Football Governance Bill (Third sitting)
Thursday 16th May 2024
(7 months ago)
Public Bill CommitteesRead Full debate Football Governance Bill 2023-24 View all Football Governance Bill 2023-24 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 May 2024 - (16 May 2024)
The Chair
I invite our first witness, Ben Wright, the director of external affairs at the Professional Footballers’ Association, to start his evidence. Can you introduce yourself, please?
Ben Wright: Thanks very much for the opportunity to come and speak to you this morning. My name is Ben Wright, and I am the director of external affairs at the Professional Footballers’ Association. The PFA is the trade union for all current professional players in the Premier League, the English Football League and the Women’s Super League. We have approximately 5,000 current members, and provide support to approximately 50,000 formers members as well.
Stephanie Peacock (Barnsley East) (Lab)
Q
Ben Wright: Thanks for the opportunity. First, I will say that we have really appreciated the opportunity to engage throughout this process, from the fan-led review and then all the way through to the publication of the Bill. We welcome the support of the Minister and his officials, who have been very willing to listen to our views on this.
On the Bill as a whole, we have always taken the view that, if football was able to show that it can regulate itself, the Bill should not be necessary. I think it has been said to you before that we should view it ultimately as a failure of football that it has got to this point. However, we are broadly supportive of the way that the Bill has been presented. The fact that it is light touch and contains a relatively tight and focused remit is the right approach at this stage. We believe that a proposed code of governance, which can be established by the Independent Football Regulator, rather than being specifically set out in the legislation, is the right way to go.
We do think that the omission of any mention of players in the Bill, which you nudged towards, is significant. I am paraphrasing something that our friends at the Football Supporters’ Association said to you the other day, but we certainly do not view it as a conspiracy to make sure players’ voices are not heard; I think it is possibly a result of a perhaps understandable determination to reduce the amount of specification and detail in the Bill and to keep it very tightly framed. However, the Bill mentions a lot of things—leagues, governing bodies and all the rest of it—and we always take the view that there are only two groups without which professional football cannot exist: those who play it and those who watch it. If you take football out of the Bill—this is not intended as a criticism of other regulated industries, but I would imagine there is possibly slightly more scrutiny of this Bill, because it is football—the Bill is ultimately about enabling the regulation of an industry. We think that there is a need for the employees in that regulated industry to be recognised as a group who have a degree of importance that perhaps elevates them above other stakeholders. Their views should be sought and heard.
Stephanie Peacock
Q
Ben Wright: In terms of the Bill itself, we would like to see it reflected in the regulatory principles. The PFA and I think that there is almost a philosophical need for players to be identified and for their importance in the game to be established in the regulatory principles.
There are other aspects, though. There is a provision in the Bill about the ability of the regulator to pass views on new competitions and applications for new competitions, but it does not specifically mention that players should be consulted about that. There are two reasons for this: the slightly philosophical and then the practical. In a lot of the things that the IFR could have the capacity to do, players are one of a very small group who could be substantially and substantively impacted by the decisions it makes. From a trade union point of view, I am talking about their contracts, which will be explicitly linked to the competitions they play in, the financial security of their owners, and what any decisions by the IFR might mean for their employment contracts. That is why, from a practical reason, I think they need to be recognised.
With things like new leagues, the obvious and clear reference point is the development of European Super League proposals, which is understandably very much framed around the fan opposition there was to that. It often gets forgotten that there was also a huge backlash from players towards that—it developed to a point where players were finding out about it by hearing reports on Sky News, or wherever it might have been, on a Sunday afternoon. As the union, you are getting calls from players saying, “What’s all this about?”. Some of them may have moral reasons—to term it loosely—why they might have a problem with where competitions are hosted, and they might have practical reasons for wanting more information, based on their employment contracts.
Stephanie Peacock
Q
Ben Wright: Again, that is possibly an area where the code of governance might be useful. We had long conversations at the outset of the fan-led review, and the White Paper does actually reflect quite a lot around player welfare. There were specific mentions—I know officials at the Department for Culture, Media and Sport are still working on this, and have taken it seriously —of player welfare within club academies and the right for independent support to be offered to those players.
I think the code of governance is absolutely a discussion to be had. What I would point to, though—I think the FA talked about this when they spoke to you the other day—is that there are well-established mechanisms in place around a lot of player welfare issues that have been very effective. A lot of those are actually enshrined in their contracts. One of the things that we, as a union, always slightly guard against is the idea that while football is not a normal profession, it is a normal job, and you have the rights to the same employment protections and rights of protection from your employers and expectations as anyone else should have. That is fundamentally where they should be enshrined. We would support that remaining the case.
Robin Millar (Aberconwy) (Con)
Q
Ben Wright: You will probably be unsurprised to hear me say no. I think there is—
Robin Millar
It is not just me; there are a lot of people who will be interested.
Ben Wright: I absolutely understand, and I heard the evidence the other day as well. We have always taken the view that financial sustainability in football is fundamentally based on sensible, long-term club ownership decisions that are properly regulated and properly scrutinised. There is always a tendency, when that fails —when clubs potentially spend beyond their means, and when a market does arguably and potentially get inflated—for that to roll downhill, and it always ends up that the problem is the money being paid to the players, rather than the decisions that are being made to pay those players that amount of money.
A player has a right, like any other employee, to negotiate within the market that they exist in. We have always taken the view that it should not be the responsibility of the employees to ultimately become part of an artificial restraint on a market. Markets can be shaped, restrained and managed organically. A lot of Premier League clubs, for example, will have stipulations written into contracts that mean if they get relegated, players’ wages naturally go down. That, as far as we are concerned, would be a sustainable ownership decision, but it is something that has to come from the clubs and the owners themselves, rather than that kind of rolling down towards the players.
You make the point with someone like Haaland. We are always at pains to point out that very obviously, our most high-profile members will be people who play for the biggest clubs, but they are not reflective of the majority of footballers. I understand the reference that was made to the evidence that was given the other day, but most footballers do not live in those circumstances where they are on inflated, long-term contracts. It can be an incredibly insecure career, and I think that that needs to be recognised.
Robin Millar (Aberconwy) (Con)
Q
Ben Wright: The first point I make about players wanting to disassociate themselves; one of the reasons we want players represented in the Bill is for the exact opposite of that, it is so that players do have a voice in this, which at the moment they would not necessarily be guaranteed. Could you repeat the second question?
Robin Millar
Would the introduction of a regulator would actually help owners to manage players’ wage expectations?
Ben Wright: I do not necessarily know that I would accept the premise that a regulator would help owners manage player’s wage expectations. What a regulator can do is make sure that the decisions clubs are making as private businesses about what to pay their employees are sustainable decisions. Ultimately, as we said at the start, this is something that football should have been able to do, but a regulator’s job as far as we understand it, is not to come in and, we would argue, artificially suppress wages. A regulator’s job is to make sure that when clubs write their budgets, and their payrolls, that they can fulfil them. Clubs as private businesses have got to be allowed to do that.
Rachel Hopkins (Luton South) (Lab)
Q
Ben Wright: We have been heavily involved in the Karen Carney review: obviously it is a different strand of work at the moment. We have taken the view that it is probably correct at the moment that it does not fall within the Bill. They are businesses, and leagues, that are at very different stages of development with very different issues. The stage we are at with women’s football and the professionalisation of women’s football— obviously, we speak representing every player in the WSL—is a very different stage of the professionalisation journey. I think it is right that the new structures being put in place around NewCo and the professionalisation of the Championship is allowed to be developed and owned in its own way before direct regulatory involvement. That is not to say that in the future there may not be a requirement or a need for a regulator to get involved. Given the scale and scope of the leagues, and their differing stages of development, we are happy, or comfortable, at the moment, that it does not fall under the auspices of the regulator. But that should not something that should be a sealed deal, and maybe that is something ready to be developed.
Rachel Hopkins
Q
Ben Wright: We always bang the drum bout not making the same mistakes as the men’s game, particularly in areas such as fixture congestion in the calendar. What drives fixture overload and player workload overload? It is money. There is suddenly a realisation that people can invest and make money from holding competitions, and then, as there is in the men’s game, there is a race for space. So they try to fill the calendar. It has not worked in the men’s game and it will not work in the women’s game. That is something we watch very carefully. For it to be sustainable there has to be a proper balance with international football, which until this point has been the most high-profile format for the women’s game, particularly for an English audience, but it also has to allow the space for the domestic leagues to develop. That is something we are seeing play out in the men’s game, where there is a conflict between international scheduling and international competitions, and domestic competitions. You have to give our domestic game the room to grow and the space to do that without it being in competition with national and international formats.
Anna Firth (Southend West) (Con)
Q
Ben Wright: I do not necessarily know if “unintended consequences” is how we would frame it; it is more about the need for awareness by the regulator of those consequences. A lot of them come down to practical impacts on players, and their contracts, rights and conditions. I believe that this is referenced in one of the amendments that you will consider, but where at the moment there is an outlining of the IFR’s ability to make decisions that impact clubs, whether that is sanctioning measures or things like that, there is not necessarily a huge amount of detail about what that might look like for the players, who almost inherit the decisions that are put on to clubs. That is not something that needs to be laid out in detail within the Bill, but we would argue that that is why it is so important that players and the potential consequences—unintended consequences, if you like—are reflected in the work of the regulator and in why it has that engagement with players and their representatives.
Anna Firth
Q
Ben Wright: With the National League, the PFA has members who are constituted as current members of the Premier League, EFL and the WSL, then we have former members—approximately 80% of players in the National League are former PFA members, so they retain all that access and can come to us for support. At the moment, it is not constituted as a professional league. That may change and it might be that the regulator has a role in changing that, because it brings it closer to the EFL and the Premier League. But that is always something we will look at closely, ultimately.
Ian Byrne (Liverpool, West Derby) (Lab)
Q
Ben Wright: In terms of regulation of agent payments?
Ian Byrne
In terms of regulation.
Ben Wright: We take a principled position on this. Ultimately, these are usually our members who are employing agents. We are very careful never to immediately jump on this idea of “Agents, bad”, because there are some good agents—it is like any other industry. Some of our members feel they get enormous value out of their agents. I would argue that it is almost exactly like what I described with the role of the IFR, in that the role of agents needs to be properly regulated and properly licensed. I think moves and measures are being taken to do that.
Ian Byrne
Q
Ben Wright: I think it is already happening. I am sure that this is work that the Department will have done, but the IFR has to be very careful about the legalities and where its scope can end. If they are licensed agents who are being paid in open transactions by their clients, we do not philosophically have a problem with that, but that regulation of agents is important, yes.
Matt Rodda (Reading East) (Lab)
Q
Ben Wright: Absolutely, I have an example. It was mentioned by the FA when they gave evidence the other day. There is in existence a committee called the Professional Football Negotiating and Consultative Committee—football is full of acronyms, so I am sorry about this, but the PFNCC. It is something that has worked well, essentially to stop leagues, clubs and unions making unilateral decisions that might have wider impacts. It is important that the regulator, when it comes in, understands the role of those bodies and hopefully acts in a way that complements them. But again, it is important that the stakeholders within those groups act in a way that shows respect to their functions, and make sure that they function properly so that the regulator would not need to get involved to supersede them.
The Chair
I am afraid that brings us to the time limit; I have no discretion to extend it. Thank you very much for your help.
Examination of Witness
Sanjay Bhandari gave evidence.
The Chair
Welcome, Mr Bhandari. Could you introduce yourself briefly? Then we will have the first question.
Sanjay Bhandari: I am Sanjay Bhandari, the chair of Kick It Out, an equality and inclusion charity. It is the leading inclusion charity in football. We have been around for 30 years and our mission is to eradicate discrimination and make football a game where everyone feels they belong.
Stephanie Peacock
Q
Sanjay Bhandari: Last year, we had just under 1,000 reports. We have had steadily increasing numbers of reports for the last four seasons. Racism is always a steady high, and we have had increases over recent years in sexism and misogyny, in homophobia and transphobia and, over the course of the last year in particular, in Islamophobia and antisemitism. That is what you would expect with what is going on in the outside world, but each year we have increasing numbers of reports, and of reports per incident. That tells us that fans are doing their bit and sending a message that they are not tolerant of discrimination.
Stephanie Peacock
Q
Sanjay Bhandari: There is an opportunity to be more front-foot on equality, diversity and inclusion that the Bill could have taken. Wearing my hat as having 30 years in the regulated industries, part of the challenge is: what is the purpose of a regulator? What harm are you guarding against? How do you craft that?
You could argue that football is different. Football is not banking; it is not like any other industry. In football, clubs will routinely project that they represent their local communities, but do they? There are several clubs that actually represent the local communities that lived there 40 and 50 years ago. When those people come from outside to the stadium, the locals go in their homes. So actually, who is holding them to their promises? You could argue that the Bill should go further because clubs are heritage community assets.
There is also another way in which football is not like banking. A banking regulator can take action that will put you out of business. No one has ever put a football club out of business from a regulatory perspective, and no regulator will. Everyone knows that the political ramifications and the impact on communities are so large that it would never happen. Football gets a benefit that no other industry gets. That is because it plays such a significant part in its community, with the link to community and the creation of community cohesion. What price should it pay for that? The price is that it should be held to account on representing those local communities.
Stephanie Peacock
Q
Sanjay Bhandari: There are lots of really worthy initiatives and lots of good intentions, but the road to hell is paved with good intentions. Good intentions are not enough. Intentions do not change outcomes. It is outcomes that we want, and it is actions that change outcomes, not intentions and rules. There have been lots of things: the Premier League equality standard is a really good development; the football leadership diversity code had noble ambitions. But those are all members’ organisations with members’ rules. The rules can be changed by the members. They are not regulators: they are administrators. The leagues are just like your local golf club management committee. If the members of the golf club do not like the rules, they will change them if they think the members of the management committee are overstepping or overreaching, and that is the position we are in.
