend the definition of relevant revenue, preventing them ever being included in the definition of relevant revenue in the future.
In our view, these amendments are fundamentally short-sighted. I hear the concerns from the noble Baroness, Lady Brady, but we heard a very different alternative view from my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton and the noble Lord, Lord Goddard of Stockport. Clearly, it is disputed within your Lordships’ House. If the effects of parachute payments are risking the sustainability of the wider pyramid, the regulator must have a lever to address the issue.
These amendments make the definition of relevant revenue less flexible, less able to address the changing landscape of football’s finances and, overall, less effective. The current power in the Bill allowing the Secretary of State to amend the definition of relevant revenue is balanced, requiring substantial consultation with the relevant leagues. Removing this instead leaves us with a static definition that is likely to become outdated over time. For the reasons I have set out, I ask the noble Lords not to press these amendments.
Lord Markham (Con)
I thank the Minister and all noble Lords for their comments. It has become clear in this heavily truncated debate, but taking on the major points that we spoke about in Committee, that all noble Lords care passionately about what we are trying to do here, and that between us we are all trying to find what we think will be the best solution for football overall.
My concern and the concern of my noble friends and many others is that if you damage the competitiveness of a lot of those Premier League games, it will result in less money being paid in media rights to the Premier League, which will mean less money to all the clubs in the pyramid. That is the real danger that we are talking about here.
To directly address the points made by the noble Lord, Lord Bassam, around the closed-shop nature of the Premier League, only five clubs have been in the Premier League for the whole of its existence, so that is not a closed shop, and 55% of all the clubs have been in the Premier League at some point.
Although the Minister’s comments were not unexpected, I believe that the previous version of the Bill that was presented by the then Conservative Government was better than the one before us today, and one of the major reasons for that is the changes around parachute payments.
I regret that, although the Minister understands the importance of all the amendments, she is not minded to accept our Amendment 70 as a genuine attempt to reach compromise and consensus on this issue. That means that the regulator can still, if it considers it correct, abolish those parachute payments in their entirety, which I truly believe would have a significant impact on the game and damage all 92 clubs. As a result, I am afraid that I am not satisfied by Minister’s response and, as I indicated earlier, I would like to test the opinion of the House on Amendment 57.
Baroness Twycross (Lab)
My Lords, I thank the noble Lords, Lord Birt, Lord Pannick and Lord Burns, and the noble and learned Lord, Lord Thomas of Cwmgiedd, for tabling the amendments in this group. It is indeed an impressive team, as the noble Lord, Lord Pannick, stated. I particularly thank the noble Lord, Lord Birt, for his considered engagement and persistence, and for the time he spent considering ways in which we could improve the backstop process for the good of football, which is what the Bill is intended to provide.
I am grateful for the contributions from other noble Lords co-sponsoring the amendments and other noble Lords from across your Lordships’ House who have contributed to debates and engaged constructively during discussions and during this debate. We have had a series of productive meetings exploring some of the aspects of the model that were not discussed in detail in Committee.
If I may give a personal view, as someone who has learned a huge amount through the passage of the Bill and been on an incredibly steep learning curve, I think it is unfortunate that the tone and nature of the debate in Committee at times prevented these sensible discussions taking place on the Floor of your Lordships’ House. However, I am grateful to the noble Lord, Lord Birt, and others, as they have raised a series of important questions that have helped to inform our government amendments in this area. I genuinely appreciate his and other noble Lords’ time and expertise. I particularly appreciated how the noble Lords, Lord Birt and Lord Burns, viewed the draft legislation with the regulator and the regulated in mind, using their considerable relevant experience to provide fascinating and useful insights.
We have heard the view of the noble and learned Lord, Lord Thomas, with his experience in dispute resolution. The IFR needs effective tools and, as the noble and learned Lord said, the tools and the approach should be fair and careful. I add to his point that they also need to be seen to be fair.
The noble Lord, Lord Hayward, asked for a specific commitment. While I recognise his concerns, we do not think it would be possible to reach an agreement before the conclusion of Report or Third Reading in the Lords. Our current position is that, while we are sympathetic to the intent of the amendments tabled by the noble Lords and the constructive way in which they have engaged, their approach differs significantly from existing drafting. We therefore do not think there is enough time to conclude discussions on these important differences at this stage or before Third Reading. We kept the model—
Lord Hayward (Con)
I thank the Minister for answering as she has, but implicit in what she said is that the Government might find a way to introduce amendments when the Bill goes to the other place. Can I please seek clarification as to whether that is what she intended to say, or whether that was just something that would take it further down the road?
Baroness Twycross (Lab)
The only commitment I will give is the one I have in my speech. We do not think it is possible to reach an agreement before the conclusion of Report or Third Reading in the Lords. Our current position is that while we are sympathetic to the intent of the amendments, they differ significantly from the existing drafting.
As I started to say, we kept the model chosen by the previous Government. This model is intended to create the right incentives. A number of noble Lords, including my noble friend Lady Taylor, spoke of the intention behind the current model. The final offer mechanism is designed specifically to address unequal negotiations between parties with power imbalances such as those that naturally arise in the football industry. The noble Lord, Lord Addington, said it was designed for people not to get there. It is actually designed not to be used.
The process as it stands in the existing legislation heavily incentivises reasonable proposals, since an unreasonable proposal has a very high chance of rejection when compared to a more sensible competing offer. We must maintain this incentive—
Baroness Twycross (Lab)
If I may, I will get through the points and finish; I am happy to give way if I do not answer the noble Lord’s point.
Our objective is to ensure that the backstop effectively pushes leagues to co-operate—the point that I think my noble friend Lady Taylor of Bolton was driving at. This was, and remains, the rationale for the existing drafting and model adapted by the previous Government, and in the Bill brought back by this Government to your Lordships’ House.
Alongside this, we want to ensure that the model is light touch—to echo a point made by the noble Lord, Lord Pannick—low cost, flexible and has a clear process. In considering strengthening the model, we must also ensure due consideration, and that appropriate engagement with the relevant stakeholders takes place.
We recognise the intent of the proposed amendments in supporting these objectives, including how the process is triggered, how mediation is conducted and how a final decision is made, including the criteria for a decision. I know that the noble Lords’ proposals have the best interests of football at heart and are based on the huge amount of experience of all those who have signed the amendments. The department will continue working to ensure that the backstop delivers the right balance and the right result for football. This is our shared goal.
I understand that the noble Lord may still wish to divide the House, given that I cannot give a firm commitment at this stage or commit to bringing something back before Third Reading. But throughout the Bill’s passage and consideration of amendments in the Commons, we are very happy to engage with the noble Lord, Lord Birt, and noble Lords who have signed up to his amendments, as well as with other noble Lords with an interest in this area, with the hope of reaching a more amenable compromise before Royal Assent. With that in mind, I ask the noble Lord to withdraw the amendment.
Lord Markham (Con)
If I may, I will make what I hope is a helpful suggestion. The Minister mentioned the lack of time ahead of Third Reading. It is my understanding that it is within the Government’s power to delay Third Reading in order to give sufficient time for this. Given that one of the previous amendments said that we would not put forward measures that would have an impact during a season, and given that we all accept that this legislation will not be passed before the beginning of the new season, there is no practical difference in terms of timing and what that will mean. We have a real opportunity here, which will not have any timing impact on football but will give us the opportunity to seek the better way mentioned before.
Baroness Twycross (Lab)
There are currently no plans to move the timing of Third Reading in your Lordships’ House, but I commit to ongoing discussions with the noble Lord, Lord Birt, and others, who have been extremely considerate in the time they spent discussing their concerns about the current model with me, the Bill team and others. We wish to continue those discussions in the spirit I described previously.
Lord Birt (CB)
St Paul, Messi—the compliments have been flying around. For the avoidance of any doubt, despite having two of the leading lawyers in the country on the team, no fees were paid during the preparation of these amendments.
I have to say that if was not a party to this debate, I would have been sitting listening with my jaw dropping open at the quality of the contributions from right across the House. I am genuinely grateful to everybody who spoke—without exception. Forgive me if I particularly mention my noble and learned friend Lord Thomas. If I had been the Minister, I would have said, “I am going to give up straight away”, because his arguments were so completely devastating and convincing.
I am surprised and disappointed by the Minister’s response, which I had not expected. As she knows, I had no desire to divide the House. I had hoped, given the strength of the arguments she has heard, that she would adopt a more conciliatory and supportive line. I ask her, if she does not mind, recognising that time is not on our side and the Bill is going to go to another place: is she willing to accept my colleagues and I and others from around this House having a meaningful debate about the re-engineering of the backstop, in line with the arguments heard from all over the House today? It is possible that I am not clear on what it is that she is saying.
Baroness Twycross (Lab)
I apologise to the noble Lord if I was not clear. I am very keen to continue to have ongoing debate and dialogue with the noble Lord and his co-sponsors of the amendment, in a similar vein to the conversations we have had up until now. I apologise if I did not make that clear in my speech. That is absolutely the intention, but unfortunately, I cannot commit to bringing something back before Third Reading.
Lord Birt (CB)
Obviously, I do not expect the Minister to commit, but she has always been very generous in the past at inviting people in for talks. Let us be honest, there have been some changes to the Bill, although not many. Does she think there is a reasonable chance that we can fundamentally re-engineer the backstop process?
Baroness Twycross (Lab)
I am really sorry but I cannot commit to that, but I can commit to the ongoing discussions.
Lord Birt (CB)
I am afraid that I do not think the Minister gives me any choice. I will test the opinion of the House.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Parkinson of Whitley Bay, and the noble Baroness, Lady Brady, for tabling these amendments, and the noble Lord, Lord Markham, for speaking to this group.
On Amendments 60 and 61 in the name of the noble Lord, Lord Parkinson, the five-year timeframe is critical to the effective functioning of the backstop. A set timeframe gives the industry certainty that the regulator can intervene to end the deadlock between the leagues if they cannot agree for an extended period. In addition to this, due to the imbalance in bargaining power between the parties in this case, we do not want to allow a situation in which a league could be coerced into a much longer agreement that essentially renders the backstop unusable.
On Amendment 69 in the name of the noble Baroness, Lady Brady, Clause 61(5) is intended to function as a protection for the interests of relegated clubs, ensuring that final proposals take into account the disproportionate impact that removing or reducing parachute payments will have on them. The amendment would broaden the provision out so that final proposals consider the financial sustainability of all effective clubs, not only relegated clubs, but that change is unnecessary. Final proposals must already address the financial soundness of clubs and the financial resilience of English football as a whole. To be chosen, a proposal must advance the regulator’s objective. Of course, parachute payments may affect the overall balance of leagues, but relegated clubs are the most directly affected. That is why they need the specific protection that the current clause offers.
On Amendment 71, as the House will know from our debates over the past months, the sustainability of English football is at the heart of the Bill. I understand the noble Baroness’s intent, but the sustainability of English football and advancing the regulator’s objective are already explicitly at the heart of the backstop. Clause 7 already requires that, as far as reasonably practicable, the regulator must exercise all its statutory functions in a way that is compatible with the purpose of the Bill. Of course that includes the backstop, and it would not be appropriate to require leagues to set out how their clubs would spend the disputed funds, nor to implicitly require the regulator to approve exactly how clubs spend funds. That would be overly prescriptive and disproportionate.
As I have set out before, concerns surrounding potentially reckless spending by clubs are already addressed in the financial regulation provisions in the Bill. These measures will ensure that clubs have appropriate resources and controls in place to manage their financial risk. For example, clubs will be required to provide up-to-date financial plans, backed by appropriate financial resources, which will be stress tested. This is the most appropriate way to address how clubs spend their money.
The noble Baroness’s Amendment 73 would require the funder’s proposal to be chosen by default, as long as it met a minimum level of consistency with the principles in Clause 62. However, the fundamental aim of the backstop process is to bring balance to a negotiation between two parties where one has significantly more bargaining power than the other. That means impartiality is key and no party can, or should, be favoured.
On Amendment 74, we understand the concerns regarding property rights, and I take this opportunity to reassure the House. The provisions relating to distributions allow for interference with property rights, but that interference is lawful; it is proportionate and in accordance with the law. Most importantly, any interference would also be in the public interest. The backstop can be used only in limited circumstances where a clear issue has been identified. For a proposal to be chosen, it has to be in line with the regulator’s objectives; there is, therefore, no situation where the proposal chosen is not in the public interest. This is set out in more detail in the ECHR memorandum that accompanies the Bill. We are confident that the current drafting of the Bill, as well as the requirements of the Human Rights Act, ensure that property rights must be respected.
I move on to the government amendments in this group, Amendments 68 and 89. We have listened to the concerns raised by the noble Baroness, Lady Brady, and fellow Peers that it is imperative that financial sustainability of relegated clubs is protected under the backstop. We argued in Committee that this protection was already implicit in the Bill, but these amendments put it beyond doubt. If the backstop is used to resolve questions relating to parachute payments, the leagues must address the sustainability of relegated clubs’ finances in their final proposals. We hope that that clarity will ease the concerns of clubs that face relegation.
With regard to Amendment 62, we want to ensure that our policy intention is clear. The backstop is intended to be a last-resort power, only to be used if another regulatory intervention would not achieve the same result. We have therefore tabled an amendment adding a requirement to the list outlined in Clause 59(2) covering the considerations that the regulator must take into account before triggering the backstop process. This new requirement ensures that the regulator must consider whether any of its other functions would achieve a similar result before approving an application to trigger the backstop process. This change demonstrates clearly that the backstop will be used only if other regulatory interventions would not solve the problem.
Amendment 63 requires the regulator to outline any findings in its most recent “state of the game” report that it considers relevant to the question or questions for resolution. The regulator must outline this in its notice to trigger the backstop process. We have always been clear that we expect that the “state of the game” report will play a crucial role in the decision-making process for the backstop. However, by tabling this amendment we have made this commitment explicit in legislation. This will give clarity to the leagues as to how the findings of the report could shape the backstop process. It will also provide reassurance in the Bill that the “state of the game” report will be published before the backstop process can be triggered. The findings of the “state of the game” report will be crucial evidence to inform the regulator’s decisions, including those made as part of the backstop process.
Finally, on Amendment 66, we acknowledge the concerns raised by Peers, most notably the noble Lords, Lord Birt and Lord Burns, both in your Lordships’ House and in meetings since Committee, that the current drafting of the Bill has a hard deadline that puts an automatic end to the mediation phase. While it is important that the backstop process comes to a timely conclusion, we understand the concern that parties may be timed out due to the statutory deadline for the mediation phase being triggered. To be clear, we do not want the mediation phase to come to an arbitrary conclusion if further useful discussion could take place. The Government would strongly prefer an industry-led solution, and we hope the mediation phase will facilitate this, so we have tabled an amendment to allow the mediator to request a single extension of the mediation process, up to 28 more days. This will allow for productive discussion without extending the process unreasonably.
For these reasons, I urge the noble Lord to withdraw his amendment, and I ask for your Lordships’ House’s support on the government amendments in this group.
Lord Markham (Con)
First, I thank the Minister for the points that she has made, and particularly the government amendments, which show in a number of places that the Government have been listening to the points raised in Committee. We are grateful, as all those things help to progress and make it a better Bill.
At the same time, it is a shame that the Minister is unable to accept Amendment 60. It still seems strange to me that, when the Premier League and the English Football League have mutually reached an agreement, we are saying that they are not allowed to do it—because the word “backstop” implies that a backstop should come in force only when the Premier League and the English Football League have not agreed. Here we are saying that we are going to set preconditions on what the EFL and the Premier League are able to agree. That all remains strange to me, and a mystery as to why the Government should not be supportive of allowing the Premier League and the English Football League to come to an agreement.
I turn to Amendments 69 and 71, spoken to by my noble friend Lady Brady. It seems entirely reasonable to ask clubs to put down what they plan to spend the money on. Again, it seems entirely reasonable that, when we are talking about wanting to ensure sustainability, the clubs receiving or making the bids for large amounts of money as part of redistribution should need to make a case that the things that they intend to spend the money on are towards a long-term sustainable model in terms of investment in the club and the infrastructure of the facilities there. Again, it seems strange to me that it is not something that the Government or the Minister would say was entirely in keeping with the intention of what we want to try to do on this. As a result, I believe that the Bill would be better off for the inclusion of these amendments, but I regrettably withdraw my amendment at this stage.
Baroness Twycross
(c) considers that the question or questions for resolution could not be resolved within a reasonable period of time by the IFR exercising any of its other functions under this Act.”Member's explanatory statement
This amendment requires the IFR to consider whether the question or questions for resolution could be resolved by the IFR exercising any of its other functions before deciding to trigger the resolution process.
Baroness Twycross
“(6A) The IFR must extend the period in subsection (6)(b)—(a) if requested in writing to do so by the mediator, and(b) by such period as is set out in the request, which may be up to a further 28 days.(6B) The period in subsection (6)(b) may only be extended once.” Member's explanatory statement
This amendment requires the IFR to extend the mediation period by up to a further 28 days if requested to do so by the mediator.
Baroness Twycross
Member's explanatory statement
This amendment requires specified competition organisers to include in their final proposal the explanation described in clause 61(5) where there is a question for resolution that relates to relegation revenue.
Baroness Twycross
Member's explanatory statement
This amendment removes the definition of “Bank of England base rate” in order for it to be moved to the definitions clause.
Baroness Twycross
Member's explanatory statement
This amendment is consequential on the amendment to clause 46 at line 39.
Lord Parkinson of Whitley Bay (Con)
My Lords, Amendment 80, which relates to my favourite topic of heraldry, has already been debated. At the end of that debate on the first day on Report, the Minister very kindly agreed to a further meeting with me and with the College of Arms, which took place this morning. I am going to move my amendment in order to allow the Minister to say what she took from that meeting. On the basis of what I expect her to say, I will not be pressing this to a Division, but I look forward to hearing her.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Parkinson of Whitley Bay, for sharing his expertise and enthusiasm on this topic in your Lordships’ House, and for the opportunity to respond on this point. I thank him and the College of Arms for their time earlier today. Before he confirms whether he is going to divide the House, I reiterate that it is the Government’s intention that nothing in the Bill is to be read as superseding or impairing any prerogative powers of the Crown in relation to coats of arms, whether exercised directly by the King or on his behalf by the Kings of Arms. I guarantee that something to this effect will be added to the Explanatory Notes to this clause.
Lord Parkinson of Whitley Bay
My Lords, I am very grateful to the noble Baroness, particularly for all the time that she has spent on this niche but important issue. I am also grateful to the Bill team for their meetings, including the one we had today with Norroy and Ulster King of Arms. With gratitude, I beg leave to withdraw my amendment.
Lord Parkinson of Whitley Bay (Con)
My Lords, the noble Baroness, Lady Fox, is right that the congratulations that have been coming my way for Newcastle are entirely misplaced. However, I am sure that the cross-party support the noble Baroness and I gave them on the first day of Report buoyed the team and their success, but it had nothing to do with me. But I can reassure noble Lords that my uncle Barry was probably the person cheering the most loudly at Wembley last night.
I also agree with all those who have welcomed the Government tabling Amendment 90. In Committee, there was cross-party support for looking at how this will all work in practice, from those who are keen to see the regulator up and running swiftly to those who are more sceptical. We had support from the chairman of the Hansard Society and my noble friend Lord Norton of Louth, who watches legislation very carefully. I join the welcome expressed to the Government for bringing forward Amendment 90.
My noble friend Lord Goodman of Wycombe has argued throughout the passage of the Bill, from Second Reading onwards, that greater oversight and post-legislative scrutiny would be needed. I therefore hope that the Minister will look at the further helpful amendments that the noble Lord has tabled today, arguing that it would be better for an independent body to conduct the review of this independent regulator. Again, my noble friend has been very constructive in the points that he has raised.
Amendment 81, tabled by my noble friend Lord Maude of Horsham, which leads this group, covers the same area that my noble friend Lord Hayward has just touched on in his contribution: the cost of compliance with the new regulatory regime. Clearly, since the Bill that was brought forward in the last Parliament, we have seen new things such as increased employer national insurance contributions, the increase in the minimum wage and the further costs to business that will be coming through the Employment Rights Bill. The financial position of smaller clubs takes place in an even more difficult economic environment. We on this side of the House remain concerned that imposing a levy and further regulatory costs on top of these will likely make clubs less financially sustainable, not more.
My noble friend Lord Hayward points once again to the impact assessment, which does not account for the increased costs of hiring. It says that clubs will have to hire more staff to comply with the extra regulation but does not consider that those extra employees will cost more now than they would have done even when we first looked at the Bill. This is particularly severe when it comes to the smallest clubs in the National League. The general manager of the National League, Mark Ives, and the chief executive of Dagenham and Redbridge, Stephen Thompson, have both warned of the potential for the Bill to create onerous consequences for National League clubs which are not only financial but bureaucratic. Mr Ives 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”.
National League clubs operate with a very small number of staff, with many in Mr Thompson’s words working on only
“two or three people and some volunteers”.
There is a real risk that some of these smallest clubs will struggle with the further burdens that are placed upon them, so I hope the Minister will look at these amendments.
My Amendment 94, which is in this final group, seeks to ensure that the review takes into account the effect of the regulator’s activity on ticket prices. We had a good debate on this during our first day on Report and indeed a Division which was very conclusive, so I will not say anything further about that issue other than to thank the Minister for all the engagement that she has given during and since Committee, ahead of Report and during our two days on Report. We are all very grateful.
Baroness Twycross (Lab)
I thank the noble Lord, Lord Goodman, for his amendments and for speaking to the amendment in the name of the noble Lord, Lord Maude of Horsham, and other noble Lords who have spoken during this short debate.
In Committee, Peers across the House raised the topic of evaluating the impacts, efficacy and success of the regulator. I thank the noble Lord, Lord Norton, in particular, for his expertise and time in discussing the topic despite his complete lack of interest in football. I have sometimes found that those noble Lords who have an interest in the details relating to legislation or a regulator come at this topic with a slightly different perspective, which is really helpful, and I welcome his contribution tonight. I am keen to continue discussions on this and other topics with noble Lords across your Lordships’ House—although I must admit that I am quite pleased to be reaching the end of Report.
We agree that it is good practice for the impact of regulation to be monitored and evaluated post-implementation. I am grateful to noble Lords across the House for welcoming government Amendment 90, which will require the Secretary of State to carry out a review of the operation of the Act and its impact on the industry. This must be completed no later than five years after the full commencement of the licensing regime. Among other things, the review will look into whether the regulator has been effectively achieving its objectives or whether they might be better achieved in a different way. This includes explicitly considering whether delegation might be appropriate, for example, to an independent industry body.
As part of looking into the impacts of the regulator on the market, the review will also consider interactions with industry rules and any resulting burdens. It will also be a set opportunity for the Secretary of State to formally consider and set out whether the competitions in scope of the regulation remain appropriate. The report will be laid before Parliament and will lay long-term scrutiny of this regime by this House and the other place.
The noble Lord, Lord Hayward, has been a champion of clubs in relation to costs throughout. In relation to compliance costs and the statutory review proposed, a separate review of compliance costs alone might be unnecessary, duplicating the work of the post-implementation review and creating additional costs. The statutory review will offer an opportunity for a more complete and detailed view of the regulator’s performance, per se, and will therefore be more useful in understanding the costs and benefits of regulation to clubs. It will also capture compliance costs that are more reflective of ongoing costs instead of the initial costs of the first year of familiarisation, although we expect that, in its annual report, the independent football regulator will have due regard to these issues.
I thank the noble Lord, Lord Goodman of Wycombe, for tabling his amendments. I completely understand their intent—namely to introduce more independent scrutiny of the legislation and its effects—but, unfortunately, we do not think it is appropriate for an external third party to carry out this review of the Act. As is common practice, it should be carried out by the Government, particularly because the review may inform future government policy and because its conclusions may include recommendations to add, amend or repeal primary legislation. The Government introduced this legislation, and, in our view, it should be the Government which review whether it has achieved what it intended. However, we completely agree that there should be additional scrutiny, and the intention is that this review will facilitate that scrutiny, for example, by a relevant committee of Parliament. However, it is not for this Act or the Government to direct Parliament to undertake that scrutiny.
On Amendment 92, we have not taken the approach anywhere in the Bill of prescribing specifically where publication must be done. Clearly, the norm these days is for publication online. However, there is no need to mandate where online, as to do so would risk the legislation becoming outdated.
I appreciate the intention of Amendment 81, tabled by the noble Lord, Lord Maude of Horsham: to ensure the regulator is offering value for money and not unduly burdening clubs financially. Ensuring efficiency and avoiding unnecessary costs have been at the heart of the Bill’s development, but the proposed amendment would duplicate the Government’s statutory review amendment and would therefore impose unnecessary additional costs and burdens on the regulator.
On Amendment 94, in the name of the noble Lord, Lord Parkinson, we are acutely aware that ticket prices are a key issue for fans. That is why the Bill explicitly requires clubs to consult their fans on this point. It may well be that the regulator also chooses to look at ticket pricing as part of the “state of the game” report. However, as it is a commercial decision, the regulator will not intervene beyond this. I again reassure the House: we do not believe that an increase in ticket prices would be a proportionate reaction to the cost of the regulator. The levy will be distributed proportionately, and no club will be asked to pay more than is fair and affordable.
An industry that earns over £6 billion a year in revenue and spends hundreds of millions of pounds on player transfers every year cannot legitimately say that it has no choice but to pass the cost of regulation on to fans, particularly since the cost faced by any one club will be relatively low and proportionate to their financial resources. However, if the regulator were to lead to higher ticket prices, this in our view would be captured within the review, which must look at the impacts of the regulator on football in England and Wales.
I turn finally to Amendment 94D in the name of the noble Lord, Lord Moynihan. As I have set out, one aspect of the statutory review will be to consider whether delegation might be beneficial. However, we do not believe that the power to delegate should be provided for in the legislation at this stage. We should not pre-empt the findings of the review, particularly as there is no way of predicting what delegation might need to look like or to whom that delegation might be. We have been clear, as the previous Government were clear, that independent regulation is needed in English football because the industry has shown itself to be incapable. Any decision to delegate back to the industry is not a decision that should be taken lightly, nor should powers established by an Act of Parliament be transferred to private third parties without proper parliamentary process. I am surprised that the noble Lord has tabled this amendment, given the concerns that he has raised repeatedly on delegated powers.
For these reasons, I hope that noble Lords will not press their amendments, and will accept government Amendment 90 when we come to it.
Baroness Twycross
““Bank of England base rate” means— (a) the percentage rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets, or(b) where an order under section 19 of the Bank of England Act 1998 is in force, any equivalent percentage rate determined by the Treasury under that section;”Member’s explanatory statement
This amendment, together with an amendment to paragraph 13 of Schedule 9, moves the definition of “Bank of England base rate” into the overarching definitions clause from Schedule 9.
Baroness Twycross
“Bank of England base rate | Section 92(1)” |
This amendment inserts a cross-reference to the definition of “Bank of England base rate” into the table in Schedule 11 of defined terms used in more than one place.
Baroness Twycross
“Review of Act(1) The Secretary of State must—(a) carry out a review of the operation and effect of this Act,(b) set out the conclusions of the review in a report,(c) publish the report, and(d) lay a copy of the report before Parliament.(2) The report must be published before the end of the period of five years beginning with the day on which section 15 comes fully into force.(3) The report must, in particular—(a) assess the extent to which the objectives intended to be achieved by this Act have been achieved,(b) assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved more effectively in any other way (for example if the IFR could delegate its functions to persons other than those listed in paragraph 17(1) of Schedule 2), (c) assess the impact of this Act and the IFR’s actions on football in England and Wales,(d) assess the interaction between this Act and the rules, requirements and restrictions imposed by competition organisers and whether that interaction is appropriate, and(e) assess whether the appropriate competitions are specified under section 2(3), including whether a competition that is not specified should be specified.(4) In carrying out the review, the Secretary of State must have regard to—(a) the purpose of the Act (see section 1);(b) the IFR’s objectives (see section 6);(c) the IFR’s general duties (see section 7);(d) the IFR’s regulatory principles (see section 8);(e) any state of the game report published by the IFR (see section 10);(f) any annual report submitted to the Secretary of State by the IFR (see section 14).(5) Before publishing the report, the Secretary of State must prepare a draft report and consult the following about the draft report—(a) the IFR,(b) the Football Association,(c) each specified competition organiser, and(d) such other persons as the Secretary of State considers appropriate.”Member’s explanatory statement
The amendment requires the Secretary of State to carry out a review of the Act and publish and lay before Parliament a report setting out the conclusions of that review.
Wednesday 26th March 2025
(1 year, 7 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 59-II Second Marshalled list for Report - (13 Mar 2025)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, it has been over four months since the Bill had its Second Reading in your Lordships’ House. I have resisted football puns throughout, but we are now reaching full-time in your Lordships’ House, so I decided to make an exception today. I hope to get through this debate without any own goals or penalty shoot-outs. This is historic legislation that will ensure that fans are placed at the heart of our national game.
I pay tribute to the work of Dame Tracey Crouch. Her fan-led review highlighted how too many football fans have been left with nowhere to turn when faced with reckless owners, financial mismanagement and threats to their clubs’ very existence. It was this work that led to all three main political parties committing to introducing an independent football regulator in their manifestos.
We supported the previous Government’s Bill, though I strongly believe that the Bill that we presented was better and has been improved further throughout its passage in your Lordships’ House. We have made changes to refine and strengthen the legislation to ensure that the regulator successfully delivers for fans and communities while protecting the strength of English football. We are taking a proportionate and flexible approach to regulation to provide the certainty and sustainability required to drive future investment and growth so that English football continues to be a global success.
I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton for their invaluable contributions and for promoting greater transparency of the regulator and its work. As a result, we have added a requirement for the regulator to establish a system for all board members and expert panel members to declare relevant interests and to keep a register of those interests. I also thank my noble friends Lord Watson of Invergowrie and Lady O’Grady, who, along with other noble Lords, have championed the inclusion of players and fans. We have amended the regulatory principles to explicitly add players, fans and others who may be affected by the regulator’s decisions to the list of persons whom the regulator should proactively and constructively engage with.
I particularly thank my noble friend Lady Blake of Leeds for her continuous support and for stepping into the breach to offer me some respite on those extremely long Committee nights. Across the House, I want to give special thanks to the noble Lords, Lord Addington and Lord Goddard of Stockport, for their constructive and at times humorous engagement and for advocating for a social responsibility duty. Our addition to the definition of corporate governance for football clubs to include a club’s contribution to the economic and social well-being of its local community will help to shine a light on the good work that clubs do for their local areas.
I thank the noble Lords, Lord Birt and Lord Pannick, for their considered engagement and for the time they spent considering ways in which we could improve the Bill, not least the backstop process, for the good of football. I want particularly to mention the noble Baroness, Lady Grey-Thompson, who raised issues about women’s football. While not envisaged as part of the initial regulatory regime, we fully support women’s football and the aims of the Carney review.
While we may not have agreed on every issue throughout the Bill’s passage, I thank the noble Lords, Lord Parkinson of Whitley Bay and Lord Markham, for their scrutiny and for ensuring that the niche but highly important issue of heraldic terminology is appropriately reflected in the Bill. I am also grateful for all noble Lords who have participated with a range of knowledge and expertise—not always on football—including but not limited to the noble Lord, Lord Norton, on post-legislative scrutiny and, clearly with expertise in football, the noble Baroness, Lady Brady, and the noble Lords, Lord Moynihan and Lord Hayward, for their unique perspectives and expertise, and for occasionally missing matches to take part in proceedings.
The discussions and changes that we have made in this House will guarantee that English football remains the best place to be a football fan now and in the future. The Bill’s passage through this House has been long and, at times, slow, so please excuse me for taking a moment briefly to thank the many civil servants who have worked so diligently and patiently. In particular, I am very grateful to the Bill manager, Bill team and policy team. My thanks also go to the numerous lawyers and my private office, who have been very patient—mainly with me, to be honest.
I am proud to stand here today being the one to pass this Bill over to the other House—so arguably it is half-time, not full-time, in parliamentary terms. This is important and much-needed legislation which will protect and promote the sustainability of English football in the interests of fans and the local communities that football clubs serve. Football fans up and down the country deserve and want this regulator. I beg to move.
Lord Addington (LD)
My Lords, it comes to my turn to say a few words. It has been a very interesting experience, and I thank the Minister for her engagement and for a number of meetings when she made her time and her staff available to us. I may have walked past the department door on my first meeting, but I certainly did not do so for the next half-dozen. I also thank my noble friend Lord Goddard. It was nice to have a wing-man, and occasionally letting him fly the plane proved a very wise move as well.
I also thank the Minister for some of the specific things they brought in. I always felt social inclusion was lacking, and although football does good work, it is bitty. Making sure it is there means taking on something that has been outside the remit of government; but we have an interest in it and we have now secured it, in its current form or something like it, for the foreseeable future. Making sure that that happens also implies a duty to the community and I hope that, now we have that mentioned in the Bill, the two-way relationship will be expanded.
I was only shouting in the chorus for the inclusion of fans and players in the Bill, but I am very glad it happened. Players have only short careers and most of them, despite the myths, have short and not very well- paid careers in the lower divisions. They deserve some consideration as well.
I also thank many of the people from the Opposition Benches for enlightening me on a range of subjects. I never thought I would learn something about heraldry on this Bill, so I thank the noble Lord, Lord Parkinson, for that.
I hope this Bill fulfils its functions and goes forward and I hope we do not have to come back to it.
Lord Pannick (CB)
My Lords, from these Benches, I too thank the Minister, the Bill team and the Secretary of State for the exceptional level of engagement that they have shown in relation to the concerns and interests of noble Lords around the House. It has resulted in a much better Bill, which is of course the function of this House.
Monday 28th April 2025
(1 year, 6 months ago)
Commons ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: HL Bill 59-II Second Marshalled list for Report - (13 Mar 2025)
21:59 - The House divided: - Ayes: 74 / Noes: 337 - Question accordingly negatived.
22:13 - The House divided: - Ayes: 342 / Noes: 70 - Question accordingly agreed to.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Secretary of State for Culture, Media and Sport (Lisa Nandy)
I beg to move, That the Bill be now read a Second time.
Today is a day of celebration for football fans in towns, villages and cities across England. Football would be nothing without the fans, and today we put them back at the heart of the game, where they belong. Football is genuinely our national game—it is the beating heart of our communities, a core part of what it means to be British, and one of our greatest exports. English football lights up the world through the premier league, and it lights up lives in every community through the magic that clubs bring, from the biggest in the world to our smallest grassroots clubs. However, while we celebrate the global success of the premier league, there is deep concern at every level of the footballing world about the fragility of the wider foundations of the game, which threatens its global success and the success of the whole game itself.
Since 1992, 60 clubs in the top four divisions have been plunged into administration, and behind that is the stark reality that fans have lived with for too long: that of being just one bad owner away from collapse. In my town of Wigan, we are no strangers to that; in recent years, we have fought two long, lonely battles to save our club. What I saw and learned over those long and difficult months appalled me, with rogue owners, asset-stripping administrators, and fans who were put last when they should have been first. In Reading, Fleetwood, Derby, Morecambe, Macclesfield, Chester and Bury are fans who have lived with a daily drumbeat of anxiety as leagues failed to come to agreement, owners came and went, and the systems set up to protect the fans failed one by one. We promised those fans that we would put an end to that. Today, we make good on that promise by bringing to this House a historic piece of legislation that has been far too long coming and putting fans back at the heart of the game, where they belong.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
I congratulate my hon. Friend on bringing forward this Bill and on strengthening the previous Government’s Bill, particularly when it comes to financial sustainability. Not only are football clubs the beating heart of our communities; they give a lot back to those communities. As a former Hammersmith councillor, she will know that no club is better at doing so than Queens Park Rangers, through the QPR in the Community Trust and its chief executive Andy Evans. They are fantastic, and do wonderful work in some of the poorest communities in the country.
Lisa Nandy
I agree with my hon. Friend, at least about the Bill—we perhaps differ on what is the best football club in the world. I also commend him on his long support for not just his football club, but his community, in which it plays such an important part.
Dr Andrew Murrison (South West Wiltshire) (Con)
Before the Secretary of State goes any further in her speech, will she take the opportunity to pay tribute to Dame Tracey Crouch, whose work in government laid the foundations for what the Secretary of State is talking about now? Since independence should be at the heart of everything we do, will she also say that it would be a pity if this Bill were mired in another story about Labour cronyism?
Lisa Nandy
I unreservedly pay tribute to Dame Tracey Crouch. Without her tenacity and determination, we would not have this Bill before the House in such good condition. We owe her a great deal, as does every football fan in the country. It is a source of pride to me that from the Bill’s inception—from the moment the fan-led review began—it has been a cross-party endeavour. I am grateful for the relationships we have been able to forge across the House to get us here.
Let me address head-on the question about the chair of the independent football regulator. David Kogan is by far one of the people in football most qualified to take on this role. [Interruption.] The right hon. Member for Beverley and Holderness (Graham Stuart) likes to chunter, but he might want to listen for one moment, though I know it is not his normal mode of operation. Not only is David Kogan negotiating billions of pounds-worth of broadcasting rights, but he has advised the Premier League, the English Football League, UEFA, the National Football League and the Scottish premiership among others. He was also on the list that I inherited from the previous Government, who had headhunted him directly to ask him to apply for the job. Not only that, but top of the list was somebody who had donated over £50,000 to the Conservative party, so I will take no lectures from the Conservatives.
Lisa Nandy
No, I will not take the intervention, because I think a period of reflection and a bit of humility might be welcome from the Conservatives. They are embarrassing themselves. It is about time they listened and reflected on how this issue is perceived by millions of fans across the country.
We should be ashamed that it has taken so long to get to this Bill. It has been 14 years since parliamentarians first called for urgent change. It has been five years since Bury FC collapsed, sending shockwaves through English football. It has been four years since the European super league forced politicians to end years of violent indifference. It has been three years since the Crouch review called time on a system that has let fans down for two long, and it has been two years since the right hon. Member for Daventry (Stuart Andrew) introduced the Bill to Parliament, calling it a landmark moment for fans.
Mr James Frith (Bury North) (Lab)
I refer Members to my entry in the Register of Members’ Financial Interests. I congratulate the Secretary of State on bringing the Bill to the House. I hope the House will join me in congratulating Bury FC, the Mighty Shakers, for their historic first promotion since the club’s no-fan-fault eviction from the football league. We love a comeback in Bury, and know all too well of the devastating impact when football clubs forgo good ownership and standards. The Government are right to deliver on their promise of an independent football regulator; that promise was a consequence, in no small part, of the trauma we experienced. Will my right hon. Friend support my call for the new regulator’s home to be in Bury?
Lisa Nandy
My hon. Friend is a big fan of a comeback himself, as this House knows. I too declare an interest: my stepdad was a lifelong season ticket holder at Gigg Lane. I know that I would be speaking for him, were he still alive, in thanking my hon. Friend for the tireless work he did while the Conservative Government stood by and did absolutely nothing as his club was allowed to collapse. My hon. Friend worked tirelessly with fans in the community, and has been able to throw open the doors of Gigg Lane to fans again, so I am grateful to him for that.
The time for inaction is over. We have known for so long that for English football to prosper, it must be made sustainable. That is what the Bill does. We promised that, and we are doing it. We ask everybody who cares about the future of football to back our fans, our game, and the Bill.
Paul Waugh (Rochdale) (Lab/Co-op)
I welcome Bury FC’s revival, not least because Rochdale FC can now beat them in the local derby. On Saturday, I was at Spotland to see Rochdale clinch a play-off place for the national league, thanks to a 5-1 win over Hartlepool FC. Many people there knew it was a super achievement, precisely because a year ago we were threatened with financial collapse. There was a poignant moment at the game when we all remembered the death of Joe Thompson, whom we lost to cancer aged just 36. His work is being carried on by the local cancer charity Team Thompson. That epitomises everything that is great about our game; it is at the heart of the community, and is giving something back, through players like Joe. Does my right hon. Friend agree that people like Joe are everything that is great about our English game? Does she also agree about the need to ensure that smaller clubs see a reverse of the inequity we see in the game nationally?
Lisa Nandy
May I thank my hon. Friend for his intervention, and add my voice to his in paying tribute to Joe? All our thoughts are with his family and the community.
That example shows exactly why this Bill matters. It also shows why, up until today, this has been a genuinely cross-party endeavour, backed by Members in all parts of the House. Against that backdrop, may I take this opportunity to say that this amendment is an absolute embarrassment? With the exception of stronger protections for fans, which the Conservatives supported, this Bill, which the right hon. Member for Daventry is opposing, is the Bill that he introduced. This is the system of light-touch regulation that incentivises football to get its own house in order that only a few weeks ago he was championing. In fact, not only is it light touch and pro-growth, but we got those measures into the Bill—something that the Conservatives failed to do when they were in government. He should be thanking us and welcoming the strengthened provision in the Bill.
This Bill takes a proportionate approach that rejects one-size-fits-all, so that those with the broadest shoulders bear the greatest burden. The right hon. Member should know that because he presented the Bill to this House, and only a few weeks ago he was busy endorsing it. This is the Bill that every single Conservative Member supported at the election in their manifesto. Promises made, promises broken—we simply cannot trust a single word they say.
Mike Wood (Kingswinford and South Staffordshire) (Con)
The Secretary of State talks about a light touch and proportionality. The general secretary of UEFA wrote to her about the potential consequences of her proposals before Christmas. That letter is relevant to the decisions we have to make today, so will she publish a copy for the House before we vote this evening?
Lisa Nandy
They just cannot stop embarrassing themselves. Seriously, the hon. Member was the Whip on the Bill Committee. He knows full well that UEFA has confirmed in writing to me, as the Football Association confirmed directly to Members of both Houses, that the Bill before the House does not breach UEFA statutes. I will say to him gently, as I said to Opposition Members—[Interruption]—the right hon. Member for Beverley and Holderness might like to learn something—that it is one thing to criticise the Government for something they disagree with; it is another to criticise them for doing exactly the same thing that they did in government.
The hon. Member for Kingswinford and South Staffordshire (Mike Wood) will know that the last Government—in which the shadow Secretary of State was the Minister responsible for the Bill—refused to publish any private correspondence, be it from UEFA or otherwise, because they said, rightly, that it remained confidential and was private. However, we have been happy to disclose to the House that there is no problem with the Bill presented as far as UEFA is concerned. I mean, honestly—
Lisa Nandy
No, the hon. Gentleman is embarrassing himself. Sit down, have a period of humility, and learn what is in this Bill.
Amanda Martin (Portsmouth North) (Lab)
We will hear a number of speeches today, and we have a number of football fans in the Chamber, representing many football clubs across many leagues, so I expect that many of us will not be surprised to hear the chant: “Well, it’s all gone quiet over there!” Is the Secretary of State, like me, surprised at the apparent silence from the Opposition Benches, and at Opposition Members’ seeming reluctance to put fans at the heart of our game?
Lisa Nandy
Even though we are talking about the Conservatives, I am absolutely gobsmacked. We are talking about millions of football fans around the country. Certainly in recent years, I have never not been of the opinion that Conservative Members do not think about anyone but themselves, but even on that test, I would have thought that they would see that it was in the interests of the Conservative party to back something that means so much to millions of people in every town, village and city across this country.
Lisa Nandy
I will make some progress, but I will bring the hon. Member in when I can.
Let me remind the right hon. Member for Daventry what he used to think about the Bill. He used to say that a regulator was “substantial but necessary”; that not having one would be “catastrophic”; and that
“Without fans, football clubs are nothing. We would all do well to remember that as we work towards reform to secure a brighter future for football.”
The Conservatives have now worked themselves so far towards reform that they are virtually indistinguishable from the hon. Member for Clacton (Nigel Farage). I can only think that he is writing their policy on football.
But seriously, how can the right hon. Member for Daventry look football fans in Hartlepool, Bolton, Portsmouth, Reading, Bury and Luton in the eye and defend this amendment, after making them a promise just two years ago, and again at the general election? [Interruption.] I have the full list. He might as well have it, because he is the only person in this room who does not seem to remember what he has said. I am left wondering whether he did not understand a word of his own Bill, which he introduced to this place just a few years ago and championed at the general election, or whether the sad truth is that the public cannot trust a single word that his party says.
Let me try to help the shadow Minister on what the Bill actually does. First, it introduces a licensing system to require clubs to have a sensible business plan that they stick to. That will include a clear financial plan that properly assesses risk. That is measured and proportionate, and it places requirements on clubs that reflect their circumstances. Let me address the concern that he has just discovered that he has. The Bill will take into account factors such as league, club size and financial health. That will ensure that the regulation is light-touch. We have cemented the proportionate approach that we inherited from him by adding two measures: a financial growth duty, so that the regulator will need to consider the financial growth of English football as part of its secondary duties; and a specific—[Interruption.] He cannot have it both ways. He cannot take credit for this legislation and then try to vote it down. Honestly, I have seen a lot from the Conservatives. I have seen people taking three different positions on two different options in front of them, but what I have not seen for a long time is a shadow Minister who has two different positions on his own view. It is just absurd.
We have also included a regulatory principle in the Bill to clarify that the regulatory regime is light-touch. That will provide clarity and certainty, and prevent any unintended consequences from deterring good owners from investing in our clubs. The Sports Minister, my hon. Friend the Member for Barnsley South (Stephanie Peacock), and I have worked closely with clubs at every level to produce legislation that is clearer for prospective owners than the existing system, and we are confident that this stable environment will drive more investors with a long-term prudent approach into the game.
Dr Luke Evans
One of the sticking points in the Bill, and one of the things that has changed, is the approach to parachute payments. One of the Opposition’s concerns is that the Bill will deter investment. We are talking about literally the best league in the world. People from across the world invest with security because of those payments. If the Government take them away, there is a worry that it will deter investment in other leagues. That is exactly what the German league, the French league and the Spanish league are looking for. Will she rectify the issue by putting a provision about those payments in the Bill?
Lisa Nandy
The hon. Gentleman raises a decent point, and I will address it head-on. We have no plans to abolish parachute payments, and there is no measure in the Bill that allows us to do so. We also do not take a view on parachute payments; it is for football to determine its view. However, it would be nonsense to exclude parachute payments from the state of the game report, given that this Bill is about the financial sustainability of the whole game. The regulator must be able to take that into account and to use it to inform discussions with clubs in every league across the footballing world. That is the view that we took, but it is also far closer to the spirit, intention and recommendations of Dame Tracey Crouch’s review of football, which was led and informed by thousands of fans across the country. It is the right thing to do.
Several hon. Members rose—
Lisa Nandy
I will make some progress, as many Members want to speak. It shows how important this issue is to this House.
Some Members have raised concerns about competition, so let me be crystal clear. Football is an economic powerhouse. The Premier League and its clubs contributed more than £4.2 billion in tax in 2021, supporting more than 90,000 jobs. England leads the world when it comes to football, and the English pyramid is based on competition. That is why the regulator will not intervene in competition matters. Its scope is tightly defined, and I can say to the House with confidence that it will not risk contravening any international statutes. Members will have heard what I said to the hon. Member for Kingswinford and South Staffordshire about the view of UEFA, and they will have heard what the FA has confirmed directly to Members of both Houses. In fact, we are so committed to this principle, to protect England’s ability to compete in international matches, that we removed a damaging clause we inherited from the previous Government. It would have required the regulator to
“have regard to the foreign and trade policy objectives of His Majesty’s Government”
when approving takeovers. The system will be better and far more independent as a result.
Tim Farron (Westmorland and Lonsdale) (LD)
Given the enormous amount of money that sits with the Premier League, does the Secretary of State share my feeling that it and the FA in general do not do justice by the families of former footballers who suffer from neurodegenerative conditions? Footballers are four or five times more likely to have such conditions than the rest of the population, and those organisations are meant to help families with the care costs of such former professionals, but they do not do so. Will the Secretary of State meet Football Families for Justice so that we can put something in the Bill that will force the wealthy people in football to support those who suffer?
Lisa Nandy
I thank the hon. Friend for his advocacy. I also thank my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who has done incredible work in this regard. I am due to meet some of the families shortly.
I will try to make some progress, because many Members want to speak and raise issues about their own clubs and communities. Let me turn to the subject of financial distributions. Our strong preference is for football to be able to reach its own agreement on broadcast revenue distribution, but regrettably, as the House will know, no agreement has been reached since the last deal was struck in 2019. That is why we agree with Dame Tracey Crouch that clubs must have a safeguard in these circumstances, and the Bill proposes a backstop power. It was explicitly designed to incentivise industry to come to its own agreement, and restores the right of the regulator to consider all elements of club finances, including parachute payments. By definition, a backstop is a measure of last resort, and we have strengthened the measures in the Bill to ensure that the regulator will have the power to intervene only as a last resort. We have also made it clear that the regulator will need to publish its “state of the game” report before the backstop can be triggered, so that all parties have a clear and common understanding of the problems that should be addressed before engaging in mediation.
I recognise that the exact process of how the backstop should work has been a matter of serious and considered debate in the other place, with thoughtful suggestions made by Lord Birt, Lord Pannick and others. We are confident that we have proposed an effective mechanism, but we appreciate the constructive and thoughtful debate on this matter. Before the Committee stage, we will consider whether there are sensible ways in which to improve the process and ensure that we present the best possible option to the House.
Mr Clive Betts (Sheffield South East) (Lab)
May I return the Secretary of State to the Conservatives’ position on parachute payments? I welcome the fact that the Government have not ruled out taking them into account when the regulator does his work. Surely the purpose of the “state of the game” report is to look at the health of the football pyramid as a whole, but before that report is published, the Opposition want to rule out allowing the regulator to take account of parachute payments. As 80% of the help that the Premier League gives the rest of the league is spent on parachute payments, surely that is a nonsense and at least should be considered for the future.
Lisa Nandy
I agree very much with what my hon. Friend has said.
Let me deal with the subject of owners’ and directors’ tests. Football clubs are the pride of our towns and cities. New owners bring important investment, but they are also the guardians, the custodians, of clubs that have stood at the centre of our communities and our lives for more than 100 years. Fans grow up attending matches with parents and grandparents; later, they take their own children and grandchildren. These clubs are handed on from one generation to the next. They are institutions that—as the right hon. Member for Hereford and South Herefordshire (Jesse Norman) once wrote—help to shape and define us as we help to shape and define them, and they are too important to be used as playthings by people who have no stake or care for the community that owns them.
That is why the Bill introduces a fitness test for owners and directors, a source of wealth test for owners, and a requirement for adequate financial plans and resources, also for owners only. Prospective owners and directors will have to pass those tests before buying or joining a club. Incumbents will not automatically be tested, but the power exists, if there is concern about their suitability, to remove them if they are found unsuitable. This approach reduces the regulatory burden, and is targeted proportionately where there is a risk of harm. It will bring peace of mind to clubs, their staff and their fans, who deserve nothing less.
Graham Stringer (Blackley and Middleton South) (Lab)
I suspect that many in this Chamber will be surprised to hear that when I first supported Manchester United, “United will survive” was on the front of the match programme: the club were bankrupt, because the young men who were killed in the Munich air disaster were not insured, and it took a lot of effort to move on. My right hon. Friend is talking about directors and “right and proper” people. I think I speak for every Manchester United fan when I say that if the Bill does not enable the fans to get rid of the Glazers, who are sucking money out of Manchester United to support shopping centres in Florida, it is defective.
Lisa Nandy
We have purposefully set a high bar for incumbents, but it is right that the power exists.
Finally, I turn to the most important people: the fans. I said at the outset that the Bill maintains a tightly defined scope focused on financial sustainability and safeguarding heritage, and it will continue to take a light-touch, targeted and proportionate approach, but it is a new season and there is a new manager. Like all good managers, I could not resist making some well-timed substitutions to improve our odds of delivering on our manifesto commitment to make this country the best place in the world to be a football fan, and to deliver a Bill that is match fit. Too many fans have seen their teams’ owners change club badges and colours without any fan input, or have seen their club sell its stadium and up sticks until it is barely recognisable. Too many fans have watched as their clubs have tried to join closed-shop breakaway leagues against their wishes, and too many have seen their club struggle or even collapse under the weight of mismanagement and poor ownership.
Lisa Nandy
Nobody knows that better than my right hon. Friend, to whom I will happily give way.
Anneliese Dodds
My right hon. Friend has been passionate about the beautiful game for many years, and I am delighted that she is ensuring the Bill will be passed and make a difference for fans. One huge problem for fans has been their club getting trapped with an unsuitable, unsustainable and extremely expensive stadium because of goings-on at the club. We have that with Oxford United now. Does she agree that the Bill will help to stop that kind of situation, and that Oxford United must be allowed to move to the Triangle as soon as possible?
Lisa Nandy
I am sure my right hon. Friend will continue to fight for Oxford United and all their fans. We have explicitly included provisions in the Bill to ensure that there are protections for fans around club relocation and the sale of stadiums. I know from my own experience at Wigan Athletic that one of the only reasons we still have a club is that the council had a covenant on the land, which prevented the stadium from being sold when we were in administration.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I commend my right hon. Friend for making a fantastic speech. We should also commend the good owners of football clubs, such as Frank Rothwell and his family, who have made such a difference to Oldham Athletic. He has not just ploughed money into the club, but raised millions of pounds for Alzheimer’s research. May I also associate myself with the comments from the hon. Member for Westmorland and Lonsdale (Tim Farron) about Football Families for Justice’s efforts to get an independent and comprehensive strategy on dementia for footballers, who are four to five times more likely to suffer from dementia?
Lisa Nandy
I am grateful to my hon. Friend not only for putting this issue on the record, but for raising it with me privately on a number of occasions—I know how committed she is. May I associate myself with her words about good football club owners? We firmly believe that this Bill will provide the clarity and certainty that allows good owners to invest without being outbid or having to compete with people who mean our clubs ill. I, too, have an extremely good owner at Wigan Athletic. We are fortunate to have him, and we know how important such owners are.
James Wild (North West Norfolk) (Con)
During covid, non-league clubs took DCMS sport survival loans, but their repayment now threatens the viability of some. Will the Secretary of State assure fans that she will do all she can to assist them? As my local club, King’s Lynn Town, are in active discussions with Sport England about their loan, will she or the Sports Minister agree to meet me to discuss that?
Lisa Nandy
I am grateful to the hon. Gentleman for raising that issue, which affects many clubs around the country. The Department continues to engage regularly with fans and sporting governing bodies that are facing difficulties—not just in football, but across the board. We are working constructively to help support them, and I would be delighted to provide him with a further update on the individual case that he mentions.
We are determined to meet our commitments and promises to fans. We have improved the Bill explicitly to require clubs to provide effective engagement with their supporters, and to consult fans on changes to ticket prices and on any proposals to relocate their home ground.
Lisa Nandy
If the hon. Gentleman forgives me, I will make some progress. I think over 50 Members want to speak in this debate, and I want to give them an opportunity to contribute.
We are determined to ensure, through this Bill, that those protections are in place. Clubs will be required to establish that a majority of fans are supportive of changes to club emblems and home shirt colours, and obtain FA approval of any change to a club’s name. For the first time ever, this will set a minimum standard of fan engagement in law. It will introduce financial regulation giving the regulator the power to oversee financial plans and step in where it has concerns. Many clubs are already delivering with and for their fans, but this should be a right of all fans, not just some. This Labour Government are delivering strong and sensible measures that respect the contribution of working people to this country, and our message is clear: if they value it, we will protect it, by putting fans at the heart of the game, where they belong.
Graham Stuart (Beverley and Holderness) (Con)
The Secretary of State has been most generous in giving way. It is reported that Manchester United, Liverpool and others have advertised posts that exclude applications by white men. Will she say on the Floor of the House today that any such policy is illegal in that it infringes the Equality Act 2010, and will she give a clear message that any such policy must be reversed?
Lisa Nandy
I am not aware of that—genuinely, this is the first I have heard of it—but I am happy to look into it and come back to the right hon. Member.
Lisa Nandy
I am going to proceed, Madam Deputy Speaker, because I can see, by your nodding your assent, that you would like to do so.
Real change or lasting change never comes from the Government alone; it takes a nation. I thank the fans, the clubs and the leagues, including the English Football League, the Premier League and the National League, for their extensive and constructive engagement; the FA, UEFA and FIFA for their continued support of the Bill; the Football Supporters’ Association, the Professional Footballers’ Association, Kick It Out and clubs across the pyramid for their invaluable perspective and support; and noble Lords for their close scrutiny. I also thank the civil servants in my Department who have worked tirelessly for many years, across two different Governments of different political persuasions, to get us to this point. Most of all, I thank one woman, without whose passion for football and its fans, relentless drive and determination to make good on this long-held promise, we would never have reached this moment—Dame Tracey Crouch.
This effort has united clubs across every league, fans and governing bodies; towns, villages and cities across our country; and, until today, even political parties, in our determination to fulfil our promise to fans. For the Conservatives, this—the amendment—is genuinely a shameful moment, pitting themselves against fans, clubs and the national game. However, for football and its fans, this is a new dawn. Hard-fought-for and long-awaited, it will give our national game and our much-loved clubs the most promising future, and put fans back at the heart of the game, where they belong. I commend this Bill to the House.
Madam Deputy Speaker (Judith Cummins)
I call the shadow Secretary of State.
Nick Timothy (West Suffolk) (Con)
I declare my interest as an Aston Villa season ticket holder and therefore speak as somebody experienced in the highs and lows of football. I refer not to the FA cup semi-final on Saturday but to the moment in 2018 when Villa almost went bust under Dr Tony Xia.
To own a football club is to respect one’s responsibility as a custodian of an important community institution. That is something, despite some of the speeches we have heard, that most owners respect. We cannot debate the Bill without acknowledging the extraordinary success of English football, because the premier league is the greatest show on earth. It is broadcast to 189 different countries, and nearly 2 billion people follow the league weekly. The revenues that football accrues are invested not only in top talent but through the divisions and in grassroots facilities overseen by the excellent Football Foundation. The New Croft in my constituency, for example, is home to Haverhill Rovers, who just became champions of the Thurlow Nunn league first division north, and incredible all-weather pitches that host more than 50 teams of different ages and abilities.
What is the problem that the Bill seeks to fix? The Government say that the new regulator will protect and promote the sustainability of English football. The examples given to justify regulation are Bury and Macclesfield Town among others, but the experience of those clubs shows the power of community and supporter activism. Bury was rescued by a supporters’ group, and Macclesfield by a local businessman. Both are going concerns today.
Lisa Nandy
I gently point out that Bury FC were allowed to collapse. They were expelled from the league and they lost their football share. I know acutely from my own family experience that supporters continued to gather at the gates every Saturday because of that drumbeat of a ritual that had meant so much to them and their families. I know that the hon. Gentleman cares deeply about community, so surely he agrees that that can never be allowed to happen again.
Nick Timothy
Of course, I agree that Bury was a very sad incident. The right hon. Lady mentioned 60 clubs, I think, that had gone into administration. My point is that I am not aware that any of them collapsed to the extent that they are not going concerns or not participating in league or non-league football. We know from the examples of Bury, Macclesfield and AFC Wimbledon that it is possible for clubs to come back. Supporter activism is not the only solution.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
I would like to return to the substance of the Bill. English football is the envy of the world. It is one of our greatest exports, watched by billions globally with some of the most exciting players, clubs and stories in any league. The premier league, the EFL and the national league contribute billions to our economy, support thousands of jobs and provide the infrastructure that supports the next generation of sporting talent.
Despite the global success of English football, nothing can disguise the underlying fragilities of the game. Too many fans have watched on as their club sells their stadiums, changes colours or collapses under malicious ownership. Since 1992, over 60 clubs have gone into administration, and expert analysis suggests the financial picture across the pyramid is worsening, not improving. For each club that fails, there is a devastating knock-on impact for local communities. Indeed, these clubs are more than just businesses; they lay at the heart of communities up and down the country, steeped in history and providing sources of identity and pride across our towns, cities and villages. I have seen that at first hand when visiting clubs across the country—from Southend United to Everton, from Barnsley to Brighton. Those fans deserve to focus on what is happening on the pitch rather than off it.
Of course, it was the previous Government that launched a fan-led review into football governance. That review, led by the former Conservative Sports Minister Dame Tracey Crouch—I pay tribute to her for her tireless work on this topic—identified the need for an independent football regulator. Of course, it was the previous Government that published their Bill to do just that. It fell due to the election, when Members on both sides of this House stood on election manifestos that committed to bringing forward a regulator again.
Ultimately, the purpose of the Bill is simple: it introduces a new light-touch regulator for the game intended to cover the top five levels of men’s football. At a basic level, the regulator will require just three things of clubs: be a fit and proper owner, have a sensible business plan and consult the fans. It will of course be applied proportionately.
Several Members across the House have highlighted the experience of their local clubs with rogue owners, including my hon. Friends the Members for Earley and Woodley (Yuan Yang), for Sheffield South East (Mr Betts), for Sheffield Brightside and Hillsborough (Gill Furniss), for Derby South (Baggy Shanker), for Blackpool South (Chris Webb), for High Peak (Jon Pearce), for Tewkesbury (Cameron Thomas), for Bracknell (Peter Swallow), for Reading Central (Matt Rodda) and for Portsmouth North (Amanda Martin). I know that many other Members would have liked to contribute to the debate.
I turn to financial distribution. I want to be clear that a football-led solution is the preferred outcome. The regulator’s primary focus will be ensuring that clubs have a suitable custodian and are run sustainably. Distribution should primarily be a matter for leagues themselves, but if a football-led solution cannot be reached, the regulator will be ready to step up if required. As a last resort, it can facilitate a solution. This backstop mechanism will only be used if football needs it, and it will be underpinned by the “State of the game” report, which will inform the regulator’s work for a comprehensive review of the financial health of football.
I turn to some of the other issues raised in the debate. A number of Members rightly paid tribute to their own grassroots clubs, and I have seen the contribution in my constituency of Barnsley South. Grassroots football is the foundation on which the football pyramid is built. It is not in scope of the Bill, but a few weeks ago we announced further investment. I was of course pleased to visit Basingstoke, and my hon. Friend the Member for Basingstoke (Luke Murphy) also raised that point specifically. The hon. Member for Cheadle (Mr Morrison) and my hon. Friend the Member for York Outer (Mr Charters) also mentioned it.
A number of Members mentioned concussion. That issue is not covered by the Bill, but the Secretary of State and I will meet families shortly. I have heard the points that they have made.
The Chair of the Culture, Media and Sport Committee, the hon. Member for Gosport (Dame Caroline Dinenage), rightly highlighted how some of the changes that we have made reflect the previous Committee’s report, whether with regard to fans or foreign policy. She also pointed out that we could ask 10 different people about parachute payments and get 10 different answers, but we believe it is right that they are not ruled out. She also spoke about how the chair of the regulator will need to demonstrate an understanding of the complex football ecosystem. I very much heard her comments about the appointment of the chair. We welcome the scrutiny that her Committee will provide—I know that she will be fair and robust. She asked for a cast-iron guarantee on clubs in trouble. We believe that the regulator would be able to prevent or mitigate similar situations, because regulation can be proactive. Real-time financial monitoring will allow early intervention if a club shows signs of distress. We heard so many examples in the debate, including Derby, Reading, Sheffield Wednesday and Blackpool.
I appreciate the support and contribution of the Liberal Democrat spokesman, the hon. Member for Cheltenham (Max Wilkinson), who raised a number of issues. I am happy to meet him to discuss them further. He asked specifically about commercial issues. The regulator will not intervene on commercial matters such as sponsorship. The Government will continue to follow the best available evidence on the impact of gambling sponsorship in sport to inform future decisions.
Let me be very clear: UEFA has confirmed in writing to the Secretary of State, and the FA confirmed directly to Members of the other place, that the Bill as drafted does not breach UEFA statutes. [Interruption.] The regulator will be operationally independent of Government and will not exert undue influence on the FA’s ability to govern the game. The extent of its statutory powers and duties will simply not allow it to do so. Conservative Members call for private correspondence to be published. How many letters from FIFA and UEFA were published by their Government? None.
Let me address the reasoned amendment. It is disappointing but not surprising that the Conservatives have tabled an amendment to kill the Bill. I will take some of those points in turn during the short time I have left. The Secretary of State has selected David Kogan as her preferred candidate for the role of chair of the independent football regulator. That follows a fair and open recruitment process that was run in line with the Government’s code for public appointments. David brings a wealth of expertise from the sport and media industries, making him an outstanding candidate for the role.
Let me make a few things clear on the increased costs and regulatory burden for all English football clubs, particularly in the lower leagues. First, these are exactly the same levy provisions used in the previous Bill, which the Conservatives introduced. As they will know, the Government are not setting the levy charge. Given the requirements in the Bill, we expect any charges to be distributed proportionately. Those with the broadest shoulders will pay the most.
I challenge the suggestion that the proportionate costs of the levy should lead directly to increased ticket prices. Some clubs have spent more on the transfer fee for one player than the regulator is estimated to cost over several years. When the levy is distributed across clubs, no club big or small will be charged more than is fair or affordable, so passing the costs on to fans would not be proportionate. It is quite amazing that the shadow Minister, the hon. Member for Old Bexley and Sidcup (Mr French), spoke about own goals. When I was in opposition, I heard him question the then Sports Minister—now the shadow Secretary of State, the right hon. Member for Daventry (Stuart Andrew)—about how the Bill could go further. Indeed, I have spent hours with the right hon. Member, whom I like and respect. I know that he has had a difficult day.
Each Member here from across the House will have a football club in their constituency, whether in the grassroots or up in the premier league. All of our communities have a stake in this game and in the pyramid. I believe this Bill will protect and promote the sustainability of the game. I thank everyone who has contributed to the Bill, from the clubs and the leagues to the fans, and of course to the Department for Culture, Media and Sport officials.
This is a once-in-a-generation opportunity to ensure that the sport we all love can be enjoyed for years to come by local fans and communities. It is the Labour party that is on the side of football fans. We are making good on our manifesto promise. Tonight we will deliver that change. I commend the Bill to the House.
Question put, That the amendment be made.
Football Governance Bill [ Lords ] (First sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 3rd June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 3 June 2025 - (3 Jun 2025)
The Committee divided: - Ayes: 3 / Noes: 13 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 13 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 13 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Lee Dillon (Newbury) (LD)
I sold my shares in Manchester United to the phoenix fund, which exists to buy the club if it ever comes back on the market.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
For clarity, my interests are declared in the ministerial register.
The Chair
We now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room and on the parliamentary website. It shows how the clauses, schedules and selected amendments have been grouped together for debate. A Member who has put their name to the lead amendment in a group will be called first, while the Minister will be called first for clause stand part debates. Other Members are then free to indicate that they wish to speak in the debate by bobbing.
At the end of a debate on a group of amendments, I shall call the Member who moved the lead amendment or new clause again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or new clause or to seek a decision. If any Member wishes to press any other amendment to a vote —including a new clause in a group—they will need to let the Chair know. My fellow Chairs and I shall use our discretion to decide whether to allow a separate stand part debate on individual clauses following the debates on relevant amendments. I hope that explanation is helpful.
Clause 1
Purpose and overview
Stephanie Peacock
It is a pleasure to serve under your chairmanship, Sir Jeremy. I begin by welcoming the Committee; it is a real pleasure to be here. It is just over a year since I was sitting on the other side of the room debating the Bill’s previous iteration. I look forward to working with Members from all parties. The Bill was in both the Labour and Conservative party manifestos. It is an important piece of legislation and we will spend a lot of time on line-by-line scrutiny.
I thank the hon. Member for Old Bexley and Sidcup for tabling amendments 95 and 96. I will also respond to some of the points made by the hon. Member for Isle of Wight East and my hon. Friend the Member for Dartford.
Amendment 95 was debated at length in the other place. Unsurprisingly, the Government’s position on it remains the same. We do not agree with its intent to narrow the purpose of the entire Bill specifically to financial sustainability, or to add to its purpose the vague and undefined words “success of English football”. I was a little confused by the contribution from the hon. Member for Isle of Wight East. He said he was concerned about “narrow financial metrics”, but the amendment in the shadow Minister’s name actually would narrow the purpose simply to financial sustainability. I will outline why we do not agree with that.
The Bill’s purpose is sustainability, as defined in clause 1. It is about the continuation of service. I draw Members’ attention to subsections (3) and (4), which say that sustainability means continuing to serve the interests of fans and to contribute to the wellbeing of the local communities that regulated clubs serve. Of course, financial sustainability is an important part of that. If a club suffers financial collapse, it cannot continue to serve its fans and the community. However, we believe there is more to it. If a club’s balance sheet remains healthy, but it ups sticks and moves 60 miles away, or changes its name, badge and shirt colours, that is not continuity of service. That is precisely why the Bill covers aspects such as fan engagement and heritage, as well as financial issues, and why the Bill’s purpose needs to be overall sustainability, not just financial sustainability.
I understand the desire to ensure the continued success of English football as one of this country’s greatest exports—Members from throughout the House have outlined the huge contribution that it makes globally —but that is already achieved in the Bill. As part of its secondary duties, the regulator must have regard to avoiding impacts on important outcomes in football. That includes domestic sporting competitions, the competitiveness of our clubs against international clubs, financial growth, and investment in football. Rather than the undefined concept of “success”, those specific elements represent the building blocks on which English football’s success has been built. Actively pursuing those 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.
If, as part of the Bill’s purpose, the regulator were required to protect the success of English football as well as its sustainability, there would be a significant widening of its scope. The regulator would need to be actively involved in anything that relates to the success of English football, such as the commercial and sporting sides of the game. Government Members have been clear that we do not want scope creep, which brings me to the question from the hon. Member for Isle of Wight East about the National League’s three up, three down campaign. I have met representatives of the National League a number of times and I am completely sympathetic to their aims, but that does not fall within the Bill’s scope. I think we can all agree that it is not something that we, or organisations such as the Football Association, UEFA and FIFA, want the regulator to interfere in.
Amendment 96 seeks to add further detail to the definition of “sustainability” for the purposes of the Bill. I thank the hon. Member for Old Bexley and Sidcup for largely copying and pasting the Government’s explanatory notes to clause 1; however, the purpose of the explanatory notes is to provide that sort of additional, illustrative detail about the intention behind the legislation that is not appropriate for the face of the Bill.
The amendment also seeks to add criteria on TV viewership, match-day attendance and international competitiveness to the definition of “sustainability”. We have significant concerns that that would expand the scope of the regulator and put in place a much more interventionist regime than this Government propose and, indeed, than the previous Government proposed. The regulator would be required to concern itself with issues such as match-day attendance and TV viewership, as my hon. Friend the Member for Dartford mentioned. It would not be able to have a direct impact on those issues without actively intervening on issues such as ticket prices and broadcasting. At best, we would have a regulator without the powers to achieve its purpose, and at worst, we would have mission creep into areas that do not warrant statutory regulation. For those reasons, I ask the hon. Member for Old Bexley and Sidcup to withdraw his amendments.
Stephanie Peacock
The clause sets out the Bill’s purpose, which is to promote and protect the sustainability of English football, as well as summarising what each of its parts provides for. It explains that 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 wellbeing of local communities with which regulated clubs are associated. The Bill’s purpose is crucial as the regulator will be obliged to act in accordance with it at all times, so far as is reasonably practical.
The fan-led review made clear that the pre-eminence of failure in the market is unsustainable, with football clubs unable to continue to provide their service. It is unacceptable that fans and local communities could witness their clubs no longer operating. We know the huge impact and contribution that clubs make to communities up and down the country, which is why we are making good on our manifesto commitment and have introduced the Bill.
The clause defines “sustainability” for the purpose of this legislation as the continuation of service in the interests of fans and for the wellbeing of local communities. We will debate and explore the Bill’s purpose in detail over the course of the Committee. At a basic level, the Bill asks clubs to consult their fans, to be a fit and proper owner and to have a business plan. In essence, clubs should continue to belong to their fans and communities now and in future, which means there should not be financial collapse, relocation of stadiums or new breakaway competitions.
Mr French
It is an honour to speak again under your chairmanship, Sir Jeremy—I promise the Committee that I will not say that every time.
The Opposition do not disagree with much of the sentiment as we are all passionate about football and understand the role of clubs in our communities, as I acknowledged earlier. Our concern, which is why we tabled the amendments, is that the opaque definition of sustainability could have significant unintended consequences for the regulator’s direction of travel.
The Minister said of our amendments that the considerations we were trying to put in the Bill were secondary—or words to that effect; I apologise if I have slightly misquoted her—but my concern is that those considerations are primary in their focus. It will take many months to get the new regulator up and running, but if it does not understand the message that the House is sending it—that it should be focused on trying to improve football—it could be a lost cause before it has even got started.
Our concerns are clearly articulated in our amendments. We accept that we have lost the vote—the Government have a massive majority, so that is not surprising—but we urge Ministers, in their work going forward, to be clear with the regulator and the people who work for it that the ambition of this House is not to limit the scope of the regulator to just the clauses before us today.
Stephanie Peacock
I thank the shadow Minister for his comments, but I simply do not recognise their premise in terms of the definition of sustainability being vague. In the Bill’s previous iteration, the Government did not make the amendment that the hon. Gentleman proposed. I will not repeat my previous speech. We think that sustainability is much broader than simply finances. There is a procedural issue around not necessarily secondary considerations; the explanatory notes provide additional illustrative detail, and obviously what we say in Committee will give a clear indication to the regulator, and indeed to clubs.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Key definitions
Mr French
I beg to move amendment 132, in clause 2, page 2, line 31, leave out subsection (3) and insert—
“(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 subject to approval by both Houses of Parliament amend the competitions specified in section (3).”
This amendment would specify the leagues that are to be classed as “specified competitions” under Act.
Stephanie Peacock
It is a pleasure to serve under your chairmanship, Sir Jeremy. It is disappointing to see the return of amendments 132 and 74 after the extensive debate in the other place, where it was made very clear that they would likely make the Bill hybrid. I will respond to some of the points that Committee members have made but will outline the Government’s position first. Throughout the development of the policy, there have been countless opportunities for all affected and interested parties to make representations on scope. These wrecking amendments would serve no purpose other than to kick the legislation into the long grass.
The hon. Member for Isle of Wight East, a new Member, said that amendment 132 would be a simple addition. He should know that the addition of those competitions would indeed make the Bill hybrid. As I said, the issue was debated extensively in the House of Lords. The amendment would unnecessarily delay a Bill that was in both parties’ manifestos. This time last year, I spent many hours in a room on this corridor debating the previous Government’s version of the Bill; the hon. Gentleman, of course, stood on a manifesto that committed to it.
Lincoln Jopp
I regret that I have not spent as long as the Minister has in considering this issue. Could she point me to the clauses that make it absolutely clear that the English national team could not be taken within the scope of the regulator and that “a club” could not apply to the Football Association?
Stephanie Peacock
I thank the hon. Gentleman for his contribution; I will come to debate some of the points that he has made later in the Bill. We are very clear that UEFA and FIFA have no issue with the Bill and that the England national team do not fall foul in any way of this legislation.
I move on to the amendments. I understand the desire for up-front clarity in the Bill about which competitions will initially be in scope. There is a sound policy rationale for the approach that we have taken in clause 2. By delegating to secondary legislation, we are merely following the precedent established by other, similar, sport-related legislation, including the Safety of Sports Grounds Act 1975 and the Football Spectators Act 1989. The delegated power ensures that the competitions in scope can be amended in a timely manner and that the scope of the regime remains relevant. It future-proofs for future innovation and protects against circumvention by ensuring that clubs and competition organisers cannot simply reconstitute, rename or establish new competitions to avoid the regulator’s regime.
As mentioned, the intended scope of the regulator is well known and has involved extensive consultation with the clubs and leagues that will be in scope. Any changes in the future would again require consultation and would be subject to appropriate parliamentary scrutiny under the affirmative procedure.
Mr French
I have listened carefully to the Minister’s comments about why she believes we should not specify the leagues, but what is unclear in her language is whether she believes that the Committee should have the opportunity for scrutiny; these measures have been scrutinised in the other House and by a previous Parliament. I believe passionately that when it comes to future-proofing the Bill it is the role of elected Members on the Committee to scrutinise and have a proper debate. I appreciate that the issue has been debated elsewhere, but we need to have a proper debate here, and that is what I am trying to do. I am trying not to be too political in my comments.
My other point is about the consultation exercise with clubs. From the feedback we have had from clubs, it is unclear why they were not invited to give evidence to the Committee. Will the Minister explain why the Government did not want clubs to give evidence to the Committee?
Stephanie Peacock
I thank the hon. Gentleman for those points. I very much welcome parliamentary scrutiny, and hon. Members will know that we intend to make some changes to the Bill following the debate in the House of Lords. Of course, it is the role of the Committee to scrutinise the legislation, but we must recognise that calls for change date back to 2011 in this place, with the cross-party Select Committee report and the fan-led review. We had extensive evidence sessions a year ago where we heard from clubs, fans and lots of different stakeholders, and indeed over the last year as the sport Minister I have done extensive consultations. The Bill remains largely the same as the one we previously debated. We believe that we have made some changes to strengthen it, and that is what we are here to debate.
Stephanie Peacock
No, I will make some progress and then take another intervention in a moment.
On the point about consultation and it being appropriate for parliamentary scrutiny—this comes to the point made by the Liberal Democrat spokesperson—currently, National League North and South are not in scope, but clearly it would not be feasible for the regulator to oversee the entire pyramid and place requirements on clubs all the way down to grassroots.
On the basis of extensive consultation, we believe that the top tiers are the most sensible and proportionate place to draw the line; below that, the regulatory burden would outweigh the potential benefits. However, if circumstances change and the Secretary of State feels that the National League North and South might benefit from being within scope of the regulator, the Secretary of State could conduct an assessment and make regulations to include them.
Mr French
I might have jumped the gun, particularly given what the Liberal Democrat spokesman said, but I want to understand the Government’s thinking about that exact classification and the difference between the National Football League and the National Leagues South and North. What are the Government fundamentally looking at in defining what leagues should be in scope of the regulator?
Stephanie Peacock
It is a fair question, but there was exactly the same cut-off under the previous Bill.
Stephanie Peacock
I am going to answer the question. It is largely—not exclusively—about where teams tend to be full time. It is not a perfect cut-off, and the Liberal Democrats have made a perfectly clear argument, but there has to be a cut-off somewhere and we believe, as the shadow Minister’s Government did, that the top five tiers is the best cut-off.
