Grand Committee

Wednesday 13th November 2024 Grand Committee

Wednesday 13 November 2024

Arrangement of Business

Wednesday 13th November 2024 Grand Committee

Announcement

16:15

[The Deputy Chairman of Committees (Lord Duncan of Springbank)]

My Lords, we seem to have the hard core gathered here this afternoon. The Committee knows the drill: we are not expecting any votes but, if there is one, we will suspend the sitting and dance off to the Chamber, so let us kick off.

European Forest Institute (Immunities and Privileges) Order 2024

Wednesday 13th November 2024 Grand Committee

Considered in Grand Committee

16:15

Moved by

[Baroness Chapman of Darlington]

That the Grand Committee do consider the European Forest Institute (Immunities and Privileges) Order 2024.

[The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)]

My Lords, copies of this order were laid before this House on 15 May 2024. The order was laid in draft before Parliament on 15 May, in accordance with the International Organisations Act 1968. It is subject to the affirmative procedure and will be made once it is approved by both Houses. The order was approved in the House of Commons on 23 October 2024.

The main legal recourse to grant privileges and immunities to international organisations with a presence in the United Kingdom is the International Organisations Act 1968, which specifies the maximum privileges and immunities that may be accorded in the UK to various categories of international organisations. The provisions of the Act are applied to different organisations by means of Orders in Council. This order will confer on the European Forest Institute, referred to as the EFI, a bespoke set of privileges and immunities to enable the organisation to function and operate effectively in the UK. It does not confer legal capacity, as this was conferred on the EFI in the European Forest Institute (Legal Capacities) Order 2005.

This order will contribute to the fostering of closer collaboration between the EFI, its members and the UK Government, and support the establishment of an EFI UK office. In addition, in granting these privileges and immunities, we will be able to host an expansion of the EFI’s international partnerships facility in the UK through the opening of a UK office. The international partnerships facility is a global centre of knowledge and expertise that supports policy and governance reforms to improve forest governance and safeguard the world’s forests.

The EFI would host a small, permanent UK-based team, as well as drawing internationally renowned expertise into the UK. With London a major hub for private sector climate finance, there are potential opportunities to bring international forest and finance experts together to foster new financial initiatives, aimed at protecting the world’s forests and tackling climate change and nature loss. The order affords the director, the head of office and EFI staff members a bespoke set of privileges and immunities which diplomatic agents of a diplomatic mission established in the UK are entitled to, including an exemption from the suit and legal process. However, no immunity is conferred in the case of a motor traffic offence or damage caused by a motor vehicle. This is now a standard clause included in statutory instruments and treaties providing for privileges and immunities.

The Government consider these privileges and immunities necessary and appropriate to deliver on the interests and commitments that the UK has towards the EFI. The privileges and immunities conferred will enable its staff to operate effectively in the UK. They are within the scope of the International Organisations Act and in line with UK precedents. The EFI’s board members, and representatives of members, are subject to “official act” immunities. These immunities cover the inviolability of official papers and documents, customs provisions and immunity from suit and legal process, within the scope of official activities. The order also covers the inviolability of the EFI premises and archives, taxes and customs rates, and an immunity waiver.

The support for the EFI’s establishment of an office in the UK is a unique opportunity to reinforce the UK’s leadership on international forests and climate policy. The UK has been involved with the EFI for over 10 years, including through the FCDO’s flagship forest governance, markets and climate programme. Together with the EFI, we have supported national processes on forest and land-use governance in 17 countries across the three tropical forest basins. The EFI is key to that work and the UK remains committed to the organisation. I beg to move.

[Lord Callanan (Con)]

My Lords, I thank the noble Baroness, Lady Chapman, for her comprehensive introduction to this subject. She will not be surprised to know that we are fully supportive of the European Forest Institute. It is a good idea for it to be based in the UK and we support the instrument that the Minister has brought before us today.

The EFI plays a pivotal role in advancing research, fostering innovation and developing evidence-based policy recommendations for the extremely important subject of sustainable forestry. As ecological degradation threatens forests worldwide, the institute has a key role to play and its work is becoming ever more vital. As the Minister said, this order seeks to grant immunities and privileges to the EFI, in line with a number of similar agreements that we have established with other international institutions—I took some of those orders through Grand Committee a matter of months ago. Immunities such as those outlined in the order are essential for allowing the EFI to operate independently, free from local administrative and judicial interference.

The UK has historically been a leader in international environmental co-operation. Supporting the EFI aligns with our commitment to combat climate change. It reflects our shared desire for forests that are productive, biodiverse and resilient against the stresses of modernity. The only question I have for the Minister is whether she has any more of these orders coming forward for other international organisations or whether this is the only one outstanding at the moment. We support this order.

[Baroness Chapman of Darlington (Lab)]

I am grateful to the noble Lord for his support. It is very good when we can agree on important issues such as this on a long-term, bipartisan basis. It is good to be able to work in this way on an issue such as forestry, especially in a week when the Prime Minister and the Foreign Secretary are at COP in Baku, where deforestation and the responsible management of forests will no doubt be discussed. I welcome the support from the Official Opposition.

Motion agreed.

Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024

Wednesday 13th November 2024 Grand Committee

Considered in Grand Committee

16:22

Moved by

[Baroness Blake of Leeds]

That the Grand Committee do consider the Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024.

[Baroness Blake of Leeds (Lab)]

My Lords, I start by thanking your Lordships for attending today’s debate on these four statutory instruments, two of which were raised as instruments of interest by the Secondary Legislation Scrutiny Committee. With the leave of the Committee, I shall, in moving this Motion, speak also to the Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024, the Securitisation (Amendment) (No. 2) Regulations 2024 and the Consumer Composite Investments (Designated Activities) Regulations 2024. The regulations that we are introducing today will ensure effective, proportionate regulation for the financial sector by laying the groundwork both for the reform of certain consumer disclosure for financial services and for effective prudential arrangements.

I turn to the consumer composite investments—CCI—instrument. The PRIIPs regulation was designed to standardise disclosure both across a wide range of more complicated financial investments and across the EU, in an attempt to improve transparency and enable comparison between products for retail investors. However, as noble Lords are aware, the regime was overly prescriptive and burdensome, with the one-size-fits-all template of the key information document—KID—resulting in the presentation of misleading information to consumers on potential risks and returns. The Government took urgent action to address the most pressing issues with the KID in the Financial Services Act 2021, and this SI delivers on the Government’s commitment to wholesale reform of these EU-inherited rules, with a new regime tailored to UK markets and firms.

This SI provides the Financial Conduct Authority with tailored rule-making and enforcement powers to deliver this long called-for reform and to ensure its effective implementation. The new regime for CCIs will have tailored and flexible rules that address the key issues with PRIIPs, and it will support investors to better understand what they are paying for. The FCA’s consultation later this year will provide an opportunity for a full range of stakeholders to provide feedback on the new regime to ensure that it works as intended.

I turn to the PRIIPs amendment SI. I have heard the concerns from industry about PRIIPs—in particular that current disclosure requirements have had unintended consequences for the investment trust sector specifically. The Government have greatly valued the contributions made by this House, particularly those of the noble Baronesses, Lady Bowles and Lady Altmann—I see that they are in their places—in bringing to our attention the impact of these rules on the sector.

Listed investment trusts are a British invention dating back 150 years, and they are unique to the United Kingdom. Representing over 30% of the FTSE 250 and predominantly investing in illiquid assets, including infrastructure projects and renewables, they play an active role in supporting the Government’s growth agenda. The Government recognise that the prescriptive cost disclosure methodology required by the PRIIPs regulation does not reflect the actual cost of investing in these close-ended funds. Industry has told us that this is negatively impacting on its ability to fundraise, and its competitiveness. Therefore, this instrument will immediately exempt listed investment trusts from the current PRIIPs regulation and other relevant assimilated law, as we finalise the replacement CCI regime, delivering on a key industry ask.

Recognising that the pace of legislative reform can be slow, the FCA has already implemented regulatory forbearance so that firms are able to take advantage of this immediately, before this instrument takes effect. This approach is intended as an interim measure and, in the long term, investment trusts will be included in the scope of the CCI regime, following bespoke and tailored rules befitting the industry. I encourage all sides to come together to find a sensible solution under the future regime, once the FCA consults on new rules later this year.

The Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024 make two amendments. The first is a technical change, supporting the implementation of Basel 3.1—the final round of bank capital reforms following the global financial crisis. Bank capital rules are contained in the Capital Requirements Regulation—CRR—which is part of assimilated law on financial services. This SI will enable revocations of the CRR, allowing the Prudential Regulation Authority to replace those revoked parts in its rulebook, while ensuring that the PRA’s rule-making remains subject to appropriate accountability and scrutiny.

16:30

The second amendment will expand the definition of a recognised exchange, moving from referring only to domestic investment exchanges to include those from overseas. This will enable stocks and shares from qualifying overseas exchanges to benefit from lower capital and liquidity requirements when used as collateral to secure financial services. This will broaden our definition, making the UK comparable with international counterparts such as the EU and the US, supporting our competitiveness.

Finally, I turn to the Securitisation (Amendment) (No. 2) Regulations 2024. The SI extends a temporary arrangement allowing UK banks to treat EU securitisation products as though they originate from the UK, provided that they meet the standards of the simple, transparent and standardised framework. This means that banks and insurance firms holding such products may be able to benefit from lower capital and liquidity requirements. The current arrangement is due to expire at the end of December 2024, which would mean that no additional EU STS securitisations would be able to enter into the temporary arrangement after this date. This could impact on the range of investment options for UK market participants, so the Government are legislating to extend this arrangement to June 2026. This extension will allow UK authorities to make a more informed decision about the non-time-limited designation of EU STS securitisation products. This decision should take into consideration the recent EU securitisation regulation, adopted in June 2024. These regulations are expected to be implemented by the three EEA EFTA states over 2025. The extension granted by this instrument will ensure that a single decision can be taken with respect to the EU single market.

In closing, these SIs will empower regulators to ensure that our financial services industry is subject to a rulebook that is fit for purpose, more proportionate and tailored to UK markets. I hope that noble Lords will join me in supporting these regulations and their objectives. I beg to move.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I shall speak mainly to the instruments on listed investment companies. I first raised this issue in the House on 6 June last year, attempting to make an amendment during the passage of the Financial Services and Markets Bill. Perhaps history is now catching up with me. I thank the noble Lord, Lord Livermore, then on the Labour Front Bench, for grasping the economic importance of the matter, which he will appreciate even more as Financial Secretary, given the perhaps as much as £40 billion of lost investment in infrastructure, green energy and social buildings.

On one hand, I am pleased with the PRIIPs statutory instrument that was introduced in September, removing investment trusts from PRIIPs, and the cost disclosures part of the MiFID Org regulation and the accompanying FCA forbearance statements. Before I go further, I must flag that this was never about not reporting costs or not providing investors with a full suite of information on fees or all other corporate costs and charges. Investment trusts are listed companies and as such must provide all the transparency for investors that listing requires, including publishing full information in annual reports.

Unfortunately, after the September actions by the Government and FCA, the competitor industry to investment trusts, the open-ended funds and their organisation—the Investment Association—held a members’ meeting and agreed not to do what HMT expected, which has just been iterated by the Minister. They agreed that they would not accept that, at the share level—the investor-holding level—of investment trusts there are zero deductions from investment value.

Convening the meeting, and seeking member agreement, was confirmed by the CEO of the IA, Chris Cummings, at the Lords Financial Services Regulation Committee last Wednesday. Today, Ashley Alder, chair of the FCA, confirmed to the committee that there was no deduction to make from share value —I hope that everyone listened keenly. Chris Cummings further said last week that they did not want any changes to the current practice—the practice that has caused all the problems—until the FCA has completed its consultation and done all the new rules. They do not want any of the interim provisions. In another slide presented to the members’ meeting, it was shown that this could take until 2027. That is plenty of time for the misinformation to continue and to destroy the sector with which they compete.

There are other players assisting them in this anti-competitive effort, including the majority of large retail investment platforms, with the laudable exception of ii, although there may be others. Hargreaves Lansdown, which is the largest and also a member of the Investment Association as it is also a fund manager, spoke at the IA members’ meeting to explain how they—meaning itself and other platforms—would block retail investors from purchasing the shares of investment trusts that put “zero” in the costs to be deducted field of the European MiFID template, or EMT, which also generates the deduction from investment illustrations on platforms. After the meeting, Hargreaves Lansdown, Fidelity, and possibly others that I have not seen, sent out emails to fund managers and investment trust boards and commenced blocking operations for those investment trusts that dared to enter “zero”. Not surprisingly, many investment trust boards capitulated out of fear of being disconnected from the marketplace.

What happens as a result is a continuation of the bogus practice of telling investors they will lose large amounts off the share value of their investment—and guess what? They might buy an open-ended fund instead. For example, if, on the Hargreaves Lansdown site, you click on “How much will it cost?”, there are computations showing—wrongly—that on, say, a £5,000 investment over five years there will be management fee deductions, in some instances of well over £1,000, and even some causing losses. But that is not the case, because those costs are already reflected in the share price. It is very nice to force your competitors into a corner and keep them there until 2027 or longer, if you can continue to use your might, being 45 times larger than the competing sector you are colluding against.

That brings me on to the second pair of the SIs which, regrettably, have done nothing to address the shenanigans that have gone on for the last few years, or to prevent this vast open-ended fund sector using its size and might to continue to gaslight and bully investors—and even regulators—about the role that market share price plays in absorbing and reflecting the internal company costs, just as does the share price of any listed company. You buy the share; you sell the share—there are no deductions from your share price by the company. In fact, I would like to know what mechanism people think that could be done by.

The second SI continues to classify investment trusts as consumer collective investments, despite market-wide concerns expressed in consultation responses by some 340 respondents. The Treasury says that there will be special treatment, but it is not in the statutory instrument. All it has done is amend the old definition of a CCI in an admission that previously, investment trusts were not properly within the definition—all part of the old misinterpretation of “value”.

There has been no clarification of the circumstances in the market. It needs to be clear that investment trusts are financial instruments, like other shares. They should not be confused with savings products, and they are not covered by the Financial Services Compensation Scheme. They must be given all the recognition that derives from being a listed company, with market-set share price which is the value. Is that in the SI? No. Can you guarantee that the FCA will get it right? No. The CEO has made incorrect statements that investment trusts are savings products and muddled that costs are not zero, clearly referencing net asset value, which is not what you hold.

I am sorry to say that this SI is a poor example of what we expected when the future financial framework was proposed and consulted upon. We were promised policy guidance in the statutory instruments, and it is not here, even when there have been the direst circumstances that require it and a massive consultation response in favour of it. All that has been set aside, with nothing to show in the legislation. The only policy is saying they are still a CCI, which, after all that has gone before, is not adequate policy guidance. If you want to know what the right kind of guidance might look like, I suggest referring to my own Private Member’s Bill, which we will be discussing on Friday. I am afraid that the job is not yet done.

[Baroness Altmann (Non-Afl)]

My Lords, I too would like to address the statutory instruments relating to the PRIIPs and to the consumer composite investments. I am very grateful to the Government for laying these statutory instruments. I would also like to thank the Treasury and the Financial Conduct Authority for the statements they issued in September, and the FCA for its first set of forbearance and its subsequent additional emergency forbearance.

However, like the noble Baroness, Lady Bowles, it appears to me that, despite the clear intentions of the Government and the Financial Conduct Authority, as expressed particularly in the PRIIPs statutory instrument, some parts of the industry are not willing to accept what the Government believe and the FCA have clearly indicated is the right position. That is a particular concern to me.

The Minister rightly pointed out that the aim is to improve transparency and enable comparison between products for investors. The whole point of cost disclosures has always been to help consumers and investors—whether they are retailers, small institutions or others—understand what they are going to be paying for any investment product they buy. We know that, in the past, many of these costs were hidden. As the Minister said, investors need to better understand what they are paying for the product they buy. It needs to be accurately reflected to them, so they know the actual cost of the investments they are considering making or that they are holding.

16:45

More than 30% of the FTSE is at risk here, and there is potential detriment, which it is estimated has already materialised to the extent of many tens of billions of pounds, to the Government’s desire to support long-term growth and, particularly, sustainable growth. Anything undermining investment in this sector is of significant national consequence, and that is why the Government rightly issued their emergency forbearance. These statutory instruments contain elements of what we were trying to achieve with my Private Member’s Bill, which was supported from all sides of the House, including by the Minister’s Front Bench and fellow Ministers.

That is why we need to take the time and the opportunity, as these statutory instruments are coming before the Committee today, to register the deep concerns and to ask the Minister whether she will meet us and look carefully at what is going on in the marketplace, which looks very much like a collective effort to prevent the Government achieving the agenda they are aiming for and to maintain the position that the Government have already said is unacceptable for as long as possible.

The wording of the statutory instrument intends the UK listed, closed-ended investment company sector to,

“no longer be required to … report, the costs of manufacturing or managing shares”,

in these investment companies. Of course, they need to report them in their reports and accounts, and they do. They can also report them elsewhere, but they should not be reported as ongoing investor costs because they are not.

The instrument, according to the documents in front of us, therefore represents an immediate change in policy to address the concerns about the misleading cost disclosures that have resulted in massive selling and an inability to raise new capital. Sadly, what we have seen—notwithstanding the September report from the Capital Markets Industry Taskforce that specifically highlighted that the Government need to do what they have now done in terms of issuing urgent legislation, clarification and immediate transitional forbearance to stop the disclosure of costs that consumers do not bear as if they do bear them—is wording being used by retail investment platforms to justify banning some investment trusts from their platforms if those investment trusts wish to follow exactly what these instruments, particularly the PRIIPS one which is meant to be immediate, require and wish to see happening. It is quite interesting. It was said, for example,

“We want to ensure retail investors understand the cost of investing so that they can make an informed decision between two investment trusts, or indeed a fund and an investment trust.”

In an email, it was said:

“We expect the EMT”—

that is the industry cost disclosure template that is used to feed the retail platform’s information to its own clients—

“to still include a reasonable representation of the ongoing costs of managing the trust. We do not expect … ongoing cost figures to be zero … Where the charges are updated to zero, we would prevent clients placing further investments into the trust.”

In other words, if these trusts do not enter a figure that they know is not correct and that the FCA has already claimed is not correct, they will not get any investment from the retail platforms.

I believe that in this case the Government and, I hope, the regulator will urgently call in these retail platforms or meet representatives from this House and affected companies to work out how to overcome the intransigence and resistance that cannot be justified by consumer interest but only by some kind of self-interest on the part of those platforms to maintain a position that has become indefensible. However, as they are all doing it, they seem able to browbeat the investment trust sector into kowtowing to something that everybody other than those who do not wish to see it can see is not correct.

I hope that these statutory instruments will be the start. We do not want them not to go through, but it is clear that, given that the industry is seeking to undermine their intent, stronger wording and a more careful assessment of what is happening in the market might be required to achieve what the Government rightly want to achieve, which is more investment in the British success story, which is listed UK investment trusts. They are a much lower risk and diversified way for investors to invest in a portfolio of sustainable growth or other investments. That requires retail investor platforms not to tell investors that they pay costs that they do not pay but to inform them properly in line with the consumer duty that when they are looking to buy these companies, they need to look at much more important factors, such as whether they are at a discount or a premium and whether the type of investment they are investing in is what they wish.

I apologise for taking up the time of the Committee this afternoon, but this is so serious, and it is difficult to know how to get across to a Government and Ministers who have already done what should have been done that this is not working on the ground. There is an urgency to this, which the Government recognise but the industry is refusing to comply with.

[The Earl of Effingham (Con)]

My Lords, I thank the Minister for bringing these statutory instruments before the Committee. I refer noble Lords to my entry in the register of interests. Some of these instruments were developed by the previous Government and some by the current Government. We welcome these measures. Together, they form part of His Majesty’s Treasury’s programme to deliver a smarter regulatory framework for financial services.

The first set of regulations governs packaged retail and insurance-based investment products, known as PRIIPs. This legislation concerns the vital area of retail investment disclosure, which is of great importance to not only the financial sector but everyday British people seeking to secure their financial futures.

The second set of regulations clarifies the interpretation of capital requirements regulation rules and adjusts the criteria for recognised exchanges. This change is essential, as it seeks to ensure that our prudential regulation, particularly in the light of evolving international standards, remains finely tuned to support our unique market parameters.

The third set of regulations refines the transparency, risk retention and reporting requirements for securitisation issuers. It should help bolster investor confidence and market stability, which we all desire. Securitisation, which packages assets together for sale to investors, plays a key role in supporting credit availability and economic growth.

Finally, the fourth set of regulations introduces new standards for consumer composite investment products—those that pull together multiple asset types such as stocks, bonds and other investments. This measure is a prudent step towards fostering trust and accessibility in the UK’s retail investment market.

Although His Majesty’s Official Opposition welcome these changes, we are conscious that we must be careful to avoid overregulation, which could stifle market participation and limit access to credit. Which key stakeholders in the industries affected by these changes have been consulted? In particular, what feedback have banks and insurance companies provided?

We on these Benches really want to see a marketplace that is both free and fair. We believe that consumers deserve clear, accurate and accessible information that empowers them to make informed choices and educated decisions. It is with this principle in mind that we approach these regulations.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank all noble Lords for their contributions on these important SIs. I again emphasise that they represent an important step in ensuring that our approach to regulation of financial services is effective, proportionate and tailored to the UK.

I will pick up on some of the specific points raised. The noble Baroness, Lady Bowles, expressed concern about the FCA consultation. The FCA will consult on its proposals for the new CCI regime by the end of this year, as we have said; we look forward to its final rules being published in the first half of 2025. This will provide an opportunity for stakeholders to provide the necessary feedback on the new regime to ensure that it works as intended. Firms will transition to providing disclosure under the new CCI regime following an appropriate transition period, which the FCA will set out in due course.

Following on from that, I turn to why we are talking about investment trusts and not just shares. As we know, like open-ended funds but unlike other shares, investment trusts have an active investment strategy and associated fees. It is right that these costs should be disclosed to retail investors through tailored disclosure. Nevertheless, the Government recognise that the prescriptive cost disclosure methodology required by the PRIIPs regulation does not reflect the actual cost of investing in these closed-end funds. The proposed new CCI regime will provide more useful and relevant disclosure to retail investors, as well as more flexibility to tailor disclosure to clients, and will be less burdensome for firms to produce.

In response to the noble Baroness, Lady Bowles, on why investment trusts do not have zero costs, the Government recognise that the prescriptive cost disclosure methodology required by the PRIIPs regulation does not reflect the actual cost of investing in these closed-end funds. Nevertheless, it is right that investment trusts, like other products that directly market to retail investors, must provide tailored disclosure on costs, risks and performance for retail investors. This SI gives the FCA the rule-making powers to design a new regime, in consultation with industry, that works for firms and investors.

On why firms are not implementing forbearance now, I say to the noble Baronesses, Lady Bowles and Lady Altmann, that this SI gives legislative certainty to firms ahead of the implementation of the new CCI regime. Although I recognise that there may be some frustrations in the sector, as expressed, the operationalisation of the FCA’s forbearance is a matter for industry and the regulator.

17:00

[Baroness Bowles of Berkhamsted (LD)]

I recognise that the Minister is saying that, ideally, the Government and the regulator have done what they could and industry should follow. Of the two, the Government have been clearer, but we now have a standoff where the regulator says that it is industry’s business and industry says that it is the regulator’s business. Therefore, the starvation of funds from worthy causes is set to continue for at least another year. These are tens of billions of pounds going into just the kinds of things that the Government want: green energy, social housing and infrastructure.

We are talking about tens of billions of pounds—potentially more than you get from an investment summit—so it is strange that the Government are not giving a little more oomph. I imagine the Minister cannot say this straight off, but can the Government strengthen their message and say that these things should be implemented now, or at least when the statutory instrument passes at the latest? There will be no certainty for the future of the investment trust sector if all this is delayed, not actively but passively, for another year.

[Baroness Blake of Leeds (Lab)]

I hear the passion in the noble Baroness’s voice—I think we all can—and I appreciate the frustrations expressed. But, as set out and agreed by this Parliament, it is for the regulator to set detailed rules in consultation with the industry. That is the position we are in.

[Baroness Altmann (Non-Afl)]

I am sorry—I know the Minister would like to make progress, but this is a relevant point. She talked about an appropriate transition period and tailored disclosures required to disclose the costs, because these funds are marketed directly to retail investors. It is not clear to me in what manner the direct marketing occurs, so I would be grateful if she could write to me on that.

Does the Minister believe that there are actual investor costs of holding the shares in a listed investment trust, any more than there are costs of holding the shares of another company that is listed on the UK market? That is the current industry practice—to tell investors that they are charged directly for holding these company shares, which is not true. The noble Baroness, Lady Bowles, and I are trying to understand whether the Government and the regulator recognise that consumers do not have such direct costs and, therefore, recognise the importance of not telling them that they do as quickly as possible—or whether they somehow feel that this is not like another company and, even though there are not direct investor costs, the investor needs to be told that there are in some way. I am a little confused.

[Baroness Blake of Leeds (Lab)]

I thank the noble Baroness. I will write to her to lay out the answers to the questions that she raises. I refer her back to the comments I made about costs earlier in answering.

To expand slightly on where we were before, this is an important moment for everyone. It is appropriate as we move away from EU language to reflect the significant reform of the new regime, which will be tailored to UK firms and markets. We should make sure that we recognise where we are in that process. In practice, the definition of consumer composite investments is closely aligned with the EU PRIIPs. The regime will continue to apply to products where the amount repayable to the investor is subject to fluctuations because of exposure to reference values or the performance of assets not directly purchased by the investor.

[Baroness Bowles of Berkhamsted (LD)]

That is the whole problem. If you purchase investment trust shares, the price is set by the market. Obviously, the underlying investments in some way reflect up into it, but the big difference is that the market decides the value all in, just as it does for any other company.

Let us take two examples. You could buy shares in Tritax Big Box, which is an investment trust that owns property of the sort that Amazon and data centres use. It manages those properties and that comes off what the company earns. It does not go knocking on the doors of investors saying, “We have just repainted—hand over some money”, but, effectively, that is what any investor in Tritax Big Box is being told: when you buy those shares, the management costs are going to be deducted from the value of what you own. That is shown in illustrations on platforms. It is completely misleading, so it frightens investors away and we have the scenario we have. It competes against SEGRO, which is listed as an ordinary company. It owns the same kind of buildings and does the same kind of maintenance. When you go to buy SEGRO shares nobody says, “By the way, you are going to have to have deductions”, but the structures are the same. They are both listed companies. The only difference is that one lists under a different part of the listing rules than the other, but the way the costs work and what is internal to the company is exactly the same.

The definition of CCI as the amount repayable cannot be on the basis of the underlying assets. You can sell your shares only on the market. The amendment has been slightly tailored to say “shares or” to cover the point. I know it is difficult when one first comes across these things, but small semantic things make a huge difference to whether something for good is invested in or is not.

[Baroness Blake of Leeds (Lab)]

I refer to the answer that I gave earlier about costs, but I recognise the detail within the noble Baroness’s question. I commit to write to her on the detail that she raises.

On confidence, in line with the FSMA model of regulation, it is for the expert regulators to set out firm-facing rules. I absolutely agree with that. The new CCI regime will be tailored to the UK, with rules that are more proportionate to ensure that consumers have sufficient information to make informed investment decisions. The regulators remain fully accountable to Parliament and the Government for their actions. In terms of the model of regulation, the House agreed this under FSMA 2023.