As an example, when we were creating the football leadership diversity code, one of the weaknesses we saw was that you do not have whole-workforce transparency. All you are doing is looking at the new hires. Say you hire five new people, and one is from an ethnic minority and two or three are women, you look like you have met the football leadership diversity code standard. But you have 500 employees. You have no idea how representative your entire workforce is. We feared at the time that that would be the weakness, and those fears have come to pass. Why could we not get the mandatory workforce transparency that we asked for during that process? The clubs would not agree to it. It is the golf club members agreeing the rules of the committee. That is why you need third-party regulation, to impose that from above.
Brendan Clarke-Smith (Bassetlaw) (Con)
Q
Sanjay Bhandari: Just before I answer that, I should have said thank you for the opportunity to speak and for inviting me. I thank the Minister and the teams for their support and engagement throughout the last three years.
I think quotas are actually illegal in this country, because positive discrimination is illegal under the Equality Act 2010. You can have positive action, so you can have differential investments in talent, and leadership and talent programmes, but you cannot have quotas. What you can have is representation targets, but in practice, the way people may execute them is to see them as quotas, which can be quite negative. Ultimately, it is down to the regulator. It is down to the current flavour of what is going on in governance.
I was in one organisation where we set targets that actually helped to increase its performance. We were 17,500 in the UK and 300,000 globally, and in the business units that executed best on diversity, we could point to a one-point difference in margin. We could go to our partners and say, “Would you like more profit?” Funnily enough, they quite like that.
It depends on the particular issue. There are still some very stubborn areas of under-representation in English football. Black people make up 40% of players and 14% of the coaches qualified with a UEFA A licence, but only 4% of coaches. There is something going wrong in the recruitment system. South Asians are the single largest ethnic minority in the UK, but they make up only 10% to 15% of players at grassroots level, 0.5% of professional players, and 1% of the academies from age six. That is not acceptable. There is something going wrong in those recruitment processes. Those are the kinds of things that call out for targeting.
Matt Rodda
Q
Sanjay Bhandari: We see clubs like Brentford, which I worked with when it was recruiting independent non-executive directors. I helped to support that process. Having non-executive directors on the board is something that other people may talk about.
The Premier League is doing some good work trying to develop black coaches. An organisation called BAMREF has been working very effectively with the FA and Professional Game Match Officials Limited on developing the pipeline and pathway for Black and Asian referees and female referees. In many ways, that is one of the best examples of interventions that are connected across football, with a pathway to try to change the way the workforce looks. It is a relatively rare example. Football is a team sport, but not off the pitch. We are really not very good at teaming across, but that was a rare example of good teaming.
Rachel Hopkins
Q
Sanjay Bhandari: I think it is because the culture of football is such that people do not feel comfortable coming out. Every time there is a suggestion that someone might be coming out, there is a black silhouette on the front page of a tabloid newspaper, which then further discourages people from coming out. If we get the culture right, people will feel more comfortable being themselves.
Rachel Hopkins
Q
Sanjay Bhandari: After the Government’s response in September 2023 to Dame Tracey Crouch’s excellent review, we said that football needed to do three things. One was that EDI requirements should be incorporated into the club licensing system via the code for governance. It kind of appears that they now will be, although the wording is slightly ambiguous and probably could benefit from being clarified in schedule 5.
Secondly, we said that the processes for recruiting the leadership of the IFR should adopt best practice on inclusion. Again, there is some slightly ambiguous wording in relation to the recruitment of the CEO, which could benefit from being clarified.
The third one was that the requirements in the code for football governance should include, along with other requirements, significant mandatory data transparency reporting on representation, recruitment, progression and cases of discrimination. Transparency is the greatest disinfectant. Clubs are often collecting all this data for the Premier League equality standard or the EFL code, but they are not publishing it, so no one can hold them to account on it. We are asking for consistency and transparency.
I will give an example of where it goes very wrong. There are currently between 200 and 300 mechanisms for reporting discrimination incidents in English football. Those are 200 to 300 orphaned databases of information that do not speak to each other. We probably run the biggest reporting app. I have been banging my head against a brick wall for five years asking for insight from that data to be able to say, “What are the root causes? What are the outcomes of those incidents?” Then we can we create data-driven policy interventions, but we have not been able to get the clubs to agree to share the data.
From the clubs’ perspective, and I suppose often very legitimately, they think that data privacy is a worry. I do not share those concerns in the same way; I think there are exemptions that allow it. Fans have done their bit and said what they want. They are not tolerating discrimination. If we do not listen to them, we are doing them a disservice. Football needs to do its bit, and if it cannot volunteer to do that, an independent regulator can certainly cut through and help to create the exemptions to get that data sharing. Then we can start addressing the root causes of some of these incidents.
Shaun Bailey (West Bromwich West) (Con)
Q
My second point is on D&I, which has obviously been really important, particularly in the financial services space. Do you think there comes a point, which perhaps could be addressed in the Bill, at which there is not just a proactive obligation but maybe even a penalty system? It could be that if your club is not meeting those standards because of incidents like those you have highlighted, you as a senior manager become accountable, just as you would in a professional setting elsewhere.
Sanjay Bhandari: There is an answer in principle and an answer in practice. The answer in principle is that there should always be a sliding scale of sanctions, depending on the degree of the harm being caused. Whenever we are in any kind of regulatory or law enforcement regime and create sanctions frameworks, we reflect not just the offence itself, but the offender, the nature of the offence that has been committed, and whether it is persistent or egregious. You need to have that sliding scale. In reality, it will be relatively rare where you get to that point of actually sanctioning an individual. There might be rare occasions, but I think they will be highly unusual cases.
Damian Collins (Folkestone and Hythe) (Con)
Q
Sanjay Bhandari: Yes. Schedule 5(7)(2) says:
“‘Corporate governance’, in relation to a club, includes”—
so it is non-exhaustive, and you could argue that it includes equality, diversity and inclusion. Some of the things included are
“the nature, constitution or functions of the organs of the club…the manner in which the organs…conduct themselves…the requirements imposed on organs of the club, and…the relationship between different organs of the club.”
That is probably the area where you might amend it.
If you go back to the September 2023 Government White Paper response, there is a list. Paragraph 65 on page 30 talks about the principles of governance and a wide range of responses, and then it lists the kinds of issues that were regarded as principles of governance, which include:
“independent non-executive directors; integrity; equality, diversity and inclusion (EDI); sustainability; fan representation and stakeholder engagement; training on appointment; following best practice with regard to board constitution and decision-making processes; communication and transparency; and promoting clear guidelines and processes.”
The benefit of adding clarity to schedule 5(7)(2) is that we also have to remember what environment we are in. I have worked in lots of environments, and football is the lowest of low-trust environments. If something is not explicitly in there, there is a fear that it means it is not going to be covered. Our submissions were in response to noises we were hearing that there was going to be an attempt to artificially fetter the power of the regulator. Our view is that if there is going to be a regulator, it should be a standard regulator with the standard inherent powers that any regulator would have to perform its functions and deliver on its objective, in the same way that any other regulator would, so to artificially fetter it to reduce the power to deal with equality of inclusion would be wrong in principle.
Damian Collins
Q
Sanjay Bhandari: It should. We are doing a project with the University of York, and we are up to 40 pages of a review looking at lots of different regulators in comparison to other industries, and saying, “What should be in that code for football governance, which we will deal with along with the regulator once constituted?” If the provision stayed as it was, though, we would argue that it includes equality, diversity and inclusion, because it is a non-exhaustive list and it falls within some of the subcategories.
It would be difficult, if it was in the corporate governance code under the Companies Act, to say that it is not included. The fear, as has been expressed by other people giving evidence, is that football is a low-trust environment and that is why you are getting this response asking, “Is this a way of wriggling out?”
Mr Clive Betts (Sheffield South East) (Lab)
Q
Sanjay Bhandari: Our view is that the regulator should have the ability to have oversight in the way that any other regulator does, as a matter of governance, and that what should go in the governance code is what reflects contemporary best practice. In our experience, to drive change it is probably a couple of different things. There is the base standard and mandatory stuff, and we think the key to that is transparency reporting. Again, transparency is disinfectant. What there might then be is good and/or best practice guidelines, reflecting what is going on in other industries and in this industry. It would say, “Here are some examples of good or best practice that the good or the best institutions are doing,” and try to encourage change through that.
The Chair
Thank you for coming and for giving your evidence.
Examination of Witnesses
Alistair Jones, Sarah Turner and Tim Payton gave evidence.
The Chair
Good afternoon. Thank you for coming along. Would each of you please introduce yourselves?
Tim Payton: I am Tim Payton, and I am from Arsenal Supporters’ Trust.
Alistair Jones: I am Alistair Jones, and I am from West Bromwich Albion independent supporters’ trust, formerly Action for Albion.
Sarah Turner: I am Sarah Turner, the chair of the STAR: Supporters’ Trust At Reading.
Stephanie Peacock
Q
Tim Payton: It would be good to see supporters’ trusts recognised in the Bill. They are democratic organisations registered with the Financial Conduct Authority, and they bring governance standards that reflect the wider aims of the Bill.
There are other areas where the Bill could be strengthened to recognise supporters. I want to highlight one that is almost breaking news: you might have seen that, overnight, FIFA, at its congress, set up a committee to look at allowing club games to be played overseas in different jurisdictions.
In clause 48(4), which relates to the duty not to relocate, it would be very reassuring to see supporters given a direct role in engagement with the IFR before approval to relocate is given. I can promise you that the next event where you will see my members marching on stadiums and flooding your inboxes at the levels they were after the super league was announced will be when they try to move Arsenal, Spurs, West Brom or Reading games to jurisdictions overseas. A tightening of that area for supporters would be really welcome.
Alistair Jones: For me, I think it is a lack of trust from the organisations that run football. Independent supporters’ trusts that have been democratically elected by the fans that support the teams will definitely help. Since 1992, there has been a constant mistrust of regulation and football in this country, and having fans able to represent the views of all the fans that they cover will definitely help.
Sarah Turner: We were disappointed that the “golden share” idea was not taken through from the White Paper, because we feel that fans are in the best position to protect our heritage and other things that are in fans’ interest. We think supporters’ trusts are exactly the right way forward, but we would have liked that in a more authoritative way so that we had more of a say on heritage, kit, moving stadiums, changing names and anything else like that.
Stephanie Peacock
Q
Sarah Turner: Reading have had a terrible couple of years. If an independent regulator had been in place, they may have been able to stop some of the things from happening to us. We were in a position where no one could actually help us. We had an owner who was unwilling or unable to fund the club. The EFL was unable to help because it could not make him sell the club.
The impact on the community is huge. Reading is a small town; the football club is at the heart of it. The uncertainty has really affected everybody, not to mention the liabilities: people have not been paid for things at the football club, because it has been unable to.
Alistair Jones: We have just recently come out. We speak to Reading regularly. West Brom were purchased by Mr Shilen Patel and Bilkul Football in March 2024, but until that point there was a real genuine fear that West Brom would no longer exist. We did not have enough money towards the end of the season.
It became apparent that we had to do something ourselves as a voluntary fan group, and that just cannot be right for football moving forward. There were questions back to 2016 and the initial purchase about how on earth a company with no transaction or trading history at all was allowed to purchase West Bromwich Albion for north of £200 million, which was way above the market value.
We look at many things, and the fundamental reasoning for me is that it should not be down to fan groups such as those at Reading and West Brom to try to protect their football clubs. There should be something in governance to be able to stop that before it gets to that point.
Stephanie Peacock
Q
Sarah Turner: I think fans need to be consulted on where the club plays, because people can move clubs and historically people have moved things away; and on the sale of clubs, because our assets have been stripped at Reading and sold on.
Although there is protection in the Bill for grounds, we would like that to be extended to cover training grounds. Our owner split off the training ground, the stadium and the car park from our club, and they were all sold under different entities, which has made the sale very complicated. We would like a regulator to look at protecting the other assets as well as the stadium.
Alistair Jones: I will just touch on that very quickly. We have had a similar experience, but we have come out of it now. There was a spider’s web of who actually owned West Brom behind the initial vehicle of Yunyi Guokai Sports Development. We proved where the money had come from—it was China in this particular instance—but there has to be some sort of ability to stop that moving in the future.
On corporate governance, for 10 years we have had one named director of West Bromwich Albion Group, so we support schedule 5. We need independent non-executive directors to ensure corporate governance in football clubs.
Tim Payton: I would like to briefly cover not just what we are consulted on but how we are consulted. I will use ticket pricing as an example, because there are now supposed to be advisory boards in place, but the process this year seems to be really unsatisfactory.
Before coming here, I put a message on the Premier League loop, where we talk to all the other trusts. I had messages from the Tottenham Hotspur Supporters’ Trust, Save Our Seniors at Spurs, Spirit of Shankly, Fulham Supporters Trust, Foxes Trust, Nottingham Forest, Newcastle and Wolves 1877 Trust, and all of them feel that there is not really fan consultation on ticket prices; it is more broadcast. You go into a meeting, you get told the announcement, and an hour later it happens.
In the evidence I put in—as policymakers, you will understand this—I thought about a framework almost like a supporter impact assessment following a regulatory impact assessment. It would be very basic: you set out what you plan to do, you have a consultation over a number of weeks, you particularly listen to affected parties—at Arsenal at the moment, they are trying to move season tickets from all senior concessions—and then at the end you produce a report.
In producing a report and explaining what you have done, you bring that accountability and transparency, which might lead to better policymaking. I know that is probably not for the face of the Bill, but we would welcome the understanding in guidance that there will be thought about what effective consultation is, as well as the list of items we are consulted on.