I want to respond to the shadow Minister’s points about the women’s game and how it could be brought into scope. Karen Carney’s review of women’s football recommended that it be given the opportunity to grow and self-govern rather than move immediately to statutory independent regulation. We are not saying in any way that it should be brought into regulation; we are simply giving that option so that we would not have to return to primary legislation. For those reasons, I ask the shadow Minister to withdraw the amendment.
Mr French
I have listened carefully to the Minister’s comments, but in the feedback we are receiving there seems to be inconsistency not only about what leagues should be under the powers of the regulator to ensure certainty and clarity, but about the powers of the Secretary of State. As I said, there is a massive issue about the role and power of Parliament to hold the Government of the day to account, which we all should believe in regardless of what party we represent.
I note to Labour Members that their party will likely not be in power for ever—I am not making a point beyond that—but this legislation will be in place until another Parliament seeks to change it. Whatever the colours of the Government of the day, Members should have an opportunity to scrutinise what they bring forward. Our amendment 132 seeks to ensure that that happens, by giving hon. Members a clear ability to have a vote whenever the Secretary of State wishes to expand powers.
Max Wilkinson
No, we accept the numbers in the room.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
This clause, as is standard procedure, sets out the key definitions used throughout the Bill. It gives the Secretary of State power to make a statutory instrument to specify competitions, as we have just debated. Those specified competitions can then define the regulated population.
Defining the scope in this way is an important part of future-proofing the Bill, as was seen when the old First Division became the Premier League in 1992. Before making any changes to the specified competitions, the Secretary of State must carry out an assessment on whether it would be appropriate to do so. In carrying out that assessment, the Secretary of State must consult the regulator, the FA and any other stakeholders who the Secretary of State considers relevant. A report of that assessment must also be laid before Parliament. I commend the clause to the Committee.
Mr French
I will pick up on a couple of my previous comments that have not been answered by the Minister, as we will shortly conclude debate of this clause. Why have the Government decided to specify the FA in the clause but not the other leagues? That point has been raised with me by those other leagues. Why are the Government not specifying the other regulatory bodies involved in football? I am interested to hear the Minister’s response, and will happily give way if she would like to give it.
Stephanie Peacock
As the hon. Gentleman will know, the FA is the national governing body of the English Football League, and that is why it is specified.
Mr French
I welcome that comment, but the FA has a quite different role than the leagues themselves, which are currently responsible for various regulatory aspects of English football—whether in the Premier League, the EFL or the National Football League. The FA’s role is alongside those bodies. That is why—these are not my words—there is uncertainty about why the Government have decided to only specify the FA, given that there are clearly other governing bodies involved in English football. That is currently a bit of a mystery.
On the Minister’s other comments, the Government are unclear on the direction of travel of English football and on what the Bill will and will not do. It has been suggested that the regulator will be able to solve all problems, but we have to be honest with the public and say that that is not going to be the case. If a club is badly managed—and I know we are about to discuss ownership—there is little that the regulator will be able to do to stop a club from going bankrupt, as an extreme example. We all have to acknowledge that that is a real risk for football, regardless of what the regulator looks like. I will end my comments there.
Stephanie Peacock
As I said in my intervention, the FA is the national governing body: there is only one governing body, and that is why it is specified. We expect the regulator—this provision is in the Bill—to consult all relevant parties, including leagues and fans. In the previous debate, we were clear that the leagues will be specified by statutory instrument.
The shadow Minister just said that it has been claimed that the regulator will solve all problems, but that absolutely has not been claimed, either by this Government or the previous one. We are debating the purposes of the Bill this morning; it is about the sustainability of the football game, having not been able to do that itself over the last decade. There have been calls for change in this place dating back to 2011—the ill-fated super league, the fan-led review and his Government’s previous Bill. This Bill will not solve all problems, but we hope it will put football on a sustainable footing.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Meaning of “owner” etc
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Schedule 1.
Clause 4 stand part.
Stephanie Peacock
Clause 3 is about the owners of football clubs, who play a pivotal role in the sport. Without their efforts and investment, English football would not be the success it is today. Owners have an immense responsibility to not just their club, but fans, local communities and businesses in the surrounding area. Although current league rules outline a requirement to declare who controls a club, there are concerns with their application. That applies particularly when clubs are owned or controlled by offshore entities or complex company structures.
Fans have also expressed concerns about the opaque nature of who owns their clubs. They deserve to know who has ultimate responsibility for the club they support, and the clause ensures just that. The clause signposts to schedule 1, which defines when a person is an owner of the club. The clause also defines a club’s ultimate owner or owners. The ultimate owners of a club are those who have the highest degree of influence or control over the activities of the club. When a club applies for a provisional operating licence, it has to identify its owners and ultimate owners to the regulator in a personal statement. Defining the ultimate owners of a club and requiring clubs to declare them will be a crucial step to improving transparency and accountability in the game.
Schedule 1 defines owners for the purpose of the Bill and equips the regulator to apply that definition in different real-life circumstances. It is crucial that owners are suitable so that the sport is placed on a more sustainable footing. An ownership chain may be long and complex, with many links; to ensure clubs have sustainable custodians, the regulator needs to identify the human being with actual control at the very end of the chain—rather than the holding companies or other legal structures, which are just links along the way. That is why, under the Bill, the definition of an owner focuses on identifying individuals, except where clubs are owned by registered societies.
Registered societies are specific legal structures defined in clause 91; they must be run as co-operatives or for the benefit of the community. When used for ownership of football clubs, they are typically one-fan-one-vote organisations where control is split equally among hundreds or thousands of members. That is why ownership chains can end with registered societies, without needing to identify named individuals behind them.
The Bill’s definition of an owner draws heavily on precedent from other legal regimes where ownership can be complicated or opaque, including the “persons with significant control” regime in the Companies Act 2006. The Bill’s definition is designed to capture those who have significant shares or rights, or other forms of significant influence or control over the club. It also includes owners who meet one of these conditions at arm’s length, such as via a trust or a similar body. That approach means that owners cannot simply evade regulation by creating ever more complicated ownership structures. Having a clear definition of an owner means that owners can be identified, tested and held to account as custodians of the club.
Clause 4 is about officers and senior managers. The Bill will introduce two key things: transparency for fans and accountability for decision makers at clubs. The clause defines an officer and a senior manager of a club for the purpose of the Bill. Those definitions have been drafted in recognition of the existing legislative precedent, including the Companies Act 2006 and the Financial Services and Markets Act 2000, as well as the definitions currently used in the football industry. The clause’s purpose is to appropriately define the people who run, or have a significant level of direct influence, over the day-to-day running of a club.
Officers of a club are subject to legislative requirements, including the owners and directors test. The regulator may take enforcement action against a senior manager— a subset of officers who carry out specific management functions at the club. If a club commits a relevant infringement connected to a senior management function carried out by that individual, the individual can be held liable. I commend the clause to the Committee.
Mr French
I will start with clause 3, which deals with the broad definitions of an “owner” within the context of this legislation, as the Minister has just set out. While it may appear technical on the surface, this clause lays the groundwork for the regulator’s ability to properly identify and engage with those who hold real power and influence within our football clubs. Getting these definitions right is absolutely essential. For too long, fans have felt that football governance has been undermined by opaque ownership structurers, shadowy investment vehicles and individuals who exercise effective control without proper scrutiny or accountability.
The clause also ensures that the regulator is not hamstrung by narrow or outdated definitions of ownership. It gives clarity on who can be held responsible, whether through legal ownership, executive authority or de facto control. That clarity is vital if we are serious about improving transparency and strengthening the fit and proper person test regime. At the same time, it is right that this is done in a proportionate and legally precise manner. We must avoid unintended consequences that could dissuade responsible investment or penalise legitimate business structures. Definitions must be robust but not overly broad.
On that point, I will pause for a second. As Members, we have to recognise the international nature of club ownership, both in the EFL and the Premier League. We are talking about English football, but there are only four or five clubs in the Premier League that have an English majority owner these days. We have to be very clear in our work, and in our discussions on the Bill, that we do not want to deter inward investment in the game. We need to understand that there is increasing international competition for these owners to effectively move their assets into other countries. In particular, there is the rise of the Saudi league, which is growing in competition versus the more traditional heavyweights of the European sector.
In seeking to strengthen the ownership test, which I support, we have to be mindful of not deterring investment. Could much of this work on ownership structures and tests have been done appropriately through the current governance structures of English football? Yes, I think it could have been done better already, and I personally would have preferred that to be the direction of travel, rather than through the Bill. However, we are where we are, and I will not oppose clause 3 for the sake of it.
Clause 4 defines the roles of an “officer” and “senior manager” within football clubs, and again seeks to improve transparency on accountability, roles and responsibility. This provision, as outlined by both the Minister and the Premier League in some of its comments, seems to mirror banking regulations, which I was familiar with before coming to Parliament nearly four years ago—time flies when you’re having fun.
The language used in this provision is similar to that used by the Financial Conduct Authority. When the Minister speaks again, I would be quite interested to understand why the Government have chosen banking regulations as the model for football, because I want to understand their thinking on the future of the regulator and football. We are talking about both a business and a sport that differs in many ways to financial services and in the positive impact that it has on this country. While football creates many jobs, it also has an impact on communities around the country and grassroots clubs, where we like to see young boys and girls participating in football.
Schedule 1, like clause 3, is foundational to the Bill and thus to the future of English football in providing a detailed meaning of an “owner”. Where the clause provides the broader meaning of an “owner”, this schedule details the conditions for being an “owner” and rightly looks beyond just legal shareholders. It captures those who influence clubs through formal or informal control, whether that is through a boardroom presence, financial influence or complex ownership structures.
The inclusion of the 25% ownership threshold is rooted in established legal standards, but equally important is the provision to capture those who may fall below that line but wield significant power. We have seen far too many clubs come to harm because of murky ownership arrangements and a lack of transparency. I am confident that other hon. Members will speak to the goings-on at Reading in recent months and years, if previous debates are anything to go by. I know more about Reading than I ever thought I would, as a football fan, but a lot of hon. Members have mentioned the example already.
That said, I must also raise the example of Charlton Athletic, a proud and historic club just outside my own constituency of Old Bexley and Sidcup. It operates in the Greenwich borough next door to mine, with the training ground literally on my constituency boundary and the home ground, the Valley in Charlton, a bit further away.
Amanda Martin
It is a pleasure to serve under your chairmanship, Sir Jeremy. I refer Members to my entry in the Register of Members’ Financial Interests. As a Pompey fan and season ticket holder, and as an elected member of Portsmouth supporters trust board, ownership is a very painful subject in my city, because bad ownership has almost cost us our club on more than one occasion. I welcome the definitions in schedule 1, because there has been a series of owners—some have been the subject of international arrest warrants, some have had their assets frozen by the Government, some have been imprisoned, and no one could prove that one of them even existed, as I have said before in the House. That string of horrendous owners had a devastating impact not just on the football club, but on the community. Assets were sold off to areas of the owners’ other companies, and local businesses and employees lost thousands of pounds. The Bill and the regulator, and clause 1 and schedule 1, can protect clubs from poor ownership and will therefore mean that football clubs up and down England will never have to experience what Pompey fans had to experience.
Stephanie Peacock
I will attempt to respond to the various questions from the Opposition spokesperson, my hon. Friends the Members for Portsmouth North and for High Peak, and the hon. Member for Isle of Wight East. The Opposition spokesperson broadly welcomed the provisions, but he asked some specific questions. He made points on financial regulation, and I think he used the word “banking-style”. The Bill draws on precedent from a range of previous regulation. Some elements are from financial regulation. A previous amendment of his dealt with financial sustainability, and the Bill, as drafted, is all about that. We would not term it as “banking-style”, but it does draw on previous legislation and existing regulation.
The hon. Gentleman broadly welcomed the provisions on owners and directors. He mentioned that it has been four years since he was elected to this place, and in 2023, he asked the then Sport Minister to strengthen the ownership test, so I am really pleased that he welcomed the changes that we have made. He also said that he would prefer this to have been implemented without legislation. Of course, we all would, but we are where we are, and that is why both parties stood on a manifesto to introduce a football regulator Bill.
The Opposition spokesperson made some broad points on the owners and directors test, and we will have a further debate on that when we come to part 4. ODTs have to be applied clearly and consistently. If the owner has appropriate financial resources and meets other aspects of the test, our ODT would not prevent multi-club ownership. Concerns around multi-club ownership are to do with conflicts of interest and competition, which is why the leagues and UEFA have rules around multi-club ownership. Clubs competing in those competitions will be required to abide by any applicable rules, but we can come back to that point on part 4 when we will debate this issue at length.
Mr French
I want to flesh out the point that I tried to make, although I appreciate what the Minister said about coming to this later. Why this is not defined at this point is key, because, as I am sure all Members will agree, we do not want to accidentally create an open goal for wealthy clubs to get around the Bill. There is a real risk coming through from the football community that, if we do not tackle the issue of multi-club ownership up front, the Bill will create just that open goal.
In the comments from across the Committee today, there has been a consensus about what we hope the future of football will look like and around fairness; I think that that is all we can seek to achieve as a House. However, I am concerned that we are not putting the multi-club issue in the Bill. It is difficult to understand the reason why, because it is so pertinent to the ownership test. I accept that the Minister has said that she does not want to block it—that would not be wise, given that a number of clubs have that structure already—but I urge her to address the point about the risks to football. There are major risks, as we have seen already. The Minister’s reference to leagues and competitions was pertinent; we saw the press story yesterday about Crystal Palace and its European future. How will the Minister define the multi-club issue and how will it interact with the Bill?
The Chair
Before the Minister responds, I remind all hon. Members that interventions should be brief. There are plenty of opportunities to make longer speeches.
Stephanie Peacock
I am grateful to the hon. Member for Old Bexley and Sidcup, who makes some valid points. We will talk about owners and directors when we come to part 4. Competition and conflict of interest are not in scope of the Bill and are for UEFA, but I am happy to debate this with him further down the line.
The hon. Member for Isle of Wight East made an extensive and technical speech. For transparency purposes, the ultimate owner or owners will be publicly identified in clubs’ personal statements, and this will help fans to hold the most powerful owners to account, as my hon. Friend the Member for High Peak said. Anyone who exercises significant influence or control will be defined as an owner and can be subject to an ODT, but I am happy to write to the hon. Member for Isle of Wight East on some of the technical points that he made, as he asked.
Joe Robertson
I thank the Minister for that. She has already given some better words by talking about “significant” control. That is not the wording in clause 3, but I prefer it, to be honest. Will she go away and look at that? It is probably a drafting issue.
Stephanie Peacock
I am grateful to the hon. Gentleman for his comments and for welcoming my comments. I will take that away, but I hope to have provided him with some clarity.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Schedule 1 agreed to.
Clause 4 ordered to stand part of the Bill.
Clause 5
Establishment of the IFR
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
This clause formally establishes the regulator as an independent corporate body and refers to schedule 2, which contains further details on the structure, set-up and governance of the regulator. I commend the clause to the Committee.
Mr French
The clause formally establishes the Independent Football Regulator as a statutory body, providing the legal foundation for the IFR’s existence and marking a significant moment in English football governance and our constitution. The clause gives the Independent Football Regulator its own legal personality, allowing it to operate independently of Government and the football authorities.
We will come to the issue of independence, so I will not hold up the Committee too much on the point. I will not make this personal to the Government’s proposed choice of chair. It is rather about the structural integrity of independence, which is crucial to what we do as a House and how sport operates across this country, as it has done successfully for a number of years. The last thing that sport fans want is politicians involved in the regulation of football. We all welcome being supporters—a number of Members are supporters of clubs—but we must be clear that there should not be political interference in the running of the game.
The clause ensures that the regulator can exercise powers conferred elsewhere in the Bill, including around licensing, enforcement and oversight functions. We have a number of concerns about how the details in schedule 2 will work in practice, and the rules around making the independence of anyone involved in football regulation clear as we move forward.
More broadly, I seek clarity from the Minister on a few matters. Does she believe that clause 5 provides sufficient clarity and authority for the IFR to act decisively and independently when enforcing breaches of licensing conditions or financial rules? What safeguards are in place to ensure the Independent Football Regulator’s independence from political or industry pressure when taking enforcement action against powerful clubs or owners?
Will the IFR have the necessary investigatory powers from the outset to underpin robust enforcement, or are those powers dependent on secondary legislation or guidance? How will the IFR balance its role as a regulator with the need to maintain constructive relationships with clubs, especially when initiating enforcement proceedings?
On that point, I again highlight the importance of independence—not just independence from this place, but independence from other leagues and experiences that might bring into question any judgment that the IFR makes. That is a concern I have around the choice of chair, which I know we will come on to. I have concerns about leagues and any bias—known or unknown—in decision making, and the questioning of that. Going forward, that would generally be very unhelpful for the game.
Lastly, to what extent will the IFR be held accountable for the consistency, transparency and proportionality of its enforcement decisions under the powers established in the clause?
Joe Robertson
Thank you for that guidance, Sir Jeremy. I can see what the hon. Gentleman is inviting me to do, and I have sympathy with his general point about the independence of chairs of bodies, but I will stick to this Bill and this independent regulator for two reasons. The first is that we are in this Bill Committee today to talk about football governance. Secondly, the point I was making is that because this is a new departure—to have a regulator in a sport that does not have a regulator—particular regard needs to be paid to political independence. We have a candidate who has made a political donation to the Prime Minister and the Secretary of State. Therefore, the Government have an unexpected relationship with the preferred chair of the regulator.
I urge the Minister to address at some point today how the independence of the football regulator will be protected. Even putting to one side the preferred candidate, the fact is that the appointment will always be made by a Secretary of State, so how will we avoid the criticism that the hon. Member for Cheltenham identified? If it is a political appointment, there are always going to be accusations—in this case, fair—around an elected politician appointing a regulator over English football. I know that that is inherently unattractive to fans, who should be our priority.
Stephanie Peacock
I will deal with the comments specifically on the chair in the next group—I am not avoiding the question, but I think we are going to have a more substantial debate on the next group. Let me answer some of the other specific points that Members have made. The shadow Minister asked about finance, and the levy will be proportionate to the size and level of the club. We absolutely value the independence of the regulator. That means all sorts of different things in terms of leagues, Governments, clubs and so on.
On how the independent regulator operates and what will guide them, I draw Members’ attention to clause 8 in part 2 on the regulatory principles. We will go through those later so I will not go into any detail now, but they are a useful guide to help the independent regulator in their functions and in carrying them out. I will pause there, because I think we will have a more substantial debate in a moment.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Schedule 2
The Independent Football Regulator
Mr French
I beg to move amendment 117, schedule 2, page 87, line 12, at end insert—
“3A Any political interests of, and political donations made by, the prospective chair of the Board, must all be declared as part of the appointments process, and published before the chair’s pre-appointment hearing with the Culture, Media and Sport Select Committee.”
This amendment would ensure that the political interests of the Secretary of State’s preferred candidate for the Chair are made public before the appointment is confirmed.
Mr French
I thank the hon. Gentleman for his question. He is a very well-respected Member of this House and of the football APPG. Obviously I was not a Minister in the previous Government, so it would not be possible for me to publish correspondence. I can speak only on my own behalf, and I do not have any UEFA correspondence. Again, I understand the basis of the hon. Gentleman’s question, but, on the question of what I have urged the Minister to do, I am happy for that to be done on a private basis, so that we can have those reassurances as Members of this House.
This situation is clearly pertinent to the Bill, because, as Members of this House, and as football fans—a number of people have outlined their local clubs and who they support—we surely have to have confidence that what we are putting into law through this House does not conflict with the ability of English clubs to participate. This is not me trying to scaremonger; I just need to know the information.
Stephanie Peacock
I am interested about the shadow Minister’s idea of “publishing” something privately; that is a new concept to me. I have said in this House more than once—in this Committee, on Second Reading and in Westminster Hall—that the letter from UEFA to the Secretary of State makes it very clear that there are no concerns with this Bill. I am obviously confidently saying that in Parliament; I am very much not going to mislead Parliament. As my hon. Friend the Member for Sheffield South East pointed out, the shadow Minister’s Government did not publish any correspondence. I sat in a room like this with the right hon. Member for Daventry, and he did not publish it, so why is the shadow Minister asking us to when he knows that Governments do not publish private correspondence?
Mr French
I recognise what the Minister is saying, and I understand the comparison she is making, but my understanding is that, if a Minister refers to a letter between the Government of the day and an international body that has important structures, there are rules within “Erskine May” that would allow—and sometimes force—the Minister to table that letter in the House of Commons Library for all Members to see, so I would urge the Government to do that.
Sir Jeremy, because this is very important, I seek your advice on whether, now that the Minister has referred to that letter, it should now be published under the rules of “Erskine May”. Can the Clerks clarify that, because the Minister has referred to it in her comments? It is in “Erskine May”—I checked on Second Reading—but I just want the guidance of the Clerks on whether that letter should now be published so that Members of this House can have an informed discussion about the risks to English football linked with the independence of the football regulator, because that is critical to all the work that we are going to do today.
Football Governance Bill [ Lords ] (Second sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 3rd June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 3 June 2025 - (3 Jun 2025)
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 13 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 13 / Noes: 3 - Question accordingly agreed to.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Louie French (Old Bexley and Sidcup) (Con)
Thank you, Sir Jeremy. I appreciate your work and that of the Clerks to get some further information on the point. Just so that all Members are aware of the part of “Erskine May” to which I was referring, it says that
“a document which has been cited by a Minister ought to be laid upon the Table of the House, if it can be done without injury to the public interest.”
I appreciate your comments, but I think that the spirit of the House is quite clearly outlined there. I would like the Minister to publish the document so that Members can have a view.
I would also argue strongly on your last point, although I appreciate that this is a point of debate rather than one of fact, because I believe that the document in question is not a private letter but a piece of correspondence from a key international regulator to His Majesty’s Government. I believe that Members of this House deserve to have all the information available to make informed decisions about a regulator that will be of the utmost importance to football, as well as to this House.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
I know that there have been requests to see the letters that UEFA has sent to the Government. As a matter of course, the Government do not share private correspondence, as it would undermine the ability to have open, honest and frank discussions with key partners. It is worth stating that we wrote to UEFA asking whether it would be content for it to be published, but it confirmed that it would rather communications were kept private.
Paragraph 21.26 of “Erskine May” states:
“A Minister who summarises a correspondence, but does not actually quote from it, is not bound to lay it upon the Table. The rule for the laying of cited documents does not apply to private letters”.
“Erskine May” is fairly clear that the Government are not bound to publish the letter, as I have not quoted from it. I refer the House to my earlier comments on the letter.
Mr French
I thank the Minister for her confirmation of her position. I appreciate her clarification of her perspective, although obviously I disagree with it; that is why I raised the point. I am concerned about this, and I will pick up the point with Mr Speaker afterwards, because there is a general theme here. This is not aimed at the Minister—I have a good relationship with her, and I respect her—but there is an ongoing issue, which has been expressed in this House in recent days, about the Government not being open and transparent with the House in other announcements that have been made.
Stephanie Peacock
I say gently to the hon. Member—this is a point that has been made by my hon. Friends behind me—that his Government did not publish any private correspondence from UEFA. There will be letters in existence similar to the one to which he refers. The right hon. Member for Daventry (Stuart Andrew), whom I like a great deal—indeed, I respect both gentlemen—did not publish those, so I am a bit confused about why the hon. Gentleman is making this very well-rehearsed argument, which is contrary to what his Government did.
Mr French
It is not well rehearsed—it is not in my speaking notes at all. It is just a general point of principle that this House should be able to hold the Government to account with full information. I appreciate that I am testing your patience, Sir Jeremy, so I will get back to the amendments. [Hon. Members: “Hear, hear!”] I have lots of support from Government Members.
Schedule 2 sets out the constitution of the Independent Football Regulator for an initial period when it is first being established, and for subsequent periods thereafter. It contains detailed provisions about the appointment of the chairman, deputy chairmen and non-executive members of the board, and the rules by which somebody may be appointed to the board in relation to conflicts of interest. On conflicts of interest in particular, the Government have left much to be desired, so we seek to correct some serious omissions.
As we have seen in recent weeks, the Labour Government have politicised what was supposed to be an independent football regulator by appointing a crony. That is nothing short of a disgrace—such a disgrace, in fact, that the Secretary of State has been forced to recuse herself from any further part in the appointment of the chair. As I said this morning, that is now a point of independent inquiry, so it is not just my opinion. There is clearly a concern, which is why the Commissioner for Public Appointments will be looking very closely at it.
That is why I tabled amendment 117. As we know, although only because of his revelations at the Culture, Media and Sport Committee, the Government’s appointee donated to the Secretary of State’s leadership campaign. We believe that she did not declare that in line with the ministerial code. We also believe that it was not disclosed earlier. Does the Minister think it acceptable that the Secretary of State concealed that information from Parliament? We believe that there was no reference to that donation on Second Reading. Did the Minister know that the proposed chairman had donated to both the Prime Minister and the Secretary of State? Will she confirm whether she or any other member of this Committee has received any donations from the chairman of the regulator? Is she concerned about what the independent inquiry that was announced yesterday might mean for the future of the regulator, if it is found that the process has been breached?
Those are really fundamental points, because a breach of the process will have direct consequences for a lot of what we are discussing today. It will throw English football up in the air and bring it into disrepute if the first chairman of the regulator is found to have been appointed without the Government following due process.
Joe Robertson (Isle of Wight East) (Con)
We are debating a group of amendments that attempt to better the regulator’s independence. The shadow Minister has set out at great length—made even longer by the interruptions —how these amendments would do that.
I think we all agree that the regulator should be independent. It is perfectly open to Labour Members to say, “Hang on a minute, the Bill already does that,” but their interventions and their scoffing from sedentary positions seem to make the counterargument, “Well, when you were in government, you made political appointments to bodies like the BBC and Ofqual.”
Joe Robertson
The Government Whip is agreeing from a sedentary position. “And therefore it is perfectly open to us to make a political appointment to the football regulator.” That is an extraordinary argument.
Lincoln Jopp
If people appointed to regulators and quangos have fully declared what they have done, ab initio, that does a lot to dampen down concern about partiality. It would be nice to see the Government select someone for one of these appointments who was not a donor at the last election.
Stephanie Peacock
Before speaking directly to these amendments, I want to address the comments made about the chair appointment. I am very aware of the direction that you have given, Sir Jeremy, so I will focus my remarks on the comments made by the shadow Minister and Opposition Members.
David Kogan brings with him a wealth of expertise from the sport and media industries. The shadow Minister’s speech had three parts, so I forget when he said this, but he made the point more than once that it is about attracting the right candidate with the right experience, and how that is a challenge. We are confident that David Kogan is the right person. He was found appointable for the role by a panel that included a senior independent panel member who was agreed by the Commissioner for Public Appointments.
David Kogan declared his political activity to the DCMS Committee, as the shadow Minister has stated, which endorsed his appointment, adding a further layer of robustness to the appointment process. The donations were declared during the Committee session, as the shadow Minister also stated, and the Committee was sufficiently aware when it published its report endorsing him.
Joe Robertson
I know we know this, but the Select Committee is dominated by Labour MPs—I want to make that clear. I did not follow the process within it, but a Committee dominated by Labour MPs approved a Labour donor as the independent regulator.
Stephanie Peacock
I know the hon. Gentleman is new to the House, and I will stand corrected if I am wrong, but I believe that it was a unanimous decision by the cross-party Select Committee. There will have been similar instances in the previous Parliament, so I think his point is somewhat unfair, but it may be a reflection of the fact that he is new to this place.
Reference was made to the fact that we have received a letter from the Commissioner for Public Appointments, and we will of course co-operate fully with his office. No conclusions have been reached at this stage, and we will completely co-operate. Some points were made about what was said on Second Reading and to the Select Committee. The governance code already sets out the requirements for political donations. Donations in scope of the governance code were provided to the Select Committee in advance of the hearing. The leadership campaign donations fall outside the reporting window and the threshold for declaration; however, they were disclosed to the Select Committee in the interests of transparency, which endorsed the appointment on a cross-party basis.
Lincoln Jopp
I completely take the Minister’s point about the unanimity of the Select Committee. In that same spirit, it is worth quoting the Chair of that Committee, my hon. Friend the Member for Gosport (Dame Caroline Dinenage), who said:
“While Mr Kogan’s background and experience make him well-suited for the role, his past donations to the Labour Party will inevitably leave him open to charges of political bias in a job where independence is paramount.
We want to see the new Independent Football Regulator succeed, so it’s crucial that nothing undermines the regulator as it gets up and running. Mr Kogan must give 110% when it comes to reassuring everyone in the game that he is his own man. The Committee looks forward to working with him constructively and holding him to account.”
Imagine how much simpler life would be if someone who did not have that perceived conflict of interest—
The Chair
Order. First, that intervention is too long. Secondly, I will let the Minister respond to the hon. Gentleman’s point, but I am afraid we will then have no more debate about this individual. We have covered the subject; both sides have had a go. A yellow card is now being shown and we will move on. Minister, please give the last thought on this subject.
Stephanie Peacock
I have heard the points that the hon. Gentleman has quoted. I do not have the quote in front of me, so I will paraphrase, but I believe that the Select Committee also praised, or acknowledged, Mr Kogan’s candour and transparency—the fact that he was open with them—and of course the Committee did endorse him. I will heed your yellow card, Sir Jeremy.
Mr French
The amendment is quite clear that it is not about the individual but the process going forward for transparency on donations. I will not mention the gentleman, but the other question that the Minister was answering before the intervention related to the rules and duties on Ministers and Members of this House. She made the point about disclosure thresholds within the code, but the spirit of the rules makes it quite clear that any perceived conflicts of interest must be disclosed. It is my understanding that that had not happened, which is the point that I was trying to make.
Stephanie Peacock
The hon. Gentleman gets ahead of himself; he is somewhat excited this afternoon. That was my second point—I have numbered my points one and two, and I have a third to make. He asked about members of the Committee. It is for hon. Members to declare relevant interests, and when we began the sitting this morning hon. Members did indeed refer to their entries in the Register of Members’ Financial Interests. I do not want to be drawn any further on the details of the process as that would not be appropriate. I have made all the comments I can within the confines of the topic and the yellow card you very kindly gave, Sir Jeremy. I will therefore move on to talk briefly about the amendments.
I will explicitly state that the independence of the regulator is paramount. The Bill is, as the hon. Gentleman said, designed to create an independent football regulator free from any undue political or industry influence. That has always been and continues to be our aim. In the service of that, we have already strengthened the Bill further, now requiring the regulator to establish and maintain a register of relevant interests of members of the board. That already includes the chair, so any further amendment is not necessary.
The definition of relevant interests in the Bill is already broad enough to include political donations if they are relevant to the regulator’s functions. The appointment of the chair is subject to the governance code on public appointments, which clearly sets out that any political activity
“should not…be a bar to appointment”,
as well as the requirements in relation to the declaration of political activity. That point has been well rehearsed; indeed, the Liberal Democrat spokesman made it earlier, as have other hon. Members.
The chair of the regulator is already required to undergo a pre-appointment scrutiny hearing, which we have debated at length. Pre-appointment scrutiny is reserved for the most significant roles, including those where demonstrable independence from the Government is required. The chair and other non-executive members of the board would also be bound by the code of conduct for members of public body boards, which sets clear expectations around political impartiality once in a role. I reassure the Committee that the Bill is robust in ensuring the independence of both the chair and board members more widely. The amendments would not in any substantive manner increase the level of protection in the Bill against undue political influence over the chair.
I turn to the amendments 118 and 119 about conflicts of interest for the board and the expert panel. I reassure the Committee 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, irrespective of sector. It is also important that the widest possible range of people are encouraged to apply to contribute their skills and experience so long as any and all conflicts of interest are managed appropriately. That point was well made by my hon. Friend the Member for Portsmouth North.
Government amendments made in the other place have strengthened those protections even further, and beyond doubt. Paragraph 17 of schedule 2 requires members of the board to declare their interests in any matters that fall for consideration by the board, and for that declaration to be recorded. The board member would not be permitted to take part in any discussions related to a matter if they have a significant direct or indirect interest in it.
With specific regard to the expert panel in amendment 119, 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. The Bill sets out that the chief executive officer must ensure that the expert panel has all the relevant range of skills, knowledge and experience. The amendment might limit the ability of the chief executive officer to do that, as it would restrict the pool of potential members of the expert panel. It may well be appropriate for the expert panel to have expertise in media or broadcasting, but the amendment would outright preclude that, and so might hinder the regulator’s ability to fulfil its objectives.
All in all, the Bill contains comprehensive safeguards to examine and manage genuine conflicts of interest appropriately. I therefore urge the hon. Gentleman to withdraw the amendment.
Mr French
I have heard the Minister’s comments clearly and I am afraid that I am not filled with confidence, not necessarily because I doubt what she says or her intentions but because of the proven experience of the situation in which we find ourselves. I appreciate the yellow card, so I will not go fully back into that, but it does bring into question the judgment of Ministers and individuals and whether we can have certainty in these steps and measures. The Opposition think these amendments are not party political at all. We want to ensure that we have transparency and absolute security that whoever is appointed to these positions will act with complete neutrality and independence, and avoid any perception of bias. I will not repeat the arguments of why that is so important for sport and the independence of sport. We will press our amendments to a vote.
Question put, That the amendment be made.
The Chair
That result may not have come as a surprise. Does the hon. Gentleman still wish to move amendment 116 formally?
The Chair
I am sorry to disappoint the hon. Gentleman. For the reassurance of the Committee, we will reach amendment 119 later because we have not yet got to that point in the Bill.
Mr French
I beg to move amendment 138, in schedule 2, page 88, line 37, at end insert—
“(1A) But the number of persons in the employment of IFR (including any persons seconded to the IFR) must at no time exceed 50.”
As always, you are keeping me on my toes today, Sir Jeremy; I thought we were about to vote on amendment 119. We always learn something new in Bill Committees. Amendment 138 raises a serious and growing concern, so I will be very clear about what the amendment would do. We seek to limit the number of employees of the Independent Football Regulator to a maximum of 50. We think that is quite fair. I could have proposed 20, 10 or some other number, but I thought 50 was fair, based on the conversations that we have had with the football world.
Our serious and growing concern is about not just what the legislation says, but the consequences of the way this Government have chosen to structure the regulator. The amendment uncovers and seeks to prevent the key problem with the Government’s regulator, which we believe is purely that it will ultimately put up prices for fans. This morning, the Minister said that her Government have not claimed that the regulator will solve all the problems, and while that may be true, we believe that her regulator will actively create more problems for clubs and for fans. I will come on to the problems that we believe it will cause for clubs later in the Bill, but, to be clear, we put fans first and that is what this amendment seeks to do.
The creation and operation of the Government’s regulator and the burdens it generates will impose a very real cost on clubs. I suspect that will not have a massive impact on the billionaire owners of the big clubs, or the executives, consultants and lawyers employed in the football industry, but it will significantly affect clubs that are already subject to serious financial constraints and those lower down the pyramid.
Let us begin with the principle. I do not believe that anyone here disputes the need to protect the long-term sustainability of English football and the need for English football to be sustainable, even if definitions of “sustainable” differ. However, if the Government genuinely intend to safeguard the game for future generations, creating a vast and costly bureaucracy is not the way to do that—yet that is what this regulator will do. It will increase the costs on clubs, which will ultimately have no choice but to pass them on to fans. That view is accepted by those in the industry that I have discussed this with. This Government have chosen bureaucracy over the beautiful game and its fans. It is the ever-present home and away supporters who will end up bearing the brunt of the costs of this regulator.
Turning to the specifics of amendment 138, last week I submitted a written question to the Secretary of State to ask how many appointments had been made to the shadow football regulator already and how many of those appointed were previously employed in her Department. I know from conversations I have had with the EFL, the National League, the Premier League and the FA that the shadow regulator has already begun to scale up. When my noble Friend Lord Moynihan asked the Lords Minister a similar question in the other place in December, the answer, which was received in January, stated that the number of IFR employees already stood at 38. As it happens, the answer to my written question is due today. Can the Minister save me the trouble of waiting for that response to come through online and tell us here and now how many full-time equivalent staff are currently working on the shadow regulator and how many of those were previously employed in her Department as employees, advisers or appointees?
Stephanie Peacock
There were 42 employees as of 1 June; 11 joined having previously been employed by DCMS and two joined having formerly advised DCMS. The answer is due by 6 o’clock today and I will make sure that the hon. Gentleman receives it in writing by then.
Mr French
I must admit that I am surprised to get a concise answer from a Minister; I thank the hon. Lady very much. There are 42 employees and a number of those were already in roles in the Department. That is very important because it highlights the size of this regulator already.
Lincoln Jopp
We do not know yet what the target operating model will be. I think the Government can do that work, as they have a pretty clear picture of the functions of the regulator that are envisaged in the Bill. The shadow Minister asked the Minister to give some indication of the limits on money and structure, because we have the powers and the functions. I, for one, welcome the opportunity to hear the Minister’s answers.
Stephanie Peacock
I thank the hon. Member for Old Bexley and Sidcup for his amendment. I note the irony of him saying he does not want to oppose the Bill for the sake of it, given our discussion today and the fact that the Bill began its life under his Government. I completely understand the intent to ensure that we do not end up with an overstaffed regulator that is not delivering value for money. That is exactly why there are appropriate controls over the regulator’s expenditure.
Proportionality is key to the point about costs. We will have a further debate today or on Thursday about the regulatory principles, which are really important, but the operational cost estimate is between £77.4 million and £106.8 million over 10 years. That was based on the impact assessment signed off by the previous sports Minister, the right hon. Member for Daventry. Those costs have not changed—with the caveat, of course, that that is an estimate.
Stephanie Peacock
We do not believe that the changes are significant enough to lead to a significant increase in costs.
Lincoln Jopp
Quoting those figures is very helpful. Can the Minister tell us what personnel assumptions those figures were based on?
Stephanie Peacock
I am happy to provide the Committee with a copy of the impact assessment. I will address the point on staffing in a moment, if the hon. Gentleman will allow me.
Lincoln Jopp
On that principle, does the Minister agree with the Secretary of State for Defence, who said yesterday that the number of people in the Army would be 73,000?
Stephanie Peacock
It is not for us to say. It is an independent regulator. The hon. Gentleman outlined how different regulators have wildly different numbers of staff. We do not think that we should set a cap.
Joe Robertson
Can the Minister give any indication of the sort of headcount she expects of this regulator?
Stephanie Peacock
I am not going to be drawn on figures. I will say that we think that the regulator should be as light touch and slim as possible. We do not think that it should be unwieldy and we do not think there should be staff for staff’s sake. It is not for me as the Minister to prescribe a specific number. I do not agree with that. For those reasons, the hon. Member for Old Bexley and Sidcup should withdraw his amendment.
Mr French
I have listened very carefully to contributions from hon. Members on both sides of the Committee and to the answers provided by the Minister. I am concerned that the Government will not publish a refreshed impact assessment because, as I have highlighted, the costs to businesses and football clubs around the country have increased since the impact assessment was published. The regulator designed by the current Government also differs from the previous Government’s. We believe that it is bad practice for Members not to have all the information to hand for a live discussion about the expected costs of the regulator or concise information about what the size of the regulator may be.
Mr French
I beg to move amendment 120, in schedule 2, page 89, line 9, leave out subparagraph (3) and insert—
“(3) The IFR may pay a person appointed as the Chief Executive no more than £172,153 per annum.
(3A) Notwithstanding the remuneration of the Chief Executive Officer as per paragraph (3), the IFR must pay its employees such remuneration as may be determined by the non-executive members.”
This amendment limits the pay of the Chief Executive.
It is a pleasure to continue to serve under your chairmanship, Sir Jeremy—I have not said it in a while—even if you have given me a yellow card. At least in football that does not mean the sin bin, so I can keep playing.
Let me explain why the amendment is important. In doing so, I will stick to the principle of trying to play not the man but the ball. We tabled the amendment to make sure that taxpayers and fans get value for money from the Government—in what would be a first since their election. It would limit the pay of the chief executive of the Government’s regulator to make sure that they are not paid more than the Prime Minister. Who would argue with the principle that the chief executive of a regulator should not be paid more than the Prime Minister of this country, whatever you think of him or her at the time?
It is a fair amendment that would also ensure that non-executive board members determine employees’ pay, instead of the chief executive by themselves as an employee of the regulator. We believe the Bill will create a conflict of interest if it is left solely to the chief executive to determine pay, as the chief executive would be able to determine their own pay increases as part of the package, unless it was done independently by non-executive members of the board.
Joe Robertson
I will not repeat what the shadow Minister has very ably said, but clearly the amendment goes back to the issue of costs spiralling out of control. Let us remember that the concern is about the pay levels for those appointed. The role has already been advertised, as I understand it, on the Government website at £130,000 for a three day part-time role, which means that pro rata they will be paid more than the Prime Minister. I have a serious problem with that, and I suspect that most fans have a serious problem with this so-called slimline light touch regulator being headed up by somebody who is paid more than the Prime Minister of the United Kingdom. That is why my hon. Friend is trying to bring in some level of cap on pay.
We were not successful in bringing in a cap on headcount, but the Minister could not give us any indication of how many people she expects to be employed by the regulator. The Government are prepared to say that 73,000 people should serve in the armed forces, so it is not unprecedented to give an indication of the number of employees in organisations, which is all this amendment is trying to do. If Government Members are happy for the regulator to be paid more pro rata than the Prime Minister of the United Kingdom, so be it—they will have to vote in that way. I am not happy, and that is why I support the amendment.
Stephanie Peacock
I thank the shadow Minister for his amendment, and I appreciate the intent to ensure that the regulator offers value for money. That is precisely why the regulator has a regulatory principle encouraging it to be as cost-efficient as possible. There are also countless other safeguards in place to ensure value for money, and we referred to those in earlier debates. For example, 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 are, to ensure that pay rises are justifiable. That will ensure value for money without sacrificing important operational flexibility for the regulator. On the other hand, a maximum salary for the CEO, fixed in legislation, would leave the regulator unable to adapt to market changes and could leave it unable to recruit and retain the expertise that it needs to effectively regulate.
I understand that the amendment seeks to limit the CEO’s salary to no more than the current salary of the Prime Minister. There would be no way to update that if the salary changed in the future, or even with inflation. It is not a practical constraint to impose.
Max Wilkinson
Does the Minister find it strange that, in this room, a Liberal Democrat spokesperson and a Labour Minister are arguing with the Conservatives about letting the market decide someone’s salary?
Stephanie Peacock
I absolutely agree, and the Liberal Democrat spokesperson puts an important point on the record.
We expect a significant benchmarking exercise to be undertaken in determining the appropriate level of remuneration for the CEO of the regulator. That should be consistent with other regulators of a similar size and regulatory remit. We believe that an arbitrary constraint would be problematic. Safeguards are also in place already requiring approval for any public sector salary that exceeds £150,000, as per the senior pay controls process.
Mr French
I thank the Minister for her comments, and I am listening carefully. On the point about markets, we are not talking about the market dictating the level, but Members of Parliament. The hon. Member for Cheltenham is in for a rude awakening if he believes that this is what the market looks like, if he goes down to the City of London. But on the argument that the Minister is making about the size of the regulator, what is that comparable size? We have tried to get an answer on what size the Government are looking at. So on the point that she just made about the salary being appropriate and reflective of other representative regulators, what is the size of the regulator? My hon. Friend the Member for Isle of Wight East made the point about the salary that has been advertised only being a part-time salary, so what are the expectations in relation to that compared with the size of the regulator? That is fundamental to the Minister’s point.
Stephanie Peacock
As I have outlined, a benchmarking exercise will be done thoroughly on that. I am intrigued by the mock outrage from the Conservative party, who did not in any way put in a staffing cap or a salary cap when we were in this room previously. To take some examples of other salaries, they are much higher: at the Financial Conduct Authority, the salary is £400,000, at the Competition and Markets Authority, it is £200,000, and at Ofcom, it is £350,000. This is the current salary now but it was not wildly different under the last Government. I did not see them making these amendments to their Bill.
Mr French
Again, there is this deliberate conflation regarding what I am asking. The Government are arguing that this regulator is light-touch and different from those other regulators, and that the salary has been benchmarked against those at other regulators of a similar size and nature. This is the question I am asking the Minister: what is that other regulator, and how big is it? That determines what is an appropriate level of salary. This is about not only the Government’s arguments and our understanding, but the cronyism argument. I will not go into this but the reality is that a Labour donor is in the process of being appointed to a part-time job on a six-figure salary. Members of the public have a right to know what analysis the Government have done to determine that level of salary on a part-time basis.
Stephanie Peacock
I do not know if the hon. Member is wilfully misinterpreting what I am saying or not. I have made it very clear that there will be a benchmarking exercise. I have given a number of examples of other regulators whose salaries are much higher and were so under the previous Government.
Senior pay controls allow the Government to ensure that senior pay is set at an appropriate level to enable the public sector to recruit, retain and motivate the best people, while also ensuring value for money for the taxpayer. That means that if the regulator sought to set the CEO’s salary above £150,000, it would need approval from the Chief Secretary to the Treasury. For the reasons that I have set out, I hope that the hon. Member will withdraw his amendment.
Mr French
I appreciate the Minister’s comments, although I think they were more confusing than they were an answer to the questions. We have tried to be clear, and I do not mean this disrespectfully. I am not wilfully misunderstanding; I am asking a really clear question about the comparison the Government are making. What does the benchmark look like? That is not a theoretical question; we already know that someone has been appointed, and they used a benchmarking exercise to make that appointment. That is the point I am trying to make: a benchmarking exercise must have already been carried out, if the Government have done their due diligence in making that appointment.
Stephanie Peacock
I beg to move amendment 61, in schedule 2, page 89, line 29, leave out “sections 61 and 82” and insert “section 82”.
This amendment is consequential on the insertion of NC3.
Stephanie Peacock
It is a pleasure to serve under your chairmanship, Sir Jeremy. Government amendments 61 to 63 are technical amendments to schedule 2 that support our proposed changes to the distribution models put forward in other Government amendments. We will get into more detail on our changes to the distribution mechanisms later in the Committee’s proceedings, as they should be discussed in the context of the part of the Bill to which they relate. However, these are amendments to schedule 2, which we are currently discussing.
The primary goal of our changes is to move from a binary, winner-takes-all model to a staged regulator determination, where the regulator will be empowered to design its own solution, drawing from proposals submitted and extensive evidence. I will not elaborate further now; I have met the shadow Minister and the Liberal Democrat spokesperson, I believe, to speak about this. We will be debating it later; it is just the way that the Committee’s proceedings have fallen that means that these technical amendments come now.
I would like to reassure Members that these changes have been proposed after extensive engagement with the stakeholders most heavily invested in the process and following significant scrutiny of the Bill throughout its passage. We believe that the changes will strengthen the mechanism, making it more likely to deliver a distribution solution that works for football.
The primary function of Government amendments 61 to 63 is to make the board of the regulator, rather than the expert panel, responsible for the design of distribution orders. Both the decision to trigger the process and the design of the final distribution orders are important regulatory decisions that will have a significant impact on the financial landscape of football. The regulator may face criticism or challenge over decisions of such magnitude, and needs to be accountable for them at the highest level. These amendments enable this.
First, amendment 61 removes an exemption to the functions exercisable by the board of the regulator, so that decisions regarding distribution orders can now be undertaken by the board. The amendment is intended to improve the coherence of legislation and to reflect the increased responsibility of the regulator in the design of a potential distribution order.
Government amendment 62 ensures that the board directly takes these important decisions itself, by specifying that it can only delegate those decisions to a committee of the board and not to another entity. That reflects the previous design of the backstop, which we will speak to later. As stated, the decisions at this stage are crucial to secure the financial future of football and to ensure that the regulator can deliver its objectives, particularly regarding sustainability. It is right that these decisions are taken directly by the board.
Government amendment 63 removes the requirement for the CEO of the regulator to establish a committee of the expert panel to undertake the final proposal stage of the distributions mechanisms. Again, that reflects the change from the previous mechanism. It is slightly odd to discuss this outside the backstop, but we will be able to debate that in more detail later on. For the reasons that I have set out, I hope that Members will support these amendments, and I commend them to the Committee.
Mr French
As the Minister set out, Government amendments 61 and 63 are consequential on the insertion of new clause 3, so I will limit my comments on this part, because I agree with her that it would be better placed at that point. However, I want to ask her about a couple of points. My understanding is that new clause 3 replaces what was clause 61, which set out the final proposal stage under the resolution mechanism. Again, I will save my substantive comments on that for later.
Government amendment 62 provides that the board may only delegate the functions of deciding whether the resolution process should be triggered under clause 59 or of making a distribution order under new clause 4 to another committee of the board. I would like to ask the Minister the rationale for making this change at this stage in the process, given that the Bill has gone through the other place. We had a discussion on Second Reading and, as she just acknowledged, the leagues were not happy with the mechanism as it was designed previously. It is a fair question to ask why the Government are seeking to change this part of the Bill now. Why does the Minister think that the decision on whether to trigger the resolution process or to make a distribution order should be delegated to a committee rather than taken by the board itself?
Stephanie Peacock
I am grateful to the shadow Minister for his questions. On the broad question of why we are making the change, to be quite blunt, it would be easier not to. We have a big majority in this place, but we spoke earlier about parliamentary scrutiny and we genuinely listened to the debate in the Lords, where there was quite a lot of discussion around the mechanism of the backstop.
It is important to make it clear right now that the backstop is a backstop. I often quote Dame Tracey Crouch, to whom we all owe a huge debt of gratitude. In the previous Bill Committee, she made a very succinct speech—it is worth reading—about how the backstop should be a backstop. Understandably, a lot of the debate has focused on the backstop—that is not a criticism—but it is genuinely meant to be a backstop. To be quite blunt, it would be easier not to make the change, but we think that it is the right thing to do. I could understand the previous Government’s pendulum arbitration and why it could be successful, but it was more risky, and that prompts more nerves from stakeholders. I am straying into debating the backstop, which I do not want to do because we will debate it later on.
On the question about specifying that the board can delegate these decisions to a committee, hon. Members will correct me if I am wrong, but we are not changing the way that the backstop can be triggered— again, we are straying into the backstop. There is a set of criteria for when the backstop can be triggered by a league, and the state of the game report must have been written and the regulator must agree with that. That stays the same.
I am straying into a future debate, but I think that the hon. Gentleman was saying—he can correct me if I am wrong—that under the previous mechanism it was pendulum arbitration, where party A would put forward a proposal, as would party B, and an expert panel would decide on one or the other, in a completely binary way. This changes it so that there is informal mediation and then a proposal stage. Because the regulator is more involved in saying, “We like that but go and speak a bit more about this,” or, “Seek some more evidence on that,” it makes sense that they do not then delegate that decision. That is the point that I am making, though it is quite difficult to debate this outside the backstop, as I acknowledged in my remarks. I am happy to take his comments away, and when we come to part 4, I believe, and we debate the backstop and the changes more thoroughly, I am really happy to go into more detail.
Amendment 61 agreed to.
Amendment made: 62, in schedule 2, page 91, line 41, at end insert—
“(da) the function of deciding whether the resolution process should be triggered under section 59;
(db) the function of making a distribution order under section (Distribution orders);”—(Stephanie Peacock.)
This amendment provides that the Board may only delegate the functions of deciding whether the resolution process should be triggered under clause 59 or making a distribution order under NC4 to another committee of the Board.
Amendment proposed: 119, in schedule 2, page 93, line 2, at end insert—
“4A No member may be appointed to the Expert Panel if they currently have any broadcast or media interests or any role in a television or media broadcast that relates to football.”—(Mr French.)
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 Expert Panel.
Question put, That the amendment be made.
Mr French
I beg to move amendment 121, in schedule 2, page 94, line 34, at end insert—
“31A (1) The Expert Panel must publish any decision that it makes relating to any of its functions under this Act.
(2) Any decision published by the Expert Panel must include—
(a) the number of members of the Expert Panel who supported the decision;
(b) the number of members of the Expert Panel who did not support the decision;
(c) the reasons for the decision;
(d) the reasons why those who did not support the decision decided not to.
(3) The Expert Panel must publish any records of its committee proceedings as recorded under paragraph (30).”
This amendment requires the Expert Panel to exercise its functions transparently.
The amendment seeks to ensure that the panel must publish any decision that it makes relating to any of its functions under the Bill, and that any decision published by the expert panel must include the number of members of the expert panel who supported the decision, the number of members of the expert panel who did not the support the decision, the reasons for the decision, and the reasons why those who did not support the decision decided not to. The expert panel must also publish any records of its committee proceedings as recorded under paragraph 30 of schedule 2.
The amendment is all about transparency of the decisions made by the expert panel. As it stands, paragraph 30 requires that the expert panel
“must act independently of the Board”
when exercising its functions, without preventing the two-way exchange of information between the board and the expert panel. It is clear, however, that that needs to go further, which is why we tabled amendment 121, which requires the expert panel to exercise its functions transparently. I hope that the Committee agrees that no regulator should hide behind closed doors, and the Government’s football regulator should be no different.
That being said, the Bill lacks detail on the expert panels, and I would like to ask the Minister to clarify the following. How many people does she expect to be on the panels? How many of the panels does she expect to be needed in the first year of operation, and then in subsequent years? What is the cost expected per panel, and is there a specific cap on the cost that can be incurred by an expert panel to the regulator? Finally, how will each member of the panel meet the qualifications of the experience, skill and knowledge we have discussed already, while not incurring a conflict of interest?
To be clear, amendment 121 seeks to ensure that the regulator, a world-first in sports governance, and not in a good way for many of us, will maintain transparency with the fans it is intended to protect and support. We in this House have a great many tools at our disposal to hold the Government to account. It is only right that fans who do not have such tools can see what those deciding the future of their clubs and English football are doing. Sunlight is the best disinfectant and my amendment seeks to let the sun shine on the Government’s regulator.
Stephanie Peacock
I will address some points on amendment 121 and then respond to the hon. Gentleman’s questions. The Government recognise it is vital that the regulator is transparent and able to be held accountable by Parliament and others. That is why, for the expert panel, the legislation already sets out a number of requirements to publish decisions and give reasons for them.
Transparency in decision making is important, but it is also 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. It will also be necessary in some instances for details to remain private for commercial, personal or other sensitive reasons. We absolutely agree that transparency around the regulator’s processes and decisions is important, particularly in football, where fans often complain of being out of the loop. That is exactly why the Bill already contains extensive publication and consultation requirements and the regulatory principle encouraging the regulator to be transparent. However, the amendment goes further and risks undermining the operation of the expert panel. Some details may be commercially sensitive, as I have outlined. Equally, individual panel members should not necessarily be singled out for their contributions to decisions; the panel as a whole makes decisions and is held accountable as a whole.
I am at risk of comparing apples with oranges, but we spoke earlier about the Select Committee. In this place, we will have minorities on Select Committees, and I do not believe that those Members who do not agree have their names published. I acknowledge that I am not comparing like with like, but I make a gentle point about how members should be able to make decisions without fear or favour.
The hon. Member asked some specific questions about the expert panel. For the panel to take a decision, it must form a committee of at least three members. If that decision is appealed, three new members will be needed to form a committee to take a new decision, so the minimum number of members required for the expert panel is six. There is no cap on the maximum number of members as the regulator should have flexibility to react in the event of a high workload. Obviously, different panels may be required for different issues. For those reasons, I ask the hon. Member to withdraw his amendment.
Mr French
Unfortunately, based on the earlier deliberations, I do have something to say. I will try to be succinct and not rehash the debates we have had already, although I am happy to carry on taking interventions, as I have done all day.
I will set out why the Conservative party will be opposing schedule 2. The Government have missed the opportunity to tighten up the transparency of the regulator. Instead, they have allowed it to operate under a shadow, and they have not ensured that it will be transparent to fans, who are the ultimate stakeholders in this process. There is a lack of transparency in the decision-making processes. The regulator is granted broad discretionary powers with limited obligations to publish detailed reasoning for its decisions, as we discussed in the debate on amendment 121. Clubs and stakeholders may be left unclear about how rules are interpreted and applied, undermining confidence in regulatory fairness.
A number of times today, I have made the point that there is to be limited parliamentary scrutiny. Because of the amendments that have not been accepted, there are limits in the Bill on how Members of Parliament can have their say on what the regulator will look like. The regulator’s rules and standards are not subject to the affirmative procedure or meaningful parliamentary oversight.
I know that the Minister did not wish to make any comments, but I am interested in her view and the Government’s view on where reports on the regulator will end up. Will it be at the Culture, Media and Sport Committee or, given the costs involved, at the Public Accounts Committee? It is important that Members understand whether they will be at least able to see the reports, even if the Government are not willing to make votes available. There is no requirement to consult publicly before issuing or revising key regulatory frameworks, which again limits external input. We have already brought up the issue of some people not being consulted and others being consulted.
On the opaque appointment and governance structures, we have highlighted the Opposition’s concerns about how the selection process has taken place and how it will take place in the future. We need strong safeguards to ensure that political interference does not impact the perceived and the realised work of the independent regulator. It is a fundamental risk to the future of football and the future of sport.
We believe that the duty to disclose key information is insufficient and that the regulator should be disclosing information on a regular basis, so that Members of Parliament and fans can have clear sight of what it is doing. That is a completely fair thing to ask for. It is not a political request; it is about transparency.
On costs, which we have discussed at length, the Opposition are concerned that we do not have transparency about the cost of the regulation. We are unclear on what the Government’s end goal is for the regulator. We have heard different arguments about what its size may be in the future and comparisons with regulators that I think would scare most of us. Hearing the cost of 900 members of staff should scare all football fans, if that is the direction of travel the Government are going down with the regulator, which is supposed to be light touch.
I have a couple of questions for the Minister, just to give her a bit more time. How will Parliament scrutinise the regulator’s spending, as set out on page 96 of the Bill? Can she tell us whether scrutiny will come from the Culture, Media and Sport Committee or the Public Accounts Committee? There is also mention of financial assistance being provided, based on the Secretary of State’s judgment. Can the Minister tell us what the Bill means by “appropriate” and whether taxpayers will be bailing out failing clubs or even the regulator?
Stephanie Peacock
I am grateful to the hon. Gentleman for his comments. To take the final one first, taxpayers will not be bailing out failing clubs. This is not going to save every single club; to make it very clear, it was never intended to do that.
The provisions in the schedule ensure that the regulator has the necessary structures in place to function effectively and efficiently, with appropriate accountability as a public body, which is an issue that we have debated extensively. It ensures that an agreed and transparent process is adhered to when establishing a governance framework, including its board, committees and expert panel. We have made provision for the regulator to appoint a board observer from the Football Association, and as the national governing body for English football, they will get an insight into the operation of the regulator without having voting powers. Ultimately, the regulator will be accountable to Parliament. As we have spoken about throughout this debate, it will be operationally independent and free from undue political or industry influence. The provision in this schedule is central to creating that framework, and I commend it to the Committee.
Mr French
As I referenced in the question, I was deliberately trying to be specific because we have not really got into what part 4 of the schedule says. The Minister has just made a point about scrutinising the spending of the regulator. How will Parliament be able to scrutinise the regulator going forward? I am happy to have it in writing, if the Minister does not have the answer on her today. Will it be the role of the Select Committee on Culture, Media and Sport, the Public Accounts Committee or both? Will reports be laid on the Floor of the House, for example, for hon. Members to look at, or in the House of Commons library? That is the question that I am trying to ask the Minister today, and I would appreciate it if the hon. Lady gave us a bit of certainty on that.
Stephanie Peacock
I am absolutely happy to do that. It is obviously up to the Select Committees, and they can scrutinise if they want to—it will be up to individual Select Committees to decide. The IFR has to publish an annual report, and there is a review clause in there, too. We are happy to write to the hon. Gentleman with more detail if that would be helpful.
Question put, That the Schedule, as amended, be the Second schedule to the Bill.
Stephanie Peacock
That is quite okay, Sir Jeremy. I have done a lot of talking today. I thank the hon. Member for Cheltenham for moving the amendment and for giving us the opportunity to discuss it. I will explain why we are not able to accept it, but it is important to say first that the safety, wellbeing and welfare of everyone taking part in sport is absolutely paramount.
I am very aware of this issue—I participated in a debate on it in the Chamber in September 2023, and I care greatly about the subject—and the hon. Gentleman, and indeed other Members across the House, spoke very movingly, giving a number of examples of the terrible experiences that footballers and their families have had.
I pay tribute on the record to the work of Football Families for Justice in supporting ex-players and their families. I commend it for its excellent work. Again, I echo the shadow Minister’s comments, as he made an important point about directing people to the fund and making it clear that the money is available.
The Government absolutely agree that this area requires further work, and we have committed to looking at these issues. I do not believe these measures are appropriate for this Bill, but I am fully aware of the importance of prioritising player welfare and ensuring that former players and their families have the support they need.
National governing bodies are responsible for the regulation of sports and for ensuring that appropriate measures are in place to protect participants from harm, including head injuries. The Government expect national governing bodies to take the health and safety of players as a top priority.
The Secretary of State and I recently met a small group of affected families and ex-footballers, including individuals associated with Football Families for Justice, to discuss player safety and welfare for those suffering with dementia. We heard, at first hand, about players’ experiences and the views of the group on how safety and welfare could be improved at all levels of the sport.
We are considering what is required, including how to support football to come together to address the problems raised. We are committed to supporting the families and football authorities to come together to address those issues, and our officials are in the process of arranging meetings to further explore the issue.
That has hopefully outlined how the Government and I care very much about these issues. I will briefly say why we do not feel we can accept these measures. I thank my hon. Friend the Member for Caerphilly (Chris Evans) for tabling them, and I thank the hon. Member for Cheltenham for introducing them—he spoke very powerfully.
The regulator will be a specialist regulator with a precise focus on financial regulation, corporate governance, fan engagement and heritage, as we have heard throughout today’s debates. It will be aimed at addressing the main issues that came out of Dame Tracey Crouch’s fan-led review.
We have heard at length, in this House and the other place, about the importance of a tight regulatory scope focused on the market failures that the industry cannot address itself. Even if we wanted to accept this change, we feel it would open the door to other amendments, and indeed to scope creep, which we do not want. But that is certainly not in any way a reflection of how seriously we take this issue—we take it very seriously. We look forward to meeting and working with campaigners, and indeed with everyone in football, to come to a solution on this issue.
Max Wilkinson
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 6 sets out the regulator’s objectives, which are its primary aims and also the limits of its statutory remit. As clause 7 sets out, the regulator may act only if the action taken, so far as reasonably practicable, advances one or more of those objectives. I will speak briefly to the objectives, and then we can debate them further.
The first objective is club financial soundness—the ability of individual clubs to continue meeting their debts and liabilities even in the face of challenging circumstances, new risks and financial shocks. The second is systemic financial resilience, which relates to the wider financial resilience of English football. That involves issues that, individually, pose a small problem, but that, when aggregated or multiplied, pose a significant threat to groups, clubs and the pyramid as a whole.
The third objective is safeguarding club heritage and the heritage of English football. Clearly, financial collapse is a risk, but so is the potential for clubs to become unrecognisable to their fans and communities. As we know, the Bill grew out of the fan-led review, which highlighted myriad problems facing football in this country. There are a number of areas where action is needed, but not all the problems are for a statutory regulator to fix. We have been clear about the areas where the regulator would need to act; some relate to issues of sustainability, where we believe that the market has failed, or remains ill equipped, to act.
We believe that the three objectives are the right focus. When I talk about the Bill, I always say—and I said it when I opened today—that at a very basic level clubs have to do three things: be a fit and proper owner, have a business plan and consult their fans. Many are doing that, and doing it well, and in that case there will be no need for duplication. At a very basic level, that is what the Bill and the regulator aim to do.
Mr French
I will make my comments brief, because the hon. Member has made a number of excellent points that need to be addressed by the Minister rather than by me. The objectives under clause 6 are the promotion of the financial soundness of regulated clubs; protecting and promoting the financial resilience of English football; and the safeguarding of heritage assets, which is the main point the hon. Member for Sheffield South East just made. He spoke well about how those different issues interlink between clubs of different sizes, and the impact it has on lower league clubs that value the financial benefits of a replay.
I remember, as a Cheltenham fan, when we were in what was League One then, but now is the Championship, going to Bolton, where we lost in Bolton’s new stadium, and going to Coventry where we beat a Premier League team. It is incredible for fans to go to grounds that they would not normally get to experience. We must not lose that aspect of this. There is also the financial impact of the smaller club getting a replay, which is absolutely crucial. Welling United, one of my local clubs, has sadly just been relegated from the Conference South. I remember—I think they had got to round two in the cup a few years ago—Carlisle had come to visit. Welling United fans would never normally have had the opportunity to watch them play that club, or to visit their stadium and see all the characteristics of stadiums at that level and professional players perform there. That is an important part of the fabric and the love of the FA cup, which we all share.
I am talking about the EFL cup as well, but the FA cup in particular is incredibly powerful. I spoke about the soft power asset of English football around the world—people understand the value of the FA cup and what that means for competition across the whole pyramid. We know clubs in the lower leagues play a number of qualifying rounds to try to get to round three when the Premier League clubs normally come in. We must not lose sight of the impact of replays, and I would be genuinely interested to see what the Minister says in response to the point made by hon. Member for Sheffield South East on those.
We had a long debate earlier about what we thought were good ambitions to try to expand the scope of the objectives of the IFR in clause 6, and I appreciate that Committee members have had their say already on whether that is the wrong thing to do. I encourage the Minister, again in good faith, to consider the point about the growth of the game. We are concerned that, as drafted, the objectives of the regulator do not fulfil the potential it could have to try to look at the growth of the game. In other Departments I know the Chancellor has urged Ministers to write to their regulators to ask for growth examples, but at this point in the Bill we can mandate that to be a part of the regulator’s considerations. I urge the Minister to think about that point.
Stephanie Peacock
It is a pleasure to once again, and possibly finally for today, serve under your chairmanship, Sir Jeremy—but we will see. I am grateful to my hon. Friend the Member for Sheffield South East for all his work in the all-party group and for his long-standing interest. I completely appreciate his points. I would say that the regulator will have a number of ways to safeguard heritage, including to be able to prohibit competitions, and require consultation on matchday operations. Clause 8 encourages the regulator to engage with both players and fans on relevant matters. The regulator has a tightly defined scope and purpose focused on protecting and promoting the long-term financial sustainability of the game for the benefit of fans and local communities. It will not intervene on sporting competition matters, such as the footballing calendar.
To address the point by my hon. Friend for Sheffield South East about the FA cup and replays, I remember that just as the previous Bill was published, it was in the news and a real debate. I completely appreciate that one could argue that it is very much part of the heritage of the game, but it is also a competition matter, and therefore it is out of scope of the Bill. I will take away the comments by my hon. Friend, and I appreciate Members from across the House for putting theirs on the record.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Vicky Foxcroft.)
Football Governance Bill [ Lords ] (Third sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateThursday 5th June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 5 June 2025 - (5 Jun 2025)
The Committee divided: - Ayes: 3 / Noes: 13 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 13 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 13 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a real pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Old Bexley and Sidcup for his amendment. I understand that its intent is to put beyond any doubt that the Bill and the regulator will not breach UEFA or FIFA statutes, and so will not risk English clubs or national teams being banned from international competitions. I will set out why we do not think the amendment is necessary, and then I will respond to some of the questions that hon. Members posed during the debate.
I assure the Committee that the amendment is not necessary. UEFA and FIFA statutes require that the FA manages its affairs without undue influence from third parties and remains independent of political interference. The regulator will be operationally independent of the Government and will not exert undue influence on the FA’s ability to govern the game.
The shadow Minister asked about consultation. Through the observer role on the regulator board, there is an explicit requirement to consult the FA. The extent of its statutory powers and duties will not allow it to undermine FIFA’s or UEFA’s statutes. That is why—to answer the question from the hon. Member for Spelthorne—UEFA has confirmed in writing to the Secretary of State that the Bill as drafted does not breach UEFA statutes. The FA has also confirmed that directly to Members of both Houses, and it is of course publicly supportive of the Bill.
Rather than protect English football, I am afraid that the amendment would have serious unintended consequences. It would put the regulator in a position of deference to a private international organisation—a point the hon. Member for Cheltenham made eloquently a number of times. That would not only undermine the sovereignty of Parliament, but leave English football in a very weak position. UEFA has confirmed that the amendment is not needed, and it would undermine parliamentary sovereignty; for those very straightforward reasons, I ask the hon. Member for Old Bexley and Sidcup to withdraw his amendment.
Mr French
Although I do not doubt the Minister’s sincere belief in the assurances she has given, I am afraid that unless we have evidence that gives the Opposition certainty about them, we will not withdraw our amendment. We are very concerned about the future participation of English clubs in Europe and of the national team in European and world competitions for reasons that I outlined in my speech—in the interest of time, I will not repeat them now.
I note that the Minister was very careful in her wording when she talked about what was said in the letter from UEFA. She talked about the Bill “as drafted”. The Opposition are extremely concerned about scope creep from the regulator, and much of our contributions have focused on the fact that the future regulator may take a decision that is not in conformity with the rules of FIFA and UEFA, which this House would then have few means to change. That would put at risk clubs, investment and jobs in clubs up and down the country. That is why I will press the amendment to a vote.
Question put, That the amendment be made.
Mr French
I understand the Lib Dem spokesman’s point, but in my understanding, that would be the responsibility of the leagues. That is not what we are trying to block with this amendment; we are trying to block club-to-club forced redistribution. That is an important distinction, and I will come on to explain why.
I do not believe that this is a theoretical concern. The regulator’s objectives include financial sustainability. One can easily imagine a future regulator interpreting this objective to mean that it should balance resources across the pyramid, effectively redistributing funds to prop up weaker clubs. Without this amendment, nothing in legislation explicitly prevents such a scenario.
Some may argue that redistribution is needed to make the game fairer—I understand that point—but fairness in football has always been earned through competition, not imposed through central control. We must be very cautious about importing the language and logic of equalisation into a sport that depends for its vitality on aspiration, competition and merit. Sporting competition is a hill that I am willing to die on.
It is also worth noting that forced redistribution between clubs would create perverse incentives. It would reward financial mismanagement and punish prudence, and it would create a moral hazard where clubs are less motivated to balance their books if they believe that the regulator will require others to bail them out. That is not a path to sustainability; it is a recipe for mediocrity, or worse, disaster.
The principle at stake is clear: the role of the regulator is to set standards, ensure compliance and uphold integrity, and not to act as a central accountant deciding who deserves what. If clubs wish to strike revenue-sharing deals through their leagues, they may do so. The amendment draws a line: it protects club autonomy and supports continued investment in the game, and it ensures that the Government’s regulator—whatever its remit ends up being—respects the rights of clubs to manage and retain their own finances.
Stephanie Peacock
It is a pleasure once again to serve under your chairmanship, Mr Turner. I thank the shadow Minister for the amendment and the chance to clarify the Government’s position on the redistribution of revenue. Let me be clear: the backstop process will apply only to revenue received by the leagues. That is already explicit in the definition of “relevant revenue” in clause 56. It does not allow the regulator to include individual club revenue that is not relevant for distribution agreements—for example, shirt sales. The amendment is not necessary to ensure that. It would call into question the regulator’s powers under the backstop process. Although that process is about resolving distribution disputes between the leagues, not individual teams, the money received by the leagues is ultimately distributed to their member teams.
Joe Robertson
I thank the Minister for seeking to provide clarification. Can she clarify what would happen in the scenario posed by the hon. Member for Cheltenham? If a club such as Manchester City were to negotiate a TV rights deal abroad, and it was a very good deal, should the football regulator have any role in seeking to redistribute that money in any circumstances?
Stephanie Peacock
The point in the intervention speaks contrary to the amendment that we are discussing. It is somewhat confusing—[Interruption.] It was a question, indeed, but it speaks contrary to the amendment in the shadow Minister’s name.
The amendment would cast doubt on the regulator’s ability to effectively deploy the backstop, even where requested to do so as a last resort by the leagues. For the reasons that I have set out, I am unable to accept it.
Question put, That the amendment be made.
Stephanie Peacock
The clause sets out the general duties of the regulator to define when and how it can act. The regulator must act in a way that, in so far as is reasonably practicable, is compatible with the purpose of the Bill—to protect and promote the sustainability of English football—and that advances one or more of its objectives. As part of that, the clause requires the regulator to, where appropriate, take certain things into consideration when it acts. As the regulator is required only to “have regard to” these things, it is not strictly bound by them, and so its operational independence is not undermined.
The regulator must consider some key outcomes in the football market, beyond its primary objectives. Specifically, where possible, it should have due regard to the desirability of avoiding indirect impacts on: the sporting outcomes of regulated clubs; the competitiveness of regulated clubs against other clubs, which includes overseas competitors; and investment into, and growth of, English football. That recognises that there are other features of the market that should be protected. We want a sustainable football pyramid, but not at the expense of the exciting, competitive product that continues to attract so many viewers and investors. We have explicitly added growth to this provision. The regulator will not actively pursue these outcomes, but it will be mindful of unduly harming them while it advances its statutory objectives.
The regulator must also have regard to five further things when exercising its functions. They include its regulatory principles, which guide how it should operate, its own guidance and the guidance from the Secretary of State, the most recent state of the game report, and the most recent football governance statement from the Secretary of State. We will discuss some of those points later today. I commend the clause to the House.
Mr French
It is disappointing that our amendments, which were tabled in a constructive manner, not a political one, have not been accepted. We remain concerned about some of those risks to the future of English football, but we will not seek to divide the Committee on this clause.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
The IFR’s regulatory principles
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The regulatory principles outlined in this clause are designed to guide the regulator to exercise its functions appropriately and in the manner intended by Parliament. The regulator must have regard to those principles when acting. The first principle encourages time and cost efficiency in everything that the regulator undertakes, encouraging swift action and value for money. The second principle encourages the regulator to co-operate with both those it regulates and those who will be impacted by its decisions. That reflects that the ideal regulatory environment is one where all stakeholders are working towards the same goals. Therefore, where the Bill says that the regulator should consult other relevant persons, we would expect that those affected by its decisions, such as fans, players, and representative groups, would be included when appropriate.
The third principle encourages the regulator to consider, before acting, whether the intervention is necessary, and if the same outcome could be achieved in a less burdensome way. That steers the regulator to take a light-touch approach to regulation where appropriate. The fourth principle encourages proportionality. The regulator should always look to choose the least restrictive action that still delivers the intended outcome, and be able to justify why any burden is worth it for the benefits expected. The fifth principle encourages the regulator to acknowledge the unique sporting context in which it is regulating. For example, it should consider the existing rules and burdens that clubs are subject to, and that market features such as transfer windows impose unique constraints on clubs.
The sixth principle encourages the regulator to apply regulation consistently, while still ensuring that requirements are appropriately tailored to a club’s specific circumstances. A Premier League club and a National League club operate in very different ways and face very different risks, and the regulator should and will take that into account when regulating, as I heard when meeting representatives of the Premier League, the EFL and the National League. The seventh principle encourages the regulator to hold the individuals responsible for making decisions at a club accountable for the actions and compliance of the club. For too long, clubs and fans have suffered the consequences of bad actors and mismanagement by the individuals calling the shots.
The eighth and final principle encourages the regulator to be transparent in its actions. It is important that the regulator and its regime are open and accessible to the industry, fans and the general public. I commend the clause to the House.
Mr French
I will not seek to repeat all the objectives that the Minister outlined for clause 8, but I will make some comments on each principle, and pose some questions to which I hope she can provide answers.
As the Minister described, clause 8 outlines the eight operating principles that guide the regulator’s approach. First, the Government’s regulator should be on time and cost-efficient, which is why I have tabled amendment 101 to clause 16. Secondly, the Government’s regulator should take a participative approach to regulation, helping to co-ordinate and co-operating with clubs and competition organisations, as well as engaging with players, fans and others. That relates to an amendment that we will come to shortly.
Thirdly, the Government’s regulator should be light touch in its approach to regulation, wherever possible. Sadly, we Opposition Members believe that that is now highly questionable due to some of the new parts of the Bill, which we raised concerns about in the first day’s sitting. Fourthly, the Government’s regulator should be proportionate in everything it does. Again, we have concerns about that and we have outlined some of those already.
Fifthly, the Government’s regulator should acknowledge the unique sporting context in which it is regulating, aiming to minimise any potential disruption to sporting competitions. I will not go through the debate we just had around UEFA international competitions, but I again highlight some of my earlier questions that I put to the Government on Tuesday about how this regulator is benchmarked against other regulators, because, in a sporting context, it is the first of its kind. It is very difficult for us to understand where the Government are moving towards, whether that is about resources, the size of the regulator, or the future direction, and we would like some clarity on that.
Sixthly, the Government’s regulator should apply the regulation consistently. We all hope that the regulator will do that in the future. Seventhly, the Government’s regulator should, where appropriate, hold individuals responsible for the actions of the club. That is absolutely right. There are clauses that seek to do that, and, as we have heard, to identify the appropriate officers and senior directors for different components of the club.
Eighthly, the Government’s regulator should be as transparent as possible in everything it does. Disappointingly, Government Members voted against the transparency amendments that we tabled, which, again, were not political; they were aimed to future-proof the transparency regarding how the regulator operates. I fundamentally believe that Members, regardless of what party they belong to, should be able to have all the information to make informed decisions on the benefits to their constituents.
Many of the principles in this clause are generally welcome, but I seek clarity from the Minister on a few matters. Does she think that these principles are strong enough to prevent the regulator from jeopardising the future participation of English clubs, particularly abroad? The fifth principle states that the regulator “should” aim to minimise disruption. Surely—we believe—it “must” avoid disruption, because of the risks that I outlined in previous amendments.
Lastly, none of the principles reference or reinforce the regulator’s independence. Why is there no principle regarding the regulator’s independence from the Government and politics at large, for the reasons we have outlined?
Stephanie Peacock
I thank the shadow Minister for broadly welcoming the principles. I will address a couple of those points, but without rehearsing this whole debate. Independence runs throughout this Bill; it is very clear that it is an independent football regulator, and we will talk about some of the safeguards for that in future debates.
The principles that we are debating are the same as they were under the previous Bill, with one exception: the third principle has been added, which is about making this less burdensome and which steers towards a light-touch regulator. I think that Members across the House would welcome that.