Moving on, the noble Baroness, Lady Altmann, spoke about the costs presented in the European MiFID Template. The EMT is an industry-led initiative to support the sharing of key disclosure metrics across the distribution chain. It is not required by legislation. Although I recognise that there may be some frustrations in the sector, the adaptation of the EMT feed to reflect changes to disclosure requirements is a matter for the industry.

[Baroness Bowles of Berkhamsted (LD)]

I am sorry to interrupt again. I can accept that the EMT is an industry standard; strangely, the open-ended funds sector organisation designed it. However, if the result of something that the industry does is systematically misinforming the market, surely that is a matter for the regulator to act on, rather than just saying, “Oh, it’s the industry”. The Minister just said that the regulator is accountable to the Government. If the regulator allows such misinformation to continue despite its consumer duty, is that not the point at which the Government must intervene, if the regulator is accountable to them?

[Baroness Blake of Leeds (Lab)]

At this stage in this debate, let me say that I will write to the noble Baroness to lay out the detail on her points.

Looking forward, the important thing is that all Members with an interest engage actively with the upcoming consultation—I feel as though I do not need to say this. Of course, the detail around these rules will be absolutely critical. This goes across the retail disclosure on the FCA consultation. We look forward to the detailed rules that will be published later this year. I think we all know that, last year, the previous Government consulted on the approach, receiving widespread support as a result of that consultation.

That leaves me to thank noble Lords for this informative debate. I know that further discussions on this matter in the Chamber are coming up on Friday. I look forward to seeing the content of the debate as we move forward but I hope that, at this stage, noble Lords will join me in supporting these regulations.

Motion agreed.

Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024

Wednesday 13th November 2024 Grand Committee

Securitisation (Amendment) (No. 2) Regulations 2024

Consumer Composite Investments (Designated Activities) Regulations 2024

Considered in Grand Committee

17:13

Moved by

[Baroness Blake of Leeds]

That the Grand Committee do consider the Prudential Regulation of Credit Institutions (Meaning of CRR Rules and Recognised Exchange) (Amendment) Regulations 2024, the Securitisation (Amendment) (No. 2) Regulations 2024 and the Consumer Composite Investments (Designated Activities) Regulations 2024.

Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee.

Motions agreed.

Persistent Organic Pollutants (Amendment) Regulations 2024

Wednesday 13th November 2024 Grand Committee

Considered in Grand Committee

17:14

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Persistent Organic Pollutants (Amendment) Regulations 2024.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, this instrument adds three substances, UV-328, dechlorane plus and methoxychlor, to the assimilated persistent organic pollutants—or POPs—regulation in response to the adoption of these three substances as POPs under the United Nations Stockholm convention. The UK is a party to the convention and is therefore obligated to reflect in UK law the listing of POPs under the convention.

In addition, this instrument makes a number of other technical changes to the annexes of the POPs regulation. These include changes to waste concentration limits, specific exemptions and unintentional trace contaminant levels—or UTCs—for some POPs. The amendments, in brief, update and clarify the way that some articles, substances or mixtures containing some POPs can be used, manufactured, placed on the market or disposed of.

This legislative change is permitted by use of the powers available within Articles 7, 15 and 18 of the assimilated EU regulation on POPs. We have worked with the devolved Administrations on this instrument.

POPs are substances recognised as being particularly dangerous to the health of humans, wildlife and the environment. This instrument preserves and adds to the current regime for managing, restricting or eliminating POPs in the UK. Some of the regulations in this amending instrument are needed to implement the UK’s commitments under the United Nations Stockholm convention on POPs. The majority of amendments are informed by updates to the Stockholm convention and, in some cases, following updates made to the Basel Convention guidance on the management of POPs waste, and following consultation.

Let me turn now to the detail of the instrument. At the 11th meeting of the conference of the parties held last year, a decision was adopted to add three new substances called UV-328, dechlorane plus and methoxychlor to the list of substances for global elimination under the convention. This decision was communicated to parties by the UN depository in February 2024. This instrument adds these new POPs to the list of substances that are prohibited by law from being manufactured, placed on the market and used in GB.

Secondly, the instrument provides some exemptions from the prohibitions by allowing the unintentional presence of these three substances at trace levels. These limits define the concentrations at which UV-328, dechlorane plus and methoxychlor can lawfully be found in a substance, article or mixture where they are unintentionally present and found in minimal amounts. Dechlorane plus and UV-328 will also be listed alongside time-limited exemptions for their continued use in specific circumstances. These exemptions are available following agreement by the conference of the parties to the Stockholm convention.

This instrument will make a number of further changes to Annexe 1 of the POPs regulation, including the addition of a UTC level for two POPs that are already prohibited in GB. It will also make amendments to the UTC limits and specific exemptions listed for the substance PFOA, including a provision to phase out or remove exemptions which are no longer required, and tighten the requirements regarding a specific exemption for use of PFOA in PTFE micropowders.

Annexes 4 and 5 of the POPs regulation relate to the treatment of waste containing POPs. This instrument will add or update waste concentration limits for several POPs. In practice, these limits specify the concentration at which waste containing POPs must be diverted from landfill to high-temperature incineration or other appropriate disposal to ensure that the POPs content is appropriately destroyed. Importantly, this includes the introduction of a limit specifically targeted at firefighting foam mixtures containing PFOA, a substance in the PFAS group of chemicals, to ensure environmentally sound disposal of any remaining stockpiles of these foams.

This instrument will update the maximum concentration limits for a number of POPs and add decaBDE, a brominated flame retardant, to the list of PPDEs in annexe 5 of the POPs regulation. Maximum concentration limits set the threshold at which waste handlers can apply to permanently store certain wastes in designated landfill for hazardous waste or salt mines, where it can be demonstrated that destruction is not the environmentally preferred option. The instrument will also add two new European Waste Catalogue codes to the provision: one for fly ash from peat and untreated wood, and one for soil and stones.

Policy development informing this instrument was subject to a public consultation in 2023. In the public consultation, we also stated our intention to prohibit the three new substances once they were adopted for listing under the convention, to implement our international obligations. There have been various opportunities at both domestic and convention level for UK stakeholders to submit information regarding the potential prohibition of UV-328, dechlorane plus and methoxychlor, and their potential adoption for global elimination under the Stockholm convention.

A de minimis impact assessment was carried out. This concluded that there is no indication that the amendments in the instrument are expected to have an impact on businesses, beyond one-off familiarisation costs, and that this instrument is not expected to disproportionately burden small businesses.

The Environment Agency is the delivery body for the POPs regulation for England, and Natural Resources Wales and the Scottish Environment Protection Agency are the delivery bodies for Wales and Scotland respectively. They have been involved in the development of this instrument and have no concerns in relation to implementation or resources.

The territorial extent and application of this instrument is Great Britain. Under the Windsor Framework, the EU POPs regulation applies in Northern Ireland. The devolved Administrations in Wales and Scotland were engaged in the development of the instrument and have consented to it being made on a GB-wide basis.

In conclusion, I emphasise that the measures in this instrument are needed, in part, to implement requirements of the Stockholm convention by adding new POPs UV-328, dechlorane plus and methoxychlor to the list of substances that are prohibited in GB by law. Other amendments included in this instrument ensure that the POPs regulation is adapted to scientific and technical progress in our understanding and treatment of POPs. The draft regulations will allow the UK to implement the Stockholm convention requirements to prohibit, eliminate or restrict the production and use of POPs.

I hope noble Lords will support these measures and their objectives, and I commend the draft regulations to the House.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the Minister for her introduction. I understand why the changes to these regulations have been brought forward, in order to take account of changes to scientific and technical progress, and to stay in line with amendments to the Stockholm Convention on Persistent Organic Pollutants. The UK is a party to this critical convention, and it is important that we ensure that the country and the public as a whole are protected from toxic substances.

The four qualifications for substances being classed as a POP are that they are persistent, toxic, bioaccumulative and subject to long-range environmental transport. This SI makes amendments to the lists of substances in annexe A of the convention. The SI lists these substances as UV 328, dechlorane plus and methoxychlor. The instrument also lists unintentional trace contaminant UTC limits for those substances, and adds two new POPs to this category which are already prohibited under the ordinary POPs regulations: hexachlorobenzene and pentachlorophenol. There are other substances named which are covered by the SI, but I readily admit that, not being a chemist or a scientist, some of the detail is outside my experience.

Paragraph 5.8 of the Explanatory Memorandum refers to certain POP waste being permanently stored in designated hazardous waste landfill or salt mines when destruction is not the environmentally preferred option, as the Minister referred to. I assume that the salt mines referred to will be depleted and never brought back into use. Can she provide reassurance on this matter?

The SI also expands the scope for three offences under the POP regulations of 2007, but neither the Explanatory Memorandum nor the SI says what the penalties for the offences are. Can the Minister provide clarification on this?

An eight-week public consultation took place from 3 March to 23 April 2023. There were 58 responses. Of those, 14—24%—were from industry associations, 16% were from large businesses of 250 or more employees, 16% were from local authorities, 9% from charities, 5% from small and micro-businesses of less than 50 employees, 3% from medium businesses of 50 to 249 employees, 2% from NGOs, 2% from a government body and 2% from a consultancy. There was also 9% from “other”. I wonder who the “other” were, as the website did not say. This is a very wide range of responses on quite a specialist area. The consultation response and the Government’s responses are very detailed and are on the website. I am therefore satisfied that those who will have to implement these regulations know what is likely to happen.

The regulations come into force 21 days after the day on which they are made, which I imagine will be one day next week. Can the Minister confirm this? This is a very specialist subject, but it is important that toxic substances receive adequate regulation. I believe the SI does this and I am happy to support it.

[Lord Roborough (Con)]

My Lords, I also thank the Minister for bringing these regulations to the Committee and for opening this debate. We wholeheartedly support the Government in their work to build on our strong track record of tackling pollution and effectively managing substances that are persistent pollutants.

These regulations amend EU regulation 2019/1021 of the European Parliament and Council on persistent organic pollutants to alter the rules for the management of certain substances under the persistent pollutant regime. It is important that the Government have the right rules in place for the management of substances that can pollute our environment over many years because they break down slowly. We welcome these regulations.

What assessment have the Government made of our pollutant regulation regime since they took office? Can the Minister confirm whether they have identified any areas of pollution where Ministers intend to change our existing regime or whether they feel that it is currently satisfactory? Can she give some idea of current trace levels of these persistent pollutants and how they compare with the limits in this instrument? Further to that, can she reassure this Committee that these new limits will ensure that none of these pollutants can be intentionally introduced in manufacturing, except for the specified products?

The Minister set out exemptions for the use of these chemicals. Can she explain why these exemptions are necessary given the awful long-term consequences of allowing any production of these chemicals and compounds? Finally, what steps are the Government taking to monitor the levels of “forever chemicals” in our environment to ensure that these levels are within a safe range?

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord, Lord Roborough, and the noble Baroness, Lady Bakewell of Hardington Mandeville, for their support for this SI. It is very much appreciated. This was a small but perfectly formed debate on something complex but nevertheless important, because these draft regulations ensure that existing legal provisions for the prohibition and restriction of the manufacture, placing on the market and use of POPs will be extended to the new substances, and they also amend the annexes.

17:30

PFAS chemicals were recently raised as part of debates on the Water (Special Measures Bill)—the noble Lord, Lord Roborough, referred to this. I recognise the concerns, particularly about PFAS. I know that the Rivers Trust did a good but concerning report on this earlier in the year—that was launched here in the House of Lords, and I went to it. There is currently a lot of research on PFAS to improve our understanding. We are also looking at whether we should restrict PFAS in firefighting foams, as well as further restrictions for consumer and industrial uses. The instrument includes the introduction of a limit specifically targeted at PFOA, which is a type of PFAS in those foams. This will be designed to ensure environmentally sound disposal of any remaining stockpiles of these foams. Quite a lot of work is going on PFAS because we are very much aware of the problems in that area.

On chemicals included in the EIP, the Government have launched a rapid review to look at the legally binding targets within the environmental improvement plan, including how we accelerate progress to hit our international commitments of protecting 30% of the UK’s land and sea by 2030—the 30 by 30 target. So that is one thing that we are looking at, and we will use that as an opportunity to review some of the areas raised today.

The noble Baroness, Lady Bakewell, asked about waste. As I said, waste containing POPs above the specified waste concentration limits must be diverted from landfill or recycling because it is important that they are destroyed—for example, through high-temperature incineration. The noble Baroness asked about salt mines in particular. I probably need to get back to her on that and her question about penalties. I have not got the detail on salt mines in front of me, and there is a range of options for penalties, so it might be helpful to lay that out in a letter to the noble Baroness and share it with the noble Lord, Lord Roborough. Have I missed anything? It was such a short debate.

[Lord Roborough (Con)]

Has the Minister any more information on trace limits as a result of historic manufacturing of these persistent pollutants, compared to the limits in the instruments? That would be interesting and I completely understand if that might need a letter rather than an answer now.

[Baroness Hayman of Ullock (Lab)]

That is an extremely important point, and it is probably part of the research currently being carried out in this sphere. I will check and we will get back to anyone with any outstanding questions.

Motion agreed.

Environmental Protection (Single-use Vapes) (England) Regulations 2024

Wednesday 13th November 2024 Grand Committee

Considered in Grand Committee

17:33

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Environmental Protection (Single-use Vapes) (England) Regulations 2024.

Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee (Special attention drawn to the instrument).

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, it is estimated that more than 360 million single-use vapes were placed on the UK market in 2023. These devices are designed to be used a small number of times and are often referred to as disposable. Once used, which may be after a matter of hours, they are commonly thrown away. Research by Material Focus estimates that 5 million single-use vapes are thrown away every week. That is equivalent to eight per second.

They are often littered. They blight our parks, playgrounds and streets, and they introduce plastics, nicotine salts, heavy metals and lithium-ion batteries into the environment, harming biodiversity, soils, and our rivers and streams. Alternatively, they are thrown into black bins where, at best, they end up in landfill or are incinerated—at worst, they cause fires when they are crushed in bin lorries.

Last year, it was estimated that 700 waste fires were caused by batteries hidden in electricals such as vapes. This generates pollution, damages waste infrastructure and risks the safety of waste management workers, firefighters and the public. To give a personal example, a friend of ours has a medium-sized haulage business, and he lost virtually all his lorries last year through a fire caused by single-use vapes, which pretty much destroyed his business. So they can do enormous damage, and it is important that we tackle this problem.

Research by Action on Smoking and Health shows that the rise in single-use vapes has happened concurrently with an increase in young people vaping. Although vapes can play an important role in smoking cessation, adults who do not smoke and children should never vape. We must do what we can to prevent children from being targeted. Without action, it is estimated that, by 2030, the number of single-use vapes placed on the UK market could rise to over 1 billion per year. We must therefore take steps to stop the misuse of resources and protect our environment.

My department is leading a drive towards a circular economy to minimise waste, prioritise circular product design and retain the value of resources for as long as possible. It is estimated that, last year, 40 tonnes of lithium from single-use vapes were thrown away. This is enough lithium to power 5,000 electric vehicles. Single-use items such as these play no role in a circular economy, so we must act now to ban the supply of single-use vapes in England.

Before I turn to details of the legislation, I acknowledge the work of the Secondary Legislation Scrutiny Committee. Its report highlighted several points of interest, particularly the links to youth vaping, which I referred to earlier, and whether we will monitor market developments following the implementation of the ban. We work closely with the Medicines and Healthcare products Regulatory Agency to understand the types of products notified for use, and we will continue to look at this in future.

The committee highlighted correspondence received from Green Alliance, which strongly supports the ban but questioned the timeline for implementation and enforcement. We want to introduce the ban as soon as possible, but we must allow a minimal but reasonable transition to allow businesses time to run down stocks and adapt activities. That is why the ban will come into force on 1 June next year. Effective enforcement is critical, and we will work closely with enforcement agencies to understand how we can best support them.

I turn to the details of the legislation. This ban is introduced through powers in the Environmental Protection Act 1990. Part 1 of the legislation sets out the meaning of a “single-use vape”, which is

“a vape which is not designed or intended to be re-used”

and which includes any vape that is not rechargeable or refillable.

The ban applies to England only, but my officials have worked closely with the devolved Governments, who are bringing in equivalent legislation. We are grateful to our colleagues in the devolved Governments for their collaboration to ensure that, from 1 June next year, there will be a UK-wide ban.

Parts 2 and 3 of the legislation introduce offences and enforcement provisions. Enforcement of the ban in England will be carried out through local trading standards officers, and the powers in the legislation have been developed in partnership with them. The regulations provide new civil and criminal sanctions and provide powers to test or seize illicit products and issue fines as well as stop or compliance notices. Where a compliance or stop notice is not complied with, a further fine or jail sentence may follow.

Lastly, Part 4 of the legislation covers requirements for guidance, as well as setting out review clauses.

Vapes can play a role in helping adults to quit smoking, but there is no reason for these products to be single use. Given the harm caused, we must take this simple but important step to ban these products.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, the Minister has set out the rationale for the introduction of this SI very clearly.

Single-use vapes are extremely popular among young people. Encouraging young people not to start smoking has to be a key aim of any Government. It is something of a rite of passage to gather with your friends for a chat and a smoke or a vape. Preventing experimentation with cigarettes is the first priority. Then, it is about encouraging young people away from vapes—especially single-use ones—when they may have switched to vaping.

I am grateful to Green Alliance for the briefing that it provided on this subject, and to the Secondary Legislation Scrutiny Committee. Since 2023, 7.7 million single-use vapes have been bought every week—twice the number in 2022. Vapes are easily discarded, causing plastic-containing litter. They also contain other hazardous substances such as nicotine, which has previously been used as a pesticide. The batteries in vapes are a potential fire risk; the Minister gave a good example of that.

Although the lithium contained in the vapes discarded in 2023 would have made 5,000 electric vehicle batteries—the Minister referred to this—recycling them is problematic. Young people and others are not going to take their used vapes to a recycling point. The vapes are going to be discarded where they are, sometimes in a litter bin but often just thrown on the ground. A ban on single-use vapes will ensure that the lithium is put to a better use.

The Government’s recent Budget introduced a vaping products duty, which will be introduced in October 2026 —that is two years away—and is to be £2.20 per 10 millilitres of vaping liquid. This will increase the cost of vapes and will, I hope, discourage their use. Cheap, reusable vapes are as easily discarded as single-use ones, so increasing the cost of reusables must be part of the strategy in moving people away from vaping. The ban on single-use vapes will come into force in June 2025, as the Minister said, which gives enough time for retailers to reduce their stocks and for users to become accustomed to buying reusable vapes.

I fully support this SI but I have a couple of small queries. Paragraph 9.7 of the Explanatory Memorandum talks about the

“impact on the public sector as local authorities are regulators and therefore responsible for enforcement”.

The last sentence of the paragraph reads:

“Funding will be provided to support enforcement”.


That is an encouraging statement. Although it does not say what the funding will be, having a statement that it will be provided in the Explanatory Memorandum is to be welcomed.

I turn now to the SI itself. Regulation 14 states that, at the end of a three-year period, the Secretary of State must conduct a “review of the operation” of the Schedule. As with any change in legislation, a review of how the change has had an impact on those affected by the SI is key to ensuring that changes keep pace with public behaviour.

Paragraph 1(1)(a) in Part 1 of the Schedule indicates that a fixed monetary penalty of £200 will be paid to the regulator for a breach of the regulations. Later on, paragraph 16 in Part 2 of the Schedule, which is headed “Offence”, states:

“Where a person on whom a stop notice is served does not comply with it, the person is guilty of an offence and liable—


(a) on summary conviction, to a fine, or imprisonment for a term not exceeding the general limit in a magistrates’ court, or both; or

(b) on conviction on indictment, to imprisonment for a term not exceeding two years, or a fine, or both”.

Imprisonment for 12 months or two years is quite a jump from a £200 fine. It is likely that I have not understood how what seems like an on-the-spot fine of £200 can escalate to imprisonment; I would be grateful if the Minister could help me with this.

Green Alliance has asked three questions. First, given the exponential growth of single-use vapes, can the Government expedite the ban to before 25 June? Also, how do they plan to limit further growth in the use of vapes between now and then?

17:45

Secondly, have the Government considered establishing a hotline for traders to report transgressions to help boost compliance? Finally, how will the enforcement regime be funded and will it be at risk in financially strained local authorities? It could be that the £200 or more fines imposed are destined to go to local authorities as recompense for their work in this area. I congratulate the Minister on bringing forward this SI. It has a vital role to play not only in the health of our young people but in reducing unnecessary, unsightly and dangerous waste.

[Lord Roborough (Con)]

My Lords, I am grateful to the Minister for her introduction to this instrument. I declare my interest as a user of multiuse vapes for well over 10 years and that I have not smoked for well over 10 years. It is right that the Government are building on our work to deliver regulatory measures that not only restrict the sale of single-use vapes but put in place systems for proper disposal and recycling.

In government, we allocated £3 million of additional funding for trading standards to support the seizure of illegal vapes. This funding was aimed at tackling the importation and sale of non-compliant products. I urge the Government to honour this commitment and ensure that this funding is not only maintained but effectively used to support enforcement operations. Can the Minister give that undertaking today?

This April, my Government created a specialised illicit vaping enforcement team, Operation Joseph. Will the Minister update the Committee on the progress made by that team? I would hope that making the sale of all single-use vapes illegal will make these unregulated vapes easier to identify and control. However, there is a risk that it will drive previously legal users to supply channels that breach the law. What additional steps will the Government take to control this potential black market?

As we regulate single-use vapes, we must also address the growing issue of battery waste. The batteries in these devices, whether single-use or rechargeable, present an environmental hazard if not disposed of properly. Without proper recycling systems in place, these batteries can contaminate the environment with toxic chemicals as well as presenting the dangers the Minister highlighted with her friend’s haulage operation. Many consumers are unaware of the environmental dangers posed by batteries disposed of improperly. Public awareness campaigns are crucial to educate the public about how to dispose of batteries safely and where they can drop them off for recycling. What measures are the Government taking to improve the level of recycling of batteries, particularly those from electric vehicles, whether they be cycles, scooters or cars?

Finaly, I emphasise that our regulatory efforts must not undermine smoking cessation efforts. Vaping has been shown to be a crucial tool for helping people reduce or quit smoking. It is essential that any regulation focuses on eliminating the environmental harm caused by single-use vapes while ensuring that safer alternatives remain available to those who rely on them to quit smoking. I welcome the Minister’s acknowledgement of the relative merits of multiuse vapes as regards smoking in her introductory remarks.

[Baroness Hayman of Ullock (Lab)]

I thank noble Lords for their contributions to this debate. I shall go through some of the questions, and I thank noble Lords for their support for this ban.

The noble Baroness, Lady Bakewell, asked about the date of 1 June for implementation. We need to act swiftly but we have to be practical, as she said, about how we bring this in and allow businesses sufficient time to run down their stocks and adapt what they are doing. That is why we think that six months is a reasonable transition period. It is also a standard transition period in line with international obligations. But we are not just going to do this and leave it for six months. We will use the lead-in time to put in place guidance for businesses, to ensure that there is support for local authority trading standards officers and to communicate details of the ban among stakeholder networks and the public. The idea is to use that time effectively to ensure that, when the ban comes in, it is adhered to and is as effective as possible.

The noble Baroness also asked about funding for enforcement. While I cannot give a specific figure for funding, enforcement will clearly be critical. There is no point having legislation if you do not have anything to enforce it with. We need to consider enforcement for single-use vapes alongside other types of illicit vape, because there is a black market in other kinds of vape as well. We will look at how we can work closely with the Department of Health and Social Care and other relevant enforcement bodies to understand the best way to make sure that the ban is enforced. That is work we will be doing between now and 1 June.

On enforcement, the noble Lord and, in particular, the noble Baroness asked about the £200 fine up to a prison sentence. It is important to say that imprisonment would apply only in cases of persistent non-compliance. It would be the very top end, if someone is continually refusing to comply after they have broken the law on a number of occasions.

The noble Lord, Lord Roborough, asked about the black market. We are discussing with local authority trading standards how we can best support them on black market issues, particularly around underage and illicit tobacco and vapes. There will also be a focus on intelligence sharing between enforcement agencies such as Border Force, HMRC and trading standards to ensure that agencies understand what they need to do to stop this activity and that they work together and share information.

The noble Lord asked about improving the recycling of batteries. At the moment, we are considering proposals to reform batteries regulations. We want to set out some new steps on how we go forward with this, so we will keep noble Lords informed.

On success in tackling illicit vapes, which the noble Lord asked about, in April 2023 the previous Government announced £3 million of investment over two years to enhance work on illicit vapes enforcement, which was led by National Trading Standards. I am sure he is very aware of that. The current actions and activities include intelligence sharing on illegal products and sales, market surveillance and ports enforcement, because we need to be able to catch them when they come in. There is also Operation Joseph. When we know more detail, we will be happy to share that information with noble Lords.

I think I have probably covered everything. If I have missed anything out, I will get back to noble Lords. I beg to move.

Motion agreed.

Terrorism Act 2000 (Alterations to the Search Powers Code for Northern Ireland) Order 2024

Wednesday 13th November 2024 Grand Committee

Considered in Grand Committee

17:54

Moved by

[Baroness Anderson of Stoke-on-Trent]

That the Grand Committee do consider the Terrorism Act 2000 (Alterations to the Search Powers Code for Northern Ireland) Order 2024.

Relevant document: 5th Report from the Secondary Legislation Scrutiny Committee

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, I would like to begin by taking a moment to pay tribute to all those who lost their lives or were injured as they worked to keep the people of Northern Ireland safe. The Secretary of State’s attendance at the service of remembrance in Enniskillen on Sunday offered the chance to reflect on the bravery and sacrifice of those men and women. I know that noble Lords will join me in these sentiments. While the vast majority of people in Northern Ireland want it to continue to be a safe and wonderful place in which to live and work, sadly, we know that there is a small minority who want to cause harm. It is important that the PSNI has the tools it needs to allow it to continue to keep people safe.

Following the terrorist attack at Fishmongers’ Hall in November 2019, the then Home Secretary commissioned the Independent Reviewer of Terrorism Legislation, Jonathan Hall KC, to review the Multi Agency Public Protection Arrangements, commonly referred to as MAPPA, used to supervise terrorist and terrorist-risk offenders on licence in the community. In response to recommendations made by Jonathan Hall KC following the review of MAPPA, the Police, Crime, Sentencing and Courts Act 2022 established three new powers for counter-terrorism policing: a personal search power, a premises search power and a power of urgent arrest. These powers were established in 2022.

This order relates to the new power of personal search, the creation of which was also recommended by the prevention of future deaths report that followed the Fishmongers’ Hall inquests. The personal search power has been inserted into the Terrorism Act 2000, in Section 43C, by the 2022 Act and applies UK-wide. The new search power came into force on 28 June 2022. The order puts into practice the revised Code of Practice (Northern Ireland) for the Authorisation and Exercise of Stop and Search Powers relating to Sections 43, 43A, 43C and 47A of, and Schedule 6B to, the Terrorism Act 2000. A copy of the draft revised code was laid before Parliament on 15 October 2024. The purpose of the code is to provide guidance to officers authorising and conducting stop and searches under Sections 43, 43A, 43C and 47A of and Schedule 6B to the Terrorism Act 2000 and protections to those persons searched.