Alistair Jones: It is not just the Premier League. Fan representation is not just about ticket pricing; it is about the times of games too. Next year, more than 1,000 games will be televised by the broadcast partners just in the EFL alone. That means that an average of 20 games per season will be covered, but what does that mean to the travelling fan? For instance, I have to be in Southampton for one of the biggest games of our lives at 8 o’clock tomorrow night. Now, I have young children, and if there is extra time and penalties—hopefully we win—it will be a half-past 2 or 3 o’clock journey back. I understand that commercial revenues are important, but that is part of being a fan who goes to these games, so that needs to be thought of as well.
The Chair
I have six colleagues who want to ask questions, so can we make them brief, please?
Damian Collins
Q
Tim Payton: Specifically, at the moment it mentions Premier League broadcast revenue, and that does not address where the game is moving. I picked up the widespread dismay on Second Reading and on Tuesday about the loss of FA cup replays. Why are FA cup replays going? Because the European competitions are expanding. The European revenue that will come in is not captured by the relevant revenue clause, because it goes directly to the clubs. Similarly, FIFA is going to expand the Club World cup, and the big clubs are earning more and more from commercial revenue. I know there is a heated debate about whether you have parachute payments within that clause and how it is triggered, but it is almost an irrelevant debate to us until you address the relevant revenue.
The clause also does not future-proof the Bill because at the moment if you move to individual broadcast selling, which is what the large clubs want to do, the clause is meaningless because there is no revenue left to be redistributed. I think a simple wording change could make it much more effective.
Damian Collins
Q
Tim Payton: The way Premier League broadcast revenue is distributed is fantastically collective. I think it is 1:1.6, so it really helps to keep a competitive balance, which of course Richard Masters was stressing the importance of to all of you. But the regulator is in effect having the powers over the wrong bit of the broadcast income. It is Manchester City, Manchester United and Arsenal’s revenue that must be included, so that we have a progressive system of redistribution, but also a check on where the game is heading.
Robin Millar
Q
Alistair Jones: For the EFL, the precipice between the bottom of the Premier League and the top of the Championship is massively disproportionate to wherever it has been before. The simple fact is that over the 72 football league clubs, there is £450 million of losses just last year alone. That cannot continue—everything has to be sustainable.
For me and for Albion fans, a fairer distribution of wealth and a fairer redistribution of Premier League income would make that difference less between the 20th team and the 21st team in the country. At the moment, over £50 million of turnover is written off more or less overnight, and that is dependent on whether parachute payments are consistent. Also, the lack of competition is a big worry. The bottom three of the Premier League were the top three that got promoted last year, and they have just swapped places. It is more than likely that two of the three will be promoted this year.
Sarah Turner: We would like parachute payments to come under the independent regulator because we think it does make it an unfair competition. You are striving to reach the promised lands, so you will throw everything at it, and it makes owners gamble and spend recklessly, which is what has happened to Reading and many other teams. It is an unfair competition because you are pushing yourself so far to get there. We were relegated because of a points deduction to League One, and we are striving to get back up to the Championship.
Tim Payton: We are here because of the European Super League and the furore. I was in the meeting with the Prime Minister where he said he would “drop a legislative bomb” on it. What I hope you are all doing is passing legislation that means we do not need to throw bombs around but we have a good defensive mechanism in place. The two big threats to the heritage and competitive balance of the Premier League are all the revenue being earned outside of that in the UEFA and FIFA competitions and, as I said before, the relocation of our games. I would urge you to look closely at the suggestions we have made for tightening up in those areas.
Matt Rodda
Q
Sarah Turner: It is a good start, but there is probably more we can do. I do not know if the owners and directors test is a duplication of the ones that the EFL will do or whether it will hand that over to the independent regulator. We think there needs to be some real-time tracking of what is going on at clubs because they are continuously overspending and risk-taking. We think the regulator should be taking an overview all the time of what is going on, rather than just at the beginning when they purchase.
Alistair Jones: I concur on real-time accountability around accountancy. From looking back at 2016 when we were purchased, it would be—quite simply; I am a simple man—a great case study to look at. If we could look at West Bromwich Albion, when they were purchased in 2016, and use that as a case study, what if the same company came and purchased West Brom now? Would it still be allowed? If that were the case, quite frankly there would be no point in doing it because it has proven that it was a poor opportunity to buy the club.
Tim Payton: In our evidence, we put forward the importance that the independent non-executive director can have. Following up from what you heard from Sanjay, we think that it would be powerful having in the Bill the need to have two INEDS on the board of each club, and the regulator obviously could then set the guidance and framework. Of course, we already have that in the corporate governance code, which is set out in—I think you mentioned—the Companies Act. Where I see it linking across to other areas of the Bill is the INED under the corporate governance code already has a lead responsibility to consider stakeholders, and of course the stakeholders in football are the supporters.
When we look for improved fan engagement, we do not just look at the fan engagement standard, but to the INEDs on the board being there to ensure that effective fan engagement is taking place. Good INEDs are an early warning system to many other things going wrong. The Minister will be aware of the improvements that have come to national governing body governance through the corporate code. He inherited all that from the pioneering work that Tracey pushed through. I really hope we can have the same framework for the football clubs under the IFR.
Brendan Clarke-Smith
Q
Sarah Turner: I think they probably can, but the FSA do a fantastic role in that. Your first port of call would always be to go to them, but the independent regulator may go over it on the financial side.
Brendan Clarke-Smith
Okay. Alistair?
Alistair Jones: I agree. The FSA does a fantastic job for independent supporters’ trusts. It is more fitting for us to report into an FSA sort of body rather than directly into an independent regulator, if you want my honest opinion.
Tim Payton: The Arsenal Supporters’ Trust used to own shares in Arsenal and used that association to have a role in the governance. Unfortunately, we were squeezed out. Under companies law, somebody reached 95% and compulsorily took the shares off us. I do not see a practical way of going back to us being shareholders in the club any more, so I very much look to the Bill to, in effect, give us shadow ownership and powers going forward. I hope we see this Bill on the statute book and that it will help supporters have a more meaningful say in their clubs.
Alistair Jones: It is very difficult to give you an all-encompassing answer, because we have 12% of shareholders, represented by Shareholders for Albion. If it had not been for them telling people about the issues we have, it might have been a very different story for us at West Brom. So it is a very difficult to give an all-encompassing answer.
Anna Firth
Q
Sarah Turner: It is not, is it? It cannot be a fair distribution. The whole system and pyramid is not fair. That is one thing we would like the independent regulator to be looking at—how money could be distributed down. At Reading we looked at some of the players that have come forward and are starring in the Premier League, and they were made in the National League and the EFL—so yes, we think so.
Alistair Jones: I could not agree more in terms of the distribution, and it is not just because we are at the top of the Championship or in the Premier League. We believe that it cannot be right. There is no way that the top 20 clubs can have so much power in this country over the 72 below. It has got to change. We can point to the FA Cup replays being scrapped for rounds one and two. That was decided by the Premier League, and they are not even entering it until the third round. How can that possibly be right? It has to change.
Tim Payton: The Arsenal Supporters’ Trust is also your ally, because why did we fight the Super League so hard, together with the supporter groups at all the other big clubs? We wanted to fight the self-interest. What is football if Southend cannot dream of coming up to the Premier League? Football is about us all working together. It strengthens the pyramid, promotion and relegation, and the jeopardy. Everybody must be able to dream in football.
Anna Firth
Q
Alistair Jones: Personally, no. I do not think it goes far enough. I think it needs some work on it at the moment. Again, I stress that the competition is key. There are 51 clubs that have participated in the Premier League since its inception in 1992. There are only six that have stayed in there. That means that 45 clubs have been spread right across the Football League and even the international leagues—Oldham being an example that are now in the National League but were in the Premier League. We have to support, carry and help those clubs.
Sarah Turner: I would really hope that the Premier League and the EFL could come to an agreement without requiring the backstop.
Tim Payton: I would just take you back to what I said before, which is that if a backstop is going to be activated, the Bill needs to redefine “relevant revenue”, so that it is effective. It must capture all the revenue coming into the game, rather than just the broadcast revenue, or it will not do what you want in the years to come.
Shaun Bailey
Q
Tim Payton: It is a very good question. I think the regulator must have some means of acting a bit like an Ofsted, or there must be a check and balance whereby supporter trusts and other organisations can go and say they do not feel the consultation is being effective, but of course, you do not want to reach that stage. You want effective consultation, so let us work with the IFR and the clubs to come up with a framework. I think we all know what good consultation looks like. As I set out, you announce your proposals; you talk to the affected parties; and then, at the end of the process, you have to write up and explain where you have got to. But it will be important that the regulator has some real teeth to enforce that on clubs, because it will be about changing a culture that is very much one where clubs say, “We’re going to do what we want to do, and you’re so loyal and committed to us that you will suck it up whatever we do.”
Alistair Jones: We are in a fortunate position at my club, because we have had really good dialogue and communication. My club is an outstanding example of what can be achieved if you sit down at a table in a room and discuss what we both want, given what we share, which is the love of our football club. From our point of view—speaking selfishly—we already have that at West Brom. We have a really good dialogue. The issue is, of course, that every club is different, as we have intimated before, so I think the regulator has to set out some guidelines as to what can be done with regard to ticket pricing, fan entertainment or anything to do with fan engagement.
Shaun Bailey
Q
Alistair Jones: We campaigned and tried to get answers, and credit to them: they did provide that over a certain amount of time. Once we got to the table, they recognised that we are only here to help. The members of every independent supporters’ trust that I have sat down with volunteer because they love the football club; they do not do it for kudos.
Tim Payton: Of course, if you have the independent non-executive director there, you have a different check and balance, because the INED follows the corporate governance code and would be making sure that effective consultation was happening from a different perspective, but over-layering with whatever the IFR does.
Sarah Turner: Formalising how that engagement looks would be a really good idea, because as you say, people look at it in a different way. Anything that goes forward and that listens to fans and gives them that forum to have their opinions heard has to be a good thing.
Ian Byrne
Q
Tim Payton: I always think independence is good and important, so I assume the IFR board will have INEDs in its process. I think you asked how we make the fan engagement processes better. Ultimately, it comes down to the fact that a supporter trust must have the ability to go to the IFR and say that it does not think that the consultation has been effective. To do that it probably needs a checklist or a process of consultation to have been set out so that it can say, “This has not been followed”. That takes you back—it is starting to sound a little bit repetitive—to a supporter impact assessment or a regulatory impact assessment for all consultation issues.
Alistair Jones: You are right. We cannot guarantee that we will have constant and good communication with our football club—we did not for eight years, for instance. The IFR needs to put procedures and processes in place to address any lack of meaningful communication with the football club. That needs to be addressed in the Bill as well.
Sarah Turner: I agree. Fans are the best early warning signal of anything going wrong, so any independent body that you can go to will always be useful.
Alistair Jones: At the end of the day, if you have 12,000 people marching on a football stadium, it is too late. We need action before that. That is something that needs to be addressed in the Bill.
Anna Firth
Q
Alistair Jones: From the point of view of West Brom, it fell upon Albion fans and Shareholders for Albion to get an asset of community value to try to protect the stadium. It was probably not the all-seeing answer that we hoped it would be, but again, that was reliant on us.
To put it simply, we need better governance. Our previous owner borrowed money from West Bromwich Albion to put into another business portfolio. He could do that without any governance at all. That was never paid back, even though he promised it three times. It was finally paid back by our new owner last month. There must be procedures in place where that can be stopped. If you have money from broadcast revenue, or wherever the money has come from from your football club, and you are using it for other areas of your business portfolios, that should be stopped and not allowed.
Sarah Turner: We would also like the other assets protected, such as the training grounds. We cannot get an ACV on our training ground because it is not a public property, but we think that should be protected in some other way so that it is for the use of the football club.
The Chair
If there are no more questions, may I thank all three of you for your concise and very helpful answers? Thank you very much.
Ordered, That further consideration be now adjourned. —(Mike Wood.)
Football Governance Bill (Fourth sitting)
Thursday 16th May 2024
(7 months ago)
Public Bill CommitteesRead Full debate Football Governance Bill 2023-24 View all Football Governance Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 16 May 2024 - (16 May 2024)
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Chair
I hope everybody has had a good lunch. We will now move on to clause-by-clause consideration.
Clause 1
Purpose and overview
Question proposed, That the clause stand part of the Bill.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
It is a pleasure to serve under your chairmanship this afternoon, Sir Christopher. I thank members of the Committee for their time and commitment, and I thank all the officials who have done an enormous amount of work in preparing the Bill. It would be remiss of me not to thank my hon. Friend the Member for Chatham and Aylesford for all her work on preparing it.
Clause 1 sets out the purpose of the Bill and summarises what each part of it provides for. Its purpose is crucial: it underpins the regulator’s entire regime, as the regulator will be obliged to act in accordance with it at all times, so far as is reasonably practicable. Since the fan-led review was published, the Government have been clear that the pre-eminent failure in this market is the growing risk of football clubs being unable to continue providing their service. The potential harm that that can cause to fans and the local communities reliant on the clubs is unacceptable, and the industry has not been and is not doing enough to tackle the risk. That is why we are intervening here, and that is the Bill’s purpose.
The clause explains that the purpose of the Bill is
“to protect and promote the sustainability of English football.”
It goes on to define that, for the purposes of the Bill, sustainability refers to a continuation of service in the interests of fans and for the wellbeing of local communities. In essence, clubs should not be lost to their fans and communities now or in the future, be that through financial collapse, relocation 60 miles away or turning their back on their fans to join a new breakaway competition. I commend the clause to the Committee.
Stephanie Peacock (Barnsley East) (Lab)
It is great to be here today to welcome the Bill as it enters its next stage of scrutiny. As I outlined on Second Reading, Labour has supported reforming football through an independent regulator for football for a long time. We echo the Minister’s thanks to all the officials for all their hard work, to all Members on both sides of the Committee, and in particular to the hon. Member for Chatham and Aylesford for all her work on the fan-led review.