I will not rehearse the conversations we had on the make-up of the regulator—on staffing and so on, which we spoke about that the other day—but the shadow Minister touched again on UEFA. I gently remind him that we removed the need for the regulator to have regard to Government’s foreign and trade policy when considering club takeovers. We took that out of the previous Bill, and that is clearly welcome in the context of that UEFA debate. We are therefore confident that these are the right principles to guide the regulator to do a good job.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill
Clause 9
Transfer schemes
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
We are committed to establishing the regulator as quickly as possible post the passing of this Bill. To that end, the regulator is currently operating in shadow form in the Department for Culture, Media and Sport in parallel to the passage of this Bill. This is a precedented approach; for example, the Trade Remedies Authority was run as a shadow function out of the Department for International Trade before it was formally established by the Trade Act 2021.
The shadow football regulator has started work to develop the regulator’s policy and guidance, engage with stakeholders, and undertake the necessary corporate activity to build an organisation, such as recruitment and procurement. That will enable the regulator to hit the ground running once it is legally established. The shadow regulator, of course, was established by the previous Government, as they clearly also recognised the importance of the regulator being ready to operate as soon as possible once the Bill receives Royal Assent.
On the creation of the regulator, it will be necessary for the property, rights, liabilities and staff held by the shadow regulator within DCMS to be transferred to the regulator. The most appropriate vehicle for effecting these transfers will be a statutory transfer scheme, as has been used in similar situations involving the transfer of assets following the transfer of functions between public bodies. The details of such transfers will be determined at the point of transfer.
Mr French
As we heard from the Minister, the clause relates to the transfer of staffing, resources and property to the Government’s regulator in the future. I would like to ask her—this goes back to an earlier conversation on the potential direction of travel, size and scope—how many staff will be transferred? What resources or properties are we talking about, so that taxpayers can understand, and what cost will there be to the taxpayer? Hopefully, those are fair questions.
We did seek to put an employee cap into the Bill to help to maintain value for money for taxpayers. I think that was a fair proposal, but Members did not agree with it or with the number of 50 that we put forward. However, the principle of trying to cap the size of the regulator is fair, especially given the size of some of the regulators that were described in comparison—I believe one had 900 members of staff. Most members of the public would be alarmed if the football regulator ended up anywhere near that, let alone a tenth of it. We are concerned, so I ask the Minister again, given the impact on costs to football clubs linked to the regulator, how big the Government expect it to grow. Can she also answer the questions that were raised about what will be transferred on day one?
Stephanie Peacock
I am grateful to the shadow Minister for those questions, which somewhat rehearse the previous debate on the staffing of the shadow regulator. He should have received an answer to the written question, and we spoke about this last time; as of 1 June, it has 42 staff. I cannot comment on exactly how many staff there will be at the point of Royal Assent. In my remarks, I said that upon the creation of the regulator, property rights, liabilities and staff will be transferred. I am happy at that point to write to the shadow Minister, but I will not speculate now.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Schedule 3 agreed to.
Clause 10
State of the game report
Mr Betts
I beg to move amendment 2, in clause 10, page 7, line 6, at end insert—
“(d) an assessment of any existing and effective financial distribution agreement against the principles set out in section 62(2);”
This amendment would require the state of the game report to make an assessment of any existing and effective financial distribution agreement against the principles set out in distribution orders for the resolution process.
It is a pleasure to serve under your chairmanship, Mr Turner. We are finally starting to get on to the football issues in the Bill. The state of the game report is obviously a key element. It will shape how the regulator operates, and eventually, the financial distribution, which we will come to later in the Bill. So the report is really important.
Amendment 2, without undermining what is already in the Bill in any way, simply ensures that the financial distribution as it exists, and as it might exist according to the principles laid out in further clauses of the Bill, is taken into account when developing the state of the game report. It brings a symmetry to the whole process, so that the state of the game report looks at the financial distribution, and when we come to the financial distribution, it goes back to look at the state of the game report. It is a simple amendment that makes the Bill coherent as a whole. I hope that the Minister might at least consider it when looking at how the Bill might be improved.
Max Wilkinson
It is a pleasure to serve under your chairship, Mr Turner—I got it right this time.
We support the amendment. We believe it is in the interests of the game to redistribute money further from the top to the Football League and further down the pyramid. We believe the only way that will be achieved is if, via the mechanism of the football regulator, there is regular reporting that then demonstrates what we know is true—that an increasing amount of money is being hoarded by the Premier League, while those lower down tend to miss out.
We know that over the past few years or decades, since the inception of the Premier League, more and more money floating around in football is being retained by the Premier League as a proportion of the amount of money that is available. That is not a good thing for football. It is not a good thing for the sustainability of the game. We believe that this simple reporting mechanism will give further oxygen to the discussion about why that is harmful, and will hopefully, over time, result in further redistribution. That is why we support and welcome the amendment.
Stephanie Peacock
I thank my hon. Friend the Member for Sheffield South East for the amendment. I understand its aims. We do not consider it necessary, as we are confident that the Bill already covers the issue. Per clause 10, the regulator will be obliged to look into the main issues affecting English football and any features of the market that risk jeopardising its objectives. If the existing distribution arrangement meets either of those criteria, the regulator will cover it in the state of the game report. I reassure my hon. Friend that the regulator has the ability to address distributions in the sector if the current scenario reaches a threshold, and we will discuss those powers when we get to part 6.
In general, we have not taken the approach of being overly prescriptive and listing every issue the regulator could and should look at here in the Bill.
Mr Betts
I am trying to work out what the Minister is saying. Is she saying that the amendment is unnecessary, because in the state of the game report as laid down already in the Bill, the regulator can do precisely that—look at the distribution within football? There were some other words added then about what might be a restraint on the regulator’s ability to do that. Is the regulator completely free to look at the distribution of resources and revenue within football as it stands?
Stephanie Peacock
Yes, the regulator has the ability to address distribution in the sector if the current scenario reaches the threshold. We will come on to discuss that in part 6. I was going to say that, in general, we have not taken the approach of being too prescriptive and listing every issue in the Bill that the regulator could and should look at, as that would be contrary to the light-touch regulator that we have discussed throughout the Committee’s proceedings. I can be very clear in answering my hon. Friend’s question: it has the ability as it stands, and we will discuss that point further in part 6. I hope that he will withdraw the amendment for those reasons.
Mr Betts
I think I am reassured by what the Minister is saying. It is obviously quite a complicated area, and it links in to what comes later in the Bill. Maybe we can pursue this later. I want to be certain that the regulator has these powers, because I believe that much of the concern among football fans is around the current distribution of revenue, and we must ensure that when we have finished with the Bill, it sorts that problem out. At this stage I will not pursue this to a vote, but we will have discussions about distribution in due course. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Joe Robertson
Once again, I am going to refuse the temptation to make a political point about back-of-a-fag-packet calculations by the Liberal Democrats. This amendment does not provide a get-out for clubs to blame the regulator for putting their ticket prices up. They could do that anyway. Clubs can, if they want, try to blame the regulator, regardless of whether the regulator has a power or a compulsion to assess its own impact on ticket prices. What the amendment seeks to do is just add a layer of transparency. Of course, it is up to the regulator to make its own assessment of its impact on ticket prices, and it may be that its assessment is that it has had a negligible effect. However, it seems entirely reasonable, in the interests of transparency, to compel the regulator to nevertheless make this assessment. At the end of the day, we should all be here in the interests of one group of people only—the fans—and it would be a great shame, indeed worse than that, if the regulator were to increase the cost of match tickets, which are already very high.
Stephanie Peacock
The amendments from the hon. Member for Old Bexley and Sidcup regarding ticket pricing touch on an important issue that I recognise is very important to fans. I reassure fans that the Bill will increase clubs’ overall accountability, including on this important issue. However, the annual report is not an effective place to address ticket prices.
Ticket pricing is fundamentally a commercial decision, and it would not be appropriate for the regulator to interfere with the commercial decisions of a private company. That is why the regulator will not intervene on this issue, aside from ensuring that clubs consult their fans on ticket pricing. It may well be that the regulator chooses to look at ticket pricing as part of the state of the game report, but mandating that it reviews the effect of its regulatory activities on ticket pricing as part of the report would be unnecessarily prescriptive.
Ticket pricing is ultimately a matter for clubs and is driven by many factors, but we do think it vital that fans are consulted and can have their voices heard. That is exactly why this Government amended the previous Government’s Bill to add an explicit requirement that clubs must consult their fans on ticket pricing and take their views into account as part of fan engagement. That is the way to ensure that fans can have their voices heard on such an impactful issue.
The amendment seems to assume that the cost will be passed on to fans in the form of higher ticket pricing. I want to be clear, as I was on Second Reading, that that would not be a proportionate response by clubs. If clubs increase ticket pricing, it will not be because they cannot otherwise afford to pay the regulator’s levy. As mentioned before, the cost of the regulator will be tiny compared with the vast revenue of the game, and the cost of the levy will not be among any club’s top area of expenditure.
Every measure has been taken to ensure affordability. No club will be charged to the point of needing to increase ticket pricing, and no fan will be subject to price rises without having their voice heard—I associate myself with the comments of the Liberal Democrat spokesperson, the hon. Member for Cheltenham. For those reasons, I urge the hon. Member for Old Bexley and Sidcup to withdraw his amendment.
Mr French
It is rather disappointing that the Liberal Democrats and Labour seem to be against the principle of transparency for fans of the impact on ticket prices, given that the issue is so pertinent to fans across the country. As Conservatives, we want to stick up for those fans. We understand the costs of going to a game, as my hon. Friend the Member for Spelthorne said—I will not criticise his choice of club. Going to games and season tickets cost a lot of money for the average fan, and we have seen the impact of that. One example was the cost for Man City fans of coming down to the semi-final. Part of Wembley was empty because fans were saying that they could not afford the costs, because of the times of fixtures, although that is a slightly different point. We have to be mindful of the impact on ticket prices.
Football Governance Bill [Lords] (Fourth sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateThursday 5th June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 5 June 2025 - (5 Jun 2025)
The Committee divided: - Ayes: 3 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 13 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 11 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Louie French (Old Bexley and Sidcup) (Con)
It is a privilege to serve under your chairship, Ms Butler—a half-time substitute in today’s proceedings. I will speak briefly to the amendment. I completely understand the objective that he is seeking to nudge the Government towards, which he explained well. The obvious question for the Minister is whether more frequent reporting—three years rather than five years—would mean additional costs. I await the Minister’s response, but I understand that the hon. Member is not seeking to press his amendment to a vote.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a pleasure to see you in the Chair and to serve under your chairship this afternoon, Ms Butler. I thank my hon. Friend for his amendment.
The state of the game report will be a key study into the structure and dynamics of the industry. It will help to build an evidence base to inform the regulator’s approach and decision making. I therefore recognise the intent behind my hon. Friend’s well-meaning amendments.
The state of the game report needs to be produced promptly, but it also needs to be a robust study. The timeframes set out in the Bill balance the importance of a timely first report with giving the regulator time to undertake the necessary in-depth analysis. The regulator will need to publish its first report as soon as possible or, as my hon. Friend outlined, within 18 months of the competitions in scope of regulation being specified by the Secretary of State, as an absolute maximum. For subsequent reports, a maximum of five years between publications will encourage the regulator to take a more long-term look. That should minimise unnecessary burdens on the industry and better align with the timelines for existing industry processes, such as commercial agreements. The regulator will still have the discretion—as my hon. Friend anticipated—to publish subsequent reports sooner if it considers it appropriate to do so.
I cannot accept my hon. Friend’s amendments to reduce the timings further. He asked me to go away and reflect on them, but I do not want to give him any false hope. We have put careful consideration into the time limits, which were changed from the previous Bill. They are an absolute maximum. We have had a number of conversations with the various leagues and stakeholders, and we are confident that they are the right time limits. We have made it clear that the regulator has the power and discretion to publish sooner, and we would very much hope that that would be the case for the first report in particular. For those reasons, I cannot accept his amendments.
Mr Betts
I will not press the amendments to a vote, but I want to encourage the Minister on this point. As she said, the regulator can come back to the state of the game report before five years. In doing so, would the regulator be encouraged to take account of any views or concerns from the leagues and clubs that are being regulated, and from fans’ groups? If there was a real concern that things were changing fundamentally, would the regulator be encouraged to come back and reflect on whether a state of the game report should be done more quickly?
Stephanie Peacock
Yes, absolutely. We have talked about light-touch regulation throughout the Bill. The regulator has the ability to go sooner, in both its first report and subsequent ones, so we hope that there will be ongoing conversations with all the affected parties. If something happens, the regulator has that power and we would expect it to react. That is why we are not being prescriptive.
Mr Betts
Briefly, I think we are going back to a very similar discussion to the one that we have just had, but would the Minister expect—without this going on the face of the Bill—the regulator to consult fans, in particular the Football Supporters’ Association? It has done a brilliant job. It was party to the fan-led Crouch review, and it has provided a great deal of assistance in framing this legislation. I hope that the association would be seen as part of the consultation process when the regulator comes to do that.
Stephanie Peacock
The state of the game report is expected to be a key piece of work that the regulator produces on the basis of extensive research and consultation. The Bill sets out a few parameters. What is included in the state of the game report, and therefore who is relevant to consult, are up to the regulator’s discretion, as the expert, allowing the report to evolve over time. The Bill therefore does not set out an exhaustive list of who to consult, and nor would we want it to.
Throughout the Bill, however, and especially where it states that the regulator should consult other relevant persons, we expect that those affected by the decisions of the regulator, such as fans, players and representative groups, would be included when appropriate. To answer the point made by the hon. Member for Sheffield South East directly, we absolutely would expect those groups to be taken into consideration. That is made clear in the regulatory principle set out in clause 8.
Joe Robertson
I appreciate that we have a situation where one of the Minister’s Back Benchers is seeking assurances in this Committee, but does she accept that is not the equivalent of having something written into the Bill? With the greatest respect, if it is not in the Bill, her assurances here on what she expects from the football regulator is only her expectation—it is nothing more certain.
Stephanie Peacock
I remind the hon. Gentleman that part of the purpose of a Bill Committee is to give our intention as Parliament. Yes, I can give those assurances and I have done so at every step of the way.
Stephanie Peacock
I will take a further intervention, but I have not actually answered the hon. Gentleman’s substantive point. I want to answer it, if he gives me the chance.
Joe Robertson
It is a fundamental principle of lawmaking that, when interpreting the law, judges or anyone else do not go and look at what a Minister might have said in Hansard. I appreciate that she may have a long career, but the Minister will change at some point, and the law has to stand, potentially, for a very long time.
Stephanie Peacock
The hon. Gentleman shouts his CV from a sedentary position.
Kevin Bonavia (Stevenage) (Lab)
Members of the Committee may have heard of the case Pepper v. Hart, which showed that courts do look at what is said in Parliament. What we say here does matter.
Stephanie Peacock
I am grateful to my hon. Friend for that comment. The intention of the regulatory principle is not to list every possible stakeholder that the regulator should ever engage during the course of regulation. That would be a slippery slope to an enormous list that risks missing persons off. Rather, the broader group of those affected by decisions are captured by this provision, even if they are not explicitly mentioned. That is why I am very pleased to give those assurances to my hon. Friend the Member for Sheffield South East.
Mr Dillon
I am grateful to the Minister for her response, and I thank the hon. Member for Sheffield South East for drawing that conclusion from the Minister in his useful remarks. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The state of the game report will allow the regulator to better understand the finances and economics of the industry and its individual clubs. This, in turn, will inform the regulator’s approach and decision making across the regulatory framework.
Clause 10 requires the regulator to publish the report and sets out the topics that it must cover, including an overview of the main issues affecting English football and whether any features of the industry are jeopardising the regulator’s ability to deliver its objectives. These are deliberately broad and non-specific topics, affording the regulator some discretion as to what to cover. In essence, this means that the regulator can cover any matter that it considers relevant at the time, providing it relates to the functions of the Bill.
I would like to take this opportunity to provide further reassurance to my hon. Friend the Member for Sheffield South East on his earlier amendment. We would expect at this stage for it to include distributions, and powers lie within the Bill for the regulator to do that. I want to put that on record once again, further to our earlier debate. It will depend on which issues and features of the market are relevant to its objectives and the regulatory regime at any given time. However, the report is still constrained by its link to only matters relevant to the regulator’s function, so I reassure the Committee that this cannot be an avenue for scope creep.
The clause also requires the regulator to publish its first report no longer than 18 months after the competitions and scope of the regulation have been specified by the Secretary of State, as we have discussed. Subsequent reports must be published at least every five years after this but, as we have just debated, they could be more frequent if the regulator considers it appropriate. These timeframes balance the importance of a timely first report with giving the regulator time to undertake the necessary in-depth analysis.
Finally, the clause sets out clear consultation requirements, including an open process of inviting suggestions about the issues to be included in the report, as well as targeted consultation on a draft report, which I hope speaks to some of the comments from the hon. Member for Newbury on his previous amendment.
Mr French
I do not want to rehash the debate we had before the lunch break. We will press amendment 122 to a vote under a future clause, but we are disappointed that the Government are not willing to accept amendment 123. As we explained before the break, Conservative Members are very concerned that the regulator may impact ticket prices even further. We were calling for transparency in the state of the game report for fans and for Parliament so that they could understand the impact of the regulator on ticket prices for fans. We are disappointed that that amendment was not accepted. I appreciate the further comments that the Minister made, but I would like her to consider that in the future.
Stephanie Peacock
The hon. Gentleman said that he would not rehash the debate, but somewhat did. I have made my argument clear: ticket pricing is a commercial decision, and the Government have gone further by adding a consultation. We have nothing more to add on that topic; it has been fully debated.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Football governance statement
Mr French
I beg to move amendment 113, in clause 11, page 7, line 41, at end insert—
“(7) No football governance statement may have effect unless approved by resolution of both Houses of Parliament.”.
This amendment would require the football governance statement to be approved by Parliament before it could have effect.
As we know, clause 11 makes provision for the Secretary of State, whoever that may be in the coming months, to issue a statement on issues related to football and, specifically, to the Government’s regulator. While the statement is not a binding one, it walks a very fine line and could be interpreted as political interference in the governance of football. As we have already heard when deliberating on clause 7, that is a very real issue with real-life implications for English football and English clubs.
I do not want to get bogged down in the earlier debate, but I ask the Minister to accept the fact that, aside from the context of the Bill, if UEFA or FIFA deem the Government to be exerting influence on how football is run in a way that compromises the independence of football associations and clubs in line with their statutes, they can, and perhaps will, take action to exclude the nation’s teams and clubs from competition. Irrespective of the Bill, if FIFA or UEFA believe that there is Government interference in football, there is a risk that clubs could be kicked out of European competitions.
Stephanie Peacock
No one is disputing that. We are clear that the Bill does not stray into that. As I said to the hon. Gentleman, in his Government’s iteration of the Bill, the regulator had to have due regard to foreign and trade policy. We took that out, further strengthening the independence of the independent football regulator.
Mr French
I genuinely thank the Minister for clarifying. We have to understand the context in which the Bill is operating. As I said earlier, the Bill is being made not in isolation, but in a complex international football ecosystem. We have to be mindful of that in everything that we do in this Committee and in the legislation that goes forward. Will the Minister therefore accept that, even if she does not believe that it will happen, if her regulator is perceived to be exerting influence and undermining the independence of English football, both international governing bodies will exclude English teams? I want to confirm that the Government understand those risks.
Much like the Secretary of State’s failure to declare her interests in relation to her appointee to the chairmanship of the regulator, who we know donated to her, this is about the perception of undue influence and the impact that will have on how the independence of English football is viewed internationally. If UEFA and FIFA perceive that there is undue influence from whoever the Government of the day may be, they will act, as I explained already with the example of Greek football in 2006. I hope that, as the Secretary of State has now done, the Prime Minister will make sure to declare any relevant interests, as we know that the chairman also donated to his campaign.
I believe that the Minister confirmed that she understands that there is a real risk that we have to be mindful of and that if the regulator breached independence, the entirety of English clubs’ participation in Europe, and the jobs and significant revenues that come alongside that, would be at stake. That is why I have tabled amendment 113, which would require the football governance statement prepared by the Secretary of State to be approved by Parliament before it could have effect. That is a vital safeguard to prevent the perception that any Government of any colour have direct influence over the regulator.
Mr French
I thank the hon. Gentleman for the intervention, but I am speaking very clearly about the interference of Government in football. That is very different from how Parliament acts in creating this statute and being able to check that the regulator is not putting clubs at risk, as I have said before. It is about Parliament having its say, rather than just delegating powers to the Secretary of State of the day.
By requiring that Parliament approve the statement, my amendment would ensure two things. First, there will be proper scrutiny of the Government and their policy. Mr Speaker has recently had to remind the Leader of the House, because of the way the Government have continued to ignore it, of paragraph 9.1 of the ministerial code, which states:
“When Parliament is in session, the most important announcements of government policy should be made in the first instance in Parliament.”
The amendment would require the Government to come the House to present and defend their policy, instead of hiding behind media briefings or social media posts.
Secondly, the amendment would help to mitigate UEFA’s and FIFA’s concerns about the direct influence of Government over the independence of English football. Accepting the amendment and inserting Parliament into the equation would make the regulator much more palatable for the international governing bodies.
I hope that members of the Committee will accept the amendment for what it is: an attempt to ensure that no Government of any colour can be the cause of English football’s exclusion from European or international competitions. There will come a day—the sooner the better, in my opinion—that the Labour party is no longer in government. Labour and Liberal Democrat Members must therefore be realistic, practical and honest about the situation. When there is a different Government in place, will they accept the risk of that Government being the reason that the Three Lions cannot play in the World cup, or the reason that English clubs—from Cheltenham to Barnsley or Welling, or perhaps Sheffield Wednesday —cannot compete in European competitions? That might seem a remote prospect at the moment, but it is the ultimate aim of every club to be in such competitions. That is at risk without this amendment.
If hon. Members are being honest with themselves, their constituents and football fans across the country, the answer will be clear, and they should support my amendment to help to protect English football and give Parliament a greater say.
Stephanie Peacock
I thank the hon. Gentleman for his amendment, but I am not sure that his remarks spoke much to the detail of it. I remind him that this part of the Bill has not been changed since its previous iteration under the last Government. He has once again made his well-rehearsed argument about UEFA, but there is no risk in that regard. We have been very clear. UEFA and FIFA are happy with the Bill as drafted, and the FA has made that clear to Members of both Houses.
The purpose of the clause is to allow the Secretary of State the power to prepare a football governance statement that sets out the Government’s policies on issues related to football governance, where these are consistent with the regulator’s statutory remit. We believe that this is an important tool that the Government can use to set out their priorities in football governance, similar to the way that the Government give a strategic steer to the Competition and Markets Authority and other regulators.
We drafted the provision with appropriate deference to Parliament. Any statement must be consistent with the purpose of the Bill and the regulator’s objectives as set out in the Bill. The Committee has already considered that purpose and those objectives and has approved them. Parliament has set out the statutory remit, but it is appropriate that the Government of the day are able to set out their policy priorities within that well-defined remit without requiring parliamentary approval each time. There are also restrictions on when statements can be made, to ensure that they are not overused. Any statement must be published and laid before Parliament, so Parliament can hold the Secretary of State accountable for its content. Requiring the Secretary of State to gain approval for this statement would add an extra burden to Parliament.
Lincoln Jopp (Spelthorne) (Con)
I struggle to understand what might be contained in the Government policy statements. The Minister is steeped in this legislation, so must have discussed this in the past. Can she give the Committee an indication of what sort of thing might be covered?
Stephanie Peacock
I am grateful to the hon. Gentleman. He was new to this place at the election, so he perhaps is not familiar with the previous Bill, but as I have said, this Bill is the same as the Conservative version. On the specifics of the statement, I do not want to pre-empt what may be in there, but it could be, for example, the idea that the Government focus on growth; we have that in the objectives. I do not want to anticipate what could be, but let us be clear: this is about broad objectives, not specifics or operations, and any statement that is not consistent with Parliament’s intention in passing the Bill, as set out in the regulator’s statutory objectives and in the purpose clause of the Bill, could be challenged legally. Similar discussions have taken place in both the House of Lords—the other place—and the House of Commons, and we expect the statement to reflect the Government’s position on the regulator’s use of its powers.
Mr French
I stand to be corrected; we will look at Hansard, but one of the votes that we have had already in Committee was on an Opposition amendment to make sure that growth was clearly defined in that objective in the Bill, and it was rejected by the Government, so I am slightly confused. My hon. Friend the Member for Spelthorne has asked for clarification of what might be in the report, and the Minister seems to be contradicting a vote that has already happened. Could she clarify what she means?
Stephanie Peacock
I can absolutely. I said I did not want to be drawn on the specifics of the statement; I do not want to pre-empt what is in there, but I tried to give an illustration without being drawn into the specifics. If, say, there is a general election and a new Government take power, a new Secretary of State may want to give broad direction. We as this new Labour Government have made it very clear that growth is a focus. We know that is in the Bill, so that is why I thought it was a sensible illustration to give in answer to the question from the hon. Member for Spelthorne, but I want to be very clear that I do not want to be drawn into specifics, because this could cover the approach with regulation in, for example, minimising burdens on clubs, which would tie in with that.
I simply do not think this amendment is necessary. For that reason, I ask the hon. Member for Old Bexley and Sidcup to withdraw it.
Mr French
I must admit I am slightly confused by the answer that was given. I expected the Government to refuse my amendment, but I am genuinely confused about the direction of travel now. I explained the causes of the amendment. The answer that the Minister has just given to my hon. Friend the Member for Spelthorne seems to contradict—other Members are nodding—votes that have already taken place on this Bill. Without rehashing the whole exchange, we wanted to put in as an objective of the regulator economic growth and growing the game of football, for very plausible reasons. The debate was around the word “sustainability”—I appreciate that you were not in the Chair at that point, Ms Butler. To hear the Minister describe the objective that was voted down by the Labour party as a key part of Government policy—that was the argument we made earlier; we could not understand why the amendment was voted against—is confusing. We are genuinely confused, so I will press the amendment to a vote.
Question put, That the amendment be made.
Stephanie Peacock
Clause 11 provides a power for the Secretary of State to issue a statement on the Government’s policies related to football governance. A football governance statement can only include issues within the scope of the regulator’s regulatory regime. It can be revised every five years, or more frequently only if a general election has taken place, as I illustrated just now; if there has been a significant change in Government policy relating to football; or if the Secretary of State considers the statement is inconsistent with the purpose of the Bill or the regulator’s objectives. It cannot be used to direct the regulator’s day-to-day operations, which protects the regulator’s independence.
The general duty set out in clause 7 requires the regulator to have regard to any football governance statement when exercising its functions under the Bill. For the Government to issue such a statement is common practice used with other regulators. In its detail, as discussed, it could cover the approach to regulation—for instance, minimising burdens on clubs—or the Government’s growth agenda.
The clause is an appropriate and proportionate power that will help give assurance to the Government and Parliament that the regulator acts within its regulatory scope and has regard to strategic issues. It does not interfere with any daily operations or affect the independence of the regulator.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12
Guidance published by the IFR
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
To ensure that the regulatory regime is as effective and efficient as possible, the football industry needs to understand what is expected of it. That is why this clause empowers the regulator to prepare and publish guidance on the exercise of its function. The guidance will be crucial to translate the legal framework in the Bill into a detailed and practical explanation of the regulator’s regime. It will ensure that the industry understands the regulatory system, what to expect from the regulator and what is expected of it. Not only will that reduce burdens, but it should improve compliance.
The clause sets out that the regulator must publish guidance about the exercise of its functions under specific sections of the Bill. It also commits the regulator to publish guidance about the exercise of any of its other functions. The regulator must consult any persons that it considers appropriate before publishing guidance for the first time and before revising guidance in the future, unless the revisions are minor. This will ensure the regulator is taking into account the views of all relevant stakeholders and experts when preparing its guidance.
Clause 13 permits the Secretary of State to prepare and publish guidance on the regulator’s functions. If needed, this guidance offers an opportunity to provide some additional detail on the regime that was not included in the Bill.
The industry and fans alike have been clear that they do not want to see ongoing Government involvement in football, as we have debated in this Committee. That is why the regulator must have regard to the Secretary of State’s guidance, but is not obliged to follow it. That is also why the Secretary of State may not revise this guidance any more frequently than every three years. This will deliver an appropriate arm’s length role for the Government, but avoid any risk of the regulator becoming a political football. 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. I beg to move that these changes—I mean clauses—stand part of the Bill.
Mr French
The Minister will be pleased to know that I will not pick her up on that slip of the tongue, given I made a few of my own this morning with some of the tongue twisters that my assistant put into my speeches.
As we have just heard, clause 12 requires the Government’s regulator to publish guidance about the exercise of its functions as set out in clauses 21 to 25 and the outcomes it seeks to achieve, and to consult appropriate persons before publishing that guidance.
I have a few questions. Will the Minister clarify when she expects her regulator to have translated its powers and duties into a detailed, cohesive and practical explanation of the IFR regime, and what she believes detailed and practical mean for the clubs, so they can understand that?
Clause 13 permits the Secretary of State to prepare and publish guidance on the Government’s regulator’s exercise of its functions under the regulatory regime. This guidance would aid the Government’s regulator in interpreting the intention of legislation when designing and implementing its regulatory regime. It would be non-binding, but the Government’s regulator must have regard to it when exercising its functions.
There was an interesting debate between two lawyers on this Committee about where those lines are drawn. They have both made their arguments for the record, so I will not go back into that, but the clause does stipulate that revisions to guidance may not be made
“more frequently than every three years”
unless there is a revision to the Bill, or the revision is pre-agreed upon between the Secretary of State and the Government’s regulator. It also requires the Secretary of State to consult both the Independent Football Regulator and any appropriate persons before publishing or revising any guidance and laying it before Parliament, unless the revisions are minor.
The Minister will be aware that in the previous sitting I pressed her about that parliamentary role; I will now do so again. Might we have some insight into where, when the reports come back to Parliament, the Government plan to publish them? On Tuesday I asked the Minister whether that would be the role of the Culture, Media and Sport Committee, or of the Public Accounts Committee, given the financial aspects and the costs, and the role of the Comptroller and Auditor General, or whether that would be on the Floor of the House. We really would appreciate, as the official Opposition, some guidance on where the Government plan to publish those reports, so that everyone in the House may have a clear understanding of the direction of travel and where those reports will be available to be read.
While the guidance may not be binding, the clause highlights the blurred lines between Government and regulator, particularly when the appointee was a political appointee, as we know. How will the Minister ensure that any guidance published by the Government is not interpreted as Government intervention, and that the regulator remains free to act independently while not bringing in those risks that we have discussed today?
Stephanie Peacock
I am grateful for the shadow Minister’s questions. There is no timeline on guidance, but it will be for the regulator to publish. We expect it to be done in a timely fashion, ahead of clubs having to engage with the system.
On the shadow Minister’s question about parliamentary engagement, I wrote back to him this morning; I believe that went out this morning. The obvious Select Committee is the Culture, Media and Sport Committee, but it is not for me as the Minister, but for the individual Select Committees to determine whether it is relevant, and whether they would like to invite the regulator to give evidence or to engage with any of their inquiries.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Clause 13 ordered to stand part of the Bill.
Clause 14
Annual Report
Amendment proposed: 122, page 9, line 3, at end insert—
“(aa) the impact that the IFR’s activities have had on the price of match tickets, and”—(Mr French.)
This amendment would require the IFR to include in its annual report the impact that its regulatory activities have had on ticket prices.
Joe Robertson
It is a pleasure to serve with you in the Chair, Ms Butler.
The shadow Minister, as ever, is a strong advocate for the fans and has set out a compelling case for supporting the amendment. I will not rehash all the arguments, but it is about transparency and reporting—indeed, the clause that the amendment seeks to change is about reporting. Clearly, the Government believe that an annual report should be made or that would not be provided for in the Bill. The report must include a “summary of the activities” undertaken by the regulator, with reference to a financial year, and yet there is nothing about that report’s including the financial impact, which would be fairly usual in a report by any organisation compelled to do one year on year in the interests of transparency.
We debated amendment 122 earlier, and that was more specifically about the impact of the regulator’s activity on match ticket prices. I recall that one of the Liberal Democrat Members did not support that on the basis that the cost of administering the regulator would, if divided up as on his fag packet between match tickets and clubs, add up to a small amount. Amendment 134 is much more compelling because it is about the cumulative impact of the costs of complying with the regulatory regime. It could be the case that the actual budget of the regulator remained reasonably contained, while the regulation that the regulator creates and its obligations on football clubs could balloon.
In my view, that is why the regulator should be compelled each year to include in the report the financial impact of its regulation and the full range of its activities, in so far as they have an implication for football clubs. If it creates a regulatory burden and hence a cost burden on clubs, there will always be the worry that that will be passed on to fans. Whether an individual member of the Committee believes that the regulator is a good thing, or that the cost is bearable, and whatever their view on how much cost is bearable, at the very least the regulator should be reporting this each year, so that the public and Members in this place in the future can form their views. This is a basic argument about transparency, and no one should seek to assist the regulator in not being transparent in financial matters. For that reason, I will back the amendment.
Stephanie Peacock
I thank the shadow Minister for his amendment. He gave a wide-ranging speech, and I will focus my remarks on the amendment itself, but I will first respond to a couple of points that were made. Towards the end of his speech, he commented that regulation has not been done well for the past 20 years—perhaps I should remind him of who was in government for most of that time. [Interruption.] Indeed, the past 20 years. The hon. Member for Isle of Wight East said that some members of the Committee may or may not think that the regulator is a good thing. But of course we all stood on a manifesto that included it, so I hope that most Members here think it a good idea; fans up and down the country certainly agree that it is.
In speaking to the amendment, I again remind the Committee that no changes have been made since the previous Bill. The Government agree that it is vital that the cost of regulation should not place an undue burden on clubs. That is why we have designed an agile and light-touch regulator that takes a collaborative approach with those it regulates. Unfortunately, the amendment could do the exact opposite of what I think it intends. If the regulator were to track and publish compliance costs every year, it would need all clubs to measure and report on that on an ongoing basis.
Lincoln Jopp
What makes the Minister think that clubs themselves would not, as a normal matter of course, be noting their compliance costs?
Stephanie Peacock
Clubs may well do that, absolutely, but the amendment goes further than is needed and I will continue to make the case as to why I simply do not think it is necessary. It could involve the lengthy and onerous process of identifying and separating compliance costs from their overall operational costs. Reporting on compliance costs would drive up those costs unnecessarily. The regulator and Department will already be required to undertake monitoring and evaluation of the impact of regulation; that includes the review of the Act by the Secretary of State as per clause 96. For those reasons, I cannot accept the amendment and I ask the hon. Member for Old Bexley and Sidcup to withdraw it.
Mr French
We tabled the amendment because, as my hon. Friend the Member for Isle of Wight East explained, it is in the interest of driving transparency for fans and clubs, and for Members to see the effectiveness and impact of the regulator. As my hon. Friend the Member for Spelthorne explained, it is highly likely that most clubs captured by the top five leagues of the regulator will have reports in their board rooms that explain the costs of regulation and compliance costs. As I said earlier, they have to report on a variety of functions for their league credibility, so it is not unusual to expect them to be able to account for how much this extra regulation will cost, nor is it unusual to expect us to have transparency on the impact of the Government’s football regulator on the football pyramid from the bottom to the top. We will press the amendment to a Division.
Question put, That the amendment be made.
Stephanie Peacock
Clause 14 requires the regulator to report annually to Parliament on its activity for that year. As with all public bodies, the regulator must arrange for the report to be laid before Parliament by the Secretary of State for purposes of transparency and scrutiny. The Secretary of State will have some flexibility to direct additional material to be included with the annual report. That will help ensure that the regulator captures all relevant information in a year, and allow the Government and Parliament to properly scrutinise its performance.
Stephanie Peacock
I do not believe so. I have written to the shadow Minister and will double-check the correspondence. The report will help to ensure that the regulator captures all relevant information in a year, thereby allowing the Government and Parliament to properly scrutinise its performance. I commend the clause to the Committee.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Operating licences
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 2—Support to clubs—
“(1) The IFR shall provide reasonable and proportionate assistance to—
(a) regulated clubs seeking to obtain a provisional club licence;
(b) clubs with a provisional club licence seeking a full club licence; and
(c) unregulated clubs who are reasonably likely to become regulated clubs in the next football season.
(2) The IFR shall provide reasonable and proportionate assistance to regulated clubs in their efforts to continue to comply with the conditions of their provisional club licence or full club licence.
(3) In fulfilling its duty under subsections (1) and (2), the IFR shall have regard to the factors listed in section 53(9).
(4) This assistance may come in the form of—
(a) financial support;
(b) training; and
(c) support staff.”
This new clause would require the IFR to provide assistance to football clubs transitioning to the new licence regime and to enable clubs continued compliance with its requirements.
New clause 6—Support to clubs—
“(1) The IFR shall provide reasonable and proportionate assistance to—
(a) regulated clubs seeking to obtain a provisional club licence;
(b) clubs with a provisional club licence seeking a full club licence; and
(c) unregulated clubs who are reasonably likely to become regulated clubs in the next football season.
(2) The IFR shall provide reasonable and proportionate assistance to regulated clubs in their efforts to continue to comply with the conditions of their provisional club licence or full club licence.
(3) This assistance may come in the form of—
(a) financial support;
(b) training;
(c) support staff; or
(d) temporary exemption from levy payments.”
This new clause will mandate a duty on the IFR to aid regulated clubs with compliance.
Stephanie Peacock
The clause introduces the licensing system. One of the regulator’s main responsibilities will be to operate a licensing system for football clubs through which the majority of its regulation will be delivered. If clubs do not have an operating licence, they will not be allowed to play. The licensing regime will cover all football clubs that have a team playing in any of the competitions specified by the Secretary of State in regulations—that is intended to be the top five leagues. The clause will require football clubs to have a licence to lawfully operate a team in any of the specified competitions.
The clause sets out the requirement for clubs to have a provisional or full operating licence, along with the regulator’s power to grant licences subject to clubs passing the relevant tests set out in the subsequent clauses. The licence will enable the regulator to regulate clubs through licence conditions set out later in the Bill. That will enable proportionate regulation tailored to clubs, rather than a one-size-fits-all approach. An operating licence will specify which clubs the licence relates to, the team the club is operating and any conditions attached to the licence.
Let me set out how, broadly speaking, the licensing regime will work. The duties in part 5 will apply to regulated and formerly regulated clubs within the licensing regime, and will cover clubs that have been in scope within the previous 10 years, to prevent circumvention. We will debate that later in Committee. For a club to gain a provisional operating licence, the independent football regulator must be satisfied that the club operates a relevant team and will comply with the mandatory conditions and the free-standing duties. The independent football regulator need only be satisfied that the club will comply with the mandatory conditions; it will not need to comply at the time of the provisional licence test. A provisional licence can be issued for a maximum of three years, but the time can be shorter if the regulator determines that. The regulator can use discretionary licence conditions to bring a club’s standard up to the necessary threshold requirement level.
Let me set out the test for a full operating licence. The independent football regulator must be satisfied that a club meets the threshold requirements and will continue to comply with the mandatory conditions and with the free-standing duties, and the regulator must not have determined that a current owner or officer is unsuitable. We will, of course, go into further details on these matters as we move through the licensing regime, so I will not do so now. I commend the clause to the Committee.
Mr Betts
With new clause 2, tabled in my name, we come back to the other key issue in the Bill, aside from distribution: how clubs operate, how owners have in some cases badly operated them in the past, and how we can do more to help to control such situations. The issue of operating licences is, then, absolutely key.
Before anyone gets too worried, I should say that I have not been collaborating with the Lib Dems, although their new clause is very similar. Perhaps we have both been talking to Fair Game, an excellent organisation that has been trying to work with clubs and fans to improve the regulation and operation of football clubs.
The simple aim of new clause 2 is to ensure that the regulator provides help when it is needed. Premier League clubs are not going to need help and Championship clubs should not need help. The EFL says that clubs in Leagues One and Two are already required, under the EFL’s regulations, to provide the vast majority of the information that the regulator will need anyway, so they are doing so as a matter of course. The new clause would probably apply only to some National League clubs. The support may not be financial support; in some ways, for the relevant clubs, training and supporting staff is the key issue. There may not be anyone in the club with a working knowledge of some of the complications and the legalities of the legislation so, to avoid the club getting into difficulties, the new clause would require the regulator, in those circumstances, to help those clubs, in a reasonable and proportionate way, with the requirements of the licence conditions.
Mr French
That was a strange intervention.
New clause 2 and new clause 6 would require the independent football regulator to provide assistance to regulated clubs seeking to obtain a provisional licence, clubs with a provisional licence seeking a full licence, and unregulated clubs that are reasonably likely to become regulated in the next football season. The new clauses would also require the independent football regulator to provide reasonable and proportionate assistance to regulated clubs in their efforts to continue to comply with their licence conditions.
The sentiments behind both arguments are not bad ones. We have made strong arguments already about our concerns regarding costs for clubs lower down the pyramid. I do, however, question the contradiction of being concerned about clubs in National League South and North, but wanting to get them in the scope of the regulator—we disagree with that. I have a few questions about the new clauses that I hope either the hon. Member for Sheffield South East or the hon. Member for Cheltenham might be happy to answer, just so the Committee can understand.
Given that the new clauses would require the independent football regulator to provide reasonable and proportionate assistance, we would be interested to know what assistance those hon. Members think might be reasonable or proportionate for clubs to require, and whether the independent football regulator is to provide them in the different instances covered by the new clauses. How would the independent football regulator’s liabilities towards clubs under the new clauses be determined and enforced? How would it be funded? That would be a question that all clubs would ask.
In a feedback loop that I am sure the hon. Member for Sheffield South East is aware of through his chairmanship of the football all-party parliamentary group over many years, one of the arguments that a number of clubs make is, “Why should I pay for someone else to come and try to take my place in the league that I am in?” That is part of the competitive nature of football. Although there is cross-club working in a number of areas trying to help clubs, often, the same clubs are competing against each other. We would need a bit of clarity on how the additional provision of help would be paid for. Would the cost be passed on to other clubs? Leaving aside those questions about what that may look like in the future, we understand the sympathies expressed in the new clauses to try to help clubs further down the pyramid, so that they are not excluded based on the fact that they cannot afford to apply for a licence.
Stephanie Peacock
I thank my hon. Friend the Member for Sheffield South East and the hon. Member for Cheltenham for tabling new clauses 2 and 6. The Government recognise the intent behind them, and we agree that the regulator should help clubs to comply with regulation as much as is reasonably possible. It is in everyone’s interests for clubs to become compliant quickly and with as little additional burden as possible. It is vital that the regulator helps clubs get to grips with its regulatory regime, which is why we have been very clear that the regulator will operate an advocacy-first approach, and why provisions for a collaborative approach are already in the Bill.
For example, the regulatory principle of clause 8(b) encourages the regulator to co-operate and constructively engage with clubs. Regulatory principles (c) and (d) encourage the regulator to ensure that any action is proportionate to the benefits expected from it.
In relation to the specifics of the new clauses, we disagree with any provision that would require the regulator to provide financial assistance to clubs to comply with requirements imposed by the regulator. That would amount to redistribution by the back door, given that the Independent Football Regulator would be levying some clubs in order to provide financial assistance to others. That is not the regulator’s role, and we do not believe it should be. On training, the regulator can work with clubs to ensure that they fully understand the regulation and what is expected of them. Of course, in cases where this is necessary, the regulator can appoint a skilled person to assist the club in resolving issues in respect of a relevant infringement. For the reasons that I have outlined, I am unable to accept the new clauses and I hope that they will be—
Mr Dillon
I seek further clarification from the Minister. Subsection (1)(c) of both new clauses refers to
“unregulated clubs who are reasonably likely to become regulated clubs in the next football season.”
They would stand outside the remit of the Bill if unamended, but would the Minister’s view be that the regulator should engage with those clubs that may be just about to come into the regulated area?
Stephanie Peacock
That is a really good question. The regulator can engage with clubs outside of scope, such as those in the National League North and South, to assist with the application process. I hope that answer gives clarity. It is a very good question from the hon. Gentleman. However, for the reasons that I have set out, I am unable to accept the new clauses, and I hope that they will be withdrawn or not pressed.
Mr French
Clause 16 is about the application for provisional licences, and this debate builds on the previous debate about costs. The way in which clause 16 is currently drafted is a textbook example of how the Government have left the door open to scope creep from the regulator. This clause gives the Government’s politically led regulator the power to set its own rules on what documents clubs must provide when applying for a provisional operating licence. On the surface, this may sound like a mere procedural point, but it in fact is emblematic of a broader concern: the unchecked expansion of regulatory scope—scope creep—that could come to characterise this regime if we are not careful. In fact, it may no longer be appropriate to define it as “scope creep”, as there is nothing subtle or creeping about it. The Bill actively, in different places, encourages the Government’s new regulator to build its own football governance empire, as other regulators have done. It would be better now to define some of this risk of scope creep and to avoid such scope imperialism in the future.
That is why I tabled these two amendments. Amendment 99 would prevent the Government’s regulator from requiring information from clubs, other than the personnel statement and strategic business plan specified by the Act, when applying for a provisional operating licence. Amendment 100 would prevent the Government’s regulator from requiring information in the strategic business plan that is not specified by the Act.
At this early stage of the Bill Committee, I am already at risk of sounding like a broken record.
Joe Robertson
The shadow Minister has already set out in great but necessary detail the reasons why amendments 99 and 100 have been tabled and should be supported. The issue is that subsections (3)(c) and (5)(b) of clause 16 provide a catch-all that allows the regulator to include such other information and documentation as it may specify when a club applies for a provisional operating licence. I support these amendments because I think those two provisions open the floodgates unnecessarily, and clause 16 already sets out the things that the regulator wants to see football clubs submit. To have that completely open floodgate is a problem for the reasons given.
If the Government were keen to have some flexibility here, they could have allowed the Secretary of State to specify any other such information in the future. At least there would then be some accountability via the Secretary of State’s being an elected person and ultimately accountable to Parliament. The particular issue here is that the regulator, once set up, does not have direct accountability, and therefore it would be easy for it to start stipulating all sorts of things. I support the amendments and I think that it should be tight, but the Government could have steered a halfway course here by retaining some powers for the Secretary of State, rather than the unelected regulator.
Stephanie Peacock
I thank the shadow Minister for tabling amendments 99 and 100, which are very similar in effect. The Opposition do seem to be getting carried away this afternoon. I noted down some of the phrases he used: “Politically led”; “unlimited power”; “a regulatory land grab”; and “dangerous for sport”. Then he asked whether the Government had written a blank cheque. Well, I do not think that is the case, but if they did, it was his Government, because there have been no changes to this part of the Bill since its previous iteration.
Mr French
The Minister is trying to suggest that everything is the same, but the Secretary of State has literally nominated a Labour donor who donated to her and the Prime Minister to chair the regulator, so the situation has clearly changed. The appointment is now the subject of independent inquiry; they are under investigation for the appointment. The Minister has been landed the role because the Secretary of State has recused herself, so the situation has clearly changed and it is clearly a political appointment.
Stephanie Peacock
The hon. Gentleman can make that well-rehearsed comment, but I specifically said there are no changes to this part of the Bill. I am focused on what we are talking about, and the parts of the Bill that amendments 99 and 100 relate to have not been changed. He also said that he would not oppose just for the sake of it, but that does seem to be what he is doing.
Lincoln Jopp
My hon. Friend the Member for Isle of Wight East and I were not here in the last Parliament, so what went on and the provenance of the Bill are not really our concern. We are being asked to contribute to the discussion and the debate on the Bill that has been placed before us. Neither of us saw the last one, so these are genuine points.
Stephanie Peacock
I take that point, but both the hon. Gentlemen stood on a manifesto that committed to introducing the Bill.
Amanda Martin (Portsmouth North) (Lab)
I believe that the Conservative Whip, the hon. Member for Kingswinford and South Staffordshire (Mike Wood), who previously represented Dudley South, while highlighting the Bill’s alignment with Conservatives prior to the last election, said he believed that this is a Bill that every single Conservative Member stood on at the last election in their manifesto, which was a ringing endorsement of the Bill.
Stephanie Peacock
Indeed, a number of Conservative Members are on record as supporting this policy; it is just sad that the ones sitting opposite seem to have forgotten the manifesto they stood on.
Mr French
Sorry—Government Benches. Members of this Bill Committee have been appointed to it to scrutinise the Bill based on the situation now. The argument that seems to be coming from the Government Benches is that, under a new Parliament, we are unable to criticise or challenge the Bill because of what a previous Government proposed. We have already explained why we believe that the situation has changed, and why we have concerns, so we are well within our rights to table amendments. If the Opposition party does not agree with the Government, that is their decision to make.
The Chair
Order. Interventions should be short, snappy and relevant to the amendment we are discussing.
Stephanie Peacock
I am grateful, Ms Butler. I completely appreciate the point the shadow Minister is making, but he seems to be missing the point I am making that this part of the Bill has not changed from the previous one. I will now outline why we do not think amendments 99 or 100 are appropriate.
We do not think it is right to remove the ability of the regulator to require additional information from clubs during the application process for a licence. It is only right that the regulator can specify any further information or documentation it may need in order to properly assess whether a club needs the test for a provisional operating licence. It may require further information to assess a club’s circumstances and whether it will need to tailor any mandatory licensing conditions, or attach any initial discretionary licence conditions to the club.
Specifically on amendment 100, the criteria listed in the Bill are non-exhaustive, and the regulator should have the flexibility to request additional information from a club regarding its business plan when necessary. In line with the regulator’s principles, any request for information will, of course, be proportionate, and the regulator will co-operate and engage practically with the club. The regulator will not be asking for any information that is not in the scope of the provisional licence; there would be no reason for it to do so. However, there is an appeals process.
To end with an example, if a club puts forward a business plan and something seems out of the ordinary, the regulator may wish to ask where the funds are from. We think that that is perfectly reasonable, and it was in the previous iteration of the Bill.
Mr French
I appreciate the points that the Minister is making. Another point that I made—this is not political—was about the standardisation of requests, which would allow clubs to prepare on the basis of what they expect the regulator to ask and ensure consistency between clubs. Will the Minister tell us how that might work?
Stephanie Peacock
Standardisation is not appropriate in this context, because the extra information may relate to discretionary licence terms, which will be tailored to a club. It is therefore not relevant.
For the reasons I have given, I hope that the hon. Gentleman will withdraw the amendment.
Mr French
We are concerned about unchecked powers, as we have explained at some length, and believe that the House should be able to check those powers. We are concerned about the lack of standardisation. I fear that, by treating clubs differently depending on their circumstances, the regulator will be left open to legal challenge. Some clubs have the financial resources to challenge a league, and will have the resource to challenge a regulator. We have seen that with certain clubs in the Premier League—I will not mention the cases, for legal reasons. Some football clubs are willing to challenge their regulation in court. We fear that, without standards for what is asked of clubs, there could be more legal challenges down the line. For those reasons, we will press the amendment to a Division.
Question put, That the amendment be made.
Stephanie Peacock
The introduction of the football regulator into a previously unregulated sector will be a substantial change to the industry, but it is necessary to safeguard the future of English football. To provide for a gradual transition to being fully licensed, a club will initially apply to the regulator for a provisional operating licence. We see this as a natural step to attaining a full operating licence. That will give clubs time to adapt to the regulatory system and make the necessary changes without being unfairly penalised for being unable to raise standards overnight.
The application for a provisional licence requires basic information on a club’s owner or owners, officers and senior management, as well as a strategic business plan detailing such things as estimated costs of the club and how they are expected to be funded. A personnel statement will identify each of the club’s owners and officers, the club’s ultimate owner, and the job titles and roles performed by those people. A strategic business plan is a document containing information about the operation of the club, the estimated costs, how those costs will be funded and the source of such funding.
Mr French
I thank the hon. Member for that point. Transfers are a key aspect. If a club is in limbo, it could arguably be at a much bigger disadvantage when the season starts if it had not been able to make transfers because it was uncertain about whether it could compete in the competition. The point is well made.
Secondly, the absence of a defined period creates a lack of accountability within the regulator itself. As we have discussed, the regulator cannot be scrutinised in the way that we would have hoped. We know that the Government do want it to be strong, but with strength must come accountability and transparency. If it is to command the trust of fans, clubs and local communities, it must be seen to act with purpose, not with delay.
We know from numerous examples across different industries that when regulators are left without timetables, backlogs just build up. I will not name examples because I am conscious of time, but we know that it happens. My amendment proposes a time limit of one month—a full 30 days—for the regulator to determine whether a provisional licence should be granted. That is not a rushed timetable; we believe that it is a reasonable one, especially considering that when a club applies for a provisional licence, the key facts will likely already be known by the regulator. Again, this is not designed to be a forensic financial autopsy, but a short-term stabilising mechanism.
Let me also be clear that the time limit does not bind the regulator to approve an application within a month; it simply requires a decision one way or another within that time. That allows the Government’s regulator to reject unsuitable applications if needed—hopefully not—but it removes the damaging uncertainty of a process that otherwise could drag on indefinitely. We must not forget who bears the cost of delay. It is not just the club executives and directors, but the fans, players and staff. We have just heard about transfers, which are a great example. It is about the people who turn up on a Saturday afternoon come rain or shine, the people who run the club shop and the ticket gates, and the people whose local economies benefit from having a club that is alive, operating and secure.
The amendment also supports the broader aim of stability in football. A system without timelines invites inconsistency and subjectivity. One club might be processed in a week, and another in six. That cannot be right. We owe it to clubs at all levels, from the top of the Premier League right the way down to the National League, to create a system that is predictable and fair.
Finally, good regulation is not just about the rules but about responsiveness. It is about a regulator that can act promptly, efficiently and in partnership with the people it is overseeing. Our amendment does not weaken the regulator; it makes it better. It strengthens the trust between the regulator and the regulated. It gives clubs the certainty that they need to plan, invest and survive. After all, that is what the Government say is the intention of this regulator. I hope that hon. Members will support the principle behind the amendment. We have heard some of the issues that may arise if not.
Stephanie Peacock
I thank the shadow Minister for tabling amendment 101. I will outline the reasons why we will not accept it, and then I will respond to some of the questions that he raised.
The Bill ensures that the regulator has the necessary flexibility to ensure that all clubs that meet the test for a provisional licence will be given one. Introducing an arbitrary statutory timeframe of one month for the regulator to make a decision on a club’s application would remove that flexibility. Only the regulator can know what the process of assessing applications might entail or how long it might take, so it should have the ability to set in rules the period within which it will make a decision, the period of any potential extension and the circumstances in which an extension will be granted. The regulator will engage with all clubs prior to the application for a provisional operating licence to ensure that the process is as smooth and efficient as possible, and its regulatory principles encourage it to act in a timely manner.
I turn to some of the specific points that the hon. Member made. There will be no requirement to restructure the board to get a provisional licence. As I outlined in my opening remarks, the regulator will take an advocacy-first approach. Clubs will be asked to submit basic information and documentation, and to show a readiness and willingness to work with the regulator. I draw the hon. Member’s attention to clause 17(4)(b), which says that if, for whatever reason, the regulator does not give a licence, it would have to give reasons. Even in that scenario, which I highlight is hypothetical, enforcement might take place, but it would not prevent the club from playing. For these reasons, I ask him to withdraw his amendment.
Stephanie Peacock
Of course. The shadow Minister referred more than once to clubs not being able to play. As I said, this is an advocacy-first approach; the regulator will work with clubs to make sure that they can reach the provisional licence requirements. It is a basic set of requirements, and they do not have to meet it to receive the provisional licence; they just have to show a willingness and an ability to do that. In the hypothetical scenario that they do not, enforcement may happen, but they will not be prevented from playing. However, we do not anticipate that happening, because at the provisional stage, the regulator will work with them to make sure that they can do that. I want to be very clear—perhaps the hon. Member for Spelthorne misunderstood what I said—that the regulator will work with teams to make sure that they can get that provisional licence.
Stephanie Peacock
The granting of a provisional operating licence will act as a first step towards a club gaining a full operating licence, and will allow the club to operate for a time-limited period. That will be up to three years initially, although it could be shortened or extended depending on the circumstances. This provisional period will allow the regulator time to assess the current standing of the club and determine what steps will need to be taken to attain a full operating licence, as well as giving the club the time to take those necessary steps. The club will provide a personnel statement and a strategic business plan as part of the application process, providing an overview of the club’s operations and financial information.
Once a club has a provisional licence, it will be required to meet basic requirements set out in the mandatory conditions, as well as to comply with the free-standing duties contained in the Bill. This will help to safeguard the club’s sustainability and heritage. There are three aspects to the test that the regulator will apply when deciding whether to grant a provisional operating licence. First, the club must operate a team in a specified competition, which effectively means that the club must be in scope of the regulator. Secondly, the club will comply with the mandatory licence conditions that will be attached to the licence by the regulator; full details of the mandatory licence conditions are in schedule 5. The third aspect is that the club will comply with the duties on clubs, as set out in part 5.
If the regulator is not satisfied that the club meets all the elements of the test, it must let the club know and give it an opportunity to engage with the regulator to rectify the issues identified before the regulator takes a decision. That collaborative approach will aim to ensure that clubs are given every opportunity to meet the requirements and gain a provisional operating licence.
The test for a provisional licence has been carefully designed to get clubs into the regulatory system as quickly as possible, and then to give them a transition period to raise standards, if necessary, and obtain a full licence.
Lincoln Jopp
The Minister said that clubs would still be allowed to play in the absence of a provisional operating licence. How long would they be allowed to play for before being granted such a licence?
Stephanie Peacock
We do not anticipate that happening. Enforcement would take place, but we do not want the regulator to stop clubs being able to play. I am outlining how the regulator will do everything it can. The information is fairly basic, and the aim is to move as quickly as possible, so we anticipate clubs being able to receive that provisional licence.
Clause 18 establishes the second step of a two-step licensing process designed to ensure a smooth transition to regulation. Being granted a full operating licence should be the aim of all clubs in scope of the regulator. The full licence means that the regulator is satisfied that the club meets all relevant requirements, including the threshold requirements. For a club to pass the test for a full licence, the regulator must be satisfied that the club
“meets the threshold requirements set out in Schedule 4”
and is complying with and
“would continue to comply with the mandatory licence conditions”
and the free-standing duties on clubs set out in part 5. Finally, the regulator must not have determined
“that any person who is an owner or officer of the club is not suitable”
for the position they hold.
The clause also details the power that the regulator has to extend the provisional operating licence for a club. That will be done only if the regulator believes that the club does not meet the bar for a full licence at present, but will do if given more time. Clubs will have had time and support, while provisionally licensed, to ensure that they can meet the higher bar for a full licence. Once the club has a full licence, it will not have to be periodically reviewed. Instead, the regulator will continue to monitor and supervise the club. There will be an annual touchpoint in the form of an annual declaration, in which the club will notify the regulator of any relevant changes. That will minimise burdens while still ensuring that the club continues to adhere to the necessary requirements, including requirements that ensure that fans’ best interests are at the heart of the club’s decision-making process. I commend the clauses to the Committee.
Mr French
The Minister has outlined clauses 17 and 18 at some length. We had a lengthy debate on clause 17 in relation to our amendment 101. We are naturally disappointed that the amendment, and the time limit that we seek for the provisional licensing, was not agreed to. However, in the interests of time, I will move on to clause 18.
Clause 18 sets out the process by which the Government’s regulator may grant the full operating licence to a club, which is a crucial stage in the proposed licensing regime, with significant long-term implications for the structure, stability and future of the English game. This clause is where the Government’s regulator transitions from assessing provisional eligibility to giving a formal stamp of approval for a club’s longer-term competition and compliance. However, the clause raises several questions that the Committee must interrogate, and that I hope the Minister will be able to answer—not least whether it achieves the right balance between regulatory assurance and operational flexibility.
Under the clause, the regulator may grant a full operating licence only if satisfied that a club meets the relevant conditions of eligibility. That is right and proper, and clubs should be expected to operate on a stable financial footing, meet appropriate governance standards and protect the game’s integrity. But I am concerned about the breadth and, in some respects, the open-ended nature of what those conditions of eligibility might come to mean in practice.
We must be alive to the risk of regulatory overreach, as the Opposition have highlighted, and we should all recognise that bad regulation is worse than no regulation at all. If clubs are to be subject to vague or ever-changing thresholds, with little recourse or clarity on what is required, we risk imposing a level of uncertainty that could deter vital investment, discourage long-term planning and undermine the very sustainability that the regulator seeks to ensure. That is why the Opposition will—as we already have done in Committee—continue to press for greater transparency around the costs and cumulative burdens that flow from the action of the regulator; and it is why we believe that the regulator should not have unfettered discretion to shift the goalposts without clear parliamentary scrutiny and approval. As I have said, we should not write blank cheques to a politically led regulator.
Another issue with the clause is timeliness. As we have explained, clubs will need to plan ahead, financially, structurally and operationally. If the licensing process drags on, it risks becoming a bottleneck and not a safeguard for clubs around participation. We tabled amendments that would ensure timely decision making on provisional licences, and the same principle must surely also apply to full licences. However, we appreciate the different context within which a full operating licence will exist. That is why we have not tabled an amendment to this clause with a specific deadline. We understand that full licences will take slightly longer.
Moreover, there is a danger that the full licence becomes a tool for undue influence. We have spoken about our concerns about the impact that that may have on the statutes of UEFA and FIFA—in the interests of time, I will not go into that again. If clubs feel under pressure to comply with this new licensing regime to be able to play in English football, there may be a concern about them breaching other regimes, such as UEFA and FIFA, and, again, they may fear expulsion from those competitions.
One club asked me this question, although it was a tongue-in-cheek comment, so I will not name them. If a Premier League club decided not to apply for a licence, would the Government look to exclude it? There is the risk that, if a club feels that it will not be able to compete in Europe, for whatever reason, it may choose what this Bill was originally intended to stop: the European breakaway league.
I am not sure that the club would do that, as it was a tongue-in-cheek comment, but what would happen if a club says, “We are not going to meet these conditions, and therefore we will not apply for a licence”? Would the Government or regulator be willing to kick that club out of the Premier League? Even though that question is hypothetical, we need to know where this might lead, because we are talking about a regulation that will have an impact. If the Minister can answer where she thinks that club might go, I would be particularly interested in that.
We are also concerned about the future interpretation of eligibility and how that may veer into what we believe to be subjective decisions, or where the Government’s regulator will take on new powers as it enters mission creep. As such, I would appreciate it if the Minister will confirm that there will be no demands, for example, on clubs to provide diversity quotas, net zero targets or enforced political campaigns, all of which stray beyond the regulator’s core remit of financial sustainability and good governance. Let us not forget that football clubs are not franchises, as they are in the American sport system. Our clubs are community institutions with long histories and unique identities. They are not all cut from the same cloth.
Mr French
I thank the hon. Lady for her intervention, but that is not the point I was making. I am talking about quotas, which is a slightly different thing. We do not think that the regulator should be insisting on quotas, and that is very different from Kick It Out, which has made incredible progress for football over the years. The hon. Lady has raised a very different point, so I will not go down that rabbit hole.
I am sure that the Minister would agree that what is best for Barnsley FC is not necessarily best for Bromley FC or Bristol Rovers. Each club has unique characteristics and should be treated as such. However, we feel that the Bill, as drafted, could lead to clubs being lumped in the same direction. We believe in the equalisation of treatment, but each club should not be treated exactly the same when there are clear differences, whether that be in league structures or financial positions.
We are concerned about parts of clause 18, but we believe that it is an important part of the licensing structure that must be implemented with care, proportionality and consistency. It is essential that the Government’s regulator operates with discipline, sticking to those statutory objectives, resisting the temptation to micro-manage and always keeping front of mind the importance of stability, continuity and respect of football’s unique heritage. We support the principles of the clause, but I would appreciate it if the Minister answered some of my questions about what may come in the future and what the Government would do if a club decided not to apply for a licence.
Stephanie Peacock
I am grateful to the shadow Minister for his comments. A number of the points that he made have been well debated over the last few days in Committee, so I will not be engaging in them. I will not be engaging in hypotheticals either. We have been very clear that we simply do not want scope creep. The two-step process of the provisional and full operating licence means that clubs do not need to make substantial changes in a short space of time. We absolutely appreciate that it could be difficult for some clubs to meet threshold requirements, and the regulator will very much work with them. The regulator will have a balanced and proportionate approach, centred around advocacy first.
Mr French
I appreciate that I was asking about a hypothetical situation, but it is an important hypothetical. We are talking about a structure going forward in which clubs will be required to have a licence, and we have had some exchanges on that. This is a serious question: what would the football regulator do if a club said that it did not want the licence, and it did not believe it had to have one? Where would that legally leave the club and regulator? Even though it is hypothetical, it is very important to what we are debating in the Bill.
Stephanie Peacock
I disagree that it is an important hypothetical. We can come on to talk about enforcement later on, but we are talking now about the regulator’s approach, which will be balanced, proportionate and centred around advocacy.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clause 18 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Vicky Foxcroft.)
Football Governance Bill [ Lords ] (Fifth sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 10th June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 10 June 2025 - (10 Jun 2025)
The Committee divided: - Ayes: 3 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 11 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Jon Pearce
Absolutely. As a Derby fan, for once I can probably agree with a Notts Forest fan. It is vital that fans have a say. Fans will always want their clubs to do better and to drive forward, and there will be cases where it is right for a club to move; but where there is malign interest, the fans need to have the ability to keep their stadia and clubs together.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a pleasure to once again serve under your chairship, Sir Jeremy. I look forward to day three of Committee. I thank my hon. Friend the Member for Sheffield South East for the amendments; I am never fed up of hearing from him and I know he is very passionate about this issue.
The Government recognise the intent behind the amendments to ensure that football continues to be played at a club’s home ground. The Bill already has a number of strong protections to safeguard home grounds against reckless sales or ill-thought-out relocations. I will respond to a couple of points made in the debate and will then outline why we will not be accepting the amendments.
Fan consultation was mentioned. Clubs must consult their fans on any plans to change or move their home ground as per the fan engagement threshold condition. The shadow Minister, the hon. Member for Old Bexley and Sidcup, made an important point about how it will sometimes be necessary for clubs to relocate their home ground, for a number of reasons, such as the ground being too small, facilities no longer working or the ground being sold. We recognise that we need flexibility in that approach, but fans will have a say.
For clubs that do not own their stadium or have already sold the stadium, due to the scope of the Bill and existing property law, it is not always possible for home grounds that are not owned by the club to have the same protections as home grounds that are. This point was recognised in the fan-led review. However, alongside the fan engagement requirements, there are also protections under the national planning policy framework for sports grounds and existing assets of community value, and there is work under this Government, as well as an ongoing Law Commission review of security of tenure that has the scope to address sports grounds. Those powers will all work alongside the soft powers and levers of the regulator to look to protect home grounds, as far as possible.
My hon. Friend the Member for Sheffield South East also referred to the fact that leagues have requirements for tenure, and clubs are prevented from entering the league if they do not meet them. Leagues also have enforceable standards regarding the quality of the grounds. These vary from league to league and can get into the specifics of grass length on matchdays, for example. Given those requirements, we do not feel it is necessary for the regulator to duplicate rules. Instead, it will work alongside the leagues.
It should be noted that clubs may not own their home grounds—I have responded on that point—and therefore they would require the agreement of their landlord to meet the additional licensing requirement we believe that the amendments would lead to. These amendments would place a requirement on clubs to guarantee something that may not be within their control, as well as duplicating pre-existing league requirements for home grounds.
We recognise that the fan-led review recommended that the Government explore the viability of introducing security of tenure property rights for football clubs. I hope I have explained why we do not feel we can do that.
The Law Commission is now in the process of reviewing the Landlord and Tenant Act 1954, including an assessment of security of tenure for all commercial properties, including football clubs. Following the review, the Ministry of Housing, Communities and Local Government will consider the recommendations and publish a full response.
For those reasons, I am not able to accept my hon. Friend’s amendments and would ask that he withdraws them.
Mr Betts
I am still not quite sure why my amendments would cause so many problems. I understand the difficulty where a club does not actually own the ground but leases it, but the amendment is about security of tenure. There does not have to be ownership; it could be a secure lease, as the English Football League requires, for a 20-year period. That is implied by the amendment.
I was not quite sure what the Minister was saying about how the review by the Law Commission and implementation by MHCLG Ministers would secure the position for football clubs, and what else is being looked at in terms of the planning framework. Is she able to say any more on those points to get on the record what further safeguards might be in place?
Stephanie Peacock
On the point in the amendments about 20 years, we appreciate that not all the leagues go that far, but we think that the point is addressed by the league rules. On the consultation by MHCLG, it might be helpful if I ask my counterpart there to write to my hon. Friend and to share that letter with the Committee, because that ongoing work falls in that Department.
Mr Betts
The Minister often completely convinces me—on this occasion, she goes a little way towards being convincing. I want to read what MHCLG is going to say. In the end, it is not how we do it, but what we achieve in terms of the safety and security of grounds for the fans. That is what this is about. If what MHCLG is going to do moves us in that direction, as the Minister indicates it will, I am happy to await that correspondence from it before pushing this further. I hope that we can get a response from MHCLG Ministers before Report—if the Minister could encourage them to write in that time period, it would be helpful.
Stephanie Peacock
It is a disappointment that I am not able to convince my hon. Friend fully. Not all of what he asks is in my gift, but I commit to the Committee that I will do my very best to get a response from the Department before Report, and if possible earlier.
Stephanie Peacock
I will begin with a couple of brief points in response to the shadow Minister. However, as Sir Jeremy has just outlined, some of the shadow Minister’s points relate to schedule 4 more broadly, which falls under group 38, and the points on fan engagement fall under group 48. I will make some quick comments, but I am happy to take some points away and elaborate further when we come to those groups.
The shadow Minister asked a specific question about what constitutes “adequate” and “effective”. The Bill is intentionally designed to allow for each club to have its own approach to fan engagement. That is why a specific form of fan engagement is not mandated in order to meet the benchmark of adequate and effective. Instead, we expect that the regulator will look at a number of factors to assess fan engagement at clubs, and publish guidance for clubs on what will be expected. Across all of that, the regulator will look to uphold proportionality, taking into account the size and make-up of each club and what is appropriate. We will revisit those issues when we move on to groups 38 and 48. Of course, the debate on ticket pricing has been well rehearsed. This Government added an obligation to consult fans on ticket prices, which will strengthen the fan voice on that issue.
Amendment 104 seeks to add a requirement for a club to consult fans on any political statements or positions that it makes or takes, and new clause 16 seeks to mandate fan approval prior to any political statement or political activity being made by the club, its players or staff. It is not the place of a statutory regulator tasked with financial sustainability to limit or add additional approval processes for political speech or action. Clubs and leagues here and abroad take positions on a variety of issues that could be deemed political, and that is their right.
However, it is not appropriate for an independent statutory regulator to take subjective positions, or opine on the positions of others, in the same way—especially not a regulator tasked only with a tight mission of financial sustainability, to which political statements bear no relevance. It may be that clubs wish to consult their fans in this regard as part of their regular fan engagement. We would not expect the regulator to have any issue with that, but it is not something that it will require of clubs.
The Bill is intended to ensure that fans have a voice in key decisions regarding their club, but we must ensure that this is proportionate. That is why we have not listed every possible issue on which clubs should engage their fans in minute detail. We also do not want to inhibit the free speech of players or any representatives of the club. It is also notable that many sporting personalities have used the attention that the sport gets to protest relevant issues that concern them. We do not want to inhibit the free speech of any of those individuals.
Max Wilkinson
Is the Minister concerned about inhibiting the free speech of Members of the House of Lords, for example Baroness Brady, who made significant and very valuable comments in the debate on the Bill in the other place, and then repeatedly made similar statements in the press and other media? She is, of course, a representative of West Ham and the Conservative party, as was noted by the hon. Member for Portsmouth North. Would we seek to retain her freedom of speech and freedom of expression by voting down new clause 16?
Stephanie Peacock
The hon. Gentleman puts his point on the record. We had a full debate in the other place, in which many Members took part.
Ultimately, the amendments have no relevance to the regulator’s purpose and will not help it to deliver its objectives. Rather, they would serve only to stifle freedom of speech. For those reasons, I ask the hon. Member to withdraw them.
Question put, That the amendment be made.
Mr French
I beg to move amendment 112, in schedule 4, page 99, line 34, leave out “crest” and insert “badge.”
My amendment raises a point that may seem technical, but I believe it is important if the Bill is to respect the history and traditions of our great national game. There is reference in the proposed legislation to the “crest” of a football club, but as any student of heraldry or loyal football supporter will tell us, that term is often misunderstood. In fact, the correct term in almost every case should be the “badge”. A crest is a specific heraldic element part of a full coat of arms traditionally appearing above a shield and regulated under royal prerogative through the College of Arms.
That distinction may seem academic, but it is not. When clubs are challenged on their intellectual property, or when supporters are concerned about the commercialisation or alteration of the symbols that represent generations of loyalty, it matters enormously that we use the correct terminology. We are not just talking about branding. We are talking about something deeply symbolic: an identity that lives on scarves and gravestones, and in the hearts of whole communities. My noble Friend Lord Parkinson raised this point in the Lords with great care and I believe he was right to do so. He proposed that the Bill use the term “badge”, not “crest”, to ensure accuracy and to avoid the legal and cultural confusion that can arise when the wrong term is used.
Mr French
I thank my hon. Friend for making that point. I must admit, as a long-term football fan, that I have never heard a player say that he kissed the crest of his club when celebrating a goal. The footballing term is as accurate as the legal one, as he highlights.
This may seem a modest amendment, but it speaks to something bigger: the importance of precision, respect for history and an understanding of football not just as a product but as a tradition. If we are going to regulate the game, let us do it properly with the right words and the right respect.
Stephanie Peacock
The hon. Member’s amendment follows the extensive debate regarding heraldic terminology in the other place. I can reassure him that the Government have worked closely with the College of Arms to ensure that the term “crest” is used consistently with heraldic law, and with the FA to ensure accuracy and cohesion with industry norms, as the term “crest” is the key term within its existing heritage rules. The Government amendments made in the other place make sure the legislation remains in step with both the FA and heraldic law, and that is in addition to changes to the explanatory notes, to further clarify the point.
Although the word “crest” is used colloquially in the industry, “crests” have a very specific meaning in heraldic law. Crests can only be granted by the College of Arms and only a select few clubs have been granted one. For that reason, the legislation refers to crests, but also needs to capture other clubs and circumstances. That is why the Bill uses “emblem”.
When making these changes, the Government explored the use of “badge” instead of “emblem”. However, it was felt that “badge” would risk unintentionally only capturing the image on shirts. In examples such as Arsenal or Liverpool, the shirt features only one element of the club’s emblem, such as the cannon or the liver bird. In those instances, “badge” might capture only those elements and thereby not deliver on the policy intent of protecting the heritage associated with the entire emblem. Given those comments, I ask that the hon. Member for Old Bexley and Sidcup withdraw the amendment.
Question put, That the amendment be made.
Stephanie Peacock
Schedule 4 sets out the three threshold requirements—financial resources, non-financial resources and fan engagement—that clubs will have to meet in order to be granted a full operating licence. As I set out last week, to apply for a licence, a club must submit a business plan and a personnel statement. These are basic requirements that any club should be able to complete. As I have made clear, the regulator will support them with their applications wherever needed.
Before discussing the requirements for a full operating licence, I would like to correct a point I made last week regarding the hypothetical scenario where a club is not granted a provisional licence. I want to clarify that once a provisional licence is in force, a club must have a licence to be able to play in a specified competition.
As I have set out, to receive a provisional licence, a club must submit a business plan and a personnel statement. We think these are basic requirements that any club should be able to complete, and the regulator will support them with their applications where needed.
Lincoln Jopp (Spelthorne) (Con)
The Minister mentioned the two criteria of the business plan and the personnel statement. I thought from our discussions last week that giving the regulator any form of information that the regulator so requested was an additional condition.
Stephanie Peacock
The two I mentioned are the basic points. The regulator has the ability to ask for further information should they want it. I think I gave the example that if the regulator is unsure about the source of funds, or whether there is enough, it could ask for more information. That will be at the discretion of the regulator—we had a well-rehearsed debate on that point last week.
We think that the requirements for a provisional licence are basic requirements that any club should be able to complete. As I was really keen to stress in the debate last week, the regulator will be keen to work with clubs to do everything it can to help them to meet those requirements.
The regulator needs to be satisfied that a club will be able to meet the mandatory licence conditions and duties on clubs once it has been granted a licence. This is a forward-looking “would comply” test. The expectation is that the provision of information and documentation, as well as the engagement with clubs as part of the application process, will be sufficient to satisfy the regulator. It should be straightforward for all clubs to obtain a provisional licence. Once they are in the regulatory system, a club will have time to improve standards up to the necessary requirements for a full licence, with the support of the regulator as needed.
Mr French
One of the points we were slightly unclear about when we had the discussion of provisional licences before was what would happen if a club decided it did not want to apply for a provisional licence. There are several clubs that are very publicly concerned about the regulator. What would happen if they were to form, say, a union and go against the regulator and refuse to apply for a provisional licence? How would that work in practice? Would they be kicked out of the league?
Stephanie Peacock
The Government envisage that licence refusal or the revocation of a licence would be in extreme circumstances, but there will come a point when the regulatory system switches on and a licence will be needed in order to play. That is the point that I am keen to clarify. Yes, ultimately a club can be stopped from playing if it does not apply for a licence, but I stress that, with the provisional licence, it does not have to be meeting it; it has to be willing to meet it.
The regulator will do everything it can to work with clubs, because it is in no one’s interests for a club to be unable to play—that would be completely contrary to the purpose of the Bill. The purpose of the Bill is to improve club sustainability once the regime is in force. There must be a consequence for extreme cases, which is the point that the shadow Minister is making, but the club must be given every opportunity to meet the standards if it has failed to do so. Once a club is licensed, the regulator will have a range of other escalating enforcement tools. We will come on to enforcement, so I will not elaborate on that now—I do not want to test your patience, Sir Jeremy.
I turn now to the threshold requirements in schedule 4. There are three main areas of the regulator’s licensing regime that build on the freestanding duties in the mandatory conditions. Meeting the threshold requirements will mean that the regulator is satisfied that the club can currently operate sustainably in its financial, non-financial and fan-engagement areas and will continue to do so.