I start by assuring the Committee that the revisions to the code will not change the manner in which searches are conducted in any way. The amendments should be non-contentious, I hope, and relate mainly to technical matters. They are intended to provide guidance to the PSNI regarding the search powers contained within the Terrorism Act 2000. The equivalent code of practice for police in England and Wales and Scotland was updated in 2022. The changes to this Northern Ireland code will align, but not mirror exactly, the codes of practice for England and Wales and Scotland due to jurisdictional differences.

The revised code, as considered today, builds upon work started by previous Ministers in the Northern Ireland Office, including the noble Lord, Lord Caine. I know how well versed he is on this issue and welcome his continuing interest in and support on these matters. I will outline the main revisions for the Committee now.

The primary update to the code is the incorporation of the new stop and search power provided for by Section 43C of the Terrorism Act 2000. The code as amended provides guidance to the Police Service of Northern Ireland, and officers from England, Wales and Scotland police services when operating in Northern Ireland, surrounding the use of not only Sections 43, 43A and 47A of and Schedule 6B to the Terrorism Act 2000, as outlined in the original code of practice, but Section 43C.

Section 43C provides a power for a constable to search a terrorist offender who has been released on licence, and not recalled, and whose licence includes a search condition. I reassure the Committee that this power applies only to those who have been convicted and where it has been deemed appropriate for an offender, when released, to have this licence condition included as part of the conditions of their release. Even where the power is included as a licence condition, for it to be used the constable must be satisfied that it is necessary to do so for purposes connected with protecting members of the public from a risk of terrorism. Furthermore, the constable may conduct the search in any place to which they legally have access, whether or not it is a place to which the public has access.

In revising the code to include the Section 43C power, we have set out for police officers the basic principles for its use and clarity on its scope. This includes providing guidance on when the power can be used and the powers of seizure associated with the search power. The revised code also clearly sets out the limitations on the clothing that a person can be required to remove when the Section 43C power is being exercised by officers. In keeping with the existing stop and search powers, police officers exercising the Section 43C power may not compel a person to remove any clothing in public except for an outer coat, a jacket or gloves, and an intimate search may not be authorised or carried out under the new power.

18:00

Also added to the NI code is an explanation of when the search condition can be added to a licence, specifically to help manage the risk posed by terrorist offenders on licence who are assessed to be a high or very high risk to the public. The code, as amended, contains some language and format differences to the code for Great Britain. However, the purpose and key content of the code remain the same. These differences reflect the devolution of policing and justice functions in Northern Ireland, as well as the consequent differences in approach adopted in different jurisdictions. For example, I draw noble Lords’ attention to the fact that the code for Great Britain contains an explanation of the basis on which an offender is to be released on licence, whereas the revised Northern Ireland code outlines the role of both the Parole Commissioners and the Department of Justice in this process.

I assure noble Lords that the Government ran a 12-week public consultation on the proposed amendments to the code of practice, which closed in January 2024. I highlight the fact that the DUP was the only political party to respond to the consultation and was supportive of it; I am grateful for its participation. Seven responses were received, six of which were in favour of the revisions, with one response commenting that, as a matter of policy, it would not be appropriate for them to comment. Of the six who responded in favour, five suggested other slight amendments to the code. These were duly considered, with a number being accepted. The full details of these suggestions were published in the consultation response document on the NIO web pages in March 2024.

I hope noble Lords will agree that, although these revisions are technical, they are important. They align the code of practice used in Northern Ireland with the code used in the rest of the UK, ensuring that this offender management tool is available across the UK. They give guidance to the PSNI in its use of the powers to stop and search contained within the Terrorism Act.

This Government, like the previous Government, are committed to keeping people safe. The fact that the threat level for Northern Ireland-related terrorism in Northern Ireland remains “substantial”, following its reduction in March 2024, is testament to the tremendous efforts of the PSNI and its security partners. We must ensure that they have the right and appropriate tools to continue at this level.

I know that noble Lords will join me in welcoming the increased additional security funding to be provided to the PSNI in the next financial year. This £37.8 million of funding, provided in recognition of the unique security situation in Northern Ireland, will ensure that the PSNI is equipped to tackle the threat posed by Northern Ireland-related terrorism in Northern Ireland. The revised code promotes the fundamental principles to be observed by the police and helps preserve the effectiveness of, and public confidence in, the use of police powers to stop and search under the Terrorism Act 2000. I very much hope that noble Lords will support these alterations to the code of practice. I beg to move.

[Lord Morrow (DUP)]

I welcome the fact that the Minister made clear her support for, and paid tribute to, the Police Service of Northern Ireland. As I am sure she is acutely aware, the RUCGC lost more than 300 of its officers during the Troubles in Northern Ireland. Many of the officers who were murdered were the salt of the earth. They were in their job not because it was a job but because they saw it as a vocation. To this day, for many of those who were murdered, nobody has been brought to court to give an account of their actions. I thank the Minister for her tribute to the people in the police service, who are often forgotten.

Over the weekend, many of us—if not all—attended various services in open spaces, in our churches, in our schools and elsewhere to pay tribute to those who died during the Troubles in Northern Ireland and those who served in both world wars. As members read out the roll of honour, they were very moved because stood shoulder to shoulder with those very police officers and UDR personnel with whom they served. One of them said, “I stand here today; my comrades do not”. That is the reality of the situation back in Northern Ireland.

We will be brief—we do not plan to have a tough debate on this legislation. We are not here to pull it apart or anything like that, but we have some queries and questions here and there. I am sure the Minister is acutely aware that policing is a very difficult job in Northern Ireland. From the inception of the Belfast agreement, its stipulations and outworkings have meant that hundreds and hundreds of dangerous and unrepentant terrorists have been returned back to our streets, and today they are at large.

It is stated that the purpose of the code is to provide clarity that the threshold for making an authorisation is higher under the new powers, and that the way in which the powers may be exercised is also different. I hope we have read that correctly and that the outworking will not curtail or restrict the police in Northern Ireland in carrying out their duties. No police force anywhere in Europe is scrutinised to the degree and extent that ours is. Now, that can be a good thing, but it can also have a detrimental impact on policing itself.

I and my colleagues speak for my party on this, and we agree that there has to be accountability and that the police must always act with great discretion and responsibility. I hope that this legislation will not in any way deter them. I do not think it will, but I hope it is that way. All of us have a moral and community responsibility to support and encourage the agencies of law and order. That includes, for instance, our Ministers in the Northern Ireland Executive attending graduation days, and our schools promoting the police service as a good career to follow and get involved in. That does not always happen. I sometimes think that the Government could do a bit more to encourage that line. That would go a long way to playing a good part in the full restoration of law and order.

Things are infinitely better than they were—we can all say that without fear of contradiction. However, the Minister rightly said that the threat level in Northern Ireland is still high. Other police services across the United Kingdom do not have to contend with that to the same extent as our police service in Northern Ireland. I hope that there is no discouragement in this document, which I have tried to read through, although I will not give the impression—I hope—that I understand every line of it. The Minister briefly quoted from the Terrorism Act 2000, the workings of which she is obviously well acquainted with.

Can the Minister assure us that this measure will be for the betterment and the more efficient delivery of a police service, and that those who try to thwart the police in their duties—the very people she has spoken about—and cause a great deal of concern will not benefit from this? I know that that is not the intention, and I am not in any way saying that it is. I just hope that the security forces, our police, will see that this is intended to help them deliver a duty and service that they can be proud of. I hope too that the law-abiding in Northern Ireland will be reassured that this legislation is good and for their betterment, and that we will see an efficient and effective outworking.

[Lord McCrea of Magherafelt and Cookstown (DUP)]

My Lords, I will follow on from the remarks of the noble Lord, Lord Morrow. I welcome the noble Baroness leading this short debate to her place. I pay tribute to the noble Lord, Lord Caine, for the manner in which he dealt with issues of security in Northern Ireland when he held the office. I believe that he did so with courage and determination—he carried a heavy responsibility when he was in the noble Baroness’s position.

I join the noble Baroness in commending the bravery of our police officers and all the other security personnel who not only defended freedom in Northern Ireland in the past but are still doing so. I totally reject the contention of some in society that there was no other way than terrorism. That is absolutely untrue. I note that the noble Baroness said that the terrorist threat remains “substantial”. That reminds us that there is a great need in Northern Ireland to keep vigilant. Securing the safety of our people will certainly demand vigilance.

The noble Baroness mentioned the additional finance that has been given. It is certainly correct that additional finance has been provided in the recent Budget, and it is deeply appreciated, but I draw to her attention the fact that the number of serving police officers in Northern Ireland is well below what was recommended. We therefore do not have the numbers of police officers on the ground to give that adequate and proper protection for the people of Northern Ireland.

I am sure that the noble Baroness was delighted to remind us that our political party welcomed this legislation. In fact, she said that we were the only party that responded, which is strange, bearing in mind that the security of our people ought to be one of the most important issues that we face. I join the noble Lord, Lord Morrow, in saying that the police service in Northern Ireland is practically the most scrutinised police service in the world. In fact, unbelievably, we have former terrorists sitting on the Policing Board, scrutinising persons they have terrorised in the past.

We want an efficient delivery of policing, and I will therefore ask the noble Baroness a few questions. I note that the purpose of this code is to

“reflect that changes to Terrorism Act 2000 powers entirely replace those previously found in sections 44-47 of Act and are not simply a modification of those provisions”.

But the code then says that the

“new provisions carry different criteria for both authorisation and use”—

in fact, it is stricter. Paragraph 3.3 of the code says:

“To provide clarity that the threshold for making an authorisation is higher under the new powers and the way in which the powers may be exercised is also different”.


If it is higher and we still have a substantial threat in Northern Ireland, surely that makes it more difficult, rather than allowing police officers to have the freedom they need when they are out on duty and dealing with possible terrorists.

Paragraph 4.3 says:

“This Code of practice must be readily available at all police stations for consultation by police officers, detained persons and members of the public”.


I am wondering what is meant by “available … for consultation” by police officers, detained persons and members of the public, because surely these are the guidelines that are already set down—the consultation part is over.

Then, paragraph 6.2 of this document states that, for the police officer dealing with this, having “reasonable grounds for suspicion” depends

“on the circumstances in each case”.

How should an officer faced with an immediate situation actually interpret “reasonable grounds for suspicion”? If they fall foul of what a court later says is not reasonable, are they penalised because of that?

18:15

Finally, paragraph 7.24 says:

“Information should be provided which demonstrates that all officers involved in exercising section 47A powers receive appropriate briefing on the use of the powers”.

What will be regarded as “appropriate briefing” and how far does that statement go?

Can the Minister say whether adequate finances have been provided so that those officers out on duty are provided with proper body cameras, which will be a protection against vexatious claims against them? Will all officers be provided with such cameras?

[Lord Caine (Con)]

My Lords, I welcome the noble Baroness to what I think is her first Northern Ireland-related Grand Committee. I thank her for her kind words and thank noble Lords from the DUP for their kind words too. I also associate myself very strongly with her comments about the PSNI and the Armed Forces, and the commemorations that took place over the weekend. As Minister, I had the great honour of laying a wreath of behalf of His Majesty’s Government at Belfast City Hall in 2012 and Messines in 2023, where the Ireland Peace Park is located—very moving and poignant events they were too.

If the noble Baroness were to look at my Twitter account—or X, as it is called these days—from Saturday, she would see that I was proudly sporting a poppy that contained the cap badge of the Royal Ulster Constabulary. I have long maintained that, without the service and sacrifice of the RUC, the PSNI and our Armed Forces, there would have been no peace process in Northern Ireland. They created the conditions in which politics could work, and we owe them all a huge, enormous debt of gratitude.

I am grateful to the noble Baroness for concisely setting out the terms of this statutory instrument. I will be very brief because, as the noble Baroness made clear, the SI has its origins in changes to the Terrorism Act that were contained in the Police, Crime, Sentencing and Courts Act 2022—a hugely long title for an Act of Parliament—which I well remember my colleagues debating at length when it was going through your Lordships’ House. The changes made to the Terrorism Act, as the noble Baroness set out, related to stop and search powers under Section 43C and required the publication of terms of reference under Section 47 for the exercise of those powers. The SI might, in some respects, be described almost as Conservative legacy legislation. The noble Baroness referred to the consultation that we conducted, which concluded earlier this year.

I can see nothing in the terms of reference that we would have done any differently, frankly, and they should therefore have our full support. Of course, as the noble Baroness made clear, they largely align Northern Ireland with the powers available to and codes of practice for police in other parts of the United Kingdom, to which no unionist could possibly take exception or object.

I have just one question for the Minister; I gave her prior notice of it yesterday. For the general benefit of the Committee, can she set out how the new powers sit alongside the powers that exist for the police, in the justice and security Act of 2007, relating to stop and search without reasonable suspicion? I signed a number of authorisations for the use of these powers, so I know how important they are for the police in the exercise of their functions. It would be helpful if the Minister could elucidate a little further how they sit alongside the powers contained in the Terrorism Act.

The fact that we are debating these matters today, with the contributions from the Minister and DUP Members, reminds us of the security backdrop in Northern Ireland. We have been reminded that the threat level is currently classed as “substantial”. It has been reduced from “severe”, to where it was raised after the murderous attack on DCI John Caldwell in February 2023, but it is worth reminding ourselves that the difference between “substantial” and “severe” is one word: “highly”. “Substantial” means that an attack is likely, while “severe” means that an attack is highly likely.

The ongoing threat from terrorism is real. As the Minister made clear at the beginning of her remarks, there remains in Northern Ireland a small group of people who have lethal intent and capability, and who wish to continue to pursue their political objectives by violence. It is essential, therefore, that the PSNI has all the necessary powers available to it in order to combat that ongoing terrorist threat.

I conclude by reiterating our heartfelt thanks for everything that the PSNI does in Northern Ireland and that the security services do. They do a superb job of keeping people safe and secure from terrorism in Northern Ireland and, in so doing, keeping us safe and secure throughout the whole of this United Kingdom. On which note, I strongly welcome the SI; it has our full support.

[Baroness Anderson of Stoke-on-Trent (Lab)]

I thank noble Lords for their contributions. As ever, they were thoughtful and considered and took us to the heart of the issue, especially in relation to our security and safety.

I wholeheartedly agree with noble Lords’ comments about the role of our security services in keeping us safe. These are people who run towards the fire in trying to protect others as they run away from it. We are always in their debt. This SI is one effort in ensuring that they have the right powers available to them, without us doing them a disservice and restricting their ability to operate. I assure noble Lords that that is where we are.

We talked about Remembrance Sunday. I reside in Staffordshire, where the National Memorial Arboretum is. One of the most beautiful parts of the arboretum is the area dedicated to those who served and fell during the Troubles, and those who continue to serve to keep us safe. I highly recommend a visit to noble Lords.

Let me respond specifically to the questions raised by noble Lords. I say in response to the noble Lord, Lord Morrow, that this instrument is not an effort to curtail policing in Northern Ireland. We are doing everything we can to ensure that everyone has the appropriate tools and resources available, which is why we increased the PSNI’s additional funding budget for security in last month’s Budget.

I have some specific responses so I ask noble Lords to bear with me. My civil servants have done what they are meant to do: make sure that I do not have to write.

The threshold for power and use has not changed or restricted the PSNI. This is a new power, brought in in 2022, to allow the search of an individual who is licensed—that is, someone who has already been arrested. They are included in a search condition so that they can continue to be monitored. As I will emphasise in response to the questions from the noble Lord, Lord Caine, this is a separate power. It is in addition to, not in replacement of, the existing powers under TACT and the justice and security Act, and it has been supported by the PSNI. We have not done this to the PSNI; we are doing it with the PSNI.

This new code of conduct will not change the way in which police searches are conducted. The code simply provides guidance to police officers in Northern Ireland on basic principles for the use and scope of the new Section 43C power.

With regard to the question from the noble Lord, Lord McCrea, on police numbers, decisions about the allocation of the Northern Ireland budget rest with the Northern Ireland Executive, as the noble Lord knows well. It is a matter for the PSNI and DoJ to consider and agree on officer numbers to fulfil the services, operational demands and its responsibility to keep Northern Ireland safe. I am reassured that while the PSNI, as of 1 October, has 6,303 full-time equivalent officers, the New Decade, New Approach draft programme for government aspires to 7,500, which is definitely a step in the right direction.

With regard to how police officers will make decisions in practice to be satisfied that a search is necessary, which was raised by the noble Lord, Lord McCrea, the PSNI has operational independence. It is for it to determine how it will apply this. This should do nothing to restrict its efforts. In terms of making the threshold higher, this is a new power. Codes of practice have always been available to be viewed. “Consulted” was probably the wrong term. It should have been in terms of viewing and being able to access, rather than consulting on, the document. It is not a living, breathing document in that way.

Section 6(2) circumstances for a search are an operational decision for the individual officer. How the PSNI wants to do briefings and training will remain an operational matter for it. That also relates to bodycams and their application. We have provided additional funding, and it is up to it how it uses it. I am sure that it will want to get additional bodycams, but that is a matter for it.

With regard to the question from the noble Lord, Lord Caine, about the Justice and Security (Northern Ireland) Act versus TACT powers, as requested I read into the record that JSA powers are specific to Northern Ireland, timebound and must be authorised by a Minister for a maximum 14 days for a designated geographical area in Northern Ireland. Under these powers, PSNI can stop and search a person without reasonable suspicion to ascertain whether they are in possession of wireless apparatus or are in unlawful possession of munitions. Each JSA authorisation is reviewed and considered by the Secretary of State or someone with their delegated authority if the authorisation is to last longer than 48 hours. The noble Lord, Lord Caine, did many of these in his time as a Minister.

Section 43C of TACT applies across the whole of the UK but can be used only where it is applied as a licence condition and where the police constable is satisfied that it is necessary to do so for purposes connected with protecting members of the public from a risk of terrorism. It has been in operation and, although the number of stop and searches is slightly down this year on last, it has not changed how the police are operating.

I hope that with those reassurances noble Lords will appreciate that this SI is largely technical but is important to policing in Northern Ireland. It will help the police continue to keep people safe. This Government are committed to ensuring that the people of Northern Ireland, as in the rest of the UK, are safe.

Motion agreed.

Committee adjourned at 6.29 pm.

House of Lords

Wednesday 13th November 2024 Lords Chamber

Wednesday 13 November 2024

15:00

Prayers—read by the Lord Bishop of Manchester.

Arrangement of Business

Wednesday 13th November 2024 Lords Chamber

Announcement

15:06

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, before we proceed to Questions, I want to point out to the House that we have only three Questions today, not four. The noble Lord, Lord Balfe, was successful in the ballot on Monday for the Wednesday Topical Question. At 5 pm yesterday, he decided to withdraw his Question as he was not able to be in the House today, and he decided that he did not want another Member of the House to ask the Question on his behalf. That was his decision, but with less than 24 hours before the Question was due to be asked, there was no time to fill the slot. The Companion is clear, though, and each Question is still allotted 10 minutes, so Question Time today is 30 minutes, not 40.

While I am on my feet, I again remind everyone asking questions today to ensure that they are short, sharp, succinct and to the point, which is what the House wants and expects. Replies from our ministerial colleagues should also be short, sharp, succinct and to the point.

Journalists Detained or Killed Overseas

Wednesday 13th November 2024 Lords Chamber

Question

15:07

Asked by

[Lord Black of Brentwood]

To ask His Majesty’s Government what assessment they have made of the report by the South Sudan Investigation Committee, published on 20 March, into the killing of Christopher Allen in 2017; and what plans they have as a result to improve support for British journalists detained or killed overseas, and their families.

[Lord Black of Brentwood (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I declare an interest as patron of the Rory Peck Trust and note my other interests in the register.

[The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)]

My Lords, we urge the South Sudanese Government to protect journalists and end impunity for human rights abuses. We consistently pressed them to conduct a thorough and credible investigation into Christopher Allen’s death, which resulted in the formation of the investigative committee in 2003 and the subsequent report in March 2024. The UK is examining options to strengthen support for British nationals abroad, including a right to assistance in cases of human rights violations.

[Lord Black of Brentwood (Con)]

My Lords, in August 2017, journalist Christopher Allen, a UK-US citizen, was brutally murdered by government forces in South Sudan while reporting on the conflict there, his corpse despoiled and trophy images of it displayed and filmed in an act of barbarity. No one has been brought to justice, and the report the noble Baroness mentions was deeply flawed and was condemned by international lawyers and press freedom groups as a whitewash.

I have two points for the noble Baroness. First, what pressure will the Government bring to bear on South Sudan to facilitate a proper, independent report which allows Christopher’s family finally to learn the facts about his killing and establish lessons for the UK Government? Secondly, what action will the Government take to bring an end to appalling levels of impunity? Some 80% of the killings of journalists worldwide go unpunished, which directly puts the lives of British journalists in jeopardy.

[Baroness Chapman of Darlington (Lab)]

I am grateful to the noble Lord for his supplementary question, and he is absolutely right to draw attention to this issue. We recognise the criticisms about the report that he outlined. We want to know what happened. When you lose a member of your family in such circumstances, in the conduct of their work in a dangerous situation, the family is entitled to know what happened. Sadly, I am afraid that I do not have a great deal of optimism about getting another investigation that would be any more credible or shed any more light on what happened. However, I thank the noble Lord for again bringing the House’s attention to Christopher Allen’s case, and we send our deepest sympathies again to his family.

[Lord Alton of Liverpool (CB)]

My Lords, in the second part of the noble Baroness’s very welcome reply to the Question that has been put to her, she referred to providing assistance in cases of human rights violation. I welcome the fact that it was a manifesto commitment to do that. Considering the recent meetings that the Foreign Secretary has had with his Chinese and Egyptian counterparts, can the Minister outline what concrete steps His Majesty’s Government have taken to secure consular access to Jimmy Lai, a British publisher who was unjustly jailed in Hong Kong, and Alaa Abd el-Fattah, a British blogger who has been arbitrarily imprisoned in Egypt for the past 10 years?

[Baroness Chapman of Darlington (Lab)]

As the noble Lord knows, I believe that we have answered questions on Jimmy Lai very recently, but we continue to raise these cases at ministerial level with the relevant Governments, and we remain deeply concerned that we have been unable to gain the access that we would wish.

[Lord Ahmad of Wimbledon (Con)]

My Lords, I thank the noble Baroness for her Question. We in the previous Government were very much focused on this; can the Minister reassure us about the focus of this Government on media freedom globally and the international alliance that the previous Government set up with Canada? Secondly, the previous Government were exploring the issue of compensation. She may recall that, back in 2014 under the leadership of my noble friend Lord Cameron, we set up a compensation fund for victims of terrorism abroad. Efforts were made to see whether we could also look at extending the scope of that fund, which—from memory—sits with the Ministry of Justice.

[Baroness Chapman of Darlington (Lab)]

In thanking the noble Lord, I note that sometimes, where there is a change of power in our democracy, former Ministers take with them different things; the noble Lord takes with him a desire to make sure that the torch is received by the incoming Government and that we will carry on doing the work that he initiated. We respect that. I will consider the points he makes about compensation; as he rightly says, that may well lie in other departments, but he was right to raise them.

[Baroness Boycott (CB)]

My Lords, so many conflicts now are incredibly dangerous that reporters who are on the front line—often the faces and the voices that we see and hear on our news channels—are not the people who actually shoot the footage and get out there on the front line. Often, these freelance journalists are inadequately protected. I know that they are protected by some statute, but could the Minister look to see whether, in the case of broadcasts that we see here in the UK, we could at least offer them flack jackets and some level of support, and ensure that, if they do get into trouble, they are helped and, possibly, returned, if that is necessary, to the UK or a place of safety?

[Baroness Chapman of Darlington (Lab)]

We respect enormously the work that is done by journalists. We advise against all travel to South Sudan, and yet we know that it is important that the truth of what is happening there is reported by brave journalists. We will offer every assistance that we can, should they need it.

[Lord Bellingham (Con)]

My Lords, the Minister will be aware that aid to South Sudan comes in different strands, including humanitarian development and direct budget support. As far as the latter is concerned, that is money paid by the UK Government to South Sudanese government departments, where there is obviously some leverage that can be made. Therefore, can she comment on what pressure is being put on them and how they are using that leverage in a constructive way?

[Baroness Chapman of Darlington (Lab)]

It is true that there are different options we can use to approach South Sudan. We can disengage or we can use various levers. We have a relationship with the Government there, and our view is that that is the best way to have some influence. We have a team in Juba, and we provide assistance to people in the most desperate situations. It is one of the most difficult areas on the planet at the moment. Our Minister for Development, in her first visit to Africa, chose to visit South Sudan just to make sure that we use every opportunity to raise our concerns.

[Lord Purvis of Tweed (LD)]

My Lords, the situation in Juba, South Sudan, requires the kind of reporting and free media that the Minister states, and I agree with her very strongly. However, in Sudan, with the world’s greatest humanitarian crisis and the conflict going on, there is scant reporting and still very brave journalists who are under very considerable threat. The Disasters Emergency Committee has told me that it is not willing to open a humanitarian appeal for Sudan because of the lack of public awareness of the Sudanese crisis. Will the Government support UK-based media and those who are seeking to allow the public to understand that the world’s greatest humanitarian crisis is going on? Those who are responsible for asking the public for support are not being asked.

[Baroness Chapman of Darlington (Lab)]

I was not aware that the DEC took that view. I will look into that, following the noble Lord’s question. It is clearly right that journalists should be able to report from situations that they feel we need to know about, and we respect their freedom to do that and support it. I assure journalists who wish to report from Sudan that they will have the support of the British Government in doing their job.

[Lord Curry of Kirkharle (CB)]

My Lords, the situation in South Sudan is dangerous for all citizens, not just journalists. Democratic elections planned for this month have been cancelled. Can His Majesty’s Government explain what they are doing to achieve stability and to re-establish democracy in South Sudan?

[Baroness Chapman of Darlington (Lab)]

It is true that progress on the peace agreement has been slow and progress towards holding democratic elections is not what we would want to see. We continue to press upon the Government in South Sudan the importance of making progress and our continued support for the peace process. However, the institutions needed for elections are not sufficiently developed as yet. None the less, we will continue to make the case for free and fair elections in South Sudan.

[Lord Camoys (Con)]

My Lords, there are more than 1,400 political prisoners in the Russian Federation, at least 63 of whom are journalists and media actors. There have been reports of Russia targeting journalists in the Ukraine war. Does the Minister know how many British journalists are in Ukraine, and how does she plan to keep them safe?

[Baroness Chapman of Darlington (Lab)]

The truth is that I do not know how many British journalists are in Ukraine or whether anybody would be able to answer the noble Lord’s question. However, we work with media organisations, we listen to Reporters Sans Frontières and we take the concerns that they raise seriously and use every lever that we can, multilaterally and bilaterally, to ensure the safety of journalists, who, as I have said, do such an important job for us. It is vital that we understand what is happening in Ukraine.

Sharia-compliant Student Finance

Wednesday 13th November 2024 Lords Chamber

Question

15:18

Asked by

[Lord Sharkey]

To ask His Majesty’s Government what progress they have made towards the introduction of a Sharia-compliant student finance product.

[The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)]

My Lords, we are committed to delivering an alternative student finance product that is compatible with Islamic finance principles as quickly as we can. We are making good progress to achieve this. This month we are reconvening the alternative student finance working group for its first meeting since the election, which I am grateful to the noble Lord for being part of. We have also appointed a secretariat to take forward the sharia certification of the product.