We want to scrutinise this Bill appropriately, and I look forward to doing just that in the coming days. However, given how long it has taken for this legislation to be introduced and the number of fans who have had to watch their club pushed to the brink in the meantime, we want to see the regulator implemented as swiftly as possible. I am therefore pleased to see a degree of consensus around the implementation of an independent regulator across the House. With that in mind, I have been focused on tabling amendments and will shape my remarks to be constructive where possible, while of course giving the Bill the scrutiny it deserves. I hope to be able to work with fellow members of the Committee to make sure that the Bill truly achieves its aim of ensuring the future of English football for generations to come.
Getting clause 1 right is crucial to the rest of the Bill. The purpose of the Bill, and therefore the regulator, will underpin all the other measures that we go on to discuss. It will act as a reference point to return to when interpreting the overall sense of intention and direction of the whole regulatory system.
It was the fan-led review that first noted that the regulator would need a clear statutory objective, which it said would be useful for dictating to the board and employees of the regulator what the body is there to achieve, how it should assess any problems and the outcomes it should deliver. If well designed, it should seek to tackle many of the problems identified within English football: the poor management of clubs, substandard corporate governance, the lack of fan involvement and the unsustainable finances that have threatened the long-term health of football. As a result, the fan-led review suggested that the objective should include acting in the interests of both local fans and communities. It said:
“There is no one else more important”,
a sentiment with which I absolutely agree. It must be central to both the Bill and the future regulator that football works in the long-term interests of fans and communities. I am therefore pleased that the clause defines English football as sustainable if it
“continues to service the interests of fans of regulated clubs”
and
“continues to contribute to the economic or social well-being of the local communities”
with which the clubs are associated.
Given the centrality of those concepts, it is curious that the likes of fans’ communities and social wellbeing are not defined in the Bill. The explanatory notes indicate what those terms might mean in practice: “fans” might mean season ticket holders and regular match-goers, and “local communities” might mean the people
“who live, work or trade in the geographic area associated with a football club”.
However, those indications will not become law when the Bill is passed, which leaves ambiguity as to how they might be interpreted. I ask the Minister why fans, communities and social wellbeing are not given clear definitions and whether he believes that there is potential for such terms to be misunderstood or misused as a result.
Further to that point, some clarity is needed that when we talk about the “interests of fans”, we mean their long-term interests. I can imagine quite a few scenarios in which it might be in the fans’ interest for their club to adopt reckless short-term strategies to achieve immediate on-field success. Yet those short-term strategies might lead to the club’s long-term financial demise, which is contrary to the aim of the Bill and against the long-term interests of fans and communities. Can the Minister therefore confirm that the phrase “interests of fans” must be taken to indicate a long-term continuation of the club and its heritage, rather than anything to do with on-pitch results at any given time? I agree with the principle of centring fans and local communities in the Bill and the regulator, but we must make sure that we are clear on what that means right from the very beginning, to ensure that the intended outcomes are achieved.
Stuart Andrew
I thank the hon. Lady for her opening comments. She will know from our engagement that we centre fans in the whole of the Bill’s process. She is right that as we go through line-by-line scrutiny, I will be able to give more indications that fans need to be consulted when it comes to important decision making by clubs up and down the country. Some clubs are doing that brilliantly, but we need to raise the bar. I hope that the provisions in the Bill will ensure that that happens and that fans will rightly be at the centre of the clubs they support.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Key definitions
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause 3 stand part.
Schedule 1.
Clause 4 stand part.
New clause 1—Reporting requirements (women’s football)—
“(1) The Secretary of State must, no later than five years from the date on which this Act is passed, carry out a review of the professional tiers of women’s football to determine whether the competitions specified by the Secretary of State under section 2(3) should include women’s football competitions.
(2) For the purposes of subsection (1), the review should take account of—
(a) the State of the Game Report,
(b) the risk of financial failure in women’s football, and
(c) such other considerations as the Secretary of State considers appropriate.
(3) The results of the review must be published and laid before Parliament.”
This new clause would review whether or not women’s football should be added to the scope of the IFR.
Stuart Andrew
Clause 2 sets out the key definitions used in the Bill. It also gives the Secretary of State the power through a statutory instrument to specify competitions. Those specified competitions then define the regulated population—the clubs and competition organisers in scope of regulation. Defining the scope in that way is important in future-proofing the Bill. In particular, it will allow the regulator’s regime to adapt to future innovations in the market like those that we saw when the old First Division became the Premier League in 1992, or when the Football League was expanded and rebranded in the years that followed.
I turn to clause 3. Owners of football clubs play a pivotal role in the sport; without their efforts and investment, English football would not be the success that it is today. Owners have an immense responsibility not just to their club, but to fans, local communities and businesses in the surrounding area. While current league rules outline a requirement to declare who controls a club, the fan-led review identified concerns with the application of the role, in particular where 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 club. Fans deserve to know who has ultimate responsibility for the club they support, and the clause will ensure just that.
Clause 3 signposts to schedule 1, which defines when a person is an owner of a club. The clause also defines a club’s ultimate owner or owners as those who have the highest degree of influence or control over the activities of a 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. Clause 51 requires licensed clubs to publish their personal statements.
Defining the ultimate owner of a club and requiring clubs to declare who they are will be a crucial step in improving transparency and accountability in the game, and in ensuring that fans know who owns their club. Schedule 1 defines owners for the purposes of the Bill and equips the regulator to apply this definition in different real-life circumstances.
It is crucial that owners are suitable in order that the sport can be placed on a more sustainable footing. An ownership chain may be long and complex with many links. To ensure that clubs have suitable custodians, the regulator needs to identify the person with actual control at the very end of that chain, rather than the holding companies or the legal structures that are just links along the way. That is why, under the Bill, only individuals or registered societies are defined as club owners.
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 by fans for collective ownership of professional football clubs, they are typically “one fan, one vote” organisations in which control is split equally between hundreds or thousands of members. As such, they do not concentrate influence or control with just a few individuals.
Mr Clive Betts (Sheffield South East) (Lab)
This is a really important clause. There have been so many problems in so many clubs where actions have happened but there is some mystique about who is responsible. The mystique is often deliberate, to hide the real owners and what they are doing.
Although this will be the rule from now on, one issue that I can see arising is about what happens when a league wants to look at who was responsible for the actions of a club in past months and years. Will there be a trail to discover who the owner was in past months and years, so that that sort of action can be taken by the leagues?
Stuart Andrew
That would probably be an issue for the leagues. This is about setting up the statutory obligations and the powers that the regulator will need, and will have, to be able to identify the specific owner. The hon. Gentleman is absolutely right: I have heard time and again from fans that trying to identify who the specific person is has been almost impossible. As we are now putting this measure on a statutory footing, the clubs themselves will be obliged to identify who that person is, but I think retrospective work would be something for the leagues to deal with. If the hon. Gentleman will permit me, I will have a further think about the point and come back to him in writing.
I was explaining why ownership chains can end with registered societies without those societies needing to identify the named individuals behind them. The Bill’s definition of an owner is designed to apply to those at the end of ownership chains, no matter how complex the chains are. It 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. It is designed to capture those who have significant shares or rights in or other forms of significant influence or control over clubs. The definition also includes owners who meet one of those conditions at arm’s length, such as via a trust or similar body. This robust and comprehensive definition of owners recognises that clubs have different ownership structures. Part 3 of schedule 1 allows the definition to be amended to ensure that it is future-proofed.
Ultimately, the definition enables the regulator to look behind ownership structures to find the person who is actually responsible. That means that owners cannot simply evade regulation by creating ever more complicated ownership structures. Having a clear definition of an owner that reflects those who have influence or control over a club means owners can be identified, tested and held to account as custodians of the club.
I turn to clause 4. The Bill will introduce two key things that are missing in the industry at present: transparency for fans and accountability for decision makers at clubs. Central to both those points is clarity about who the decision makers are. Officers and senior managers must be clearly defined within the new regime so that regulatory requirements and enforcement can bite on the right people and fans know who is running their club. The clause defines an officer and a senior manager of the club for the purposes of the Bill. The definitions have been drafted in recognition of existing legislative precedent, including the Companies Act 2006 and the Financial Services and Markets Act 2023. It also uses the definitions currently used in the football industry.
The purpose of the clause is therefore to appropriately define the people who run or have a significant level of direct influence over the day-to-day running of the club. Other provisions in the Bill will require regulated clubs to publicly set out who their officers are and which persons carry out specified senior management functions. Officers of the club are subject to legislative requirements, including owners and directors tests. Senior managers will be accountable for the aspects of the club’s affairs that they are responsible for. The regulator may take enforcement action against a senior manager if the club commits a relevant infringement that is connected to a senior management function carried out by that individual or individuals.
Stephanie Peacock
I will begin by addressing clause 2 and my new clause 1 before looking briefly at clauses 4 and 3 with schedule 1. Clause 2 provides important definitions that will help make sense of the Bill. Most of the definitions are relatively straightforward, so I will focus on the Secretary of State’s ability to designate which specified competitions will fall under the remit of the regulator.
It is widely understood that the Government’s intention is to identify step 5 and above of the men’s football pyramid as being within scope. That choice is the right one as long as the regulator’s enforcement is proportionate to ensure that clubs in the National League and lower tiers of the EFL are not burdened by compliance. Indeed, at this early stage it is important to set out that regulation does not necessarily need to result in burdensome compliance requirements. As long as the Bill is done right, that will not be the case.
It is important that we leave room for the competitions in scope to be amended in future should circumstances change. I appreciate the Minister’s comments on my new clause 1, but I am sure the Committee will allow me to outline the arguments on why I tabled it.
We should pay close attention to ensuring the healthy growth of the women’s game and whether it should be brought into the regulator’s remit. Despite its recent soaring success, as shown by the historic achievements of the Lionesses and sustained by the growth in support for the Women’s Super League and Championship, the women’s game faces a wide range of issues. The Carney review, commissioned as a result of the need for parity identified by the fan-led review, brought many of those issues to light.
The review raised concerns, for example, about the growing gap between those at the top of the elite game and the rest of the women’s football pyramid. Indeed, the annual turnover in the Women’s Super League, featuring teams such as Chelsea and Manchester City, peaked at around £7 million. Meanwhile, in the Women’s Championship, where teams such as London City and Sunderland play, sides are recording turnover as low as £150,000.
Further to that, the review noticed that there has not been enough progress on ensuring minimum professional standards. Players have been reported as being treated as second-class citizens rather than elite athletes, with everything revolving around the schedules of the men’s teams. Also, women players are three times more likely to suffer an anterior cruciate ligament injury—a serious rupture that strikes top players out for around a year—than their male counterparts, and there is no guaranteed access to even a basic level of mental health support even for those who might be seriously struggling.
Finally and perhaps most relevant to the Bill, the review also identified that the costs of sustaining participation in the women’s game are much higher than the revenues being organically generated by women’s teams. That is true even with the growth of broadcasting audiences and sponsorship revenue. Rather than bringing women into scope of the independent regulator at this stage, however, Karen Carney’s review concluded that women’s football would benefit from the opportunity to incentivise investment and self-regulate first.
Given that the IFR has been designed with the failures of the men’s game in mind, I agree that the women’s game and NewCo should be given the chance to take learnings and to proactively address issues so that it can run on its own two feet. However, I also believe that the option of an independent regulator must remain on the table, not least so that if it is needed, the regulator can act at an earlier point than it has been able to in the men’s game. That is why I tabled new clause 1.
Players, fans and the whole country want to see healthy growth of the women’s game and NewCo, and they now have the opportunity to see just that with the right investment, support and approach. However, if issues prevail, as they have done in the men’s game, it is right that we be proactive rather than reactive this time.
The Government agreed to all the Carney review’s strategic recommendations, but I believe there has been only one meeting of the implementation group. Parity of importance must be given to change in the men’s and women’s game, and I hope the Minister can provide an update on the Department’s progress either in this debate or in writing.
Clauses 3 and 4 and schedule 1 set out some of the other key definitions in the Bill, particularly of owners and officers, and I welcome their clarity. Due to the complex ownership structures of some clubs, it has not always been clear who or what might count as an owner, ultimate owner or indeed who can be held accountable as officers.
The fan-led review identified the example of Birmingham City, who at the time were alleged to be in £100 million of debt. They were in breach of profit and sustainability rules and in a situation where the club and ground were owned by two different people under a complicated offshore ownership structure. Trying to untangle and resolve such difficulties without being able to understand where accountability lies in an opaque structure is no easy task. The detail in clauses 3 and 4 and schedule 1 on how calculations will be made in relation to shares and the like is therefore welcome. In combination with the duty in clause 16 on clubs to provide a personnel statement, the Bill will improve transparency and ensure that the regulator is able to operate from a much clearer standpoint.
I have one question on behalf of the Football Supporters’ Association, which is concerned that the definition of “senior manager” might include football-related posts that were not intended to be within scope of the Bill, such as team managers. Can the Minister confirm that that is not the case and that football-specific posts will not be covered?
Stuart Andrew
I completely agree with the hon. Lady on ensuring that clubs, specifically those further down the pyramid, are not over-burdened. That is why we have been careful throughout the drafting of the Bill to ensure that it is proportionate and that our approach is dependent on the size of the club and where they are in the pyramid. I do not think there should be anything for many of those clubs to fear. We heard from witnesses in the evidence sessions that many of those clubs rely on volunteers to do a lot of the paperwork, and we have taken that into account.
I absolutely welcome the hon. Lady’s comments about the women’s game. We all want to see healthy growth in the women’s game, and it has been incredible to see how popular it has become. That is precisely why we brought about Karen Carney’s review, and I put on the record my thanks to her for the work that she has done in this area. What has been useful about that—rather than just doing it through the IFR—is that it has enabled there to be a much broader approach to the women’s game; and she rightly highlighted health and wellbeing as a really important aspect. Although the implementation group has only met once, it was an important meeting for us to set out the questions that need answering, and work is going on behind the scenes in preparation for the next meeting to ensure that we see progress. As she acknowledged, we support all the recommendations of Karen Carney’s review. We want to now ensure that progress is made in implementing them.