Although the threshold requirements are principles set in legislation, what each club must do to meet the threshold will not be the same. For example, what constitutes appropriate financial resources for a Premier League club will be very different to a League One club. A club may already meet the threshold requirements, for example, through naturally good operations or by complying with competition laws. In such cases, the regulator will not need to directly intervene. But if not, the regulator can apply discretionary licence conditions to bring the club up to the required threshold, which was the point that the hon. Member for Spelthorne referred to.
The structure will allow for a proportionate, light-touch system, with requirements tailored to clubs. The threshold requirement for financial resources means that clubs need an appropriate level of financial resources to support their long-term financial sustainability. The regulator will be able to consider any relevant factors to determine whether the club’s financial resources are appropriate relative to its circumstances and the risks it faces. For example, that might include which competition the club competes in, its financial relationship with its owners, and the wider economic context that it operates in. In particular, the regulator should take into account the club’s financial plan, and its contingency plan for dealing with financial shocks.
In essence, a club must have the financial resources to match the business it is operating—and plans to operate. If a club does not have the finances to back up its plans, or does not have plans in place for how it would manage foreseeable risk, it would need to do one of two things: either demonstrate that it has access to the necessary funding, or reconsider its plans and risk appetite. If it does not, then the regulator can impose discretionary licence conditions to bring the club’s finances back in line with its operations and risk level.
For non-financial resources, a similar threshold requirement and process applies. Non-financial resources could include things such as internal control systems and policies, as well as the information and people that a club has available to it. Although not financial in nature, these are important resources for any well-run club and need to be adequate. When assessing whether these resources are appropriate, the regulator might consider the skills and experience of senior managers, its plans, and its corporate governance arrangements.
The financial and non-financial resources of a club both need to be appropriate. For example, a club needs to have the financial means to back up its plans, and on the non-financial side it needs to have a contingency plan and risk-management processes to mitigate potential financial shocks.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
Is it the Government’s expectation that financial and non-financial resources will be proportionate to the size of the club?
Stephanie Peacock
My hon. Friend makes an important point; it will be proportionate. I have met with all the leagues a number of times, and this was of particular concern to the National League. It will be proportionate, and the regulator will take that approach when dealing with the different clubs and leagues.
Mr French
I appreciate the Minister’s comments about proportionality; we will look to review that as the Bill goes forward. One question I have is about how the regulator will interact with the existing rules. The most obvious ones that come to mind are the financial fair play rules that are already in existence in the Premier League. What analysis of, and crossover with, the existing league investigations and restrictions to clubs will there be?
Stephanie Peacock
Those will be an issue for the leagues; where the leagues have rules, clubs will continue to comply with them. That is not something that the regulator will be involved with. Where there are league rules, that is for the leagues to enforce. I am happy to write to the hon. Gentleman to outline that further.
Mr French
If the Minister could outline that further, it would be really helpful. At the end of the day, we are keen to ensure that there is no confusion in the regulations for clubs, nor any duplication of purpose for the regulator. We would like to understand how that will work in practice, and I would appreciate that in writing.
Lincoln Jopp
I am sure that the Minister realises that one of the variants in a club’s business plan is whether its matches are selected for being televised. It is an incredibly haphazard process and difficult to predict, because they are decided within season. What guidance will the Minister give, as the appointer of the regulator, as to reasonable assumptions in the business plan regarding expected television revenue in season?
Stephanie Peacock
I think that it is an issue for the leagues, but I will happily write to the hon. Gentleman. I will check that point, but I am pretty confident that it would be left to the leagues. It is similar to what they deal with now. I will write to the hon. Members for Spelthorne and for Old Bexley and Sidcup further to their points, because it is helpful to get clarity in writing. Where there are league rules, they are for the leagues to enforce, but I will add further detail in writing, if that is helpful.
I would like to move on to the final point, about the requirement for clubs to adequately and effectively consult and consider the views of fans when making decisions relating to certain specified matters. Those relevant matters are listed in the Bill and cover key “off pitch” decisions, which the fan-led review highlighted as important to fans across specified leagues. The Government have made it explicit that that will include ticket pricing, as mentioned already, which is an issue of importance for many fans.
The threshold requirement is designed to work in tandem with the fan consultation mandatory licence condition. Through that condition, all clubs must regularly consult with a representative group of supporters to discuss the relevant matters listed in the Bill. That must be in place by the time a club is granted a provisional licence. Appropriate fan engagement will look different at every club and will partly be based on the size and complexity of the club’s fanbase, as I touched on in my earlier contribution.
James Naish
This point is slightly tangential, but it is related to fan engagement. England are playing Senegal in Nottingham later today. With the support of the FA, we have run a competition for primary and secondary school children to design a new England shirt. Would the Minister be happy to congratulate Albie, Dylan, Joshua and Mikey on their contributions?
The Chair
Order. That is not slightly tangential; it is very tangential. Just a brief answer, Minister, and then we must return to the schedule.
Stephanie Peacock
With the indulgence of the Chair, I will speak to the hon. Gentleman after today’s sitting. I would like to write to those who took part in such a wonderful competition.
I would like to complete my remarks by talking briefly about the threshold requirement, which has been designed to allow the regulator to recognise the inherent variation between clubs, while ensuring that standards are raised where necessary. It also allows the regulator to impose discretionary licence conditions on clubs relating to fan consultation.
Fans are the foundation of any club, and putting in place a supporter engagement threshold requirement recognises that they must be consulted on key decisions that affect their club. The Government have also looked to protect fan views, even in the worst-case scenario of a club entering administration. That includes the addition of a requirement to continue taking the views of fans into account when making decisions in insolvency proceedings, as long as the club retains the power to make decisions about the relevant matters.
Mr Betts
On a general point, when we talk about fans and fan groups, who defines who they are and the relevant ones? That is a really important point. Coming back to our club, Sheffield Wednesday, we have more than 20 different fan groups. That is also true of other clubs. Talk to the EFL, because it often struggles to engage or know who actually represents fans, as opposed to two or three people who have got together to name themselves as a group. How are we going to deal with that? As fans become an integral part of the process, who decides who the relevant groups are?
Stephanie Peacock
I appreciate that point. We will come on to discuss that in relation to schedule 5, and I will give a fuller response then.
Question put and agreed to.
Schedule 4 accordingly agreed to.
Clause 19
revocation and cessation of operating licence
Mr French
I beg to move amendment 106, in clause 19, page 13, line 19, at end insert—
“(c) inviting the club to make representations about the proposed revocation, and
(d) specifying the means by which, and the period within which, such representations must be made, which must be a period of not less than one month beginning with the day on which the notice under subsection (3) is given.”
This amendment allows clubs to make representations about the proposed revocation of their operating licence.
Clause 19 concerns the revocation and cessation of an operating licence granted to football clubs. That is understandably a crucial provision that goes to the heart of how the Government’s new regulator will exercise its most serious power, the ability effectively to remove a club from the regulated football pyramid by taking away its licence to operate. Let me clear from the outset that we support an independent regulator that can intervene when standards are seriously breached but, as with all powers of this kind, the devil is in the detail. Our task in this Committee must be to ensure that the regulator’s powers are proportionate, transparent and accountable.
Clause 19 provides that the regulator may revoke a licence if the club in in breach of licence conditions or if there are grounds to believe that the licence should never have been granted. In principle, that is entirely reasonable, but the consequences of revocation, for clubs, fans and communities, are potentially devastating. This is not the revocation of a licence to sell alcohol or to host events late into the night; it is the revocation of a licence to participate in the life of a community—in many cases, the cultural soul of a town or city. That power should not be exercised lightly, so I must raise several matters with the Minister.
First, what thresholds and safeguards are in place to ensure that revocation is used only as a last resort? Will the Government’s regulator be required to consider less draconian alternatives—such as conditional compliance periods, fines or a change in ownership—before resorting to the total revocation of a licence? Secondly, what procedural protections exist for clubs facing this threat? As it stands, there is no right of appeal, which is why I tabled amendment 106, which would allow clubs to make representations about the proposed revocation of their operating licence.
These are serious matters. The Government’s regulator is empowered to act in the interests of the game and to uphold high standards of governance, transparency and financial responsibility. But with such powers must come robust safeguards, and that is where the clause as drafted falls short. As it stands, there is no explicit requirement for the regulator to notify a club of its intention to revoke the licence, or to invite the club to make representations, before such action is taken. In effect, the regulator could move straight to revocation, without a formal process that allows the club to defend itself, explain its actions or offer remedial steps. That is not due process, it is not natural justice, and in any other regulated sector such an approach would be wholly unacceptable.
Stephanie Peacock
As you say, Sir Jeremy, we will speak in detail about the revocation or suspension of an operating licence when we debate clause 19 stand part, so I will save my detailed remarks for then.
To respond directly to the shadow Minister’s questions, there is an appeals process, and clubs can make representations; I will outline how. I thank him for his amendment, but the Bill already provides sufficient opportunity for a club to make representations ahead of its provisional licence being revoked. If a club persistently fails to meet the test for a full licence, clause 18(4) requires the regulator to give it notice inviting it to make representations.
There is a high bar for the revocation of a provisional licence under clause 19. The regulator must be satisfied of three things: first, that the test for a full operating licence is not met; secondly, that the club in question has persistently and without reasonable excuse failed to take reasonable steps to meet the test; and, finally, that there is no reasonable prospect of the club meeting the test within a reasonable period, even if it is given more time. In the unlikely circumstance that that high threshold is met, clause 18 sets out requirements to notify the club and allow it to make its case one last time. Specifically, if the regulator is minded to revoke a club’s provisional licence, it must give the club notice explaining why and invite it to make representations.
Only after that, if the regulator is still convinced that there is no reasonable prospect that the club will obtain its full licence, even given an extension, it can revoke the club’s provisional licence. In every case, the club will have been given adequate opportunity to make formal representations on the issue, in addition to the informal constructive engagement that we expect the regulator to have with the club regularly throughout this period. It is not necessary or proportionate for the club to be given another opportunity to make further representations as the amendment proposes.
If, after all that, the club believes that the regulator has taken the wrong course of action, there is further recourse through the appeals process. The club will be able to request that fresh decision makers at the regulator reevaluate the decision through an internal review. Alternatively, the club may appeal directly to the Competition Appeal Tribunal. If the tribunal decides to hear the appeal, it will do so on the merits of the case, so it will reconsider the evidence and may substitute its own decision for that of the regulator; it may, therefore, reverse the decision to revoke the club’s licence. That is another way that the regulator can be held to account and its decisions can be scrutinised. For those reasons, I ask the hon. Gentleman to withdraw his amendment.
Mr French
The Minister has outlined the initial process before revocation is determined by the regulator. As I explained in my lengthy speech, which I will not seek to repeat, the amendment would give clubs a say if they believed a decision reached by the regulator was wrong. The Minister was clear about the tribunal approach if a club is not happy with a decision, but as I have outlined previously, my fear is that clubs will end up spending more time in court than they will focusing on the pitch and on the game. The official Opposition believe that an appeal process at that point would be more beneficial than a legal route.
Stephanie Peacock
As I said, clubs can make representations to the regulator and ask the regulator to look again, and beyond that there is the appeals process. As with all aspects of appeals process, the key considerations are the expertise of the judiciary, the tribunal’s experience and familiarity with the policy, speed and cost. We think the Competition Appeal Tribunal is the best option for balance. It is an internationally well-respected tribunal which offers time and cost-efficient options, with flexible case management to expedite urgent cases and bring in appropriate expertise. We believe that that avenue and the internal review process make adequate provision in the Bill and that the hon. Gentleman’s amendment simply is not needed.
Stephanie Peacock
Clause 19 details revocation of a club’s provisional operating licence for failing to progress to a full licence, and a licence ceasing to have effect. For the revocation to occur, the regulator must satisfy itself of three things: first, that the test for a full operating licence is not met; secondly, that the club in question has persistently and without reasonable excuse failed to take reasonable steps to meet the test; and finally, that there is no reasonable prospect of the club meeting the test within a reasonable period, even if given more time. The regulator should engage with the club throughout this period. We expect that, through constructive dialogue, a solution can be found that avoids this drastic step in all but the most serious of cases.
The regulator must notify the club of its decision and provide its reasoning. Revocation must not take place before the end of the current season, to reduce as much as possible the impact on ongoing sporting competitions. A licence automatically ceases to have effect only when a club stops operating a team in specified competitions, the most likely cause being that the club is relegated from the specified competition and is therefore no longer in scope of the regulator.
Mr French
I am trying to get clarity. Again, I will happily accept it in writing if the Minister does not have the answer today. Waiting until the end of the season before revoking a licence is entirely sensible, but what would that mean for relegation and promotion? For example, if a club is mid-table and the regulator decides its licence should be revoked, that will have a direct impact on the competitive nature of the league. Has any thought been put into whether, for example, that may mean only two teams are relegated that season, because one has lost its licence? How might it work in practice?
Stephanie Peacock
Where possible, we want to reduce any impact on ongoing sporting competitions. The hon. Gentleman presents me with a hypothetical scenario. I think it would be best if I respond in writing to him.
Regarding the circumstances when a licence automatically ceases to have effect, it will only happen when the club stops operating a team in specified competition. The most likely cause of that is a club having been relegated and therefore no longer being in scope. I commend the clause to the Committee.
Mr French
I will not rehash the debate we have already had on the amendment. We were seeking greater transparency and a greater say for clubs at risk of losing their licence, which, as I have explained, is the ultimate sanction and would cause enormous damage to clubs and the communities in which they operate through job losses, and impact on the game and on fans. I would appreciate the Minister giving more clarity on how this will work in practice. These situations are hypothetical, but realistic, and would have serious consequences for not just the individual clubs, but the leagues and how they operate.
We believe strongly that promotion and relegation should be based on competition on the pitch. However, in the extreme example of a club breaching the licence so significantly that it is revoked, which might more realistically happen at the lower end of the pyramid, we need to have a greater understanding of what that means for relegation. All clubs deserve transparency in that regard. We have seen much speculation in recent years around change of ownership—I will not mention the clubs involved as some of the legal cases are ongoing—what that might mean for relegation and the significant financial consequences it may have for other clubs. It would be greatly appreciated if the Minister provided guidance on that in writing so that all Members can have a greater understanding of how it will work in practice.
Baggy Shanker (Derby South) (Lab/Co-op)
Will the Minister say whether a good licensing regime and, if necessary, revocation of licences would prevent clubs from going into full administration—as in the example of Derby County that my hon. Friend the Member for High Peak described—and the knock-on effect of that on supporters, suppliers and the local community? A licensing regime should prevent full administration and be able to deal with problem clubs at a much earlier stage.
Stephanie Peacock
My hon. Friend raises an important constituency point. I do not want to comment on particular clubs and predict the action the regulator may or may not take. We hope that the Bill will raise the bar across the board and prevent clubs from getting into difficulty, but I do not want to be drawn on the specifics.
We have been clear that this is not a zero-fail regime. I will endeavour to write to the shadow Minister regarding the complex, but important, hypothetical situation he has proposed.
Mr French
I appreciate the Minister committing to that. The example just mentioned by the hon. Member for Derby South needs fleshing out as well, because clubs get into financial difficulty as a matter of course; points are therefore deducted mid-season, as we have seen, or, in the worst cases, the club goes into administration. The tests for the licence are about financial prudence and sustainability, so the hon. Gentleman makes a fair challenge.
What would happen if a club went into administration? Would the regulator seek to change the owner to allow the operating licence to continue, for example, or would the club, having lost the licence, then reapply via a new owner? The consequences would be dramatic. One would automatically assume that a club that no longer had a licence would have to start at the bottom of the football pyramid and come back up again, as we have seen in the past. Can the Minister add clarification of that important example to her letter?
Stephanie Peacock
Absolutely. We will come on to the owners and directors test later in the Bill Committee; perhaps we can explore this further at that point. The one point I would make to the shadow Minister and to my hon. Friend the Member for Derby South is that the aim of the regulator is always to minimise disruption to ongoing sporting competitions. I will add clarification on that when I write to the shadow Minister about the complex scenario he proposed.
Question put and agreed to.
Clause 19 accordingly ordered to stand part of the Bill.
Clause 20
Mandatory licence conditions
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause requires the regulator to attach full mandatory licence conditions to the provisional and full operating licences for all licensed clubs. These are basic and fundamental requirements of the whole regime and so apply to all licensed clubs, regardless of their individual circumstances.
The mandatory conditions vary in their aims. They are set out in schedule 5, so we will cover them in more detail, but to summarise briefly, the conditions on financial plans and annual declarations are about ensuring that the regulator has the relevant and timely information it needs to regulate effectively. That includes financial risk assessments, plans for managing financial risks, details on income and expenditure, and contingency plans in the event of a shock such as relegation.
The corporate governance condition introduces basic requirements to report against the club corporate governance code of practice published by the regulator. This reporting mechanism will mean that clubs are transparent about board structures, decision making processes and equality, diversity and inclusion.
The fan consultation condition establishes a baseline level of fan engagement that requires clubs to consult fans on specified matters. This will ensure that clubs have a framework in place to regularly meet and consult a representative group of fans on key strategic matters at the club, and on other issues of interest to supporters. This will work in tandem with the freestanding duties, such as those protecting club heritage and other key areas.
The annual declaration condition requires the club to submit a declaration on any matters that should have previously been notified, or to confirm that there are no such matters. I commend clause 20 to the Committee.
Mr French
As outlined by the Minister, clause 20 requires the IFR to attach four mandatory licence conditions to the each club’s operating licence, whether provisional or full. This includes a requirement for the club to submit a financial plan, either annually or at more frequent intervals. I would be interested to hear the Minister’s views on how frequent she believes is reasonable; is that semi-annually, for example?
The club must also submit and publish a corporate governance statement explaining how it is applying the IFR’s corporate governance code, and regularly consult its fans. I think we need some clarity about how that will work in practice. The hon. Member for Sheffield South East raised the example of Sheffield Wednesday and multiple fans’ groups claiming to represent the club. I think that that needs some fleshing out so that the regulator is clear about what that consultation looks like. Obviously, that will be different for each individual club, which should, hopefully, know its fans better than anyone else.
Last, there is a requirement to submit an annual declaration of any material changes in circumstances affecting the club. Again, we would argue that that needs to be very clear to clubs, particularly if there is any—
Stephanie Peacock
I appreciate the shadow Minister’s comments. I will address them in detail when we come to the relevant debate.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Schedule 5
Mandatory Licence Conditions
Mr Betts
They would, and therefore the club disappears. No one wants to see that. The whole purpose of the Bill is to stop clubs disappearing, to stop what happened to Bury, and so there is a gap in the legislation, because what happens in that situation? It nearly happened at Reading—the club nearly disappeared, but in the end it was a last-minute sale. If the owner had not sold it at the last minute, however, the EFL has no powers to deal with it, and the regulator will not either. The regulator has the power to say: “You shouldn’t be owning the club. You shouldn’t have a licence to operate the club, because of what you have done, you haven’t got the funds, your source of funds is inappropriate”—all those things—but then what happens?
I am saying to the Minister that the whole intention of the Bill is to ensure that the clubs that fans have supported for years, for generations—for communities, it is their club—do not disappear, go out of business or lose their place in the competition they are playing in. Clubs might get relegated, that is fine, but they should not lose their place because they have an owner who is not fit and proper, and does not meet the test. We have to find way of dealing with this, which the Bill does not do as drafted.
Stephanie Peacock
I thank my hon. Friend for moving the amendment and tabling amendment 8. To be the owner of a football club is to be the custodian of a treasured and historic community asset. That should be an honour, but it also comes with great responsibility. We recognise that in the past, however, it has typically been the actions of unsuitable custodians that have put our historic clubs at risk of collapse. It is vital that the regulator has the necessary powers to protect clubs and their fans from such owners. We therefore completely recognise the intent behind the amendments—to ensure that the regulator has the necessary enforcement mechanisms to back up its regime and guarantee protection from unsuitable owners.
I reassure my hon. Friend that the Bill already suitably achieves that. The regulator already has the power to require a club to make constitutional changes if the regulator considers that that is an appropriate way to secure an unsuitable owner’s removal. It has a range of strong powers to enforce against any non-compliance. The powers include the imposition of sanctions, such as financial penalties, all the way up to forcing divestment, which would force an owner to divest their stake in the club at no minimum price, directing them to take no part in the running of the club in the meantime. If necessary, the regulator can appoint an interim officer to assist the club operating effectively in the owner’s absence.
To respond to the point made by the hon. Member for Spelthorne in an intervention—a point made by my hon. Friend the Member for Sheffield South East a number of times—that ability to isolate and remove unsuitable owners and officers should mean that a club never has to have its licence suspended or revoked. A clubs’ fans should therefore not have to suffer the consequences of bad leadership. To be clear, because the licence is separate from the owner, the removal of an owner will not impact the club’s licensed status. We will come on shortly to discuss owners and directors, so I shall reflect on my hon. Friend’s comments ahead of that debate. I hope to provide him with reassurance, but we will not support his amendment.
Stephanie Peacock
I am saying that the regulator may—I am not saying definitely will, because I do not want to get into hypotheticals of what it will do or not—appoint an interim officer to assist a club to operate effectively in the owner’s absence. To be clear, the club’s licence is separate from its owner, so the removal of the owner does not impact the club’s licensed status.
Mr Betts
In further debate, we will come back to the issues of owners and directors, to which the Minister referred. As I said at the beginning, this was an exploratory amendment for discussion of the whole issue, which is important, but with her reassurance. at this point I will not press the amendments to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Betts
Assets of community value have been looked at in a number of different ways over time. Some clubs are already in this situation because their fans have moved to do this. That is true at Sheffield Wednesday, where fans moved some time ago to have the ground designated as an asset of community value. It does not provide a complete safeguard against an owner, who wants to cause mischief and upset for fans and the club, transferring the ground for another purpose, but it provides more of a safeguard than simply having it as a ground without any particular protection, as is currently the case.
The Minister referred to what the MHCLG might be doing in this area on the rules around planning. Is she prepared to look at using assets of community value to give further protection and to comfort fans that football grounds hold a different status to other assets that owners, from time to time, might want to change for another purpose?
Stephanie Peacock
I thank my hon. Friend for tabling the amendments. I know we have discussed this issue a number of times; it has always been a pleasure to do so, and I recognise its importance. Home grounds are often the most important asset that a club owns, so that is why I want to thank my hon. Friend for placing a real focus on them.
The significant financial and heritage value that grounds hold is why the Bill has strong protections to prevent home grounds 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 supporter groups have obtained for their home grounds. We would expect the regulator to welcome any club that wishes to gain community value status for an asset as another way to protect their home ground.
However, we are confident that the legislation will provide the necessary protections to address fan concerns and keep these important assets protected without mandating this status. Additionally, while assets of community value have proven beneficial for many clubs where no other protections have been in place, these amendments may place an unnecessary burden on clubs. As currently drafted, they would require clubs to either go through what can be a lengthy process with the relevant authority or make structural changes to the constitutional document of a club. Given that significant protections are already in place in the Bill that deliver the necessary safeguards, it is difficult to justify any additional measures for all regulated clubs, especially as a mandatory licence condition.
I really want to reassure my hon. Friend, as I know that home ground protections are of particular importance to him, that the Government have already committed to asset of community value reform in our manifesto, and this is something that the recent English devolution White Paper from the Ministry of Housing, Communities and Local Government commits to.
Mr French
I have a lot of sympathy for the amendment tabled by the hon. Member for Sheffield South East. The Minister argues that this does not need to be addressed through the regulator, but will guidance be published for those fan groups who are keen to ensure the long-term future of their grounds? What guidance will be published to ensure that any fans in this situation have clear advice from the Government on the best routes to protect their ground?
Stephanie Peacock
I am saying that I am confident the legislation will provide the necessary protections to address fan concerns, but I also draw the Committee’s attention to the work of the Ministry of Housing, Communities and Local Government on the specific issue of assets of community value. Of course, that does not fall into my portfolio, but I am very happy to commit to speaking to my relevant counterpart and adding to the letter that I have earlier committed to writing. This is something that I am sympathetic to, but I do not have the ability to make that commitment today. I believe that the work the Ministry is doing is very interesting and relevant to what we are discussing. For that reason, I am unable to accept my hon. Friend’s amendment, and I ask that he withdraws it.
Mr Betts
I thank the Minister for that reply; it is helpful in moving the discussion in the right direction. I appreciate that she cannot commit on behalf of another Department and other Ministers, but she has indicated that work is going on in this area. Again, it would be helpful if she could encourage her colleagues in the MHCLG to come forward with that further information before we get to Report. If they are going to write to us about the other issue, they could write to us about this as well. It would be extremely helpful if that could be done, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr French
As I have made clear, we believe that some of these issues are important, but we believe that they should be addressed on a voluntary basis, which is what has driven progress in the game. We do not believe that it should be mandated in statute at arm’s length by the Government. I have been clear in making that distinction in my comments.
Requiring clubs to report annually on their EDI action is not a proportionate or effective way to achieve those broader aims. It amounts to moral licensing, encouraging clubs to go through the motions rather than to take meaningful steps to foster a welcoming culture in ways that make sense for them.
My amendments would restore clarity to the regulator’s remit. They would ensure that schedule 5 is focused on what really matters: clear lines of accountability, proper oversight of directors and owners, and a robust governance structure that protects clubs from the kind of catastrophic mismanagement that we have seen in the past. Football has always been about community; it is in the dressing rooms, on the terraces and in the shared heritage of our towns and cities that the game’s values are lived. Let us not fall into the trap of thinking that they can be legislated for by line item in a regulator’s reporting requirements. It is for that reason that I tabled these amendments. I urge the Minister to reflect seriously on whether this part of schedule 5 is truly consistent with the aims of the Bill and the traditions of our national game, which is inclusive by default.
Stephanie Peacock
I thank the hon. Gentleman for the amendments, but I disagree with the attempts to remove the references to EDI from the Bill. I will outline why and then, towards the end of my contribution, I will respond to his specific questions.
The Government believe that equality, diversity and inclusion is a key part of good corporate governance. As my hon. Friend the Member for Great Grimsby and Cleethorpes outlined, it is common practice. Research shows that diversity on boards and in organisations promotes better governance, decision making and transparency, all of which, in turn, contribute to improved financial sustainability. The relationship between diversity and better corporate performance is recognised by the Financial Reporting Council and the Association of Chartered Certified Accountants.
The industry is already taking action in this space, and the shadow Minister shared some examples, which I will not repeat. In November 2024, the FA published its four-year equality, diversity and inclusion strategy, titled “A Game Free from Discrimination”. It set out a long-term commitment to celebrate and promote diversity in English football, as well as an ambition to tackle all forms of discrimination in the game.
At a club level, in May this year, Chelsea’s incredible work in that area was recognised, with the Premier League awarding them the advanced level of its equality, diversity and inclusion standard—the highest level that can be awarded. All clubs in the Premier League, and some that have since been relegated from it, engage with the Premier League equality, diversity and inclusion standard initiative.
The Bill does not put EDI in football—it is already there and it is being celebrated by the industry. It is therefore right that, as a regulator that will be introducing a corporate governance code and requiring clubs to report against that, it covers EDI. The regulator will look to work co-operatively with stakeholders, draw on the expertise of the sector and add industry initiatives.
As with fan engagement, this will be a statutory baseline. Clubs that already champion equality, diversity and inclusion will not have an additional burden placed on them, other than having to periodically report on those things. Under the corporate governance code, clubs will simply be required to explain how they are applying the code and what actions they are taking to improve equality, diversity and inclusion—and nothing more. That is not onerous; it is a very helpful transparency measure, and it speaks to the question that the shadow Minister posed. I want to be very clear: the regulator is not going to prescriptively micromanage each club’s board or set targets and quotas on EDI. That is simply not the role of the regulator and would cause a significant burden to both the regulator and clubs. Ultimately, this is only a reporting requirement that all clubs should be able to meet.
Mr French
I appreciate the clarity provided by the Minister in outlining what she believes the regulator should or should not do. On quotas, can we be absolutely clear that the Government’s intention is not for there to be a mandated quota for clubs to have certain elements and different parts of the community on the board? Is that the clear intention in what the Minister is saying?
Stephanie Peacock
Absolutely. I will repeat the wording I just used in the Committee: to be very clear, the regulator is not going to prescriptively micromanage each club’s board or set targets or quotas on EDI. We will have that in Hansard twice now, so the intention should be very clear. Therefore, I hope that the hon. Member will seek to withdraw his amendment.
Mr French
I appreciate the clarity that the Minister provided on quotas, because that particularly concerns Opposition Members. As I have mentioned—I will not seek to repeat my comments—we are concerned about mission creep and scope creep of the regulator and what the Bill is designed to do. I made it clear earlier that I believe that football is inclusive and that it has done amazing work, when we compare the state of football 20 or 30 years ago with where we are today. We see that on the terraces at most clubs every single week, and we certainly see that with the national team, which most of the country comes together to support, particularly in big tournaments.
Mandating EDI reporting and turning it into a bit of a tick-box exercise—that was highlighted in some of the Minister’s comments—moves away from what we believe to be the valuable part of this work, which is to drive forward inclusivity in clubs and increase the fan base, which is good for clubs, by expanding beyond some of the traditional support of the game. We fear that having this provision in the corporate governance code, in the way it is written, will lead to unintended consequences. It will drive certain agendas, and we fear that clubs will walk into a number of traps accidentally.
We have tabled these amendments because we believe that EDI reporting, especially in certain areas where it is contested, should not be put on clubs in this way. The voluntary scheme in football has worked much more powerfully over the years, and that is proven in the experiences at football grounds around the country.
Mr French
I beg to move amendment 137, in schedule 5, page 102, line 2, at end insert
“including the club’s official charity.”
This amendment would make clear that the activities of a football club’s official charity can be counted towards it meeting the corporate governance code.
It is a pleasure to speak in favour of the amendment. The Bill as drafted does not specify that the activities of these charities—often known as community trusts—count when taking into account actions taken by the club in relation to meeting the corporate governance code, so I start by asking the Minister why the Bill does not contain explicit recognition, in the governance reporting requirements, of the work done by community trusts. I would appreciate it if she could pick that up in her comments.
As both the shadow Minister for sport and the Member of Parliament for Old Bexley and Sidcup, I am in a fortunate position: I get to see week in, week out how sport, and football in particular, can transform lives. I also get to see what that looks like in practice, not just in headlines or strategies, but on the ground—in local parks, youth centres and school halls across my constituency. I know that other Members will have similar experiences in their own.
In my constituency, we are lucky to benefit from the extraordinary work undertaken by Charlton Athletic Community Trust. It is no exaggeration to say that CACT, if we want to call it that—I do not really like that wording—has become one of the most respected and impactful community foundations affiliated with a professional football club anywhere in the country. It often wins awards at national level for that work. Its work extends far beyond the pitch and well beyond the borough of Greenwich, where the training ground and the stadium—the Valley—are located, and deep into my borough of Bexley, the wider south-east London area, and Kent. In fact, Charlton have been delivering services and support in Bexley for well over a decade.
Charlton’s community trust delivers youth services on behalf of Bexley council. It provides safe spaces and structured activities that help young people to develop skills, build confidence and stay on the right path. In today’s world, where young people, as most Members would recognise, face growing pressures and limited opportunity, that kind of work is more vital than ever.
Although Charlton are not a Premier League side just yet, one of the flagship initiatives that it runs is the Premier League Kicks programme, which operates across the borough in areas such as Thamesmead, Slade Green and Erith—places where young people often face the dual challenge of limited opportunities and exposure to risks—as well as in my area of Old Bexley, Sidcup and Welling. The Kicks sessions are free weekly football sessions, but they are about much more than just sport. They take place in safe and welcoming environments and are led by trained staff. Young people aged between eight and 18 can build confidence, learn leadership skills and receive mentoring from positive role models—often young adults who were once participants in the scheme.
What makes the Kicks programme in Bexley particularly valuable is its consistency and partnership working. Sessions are delivered year round in collaboration with the police, youth services and local schools. This is not a one-off scheme or a publicity stunt. It is part of a broader, integrated approach to youth engagement and early intervention that genuinely helps to steer young people away from things such as crime and towards the opportunities that football presents.
Charlton’s work goes far wider than just youth engagement, although I have seen that recently at Hurstmere school in my constituency and when Charlton brought the Premier League trophy to a local park. It was incredible to see the reactions of young football fans to the trophy. Just remember not to touch it—a mistake that I made on the day, and I was rightly told off.
In Bexley, Charlton are a contracted delivery partner for the council’s early help youth services—statutory support that has been delivered to a high professional standard for many years. Importantly, the trust has developed deep and lasting partnerships in Bexley and Greenwich, not only with the local authority, but with the NHS, local schools, the police and the voluntary sector. That joined-up approach is what makes its work sustainable and successful. As I said, I am sure that many other clubs around the country are doing such work.
Football Governance Bill [ Lords ] (Sixth sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 10th June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 10 June 2025 - (10 Jun 2025)
The Committee divided: - Ayes: 5 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 13 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 13 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 13 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a pleasure once again to serve under your chairmanship, Mr Turner. I thank the hon. Member for Old Bexley and Sidcup for his amendment. He made some important points in his contribution, including his reference to the Kicks programme. He also pointed out an event in his area where he was able to see the Premier League trophy; that is a fantastic tour involving lots of grassroots and other clubs. I was really pleased to visit one such club in Mr Speaker’s Chorley constituency, and I will take this opportunity to wish Mr Speaker a very happy birthday. I am sure that other Committee members will join me in putting that on the record.
We do not believe, however, that the change in amendment 137 is necessary. I will outline why and respond throughout my speech to some of the hon. Gentleman’s points. As drafted, the Bill gives flexibility to a club to detail what action it is taking to contribute
“to the economic and social well-being of the local community with which it is associated”.
This provision was introduced through a Government amendment made in the other place to allow the regulator to include clubs’ community contributions in its corporate governance code. The regulator will work with the industry to design the code to ensure that it is relevant to clubs, the challenges they face and the unique nature of the responsibilities associated with custodianship of a football club.
If a club details, in its statement, its work with or through its official charity, that would of course be accepted by the regulator. That is the opposite of what the hon. Member for Old Bexley and Sidcup said. He referred to scaling back charity work, but that is absolutely not what we will see as a result of the proposals.
Let me detail some of the specifics. If a club is donating to or funding bodies that are not its official charity, that is also a contribution to the community and could be included. We have tried to keep this as broad as possible. To share something from my constituency and town, Barnsley FC Community Trust is a great example of a charity that is closely connected to a club. The community trust held its conference on Monday, and I was pleased to send them a message. One purpose of that conference was to raise the charity’s profile across Barnsley. It helps between 10,000 and 15,000 people each year, who range in age from two to 100 years old. I will not detain the Committee by outlining the work that the trust does, but it ranges from education to health, social inclusion and sports participation, not just in and around the centre connected to Oakwell, but across the whole of Barnsley and my Barnsley South constituency.
Barnsley FC could use their work with the trust to show how they contribute to the economic and social wellbeing of their community, and I put on record that they very much do that in my area. But it is not just Barnsley FC that do such work; many clubs carry out great work in their communities, whether through their official charities or not. Portsmouth FC’s Pompey in the Community and the Sheffield Wednesday FC Community Programme are just two examples; I am sure that hon. Members across the Committee have examples from their communities. It is important to shine a light on those contributions to the local community, and that is why a club’s report on their corporate governance will be published online to allow public scrutiny, so that they can be held accountable for their actions, or inaction. We believe that this will encourage transparency and, as with the approach to corporate governance more widely, encourage greater action in this space.
Above all, that approach will allow flexibility for each club to comply in accordance with their resources and size in a way that is suited to the needs of their local community. Additionally, when the regulator publishes its corporate governance report on clubs, best practice can be shared with the industry. We therefore believe that the Bill, as drafted, sufficiently allows clubs to demonstrate the actions they contribute to their communities. I hope that the hon. Member for Old Bexley and Sidcup will withdraw his amendment.
Mr Louie French (Old Bexley and Sidcup) (Con)
It is a privilege to speak again under your chairmanship, Mr Turner. I congratulate you and the city of Hull on the Challenge cup victory at the weekend, which probably does not please Mr Speaker on his birthday, but such is sport.
Moving back to football, before the lunch break, I explained why the Opposition felt the need for amendment 137. It is a technical amendment that would make it very clear that the official charities and trusts of the clubs would count towards the corporate governance structure. I have listened carefully to the Minister’s comments and appreciate the feedback that she has given. However, we would still like to see the amendment made to provide clarity to clubs, so we will press it to a Division.
Question put, That the amendment be made.
Mr French
I beg to move amendment 131, in schedule 5, page 103, line 16, at end insert—
“Agents fees
11A (1) An agents fees condition is a condition requiring a club employing an agent to cap their fees.
(2) The agents fee cap will be set by Regulations subject to approval by both Houses.”
My amendment proposes that clubs regulated by the Government’s new regulator should be required to cap the fees paid to agents, because, as many fans know, an ever-increasing amount of money is leaving the football pyramid to agents. The level of the proposed cap would be set through regulations, subject to the approval of both Houses of Parliament, and determined following consultation with clubs and leagues.
Let me set out why we believe the measure is necessary—not as an attack on agents or their role in the game, but as a proportionate, reasonable step towards a more sustainable, transparent and responsible football ecosystem. If we are serious about football reform and safeguarding the long-term financial health of clubs up and down the pyramid, we must be prepared to tackle the excesses and distortions that have taken root in the sport.
Few are more obvious or pressing than the spiralling sums paid to agents. According to the Football Association, in the year from February 2024 to February 2025, Premier League clubs alone paid more than £409 million in agent fees and intermediaries. That is more than the total broadcast revenue of a number of Championship clubs in 2022-23; or more than double the commercial revenue of several clubs for that season; or almost three times the matchday revenue of a number of Championship clubs in the same season.
This is not wages or transfer fees, nor is it investment in the matchday experience for fans—it is money paid out purely for representation costs, often for work done on both sides of a deal. To put that into context, it is more than the entire annual income of many Championship clubs combined, and this is not just a Premier League problem. Although the sums are relatively smaller further down the pyramid, the pressures are arguably even more acute for clubs with less budget.
My amendment seeks to introduce a straightforward principle—that there should be a fair and proportionate limit on the fees that clubs can pay to agents, and that the limit should be set by regulations made by the Secretary of State subject to affirmative procedure. This would help to ensure full parliamentary oversight and allow future Governments to adjust the cap based on changing market conditions, evidence from the Government’s regulator and broader economic factors in football.
There is already a strong precedent for this kind of intervention. For example, FIFA’s agent regulations now attempt to impose limits on the commissions payable to clubs and players alike, but those rules remain subject to legal challenge and uneven enforcement across jurisdictions. In the absence of effective international enforcement, there is an opportunity for this to be included in the scope of the Government’s regulator as a core part of the financial sustainability of English football.
The Chair
Before we move on, there are one or two points I want to raise. First, we are expecting Divisions on the business in the main Chamber. If there is a Division, we will suspend the Committee for 15 minutes for the first Division, and 10 minutes’ injury time thereafter if required. Secondly, it is a bit warm in this room, so Members are welcome to take off their jackets.
Stephanie Peacock
I thank the hon. Member for Old Bexley and Sidcup for his amendment 131. Football is a worldwide industry, and the activity of football agents continues to be a significant contributor to the financial pressures on English football, as well as internationally. We recognise that this is a key issue, which is frequently raised by the industry. Agent fees are a significant cost pressure, particularly on clubs in the Premier League and the Championship. The largest fees are often paid in international transfer activity, where regulation is especially difficult without a global framework. There are also concerns about dual representation and conflicts of interest, which can further inflate costs.
However, the regulator cannot be the solution for all of football’s woes. The Bill establishes a club licensing regime with a tightly defined scope, in which agents are not included. The fan-led review recognised that and recommended pursuing an international and game-wide solution to football agents, rather than trying to address the issue in isolation. Acting unilaterally may end up being disadvantageous to English football. It is right that we follow the review’s recommendation not to try and address the issue in isolation, which reflects the unique scale and complexity of English football’s place in the global game.
I want to make it clear that the Government acknowledge the importance of this issue, and will continue to work with the industry on agents and fees. We will work closely with governing bodies to support full compliance once legal proceedings conclude in the courts, and to drive forward our shared ambition for transparency, integrity and best practice across the game. We will keep this issue under review, but for those reasons, I ask the hon. Member to withdraw the amendment.
Mr French
I have listened carefully to the Minister’s comments and acknowledge a number of the points that she made. The purpose behind the amendment was to have the discussion about the impact of fees on the game. I accept some of her points about the international nature of the transfer market. I would like to continue discussing this with her and the regulator once in situ, because I think there is something we can do here, either formally or informally, to move the game along so that it stops losing so much money to agents’ fees. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Stephanie Peacock
I beg to move amendment 64, in schedule 5, page 103, line 18, after “specified” insert
“from time to time by the IFR”.
This amendment clarifies that the IFR may specify certain elements of the mandatory licence conditions from time to time.
The regulator will attach four mandatory licence conditions—the financial plan, the corporate governance statement, a fan consultation and an annual declaration—to the operating licence, both provisional and full, of each club. This means that all licensed clubs will need to comply with those requirements.
While the mandatory conditions are basic requirements that apply to all licensed clubs as standard, elements within them can be varied. For example, the regulator can specify when a club must submit and update a financial plan, or require that a plan contains additional information. As another example, the fan consultation condition can require that clubs consult plans at specified periods, which speaks to a point that my hon. Friend the Member for Sheffield South East raised earlier.
Government amendment 64 simply makes it explicit that the regulator can respecify these elements to the mandatory licence conditions from time to time. The licensing regime is designed to be flexible and proportionate, and the mandatory licence conditions are no different. For instance, a Premier League club’s financial plan is likely to be more detailed than one for a National League club. If a club’s circumstances change—for instance, if it gets promoted or relegated—the regulator should have a chance to respecify the mandatory licence condition to ensure that it remains proportionate.
The regulator also needs to be able to keep pace with developments in the industry and changes in best practice —for example, if there are innovations in financial plans or mechanisms for fan engagement. Government amendment 64 simply makes that explicit in the Bill.
Amendment 64 agreed to.
Question proposed, That the schedule be the Fifth schedule to the Bill.
Stephanie Peacock
The schedule outlines the mandatory licence conditions that the regulator will attach to all licences as standard, regardless of the club’s circumstances. Those conditions are related to core areas of financial management, corporate governance, fan engagement, and reporting. They will form the foundations for the overall improved standards and sustainability of a club. Long-term financial sustainability is at the heart of the Bill, and is vital to making clubs more resilient to financial difficulties.
The financial plan condition requires clubs to present a plan that allows the regulator to understand the risk profile of the club and its plans for mitigating risks if necessary. That will include contingency planning and plans to wind a club back to a sustainable state if it faces unexpected financial difficulty. Those are not overly onerous requirements, but basic business planning that most well-run clubs will already be doing. It is anticipated that the regulator will help clubs update their plans if they exhibit unmanaged risk. If the updated plan still exhibits excessive risk, the regulator can place discretionary licence conditions on a club to help them meet the financial resources threshold requirement. That ensures that clubs can be ambitious but, equally, that failing to achieve those ambitions does not put the long-term financial sustainability of the club at risk.
A key tenet of a well-run business is good corporate governance, and the regulator will look to instil that into all licensed football clubs through the mandatory condition. Corporate governance standards in the industry need improving, with many clubs lacking even the most basic of good governance arrangements, such as a proper, functioning board. In consultation with the Football Association and other relevant stakeholders, the regulator will prepare and publish a code of practice about the corporate governance of regulated football clubs. Through that condition, licensed clubs will be required to submit a statement detailing how they are applying the code of practice. That will include what action they are taking to improve equality, diversity and inclusion.
Given the rich variety of clubs and fanbases, good supporter consultation will look different from one club to another. The fan engagement licence condition has been designed to reflect that, empowering the regulator to impose specific requirements on the form and frequency of supporter consultation where necessary. That mandatory licence condition works in tandem with the fan engagement threshold requirement, which is in schedule 4. The mandatory licence condition will be the minimum requirement for all clubs.
Stephanie Peacock
I will address some of my hon. Friend’s points, if he bears with me for a moment. If I do not, I will be very happy to give way.
All clubs must regularly consult a representative group of fans or a group elected by the club’s fans to represent them on the relevant matters listed in the Bill. The regulator can specify that the group is formed via fan elections—an additional measure the Government added to ensure the fan group can be independent from the club. The threshold requirement in schedule 4 then empowers the regulator to go further on fan engagement, if needed. It allows the regulator to impose discretionary licence conditions on clubs relating to fan consultation. There are several types of fan engagement that could be used to meet that requirement. No one way has been specified on the face of the Bill in order to allow for a bespoke approach to be taken at each club. We expect, however, that we would likely look to utilise existing structures where appropriate. Those would likely be organisations such as supporters’ trusts or fan advisory boards, which are often key independent fan bodies.
To address the points made by my hon. Friend the Member for Sheffield South East, for the most part, individual clubs will be in the best position to understand the demographics of their fans. The regulator will be able to provide guidance for clubs on how best to consult fans, which will include how to approach consulting across a widespread fan base. It is, however, vital that they engage with a representative group of fans, and therefore, if a section of the fan base has not been engaged with, the regulator has the ability to specify the club should meet with them. That will ensure that clubs have an appropriate framework in place that allows them to meet regularly and consult the group on key strategic matters and supporter interest.
Clubs in the lower leagues will tend to have more a more local fan base, whereas larger clubs will tend to have fans from across the world. That diversity is part of the reason why the English football pyramid is so special. It is also why we want to implement proportional and flexible proposals that work for clubs across the pyramid. The regulator will implement a minimum requirement for fan engagement, which the regular fan consultations will be a significant part of, alongside protections for club heritage. I hope that answers my hon. Friend the Member for Sheffield South East. I am happy to give way if not, or he can contribute to the debate.
Stephanie Peacock
Perfect. The annual declaration condition requires a club to submit an annual declaration to the regulator, which sets out all the notifications that the club has made, or should have made, to the regulator in the preceding 12 months. Broadly speaking, these notifications relate to changes in the circumstances affecting the club that the regulator needs to know about to regulate effectively. That includes any non-compliance related to the club. A club will also have to issue a statement even if there are not any matters to notify the regulator about. That will create a formal touchpoint each year in lieu of any licence renewal; the emphasis will be on clubs to declare all relevant changes in circumstances and compliance against which they can then be held accountable.
Mr Betts
It is a pleasure to have you back in the Chair, Mr Turner. The Minister is doing all she can to deal with situations that will apply to most clubs. The problem is those owners that do not want to engage. They will try to avoid this responsibility because they see it as an infringement of their right to run their club in the way they want.
I have to come back to Sheffield Wednesday because Mr Chansiri has a track record on this. He set up an engagement panel with fans, but he invited the fan groups he wanted to invite. Worse than that, once someone goes into a meeting with him, they have to sign a statement to say that they will not divulge any of the things that happen in that meeting. It is a closed shop.
I sat down with a myriad of different groups including the supporters’ trust, which is the biggest fan group by a long way, and several other groups, including the women’s group and the 1867 group. We formed an umbrella group to try to bring all the fan groups together. The club spoke to the groups and said, “If you get involved in the umbrella group, you will not be allowed on the engagement panel.” It is either/or because that is seen as an attack on the club and the chairman. You could not make it up—well, you can make it up, because we can see how the club is run. That is the problem.
How do we get around that situation? I was told the other day, “The chairman engages with fans. He has actually had two meetings of five hours each with fans.” But he does not answer any questions. When I asked one of the officers at the club why he will not answer questions, they said, “Well, they wanted to know what his business plan was.” It is not a bad question to ask, and that is exactly what the regulator is going to have the powers to do.
I am still not absolutely certain on what happens when the club tries to control the situation. Does the regulator then arbitrate? Does the regulator come in and say what they think good fan engagement looks like? It would be very helpful if the Football Supporters’ Association were to be given some role in that, because it understands fan engagement and fan involvement better than anyone. It knows what happens on the ground, it knows the tricks that the clubs pull and it knows how genuine fan engagement can be developed and implemented. I am not sure a new regulator will necessarily have all that intrinsic knowledge about what happens at clubs. Some role for the FSA in this would be helpful. In particular, it would help when problems arise of the sort that I have just explained.
I am sure Sheffield Wednesday are not the only club where owners do not really want fans around—they just want them to turn up, pay their money and go away. The Chair probably cannot get involved in the debate, but I can see you nodding, Mr Turner, because I am aware that there have been a few problems at Hull in that regard in the past. I ask that the Minister provide a bit more of an explanation and flesh this out further. In particular, sub-paragraph 8(2) reads:
“So far as the condition requires consultation with persons within sub-paragraph (1)(a), the condition may require the club to constitute a group of such persons”.
I know immediately how some clubs will constitute that group, and it will not be proper fan consultation.
Stephanie Peacock
I am grateful to my hon. Friend for his contribution. We would obviously expect the regulator to build on relevant expertise internally and via consultation. I have worked with and met representatives of the FSA a number of times. I pay tribute to the work they do, and I am sure that is the sort of group that the regulator will very much draw on.
My hon. Friend will completely understand why I am slightly reluctant to comment on live examples. That does not mean that I am not sympathetic to the points he makes on behalf of his constituents. I draw his attention to my remarks about how, if a section of the fanbase is not being engaged with, the regulator has the ability to require a meeting with the club. Where an owner or a club are not engaging, or not engaging effectively, the regulator will be able to intervene.
Mr Betts
It is helpful of the Minister to have elaborated on that. Would she go a bit further and say whether she anticipates that the regulator will engage with the Football Supporters’ Association when difficulties arise and there needs to be an independent look at fan engagement with a club?
Stephanie Peacock
We have talked about the regulator engaging with a wide range of stakeholders. We anticipate throughout the Bill—in lots of clauses, not just this one—that it will absolutely engage with relevant stakeholders.
If a certain group of fans feel that they are being ignored or excluded, or that the owner is not engaging in good faith or appropriately, the regulator has the ability to step in and specify that they should be engaged with more frequently, and sanctions may be imposed if the owner is not behaving correctly. There are enforcement powers that the regulator can draw on. We are clear that, although the approach is flexible and bespoke for different clubs, the voices of fans should be heard.
Question put and agreed to.
Schedule 5, as amended, accordingly agreed to.
Clause 21
Discretionary licence conditions
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause relates to the discretionary licence conditions. Where needed, the regulator will use discretionary licence conditions to bring a club up to the required level of compliance with the threshold requirements. That will mean that the regulator is satisfied that the club can currently operate sustainably, and will be able to continue to continue to do so, in the financial, non-financial and fan engagement areas. Those conditions will be in addition to the standardised mandatory licence conditions. When applied, they will be tailored to the club’s specific circumstances and identified financial risk.
If a club is already meeting the threshold requirements set by the regulator, there will be no need to attach any discretionary licence conditions to that end. That means that the regulator can be light touch where appropriate, and that it does not need to directly intervene if a desired outcome is already being met.
Discretionary licence conditions could also be used to protect and promote the financial resilience of the football system. They will be used to resolve risks that might not threaten any one club significantly, but whose aggregated, correlated or multiplied effects may pose a significant risk to large parts of the football system or the pyramid as a whole. I commend the clause to the Committee.
Mr French
The clause formally sets out the regulator’s powers to attach, amend or remove discretionary licence conditions, which could bring a club toward meeting a threshold requirement or mitigate financial risks. It raises some concern about mission creep, so I hope the Minister will assure us that the regulator’s powers do not extend beyond those objectives. Should the regulator use the powers to effectively create new burdensome regulatory requirements, that would significantly change the purpose of the regulator.
Will the Minister please clarify what engagement the regulator will have with clubs to ensure they are aware of the discretionary licence conditions? Will there be any consultation or engagement with clubs prior to attaching or amending a discretionary condition? Will clubs have the ability to request a variation or removal of a condition? In what timeframe will that be processed?
If a club feels that a discretionary licence condition has been placed arbitrarily or punitively, how can it appeal or challenge the condition? What will the process look like, and what timescales will be used? Will the timescales be standardised, or will they be at the regulator’s discretion? Although some larger clubs may have the resources and budgets to appeal a condition, what support will be given to smaller clubs? Have the Government considered the potential merit of a tiered application based on the club’s size?
Aside from the concern about mission creep, it is important that these powers are exercised proportionately and based on evidence. Will there be any oversight of their use to ensure that happens? Subsection (4) states:
“The IFR may vary a discretionary licence condition where…the IFR considers that the condition is no longer effective, or…there has been a material change in circumstances”.
However, it fails to define what constitutes a material change in circumstances. The lack of such a definition leaves the door open for the Independent Football Regulator to vary conditions without sufficient reasons or evidence.
We ask those questions now because we are concerned about future legal cases if there is a lack of consistency and transparency surrounding how the conditions are applied. I would appreciate some answers from the Minister.
Stephanie Peacock
I am grateful to the shadow Minister for those questions. Throughout this process, we have been keen to reiterate that discretionary conditions must be proportionate to the club’s size and the league it plays in. We absolutely expect the regulator to engage thoroughly with a club before applying any discretionary licence conditions. Perhaps I could just draw on the conversation that we had in the previous debate in terms of fan engagement: I am hesitant to get into hypothetical scenarios, but it might be that, if a club is not effectively engaging with fans, that could be a discretionary licence condition if there is an obvious gap in what the club is doing. If the club does not believe the regulator has made a correct decision, it does have recourse through the appeals process, which is set out in part 9.
We want this to be a flexible regime so it can be light touch where appropriate. If the regulator does not need to attach extra conditions, it will not, but it will have that ability to make sure that all clubs are meeting the conditions they need to.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Clause 22
Scope of powers to attach or vary discretionary licence conditions
Mr French
I rise to speak on clause 22 of this important Bill, which provides the Independent Football Regulator with powers to attach, amend and remove discretionary licence conditions for individual football clubs. At face value, this clause offers the regulator flexibility to respond to particular risks or circumstances on a case-by-case basis. However, as with all regulatory discretion, the true implications lie in how such powers may evolve over time, be interpreted, or be expanded.
In this Committee, it is our role to ensure that what begins as a sensible framework for tailored intervention does not become the thin end of a wedge that risks overreach, centralisation and, ultimately, the erosion of club autonomy. I believe strongly that English football does need reform in certain areas, but I also believe in restraint, clarity of purpose and fidelity to the principle that football clubs, however commercial they may have become, are civic institutions first and foremost. They belong to their communities, not to Whitehall, not to arm’s length bodies, and certainly not to ministerial discretion.
Clause 22, as drafted, gives the Independent Football Regulator a wide and open-ended ability to impose additional conditions on individual clubs—conditions that are not part of the baseline threshold requirements in the Bill, but which the regulator may, in its own judgment, decide are appropriate. We should acknowledge that there are circumstances in which such powers might be necessary. For example, where a club has narrowly avoided insolvency, has a particularly opaque ownership structure, or is operating under unusual financial pressures, the regulator may wish to impose temporary conditions to help safeguard the public interest, protect creditors or ensure better transparency.
That flexibility has its place. However, it must be anchored in the principles of proportionality, accountability and predictability. It is for that reason that I want to speak to three amendments that have been tabled in my name, each of which I believe would help materially improve the Bill by preventing mission creep, protecting the distinct role of the leagues, and ensuring that Parliament, not the Executive, retains the ultimate authority over the scope of regulation.
The first amendment would prevent the regulator from imposing discretionary conditions relating to a club’s internal controls—that is, the systems and procedures by which a club governs itself, monitors risks, approves spending and safeguards assets. These are matters properly for the board of directors, who have legal duties under company law, are accountable to shareholders and fans, and must answer to independent auditors.
To allow the regulator to second guess those internal arrangements and dictate how a club structures its finance team or risk-management processes would be a significant intrusion into corporate governance territory. Let us be clear: there is a distinction between requiring that a club has adequate systems and mandating the precise nature of those systems. The former is reasonable; the latter, we believe, is excessive.
We must also be mindful of the danger that the regulator could, perhaps with good intentions, begin to substitute its own preferred model of governance over the perfectly legitimate models that clubs themselves decide to adopt. For example, what works for a large Premier League club with international operations may not be appropriate or affordable for a League Two club or a community-owned side. Discretionary licensing conditions must not become a one-size-fits-all instrument that penalises innovation, tradition or diversity in club structures.
I support this amendment because it would help ringfence those areas of internal decision making that are rightly matters for the club’s board—subject to transparency and good practice but not for centralised prescription.
The second amendment that I have tabled would prevent the regulator from imposing licensing conditions relating to a club’s overall expenditure. Amendment 108 would prevent the regulator from imposing licence conditions relating to a club’s overall expenditure. This is a fundamental issue. English football operates within a competitive ecosystem, as we have discussed. Decisions about how much to invest in players, infrastructure, academies or commercial operations are matters of strategic importance for clubs. They should be driven by ambition, fan demand and commercial opportunity, not by the regulator’s view of what is appropriate spending.
We must not fall into the trap of conflating good financial regulation with financial central planning. The role of the Independent Football Regulator should be to monitor solvency, ensure robust business plans, enforce transparency and intervene when there are clear risks of harm. It is not the regulator’s job, and it should never become its job, to determine how much a club is allowed to spend. There is a world of difference between assessing whether spending is sustainable and attempting to control outright the volume of that spending.
Let us remember that the leagues themselves already impose cost controls. The Premier League has profit and sustainability rules. The English Football League enforces squad salary caps and financial fair play frameworks, and now has the new financial review panel. The regulator is not meant to replace those roles. It is not a shadow competition authority, nor should it seek to override club investment decisions, which often have complex justifications and long-term returns.
Amendment 108 would help to ensure that the regulator cannot use its discretionary power to micromanage investment levels. Such a step would go beyond the spirit and the letter of what the Bill intends to achieve. The goal is to protect clubs from existential risk, not to homogenise them or stifle ambition.
Amendment 109 would remove the Secretary of State’s power to amend the list of discretionary licence conditions by regulation. This is not a technical point; it goes to the constitutional heart of the Bill. The Independent Football Regulator must be just that: independent. Its scope, duties and powers must be defined by Parliament and subject to oversight. We cannot accept a model in which future Secretaries of State, by regulation and with minimal scrutiny, can expand the areas the regulator may interfere with. That would allow a future Government of any colour to alter the regulatory perimeter at will. Today, it might be internal controls; tomorrow, it might be club ticket pricing, political messaging or hiring policies. The clause must be narrowed to ensure that any expansion of discretionary licence conditions comes through primary legislation that is debated and approved by both Houses.
Regulatory stability is vital not only for clubs but for fans, leagues and the broader football economy. Clubs, particularly those in the lower leagues, need to be able to plan over multiple seasons. Uncertainty about what new regulatory burdens might be imposed, or fears that the regime could be altered mid-season by ministerial decree, will have a chilling effect on investment, sponsorship and ambition. Regulation must be predictable and principled, not politicised or ever-shifting. Amendment 109 would safeguard its integrity.
Clause 22 presents a risk of regulatory overreach, however well-intentioned it may be. The amendments would not strip the regulator of useful tools. They would simply place guardrails around its discretion and ensure that decisions of fundamental importance to club governance, financial independence and regulatory scope remain where they belong: with clubs, fans and Parliament.
We need a regulator that enforces minimum standards, upholds transparency and ensures financial resilience. What we do not need is a regulator that micromanages club affairs or displaces the judgment of boards and owners. Football clubs must remain free to compete, to innovate and to fail or succeed on their own merits—within a fair framework, yes, but not under constant intervention.
The amendments reinforce that principle. They are not ideological; they are practical, measured and consistent with the values that underpin the Bill. I urge the Committee to support them and, in doing so, to send a clear signal that we are legislating not to control football but to support it firmly, fairly and with the long-term interests of the game at heart.
Stephanie Peacock
I thank the shadow Minister for tabling the amendments, which I will take in turn in responding to the points that he made.
Broadly, amendments 107 and 108 concern integral powers for a financial regulator. Limiting those powers by reducing the scope of the regulator’s discretionary licence conditions would jeopardise its ability to achieve its objectives. On internal controls, the conditions cover areas such as the completeness and accuracy of reporting and information from a club, and continued compliance with the rules and regulations. If the regulator had no power to intervene to improve those areas where it was deemed necessary, it would not be able to bring a club up to its non-financial threshold requirement, and therefore the club would be unable to obtain a full operating licence.
Similarly, not allowing a financial regulator to require a club to limit its future expenditure to a sustainable amount, for example, would be self-defeating. This is a financial regulator, and it should have the power to intervene in a club’s finances if necessary, but—to respond directly to one of the points made by the shadow Minister —while it can direct the club to reduce expenditure, it cannot specify exactly how that is done, which is for the club to decide.
The regulator may only set licence conditions in such areas if a club is not meeting its threshold requirements. Any condition must be proportionate to the issue identified. The regulator must also have regard to whether the requirement or restriction is necessary and to whether a similar outcome could be achieved by a less burdensome means, as per the principles.
Stephanie Peacock
Clause 21 outlined the use of discretionary licence conditions, which can be used to bring clubs up to the threshold requirements for a full operating licence, if necessary. They can also be applied to clubs with a full licence if there is a risk that they might drop below the threshold requirements.
Clause 22 sets out the scope of powers that the regulator will have to attach or vary a discretionary licence condition. Under the financial resources threshold requirement, discretionary conditions may address only four areas: debt management, liquidity requirements, restricting a club’s overall expenditure and restricting a club’s ability to receive illicit finance. The fourth area, which enables the regulator to restrict a club’s ability to access funding if it has reasonable grounds to suspect it is connected to serious criminal conduct, is integral. It will empower the regulator to limit illicit finance, which is inherently unsustainable for a club.
Under the non-financial resources threshold requirement, conditions may relate to only one of three areas: internal controls, risk management and financial reporting. As outlined in clause 21, the regulator can also attach discretionary licence conditions to advance its systemic financial resilience objective. That objective is specifically to address systemic risks or structural issues by applying conditions to multiple clubs, or even to all licensed clubs. Clause 22 limits the scope of such conditions to those that relate to debt management or liquidity requirements, and those restricting a club’s overall expenditure.
In order to future-proof the regulator’s regime, the Secretary of State will have the power to amend the areas that discretionary licence conditions may relate to. However, as we have discussed, that can be done only if the regulator makes a request in writing to the Secretary of State, having carried out a consultation first, explaining why an amendment is needed by reference to the purpose of the Act. We have also made it explicit in the legislation that the regulator must consult all regulated clubs and each specified competition organiser before requesting any amendments. That means that the Secretary of State will not be able to amend the regulator’s powers to attach discretionary conditions on their own initiative and against the wishes of the regulator, which, as I said, will limit the risk of unwanted, politically motivated scope creep in the future. I commend the clause to the Committee.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clause 23
Procedure for attaching or varying financial discretionary licence conditions
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause 24 stand part.
Schedule 6.
Clause 25 stand part.
Stephanie Peacock
Clause 23 sets out the procedure for attaching or varying financial discretionary licence conditions on clubs, which ensures that clubs and competition organisers are notified and given the appropriate opportunity to engage in advance when the regulator considers that a discretionary licence condition is needed. Where appropriate, the regulator will look to allow the relevant club and league to address identified issues and risks, so that the regulator does not have to formally intervene itself. That will allow the potential for the football industry to respond to issues, reducing regulatory intervention and producing a better regulatory response and outcome. The industry may be best placed to address specific issues within the overall context of a league’s own regulatory framework.
Before any action is taken by the regulator, there will be a period in which leagues and clubs are able to make representations, and the competition organiser will also be able to give a commitment to take action in lieu of the condition being attached or varied as proposed by the regulator. Clause 24 explains in further detail the mechanism for commitments in lieu of discretionary financial licence conditions. It is a final, formal opportunity for competition organisers to offer a self-regulatory solution to a problem identified by the regulator, so that the regulator does not have to step in. It is another important aspect of the regulator’s approach, which emphasises engagement and working with the industry to minimise formal intervention where possible. The regulator will still have powers to step in if the issue is not resolved, but the mechanism will give a competition organiser the chance to present a football industry-led solution to an identified risk.
The regulator can accept a commitment if it concludes that it should achieve the same results as the proposed discretionary licence condition and it does not conflict with the regulator’s objectives. The regulator does not have to accept the commitment, although, if it does not, it must provide reasons why. If a commitment proposed by a league will not achieve the regulator’s desired outcome, the regulator can reject it, and it will retain the power to intervene directly by imposing a discretionary licence condition on a club where any accepted commitment proves ineffective.
Schedule 6 expands on clause 24 by outlining the procedure where a competition organiser gives a commitment that the regulator is minded to accept, or requests a variation to a commitment in force, in lieu of the regulator’s attaching a financial discretionary licence condition to a club. The intention, as I referenced earlier, is for commitments to provide a less burdensome solution for all parties and still address the identified risk. However, for that to be the case, it is important that there is a clear procedure for interaction between clubs, the relevant competition organisers and the regulator, and the schedule sets out that procedure in further detail. Clubs can make representations to the regulator before accepting a commitment from a competition organiser, as well as before a competition organiser is released from a commitment.
Clause 25 sets out the procedure for the regulator to attach or vary a discretionary licence condition relating to the non-financial resources threshold requirement or the fan engagement threshold requirement. The regulator must notify the club and give it a period of no less than 14 days to make representations, but the clause allows the regulator to take more immediate action in situations that are more urgent and serious: if it thinks that giving a club notice and allowing a period for representations will jeopardise or risk jeopardising one of its objectives, it can apply the discretionary licence condition immediately and without prior notice. I commend the clause to the Committee.
Mr French
Clause 23 sets out the process that the Government’s new regulator must follow when it wishes to attach or vary a financial discretionary licence condition, which are by definition additional obligations that the regulator may impose on clubs that go beyond the mandatory licensing framework. In doing so, the clause confers on the regulator considerable further discretion. As with other discretionary powers in the Bill, the risk is not merely that the regulator uses its discretion, but that it does so inconsistently, unpredictably or in a way that strays beyond its core remit. Given that the powers provided by the clause relate directly to the financial obligations of clubs, the implications for competitiveness, investment and long-term planning are significant.
Although it is welcome that the clause does not set out a consultative process for how the financial conditions are imposed or amended, the process must not be a box-ticking exercise. Clubs should be able to challenge unreasonable conditions, and the regulator should be required to justify in clear terms why any new financial burden is necessary to meet the threshold requirements. It cannot become the case that discretionary conditions are routinely imposed as a back-door method of raising standards in areas for which Parliament has not explicitly legislated.
The risk of regulatory mission creep is particularly acute in a sector like football, in which the boundaries between finance, governance and culture are easily blurred. That is why we will be looking closely at whether there are sufficient checks, balances and transparency mechanisms in the clause to protect clubs from arbitrary financial conditions. Will the regulator issue any guidance on financial discretionary licence conditions, and will that guidance be made public? Will the Minister consider requiring an annual report to Parliament detailing how many clubs have had such discretionary financial conditions imposed, varied or removed, and on what grounds those decisions were made?
Without such checks, there is a real risk of an unequal competition taking place without fans and Parliament knowing, until it is too late and UEFA and FIFA have ejected us from their competitions. That is what I most fear may happen by accident. As we have discussed at length, the Bill is already flawed in this respect, and UEFA and FIFA would intervene if the regulator caused any impact on competitiveness. I only have to highlight the example of Crystal Palace, which is currently in the press, to demonstrate that UEFA and FIFA will stick to their rules rigidly, whether we like them or not. As I said when speaking to my amendment 97, any new licensing requirements introduced by the IFR must be meticulously aligned with existing UEFA and international frameworks.
Does the Minister accept that clubs, as entities directly impacted by licensing regulations, must have a voice in the development and implementation of these requirements? As the clause stands, her new regulator will be able to attach or vary financial licence conditions that would that mean one club becomes more competitive than another. She has said that she intends for the regulator to be able to adapt to the circumstances of each club. However, we must be mindful that that would mean changing the level of competitiveness between clubs. That is the key risk. That is not a political point; it is sadly a risk and a fact of which we have to be mindful.
Let me stress-test that with a hypothetical question for the Minister on the Bill’s impact. Brighton & Hove Albion and Aston Villa will both compete in the Premier League next season, both have been in that league for a number of years, and both also compete for European football. If her regulator decided, for whatever reason, that Brighton required stricter or simply more financial licensing conditions than Aston Villa, there would be a competitive imbalance between the teams. Does she accept that fact, which is plainly obvious, and recognise that such club-by-club tailoring of rules and licence conditions is potentially a violation of UEFA and FIFA rules on fair competition? To give her a bit of time, I ask her to respond to that concern after I have spoken about the other provisions in the group.
Stephanie Peacock
Clause 23 already tightly constrains the regulator’s ability to set discretionary licence conditions, and the shadow Minister’s earlier amendment sought to tighten that further, but it would have left the regulator unable to act as necessary to ensure financially sustainable clubs. It would have been unable to manage unsustainable debt or spiralling spending.
The regulator must act in accordance with its objectives and duties at all times, which include transparency and consistency. It can tailor regulation to clubs that will not breach UEFA statutes. I draw hon. Members’ attentions to page 14 of the Bill, which outlines in detail the scope of the powers to attach or vary licence conditions. Of course, a discretionary licence condition relating to the financial resource threshold requirement may only, as I said earlier,
“relate to debt management…relate to liquidity requirements…restrict the club’s overall expenditure, or…restrict the club’s ability to accept or receive funding which the IFR reasonably suspects to be connected to serious criminal conduct.”
We expect the regulator to work with clubs. If they are acting in good faith, we have said all along that the regulator will work with them. I think that answers the shadow Minister’s points.
In my opening remarks on this clause, I outlined in detail that there is a process available to come to a football-led solution. If the regulator thinks that giving a club notice or allowing for representations would jeopardise or risk jeopardising one of its objectives, it can apply the licence condition immediately, without prior notice. However, there is scope within the Bill and the regulator’s powers to reach football-led solutions in which it works together with clubs.
Question put and agreed to.
Clause 23 accordingly ordered to stand part of the Bill.
Clause 24 ordered to stand part of the Bill.
Schedule 6 agreed to.
Clause 25 ordered to stand part of the Bill.
Clause 26
Part 4: overview and interpretation
Max Wilkinson (Cheltenham) (LD)
I beg to move amendment 75, in clause 26, page 19, line 20, at end insert—
“(c) respects and promotes the protection of human rights and prevents modern slavery (as set out in section [Human rights and modern slavery considerations]).”
This amendment is linked to NC8.
Joe Robertson
I have sympathy with the aims of the amendments, but I also have a few questions. I wonder whether the wording in the Bill about “requisite honesty and integrity” might cover the issue that the hon. Member for Cheltenham is trying to deal with in new clause 8. I note that amendment 75 would do more that protect against owners with a record of human rights abuses, because it would require them to promote human rights. I obviously have no problem with people promoting human rights, but the amendment would put a duty on an owner to do something positive to show that they are fit and proper. I wonder whether that is really the hon. Member’s intention.
Stephanie Peacock
It is once again a pleasure to serve under your chairship, Mr Turner. I thank the hon. Member for Cheltenham for tabling his amendments. It is absolutely right that clubs should have suitable owners, which is why the new statutory owners and directors test is a key focus of the regulatory regime. Because we have provided the regulator with statutory powers, including information-gathering powers and information-sharing gateways with other government agencies such as His Majesty’s Revenue and Customs, the regulator will be better placed to apply all elements of its tests than the relevant leagues. Unlike the tests used by the leagues, the regulator will assess owners’ and officers’ suitability in the round, as well as any relevant mitigating circumstances, leading to a better determination of whether an individual is suitable.
A core part of the owners and directors test is the fitness test, which the hon. Gentleman’s amendments seek to expand. The individual ownership fitness test criteria—honesty and integrity, and financial soundness—have been carefully designed. The relevant matters the regulator must consider are listed in clause 37, which I will speak to in a later sitting. They are based on precedent, and are specifically relevant to whether someone is suitable to be an owner of a football club.
All individuals will be tested against the same criteria. I reassure the hon. Gentleman that much of what his amendments seek to achieve is already delivered by the Bill as drafted. In line with the relevant matters listed in clause 37, if an individual has had legal proceedings brought against them, whether civil or criminal, including in the international courts, the regulator must have regard to that.
The regulator will also look at whether the individual has had regulatory or disciplinary action of any kind brought against them. If that action has a bearing on their honesty or integrity, the regulator must take that into account and could potentially find them unsuitable on that basis. That means that offences under the Modern Slavery Act 2015 or equivalent legislation, whether in the UK or elsewhere, are already captured by the Bill’s owners and directors test, as are any behaviours that have given rise to legal, regulatory or disciplinary action against the owner in any forum, as well as egregious actions committed outside the UK that can be proven and that would have been criminal if done here. In addition, the regulator will consider whether any individual is sanctioned by the UK Government—for example, because of their connection to a foreign state. The regulator will take those things very seriously.
Where the amendments go further than existing drafting, however, we believe they are not appropriate. New clause 8 gives the regulator absolute discretion to determine who is “complicit” in violations, but complicity is not a clear legal test. That would fundamentally undermine the general principle of how the test is applied, and would lead to a subjective decision. The Bill, as drafted, ensures that any negative determination the regulator makes must be evidence-based. It will test every individual against the same criteria. It is crucial that it remains that way. The new clause also states that the regulator can establish a committee to help make decisions about owners. We agree that it is important that the regulator can do that, which is why it is already possible under schedule 2, so there is no need for the amendment.
The shadow Minister also spoke about appeals, which we will come on to when we debate clause 28. For the reasons that I have set out, I ask the hon. Member for Cheltenham to withdraw his amendment and not to move the new clause.
Stephanie Peacock
We have seen too many instances of unsuitable custodians mismanaging clubs, taking risks that jeopardise a club’s long-term future, and disregarding the interests of fans and communities. It is evident that the industry’s existing tests have not been effective enough at screening and rooting out bad actors. Existing tests are conducted on a self-declaration basis, as the hon. Member for Cheltenham just mentioned. Consequently, those tests have allowed in owners who have long histories of business bankruptcies, and owners have later been imprisoned for crimes including money laundering.
That is why part 4 of the Bill establishes strong, new statutory owners and directors tests, including by giving the regulator the power to test the suitability of prospective new owners and officers before they can enter regulated clubs, as well as the power to test incumbent owners and officers in certain circumstances. The clause provides an overview of part 4 and signposts to the rest of the clauses in this part of the Bill. I commend the clause to the Committee.
Mr Dillon
It is a pleasure to serve under your chairship, Mr Turner. I thank my hon. Friend the Member for Wokingham (Clive Jones) for tabling new clause 15. It is the result of close co-operation between local parliamentarians and the Supporters Trust at Reading, which I have mentioned previously. I thank it for its constructive approach to the Bill.
The new clause mandates that individuals must notify the IFR if they are aware of any evidence that indicates a change in circumstances that could affect the ability of club owners or key personnel who are essential to the management and survival of football clubs to meet the statutory fitness criteria set forth in clause 26. It is widely recognised that whistleblowing is a vital tool for public scrutiny and accountability of individuals, and that wrongdoing and bad practice need to be called out. It is therefore essential that there are protections to encourage people to speak out. The new clause seeks to flesh out formal whistleblowing routes with regard to football ownership. Although I welcome and recognise the detail already included in the Bill on that, we need to go much further.
We need to expand the list of groups and stakeholders who would be required to report any concerns that they have about the suitability of owners or officers, including the governing body for the relevant league, the football supporters’ trust and the Football Supporters’ Association. It is often the case that those stakeholders have more knowledge about the day-to-day operations inside a club than fans, due to their proximity to the club’s inner workings. As many fans do not have the same connection or influence as such organisations, it is vital to provide a strong and accessible voice for them when issues arise, particularly when evidence concerning the survival of a club comes to light.
It is essential that the individuals listed in new clause 15 have the opportunity and route to escalate their concerns when necessary. If we take as an example my local EFL club, Reading, there may have been some people in the EFL and in the club itself who had suspicions about the deteriorating situation at the club long before those problems came to the surface and to the attention of the fanbase. If this new clause had been in place, it would have given stakeholders a formal route to raise such concerns and ensure that Dai Yongge was scrutinised properly. That could have gone some way to resolving the situation before the club ended up teetering on the brink; it is only recently that it has been sold and been able to recover.
To conclude, new clause 15 would enable accountability and monitoring of owners during their time in charge. Football club owners are temporary custodians of heritage assets that are vital to our communities; at the very least they should face regular scrutiny. It is for those reasons that I hope new clause 15 is accepted.
Mr French
I thank the hon. Member for speaking to the new clause on behalf of his colleague, the hon. Member for Wokingham. The point that he made is very interesting and I have great sympathy with fans of Reading football club, who he referred to, and with fans of other clubs around the country that have fallen foul of their owners, who, I think it is fair to say, did not have the club’s long-term interests at heart. I say that as someone who has already referred to Charlton a number of times in this Committee—been there, done it, got the T-shirt. As I say, I have a lot of sympathy with fans of Reading and I hope that the future looks brighter for that club.
Even before the election, I publicly supported strengthening ownership tests. I believe them to be part of one of the most fundamental roles that the regulator should play. We should ensure the consistency of those tests between the leagues, and we should ensure that up and down the country we have the best people in charge of such community assets, and that they have the long-term interests of clubs at heart, as I believe the overwhelming majority of club owners do.
Those examples of where problems came to a head and caused significant damage to communities have proven that there is a difference in some of the tests applied by the leagues historically, with gaps and loopholes that individuals have looked to exploit. Such examples have also highlighted the need for ongoing review by the regulator about how it manages the information that comes to light. An owner might be deemed an appropriate and fit person to run a club in 2025, but changes to their financial circumstances—assuming that they have other business interests—could mean that they become more stretched, and they might be involved in other activity that comes to light, so it would be right for the review to take place as early as possible to minimise the potential damage to clubs.
My hon. Friend the Member for Isle of Wight East posited a number of important legal challenges around this point of duty. I have sympathy with the broader objective of new clause 15, but this issue of duty poses a number of risks for people who are not board-level employees or in significant roles of influence. I think that all Members would seek to avoid a situation where people disengage from a process because they are concerned about that word “duty”, and what that could leave them exposed to legally if they were to come across information, for example, but did not feel confident in passing it on. That might arise in a variety of circumstances, but I am interested to hear the Minister’s comments on new clause 15 in particular and on how we can seek to deliver the broader objective of strengthening ownership tests, without having to go down the rabbit hole of this duty element.