[Lord Sharkey (LD)]

My Lords, Muslim census research shows that over 6,000 students annually miss out on university entirely due to the lack of sharia-compliant finance. I know that the Minister is alive to the problem, its scale and its 11-year history. I thank her and her predecessor, the noble Baroness, Lady Barran, for the work that they have done or are doing in moving the alternative student finance project forward. However, progress is slow, largely because ASF is being produced sequentially to the lifelong learning entitlement, which is delayed in the Budget by a year. What is now the latest date for the full implementation of the ASF? We should surely be able to move faster. Can, for example, ASF development be uncoupled from the LLE and progressed in parallel? What consideration has been given to the use of outside contractors to speed things up?

[Baroness Smith of Malvern (Lab)]

I think it would be fair to say that that was the question I asked at the point at which it was suggested to me that we should link the delivery of the ASF to the introduction of the lifelong learning entitlement. I think that the last Government were right in making that decision, because the lifelong learning entitlement brings about a fundamental change to the system of student finance, and it is important that, to be able to access the alternative student finance provisions effectively, they are linked to the overarching system for student support. We are introducing the lifelong learning entitlement for applications from September 2026 and for courses and modules that begin from January 2027.

[Baroness Manzoor (Con)]

My Lords, will the Minister say what the Government are doing to raise awareness of sharia-compliant finance to all students and what training is being offered to those that work in this sector?

[Baroness Smith of Malvern (Lab)]

For students, we are raising information about, for example, degree apprenticeships that would allow students to study towards a degree while they work, without paying for tuition. Students can also find information on other forms of support on GOV.UK, including bursaries, scholarships and awards for eligible students to ensure that, as the noble Lord pointed out, we help to make progress for the about 6,000 students per year that the Muslim census suggested might not be able to access higher education because of the nature of mainstream student finance.

[Lord Watson of Invergowrie (Lab)]

My Lords, I commend the tenacity of the noble Lord, Lord Sharkey, in pursuing this issue, which I know he has been raising since 2012. I recall being in debates with him on what became the Higher Education and Research Act 2017, when it seemed that a solution was close to being found. Yet, as he said, many young Muslims have a barrier to higher education because of this, and those who go to university none the less suffer severe financial hardship. But I disagree with him and say to my noble friend that, rather than separating the need for a sharia-compliant loan to be found and the lifelong learning entitlement, the lifelong learning entitlement’s rollout from 2026 should be used as a backstop. If it is not available to young Muslims, it cannot properly meet the reason that it is being established.

[Baroness Smith of Malvern (Lab)]

My noble friend is right. That is why, in working towards the lifelong learning entitlement rollout, we will also be making progress towards delivering the alternative student finance. We will be able to look at the details about the progress that has already been made and the steps we still need to make in the working group, which I am glad that the noble Lord, Lord Sharkey, will be able to attend.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am grateful to the Minister for answering my Written Question as to what the nominal value of student debt will be. In her answer, she said that, in five years’ time, the cumulative total debt will be £540 billion and, in 10 years, £869.4 billion. I understand that this is being used to kind of create more headroom for the Government’s borrowing. Is she really satisfied with student debt soaring to those levels?

[Baroness Smith of Malvern (Lab)]

I am not sure whether the noble Lord is arguing for a wholesale reform of the student funding system—it would be legitimate if he were, although this Government have taken a different route at this point. I think it is important, notwithstanding the impact on the national finances, to be clear for individual students that an increase in their tuition fees and the loan they take out to fund them will not increase their repayments, because repayments of this loan are wholly linked to earnings levels, so no student will repay higher levels per month as a result of the most recent decision that the Government have taken to increase tuition fees.

[Lord Vaux of Harrowden (CB)]

My Lords, interest rates are not only a problem for Muslim students. Can the Minister explain why it is appropriate that all students should pay a rate of 7.3%, which is somewhat usurious, for the period in which they are studying?

[Baroness Smith of Malvern (Lab)]

Obviously, we keep interest rates, which are linked to the RPI for student finance, under review. But in principle, as far as the student finance system is concerned, it is right that students who continue to get considerable benefit from higher education help to fund that higher education, alongside the taxpayer, who also of course stands behind the loan system. At the end of the period of its term, a loan will be written off for any student who has not repaid by that point.

[Lord Ahmad of Wimbledon (Con)]

My Lords, in welcoming the continuation of the initiative of the previous Government, it is also important that the principle of takaful, which is inherent in Islamic finance, is also made abundantly clear to the community. Building on my noble friend’s question on the issue of communicating, it is a barrier to entry and to higher education, particularly for young girls. These girls are often very high attainers.

[Baroness Smith of Malvern (Lab)]

The noble Lord makes a very important point. Perhaps I was not clear enough in response to his noble friend. Part of the work that we are doing is to engage with the Muslim community, firstly to ensure that the plans the Government are putting in place will be sharia-complaint and acceptable to the community, and also to ensure that the message about the ability to take up this student support in order to be able to undertake higher education is properly communicated. We are absolutely committed to continuing with that engagement, including with Islamic finance specialists.

[Baroness Swinburne (Con)]

My Lords, can I ask the Minister what the Government will be able to do to help prospective and existing students understand what their loan commitments mean for them? I have had recent experience with my own children and their friends, who had no idea what they signed up to several years ago.

[Baroness Smith of Malvern (Lab)]

I think the Student Loans Company works quite hard in order to ensure that students understand the commitments that they are taking on with student loan finance. But it is a fair point that it is important not just for the Government but for higher education institutions to be clear with students about what they are getting for their money, and then for us and the Student Loans Company to be clear with students about the impact later on in their life of the loans they are taking out.

I will reiterate the point I made earlier that sometimes there is confusion among students, who think that student debt is similar to other forms of debt, when clearly it is very different. Repayment is linked to earnings levels and, at the end of the term, any remaining debt will be written off. I try to say that as frequently as possible. It is a fair challenge that we should ensure that as many students as possible understand that that is the situation with student debt.

[Lord Blunkett (Lab)]

Would my noble friend the Minister recommend that anyone who is confused should go on Martin Lewis’s website? He is very clear about this and it might help them to understand precisely what the scheme is all about.

[Baroness Smith of Malvern (Lab)]

My noble friend is absolutely right and I am pleased to say that I will be meeting with Martin Lewis, who does a sterling job of explaining not just this but many elements of finance. I will be keen to hear from him what more he thinks we should do to make the position clear.

West Papua

Wednesday 13th November 2024 Lords Chamber

Question

15:28

Asked by

[Lord Harries of Pentregarth]

To ask His Majesty’s Government what representations they are making to the government of Indonesia to ensure that the recommendations of the UN Human Rights Committee regarding the indigenous population in West Papua are fully implemented.

[The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)]

My Lords, the UK welcomes the recommendations of the UN Human Rights Committee in response to the second periodic report of Indonesia under the International Covenant on Civil and Political Rights. We regularly raise our concerns about the human rights situation in Papua, both with the Indonesian embassy in London and directly with the Government in Jakarta. In July 2024, the Foreign Secretary raised Papua with the then Foreign Minister, Retno Marsudi.

[Lord Harries of Pentregarth (CB)]

I thank the Minister for her reply. Since Indonesia invaded and occupied West Papua there have been the most appalling human rights atrocities. Perhaps as many as 300,000 people have been killed, and particularly worrying at the moment is the way West Papua is being repopulated by people from Indonesia so that the indigenous population is in danger of becoming a minority in its own country. The world does not know about this, because Indonesia refuses to allow the press, NGOs or human rights commissioners in. What further steps could the Government take to press the Indonesian Government, and what further steps might they take with the UN itself? This situation has gone on for far too long.

[Baroness Chapman of Darlington (Lab)]

The noble and right reverend Lord raises his concerns about this issue consistently, and we respect him for doing that. As I say, we will continue to raise concerns through the Foreign Minister and others. Minister Dodds visited Indonesia in September, and she also raised concerns about Papua.

[Lord Jackson of Peterborough (Con)]

My Lords, the Government are committed to universal human rights. The Minister may anticipate my question, as I have mentioned it before in the House. When are the Government going to appoint a special envoy for freedom of religion and belief? Contrary to the promises that have been made, this has not happened. This is a bipartisan issue, which we all support.

[Baroness Chapman of Darlington (Lab)]

This is very much a bipartisan issue, and so it should always be. The Government will be making announcements about trade envoys and others, I hope very soon.

[Lord Purvis of Tweed (LD)]

My Lords, has the Minister been briefed on the Human Rights Watch report from September, which recommended that the Indonesian Government unconditionally release West Papua and other detainees in exercise of their fundamental political rights, and specifically for the new Indonesian Government, just formed, to permit UN human rights monitors to visit West Papua? This would honour a commitment that the previous Indonesian Government gave in 2018 but that has yet to be honoured. Have His Majesty’s Government specifically asked for that latter point with the new Administration?

[Baroness Chapman of Darlington (Lab)]

We support the work of the UN Commission on Human Rights in this regard. As the noble Lord suggests, this was raised in recent dialogue with Indonesian political representatives.

[The Lord Bishop of Manchester]

My Lords, do His Majesty’s Government agree with the Pacific Conference of Churches that the future for West Papua, alongside Mā’ohi Nui, or French Polynesia, and Kanaky, or New Caledonia, lies in self-determination? If so, what conversations have His Majesty’s Government had with the Indonesian Government to put the case that they should give freedom to those territories they have invaded and annexed?

[Baroness Chapman of Darlington (Lab)]

The issue here is that we support self-determination but recognise the territorial integrity of Indonesia. There are many cases where there are independence movements, including, it should be noted, here in the UK. It is usually wise for international partners to raise these sorts of issues in a very careful way. We have raised issues of human rights, but we respect, as I have said, the integrity of the borders of Indonesia.

[Lord Gold (Con)]

My Lords, the deliberate abuse going on is terrible. If the Government are going to be consistent with their policy, should they not be doing something more than talking to the ambassador for Indonesia? We have seen elsewhere that they are prepared to stop trade. There is £3.5 billion-worth of trade going on with Indonesia each year. Perhaps the Government should stop some of it.

[Baroness Chapman of Darlington (Lab)]

We have a range of options, as the noble Lord indicates, and these judgments can be very finely balanced around how to have influence and how to become an irrelevant voice on the sidelines. We encourage Indonesia to co-operate with the United Nations. I do not think that all we are doing is talking to the Indonesian ambassador —although of course we do that. These issues have been raised by the Foreign Secretary and by the Minister for Development, Minister Dodds, in person, in Indonesia, at ministerial level.

[Lord Watts (Lab)]

My Lords, the Minister is right to be realistic. Is there any evidence whatever that taking action against one country on trade would make any difference? Quite frankly, if we go down that road then there will be hardly any nations we can trade with.

[Baroness Chapman of Darlington (Lab)]

Every circumstance is different. All the situations where we have concerns are unique. Sometimes it is not possible to raise concerns through dialogue. Sometimes the nature of the relationship is such that that is completely unproductive; we can all think of examples where that is the case. In the case of Indonesia, we have a good relationship with the Government there. We seek to use that relationship to raise these concerns. I think that is the right approach.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I am sure the Minister is aware that the alien and invasive crop of palm oil, which was imposed on the people of West Papua little more than a decade ago, has caused enormous destruction and is very much associated with the human rights abuses that the noble and right reverend Lord, Lord Harries, raised in his Question. I do not know whether she is aware of an excellent anthropological study of this, In the Shadow of the Palms: More-Than-Human Becomings in West Papua, which describes how, for the indigenous people of West Papua, oil palms are like sessile triffids that have come in and destroyed their environment and their communities. Can she assure me that no palm oil from West Papua is coming into the UK?

[Baroness Chapman of Darlington (Lab)]

We have worked with the Indonesian Government on sustainable palm oil. I have not read the anthropological study that the noble Baroness refers to, but if she wants to send it to me I would be very happy to look at it. We very much support the role of indigenous communities, particularly in promoting biodiversity and preventing deforestation. They are vital partners and we will achieve very little unless we work closely with indigenous communities.

[Lord Lexden (Con)]

My Lords, should we not be concerned about the Indonesian colonisation of West Papua, which, as the noble and right reverend Lord said, has led to the deaths of tens of thousands among the indigenous population? Will the Government do all they can to stir the international community into action on this matter?

[Baroness Chapman of Darlington (Lab)]

I think the international community is aware of the situation in Papua, hence the interest from the United Nations. We will continue to work through that method, and bilaterally, to raise the issues that we are all so concerned about.

[Lord Spellar (Lab)]

My Lord, I congratulate the Minister on the very measured approach that she is taking. Can she reassure us that the Foreign Office recognises the crucial importance of Indonesia, which is the fourth most populous nation in the world, the most populous Muslim nation, and a crucial part of the economic and security infrastructure in the Indo-Pacific? While we make those representations, can we also advance our relationship?

[Baroness Chapman of Darlington (Lab)]

Whenever possible, influence should be gained through a good relationship and, sometimes, by being a critical friend. The noble Lord’s points about the wider Indo-Pacific and the security situation are things that a responsible Government here in the UK need to take into account.

[Lord Hannan of Kingsclere (Con)]

My Lords, I am very grateful to the Minister for her answers to the noble Lords, Lord Spellar and Lord Watts. Will she take this opportunity to congratulate Indonesia on having last month deposited its formal application to join the CPTPP? Will she congratulate it on, like us, having had a recent democratic and peaceful transition of power, where the new Government keep the same trade policy towards the Pacific bloc as the previous one? Will she take this opportunity to confirm that we will not engage in the kind of protectionism disguised as environmentalism that has led the rapeseed oil industry in Europe to come up with, effectively, a sabotage of any trade deal, thereby opening the door towards the UK being Indonesia’s chief trading partner in this part of the world?

[Baroness Chapman of Darlington (Lab)]

We note the approach to the CPTPP by Indonesia. We believe in free trade and we want to strengthen our trading relationship with partners through the CPTPP, as the noble Lord would expect.

House of Lords (Hereditary Peers) Bill

1st reading
Wednesday 13th November 2024 Lords Chamber

First Reading

15:39

The Bill was brought from the Commons, read a first time and ordered to be printed.

Barnsley and Sheffield (Boundary Change) Order 2024

Wednesday 13th November 2024 Lords Chamber

Motion to Approve

15:41

Moved by

[Baroness Taylor of Stevenage]

That the draft Order laid before the House on 7 October be approved.

Considered in Grand Committee on 11 November.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, I apologise to the people of Yorkshire for mispronouncing the name of the place affected by this Motion. I am reliably informed that it is Oughtibridge. I beg to move the Motion standing in my name on the Order Paper.

Motion agreed.

Property (Digital Assets etc) Bill [HL]

2nd reading
Wednesday 13th November 2024 Lords Chamber

Second Reading

15:42

Moved by

[Lord Ponsonby of Shulbrede]

That the Bill be now read a second time.

Considered in Second Reading Committee on 6 November.

Bill read a second time and committed to a Special Public Bill Committee.

Passenger Railway Services (Public Ownership) Bill

3rd reading
Wednesday 13th November 2024 Lords Chamber

Third Reading

Relevant documents: 2nd and 5th Reports from the Delegated Powers and Regulatory Reform Committee. Scottish and Welsh legislative consent granted.

15:43

Motion

Moved by

[Lord Hendy of Richmond Hill]

That the Bill do now pass.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, I am hugely grateful for the robust and detailed scrutiny from all sides of this Chamber on what is an important and landmark Bill. The Government were clear in their manifesto commitment to bring passenger services back into public ownership, and we shall not pass up the opportunity to do so. We have taken a significant step towards achieving this over these last weeks. Six and a half years after the timetable crisis of May 2018, I am delighted that we have finally begun the process of reforming our railways.

I shall briefly update the House on the position of the devolved Governments. There has been constant and constructive engagement undertaken to date with both the Scottish and Welsh Governments, in keeping with this Government’s commitment to reset the relationship with the devolved Governments. I am pleased to confirm that the Motion has passed each respective Parliament. This demonstrates the unified belief in the necessity and relevance of this Bill.

I thank all colleagues involved in this process. It has been a privilege to take this Bill, one of the first major pieces of legislation for this Government, through this House. On a personal level, I am grateful to be part of the process to improve the industry, which can deliver so much for growth, jobs, housing and the Government’s missions, and to which so many are vocationally committed.

I owe thanks to my noble friend Lady Blake, who so admirably and impressively stepped in to act on my behalf for the Bill’s Second Reading. Her guidance and support on the Front Bench have been of great help.

We will finally have trains that are run for the public by the public. The Secretary of State for Transport said in the other place that her aim is to move fast and fix things. The Bill is the first step towards unravelling a failing, fragmented system and instead places the interests of passengers and freight front and centre. There is a lot of work ahead, and separate legislation will be introduced later to address the much-needed wider reforms. I extend my gratitude to a number of noble Lords who have dutifully engaged with and examined the Bill.

I congratulate the noble Lord, Lord Moylan, on his substantive appointment as the shadow Minister and on his unique and effective style of questioning. It is by no means the first time the noble Lord and I have worked together; he will recall in particular election night in 2010 when, under his and the previous Mayor of London’s political direction, we joyfully took Tube lines back into public ownership—another example of a failed transfer of public assets, in that case to a public/private consortium. However, I should remind him that we needed no reports or further constraints in making the Tube better as a result. We both knew that public ownership itself would bring greater accountability and improvements in performance, and in order to achieve that the noble Lord himself was appointed chair. I hesitate to mention it, but it was a direct appointment without competition. I have no doubt that the noble Lord will feel a similar sense of triumph today as this Bill passes to the other place.

I pay tribute to his colleagues, the noble Lords, Lord Gascoigne, Lord Lansley and Lord Young of Cookham, and I thank them greatly for their most constructive and courteous engagement. I am grateful to the noble Baroness, Lady Randerson, for her valued contribution, and I thank the noble Baronesses, Lady Pidgeon, Lady Scott of Needham Market, Lady Finlay and Lady Jones of Moulsecoomb, and the noble Lord, Lord Bradshaw, for their input in the Chamber and our separate meetings. The noble Lord, Lord Bradshaw, has of course seen it all and is a great champion and mentor for a joined-up, coherent railway.

I place on record my gratitude to the noble Baronesses, Lady Brinton and Lady Grey-Thompson. Their powerful contributions to the debates were moving, thought provoking and essential. I will not take lightly what they have shared in this Chamber. My hope is for us together to build the passenger experience for many, including the disabled, into a source of shared pride rather than a confidence-sapping lottery.

I say to my noble friends Lord Sikka, Lord Liddle, Lord Berkeley, Lord Snape, Lord Tunnicliffe and Lord Hanworth that their wisdom is hugely beneficial, so I extend my thanks to them for sharing it and for their counsel. Additionally, I thank all the officials who have supported me, especially the Bill team, who have worked so hard. Their names are Emma, Matt, Sophie, Heidi, Dani, Emily, Tom, Gabriel and Marisa, and I thank them all. Finally, I thank the Lord Speaker and the parliamentary staff.

This Bill is the first step in changing the culture of the railway and how it works in order to put passengers and freight back at the heart of the system. Only by these means can we start the great process of the reform of our railways to deliver passengers and freight better across Great Britain. I beg to move.

[Baroness Randerson (LD)]

My Lords, I thank the Minister and his team, who have been exceptionally generous with their time in offering advice and assistance on the Bill. The Minister has been willing to give many of the details that we sought about the much-anticipated big Bill that we expect next year.

In addition, the Minister offered an important amendment to the Bill, which he has just referred to, on disability access. That was in response to an amendment in the names of my noble friend Lady Brinton, the noble Baroness, Lady Grey-Thompson, and the noble Lords, Lord Blunkett and Lord Holmes. These new legal obligations will have significant implications for train operators and the rail network generally, and we are very grateful for that commitment, which will make a real difference to the lives of people with disabilities.

From these Benches, we have made it clear that we would not have adopted the same approach as the Government. We would not have divided the issue of ownership from the details of how the system will be organised and how the parts will fit together. The Secretary of State stated on Monday, absolutely correctly, that nationalisation is no silver bullet. In essence, most of the amendments that were put forward, both from our Benches and from the Conservative Benches, simply sought more information on how it would work and where the powers would lie.

As Liberal Democrats, beyond our concern about disabled access, we wanted assurances that passengers would be at the heart of the reforms and that devolution would not just be tolerated but be allowed to grow. We appreciate that the Minister did his best to reassure us on those issues; in particular, he moved some way on devolution. We therefore look forward with enthusiasm to the big Bill, when we can promise him very thorough scrutiny.

I remain sceptical that the Government have the answers to everything; for instance, whether they will genuinely be able to accept private sector operators under a public/private partnership scheme within devolution. I also have reservations about the cost to passengers of the harmonisation of terms and conditions for staff. But I always accept that the Minister understands his brief comprehensively and is absolutely in good faith in his assurances.

We send this Bill back to the other place with the amendments that were passed against the wishes of the Government and are strongly aware of the Government’s majority in the other place. We are realistic about what will happen, but I say to the Government that it would do their cause no harm to accept the good intentions of the first amendment that passed here, which simply stated that it is the duty of the Secretary of State to improve passenger standards. That is, or should be, a statement of the obvious. I hope they might consider bringing forward an amendment of their own on that.

Finally, I thank my colleagues on these Benches for their support and contributions: the noble Baronesses, Lady Brinton, Lady Pidgeon and Lady Scott, and the noble Lords, Lord Bradshaw and Lord Teverson. Finally, I must thank Elizabeth Plummer, our legislative adviser, who was responsible—as always—for excellent advice and for amendments from these Benches.

[Lord Moylan (Con)]

My Lords, before I turn to the substance of the Bill, and in response to what the Minister said, I remind noble Lords who may have forgotten that the remarkable thing about election night in 2010 was that it initiated a period of approximately a week in which, in effect, the country had no Government at all. Labour had lost and the victors were locked in some room in Whitehall trying to work out terms of their agreement. In those circumstances, there was nobody to stop us doing what we did to Tube lines; it shows that you can move fast and fix things when you get the opportunity.

I am very grateful to the Minister for the courtesy he has shown me outside the Chamber as he has given me assistance in relation to this Bill and for the patience he has shown inside the Chamber. It is always difficult for a new Minister when dealing with a Bill which is open to such criticism, but he has handled it with great good grace.

I am also grateful to the Minister’s officials whom I have met and who have offered me advice and briefings. On our own side, I received support in our Opposition Whips’ Office from Abid Hussain and Henry Mitson, and I am very grateful to them. I am also grateful to all noble Lords who spoke in debate in considering this Bill. I shall not attempt to name them; the Minister has already mentioned their names. We had a very good series of debates on this Bill.

None the less, it is not a good Bill. Everyone agrees that the railways need reform. The privatisation model has produced record growth in passenger numbers. There has been a true rail renaissance over the last 25 or 30 years in this country, but the railway has not recovered from the effects of Covid on its operations and reform is definitely needed. The basis of that reform appeared to be the Williams review, which gained a wide measure of cross-party support. It envisaged an important role for private train operating companies but on a different financial and operational model from the existing privatisation model.

Labour has broken that consensus. Why? It is hard to tell, but it is noticeable that the rail unions have been pushing hard for full nationalisation, which will of course increase their power and leverage over the travelling public. Labour now owns the train set and can call the shots. I suspect it will fall to the Conservatives to fix it again when it all goes wrong, as in 2010, on election night, it fell to a Conservative mayor to fix the problems created for London Underground by Labour’s disastrous PPP.

However, the Bill now goes forward to the Commons greatly improved. As the noble Baroness, Lady Randerson, said, it would be churlish and wrong of the Government to refuse to accept those amendments or some variation on them. If we see it back here at all, I hope it will be rather different from how it was when it first came to us.

Bill passed and returned to the Commons with amendments.

Small Boat Crossings

Wednesday 13th November 2024 Lords Chamber

Commons Urgent Question

The following answer to an Urgent Question was given in the House of Commons on Wednesday 6 November.

“For too long, smuggling gangs have been undermining our border security and putting lives at risk, which is why the new Government have made it a top priority to address the crisis we inherited. Let us be clear about what that crisis entailed: small boat crossings in the first half of the year at their highest point on record, and over 100,000 arrivals in the five years prior; over 200,000 cases stuck in the asylum system, costing the taxpayer billions in support; and £700 million spent on a gimmick that sent just four volunteers to Rwanda.

When we entered government, we said it was time for grip, not gimmicks, and that is exactly what we are delivering. Since July, we have established the border security command, headed by experienced police chief Martin Hewitt. In the King’s Speech, we set out our intention to bring forward legislation to give the border security system stronger powers to investigate and prosecute organised immigration crime. We are recruiting 100 new specialist agency and investigation officers at the National Crime Agency to target and dismantle the criminal networks behind this phenomenon. We have also announced an extra £75 million to bolster border security, bringing our investment in the border security command over the next two years to £150 million. This Government’s border security funding boost will go towards a range of enforcement and intelligence activities and capabilities including covert technology as well as hundreds of staff and specialist investigators as we crank up the pressure on the smuggling gangs.

This is an international problem requiring international solutions. Since the general election we have intensified co-operation with partners overseas. We recently struck a new anti-smuggling action plan with G7 partners and the Prime Minister and Home Secretary both attended the Interpol general assembly in Glasgow on Monday to press the case for a much stronger and more integrated global response to organised immigration crime.

As well as tackling the issue upstream, we have taken action to speed up decision-making and stepped up returns of those with no right to be in this country. The result of all this action is 9,400 returns since this Government took office including a 19% increase in enforced returns and a 14% increase in returns of foreign national offenders.

Sticking plasters and gimmicks have failed. The smugglers and traffickers have been getting away with it for far too long. It is time to show them we are serious, not with words, but with action. The security of Britain’s borders is paramount and under this Government it always will be”.

15:57

[Lord Murray of Blidworth (Con)]

My Lords, the Minister for Border Security and Asylum in the other place failed to say whether the Labour Party would honour its manifesto commitment and not open any more asylum hotels. This weekend in Altrincham, we saw a new hotel repurposed, with many local people angry with this decision. Does the Minister share their concern? Does he agree that this breaches the Labour Party’s manifesto commitment?

[The Minister of State, Home Office (Lord Hanson of Flint) (Lab)]

I am grateful for the question. No, it does not breach the Labour Party’s manifesto commitment. As the noble Lord will know, we do not comment routinely—as did his Government—on the location or content of particular asylum hostels. But he will know that this Government are resolutely committed to restarting the asylum process and to saving an estimated £7 billion for the taxpayer in doing so. We are going to deliver a major uplift in returns, and we have already returned people. We will scrap the Rwanda scheme, which the noble Lord was an architect of. We will save several million pounds in doing that and we will put that towards speeding up asylum claims and ensure that we put this matter back on track. We will revisit the Labour manifesto in due course, but I give him a firm “no” in answer to his question today.

[Lord German (LD)]

My Lords, I declare my interest as set out in the register; I am supported by RAMP. We all want to stop dangerous journeys to the United Kingdom, of course, and it is right that we deal harshly with people smugglers, but surely we must also try to take away the demand for the trade that these cruel people provide. Claims for asylum protection can be made only from within the United Kingdom, so the way to beat the smugglers is to provide a safe way of making an application. Will the Government examine pre-screening people from countries with a high chance of a successful application—such as Afghanistan at 96% and Syria at 99%—and then provide them with a travel permit giving them the right to make an application for asylum, thus bypassing the smugglers? Does the Minister agree that this proposal would enable the Government to regulate and predict the number of asylum seekers, as has happened in other parts of the world?