The hon. Lady is right that we need to learn from the men’s game at a much earlier stage, which is why we are looking at all aspects, but should we get to the point where it needs to be looked at by the independent football regulator, provisions are in the Bill for that purpose. On the issue of owners, as we have described in the Bill, it is those with a controlling decision-making process within the club that will come into scope.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3 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.
Stuart Andrew
The provisions in schedule 2 ensure that the regulator has the necessary structures in place to function effectively and efficiently with appropriate accountability as a public body. It ensures that an agreed and transparent process is adhered to when establishing a governance framework, including its board, committees and expert panel. It provides the necessary flexibility to future-proof the regulator and the agility to act quickly where required.
We have made provision for the regulator to appoint an observer from the Football Association. As the national governing body for English football, it will be able to provide insights on behalf of the football industry to support the board if needed in the execution of its functions. Ultimately, the regulator will be accountable to Parliament, but it will be operationally independent and free from undue political or industry influence. The provisions in the schedule are central to creating this framework and strike the right balance between those competing demands.
Stephanie Peacock
I am extremely pleased to welcome these provisions, which establish the long-awaited Independent Football Regulator as a body corporate. This is a good opportunity to discuss why it is important that the independent regulator has been established in the form it has—a body that is operationally independent of current football governance structures. This independence will be key in ensuring that decision making is impartial, free from conflict and credible. As the fan-led review clearly reveals, public confidence in existing football authorities is unfortunately very low. Part of the reason for this, according to the review, is that the constitutional set-ups of existing authorities are inherently conflicted and
“the rules of regulation being set by the parties that are to be regulated.”
There are two big problems with that. First, it results in clubs being naturally incentivised to prioritise their own interests rather than the long-term view of what is best for the game. Secondly, it means that there is a natural disincentive for disciplinary action to be taken where it might be commercially damaging for the club involved. Though this new phenomenon was identified by the fan-led review, it is not a new concept. It has been over a decade since the 2011 Culture, Media and Sport Committee’s report that made recommendations to improve the accountability of the regulation of football, and it is almost 20 years since the Burns review, which found football governance unfit for purpose.
Opportunities have been presented over and over, but the same problems have prevailed. This is why it is important that we are finally here today. Independence does not mean that the regulator will have no relationship with existing structures. As we will discuss, working constructively with football governance will be vital to the regulator’s success. This does, however, bring up questions of regulatory clarity.
As it stands, I am not entirely convinced that everyone is clear about whose rules will take primacy and when. The Government’s response to the White Paper consultation seemed to be firm on this, identifying that although there needs to be collaboration, the regulator will be the ultimate authority on matters within its remit. However, the Bill is not always clear, so I hope this is something we can come back to and clarify as we progress.
It is also important to note that the regulator will be independent from politicisation and undue influence from the Government, which is important not only for the sport as a whole, but to ensure that the regulator in no way impacts compliance with UEFA and FIFA rules. Overall, however, I am pleased with the institutional location of the regulator and the fact it is finally being established through the clause.
Rachel Hopkins (Luton South) (Lab)
I would like to build on the comments made by the shadow Minister, particularly on the appointments to the independent regulator and the expert panel. We heard much in the evidence sessions around equality, diversity and inclusion, and I seek assurances from the Minister that there will, in the usual way with public appointments, be a desire for the board to be reflective of society. We have heard, sadly, that we do not see people with a range of diverse characteristics coming through to senior levels in all aspects of football, across the game—there are very few such referees, and so on.
On appointments to the expert panel, I would like a little more clarity from the Minister on the fact that the chief executive officer must exercise the power to secure
“the range of skills, knowledge and experience of the members of the Expert Panel”,
which includes skills, knowledge and experience relating to
“the operation, organisation or governance of clubs or competitions, and financial or other regulation.”
Reflecting on what we already know about the game, could we have some assurance that this provision merely includes that range of skills, and that we could, in fact, have a wider range of skillsets? We want to ensure that we recognise equality, diversity and inclusion in appointments to the expert panel and the board, so that we are not restricted only to people who have experience of the operation, organisation or governance of clubs or financial or other regulation. Other regulators often have a lay person, for example; they may be a senior professional, but they bring a sort of objectivity to the table that others who are very involved in the industry sometimes cannot see. I hope we can have some clarity from the Minister on that.
Mr Betts
Can I just raise two issues? The first is about appointments to the board. Does the Minister feel that the issue of conflict of interest is important? Does he feel that he ought to be setting down somewhere what conflicts of interest may amount to, and what may disqualify someone from being a member of the regulator’s board? Secondly—this issue arises in Select Committees from time to time—will the regulator’s chair be subject to a pre-confirmation hearing by the Select Committee?
Stuart Andrew
I agree with the hon. Member for Luton South about the independence of the football regulator; we were really careful to ensure that as we drafted the Bill. She is right that we have to take into account the UEFA and FIFA rules. That is why we have made sure throughout that the regulator will be independent, including from political interference. We would not in any way want to see any sanctions on English football because of any pressure that might be given. As with others, we have engaged with both of those bodies. So far, we feel that they recognise that we have gone to great lengths to ensure that that independence is recognised.
On the board being reflective of society, I am a big advocate of making sure that that happens. There are the usual processes of Government appointments; as hon. Members will know, that issue is very much a consideration. Work is constantly being done to encourage a wide range of candidates to apply. I suppose this gives me an opportunity to shout out to the wider society: get involved! We need a very diverse range of candidates to apply for these positions.
We absolutely need to ensure that the measures on conflicts of interest are in there, just as we would with any other public body, and, yes, there will be a requirement for pre-confirmation of the chair through the Select Committee.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Schedule 2
The Independent Football Regulator
Stephanie Peacock
I beg to move amendment 14, in schedule 2, page 82, line 20, leave out “is satisfied” and insert “has ensured”
This amendment would strengthen the responsibility of the appointer.
The Chair
With this it will be convenient to discuss amendment 15, in schedule 2, page 82, line 20, at end insert—
“(1A) A person appointed to the board must declare any interests they consider might give rise to a conflict of interests or the perception or a conflict of interests.”
This amendment would strengthen the duty of an appointee to declare a conflict of interest.
Stephanie Peacock
I am grateful for the opportunity to discuss the appointments process for the regulator. I was pleased to hear the Minister’s comments just now and those by the hon. Member for Gosport (Dame Caroline Dinenage) on Second Reading; she confirmed that the Culture, Media and Sport Committee will be holding a pre-appointment hearing with the chair of the regulator once there is a preferred candidate.
The first chair will have a formative role in shaping the regulator at a time when implementation will be key to success. However, on the whole, the Bill has provided limited information about how candidates for roles will be vetted. This is an incredibly important process to consider, not only due to the sheer importance of many of the decisions that these experts will be making but because we must be very careful not to import the same industry groupthink that has caused us to need an independent regulator in the first place.
There is no point in setting up an independent regulator if it is run by those who can offer no real independence from existing football governance structures. To ensure the strength and independence of the regulator, therefore, we require more detail in the Bill about appointments, as well as due diligence on behalf of those making the appointments in practice. The schedule does offer small bits of guidance in this area. It states that a person can be appointed only if their appointer is satisfied they do not have a conflict of interest, and that is an important start.
However, as Fair Game points out, the schedule is not comprehensive enough to provide the necessary assurances that the board will be free from such conflicts. Indeed, as the Bill stands, it does not say that a person cannot be on the board if they have a conflict of interest; instead it is more subjective, giving the power to the appointer to make the determination that they are satisfied there is no such conflict. I am simply not sure that that is strong enough.
Ian Byrne (Liverpool, West Derby) (Lab)
What the shadow Minister is saying is so important at the moment, because there is a complete lack of trust and faith in the game. That is why we are sitting here today. We heard from the evidence sessions that that lack of trust is hardwired in the National League, the EFL and the Premier League, so ensuring that everybody who loves the game sees the independent regulator as something to be trusted and as completely independent is so important. That is one of the key reasons why we are here today.
Stephanie Peacock
I welcome my hon. Friend’s comments. He is absolutely right, and he sums up why the process for appointments must be robust and underpinned by transparency and accountability on all sides.
Dame Tracey Crouch (Chatham and Aylesford) (Con)
The shadow Minister is making a very important point, but has she looked at the public appointments process on the Government website? The appointment to the independent regulator will be subject to the processes from the Office of the Commissioner for Public Appointments, which has stringent rules around appointments, particularly regarding transparency and conflicts.
Stephanie Peacock
I welcome that input, and that is absolutely right. I am trying with these probing amendments to seek some clarity from the Government, so that all hon. Members and everyone who has an interest in the Bill are satisfied. I tabled them to make important clarifications and to ensure that appointments to the regulator are free from vested interests. I believe that that is the intention behind the Bill.
It is peculiar that the process of declaring a conflict of interest does not involve potential appointees making any declarations themselves. Given that potential appointees are the experts on their own history, they must take a level of responsibility for ensuring that time is not wasted as part of their appointment. Amendment 15 would ensure that candidates are obliged to make a declaration if they hold any relevant interests that might give rise to a conflict. That would create a pathway for unsuitable candidates to be easily and quickly dismissed, and ensure that the appointer is not the only person responsible for identifying conflicts. That shared accountability would strengthen the process.
The involvement of the appointer in any investigation of any potential conflicts will also be crucial. I tabled amendment 14 to require appointers to categorically and objectively ensure that the candidate is free from vested interests. It is not enough for an appointer to simply say they are satisfied that there is no conflict; the Bill must require a level of intentional due diligence on behalf of the appointer, so that if any conflicts are identified later down the line, there is a level of objective accountability. Replacing “is satisfied” with “has ensured” will strengthen not only the wording but the entire system of appointments.
I hope that the Minister can accept the changes as a necessary part of achieving the Bill’s aims, or at the very least can provide clarification on why the Bill as drafted allows for subjectivity in decision making when it comes to conflicts. It is only by getting the appointment system right that we will get the regulatory system right. We hope that the process will be watertight.
Stuart Andrew
The Government recognise the intent behind the amendments, which is to make certain that the board is free from conflicts of interest—not least given the fact that so many of the witnesses talked about trust, as the hon. Member for Liverpool, West Derby just mentioned. It is essential that the regulator can deliver its regime free from influence from Government or the industry that it will regulate, which is why independence has driven the design of the regulator from the start. That is reflected throughout the Bill and will continue to shape how the regulator is established, including the appointment of its board.
I strongly support the objective that conflicts of interests should be managed appropriately, but the amendments are unnecessary. The current drafting, supported by public law principles, as my hon. Friend the Member for Chatham and Aylesford hon. Friend mentioned, and non-legislative measures already in place achieve that objective. The appointer must already satisfy themselves that a candidate board member is free from conflicts before appointing them, and the board members will have responsibilities to openly and honestly declare any interests that could give rise to actual or perceived conflicts.
In addition to the checks for conflicts at the point of making the appointment, there is an explicit requirement in schedule 2(22) for members of the board to declare their interest in any matters that fall for consideration by the board. That paragraph sets out a process for managing any interests in line with the approach taken for other regulators, and provides assurance regarding the suitable management of board members’ interests. Members of the regulator’s board and their terms of appointment will be subject to the Cabinet Office’s “Code of Conduct for Board Members of Public Bodies”, which sets out clear requirements on the appropriate disclosure and management of conflicts of interests. For the reasons that I have set out, I am not able to accept the amendment tabled by the hon. Member for Barnsley East, and I hope that she will withdraw it.
Stephanie Peacock
I am grateful to the Minister, and on the basis of what he has said, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2 agreed to.
Clause 6
The IFR’s objectives
Stuart Andrew
The clause 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 only act if the action taken advances
“so far as reasonably practical…one or more of the IFR’s objectives”.
The fan-led review highlighted a myriad problems facing football in this country, and they are all important issues on which action is need. However, in our response to the independent review, and the White Paper that followed, we were clear that not all those problems are for a regulator to fix. The Government have been clear about the areas on which a potential football regulator would need to act. They are areas related only to sustainability, as it is on the issue of sustainability that we believe the market has failed and remains ill-equipped to act. The three objectives in clause 6 codify that intention into legislation, while limiting the opportunity for scope creep to the various broader issues in football.
The first objective on financial soundness looks to deal with the ability of individual clubs to continue to meet their debts and liabilities, even in the face of changing circumstances, new risks and financial shocks. The lower the risk that a club will be unable to meet its debts and liabilities in the future, the more financially sound it is. More financially sound clubs should help to reduce the risk of clubs being run into the ground and lost to their communities.
The second objective is on the wider financial resilience of the English football system. It involves the regulator taking a more macro view of the market to address structural issues and systemic financial risks. There are issues that individually are a small problem, but when aggregated or multiplied pose a significant threat to groups of clubs or the pyramid as a whole. Examples include the distribution of broadcast revenue throughout the football pyramid, or where several clubs are highly dependent on similar sources of income or similar credit markets.
Mr Betts
I am interested in what the Minister says about the sustainability of the football pyramid. If a particular measure on the distribution of funding affects other clubs and those in the pyramid that receive that money, that could be construed as posing a risk to the pyramid and might fall within the remit of clause 6(b).
Stuart Andrew
We have had this discussion many times, and I look forward to further debate on this as we go through the Bill. The hon. Gentleman will know that we also have provisions in the Bill for the regulator to look at those sorts of issues through the licensing conditions. I look forward to going into that in a bit more detail with him when we get to that part of the Bill, but I am acutely aware of his interest in that specific issue.
The third objective is on safeguarding the heritage of English football. Since the game was first played more than 160 years ago, football clubs have been an integral part of local communities and the lives of their supporters. The identity of each club is unique and often entwined with the identity of its fans and the history of the local community. Clearly, financial collapse is a risk, but so is the potential for clubs to become unrecognisable to their fans and communities.