Stephanie Peacock
I thank the hon. Member for Wokingham for tabling new clause 15 and the hon. Member for Newbury for speaking to it, but it is already open to anyone, including all those listed in the new clause, to share relevant information with the regulator. That is in addition to the existing requirements on clubs, owners and officers, which the new clause unnecessarily duplicates.
I assure the Committee that the regulator will take credible reports about unsuitable owners or officers very seriously, whether they come from a whistleblower inside the industry or any other source. We do not need to create a separate obligation in the Bill for individuals to report information to the regulator. In fact, new clause 15 would place regulatory obligations on new individuals and organisations, thereby extending the effect of the regulator’s regime. It would take things a step further and create a duty—beyond the relevant owner, officer or club—for club employees, competition organisers, supporters trusts, the FSA and Fair Game to notify the regulator. As matters stand, anyone including owners, officers, club employees, competition organisers, the Football Supporters’ Association, trusts and supporters can notify the regulator if they have information regarding an individual’s suitability to be an owner or an officer. There is no need for any specific legislative provision to enable that. As the regulator will only regulate clubs, owners, officers and competition organisers, we believe that it would not be appropriate to obligate other persons to report any changes to the regulator. The new clause would extend the scope of the regulator.
The key point is that we do not think that that should be a duty. It is of course open to all those whom I have listed, and indeed any others, to approach the regulator, which as I say will take any reports seriously.
James Naish (Rushcliffe) (Lab)
I thank the Minister for the clarification, which I hope is helpful to the hon. Member for Newbury. In essence, is she saying that it is important for regulators to create an atmosphere of confidence, where individuals who have that type of information can share it with the regulator directly, irrespective of new clause 15?
Stephanie Peacock
Yes, absolutely. We very much want that confidence to be established. We simply do not think that regulating junior employees, supporters trusts or the FSA is appropriate or proportionate. On that basis, I would be grateful if the hon. Member for Newbury did not press the new clause to a vote.
Mr Dillon
Given the assurances of the Minister, I am happy not to move new clause 15. I thank the hon. Member for Rushcliffe for seeking clarification about the atmosphere that will be created.
Question put and agreed to.
Clause 26 accordingly ordered to stand part of the Bill.
Clause 27
Duties to notify IFR of prospective new owner or officer
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The regulator’s owners and directors test has been designed to prevent unsuitable custodians from running or owning clubs. Therefore, the regulator needs to know who a club’s prospective new owners and officers are before they buy or join a club so that they can be tested.
Clause 27 places duties on a person to notify the regulator when there is a reasonable prospect of them becoming a new owner or officer of a regulated club. This will ensure that the regulator receives advance notice that an application should be coming, and it will help the regulator prepare to act quickly when it receives the application. The clause also places the same duty on regulated clubs themselves, as another means of ensuring that the regulator will be notified.
The regulator needs to know a person’s role at the club so that it can prepare to assess whether they are suitable to be an owner or officer of that club. That is why, where the notification relates to an officer, the notification must state their proposed job title or job description, and any senior management functions they will carry out.
Enforcement measures, such as censure statements or financial penalties, are available to the regulator should it determine that this requirement has not been complied with without reasonable excuse. That will deter those who do not wish to comply with the regime. I commend clause 27 to the Committee.
Mr French
As the Minister just outlined, clause 27 requires regulated clubs to notify about prospective new owners and officers if there is a reasonable prospect of such a change. It also requires an officer’s proposed job title, job description and senior management functions. If the football regulator is not notified before the change, the club must notify as soon as practically possible.
I am slightly concerned that this could be a burdensome requirement on some clubs. Any large organisation, such as a football club, will often cast a wide net when considering such appointments, with people on the radar long in advance. I therefore ask the Minister to enlighten us on what she believes constitutes “a reasonable prospect”. For example, would media speculation that the right hon. Member for Houghton and Sunderland South (Bridget Phillipson) might move to the Minister’s Department be considered “a reasonable prospect”? There are non-political examples of how that might work too, but it would be interesting to hear what the Government believe to be a reasonable prospect.
Stephanie Peacock
I am grateful to the hon. Gentleman for his contribution. As with everything throughout this Bill, we would expect the regulator to act proportionately. Where there is a reasonable prospect, it is obviously very helpful for the regulator to be informed of that, because that will, of course, allow them to move as speedily as possible. We therefore think this is an appropriate provision. The hon. Gentleman tempts me to get into other examples, but I will resist that, if he does not mind.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Determination of suitability required for new owner
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
As we have heard throughout the passage of the Bill, football clubs hold unique importance to their fans and local communities, and it is these fans who lose out when clubs are exploited or mismanaged by unsuitable owners and officers. Clause 28 prohibits a person from becoming a new owner of a club unless the regulator has determined they are suitable to own that club beforehand. Prospective new owners will be required to provide an application containing information about how they propose to run a club and where club funding will come from. This will better ensure that prospective owners are clear from the outset about how they would deliver their plans for a club.
Once a complete application has been provided, the regulator can only pass the individual owner if the following requirements are met. First, the individual must meet the individual ownership fitness test. This means that they have the requisite honesty and integrity and are financially sound. Secondly, they must have sufficient financial resources. Finally, the regulator must not have grounds to suspect that the individual has any source of wealth that is connected to serious criminal conduct, including crimes such as drug trafficking and fraud. This will better mitigate against illicit finance in the game by requiring new owners to undergo the regulator’s test. Clause 28 will prevent unsuitable custodians from ever becoming owners.
Clause 29 prohibits individuals from becoming a new officer of a regulated club unless the regulator has determined that they are suitable beforehand. Once the prospective officer has provided a complete application to the regulator, it will assess them to ensure they meet individual officer fitness criteria. That means they must possess the requisite honesty, integrity and competence, and be financially sound. If the regulator is satisfied that the individual meets those requirements, it must find them suitable to be an officer of the club; otherwise, it must find them unsuitable. When making this determination, the regulator will take into account the matters listed in clause 37. By requiring new officers to undergo the regulator’s test, this clause will stop unsuitable individuals from becoming officers.
It is possible that someone might take up a position at a club without first having undergone the owners and directors test. That may be a blatant and deliberate breach of the requirement to undergo the test before joining the club. A prospective owner may act in bad faith, hoping that once they are “in”, the regulator would be more hesitant to fail them. However, in some circumstances a person may fall within the definition inadvertently or have some other relatively innocent reason for the breach. This may occur, for example, when a person inherits significant equity in a football club. Alternatively, a person may dispute in good faith whether their actions bring them within the Bill’s definition of an owner.
Therefore, where a person becomes a new owner or officer without the regulator having determined their suitability, clause 30 gives the regulator the power to respond decisively but flexibly. When the regulator becomes aware this has happened, it has two options: to either notify the new owner or officer that they are automatically treated as unsuitable, or require them to submit an application as though they were a prospective applicant. The regime cannot be allowed to be abused; the regulator must have the discretion and the teeth it needs to address harm to the sector. Clause 30 is an important step to achieving this aim.
If the regulator is minded to fail a new or prospective owner officer, clause 31 requires the regulator to give that person and the relevant club the opportunity to make representations. This must take place before the regulator makes its final decision. That will allow a new owner, officer or relevant club an appropriate opportunity to argue their case before the regulator finds them unsuitable. This ensures the regulator has all relevant information available to it, allowing it to make better decisions so that the regime is more effective.
Football is a fast-paced industry where clubs operate within constraints such as league seasons and transfer windows. Timely decisions about the suitability of new owners and officers is important for clubs’ financial sustainability. Without deadlines, we have seen league determinations drag on, unable to reach a decision. The regulator will need to conduct a thorough level of scrutiny of new owners and directors, but it also needs to make decisions in an appropriate timeframe to ensure clubs are not unnecessarily impacted.
That is why the regulator will be subject to a statutory deadline when it tests the suitability of new prospective owners and officers, which clause 32 sets out. When a complete application is provided, the determination period starts. By the end of that period, the regulator must find an applicant suitable or unsuitable. As well as providing certainty to the industry, the deadline will incentivise new owners and officers to provide the necessary information the regulator needs to assess suitability in a timely manner.
If the regulator cannot decide before the initial deadline is met, it can extend the determination period, and this will provide it with the necessary flexibility to gather more information to make well informed but timely decisions. The determination period, including the maximum amount of extra time, will be set by the Secretary of State in secondary legislation. This will ensure the regulator is bound by it—but there is still flexibility for the deadline to be amended in the future. If the regulator cannot make the decision before the period expires, the person is automatically determined to be unsuitable. This means that only owners or officers that the regulator is confident are suitable will be allowed to get involved with clubs.
The measures set out in the group of clauses will form a key part in ensuring our clubs have suitable custodians, which in turn will help to safeguard the financial sustainability of football over the long term. Therefore, I commend the clauses to the Committee.
Mr French
Clause 29 prohibits any person from becoming an owner of a regulated club without first applying to the independent football regulator and being determined suitable for that role. It requires any applicant to provide information on the proposed operation of the club, estimated costs, how those costs will be funded and the source of funding, which is a point that is been raised already in this Committee.
The football regulator must make an affirmative determination regarding the application if the potential owner is considered to have sufficient financial resources and meets the individual ownership fitness criteria. I already spoken about why I believe it is important that these fitness tests are strengthened wherever possible, but there are a couple of questions I would like to ask the Minister on this clause first.
What assurances can the Minister provide that this process will be completed swiftly and will not unnecessarily delay any ownership changes which, as we have already discussed, may need to happen very quickly when a club is under significant financial stress—to ensure wages are paid and to prevent further hardship when seeking a change of ownership?
Clause 30 sets out what should happen in the event that a person has become an owner or an officer of a regulated club without first obtaining the suitability determination from the football regulator. The clause assumes that the football regulator “becomes aware”; is the expectation that there is a disclosure from the club, or will the IFR be probing clubs, looking at news reports, Companies House and so on? It would be helpful for Members to have an insight into how that might look, because this clause does not offer a specific timeframe within which the football regulator must act at once if it becomes aware of an unauthorised appointment at a club.
It also seems that the football regulator can indefinitely extend the deadline for submitting such an application; the clause fails to clarify how many times and under what conditions. I therefore wonder whether the Minister has considered the potential effects on the stability of the club of the football regulator deeming an individual unsuitable: would that open clubs to legal or operational risk, and would there be financial consequences of those risks? It is vital that decisions taken by the regulator are independent and impartial, as already discussed, so what safeguards will there be to ensure that neither media nor political pressure is exerted on the football regulator to deem an owner unsuitable?
Clause 31 states that the football regulator must “have regard to” representations from affected clubs or individuals. What does that constitute in reality—a response, or simply a consideration? Must the football regulator provide written reasoning if it rejects the arguments made in the representation? Does this clause not lack basic safeguards and, without a framework for how representations should be made or evaluated, does it not risk leading to inconsistent decision making? Again, I fear there would be various legal challenges, given the financial implications of such decisions.
There is also no requirement, it appears, for the football regulator to consider other external stakeholders, which could include other directors or supporters’ trusts involved with the running of a club. Should an individual receive a negative determination, the legal and financial resources to make a strong representation within a specified timeframe might be considerable. Does the Minister envisage many applicants seeking legal aid or other advisory support mechanisms in such a scenario?
Clause 32 outlines several points about the football regulator’s determinations after an individual makes an application under clauses 28 and 29. The IFR seems to be able to extend its determination periods several times, but the clause fails to outline for what reason an extension might be justified and how long it should or could be. Can applicants, for example, challenge or appeal those delays, if the reason for them lay with the regulator rather than the individual club? A delay by the regulator would risk unfairly penalising applicants who were not personally at fault for it. Will there be an obligation on the football regulator to inform applicants of approaching deadlines, to ensure that they know when the determination period is nearing its end, and what oversight will there be to ensure that extensions are not routine?
Lastly, will there be monitoring of how often extensions are used and how long determinations typically take, so that clubs can start to plan for such instances where they occur? That would also give greater certainty to the leagues because, as I highlighted earlier, it is not just individuals, but clubs themselves at risk. If we think about not just the financial penalties imposed, but the points that can be deducted, there are major implications for the competitive nature of the league. I look forward to the Minister answering a few of those questions.
Stephanie Peacock
I am grateful to the shadow Minister for those questions. I reiterate, as I said in an earlier intervention, that the licensing is separate from the ownership. On some of his points about the extension, we have talked throughout proceedings about being collaborative and working with owners and clubs; if the regulator needs more information, it has the ability to provide an extension. Of course we would expect it to provide appropriate information of approaching deadlines or expected timelines. I will not repeat what I said in my main contribution on this group, but I did try to set out some examples where a breach is a genuine accident or someone has inherited equity, versus somebody trying to circumvent the regime. The regulator has that flexibility and a regime with teeth so that it can respond to both scenarios.
The shadow Minister posed a number of questions, so I will double-check Hansard and, if I have not answered them all, I will write to him.
Question put and agreed to.
Clause 28 accordingly ordered to stand part of the Bill.
Clause 29 to 32 ordered to stand part of the Bill.
Stephanie Peacock
It is important for sustainability that incumbent owners and officers continue to be suitable custodians of their clubs. That is why the Bill gives the regulator the power to test incumbents if it has grounds for concern about their suitability. That will help mitigate the risk of harm from individuals already in the system.
Clause 33 places a duty on incumbent owners and officers, as well as regulated clubs, to notify the regulator where they consider there to have been a relevant material change in circumstance. Notably, this is a change of circumstances that could have an impact on whether the regulator would find the individual suitable to be an owner or officer of the particular club—for example, if an officer became subject to criminal or relevant civil proceedings that the regulator was not previously aware of, or if an owner’s source of wealth had changed in some way that is relevant to whether it is connected to serious criminality.
The notification must explain the material change in circumstances and its relevance to an individual’s suitability. If this information gives the regulator grounds for concern about the incumbent’s suitability, it has the power to test them under clauses 34 or 35. Ensuring that the regulator is aware of relevant material changes will better enable it to ensure that incumbent owners and officers continue to be suitable.
Clause 34 provides the regulator with the necessary powers to test incumbent owners already in place in clubs where there is concern about their suitability. This allows the regulator to tackle any risks to clubs from unsuitable owners already within the industry.
Mr Betts
I just want to be clear about the grounds on which the regulator can investigate or intervene. We talked about the source of wealth being criminal, which has been clearly laid out. However, if the source of wealth is one that has diminished substantially, so the owner cannot now show that they can continue to run the club, is that a reason for the regulator to consider intervening?
Stephanie Peacock
There are different thresholds for new owners and incumbent owners; with new owners, it is grounds for suspecting, but with incumbent owners, it is the balance of probabilities. Of course, the latter is a higher bar, given the existing owner’s property rights. I do not know whether that fully answers my hon. Friend’s question, but I can write to him with some further detail.
Mr Betts
It would be helpful if the Minister could write to me because this is a big question in football. There are owners who promise the world and then find that they cannot deliver it; indeed, they can deliver very little. I come back to Sheffield Wednesday, but there have been other owners, such as Ken Bates at Oldham, who set up a structure that could not then be financially maintained. It is important to understand whether the regulator has power in that circumstance to intervene.
Stephanie Peacock
Absolutely, and I refer back to some of our earlier conversations. If we take the regulatory regime as a whole, at the very basic level, owners need to have a business plan, consult their fans and be fit and proper—those three things work together. As we spoke about earlier, if the business plan does not match the source or amount of funds, the regulator can go back and direct them. Perhaps that provides a little more clarity, but I am very happy to add more detail.
Mr Betts
I think the Minister and I are getting there. Obviously, the business plan and the source of funds come with a new owner and then continue. However, with an owner already in place, does that still apply? Can the regulator say, “Wait a minute. I need to see a business plan and a source of funds to ensure that you are a fit and proper person”?
Stephanie Peacock
In certain circumstances. I am hesitant to use the word “new” information, because the information may not be new. However, if relevant information comes to light for the regulator, which may be new or pre-existing but relevant, the regulator can look at it. I draw my hon. Friend’s attention to the difference in the threshold between new owners and existing owners.
Mr Betts
I will make just one more point—I think it is important that we understand precisely what this means. Clause 33 talks about an owner or club having a responsibility to notify the regulator. Surely that does not mean that nobody else could notify the regulator, if relevant information came to them. Could they then pass it on for the regulator to look at?
Stephanie Peacock
Yes, absolutely. That goes back to the discussion that we had earlier on new clause 15. The regulator will take credible information seriously.
Clause 34 provides the regulator with the necessary powers to test incumbent owners—those already in place—of clubs, where there is a concern about their suitability. It will allow the regulator to tackle any risk to clubs from unsuitable owners within the industry, while recognising that there are suitable owners already in the system who do not need to be tested. We want to ensure that the approach is not overly burdensome for the regulator, and we do not want to deter investment in the game. Incumbent owners can be assessed to ensure that they have the requisite honesty and integrity, and are financially sound enough, to own a club. If the regulator has information that gives it grounds for suspicion, incumbent owners can also be tested on their source of wealth. The regulator will need to establish if wealth is connected to serious criminal conduct, including crimes such as drug trafficking or fraud. The regulator will not remove incumbent owners because of a mere suspicion about their source of wealth. Rather, an incumbent owner must be treated as unsuitable if the regulator is more sure than not that their source of wealth is connected to serious criminal conduct. The clause will ensure that the regulator has the appropriate powers to test incumbent owners where a risk of harm arises.
Clause 35 provides the regulator with the necessary powers to test incumbent officers—those already in place—of clubs, where a risk of harm arises. As with the provisions for owners in clause 34, testing of officers is limited to cases where there is concern about suitability. It allows the regulator to tackle any risks to clubs from unsuitable officers already in the industry. Incumbent officers can be tested to ensure that they have the requisite honesty, integrity, competence, and are financially sound enough, to continue in their role.
The Government are aware that finding an incumbent owner or officer unsuitable would bring about significant consequences for that person, and may cause concern for clubs or fans. That is why, when the regulator is minded to fail an incumbent owner or officer, clause 36 gives the individual and the club concerned an opportunity to make representations before the regulator makes its final decision. That allows an officer or owner an appropriate opportunity to argue their case before the regulator finds them unsuitable. The regulator has the ability to test or re-test incumbent owners and officers, which will prevent unsuitable custodians from harming clubs over the long term, not just at the point of entry. That will help to ensure the sustainability of clubs over the long term, benefiting football now and into the future. I therefore commend the clause to the Committee.
Mr French
Clause 33 places a duty on clubs to notify the Government’s new regulator of any change in circumstances relating to the current owner or an officer that could impact their suitability under the regime set out in part 4 of the Bill. On one level, it is an understandable provision. To fulfil its statutory duties, the regulator must be kept informed of material changes, as ensuring the fitness and propriety of owners and officers is a core part of its remit. However, the clause as drafted raises a number of serious and practical concerns about how such a duty will be defined, interpreted and enforced.
The first issue with the clause is its vagueness. What exactly constitutes a “change in circumstances”? The explanatory notes prepared by the Government give a small indication of what such circumstances might include, stating that
“Relevant material changes could include, for example, an officer becoming subject to criminal proceedings or regulatory action”.
That is somewhat clear, but what qualifies as “regulatory action”? Could it be an Ofcom investigation, for example? The explanatory notes add that
“new information coming to light regarding whether an owner’s source of wealth is connected to serious criminality”
also qualifies as a material, relevant change. What qualifies as “new information”? Does it mean a full-blown criminal investigation or spurious claims, potentially made by activist groups against foreign owners? How the provision will work needs to be clarified.
The Government and the new regulator must be up front, open and honest with fans and Parliament as to what those terms actually mean. We fear that the Government are deliberately muddying the waters around what the regulatory environment would look like under the Bill, and around the rules that the regulator will seek to apply. The Minister must answer whether a “change in circumstances” is limited to formal legal developments, such as bankruptcy, a criminal conviction, or something as small as a parking fine. I hope not the latter. Could the definition extend to more subjective matters such as personal, reputational issues, media allegations, or ongoing investigations? If so, I fear that the Government and their regulator would be on very shaky ground, not just because clubs would find themselves in the near-impossible position of having to second-guess what the regulator might later deem to be relevant, even when no formal wrongdoing has occurred, but because it would open up the regulator to spates of judicial reviews. As we see already, the wealthiest clubs would be able to hire the best lawyers, and those clubs that are already struggling would be subject to the personal diktats of the chairman of the Government’s regulator. That is not a sustainable, appropriate or moral way to regulate, and it is totally incompatible with the principle of legal certainty that should underpin any new statutory regime.
Furthermore, clause 33 requires that the Government be notified
“as soon as reasonably practicable”
after a change has occurred. Again, the language is open to wide interpretation. What is “reasonably practicable” for a large Premier League club with extensive legal support may be entirely different for a National League side with minimal back office capacity. We must ensure that smaller clubs are not disproportionately penalised because they lack the administrative infrastructure to track and report such changes with the same immediacy as those international brands that sit atop the English football pyramid. We must also ask whether the sanctions for failing to report, which could be very serious, potentially leading to licence revocation, are proportionate to each breach. Clubs cannot become the regulator’s enforcement arm, expected to carry out continuous due diligence on their own officers and owners, with the threat of regulatory action hanging over them if they get it wrong.
Clause 33 touches on a sensitive area: the relationship between clubs and their owners, and the role of the state in policing suitability. It is right to expect clubs to act responsibly and keep the regulator informed, but the duty must be clear, proportionate and fairly enforced to avoid lower-level staff being put in extremely difficult situations. We do not want to create a culture of regulatory paranoia, where clubs feel compelled to notify the Government’s regulator of every minor development just in case it is later deemed relevant, nor do we want smaller clubs punished for failing to meet standards that are de facto only achievable for the top tier. The Government must ensure that the clause is not a trapdoor for arbitrary enforcement, and that it supports predictability, stability and confidence in the regulatory framework. We understand the underlying principle, but we will continue to press the Minister to ensure the practical operation of the clause does not give rise to legal ambiguity, unjust outcomes or unaccountable discretion.
Before moving on, I have a number of questions on clause 33. Could the Minister clarify what sorts of events would qualify as a “change in circumstances” under clause 33? Will guidance be issued by the football regulator to ensure consistent interpretation? Will the definition be limited to formal, objective legal changes? What level of evidence or certainty will clubs be expected to have before reporting a change? Will clubs be required to report allegations or media speculation? Will the football regulator consider good-faith failures to notify or take a strict liability approach? How will the regulator account for differences in club size, structure and resourcing when judging what is “reasonably practicable”? Will there be any threshold or scaling in terms of compliance expectations for clubs of differing means?
What appeal or review mechanisms will be available to a club if the football regulator finds that it failed to notify as required? Will there be a formal process for representations or challenge before any enforcement action is taken? How does the clause interact with the broader principles of legal privilege and privacy? Will clubs be expected to disclose internal HR issues or ongoing internal investigations, even if there is no conclusion yet? Have the Government assessed whether the clause is compatible with UEFA and FIFA expectations of non-interference in the running of football clubs? I had a written response from the Minister this morning regarding her last meeting with UEFA and FIFA, which was 1 November. A lot of water has gone under the bridge since then, so we are still concerned about the broader point regarding UEFA. I would appreciate a response to that point today.
Moving on to clause 34, it empowers the football regulator to determine whether an incumbent individual owner meets the fitness criteria or has wealth associated with serious criminal conduct, if the regulator has information that raises grounds for concern. It requires the regulator to inform the owner and club before making a determination and then notify them of the outcome. If passed, more than 100 English football clubs will be subject to the regulation. It is not specified in the Bill what level of information would raise grounds for concern regarding incumbent owners. If the bar is set too low, the regulator may be immediately burdened by reviewing multiple existing owners, causing unease in English football. What level of information is required to qualify as grounds for concern? There is also no time limit for the regulator to make its assessment, so how will the regulator ensure that the threat does not needlessly hang over existing owners?
Clause 35 empowers the football regulator to determine whether an incumbent officer meets the fitness criteria if the regulator has information that raises grounds for concern. It requires the regulator to inform the owner and club before making a determination and then notify them of the outcome. As I said regarding the previous clause, more than 100 English football clubs will be regulated if the Bill passes. It is not specified in the Bill what level of information would raise grounds for concern regarding officers, of which there are even more to consider. If the bar is set too low, the regulator may be immediately burdened by the need to review multiple existing officers for each club. I ask the Minister again: what level of information will be required to qualify as grounds for concern? There is also no time limit for the regulator to make its assessment, so how will it ensure that this threat does not needlessly hang over existing officers?
Lastly—you will be pleased to know, Mr Turner—clause 36 requires the football regulator to give advance notification to an incumbent owner or officer if it is minded to find them unsuitable. Before making a final decision, the clause requires the person and club in question to be allowed to make representations, which must then be taken into account. The clause stipulates that the regulator must inform incumbent owners and officers only that it is minded to find them unsuitable, not of the reasons why. Given the vital importance of these representations, should there not be a requirement for the regulator to disclose the reasons to the person and club so that they can fully engage? I would appreciate the Minister picking up the point about the reasons, because it is important.
There is a broader point here about clubs that may be listed on the open market. My understanding of this clause is that, before a final decision is taken, the club would effectively become an insider from a trading perspective. It will be interesting to see how the Government will seek to manage that risk in terms of financial compliance, given that an issue with a particular owner or officer could have significant financial implications for a club and therefore potentially leave individuals inside that loop at risk of being involved with inside information from a dealing perspective. As we all know, if anyone is found to be in breach of inside information, it has very serious consequences. It will be interesting to see how the mechanism in this clause to inform clubs and individuals first will work with the broader notifications in the market where clubs are listed.
Stephanie Peacock
I will begin with the subject of UEFA. Once again, I can reassure the shadow Minister that UEFA is content with the Bill as drafted. He will note that, in answer to his written question, I detailed my last meeting with UEFA, which was after the Bill was published, and said that we continue to engage with officials on a regular basis.
The shadow Minister asked a long list of questions to which I will respond in writing to ensure accuracy, as I did not get a chance to note them down. We have spoken about some of the points he touched on around appeals and enforcement and will come on to debate them in further detail.
I draw the shadow Minister’s attention to the fact that, as I said in answer to my hon. Friend the Member for Sheffield South East, the bar is set differently for existing and new owners. I outlined points on new owners, grounds to suspect, incumbent owners, the balance of probabilities and the higher bar given existing owners’ property rights.
The shadow Minister also asked a number of questions on what information would be relevant. A parking ticket, certainly, would not be relevant, but serious legal issues or an investigation or action by a regulator—things of that nature—would be relevant. The regulator will not immediately test information in every case just because it comes in. It will make its own decision about whether the information reaches a high enough threshold for it to take action.
Information that gives the regulator grounds for concern could come in lots of forms. It does not need to be new information, as I outlined in my response to my hon. Friend the Member for Sheffield South East, but it has to call into question whether the individual is still suitable to be an owner or officer of a club. The information may be relevant if the club gets into difficulty or fails to comply with the regime. Information that is in the public domain or held by external organisations about incumbent owners could be considered grounds for concern to test an individual. It will be up to the regulator to decide whether the information meets the threshold for the incumbent to be tested.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
Clauses 34 to 36 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Vicky Foxcroft.)
Football Governance Bill [ Lords ] (Seventh sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateThursday 12th June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 12 June 2025 - (12 Jun 2025)
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
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Mr Louie French (Old Bexley and Sidcup) (Con)
I beg to move amendment 110, in clause 37, page 28, line 28, at end insert—
“(fa) whether the individual is a member of a proscribed organisation as per section (3) and schedule (2) of the Terrorism Act 2000.”
This amendment requires that IFR, in determining whether an owner or officer has the requisite honesty or integrity, to consider whether the person is a member of an organisation proscribed under the Terrorism Act 2000.
It is a pleasure to serve under your chairship again, Ms Butler. I welcome all Committee members back for day four. Amendment 110, tabled in my name, requires this Government’s regulator, in determining whether an owner or officer has the requisite honesty or integrity, to consider whether the person is a member of an organisation proscribed under the Terrorism Act 2000.
Clause 37 sets out the framework under which the Government’s football regulator must assess whether an owner or officer of a football club meets the required standards of honesty, integrity and competence. This is an important part of the Bill. Football clubs are not like ordinary businesses, as we have discussed; they are institutions rooted in community, tradition and even national identity. Those who control them must be held to the highest standards and supporters quite rightly expect that clubs should be fit to uphold those responsibilities.
The Government’s regulator’s task in clause 37 is to ensure that persons in positions of influence over our national game are financially sound and professionally competent. However, the clause as currently drafted leaves the test for honesty and integrity open to interpretation—arguably too open. That is why we have tabled amendment 110, which provides a clear and unambiguous requirement that, in determining whether a person has the requisite honesty or integrity, the regulator must take into account whether that person is or has been a member of an organisation proscribed under the Terrorism Act 2000.
Let me be clear: this is not about political views, past associations or guilt by implication, but about having a national minimum standard of moral fitness. It should be inconceivable that a person with demonstrable ties to a terrorist organisation could pass the fit and proper person test to own or operate a football club in this country. Football clubs are part of the fabric of British civil society. They are symbols of local pride and national values, and they have international reputations. To allow a person associated with a proscribed group, many of which pose active threats to our national security, public order and democratic way of life, to take a controlling interest in such an institution would be not only morally indefensible, but deeply dangerous.
This is not a hypothetical concern. We live in an increasingly globalised football economy and genuine questions have been raised in recent years about the sources of funding, ownership and political influence across the game. My amendment does not attempt to legislate morality in broad terms; it simply anchors the Government’s regulator’s assessment in existing law, specifically the Terrorism Act 2000, which provides a clear, publicly available list of proscribed organisations that Parliament has already determined pose an unacceptable risk to our way of life.
By incorporating that into clause 37, we do two things. First, we clarify the threshold for what constitutes a failure of the honesty and integrity test, giving both clubs and the regulator a clear reference point. Secondly, we send a signal to not just fans and communities here at home, but investors and foreign Governments abroad, that English football will not be compromised by individuals whose allegiances lie with organisations committed to violence, extremism or the subversion of our national interest.
Football is a global sport, but it must still reflect and uphold our national values. It is not alarmist or over-zealous to say that those who control our clubs must have a character as close to unimpeachable as possible. We are asking them not to be saints—unless, perhaps, they own Southampton FC—but to be the pillars of the community that we already expect them to be.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
That was so bad.
Mr French
I have woken everyone up there.
Clause 37 is an important safeguard, but without amendment 110, it lacks a clear and necessary line in the sand. Parliament has already determined that proscribed organisations represent a threat to public safety and national order. That same logic must apply here. I urge the Government to accept this modest but essential amendment and, in doing so, to help to ensure that our clubs are not just well run and financially sustainable, but led by people whose values are consistent with the country, communities and traditions that they are entrusted to serve.
Joe Robertson (Isle of Wight East) (Con)
It is a pleasure to serve under your chairship, Ms Butler. I rise to add my support to the amendment that the shadow Minister discussed very well and clearly.
The point is that the list set out in clause 37(2)(a) to (f), which gives examples of things that would prevent a potential owner from having the requisite honesty and integrity to own a football club, is missing a provision about their being a member of a proscribed organisation such as a terrorist organisation. In football, which is the most international sport and which has very international ownership, it seems particularly sensible to have that provision.
I do not think a terrorist offence is captured by someone being
“convicted of a criminal offence”,
because, as we know, the Terrorism Act 2000 was put in place to introduce various provisions relating to terrorism where it had not necessarily been identified that a perpetrator had committed a criminal offence. The provision in the amendment would therefore be a fair addition to that list.
Of course, clause 37(2)(g) is a catch-all measure that refers to “such other matters”. Nevertheless, the point is that this matter is particularly important and we do not want to leave it to be swept up in a catch-all measure. Of course, if it is argued that it could be swept up in a catch-all measure such as clause 37(2)(g), why have the list in clause 37(2)(a) to (f) at all? I support the sensible and non-controversial amendment.
Stephanie Peacock
It is a pleasure to serve once again under your chairship, Ms Butler. I echo the welcome back from the shadow Minister, the hon. Member for Old Bexley and Sidcup, to Committee members.
I will respond to amendment 110. I reassure the shadow Minister that the intent of his amendment is already achieved within the current drafting of clause 37, which lists the matters that the regulator must take into account when it conducts its owners and directors test. We will discuss that in more detail when we consider the next group of amendments, but I will summarise briefly now.
When assessing an owner or officer’s fitness, the regulator must have regard to any criminal convictions and proceedings, in particular 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 2007.
The regulator will seek information and expertise from relevant organisations to help it to stay alive to both national and international concerns. The shadow regulator is already building a strong relationship with the National Crime Agency and law enforcement in general to ensure that the regulator is in a strong position to gather the information it needs.
I also reassure Members that the regulator and its staff will have the requisite measures and security clearance to be able to receive information relevant to their functions. Consequently, the current provisions in the Bill deliver the intent of the amendment. On that basis, I would be grateful if the shadow Minister would withdraw it.
Mr French
I appreciate the Minister’s comments with regard to amendment 110, which I tabled. I have listened carefully to her arguments, but it is still unclear to those of us on this side of the Committee why consideration of the Terrorism Act 2000 was not included in the list of factors set out in clause 37. We believe that is an oversight and, consequently, that the clause lacks the clarity that the amendment seeks to deliver in the Bill and that those who refer to it will seek going forward—in other words, the regulator. We will therefore press the amendment to a vote.
Question put, That the amendment be made.
Stephanie Peacock
Clause 37 lists the matters the regulator must take into account when it conducts an owners and directors test. That includes what it must consider when determining whether an individual is financially sound, has the requisite honesty and integrity and, for officers only, has the competence needed to do their role—ultimately, to determine whether they are suitable. The matters listed in the clause draw heavily on existing fit and proper person tests applied by other regulators, such as the Financial Conduct Authority and Bar Standards Board.
For financial soundness, the clause includes past bankruptcies and the financial situation of companies and other bodies they have been responsible for. For honesty and integrity, it includes an individual’s criminal history, legal cases they have been involved in, regulatory or disciplinary action, and whether they are banned from entering the UK or sanctioned by the UK Government. When assessing officers’ competency, it includes qualifications, experience and training.
Those factors are specified because they have a bearing on whether the owner or officer could have a significant detrimental impact on a club’s financial sustainability. That is why the legislation requires that they are taken into account when the regulator is considering someone’s suitability. Listing specific matters also provides greater clarity to the industry about what will be tested, and it constrains the regulator, as the matters listed in the clause are the only things it will take into account when considering their fitness. To future-proof the test, the regulator has the power to use its rules to add further matters it will take into account. That will ensure that the list of matters for fitness tests continues to be relevant over time.
Before using the power, the regulator must consult with the leagues. Suitability should be based purely on an impartial assessment of the individual’s fitness, their source of wealth, and their financial plans and resources. The Government have been clear that the independence of the regulator is vital, which is why they 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. The clause will ensure that the test can be applied consistently and that it remains fair, transparent and robust and focused on whether the individual is a suitable person to own a football club.
Question put and agreed to.
Clause 37 accordingly ordered to stand part of the Bill.
Clause 38
Disqualification orders
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The financial distress experienced by some of English football’s most historic clubs was partly down to unsuitable owners and directors. As we have already discussed, the regulator will be able to conduct strengthened owners and directors tests to tackle that and to help to ensure that each club has suitable custodians. I previously set out what powers the Bill gives the regulator to disqualify a person it finds unsuitable, what happens when an individual is found unsuitable, how they can be removed, how they can be prevented from causing further harm to the club, and the tools the regulator needs to ensure the continued effective operation of the club.
Where the regulator finds someone to be unsuitable to be an owner or an officer at a particular club, clause 38 gives the regulator the power to disqualify that person from being an owner or an officer at any regulated club in the future. In order to ensure that sufficient protections are in place, relevant parties will be allowed to express their views before the regulator makes its decision. Once a decision has been made that takes those views into account, the regulator must publish a notice of that decision, including the rationale behind it. That will help to ensure that those key community assets have suitable custodians who run the club properly.
When the regulator finds an incumbent owner unsuitable, the regulator must begin the process of removing them from the club. Clause 39 therefore gives the regulator the power to direct an unsuitable owner to relinquish ownership of the club. This is the first step in removing an unsuitable owner. They are directed to leave by the regulator and given a deadline, but they have a chance to take steps to leave the club on their own terms before the regulator takes direct action to remove them. For instance, those steps could include selling their stake in the club.
To ensure that sufficient protections are in place, the regulator must consult the unsuitable owner, the relevant club and the relevant league before issuing the direction. If an owner does not comply with such a direction, the regulator can escalate to the next stage of making a removal order under clause 43, which we will discuss in the debate on the next group.
Mr French
I thank the hon. Member for that valuable contribution and for telling us his experiences as a Derby fan. There are many examples that have been drawn on in various aspects of the Committee’s debates, and I suspect that there will be more going forward. Just to be clear, we are not seeking to press the provision to a Division. The point we are making is that we want the strongest owners and fittest people to run clubs, but we also want to ensure that the regulator is seen to be acting lawfully and in a balanced way at all times, to avoid any issues of impartiality. I understand the point the hon. Member makes, which is why I have always supported strengthening ownership tests, even in the previous Parliament.
We do not believe that exclusion based on reputational judgment or politics should come into these kinds of judgment. The Government must not forget that they are regulating not just football clubs, but people’s lives, reputations and livelihoods. That demands humility, caution and a presumption in favour of freedom and innocence, unless the case for restriction is absolutely clear and overwhelming. Where there is doubt, the Government’s regulator must not fill in the blanks with its own qualifications or prejudices.
The Opposition support the need for disqualification in serious cases, but we continue to press the Government to ensure that the clause is not open to abuse, and that football remains a competitive, plural and fair environment, rather than one policed by the regulator, acting as judge, jury and executioner in uncertain circumstances.
Clause 39 empowers the regulator to give a removal direction in requiring an unsuitable owner to take all reasonable steps to cease being an owner by the end of a specified period. The exception to this requirement is when an owner did not have prior regulatory approval, and the regulator can exercise its power to make an ownership removal order within three months, starting from the determination day. The clause requires the football regulator to inform the owner of the club and relevant competition organiser before giving a removal direction. It also requires the football regulator to notify the owner and the club of the possible enforcement action for not complying with the direction.
It is because of powers such as these that the regulator must be seen as independent. If a Government regulator is to order the removal of incumbent owners, this could be seen by competition organisations as clear interference, which as we have discussed at length, and could cause many issues for English clubs, especially when competing in UEFA and FIFA competitions. I would be interested to hear some assurances from the Minister about how that might work in practice. If the Government’s regulator is to tell clubs that they must change ownership, how confident is the Minister that that will not breach the rules that we have discussed?
This goes back to a point I made in a previous sitting about something that is a theme of the clauses in this group. Giving the owner or officer of a club notice of a regulatory action that is coming will hopefully allow them the rights of representation and challenge, if they feel that they have been handled wrongfully, but it also opens up issues around insider information, particularly with regard to a club’s valuation. I suspect that all hon. Members appreciate that such a change, particularly at the top levels of ownership, will have a dramatic impact on the valuation of a club. We want to understand how the regulator will deal with that issue to ensure that insider dealing, in particular, does not become a widespread issue where the regulator is trying to enforce its actions, as provided for by these clauses. We want to understand how that will work in practice, to ensure that these clauses do not have unintended consequences.
Clause 40 empowers the regulator either to issue a removal direction to an unsuitable officer, requiring them to take all reasonable steps to cease being an officer by the end of a specified period, or to give such a direction to the relevant club, or both. It requires the independent football regulator to inform the owner, club, and relevant competition organiser before giving a removal direction. It also requires the IFR to notify the owner and the club of the possible enforcement action for not complying with the direction. I have the same question about this clause as for the previous one: how will the risk of inside information be managed?
Clause 41 empowers the regulator to prohibit an unsuitable owner or officer from carrying out specified activities or exercising specific rights and/or to issue a direction to the club requiring it to ensure that the unsuitable owner or officer does not exercise specified activities or rights. The clause provides a non-exhaustive list of such activities and rights, including any right
“to vote on any matter relating to the…club’s activities”;
appointing, terminating or changing the terms of appointment or responsibilities of any officer or employee; changing the corporate structure; and undertaking any specified actions without obtaining prior approval from the independent regulator.
Clause 41 also requires the IFR to notify the owner and the club of the possible enforcement action for not complying with the direction. Such action could seriously impair the ability of a club to function while it seeks a new owner or officers, as ordered by the regulator. As we all know, it takes a significant amount of time to find a new owner, and many may be deterred by perceived interference in English football, compared with other nations without a state regulator. Clause 41 may cause more damage to a football club than the owner, who the regulator cannot dismiss. How will the Minister ensure that the regulator uses these powers only if and when deemed strictly necessary?
Clause 42 relates to situations where directions under clause 41 would impede a club’s ability to operate effectively or comply with regulatory requirements. It empowers the IFR to temporarily appoint an officer to carry out a specified function, or redistribute functions among existing officers. It stipulates that those functions must be specified, must be for a specified amount of time, and can be revoked or varied by another order. It specifies that an interim officer is not subject to the duties and requirements placed on officers by the Bill. It also requires the IFR to notify the owner and club of the possible enforcement action for not complying with the direction.
Clause 42 adds to the fear that the regulator could erode the independence of English clubs and how they operate. It empowers the regulator to effectively govern a club while seeking to remove unsuitable officers or owners. Given the time that it takes to find new ownership, that situation could last for a considerable period and cause massive issues on the pitch with regards to investment and transfers—as we discussed in a previous sitting—and how the club functions. It would also leave the regulator wide open to criticism if its actions lead to relegation, for example, for a particular club. Does the Minister think that there is a risk that such a club could be barred from international competitions—as I suggested earlier—or that the Government’s regulator could be left wide open to legal challenge if it directly impacts a club’s performance on the pitch, or its financial performance off the pitch while such considerations, or changes of ownership, take place?
Stephanie Peacock
I thank the shadow Minister for his points, to which I will respond briefly. There are no changes in the bit of the Bill that we are talking about compared with the previous Bill, other than—as I referenced in my previous contribution—the removal of the requirement for the regulator to
“have regard to the foreign and trade policy”
of the Government. We think that removal strengthens the independence of the regulator, and I reiterate that we do not have any concerns in relation to UEFA.
The shadow Minister asked some specific questions. There are no thresholds in the Bill, but the regulator will need to act fairly and proportionately. There are robust appeals processes through the Competition Appeal Tribunal. The shadow Minister made points about the publication of information. In order to ensure that sufficient protections are in place, relevant parties will be able to express their views before the regulator makes a decision. Once the decision is made, it will take these views into account, and the regulator must publish a notice of that decision, including the rationale behind it.
Question put and agreed to.
Clause 38 accordingly ordered to stand part of the Bill.
Clauses 39 to 42 ordered to stand part of the Bill.
Clause 43
Ownership removal orders
Mr Clive Betts (Sheffield South East) (Lab)
I beg to move amendment 94, in clause 43, page 34, line 38, at end insert—
“(e) following the revocation by the IFR of the club’s operating licence under clause 19 or under paragraph 9 of Part 1 of Schedule 9.”
I am pleased to see you in the Chair again, Ms Butler; it is a pleasure to have you presiding over us. The amendment is fairly simple, and I hope the Minister will consider it. Clause 43 is quite an important clause, because it deals with the removal of ownership. Ownership, in the end, is of a private asset. A club is a public good for the fan base, but in the end, it is owned by an individual or a corporate entity. The clause provides the regulator with a power, not a duty, to remove owners in certain circumstances if appropriate. All my amendment would do is add the revocation of a club’s operating licence to the circumstances in which the regulator can act. In other words, if the club does not have an operating licence, should not that be a factor that allows, but not forces, the regulator to deal with the ownership of the club?
Stephanie Peacock
I thank my hon. Friend for his amendment. We have seen far too many examples of the damage that can be caused by unsuitable custodians of clubs, and that is why the Bill introduces a strengthened owners and directors test.
I believe that my hon. Friend hopes that the amendment will give reassurance to fans that, where a club fails to comply with regulation and loses its licence as a result, the regulator will be able to remove the owner. The aim is to hold those responsible to account. Let me reassure my hon. Friend that the regulator is already empowered to hold individuals to account for their actions. If the club’s non-compliance or its financial situation gives the regulator concern about the owner’s suitability, it can test them, and they could be failed on that basis. If they are found to be unsuitable, the regulator will have the power to remove them. That ability to isolate and remove unsuitable owners and officers should mean that a club never has to have its licence suspended or revoked on the basis of poor ownership. That means that a club’s fans should not have to suffer the consequences of bad leadership.
The revocation of a club’s licence is the very last resort. We hope the regulator will never have to do that, but I reassure my hon. Friend that if a club is so seriously and consistently non-compliant that the regulator has no choice but to revoke its licence, we would expect the regulator to consider very carefully whether any responsibility for that failure can be laid at the owner’s door, and if the owner is tested and found unsuitable, they can be removed on that basis. We believe that the Bill’s provisions are sufficient to protect fans and hold owners to account where necessary. We hope that they will ensure that a licence is never revoked.
Lincoln Jopp
If a club has lost its licence, has it not therefore been taken beyond the purview of the regulator? How is the regulator still empowered to pursue the owner?
Stephanie Peacock
I will address that point in just a moment.
As a club’s licence is separate from its owners, the licence is held directly by the club itself, not its owners. The removal of an owner will not impact the club’s licence status. This ability to isolate and remove unsuitable and owners and officers should mean that a club never has to have its licence suspended or revoked because of its owner, which means that a club’s fans should not have to suffer the consequences of bad leadership.
We hope that a club losing its licence will be the very last resort, and an unsuitable owner will have to follow the removal order made by the regulator. It will be in the best interests of an unsuitable owner to sell their stake in a club before the regulator has to step in to force divestment and a sale at no minimum price. If the owner fails to comply with this order, the regulator will have enforcement powers that it can use to ensure compliance.
These powers will include a variety of sanctions against the individuals calling shots at the club and, where necessary, directly against the club itself. Where appropriate, the regulator will also be able to seek an injunction from the courts. Having this broad range of tools of escalating severity at its disposal will allow the regulator to take strong action as and when required. For those reasons, I hope that my hon. Friend the Member for Sheffield South East will withdraw his amendment.
Stephanie Peacock
As set out previously in the debate on clauses 38 to 42, the regulator will be able to direct an unsuitable owner to leave the club in a specified timeframe and to prohibit them from undertaking certain activities at the club in the interim. However, there is a risk that an unsuitable owner does not comply with these directions. For instance, they may refuse to leave the club or continue to use their position as an owner to damage the club. In these situations, the regulator will need sufficient powers to directly remove the unsuitable owner from the club. That is why clause 43 gives the regulator broad discretion in such cases.
The regulator can make an order containing such provision as the regulator considers appropriate to secure the unsuitable owner’s removal. For example, that could include appointing trustees, empowering the trustees to sell the club and requiring the unsuitable owner, or any other person, to comply with the trustees’ directions. However, the regulator can use this power only against unsuitable owners who have demonstrated that they are willing to flout regulatory requirements, or if they fail to comply with the directions that the regulator has made to protect the club from harm. As set out previously, in certain situations the regulator will have the power to make an ownership removal order containing whatever provision is appropriate to ensure that an unsuitable owner leaves a club.
To ensure that there are sufficient safeguards in place, clause 44 sets out the process that needs to be followed by the regulator. In particular, before issuing an ownership removal order, the regulator must publish a notice that it intends to issue the order and allow a period for interested parties to express their views. After this, the regulator must decide whether to make the order, and must publish a notice of its decision including its rationale. This helps to ensure that the views of those affected are taken into account in the decision-making process. Separately, the regulator may make rules requiring unsuitable owners to pay costs associated with an ownership removal order, such as costs incurred by a trustee appointed by an order. This power helps to ensure that the costs are borne by the unsuitable owner.
Mr French
Clauses 43 and 44 set out how ownership removal orders are to be made, and the legal consequences of non-compliance. Clause 43 matters hugely because it allows the regulator to force an individual to sell their ownership stake in a club. That is a serious and intrusive power, so we must ensure that it is used sparingly, lawfully and with robust safeguards. On process and fairness, we welcome the requirement in clause 44 to notify the person and allow representations to be made before an order is issued. However, is that enough? Will representations be meaningful, or will this just be a procedural tick-box exercise?
I have some questions for the Minister. Will the regulator be required to give full written reasons for the proposed removal? Will the owner have access to the evidence relied upon? Is there a statutory right of appeal or review, and if not, why? Secondly, on liability and legal exposure, clause 44(6) imposes the liability for costs incurred by non-compliance with an order on to an owner. What types of loss are envisaged for owners? Are they just financial, or reputational and contractual? Who decides whether a loss is caused by the non-compliance, and is causation clearly defined? Could this lead to vexatious or opportunistic claims in the future? How will this work with ownership groups, when there are multiple owners of a club?
On commercial realities, forcing the sale of a football club is not simple; in most cases, these are not liquid assets. The value depends on market conditions, the timing of the economy and sale, and obviously buyer availability and demand to purchase a football club. I therefore ask the Minister: will the regulator have a duty to ensure fair market value is preserved during a forced sale? What happens if the regulator’s actions or any delays cause the value of a club to fall? Could we see a situation where the regulator is frequently appearing in court on such claims? Fourthly, on the broader principle, the clause is in effect a power to force the sale of a privately-owned business. That is a major constitutional step. Property rights in this country matter, due process matters, and so does the rule of law. We need real safeguards, not just procedural gestures.
We want to keep football in safe hands, but the clause needs to be clearer, fairer and more restrained in its use. It must not give the regulator quasi-judicial power without necessary oversight of Parliament. That is not regulation; we believe it would be overreach. I would be interested to hear the Minister’s comments on my questions.
Stephanie Peacock
I echo the shadow Minister’s comments about the power being used clearly, robustly and fairly. I think all of us on the Committee can agree that that is absolutely right. On his question about whether the reasons would have to be written, the regulator will have to give the owner enough reasons for its decision to enable them to understand why it has been taken. That has one of the strongest appeal routes in the Bill; it can go directly to the Competition Appeals Tribunal and be heard on its merits. We think there are robust protections in place here already.
Question put and agreed to.
Clause 43 accordingly ordered to stand part of the Bill.
Clause 44 ordered to stand part of the Bill.
Clause 45
Duty not to operate a team in relation to a prohibited competition
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause is the first in part 5 of the Bill, which deals with duties on clubs and competition organisers. It prevents all regulated clubs and clubs that have been regulated in the previous 10 years from having a relevant team participate in a prohibited competition.
The European super league proposed in 2021 posed an existential threat to the English football pyramid. It was an attempt by a small number of clubs to set up a closed-shop league to benefit themselves at the expense of all other clubs and against the wishes of fans. Ultimately, the European super league was stopped by the sheer will of fans around the country and the then Government’s promise to consider legislation. However, the risk of a similar breakaway competition rearing its head in the future remains, which is why we are now bringing forward statutory protections.
The clause will prevent a regulated club, or a club that has been regulated in the previous 10 years, from entering a team into a competition that the regulator has prohibited. The extension to clubs regulated in the past 10 years will stop clubs circumventing the rules by withdrawing from existing competitions to join a new breakaway competition. Similar safeguards against circumvention are found in clauses 46 and 47, which require clubs to gain the approval of the regulator for the disposal of the home ground or the appointment of an administrator. I will speak to them later.
On clause 45, the regulator is expected to prohibit competitions on the basis of a predetermined, proportionate and transparent framework based on the prescribed factors set out in legislation. That will provide up-front clarity to the industry and mean that new competitions will not just be prohibited outright. That is important to ensure that the regulator does not unduly stand in the way of innovation in the market, such as when the old First Division became the Premier League in 1992.
The clause requires the regulator, when deciding whether to prohibit a competition, to consider several factors, including whether the competition is merit-based, operates on the basis of fair and open competition, jeopardises the suitability of English football’s existing competitions or the clubs in those competitions, or harms the heritage of English football. Football belongs to its fans, so the regulator will also determine and consider the views of fans in England and Wales before prohibiting a competition.
As the national governing body for football, the FA will be consulted before the regulator prohibits any competition, and the regulator will also consult anyone else it considers appropriate. For example, we might reasonably expect that to include other competition organisers, clubs and players who might have been involved in the competition that the regulator is considering prohibiting.
Lincoln Jopp
The hon. Member makes a pertinent point. As I said, the word “competition” seems to refer to the sort of flyaway league we have discussed; are one-off friendlies competitions under the terms of the Bill?
Stephanie Peacock
I am grateful to Members for their contributions and will take their points in turn.
The clause applies both to existing and to new competitions. If any competition breaches the criteria, it can be prohibited, but matters such as scheduling are for competition organisers.
On shadow Minister’s points, we will come on to player welfare, to which we are all very sympathetic, just as we are sympathetic to the 3UP campaign, but it is outside the Bill’s scope and is for organisers. He asked some specific questions on the criteria; that will be for the regulator to determine. It is expected to do so based on a predetermined, proportionate, objective and transparent framework based on factors listed in the clause. For example, if a competition is not merit-based, jeopardises the sustainability of existing domestic competitions, and is not supported by the fans, we would expect it to be prohibited.
Mr French
My hon. Friend the Member for Spelthorne and the hon. Member for Newbury highlighted the issue of friendlies. The Minister has indicated that she will come to that, but I do think we need some clarity as to what that might look like in practice. The end-of-season competitions are normally internationally designed, and although they may be endorsed by UEFA or FIFA, they would breach some of the conditions under the definition the Minister just gave. We need clarity about how this will work, because we do not want to put English football on a collision course with international football.
Stephanie Peacock
No, of course we do not. I totally agree. I was coming to that point. As I understand it, friendlies would be out of scope, but I am happy to write to Committee members if they would like greater clarity.
We have discussed the appeals and representations several times. The relevant competition organiser will be given a period in which they can make representations. If the organiser has concerns about the regulator’s decision to prohibit the competition, it will be able to appeal the decision. As has been discussed, the organiser can also appeal to the competition appeal tribunal.
Mr French
I thank the Minister for those remarks. I suspect that a letter of clarity would be helpful for all Members. There is a risk that FIFA, or UEFA, as we have seen with the Nations League in recent years, looks to introduce a new competition, whether at club or international level, that would contradict the regulator. As we have spoken about at length, and as the hon. Member for Sheffield South East has described, the different governing bodies of UEFA and FIFA are often in competition with our national competitions. We have to ensure that clubs are not forced to choose between a licence in the English game and partaking in international competitions. We fear that could drive acceleration toward a breakaway league, rather than prevent one.
Stephanie Peacock
I completely appreciate the shadow Minister’s comments. As I said in my opening remarks, we do not ban all international competitions automatically. We are mindful of enabling innovation in the market. I am happy to supplement my comments with a letter to Committee members.
Question put and agreed to.
Clause 45 accordingly ordered to stand part of the Bill.
Stephanie Peacock
I thank my hon. Friend the Member for Sheffield South East for tabling his amendments. Prior to speaking to them, I would like to let him know that I have raised his points on a similar issue—on assets of community value—with the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Nottingham North and Kimberley (Alex Norris). I spoke to him following our Committee session on Tuesday, and he has committed to write to my hon. Friend as swiftly as possible, so I will follow up with him in a timely fashion.
Turning to my hon. Friend’s amendments, I hope I will be able to reassure him on the development of the reform. I understand the intention of his amendments, but I will explain why we intend to resist the changes to include specified properties. On extending the scope of clause 46 to include training grounds, among other properties, the legislation has carved out specific protections to safeguard home grounds against risky financial decisions or sales of the grounds. I will speak specifically to the mechanism of clause 46 and the approval process later, but the focus on the home ground is to reflect that it is often the most financially significant asset at the club. That does not mean that other assets such as training grounds or office space are not also important to the club, but that there is a specific consideration necessary for the home ground.
I understand that my hon. Friend’s amendments are likely in response to instances where owners have intended to asset strip or make reckless decisions. Members on the Committee have shared some examples, and we are all familiar with recent ones. I wish to reassure all that there are protections elsewhere in the Bill to safeguard against this. That includes an enhanced owners and directors test that will ensure that owners are prepared to be appropriate custodians of their club and its assets, as we discussed on part 4 of the Bill. If it were to become evident that an owner’s actions were likely to worsen the financial position of the club, the licensing regime gives the regulator power to place licensing conditions on the club. The regulator can also take enforcement action where such a condition has been breached or the financial plan has not been followed. Additionally, the regulator will 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.
Mr French
On the point about risky situations and the risk-averse nature the Minister is describing, the Bill is clearer on disposable home grounds. I am intrigued to see how the regulator would deem a club either selling its freehold and then having a leaseback option, which we have heard has happened, or looking to move to a ground or stadium that it did not own and pay rent going forward. Would that be seen as a bad financial move or a good one by the regulator? It is not quite clear how it would work for non-disposable treatment of assets.
Stephanie Peacock
I do not want to get drawn into hypotheticals. As we previously discussed, there might be a perfectly legitimate reason for a club to move—or to move temporarily, such as for flooding. It is not an absolute power. We want to give the regulator discretion when clubs may need that for legitimate reasons. The amendment speaks to where we think clubs are asset stripping or acting in bad faith.
We would expect the power to include assets remaining in the club’s ownership and any plans to change its financial arrangements. It would be at odds with the sustainability of a football club for there to be no home ground or location to train. It is therefore implicit that the regulator would address that.
Stephanie Peacock
Yes, I believe that there is provision in the Bill to do that. For those reasons, I ask my hon. Friend to withdraw the amendment.
Lincoln Jopp
The Minister knows—I have approached her about this—that a club in my constituency of Spelthorne has gone into administration. It has no home ground, but it does have a training ground, which is a community asset. I am intrigued to know whether, in the potential conflict between the purview of the regulator and the enactment of companies law in dealing with the administration of the company, the provisions in the clause give the regulator power to influence the administrator on the manner of the administration and whether clubs’ training grounds can be bought or sold. What is the hierarchy of legislative authority between companies law and the clause?
Mr Betts
I beg to move amendment 83, in clause 46, page 39, line 2, at end insert—
“(ii) in the case of the home ground and training ground, it is satisfied that there are suitable plans in place to ensure the club’s continued long-term use of the home ground or training ground or to secure an alternative home ground or training ground for the next football season;
(iii) in the case of a home ground, it is satisfied that any alternative under sub-paragraph (ii) will have been actively approved by the club’s fans domiciled in England and Wales if any of the following non-exhaustive factors represent a significant upheaval of the connection between the fans of a club and the club: proximity to home ground, proximity to other clubs' grounds, journey time for fans and any other factors that the Regulator deems relevant;”
I have a simple question for the Minister. If the regulator decides that a sale can go ahead, is the power there to allow it to be satisfied that there are suitable plans to ensure that the club will have long-term use of a home ground and training ground? That may not be the ground it had before, but there must at least be a replacement. Does the regulator have the power to ensure that?
Stephanie Peacock
I thank my hon. Friend tabling the amendment. It seeks a number of things: extending the clause to include training grounds; guaranteeing long-term use of home grounds and/or training grounds; and introducing parameters for home ground relocation. If it is helpful, I will address those briefly, but I appreciate that this debate is similar to the one we just had.
On extending the scope of the clause to include training grounds, the Bill has carved out specific protections to safeguard home grounds against risky financial decisions or the sale of grounds. As I said in the previous debate, that is to reflect the home ground being the club’s most important asset. It does not mean that other assets, such as training grounds or office space, are not important.
I understand that, as we have discussed, the amendment is really focused on asset stripping. As I have alluded to—I will be a bit clearer and perhaps more explicit—the regulator has the power to attach discretionary licence conditions. Therefore, on the point about needing a training ground, I believe that the regulator could apply a temporary or particular licence condition on a club.
Mr French
I will not dwell on this point too much, but the implications of this amendment and the ones that we were just discussing are not hypothetical; we have seen real-life examples of where this issue has become a real one for football clubs. So, we seek some clarity from the Minister about how the regulator would act in such scenarios in the future.
As I said in my previous comments, I think the disposal of a ground is probably slightly clearer than the relocation of a ground. However, I will use the example of Coventry City football club. When they moved to the Ricoh Arena, I believe that the stadium was jointly owned by the local council and another group. I assumed that the club moved to a new stadium with the best interests of the club at heart. I had the pleasure of going to Coventry’s old stadium when Charlton played Coventry in the FA Cup, but that is a bit by the by. It was in need of improvements; most people would have thought that.
How would this measure work? We know that Coventry ran into a number of issues with the Ricoh Arena, which I believe is now owned by the Frasers Group. At that point in time, when the club moved, would that move have been deemed to be in the regulator’s purview of an inappropriate action by the previous owners? I ask that question because this is a real-life example of where it is not clear how this legislation would apply. As Parliament, we have to be clear how we intend the regulator to behave in such situations, because, as I say, that was a real-life example of how football clubs might seek to improve their stadia when they do not have the assets to do so themselves.
Stephanie Peacock
I am grateful to the hon. Gentleman for his comments. I draw his attention to the discretionary licensing addition that I have referred to: the regulator can react to different situations. I do not want to be drawn on individual cases, nor do I want to pre-empt the actions of the regulator.
Mr Betts
I really do not understand the way in which the Bill is written at present; perhaps the Minister can help me with that.
We will come on to clause 48, which is about the relocation of a club; of course, that means moving grounds. As set out in clause 48 4(c) and (d), there is a specific requirement on the club to consult with fans. We can have another discussion at some point—we may do—about consultation with which fans and which groups. I still think that this is a challenging issue that we need more clarity about.
Clause 46 is about the disposal of a ground, which is a very emotive subject for fans. It may not be the wrong decision to relocate, and clubs can relocate and take their fans with them, with proper involvement; the Everton example is probably in that category. However, there is no requirement at all to consult the fans on the potential sale of a ground. That seems to be a big omission in the Bill. Fans would not have a veto, because it is understood that sometimes there are very good commercial reasons as to why a club needs to move, which can be accepted and explained to the regulator.
Therefore, I am not saying that the disposal of a ground has to get the full approval of the fans, but surely there should be a measure whereby the fans are at least consulted and their views taken into account before the home ground of a club, where the club may have played for 100 years, is disposed of. That would not be inappropriate.
Stephanie Peacock
I thank my hon. Friend for tabling the amendments. Home grounds are a vital asset for all clubs, so I do understand his intent.
Regarding changes to the ownership of a home ground, the potential adverse outcomes are entirely financial. We do not believe that they impact the heritage of the club, which is why clause 46 does not require any heritage consideration or fan engagement. Additionally, decisions about the financial arrangements of a home ground are commercial decisions and therefore we do not think it is appropriate to legislate on them. However, I will reassure my hon. Friend that if the sale of a club’s home ground would result in the relocation of the club, fans absolutely have to be consulted about that, as per clause 48, which we will discuss later. We know how much home grounds matter to fans and communities, but this clause is purely about protecting a club’s financial position.
Mr Dillon
I seek some clarity on the relocation of a ground. White Hart Lane was demolished and rebuilt on a similar, but bigger footprint. Obviously, at Old Trafford, Manchester United’s owners are talking about building on land next to the stadium. Personally, I would not class either of those moves as the relocation of a ground. However, in the Bill would they count as relocation, because those new stadia are not on the same footprint as the original stadium?
Stephanie Peacock
I will double-check that point, but I believe they would. I also refer to the points we discussed earlier in the Committee: clubs may want to move for a particular, legitimate reason—to improve their ground, or because they have to due to flooding in adverse weather, for example. We appreciate that these are not all bad actors and it is not all bad faith, but I will double-check that point and come back to the hon. Gentleman. We know how much home grounds matter to fans and communities; this clause, together with the owners and directors test, is about protecting the club’s financial position and its balance sheet from asset stripping by bad actors.
Mr Betts
Is the Minister saying, then, that a club owner could sell the ground without even consulting the fans—just present it as a fait accompli—and then, because there would not be a home ground to play on and the club might have to relocate, at that point they could say to the fans, “Well, the ground’s gone; we’re now going to ask you whether you want to move.”? There seems to be a gap in the thinking somewhere.
Stephanie Peacock
I appreciate that point, but the sale of home grounds is a primarily financial decision, separate from the decision about where the club actually plays its games. That is why there is currently no requirement to consult or obtain approval. If the club has not actually relocated, it would be caught in clause 48 and would be required to consult fans. We will come on to discuss that later.
Mr French
I must admit that—like other members of the Committee, to judge from their facial expressions—I am slightly confused by the reasoning the Minister has given in response to the hon. Member for Sheffield South East on this clause, and where the distinction lies between the ultimate decision to relocate the ground and the sale of the ground. The decisions are clearly interlinked, and I would argue that fans would have strong concerns if a club owner was seeking to sell the ground, which would in a number of instances lead to either a relocation or an impact on the club’s heritage. The sale, for example, could lead to the renaming of a stadium, and the fans would clearly have a view on how that would impact their support for the club.
I ask the Minister to reflect on the hon. Gentleman’s points, because the clause seems to lack clarity on how that distinction is being made. I understand the point she is making about the financial considerations of owners, but the Government should reflect carefully on the argument against this clause, because it is not very clear to members of the Committee.
Stephanie Peacock
I appreciate the comments that have been made, and I will take them away and reflect on them, but I ask my hon. Friend the Member for Sheffield South East at this point to withdraw his amendment.
Mr Betts
The Minister has taken a very sensible approach. I accept that accepting an amendment here and now, out of the blue, is not how Government operate; but there is a lack of consistency between the two clauses, so I appreciate her agreeing to go and have a look at them. She has not committed to a change, but she has agreed to have a look, and that is very helpful. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
As discussed during the debate on the previous amendments, clause 46 serves as an important protection for the home ground of a club. It requires clubs to gain the approval of the regulator prior to any sale or use of the home ground as collateral. A home ground is often one of the most vital and valuable assets a club can own. If it is used as collateral for debt or sold off, that can impact a club’s financial position by weakening the balance sheet. Not owning the stadium may also threaten a club’s long-term financial sustainability.
This clause requires clubs who own their ground to obtain the approval of the regulator prior to any sale or use as collateral. The regulator will consider the risk to the financial sustainability of the proposed transaction and block any potentially financially damaging sale of a club’s home ground. This applies to regulated clubs and also to any club regulated within the last five years, which prevents bad actors from being able to circumvent regulation by leaving regulated leagues in order to skirt protections and strip assets. It recognises the important role that football grounds play in the financial sustainability of clubs and adds protections against bad actors.
Question put and agreed to.
Clause 46 accordingly ordered to stand part of the Bill.
Clause 47
Duty not to appoint administrator without approval
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
This clause sets out the duty on regulated and formally regulated clubs not to appoint an administrator without approval from the regulator. This is to ensure that administration is transparent, acts in the best interests of the club and its creditors and avoids any perceived or actual conflicts of interest. This will give all stakeholders, especially fans, confidence in the administration process.
As with clause 46, this applies to regulated and formally regulated clubs to avoid any risk of circumvention of the rules. The regulatory framework is not a zero-failure regime, so it is possible that football clubs may enter administration despite the best efforts of the regulator. There is already a legal framework for companies, including football clubs, to enter into administration, which is detailed in the Insolvency Act 1986. In many cases, the existing framework has enabled clubs to go into administration and re-emerge as solvent.
However, there are occasions where the administration of a club is not initiated by the creditors but the club itself, so it does not require a court to sanction the appointment in advance. In these circumstances, there have been occasions when some have had cause to question a relationship between the insolvency practitioner appointed as administrator and the football club. This is why, in specific circumstances, the appointment of an administrator requires the regulator’s approval to ensure that the process is transparent, and to avoid conflicts of interests or perceived bias in the appointment. By doing so, all stakeholders, particularly fans, should have more confidence that the outcome is the best one available in the circumstances for the individual club.
Mr French
Clause 47, as the Minister has just outlined, creates a new legal duty on clubs not to enter administration without the prior approval of the regulator. This is an unprecedented intervention: a regulator potentially blocking access to what is, in most sectors, a standard insolvency mechanism. We understand the intent to prevent abuse of administration as a means of dodging financial responsibility and to help protect club continuity. However, this clause raises serious concerns about the balance between corporate law and football regulation going forward.
As drafted, subsection (1) says,
“as soon as reasonably practicable after the body considers that there is a reasonable prospect of an administrator of the body being appointed”.
I would therefore naturally ask the Minister: what constitutes “reasonably practicable” and “a reasonable prospect”? We all appreciate that, in most examples, an owner’s wealth is generated not by the club itself but other business interests. It may become very difficult to determine what is “a reasonable prospect” if we are looking at business interests far from football.
Administration is recognised as part of UK insolvency law, which the Minister referred to, and it exists to help distressed businesses rescue viable parts and protect creditors where possible. Blocking access to administration could make things worse, not better, specifically if it delays actions or deters future buyers. Why are the Government confident that the regulator is better placed than insolvency professionals to determine when administration is appropriate?
On some of the practical risks, insolvency situations often develop quickly, and clubs may need to act fast to avoid a complete liquidation of assets. A duty to obtain the regulator’s approval would therefore add delay and could risk total collapse where speed might be essential. We have seen that in a number of club takeovers over the years. Will there be an emergency approval process for an administrator? Within what timeframe does the Minister expect the regulator to respond? Is there a default route if it does not respond in a quick enough time?
On consistency with company law, clause 47 effectively overrides the Companies Act 2006, creating a two-tier insolvency regime for football clubs. That is not a small step. It sets a precedent for sector-specific interference into commercial law. What discussions has the Minister’s Department had with the Insolvency Service and the Department for Business and Trade on this specific clause and mechanism going forward? Are there any comparable sectors in the UK where companies would be forbidden from entering administration without the regulator’s consent?
Lastly, on unintended consequences, could this provision make distressed clubs less attractive to investors who fear regulatory delays? I fear that it may. It may also push clubs to delay taking action, making outcomes worse for creditors, fans and staff in the longer term. It could also expose clubs to legal risks, if creditors challenge a failure to act promptly to directors. The Opposition support strong oversight, but clause 47 must not become a regulatory roadblock in moments of crisis. Football clubs must be able to act swiftly to protect their future. The football regulator should be a safeguard, not a barrier to survival. We urge the Minister to have a close look at some of those questions and hopefully provide some answers today. We fear that this clause, as drafted, may have a number of unintended consequences.
Ordered, That the debate be now adjourned.—(Vicky Foxcroft.)
Football Governance Bill [ Lords ] (Eighth sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateThursday 12th June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 12 June 2025 - (12 Jun 2025)
The Committee divided: - Ayes: 2 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Lincoln Jopp (Spelthorne) (Con)
It continues to be a pleasure to serve under your chairship, Ms Butler. I do not know whether the Minister has ever run a company that was approaching either administration or insolvency, but had she, she would know that a number of incredibly onerous and important duties are placed on the directors of such companies, which are literally minute by minute, in terms of them being shown to be acting responsibly. That can include, potentially, having multiple board meetings during a day, which are minuted, in order to revisit the “going concern” statement that the company does indeed have sufficient resources to meet its obligations as they fall due.
The penalties for failing to act responsibly and in accordance with the Insolvency Act 1986 in such circumstances can include being barred as a director of any company by the Secretary of State for a number of years, whereas the jeopardy in this Bill is possibly losing the ability to own a football club or to be an officer thereof. On the basis that we can all become millionaires or start-up billionaires and buy a football club, it is very concerning that we are putting in law the ability to override the directors of said companies’ obligations under the Insolvency Act. I would be grateful if the Minister could tell us whether the Government have taken any legal advice on the specific question about the potential conflict between obligations on directors under the Insolvency Act and obligations on owners and officers under the Bill.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
I will respond to the points made by the shadow Minister and then come to those from the hon. Member for Spelthorne. The appointment of an administrator would not delay a club entering administration, as that is a separate process from the appointment of a specific administrator. My officials have met both relevant teams in the Insolvency Service and the Department for Business and Trade to ensure that the provisions in the Bill do not impinge on the existing insolvency processes. That speaks to the point made by the hon. Member for Spelthorne.
As for the shadow Minister’s other questions on precedent, special administration regimes exist for various purposes, such as the water utilities or energy suppliers. They have distinct processes for entering administration. The provision in the Bill does not go as far as that. Ideally, the provision will not need to be used frequently, if at all, but if it is, it will look to ensure that fans can feel more confident than they do now. It works alongside the requirements but it still stands alone, so I commend the clause to the Committee.
Question put and agreed to.
Clause 47 ordered to stand part of the Bill.
Clause 48
Duty not to relocate without approval
Mr Clive Betts (Sheffield South East) (Lab)
I beg to move amendment 91, in clause 48, page 40, line 18, at end insert—
“(e) if the arrangements would represent a significant upheaval of the connection between the fans of a club domiciled in England and Wales and the club (taking into account the following non-exhaustive factors: proximity to home ground, proximity to other clubs’ grounds, journey time for fans and any other factors that the IFR deems relevant) the club’s fans have actively approved the arrangements.
(4A) In order for the Regulator to be satisfied with subsection (4)(b), a regulated club must take reasonable steps to establish that the majority of the club’s fans domiciled in England and Wales do not consider the arrangements to constitute significant harm to the heritage of the club.”
Mr Louie French (Old Bexley and Sidcup) (Con)
I hope that everyone is appropriately refreshed after the lunch break. I will not seek to go to VAR to rehash any of the debates we had before lunch, but we have great sympathy with the points made by the hon. Member for Sheffield South East. We also believe that fans should have a strong say if clubs seek to move ground, as we have debated. The obvious questions, which we will come to in the next set of debates, are about what fan consultation and approval would look like. I know that that will be part of our heritage discussion in a moment, so I will not proceed on that now.
In thinking about some of the hon. Gentleman’s examples—Wimbledon being the most obvious one—I recall that as a teenager, or a bit younger, I would watch Wimbledon play at Crystal Palace, at Selhurst Park. They were the Crazy Gang in south London at that point, and they would often play there. So I understand his point, especially about the move to Milton Keynes and the controversy that that caused. As he highlighted, thankfully, we have not had too many examples that are similar to the American franchise system, where, in the National Football League, the Raiders have moved a number of times over the years, to different cities, depending on the financial attraction of each state.
Beyond the Man United and Everton examples, which we have discussed, there are other clubs who have moved. The one I first think of, which is closest to where I am from, is the Arsenal move a number of years ago from Woolwich Arsenal in south-east London to Islington. It is an interesting point, because a lot of the fans in south-east London are still strong supporters of Arsenal because of their generational links. For example, my brother-in-law’s grandfather was an Arsenal fan, so he is an Arsenal fan. The London example is probably not the best one, because it is simple to argue that fans can get across London fairly easily. It would be more dramatic if a club were being moved to the other end of the country, which is the point he is making—he is nodding in agreement.
I will be interested to know how the Minister and the Government view the amendments and how this issue might impact the regulator’s operations. I have a lot of sympathy for the amendments, and I will listen carefully to the Minister’s response.
Stephanie Peacock
Welcome back to the Committee after lunch, Ms Butler. I thank my hon. Friend the Member for Sheffield South East for tabling the proposals, which seek to strengthen the protections on club heritage. The safeguarding of football heritage will be a key priority for the regulator, and there are a number of provisions in the Bill to uphold that key objective. It is vital that fans can have their voices heard at their clubs, especially regarding key heritage assets that can play a significant role in community identity and history.
That is why, as we will discuss in relation to clause stand part, clause 48 requires clubs to consult their fans and have regard to their views on a proposed relocation of a home ground. It is also why the regulator will determine whether the relocation will result in significant harm to a club’s heritage. This is not a binary decision, however, and in lots of cases will require a holistic approach and for the regulator to consider a number of factors, including not just the views of current fans, but the club’s history and the ability of fans to get to the ground. We would expect the regulator to engage and consult fans of the club, because it would be necessary to do so to ascertain the impact on club heritage. As the shadow Minister touched on, we will discuss this further in a little bit.
Amendment 91 would require the club to take reasonable steps to establish the views of the majority of supporters, rather than allowing the regulator to take the multifaceted approach that the Government think is best suited to the nuanced issue of club heritage. The importance of fan voices being heard is why the regulator spells out a number of protections for heritage assets, such as the home brand and home shirt colours, among others. Any breach of these duties would qualify as a relevant infringement by the club. Although we expect that the regulator will take an advocacy-first approach, a range of sanctions will be available.
Although the Government understand that the intention behind new clause 14 is to further entrench these duties, this legislation has been designed so that the duties apply across the clubs, with the regulator ensuring compliance. Amending articles of association can be resource-heavy and require shareholder agreement. It also does not guarantee that there will be compliance. This is not something that the Government see as an appropriate or necessary step to require all clubs to take. Instead, the Bill will protect fan consultation through other means. For those reasons, I am unable to accept the amendments.
Mr Betts
I thank the Minister for the reply—I think. That was a bit of a reply about new clause 14 but she did not really address amendment 91 and the regulator being required to take account of factors such as relocation over distance and where fans live. In some ways, I think that is the strongest part of this discussion, because it is the thing that worries fans the most.
Stephanie Peacock
I talked about taking a holistic approach, and I said that the regulator must consider a number of factors—not just the current views of fans but the club’s history and how fans get to the ground. I acknowledge some of the examples that my hon. Friend has given, and I was really pleased to visit the new Everton stadium a few months ago. We obviously recognise that sometimes it is very legitimate, and other times it is not. That is why we have gone for the holistic approach.
Stephanie Peacock
Yes, and I have obviously drawn attention to some of them in my remarks. That is why we do not want to be prescriptive; we want the regulator to be able to take a holistic, case-by-case approach.
Stephanie Peacock
It was. I gave some examples in my contribution about history—
Stephanie Peacock
Clause 48 places a duty on clubs not to relocate from their home ground without approval from the regulator. As we just discussed, home grounds play an important role in the history of a club and are often the club’s most valuable asset. These grounds are where many thousands of fans watch their teams play every weekend. Relocating them to areas that have no connection to the heritage and history of a club can have a significant impact on those supporters and the local area, as we saw when Wimbledon moved to Milton Keynes, which my hon. Friend the Member for Sheffield South East just spoke about.