[Lord Hanson of Flint (Lab)]

We will regularly keep under review how we manage the case load on asylum. The noble Lord has made some suggestions that are certainly worthy of examination, but the Government are committed, overall, to meet their international responsibilities on asylum, to reduce the use of hotels, to smash the criminal gangs and to end the Rwanda scheme and use that money in a productive way. On criminal gangs, since 4 July—which, he will note, was the election date—53 people have been convicted of smuggling, 23 of them for running small boats, and they are now enjoying 52 years in prison as a result.

[Lord Baker of Dorking (Con)]

My Lords, is the Minister aware that the refugee convention of 1951 was never meant to deal with the mass migration of people but was very much to do with the persecution that Germans suffered under the Nazis? It is now being used to give the right, to any citizen of any country in the world, to set out on a journey to find a better life in another country—they are economic migrants. Now that the Rwanda scheme has been abolished, what proposals do the Government have to try to prevent economic migrants starting out on what is an illegal journey?

[Lord Hanson of Flint (Lab)]

As the noble Lord said, we have to examine how people are coming to the United Kingdom and what is driving them to do that. As the noble Lord, Lord German, said, some of those people are transporting themselves because of the need for asylum, or because of poverty or persecution; some will be economic migrants. We need to send a signal by the way in which we deal with those individuals in the United Kingdom on arrival and how they are treated. The noble Lord will be pleased to know, I am sure, that since 5 July this year we have had 24 flights sending people back who have no right to be in the United Kingdom, most of whom are economic migrants. We sent 46 individuals to Vietnam, for example, on 24 July this year. In the long term, I hope that will send a signal about people who have a right to asylum and people who have no right to come to the United Kingdom.

[Lord Laming (CB)]

My Lords, can the Minister bring the House up to date? In recent months, how many unaccompanied children have arrived in this country? Is he satisfied with the arrangements to protect them from abuse and exploitation?

[Lord Hanson of Flint (Lab)]

I cannot give the noble Lord an exact figure today, but I will ensure that I write to him with an updated figure. We had this debate a couple of weeks back with a Member from the Liberal Democrat Benches. I included a figure then but I do not have a figure in front of me, so I will need to update that and give it to the noble Lord. As we did in the debate we had in this place two to three weeks ago, I will set out in that reply how we are seeking to protect children appropriately by ensuring that we deal with local authorities in Kent and elsewhere—and to find those missing children, of whom there are approximately still 90, who went missing under the previous Government’s regime.

[Lord Dubs (Lab)]

My Lords, my question is based on having been to Calais about a year and a half ago and talked to the NGOs working with people who were trying to get on the boats. Their feeling was that some of the people who got to Calais went because they had no advice about what was in their best interests. If there were some social workers or others in the Calais area, they might be able to give these people—young people, many of them—some better advice than simply saying that the only future for them is to get on the boats. But that is a sensible policy only if it is backed up by our willingness to take in those who have a connection with this country, particularly on the basis of family reunion.

[Lord Hanson of Flint (Lab)]

My noble friend speaks with authority on this matter. This Government are trying to better engage with our European partners, and France in particular, on how we deal with this problem in Calais and other parts of northern France. One of those issues will be not just the policing and action at ports or on beaches but what we need to do up stream. The Prime Minister will be engaged with a number of European nations to try to look at that upstream element. It is important that we do that.

Because the figure is now in front of me, I can say to the noble Lord, Lord Baker, that we have had 9,400 returns since 5 July this year, which indicates that economic movement is not acceptable behaviour when there are legal routes for application to come to the United Kingdom.

[Lord Deben (Con)]

If we are to solve this problem, it is clearly welcome that the Government are now talking much more closely to our European neighbours. Will they accept that solving the issue of climate change is also important? If that is not solved, the number of migrants we have today will pale into insignificance compared with the numbers of people who will travel across the world to get a life—not a better life but a life at all.

[Lord Hanson of Flint (Lab)]

I find myself in agreement with the noble Lord. The factors that drive movement are war, poverty and climate change. He will know that the Prime Minister and other Labour Government Ministers have been in Baku this week to try to get further action on climate change. One commitment that this Government have is to ensure that, in our term of office, we deal with this issue because, as the noble Lord rightly says, it will drive movement of people, poverty and potentially even war still further if it is not solved.

[Lord Kerr of Kinlochard (CB)]

Can the Minister look again and think about the suggestion from the noble Lord, Lord German? Since the majority of small boat arrivals are from Afghanistan, Syria, Somalia and Sudan, and since a huge majority of these applications are allowed in the end—the case for asylum is proved—would it not make sense to allow for initial vetting of applications by our diplomatic premises in the region? Would that not be a good additional way of cutting down the queue here and putting the smugglers out of business?

[Lord Hanson of Flint (Lab)]

The noble Lord might be interested in the fact that the top five countries for migration are Vietnam, Afghanistan, Iran, Syria and Eritrea, and individuals come for a range of different reasons. I will bring that suggestion to the attention of my colleagues in the department who have direct responsibility for this area, who are Members of the House of Commons.

[Baroness Lister of Burtersett (Lab)]

My Lords, when asked about safe routes, the Minister in the Commons yesterday said that they would not stop all the channel crossings—but all the refugee organisations argue that they would stop some of them. Following on from the questions from the noble Lords, Lord Kerr and Lord German, can the department look more positively at the range of suggestions being made about safe routes?

[Lord Hanson of Flint (Lab)]

The department is open to suggestions generally. We have a triple-track approach of long-term prevention, as mentioned by the noble Lord, Lord Deben; long-term issues on smashing gangs and people smugglers through conviction and arrest; and modernising and improving our asylum system so that we can deal with asylum claims properly. We are open to suggestions about other matters that may help to resolve this problem. We are not going to be blind to the fact that there are a range of potential options, and what we need to do for the sake of those people who are being exploited by people smugglers is to try to reduce this trade dramatically.

Rail Performance

Wednesday 13th November 2024 Lords Chamber

Statement

The following Statement was made in the House of Commons on Monday 11 November.

“With permission, Mr Speaker, I shall make a Statement about rail performance. I welcome the shadow Secretary of State for Transport, the honourable Member for Orpington, Gareth Bacon, to his place. I am sure the Opposition will be interested in what we have to update the House about this afternoon.

After 14 years of neglect, our inheritance was a railway that was failing its passengers, with cancellations at a 10-year high and punctuality that is consistently inconsistent across the network. Back in 2015, cancellations represented around 2% of all services, but thanks to our inheritance of extraordinary failure, that doubled to 4% when the last Government left office. The situation is holding back our economy, stifling our businesses and making life miserable for passengers. That is why, as part of this Government’s public service reform agenda, we are pushing ahead with the biggest overhaul of our railways in more than 30 years. I am grateful for this opportunity to update the House on the progress we are making.

As Members will be aware, the Passenger Railway Services (Public Ownership) Bill is making its way through the other place. It will allow the Government to give three months’ notice to the first private train operating company to be taken into public ownership, which we will announce as soon as Royal Assent has been achieved. No one has ever pretended that public ownership alone is a silver bullet. The people impacted by delays and cancellations, who can no longer rely on the train to get where they need to, do not care who owns the trains; they care whether they are working or not. Under the model we inherited, no one could argue that they were working, so we will soon launch our consultation setting out plans for unification across the railway.

As part of that, Great British Railways, as the single directing mind, will plan services on a whole-system basis, to better deliver for passengers and freight customers, unlock growth and provide the services a modern, efficient railway should. That will lay the groundwork for the introduction of the railways Bill, later this Session, which will establish Great British Railways and end the fragmentation that has hampered our railways for over 30 years of privatisation.

But we do not want to wait for legislation. The Government are already making improvements and taking steps to deliver reform across the railways. I have appointed Laura Shoaf as chair of shadow Great British Railways, bringing together Network Rail, the publicly owned train operating companies and my department to drive better integration now. Working with operators already in public ownership, we are seeking to drive savings by eliminating duplication and deliver the improvements that passengers want, such as allowing tickets to be accepted across those TOCs in public ownership during disruption.

Shadow GBR gives us the tools to assess the structure of the timetable, question resource plans and review performance measures and targets. We are using those tools to unlock the punctuality and reliability that passengers deserve across the country. For example, Southeastern is now performing much better. Its cancellations are low, with its punctuality ranking among the top five operators contracted to my department, and that level of service will increase by 44 additional trains per day when the timetable is updated in December. That is what shadow Great British Railways is delivering now.

We are demonstrating what integration between track and train can deliver for passengers. Take those who rely on Euston station, for example. Indecision on HS2 left passengers with fewer platforms and greater overcrowding, victims of the so-called Euston dash. Convening Network Rail and train operators at Euston in the interest of passengers is an excellent example of the benefits that our reform agenda can achieve. Euston now not only has an integrated station management team but a 100-day plan of rapid improvements that puts the interests of passengers first and individual organisations second. Platform announcements are made earlier, crowding has been reduced and, yes, the advertising screen has been temporarily switched off.

Delays and cancellations were not the only inheritance. For two years, strike followed strike, and disruption followed disruption, in the longest industrial dispute on our railways. I have made it my priority to get around the table, reversing the previous Government’s antagonistic approach by resetting industrial relations and settling the pay disputes that saw the country grinding to a halt. I am working with the sector to speed up training and accelerate the driver recruitment pipeline, which will reduce the railway’s reliance on rest day working agreements and lower the burden on taxpayers. Settling this saga allows us to move forward with long-overdue negotiations on workforce reform, bringing our railways into the 21st century. That is what moving fast and fixing things looks like.

We are putting passengers first and, today, I can inform the House that since the resolution of the LNER driver dispute, we have seen green shoots emerging, with the number of LNER cancellations falling. Not only have cancellations due to a lack of driver resource dropped to near zero as a direct consequence of getting around the table with unions but revenue is £15 million higher for the recent rail periods this year versus the same periods last year. Overall cancellations are down from 7% to 5%, and LNER has run 100 more train services in the last four weeks than in the comparable period last year.

Elsewhere, passengers will see a tangible impact on reliability on Northern Rail trains. Thanks to our agreement on rest day working, hundreds more driver shifts have been covered this weekend, cutting cancellations now and in the long run. At TransPennine Express, operator-caused, on-the-day cancellations averaged around 2% in the last year, compared with 5% in the year before it was taken into public ownership. On CrossCountry, we took immediate steps to implement a remedial plan to reduce its cancellations and get services back on track. Its reduced timetable has brought greater stability, and I expect even greater reliability in the long term as the full timetable returns today.

Those are early signs of what happens when a Government get a grip and put passengers at the heart of decision-making. Resetting industrial relations is already having a direct impact on better services, but it will take time to pass all the benefits on to passengers. We have to be clear-eyed about the problems, but we are committed to full transparency. I can announce today that we will be fully transparent with passengers by displaying performance data at stations to demonstrate how the railway is working and to allow the public to hold us to account as we deliver change. That is important, because the railway is a promise—a promise to passengers from the moment they buy a ticket that the train will arrive on time, as the timetable says.

While there are encouraging signs, I am not naive to the reality that passengers will see only a broken promise so long as the departure board shows trains delayed and services cancelled. That is why I have approached the situation with the urgency it demands, including: focusing on performance today; bringing together industry to make it clear that improvements that can be made now must be made now; and using every tool at our disposal to drive improvements as fast as possible.

At the same time, the root of the problem grows deeper. Decades of muddled decision-making have left the railway fragmented. We have tolerated an unworkable system of track in one organisation and trains in another for decades too long. This Government will turn the page on that chapter of fragmentation. I have wasted no time in kick-starting the long-term reform that our railway desperately needs. We have wasted no time in bringing train operating companies under public ownership. As today’s figures show, we have wasted no time in getting around the table with unions and making change happen now. That is what moving fast and fixing things looks like, and I commend this Statement to the House”.

16:08

[Lord Moylan (Con)]

My Lords, when a Secretary of State comes to the House of Commons to make a Statement, I have always imagined it to be a rather portentous matter; something serious must be afoot. I note that the Minister has not exercised his right to read this Statement to the House and I can understand why, because it is almost completely vacuous. There is nothing in it at all, really. They must be having a very quiet time in the House of Commons if they want to sit and listen to this.

We learn of a few modest but welcome improvements. We learn that there are going to be new signboards at Euston. We know that people will have their tickets accepted across publicly owned train operating companies in the event of disruption. We are even told that there are “green shoots emerging” at LNER—I thought that that phrase had rather been cast into history, but possibly it is better than “leaves on the line”. But the performance improvements that the Secretary of State claims credit for in the Statement are not all what they seem.

Cancellations on CrossCountry have been reduced but the Secretary of State does not reveal—or she does slightly reveal if you read it carefully—that this has been achieved largely by reducing the number of time- tabled trains. Cancellations have also improved on TransPennine Express, we learn in the Statement, but she does not mention that, according to the Office of Rail and Road, delays have increased. The passenger-in-chief, as she wishes to be known, claims great progress as a result of her “getting around the table with unions”. Those of us who remember her first encounter with the unions recall that she barely stayed long enough, I imagine, even to sit at the table before she conceded all their demands.

This is not serious stuff from the Government about the railways. The serious stuff was put very squarely by the Minister earlier this week, and it is that the railways cost as much as they did before Covid but they have only 80% of the revenues. That is the problem, that is how he summarised it, and that is what the Secretary of State should be coming to the Commons to talk about, not green shoots at LNER and possible improvements in cancellations on TransPennine Express. She said, as the Minister himself said earlier this week, that there is to be a consultation on the Government’s plans. He said he hoped it would be published before Christmas. She says it will be soon. We look forward to it. We will be judging it according to the standard of whether or not it addresses the problem. The railways do not have enough revenue. We want to know what the Government are doing about it. Statements such as this are merely faffing around.

[Baroness Randerson (LD)]

My Lords, I agree with the noble Lord, Lord Moylan, that this is a real time filler of a Statement, and I will not waste the time of this House by repeating some of the points he has just made that I had picked up on. Instead, I will ask the Minister some questions that flow from the rather superficial things in the Statement.

The Statement refers to ticket simplification but that is obviously still a long way off and what is being offered is a very modest measure. What passengers want to see is some kind of outward sign that the Government are taking seriously the fact that they are getting a very poor service at a very high price.

Fares went up by 5% this year and are scheduled to go up by a similar amount in March. I urge the Government to look at that again. Indeed, I challenge them to look at it again and to freeze fares in March at the current levels in recognition of the fact that rail services are not good enough to justify fare increases.

The Statement includes an update on LNER and refers to improvements in driver availability on the line. Unfortunately, that is not a general picture. Both Great Western Railway and Northern Trains regularly cite non-availability of drivers and train crew as a reason for cancellation. Can the Minister tell us what the Government are doing, across all train operators, to deal with failures of recruitment and training? That is clearly what must be happening at the moment. I fear this situation could get worse as train operators come towards the end of their franchises. I am interested in the Government’s strategy to stop this system, which is bad and getting worse.

Finally, the Statement references an improvement in industrial relations, but the Government face a big challenge as the nationalised train operator moves to one harmonised set of terms and conditions. What are the Government intending to do to ensure that the inevitable levelling up of terms and conditions properly modernises the industry and does so at a cost that taxpayers and passengers can afford, and when will they do it?

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

I thank the noble Lord and the noble Baroness for their comments. I start by saying that I could not disagree more with either of their descriptions of the Secretary of State’s Statement in the other place. All my experience as a public transport operator is that people really care about the service that they are offered on a daily basis, and I think that we should welcome the Secretary of State making a Statement about things that are happening on the railway for the service of passengers. It is really very welcome. It is very important that it is recognised as a Statement by the Secretary of State for passengers, about what is going on.

I disagree with the suggestion from the noble Lord, Lord Moylan, that these things are trivial. It is absurd, frankly, that on many journeys in northern England which are served by two companies—both owned by the Government—tickets are valid only on one of them and passengers might get fined for getting on the wrong-coloured train. Ticket acceptance, both in normal times and when services are disrupted, ought to be completely obvious, but the railway does not allow it, not even when the companies have the same owner—it is just extraordinary.

The noble Lord referred to CrossCountry cancellations being reduced. The reason they and the timetable are reduced—much to my irritation and that of the Secretary of State—was that the company which ran it suddenly found that it did not have enough drivers available. It appeared to be extraordinarily sudden, and I will come back to that in due course. The noble Lord mentioned delay minutes on TPE, but sadly his counterpart in the other place had not looked in a sufficiently granular manner at the statistics. In the last 12 months, as well as cancellations going down on TPE, delays have reduced; the statistics that were quoted were four-year statistics. I do agree with the noble Lord that it is more than this, and that is why we have said consistently—and I have been able to say consistently in discussing the Bill on which we have just had Third Reading—that there will be a much bigger Bill. But it is really important that things happen now, because people are travelling on the railway every day and they care about the service they are offered. They are offended by the stupidity of some of the existing rules which are the result of the balkanisation of the railways, and we should fix them.

Of course, the major ticket simplification that the noble Baroness referred to is a long way off, but it is one of the purposes of the Bill that has just had its Third Reading. Until we can control the fares structure and the information about fares and ticketing, it will not be possible to reform the fares system in the way that people want. The noble Lord, Lord McLoughlin, has reminded me several times of his ambition to do that in his time as Secretary of State for Transport and his frustration from not being able to do it. The fact is that we will not be able to do it until we have got hold of information that is currently commercially confidential, even though it is on a risk that has been taken wholly by the public sector since Covid.

The driver availability issues are legion, so it is worth talking about them briefly. LNER has improved because we have solved the industrial dispute. Drivers are now working rest days and cancellations are now virtually zero. However, there are cancellations on other train companies, which are caused by a railway-wide shortage of drivers—a shortage of people and a shortage of the knowledge to drive all the routes and knowledge of the tracks on which they drive. It seems astonishing, but we have had to commission work to find out how many drivers the railway is short of, because no previous Government collected that information in order to deal with it.

The Government are doing a huge amount. In the business plans of all the train operators next year, one of the inputs that I want to see is how many drivers are being trained and the availability of those drivers. I can tell your Lordships that, over my nearly 50-year career in public transport, the first thing you want to understand is how many staff you have, what they do and where they are. The fact that we cannot account for that over the railway as a whole demonstrates that we do not have workforce planning in anything like the way that we would want.

The noble Baroness made some assumptions about the future of terms and conditions on the railway. In Committee and in other discussions on the Bill, we have not made our minds up yet about what to do. However, she is right that we need a modernisation of those conditions. I used to feel uncomfortable with the pay and conditions of Tube drivers when I ran Transport for London, but it took me some time to realise that at least they were rostered for seven-day weeks. Most of the railway asks people to cover work on Sundays on a voluntary basis, which is, if not Edwardian, Victorian. Nobody sought to change it, but we must change it, because it is unacceptable both to ask the staff to give up their work rest days and to ask the passengers to tolerate a service where people are not rostered to cover what is in the timetable.

My response to both the noble Lord and the noble Baroness is that these things are important. I welcome the Secretary of State making the Statement in the other place, because people want to know not only that we have a great plan to reform the railway but that we are doing something about it now. She said what we were doing and some of it is good news.

16:23

[Baroness Deech (CB)]

My Lords, I have twice invited the Minister to come to see the shambles and chaos in Oxford caused by Network Rail, but he has not so far taken up my invitation. Patients and doctors who need to get to hospital have not been able to get through the blockage caused by Network Rail for nearly two years, with no end in sight. The project has failed; it is bogged down in mud and a lack of resources. All the residents of west Oxford are blocked from accessing the station unless they can afford a £50 taxi fare around the ring road. I have appealed to the Minister and the Secretary of State to do something about it, but I hereby repeat my invitation: come and see the businesses that have closed, the people who are limping towards the station and the children who cannot get to school. It is a real disaster—please see it and sort it out.

[Lord Hendy of Richmond Hill (Lab)]

I absolutely understand the noble Baroness’s discontent and irritation with the situation in Oxford. What I have promised her, and indeed other important stakeholders, is that when we understand what the solution to this issue is, and that will be soon, I will come very willingly and will bring with me the chief executive of Network Rail, who is equally embarrassed—in fact, it is now his job rather than mine directly—and we will talk directly with everybody about the situation. It is very unfortunate and unsatisfactory. In the meantime, I have said to the noble Baroness and others who have written to me that, if they think that we can do any more to alleviate the position of the people in west Oxford, all she needs to do is to write to me and we will do everything we can.

[Baroness Humphreys (LD)]

My Lords, the new Avanti trains on the west coast north Wales line are very welcome, but access to those trains is sometimes difficult, with large gaps between the train and some platforms. Can any remedial action be taken to ensure the safety of passengers, especially those with limited mobility?

[Lord Hendy of Richmond Hill (Lab)]

The noble Baroness raises a subject that I feel that I should know more about than I do. I know the general issue, and one of the benefits of a coherent, integrated railway ought to be that Great British Railways should be considering level boarding far more deeply than anybody on the railways has generally done. That criticism can be levelled at most parts of the British railway system, with some notable exceptions.

I will now go and look at the compatibility or incompatibility of the trains and the platforms in north Wales. You have to remember that the platforms were largely built in that case in the 1840s, and not much has happened to them since. However, I recognise that it is a huge problem and I recognise the access issue, which always or nearly always calls for ramps and people to deploy them. It is unsatisfactory. Sadly, the infrastructure lasts for a very long time indeed, and the trains last for a long time, and it is a subject on which Great British Railways will have to do better than the railway has done for the last 50 years.

[Viscount Stansgate (Lab)]

My Lords, I am not a current active user of Euston Station but, in the course of my lifetime, I know well enough what experience you can have at that station, and it has often been quite dismal. However, I am encouraged by the Statement, which refers to “a 100-day plan of rapid improvements”. Can my noble friend the Minister outline a little more what he hopes will be the situation that will make the business of using Euston a more pleasurable experience for passengers?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for that question. I was at Euston a week last Monday, hearing about the details of the plan. The station itself was very modern in 1968; it is no longer very modern. As a previous chair of Network Rail, I can tell your Lordships that if you look closely at the columns in the station, there are bands around the marble because it would fall off without them. The station is no longer in a fit condition. I would like to take some modest credit for having reincluded the concourse at Euston in the overall plan for the redevelopment of Euston and, now that the tunnels for HS2 will go there, I am very hopeful that all parts of the station will be fit for passenger usage in the future.

However, in the meantime, the most important parts of the 100-day plan are the following. The concourse is too small, so the logical thing to do on the concourse is to load the trains earlier, yet the position up until very recently was that neither of the train companies routinely managed to do that. However, they are now changing. So, a significant proportion of Avanti trains will be loaded at least 20 minutes before departure and, for the more local services on the London Northwestern trains, the platforms will be full of passengers even before the train has arrived. That will make a huge difference. There is a bookshop there currently that will not be there shortly, to create some space. I recall that we got criticism for removing Boots, but too many shops and not enough concourse space is the wrong answer. There will also be some further improvements to signage and visibility. When the last signage was done, it was hoped that it was the right job, but I am afraid it turned out not to be.

I hope that that is sufficient granular detail, but, if my noble friend would like to make himself available, either I or somebody else will show him around Euston Station, and I can get them to show him what is going to happen.

[The Lord Bishop of Manchester]

My Lords, I am grateful for what we have just heard. As somebody who frequently travels between Manchester and London Euston, I know that, at Manchester, I can often get on the train 20 minutes before it is due to leave and settle down, but at Euston it is a mad dash. It has still been like that, even in recent weeks. I want to focus on more local rail services. When I last spoke in this House on that subject, I asked the Minister whether there was any progress on allowing Greater Manchester—which now has control of the buses and the metro system—to take control of local rail as well. Integrating the transport system in a major city, as happens in London, is absolutely crucial. I can get to Manchester and then it takes me an hour to get home, out of the city, even though it is only two miles away. Is the Minister able to give us a progress report on that?

[Lord Hendy of Richmond Hill (Lab)]

My previous statement about Euston could be added to only by saying that it would be very good if Avanti would like to run all the train services.

As far as the local rail services in Manchester go, I was with the Mayor of Greater Manchester last Thursday—six days ago—and there have been a lot of discussions between Transport for Greater Manchester and the department about a package of measures so that the mayor can replicate the success of his Bee Network for buses and the Metrolink with the railway service. Indeed, some of the discussion with the noble Baroness, Lady Randerson, and her colleagues about the Bill that had its Third Reading earlier was about greater devolution. The mayor has an aspiration to have much more control over the local railway service, and I think we have a plan coming together to achieve that. The substantive railway Bill will give combined authority mayors a statutory role in that. In advance of that, we are making significant progress on fares, ticketing and service levels.

My final point is that the service, particularly with Northern, has been ravaged by driver shortages and industrial disputes. I referred earlier to an industrial dispute on Northern that has been going on for nine years and has not improved either the morale of the staff, customer service, or the reliability of the train service. We have resolved a dispute with Northern drivers and we are on the cusp of resolving a dispute with its conductors. That would be much to the benefit of all local rail travellers in Manchester and north-west England.

[Lord Sterling of Plaistow (Con)]

My Lords, I brought this up a few weeks ago. Apart from passengers—and the noble Lord knows more than anybody else on this subject—the main thing about the railway system is trade. I talked then about when I wanted to buy a trade line. At the time, P&O—or the Peninsular and Oriental Steam Navigation Company, if noble Lords really want its full name—controlled well over 25% of all transport in this country, and I wanted to buy a freight line. At that time, a huge number of trucks—thousands of them—were going up and down the main roads. We wanted to take all that freight on to the railway system. We controlled only about 3% of trade in continental Europe, but we wanted to take freight right the way through to Istanbul—2,500 miles and further. We are where we are today. The Minister knows much more about this than almost anybody else in this House, but there are thousands of vehicles going up and down the trunk lines. In practice, they could be taken off the roads, as is done in China and other great nations, particularly America, where the railway systems move all freight and heavy freight. At a time when we really want to make this much cleaner in this country, I suggest that that is something of great importance that should be considered.

[Lord Hendy of Richmond Hill (Lab)]

The Government are committed to growing railway freight. I made a commitment during the passage of the Bill, the Third Reading of which we had today, that the Government would institute a growth target to increase freight traffic by rail in this country. The companies that do it are, for the most part, privately owned; they are commercial businesses and the terms on which they deal with the freight that they run are largely for them. However, the Government have some schemes to assist new freight flows and we will continue to look to do so in the future.

[Lord Watts (Lab)]

My Lords, I congratulate the Minister. After 13 or 14 years of a Government who seemed committed to keeping a dispute with the rail unions going for as long as they could and doing nothing to solve the problems of the railway, today we are hearing of all the problems that still exist, but they are historic. I am very pleased that the Minister is doing a root-and-branch attack on all the issues that need to be addressed if we are to have a modern railway system. Does he agree that we need to move as quickly as we can?

[Lord Hendy of Richmond Hill (Lab)]

I do.

[Lord Wigley (PC)]

My Lords, further to the question asked by the noble Baroness, Lady Humphreys, on the condition of the platforms along the north Wales line, if the Government can find £100 million for bat runs relative to HS2, surely they can find a fraction of that money to help disabled people along the north Wales coast.

[Lord Hendy of Richmond Hill (Lab)]

The provision in HS2 for bats is a whole other subject, but I sympathise with the drift of the noble Lord’s argument. We should be doing as much as we can to enable access to the railway system by everyone. The noble Baroness, Lady Grey-Thompson, who is in her place, knows that we have not been very good at it so far. I made a commitment to the House during the passage of the Bill of which we had the Third Reading today that we would do more. Level access, which I have already referred to, is an important subject. It is hard to crack but we should start, because if we do not start then we will never finish.