Ian Byrne
That is a really good outline of why heritage is important. The Minister has talked about communities and football clubs. Maybe two words were missed out: “working class”. We have to ensure that working-class representation in the game stays within the game, as part of the heritage. I ask the Minister to include ticket pricing in that, because if we price working-class fans out of the game, we lose the lifeblood of the game.
Stuart Andrew
I never thought I would get into a discussion about class when talking about this Bill. My view is that football is there for everybody, and I absolutely recognise the roots of it in various parts of the country. Of course, particularly in the hon. Gentleman’s part of the world, there is a close association. I know we will come on to ticket prices later, but I hope the clause provides reassurance that the things that are important to fans—the identity of their club with their community, the colours, the names and so on—are an integral part of the work that the regulator will do to protect them.
Mr Betts
I am interested in the Minister’s definition of heritage. So far he has talked about the heritage of English football clubs, not the wider game, and that is quite interesting. Does he accept, for example, that the FA cup is very much part of the heritage of football in this country, and therefore the regulator ought to be able to give some thought to that competition and its future?
Stuart Andrew
The hon. Gentleman tempts me to get drawn into an area of further expansion. I understand his point. I have never in my entire life been stopped by so many people to talk to me about football as on the weekend that announcement was made. I of course recognise the importance of the FA cup, but for the regulator to get into areas of match timings, replays and so on may be a bit too far. We will probably look more into that later.
The third objective looks to safeguard the elements I mentioned in the interests of the community and future fans, but not to stand in the way of the natural growth and renewal of a club. I commend the clause to the Committee.
Stephanie Peacock
Given the purpose of the Bill, as set out in clause 1, it is important that the regulator’s objectives are shaped carefully and clearly, as they will underpin many of the other measures. Although the fan-led review initially recommended a dual focus on sustainability and competitiveness, when it came to the regulator’s objectives the White Paper streamlined things so that the primary duties were regarding sustainability, with competitiveness becoming a secondary focus. I understand the Government’s reasons for that and have welcomed the subsequent primary duties being in three areas: the financial sustainability of individual clubs, the systematic stability of the football pyramid, and protecting cultural heritage.
I am pleased that the proposal from the White Paper is largely reflected in the Bill. However, I am curious about a few small changes, to which my hon. Friend the Member for Sheffield South East alluded in his intervention. For example, the exact wording in the Bill has “financial soundness” rather than “sustainability”, as was in the White Paper. Will the Minister explain why? It seems strange that the word “sustainability” is not included at all in the objectives. Further to that, the White Paper framed the systemic financial resilience objective in terms of the football pyramid, but the Bill goes only so far as to say “English football”. Will the Minister tell us whether the word “pyramid” has been purposedly omitted? Or does he believe that the definition of “English football” adequately covers things? I have no further issues with the intent of the objectives, but the wording is important if the Bill is to achieve its stated aims.
Mr Betts
The Minister’s answer with regard to the FA cup will disappoint many football fans. Football fans look to us to address things that matter to them, and the Minister is right that many fans were outraged at the decision taken with no consultation—not even proper consultation with the EFL and other leagues—to simply abandon FA cup replays.
We could all wax lyrical about the FA cup replay matches we have been to. Those are the ones I remember, and I refer again back to the 1970s, when Sheffield Wednesday, a third-tier club, had four FA cup replays with Arsenal, which was then in the top tier. I remember every one of those games—I went to four of them at least—because they were a unique experience, and that is what many fans feel. They want us to recognise that and to give some assurance that such decisions will not be taken with their interests cast to one side, as though they simply do not matter.
Robin Millar (Aberconwy) (Con)
The hon. Gentleman will have heard the questions that I asked in the evidence sessions that reflected that concern. However, I am mindful of Ronald Reagan, who said that the scariest words in the English language are, “I’m from the Government and I’m here to help.” Does the hon. Gentleman accept that there is reason, merit and even value in the Government’s cautious approach?
Mr Betts
We should always be cautious when we look at regulation. Without drawing you into the debate, Sir Christopher, I am sure that you would echo that point. Nevertheless, the fact is that there is a bit of conflict in the Government’s argument. Why are we here today with the Bill in terms of regulation? One of the reasons why is that a handful of clubs decided that they wanted to break away into a European super league, so the Bill specifically mentions clubs not being able to simply up roots and go into a different league without permission. The Bill legislates for and gives the regulator powers over new competitions and which clubs may enter into them, but no powers over existing competitions and how they may be changed.
Let me put a scenario to the Minister that involves not just FA cup replays, because I suppose that decision could be reversed; it would not be too difficult to manage if we got to the point where we wanted that to happen. Let us say there is a scenario—it nearly happened a few years ago—in which the Premier League decides to create a Premier League Two, then pulls the drawbridge up and stops relegation from that league. What would happen then? Would the Minister say, “That is terrible. I am getting a lot of letters and emails and people stopping me in the street; I cannot do anything about it and the regulator has no power”? Indeed, would the regulator have a power to intervene at that point, because that would be a major disruption to the whole structure and pyramid of English football? If the regulator will not be there to protect the pyramid, what will it be there for?
Stuart Andrew
On the hon. Lady’s points, the term “sustainability” is used in the purposes and not again in its objectives. Our advice from the Office of the Parliamentary Counsel said that “soundness” achieves the same thing, but we are talking about the remit over the entire pyramid. We feel that would overstretch the regulator, which is why we are focusing on the top five leagues.
I understand the points made by the hon. Member for Sheffield South East. On a recent podcast, I repeated the phrase, used by many, that replays are often the David and Goliath of English football. However, in terms of financial sustainability, I cannot imagine a single club relying on the off-chance that it may have a replay at some point as a sustainable business model for its individual club. As I say, that is why the regulator will focus tightly on what the business plans would be.
Damian Collins (Folkestone and Hythe) (Con)
Does my right hon. Friend agree that part of the tension here is that the FA is under pressure from UEFA to free up days in the football calendar? That means it is left in the invidious position where it either does that, or requires teams to play scratch sides to fulfil fixtures when they must otherwise manage their resources for competing fixtures as well. That is why we moved away from never-ending replays in the FA cup in the ’50s and ’60s to a far more limited scope for replays today.
Stuart Andrew
My hon. Friend has got it exactly right and articulated it extremely well. We recognise that that is the challenge football has with the obligations it must match with the likes of UEFA and so on. I thank my hon. Friend for his intervention, and with that I commend the clause to the Committee.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7 ordered to stand part of the Bill.
Clause 8
The IFR’s regulatory principles
Stephanie Peacock
I beg to move amendment 2, in clause 8, page 5, line 33, at end insert—
“(iv) supporters and supporters’ organisations”.
The Chair
With this it will be convenient to discuss the following:
Amendment 9, in clause 8, page 5, line 33, at end insert—
“(iv) football fans,
(v) football supporter organisations,
(vi) any local community groups that the IFR considers relevant,
(vii) employee groups and unions with members employed by football clubs, and
(viii) professional football players and their representatives.”
This amendment expands the list of those whom the IFR must engage constructively.
Amendment 20, in clause 8, page 5, line 33, at end insert—
“(iv) representatives of major club employee groups such as player or staff unions.”
Stephanie Peacock
It is good to be able to discuss the issue of who the regulator is to work constructively with in the context of my amendment 9 and amendments 2 and 20, which were tabled by my colleagues.
I of course welcome the principle that on the whole the regulator should co-operate and proactively and constructively engage with existing structures in the footballing industry. That is incredibly important if we are to ensure that the landscape of football governance runs as smoothly as possible. However, currently the list of people or groups that that obligation applies to is limited to clubs’ owners, officers and competition organisers. Those are all vital groups that the regulator will have to work well with, and I am pleased they are included, not least if the regulator is really to employ an advocacy-first approach. However, there is no explicit mention of fans, supporters’ trusts or local community groups who might be engaged with constructively. That seems a strange omission given the rhetoric surrounding the Bill—namely, that it will ensure that football is for the fans—and the fact that its purpose is to serve the interests of fans.
Robin Millar
I am really sympathetic to the notion of a redistributed ownership of the game; I have always struggled with the idea that the ownership sits, for example, with the Premier League. The Bill makes provision for consultation or constructive engagement with clubs. Is it the hon. Member’s contention that that is not satisfactory, because many clubs do engage with fans and, obviously, will talk to their players?
Stephanie Peacock
No. The point I am making is that, as we heard in the evidence sessions, lots of clubs have lots of good structures and some best practice that we can learn from, but this particular part of the Bill lists the groups that the regulator should have a relationship with, and I am simply suggesting that we could strengthen that. I am interested to hear what the Minister has to say.
Matt Rodda (Reading East) (Lab)
My hon. Friend is making an excellent point about the importance of fans and players, and indeed, by implication, football club staff. As we heard this morning, fans, players and others have suffered from enormous challenges when there have been problems with ownership. It is difficult to describe the full level of stress and pressure that many fans of clubs have suffered over long periods, sometimes for more than one season. I believe that my hon. Friend is making a very worthy and important point, which I hope the Minister will consider.
Stephanie Peacock
I appreciate my hon. Friend’s intervention. I know the amount of work that he has done with his local football club and with fan groups.
Rachel Hopkins
I, too, mentioned this point on Second Reading. Does my hon. Friend agree that not including groups such as fans, players or staff of clubs would be like the health regulator regulating hospitals but not talking to patients or doctors?
Stephanie Peacock
My hon. Friend makes an important point. Again, we are attempting to be as helpful as we can. We are not giving a veto; we are simply saying that the regulator should have a good, constructive working relationship with these groups.
I will make a little progress. My final point, as I said, is that the Bill does not currently recognise that there are cross-governance structures that work well within the game and with which it could be beneficial for the regulator to work constructively. The PFA provides an example of that in the Professional Football Negotiating and Consultative Committee. This mechanism is used by the league’s union and governing body of football to provide a backstop on players’ rights, ensuring that substantive changes to player contracts and conditions cannot be made unilaterally. Where collaboration works well in the football ecosystem, it is important that the regulator can work constructively with the bodies as well as clubs, governance structures and competition organisers. Has the Minister considered that? I would welcome his thoughts on that today.
It is great that the independent regulator will be tasked with working constructively, but we must make sure that there is a comprehensive list of those that should apply to so that co-operation exists in the new landscape wherever possible. I tabled amendment 9 to broaden the scope of constructive working. I hope Members across the Committee will lend their support.
Amendments 20 and 2, tabled by my hon. Friends the Members for Liverpool, West Derby and for Sheffield South East, mirror my amendment, demonstrating that there is a wider recognition of the need to expand the list. I hope that the Minister will take that into account.
Dame Tracey Crouch
I am not unsympathetic to the hon. Lady’s point about supporters and the fan community, but given that the Bill establishes an independent regulator to look at the long-term financial sustainability of the game, what does she think the other people listed in her amendment would practically contribute to, for example, the owners and directors tests or some of the licence conditions?
Stephanie Peacock
We are not suggesting that they will all be able to contribute to every element. I gave an example where, for example, football clubs are in the early stages of suffering financial problems and issues. Often, the groups that I refer to are the first to recognise and realise that. We are simply attempting to make sure that the legislation is as strong as it can be and that the regulator has the most thorough and useful list of people to work with constructively.
[Sir Christopher Chope in the Chair]
Ian Byrne
My amendment 2 builds on what my hon. Friend has just spoken about. The principles are all fine, but there is a glaring omission. We are here today because of supporters. It was the supporters that defeated the European Super League. If the reports are true, the then Prime Minister met the chief executive of Manchester United and there was not much of a furore around the European Super League politically. That suddenly changed when the fans rose up from every single club that was involved, much to the consternation of the owners —I know this personally. They thought that the fans of the said clubs would be delighted at the riches that were going to be pouring into their clubs and at ensuring their success, but that was not the case. It was the supporters of the six clubs and also the pyramid that rose up and defeated the European Super League.
Robin Millar
The hon. Gentleman and I see eye to eye on this, but it would be remiss of me not to point out, from the Government Back Benches, that the Prime Minister at the time was well aware of the objections and concerns that were felt across our constituencies.
Ian Byrne
That is a fine point. I am not excluding anybody, because there was outrage across the piece. Setting this regulator up is welcome, but it must have supporters at its heart. The regulatory principles should include supporters, so I hope the Minister takes on board what we have outlined and adds that one word, which would make a huge difference. It would reinstate trust in the whole process if supporters were listened to.
Mr Betts
I was thinking of moving my amendment from the Chair and then I could have directed the Minister to agree with it. [Laughter.] This proposal would feel very strange, as Ben Wright from the PFA said this morning, without the two groups of people who are absolutely key to football. We can manage without owners and directors, but we cannot manage without fans and players, and they are not mentioned in this part of the Bill. Will the Minister give us some comfort at least about how that particular point will be addressed?
Stuart Andrew
I recognise the intent behind the amendments, which is to add further groups to the list of persons the regulator should co-operate and proactively and constructively engage with. However, we do not think that is necessary, and we believe it would alter the intention and effect of the regulatory principle in question. We have always said that the regulator should take a participative approach to regulation, which means to co-operate constructively with the regulated industry where possible.
The principle’s original intention was to guide the regulator to take that approach, which might not otherwise have been implicit, since the natural instinct for regulators may be not to co-operate with the persons they are regulating. By contrast, for other groups such as fans and members of local communities, it is implicit that the regulator should engage with them where appropriate, not least because the sustainability objective of the regulator is in the very interests of fans. Indeed, fans and local communities are the key consumer group that the regulator is established to protect. They feature in the very purpose of the Bill in clause 1.
My concern is that to list every possible stakeholder that the regulator should engage with during the course of regulation would be a slippery slope that could impact on the effectiveness and, crucially, the speed of the regime. That is not the intention of this principle, nor is it necessary detail for the face of the Bill.