The impact of a home ground relocation on fans and the club is why we are legislating for the regulator to pre-approve any proposal in that regard. As subsection (4) of the clause sets out, the regulator must be satisfied that the proposed relocation would not “undermine the financial sustainability” and significantly harm the heritage of the club. This Government have added a requirement for the regulator to be satisfied that the club has taken
“reasonable steps to determine the views of… fans”
and taken those views into account.
The Government do not want to stifle development where it brings value and aligns with the heritage of the club. The clause makes the important and necessary recognition of the vital role that home grounds play in communities and adds an extra layer of protection to them while leaving room for clubs to evolve and continue to develop. I commend the clause to the Committee.
Question put and agreed to.
Clause 48 accordingly ordered to stand part of the Bill.
Clause 49
Duty not to change crest, home shirt colours or name without approval
Mr Lee Dillon (Newbury) (LD)
I beg to move amendment 140, in clause 49, page 40, line 31, at end insert—
“(1A) A regulated club must notify the IFR if it is considering making any material changes under subsection (1) and the IFR must monitor the reasonable steps taken to independently establish that the changes are supported by a majority of the club’s fans.”.
This amendment would require the IFR to take steps to independently oversee a club’s fan consultation process on the material changes specified.
Stephanie Peacock
I thank hon. Members for tabling the amendments to clause 49. We will discuss the clause in more detail in the clause stand part debate, so I will reserve some of my comments until then. To summarise, however, the clause places a duty on regulated clubs not to make changes to key items of club heritage without the support of the majority of the club’s fans and approval by the Football Association.
As set out in clause 7(4), the regulator is already required to monitor compliance with obligations. However, we do not think it appropriate for the regulator to be directly involved in every instance of a heritage change. As a light-touch regulator, we do not expect it to intervene where clubs are already meeting what is required of them. Instead, it will be able to have a wide view, and intervene where there are concerns.
Any change to heritage assets will necessarily come under significant scrutiny by fans and the public, as well as the FA through its existing fan engagement standards. Additionally, in any case of non-compliance, the regulator will have sufficient enforcement options at its disposal. The process is therefore appropriately safeguarded without the need for direct regulatory involvement each time.
Turning to amendments 111 and 92, club names are a vital part of the club’s heritage. The legislation therefore introduces legal protections for that heritage asset. The FA has a long track record of being able to take a considered approach to name changes, listening to fans and heritage concerns, and taking appropriate action. That was demonstrated in the case of Hull City: the FA blocked multiple attempts to change the name to “Hull Tigers”. The FA, with oversight of all levels of football, is also in a good position to ensure that name changes do not have unintended implications for clubs that are outside the regulator’s scope.
The Government therefore believe that the FA is in the best position to take into account fan opinions and all the other relevant considerations, with the regulator acting as an enforcement backstop. That is in addition to any mandatory licensing requirement for clubs to consult their fans on any matters relating to the club’s name, among other heritage assets.
The shadow Minister asked which fans will be consulted. For the most part, clubs will be in the best position to understand the demographics of their fans. The regulator will be able to provide guidance for clubs for on how best to consult fans. Clubs in the lower leagues will tend to have a more local fanbase, whereas larger clubs will have fanbases from across the world, as the hon. Member for Sheffield South East pointed out. That is why we want to implement proportional and flexible proposals.
Mr Betts
We all feel concerned about this issue. It is not about the clubs that already consult well; it is about those that do not consult, but will be compelled to consult by the legislation, and will not really want to—they will find ways around it. The regulator can give guidance, but if a club does not follow that guidance, what will the regulator’s likely course of action be?
Stephanie Peacock
We will come on to enforcement, but a range of enforcement options will be available to the regulator, if it feels that a club is not doing what it asked the club to do.
Mr French
To add to the point made by the hon. Member for Sheffield South East, if a club—the Minister gave the example of Hull—decided that it wanted to go ahead and change its name to “Hull Tigers”, but the regulator felt that the fans had not been consulted thoroughly enough, could the regulator deduct points from a club?
Stephanie Peacock
No, there are no sporting sanctions in the Bill. Those are not in scope. To take the point about the FA further, it has a long track record of being able to take a considered approach to name changes, to listening to fans and heritage concerns, and to taking appropriate action.
Lincoln Jopp
I welcome the fact that the Minister is saying, “Let’s trust existing organisations to do it”, rather than bringing it within the purview of a higher regulator. On the basis that the FA has exercised such responsibilities when it comes to names, why cannot it be trusted to have the same consideration for emblems and colours?
Stephanie Peacock
As I said, the FA, with oversight of the levels of football, is in a good position to ensure that name changes do not have unintended implications for clubs that are outside the regulator’s scope. It has done that point on names well. That is why we want to leave it to do the good job it is doing.
Mr Dillon
I thank the Minister for her response. Although the Bill tackles financial sustainability, it has a real ability to rebuild trust between fans and football clubs. I feel that all three amendments are still worthy of being pressed to a vote, and I commend amendment 140 to the Committee.
Question put, That the amendment be made.
Stephanie Peacock
Clause 49 requires a club to establish that a majority of domestic supporters approve any material change to its emblem, crest or predominant home shirt colours. A club’s name, home shirt colours and emblem are intrinsic parts of its heritage, intertwined with decades of club and supporter history. The decision to materially change any of them therefore requires considered thought and consultation. The clause means that changes can still be made, but only if, and once, fans have voiced their support. In practice, we expect that could take place through a formal survey of fan opinion, as we saw last season with Bristol Rovers, where supporters opposed the final proposal that was put to them, resulting in the club halting the redesign of their emblem.
The clause also requires clubs to get FA approval prior to changing the name that the club’s team plays under. The view of supporters is a significant factor in the FA’s decision making. However, the FA may also need to balance wider considerations regarding to a name change. That might include whether there would be any adverse effects on other clubs throughout the pyramid. The existing FA rule has been used to prevent name changes, which have been proposed in the past against the wishes of fans, as I mentioned with the example with Hull City. Codifying this as a legal duty will mean there are additional powers to ensure clubs do not make changes without proper approval and allow the regulator to respond to instances of non-compliance. The clause serves one of the key objectives of the regulator: protecting the heritage of English football. I commend it to the Committee.
Mr Betts
I am still a bit uneasy about those clubs that are not going to enter into the spirit of the really important part of the Bill: proper fan consultation. I come back to Sheffield Wednesday and its owner, who thinks sitting down for 10 hours of deliberation with hand-picked fan groups and not answering any questions amounts to a consultation—it does not.
I was interested in what the Minister said about how the regulator will have the right to issue guidance about how consultation should happen, and then there can be enforcement if the guidance is not followed, which means the guidance effectively becomes a requirement. I hope that we can elaborate on that later in the Committee’s discussions, as she indicated we would, because, without those backstop powers, there will be some club owners who regard the club as their personal possession and believe that no one has a right to interfere in how they run it.
Stephanie Peacock
Names interact with other clubs in the pyramid, which is not the case with shirts and colours, and we think there are strong provisions in the Bill for fan consultation.
Mr Betts
I hear what the Minister said, but I want to think about that. I know what her good intentions are, but I also know there may be some people out there with bad intentions; it is about making sure that they come in line with the Minister’s good intentions. I am holding back to see what further discussions we have, but this is really important. It is a wider issue: there are so many clubs with so many disparate fan groups, and owners will pick and choose if there is not certainty. That is why I raised the issue, which I think we ought to come back to, of a clear role for the Football Supporters’ Association, the body that oversees fan groups in this country. It has a neutral view of which groups are the most important and relevant in different clubs, and it can help the regulator enormously in what, in some cases, will be a challenging process of trying to identify the fan groups who really speak for fans in those clubs.
Mr French
I will not put the hon. Member for Sheffield South East at risk with his own side by talking too fondly about the comments he just made—I will not make it sound like we are trying to do a double act—but we have heard a lot of concern in our debates on the clause, and the amendments tabled to it, about how it will work. The hon. Member mentioned that some club owners—one would hope only a minority of them—would seek to expose loopholes in the Bill. That is why we tabled amendment 111, which would introduce a safeguard by requiring a clear vote and the approval of the majority of fans.
There are a number of risks for the Government with this Bill, but one of the biggest is this: if it does not protect the things it is designed to protect—in this case, the heritage of a football club and a say for fans—what is its purpose at all? If one of the examples we have discussed plays out in future, that question will be asked of the Government. In our future debates on the Bill, perhaps they can provide more clarity about their thinking, and perhaps they will incorporate some of the arguments we have made today.
Stephanie Peacock
I am grateful to hon. Members for their contributions. We believe that we have strengthened measures in the Bill to put fans and communities back at the heart of the game and to protect football heritage. All regulated clubs will now be required to have an effective framework in place to meet and consult regularly a representative group of fans on the specified relevant matters, including any proposal to relocate the home ground and some of the issues we have just discussed. We expect that the regulator will be best placed to understand the circumstances of individual clubs across the country. It will produce guidance to support clubs in meeting its requirements, and it will take into account things like precedent and ensuring proportionality.
Question put and agreed to.
Clause 49 accordingly ordered to stand part of the Bill.
Clause 50
Duty to notify of changes in circumstances relevant to the IFR’s functions
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause places a duty on all regulated clubs to notify the regulator of any material change in circumstances that is relevant to the regulator’s functions, as soon as reasonably practicable. The regulator will need a complete picture of each club in order to effectively regulate. Full transparency and timely updates will allow the regulator to stay up to date on any relevant changes in real time.
The duty to notify in the clause is an ongoing duty on regulated clubs. By contrast, the annual declaration mandatory licence condition applies to licensed clubs only. The annual declaration is about creating an annual touchpoint for clubs as part of the licensing regime, rather than requiring an annual licence renewal. It will allow clubs to declare a summary of any matters that they notified, or should have notified, over the past year.
Mr French
I will not rehash the Minister’s description of the clause, but it raises a number of questions about the interpretation of the clause and the requirements on clubs. What guidance will be provided to clubs to determine what constitutes a “relevant” change in circumstances, because that is very open to interpretation? What might such a change look like? We are not trying to micromanage, but we think clubs might find it helpful to understand, even if it is via a list of frequently asked questions from the regulator, what constitutes a change of circumstances so that they do not accidently fall foul of well-intentioned drafting.
Could the duty to notify a change in circumstances be accidentally disproportionate to lower league clubs? We have discussed at length that those clubs generally do not have the same administrative resources as the big clubs. Will the regulator look to have a more flexible approach to clubs lower down the pyramid that may not have the ability to notify as quickly as those at the top?
Stephanie Peacock
We expect the regulator to look at this on a case-by-case basis. As we have said throughout, we very much intend for the regulator to be proportionate depending on where a club sits in the pyramid.
Question put and agreed to.
Clause 50 accordingly ordered to stand part of the Bill.
Clause 51
Duty to keep fans informed of insolvency proceedings
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause places a duty on all regulated clubs in relevant insolvency proceedings to keep fans informed of the progress of the proceedings. Any fan that has experienced their club going into administration can attest that it is a worrying and often confusing time. Although the regime will look to best protect clubs, it cannot be zero-failure. However, the clause is intended to make the process more transparent for fans when the worst happens. The duty will apply only as far as is reasonable and will not fall on the administrators or any body not regulated by the football regulator. The clause was added to the Bill in order to mitigate unnecessary worry and confusion for fans.
Mr French
I have a few questions. How will the regulator assess whether a club has sufficiently fulfilled its duty to keep fans informed? Could the requirement to disclose information during insolvency proceedings create additional reputational or financial risks for clubs? How will the clause be applied consistently while respecting confidential obligations to creditors? We have spoken a lot about insider information. If the Minister does not have the answers today, it would be helpful to get them in writing in order to understand how some of these complex legal matters might work.
Stephanie Peacock
I am happy to write to the shadow Minister. I appreciate that we added this clause; it was not in the previous iteration of the Bill. That is why I was keen to talk about reasonability. We appreciate that insolvency is a complex, fast-paced, changing and challenging situation, but we also appreciate—Members have talked about different clubs that have gone into administration—the worry for fans, so we want to keep them as informed as reasonably possible. The shadow Minister asked me for something further in writing and I am very happy to provide that.
Lincoln Jopp
Again, I am concerned about the clash of duties. The Minister has already told us that her team and the insolvency team have met and considered this issue. In a period of liquidation, not putting additional debt into a company, or indeed spending cash, is one of the directors’ responsibilities, but this will undoubtedly cost the club. Has the Minister sought and received reassurances that this approach is consistent with the Insolvency Act?
Stephanie Peacock
Perhaps I will add the answer to that question to my letter to the shadow Minister, and I will copy it to the hon. Member for Spelthorne. The clause is clear that the duty will apply only as far as possible, because we do not want to add a burden at an already difficult time. As this is quite a complex but important point, I am happy to write to both hon. Gentlemen.
Question put and agreed to.
Clause 51 accordingly ordered to stand part of the Bill.
Clause 52
Duty to publish a personnel statement
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause requires licensed clubs to prepare a personnel statement and submit it to the regulator for approval. Alongside the statement, clubs must provide an explanation as to why they consider it to be accurate. The owners and officers who control and run football clubs are vital to their sustainability. Therefore, the regulator needs to know who is running the show behind the scenes in order to implement its regime effectively.
A personnel statement must outline each of the club’s owners and its ultimate owner, as we have discussed; its officers, with a job description for each; and its senior managers and their roles. Once the statement has been submitted, the regulator will review it and decide either to approve it or to modify it. Any modification to the statement must be made in consultation with the relevant club to ensure that the statement is accurate. Once the statement is approved by the regulator, the club must publish it online, increasing transparency and accountability in football. Subsequent statements must be submitted to the regulator if an old statement becomes out of date—for example, after the departure or hiring of an officer.
Let me also highlight the role of the Secretary of State’s guidance in providing clarity to owners about who meets the definition of someone who exercises significant influence or control. We committed in the other House to producing the Secretary of State’s guidance before clubs are required to identify owners who meet that definition to the regulator. I commend the clause to the Committee.
Question put and agreed to.
Clause 52 accordingly ordered to stand part of the Bill.
Clause 53
Duty to pay a levy
Mr French
I beg to move amendment 133, in clause 53, page 42, line 3, at end insert—
“(1A) But the IFR may not require a club with fewer than 10 full time equivalent employees to pay the IFR a levy in respect of a chargeable period during which the club is a licensed club.”
This amendment would exempt clubs with fewer than 10 full time equivalent employees from having to pay the levy.
Mr Dillon
It is a privilege to serve under your chairship, Ms Butler. New clause 24, tabled in my name, seeks to introduce a fair and transparent exemption procedure for football clubs in administration. When a football club enters administration, it is not merely a financial event; it is often a crisis that rocks the entire community, as we saw in Bury. Supporters, many of whom have been lifelong followers, are left facing uncertainty and fear for the future of their club, which is often the heartbeat of their town or city.
New clause 24 seeks to strike a vital balance by maintaining the integrity of the levy while allowing compassionate and evidence-based interventions when a club is on its knees. It would ensure that exemptions are not handed out indiscriminately, and that the regulator must assess each case on its merits and satisfy itself that the club’s financial difficulties are not a calculated move to evade its levy responsibilities. Most importantly, the new clause would give clubs a chance.
Stephanie Peacock
I thank the shadow Minister for his amendment, and I thank the hon. Members for Cheltenham and for Newbury for their new clauses. I acknowledge the intent behind them.
We will shortly discuss the levy in more detail when I speak to clauses 53 and 54, but in short, the Bill gives the regulator the power to collect a levy to recover its running costs from football clubs that hold an operating licence. I will outline why the Government intend to resist this amendment and these new clauses before directly answering some of the specific points that hon. Members have put to me.
The levy arrangement follows the precedent of other regulators, such as the Financial Conduct Authority, the Competition and Markets Authority and Ofcom. As the regulator is designed to improve the financial sustainability of English football, it is vital that the associated costs do not burden clubs, especially those further down the pyramid.
Amendment 133 and new clause 5 seek to address similar issues relating to ensuring that small or lower-league clubs are not burdened by unaffordable costs as a result of this regulation. I assure the Committee that the Bill is already designed with National League clubs in mind. The regulator will be tasked with improving the financial sustainability of football, and placing an undue burden on small clubs would be completely contradictory to that aim.
Clause 53(10) introduces a statutory requirement for the regulator to have regard to each club’s individual financial circumstances, and the league in which it plays, when setting the levy. Given that requirement, we expect that the levy will be proportionate, with the Premier League—specifically the six clubs with the highest revenues—covering the majority of the cost. That solidarity will reduce the burden on clubs lower down the pyramid. No club should be charged more than it can afford.
Through its levy rules, the regulator will also have the power to exempt clubs from paying the levy. That power, provided by clause 53(8), ensures that there is a mechanism to avoid burdening clubs. If certain conditions set by the regulator through rules are met, the regulator has the discretion to exempt clubs from paying the levy—that answers the shadow Minister’s question. The power will work in conjunction with the requirement on the regulator to consider each individual club’s financial resources, and the competition in which it plays, when setting the levy, as well as the requirement to consult all regulated clubs on its levy rules.
On new clause 24, I agree wholeheartedly that the regulator should not place an undue burden on a club that has already entered administration. I reassure the hon. Member for Newbury that the regulator will set out its levy methodology, including the discretion to set the levy according to a club’s individual circumstances, and to exempt a club completely if specified conditions are met.
The regulator has a core objective of improving the financial sustainability of English football, and I am confident that it will be cognisant of the impact that the levy could have on any club, and especially a club in administration or other financial distress. The Bill’s provisions, such as the regulator’s discretion to exempt certain clubs from the levy, if necessary, account for that core objective.
In response to the shadow Minister, I note that there is no cap, but the regulator can set costs related only to its functions. As I have just outlined, under the powers granted to the regulator by the Bill, it could exempt small clubs from the levy, if that is deemed necessary. However, we do not think that mandating a complete exemption in legislation is appropriate. Exempting a whole league before an assessment has been made of whether clubs in that league can afford the levy would be disproportionate.
Lincoln Jopp
I want to clarify whether the Minister is entirely comfortable that the Government are in no way able to control the amount of money spent by the regulator. If, in fulfilling its duties, the regulator decided it was important to fly business class to meet UEFA and FIFA once a month—if I were the regulator, I could probably make the case that I was fulfilling my duties by doing that—it would create a huge cost and involve hiring additional staff. Are the Government really prepared to give the regulator a blank cheque?
Stephanie Peacock
There is no cap. However, I draw the hon. Gentleman’s attention to the regulatory principles we addressed earlier in the Bill. Obviously, the regulator needs to be proportionate and reasonable. The regulator will guide its operations according to those principles.
Stephanie Peacock
I am grateful to the hon. Gentleman for taking the words out of my mouth, because I was going to conclude by drawing the Committee’s attention to a letter placed in the Libraries of both Houses when the Bill was in the other place. The letter, dated 6 March, was sent by Baroness Twycross, who took the Bill through the Lords. I will not detain the Committee by reading out the letter—Members can look at it—but it breaks down the proportions. Obviously, costs are based on the impact assessment and are indicative, so they are not meant to be prescriptive; it is meant to be an indicator. The letter may be helpful if the Committee would like more detail.
Mr French
I have listened carefully to the Minister’s arguments, and she has made some helpful clarifications. However, due to the lack of a cap, as my hon. Friend the Member for Spelthorne said, it is difficult to rely on the letter for what club certainty might look like in the future. We have discussed at length how well-intentioned plans can easily spiral, which is why we believe amendment 133 is important in helping to safeguard the clubs with the smallest means and those lowest down the pyramid.
Question put, That the amendment be made.
The Chair
Decisions on the new clauses will be made at the end of the Committee’s considerations.
Stephanie Peacock
I beg to move amendment 18, in clause 53, page 42, line 8, leave out “leviable functions” and insert “functions under this Act”.
This amendment is consequential on Amendment 22.
Stephanie Peacock
These amendments will make all regulatory functions under the Bill fundable through the levy. As drafted, the Bill sets out the specific functions that will be funded through the levy, making a distinction between the funding of leviable and non-leviable functions—I will discuss those concepts in greater detail shortly. Currently, the former would be funded via the levy and the latter via rules set by the regulator.
These amendments would make the funding mechanism simpler and more reliable by clarifying and ensuring that the regulator will be able to recover litigation costs related to non-leviable functions. If the regulator were unable to recover those costs, there is a risk that it would either be unable to use some of its powers or have to seek Government financial assistance to fund them. That is why we propose these changes.
Mr French
I listened very carefully to the Minister’s explanation of these amendments, which have been introduced at a fairly late stage. I hope she can provide some clarity on a number of questions.
First, was it always the Government’s intention to have these separate streams of funding, as she has described, or is this a way of expanding the IFR’s powers to charge the levy? I am unclear about why the change has happened now, because we have obviously been through a lot of consultation and the Bill has been in the other place for some time. It is not necessarily clear why these changes have come about at this stage, so I would appreciate an answer.
Lastly, when the Minister described the charges as non-leviable, the natural question was, “Who picks up the bill?” Are we talking about taxpayers, and if we are, what are those costs? Exposure to risk would obviously be a major concern for taxpayers and, I suspect, a number of Government Departments following the spending review. I appreciate her comments about how the Government believe that the functions may not be used or required, but there needs to be an answer about the risk of those non-leviable payments and what that might look like in the future.
Stephanie Peacock
I am grateful to the shadow Minister. First, it is certainly not about expanding, and we have been very clear that we do not want scope creep. He asks “Why now?” We have always maintained that we want the best legislation and the best outcome. We very much listened to the debate in the other place. We reflected on that, and we believe that this is just a simpler, less complex way of going about it.
On his last question, I can very much assure him that it is quite the opposite. By making these changes, the costs will not have an impact on taxpayers. We are clear about that.
Mr French
I am still unclear on that point, but I am happy to have the answer in writing. Who will pick up the bill when the levy cannot be charged to clubs, and what will that bill look like? I am not at all clear about how that will play out in practice. I am not sure whether I am misunderstanding the Minister, and I am happy to have it in writing, but I am not clear what it means.
Stephanie Peacock
I say gently that I think the shadow Minister is misunderstanding, and I am happy to write to him. The amendment means that all functions can now be covered by the levy, whereas previously there were two funding mechanisms in the Bill. It is a technical change.
Lincoln Jopp
I agree with the Minister—my understanding of what she just said is the same—but that leaves a tiny bit of clarity still to be given. Will all the normal running costs of the regulator be met by the levy, and none by the taxpayer?
Stephanie Peacock
Yes, that is the intention.
Amendment 18 agreed to.
Amendments made: 19, in clause 53, page 42, line 13, leave out “leviable functions” and insert “functions under this Act”.
This amendment is consequential on Amendment 22.
Amendment 20, in clause 53, page 42, line 14, leave out “leviable functions” and insert “functions under this Act”.
This amendment is consequential on Amendment 22.
Amendment 21, in clause 53, page 42, line 19, leave out “leviable”.
This amendment is consequential on Amendment 22.
Amendment 22, in clause 53, page 42, line 26, leave out subsection (4).—(Stephanie Peacock.)
This amendment removes the definition of “leviable functions” so that the IFR may charge a levy for all of its functions under the Act.
Mr French
I beg to move amendment 105, in clause 53, page 42, line 42, at end insert—
“(6A) Once the IFR has established a levy under subsection (1) and made the required payments under section 96, the IFR must only fund its functions under this Act through its own revenue streams.
(6B) For the purposes of subsection (6A) the IFR’s ‘own revenue streams’ are any amounts payable to the IFR from regulated clubs under subsection (1).”
This amendment requires the IFR to be self-funding through the industry levy, but after it has paid its initial costs and the Secretary of State’s establishment costs to the Treasury.
The amendment would require the Government’s new regulator to be self-funding through the industry levy, but after it has paid its initial costs and the Secretary of State’s establishment costs to the Treasury, so that it is entirely self-sustaining. That is not unreasonable; taxpayers are already being squeezed by this Government, so it would be ludicrous to suggest that they should foot the bill for the Labour Government’s regulator. That is why I tabled the amendment, which seeks to place a clear financial obligation on the regulator to ensure that, after covering its start-up and establishment costs, it becomes entirely self-funding through the industry levy.
The principle behind the amendment is simple: if we are to create an independent regulator for football, its independence must extend beyond structure to include financial independence from the taxpayer. The clause gives the Secretary of State discretion to determine the mechanics of the levy, but it leaves unanswered an essential question: who ultimately pays—we have had a bit of discussion about that—and for how long? The amendment provides a clear and reasonable answer: the taxpayer may support the regulator’s launch, as might be expected, but once that is done, the regulator should stand on its own two feet.
Let us not forget the purpose of the Bill: the regulator is intended to be arm’s length, neutral and shielded from political interference. However, the Government have gone to great lengths to compromise that independence through their appointment, as we have discussed, and the principle would be fully compromised if the regulator remained financially reliant on the Department for Culture, Media and Sport, or the Treasury for that matter. Independence is not just about who makes the appointments, but about who signs the cheques.
If the regulator is to carry out its duties credibly—overseeing financial discipline, enforcing ownership standards and planning across the football pyramid for the long term—it must operate free from any perception of ministerial influence. That means being self-funding. The idea that the British taxpayer should continue to fund the ongoing operations of this new body is simply not justifiable, particularly at a time when families are feeling the squeeze and public services are under pressure. If clubs need a regulator—and the Government have decided that they do—then clubs, not pensioners in Bexley or shop workers in Barnsley, should pay for that regulator.
The amendment would also introduce discipline into the regulatory model. It would ensure that the Government’s regulator lives within its means, plans sustainably and operates efficiently, just as it will expect clubs to. We must avoid the slow drift we have seen with other public bodies, where what begins as temporary state support gradually hardens into permanent public subsidy with no sunset clause or accountability.
By requiring the regulator to repay its start-up costs and then operate independently, we would make a clear distinction between initial public investment and long-term industry responsibility. It is not unreasonable to ask that football, having accepted the need for regulatory oversight, for which many have lobbied, now contributes to that oversight on a permanent and self-sustaining basis.
That gives rise to a number of questions for the Minister. Is there a timeline for when the regulator is expected to be self-funding, or will it continue to draw on the public purse for a number of years? What provision, if any, has been made to recover the taxpayers’ outlay once the regulator begins to collect levy income? I would be grateful, as would taxpayers across the country, for reassurances from the Minister that those issues are being addressed, and that the taxpayer will not be left to subsidise the industry without a clear exit plan.
My amendment would protect the principle of independence. It would safeguard the public purse and ensure that those who arguably benefit from oversight are the ones who pay for it. Football is told that it will get a strong, credible and financially sound regulator, but taxpayers deserve clarity, discipline and fairness in how that regulator is funded. I therefore urge the Committee to support the amendment and make the regulator accountable to the industry it oversees, not dependent on the Government that created it. Let us build something that is self-sustaining, responsible, and fit for the future.
Stephanie Peacock
During our debate on the technical changes proposed by the Government, we discussed the removal of the non-leviable functions. That means that everything will be levy-funded, so there will be no cost to the taxpayer. We absolutely agree with the hon. Gentleman’s points about the regulator being self-sustaining and self-funding. The Government also agree that the regulator should not be able to borrow money at its own discretion, which is why it is already prevented from doing so in paragraph 37(2) of schedule 2, which sets out that the regulator cannot borrow money unless explicitly permitted to as part of the financial assistance from the Secretary of State. We expect that that would occur only if absolutely necessary and in extreme circumstances, and would be provided only subject to conditions set by the Secretary of State.
There is no need for the restriction to be duplicated. We absolutely agree that the regulator should be fully funded through the levy, and that is exactly what the levy is designed to do. I will come on to that in more detail when we discuss the levy under clause 53 stand part. The Bill ensures that the regulator’s source of funding for all regulatory functions is the levy. Any financial penalties it imposes through enforcement action can also be used to offset any litigation costs and reduce the burden on compliant clubs.
Mr French
I appreciate that the Minister said that she will come on to that subject in a later debate, but can she be clear about start-up costs and their recovery for taxpayers? How is it envisaged that those costs will be repaid? I appreciate the point she makes about levy contributions, but how will the start-up costs that have been incurred now, along with the cost of the shadow football regulator, be recovered, if at all?
Stephanie Peacock
I would like to address that later, if possible. I have heard the question, and will make sure the hon. Gentleman gets an answer. For the reasons I have set out, I hope he will withdraw his amendment.
Mr Betts
I beg to move amendment 6, in clause 53, page 43, line 35, after “club” insert
“and in particular that the starting point for calculation of the levy payment applicable to a particular club should be a percentage of annual revenue”.
This amendment would require the IFR to have regard to a football club’s percentage of annual revenue when calculating a levy payment.
I encourage the Minister to say whether she thinks that the levy payment should relate to the income of clubs. Some clubs are clearly mega-rich—multi-million pound businesses, every year—but other clubs’ income is down in the few thousands of pounds. My amendment is probing, really, but will the Minister confirm whether clubs’ income is the basic building block on which the levy will be formulated?
Stephanie Peacock
I thank my hon. Friend the Member for Sheffield South East for tabling his amendment. The Government completely understand the importance of any charges on clubs being transparent and proportionate and offering value for money. That must be achieved while maintaining the regulator’s operational independence and flexibility to respond to industry developments in the future. I will come on to discuss the levy in detail, but I will set out the key points now for clarity, in relation both to this amendment and to how the Bill ensures the levy is affordable for clubs.
The regulator must set out in levy rules how the annual levy payments will be calculated. The Bill explicitly requires the regulator to have regard to the club’s financial resources and position in the pyramid. That would include revenue. It should ensure a proportionate approach where no club, big or small, is asked to pay more than what is fair and affordable. Premier League clubs are expected to shoulder the majority of costs, reducing the financial burden on smaller clubs.
It would not be appropriate to prescribe an exact methodology for charging the levy in legislation, as doing so would remove the regulator’s ability to explore other possibly more effective and proportionate methods of charging. That would be counter to the agile and independent regulator we want to create. For example, a club might have a relatively low organic revenue, but its owners might have very deep pockets. The regulator might want to take that into account to ensure that charges are fair, proportionate and relative to circumstances.
I also want to highlight that there is a statutory requirement for the regulator to consult industry on the levy. Every regulated club will be consulted. That transparency means that no club will be surprised by the changes asked of them. That will be sufficient to ensure the levy is fair and proportionate. For the reasons I have set out, I am unable to accept the amendment.
Stephanie Peacock
Before I speak on clause 53, I draw the Committee’s attention to a procedural matter. In preparing for the debate, officials identified some inconsistencies in the impact assessment published on the Bill’s parliamentary web page and gov.uk. It appears that as figures were updated during the development of the impact assessment, they were not reflected in the summary of costs on one page at the beginning of the paper, which was related to the compliance cost and operational cost. The figures are correct in the main body of the impact assessment, and the total cost that those figures added up to is still correct. The inconsistencies also featured in the version submitted by the previous Government. For full accuracy and transparency, we have now corrected it, and the impact assessment on gov.uk was updated last night. We have notified the Public Bill Office to ensure the parliamentary website is updated as soon as possible, and there will be an updated version in the Library shortly.
Having provided that clarification, I will now discuss clause 53, which enables the regulator to charge a levy to licensed clubs that covers the regulator’s running cost. That follows the precedent of other regulators such as the Financial Conduct Authority, the Competition and Markets Authority and Ofcom. The levy methodology is an operational assessment that the regulator is best placed to make independently. By making football clubs more sustainable in the long term, the regulator will be providing a service to the industry. It is only fair that as a wealthy industry, football, as opposed to the taxpayer, should cover the cost of regulation, as has been well discussed by the Committee this afternoon.
The cost of regulation would represent just a tiny fraction of football’s more than £6 billion annual revenue. The industry will also benefit from regulation, which will deliver a more stable pyramid of sustainable and resilient clubs, and so help protect the commercial value of English football. The 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. It is clear in the clause what the levy covers and how the money will be used, ensuring the regulator’s transparency. As I alluded to in the discussion on Government amendments 18 to 26, all costs can now be funded through the levy.
However, 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. That and other safeguards, such as the Department for Culture, Media and Sport’s responsibility as a sponsor, will provide the necessary transparency and scrutiny to deliver value for money.
In addition, as I set out when we discussed the previous group of amendments, the clause also requires the regulator to have regard to a club’s individual financial position when setting the levy charge. Specifically, that covers the financial resources of a club and the league in which it plays. That should ensure a proportionate approach where no club, big or small, is asked to pay more than what is fair and affordable. That will be aided by the requirement for the regulator to consult all licensed clubs, which I will speak to in more detail in the debate on the next group of amendments. In addition, once operational, the regulator will have a legal requirement to set out its levy charges annually and consult all regulated clubs on its methodology.
Question put and agreed to.
Clause 53, as amended, accordingly ordered to stand part of the Bill.
Clause 54
Section 53: consultation and publication
Stephanie Peacock
I thank the shadow Minister for tabling his amendments. Amendment 102 would require the regulator to consult every regulated club, the Secretary of State, the Treasury and others that the regulator considers appropriate, for minor changes to the levy rules. Clause 54 imposes a statutory duty on the regulator to consult the Secretary of State, His Majesty’s Treasury and regulated clubs, as well as other appropriate stakeholders, on its levy rules. However, clause 54(2) sets out that consultation is not needed for minor changes to the levy rules. This is intended to allow the regulator to make immaterial amendments or corrections such as typos or minor rewording without excessive bureaucratic burden.
The amendment would add a layer of unnecessary process that is unjustified given the extensive consultation requirements on substantial changes. It is not in anyone’s interest, especially the regulator’s, to stretch the definition of minor, which is a well-recognised legal term. If the regulator does not consult on a change that has made a material impact on a club, it could face a legal challenge through a judicial review. That will ensure that the regulator is accountable for what it considers minor.
Lincoln Jopp
I do not know whether the Minister has ever conducted a judicial review, but we could not get one done for £9,000.
Stephanie Peacock
I appreciate the hon. Gentleman’s point, but refer gently to my earlier comments. We are talking about typos and very minor changes. I give that example to show that the regulator is accountable for what it considers minor.
On amendment 103, requiring the regulator to publish the information on costs laid out in clause 54(4) six months before the chargeable period would create an operational challenge and would simply not work in practice. The regulator would have to estimate its costs for a chargeable period, having only half a year’s costs to base it on. That could lead to inaccurate levy charges, which could see the regulator underfunded or clubs needlessly burdened. The current requirement to publicise charges as soon as reasonably practicable strikes the right balance between adequate notice for clubs and operational flexibility for the regulator to ensure an accurate and appropriate levy charge.
For the reasons I have set out, I cannot accept the amendments.
Mr French
I listened carefully to the Minister’s response, which was fairly limited. I do not have enough confidence in her replies to withdraw the amendments. We are concerned about the impact on clubs and about the loophole in the interpretation of minor changes. I am not clear on the regulator’s accountability to stop scope creep. I suggested a number of options that the Government might look to adopt instead and did not hear any response to them. On that basis, and linked to some of the comments made by my hon. Friend the Member for Spelthorne, I wish to press the amendments to a Division.
Question put, That the amendment be made.
Stephanie Peacock
Clause 54 imposes a statutory duty on the regulator to consult the Secretary of State, His Majesty’s Treasury and regulated clubs, as well as other appropriate stakeholders, on its levy rules. This requirement to consult on draft levy rules will ensure that the views of clubs are considered as the regulator determines its charging methodology.
The statutory requirement in the clause to consult the Secretary of State and the Treasury will provide further scrutiny and assurance that the regulator’s proposed methodology is fair and proportionate. Allowing the regulator to propose its own charging structure within the strict safeguards outlined in clause 53, and with consultation requirements, enhances its independence and allows for greater scrutiny and accountability of the regulator.
The regulator can be held directly accountable for its charging decisions and the outcomes they produce. The levy is of course an operational matter that should be determined independently by the regulator, in consultation with those it will affect. The regulator will have the necessary information to design a levy based on a robust financial assessment of clubs to ensure that charges are fair and evidence-based. Giving the regulator the discretion to set charges reinforces operational independence and mirrors the approach of other regulators, such as Ofcom and the Financial Conduct Authority.
Question put and agreed to.
Clause 54, as amended, ordered to stand part of the Bill.
Clause 55
Duties to notify and consult the IFR
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
To achieve its objectives, which include a club financial soundness objective, a systemic financial resilience objective and a heritage objective, the regulator will need information from the relevant competition organisers. The clause places a duty on the competition organisers to provide that information, and in the event that they do not, they would be liable to be sanctioned.
A competition organiser must notify the regulator if there is a risk that the regulator may not fulfil its objectives. That is with regard to the club financial soundness objective or the regulator’s systemic resilience objective. In addition, the organiser will need to notify the regulator if it is in breach of a commitment it made as an alternative to a financial discretionary licence condition, or if a club has breached the rules of a specific competition run by the organiser.
The organiser will also have to consult the regulator if it proposes to change its own rules. That is necessary given the interaction between the regulator’s regulation and that of a specified competition organiser. The regulator wants its own regulation to be necessary and proportionate and not to overburden the clubs. It is therefore important to understand any changes in other rules that clubs need to abide by, given that they may increase or decrease the financial risk of clubs.
In all cases, the relevant information will act as an additional source of data to inform the regulator of risks within the industry and whether the regulator needs to impose additional regulation or proceed to enforcement and sanction to ensure the long-term financial sustainability of the industry. I commend the clause to the Committee.
Mr French
The clause sets out a series of duties that require various football stakeholders, including leagues and governing bodies, to notify and consult the Government’s new regulator in certain circumstances. At its core, the clause is intended to improve co-ordination and to prevent regulatory surprises, which in principle is reasonable. We all agree that where the governance of the game affects financial sustainability or club integrity, the Government’s regulator should be aware and engaged.
I will focus on subsection (6), which is a far more consequential provision than it might first appear. I believe it strikes at the very heart of one of the most sensitive and important issues in football governance: the independence of sport from Government control. Subsection (6) imposes a statutory duty on specified competition organisers to consult the regulator when they either add or remove a relevant rule of a specified competition, or vary a relevant rule of a specified competition. I note the comments of the hon. Member for Sheffield South East about when the regulator is involved in a competition and when it is not, with regard to the FA Cup. Some clarity on that would be much appreciated.
In short, the provision means that competitions such as the Premier League, the EFL and the FA Cup would be required—based on the wording of this part of the Bill—to consult the Government’s football regulator every time they change or amend a rule deemed to be relevant by the regulator itself. That might sound innocuous, but let us be clear about what it means in practice: for the first time, a politically appointed regulator, accountable to the Secretary of State, who has received donations from that regulator, would be given a formal, statutory role in the internal rule-making processes of English football competitions.
This is not a light-touch oversight mechanism; we fear it might end up being a direct institutional influence. As we know, it is not compatible with UEFA’s requirements on the non-interference of Government. UEFA statutes are clear that national football associations and their affiliated leagues and competitions must be free from political or Government control. The relevant rule is article 7bis (2) of the UEFA statutes, which states:
“Member Associations shall manage their affairs independently and with no undue influence from third parties.”
Article 9 goes on to state:
“A Member Association may in particular be suspended if state authorities interfere in its affairs in such a significant way that...it may no longer be considered as fully responsible for the organisation of football-related matters in its territory”.
It is pretty clear that the FA will no longer be considered fully responsible for the organisation of football-related matters in its territory should the Bill pass with this provision. Moreover, FIFA echoes that approach in its regulations, particularly in article 14 of the FIFA statutes, which ensures that member associations, such as the FA, remain autonomous and free from governmental or political influence. Article 15 of the FIFA statutes further requires members to be neutral in matters of politics and religion, to be independent, and to avoid any forms of political interference.
Subsection (6) brings us dangerously close to the line, if not across it. Unfortunately for the Minister, the Government seem to be on the wrong side of that line. I will press the Minister on that point, because however carefully the clause may have been worded in terms of consultation, in reality it inserts the Government’s new regulator into the core rule-making processes of the football pyramid. Once that principle is established, the scope can grow.
We know that there are international concerns about scope creep, as I mentioned when speaking to amendment 97.
“UEFA is concerned about the potential for scope creep within the IFR. 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”.
Those are not my words.
Will the Minister confirm whether UEFA has been consulted on the drafting of the clause, and whether the Government have received written assurances that this level of regulatory involvement is compatible with UEFA’s independence rules? If she has, will she place a copy in the Library? If she has received any correspondence to the contrary, will she also place that in the Library so that the Committee has confidence ahead of Third Reading and can scrutinise the provision properly? What safeguards are in place to prevent this from being interpreted—either in Brussels or somewhere else—as a breach of sporting autonomy?
This is not theoretical—it is a real and dangerous risk for English football. Let us remember, in recent years, that other countries have faced disciplinary threats or warnings for perceived interference in football. We have seen federations sanctioned before. National teams and clubs have been threatened with exclusion from competitions. For example, Greece was briefly suspended from international football in 2006 after the Greek Government passed a law that interfered—that was the term used—with the autonomy of the Greek football federation, in violation of UEFA and FIFA regulations. In 1999, Moldova’s clubs and national team faced a ban from UEFA competitions, after it was deemed that there was political interference in the running of its football federation. In 2002, FIFA suspended Zimbabwe and Kenya from international competitions due to perceived Government interference in the football administrations of those countries.
Stephanie Peacock
I thank the shadow Minister for his points. Clubs will be subject to a number of rules from different football authorities. Failure to comply with them may indicate that the club is in some financial difficulty and may prompt the regulator to assess the risk profile of the club. Changes in a competition’s rules may lead to clubs taking additional risks or may threaten the financial soundness of the system. The regulator therefore needs to be aware of such changes so that it is in a position to reassess the long-term financial sustainability of clubs and whether, as a result of the rule change, additional regulation is needed.
The shadow Minister did accept that there is no veto in the clause. I reiterate once again that UEFA are happy with the Bill as drafted. He drew the Committee’s attention to a specific line in the Bill, but I remind him that it has not been changed from the previous iteration of the Bill.
Question put and agreed to.
Clause 55 accordingly ordered to stand part of the Bill.
Clause 56
Part 6: overview and interpretation
Max Wilkinson
I beg to move amendment 76, in clause 56, page 45, line 39, after “organisers” insert
“or by a regulated club”.
Max Wilkinson
Clubs in the English football pyramid currently barter as a collective for funding from broadcasters, but it is not hard to imagine a future in which Liverpool, Manchester City, Arsenal, Chelsea—the hon. Member for Spelthorne has now gone so I can say that—or other big clubs decide that they are going to barter alone. That has happened in other European countries. In fact, Spain had to legislate to stop Barcelona and Real Madrid cashing in on their massive marketable machine that massively distorted the Spanish game.
These amendments are fairly simple. They build in a future failsafe to stop the threat of that happening. If it does happen, the revenue gained by those clubs will be taken into account in the redistribution of funds in the game. It seems like a logical failsafe to introduce to the Bill, which we hope will be accepted.
Stephanie Peacock
I thank the hon. Member for his amendments. We understand the intent behind them but believe that the drafting of the Bill sufficiently captures the current primary sources of revenue in the game. We will discuss clause 56 more fully during the clause stand part debate, but to summarise briefly, among other things, it defines which revenue streams are in scope of the backstop process. Revenue in scope is called “relevant revenue” and is limited in the Bill to revenue received by a league for broadcast rights to league matches.
Broadcast revenue is undisputedly the main source of revenue in English football, but we acknowledge that that may not always be the case. Football’s financial landscape is dynamic and its economic model may not remain static. That is why the Bill already allows for the definition of “relevant revenue” to be amended if necessary. The Secretary of State can amend the definition by making regulations, but only after consultation with the leagues, the regulator and the FA. That flexibility future-proofs the definition of “relevant revenue” against potential changes in the structure of the industry while ensuring that the definition remains firmly rooted in the current reality.
We expect that, throughout the distributions process, the leagues will effectively represent the interests of their constituent clubs. However, the backstop process, including the final proposal stage, is ultimately about resolving distributions between the leagues. It is about how money earned by the leagues flows from one league to another, not between individual clubs. It is therefore right that, given how finances currently flow, it is revenue received by the leagues as a whole, not individual clubs, that should be considered. I am therefore unable to accept the amendments.
Max Wilkinson
We recognise the numbers—although we Liberal Democrats now outnumber the official Opposition—so we will not press this to a vote. However, it is worth considering that, in future, we might end up in a situation where some of our bigger clubs start to try to negotiate on their own for their broadcast revenue. The Minister did not reassure me that that could not happen. As I understand it, we do not have legislation that would stop that. There is nothing in the game to stop that apart from Arsenal, Manchester United, Chelsea and Manchester City deciding to play together nicely.
Although we are not reassured, there is no point in forcing this to a vote. But we hope that the comments may be taken forward and taken into account by the regulator in future, and perhaps we will have this discussion again as and when those big clubs decide that they are going to kick up a stink and try to ruin the rest of football for everyone else. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr French
I recognise the hon. Gentleman’s experience with Derby, and I understand his point. That is why I said there are a number of opinions, and this a very controversial subject. I have engaged with EFL clubs as part of this process, and we get a variety of opinions, even before we get to asking the Premier League clubs for their opinion, so I absolutely understand his point. This amendment is about trying to exclude parachute payments from this part of the Bill, rather than trying to take a decision on what parachute payment levels should be in any shape or form. That is the distinction we seek to make with the amendment, and I commend it to the Committee.
Stephanie Peacock
I thank the shadow Minister for the amendment, as it gives me the opportunity to speak to one of the key changes made in the new version of the Bill that this Government introduced. The amendment would take parachute payments out of the scope of the backstop, as they were in the previous Government’s Bill. The regulator needs to be able to consider all relevant revenue sources as part of the backstop process to get an accurate picture of any proposal’s impact on financial sustainability. That is why it was right to amend the definition of “relevant revenue” to ensure parachute payments could be considered as part of the backstop if necessary.
The shadow Minister pointed out that I supported the Bill when in Opposition, but I draw his attention to an amendment I put down then to this effect. We have had a clear and consistent view on this issue throughout the passage of both Bills through Parliament. We believe that allowing the regulator to make more informed decisions, rather than restricting what it can consider, will help to achieve the best possible outcome for the future of the game.
Stephanie Peacock
I beg to move amendment 27, in clause 56, page 46, line 27, leave out
“means an order under section 62(1) or (3)”
and insert
“has the meaning given by section (Distribution orders)(6)”.
This amendment is consequential on the insertion of NC4.
The amendment is consequential on Government new clause 4, which we will debate later. Although it depends on that later change, the amendment would change clause 56, which is why we are discussing it now. We will also discuss clause 56 in more detail later, but one of the things it does is set out key definitions of key terms used throughout the backstop provisions. One of those defined terms is “distribution order”, which is the order made by the regulator at the end of the backstop process. It is designed to resolve the questions for resolution if the leagues have not managed to do so during mediation. Currently, the Bill’s definition of “distribution order” refers to clause 62, but we propose to remove clause 62 and replace it with new clause 4. New clause 4 completely changes the final stage of the backstop process. I met the shadow Minister and the Liberal Democrat spokesperson, the hon. Member for Cheltenham, to discuss this ahead of the Bill Committee. It moves the backstop away from a binary, winner-takes-all model, and allows the regulator discretion to design a solution to distribution issues.
We will have a chance to debate that fully when we debate clause 62, so I will withhold some of my comments until we get to that point. This simple amendment just updates the definition of “distribution order”, so that it appropriately refers to new clause 4 instead of clause 62. It is vital that we make these sorts of consequential changes, to ensure that the legislation remains coherent. Therefore I hope that Members will support this amendment.
Mr Betts
As the Minister said, we will come on to debate these issues later, but again, I just want to place it on the record that she has been really listening to concerns that have been raised about the pendulum nature of the previous backstop. This is a much better process, which we will come on to discuss in more detail. Thanks to the Minister, we will discuss it further, but it is a much better framework that we will now be putting in place for the regulator to decide on any disputes or failures to agree between the leagues.
Amendment 27 agreed to.
Stephanie Peacock
I beg to move amendment 28, in clause 56, page 46, line 42, leave out subsection (7).
This amendment removes the definition of “the question or questions for resolution” which is now superfluous.
Stephanie Peacock
I begin by acknowledging the comments from my hon. Friend the Member for Sheffield South East. I appreciate him putting that on the record. Of course, we will have a fuller debate on the broader change later, so as I said, I will reserve my wider comments till we get to that point.
The backstop aims to ensure that where the industry cannot resolve the issue, revenue is distributed between the leagues in a sustainable way that furthers the regulator’s objectives. As I will set out in more detail when we debate clauses 57 and 58, it allows the leagues to apply to the regulator to intervene and help them to resolve specific issues that are in dispute between them. The issues that need resolving are referred to in the Bill as the “questions for resolution”. We will further discuss the process for triggering the backstop when we come on to debate clauses 57 to 59.
Put briefly, the triggering process requires a league applying to the regulator, showing that certain conditions listed in clause 57 are met, and putting forward a set of proposed “questions for resolution”. The other relevant league has a chance to respond to that proposal. The regulator will then consider the application and the response, and will decide whether to trigger the process. If it decides to trigger, it also decides exactly which questions must be taken forward and resolved through the backstop process. Therefore, the questions for resolution are set out at the very beginning and carry through, determining the scope of the whole process. They are the questions that the leagues discuss in mediation, as we will see when we debate clause 60, and they limit the scope of any regulator distribution order—something that we will discuss further when we come on to debate Government new clauses 3 and 4—to issues of financial sustainability.
Setting the questions for resolution is therefore a very important step that demands a clear statutory process and a rigorous approach by the regulator. That is even more important in the light of the proposed changes that Government new clauses 3 and 4 will make. Those new clauses propose a new model for the backstop—a staged regulator determination. They move away from the binary, winner-takes-all, final-offer model and increase the regulator’s discretion to devise its own solution for distributions. Because of that increase in discretion for the regulator, it is important that the scope of the distributions process is well defined from the outset, so that all parties are clear about what the regulator will and will not rule on if the leagues ultimately cannot agree to an industry solution themselves.
These amendments therefore strengthen and clarify the process for—[Interruption.]
Stephanie Peacock
I have indeed—clearly.
These amendments therefore strengthen and clarify the process for setting the questions for resolution. They highlight the importance of a league proposing specific questions for resolution when it applies to the regulator. They emphasise that if the regulator agrees to trigger the backstop, it will not take a sweeping approach and try to rule on every possible aspect of distributions. It must set out specific questions that it will resolve, and its powers are then restricted to resolving those questions.
These amendments make it clear that questions must meet certain tests in order to be resolved through the backstop. Those tests are twofold. First, the regulator must consider that leaving the questions unresolved presents an apparent threat to the regulator’s objectives. Then they must consider that the questions could not be resolved within a reasonable time by the regulator exercising any of its other functions.
The amendments clarify that the regulator need not take forward all the questions proposed and that the regulator can modify the proposed questions. They will also require the regulator to take into account representations from the other league that accompany the application. That will give the regulator the flexibility to pick out which questions it is appropriate and within its remit to address, without forcing it to either accept every element of an application or reject the whole application outright.
The amendments also set out procedural requirements. They require the regulator to consult the FA before setting the questions for resolution, ensuring that the national governing body has a chance to raise any views about the scope of the backstop process. They will also ensure that the regulator transparently sets out what questions it has chosen and how it made that decision. The questions for resolution will then be taken forward into the mediation phase. That will ensure that all parties understand the specific aims of the mediation stage.
Jim Dickson (Dartford) (Lab)
The Minister is setting out how important it is to get the distribution arrangements right. This is the part of the Bill that may be the most critical in ensuring that the pyramid is sustainable, which is the objective. It is great that the Government are working hard to get the backstop arrangements right, as she said. Does she agree that, once the regulator is in place, it will be important to have the state of the game report already in place—with an analysis of what is going wrong in the financial distribution and how it could be put right—before a distribution agreement is made and the backstop powers are used to bring that about?
Stephanie Peacock
My hon. Friend is absolutely right, and he touches on something we will discuss later. It is important that the state of the game report takes place swiftly. That is an important part of the Bill. Of course, it is a backstop, and we are keen that a football-led solution is the priority and that people get round the table. I often quote Dame Tracey Crouch, who was one of my predecessors as sport Minister, and obviously we know how involved she was in the Bill. In the previous Bill Committee, she made a short but very focused speech, which I encourage hon. Members to read, on how the backstop should be a backstop. I often quote that speech.
For the reasons I have set out, the amendments are vital for supporting our new backstop model, and I hope that they will be accepted. I commend them to the Committee.
Amendment 28 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Stephanie Peacock
Clause 56 is the first clause of part 6, which 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, and I hope through this debate to demonstrate that the approach taken in part 6 is the most proportionate and effective one.
These backstop powers have been introduced to help ensure that an agreement can be reached between the leagues on the distribution of revenue from the selling of TV broadcast rights. If the leagues cannot agree a deal, it will allow the regulator to step in as a last resort and impose one. A solution to this issue is vital to ensure the future financial sustainability of the football pyramid. The process has been designed to encourage an industry solution while providing the assurance that, should one not be reached, the regulator can ensure that one is put in place.
The Government have listened to industry, to members of both this Committee and its equivalent in the last Parliament, and to concerns raised in the other place. We have taken on board the points raised regarding the original distribution model in the Bill, and we have therefore tabled targeted amendments to improve the mechanism. As I have said more than once, I will set out the detail in a later group. We are confident that the regulator will have the powers necessary to ensure a timely, satisfactory distribution order, while not unduly inhibiting the ability of industry to resolve the issue itself.
Clause 56 sets out an overview of the backstop powers and outlines some key definitions that are important for clearly setting out the scope of these powers, including “relevant revenue”, which I will come on to in just a moment. Importantly, this clause also makes clear right at the outset in subsection (1) that the regulator can impose a distribution order only if the leagues are unable to reach an agreement during the backstop process. In other words, even after the process has been triggered, a regulator-imposed solution remains a last resort, only to be used if industry fails to strike a deal.
One of the key terms defined in this clause is “relevant revenue”. It expressly includes broadcast revenue because this is the predominant source of revenue for the relevant leagues, and this is the revenue that underpins the financial flows between the leagues. This clause also allows the Secretary of State to specify other kinds of revenue to be included as “relevant revenue”. This is simply to future-proof the policy; for instance, if broadcast revenue is no longer the main source of income for the leagues. However, there are safeguards on the use of this power. The Secretary of State must consult the regulator, the FA and the relevant leagues, and can use this power only when there has been a material change of circumstances. Any use of the power will be subject to the affirmative procedure in Parliament.
The previous Government’s version of the Bill explicitly excluded parachute payments from the definition of “relevant revenue”. Our version of the Bill no longer makes this distinction, allowing the inclusion of parachute payments where appropriate. This change was made to ensure that the regulator can consider all relevant aspects of revenue distribution as it makes a financial assessment of the game. Parachute payments can be included in the backstop only if the regulator considers that issues relating to parachute payments present an apparent threat to its objectives, such as the sustainability of the pyramid.
Another important definition in this clause is the “qualifying football season”. This determines which seasons can be in scope of the backstop. In effect, it limits the regulator’s power to only the next six football seasons, which prevents excessively long regulator orders or premature applications for seasons far in the future.
Question put and agreed to.
Clause 56, as amended, accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Vicky Foxcroft.)
Football Governance Bill [ Lords ] (Ninth sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 17th June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 17 June 2025 - (17 Jun 2025)
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr French
It is a pleasure to serve under you again, Sir Jeremy, and I welcome back everyone else in Committee.
The clause sets out further details on the circumstances in which the specified competition organisers can apply to trigger the resolution process. The Government have moved on the mechanism within the backstop, which is welcomed by the leagues, but the amendments tabled in my name seek to correct some gaps in the clause. Amendment 130 would allow the relevant leagues to set a different period other than five years for the resolution process to be triggered. Amendments 128 and 129 would also allow the relevant parties to set the appropriate period for triggering the backstop.
The clause matters, not just because of what it allows, but because of what it delays. In particular, it creates a cooling-off period, a requirement that certain preconditions be met before the regulator can become involved in live disputes between football’s governing bodies and competitions. Of the conditions listed in the clause, condition 4 is especially significant. As the Bill stands, condition 4 is met only if the relevant distribution agreement between competitions—for example, between the Premier League and the English Football League—has been in force for at least five years.
We understand why the five-year test was included: the intention is to prevent the Government’s regulator from being dragged into every routine renegotiation, and to ensure that the resolution process is only triggered in relation to long-standing agreements that may have become outdated or contentious. Five years, however, is a long time in football. Broadcasting cycles, financial realities and competitive conditions can change quickly.
In that time, for example, a team such as Luton Town went from playing in League Two in the 2017-18 season, to competing in the Premier League in the 2022-23 season. Granted, the team have now fallen down the pyramid to League One again, but that helps prove that, even with parachute payments being handed out from the Premier League and potentially now being included in the resolution process, that does not stop a club from failing on the pitch or in the boardroom.
I therefore tabled amendments 128 to 130, which would allow the “applicable period” under condition 4 to be shorter than five years when two conditions are met: first, when the specified competition organisers have agreed a different period, either in the distribution agreement itself or separately; and, secondly, when both organisers have notified the regulator of that agreed period. In that case, the “applicable period” for the purpose of condition 4 becomes whatever period the organisers have agreed—rather than being fixed at five years by statute.
These are flexibility amendments, which an industry with businesses will benefit from, rather than having the inflexibility of fixing a date in statute. The Government argued that our earlier amendment to cap the pay of their new regulator was inflexible and too firmly rooted in the present day, so it would be unfortunate if the Minister were to oppose the amendment for exactly the opposite reasons. None of us would want that.
The amendment allows football’s governing bodies—the Premier League, the EFL, and others—to determine their own timelines for when they believe the regulator should be able to step in, if negotiations breakdown. It does not force earlier intervention; it simply allows the option where both parties agree. That is a consensual, common-sense reform that respects the autonomy of football’s existing institutions, while giving them the tools to resolve disputes more efficiently when necessary. It makes the clause more responsive, less rigid and more capable of reflecting the fast-moving dynamics of football finance and league relationships.
Will the Minister confirm why the Government chose to fix the five-year period in primary legislation, rather than allowing the competitions to define the appropriate timeline for regulatory intervention themselves? Does she agree that, if both parties are asking for an earlier resolution window, it is counterproductive for the legislation to prevent it? It would cause delays to the redistribution of money from one specified competition to another, which would entirely undermine the point of the regulator. If we do not pass the amendment, we risk locking football into a situation where, no matter how bad a deal becomes or how outdated a distribution agreement appears, the regulator’s hands are tied for another half a decade. They say that a week is a long time in politics, and the same is true for football. In half a decade’s time there could be—and I hope there is—a new Government, and Charlton could have returned to the Premier League and may even be in the Champion’s League final—I will try to keep it realistic; the sun must be getting to me.
As drafted, the Bill allows prolonged stalemates, growing financial resentment between divisions, and a continued lack of reform, even when both sides might privately want the regulator’s help to resolve matters. That is especially important given the recurring tensions between the certain specified competition organisers on financial redistribution, among other things. If both sides were willing to allow the Government’s regulator to assist earlier, we should facilitate that, not block it.
Regulation, especially in this context, should be a last resort, and football must be given the space to sort out its own affairs where possible. The amendment reflects that principle. It does not force the regulator into a situation early; it simply allows football competitions to agree that if things go wrong, the regulator can be invited in sooner rather than later. That is not interference but empowered self-governance, which is what we should be striving for when—as the fan-led review ultimately sought to do—we return the governance of English football back to the FA. The amendment gives clubs and competition organisers more ownership of the process, not less.
Does the Minister recognise that the amendment would incentivise early engagement and constructive negotiation, rather than prolonging the stalemates that have now become common place? Clause 57 is an important procedural gateway, but the current wording of condition 4 imposes a rigid five-year rule that may prevent the regulator from acting, even in cases where both sides want its help. The amendment would introduce flexibility and consent into the process. It ensures that the trigger point for resolution reflects the needs of the game, not an arbitrary statutory timescale set many seasons before it may actually be needed.
The amendment is limited, reasonable, and entirely in keeping with the Government’s desire for a targeted, proportionate, and respectful form of regulation. I hope that the Minister will accept the amendment based on the position she has taken on earlier amendments to the Bill.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a pleasure to serve under your chairmanship, Sir Jeremy. I will use the opportunity presented by amendment 130 to talk to another of this Government’s changes to strengthen the Bill. The Opposition amendments would amend clause 57, which sets out how and under what conditions a league can apply to the regulator to trigger the backstop.
We will discuss clause 57 in more detail in the next group, but in brief, one of the conditions for triggering the backstop is that there has been no new distributions agreement between the leagues for at least five years. The amendments seek to reintroduce drafting from the previous version of the Bill that allowed leagues to reach an agreement to extend that five-year period. The Government removed that drafting when we introduced the Bill, because in our judgment five years is an appropriate period.
Our strong preference, of course, is for football to reach an agreement without any regulatory involvement. We have done everything in our power to push for an agreement and continue to urge everyone to find a solution that works for all of football. The five-year period in the Bill has been chosen to ensure the regulator can only intervene in cases where a sufficient agreement has not been reached for a significant period of time. We believe that this is the correct amount of time.
That is not to say, however, that the backstop will be triggered every five years. This is not the only threshold that has to be met to trigger the process. It is a two-stage test. The regulator must also see a tangible risk to its ability to deliver its objectives before the process can be triggered. If the leagues agreed a good deal for a period longer than five years, while a league could still apply to trigger the backstop, the threshold of jeopardising the regulator’s objectives would not be met and the backstop would not be triggered.
There is an inherent imbalance of negotiating power between the distributing leagues and the recipient league. Allowing industry to contract out of the backstop completely could inhibit agreements that appropriately finance the football pyramid while preventing involvement from the regulator. That would badly damage the regulator’s ability to protect and promote the sustainability of English football and leave it unable to address what is currently a clear issue in the industry. For the reasons I have set out, I hope the hon. Member for Old Bexley and Sidcup will withdraw the amendment.
Question put, That the amendment be made.
Stephanie Peacock
Clause 57 sets out a basic set of conditions that must be met for a league to be allowed to apply to the regulator and request that the backstop be triggered. The regulator cannot unilaterally trigger the backstop process; it must receive an application from one of the leagues under clause 57. This clause sets out that a regulated league can apply to trigger the process if there are unresolved issues between it and another league in relation to the distribution of relevant revenue. We discussed the definition of relevant revenue when we debated clause 56.
For a league to apply to trigger the backstop, at least one of the four conditions outlined in clause 57 must be met. Those four conditions are as follows: no distribution agreement is in place between the relevant leagues; there has been a material reduction in the amount of relevant revenue received by a relevant league since the last distribution agreement was reached; there has been a material change in circumstances in relation to the relevant revenue received by one or both relevant leagues since the last distribution agreement was reached; and at least five years have passed since the last distribution agreement between the relevant leagues came into force.
Each of the conditions is designed to mitigate a specific risk to the sustainability of the pyramid. Those are a complete absence of any distribution deal; a reduction in distributed revenue; a significant change in the circumstances surrounding distributions; and an old deal no longer fit for purpose but unable to be refreshed because the industry cannot agree. The conditions set an appropriate framework for when a league can apply to trigger the process. They help to avoid vexatious applications or fishing expeditions when a perfectly good, up-to-date industry deal is already in place. That is why clause 57 should stand part of the Bill.
Clause 58 specifies procedural steps and requirements. The applicant league has to comply with those for its application to trigger the backstop to be valid. Before making an application, the league must first notify the other relevant league and the regulator of its intention. That prevents either league from being blindsided by the process being triggered. The notice must list the issues in dispute, explain why one of the relevant conditions in clause 57 is met, and invite representations from the other specified competition organiser. That act, in and of itself, may help to trigger useful discussion between the leagues, as clearly outlining the issues preventing an agreement from moving forward will bring the leagues closer to compromise. After the other relevant league has had a chance to make any representations, the applicant league may apply to the regulator to trigger the process. It must include the other league’s representations with its application. That ensures that the regulator has the information that it needs from both leagues, so that it can make a considered decision on whether to trigger the backstop. The exchange of representations is also an early opportunity for the leagues to come to an agreement themselves, before the process is triggered. Ultimately, this clause is about creating transparency and promoting dialogue, which sets the tone for the rest of the backstop process.
Clauses 57 and 58 together outline the requirements that must be met for a league to apply to trigger the backstop process. The requirements in clauses 57 and 58 are just the first hurdle that a league has to clear in order for the regulator to consider its application. In order to actually trigger the backstop the regulator then has to assess whether the application meets certain legal tests set out in clause 59, which we will discuss further in a later group. I beg to move that clauses 57 and 58 stand part of the Bill.
Question put and agreed to.
Clause 57, as amended, accordingly ordered to stand part of the Bill.
Clause 58
Applications under section 57: procedural and other requirements
Amendments made: 30, in clause 58, page 48, line 7, at end insert—
“(za) set out details of the question or questions for resolution mentioned in section 57(1) to which it is intended the application will relate,”
This amendment provides that a notification under clause 59(1)(a) must set out details of the question or questions for resolution to which it is intended the application will relate.
Amendment 31, in clause 58, page 48, line 8, leave out “the application relates” and insert “that question relates or those questions relate”.
This amendment provides that a notification under clause 59(1)(a) must specify the qualifying football season or season to which the question or questions for resolution relate.
Amendment 32, in clause 58, page 48, line 12, leave out paragraph (c)
This amendment is consequential on Amendment 30.
Amendment 33, in clause 58, page 48, line 22, at end insert—
“(za) set out details of the question or questions for resolution mentioned in section 57(1) to which the application relates,”
This amendment provides that an application under clause 57 must set out details of the question or questions for resolution to which the application relates.
Amendment 34, in clause 58, page 48, line 23, leave out “the application relates” and insert “that question relates or those questions relate”.
This amendment provides that the application under clause 57 must specify the qualifying football season or season to which the question or questions for resolution relate.
Amendment 35, in clause 58, page 48, line 27, leave out paragraph (c)—(Stephanie Peacock.)
This amendment is consequential on Amendment 33.
Clause 58, as amended, accordingly ordered to stand part of the Bill.
Clause 59
Decisions by the IFR on applications under section 57
Amendments made: 36, in clause 59, page 48, line 33, leave out “the qualifying football season or seasons” and insert “one or more of the questions for resolution”.
This amendment provides that the IFR must decide whether the resolution process should be triggered in relation to one or more of the questions for resolution to which the application under clause 57 relates.
Amendment 37, in clause 59, page 48, line 33, after “relates” insert “(or a modified version of one or more of those questions)”.
This amendment provides that the IFR may decide that the resolution process should be triggered in relation to a modified version of one or more of the questions for resolution set out in the application under clause 57.
Amendment 38, in clause 59, page 48, line 36, leave out “qualifying football season” and insert “question or questions for resolution”.
This amendment provides that the IFR must be satisfied that the conditions in clause 59(2) are met before deciding to trigger the process in relation to a question or questions for resolution.
Amendment 39, in clause 59, page 48, line 38, leave out “that season” and insert “each season to which the question relates or the questions relate”.
This amendment is consequential on Amendment 38.
Amendment 40, in clause 59, page 48, line 41, after “triggered” insert “in relation to the question or questions for resolution”. —(Stephanie Peacock.)
This amendment is consequential on Amendment 38.
Mr Clive Betts (Sheffield South East) (Lab)
I beg to move amendment 93, in clause 59, page 49, line 1, after “(c)” insert
“has exercised any of the IFR’s other functions under this Act in order to resolve the question or questions for resolution and such question or questions remain unresolved, or”.
It is a pleasure to be here with you in the Chair, Sir Jeremy. I will pass this over to the Minister. This is just an attempt to slightly clarify and strengthen the role of the regulator and the point of intervention. It would be helpful to see how this fits in with the way that the Minister has reconfigured the clause with her amendments.
Stephanie Peacock
I thank my hon. Friend for his amendment. We will discuss clause 59 in more detail in the next group. It sets out the tests that must be met for the regulator to justify accepting a league application so that it can then trigger the backstop. The amendment adds to clause 59 to give the regulator an additional basis on which to justify triggering. It could accept an application to trigger the backstop if it has tried and failed to resolve the disputed distribution issues using its other regulatory functions. I want to reassure my hon. Friend that the amendment is not necessary. Clause 59 already allows the regulator to accept an application to trigger if it considers that its other functions would not be able to resolve the disputed issues in a reasonable timeframe. That appropriately covers the scenario set out in my hon. Friend’s amendment.
If the regulator has already tried and failed to resolve a distribution issue using its other functions, that would be a reasonable basis for it to conclude that its other functions were not up to task. The existing test in clause 59 could then be met and an application trigger at the backstop could be accepted. It is important to clarify once again that the regulator would not be triggering the process itself. This is simply a clarification regarding a situation in which an application was submitted and the regulator had tried and failed to resolve the issue outlined previously using its other powers. In this situation the regulator would still have the discretion as to whether or not it triggered the process based on whether the application met the other high threshold. I hope this provides some reassurance. We will discuss this a little further in the next group.
Mr Betts
We are off to a good start this morning. I am 100% convinced that the Bill already does what I was seeking it to do. I hope we are 100% convinced on the other issues that we debate later on. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 41, in clause 59, page 49, line 4, after “triggered” insert “in relation to one or more of the questions for resolution”.
This amendment is consequential on Amendment 38.
Amendment 42, in clause 59, page 49, line 10, at end insert—
“(4A) Where the IFR is minded that the resolution process should be triggered, the IFR must consult the Football Association on the question or questions for resolution in relation to which it is minded to trigger the process.”
This amendment requires the IFR to consult the Football Association on the question or questions for resolution in relation to which it is minded to trigger the process.
Amendment 43, in clause 59, page 49, line 15, at end insert—
“(zi) the question or questions for resolution in relation to which the IFR is triggering the resolution process,”
This amendment provides that the notice under clause 59(5) must set out the question or questions for resolution in relation to which the IFR is triggering the resolution process.
Amendment 44, in clause 59, page 49, line 16, leave out “the resolution process relates” and insert “that question relates or those questions relate”.
This amendment provides that the notice under clause 59(5) must set out the qualifying football season or seasons to which the question or questions for resolution relate.
Amendment 45, in clause 59, page 49, line 18, leave out sub-paragraph (ii)
This amendment is consequential on Amendment 43.
Amendment 46, in clause 59, page 49, line 18, at end insert—
“(iia) how the IFR has taken account of any representations, copies of which accompanied the application under section 57 by virtue of section 58(5)(d), in setting out that question or those questions, and”
This amendment requires the IFR to set out in a notice under clause 59(5)(b) how it has taken account of any representations when setting out the question or questions in relation to which it is triggering the resolution process.
Amendment 47, in clause 59, page 49, line 20, leave out “the question or questions for resolution” and insert “that question or those questions”
This amendment is consequential on Amendment 43.
Amendment 48, in clause 59, page 49, line 21, at end insert—
“(5A) Where any of the questions for resolution set out in the notice differ from those to which the application made under section 57 relates, the notice must set out the extent of, and reasons for, those differences.”—(Stephanie Peacock.)
This amendment requires the IFR to set out the extent of, and reasons for, any differences between the question or questions for resolution set out in a notice under clause 59(5)(b)(ii) and the question or questions for resolution set out in an application under clause 57.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
As we discussed on clauses 57 and 58, the backstop can be triggered only in response to an application by a league. Clause 59 sets out how the regulator will assess an application to trigger, how it will decide whether to trigger at all and how it will determine exactly which issues need to be resolved under the backstop. The backstop has been carefully designed to deliver the right outcomes with minimal regulatory involvement. As part of this, it has been designed to be used as a last resort. That is why this clause introduces high statutory thresholds that must be met in order for the backstop to be triggered.
In particular, the clause 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 were not triggered. The regulator must also consider whether other regulatory tools could be utilised to resolve the issues instead. The regulator must be satisfied that at least one of the conditions in clause 57—which we have already discussed —is met.
Mr French
I will be brief. I echo some of the Minister’s comments. His Majesty’s official Opposition welcome any efforts to ensure that the backstop process is triggered only as a last resort and we will carefully monitor how that works in future.
Question put and agreed to.
Clause 59, as amended, accordingly ordered to stand part of the Bill.
Clause 60
The mediation stage
Amendments made: 49, in clause 60, page 50, line 4, after “resolution” insert
“set out in a notice under section 59(5)(b)(zi)”.
This amendment clarifies that the question or questions for resolution subject to the mediation process are those set out in a notice under clause 59(5)(b)(zi).
Amendment 50, in clause 60, page 50, line 6, leave out
“the question or questions for resolution”
and insert
“that question or those questions”.
This amendment is consequential on Amendment 49.
Amendment 51, in clause 60, page 50, line 15, after “resolution” insert
“set out in a notice under section 59(5)(b)(zi)”.—(Stephanie Peacock.)
This amendment clarifies that the question or questions for resolution subject to the mediation process are those set out in a notice under clause 59(5)(b)(zi).
Question proposed, That the clause, as amended, stand part of the Bill.
Stephanie Peacock
Once the backstop is triggered, clause 60 requires the leagues to enter mandatory mediation as a first stage. As we have made clear, the Government’s strong preference is for a football-led solution to the financial distribution issues. I welcome the shadow Minister’s comments along those lines.
A mediation stage gives the relevant leagues an opportunity to reach an agreement with minimal intervention from the regulator. The stage is designed to facilitate meaningful negotiation and compromise between the parties. To this end, it encourages the leagues to appoint a mutually agreed mediator, but if they cannot, it ensures the regulator will appoint someone with the appropriate skills and experience.
The leagues can end the mediation process for multiple reasons. Most notably, the mediation—and the process as a whole—will end if an agreement is reached. However, the mediator can also end the process if it is not producing meaningful, good faith negotiations. The process can also end if it reaches the 28-day deadline. If the leagues are engaging in meaningful discussion but the deadline is reached, the mediator can extend the process by up to another 28 days.
We believe that process is flexible enough to encourage negotiation but concrete enough to ensure the backstop remains an effective regulatory intervention. I commend the clause to the Committee.
Question put and agreed to.
Clause 60, as amended, accordingly ordered to stand part of the Bill.
Clause 61
Final proposal stage
Mr Betts
I beg to move amendment 3, in clause 61, page 50, line 40, leave out
“require any final proposal to be accompanied by supporting evidence”
and insert
“require any final proposal to—
(i) be accompanied by supporting evidence;
(ii) be consistent with the resolution of any relevant issues identified in the Regulator's most recently published State of the Game report;
(iii) give effect to the views of any relevant specified competition organiser which has not been invited pursuant to clause 61(4)(c) to submit to the committee a final proposal; and
(iv) advance the Regulator's objectives in section 6, consistent with its general duties and Regulatory principles in sections 7 and 8.”
This amendment would set additional requirements to accompany any final proposal for the resolution process.
This is quite an important issue, because it concerns the principle and basis on which the regulator comes to a decision. My amendment simply sets out certain things that the regulator must have regard to and take into account when making that decision.
First, there should be supporting evidence—that seems straightforward. Secondly, and importantly, we ought to keep anchoring what the regulator does back to the essence of this proposed legislation and the regulator’s purpose. Clause 6 very clearly sets out the regulator’s objectives of promoting the financial soundness of regulated clubs and the financial resilience of English football, and I think we can all agree that that is what the regulator should be doing and seeking to achieve.
Surely, therefore, when we are talking about the detail of how the regulator reaches a final decision on the backstop, we ought to be absolutely clear that it must have foremost in its mind those initial objectives. Otherwise, what is the point of the regulator and its objectives? Why are we in this Committee if not to address the financial soundness of clubs and English football as a whole?
My amendment mentions considering the views of others who may not be formal parts of the backstop mediation process. It provides that the regulator would not have to listen to them, but could
“give effect to the views”
of the Football Supporters’ Association, the Professional Footballers’ Association or others who may have views. Those groups would not determine what the regulator decides to do, but surely the regulator has to take account of their views.
I hope that the Minister gives serious consideration to at least making sure that, when reaching that final and absolutely crucial decision on financial distribution, the regulator’s aim should be to deal with the problems of the financial soundness of clubs and the overall financial soundness and wellbeing of English football.
Stephanie Peacock
I thank my hon. Friend for his amendment. Although we are still keen for an industry deal on distributions, part of getting it right is ensuring that the regulator is best placed to act if needed. As the Government amendments that we are due to debate in the next two groups show, we have reflected on many of the same points. We think it is right that any distribution order shows how it aligns with the findings of the state of the game report and with the regulator’s objectives and duties, including the duty to have regard to its regulatory principles.
That is why Government new clauses 3 and 4, which amend the final stages of the backstop, already address these issues. We will discuss the new clauses in more detail shortly, but they clearly require that the regulator sets out any relevant findings from the state of the game report and that any league proposals include evidence about how they address those findings. They will also require that any order the regulator makes addresses the state of the game findings, and they highlight the importance of the regulator’s objectives and its general duties, including the regulatory principles.
I also make clear again that, after we set out the competitions in scope of the regime, the regulator’s objectives, namely to protect and promote the heritage and financial resilience and soundness of English football, will apply to the top five divisions of English men’s football. When creating a distributions order between any two leagues, the regulator must have due regard for the wider impact the order may have on all the clubs and leagues it regulates. The regulator must make an evidence-based decision that takes into account all relevant considerations, and its final decision must advance its objectives.
It is also important to clarify that, while the order will be limited in scope to the questions set out when the process is triggered, it will not be without context. Given the important role a satisfactory distributions order will play in the future of the entire sport, the regulator will need to come to a solution that works for all of football.
For those reasons, I cannot accept my hon. Friend’s amendment, but I hope that his concerns will be appropriately addressed by the Government amendments that we will debate shortly.
Mr Betts
I am pleased to see that the Minister actually read my amendment and formulated her new clauses accordingly. What she says is reassuring. As she just said, there is no point in the regulator doing a state of the game report unless it has regard to it when coming to a view about financial distribution. That is absolutely clear from what the Minister has said, and that is what the regulator must do. On the basis of those assurances, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Over the course of engagement on the Bill, specifically in the other place, we have heard concerns about the risk posed by the binary choice distribution mechanism outlined in the Bill. While I have always acknowledged the merits of the previous binary mechanism in the Bill, specifically the powerful incentive it created for the leagues to come to an industry-led solution, we want to provide the industry and its investors with the certainty they need. Although the previous model had significant strengths, the uncertainty it introduced into the process made it higher risk than other options.