[Lord Murphy of Torfaen (Lab)]

Regarding HS2 and Old Oak Common, what is going to happen to services from Wales and the West Country over the next number of years with the effective semi-closure of Paddington station?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for that question. I met, I think, every Member of Parliament west of Bristol two days ago, and they all had the same question. The work at Old Oak Common for the HS2 station and the construction of an interchange station on the Great Western main line, which also serves the Elizabeth line, is a big undertaking. I agreed then, and say again now, that one of the questions is whether it needs to be so disruptive, and so disruptive now. To answer that I am going to meet all the parties involved in the next few days. It is a big job at Old Oak Common, but I understand the views of those who use the Great Western main line. I will attempt to answer those questions and see what can be done to alleviate the delay during building and its effects after construction.

[Baroness Morris of Bolton (Con)]

My Lords, can I take the Minister back to Manchester and the Northern line, which I use every week? Not only are the trains regularly cancelled but, when you are waiting at the station for the next train for either Blackpool North or Barrow, it regularly has only three of its six coaches. Can the Minister explain why that is?

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Baroness for her question. I am not sure that I can explain that, but the too-frequent short formation of trains on the national railway system is wholly unsatisfactory. It is one of the things that the Government need to deal with. Part of it is a shortage of rolling stock, some of which is due to the complexity of the arrangements for their procurement, lease and operation. One of the reasons for the reform process, which I deeply care about, is that, in the end, somebody should be in charge of demonstrable parts of the railway system. They should have under their control the staff who operate the system, the rolling stock and the infrastructure, so that there is nowhere to go for an excuse.

Everybody on the railway blames everybody else; even in Network Rail, I found myself reading the morning’s performance and thinking, “Thank goodness that’s not my fault”. That is entirely the wrong way to think about it. When I ran Transport for London, as the noble Lord, Lord Moylan, knows, everything was my fault, and it was our job as the management to fix it. That is what we want out of a revised structure for the railway. I want to see somebody who says to themselves every morning as they get up, “That train service is mine. Why does it not run properly? How are we going to fix it so that yesterday’s problems do not occur tomorrow?” I am absolutely passionate about that, because I did it for nine and a half years at Transport for London; if you can do it in one of the world’s great cities, you can do it on defined parts of this railway network.

Football Governance Bill [HL]

2nd reading
Wednesday 13th November 2024 Lords Chamber

Second Reading

Welsh Legislative Consent sought.

16:40

Moved by

[Baroness Twycross]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)]

My Lords, football brings joy to fans right across the country, as well as a shared sense of community. It is an essential part of the social fabric of our country. Growing up, I lived within earshot of the Manor Ground, Oxford United’s former home. My dad, who was a season ticket holder, took me and my siblings to games, including to Wembley when Oxford won the Milk Cup.

Loyalty to clubs runs through families and creates a sense of pride within communities across the generations. With apologies to noble Lords who support Bolton, I was delighted when my niece Talullah and nephew Winston got to experience the same euphoria I did as a teenager—and in May as well—when we went to see Oxford win the League One play-off final at Wembley earlier this year.

English football goes beyond family loyalty and local communities. It is a global success story and one of our greatest cultural exports. It is an industry we want to protect, for its economic value and for the fans who turn out to support every week, even when their team is down on its luck.

Despite its phenomenal success, we know that irresponsible owners, unsustainable financial models and inadequate regulation have cast a shadow over too many of our clubs. Too often, fans have had to fight to protect their club’s identity, heritage and even its very existence. In recent years, we have seen the devastating impact that losing these battles can have on communities, such as with Bury and Macclesfield Town.

Since 1992, there have been over 60 instances of professional clubs in the top four divisions going into administration, and two expert reports commissioned for DCMS have shown that the situation is not improving. In 2023 alone, clubs in the top five leagues faced pre-tax losses of over £1 billion, and net debt stood at over £4 billion. These are eye-watering figures.

Unfortunately, the football industry has not gone far enough in tackling these issues, despite many opportunities to do so. That is why we are bringing this Bill forward to establish an independent regulator, delivering on our commitment to make this country the best place in the world to be a football fan.

This is historic legislation which has been developed over several years, including by the previous Government, who recognised the need to regulate in this space. I give special thanks to Dame Tracey Crouch for chairing the independent Fan Led Review of Football Governance. It was her review that recommended an independent football regulator and laid the groundwork for the extensive policy development on this much-needed legislation.

Before I get to the details of the Bill, I thank all those who have engaged so constructively in its development, including many noble Lords from across your Lordships’ House here today. In particular, I thank the Football Supporters’ Association, the English Football League, the Premier League, the National League, the Football Association, UEFA, FIFA, the Professional Footballers’ Association and Kick It Out, as well as clubs across the football pyramid.

I turn to what the legislation does. The regulator will improve the resilience of club finances, tackle rogue owners and directors, and strengthen fan engagement. It will also set out a corporate governance code of practice and prevent clubs joining breakaway leagues.

Too many clubs are living beyond their means. Therefore, the regulator’s primary purpose will be to protect and promote the sustainability of English football. It will achieve this through a licensing system where all regulated clubs in scope will need a licence to operate as professional football clubs. That scope will be set out in regulations and is currently envisaged as the top five divisions of English men’s football.

The regulator will not be a fix for all football’s woes, nor should it be. It will have a very tightly defined scope and purpose to tackle the specific risks of significant detrimental impact on fans and communities. Legally, the regulator will not be able to act outside of this scope.

The football industry has shown itself incapable of addressing these failures. We have seen in other industries that, when done well, proportionate regulation still allows for innovation and ambition—financial services being a good example. Where clubs are already well run, regulation will be light touch to ensure sustainability without standing in the way of clubs’ ambitions. Indeed, compared to some comparator countries, this is not interventionist regulation.

To better understand the landscape of English football, the regulator will periodically undertake a “state of the game” report. This is expected to include a broad assessment of the financial health and economic issues of the industry.

Under its regime, the regulator will introduce new regulation to improve financial resilience in the game. Clubs will be required to demonstrate sound basic financial practices, have appropriate financial resources, and protect the core assets and value of the club, such as the stadium. This will reduce the risk of clubs facing financial failure and the huge knock-on impact and distress that that carries for entire communities.

This Government are committed to putting fans back at the heart of the game. As such, the Bill goes slightly further than the Bill debated in the Commons earlier this year. It will put in place a stronger minimum standard of fan engagement in decision-making on a number of key issues at all regulated clubs. The Bill also introduces important new statutory protections for key aspects of a club’s heritage, such as its name, home shirt colours and badge, because although most clubs have a strong relationship with their fans and actively engage them in decisions that affect club heritage, not all do. Fans at Cardiff City and Hull City will know this well, where they have had to battle to keep their club’s name or shirt colours.

Clubs will need to seek the regulator’s approval to sell, or relocate from, their home ground. Relocation from a club’s home ground will not be approved unless it both makes financial sense and does not compromise the heritage of the club. This will help to prevent a repeat of what we saw when Wimbledon moved from their home in south London to Milton Keynes.

Fans have also suffered the consequences of irresponsible ownership. We have seen some owners acquiring clubs without having adequate finances, or who were involved in criminality, or who had histories of financial mismanagement. The regulator will put in place stronger, statutory owners’ and directors’ tests to protect fans from the impact of irresponsible owners and decision-makers by ensuring a club’s custodians are suitable. All prospective owners and directors must pass the regulator’s tests before taking a position at, or acquiring, a club. If someone already in the system is found unsuitable, the regulator will have powers to remove them.

We have removed a clause from the previous Bill that allowed government foreign policy and trade considerations to be considered when approving takeovers. This change makes it absolutely clear that the new regulator will be independent from government.

One of the main triggers for the fan-led review was the attempted breakaway European Super League, which prompted a fierce backlash from fans. Clubs will be prevented from playing in competitions prohibited by the regulator. This will mean that fans no longer face the prospect of seeing clubs trying to join unfair, closed-shop leagues that undermine the fundamental principles of English football.

I turn now to distribution of revenue in the game. Since 2019, the leagues have failed to negotiate a new distribution deal—another stark example of the industry being unable to resolve key issues. So, while a football-led solution remains this Government’s preferred outcome, the regulator will have statutory backstop powers to intervene if necessary. The backstop mechanism is designed to incentivise an industry-led solution. However, in the absence of one, it will be robust enough to ensure an agreement is put in place to fairly distribute revenue.

Only one of the relevant football leagues can apply to trigger the backstop mechanism, if they feel that they cannot reach an agreement themselves. This does not mean, however, that the process will automatically be triggered. The regulator can decide to trigger the process based on such an application if relevant conditions are met. The regulator will then enforce a mediation period to try to encourage the leagues to come to an agreement themselves.

However, if an agreement cannot be reached, the final offer arbitration process will be triggered. This process requires both leagues to submit final proposals for a distribution agreement, and the regulator will choose the one most consistent with its objectives to promote the financial soundness and resilience of football. It can reject both proposals if they are unsuitable. This decision will be enforced via a distribution order. At every stage, this process is intended to encourage an industry-led solution, while ensuring an agreement on distributions will be reached. The Bill will also establish a corporate governance code, requiring clubs to report how they are applying the football club-specific corporate governance code published by the regulator.

As noble Lords will be aware, Labour supported the introduction of the previous version of this Bill, which was debated in the other place prior to the election. The new Bill is largely in line with the previous Bill. However, we have made key changes to ensure we deliver the best possible proportionate regulation that safeguards the future of our national game.

These changes will empower fans, keep clubs at the heart of their communities and ensure the financial sustainability that will protect clubs for future generations. As a result of the changes we have made, clubs will be explicitly required to consult with supporters on ticket prices. This, among other measures, will give fans a louder voice at their clubs on the issues that matter to them. Clubs will also be required to consult their fans prior to the regulator making a decision on relocation of a home ground.

Parachute payments will no longer be excluded from consideration as part of the backstop process. They are a significant part of football’s financial landscape, and if the regulator identifies them as a relevant factor, it will be able to consider them as part of the backstop.

Finally, the fan-led review identified that the game needs to do more to ensure it is open and welcoming to people of all backgrounds. There is therefore a clear commitment from this government to do more to improve equality, diversity and inclusion within football club governance. Clubs will be required to publish what action they are taking on equality, diversity and inclusion as part of reporting against a new football club corporate governance code, which the regulator will introduce to improve decision-making at clubs. The measures in this Bill have been carefully developed to ensure we are taking a proportionate and flexible approach to regulation that reflects the unique and special place football has in our society.

The regulator will be focused on financial sustainability as well as safeguarding the heritage of English football. But, crucially, it will also have duties to have regard to minimising its impact on important outcomes such as the competitiveness of our clubs against overseas competitors and investment into the game. This will provide a stable regulatory environment, providing the certainty required to drive future investment and growth, so that English football continues to be a global success.

If clubs have the finances to back up their plans, have suitable owners and directors, engage their fans on key issues and do not join closed-shop breakaway leagues, they should feel very little impact from the regulator. Given the ongoing issues at some clubs, we are determined to ensure the regulator is in place as quickly as possible once this legislation passes. This is why we are already putting in place a shadow regulator to do the preparatory work and lay the foundations of the regulatory regime.

The case for better regulation of our clubs is clear. This Bill will provide the much-needed reform to protect our footballing heritage. I am grateful to noble Lords for their involvement in and support for the Bill. I look forward to working across the House in the weeks ahead. I beg to move.

16:54

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to the noble Baroness, Lady Twycross, for moving the Second Reading of this Bill and for the generous and comprehensive way she set out all the work that has gone into it to get us to this point. I am also grateful, as is my noble friend Lord Markham, for the time she gave earlier this week to discuss the Bill with us. As noble Lords may know, and as the Bill team was warned when we were working on the Bill before the election, I am not the world’s greatest football aficionado, but it is a mark of the power and allure of the beautiful game that none of us can be mistaken about the central part that it plays in our national life.

In 2010, I had the pleasure of standing for election to another place in my native city, Newcastle upon Tyne. I was an eager, first-time parliamentary candidate and had been campaigning for nearly 18 months when the election was finally called, so it was a chastening reminder of most people’s priorities to see the front page of the local papers on 6 April 2010. That was the day that Gordon Brown finally went to the Palace to seek a Dissolution. More importantly, on Tyneside, it was the morning after Newcastle United had won promotion back to the Premier League after their relegation in 2009. The Newcastle Evening Chronicle that day was a commemorative edition, offering 10 pages of photographs, analysis and reaction from the fans. Tucked away in the corner was a tiny news in brief: “Prime Minister calls election—full story, page 11”. So I have never been in doubt about where football stands in the nation’s priorities—understandably, since it is one of this country’s greatest inventions and exports.

As we begin our scrutiny of this Bill, it is worth casting our minds back to 26 October 1863. On that date, gathered in the Freemasons’ Tavern on Great Queen Street—the same tavern, incidentally, in which the Conservative Party conference was held for the first time four years later—Ebenezer Morley, along with the representatives of a dozen other London clubs, came together in a spirit of camaraderie and shared passion to form a body that would unify the rules and practices of the sport they loved. From that meeting came the Football Association—the first association of its kind, and one which has formed the model for governing bodies around the world.

The year 1888 saw another key moment in the football canon. It brought the creation of the English Football League—again, a world first—followed a year later by the establishment of the Northern League. It was with this development that the professionalisation of football really took hold. Without that Victorian spirit of imagination and enterprise, the game of football as we know it today would not exist.

Since its inception, football has been a great unifier—indeed, even a peacemaker. It was a football match that famously brokered a momentary truce on the Western Front on Christmas Day 1914. Since the inaugural FIFA World Cup in 1930, football has brought nations together around one central purpose—the love of a game—in friendly competition. Over the years, football tournaments have flourished across the globe. It has become by far the most popular and loved sport in the world. All that would not have been possible had it not been for that evening in October 1863 here in England.

Why dwell so heavily on the history of this beloved sport? It is because history is at the heart of this Bill. Football is woven into the fabric of our nation. It is central to the identity of millions of Britons. It is the thread that binds communities together—communities such as my home town, where Whitley Bay FC are a source of great local pride, not least as the record-holding, four-time winners of the FA Vase. Football generates memories, creates its own traditions and is infused with the spirit of every player, every fan and every club.

Across the country, thousands assemble weekly in all weathers to cheer on their favoured team: the club supported by their parents, their grandparents and their great-grandparents before them. A football club is more than just a patch of soil; it is hallowed turf, nourished with the blood, sweat and tears of generations. The badge worn on the heart of every player is not merely a picture but a symbol—of hope, of heritage, of devotion. That is what English football is all about and that is why it is so important for us to get this Bill right.

A football regulator will work only if it is able to protect the beating heart of the game and if it strikes a balance between protecting the past and the future of clubs and competitions. There is much in the Bill that does indeed strike that balance, and I am proud that it was the previous Government who commissioned the review that led to its creation. I repeat the thanks the Minister gave to Dame Tracey Crouch and to the tens of thousands of fans who took part in that review and helped to shape it. The work has always enjoyed cross- party support, as the Minister noted, and I welcome the fact that the new Government have sought to continue it so swiftly.

As I have discussed, the Bill attempts to tackle the issue of heritage. The regulator will have an explicit duty to protect the unique history of each and every club and to ensure that the links between clubs and their communities are immutable bonds that can never be broken. But we must not ignore the fact that the Bill before us today, as the Minister candidly set out, is not the same as the Bill that was under discussion in the previous Parliament. Key safeguards that were intended to preserve elements of the independence and sustainability of the leagues have been changed. There are four areas of this new Bill that we on these Benches will be examining particularly keenly during its passage through your Lordships’ House.

First, in considering the principle of a regulator, we support the establishment of the independent football regulator. We are pleased that it will have a role in preserving the history and heritage of clubs and that it will protect against the threat of rogue owners, some of whom in the past have asset-stripped clubs for their own gain. But we remain concerned about the potential for regulatory overreach. We must be vigilant against mission creep, as is all too often the case with regulatory bodies. A key word in the Minister’s speech was “proportionate”. If this new regulator becomes too deeply involved with the minutiae of clubs’ finances, we risk damaging one of our most significant cultural institutions and greatest exports. If the regulator becomes too prescriptive in its requirements, how will clubs retain their competitiveness against their global rivals? Any outcome that sees a reduction in investment and creates a possibility for English football to lose its premier status must be seen as a failure. It is our job to ensure that this does not happen.

Secondly, the Bill brought before the last Parliament explicitly excluded parachute payments from the scope of the regulator. This Bill, as the noble Baroness outlined, has removed that exclusion. The Government have reasons for this, as she has explained, but we remain unconvinced. We know that payments to relegated clubs are vital for the financial sustainability of those clubs. When a club is forced into the Championship from the Premier League, its overheads do not decrease yet its income does. Football clubs are not like just any other business; they cannot simply cut costs. Without parachute payments, clubs facing relegation would be forced to the financial precipice. Surely any risk of a club being forced to enter administration because of action taken by the regulator would be the polar opposite of the aim of this Bill. That too is an outcome we must resist.

Thirdly, I turn to the backstop mechanism—a term that, I admit, still brings me out in hives after years of discussing Brexit deals. The backstop in this instance was first envisaged as a last resort, to be called on only should neither party agree on the distribution of revenue. But there are absolutely no guarantees that this will be the case. If one party wants to trigger this mechanism, it may do so whenever it wishes. The binary choice presented by the backstop, and the inclusion of parachute payments in that mechanism, could lead to a scenario where the regulator forces one business to give its money to another. Setting aside the financial risks in that, the potential for protracted legal action could have very injurious implications. If league organisers and clubs cannot be certain that they will receive the income they expect and if they cannot anticipate how often they may be bogged down by lengthy and costly battles in the courts, how will they be able to produce the business plans required by the regulator for licensing purposes? Of course, the financial sustainability of the whole football pyramid is of the utmost importance, but there must be at least some recognition in the mechanism of the unique role that the Premier League plays as the ultimate funder in the financial vitality of the English league system.

Finally, one of the laudable aspects of this Bill is the attempt to improve fan engagement. Given that the Bill was born of the fan-led review, it is only right that those who give their support to the sport should be engaged by the clubs they love so dearly. But there are important issues to examine here. How do we define who a fan is? Who decides? Will clubs be allowed to choose with which groups or people they engage? Will the regulator? What impact will this have on supporters’ engagement and on clubs? We must also grapple with the fact that fan engagement can go only so far. Once we have decided what constitutes a supporter, what role will they have? Perhaps the noble Baroness can elaborate on this, either today or as we go into Committee. Will fans come to welcome this regulator? Just as the referee on a pitch adjudicates between players and thus frequently draws the ire of both teams, will this regulator attract the same criticism from supporters?

Since that October evening in 1863 that established the foundations that have allowed football to flourish in this country, football clubs have become the nuclei of communities across the country, institutions steeped in meaning and heritage that have inspired generations. Football has become one of the central elements of our national identity but, like so much of our national heritage, it is a precious and delicate inheritance. If we do not treat it reverently, we risk destroying what makes it great. As we seek to regulate football, we must keep our eye on what makes it so special and act in the spirit of those who met in that tavern in Holborn 161 years ago. The motto of Whitley Bay FC is “Ludus est omnis”—“The game is everything”. Those wise words are worth keeping in mind as we scrutinise this important Bill.

17:04

[Baroness Grey-Thompson (CB)]

My Lords, I draw noble Lords’ attention to my entry in the register of interests. I am chair of Sport Wales, I sit on UK Sport, I am a trustee of the Foundation of Light and I authored the independent Duty of Care in Sport review in 2017, which was requested by the then Sport Minister, Dame Tracey Crouch. I thank the many organisations that have been open and generous with their time in preparing for today’s debate.

Dame Tracey’s fan-led review demonstrated that self-regulation in football has failed, and the creation of an independent football regulator could strengthen the game that so many cherish. As we all know, football is deeply woven into our country’s cultural fabric. At its best, it provides incredible social value, health benefits and entertainment to many communities across the UK, as well as an important revenue stream into the UK economy. Therefore, the sustainability of football for years to come is important.

While an EDI strategy is included in the Bill, there is an obvious exclusion: the women’s game. I understand that many noble friends might suggest that adding the women’s game to the Bill would create another complex layer, but I think we should be open about what we are talking about today. It is a men’s football regulator, not one for the game of football.

I have been told that the women’s game needs a chance to self-regulate and that an independent football regulator might stifle investment opportunities that could become available to women’s football in the future, but I disagree. The fan-led review concluded that:

“Fair distributions are vital to the long term health of football. The Premier League should guarantee its support to the pyramid and make additional, proportionate contributions to further support football”.


If the aim of the Bill is to ensure financial sustainability for the future of football, should that not be for the whole game?

The women’s game is still connected to men’s football in many cases. Sadly, there are very few examples of independent women’s football clubs like the London City Lionesses, although we are slowly seeing more investment in women’s football. Many will say that no regulator is required, but I believe the exclusion of the women’s game from the Bill could hinder its growth so that it continues to be an afterthought when it should be at the forefront of football’s innovation.

Would it not be beneficial for the women’s game to avoid the fate that we have seen in the men’s game and to take proactive steps to ensure that the women’s game is protected from the same misconduct? Oversight and focus could ensure that the women’s game raises governance code standards in performance, medical and welfare provisions to drive positive change for the whole game so that football players could receive the duty of care that they deserve.

I intend to table amendments that would cover corporate responsibility and would require a club to consider the impact of the club’s operations and activities on society and the environment, in particular taking reasonable steps to increase diversity and inclusion of underrepresented groups; to eliminate discrimination; to have a positive impact on the community; and to establish, and keep updated, a target consistent with corporate governance best practice in respect of the gender diversity of officers.

In a survey by Women in Football in 2024, only 21% of women who responded said they felt supported to forge a path to the top, while 89% of women who responded had experienced gender discrimination in the football workforce. Systematic change is needed to accelerate progress, taking pockets of good practice and scaling the impact of gender diversity leadership across the professional game.

Any new regulator needs to have the voices of the players included. I urge His Majesty’s Government to ensure that appropriate consideration is given to the Professional Footballers’ Association as well as to the experience and knowledge of women in football. My work on the duty of care in sport has been across many sports, both amateur and professional, and the voice of participants enhances the outcomes that we would all like to see, so it is important that any fan consultation does not just become a tick-box exercise.

With my Welsh hat on, I understand that representatives from the Welsh Government have met colleagues from DCMS on the Bill. It was agreed that the Bill impacts Wales only in relation to those clubs that play in the English football pyramid, not Welsh football in its wider sense, so I wonder whether the Minister can say whether there is a need to include or add the regulator to the Senedd Cymru (Disqualification) Order 2020. As I understand it, it is an order of the Privy Council, but clarification on that matter would be helpful.

17:09

[The Lord Bishop of Sheffield]

My Lords, I congratulate the Department for Culture, Media and Sport and the Minister for securing this debate, and thank the previous Government for their efforts to ensure that the sport of football—a national treasure beloved of so many—is more effectively regulated.

I realise that I cannot claim that football was made in Sheffield but, in addition to the codification referred to by the noble Lord, Lord Parkinson, in London in 1863, a second codification of the beautiful game took place in Sheffield in 1867—another early governance document for the sport that was influential for decades across the north. The city is home to the oldest football club in the world, Hallam FC, as well as to the two much better-known professional football clubs, Sheffield United and Sheffield Wednesday.

As Bishop of Sheffield, it gives me great pleasure to contribute to this important debate. It is a particular privilege to follow the noble Baroness, Lady Grey-Thompson. I want to say, first, something about the relationship between football clubs and their communities; secondly, something about financial stability; and thirdly, something about the responsibility of football clubs in relation to the climate emergency.

On football clubs and their communities, we are right to celebrate the off-field successes of English football, including club community programmes and the work of the Football Foundation to support grass-roots pitches and facilities. In addition to the tens of thousands of jobs and billions of pounds of investment that the football pyramid channels into the UK economy, its social impact is profound. A recent report compiled by Substance using data from 2019-22 revealed that English football generated over £101 million for community investment, bolstering physical health, mental well-being, education and employment.

Football clubs have a clear and undeniable duty to their fans and their localities. In any conversation about the future of football, I hope these two groups will take centre field. Fan investment is the lifeblood of the sport and I applaud the Government’s intention to place fans back at the heart of the game. To name just one example, I was pleased to see that the Bill will ensure that fans are consulted on changes to ticket prices. I hope the Bill might also require football clubs to take their civic responsibilities extremely seriously. These go above and beyond those of charity foundations and extend to local regeneration schemes.

As a mildly obsessed fan of Newcastle United, I have rejoiced to see how the 2021 takeover of the club, following the deeply unpopular ownership tenure of Mike Ashley, has led to a wonderful reconnection of the football club with the fan base and with the city. Having said that, I acknowledge that the 2021 takeover raised significant concerns about the application of the owners’ and directors’ test, and I hope very much that the new Bill will tighten up that process.

Secondly, on financial stability, while acknowledging that the majority of football clubs are stable, the Bill rightly recognises the need to protect fans, players and club staff from costly club closures and the irresponsible mismanagement of club finances. My right reverend friend the Bishop of Derby, the Church of England’s lead bishop for sport, wishes she could be here to discuss the Bill. I know how much she cares about the high-profile collapse of Derby County Football Club in 2022. Ultimately, the club was, thankfully, rescued by local businessman and lifelong supporter David Clowes, but the turbulent negotiations with investors abroad exposed serious concerns and vulnerabilities. I hope the Bill will help to prevent such collapses in future.

Finally, and briefly, on the climate emergency, I particularly welcome the enhanced provisions in the Bill to improve transparency and accountability by requiring football clubs to publish what actions they are taking to improve equality, diversity and inclusion. May I suggest that this responsibility is extended to include actions that clubs take to reduce their carbon footprint and to move towards net zero? I look forward very much to hearing the views of other noble Lords and to following the progress of the Bill in the coming months.

17:14

[Baroness Taylor of Bolton (Lab)]

My Lords, I very much welcome the Bill and I congratulate my noble friend the Minister and, indeed, the Secretary of State on producing a stronger Bill than the one we were faced with earlier this year. I also have to acknowledge the work that Tracey Crouch did; I think we are all grateful to her for her review.

As a former business manager, I should also congratulate Ministers on finding time in the legislative programme for the Bill. I understand that some people might ask why we should prioritise football legislation when there are so many other problems the country is facing and so many other difficulties this Government have inherited. The simple fact is that, as we have heard, football has a profound impact on society as a whole and, if you care about communities, preventive health, mental health, loneliness and enriching children’s lives, you should care about football. Very often it is our football clubs which provide food banks, holiday clubs, schemes for young people and, importantly, a real sense of belonging to local communities. That is a factor up and down the country. Regardless of the clubs we support, football is a central part of our national life. Anybody who saw the remembrance services at football clubs up and down the country, with the remarkable silences, will understand just how much football clubs are important backbones of our communities.

Football clubs need to be recognised as having a wider role than just being a sporting venue. Indeed, they are an asset of community value. I wish that our football grounds were all classified as assets of community value. That is one safeguard that all clubs should have for the benefit of their fans.

Too often, as we have heard, clubs are treated by new owners as trophies or playthings, or as a set of assets which can be targeted for asset stripping. Very often this is done by people who simply do not care about the game or what the clubs mean to the many thousands of people who should be considered the owners of the club—certainly of the traditions of the club—namely, the fans.

We have seen over the last few years that football simply cannot regulate itself. Too many clubs have been on the brink of collapse. We have seen clubs tipped over the edge, breaking the hearts of fans and sometimes ruining the well-being of some of the local businesses that they have served. I must declare an interest, as one of the clubs that came close to oblivion was my own Bolton Wanderers, one of the founders of the Football League. My colleague the noble Baroness, Lady Morris of Bolton, and I have shared our grief about what was happening five years ago when Bolton Wanderers was very close to collapse.