I absolutely recognise that players and fans have a huge role to play in football. It will be for the regulator to engage with those stakeholders during the appropriate process. That is why, absolutely, where collaboration is working well, we would expect the regulator to continue that. Having a comprehensive list might mean that we miss out a group that we would like the regulator to consult. It might also mean that the regulator then feels obliged to consult that entire list on everything, whether appropriate or not, clogging the regulator up, if we are not careful.
Damian Collins
I am following what the Minister is saying carefully. Does he believe that it would be appropriate for the regulator to require the clubs to engage effectively with their fans, as the Bill asks them to do, and to ensure the welfare of their players, and that the regulator should stipulate that the clubs set out how they will do that through their corporate governance statement, as part of the licensing regime? When we consider schedule 5, it might be appropriate to reference some of those points specifically in the Bill as part of the licensing condition.
Stuart Andrew
My hon. Friend makes some interesting points. We will come to those measures later. I am slightly nervous about having a prescriptive way of engaging with fans. Depending on which club it is, it might be that the way a club engages its fans absolutely meets what the fans want. They might recognise that it is a good working relationship, which achieves the objectives they want. What we want is a minimum standard. Perhaps that is what he is alluding to.
Damian Collins
I think my right hon. Friend is right. I would not suggest a prescriptive requirement, but simply a requirement for the club to state its policy.
Stuart Andrew
Absolutely, and we will come to that later in the Bill. I take on board the point made by the hon. Member for Barnsley East about the health regulator, for example. We do not need to tell that regulator to co-operate with the very people it is designed and obliged to protect the interests of, so we are following the same pattern here.
Rachel Hopkins
I listened to what the Minister said, but a number of regulators have statutory consultees, including groups of people who are involved in that industry or the service that they receive. I am coming from that point, which is why I would like to see them on the face of the Bill.
Stuart Andrew
I understand the hon. Lady’s point. I do feel confident, and I am trying to make this as clear as possible, that I cannot envisage why the regulator, where there is an issue that affects the fans, would not be looking at that. We will continue to look at this very carefully and make sure that we have got it right. I want to make it very clear, as the Minister, that we expect fans to be very much part of this process. That is why I said that clause 1 was so important in making that point right at the very outset.
Stephanie Peacock
I appreciate the Minister’s response. He said that it could be quite burdensome to engage with every stakeholder, but that is not what this amendment seeks to do; it aims to lay out what we see as the most important ones. That includes players and fans, without which we could not be here. I think the Minister said that that is implicit. Why not make it explicit? Going back to that argument around burdens, the Bill mentions engagement so far as is “reasonably practicable”, so there is already that safeguard for the regulator. For that reason, I would like to press amendment 9 to a vote.
Ian Byrne
The Minister spoke about a stakeholder list, but actually the amendment was just about supporters. They asked for that single word, “supporters”, just to be on the face of the Bill. I think it would make a huge difference to supporters across the land if it was enshrined in the regulator’s principles. I think it would genuinely make a massive difference, so I do hope the Minister considers that at the next stage.
Stephanie Peacock
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 9, in clause 8, page 5, line 33, at end insert—
“(iv) football fans,
(v) football supporter organisations,
(vi) any local community groups that the IFR considers relevant,
(vii) employee groups and unions with members employed by football clubs, and
(viii) professional football players and their representatives.” —(Stephanie Peacock.)
This amendment expands the list of those whom the IFR must engage constructively.
Stuart Andrew
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. They are hugely unobjectionable but fundamental principles that should help to establish the regulator’s mode of operating and culture. The regulator must have regard to these 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 a participative approach to regulation, where the regulator should look to co-ordinate and co-operate with clubs, individuals at clubs and competition organisers. This reflects that the ideal regulatory environment is one where all stakeholders are working towards the same goals. The third principle encourages proportionality. The regulator should always look to choose the least restrictive option that delivers the intended outcome, and be able to justify why any restriction or burden is worth it for the benefits expected.
The fourth principle encourages the regulator to acknowledge the unique sporting context it is regulating within. For example, it should consider the existing rules and burdens clubs are subject to, and that market features—such as transfer windows—impose unique constraints on clubs.
The fifth principle encourages the regulator to apply regulation consistently, while still ensuring 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 different risks. The regulator must take this into account when regulating. When clubs are equally risky, they should face equivalent requirements.
The sixth principle encourages the regulator, where appropriate, to hold the individuals responsible for making decisions at a club accountable for the actions of the club and its regulatory compliance. For too long, clubs and fans have suffered the consequences of bad actors and mismanagement by the individuals calling the shots.
The seventh and final principle encourages the regulator to be as transparent as possible in its actions. While the regulator will handle some sensitive information that should not be shared, it should look to provide and publish appropriate information on decisions wherever possible. It is important that the regulator, and its regime, are open and accessible to the industry, fans, and the general public.
Stephanie Peacock
I am pleased to welcome this clause, which sets out the principles with which the regulator will regulate. Along with clear objectives and duties, as well as the guidance which we will go on to discuss, the principles will provide the regulator with clear direction and transparency in its dealings, which have long been missing from football governance. In particular, I would like to welcome the principle of proportionality. This principle should be very reassuring to well-run clubs who may otherwise have feared an over-burdensome regime. The proportionality requirement will ensure that where clubs are running sustainably, with low risk of harm, the regulator will have less of a role. In return, any restriction that the regulator does impose will be linked to a beneficial outcome.
It is also good to see the importance of consistency recognised, so that the regime is applied fairly, while acknowledging the relative circumstances of clubs. It is important that regulation is applied in the same way, where circumstances and risks are also the same. However, there may very well be differing conditions at the very top of the Premier League, in comparison to the National League, where I know there are fears about the burden of compliance, as we heard in our evidence earlier this week. The principles should help to alleviate any fears that the regulator will act without nuance on these differences. It will be an appropriately tailored regime, while maintaining a fair application of the rules overall. This is something that I am sure we will revisit multiple times in Committee.
I have a few questions I would like to clarify on these principles, including how the principles have changed since the White Paper. The initial document set out 10 proposed regulatory principles that were described as “basic and fundamental rules” for the regulator to follow. In the Bill, however, we are left with just seven. Some of this is due to condensing the principles into a smaller number. I understand the desire to not be over-wordy, but I do question whether that was necessary. For example, although the concepts of coherence and being context-specific overlap, each deserves an individual consideration.
Perhaps more concerning is that, looking closely at what has changed, some of the principles have been left out altogether. One clear omission is the principle of bold enforcement. The White Paper described how this principle would work as follows,
“When advocacy is ineffective, or in critical situations, intervention and enforcement should be bold. Sanctions should be strong and aim to deter future non-compliance.”
I am interested to hear from the Minister why this has been left out of the Bill. It is, of course, incredibly important that the regulator is not unduly heavy handed but, given the requirements for proportionality and constructive working, it is interesting that this is not complemented by the principle of bold enforcement, when this is actually necessary in critical situations.
Another omission is the principle that all decisions taken by the regulator should be evidence led. In the White Paper this was framed as being important so that all the regulator’s decisions can be defensible under scrutiny, being backed up by data, investigation, and information. Could the Minister give a reason as to why we would not want to see a regulator that puts data and evidence at the core of decision making? That is surely the intention of the Bill, and we cannot have regulation based on whims alone.
Stuart Andrew
I have to say that some things are not appropriate for the face of the Bill. Office of the Parliamentary Counsel advice tells us that to have bold enforcement does not do anything legally. Much of the work that the hon. Member alluded to, such as the advocacy-first approach and looking at the evidence—we will come on later to the sanctions a regulator will have at their disposal—involves trying to work with clubs to adhere to the conditions, and to get them on a stable footing before we get to that stage.
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.
Stuart Andrew
We are committed to establishing the regulator as fast as possible post the passing of the Bill. To that end, we are building the regulator in shadow form within the Department for Culture, Media and Sport in parallel to the passage of the Bill, to enable the regulator to hit the ground running once it is legally established.
On the creation of the regulator, it will be necessary for property, rights, liabilities and staff held by the shadow regulator within DCMS to be transferred to the regulator. The most appropriate vehicle for affecting those transfers will be a statutory transfer scheme, as has been used in similar situations involving transfers of assets following the transfers of functions between public bodies. The details of such transfers will be determined at the point of transfer.
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
Stephanie Peacock
I beg to move amendment 11, in clause 10, page 6, line 21, at end insert—
“(ba) an evaluation of the potential impact of ticket pricing and kick off times on fans and make recommendations in accordance with that evaluation.”
The Chair
With this it will be convenient to discuss the following:
Amendment 6, in schedule 4, page 93, line 10, after “issues” insert “including ticket pricing”
Amendment 18, in schedule 4, page 93, line 12, at end insert—
“(f) match ticket prices and kick-off times”.
Stephanie Peacock
I welcome clause 10, which we will debate later on. It is an important provision that will require the regulator to conduct a first of its kind evidence-gathering exercise on the football industry, helping to build an objective evidence base to underpin the regulation of the sector.
I will now focus my comments on amendments 11 and 18 in my name, and amendment 6, which is in the name of my hon. Friend the Member for Liverpool, West Derby. The amendments focus on the issue of kick-off times and ticket prices. My amendments advocate for fans to be consulted on those two topics, and for the state of the game review to look at the impact of those topics on fans. I will start with why the inclusion of ticket prices is important in both cases, before speaking briefly on kick-off times.
Ultimately, if someone cannot afford to go to a game, then almost any other matchday issue will no longer be important to them. That is why ticket pricing is so crucial. If someone cannot attend the games of the club they love, many of the other issues around fan engagement will become almost irrelevant. Unfortunately, in recent years the cost of attending a football game has continued to accelerate in a way that has priced many longstanding supporters out. That has not necessarily been due to poor intent on behalf of clubs; as clubs face further financial hardship and fans face the brunt of the cost of living crisis, ticket prices have often been forced to swell at a time when fans have increasingly less to spare.
Not to single out any particular club out, but instead to take an example, Nottingham Forest season tickets for next year have increased on average by 28% for adults and 11% for children. In some price brackets the rise is even bigger. A child’s ticket for next season can be bought for a blanket price of £190, up from the cheapest option of £90 this year—that is an increase of 111%. I do not know the details of Nottingham Forest’s finances, and it is not for politicians to decide whether it is making the right commercial decisions. Indeed, the club said on social media that renewals on season tickets are up 50%, compared with last year, which shows there is still plenty of demand for seats. However, the public response of fan groups has confirmed that there remains a group who feel matches are no longer affordable. Those fans have been attending games week in, week out; they are members of the community that the club is based in. The loss of those people matters, and the regulator and clubs should care about it.
Ian Byrne
On the point about supporters not dictating ticket prices, in 2013 the supporters came together and fought for a price cap on away ticket prices, because clubs, left to their own devices, were pricing them out of the game. I think the Arsenal-Liverpool game in 2013 was the tipping point—I think that was £68. It was felt that that was unsustainable, and that was happening right across the football pyramid. Supporters came together, campaigned and got the Premier League to sit down with them in a room and acknowledge that it was getting too expensive, and a £30 price cap was then designated. The atmosphere of games was a unique selling point for the Premier League. It was willing to price supporters out, and it was supporters who brought it to its senses.
Stephanie Peacock
That is a good example that highlights that well-run clubs will want to hear from fans on the issues that matter most to them. Of course, the ability of fans to attend games is incredibly relevant to the financial sustainability of every club. Match-day revenue is a crucial pillar of club finances, and of course getting pricing right will require much more than fan input alone, but I believe that at the very least fans deserve to have their voices heard on the matter, and they have something to offer clubs in return.
Robin Millar
It is true that there is a sense that clubs are starting to treat fans as extras who pay for the privilege in a televised spectacle, but surely the hon. Lady would not want the regulator to interfere with market dynamics and a club’s commercial approach. I am struggling to hear that in her speech. I get that these are important issues, but I am not quite sure why the regulator should get involved.
Stephanie Peacock
I completely understand the hon. Gentleman’s point, and we respect the fact that it is a commercial decision. Obviously, like me, he will have heard the evidence sessions. Fan groups said time and again that this is a really important issue and that they are not being consulted meaningfully. My hon. Friend the Member for Liverpool, West Derby gave a good example of the benefit to fans; we are simply trying to highlight that point, because we want that meaningful relationship with fans to be as constructive as possible.
I will briefly move on to kick-off times. The FSA says that one of the biggest sources of complaints to its inbox is match-going fans complaining about the scheduling of games. That is not just grumbling about inconvenience; late changes to scheduling can impact on fans’ lives and finances. With good notice for games, fans can book time off work, access advance rail tickets and accommodation, and budget accordingly. Late changes to kick-off times, which are becoming increasingly common, mean that fans are forced to make expensive cancellations or spend large sums on last-minute public transport and hotel bookings.
If the purpose of the Bill is to ensure that the game continues to serve the interests of fans and contribute to the wellbeing of local communities, the regulator must at least be taking note of the areas that matter most to fans. To reiterate, I do not believe it would be right for the regulator to take any kind of proactive role in dictating to clubs and competition organisers when matches should be played, but as I have said many times before, Ministers have repeated themselves over and over about how important fans are to football, so if that is the case, both the state of the game report and the clubs, when consulting fans, should be looking at the areas that matter most to those people.
Stuart Andrew
I absolutely recognise that issues such as ticket pricing are really important to fans. Indeed, match days, as others have said, would not be what they are without the fans. The Government believe it is important that clubs consult fans on key off-pitch issues that impact supporters, including operational and match-day issues. These provisions, and the wider provisions for fan engagement, will ensure that fans have a voice on the issues that are most important to them, but it would not be appropriate—the hon. Member for Barnsley East was alluding to this—for the regulator to be a fix for all of football’s woes. Rather, it will be set up with a tightly focused and defined scope and purpose, to tackle the specific market failures that carry a risk of significant harm to fans and communities.