We want to get this policy right and we will always be open to sensible, well-made points on the design of the regime. I thank Lords Birt, Pannick, Thomas and Burns for their thoughtful scrutiny of this part of the Bill in the other place and for their comprehensive suggestions. Their engagement has been invaluable in the continued development of this policy.
In the light of that work, we are making targeted changes to the backstop mechanism, primarily through the replacement of clauses 61 and 62 with Government new clauses 3 and 4. The new clauses will move the mechanism from a binary choice mechanism to a staged regulator determination. In our new model, the regulator can impose its own solution, drawing on the leagues’ proposals, the state of the game report and other evidence in order to best deliver the regulator’s objectives. This ensures a more collaborative, data-driven solution.
New clause 3 sets out what happens if there are still unresolved questions between the leagues when mediation ends. It requires the regulator to invite proposals from the leagues and sets a framework and timeframes for the regulator and leagues to collaborate towards a solution. The Government’s strong preference is for the industry to come to an independent solution, so the proposal stage is designed to incentivise that. The regulator will have to outline clearly the expected scope of the proposals, set by the questions for resolution that we have discussed previously. It must also set out any relevant findings from the state of the game report. That will ensure that proposals remain focused on addressing the most pressing issues facing the game.
League proposals must be shared both with the regulator and between the disputing leagues themselves. That will allow for a more fruitful negotiation, as the leagues will be more informed about each other’s position on core issues. Leagues will also be able to submit revised proposals, ensuring both sides have the best chance possible to outline their position to the regulator, and allowing the regulator the opportunity to request additional relevant information.
That structure will ensure the regulator is in the position to make the best and most evidence-based decision possible while driving the leagues closer together, encouraging them to come to their own agreement. For those reasons, I hope hon. Members will support the new clause.
Mr French
I will not repeat the comments the Minister has made, but we also believe that this new mechanism is an improvement on the previous one, in line with feedback from the other place and from the leagues. The new clause would allow modified proposals to be submitted to the football regulator and for more of a negotiated settlement rather than a binary one. The only question we have at this stage, because we will have to see how this works in practice, is about the criteria the regulator would be looking to apply when selecting one party’s proposals over another. What does the Minister envisage that will look like?
Stephanie Peacock
I am grateful to the shadow Minister for his general support for this change. He is absolutely right to acknowledge that it comes from the other place, but also from working with various stakeholders, in particular the leagues, which have welcomed it.
The regulator must follow its objectives and duties at all times and criteria that simply restate those obligations are unnecessary. We did consider more specific criteria but did not want to be overly prescriptive, so I draw the attention of hon. Members back to the regulatory principles in the Bill and the state of the game report.
Question put and negatived.
Clause 61 accordingly disagreed to.
Clause 62
Distribution orders
Lincoln Jopp (Spelthorne) (Con)
It is a pleasure to serve under your chairmanship Sir Jeremy. I remind the Committee of my entry in the Register of Members’ Financial Interests. Unlike the hon. Member for Rushcliffe, I chose my tie with purpose this morning, to celebrate both the fact that this might be the last day of the Bill Committee and also events in Atlanta last night.
What we have seen is the thin end of the wedge. I am alive to the arguments about the disparity that parachute payments create in the overall economy of football. However, this Bill is undoubtedly the thin end of the wedge. It will come as no surprise to Members that I am a Conservative, and therefore I think the best form of regulator is competition. We all just ought to watch, because if the regulator has parachute payments within its purview, what is next? It will be agents’ fees, TV rights carve-ups, finishing position bonuses and cut prize money. Seeking to run football as some sort of socialist command economy will come unstuck. I put on record my concern that that is exactly what the Bill seeks to do.
Stephanie Peacock
The amendments deal with the final stage of the backstop mechanism. I will respond to the shadow Minister, and then I will respond to the wider debate, including to my hon. Friend the Member for Sheffield South East.
The final stage of the backstop mechanism is when, if the leagues have not been able to agree a complete deal themselves, the regulator will make an order to resolve whatever issues remain. That stage is set out in clause 62, and Members have tabled amendments relating to their concerns about the existing clause 62. The Government have tabled new clause 4, which would entirely replace clause 62, so the shadow Minister need no longer be troubled by many of the concerns he has set out. He was particularly bothered by clause 62(1)(c), but that will be taken out in its entirety. Our new clause 4 addresses many of the concerns reflected in hon. Members’ amendments, and I hope I can satisfy the Committee that new clause 4 is a positive change to the final stage of the backstop.
We should remember that by this stage of the backstop process the regulator will have assessed an application and representations from the leagues, set out the scope of the backstop by defining the questions of resolution, and highlighted the relevant findings in the state of the game report. The leagues will have been through mediation to resolve those questions. They will have been asked to exchange proposals to solve any questions outstanding after mediation, giving them another opportunity for compromise and negotiation.
New clause 4 sets out how the regulator will create a distribution order as a last resort if, after all those stages, the leagues cannot strike a deal. The regulator will first have 60 days to create a provisional order. We expect that during that period it will engage with the leagues as necessary to keep the process as collaborative as possible. Even at that stage, the regulator can continue to encourage an industry deal. Unlike the binary “winner takes all” model in clause 62, new clause 4 allows the regulator to design its order based on the evidence and drawing on any league proposals submitted.
The order the regulator designs must adhere to clear principles: it must not place an undue burden on league commercial interests; it must observe a delay before any reduction in parachute payments—I will address that in a moment; it must have regard to any duly submitted league proposals; and it must explain how it addresses relevant state of the game findings. The regulator’s objectives and general duties are paramount.
The leagues will then be able to submit representations on the provisional order. That feedback will help the regulator to shape an order that works for industry. The regulator will consider the representations and finalise all that into a full distributions order. That order will take into account any relevant issues raised by the state of the game report, the evidence that the regulator has gathered throughout the process, the engagement it has had with the leagues and any proposals they have submitted. The regulator will be best placed to design a solution that addresses the problems it identifies and delivers on its objectives.
If the backstop reaches that point, it is because the industry has failed to strike a deal, but we still want the solution to be as industry-led as possible. The regulator will be required to have due regard to the league proposals submitted. It can choose to directly lift aspects of the proposals into its order, but it is not required to adopt a league proposal wholesale. That is a slightly more flexible system that moves away from the inherent risk of a “winner takes all” model, and allows the regulator to carefully design a solution.
The model also allows for more evidence-based and data-driven decisions. It gives the regulator enough discretion to ensure that any order is as effective as possible in addressing the core financial issues facing the game. We are confident that the regulator, keeping in mind its objectives to promote sustainability and its duties to avoid adverse effects on growth and sporting competitiveness, can come to a balanced solution.
I thank everyone who has engaged meaningfully with this part of the Bill throughout its passage to help us to reach this version of the model. I am confident that the new approach is the right one. In light of that, I hope that Members will support the addition of new clause 4 and the consequential Government amendments in this group.
On the non-Government amendments, I will first address those tabled by the hon. Member for Old Bexley and Sidcup, and then those tabled by my hon. Friend the Member for Sheffield South East. Opposition amendment 125 addresses the regulator’s ability to terminate the distribution process if it does not receive a viable proposal from either league, but Government new clause 4 already gives the regulator discretion to deal with that scenario. As I have said, under new clause 4, the regulator need not accept either league’s proposal wholesale. It can design its own solution, drawing on the league proposals as appropriate. We think that greatly increases the chances that the process will reach a satisfactory conclusion, and ensures that football will not go without a distribution deal. On that basis, I ask for the amendment to be withdrawn.
Lincoln Jopp
The Minister said that just because the Bill enables the regulator to consider parachute payments, that does not mean that it will. The Minister is in the unique position of being the person who is going to appoint the football regulator, because the Secretary of State has stood down from that decision. Will the Minister ask the person selected to be the regulator whether they would like to exercise the power—whether “can” will mean “will”?
Stephanie Peacock
I will discuss that in more detail in a moment, but I gently say to the hon. Member that it will not be a personal decision by the regulator; as we have discussed, the regulator will make a decision based on the findings of the state of the game report and will be guided by the regulatory principles. I do not want to get drawn into speculating whether they will or will not do that. We need the state of the game report to be done quickly, so that if the backstop is triggered, the regulator can consider the findings in the whole and make an informed decision.
On amendment 4, as the Government amendments show, the regulator will issue a notice that sets out the relevant findings of the state of the game report, which will need to be addressed by a distribution order, and the order must explain how it addresses those findings. We are absolutely aligned on the intention behind amendment 5. This exact change—to ensure that the regulator need not adopt league proposals wholesale but can instead design its own solution—is core to new clause 4.
Amendment 141, tabled by my hon. Friend the Member for Sheffield South East, seeks to shorten the transition period for parachute payments. While a timely distribution order is a priority, we must ensure that there are adequate protections for relegated clubs, to prevent a cliff edge. That is why the Bill guarantees that there can be no reduction at all in parachute payments, for an absolute minimum of one year from the end of the first season to which a distribution order applies. Shortening that period would give relegated clubs less time to plan financially, putting them at greater risk of financial trouble. That is, after all, the issue we are seeking to address through the legislation. I know that may not be the answer that my hon. Friend wants, but for those reasons I hope he will withdraw his amendments.
Mr Betts
I am still not quite sure how—given that all clubs now know that a regulator will be appointed, that the leagues and clubs know that financial distribution is at the heart of the Bill, and that a club can be promoted during the two-year period—any club can start preparing for that situation. At the beginning of that period, the club would not know whether it was going to get parachute payments, because it could be promoted and relegated in that period. I do not think the idea holds that two years gives certainty to clubs.
I am really worried about the idea of signalling, at this stage, that there will potentially be no change in financial distribution until the end of this Parliament. I do not know how far the Minister has thought that through, but if we want to encourage the Premier League and the EFL to sit down and reach an agreement—if that is the preferred way forward, and I think it is—surely the idea that the process can be extended by not reaching an agreement until beyond the next election is an incentive for the Premier League to do nothing. It is waiting for the pressure to come off, and the way to relieve it is simply to do nothing and hope that it goes away after the election.
Clearly, that pressure will go away if the Conservative party wins the election and implement a Bill with parachute payments not included in the regulator’s remit. That is what will happen. We were all elected to achieve change, and the change that most fans want to see is the addressing of the fundamental disparity within the English game that produces a cliff edge and all the problems in the Championship. We know how those problems need to be addressed: with the regulator’s powers in this excellent Bill. Why sit for two years after the regulator makes a decision and do nothing, when to give a year is fine?
The Minister has heard comments and concerns from hon. Friends today—Committee members who obviously have a great deal of interest in football in general and in their clubs in particular. Will she agree, as the hon. Member for Cheltenham asked, to take the matter away and give it further consideration? I do not want to push the Minister here and now on the words in my amendment, but I do want her to give an understanding that she recognises that there is a problem that needs to be addressed to satisfy her colleagues.
Stephanie Peacock
I assure my hon. Friend that I have thought about it carefully—that was a fair challenge. Indeed, when in opposition, I tabled an amendment to the previous Government’s Bill. I think we have very much strengthened the legislation by ensuring that parachute payments are in scope. We thought it odd to have a Bill on the financial sustainability of football without including them. That is why this Government have strengthened the Bill.
I completely acknowledge the strength of feeling on the matter. I say again that the regulator can consider it, but that does not necessarily mean that it will. It will need the evidence in the state of the game report. I appreciate and completely understand why hon. Members have shared examples from their own clubs, and are speculating on the impact of parachute payments, but that is not my role today. It is up to the state of the game report and the independent regulator to come to that decision, if the backstop is triggered.
Mr Betts
Would the Minister not therefore give the regulator a discretionary power to decide when it should be implemented, after either one year or two years? We will have a regulator who will be on top of the job and will have seen all the issues and evidence, in detail that we cannot see in Committee. Will the Minister consider giving flexibility and discretionary powers to the regulator?
Stephanie Peacock
No, I am afraid I am not in a position to do that. It is a one-year period from the end of the first season to where the order applies. We think that is a balance. It is obviously a challenging issue, with strong feelings, but formulating this part of the Bill is about striking a balance. We believe we have the right one, but I acknowledge my hon. Friend’s concerns.
Mr French
Given the previous debate, the Minister will be pleased that I am willing to withdraw amendment 125, so she gets a win out of that one. I listened carefully to her comments on removing that subsection (1)(c), and, in the light of that and in a spirit of goodwill, I will withdraw the amendment.
It would be helpful if the Minister would explain what checks and balances there will be surrounding the football regulator’s final determination. The legislation will leave it entirely up to the football regulator how best to determine the questions of resolution, with the only guardrail seemingly being that the distribution order should not place an undue burden on the commercial interests of any specified competition organiser, and the distribution order should not result in a lower amount of relegation revenue being distributed to a club during the relevant period than would have been distributed to the club during that period had the order not been made. It would also be helpful if the Minister could outline whether either of the parties would be offered the right of appeal, following a distribution order from the regulator.
Stephanie Peacock
We will come to about appeals and challenges shortly, so we might be able to explore that in further detail. I have a detailed breakdown of the process; in the interests of time, I will not read it out, but I will send a copy to the hon. Gentleman, because I think it will answer his question.
The Chair
We now come to the decisions on amendments 141 and 5. Does the hon. Member for Sheffield South East wish to pursue either of them?
Mr Betts
I am disappointed by the Minister’s response. She has generally been very helpful in trying to acknowledge concerns when they have been raised, and in agreeing to have a look at them. I will not press my amendments to a vote at this stage, but I will bring them back on Report.
The Minister is entirely reasonable and open-minded on these matters, and has engaged in discussion on all sorts of things, but I worry that a handful of clubs in the Premier League are determining what happens with distribution orders, which is disappointing. I will return to this issue in due course, because I do not think the Minister’s approach on this clause has been how she has approached the rest of the Bill. I am disappointed, but I will not press my amendments to a vote.
Clause 62 disagreed to.
Clause 63
Duration and revocation of distribution orders
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
It is important to build safeguards into the backstop process, and clause 63 outlines what happens if circumstances arise in which a distribution order made under clause 62 is no longer viable or necessary. To provide clarity to the leagues, any distribution order will need to specify when it comes into force and how long it is in force. In ordinary circumstances, an order will remain in force until the specified period ends, but clause 63 allows the regulator to revoke an order in exceptional circumstances. The regulator might choose to do that if there was an unexpected change to the broadcast market that meant an order was no longer fit for purpose. It is important that the Bill provides that flexibility to prevent a scenario in which an unsuitable arrangement is left to stand.
Similarly, the clause ensures that the regulator will revoke an order if a league subsequently strikes a distribution deal covering the same seasons as the order. That again demonstrates the Government’s commitment to prioritising and encouraging industry-led agreements wherever possible. Whenever the regulator revokes an order, it will need to notify the parties and set out the reasons for its decision, continuing the underlying commitment to transparency at every stage of the process. I urge that the clause stand part of the Bill.
Mr French
I have only a brief question for the Minister in the light of her comments: how frequently does she envisage distribution orders being reviewed by the regulator, and is there a risk that clubs or competitions may face financial instability due to short-term changes to distribution orders?
Stephanie Peacock
Not very often, is the short answer to the hon. Gentleman’s question, and it might be helpful if I give a brief example. If there was a very significant reduction in broadcast revenues, complying with an order might actually threaten the sustainability of clubs in the distributing league. It is not a measure we expect to be used frequently.
Question put and agreed to.
Clause 63 ordered to stand part of the Bill.
Clause 64
Review of distribution orders, payment of costs, etc
Amendment made: 54, in clause 64, page 54, line 18, leave out “62(8)(b)” and insert “(Distribution orders)(10)(b)”. —(Stephanie Peacock.)
This amendment is consequential on the insertion of NC4.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
For the backstop process to be viable as a regulatory solution, it needs to be legally enforceable. The clause sets out that, once the regulator has made a distribution order, it must keep the relevant leagues’ compliance with the order under review and monitor whether there is any need to take enforcement against the relevant leagues if they do not comply. Without this power, the sustainability issues that the backstop seeks to address will remain present.
Although constructive engagement with clubs will be the regulator’s default first step, the clause references its ability to take enforcement action, as outlined in part 8 of the Bill, to ensure that a distribution order is upheld. Furthermore, the clause allows the regulator to make rules on how costs associated with the backstop are to be paid. That could, for example, allow it to pass on the cost of mediation to the leagues. Finally, the clause also explicitly highlights the ability, at any stage, for the leagues to come to an alternative agreement.
It is important to reiterate that the distribution order is a last resort power, only to be used in cases where football cannot come to an agreement itself. If the leagues reach an agreement to resolve the issues in dispute before the backstop process concludes, the regulator will not impose an order. If they reach an agreement after the backstop has run its course, the regulator must revoke its order. I commend the clause to the Committee.
Mr French
The clause requires the regulator to periodically review distribution orders and monitor compliance. It also gives the regulator power to determine who should bear the costs of the resolution process, including mediation and the final proposal stages.
I have the following questions for the Minister. First, who is liable for the cost of reviews, and is there a cap on the expenses that can be passed on to clubs? Secondly, what criteria will determine how costs are apportioned between parties? Lastly, will the regulator be independently audited on its cost management in conducting such reviews to minimise the costs for clubs?
Stephanie Peacock
I am grateful for those questions. As I said, the clause sets out the rules for how costs associated with the backstop are paid. It could, although it does not have to, allow for the costs of mediation to be passed on to the leagues. If it is helpful, I am happy to write to the hon. Gentleman with more detail. The clause sets out the regulator’s ability to pass the cost on to the leagues if it feels it is appropriate, but I reiterate the regulatory principle of proportionality.
Question put and agreed to.
Clause 64, as amended, accordingly ordered to stand part of the Bill.
Clause 65
Power to require information
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 65 is the first clause in part 7 of the Bill, which covers the regulator’s investigatory powers, and relates to information gathering. It gives the regulator a power to require specified information and sets out the associated procedures for obtaining the information.
Accurate, reliable and timely information will be central to the regulator’s regime. Without a full and up-to-date picture of clubs and the market, it would not be able to regulate effectively. It would be reliant on voluntary disclosures or publicly available information, which could be incomplete, outdated or selectively presented. That is why the power in the clause is important to the regulator’s regime. The clause gives the regulator the power to issue an information notice to a person, requiring the person to give the regulator specified information that it considers necessary in exercising its functions. For example, the regulator may require information in order to monitor clubs and investigate possible non-compliance with the regulatory regime.
The ability to request information is not a unique or controversial power for a regulatory body. It is common practice among regulators to seek information from the regulated industry and from those subject to investigation. For example, the Competition and Markets Authority, the Financial Conduct Authority, Ofcom and many more all have information gathering and investigatory powers, which they use regularly. Such powers are regulators’ bread and butter, without which they would be unable to effectively regulate. I commend the clause to the Committee.
Mr French
Clause 65 allows the regulator to require persons, including clubs and their officers, to provide information that may be needed for the exercise of the regulator’s functions.
I have the following questions for the Minister. First, what are the limits on the volume or sensitivity of information that the regulator can demand from clubs? Secondly, could the clause lead to regulatory overreach if requests are too frequent or expansive? Lastly, how will the cost of compliance be managed, especially for smaller clubs?
Stephanie Peacock
We acknowledge that this is a new regime for football clubs to be operating under. They already submit information to the football authorities, and we expect that submitting information to the regulator should not be any different.
As with anything it does, the regulator should act proportionately. In this context, that means that it will consider the burden that an information request might place on a club. For example, the burden might be higher for a smaller club, so the regulator might also consider the nature of the information request. For example, the volume and nature of the information required might differ depending on the circumstances of the club.
Question put and agreed to.
Clause 65 accordingly ordered to stand part of the Bill.
Clause 66
Reports on clubs by expert reporters
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause gives the regulator the power to appoint a person to prepare a report on a regulated club. The person is referred to as an expert reporter, and they must have the necessary skills and expertise to prepare the report. The regulator will have expert staff and the ability to request the information it needs, but this power will allow it to draw on specialist third-party expertise and resources. For example, the expert reporter might be a firm with audit experience, where the regulator thinks that it would benefit from the firm’s ability to synthesise and analyse information gathered from the club at first hand. That could enable the regulator to exercise its functions more effectively.
The report can be on any matter that the regulator considers appropriate in order to carry out its functions. For example, the report might deal with a specific issue or with the club’s circumstances and operations more generally. The expert reporter will have the ability to require information from as many persons as necessary for the purpose of preparing the report.
The clause also covers other procedural matters relating to the appointment of the expert reporter, including rules on expenses incurred in the appointment of the reporter and requirements to co-operate with and assist a skilled person once appointed. There is precedent for such a power: the Financial Conduct Authority, for example, has the power to appoint a skilled person to a firm.
We expect that the regulator will find the power useful when it would benefit from the expert reporter’s skills to combine and interpret information gathered at first hand or on a more continuous basis over a period of time. Based on a report, the regulator may be better informed to determine whether it needs to take action on a club, or which action to take—for example, whether to impose a discretionary licence condition or to take enforcement action. I commend the clause to the Committee.
Mr French
As the Minister outlined, the clause gives the regulator the power to appoint an expert to prepare a report on a club. I have three questions for her. First, who will select the expert reporters and how with their independence be assured? Secondly, will there be cost limits or reimbursement rules in place to prevent financial strain on clubs that are required to co-operate? For example, without naming any individual companies, over the years we have seen many examples of excessive costs being applied by certain accountancy firms for such reviews. I am sure that we would not want those overburdening small clubs. Lastly, will clubs have a right to comment on or challenge a draft of the report that the expert provides before action is taken?
Stephanie Peacock
The regulator will be able, if it is thought appropriate, to provide for the club concerned to cover the costs associated with the expert reporter. That is because it will not be a commonly used tool and the cost will be specific to a single club, so, rather than all clubs picking up the cost through the levy, where possible, the regulator can ensure that the regulated party pays. However, the regulator will have discretion, and it might be the case that the club’s financial means are low and the regulator does not think it appropriate to impose additional costs on it.
Question put and agreed to.
Clause 66 accordingly ordered to stand part of the Bill.
Clause 67
Meaning of “relevant infringement”
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider the following:
Schedule 7.
Clause 68 stand part.
Government amendment 65.
Schedule 8.
Clauses 69 to 74 stand part.
Stephanie Peacock
This group of clauses and schedules covers the meaning of “relevant infringement”, investigations into any relevant infringements, and the regulator’s investigatory powers.
Clause 67 explains the meaning of “relevant infringement” for the purposes of the Bill by reference to schedule 7. Relevant infringements are breaches of the requirements set out in the Bill and can be investigated and enforced by the regulator. Schedule 7 sets out the cases in which a relevant infringement is committed and the persons who can commit such an infringement, which could be a club or competition organiser, but also senior individuals at a club.
The fan-led review made it clear that it was vital that those in senior positions at clubs—those who make the damaging decisions that hurt clubs—were made subject to sanctions by the regulator. That is why we have ensured that the regulator may investigate and enforce on not only clubs and owners of clubs that may commit a relevant infringement, but officers and senior managers of the club.
In addition to the information offences, which we will debate in due course, the infringements in schedule 7 are a comprehensive and complete list of the possible non-compliance that might occur in relation to the Bill and the regulator’s regime. They include failure by a club to comply with a licence condition; failure by an owner to comply with a direction to cease to be an owner; and failure by competition organisers to comply with a distribution order.
The regulator may apply sanctions in response to a relevant infringement being committed, in accordance with the enforcement provisions in the Bill, but any conduct that is not listed in schedule 7 as a relevant infringement will not warrant enforcement action by the regulator. A closed list of possible relevant infringements on the face of legislation provides up-front clarity to the regulated industry and other persons as to what conduct is not permitted. It also clarifies the limits of the regulator’s enforcement regime.
Clause 68 gives the regulator the power to undertake an investigation if it has reasonable grounds to suspect that a relevant infringement has been committed. Powers of investigation are necessary to facilitate effective evidence-based enforcement. Such powers are commonly exercised by regulatory bodies across a wide range of industries. Any enforcement action the regulator takes must be based on sound evidence. The regulator does not need to carry out an investigation before taking enforcement action if it has sufficient evidence through other means. However, the regulator will need to be able to exercise investigatory powers in cases where it does not yet have sufficient evidence to decide whether to take action.
The specific investigatory powers of the regulator are set out in schedule 8. Like the general information-gathering powers in earlier clauses, the powers are exercisable only when the regulator opens an investigation into whether a person has committed a relevant infringement. The powers will enable the regulator to obtain the relevant information that it needs to look into suspected non-compliance with its regime. It has two investigatory powers: the power to ask questions of or interview any individual, and the power to enter business premises under a warrant issued by the courts or the Competition Appeal Tribunal. Those are proportionate powers that are common across other statutory regulators; for example, the Financial Conduct Authority, Ofcom and the Competition and Markets Authority all have similar investigatory powers.
Clause 68 also sets out important procedural requirements in respect of an investigation. Specifically, the regulator is required to give notice to a person under investigation explaining the matter being investigated.
Clause 69 sets out the potential outcomes of an investigation by the regulator. When investigating, the regulator must determine whether a relevant infringement has been committed and whether there is a reasonable excuse for doing so. The regulator can close an investigation by issuing a closure notice if no infringement is found to have taken place. The notice must clearly set out the regulator’s decision and the reasoning behind it. If the regulator decides that a relevant infringement has been committed, it can take enforcement action, which we will discuss in the next group.
Clause 70 enables the regulator to accept a commitment from a person under investigation in relation to their behaviour in certain circumstances. That means that, instead of carrying on with the investigation and potential enforcement action, the regulator is able to accept a binding commitment in lieu of the investigation. For example, a club could come forward during an investigation and offer to take certain action itself to rectify a possible infringement. The clause is intended to help facilitate a participative approach in place of formal investigation and enforcement. I want to reassure the Committee that a commitment is not a way that clubs can dodge scrutiny from the regulator, or reach settlements behind closed doors in order to avoid sanctions. The regulator is not obliged to accept a commitment and is still free to investigate different behaviour, even if a commitment is accepted.
Clause 71 is supplementary to clause 70 and sets out further detailed procedures for accepting, reviewing, varying and releasing a person from a commitment. It sets out safeguards, including to keep commitments under review to ensure that they remain effective, necessary and appropriate, as well as to issue notices when taking action on commitments, which may be published in the interest of transparency.
Clause 72 imposes a duty on persons to preserve information that may be relevant to an investigation. That means that a person who knows or suspects that an investigation is being conducted or is likely to be conducted must not destroy, dispose of, falsify or conceal relevant information. As set out in schedule 9, which we will come to in the next group, failure to comply with the duty could be met by civil or criminal sanctions.
On clause 73, information is crucial to the work of the regulator. I have discussed the powers the regulator will have to obtain the information it needs. However, those powers will not cut across legal professional privilege. The confidentiality between professional legal advisers and their clients is an important protection and it would not be appropriate for the regulator to interfere with that. That is why the clause clearly sets out that the regulator cannot require any person to produce, generate or provide it with any privileged communications.
Transparency has always been a key principle when designing the regulatory regime. Clause 74 requires the regulator to publish certain notices related to investigations. The specific requirements in the clause build on the general regulatory principle of transparency in clause 8. Requiring notices to be published will enable transparency and clarity in respect of the regulator’s investigations.
Government amendment 65 to schedule 8 will ensure that the regulator can conduct investigations thoroughly and without imposing unnecessary burdens. At present, if the regulator obtains information when entering business premises under a warrant as part of an investigation, it can only keep that information for three months. On reflection, we think that is an unnecessary and arbitrary restriction. While the regulator must strive to carry out investigations promptly, we do not want the process to be curtailed artificially and risk affecting the quality or thoroughness of the investigation, nor do we want the regulator to be forced to burden clubs with repeat requests for the same information simply because the three-month deadline has passed. It is in the interests of all parties that the regulator follows best practice on the retention of information taken under warrant, including the Home Office powers of entry code of practice. This is why we tabled the amendment to remove the three-month timeframe. I urge the Committee to accept it.
Mr French
The provisions in this group all relate to infringement and the enforcement of infringements. Schedule 7 sets out the detailed definition of what constitutes a relevant infringement for the purposes of parts 7 and 8 of the Bill. It provides clarity on the types of conduct that may lead to investigation and enforcement action by the football regulator, including failure to comply with a duty under the Bill, a condition of a licence or a direction issued by the regulator. The schedule also enables further types of infringement to be specified through regulations. The intention is to provide a clear and comprehensive basis for the regulator’s investigatory and sanctioning powers.
Does the Minister think there are sufficient limits in schedule 7 to prevent the scope of relevant infringement from expanding over time without parliamentary scrutiny? Could broad definitions allow the regulator to pursue cases not originally envisaged by Parliament? How will consistency in interpretation be maintained across different clubs and cases?
Clause 68 allows the regulator to investigate whether a relevant infringement has occurred. It sets out the procedure to be followed and the types of action the regulator may take during an investigation, including seeking information and issuing notices. The clause forms part of the regulatory enforcement framework. What procedures are in place to prevent investigations from becoming unnecessarily protracted or burdensome? Could smaller clubs face disproportionate challenges in dealing with investigations due to limited resources?
Schedule 8 outlines the investigatory powers available to the football regulator in relation to relevant infringements. It includes the power to ask questions, require documents or information, and apply for a warrant to enter premises where necessary. The schedule also sets out the circumstances in which those powers may be used and the procedural safeguards that apply. The powers are designed to assist the regulator in establishing the facts of a case and determining whether enforcement action is appropriate. The provisions reflect standard regulatory practice and are intended to ensure that investigations are conducted in a proportionate and lawful manner. Does the Minister believe that there are sufficient safeguards to ensure that investigatory powers are not used disproportionately? Could the powers result in unnecessary costs or disruption to the day-to-day operations of clubs?
Clause 69 covers the outcomes of investigations. The clause sets out that the football regulator may find that there has been no infringement or, if it finds that there has been an infringement, that it may decide to take no action —possibly because the person had a reasonable excuse for committing the infringement. In what circumstances does the Minister envisage there to be a reasonable excuse, and does she worry that this risks setting a dangerous precedent? If an individual is found to have had a reasonable excuse, will that encourage others in the leagues to consider using that excuse if they are investigated? How will the outcome of an investigation be communicated to the relevant club or individual? Will the outcomes of investigations be publicly available? Once again, clause 69 raises important questions about consistency. If closure notices or outcomes are not published, what mechanism will there be for ensuring that investigations by the regulator are consistently applied?
Clause 70 sets out that the football regulator may accept an appropriate commitment from a person during the course of an investigation into certain relevant infringements. Does the Minister anticipate that that will be a regular feature? If so, what effect will that have on the football regulator’s ability to conduct an investigation? The clause clarifies that accepting a commitment does not prevent the regulator from continuing an investigation into different behaviour in relation to the same or a different relevant infringement, or starting a new investigation in relation to the same behaviour to which the commitment relates. It is therefore for the regulator to determine whether to continue the investigation. What criteria will be used to determine whether a commitment should defer or withhold investigation? Does this leave scope for inconsistencies in the approach of the regulator? If a commitment does not prevent the regulator from starting a new investigation into the same behaviour, it raises the question: why add another layer of bureaucracy when the ultimate result may be the continuation of said investigation?
Clause 71 adds provisions to clause 70. For example, it sets out that the football regulator must give the person a notice as soon as reasonably possible after it decides to accept, or not to accept, a commitment in lieu of investigation, and sets out what the notice should state. Can the Minister clarify how this notice will be given to individuals at a club? It also clarifies that the football regulator may accept a variation to a commitment, provided the varied commitment would still be appropriate. What is the process an individual would need to go through to amend or vary a commitment? Furthermore, it sets out that the football regulator may release a person from a commitment and must give the person a notice as soon as possible after deciding to do so. Many of the factors that the football regulator must consider are at its discretion, such as reviewing the appropriateness of a commitment. That raises further questions about consistency and the importance of making unbiased decisions.
Clause 72 places a duty on individuals under investigation to preserve information. The clause is key, but how will a person suspect they are subject to an investigation? Furthermore, the clause does not provide a date range up to and from when an individual must preserve relevant information. Will the football regulator adjudicate on whether information has been disposed of on purpose or accidentally? Likewise, will the regulator determine whether a document is falsified or authentic? The phrase “relevant” is broad, and it is open to interpretation by the regulator.
Clause 73 ensures that privileged communications are to be protected from the football regulator’s requirements. That is extremely important, as it covers communication between a professional legal adviser and their client to do with legal proceedings. However, will the football regulator have any powers to challenge claims that a communication is privileged? I would appreciate if the Minister could clarify whether that is a possibility. Furthermore, who will verify that a communication is privileged? Could the football regulator seek voluntary waivers of privilege in exceptional circumstances? What assessment has been made of the potential of the clause to inadvertently delay or obstruct investigation?
Clause 74—you will be pleased to know that this is my last point, Sir Jeremy—requires the football regulator to publish a notice where it has given a person an investigation notice under clause 68 or a closure notice under clause 69. Is there a timescale for such publication? How will the notice be communicated or published? Will it be publicly available? If so, will full details of the investigation be published, or will some material be redacted or withheld? Will there be an opportunity to appeal before publication to avoid reputational damage? Will clubs or individuals have the right to respond with advance warning prior to publication, if that is the case?
Stephanie Peacock
I am grateful to the shadow Minister for his questions. I noted as many down as I could, but I will endeavour to check Hansard if I do not cover all of them. First, he spoke about scope creep. I draw his attention to my comments earlier about how any conduct that is not listed in schedule 7 as a relevant infringement will not warrant enforcement action, and how we believe a closed list of possible relevant infringements in legislation provides clarity to the regulated industry and other persons as to what conduct is not permitted. The scope therefore cannot expand. I absolutely agree that things should be done in a timely fashion. In debates on the Bill, we have talked continually about proportionality, and we would expect cost and disruption to be kept to a minimum.
On the shadow Minister’s point about reasonable excuse, I draw his attention to my previous comments that it is not about sidestepping responsibility, but about being collaborative throughout. We expect the regulator will publish some information about investigations that it undertakes. It is required to publish an investigation notice issued to a person under clause 68, as well as an investigation closure notice under clause 69. However, the Bill allows for certain information to be withheld from publication if the regulator believes the disclosure or publication would significantly harm a person’s personal or business interests. The regulator is not required to publish revenue and customs information or information that might contravene data protection legislation or prejudice the prevention of crime.
Question put and agreed to.
Clause 67 accordingly ordered to stand part of the Bill.
Schedule 7 agreed to.
Clause 68 ordered to stand part of the Bill.
Schedule 8
Investigatory powers
Amendment made: 65, in schedule 8, page 109, line 14, leave out “a period of three months” and insert “so long as is necessary in all the circumstances”.—(Stephanie Peacock.)
This amendment provides that information obtained by the IFR under a warrant may be retained for so long as is necessary in all the circumstances.
Schedule 8, as amended, agreed to.
Clauses 69 to 74 ordered to stand part of the Bill.
Clause 75
Sanctions
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Schedule 9.
Clauses 76 and 77 stand part.
Stephanie Peacock
Together, the clauses and schedule in this group cover the sanctions available to the regulator for a variety of infringements, and the procedure for taking enforcement action. Clause 75 sets out the enforcement actions that the regulator may take and the sanctions that it may impose, by reference to schedule 9. We expect that the regulator will seek to pre-empt and address instances of non-compliance through constructive engagement where possible, but that will not always be appropriate. That is why this clause empowers the regulator to reach for stronger and more direct tools, and gives it the mandate to use them boldly when necessary.
The range of sanctions set out in schedule 9—sanctions of varying type and severity—will help the regulator to deter any non-compliance with its requirements. In particular, they include “name and shame” censure statements, and financial penalties. Where relevant, these sanctions can be applied to individuals making the decisions at clubs, as well as or instead of the clubs themselves. This can act as a better deterrent and avoid indirectly hurting fans. The regulator will also have the ability to appoint a skilled person to a club where relevant, to help the club to return to compliance. This presents a less punitive and more assistive enforcement tool for certain circumstances that call for it.
Schedule 9 also provides for the ultimate sanction—suspension or revocation of an operating licence. That can apply to either a provisional or a full licence, but it has a very high threshold for use, in that one or more of the “aggravating conditions” specified in the schedule must be met. We do not expect the regulator to need to reach for this sanction, particularly given that it can target owners and officers at clubs first. However, it is a necessary part of a licensing system, and a deterrent for the most egregious behaviour—for example, the threat of clubs joining a prohibited breakaway competition.
Clause 76 requires the regulator to give a warning notice before it takes any enforcement action. This is common practice and ensures a transparent and fair process by providing early warning and an opportunity for the target to make representations. Clause 77 requires the regulator to issue a decision notice once it has considered any representations received on the warning notice. The decision notice will set out whether the regulator has decided to take enforcement action and, if so, what that action is. As set out in clause 80, which we will debate in the coming groups, the regulator is obliged to publish warning and decision notices, to ensure complete transparency.
Mr French
Sir Jeremy, you and the Committee will be pleased to know that I will not seek to repeat word for word everything that the Minister has said on each of the clauses, but I will pose a number of questions to her on each of them.
As we have heard, clause 75 gives the football regulator the power to impose sanctions in response to relevant infringements. How is proportionality assessed when deciding between different types of sanction? What is the estimated administrative cost of monitoring, imposing and reviewing sanctions? What legal protections are in place to prevent sanctions from being used punitively?
Clause 76 requires the regulator to issue a warning notice before imposing a sanction. The notice must set out the proposed action and give the person an opportunity to make representations, which is welcome, but is there an independent review mechanism if a club believes that a warning notice is unjustified?
Clause 77 requires the regulator to issue a decision notice, following a warning notice, if it decides to proceed with a sanction. The decision notice must explain the reasons for the decision and the right of appeal. Is there a process to allow clubs to challenge decision notices before they are published? What legal advice and support will be available to smaller clubs facing regulatory action?
I will move on to schedule 9, regarding sanctions overall. This schedule sets out further details on the sanctions available to the football regulator. Part 1 deals with sanctions related to information failures, including financial penalties and censure statements. Part 2 concerns infringements of substantive duties and conditions and includes suspension or revocation of licences and the appointment of a skilled person. Part 3 contains further provisions regarding financial penalties, including about daily rate calculations and enforcement of penalties as civil debts.
The schedule supports the enforcement powers in clauses 75 to 78 and provides the operational framework for sanctions. How are the levels of financial penalties determined in order to ensure fairness across clubs of different financial sizes? What checks exist to prevent excessive reliance on fines as a primary enforcement tool? Could any of the sanctions—for example, licence suspension—create unintended consequences for fans and local communities?
The Minister will be aware that I have pointed out in previous sittings the sporting competition impacts of any removal of a licence and how that may or may not affect relegation. We are interested in the Minister’s comments on how licence conditions would work when sanctions are applied.
Stephanie Peacock
The minimum period for representations on a warning notice is 14 days. A warning notice is an important procedural safeguard on the regulator’s enforcement process that ensures that the person in question can make their case. For example, that might be to explain that there was a reasonable excuse for non-compliance. We will talk about appeals in a moment. We have said throughout Committee and other proceedings on the Bill that appeals can be made.
On the hon. Gentleman’s point on cost, as well as the ability to impose significant financial penalties, including fixed penalties of up to 10% of a club’s revenue, the regulator will be able to hold a club’s senior management accountable for the club’s compliance where relevant. That means that, where appropriate, the regulator can take enforcement action against individuals as well as, or instead of, clubs. Targeted enforcement of that kind will be effective in changing behaviour, deterring non-compliance and aligning the incentives of those calling the shots with the club itself. It will also mean that sanctions do not need to unduly punish a club, and so indirectly hurt its fans, when not appropriate.
Question put and agreed to.
Clause 75 accordingly ordered to stand part of the Bill.
Schedule 9 agreed to.
Clauses 76 and 77 ordered to stand part of the Bill.
Clause 78
Offences
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 78 backs up the regulator’s information-gathering powers by creating information offences, including offences relating to the destruction or concealment of information and the provision of false or misleading information. The possible penalties for a person guilty of those offences include a fine or even imprisonment. The ability for the regulator to impose strong sanctions for what are clear offences should deter any person from information-related misconduct that would hamper the regulator. Information offences and sanctions are well precedented among other regulators, and their existence acts as a powerful and necessary deterrent. I commend the clause to the Committee.
Mr French
Again, I will not seek to repeat the Minister’s words. Clause 78 creates specific offences for destroying and falsifying information, providing false or misleading information, and obstruction. On summary conviction, a person who is guilty is liable for imprisonment for a term not exceeding the general limit in a magistrates court, for a fine, or both. On conviction or indictment, a person who is guilty is liable for imprisonment not exceeding two years, for a fine, or both. In relation to those offences, what evidentiary threshold must be met before a criminal offence would be pursued? Could the clause deter voluntary disclosure for fear of criminal liability? What is the projected cost to the public purse of enforcing those offences through the criminal justice system?
Stephanie Peacock
The effect of the clause is that it is a criminal offence to destroy, dispose of, falsify or conceal relevant information; to permit the destruction, disposal, falsification or concealment of relevant information; to provide false or misleading information to the regulator or an expert reporter; to give to another person information that is false or misleading, knowing that the information will be given to the regulator; and to obstruct an officer of the regulator exercising a warrant.
We are talking only about information-related offences, so it is fairly unobjectionable that persons should not be able to conceal or destroy information that the regulator asks for. The potential for criminal sanctions is normal for offences of that kind at other regulators. Those regulators tend not to have to ever use criminal sanctions, but having them available sends a clear and strong message that misconduct related to information will not be tolerated.
Question put and agreed to.
Clause 78 accordingly ordered to stand part of the Bill.
Clause 79
Urgent directions
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 79 will enable the regulator to give urgent directions to respond quickly to a risk of serious harm. These are directions to a person, such as a club, to take or to cease a certain action within a specified timeframe to bring an infringement to an end. Urgent directions will give the regulator a strong tool to intervene quickly where serious, ongoing non-compliance jeopardises the regulator’s objectives.
We expect compliance to be the norm and that, if necessary, most cases of non-compliance can be addressed using the sanctions set out in schedule 9. However, urgent directions will provide a more direct enforcement option to bring the most serious and potentially harmful issues to an end swiftly. Given the urgency, the regulator will not be required to give the person an opportunity to make representations. There is precedent for that among other regulators. The Financial Conduct Authority has similar “voluntary requirement” and “own-initiative requirement” powers. If a person fails to comply with an urgent direction, the regulator can apply to the courts for an injunction.
Clause 80 will require the regulator to publish certain notices and directions related to enforcement. This will ensure complete transparency around enforcement proceedings for fans, the industry and the wider public—something that has been lacking in the industry to date. I commend the clauses to the Committee.
Mr French
I have some brief questions for the Minister. On clause 79, what criteria will the regulator use to justify issuing an urgent direction? Is there a risk of overreach if urgent powers are exercised without immediate oversight? Will clubs have a right to appeal or review such directions after the fact?
We believe that clause 80 mirrors clause 74 in providing a general duty for the regulator to publish various notices and statements issued under the Bill. Are there exceptions where publication could be delayed to prevent market disruption or reputational harm?
Stephanie Peacock
An urgent direction will be used only in response to non-compliance that is ongoing and of sufficient seriousness. That is reflected in the statutory threshold for the use of an urgent direction. The threshold—that the infringement must jeopardise or risk jeopardising the regulator’s objectives—is used in multiple places in the Bill as a high bar for more severe actions, for example revoking an operating licence.
A person can appeal against an urgent direction, although, as per the appeals provisions in the Bill, the urgent direction would be binding while the outcome of the appeal was being decided.
Question put and agreed to.
Clause 79 accordingly ordered to stand part of the Bill.
Clause 80 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Vicky Foxcroft.)
Football Governance Bill [ Lords ] (Tenth sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 17th June 2025
(1 year, 4 months ago)
Public Bill CommitteesFootball Governance Act 2025 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 17 June 2025 - (17 Jun 2025)
The Committee divided: - Ayes: 2 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 9 - Question accordingly negatived.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Chair
With this it will be convenient to discuss the following:
Government amendments 66, 67, 68, 71, 69 and 72.
Schedule 10.
Clauses 82 and 83 stand part.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a pleasure to see you in the Chair once again, Mr Turner. Broadly, this group deals with the first three clauses of part 9, on reviews and appeals. A key safeguard on any regulatory regime is the opportunity to challenge the regulator’s decisions. As we will discuss in subsequent groups, decisions can be appealed to the specialist Competition Appeal Tribunal, but, as a preliminary step, clauses 81 to 83 create a statutory right for anyone “directly affected” by many of the regulator’s decisions to request that the regulator conduct an internal review.
Internal reviews will involve fresh decision makers reviewing a decision. They will provide a quicker and lower-cost option than immediately pursuing litigation. That should also streamline the overall appeals process, help ensure that litigation is a remedy of last resort, and hopefully minimise burdens on all parties and on the legal system.
Schedule 10 is a list covering the majority of significant regulatory decisions the regulator will make that directly affected persons are likely to appeal. These are the decisions that can be subject to internal review and appeal to the Competition Appeal Tribunal. More operational decisions have not been captured in the list of reviewable decisions, nor have “positive” decisions, where the likelihood of appeal is negligible, such as the decision to grant a club a licence. The right to apply for judicial review still applies in the usual way to decisions not captured in schedule 10.
Clause 82 sets out that, after the regulator makes a reviewable decision, a directly affected person can request that the regulator conduct an internal review. The clause outlines the procedure for internal reviews and empowers the regulator to refuse a review request in certain circumstances, including if the regulator considers that the request is vexatious. This should ensure that internal reviews are not used as a mechanism for clubs to frustrate and slow down the regulatory process. The clause guarantees that any individual who was involved in making the original decision will not be involved in conducting the internal review. That will ensure a fair review by fresh decision makers.
Lastly, clause 83 outlines further procedure around internal reviews. The outcome of an internal review can be to uphold, vary or entirely cancel the original decision. This means that the applicable reviewer can correct a flawed or unfair decision. The regulator will have a statutory deadline of 14 days to conduct the internal review, with a maximum possible extension of a further 14 days in special cases. This should strike the fine balance between delivering a streamlined process and giving the regulator sufficient time to conduct a proper re-evaluation of the evidence. In the interests of an open and transparent appeals process, the regulator will be required to publish the outcome of any internal review.
I turn to a series of Government amendments related to appeals. Government amendment 66 will add the regulator’s decision to trigger the backstop process to the Bill’s list of reviewable decisions. This will add a statutory route of appeal for the decision. Currently, the Bill makes only a decision not to trigger the backstop a reviewable decision. Making either decision at this vital stage reviewable will strengthen the regulator’s accountability by providing competition organisers with statutory avenues to appeal.
Government amendments 67, 68 and 71 will make the board, not the expert panel, the applicable reviewer of the three distribution decisions: to trigger the backstop, to make a distribution order and to revoke a distribution order. The regulator’s board will be the regulator’s most senior decision makers and so will be best placed to make and review these momentous decisions.
Government amendments 69 and 72 will remove the statutory route of appeal for three minor procedural decisions—the decisions to conduct an investigation under clause 68, to ask questions as part of an investigation, and to not accept a commitment in lieu of an investigation. This will reduce unnecessary opportunities to hamper the regulator by appealing interim procedural steps of an investigation. It would be inappropriate to allow a club to appeal the rejection of a commitment in lieu of an investigation, as this should be entirely at the regulator’s discretion as the investigating authority.
I reassure the Committee that these changes will not limit access to justice. Affected parties will still be able to appeal the final decision—that is, the outcome of any investigation—to the Competition Appeal Tribunal. The amendments simply remove the ability to challenge and frustrate the regulator at every step of an investigation. I commend the clauses, schedule and Government amendments to the Committee.
Mr Louie French (Old Bexley and Sidcup) (Con)
It is a pleasure to serve under your chairship, Mr Turner. I will keep my comments brief, which the Committee and you will probably be pleased to hear. I have listened carefully to what the Minister outlined, and the natural questions that arose about the amendments and clauses relate to how she imagines perceived biases will be avoided from boards and the panels, given that the expertise required to review such decisions will most certainly mean that most people involved in the process will be from the football industry.
How will the regulator seek to avoid any perception of biases, so we can ensure that what looks like a stage 1 complaints process—it is easiest to compare this with a council—has the relevant transparency and process involved to avoid going to stage 2, which would be the Competition Appeal Tribunal? Secondly, can the Minister explain why Government amendment 72 removes the decision to exercise the power to ask questions in an interview from the list of reviewable decisions? Why have the Government made that decision?
Stephanie Peacock
I direct the hon. Gentleman to the regulatory principles, in terms of the individuals involved—whether that is the board or the expert panel—and schedule 10, which lists the major significant regulatory decisions. If we look again at the regulatory principles, we see that there is a requirement to be proportionate and to act in a fair way. I will write to him about his second question, on amendment 72, but I think that this refers to the three minor amendments we are making so that the system cannot be frustrated at each step of the way. But I will clarify that and write to him, in the interests of accuracy.
Mr French
I am happy to receive a response in writing.
Question put and agreed to.
Clause 81 accordingly ordered to stand part of the Bill.
Schedule 10
Reviews
Amendments made: 66, in schedule 10, page 120, line 17, column 1, leave out “not to trigger” and insert
“to trigger, or not to trigger,”.
This amendment includes a decision to trigger the resolution process in the list of reviewable decisions set out in Schedule 10.
Amendment 67, in schedule 10, page 120, line 17, column 2, leave out
“a committee of the Expert Panel”
and insert “the Board”.
This amendment provides that the applicable reviewer for a decision to trigger the resolution process is the Board rather than a committee of the Expert Panel.
Amendment 68, in schedule 10, page 120, line 19, column 2, leave out
“a committee of the Expert Panel”
and insert “the Board”.
This amendment provides that the applicable reviewer for a decision to make a distribution order under NC4 is the Board rather than a committee of the Expert Panel.
Amendment 70, in schedule 10, page 120, leave out lines 21 and 22.
This amendment is consequential on the insertion of NC4.
Amendment 71, in schedule 10, page 120, line 23, column 2, leave out
“a committee of the Expert Panel”
and insert “the Board”.
This amendment provides that the applicable reviewer for a decision to revoke a distribution order under clause 63 is the Board rather than a committee of the Expert Panel.
Amendment 69, in schedule 10, page 120, leave out lines 27 to 30.
This amendment removes a decision to conduct an investigation under clause 68 and not to accept a commitment in lieu under clause 70 from the list of reviewable decisions in Schedule 10.
Amendment 72, in schedule 10, page 120, leave out lines 35 and 36.—(Stephanie Peacock.)
This amendment removes a decision to exercise the power to ask questions under paragraph 2 of Schedule 8 from the list of reviewable decisions in Schedule 10.
Schedule 10, as amended, agreed to.
Clauses 82 and 83 ordered to stand part of the Bill.
Clause 84
Appeals to the Competition Appeal Tribunal
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clauses relate to the appeals of the regulator’s decisions to the Competition Appeal Tribunal. An appeals process should provide the appropriate opportunity to challenge that 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. Finally, while providing effective assurance of the regulator’s decision-making process and judgment, the appeals system should not unduly undermine the expert independent regulator. We believe that the appeals process, and the standard of appeals set out in the clauses, effectively balance those different considerations.
Clause 84 sets out when appeals can be made, who can bring an appeal and how they are sequenced with internal reviews. Clause 85 sets out the standard of appeal that is to be applied by the Competition Appeal Tribunal on appeal of different types of decision. The majority of decisions will be appealable on judicial review grounds, having been first internally reviewed. That will provide a streamlined process for the majority of appeals.
The regulator reviews internally to ensure that its decision is robust, and the reviewed decision can then be scrutinised by the Competition Appeal Tribunal. In judicial review appeals, the Competition Appeal Tribunal will also be able to quash flawed decisions, but not substitute the regulator’s decision for its own. That will ensure appropriate deference is given to the regulator as the expert body that is best placed to make decisions of technical judgment in the football market.
However, there are some particularly significant enforcement decisions that the regulator can take under the Bill. We expect these actions to be rare, as they are for extreme and serious circumstances only. But, if taken by the regulator, these punitive actions could have a significant impact on a person’s rights. That is why, for the six decisions, we believe that a merits appeal is more appropriate, which means that the Competition Appeal Tribunal can substitute its decisions over the regulator’s. Finally, as is standard, clause 84 also establishes an onward route of appeal of the Competition Appeal Tribunal’s decisions to the Court of Appeal.
In summary, we think that the standard of appeal, and the wider appeals process set out in the Bill, strikes the correct balance between offering appropriate scrutiny of regulatory decisions and not allowing those decisions to be constantly challenged and undermined. I therefore commend the clauses to the Committee.
Mr French
This part of the Bill is important. We have argued consistently throughout this Committee that we believe that the right of appeal will be fundamental to the clubs in the context of this Bill. But we do have concerns, as the official Opposition, that football clubs will increasingly see themselves in legal disputes rather than focusing on matters on and off the pitch.
The natural question regarding this process is really about how the Minister will help to ensure that there is a fair playing field in terms of the financial costs of going to an appeal. How will those smaller clubs have the same rights and access to such appeals when they clearly will not have the same financial means as some of the Premier League clubs?
Stephanie Peacock
My officials engaged with legal experts and senior members of tribunals while developing the Bill. That is why we have set out the Competition Appeal Tribunal process, and why we believe that it will be proportionate and appropriate for all levels of the pyramid.
Question put and agreed to.
Clause 84 accordingly ordered to stand part of the Bill.
Clause 85 ordered to stand part of the Bill.
Clause 86
Disclosure of information by the IFR
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
This group of clauses relates to the disclosure of information both to and from the regulator. Clause 86 will enable the regulator to share relevant information with bodies within the industry and regulators that are dealing with similar and relevant issues. As well as allowing those bodies to benefit from the regulator’s knowledge and information, that should encourage those bodies to reciprocate by sharing relevant information they hold with the regulator. These two-way sharing relationships should help to establish an effective network of communication that strengthens the efficiency of regulation in the industry and across the economy.
Clause 87 concerns the disclosure of information to the regulator, for example by His Majesty’s Revenue and Customs. It also gives the Secretary of State the power to make regulations to enable other public authorities to share information with the regulator, if they do not already have the ability to do so. That will help to future-proof the regulator’s regime and ensure that it can obtain information from all the relevant bodies so that it can effectively deliver its functions.
Clause 88 sets out some restrictions and protections on the processing and disclosure of information by and to the regulator. That includes ensuring that a disclosure is in line with data protection legislation and does not prejudice the prevention, investigation or prosecution of a crime. It also prevents the disclosure of certain information, received from the National Crime Agency or HMRC, without their consent. This is to give those bodies confidence that sensitive information can be shared safely. The clause also permits the regulator to exclude information from disclosure that might significantly harm the legitimate personal or business interests of the person to whom the information relates. These are all important safeguards around the treatment of potentially sensitive information.
Finally, clause 89 creates criminal offences and penalties related to the safeguards for HMRC information set out in the previous clause. The penalties for these offences are commensurate with other regulatory regimes and are a proportionate but robust deterrent against the unlawful disclosure of information. I commend the clauses to the Committee.
Question put and agreed to.
Clause 86 accordingly ordered to stand part of the Bill.
Clauses 87 to 89 ordered to stand part of the Bill.
Clause 90
Rules
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The Bill provides a clear framework of powers and duties for the regulator to follow. In places, that is a detailed and prescriptive framework to direct and constrain the regulator’s regime more closely, but in other places there is greater room for the regulator to exercise discretion. That approach reflects regulatory best practice, which is to give the expert, independent and better informed regulator the flexibility to adapt regulations to the circumstances of different persons and to changing circumstances over time. Such flexibility will allow the regulator to be light touch where possible but intervene more strongly where necessary.
The ability for the regulator to make rules facilitates that approach. Rules will allow the regulator to fill in the technical and operational details of its regime within the framework afforded to it by this Bill. It could amend, replace or revoke those rules in future to adapt to developments in the market. The clause sets out some procedural safeguards around the making of rules and what these rules may do, including that the regulator must consult specified competition organisers and anyone else it considers appropriate before making, amending or replacing any rules. As outlined previously, this consultation is an important part of the participative approach that the regulator should take to make sure its regime works for the industry.
Mr French
Without wishing to sound like a broken record, the Opposition have raised concerns about scope creep for the regulator down the line, and how that may lead to unintended consequences. The obvious question to the Minister is: what consultation will take place with Members of this House so that we can scrutinise any rule changes and be confident that the regulator has not gone beyond the scope of the powers that we deem necessary at this point?
Stephanie Peacock
I make two points in response to that. Of course, there is the provision in the Bill—I believe we will come on to this, but we may have already covered it—for a five-year review. On this clause, the regulator must consult specified competition organisers and anyone else it considers appropriate before making, amending or replacing any rules. This is about future-proofing, and certainly not about scope creep.
Question put and agreed to.
Clause 90 accordingly ordered to stand part of the Bill.
Clause 91
Regulations
Mr French
Clause 91 provides the procedural backbone to the regulatory powers contained in the Bill. It sets out how the Secretary of State—whoever that may be, should this Bill become law—may make regulations under this legislation, including who may exercise discretion under them, and the form of parliamentary oversight that will apply. In short, this clause tells us how much power the Executive has in implementing the detail of the Bill, and how much say Parliament retains once the Bill becomes law.
The clause may be tucked away in the final third of the Bill, but its importance should not be understated. It governs not only the process of regulation, but the boundaries of ministerial authority. In some areas, we believe those boundaries are drawn too widely. That is why I have tabled amendment 127, which would remove the Secretary of State’s power under clause 56(2)(b) to specify, by regulation, other sources of relevant revenue that could be brought into scope of the resolution process.
Let me start by talking about clause 91. Subsection (1) allows regulations to confer discretion on a person and to vary by purpose, or to make incidental and consequential provisions. That is common enough in legislation, but it is worth nothing that that includes financial discretion, which has material implications for how the football regulator functions.
Subsection (2) confirms that all regulations must be made by statutory instrument. Again, that is standard practice. Subsection (3) provides a list of which regulations must be made under the affirmative procedure, and subsection (4) confirms that all other regulations fall under the negative procedure.
Subsection (5) removes the hybrid procedure, even if a regulation might otherwise qualify as hybrid, effectively limiting Parliament’s ability to challenge or delay regulations in which private or commercial interests are disproportionately affected. That all gives the Secretary of State wide scope to make rules that affect both her own regulator and the football industry, with only partial scrutiny by Parliament.
Clause 56 is where this becomes far more than procedural. Under clause 56(2)(b), the Secretary of State is empowered to expand, by regulation, what qualifies as relevant revenue for the purpose of regulatory intervention. Put plainly, this is a power to change what money is up for grabs.
That is a significant power. It means that the Secretary of State can decide what kinds of revenue are subject to redistribution disputes between leagues and competitions. Today, that might mean central broadcasting income, but tomorrow it could include gate receipts, sponsorship revenue, commercial arrangements specific to certain clubs or competitions, or even transfer proceeds or merchandising royalties. In theory, it could give a future Secretary of State the ability to bring any revenue stream into scope, and thereby invite the regulator to oversee, or even compel, its redistribution. This is a constitutional concern, not just a technical one. Will the Minister please confirm whether there are any limits—statutory or political—on what the Secretary of State could define as a source of “relevant revenue” under clause 56(2)(b)? If not, does she accept that that gives the Government open-ended authority to intervene in private commercial arrangements within football?
My amendment would remove this regulation-making power from the Bill. It would ensure that the scope of financial disputes eligible for regulatory resolution is fixed in primary legislation, not adjustable by ministerial diktat. We believe that is the right balance; it allows Parliament to define the guardrails and prevents future mission creep, whereby politically contentious revenue streams are dragged into disputes between the Premier League and the EFL, or any other competitions.
This is not just about the risk of interference; it is about certainty, predictability and trust in the regulatory model. We have already made clear our concerns about how English football will run into issues with UEFA and FIFA regarding their statutes. I will not repeat that again now, but we believe that, by granting the Secretary of State the power to redefine revenue categories by regulation—outside of parliamentary debate—clause 56(2)(b), as enabled by clause 91, risks violating those principles.
Such interference has one clear sanction:
“the ultimate sanction…would be excluding the federation from Uefa and teams from competition.”
As we have already discussed, that is not a risk that should be taken lightly. If football governance is to remain independent, and if the regulator is to operate with a clear mandate, the definition of revenue categories must not be subject to political discretion; it must be set by Parliament in primary legislation, not by the stroke of a ministerial pen. That is especially true when the very mechanism in question, the resolution process, is designed to resolve disputes about money. What qualifies as “relevant revenue” goes to the heart of the matter. It is not ancillary; it is foundational.
Clause 91 may appear to be about procedures, but it is in fact about power. It determines how broad the reach of the Secretary of State will be in defining, influencing and intervening in the financial affairs of English football. In particular, through the mechanism created by clause 56(2)(b), it allows new revenue streams to be brought into the scope of the Government-backed intervention without proper parliamentary scrutiny. That is not what was promised when this Bill was introduced. We were told by the Government and this Minister that their regulator would be a light-touch and targeted regulator—one designed to uphold financial sustainability and protect supporters, not one that could be weaponised by future Ministers to remake the game’s financial settlement from above.
By tabling amendment 127, we are saying that revenue boundaries must be set in statute, not in statutory instruments, that Parliament, not the Secretary of State, should decide where the line is drawn, and that the regulator should focus on its core remit and not be dragged into every financial dispute, with a “revenue” label slapped on by regulation.
Stephanie Peacock
I believe that amendment 127 is consequential on the hon. Member for Old Bexley and Sidcup’s amendment 124 regarding our changes to the Bill to include parachute payments, which we debated last week—although I think he gave a slightly more wide-ranging speech just now. Amendment 124 would have prevented parachute payments from being considered under the backstop, and it would have prevented the Secretary of State from amending the revenue in scope of the backstop in future. I will state here what I stated last week, and what has been my consistent position, even in opposition: for the regulator to make an informed decision regarding the financial state of football, it must consider all relevant factors, and that includes parachute payments.
As drafted, the “relevant revenue” in scope of the backstop expressly includes broadcast revenue, because that is the predominant source of revenue and distributions for the relevant leagues. However, there is no guarantee that that will always remain the case. As I covered in last week’s debate, the financial landscape of football is ever-changing. No one could have predicted 30 years ago just how much television broadcasting of English football would grow, and who can predict where technology may take us in another 30 years? That is why clause 56 allows the Secretary of State to specify other kinds of revenue to be included as “relevant revenue”. This will simply future-proof the backstop mechanism.
However, as I outlined in the previous debate, there are still clear constraints and safeguards regarding this power. The Secretary State must consult with the regulator, the FA and the relevant leagues before using the power, and can use the power only when there has been
“a material change of circumstances”.
Any use of the power will be scrutinised by Parliament under the affirmative procedure.
Mr Clive Betts (Sheffield South East) (Lab)
We cannot set something in stone and say, “That’s how it’s going to be forever.” Giving that bit of flexibility is right. I was talking to my friend Richard Caborn, who was a previous sports Minister, and he said to me that, when discussions first began about revenue within football, they were concentrated on the television rights to UK matches in the United Kingdom. It has since become apparent, of course, that it is the international rights that are the real driver of resources. That was not thought about when the first distribution was done.
Stephanie Peacock
I appreciate my hon. Friend’s intervention; he has put an important point on the record, and it is always nice to be able to pay tribute to Richard Caborn, the former sports Minister and my former south Yorkshire colleague. He has done a lot of work in this area; indeed, I know that he has worked very closely with my hon. Friend.
This process is simply about future-proofing. Given that this Committee has already agreed to clause 56 and disagreed to the shadow Minister’s amendment 124, all that this amendment would achieve is to remove one of the safeguards, making regulations to update the definition of “relevant revenue” negative rather than affirmative. For those reasons, I hope that the shadow Minister will withdraw his amendment.
Stephanie Peacock
Clause 91 sets out the parameters and procedure around the powers of the Secretary of State to make regulations under the various provisions of the Bill.
Question put and agreed to.
Clause 91 accordingly ordered to stand part of the Bill.
Clause 92
Minor definitions etc
Mr Betts
I beg to move amendment 11, in clause 92, page 75, line 17, after “functions” insert
“or give rise to the perception that said person’s functions have been prejudicially affected, including (but not limited to) a situation in which a person is—
(a) employed by or engaged as a consultant by any specified competition organiser or any group undertaking of a specified competition organiser;
(b) connected in any capacity with an organisation which has, in the last year, received at least half of its income from a specified competition organiser;
(c) connected with a group undertaking of an organisation within the scope of part (ii);
(d) connected in any capacity with an organisation which has, in the last year, received at least half of its income from any of the organisations listed in parts (ii) or (iii); or
(e) connected (as defined in section 252 of the Companies Act 2006) with an individual within the scope of parts (i), (ii), (iii) or (iv) of section 92(1).”
The amendment gives further detail to the definition of “conflict of interest” within this Bill.
It is a pleasure to see you in the Chair, Mr Turner, hopefully for the last time—in this Committee, I mean. The amendment is simply trying to make the Bill a bit more specific about what “conflict of interest” might mean. I am sure that the Minister will tell me that the amendment is not quite right in its drafting and wording. Nevertheless, it is at least worth putting on the record that this is an important issue. Maybe we can obtain some clarification about what “conflict of interest” means in practice.
Stephanie Peacock
I thank my hon. Friend for tabling this amendment. I acknowledge its intent to fortify the provisions in the Bill for dealing with conflicts of interest. We will cover “Minor Definitions” in detail when we discuss the next group of clauses, which includes clause 92 stand part. However, I will touch on “Minor Definitions” briefly when responding to this amendment.
As we discussed at length on day one of this Committee, when we debated conflicts of interest, it is essential that the regulator can deliver its regime free from undue influence and vested interests. The Bill already makes it clear that the regulator will be free from conflicts of interest and the Government amendments made in the other place strengthen those protections even further—indeed, beyond any doubt.
We believe that the existing definition of a conflict of interest is appropriate and will capture the correct issues. That definition is any interest that
“is likely to affect prejudicially that person’s discharge of functions”.
I reassure my hon. Friend that our definition is well precedented; for example, it can be found in the Pensions Act 2008 and the Financial Guidance and Claims Act 2018.
Stephanie Peacock
The shadow Minister is making a well-rehearsed argument. As we have discussed previously, the newly appointed chair of the regulator has been fully endorsed by a cross-party Select Committee.
Returning to the amendment, we are confident that this definition and the conflict of interest protections in the Bill, supplemented by public law principles and non-legislative measures that are already in place, provide comprehensive safeguards to identify and manage conflicts of interest appropriately. For those reasons, I hope that my hon. Friend will withdraw his amendment.
The Chair
With this it will be convenient to discuss the following:
Clause 93 stand part.
Schedule 11.
Stephanie Peacock
Clauses 92 and 93 and schedule 11 relate to definitions. Clause 92 defines various terms used throughout the Bill that are not already defined elsewhere. Clause 93 refers to schedule 11, which lists where in the Bill to find definitions or explanations of terms that apply to multiple provisions—for example, “competition organiser,” “football season” and “regulated club.”
Clause 92 accordingly ordered to stand part of the Bill.
Clause 93 ordered to stand part of the Bill.
Schedule 11
Index of defined terms
Amendment made: 73, in schedule 11, page 123, line 4, column 2, leave out “62(3)” and insert “(Distribution orders)(9)”.—(Stephanie Peacock.)
This amendment is consequential on the insertion of NC4.
Schedule 11, as amended, ordered to stand part of the Bill.
Clause 94
Pre-commencement consultation
Stephanie Peacock
I beg to move amendment 55, in clause 94, page 76, line 14, leave out from “to” to end of line 15 and insert
“—
(a) a provision of this Act which requires the IFR to consult another person;
(b) the provision made by section 10(5)(a) and (b).”
This amendment includes the provision made by clause 10(5)(a) and (b) in clause 94.
Stephanie Peacock
These amendments relate to a simple administrative change to clause 94, the pre-commencement clause. Clause 94 will allow the shadow regulator to conduct consultation with relevant stakeholders ahead of Royal Assent. That clause was added to ensure that the shadow regulator would be able to begin consultation on its functions, and that, if deemed appropriate by the regulator post Royal Assent, that consultation could be relied on, ensuring no unnecessary delays to the set-up and commencement of the regulator.
The change simply ensures that the clause captures the slightly different wording in the state of the game clause about the regulator inviting suggestions on the report. By making this change, we reduce the operational risk of the regulator not reporting its state of the game report as quickly as possible post Royal Assent, and therefore being up and running as soon as necessary.
Amendment 55 agreed to.
Amendments made: 56, in clause 94, page 76, line 18, leave out “carried out consultation” and insert “did anything”.
This amendment is consequential on Amendment 55.
Amendment 57, in clause 94, page 76, line 20, leave out “consultation carried out” and insert “anything done”.
This amendment is consequential on Amendment 55.
Amendment 58, in clause 94, page 76, line 21, leave out
“consultation had been carried out”
and insert “thing had been done”.
This amendment is consequential on Amendment 55.
Amendment 59, in clause 94, page 76, line 23, leave out “consultation carried out” and insert “anything done”.—(Stephanie Peacock.)
This amendment is consequential on Amendment 55.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 94 will allow the shadow regulator to conduct consultation with relevant stakeholders ahead of Royal Assent, and for that consultation to satisfy the requirements placed on the regulator in legislation post Royal Assent.
Clause 94, as amended, ordered to stand part of the Bill.
Clause 95
Offences by officers of clubs and bodies corporate
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 95 makes sure that if a club is found to have committed certain offences under the Bill, such as falsifying or destroying information, the individuals responsible can be held criminally liable.
Question put and agreed to.
Clause 95 accordingly ordered to stand part of the Bill.
Clause 96
Review of Act
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
During Committee in the other place, Peers raised the importance of evaluating the impact, intended outcomes and success of the regulator. The Government absolutely agree that it is good practice for the impacts of regulation to be monitored and evaluated post-implementation. That is why we have added this clause, which will require the Secretary of State to carry out a review of the operation of the Act and its impact on industry. That review must be completed no later than five years after the full commencement of the licensing regime.
Mr French
Given the concerns that His Majesty’s Official Opposition have raised throughout the passage of the Bill in this place and in the other House, we welcome the inclusion of the review of the Act. However, the clause mentions laying a copy of the report before Parliament. How does the Minister envisage Parliament being able to have its say on the benefits or non-benefits of the regulator at that point?
Stephanie Peacock
I think we discussed this earlier. It is up to individual Select Committees whether they wish to call the independent regulator before them. I will write to the hon. Gentleman on the practicalities of laying the report.
Question put and agreed to.
Clause 96 accordingly ordered to stand part of the Bill.
Clause 97
Payments into the Consolidated Fund
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 97 covers situations in which the regulator must return money to the Exchequer and requires the regulator to pay into the consolidated fund amounts received through the levy to recoup its set-up costs.
Question put and agreed to.
Clause 97 accordingly ordered to stand part of the Bill.
Clause 98
Minor and consequential amendments
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 98 relates to minor and consequential amendments to other primary legislation. Those amendments are to existing Acts and are necessary for the Bill to function as intended. For example, they add the regulator to the Freedom of Information Act 2000 and enable the competition appeal tribunal to hear appeals of the regulator.
Stephanie Peacock
I believe so, but in the interest of accuracy I will double check and write to the hon. Gentleman.
Question put and agreed to.
Clause 98 accordingly ordered to stand part of the Bill.
Schedule 12 agreed to.
Clause 99
Extent
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 99 sets out the territorial extent and application of the Bill. The regulator’s scope is intended to be limited to the top five tiers of English men’s football. That is where the fan-led review identified significant harms and structural challenges that the market had failed to resolve. Five Welsh clubs compete in the English football pyramid, four of which—Cardiff City, Newport County, Swansea City and Wrexham—would be captured in the scope of the regulator. One more, Merthyr Town, which was recently promoted to the sixth tier, could be in scope in the future. To ensure that all clubs within the English football pyramid are captured and protected equally under the same regulatory regime, the legislation must extend to both England and Wales.
Mr French
I will not seek to rehash an earlier debate on the multi-club issue that the Opposition raised. However, I urge the Minister again to look closely at how that may work in the future. I fully appreciate her point about the Welsh clubs that compete in the English structure, but, as we highlighted in previous debates, a number of Scottish clubs now have multi-club ownership with English clubs and will be affected by this legislation directly or indirectly. If the Minister gave further thought to that and let me know, it would be appreciated.
Stephanie Peacock
I will make that commitment.
Question put and agreed to.
Clause 99 accordingly ordered to stand part of the Bill.
Clause 100
Commencement
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The Bill provides for the majority of provisions to be brought into force by commencement regulations. Different provisions may be brought into force on different days, enabling the new regime to be brought into force in a structured and considered manner. The main exceptions to that are the provisions that establish the regulator and its governance structure. In addition, there are some basic initial functions that the regulator needs to stand up the regime, such as putting rules in place and preparing a state of the game report. These provisions will be brought into force on Royal Assent to enable the regulator to get on with the task of standing up the new regime without unnecessary delay.
Question put and agreed to.
Clause 100 accordingly ordered to stand part of the Bill.
Clause 101
Short title
Stephanie Peacock
I beg to move amendment 60, in clause 101, page 80, line 11, leave out subsection (2).
This amendment would remove the privilege amendment inserted by the Lords.
Stephanie Peacock
Clause 101 concerns the short title of the Bill. It makes certain that, once it has passed through Parliament, the Football Governance Bill will be cited as the Football Governance Act 2025. Finally, Government amendment 60 is technical and procedural; it removes the privilege amendment inserted on Third Reading in the Lords to clause 101. This was added in the other place to make it clear that they have not infringed on the financial privileges of this House.
Amendment 60 agreed to.
Clause 101, as amended, ordered to stand part of the Bill.
New Clause 3
Proposal stage
“(1) This section applies where mediation under section 60 comes to an end by virtue of the occurrence of an event within section 60(6)(b), (c) or (d).
(2) As soon as reasonably practicable after the occurrence of the event, the IFR must give notice to the two specified competition organisers.
(3) A notice under subsection (2) must—
(a) set out the question or questions for resolution,
(b) specify the qualifying football season or seasons to which that question relates or those questions relate,
(c) set out any findings in the IFR’s most recent state of the game report that the IFR considers relevant to that question or those questions,
(d) invite each of the two specified competition organisers to submit to the IFR and to each other a proposal as to how that question or those questions should be resolved,
(e) require any proposal to be accompanied by supporting evidence (including evidence as to how the proposal addresses the findings set out under paragraph (c)),
(f) specify the day on or before which proposals are to be submitted.
(4) A question for resolution may be set out in a notice under subsection (2) only if it is the question, or one of the questions, for resolution remaining unresolved when the mediation mentioned in subsection (1) came to an end.
(5) Where a notice under subsection (2) sets out a question for resolution that relates to relegation revenue (within the meaning given by section (Distribution orders)(9)), the notice must require the specified competition organisers to explain in a proposal how the proposal will promote the financial sustainability of clubs which operate teams relegated from a competition organised by the specified competition organiser distributing the relegation revenue.
(6) Subsection (7) applies if, on or before the day specified by virtue of subsection (3)(f), a specified competition organiser submits to the IFR a proposal which the IFR considers is not a qualifying proposal.
(7) The IFR may give both specified competition organisers a notice specifying a later day (falling not more than seven days after the end of the day specified by virtue of subsection (3)(f)) on or before which proposals are to be submitted.
(8) As soon as reasonably practicable after—
(a) the initial proposal deadline, or
(b) (if earlier) the day on which the IFR considers that both specified competition organisers have submitted qualifying proposals,
the IFR must give a notice under subsection (9) to the two specified competition organisers.
(9) A notice under this subsection must—
(a) state which of the two specified competition organisers (if any) has submitted a qualifying proposal before the initial proposal deadline,
(b) invite each such specified competition organiser to—
(i) confirm their proposal, or
(ii) make any permitted modifications to their proposal,
and submit the confirmed or modified proposal to the IFR and the other specified competition organiser, and
(c) specify the day on or before which the confirmed or modified proposal is to be submitted.
(10) The IFR may specify in a notice under subsection (2) or (9) the form and manner in which proposals and supporting evidence must be submitted.
(11) In this section—
(a) ‘the initial proposal deadline’ means—
(i) the day referred to in subsection (3)(f), or
(ii) where the IFR gives a notice under subsection (7), the day specified in the notice;
(b) a ‘qualifying proposal’ means a proposal which—
(i) explains how the question or questions for resolution should be resolved, and
(ii) complies with the requirements imposed by virtue of subsection (3)(e) and (5) (if applicable);
(c) a modification to a proposal is ‘permitted’ unless it results in the proposal no longer being a qualifying proposal.”—(Stephanie Peacock.)
This new clause substitutes clause 61 with a new clause providing for a revised procedure for the proposal stage of the resolution process.
Brought up, read the First and Second time, and added to the Bill.
New Clause 4
Distribution orders
“(1) This section applies where the IFR has given a notice under section (Proposal stage)(9).
(2) Before the end of the period of 60 days beginning with the day on which the notice under section (Proposal stage)(9) was given, the IFR must give the two specified competition organisers a notice of the distribution order it proposes to make.
(3) The IFR may extend the period in subsection (2) by up to a further 14 days if it considers it appropriate to do so.
(4) A notice under subsection (2) must—
(a) give reasons for the proposed distribution order,
(b) explain how the proposed order applies the principles mentioned in subsection (8),
(c) explain how the proposed order addresses the findings set out under section (Proposal stage)(3)(c),
(d) invite each of the two specified competition organisers to make representations about the proposed distribution order,
(e) specify the period within which such representations may be made, and
(f) specify the means by which they may be made,
and the IFR must have regard to any representations which are duly made.
(5) The period specified under subsection (4)(d) must be a period of not less than 14 days beginning with the day on which the notice is given.
(6) As soon as reasonably practicable after the end of the period specified under subsection (4)(d), the IFR must make an order requiring relevant revenue to be distributed in a way that the IFR considers appropriate for the purpose of resolving the question or questions for resolution set out under section (Proposal stage)(3)(a) (a ‘distribution order’).
(7) In making a distribution order the IFR must—
(a) apply the principles mentioned in subsection (8), and
(b) have regard to any proposal submitted under section (Proposal stage)(9)(b).