That was the consequence of going from a benevolent owner, who had been very generous and whose motivation was the best interests of the club, to a new owner whose motivation was, to say the least, questionable. It was noticeable that, when the club was going into administration, the administrator criticised the new owner, who had used his position to hamper and frustrate any deal that did not suit his purpose. It was not about what the club’s future should be; it was what he thought he could benefit from. Thankfully, since then the club has been rebuilt. Even when we lose, as we did 5-0 to Stockport recently, at least we still have a club to cherish.

Football fans expect to be tortured by what happens on the pitch. We should not have to expect it from what happens off the pitch as well, and too often that has been the case. Organisations such as Fair Game and the Football Supporters Association have fought to protect clubs for the fans. Individuals, such as Ian Bridge at Bolton, have been crucial in co-ordinating the efforts of fans. But we need more; we need a framework and structure for football which safeguards its future at all levels.

We have a football pyramid with the fantastic Premier League at the top, but it is a pyramid and the Premier League is not the be-all-and-end-all of football in England. We need regulation to make the football structure fit for purpose. Football in the UK is a big industry, and I understand that the Premier League has expressed concerns about killing the golden goose. No one is seeking to do that. We should remember that many Premier League players have come up from lower-league clubs or have been out on loan at lower-league clubs to help them develop. The EFL clubs are important to the Premier League, as well as to their own fans.

The financial imbalance in English football is dangerous to the future of football clubs at many levels. Current arrangements—I mention in particular parachute payments —are distorting the principle of sporting competition. That is just one reason why this Bill is so important. I know that, for many years, many people in football, including the EFL, had hoped that regulation would not be needed, but it is now obvious to almost everyone that this has to be the way forward.

The Bill, as the Minister outlined, establishes for the first time an independent football regulator. It will be a very important responsibility, and I am glad that the Bill is detailed on some aspects of how this will work in practice. There is much here to be welcomed, but that does not mean we will not press the Minister for more detail in Committee, especially on issues such as the parameters for financial distribution. There will be other areas where we will seek further clarification or assurances, such as vested interests, the women’s game, as has been mentioned, lower-league clubs, and ensuring that the individual ownership fitness test is exactly what we need. There is the issue of player welfare, with the PFA recently highlighting some of its concerns, which are probably worthy of consideration. Such points are not to undermine the Bill but to make sure that it is as effective and successful as it should be.

I hope the Minister will consider one amendment that I hope to push—namely, making sure that the regulator is accountable to Parliament, because I think all regulators should be. This will be very helpful to ensure the success of the new process.

17:22

[Baroness Evans of Bowes Park (Con)]

My Lords, I declare an interest as a long-standing Norwich City season ticket holder and a supporter of King’s Lynn Town FC.

England is the home of football and English football is enjoyed by millions of people, as we have heard, who watch their team every week. The Premier League is the most-watched league in the world. It drives economic growth, generating £8.2 billion of GVA in the 2021-22 season, and supports 90,000 jobs across the country. The EFL is thriving; last year, one in four paid admissions to a UK sporting event were to an EFL match. Football is a much-loved, global British success story, and it is in this context that we should consider the Bill and its proposals to create a new regulatory structure.

This Bill is unquestionably novel. The Explanatory Notes themselves acknowledge that football

“was previously not regulated by statutory provisions”,

and explicitly state that

“the new regime and the distributions provisions in particular are unique and unprecedented”.

To avoid unintended consequences which could undermine the success story that football is, we need to be very careful in our deliberations to ensure that what is being regulated for and legislated for, as the Minister has said, creates a truly proportionate regime.

That means a light-touch regulator and clear boundaries to its powers to prevent regulatory creep and overreach. Indeed, we should assess the measures in the Bill against the words of the Prime Minister, who said at the recent investment summit that

“the key test for me on regulation is … growth. Is this going to make our economy more dynamic? Is this going to inhibit or unlock investment? … where it is needlessly holding back the investment we need … we will get rid of it … we will make sure that every regulator in this country, especially our economic and competition regulators, takes growth as seriously as this room does”.

Those seem very sensible benchmarks to me when considering a new statutory regime. We should make sure it fits within those parameters.

The key objectives of the Bill—particularly enhancing financial sustainability, preventing breakaway competitions, safeguarding club heritage assets and strengthening fan engagement—are all laudable aims for the regulator and will undoubtedly be an important focus of its work; I am sure that it can take things forward in that regard. However, the competitive and unpredictable nature of football must not be undermined by the new regulatory regime. We all know that football is about promotion, play-offs and passion. All fans dream of the possibility of their team triumphing against the odds, and sometimes they even get to see it happen. So football is clearly not akin to the typical regulated sector. As a result, the regulator in its actions needs to be mindful that football is a dynamic, risk-taking industry, with competition at its heart. That is a significant departure from the approach of other regulators, but it is imperative to protect this if the football regulator is not to unwittingly undermine the very sector it is there to support and help thrive.

The task of the new regulator will be considerable—for instance, to license clubs, it will have to review detailed business plans of all 116 and reach agreement on them. In addition to mandatory licence conditions, the regulator will have the power to impose discretionary requirements bespoke to a club. Clubs already deal with a lot on regulation, with the FA, the league and other bodies, so the new regulator needs to be careful that it does not overburden or duplicate requirements, adding unsustainable costs and bureaucracy, particularly for smaller clubs in the lower leagues.

All this will come at a cost, with money spent today by clubs on the game in future being spent on funding the regulator. Can the Minister provide reassurance that, in designing the levy, the regulator will be required to adopt a proportionate approach and ensure that costs to clubs, particularly those at the lower levels, are kept to a minimum? Can the Minister also give an indication of the expected costs or levels of staffing that will be needed for the regulator once it is fully up and running, to give us a sense of the scale of the task ahead?

How revenues are distributed through the financial pyramid is essential to the health of the game. The Bill introduces backstop powers to intervene in the currently voluntary distribution of the Premier League clubs’ TV revenues. These are unprecedented and untested powers, with the potential, if not carefully developed, to cause regulatory and investment uncertainty. It is critical that we consider the possibility of unintended consequences that may flow from this Bill and that we are confident there are strong checks and balances in the legislation to ensure that it sets out an approach that supports the continued success of football.

I am sure that we all find it disappointing that, since the introduction of a version of this Bill in the last Parliament, the latest round of financial negotiations between the Premier League and EFL have broken down again—and, to be honest, from talking to them it seems that both sides are anticipating that the backstop mechanism will be triggered. The use of these powers by the regulator may, rather than being a last resort as was hoped, be used quite quickly, once the regulator is set up. So when the process is introduced, it must not do more harm than good.

In that regard, I confess that I have some concerns about the process as set out in the Bill, particularly the binding final offer arbitration model. Rather than consider each proposal and determine the best overall approach, which may be a compromise between the two, the regulator instead must choose one of the proposals in front of it. To me, that does not make sense. In any negotiation, if both sides feel somewhat disappointed at the deal reached, it is likely to be fairer and achieve a balance between the two sides’ competing proposals. Yet in the current scenario, it seems that one side will take all. I am sure that we will explore this more in Committee, but can the Minister explain in more detail why the Government think that this is the best approach to include in the Bill?

Perhaps the most significant change to this Bill from its predecessor is the inclusion of parachute payments in any consideration that the regulator may make in relation to financial distribution through the football pyramid. I am afraid that I take a different view from the noble Baroness who spoke before me. I am somewhat concerned that this change may inadvertently incentivise bottom-half Premier League clubs in particular—and, going forward, newly promoted clubs—to cut squad investment, given the greater financial risk that relegation would present. That would be hugely damaging to the competitiveness of the league and a massive blow to fans of the clubs involved.

Rather than improving the level of competition, uncertainty around parachute payments could do the opposite and weaken the competitiveness of the Premier League—the very attribute that attracts the revenues that sustain the game. I know that that is not the intention and I look forward to more detailed discussion around these issues as the Bill goes through Committee.

To conclude, the reforms in the Bill mark a step change in the regulation of our national game. To ensure that they do not do unintended damage to the game millions of us love, it is essential that the board and those employed by the new regulator are mindful from the outset of the unique nature of football and the dangers that any ineffective regulation, or overregulation, may pose.

17:30

[Lord Bassam of Brighton (Lab)]

My Lords, it is an honour and a privilege to speak in the debate on the Football Governance Bill, which is fundamentally a good Bill and one that the Government should be proud of. We should give thanks in that pride to the previous Government for doing much of the hard work in preparing it. I also personally thank the Minister for her careful introduction to the Bill and the Premier League, the EFL, Fair Game, Women in Football, the LSE, Civitas, the LCP, the FSA and the PFA for their informative briefings. I apologise to anybody I have missed out.

Many of us have waited a long time for this Bill and then, of course, we get two Bills in a year. Both major parties have edged towards increasing the level of regulation of our beautiful game. Some say that we do not require it, others that existing regulation does not go far enough. But, for those of us who have been watching football for a long time, the current system is failing both clubs and fans and is no longer financially sustainable.

The desire for a degree of regulation to make the game more sustainable has a long history. Back in the 1990s, Labour had a mini-manifesto for the game. Once elected, our efforts were of necessity focused on countering disorder and hooliganism. Tackling racism and violence were a priority for me in my role as the football hooligan Minister back in the late 1990s, and our actions were key to ensuring that we were able, as a nation, to continue participating in international tournaments.

In 2019, both the Tory Party and Labour made a commitment to football regulation in their manifestos. As we know, to their credit, the new Tory Government invited Tracey Crouch to lead the fan-led review, and this in turn led to a White Paper and, earlier this year, the first iteration of the governance Bill. Now it falls to Labour, as ever, to complete the job. The post-election gap has enabled the improvement of the Bill in several respects, including the regulation of the financial distribution payments system across the football pyramid and the issue of parachute payments. Changes relating to fan engagement and the equalities, diversity and inclusion provisions are also welcome, as is the shortening of the time for the production of the first “state of the game” report, which will help put football on a more sustainable financial footing.

While we produce some of the world’s best clubs and fantastic football, the Premier League is becoming a closed shop, dominated by the money generated by TV rights. The top of the league is the preserve of a few clubs, primarily the richest. The rest of the Premier League is made up of clubs trying to get into two of the three European competitions or struggling to retain their place in the Premier League. In 2022-23, 25 clubs, 20 Premier League clubs and five EFL clubs, received 92% of the distributable revenues of the English game, £3 billion, while the other 67 clubs shared just 8%, £245 million. The football regulator’s task will be to ensure that there is a more equitable distribution of football revenues across the pyramid.

Football must remain a sport about risk, reward and fair competition. The current relegation payments scheme prevents this. In the last seven seasons, two of the three promoted teams from the Championship have been those relegated the season before, bolstered as they were by their financial protection following relegation. Back in 2010-11, parachute payments were just £30 million. By 2020-21, they had grown to £233 million, an eightfold increase at a time when wages had merely doubled. In the Championship, the non-parachute payment clubs are forced to overspend on players to compete effectively for promotion, creating a risk of bankruptcy, relegation and often a long, painful recovery period. We need the regulator to come up with a system that softens the financial blow of relegation, but in a way that does not distort competition. Change will need to be gradual and carefully managed, so that club viability and competitiveness are preserved, and the strength of the leagues protected.

I welcome greater fan engagement and the protection of the heritage and culture of clubs. The devil will be in the detail on how best to achieve this. The prevention of breakaway competitions will, of course, benefit players and clubs at a time when I think we are reaching the limit of what extra competitions can bring to the game.

Finally, where would I like to see improvements and changes? The first “state of the game” report will set the tone for the future development of the regulator. The last Bill gave the regulator three years to complete this work. That was too long, so I am pleased that it has been reduced to 18 months, but see no reason at all why it should not be six months or perhaps, at most, a year. Shadow staff, already in place, will have access to data and football market intel sufficient to hit the ground running. There are urgent issues to be resolved and, if they want to demonstrate change by the time of the next election, the Government would be wise to listen to those supporting faster progress. A shorter period for the initial report would justify a longer gap before the second.

In relation to the regulator’s scope, I am strongly sympathetic to bringing the clubs in the top two women’s leagues into the regulatory framework. The rapid growth in women’s football brings with it the same issues and risks, and with this Bill we have an opportunity to address these before they become a problem. It might also help tackle discriminatory behaviour and the macho culture that can impact on the game. It does seem odd, having strengthened the EDI commitment, to then exclude the women’s game from the regulatory framework. Access to even a small element of the solidarity payments produced currently would be transformational for the game.

Similarly, we should look to include the regulation of all clubs in National League North and National League South. It seems odd to regulate one-third of the National League clubs and leave the sixth tier unregulated. Some of these clubs are significant community assets and businesses with turnover figures of £4 million, £5 million and £6 million a year. More fans are turning to watch grass-roots football, and here again is an opportunity to ensure consistency in our approach at all levels.

I have a small but significant point for the Minister. Can we ensure that, among the statutory consultees, we include the players’ union, the PFA? Try having a football match without its staff.

The Minister will no doubt have read the press coverage of the Fair Game report pressing for changes and the strengthening of the Bill. I am sympathetic to many of these, some of which I have referred to. I hope she will continue her already-begun engagement with Peers so that we can improve the Bill as it goes through its Lords stages.

The Government are to be congratulated on the progress so far. This Bill is a bit like a Brighton and Hove Albion substitution at half-time: a potential game-changer. It works. When I reflect on how close my club was to going out of business for the want of effective regulation in the mid-90s, I do not want to see other clubs and their fans put through that experience. It is my belief that this legislation, with its owners and directors test, a licensing and financial control regime, and a commitment to a system of fairer competition and financial fair play, will go a long way to putting an end to the era of irresponsible club ownership.

17:38

[Lord Triesman (Lab)]

My Lords, I thank many noble Lords for their good wishes and for allowing me to speak sitting down. It is a bit of paradox to be talking about a football Bill when you cannot stand up: none the less, I will do my best. I declare my interests as the first independent chairman of the Football Association, and I have had a long and warm relationship with football supporters’ organisations.

I am wearing “the blazer” largely to illustrate what is meant—rather disparagingly, I suspect—by the press about the members of the Football Association Council. We are often described, pretty accurately, as “the Blazers”, meaning old and decrepit—and wearing a blazer—and sometimes, more kindly, as the “parliament of football”.

When I first attended the Football Association Council, there were 127 people—men and women—all but two of whom were in blazers. Two were women, and neither was ever allowed to the chair the women’s football committee. That may very well reflect the point made about how women vanish when we come to look at the issues here. There were two people of colour—they were called “black faces” by the then chair of the Premier League, the amazing Herman Ouseley, whom I miss greatly—and one gentleman from Japan. One coach, the redoubtable Howard Wilkinson, refused to wear a blazer, as you would expect, and Lord Mawhinney would never knowingly wear anything that approximated to a uniform. In the “parliament of football”, there was not one footballer. Aside from very vigorous discussion on the poor quality of the tailoring of the blazers and, on occasion, on who should be on which committee or attend which dinners, some serious discussions took place about the existence of on-the-field and off-the-field regulation, prejudice and the events that compelled clubs occasionally to play with no fans present and behind locked doors—all important issues.

On one occasion, and at my instigation, there was discussion about whether people who were born men should play post-puberty against people who were born women. In my day, the issue was straightforward. It was clear that it tended to produce an unfair competition and a very significant number of serious injuries. It led us to banning those kinds of competitions because of those reasons—no other reasons. I say with regret: shame on the Lancashire County Football Association, backed up by the FA itself, because an autistic 17 year-old girl has been banned for 12 matches for asking whether a large, really quite aggressive, bearded trans woman was authorised to play in the competition in which she was playing. She was immediately accused of transphobia and the Lancashire FA seemed to take no account of her neurodiversity. She seems to me to have been treated in a shabby way, and I do not intend to let it rest.

The FA cannot be accused of reluctance in many ways. It works within the global football market, and it works to achieve a mandate for regulating pretty much everything that happens in on-field situations, but it does not regulate anything else—and it will not. When I and my successors, David Bernstein and Greg Dyke, wanted to persuade the trade association—that is what the Premier League is—that it was too parti pris and that its CEO was too close to those who were to be regulated for that to have a real effect, it was with little surprise that he would say to me, “Just look at the FA. Do you really want it to do the regulation? You must be joking”. When I looked around, I thought that that was not an unfair point in many respects.

The EFL and the EPL did not do the job either. In fact, the trade association has been allowed to fall apart. It is suing a number of its member clubs, which are in turn suing each other and the trade association. I suspect that it is great news for the noble Lord, Lord Pannick, but all of them are energetically bashing each other with multi-million-pound cudgels—less solidarity, more Vinnie Jones. The reasons for that are clear. In many cases, the clubs do not feel that they need the federation to look after their interests—although maybe the noble Baroness, Lady Brady, will say something different. Many of them are massive brands in their own right. The basis of the breakaway super league was largely due to that and because they had become distinctive.

Lest anybody tells you that it could not happen now because of this legislation, let me tell you, from being inside football for such a long time, that while you may think that that is the case, the truth is that it has already happened. The first big reorganisation steps have been taken by UEFA, with the support of the giant clubs, and recent law cases will consolidate the supremacy of the giants in this respect. The Premier League will tell you that it is the natural regulator. It plainly believes that it should do that job unrestrained. But all regulation can threaten consumer and commercial innovation. I do not believe that this will be the case, however, and this is why I welcome the Bill so much. If you tell that story to people in many other industries, they will tell you that relevant rules of engagement are possible.

It is true that the Premier League has been an extraordinary achievement. It has built a successful global business, and that is not easy to do. They say you could kill the goose that lays the golden egg. Few of the businesses that are owned by Brits and are making money in this way are keen on anything that might alter it. However, I hope it will be appreciated in the House—I say this without any rancour—that in football circles generally around the world, there is a strong feeling that we are also seriously disliked. I do not mean everybody but quite a number of people. They feel that we hoover up many of their best and aspiring players, we bring them to this country and they play in clubs which are often owned by people from other countries—that is all probably the way of business but they are seen in that way. If you really want to aggravate them—I say this to the noble Baroness the former Leader of the House—start saying to them that England is the home of football. Say that to people in Brazil who have five stars on their shirts, or to people in Germany or Italy with four stars on their shirts, or to people from Argentina with three stars on their shirts. They will say, “Do you think we’re not homes to football?” If you want to sing “Football’s coming home”, I guarantee that it will be the last time they will ever talk to you.

The test about who we should have as a regulator is a very important one, and an independent regulator is absolutely critical.

There is one other thing; I promise that I will say this very briefly. I welcome the legislation, but still missing from it is any real attempt to regulate some of the bodies that sit across football aside from the regulator. They are the bodies that will negotiate the television and other rights, and the financial arrangements that will be made will be unbelievably complex. We all think we know about football. I do not mean to upset anybody—I really do not—but I bet that your Lordships really do not. Only one specialist company ever conducted the negotiations over the financial rights—Reel Enterprises did it on behalf of the football authorities. Its complexity means that whoever the regulator is will need to understand finance. You can tinker with the regulation all you like but it will not alter some of the fundamentals about where the money flows are. Those money flows will be understood only by people who have done that job, and there are probably no more than 10 of them in this country.

I conclude on that point because I would like to see this as a possible addition to the Bill. If we really want to do the job rather than to take a step towards it and then find we failed, we ought to do the whole of the job.

17:49

[Baroness Brady (Con)]

My Lords, I declare an interest: for more than 30 years, I have lived and breathed English football. As detailed on my entry in the register, I am currently the vice-chair of West Ham United. Throughout my 30 years of working in this industry, I have experienced both the magic and the harsh realities of the football pyramid. I have sat in EFL and Premier League boardrooms, making difficult decisions about finances. I have celebrated with supporters through promotions and trophy wins, and consoled staff when relegation meant jeopardy and job losses. So, when I speak about the dangers lurking in this Bill, I do so not from ideology or theory but from practical, real, lived experience. I also speak, like so many millions in our country, out of a love of, and real passion for, the game.

The Bill’s intentions came from a good place. Who would not want to protect their club’s historic heritage assets, prevent breakaway leagues or strengthen fan engagement? But aspects of this legislation risk suffocating the very thing that makes English football unique: the aspiration that allows clubs to rise and succeed in our pyramid system; the ambition that means fans can dream.

I want to focus my remarks on one specific area: the backstop power on financial distributions. Premier League clubs would have no fear of the regulator making an independent determination about whether the funding we voluntarily provide to the EFL—in addition to our own substantial revenues—is sufficient to deliver financial stability for well-run clubs. This is because, by any objective measure, it is. For example, every single Championship club receives £7.8 million from the Premier League, amounting to between 20% and 40% of that club’s typical annual revenue. I will not dwell on the fact that the EFL has just signed a near-£1 billion domestic broadcast deal, helping to increase its own revenues by 50%, or £100 million, a year from next season; or that the Championship is already the sixth-richest league in all of European football.

However, a regulatory determination is not what the Bill delivers. Instead, it outlines a legally untested “pendulum arbitration” mechanism related to funding, conditions, financial system and term. The regulator can only choose the Premier League’s final proposal in its entirety, or that of the EFL; it has no ability to compromise between the two. In other words, the Bill has designed a mechanism that throws all the pieces of the pyramid up into the air, with huge uncertainty as to where they may land, and it does so every five years.

The Government have now added parachute payments, which is a competitive tool that provides the scaffolding and incentives for strategic investment in both the Championship and the Premier League, into the scope of these powers. This hugely expands the likelihood of the regulator becoming directly involved in competition tools and structures. UEFA and FIFA have already warned the Government against doing that.

The Government appear, wittingly or unwittingly, to be enabling the radical redesign of the pyramid that the EFL executive has been openly promoting. This would involve extreme redistribution from the bottom-half clubs in the Premier League to competitor clubs in the Championship; large reductions in parachute payments; and the levelling down of the Premier League to bring the Championship much closer to it.

Some advocates for this—on a frankly comical basis—think it can be done without any impact on the Premier League’s world-leading status. The vision is for a German-style system where most clubs in the top two divisions can become essentially interchangeable, just going round and round in a washing machine, while a few privileged clubs are allowed to float away and entrench their financial dominance. It would replace our brutal but brilliant meritocracy with the likelihood of a closed shop, where survival—not aspiration—becomes the ceiling. It would make it harder for stories such as Leicester winning the title, Brighton’s journey from League 1 to Europe, Aston Villa beating Bayern in the Champions League and West Ham United winning a European trophy, to ever happen again. A less exciting and unpredictable league would disappoint and turn off fans, meaning reduced broadcast interest and, in turn, diminished revenues.

The Premier League shares our success—to the tune of £1.6 billion, or 16% of our total revenue—with the whole pyramid. If we stunt the ability of the Premier League to maintain its growth and revenues, ultimately there will be far less investment in the whole of football, including the grass roots and the women’s game. That would be a very bad outcome.

I struggle to believe that Ministers would deliberately put at risk the continued success of the world’s most-watched league: what our Prime Minister recently called “our greatest cultural export”. I urge the Minister to improve the backstop mechanism so that it incentivises football-led solutions, recognises the contractual and property rights of the Premier League clubs and, above all, eliminates the possibility of extreme outcomes that would damage the success of the Premier League.

Let us protect our clubs without suffocating them. Let us regulate the game without removing its aspiration and ambition. Let us ensure that English football remains not just financially stable but vibrant, competitive and full of possibility.

17:55

[Lord Wood of Anfield (Lab)]

My Lords, it is a pleasure to follow my noble friend Lord Triesman and the noble Baroness, Lady Brady, who knows so much about the regulation of this game. I welcome the Bill. It is rare that a Government inherit a Bill from their predecessor and reintroduce it in a form that overlaps so substantially with the previous proposal. According to YouGov, 80% of fans across England—across all clubs and regions—support the idea of a regulator. Of course, there have been—as the noble Lord, Lord Parkinson, mentioned—governance structures in place for more than 160 years, and in many ways it is crowded territory. However, although the FA, Premier League and EFL have a range of powers, their governance is centred on the integrity of the leagues rather than the activities and sustainability of the clubs themselves.

There are many reasons why a regulator covering the leagues should be put in place. Many of these are to do with the economics of football. It is a huge industry, contributing over £9 billion to the UK economy, yet at the level of individual clubs, unregulated commercial behaviour can, and often does, have damaging consequences. Football clubs also provide significant public goods, cohesion and cultural benefits that may conflict with the desire for profit maximisation. The industry is full of very thorny collective action problems: wage spirals, debt spirals and excessively risky behaviour in the search for success. Clubs can be far too reliant on individual owners, who often use club assets as security on loans and debts. There is a lot of poor financing and overspending and a lot of debt in general.

On top of these general economic issues, we have seen a range of recent cases mentioned earlier, where relegation combines with these ownership practices and weak governance to produce existential threats to clubs that have been at the heart of their communities for a century or more. Finally, as the regrettable Super League episode showed, the lure of greater profits, particularly at the top end of the Premier League, can threaten the integrity of the competitive leagues themselves.

Given that something has to be done, therefore, the proposals set out in this Bill seem to me to have much merit. The proposals on licensing and on powers to challenge bad practice among owners should, at least, help financial stability and deter some of the excesses of bad practice. The duties on clubs to engage with fans, including on ticket pricing, as well as fundamental changes in club practices, have been widely welcomed. The backstop provision to enable the regulator to compel a financial settlement—although we will return to some of the detail of that later—should ensure that there is no recurrence of the really regrettable impasse that has now been going on for far too long between the Premier League and the EFL.

I want to flag four areas where I think this House could add value in scrutinising the detail of this Bill when we get to Committee. The first is propelled by fans’ concerns about the continuing interest of elite clubs in moving domestic league games overseas, something that the chairman of my own team—Liverpool—is still keen to make happen. Clause 48 rightly imposes a duty on regulated clubs both to consult with fans and to seek regulator approval before any domestic league or competition match is relocated. However, some fans worry that the definition of a home game needs to be much more robust. Back in 2008, fans in this Chamber will remember that the Premier League tried to introduce the idea of an extra game—the so-called “39th game”—on top of the full home-and-away fixtures. Would this extra game have been covered by the Clause 48 provisions, centring as they do around the term “home game”? I think more comfort on these clauses being watertight would be good.

Secondly, there is the vexed issue of the backstop, which we have heard a lot about already. This is a fraught area, but everyone can agree on a few things: that the revenue that is at stake in the distribution and solidarity payments is vital for the health of clubs across England; that the EFL is an extremely commercially successful organisation in its own right even before these payments, with one of the most lucrative TV deals in Europe; and that solidarity payments must not be used to subsidise bad management by club owners down the football pyramid.

I have two quite different and, your Lordships might think, conflicting concerns about the backstop provision. First, on the relevant revenues in question, detailed in Clause 56(2) as

“revenue received by a specified competition organiser”,

one of fans’ worries is that this definition of the relevant revenue does not include revenue earned by elite clubs outside of their participation in the league. Money earned from, for example, UEFA, commercial revenues, overseas tours, pre-season friendlies and FIFA Club World Cups, is the revenue that often lies at the root of many fans’ worries about competitive balance and sustainability. The fans worry that if this is excluded from the scope of the regulator, clubs will seek to expand these revenues even further, impacting on domestic competitions in much the way that saw FA Cup replays scrapped earlier this year so that big clubs could earn even more in the expanded Champions League, for example.