Ian Byrne
I do not think the supporters expect the regulator to fix ticket prices. What they are expecting the regulator to do is to ensure that the clubs go into dialogue with the supporters, so that they can understand the difficulties that supporters may have in relation to affordability. Also, as we heard during the evidence sessions today, many decisions are being made by clubs instantaneously, or within hours, and with zero consultation, which is a cause of massive discomfort. We heard about Arsenal and Tottenham football clubs getting rid of concessions. My own football club, Liverpool, made a decision to increase ticket prices with zero consultation. That is what needs to stop. These are important things. I link this to the heritage element: if we price football supporters out of the game, we lose the heritage of football.
Stuart Andrew
I absolutely understand the hon. Gentleman’s point. It is why, on page 93, the Bill specifically says that the “relevant matters” include
“matters relating to…operational and match-day issues”.
I encourage the clubs to speak to the fans about these very issues.
The Bill is very focused on sustainability in order to protect the long-term future of clubs, in the interests of the fans and the local communities. That means that the regulator will not intervene directly on issues outside this scope—including match scheduling and ticket prices. Issues of that kind are for football to address. It is well within the gift of the leagues and the authorities to intervene if clubs are not getting it right.
The purpose of the state of the game report is to allow the regulator to better understand the finances and economics of the industry and its individual clubs. As industry experts said on Tuesday, the state of the game report will allow the regulator to look forward as well as in the rear-view mirror. In turn, that allows it to deliver on ensuring the sustainability of clubs. To specifically require the regulator to consider ticket pricing and match scheduling as part of the report would detract from that purpose.
Mr Betts
The Minister is saying that this is a job for the leagues and the clubs. One problem with the legislation—it relates to the point made a few minutes ago by my hon. Friend the Member for Liverpool, West Derby—is that clubs consult their own supporters. The real argument in the Premier League a few years ago was about the price of tickets for away supporters. How do clubs consult on that? Why should not the regulator, in looking at the sustainability of the game, consider the impact on the future of the game of pricing out away supporters?
Stuart Andrew
Again, the clubs will have that engagement and raise those points with their own individual club—the away clubs can raise the issues within their club. This is actually putting it into legislation. It gives them that opportunity, which does not currently exist.
The Government do not believe that amendments 6 and 18 are necessary, as we expect that
“operational and match-day issues”
will already capture ticket pricing, and kick-off times are ultimately a sporting decision. It is not for the regulator to intervene on the sporting calendar, but I do recognise the issues that it causes for fans. It has been raised in Culture, Media and Sport questions with me on a number of occasions, and I have raised it with the authorities. They have promised to come back to me although, in fairness to them, these decisions are sometimes out of their control too. It is quite a challenging area.
The Government would welcome any club that chose to go beyond the relevant matters and consulted fans on kick-off times and everything else. However, as I have just mentioned, it is not always an issue that clubs have enough control over to adequately consult fans and respond to opinions. Therefore, to mandate them to do so could be problematic.
For those reasons, I am not able to accept the amendments and I hope the hon. Member for Barnsley East’s will therefore withdraw them.
Stephanie Peacock
I appreciate the Minister’s comments. I am happy not to move amendment 18 but I would like to proceed to a vote on amendment 11.
Question put, That the amendment be made.
Stephanie Peacock
I beg to move amendment 10, in clause 10, page 6, line 24, at end insert—
“(2A) A state of the game report must, notwithstanding whether any women’s football competitions have been specified, consider the state of women’s football in England.”
This amendment would include the women’s game in the scope of the State of the Game report.
Amendment 10 will ensure the women’s game is another area that is explicitly required to fall in the scope of the state of the game report. The Secretary of State will have ultimate discretion over which competitions are covered by the regulator but, as my new clause 1 implies, I believe when it comes to the women’s game they should have the ability to review this after the appropriate time has passed.
To make that decision, it is important that Ministers have just as clear a picture of the women’s professional game as they do the men’s. The state of the game of the report seems like the natural place for this picture to be built. Not only will the regulator be able to build a comprehensive and objective evidence base regarding the women’s game, without the influence of vested interests, but, given it is to be repeated at regular intervals, the reviews will also be able to show how the women’s game is changing over time and cross-reference this with the comparative picture in the men’s game.
Without the women’s game being included in the state of the game report, it is unclear how Ministers will be able to make informed decisions on its inclusion within the scope of the regulator in years to come. Likewise, as financial sustainability rightly becomes a focus in the men’s game, we must ensure this has no negative consequences for the growth of the women’s game. Indeed, it would not be the first time that women’s teams have been asked to make sacrifices in order to ensure a men’s side has enough funding. When both men’s and women’s teams at Reading were relegated last year, it was the women’s team who were forced to go part-time as part of a decision that the CEO said was a “difficult but necessary financial” solution. We must avoid this happening on a systemic level as a result of what otherwise would have been a positive change to the men’s game.
Including women’s professional football in the state of the game report will enable a level of transparency over issues like this which, in turn, will breed accountability. As I have spoken to previously, the women’s game is at a formative and delicate part of its growth cycle. It has huge potential. Stadium attendance and broadcast audience records continue to be broken. Two consecutive Lionesses have won Sports Personality of the Year and UEFA estimates that European women’s football could see a sixfold increase in commercial value over the next decade. For this growth to be sustainable and beneficial, we must ensure standards are set in the right place at the right time. A comprehensive overview of the state of the game should help to achieve this. Of course, the regulator may choose to cover this issue anyway, but I believe that this is an important enough aspect of football that there is significant risk if it is not included in the general scope. I hope Members will support me and I am very interested to hear what the Minister has to say.
Stuart Andrew
The purpose of the state of the game report is to allow the regulator to better understand the finances and economics of English football, and is currently intended to include the top five tiers of men’s professional football. That, in turn, informs the regulator’s approach to the exercise of its functions and decision making across the regulatory framework.
The amendment would require the regulator to, in addition, consider the state of women’s football in England in the state of the game report, but we have been clear that that is not the intended scope of the regulator’s functions. As we set out in the White Paper, consultation response, and the Bill’s accompanying explanatory notes, we intend this to be for the top five tiers of the men’s professional game. That reflects the fact that the regulator’s scope has been carefully targeted at addressing harm where industry has failed to reform.
That said, where appropriate, the regulator has the ability to share relevant information, guidance and best practice with relevant industry bodies to deliver an effective framework of regulation. Indeed, the Government expects that that could include sharing information with NewCo, the independent entity responsible for managing the women’s professional game. The women’s game is at an exciting and pivotal stage, and should be afforded the opportunity to self-regulate in the first instance. That is why it is not part of the regulator’s intended scope, nor would it therefore be appropriate for it to be within the scope of the state of the game report.
But, even without an explicit statutory requirement, there is nothing to stop the Government or industry looking into women’s football and the unique challenges that it faces. Indeed, this Government have remained committed to supporting women’s football at every opportunity, including with the review that I mentioned a moment ago. In our Government response to that review, we demonstrated our support for all 10 strategic recommendations, and we believe that those need to be acted on to lift minimum standards and deliver bold and sustainable growth for women’s football at both elite and grassroots levels.
If, in future, the women’s game was brought into the scope of the regulator, it would then fall within the matters to be covered as part of the state of the game report. I would like to reassure Members that the future of women’s football, and addressing the challenges that it faces, is hugely important. However, we think that considering that as part of the state of the game report would not be appropriate, given that the report is focused on matters within the scope of the regulator. For those reasons, I am not able to accept the amendment from the hon. Member for Barnsley East, and I therefore hope that she will withdraw it.
Stephanie Peacock
I thank the Minister for his explanation. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Football governance statement
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss clause 12 stand part.
Clause 13 stand part.
Stuart Andrew
Clause 11 provides a power for the Secretary of State to issue a statement on the Government’s policies relating to football governance. A football governance statement can be used only to flag issues within the scope of the regulator’s regulatory regime and should not be used to direct its day-to-day operations.
The regulator’s general duties, set out in clause 7, require it to “have regard” to any football governance statement when exercising its functions under the Bill. It is common practice for the Government to issue a similar statement with other regulators. The clause is an appropriate and proportionate power, which will help to give assurance to the Government and Parliament that the regulator is acting within its regulatory scope and has regard to arising issues. It will not interfere with any daily operations or affect the independence of the regulator.
On clause 12, the football industry should not be left to piece together what is expected of it based on the legislation alone. That is why the clause empowers the regulator to prepare and publish guidance on the exercise of its functions. That guidance will be crucial to translating the legal framework in the legislation 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, hopefully, improve compliance. The clause sets out that the regulator must publish guidance about the exercise of its functions under specific sections of the Bill and also permits the regulator to publish guidance about the exercise of any of its other functions. The regulator must consult any persons it considers appropriate before publishing guidance for the first time and before revising guidance in future, unless those revisions are minor. That will ensure the regulator takes 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. That guidance is an opportunity to provide some additional detail as to how the Government intend the regime to be implemented, which was not suitable for inclusion in legislation. The industry and fans alike have been clear that they do not want to see ongoing Government involvement in football. That is why the regulator must have regard to the Secretary of State’s guidance but is not obliged to follow it.
Stephanie Peacock
Clause 11 allows the Secretary of State to prepare, publish and lay before Parliament a football governance statement setting out the policies of the Government that relate to the governance of football, to which the regulator should have regard. First, I want to acknowledge that it is right that the regulator’s processes are independent of political influence. The core purpose of the new body is to be given independent jurisdiction over a remit focused on the sustainability of English football and it should have autonomy over its decision-making processes. I know that the likes of the Premier League are concerned that the statement might jeopardise that independence. Can the Minister confirm otherwise? I am sure he spoke about that in his remarks, but he can add more when he gets to his feet again.
Regardless of that, the independence of the regulator does not mean that there will be no interaction between its work and the will of the Government on football governance more broadly. It will therefore be helpful for the regulator to have a clear statement from the Government on relevant policies that might have an impact on its work. It is right that the statement is non-binding, to hopefully give the regulator the contextual information it needs without compromising its independence. It is also right that the statement cannot contain policies that are inconsistent with the purpose of the Bill or the regulator’s objective. That means that Government policy and the regulator will be united on the cause of ensuring the sustainability of English football. I am hopeful that the clause will therefore act as another confirmation that the independent regulator will work collaboratively within the many existing structures that have an impact on the game.
As the hon. Member for Chatham and Aylesford said on Second Reading, clauses 12 and 13 will be key to how the regulator evolves. Indeed, many of the questions I will ask the Minister in Committee are on topics that I believe will likely be answered more fully as part of the guidance that will accompany the Bill’s provisions. In short, the Bill is intended to provide a robust framework, and the guidance will flesh out how that framework can be translated into a real-life explanation of how the regulator will work in practice.
The guidance will improve transparency while also providing clarity for the competitions and clubs that will have to comply with the new regime. On clause 12 in particular, which relates to guidance that will be published by the regulator itself, that set-up will also enable the regulator to have some autonomy in the detail of its approach, subject to proper consultation and clear parameters set by the Bill. The IFR guidance on how it will exercise its functions relating to the discretionary licence conditions will be mandatory, with further guidance in other areas being optional. That will be incredibly important for clubs, allowing them to understand what the regulator seeks to achieve through the use of club-specific licence conditions and to become familiar with the detail of how the regime will be enforced.
There are many further areas in which I believe the IFR guidance will be beneficial so that the minimum standards are set. One area that springs to mind, and that I am sure we will go on to discuss, is how clubs can ensure their fan consultation meets the regulator’s expectations, as well as the requirements in the Bill. I would be interested to hear from the Minister on any other areas in which he believes guidance would be helpful. As with the state of the game report, the timely publication of the guidance will be crucial. Clubs and competitions will want clarity at the right time as they prepare for and adjust to the new regulatory regime. Can the Minister provide some insight on the timelines to which the IFR will or should be working to with regard to the guidance on passage of the Bill?
Clause 13, “Guidance published by the Secretary of State”, will primarily benefit the IFR. It is important that the regulator is able to understand the full intention behind the framework that the Bill provides so that it can exercise its functions accordingly. It is right that the guidance involves consultation with the IFR and relevant parties so that the resulting guidance is genuinely useful for facilitating the IFR’s work on football governance. In combination with clause 12, this will provide the colour to the clear boundaries that we are working to set through this Bill.
Stuart Andrew
I absolutely want to assure the hon. Lady about independence. It is essential that the regulator can deliver its regime free from any undue influence from industry or Government. However, as is the case with other regulators, it is appropriate that the regulator is accountable to both Parliament and Government. Holding it to account is also important to industry, which is why the Bill provides for that in a way that is proportionate while also protecting the regulator’s operational independence.
It will be for the regulator to determine when and where it publishes its guidance. We do not specify where it should be published, but we strongly expect that it will be published on its website in an easily accessible format in the way that most other regulators do, such as the Financial Conduct Authority with its handbook.
Robin Millar
Could the Minister imagine a situation in which the Secretary of State issues guidance as per clause 13—for, example, on some of the issues raised by the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock)—and the IFR then subsequently issues its own guidance as per clause 12?
Stuart Andrew
Yes, I have been very clear that the regulator must have regard to statements from the Secretary of State but is not compelled to follow them entirely. That is an important safeguard to ensure that independence in the setup that we are establishing.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clauses 12 and 13 ordered to stand part of the Bill.
Clause 14
Annual report
Question proposed, That the clause stand part of the Bill.
Stuart Andrew
The clause requires the regulator to report annually to Parliament on its activities 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 in the annual report to reflect further specific activity undertaken by the regulator or wider industry that year. That will help to ensure that the regulator produces its annual report consistently each year, and it will also ensure that it captures all relevant information, thereby allowing Parliament to have adequate oversight.
Stephanie Peacock
It is right that the independent regulator be required to submit an annual report on the exercise of its functions. In the interest of transparency and accountability, I believe it is standard practice for regulators to produce such annual reports and accounts, and the Independent Football Regulator should be no exception, so I have no particular worries or further questions.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mike Wood.)