See also section 7 (in particular the IFR’s general duty to exercise its functions in a way that advances one or more of its objectives and to have regard to various matters).
(8) The principles referred to in subsection (7)(a) are that—
(a) the distribution order should not place an undue burden on the commercial interests of either specified competition organiser, and
(b) the distribution order should not result in a lower amount of relegation revenue being distributed to a club during the relevant period than would have been distributed to the club during that period had the order not been made.
(9) For the purposes of subsection (8)—
‘relegation revenue’ means revenue distributed by a specified competition organiser to a club in consequence of a team operated by the club being relegated from a specified competition organised by the specified competition organiser;
‘relevant period’, in relation to a distribution order, means the period of one year beginning with the final day of the first football season in respect of which relegation revenue would be distributed in pursuance of the order.
(10) A distribution order—
(a) must impose on the specified competition organisers such obligations as the IFR considers appropriate for the purpose of securing compliance with the requirements set out in the order, and
(b) may, where a distribution agreement is in force between the specified competition organisers in relation to the same qualifying football season or seasons to which the order relates, provide for that agreement to have effect subject to provision contained in the order.
(11) At the same time as making a distribution order, the IFR must give the two specified competition organisers a notice—
(a) including a copy of the order,
(b) giving reasons for the order,
(c) explaining how the order applies the principles mentioned in subsection (8),
(d) explaining how the order addresses the findings set out under section (Proposal stage)(3)(c), and
(e) including information about the possible consequences under Part 8 of not complying with the order.
(12) The IFR must, as soon as reasonably practicable after making a distribution order, publish the order or a summary of the order.”—(Stephanie Peacock.)
This new clause substitutes clause 62 with a new clause providing that the IFR may make a distribution order that distributes relevant revenue in the way that the IFR considers most appropriate for the purpose of resolving the question or questions for resolution.
Brought up, read the First and Second time, and added to the Bill.
New Clause 7
Duty not to promote or engage in advertising and sponsorship related to gambling
“A regulated club or English football competition must not promote or engage in advertising or sponsorship related to gambling.”—(Max Wilkinson.)
This new clause prevents regulated clubs and competitions from promoting or engaging in gambling advertising or sponsorship.
Brought up, and read the First time.
Max Wilkinson (Cheltenham) (LD)
I beg to move, That the clause be read a Second time.
It is a pleasure to serve under your chairship, Mr Turner. We are not calling for a ban on gambling with the new clause, but we are calling for a ban on advertising it through one of our most culturally powerful platforms. The new clause is a proportionate, evidence-led measure to break the link between football and gambling harm. When we consider that 70% of young people are aware of being exposed to gambling advertisements, is it any wonder, when these adverts are emblazoned on football team shirts and plastered on the side of every pitch for everyone to see?
Gambling firms spend a huge amount of money every year on advertising. They do not lack influence or reach. Gambling has much wider impacts than simply in the football stadium. Since 2011, gambling losses in the UK have risen by 80%, and new data from the Gambling Commission indicates that up to 2.5% of adults in Great Britain may be suffering from gambling harms. Football is unique in its reach and influence. Unlike alcohol and tobacco, gambling is still embedded in the game. Club sponsorships, half-time adverts and pundit discussions all feature it. If we do not act here, we send a message that profits matter more than people’s wellbeing. We understand that the Government think this is outside the scope of the Bill, but it is an important discussion for us to have in the context of anything to do with football.
Max Wilkinson
It is not about the money that this would take out of football, but the money that is taken out of the pockets of many football fans who are being exploited by predatory gambling companies every day.
Stephanie Peacock
I thank the hon. Member for tabling the new clause. The Government are clear that, wherever gambling advertising and sponsorship appears, it must be socially responsible. The Government do not believe that the regulator should have a role in commercial matters such as sponsorship, which are rightly decisions for clubs and competition organisers. We must be wary of scope creep that sees the regulator straying into matters that should be reserved for the industry, and stepping on the toes of industry authorities such as the FA. What constitutes the promotion of gambling could be interpreted extremely broadly, with significant consequences for clubs, and sport more widely.
For instance, the new clause could be interpreted as meaning that players could not take part in competitions that had gambling sponsors. Clearly, that would have significant unintended consequences for clubs and the sport more widely. All major football bodies have published their joint gambling sponsorship code of conduct, which sets minimum standards for socially responsible gambling sponsorship within football. We are working closely with sporting bodies to review the implementation and impact of the codes of conduct to ensure that they have a meaningful impact. This review will provide key evidence to inform the most appropriate next steps for gambling sponsorship. The Premier League has already made the decision to ban front-of-shirt sponsorship by gambling firms by the end of next season.
For the reasons I have set out, I am unable to accept the new clause, and I hope the hon. Gentleman will withdraw it.
Max Wilkinson
With new clauses 9 and 13, we are calling for an expansion of the crown jewels of sports broadcasting to ensure that key fixtures from the domestic football calendar are made available on free-to-air television. Members will have recently seen some of the coverage about dwindling viewership figures for this year on TNT and Sky. That should give us all cause for concern, particularly those who are involved in the finances of football. Specifically, we are calling for the free-to-air package to include 10 Premier League games a season, the League cup final, and the play-offs for the Championship, League One and League Two, in addition to those already free to air, such as the FA cup, World cup and the Euros.
This is not about undermining private broadcasters, but viewing figures are on the wane. We had a 17% drop in audience numbers last season. At the same time, there are signs that the value of Premier League broadcast rights has plateaued as more live games have been added to recent packages. This is an opportunity for broadcasters and leagues alike to innovate their offering. Our proposals could open the door to new forms of commercial engagement, such as sponsorship tied to mass viewership, broader brand exposure and appointment-to-view opportunities that bring in new audiences. That approach has worked elsewhere across Europe, most notably in La Liga, where one game a week is free to air, keeping the league accessible to all fans, regardless of their ability to pay.
Recent research shows that in general Premier League fans are more likely to come from lower-income backgrounds than those who regularly attend matches. The hon. Member for Spelthorne has referenced the eye-watering cost of his season ticket on a number of occasions in this Committee. For many supporters, attending games is unaffordable, and with the rising cost of living, stacking multiple sports subscriptions is out of reach for too many households. Increasing free-to-air coverage would not just make games more accessible; it would reignite national moments of the kind we see during the World cup or the Euros. Those moments build unity, inspire young people and renew grassroots interest in the game.
Stephanie Peacock
I thank the hon. Member for Cheltenham for tabling new clauses 9 and 13, which concern the televising of football matches as listed events and free to air. First, I want to be clear that it is not an issue for the Bill or the regulator, but I would like to use this opportunity to set out the Government’s position on the issue.
The Government are keen to ensure that sporting events of national interest are made available to the public as widely as possible. In domestic football, the present arrangements under the listed events regime have protected key moments such as the FA cup final, while ensuring that the Premier League, EFL and FA are able to raise billions of pounds annually, which is invested back into the pyramid. We all want to see more matches being televised free to air, but that must be balanced against that investment, and not risk it.
As for the Bill, there have been strong voices from all sides that the regulator must have a tightly defined remit, and must not intervene in areas where it is more appropriate for football authorities or others to lead. We agree with that, and I am sure the hon. Member will agree that the bar for statutory, regulatory intervention in any market should be very high. It would not be appropriate for the regulator to intervene in commercial decisions between the relevant broadcasters and rights holders. Decisions relating to the number of matches of specific competitions that are broadcast are determined through commercial negotiation and are subject to factors such as rights costs and scheduling considerations. Additionally, we do not feel it is right to expand the regulator’s remit by including it as a body that must be consulted on listed events.
Decisions relating to the coverage of certain sporting and other events of national interest are, again, a matter for the relevant broadcasters and rights holders. A widened regulatory remit considering broadcasting and commercial decisions would distract from the key responsibility of the regulator and widen the scope of the Bill. The regulator will ensure that there are financially viable clubs for fans to watch, both at their grounds and on television. For those reasons, I am unable to support the hon. Member’s new clause.
Max Wilkinson
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 10
Fan representation: mandatory golden share
“(1) A licensed club must, as a condition of holding a licence under section 15, issue a non-transferable golden share to a recognised Supporters’ Trust or equivalent democratic fan organisation.
(2) The golden share must confer on its holder the right to veto any proposal by the club to—
(a) relocate the club’s home ground outside its current local authority area,
(b) change the club’s name,
(c) materially alter the club’s primary colours or badge, or
(d) enter into or withdraw from any competition not sanctioned by The Football Association, the Premier League, or the English Football League.
(3) A licensed club must—
(a) consult the holder of the golden share on any material changes to the club’s ownership, governance, or strategic direction,
(b) provide the holder with access to relevant financial and governance information reasonably required to fulfil its function, and
(c) facilitate structured and regular engagement between the club and the holder of the golden share.
(4) The Regulator must monitor compliance with this section and may—
(a) issue guidance to clubs and Supporters’ Trusts on the operation of the golden share,
(b) impose licence conditions or financial penalties for non-compliance, and
(c) take enforcement action where a club fails to uphold the rights associated with the golden share.
(5) In this section—
‘Supporters’ Trust’ means a formally constituted, democratic, not-for-profit organisation that is recognised by the Regulator as representing the interests of a club’s supporters;
‘golden share’ means a special share or equivalent legal instrument issued to a Supporters’ Trust, entitling its holder to the rights and protections described in this section.”—(Max Wilkinson.)
This new clause would give fans a veto on club proposals, exercised through a recognised Supporters’ Trust or equivalent democratic fan body.
Brought up, and read the First time.
Stephanie Peacock
I will respond to new clauses 10 and 21 together because they both relate to a “golden share”. The regulator will operate an advocacy-first approach, and the regulatory principles in clause 8 set out a collaborative approach, including with fans. Although we expect that the regulator will welcome any club that feels a golden share is the best approach for it, such an arrangement would require a significant restructure at the majority of clubs. The new clause would place a burden on clubs to make considerable changes, such as establishing a community benefit society if one does not already exist, and amending fundamental legal documents.
Instead, the regulator will give strong, irreversible legal protections to prevent damage to the most important aspects of the club. That will include regulatory protection for club heritage and stadium changes, as well as ensuring fan engagement. As we have discussed, clubs will be required to consult fans on key issues that are important to them. The Bill mandates fan consultation on a club’s strategic direction and business priorities, and on operational and match day issues, which specifically include ticket pricing and matters related to the club’s heritage. Such consultation, along with the protections on stadiums and key points of club heritage such as colours, emblem and name, ensure that fans are put at the heart of their clubs without the burdens that could, as I have just discussed, be associated with a golden share.
For those reasons, I am unable to support the new clause.
The Chair
I am afraid I reneged on my duty to call Mr Naish. I think I was too interested in the point about Hull City.
James Naish
It is an honour to serve under your chairmanship, Mr Turner. I want to place it on the record that the Notts County supporters’ trust got in touch with me over the weekend, and it is very much sympathetic to new clause 10. The trust was set up in 2003 to save the club when it was in administration, and it has played an important role in saving the club from being wound up. It fully supports any improvements in supporter representation, and its representatives specifically noted that they would like to see at least one independent supporter director on the board of all professional clubs, which measure would push in the same type of direction as the new clause. I recognise what the Minister has just said, but I thank the supporters’ trust for getting in touch. I also recognise that, where trusts are in existence, they are doing excellent things for their clubs.
Stephanie Peacock
My hon. Friend is a strong advocate for his constituency, and I am pleased that he has been able to represent his local fan trust. The Bill will require fan engagement at all clubs with the adequate and effective means in place to deliver the licensing requirement. The regime does allow for a bespoke approach to be taken at each club, based on what is best in each club’s specific circumstances. A supporter director was considered by the fan-led review and support for the concept was mixed. The review concluded that
“a fan director rarely delivers on fan expectations.”
Clubs are welcome to introduce any additional engagement strategy that they think will be of benefit to them and their fanbases. Many clubs have already responded to the fan-led review, made decisions to push themselves beyond the recommendations, and implemented fan engagement strategies that they think will work best for their club. I am grateful to my hon. Friend for making that case.
Max Wilkinson
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 11
Protection of assets of regulated clubs
“(1) Where any of the following assets belong to a regulated club, the asset must not be removed from the club’s ownership or used as collateral for a secured loan—
(a) any stadium,
(b) any training facility,
(c) any trophies,
(d) any car park,
(e) any hotel.
(2) But subsection 1 does not apply to a car park or a hotel where—
(a) the regulated club can demonstrate to the IFR’s satisfaction that the asset is causing financial loss or poses a material risk to the club’s financial sustainability, and
(b) the IFR has provided prior written approval for the disposal of the asset or the use of the asset as collateral.
(3) Where the current owner of a regulated club owns any asset listed in subsection (1)(a) to (c), the owner may not sell the club unless the owner has inserted the asset into the club’s ownership structure.”—(Max Wilkinson.)
This new clause would ensure that the club assets listed above are recognised as the inalienable property of the club rather than the club’s owners.
Brought up, and read the First time.
Max Wilkinson
I beg to move, That the clause be read a Second time.
We cannot claim to be reforming football unless we tackle one of its most dangerous long-term trends—the creeping financialisation and asset-stripping of clubs. The hon. Member for High Peak has mentioned this on a number of occasions; he has experienced it in his former role as chair of the RamsTrust. New clause 11 would introduce protections to ensure that core assets such as stadiums, training grounds, trophies and, in some cases, commercial properties like car parks and hotels, remain in the club’s ownership, where they belong. Specifically, the new clause would ensure that assets cannot be sold off or used as security for loans without the prior written approval of the regulator; that the regulator may give its approval only if the asset is demonstrably causing financial loss or poses a material risk to the club’s financial health; and, critically, that if any of the assets are owned by another organisation rather than the club itself, they must be transferred back into the club’s ownership before any sale of the club can proceed.
The current system allows owners to move critical assets out of a club’s hands with little or no transparency. Once that happens, the club often faces high rent obligations to use its own stadium and training facilities, has weakened negotiating power in takeovers and insolvency, and potentially experiences a complete disconnection from its historical home. Derby County are not the only example of where that has happened. We think this concept is worth taking forward, and we hope the Government are listening.
Stephanie Peacock
I thank the hon. Member for his amendment. He and I have a shared aim to ensure that there are sufficient protections for home grounds and other assets. We have already discussed the issue of protections for home grounds, so I understand the intention behind the amendment. However, the Government do not believe that it is a proportionate measure. The amendment would place significant blocks on any action to alter the financial arrangements of a long list of assets, and would substantially interfere with the property rights of clubs.
Clubs should be able to exercise commercial discretion over the use of wider club-owned assets. For example, the sale or refinancing of assets can sometimes be an acceptable and prudent way of improving a club’s liquidity, if necessary, but the amendment would remove that ability. There are other measures in the legislation to protect against the mismanagement of club assets, including the financial regulation provisions, regulatory oversight of financial plans, and an enhanced owners and directors test to ensure that owners are best placed to be the custodians of a club.
Last Thursday, I set out my understanding that the regulator could prevent the sale of training grounds through the use of discretionary licence conditions. I want to clarify that the regulator cannot directly block the sale of a training ground through licence conditions, but, where appropriate, it can act to discourage a sale and to mitigate any harmful financial impacts of a sale. The regulator can only set discretionary licence conditions in a limited number of areas. As per clause 22, which we have debated already, the regulator can only impose financial discretionary licence conditions that relate to liquidity requirements, debt management and overall cost reductions.
However, the regulator does have the levers to take action to protect a club’s financial sustainability if there ever arises a scenario in which the club intends to sell its training ground. By selling a valuable asset, a club may weaken its balance sheet and increase its financial risk. If there was a problem, the regulator could require the club to take mitigating action. For example, it could place a liquidity requirement on the club. The regulator could also use its powers to discourage the club from selling its training ground in the first place—for example, by indicating that if the club were to sell its training ground, the regulator would have no choice but to impose more significant financial restrictions on the club through discretionary conditions, thereby strongly steering the club away from that course of action. If that scenario were to arise because a bad actor sought to asset-strip the club, the regulator’s owners and directors test would kick in to remove that unsuitable custodian. For those reasons, I ask the hon. Member for Cheltenham to withdraw the motion.
Max Wilkinson
I have heard what the Minister said. She seems to be implying that this issue can be dealt with by the Bill, and that the regulator will have an eye on these sorts of things. I am somewhat reassured, but I hope that when the regulator is introduced—and we hope it is introduced—it will be given a strong steer that it ought to make sure that the owners of clubs are not stripping assets. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 12
Duty not to stage home matches outside United Kingdom without approval
“(1) A regulated club must not stage any home fixture in a competitive match at a venue outside the United Kingdom without the approval of the IFR.
(2) The IFR may only grant approval under subsection (1) if the fixture is not part of a specified competition.
(3) For the purposes of this section, a ‘home fixture’ means any fixture where the club is designated as the home team by the rules of the relevant competition.”—(Max Wilkinson.)
This new clause would prevent a regulated club from staging a competitive home fixture outside of the United Kingdom. It will allow regulated clubs to stage non-competitive fixtures outside of the United Kingdom.
Brought up, and read the First time.
Max Wilkinson
The hon. Member makes an interesting point. The US has a franchise system, so every club can be moved wherever it wants. Someone who is an Oakland Raiders fan would probably also have been an LA Raiders fan. Where else did the Raiders play? There was definitely a third place, at least, in my lifetime, because clubs regularly move around the nation. When there is that franchise problem in America, hardcore elements of a National Football League club campaign against their club moving, and then campaign for it to move back to that city. The LA Raiders are a case in point.
That link between clubs and communities has already been severed in America, so it is less of a concern that the Jacksonville Jaguars are effectively now London’s team. London has taken that club to its heart, just as people across the UK have taken many other NFL and American sports teams to their heart. The hon. Member raises an interesting point, but I am not sure there is a direct comparison.
We risk getting to that point where some English and Welsh football teams go abroad—although Merthyr Tydfil might like the idea of going on tour, if they get up to the level of league where they are regulated. We need to ensure that we do not get into the position where our teams go on tour around the world to play competitive Premier League games. That would clearly be a gross betrayal of what we hold dear as football fans.
Stephanie Peacock
I thank the hon. Member for tabling this new clause. I know this is an incredibly important issue for many fans, and I am grateful to be able to address it today, after a number of Members made contributions. FIFA is currently reviewing its position on overseas league matches. It has committed to looking at how that may impact supporters as well as players, along with a number of other valuable considerations.
We appreciate this is an extremely important issue for fans and we do not want to see any developments that undermine the heritage or integrity of the game. It is crucial that fans are consulted and that their view is taken into account on any proposals that would take matches away from the local community in which they usually play.
The Government have spoken about this issue to the FA, which has a right to veto any such future proposals. It has assured us that it agrees that fans’ views must be taken into account when considering this important issue. To be clear, the Bill already ensures that by giving the regulator the power to ensure that clubs consult with their fans on operational and match day issues. We have not tried to list everything that might be considered a match day issue in the Bill, but let me be clear that moving matches abroad would be an operational and match day issue. Fully licensed clubs must have mechanisms in place to adequately and effectively consult their fans about this issue and they must take fans’ views into account when making decisions about it.
Given the importance of this developing issue, the Government will remain in conversation with the relevant governing bodies to ensure that fans’ voices continue to be heard. For those reasons, I ask the hon. Member to withdraw his new clause.
Max Wilkinson
Hon. Members are all waiting for it—this was going to be the moment that we were going to force a vote, but given that the Minister has put on record the fact that this will be considered an operational and match day issue for the regulator, so fans must be consulted on it and would probably have a veto, we are content that we do not need to press the new clause to a vote. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 17
Impact on regulator of changes in Government administration
“If the Department for Culture Media and Sport is abolished, or its functions in relation to football substantially relocated, the Government must automatically review the suitability of the continuation of the IFR and the impact that the abolition or relocation will have on the IFR.”—(Mr French.)
This new clause would require the Government to review the IFR in the instance that the Department for Culture, Media and Sport were abolished, or its functions substantially altered.
Brought up, and read the First time.
Mr French
I beg to move, That the clause be read a Second time.
We believe that new clause 17 is important, given the speculation that the Minister might soon be going somewhere else on a free transfer. On a more serious note, this is a sensible provision, given the legal requirements on the Secretary of State in the Bill. For example, there has been much speculation that if the Department for Culture, Media and Sport were disbanded, sport, for example, would end up in the Department of Health and Social Care or the Department for Education, which would mean a different relationship with the football regulator going forward. Therefore, it is important to include a review mechanism in the Bill.
Stephanie Peacock
The hon. Gentleman’s new clause suggests that if DCMS were to be abolished, or if football were to be moved out of the Department’s portfolio, that should trigger a review of the regulator. A machinery of government change should have no bearing on whether there is continued need for an independent regulator established by Parliament. Just because circumstances in the sponsoring Department change, that does not mean that the regulator should be subject to a review. Machinery of government changes are common; we saw several of them under the previous Government. We do, however, believe that the regulator should be assessed and reviewed at the right time, as part of important monitoring and evaluation of the regulation.
Max Wilkinson
Were DCMS to be abolished, which Department does she think the regulator would end up reporting into?
Stephanie Peacock
I could not possibly speculate on such a hypothetical question.
I will say that clause 96, which we have already debated, mandates a review of the Act within five years of the licensing regime being fully commenced. Among other things, the review will look into whether the regulator has been effectively achieving its objectives, or whether those objectives might be better achieved in a different way. There are also other ways in which the regulator can be scrutinised and held to account by Parliament, such as through Select Committee hearings. I therefore hope that the hon. Member will withdraw his new clause.
Mr French
I have listened very carefully to the Minister’s response and to the intervention from the hon. Member for Cheltenham. Given the point that we are making about the role of the Secretary of State in relation to some of the regulator’s powers, we think that that hypothetical question is key. I gave examples of Departments that sport or football could move to, such as the Department of Health and Social Care or the Department for Education, which we think would significantly change the perspective on the business side of football. We will therefore press the new clause to a vote.
Question put, That the clause be read a Second time.
Mr French
I beg to move, That the clause be read a Second time.
This new clause is designed to improve the transparency of the regulator, ensuring that the public, football and Parliament are aware of the risks that we have discussed at length—in particular, any issues arising from international regulators such as UEFA or FIFA. We believe it is important to have transparency, and to ensure that Members understand the risk, as can football clubs. The Opposition will look to press the new clause to a Division, subject to the Minister’s comments.
Stephanie Peacock
I thank the hon. Gentleman for his new clause. There has been a lot of debate in the House, including in Committee and in the other place, about letters received from UEFA. There have been particular concerns that the Bill and the regulator should not breach UEFA or FIFA statutes, and there is a strong feeling that we must not risk English clubs or national teams being banned from international competitions through this legislation.
Let me be clear again that 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. The extent of its statutory powers and duties will simply not allow it to do so. That is why both UEFA and the FA have confirmed that the Bill as drafted does not breach UEFA statutes. Indeed, the FA is on the record as supporting the regulator’s introduction.
The new clause would require the publication of all future UEFA and FIFA correspondence received by the regulator or the Government, or correspondence relating to the regulator. Requiring private communications to be made public would serve only to discourage honest and frank conversations with key stakeholders, and would thus stand in the way of constructive relationships with UEFA and FIFA. For those reasons, I ask the hon. Gentleman to withdraw the new clause.
Mr French
I have listened carefully to the Minister’s comments. The Committee should also be aware that the FA has warned specifically about scope creep, which is something that the Opposition have also been very concerned about. We therefore think it is prudent to ensure that there is transparency and awareness of risk going forward. If there were to be significant warnings from UEFA or FIFA about scope creep, the new clause is an important mechanism for us to understand that as parliamentarians, clubs and fans of football. We will press the new clause to a Division.
Question put, That the clause be read a Second time.
Stephanie Peacock
I thank the shadow Minister for tabling this new clause and all hon. Members for their thoughtful contributions. I gently say to him that I think that his claims to end binge drinking would probably be scope creep.
This is a very serious issue. As the shadow Minister may be aware, the legislation in question is owned by the Home Office. My hon. Friend the Member for Sheffield South East is right that this is a challenging issue, but I recognise that it is important and I will therefore raise it with my ministerial counterparts in the Home Office.
I hope the shadow Minister will appreciate that, as we have made clear throughout the Committee, the Bill seeks to ensure that football clubs are sustainable. It would not be appropriate for the Government to agree to review legislation about alcohol at football matches in the context of this Bill, given the significant public order implications, but I will reflect the comments from across the Committee to my counterparts in the Home Office. On that basis, I hope he will withdraw the new clause.
Mr French
I thank all colleagues for their contributions to this important debate on an issue that has real impacts on fans and stadiums around the country, as we have heard already. I have also seen some of the behaviours that have been referred to, such as people rushing to drink before kick-off or rushing at half-time to make sure that they can get a drink in. I have also travelled around Europe watching football. I am a big lover of sport, so I do travel and watch games when I go abroad. I have never come across many issues when I have been abroad, where the rules are different.
The Minister’s comments were interesting. I could make the usual joke about how for people to watch a team in red, they need a lot of drink—especially at the moment, given current form. However, the expressions of Committee members assure me that this is a live issue that they have concerns about. I think we should test the opinion of the Committee with a vote.
Stephanie Peacock
I thank the hon. Member for his new clause. Player welfare is an incredibly important issue, and as we have discussed previously in this Committee, I agree that the welfare of footballers should be safeguarded. But the regulator will have a precise focus on financial regulation, corporate governance, fan engagement and heritage. It will be focused only on the market failures that the industry cannot itself address. The regulator has not been designed to address sporting issues such as player welfare or equipped with the relevant powers and duties. The safety, wellbeing and welfare of everyone taking part in sport is absolutely paramount, and that is why we have committed to looking further at those issues. While it is not appropriate for this Bill, I am fully aware of the importance of prioritising player welfare and ensuring that former players and their families have the support they need.
National governing bodies are responsible for the regulation of their sports, and for ensuring that appropriate measures are in place to protect participants from harm, including head injuries. They are, of course, independent of Government, but the Government expect national governing bodies to make the health and safety of players their top priority. The Secretary of State and I recently met with a small group of affected family members and ex-footballers, including individuals associated with Football Families for Justice, to discuss player safety and welfare for those suffering from dementia. We heard at first hand players’ experiences and the views of groups on how safety and welfare at all levels of the sport could be improved.
On neurodegenerative diseases, we are considering what is required, including how to support football to come together and address the problems raised. We are committed to supporting the families and the football authorities to come together to address the issues raised, and our officials are in the process of arranging meetings to explore that further.
The number of games that footballers play each season is a matter for competition organisers and the Professional Footballers’ Association. It would not be right for the regulator to become involved in those matters, which are not ultimately about the sustainability of clubs.
Before I finish, I commit to writing to my hon. Friend the Member for Sheffield South East on ground safety, and to taking that issue away to investigate, as he asks.
Lincoln Jopp
The Minister said that the regulator’s purview is the financial sustainability of clubs, but that that was not in any way related to the number of games that teams play in a single season. Surely they are directly related, because clubs will be tempted to thrash their players in order to generate revenues from television and gate receipts?
Stephanie Peacock
I appreciate the hon. Gentleman’s point, but that is a match day issue. I direct the hon. Gentleman and the rest of the Committee to the regulatory principles, which we changed under this Government to explicitly reference players. We think that that is an important change. I am afraid I cannot support the new clause.
Mr French
I have listened carefully to the Minister’s answers in response to this new clause. I fully understand the point that she is making about it being up to the sport to better govern the welfare of players, and I have great sympathy with her on that. Ultimately, however, this Bill has been brought forward because the Government believe that football has not been good at regulating itself, and so we are debating that in Committee. Given the widespread concerns around player welfare, it seems to me that on sustainability—we had a long debate about that on the first day of the Committee—and where it sits, my hon. Friend the Member for Spelthorne hit the nail on the head by saying that the sustainability of clubs depends very much on the sustainability of players.
While I am not going to get a violin out for Premier League stars who may be on £400,000 or £500,000 a week, there is a broader point here about how far that can be pushed and what happens to players’ health—particularly, as we have heard from families, when they reach retirement. As the Minister has mentioned, there are a number of problems. We would like to give some serious consideration to where this needs to sit, because there does appear to be an issue here. As such, I will not seek leave to withdraw the new clause, and I hope that we can return to the matter at a later stage as well.
Question put, That the clause be read a Second time.
Mr Dillon
I beg to move, That the clause be read a Second time.
New clause 22 relates to a consultation on changes to kick-off times. For football fans across the country, last-minute changes to suit TV schedules have a direct impact on their plans for that sporting event, whether having to procure a hotel because they cannot get home from the game as public transport is not running, or having to change their whole plan and maybe resell their ticket. The 2025 FA cup final had a kick-off time of 4.30 pm, and in the year Wigan beat Man City it was a 5 pm kick-off time. The last train to leave for Manchester from London is at 9.01 pm. So if the FA cup final this year had gone to extra time and penalties, fans would not have been able to make that last train back home to Manchester. As a Manchester United fan, I am not one for protecting City fans, but it just seems ludicrous that for the 2025 FA cup final, the BBC wanted to keep the kick-off at 3 pm because it had Eurovision later that night to schedule and ITV wanted a 5.30 pm kick-off because it knew that would increase its revenue. Both clubs were consulted, the broadcasters were consulted, but the fans were not. This clause seeks for the regulator to have a role in adjudicating on kick-off times.
Listening to the Minister in response to other amendments, I was concerned she may consider ruling out this clause out because it affects commercial activity and broadcasters. I am now hoping it falls under the purview of operational and match day issues, and the regulator will have power to intervene.
Stephanie Peacock
The Government do not believe that it is appropriate for the regulator to intervene in the sporting calendar, including interfering with match day timings. This clause would widen the scope to cover on-pitch decisions, which is something we wish to avoid. However, I am aware of the issues that the hon. Gentleman has raised regarding the impact timings can have on fans. There may be consequential issues such as match day travel and club communication with fans that would be captured by “operational and match day issues” as one of the relevant matters for fan consultation discussed in our debate on part 5. In most cases, however, the kick-off time itself is not always an issue that club have enough control on to adequately consult fans and respond to opinion. To mandate them to do so could therefore be problematic. It is well within the gift of the leagues and the governing bodies to address concerns surrounding kick-off times, and the Government remain in conversation with stakeholders to ensure that fans are engaged properly by those bodies on this issue. For these reasons, I cannot accept the new clause.
Mr Dillon
I am disappointed in the Minister’s response. I think it is a crucial aspect. However, noting the numbers in the room, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 23
Duty to create emergency fund
(1) As a condition of purchase of a regulated club the new owner may, if required by the IFR, pay an amount equal to the club's quarterly forecast expenditure into an emergency fund (referred to in this section as “the fund”).
(2) Withdrawals cannot be made from the fund while the person who deposited the fund is the owner of the club.
(3) When a club’s quarterly forecast expenditure increases the owner must increase their deposit into the fund to match the increased forecast.
(4) If an owner does not update the fund to match an increase in the club’s quarterly forecast expenditure the IFR may suspend the regulated club’s operating licence until such time as the required deposit into the fund has been made.
(5) When a club files for insolvency the owner abrogates all claim to the fund and the fund may be accessed to pay club salaries and day to day running costs.
(6) When the owner who deposited the fund sells the club they may withdraw the fund but the fund must first be used to repay any debts accrued during the time period they were the owner.”—(Mr Dillon.)
This new clause gives the IFR an option to require new club owners to establish an emergency fund to provide for club operational costs such as player and staff wages in an emergency scenario.
Brought up, and read the First time.
Mr Dillon
I beg to move, That the clause be read a Second time.
This new clause introduces a duty to create an emergency fund if the regulator has concerns over the financial resources of a particular owner. If a player is not paid for two consecutive months, then under FIFA regulations they have the ability to terminate their contract with 14 days’ notice. However, that still means they are out of pocket. We know that there are real consequences from players not being paid, such as the contract termination that they may go through, the player and the fans having a loss of confidence in that club, and of course financial distress to individuals not paid. Clubs can have point deductions if they do not play players on time and registration embargoes as well. However, that still does not address the issue of the player and staff not being paid. As recently as March this year, the team of the hon. Member for Sheffield South East, Sheffield Wednesday, did not pay its players on time. This is a live issue that we see season in, season out. An emergency fund would mean that players could have recourse to be paid on time.
Stephanie Peacock
I thank the hon. Member for the new clause. While I understand the intent of adding this provision and creating an emergency fund, we have been clear that this is not a zero-failure system. Clubs can and do go into administration for many reasons, sometimes beyond their control. This regime tries to minimise the likelihood of that happening and gives them the best chance of being a going concern football club. This means that there is an assumption that a club will continue operating and meet its obligations for the foreseeable future
However, I reassure the hon. Member that the Bill’s strengthened statutory tests on the new prospective owners, as we discussed in the debate on part of 4 of the Bill, will work to deliver the intent behind the new clause. At the point of entry, prospective owners will be required to pass the financial plans and resources test. This will demonstrate that they have sufficient financial resources to run the club and have considered things such as the estimated running cost. This will help mitigate against any future need for an emergency fund.
On an ongoing basis, if a club is exhibiting an unsustainable level of risk, the financial regulation regime allows for specific discretionary licence conditions, which we discussed when debating part 3 of the Bill, to be put on clubs. Those conditions can relate to debt management, liquidity requirements and restricting the club’s overall expenditure. This is a far more proportionate approach to managing the risk of insolvency, rather than requiring owners to hold money that could be invested into the club to be used by default. This is likely to impact on levels of investment in the game. For those reasons, I urge the hon. Member to withdraw the new clause.
Mr Dillon
I thank the Minister for her response, and I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 25
Youth and community projects: duty on the IFR
“(1) The IFR must take steps to encourage regulated clubs to invest in youth and community projects.
(2) The IFR must, in pursuance of the duty in subsection (1), at least once a year report on the extent to which each regulated club has invested in youth and community projects.”—(Mr Dillon.)
This new clause requires the Independent Football Regulator to take steps to encourage clubs to invest in youth and community projects, including through annual publication of a progress report.
Brought up, and read the First time.
Mr Dillon
I beg to move, That the clause be read a Second time.
Many clubs already have excellent community outreach programmes and foundations with which they support their local communities. This is a simple new clause that just seeks the regulator’s ability to report on those involvements. I suspect that it would not push any existing club into having to engage, because I believe that they already engage with their communities. It is more about capturing that and selling to the wider public the benefits from the investment that football clubs make in their communities.
Stephanie Peacock
I thank the hon. Member for the new clause. Football clubs are instrumental in fostering more active and resilient communities. By harnessing the power of sport, this community outreach work promotes social cohesion, improves public health and makes a positive impact on people’s lives. The Government recognise and support the contributions of many clubs in helping to strengthen communities and get more people active, in line with the Government’s own priorities.
That is why we made an amendment to corporate governance provisions in the other place. This addition was explicitly to include a club’s contribution to the economic and social wellbeing of the local community within the definition of corporate governance in the Bill, and so require clubs to report on these contributions as part of the corporate governance statement. This reflects that football clubs are more important to their communities than a typical local business. This reporting could include, for example, whether a club has invested in youth and community projects, and we would expect any club that does so to report on it as part of its corporate governance statement.
I am afraid that I disagree the regulator should be required to encourage a specific type of community investment. As we discussed when debating schedule 5, the Bill is deliberately not prescriptive when it comes to corporate governance. That gives the regulator flexibility to write its code in consultation with the industry, and it gives clubs flexibility to explain how they are applying that code. This is about encouraging best practice and greater transparency around the operations and activities of the club. This should steer all clubs toward better governance, without micro-managing how they are operated.
As we have been clear, the regulator cannot start mandating specific changes to a club’s corporate governance, such as quotas for board members. The same applies to community outreach. Of course, we recognise that it is important and should be encouraged, but we do not believe that it is appropriate to encourage a specific, prescriptive type of community action that all clubs should undertake. That is not in line with the approach that the Bill takes to corporate governance, and would not be in line with the light-touch approach to regulation that we all want to see. That is not to take away from the huge contribution that clubs make, and I take this as an opportunity once again to pay tribute to the Barnsley FC Community Trust.
Mr Dillon
I thank the Minister for her response, and welcome the recognition of clubs’ community work in the governance statements. The new clause would add a requirement around youth because, whether on literacy or childhood obesity, football clubs have a unique power to engage young people through their very presence as a shining example to look up to. However, I accept the Minister’s remarks, and beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Stephanie Peacock
On a point of order, Mr Turner. I thank all the Chairs who have presided over this Committee; as always, I am thankful for your guidance and support throughout the sittings. I thank all those who have contributed their views on the Bill, both in this iteration and the version that the previous Government introduced. A number of important stakeholders—players, clubs and many more—have shared their views and enabled us to bring forward the Bill that we see today. In particular, I thank the Premier League, the EFL, the National League, football clubs across the country and the Football Supporters’ Association. Their engagement has been vital, and I am grateful to them for working productively to ensure that the Bill takes steps towards a future where football can be enjoyed for generations to come.
I pay tribute to Dame Tracey Crouch, whose brilliant work on the fan-led review of football led to the introduction of the Bill. Her work and expertise have been invaluable, and I thank her for her dedication to making the game fairer. I also pay tribute to the officials in the Department for Culture, Media and Sport, who have been working often very long hours on the preparations for Committee stage; I am grateful for all their help. I pay particular tribute to Adam, Ellen, Charlotte, Kaz, Lucy, Robbie, Conor, Matt, Beth, Leah, Kyle, Lewis, Comfort and Callum for their hard work on the Bill. I also thank those in my private office in the Department for their work to support me in taking the Bill through Committee as the Minister. My particular thanks go to Chris McAlister for all his work on this; the head of my office, Matthew Phillips; and of course Helen Elston. I also thank my parliamentary office, Millie, Karen and Anna, who supported me in opposition, when I was in the shadow Minister’s place.
I thank all members of the Committee for their contributions. It has been excellent to see such strong feeling in the debate. I know that Members have aimed to represent fans and their constituencies in the best possible way. I thank the Committee for such a lively and thoughtful debate throughout the sittings. I particularly thank my hon. Friend the Member for Lewisham North for keeping us all in check and on time; my opposite number, the hon. Member for Old Bexley and Sidcup; and the hon. Member for Cheltenham. I also pay tribute to House officials, and thank them for their work to support us as elected representatives. The work that they do in this place is invaluable and I, like I am sure many other hon. Members, are incredibly grateful.
It has been an excellent debate, and I am proud that the Government have delivered on our manifesto commitment by finally bringing in the Bill. I conclude by quoting Dame Tracey Crouch’s last contribution in Committee. She spoke of
“the people who just go and watch the game because they love it and it is important to them deep inside their soul.”––[Official Report, Football Governance Public Bill Committee, 23 May 2024; c. 246.]
It is for those people who love the game that we have proposed these measures. I believe that the Bill introduces much-needed changes that will protect football so that they can continue to enjoy it for generations to come. That is what we have delivered today.
The Chair
I, too, thank Dame Tracey Crouch for the work that she did in this House. I also thank His Majesty’s loyal Opposition and the Lib Dems for the constructive way in which this issue has been debated. I thank the learned Clerks for the help that they have given me, and all officials, including our wonderful Doorkeeper.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Tuesday 8th July 2025
(1 year, 3 months ago)
Commons ChamberFootball Governance Act 2025 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 8 July 2025 - large print - (8 Jul 2025)
17:55 - The House divided: - Ayes: 167 / Noes: 346 - Question accordingly negatived.
18:09 - The House divided: - Ayes: 86 / Noes: 340 - Question accordingly negatived.
18:21 - The House divided: - Ayes: 178 / Noes: 338 - Question accordingly negatived.
18:43 - The House divided: - Ayes: 415 / Noes: 98 - Question accordingly agreed to.
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr French
That is quite a rehearsed line that the hon. Gentleman is seeing to play out. As we heard in Committee, the Minister has sought to reassure the House that UEFA has no problems with the Bill. If that is the case, why is the letter not being laid in the House so that all Members can vote with full confidence in what is being said? What is being briefed to the press differs significantly from what the Minister is telling Members today.
So far, the Minister has refused to allow Parliament to see that letter so that we can scrutinise the Bill properly in the fullest possible way and in the proper context. Let me will ask her again now: what is she so afraid of? Is she scared that, given the Secretary of State is already under investigation for appointing one of her donors as chair, the publication of the letter will prove to be yet another nail in the coffin of her regulator?
Let me now turn to schedule 2. Any regulator must be credible, and that means independent beyond any doubt. But what have we seen? A preferred chair with a hidden political donation, a Secretary of State forced to recuse herself only when exposed, and a revolving door—
The Secretary of State for Culture, Media and Sport (Lisa Nandy)
Will the hon. Gentleman give way?
Lisa Nandy
I am grateful to the hon. Gentleman for giving way, given that he has named me. May I ask him why the previous Government—including his colleague the shadow Secretary of State, who is sitting next to him and who was the Minister responsible at the time—actively headhunted the individual in question and added him to the shortlist? [Interruption.] They can shake their heads all they like, but that is true.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
I am pleased to be responding on Report as the Football Governance Bill enters its final stages in the House of Commons. I begin by sending my condolences to the family of Liverpool’s Diogo Jota, who tragically lost his life last week at just 28 years of age, alongside his brother. I am sure the whole House will join me in sending our thoughts to their loved ones.
English football is one of our proudest traditions. It is more than just a game. Football brings us together, providing a source of local pride and uniting us in victory and in loss. The premier league, the EFL and the national league attract some of the best players in the world. In return, we find fans of English football clubs in almost every country. However, despite the global success story of English football, there are underlying fragilities in the game, and this Labour Government are committed to tackling them, as we are the party on the side of football fans. We have seen too many instances of irresponsible owners, unsustainable financial models and inadequate regulation casting a shadow over too many clubs, as fans of Bury, Derby County and countless others know all too well. The current issues at Sheffield Wednesday and Morecambe need resolving now, and they demonstrate the urgent need for this Bill to become law.
This change has been a long time coming, dating back in this place to the cross-party Culture, Media and Sport Committee report of 2011. The ill-fated super league attempt led, of course, to the fan-led review, and I take this opportunity to pay tribute to Dame Tracey Crouch, who pioneered that work.
Ian Lavery (Blyth and Ashington) (Lab)
My hon. Friend mentions that Conservative Minister, and Tory Members basically wrote the vast majority of this Bill, but then they decided to vote against it. I am confused about that, but could she explain to me why they think this is a socialist Bill and that football is being nationalised? I think it is absolutely ridiculous.
Stephanie Peacock
My hon. Friend makes a very good point.
“I hope that whoever wins the election on 4 July will see this as a good Bill to crack on with, because it is important for the future of football and, crucially, for the future of football fans.”––[Official Report, Football Governance Public Bill Committee, 23 May 2024; c. 244.]
Those are not my words, but the words of the right hon. Member for Daventry (Stuart Andrew), for whom I have huge respect and affection. That brings me on to the points made by the shadow Minister, the hon. Member for Old Bexley and Sidcup (Mr French), and the amendments standing in his name.
Amendment 14 is on the issue of listing in primary legislation the competitions in scope of regulation. The approach in this Bill is consistent with similar sports legislation. The Opposition’s amendment would be likely to make this a hybrid Bill, which would mean years of delay, in effect killing off the Bill that they introduced and which was in their manifesto. We have been absolutely clear that the regulator will be operationally independent of Government. It will not exert any influence on the Football Association’s autonomy to govern the game.
The shadow Minister is obsessed with the publication of private communications with UEFA and FIFA. Despite his obsession and what I would say were his quite strong remarks about me at the Dispatch Box, did his Government publish private correspondence? No, of course they did not. I have been very clear throughout that UEFA and FIFA have no issue with the Bill as it is currently drafted.
Amendment 25 is simply scaremongering on the part of the Opposition. It is also curiously at odds with one of their other amendments—amendment 21. The football governance statement, which was also in the previous Government’s Bill, allows the Government of the day to set out their priorities for the regulator. This is no different from the strategic steers that the Government can and do give to other regulators, such as the Competition and Markets Authority, without undermining their operational independence. The statement will be published and laid before Parliament. Parliamentary approval is neither appropriate nor necessary, especially given the need to avoid political interference.
Amendments 24 and 28 on levy exemptions are simply not needed. The cost of regulation should not place an undue burden on clubs and costs should be transparent, as set out in clause 54. The regulator already has the power to exempt clubs from paying the levy through its levy rules.
Lincoln Jopp (Spelthorne) (Con)
We had a long discussion in Committee about assessing how much this regulator was going to cost and how big it was going to be, but all the amendments we put forward were voted down. When will the Minister know that this thing has grown too big and costs too much?
Stephanie Peacock
I am grateful to the hon. Gentleman for his service on the Bill Committee. He is right that we had a very good debate, and the impact assessment was of course approved by the previous Minister for Sport.
On amendment 18, the governance code on appointments is clear that political activity is not a bar to appointment. David Kogan has been found appointable for the role by a panel that included a senior independent panel member agreed by the Commissioner for Public Appointments, and has now been endorsed by the Culture, Media and Sport Committee, adding a further layer of robustness. We will not set a new precedent with the football regulator by going further than the governance code on appointments, as the amendment proposes. More broadly, on amendments 19 and 20 on conflicts of interest, if the interests of a board or expert panel member might prejudice their ability to carry out their functions, the Bill already captures that as a conflict of interest.
On the owners and directors test, 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 2007. Such offences would already be considered when testing an individual’s fitness, so amendment 15 is not required.
On amendment 17 on the corporate governance code, reporting on equality, diversity and inclusion is a key part of good corporate governance. Clubs will simply have to state what they are doing on the issue.
On amendment 27 on club charities, I know from my area of Barnsley the brilliant work that the Barnsley FC Community Trust does. Through changes made in the other place, the corporate governance code gives a club the flexibility to detail what action it is taking to contribute to the economic and social wellbeing of the community. That can include the work of the club’s official charity or wider work in the community, so the amendment is not needed.
New clause 1 calls for a consultation on lifting the ban on consuming alcohol in view of the pitch. That is outside the scope of the Bill, which focuses on the sustainability of clubs and the game overall. I have raised the issue with the Home Office, which is the policy lead, as I committed to doing in Committee.
Amanda Martin (Portsmouth North) (Lab)
Does the Minister agree with me and my hon. Friend the Member for York Outer (Mr Charters) that we do need to look at alcohol sales, but that we need to do it with all stakeholders in the round—not just throw it in as a gimmick to this Bill, which is about finance and governance?
Stephanie Peacock
My hon. Friend makes a good point, and I have reflected those comments to the relevant Home Office Minister, as I said.
I will turn to the amendments in the name of the Liberal Democrat spokesperson, the hon. Member for Cheltenham (Max Wilkinson). I thank him for his constructive approach to the scrutiny of the legislation and for his party’s support. Several of his amendments are outside the scope of the regulator, but I am sure that he will put on record some important and valid points.
On free-to-air TV in new clause 3, the Government believe that the current list of events works well and strikes an appropriate balance between giving access to sporting events and allowing sports to maximise broadcasting revenue. In domestic football, the present arrangements under the listed events regime have protected key moments such as the FA cup final, while ensuring that the Premier League, EFL and FA are able to raise billions of pounds annually, which is invested back into the pyramid. We all want to see more matches being televised free to air, but that must be balanced against investment, and not risk it.
On new clause 4 on the golden share, we expect that the regulator will welcome clubs taking any measure to improve fan engagement and protect club heritage, including a golden share, but it will not mandate them to do so. That brings me on to the issue of fan engagement, which has been raised by the hon. Member for Cheltenham and my hon. Friend the Member for Sheffield South East (Mr Betts) in their amendments. Let me be really clear: the Government have strengthened fan engagement. The previous Government’s Bill required clubs to have a framework in place to ensure that they regularly meet and consult with a representative group of fans on key strategic matters at the club and other issues of importance to supporters. We have improved that by requiring fan engagement to continue even if a club enters into insolvency, and by introducing a requirement for consultation on ticket prices. We have not prescribed a fixed, one-size-fits-all approach to fan engagement. We of course expect the regulator to consult the Football Supporters’ Association where appropriate on fan issues, and I know the shadow regulator is already engaging with it. We do not want to place an unmanageable burden on clubs unnecessarily, which is why new clause 4 is not needed.
The hon. Member for Cheltenham has also tabled amendments on protections for home grounds, which my hon. Friend the Member for Sheffield South East has also raised and we have recently discussed. Home grounds are vital assets for clubs, which is why the Bill introduces protections to prevent inappropriate stadium sales and relocations. Clauses 46 and 48 require a club to get approval from the regulator before they sell or relocate their stadium.
On the sale of a home ground, let me first clarify that the legislation uses the term “disposal” rather than “sale” for technical legal reasons. For example, a club might sell a portion of the stadium, rather than the whole stadium. That is because a club might divest a shareholding, or transfer interest, in the stadium without it amounting to a full sale. Under clause 46, the regulator’s approval is needed in all instances for the sale of a stadium by a club. A sale can be approved only if it would not undermine the sustainability of the club. If a sale might mean that the club will have nowhere to play a few years down the line, that means the club may not be sustainable and the regulator is unlikely to approve the sale.
Stephanie Peacock
Yes, absolutely, and I would be happy to meet my hon. Friend to discuss that further.
I will move on to the issue of player welfare.
Tim Farron (Westmorland and Lonsdale) (LD)
The Minister might be just about to say the thing I was going to ask her about, as she has addressed a number of the amendments that my colleagues have tabled, which is the issue of footballers suffering from neurodegenerative conditions after their time. I am sure she was about to say something about that, in which case I apologise. As she will know, the proportion of footballers suffering from these conditions is significantly greater than the proportion of the general population. Many former footballers—many without the vast incomes that people assume footballers will have had in their careers—are left in a terrible situation, not supported by their clubs or the Premier League. What can the regulator do to get groups like Football Families for Justice the resources they need to support those who suffer having given their lives to the game?
Stephanie Peacock
I really appreciate the hon. Gentleman’s intervention; I know that he has worked very hard on this issue. I am hugely sympathetic to the issue of player welfare. It is important to say that the safety, welfare and wellbeing of everyone taking part in sport is absolutely paramount.
Ian Lavery
Neurodegenerative disease is a real concern of many people in the sport. I am not sure whether it should be part of the governance Bill, despite the fact that it is going to be the biggest socialist nationalised Bill there has ever been in our lifetime. [Laughter.] It is a very serious issue, though. Does my hon. Friend agree that it needs to be looked at, and can she assure me that the Government will do so separately to the Bill, because of the urgency and the fact that people up and down this country at different levels of football are suffering greatly, mainly as a result of heading the ball?
Stephanie Peacock
I am really grateful for that intervention. Again, I know that my hon. Friend has done a huge amount of work on this issue.
I have heard the calls from Members across the House, and indeed from retired footballers, and the Secretary of State and I recently met a small group of affected families and ex-footballers, including individuals associated with Football Families for Justice, to discuss player safety and welfare for those suffering with dementia. The Government are committed to looking further at this issue and supporting the families and football authorities to come together to address the lifelong consequences from concussion, as well as post-career mental health and financial crises. I am afraid that these measures are not within the tight regulatory scope of the Bill, although that does not mean that the Government are not aware and sympathetic to the calls being made on this issue, both in this House and from many former players and their families.
The Bill is focused on the financial sustainability of football clubs up and down the country. Too many fans have watched as their clubs make changes on which they have no say, from selling their stadium and changing club colours to, in the worst case, collapsing under inadequate ownership. This is unacceptable. It is devastating for fans and for local communities.
It is this Bill, delivered by this Labour Government, that will help to protect one of our great sporting assets and ensure that fans can focus on what is happening on the pitch, rather than off it. Today, Members across this House can vote with football fans, or they can vote against them. Today, we can deliver an independent football regulator. I commend this Bill to the House.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Sean Woodcock
My hon. Friend is absolutely right. When we talked about rogue owners, I was only surprised that the hon. Member for Great Yarmouth (Rupert Lowe), with his years of experience in this sphere, decided to walk out of the Chamber. But we will leave that for now and move on.
As I have said, the previous Government strutted on to the pitch full of promise, but when the whistle blew, they passed sideways, ran down the clock and then bottled it at the big moment. In contrast, this Government have shown intent and are driving the ball forward. I am proud to support this Bill in the Lobby tonight.
Lisa Nandy
I am so grateful to hon. Members who have not just spoken in this debate today, but brought the real-life experiences and voices of fans into this Chamber. This has been Parliament at its best, ensuring that those affected are finally heard and that action is taken. I am grateful to all Members who have spoken, regardless of whether the Government are choosing to accept the amendments that they have put forward. I wish to address some of the very many valid points that have been made during the course of this debate.
I shall start with the issue of player welfare, which is clearly of such concern to so many Members from all parts of the House. It was raised by my hon. Friends the Members for Doncaster Central (Sally Jameson), for Derbyshire Dales (John Whitby), for Caerphilly (Chris Evans), for Oldham East and Saddleworth (Debbie Abrahams) and for Leeds Central and Headingley (Alex Sobel) and the hon. Member for Westmorland and Lonsdale (Tim Farron) among others. It has also been raised by many, many other Members over the course of the past year both with me and my hon. Friend, the Minister for Sport.
I wish to reassure the House that although the amendment around player welfare does not fit within the scope of this Bill, that does not mean that the Government do not treat it with the urgency and the utmost seriousness that it demands. As my hon. Friend the Minister said, we were privileged to meet recently a number of families who have been affected by this and who have been campaigning for justice for far too long. That includes John Stiles, to whom many hon. Members have paid tribute. He spoke very movingly about the experience of his father and his family. They are not wealthy people and they deserve better treatment. As a Government, we are determined to grip this issue. We are clear that football can and must do more. I will be pleased to update the House as we make progress in that pursuit of justice.
I also thank the hon. Member for Dewsbury and Batley (Iqbal Mohamed) for his points about secondary ticketing, and the associated points that he made about the cost of football, which for many fans, particularly in the premier league, is of significant concern. This game belongs to its fans; it is nothing without its fans. It is important that fans are able to access the game that they love and that they have built. He will know that the Government wasted no time in opening a consultation about secondary ticketing across the board.Our message is clear: the time is up for ticket touts. The consultation that my right hon. Friend the Business Secretary and I launched seeks to work out how, not whether, to act on this issue. We are shortly about to publish the response to that consultation, and it will be before the House imminently.
I am really grateful to all hon. Members who have stood up for fans. Whether they are music fans, football fans or other fans, it really matters that they are heard.
Kirith Entwistle (Bolton North East) (Lab)
Does the Secretary of State agree that this Bill puts fans at the heart of where they should be, and that had the Bill been in place earlier, clubs like mine—Bolton Wanderers—would not have come close to collapse?
Lisa Nandy
I live just down the road from my hon. Friend in Bolton and has many friends who were directly affected by what happened at Bolton Wanderers, so I thank her for her tireless support for the fans and the town. Many people do not appreciate until they have been through a situation like that, as she and I have, that it does not just affect the football fans in the town. Bolton Wanderers stands for its town, as Wigan Athletic does; it is part of our identity and our pride. It is also part of our family inheritance. The chairwoman of my supporters’ club used to go to the football with her dad when she was a little girl. She now takes her children, and they will take their children. Football clubs are institutions that stand at the centre of our towns, and they deserve to be passed on to the next generation as part of our civic inheritance.
Peter Swallow (Bracknell) (Lab)
My hon. Friend the Member for Bolton North East (Kirith Entwistle) mentioned what happened with Bolton Wanderers. Fans of Reading FC across Berkshire, including in Bracknell, experienced something similar when they were able to support the club to be saved from an unfit owner. Does the Secretary of State agree that it is so important that we pass the Bill so that we can prevent what happened to Reading from ever happening to a football club again?
Lisa Nandy
When my club Wigan Athletic was in trouble because of poor ownership for the second time, I used those precise words. I said that this must be the last time this ever happens to football fans, but as my hon. Friend rightly says, here we are with so many Members telling heartbreaking stories about the near loss of their clubs—so I could not agree with him more.
I want to acknowledge to the hon. Members for Cheltenham (Max Wilkinson) and for Carshalton and Wallington (Bobby Dean) that although we may disagree about the best way to improve access and protect the financial sustainability of the game, I do not doubt for one moment their sincerity in wanting to make sure that far more people can experience the joy of football. The Minister for Sport said to me earlier that it has been a pleasure to work with the hon. Member for Cheltenham to get this Bill on to the statute book, so I am grateful to him for his work.
I turn to new clause 9, tabled by my hon. Friend the Member for Sheffield South East (Mr Betts), who has done extraordinary work throughout the passage of the Bill. I want to address the point that he did not have time to speak to earlier. We absolutely understand why he is pursuing this matter, and he is right to do so, but we believe that the clause is not necessary. I am happy to pass on the commitment that the Minister for Sport made to me: she will write to my hon. Friend with a full explanation of why the clause is not necessary, and a copy of the letter will be placed in the House of Commons Library. On behalf of the whole House, I thank my hon. Friend for the expertise that he has brought to bear.
Mr Betts
As I tried to set out, my intention was simply to draw attention to whether the regulator has the power—it does not necessarily have to use it—to intervene if the domestic competitions that all clubs engage in are being damaged by competitions like the club world cup, from which a handful of clubs make multimillions of pounds. I wanted to make sure that the regulator had the power to deal with that.
Lisa Nandy
We believe that it does. As I said, the Minister will write to him on that point and place a copy of the letter in the Library so that the whole House can understand the Government’s position.
Let me turn to the hon. Member for Old Bexley and Sidcup (Mr French). I do not really know where to start with this, to be honest, but I am determined to give it a try. When it comes to the Government’s preferred candidate, I gently point out to the hon. Member that this is a candidate that has been strongly endorsed by the cross-party Culture, Media and Sport Committee. He was appointed by the last Conservative Government to the board of Channel 4 and, as I made clear a moment ago, he was on the list that I inherited from the Conservative Government and the right hon. Member for Daventry (Stuart Andrew), who now serves as the shadow Secretary of State, along with a Conservative donor as well.
It is astonishing that the shadow Minister has come to this House, belatedly, with allegations of cronyism, and that the best and only defence that he has been able to offer for this breathtaking hypocrisy is that his right hon. Friend, the shadow Secretary of State, did not have a clue what was going on in his own Department. Can he not see how absurd that is?
Lisa Nandy
Of course I will. I would love to know the answer.
Mr French
Let me explain, for the benefit of Members who were not in the room at the start of the debate, that the discussion was about the fact that the gentleman in question said in the Select Committee that he was not approached by the then Minister, but by civil servants. The Secretary of State is trying to say now that her Department is not under investigation. Is that correct? Are you under investigation for this appointment?
Mr Deputy Speaker (Sir Roger Gale)
Order. First, I am not. Secondly, the Secretary of State came very close to unparliamentary language in accusing another hon. Member of hypocrisy; I am sure she did not intend that.
Lisa Nandy
Out of respect for you, Mr Deputy Speaker, I am happy to clarify. I think that the shadow Minister might be a bit confused. To add to the confusion, I refer him to a point made strongly by my hon. Friend the Member for Dartford (Jim Dickson) about the way in which the shadow Minister has made an astonishing about-turn; having called for stronger regulation, he now calls for weaker regulation. [Interruption.] If he does not want to listen to my words, perhaps I can let him listen to his own:
“Following years of misery and uncertainty for fans…I welcome the news on an independent football regulator. Will the Minister assure my constituents that the regulator will have sufficient powers to deal with regulatory breaches and strengthen those ownership tests?”—[Official Report, 23 February 2023; Vol. 728, c. 343.]
Well, I preferred his earlier work. Let me say that although the shadow Secretary of State no longer backs his own Bill and will not act, this Government will.
Let me turn to something that is very close to my heart: the experiences that were given voice by many Members today, including my hon. Friends the Members for Crewe and Nantwich (Connor Naismith), for Dartford and for Derby South (Baggy Shanker), and especially my hon. Friend the Member for Earley and Woodley (Yuan Yang), who has been a tireless champion for Reading through very difficult times. She said, “Let Reading be the last”, and she is absolutely right. In the years that football fans have waited for this piece of legislation to come on to the statute book and for the promise from all those years ago to be made good, too many people have experienced the hell that she and so many others have been through.
It is only fitting that I finish with a reference to my hon. Friend the Member for Morecambe and Lunesdale (Lizzi Collinge), who has been tireless in her defence of her club and her town. I had the privilege of going to Morecambe to meet the Shrimps and the board, which she rightly referenced and which has done so much for the club. She outlined the impact more powerfully than any of us could, as well as the strength of feeling about owners who refuse to sell their clubs even when the impact of that would be to bring those proud clubs to the verge of collapse. It has been a privilege to work closely with her, although I wish it had been on something more positive, as I know she does.
I want to make it clear from this Dispatch Box that this Government take a very dim view of owners who treat our clubs as playthings, rather than as the custodians that they are. I thank my hon. Friend the Member for Morecambe and Lunesdale and all the Members of this House—or most of the Members of this House—for a constructive debate. I commend the Bill to the House.
Mr Deputy Speaker
Order. Having lowered the temperature, I trust that I can now rely on the shadow Minister to maintain the lowered temperature. If not, I might have to intervene.
Lisa Nandy
I beg to move, That the Bill be now read the Third time.
It has been 14 years since the Culture, Media and Sport Committee first called for change for football fans, and four years since Dame Tracey Crouch began the fan-led review that set out to fix the foundations of football and end the misery that too many football fans have been forced to endure for far too long. We have had four years of promises, and today we make good on those commitments.
I pay tribute to my hon. Friend the Member for Barnsley South (Stephanie Peacock)—the Minister for Sport—and Baroness Twycross, who have steered this Bill expertly and with care to get us to this place. I thank the civil servants in my Department, who have worked tirelessly for many years to get to this point, and I particularly thank the Bill, policy and legal teams, who will be as relieved and delighted as anybody to see this Bill finally become law.
I also thank the many parliamentarians who have worked so hard with us all to get this Bill into a better shape, particularly by strengthening the provisions for fans in order to put them back at the heart of the game and to improve the backstop process. This is a light-touch regulator that will help to enhance the game, and I am really grateful to all those parliamentarians for their support.
I pay tribute to somebody who has become not just an inspiration for a lot of football fans around the country, but a friend to us all: Dame Tracey Crouch. Her fan-led review highlighted how too many football fans have been left with nowhere to turn when faced with reckless owners, financial mismanagement and threats to their club’s very existence. Her dedication and expertise have been integral to getting us to where we are today.
Although I am sad that I am unable to pay tribute to the shadow Minister, the right hon. Member for Daventry (Stuart Andrew), who steered the Bill through its first stages under the last Government and who no longer supports his own legislation, I want to acknowledge that, from the outset, it has been a cross-party effort to stand by football fans the length and breadth of our country.
Finally, I want to address our football fans, who are the best in the world. We are doing this for you, because for too long you have been treated as an afterthought at best, or as a nuisance at worst, in a game that is only great because of you. This Bill is for Macclesfield, for Wigan, for Bury, for Bolton, for Derby, for Reading, for Sheffield Wednesday, for Morecambe and for many, many more clubs that have had to endure the misery of being put last when they should have been put first. We promised in our manifesto that we would end years of inaction, and make the changes for which fans have fought for so long and which are so overdue. I am proud to be part of the winning team that have put our fans back on the pitch and at the heart of the game, where they belong.
Tuesday 15th July 2025
(1 year, 3 months ago)
Lords ChamberFootball Governance Act 2025 Read Hansard Text Watch Debate Amendment Paper: Consideration of Bill Amendments as at 8 July 2025 - large print - (8 Jul 2025)
This text is a record of ministerial contributions to a debate held as part of the Football Governance Act 2025 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
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Baroness Twycross
That the House do agree with the Commons in their Amendment 1.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, with the leave of the House, in moving this Motion I will also speak to Amendments 2 to 62.
I tried very hard to avoid the overuse of football metaphors or puns at the earlier stages of the Bill but, despite the Bill having left your Lordships’ House previously, I think we can say that we did think it was all over, and I sincerely hope, with your Lordships’ agreement, it almost is now.
Over the course of the passage of the Bill, we have heard concerns about the risk posed by the distributions mechanism outlined in the Bill. I thought that the original model had its merits. However, as I committed to do on Report and at Third Reading in your Lordships’ House, the Government have taken another look at the mechanism and in response have made a series of important amendments in the other place.
The Government are grateful for the careful and considered scrutiny from noble Lords across this House, which was invaluable in the development of this new model. I take this opportunity to again put on record my particular thanks to the noble Lord, Lord Birt, for his extensive and thoughtful work in providing such scrutiny. I know that he was sorry not to be able to be here in person today, but I also know that he will be well represented by his Cross-Bench colleagues. I thank the noble Lords, Lord Burns and Lord Pannick, and the noble and learned Lord, Lord Thomas of Cwmgiedd, for the expertise they have provided over the last few weeks.
The amendments we have made alter the distributions model through changes to Part 6, alongside supporting amendments to other clauses. These are primarily designed to change the mechanism from the previous binary choice mechanism to a new “staged regulator determination” model. This new model is designed to give more certainty to parties while ensuring that the backstop is designed to reach the best solution possible for all of football.
I will briefly explain how the amendments achieve this goal. First, the amendments introduce two new clauses. Clause 61 has been replaced with a completely redesigned proposal process. We have been clear that our strong preference is for the leagues to reach an independent distributions solution without the need for the backstop to be triggered.
Since the Bill was last before this House, the Government have announced David Kogan as our preferred candidate to chair the regulator. I know that David Kogan shares this view that the backstop should be triggered only as an absolute last resort, and our new proposal stage has been designed to incentivise that. If the backstop process is ever triggered, the regulator would invite the leagues to submit proposals detailing their solutions to the questions for resolution. The leagues would then submit their proposals to both the regulator and to each other. This will allow for more constructive negotiations, as the leagues will be more informed regarding each other’s position on core issues.
The leagues would also be able to submit revised proposals, ensuring both sides have the best chance possible to outline their position to the regulator, and, in turn, allowing the regulator the opportunity to request additional relevant information. This structure will ensure that the regulator is in the position to make the best possible evidence-based decision, while incentivising the leagues to make their own agreement.
We have replaced Clause 62 to introduce more flexibility for the regulator. Our new clause removes the binary choice for the regulator. Instead, it sets out how the regulator can create its own distribution order if, after all previous stages have concluded, the leagues still cannot strike a deal.
In the creation of this order, it can choose all of a league’s proposal or part of either or both proposals, or can propose unique solutions based on the evidence. The regulator would first have 60 days to create a provisional order. The regulator would share this provisional order with the leagues and invite representations, which it must consider before finalising the order. Any finalised order that it produces would have to take into account any relevant issues raised by the “state of the game” report, the evidence the regulator has gathered throughout the process, its engagement with the leagues and any proposals that they have submitted. Finally, under the new model, the regulator would be required to consult the FA before setting the questions for resolution, ensuring that the national governing body can now raise any views about the scope of the backstop process.
We are confident that the regulator, with its clear objective to promote sustainability and its duties to avoid adverse effects on growth and sporting competitiveness, would come to a balanced solution. I know that there is probably a slight variance with models that noble Lords view as ideal. However, I am confident that this new model is the right one, and I hope that noble Lords will support it as being substantially better than the original model that we debated earlier in the Bill’s passage through your Lordships’ House.
In addition to the changes to the backstop, we have also made some minor and technical changes to other parts of the Bill to aid the implementation and effectiveness of the regulatory regime and reduce the burden on the industry. I am happy to answer any questions noble Lords have on these changes. I hope that noble Lords understand and can support the changes that we have made in the other place. They have been arrived at after much careful consideration and conversation with noble Lords and the industry, and will ensure that the regulator can best deliver for fans. We believe the changes strengthen the Bill and will strengthen the regulatory model.
This Government promised in our manifesto to safeguard the future of our national game. In fact, as all noble Lords will be aware, the commitment to establish an independent football regulator was in the manifestos of all three main parties at the election a year ago. I hope that noble Lords will support this much- needed piece of legislation, which delivers on that commitment by protecting and promoting the sustainability of English football in the interests of fans and the local communities that football clubs serve. I beg to move.
Lord Burns (CB)
My Lords, I am very grateful to the Minister for introducing these amendments and for setting out the reasons behind them. On Report in March, the noble Lord, Lord Birt, introduced a series of amendments. These were aimed at addressing what he regarded as some weaknesses in the role of the independent football regulator in the distribution of funds between the various football bodies. I supported the amendments, along with the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Pannick.
Unfortunately, neither the noble Lord, Lord Birt, nor the noble and learned Lord, Lord Thomas, can be here this evening, and I have been asked to respond jointly for our little group, in place of the noble Lord, Lord Birt. The noble Lord, Lord Pannick, is in his place, I am pleased to say, and I hope that we will hear from him in due course.
Throughout debate on this Bill, we have emphasised the uniqueness of this situation. Under the proposed legislation, a regulator could potentially make decisions to transfer income from one regulated body to another. Moreover, both bodies are part of the same football family and they must coexist. Many clubs could find themselves moving between the Premier League and the English Football League. We argued that the arrangements should take these factors into account, including the objective of the overall success of the football pyramid.
We are very grateful to the Minister for the time that she has spent on this since then. Subsequently, the Government have brought forward their own amendments, which were agreed by the Commons and now come to this House today. I think I can say that as a group we support these amendments. While they are not entirely as we hoped, they address many of the concerns we had with the original Bill and go some way towards meeting the tests that are involved.
The most significant change is the fundamental re-engineering of the backstop process. This removes the Russian roulette binary mechanism, where an expert panel would have chosen between the final offers of the two parties, without the option of finding middle ground. Instead, the regulator now has the driving seat in both the negotiation and the determination process. The amendments strengthen the role of the “state of the game” report and modify the principles and criteria to explicitly refer to the regulator’s duties as well as its objectives. While it does not go as far as we hoped, it is an improvement and it means that, if the regulator is called on to decide, it will consider domestic and international competitiveness, growth and investment in the industry. I think that is a significant step forward.
We are confident that David Kogan, the preferred candidate to be chair of the IFR, will be able to make these arrangements work. He has exceptional football knowledge and expertise. Following the publication of the “state of the game” report, we hope that the regulator will set out its views about the most significant challenges that are faced by the leagues covered by this process. At the same time, we hope that the regulator will set out the criteria that it will apply in determining the appropriate funds flow down the pyramid. Overall, I am satisfied that this leaves us in a much better position than when we last discussed the Bill, and we support the amendments.
Lord Markham (Con)
I too start by declaring my interest as a Chelsea season ticket holder, and while I will not speak too long about Chelsea’s Club World Cup success, I will note that three of the four big European and world tournaments were won by English clubs—I can even say that half of them were won by Chelsea. We can see that we currently have a very successful game. Also, four of the starting 11 were English players and one, Cole Palmer, was the player of the tournament and even had President Trump celebrating alongside him. If only we could teach him to do the Palmer rub, we would really be there.
So we start off in a good position, and I have to add my thanks to the Minister. I think she took some political risk in bringing back amendments to the Lords when everything had obviously passed here already, and opening this up to possible further challenges and ping-pongs. She did that because she thought it would make this a better Bill, and I support everything she was trying to do and the intentions behind that, because I think it has made it a better Bill. While I agree with both my noble friends, the two Lords Moynihan, that there are dangers in the introduction of a regulator, and with my noble friends Lady Brady and Lord Maude that we need to ensure that it is a light-touch regulator, this is an improvement—but there are dangers still out there. I think we all remember the long conversations we had about the risk of UEFA, and we need only to look at the last few days, with the demotion of Crystal Palace, to see that we have to be sure that we are not doing anything here that falls foul of UEFA.
The Minister was at pains to confirm that UEFA was on board with the last version of the Bill. What we see now is, of course, quite a different version in terms of the backstop. It is a better version, particularly with the removal of what we all thought was a fairly crazy pendulum mechanism. However, it allowed the Government to say at the time, keeping to one of the UEFA golden rules or red lines, that a decision has to be a football decision. In the past, it can be said of the pendulum that it was either an FAPL or an English Football League solution. Now that the regulator is able to negotiate to find its own solution, which is very sensible measure that I support, UEFA could argue that we are now imposing a potential government solution. It is the right approach to take, but has the Minister sought similar assurances from UEFA that this new backstop does not fall foul of some of its red lines, and that it is as comfortable with this new version as it was with the old version?
That said, this is a better version, and I thank the fab four Cross-Benchers for bringing together this solution. I am sorry that both the noble Lord, Lord Birt, and the noble and learned Lord, Lord Thomas, are not in their usual places to take their laps of honour. It is a sensible amendment which tries to lead to a negotiated outcome with compromise, rather than the arbitrary pendulum mechanism.
At the same time, it is very sensible—and I know David Kogan was very involved in this—that the regulated board are now responsible for the decision, with the removal of the expert panel, and they are willing to be accountable for that decision. I have known David Kogan for some 15 years and, like others, I truly believe that we have a real expert with deep knowledge of the game and sports rights; he is a valuable addition. As so many of these issues are judgment calls, I feel much better knowing that we have David Kogan’s judgment. We all have to accept that the appointment process was perhaps a bit unfortunate. Can the Minister say where we are with the investigation, and when can we expect an outcome? Obviously, we would all like to get him on board as quickly as possible.
I conclude by thanking the ministerial team, the Bill team and all noble Lords for their work during what has been a long, thoughtful, informative and good process, which has ultimately improved the Bill. I look forward to hearing the Minister’s reply.
Baroness Twycross (Lab)
I thank all noble Lords for a constructive and good-natured debate on the amendments made in the other place and for their very kind comments, not least from the noble Lord, Lord Markham, recognising why I took the risk to bring the Bill back, which was to ensure that we get a better Bill. I am very grateful to the noble Lords, Lord Burns and Lord Pannick, and noble Lords from across your Lordships’ House, including the noble Lord, Lord Goddard, and the noble Baroness, Lady Brady, for their support for changing the backstop mechanism. I am grateful too for the support for, and confidence across your Lordships’ House in, the Government’s preferred candidate.
The noble Lord, Lord Pannick, is right that we need to see the regulator as taking a light-touch approach, and I am grateful to all those involved in helping us get this over the line in a much more match-fit state than it left us. I note the concerns of the noble Lords, Lord Maude of Horsham, Lord Moynihan and Lord Moynihan of Chelsea, and the noble Baroness, Lady Brady. I will send a transcript of the debate to the chair designate, although I am confident that he is following the debate and is already aware of the need—and their call—to tread lightly.
The noble Lord, Lord Burns, asked how we would incorporate evidence from the “state of the game” report. Under the amended model, it would be explicit that the regulator must use the “state of the game” as the basis for its decision. The regulator must explain in its notice how its solution addresses the evidence from the “state of the game” report. Leagues must also submit supporting evidence alongside their proposals, which the regulator must take into account. The regulator can request additional evidence as well as gathering its own information to ensure it has a wide evidence base for making a decision. This is a more evidence-based and data-driven process than before. We are also proposing an extension of the final proposal stage to allow for more time for the regulator to come to a considered solution based on evidence.
The noble Lords, Lord Moynihan and Lord Markham, asked whether UEFA is content with the Bill as it stands. As noble Lords will know and as I have stated previously, UEFA has written to confirm that it is content with the Bill and the FA has confirmed it. Its issues were with the previous Government’s version of the Bill and requiring the regulator to have regard to the Government’s foreign policy, something we have removed and something your Lordships’ House clearly debated at some length.
Past examples of Italy and Spain legislating in relation to football broadcasting without facing repercussions from UEFA should offer reassurance. Italy in 2008 and Spain in 2015 legislated setting out how TV rights are to be sold and how the revenues are to be distributed. Neither association has faced consequences from UEFA. I will return to exactly where we are with the process a bit later.
Lord Moynihan (Con)
I do not want to prolong this at all except to just place on the record that both the examples the Minister has given us are totally different and in fact reflected the model that the Premier League had in place, which was effectively a non-legislative agreement. Just for the record, we need to be clear that the very short legislation introduced in both those countries did not bear any resemblance whatever to the substantive Bill before us.
Baroness Twycross (Lab)
Appreciating the noble Lord’s point, I can confirm that UEFA is content with the Bill as it stands.
I am going to return to the question from the noble Lord, Lord Markham, on where exactly we are with the chair’s appointment. The lines I have in my pack do not entirely reflect his question, so I will try to answer it rather than just use the line in the pack.
In closing, I thank several noble Lords who have been involved throughout the passage of the Bill. In particular, I thank my noble friend Lord Bassam of Brighton, who was not able to be here today, and my noble friends Lady Taylor of Bolton, Lord Faulkner of Worcester and Lord Grantchester. I also thank a number of Labour Back-Benchers who have been really restrained at various points in what has been a very long process, by rationing their contributions to try to get the Bill to move forward. As noble Lords are aware, most noble Lords—probably with the exception of the noble Lord, Lord Addington—are absolutely passionate about the game, so to not contribute as much as they wanted was quite painful for a number of them.
I particularly thank my noble friend Lady Blake of Leeds for the excellent job she has done in supporting me, which continues now, and officials whose patience has been outstanding, and I was pleased that this was noted by noble Lords from across your Lordships’ House. They have worked with me, the Minister for Sport, the Secretary of State, stakeholders and many noble Lords to redesign the backstop over the past few months.
I also thank the noble Lords on the Opposition Front Bench, the noble Lords, Lord Parkinson of Whitley Bay and Lord Markham. It is always a pleasure to face them across the Dispatch Box—occasionally, I might have wished it was slightly less late into the night. I particularly thank noble Lords on the Liberal Democrat Front Bench, the noble Lords, Lord Addington and Lord Goddard of Stockport, not least for their good humour and constructive approach to raising and resolving their concerns, and the noble Lord, Lord Addington, who took the time in his contribution today to focus on the fact that this is about how football speaks to local communities—that is at the heart of why the Government have pursued this.
I am particularly grateful to the noble Lords on the Cross Benches, particularly the A-team of the noble Lords, Lord Birt, Lord Pannick and Lord Burns, and the noble and learned Lord, Lord Thomas of Cwmgiedd. They raised issues that made us pause to consider. I was sorry we were not able to bring back amendments before we got to Third Reading, and I hope noble Lords understand why this was. We are keen now to make sure that the football regulator can get on with the job.
Baroness Twycross
That the House do agree with the Commons in their Amendments 2 to 62.