My second worry is quite different. The mechanism proposed by the Bill in the event of an impasse involves, as we have heard, a triggering process, the requirement of mediation and, in the event of a continuing stand-off, the ability of the regulator to pick one of the two leagues’ proposals. From my economics background I know that there are good economics game theory reasons for why this is resolution process is in place. However, the politics of redistribution of money from the wealthy Premier League looms large over this sound proposal. It is worth us taking care to ensure that we are not, as the noble Baroness, Lady Evans of Bowes Park, mentioned, introducing a mechanism that gives the EFL no incentive to get a deal, so as to force the regulator into a politically pressured choice for more money for the EFL. That would be bad for good faith bargaining but would also put English football in bad odour with UEFA, which has already expressed concern that these proposals should not politicise football governance, saying specifically:

“Mandating redistribution which affects the competitive balance in the game and wider European competition would be of concern to us”.


Lastly, there is the relationship between the regulators and the existing leagues. The Bill stipulates a range of regulatory interventions in the event of misconduct and licence breaches, but it says very little about the regulator collaborating with the existing Premier League, English Football League and National League authorities. In any governance arrangements, you would want collaboration with existing league authorities to be a presumption of the regulator, and perhaps a principle of subsidiarity embodied in the legislation that the regulator will step in with its remedies only when the relevant league has shown that it cannot or will not take the steps required.

The reason for this is not to dilute the powers of the regulator but to stop politicisation in ways that should be avoided, to avoid duplication and inconsistency in the governance regimes of the leagues and the regulator, and so that regulatory interventions on finance and licence conditions should come only at the end of a menu of options for responses that also includes the sanctions that the leagues themselves control, such as sporting sanctions. It is worth us considering language at key points in the legislation that requires more explicitly co-operation between the new regulator and the league authorities.

18:03

[Lord Londesborough (CB)]

My Lords, my background is not in football beyond being a lifelong Hammers fan—the club which your Lordships might remember won England the World Cup back in 1966, with captain Bobby Moore, hat-trick hero Geoff Hurst and midfield dynamo Martin Peters, all products of the famous West Ham academy. It is a pleasure to follow the vice-chairman of my club, the Irons, the noble Baroness, Lady Brady, and, of course, the former chairman of the FA, bedecked in his splendid blazer, the noble Lord, Lord Triesman.

I am a supporter of the Bill but with several caveats. I feel, in the broadest interests of the game, that the time for regulation has come, although we must be very careful. Football’s financial sustainability is my number one concern. That is a perspective I hold first as a fan, but it is tempered by my experience as a CEO and entrepreneur and now as an investor sitting on the board of start-ups. Wearing those hats, I have not been a great fan of regulation. I am also privileged to sit on the Economic Affairs Committee, where the subject of financial sustainability, which runs through the Bill, looms large in all our inquiries, whether it is scrutiny of the Bank of England, our public finances or our £3 trillion national debt.

I declare a personal interest in that my son’s father-in-law is chairman of the upwardly mobile Worthing Football Club, currently challenging for promotion into our fifth tier, the Vanarama National League. Also, for 20 years I lived in Wimbledon and witnessed the appalling destruction of my local club, which went from winning the FA Cup to being forced to relocate to remote Milton Keynes. We must never permit that to happen again.

Some key questions hang over the Bill and the game of football itself which, let us be honest, are divisive. How do we balance promoting the Premier League as the world’s greatest league—which it is—while protecting our domestic competitions? Should we treat football as part of our social fabric and football clubs as community assets even if they are privately owned and run as limited companies? How do you balance competition with fairness? Football is inherently unfair. Do we continue to allow market forces to turn English football into a global product, resulting in fewer English players, fewer English coaches and fewer English club owners?

These are fraught and difficult questions. I have looked long and hard at a broad range of research and data. I have also talked to chairmen, board directors and supporters. The result is that I am firmly of the view that self-regulation will not deliver financial sustainability. Football’s finances are hair-raising, from the Premier League to the Championship through to Leagues One and Two and the National League.

I will start with the Premier League, which, as we know, is by some margin the richest league in the world in terms of revenues. Yet 16 of the 20 clubs generated pre-tax losses in the 2022-23 season, each club losing on average £60 million. Total debt across the Premier League has risen to £3.6 billion. It is probably over £4 billion now, with Man United and Spurs each clocking up almost £700 million. Even well-run Brighton carries £390 million of debt. West Ham, to its credit, is one of the least indebted clubs. Looking at the clubs’ trading history over the last 20 years, only three clubs look financially sustainable: Brentford, Bournemouth and Brighton. The financial reporting of Chelsea and Man City is opaque, to put it politely. They depend on the deep pockets of their owners, without which their balance sheets would implode.

In the EFL Championship, finances are even more precarious. Over 80% of the 24 clubs have negative equity. Not one of the clubs generated an operating profit outside player trading last season. Wage costs alone exceed revenues for many of the clubs, so the clubs are propped up by owner funding as they scramble for promotion to the Premier League and its parachute payments or fight to avoid financially disastrous relegation to League One. Look at what has happened to Birmingham, Bolton, Charlton, Derby and Wigan. Five of the Championship clubs, those in receipt of parachute payments, have average revenues of £66 million per annum, while the other 19 averaged £22 million. Cash flow is volatile and unpredictable, with cliff edges all around.

In League One and League Two, the majority of clubs generate losses, with increased dependency on owner funding, and not all owners are scrupulous. I learned yesterday that one club in League Two is paying 45% annual interest on its debt to the owner—financially sustainable this is not. When TV revenue falls, as one day it assuredly will, clubs could fall like dominoes.

Turning to the Bill briefly, I support introducing financial regulation to improve the financial resilience of clubs across the all-important football pyramid. In my view, to do that effectively the regulator must have a role in ensuring proportionate financial distributions between the leagues, as covered in Part 6 of the Bill, especially the level of parachute payments—I support these, but I feel the degree distorts competition. Our football ecosystem depends on this pyramid. The ongoing failure of the Premier League and EFL to reach agreement on financial distribution underlines the need for a regulator. Of course, there is devil in the detail. I will listen closely to what others have to say on what powers the regulator will have regarding mediation and last-resort resolution and how that is structured.

Time is short, so let me finish on the well-intended measures to give fans a greater say, ranging from consultation to representation at board level. As a fan I applaud this, but as a former CEO and chairman I have some concerns. We must be careful that the Bill does not overreach itself or, indeed, overregulate or overcomplicate the running of our cherished football clubs.

18:11

[Lord Maude of Horsham (Con)]

My Lords, I declare my interest as someone who, 57 years ago, became a supporter of Tottenham, largely to annoy my best friend at school, Matthew Harding, who even then was a passionate Chelsea supporter. As a Spurs supporter, I am accustomed to disappointment, and I have viewed the trajectory of the Bill from review to the first iteration, then to this version, with some disappointment—although in this event it was not preceded by the brief period of optimism that accompanies the life of a Spurs supporter before the disappointment sets in.

I start from a position of scepticism about whether the introduction of a state regulator is likely to improve the position of an incredibly successful activity. We have heard from many about how the Premier League is the richest and most-watched league in the world; the EFL is immensely successful and wealthy, and all credit to it. That is despite the lack of regulation, and it is not obvious that self-regulation has failed. My position is also one of disappointment at the outcome of the review, because it was not clear that the introduction of a regulator was needed; dismay that the previous Government’s Bill added significantly to what Dame Tracey had recommended; and consternation that this Bill adds yet more burden. Listening to this debate so far, I hear contribution after contribution suggesting that it should go even further. You need only to listen to the debate to know how real the risk of mission creep and scope creep is. There is a risk that serious harm will be inflicted on an activity that gives pleasure to millions in this country and to more than a billion people worldwide. We have to cherish what has been successful.

Apart from anything else, this is a huge export, with huge soft power benefits for the country as well. If we look at the ills around financial stability identified by Dame Tracey in the fan-led review, it is an unusual area of commercial activity where we can say that, overwhelmingly, most clubs in operation 100 years ago are still around. Show me another sector where that is the case; it is an unusual degree of financial and commercial stability. She identified as a crisis the effect of the pandemic, but football survived it. The noble Lord who spoke previously was talking about the amount of debt that my own club, Tottenham, has, but that was to build a world-class stadium, generally acknowledged to be the best in the world, which was then condemned to have a year and a half with no gate money coming in, so a bit of debt was not surprising. The benefit to the area—one of the most disadvantaged areas of London—of that investment, and the activity that has been brought to the area around it, is astonishing.

Then there is the concern about the ESL. What we forget is that it was killed off within hours of being announced, and not by the Government nor a regulator but by the fans: they made so much fuss about it that its promoters and the clubs that had signed up to it rapidly drew back. It is not obvious that there is a deep problem that needs to be solved by the introduction of a state regulator. It feels to me as if this is slightly like what Sir Humphrey described as the politician’s syllogism: something must be done; this is something; therefore, we must do it. We know that the things that come most readily to hand are legislation, regulation and intervention.

We have to be very much aware of the dangers of unintended consequences. I think it was the noble Baroness, Lady Taylor, who said that no one wants damage to be inflicted. Of course not, but that does not mean that damage will not be inflicted, because there will be huge costs involved in introducing this regulator. There will be the levy, which will be levied on the clubs to pay for the cost of the regulatory body, and the compliance costs on clubs, which reduce the pot available. It is all very well to have a perfect mechanism—if this turns out to be that—for distributing the goodies through the pyramid, but if you are reducing it by virtue of the intervention being promoted in the Bill, there will be less to distribute. We need to be very aware of that.

I will not add to what my noble friend Lady Brady said about the backstop powers and parachute payments. I will say only that, if the parachute payments were to be interfered with, there would be a danger of creating a greater gulf between the top of the Premier League and those lower down. It is really important to maintain that competition. Ironically, it was concern about the effect of loss of jeopardy and the lack of competitiveness that the ESL might introduce that led to it being rejected, so we need to be conscious that we are not recreating that.

I urge the Minister to look again at some of the provisions in the Bill and ask whether this is a sledgehammer to crack a rather small nut and whether there may not be better ways to ensure that there is genuinely light-touch regulation and we do not inflict great damage on an activity that gives pleasure to many but also makes a lot of money for this country.

18:18

[Baroness Fox of Buckley (Non-Afl)]

My Lords, it is good to hear the noble Baroness, Lady Twycross, emphasising again and again that the Government want proportionate and flexible regulation. Despite these reassurances, I am still nervous. As the noble Lord, Lord Maude, has just indicated, regulation has a tendency to run away with itself and lead to unintended consequences. Yes, we are all seeking to tackle problems in good faith and, yes, I understand that many football supporters feel frustrated by mismanagement and dodgy ownership of their own clubs. Still, the Bill is ultimately the state interfering in civil society.

Why football matters to so many of us was perceptively explained by Luton fan and writer Dr Rakib Ehsan in his Playing by the Rules report for ResPublica, which I read in preparation for today. Clubs that are supported by families over generations, especially in provincial towns and left-behind areas, are civic institutions that provide a sense of pride, belonging and identity to local communities. Crucially, they are the epitome of free association by free citizens, a core activity for their free time. The passions of football fandom are authentic precisely because they are organic and spontaneous, not the product of top-down statist curation by regulators. We restrict and undermine football’s freedom at our peril.

I probably would not intervene in the Bill if the legislation was confined to a focus on financial sustainability. However, my worry is that once the independent football regulator is established it may well expand its mandate and indulge in the sort of interventionist mission creep we have heard about and seen from other state-appointed regulators. What is more, the clauses added to the original version of the Bill point in this expansionist direction. My dread is of politicised attempts at shaping football clubs and their fans, continuing a broader trend of what has been, frankly, an elitist colonisation and sanitisation of football over recent years.

We are told that the proposed regulatory regime is all being done for the fans—I am rather sceptical. Yes, it is popular with many fans, but many other fans are suspicious about being used as a stage army to justify interference in what they consider to be “their” game. New provisions now require explicit democratic engagement with supporters to amplify the voice of the fans, but which fans and whose voices? I remind noble Lords that, over recent years, politicians have expressed a rather ambivalent attitude to football fans’ voices.

As the Minister explained, the plans to set a minimum standard of fan engagement and decision-making about key club heritage assets, such as home shirts, club badges, the name and so on, is important to the Bill, but it seems that not all heritage assets beloved by fans are to be protected by the Bill. What about the heritage football chants and songs? They are assets too. They are most likely to be silenced by the Government’s ever-expanding football banning orders, with the state laying down strict rules on proscribed lists of words or subjects never to be mentioned—let alone sung about—at matches. Politicians have targeted and punished those they consider to be the wrong kind of fans. Too often traditional working-class supporters—the heart and soul of British football—are viewed as “the deplorables”, in need of re-education.

Another government addition to the Bill is the demand that clubs improve their commitment to, and report annually on, their actions on equality, diversity and inclusion, or EDI. It sends a shiver down my spine. This seems to contradict the Government’s claim that they want to stop the culture wars. If so, why oh why would they introduce one of the most divisive culture-wars-type policies into football? As we speak, EDI policies are political trip-wires in all workplaces across the public and private sectors—the vehicle for identitarian ideologies and assaults on free speech. Regardless of whether noble Lords agree with my hostility towards EDI, we can surely agree that these are politically contentious policies—just look at the toxic row going on at the Bar Council at the moment—so why are the Government using legislation to foist them on football clubs?

A couple of examples may act as cautionary tales. The first is the shocking case of lifelong Newcastle fan, 34 year-old Linzi Smith. Superfan Linzi, who over the years must have handed over tens of thousands of pounds to her beloved club in tickets and merchandise, has been banned by Newcastle United from attending home and away games until the 2026-27 season. What was her crime? She did not get into a fight on the terraces or abuse a steward or fellow fans; the ban was for expressing her belief in the biological reality of sex—not at a match but on X, or Twitter. In an example of remarkable EDI overreach, she has been punished for breaching the club’s trans-inclusion policy by posting her opinions outside the ground. Linzi’s story is now in the public realm because, with the support of the Free Speech Union, she is taking the club that she has been loyal to all her life to court.

It is worth reading the details of her ordeal—the way that NUFC’s EDI team worked in cahoots with the Premier League’s mysterious investigative unit to set up surveillance and compile a dossier that was handed over to Northumbria Police. Even when the police declared that no crime was committed, the club banned her anyway for breaching EDI policy. Not all clubs have such overzealous EDI officials but, if the Government use the Bill to push EDI as proof of good governance, does this not incite clubs to target and make examples of any number of fans for expressing views at odds with EDI’s rigid orthodoxies?

The second case is of a 17 year-old autistic female footballer, which has been highlighted in the media and articulated so well here today by the noble Lord, Lord Triesman. His persistence and courage in pushing this issue of fairness and safety in women’s football is to his credit and to be commended. This young 17 year- old’s “are you a man?” speech crime was reported by a member of the opposing team and the NGO Kick It Out for breaching trans-inclusive EDI rules. Ironically, she was put in the dock by the FA in the same week that it announced its new disability policy, entitled Football Without Limits—no limits unless you are a young autistic woman who offends gender ideology it seems; so much for inclusion.

EDI policies are regularly a political minefield. I urge the Minister to kick it out of the Bill. If the Government persist, and refuse to listen, perhaps it is because, to reference one bit of fans’ chanting wisdom, “You don’t know what you’re doing”.

18:26

[Lord Moynihan (Con)]

My Lords, I declare an interest as a former Minister for Sport, having piloted the last major football legislation through another place to enact safety measures and a football licensing authority to make our grounds safe again after very dark years. I know how challenging that can be and my sympathy, admiration and very best wishes go to the Minister.

Fast forward 30 years to 23 April 2021, when Prime Minister Boris Johnson proved decisive in taking down the European Super League. As fans, players and pretty much everyone except the breakaway club owners reacted with outrage to the idea of the European Super League, the Prime Minister called for a “legislative bomb”. However, this is more than a legislative bomb to take down a European football super league. It is a hydra of a Bill that is, as we have heard today, in danger of growing and growing.

It is a Bill eagerly seized upon in the DCMS to deliver 150 pages of new law, with 100 clauses, 12 schedules and a raft of delegated powers turning what should be light-touch regulation focused on one issue into far-reaching government and regulatory financial control of our national game. The Bill is so far-reaching that, in Clause 92, the Government believe that they, not the regulator, should have the power to amend the definition of the season. I quote from the government memorandum:

“In order to future proof any changes to the footballing calendar, the Secretary of State has the power to amend the definition of ‘season’”.


Why does the Secretary of State, by law, have to make a Statement to Parliament on the governance of football every three years? That is a far more onerous responsibility than those of the Ministers responsible for Ofwat, the Office for Road and Rail, Ofgem or Ofcom.

We have the potential—this is a very sad reflection—for government intervention marching straight through the front door. My concerns are found not just in the Bill, and I ask noble Lord to please read the memorandum from the DCMS to the Delegated Powers and Regulatory Reform Committee. The Government and the Secretary of State have delegated powers to alter the Bill in secondary legislation—after we have passed it—on the purpose, overview and key definitions of the Bill, the work of the independent football regulator, the operating licences, the suitability of owners and officers, the distribution on revenue, and the list goes on. These are not powers to the regulator; they are powers to be retained by the Secretary of State through secondary legislation following the introduction of the Act. We know how tough it is to amend secondary legislation and that is what really concerns me.

If we take the memorandum into account, we have a Bill peppered with financial uncertainty and interventionist powers, which, as my noble friend Lord Maude said, could potentially, and tragically, split the Premier League, putting at risk the £1.6 billion that goes into football and damaging the much-envied Premier League that has successfully supported the five tiers and the rest of the game in our country.

All of this is without a clear answer to the following question: what is so broken about a professional sport which has seen only seven liquidations since 1945? What is so broken with the highly successful Premier League that has led the Government to create a regulator so large that the impact assessment says it would require operational costs, initially paid by the taxpayer, not of £1 million, nor of £10 million, but of up to £106.8 million over this and the next Parliament? Much to the delight of the competing leagues in Europe and the emerging football nations in the world, we stand, unless we are very careful, on the precipice of a new era in football governance, with potentially onerous financial regulation being introduced, as set out in this memorandum. I am seriously concerned and genuinely hope I will be proved wrong.

I believe that this is no longer about the super league; it is a far-reaching and potentially intrusive affront to the very principles of competition and spirit on which the national game thrives. To demonstrate that, the Secretary of State, who tries to persuade us that the Bill simply provides the framework for the independent regulation of sport, has, in the memorandum from the department, put a total of 42 delegated powers in the Bill, including Henry VIII powers. It is maybe not surprising that we have not heard back from the Delegated Powers and Regulatory Reform Committee in advance of Second Reading. I declare an interest: I had the privilege of serving on that committee. The members are probably taking the rest of the government-defined season to recover from the plethora of secondary legislation and Henry VIII powers, each one of which I would urge both sides to consider in detail in Committee.

We already have the laws of the land which provide the legal framework in which professional sports and businesses operate. Football is a wonderful game of passion, innovation and excitement. It should not be the role of government or any regulator to impose its financial will on the Premier League or dictate how clubs should operate. Turn down that route and we are, sadly, in danger of choosing an uphill path to mediocrity, to the disbelieving pleasure of competitor leagues around the world. Place arbitrary restrictions on how clubs can invest and you risk depleting them of the very oxygen that allows them to thrive. Let us be clear—and here I agree fully with the noble Baroness, Lady Taylor—that the essence of football ownership lies in the relationship between the club, the community and the fans. Ownership is something we should be very careful about if we are asking government to dictate powerful regulatory decrees outside competition laws. If a club prospers, let it be allowed to enjoy the fruits of its success.

It may be unpopular to predict, and I do so with a heavy heart, but I anticipate, sadly, that those who front up the regulatory authority will one day become the despised target of tens of thousands of fans as the ownership structure of Premier League clubs comes under strain. I am not against measures to support the aspirations of the fans, which I think are important, but against untrammelled government and regulatory financial interference, which has the potential to reduce the levels of finance reaching down through the pyramid.

This country has an outstanding record of success in sport. It has built an international reputation on the understanding that government intervention in sport, amateur and professional, must be minimal. Because of this Bill, our involvement in international football is now for the first time under laser-focused scrutiny in FIFA and UEFA. As we have seen, if UEFA does not agree with clauses in the Bill which threaten football’s autonomy—the clearly implied objective of too much of the Bill, as set out in the memorandum—when asked to jump, the Government will have to say, “How high?”

Nobody denies that there are problems to be solved in football, just as there are in all sectors of the economy. The introduction of this football regulator with the unprecedented financial powers set out in the Bill and the memorandum will, I fear, be a blight on the game and see the steady decline of investment in our clubs, to the ultimate detriment of the Premier League, the EFL and our standing in world football.

Regulation and onerous legislation are no substitute for existing competition law, and threaten autonomy. The Bill has the inherent danger of suffocating the role of ownership and accountability. The backstop and the proposals on parachute payments provide a false promise of financial prudence. Former Prime Minister Boris Johnson launched the idea of a legislative bomb. We in this House have a duty to do our level best to defuse any layers of financial regulation that could damage the success of our pyramid structure in football—the EFL and the Premier League—and all those factors set out by my noble friend Lady Brady, who shares with me a passionate interest in the future of our success in the game, both nationally and internationally.

18:34

[Lord Grantchester (Lab)]

My Lords, there can be no dispute that the formation of the Premier League in 1992 has been transformative of football and has led to English top-flight football being the most dominant across European leagues. It has attracted worldwide audiences, the best players from all continents, international investment into clubs and unparallelled cash flows from broadcasting rights. Despite the success, and despite all the good outcomes—redistributions and investments in grass-roots development—serious problems have arisen, with widespread agreement and approval for corrective action. The spark for this came from the ill-advised breakaway proposals from six Premier League clubs in 2021 to form a new 12-team European Super League. Arriving at this point has been accelerated by some rogue, self-interested club owners ignoring the heritage and community aspects of football clubs; fans have rightly insisted that protections from abuse be enshrined in legislative regulations. I pay tribute to them.

I support the Bill. I am pleased with the enhancements the new Labour Government have brought to the previous Bill of the Conservative Administration. All political parties agree on the need for reform to counter inadequate corporate governance resultant from inadequate and ineffective regulation, such that the structure and dynamics of the market create incentives for financial unsustainability.

This new Bill strengthens effective engagement with fans and their representatives; it brings income redistributions from broadcasting rights within scope; it makes the regulator fully independent of industry and government’s foreign and trade policies; and it will create a new football club corporate governance code to improve equality, diversity and inclusion, and decision-making at clubs. I thank Katie Nixon from the Premier League, Rick Parry from the Championship and EFL, Sophie Levin from the Football Association, Kevin Miles from the Football Supporters’ Association and the Bill team for all their engagements on the Bill.

I declare my interest from a lifetime of experience in football and, most pertinently, from having been a director of Everton Football Club and, presently, chairman of Everton’s football memorabilia collection charity. I hasten to add that these remarks are wholly my own and not made on behalf of or representative of anybody else.

The football industry must agree to make this legislation and regulation work effectively and successfully. It is important for the whole game and to the lives of so many. I do not share the widespread general disapproval of the Premier League or of the exaggerated risks its briefings draw attention to. In many respects, the legislation may not go far enough, but it must be made to work, and we need to consider where it may lead and how it may develop and adapt to circumstances.

The immediate issue the regulator will face is in regard to the backstop Clause 57 and the divergent proposals on parachute payments and redistributions between the Premier League and the Championship. I understand the distortion of competition this brings to the Championship. However, I contend that the internal distribution between clubs in the Premier League also requires consideration and is pertinent to this. Should the Premier League distribute income more equally between the top and the foot of the table, those regulated clubs would have improved cash flows and potentially be better able to sustain the change. They can already limit exposure through their player contracts. Redistributions could be better made to Championship clubs; the sheer volume of broadcasting rights receipts counters the argument that the effects of the multiples of distribution between clubs at the top and bottom of the Premier League are less, in percentage terms, than elsewhere across other UEFA leagues.

Volumes are also pertinent. Indeed, the sheer dominance in cash terms from broadcasting rights to the Premier League leads top European clubs to consider that the Premier League is setting itself up to be the super league. In contention to this, there are fears of an emerging super league being created from the expansion of the Champions League and other UEFA competitions attracting more Premier League clubs into their participation. Protections against the super league in Clause 45 need to recognise these concerns. The cancellation of replays from round 1 of the FA Cup competition, and thereby the Premier League increasing its dominance by taking over the Football Association’s income streams, has been the result.

There are many concerns over competition law that are relevant not only within the football pyramid but internationally between England and both UEFA and FIFA. Both have issued statements of concern. It is a complex area. I highlight the conflict of interest that arises to the Premier League in relation to its being both a regulator and a marketeer of broadcasting rights.

I turn to how competitive the Premier League is. It can be argued that merit payments and their size will create elites, especially where redistributions of broadcast rights are augmented from playing in European leagues and from worldwide rights. The probabilities of any Premier League club beating another reduce from disparities between all those distributions. Is the league actually competitive? It could be argued that competitive pressures to achieve a merit position drive incentives to unsustainable behaviour. Relegation is the ultimate cliff edge. Clause 1(1) states that the purpose of this legislation

“is to protect and promote … sustainability”.

All aspects of income distributions and their effect need to be borne in mind, and the regulator must pay due regard to them.

The present problems also include financial fair play and the Premier League’s litigation against its members. Investments into clubs, their stadiums and facilities have not been adequately appreciated in the Premier League’s PSR. Surely investment should not be discouraged and penalised. In contrast, it appears to some clubs that accounting norms and standards are challenges to be circumvented or reinterpreted. For example, one of these is the length of time over which players’ contracts can be amortised.

As an aside, the Women’s Super League has adopted a better approach by having a total salary limit—a model familiar to US owners. I assure noble Lords that Everton abides by one, even though other clubs may not. The amount that can be spent on players’ wages is limited to 40% of turnover. However, the parent men’s team can invest further sums into the club’s women’s team and thereby lessen that impact, as it can spend 40% of its investment on player wages. Further discussions are ongoing in both sections, men’s and women’s. I am also pleased that the Secretary of State has powers in the Bill to extend the legislation to apply to the women’s game, which it is correct to leave to develop itself at the moment.

I commend the provisions about fans’ engagement in the Bill. I interpret them as enabling rather than prescriptive, and they should be sufficient to be effective.

Once the legislation completes its passage through both Houses into law, the very next important step is for the regulator to set up the “state of the game” report outlined in Clause 10. Its terms of reference need careful drafting, the call for evidence needs to be wide-ranging and inclusive, and the consultations need to be extensive. The reduction of time to 18 months from three years for this to be concluded is also an improvement to the Bill. The “state of the game” report is fundamental for the independent regulator to understand a full economic and financial analysis and all the implications of the market structures of the game, to have a broad remit with wide-ranging information-gathering powers, and to enable effective consultation.

The Bill is broadly balanced in its approach, and the House can consider whether amendments may be needed to make the Bill more explicit regarding the regulator’s reach. I close with a remark from Carlos Hurtado, a sports lawyer at Baker McKenzie:

“If you have strong governance and financial controls, you’re creating the perfect environment for the sport to develop, investors to come in and create more value for the business. When you do that you’re going to have more competitive football”.

[Baroness Blake of Leeds (Lab)]

My Lords, I remind noble Lords of the advisory speaking time. We have a lot of Members who wish to speak and we want to finish at a reasonable time.

18:45

[Lord Goodman of Wycombe (Con)]

My Lords, as a member of the Delegated Powers Committee, I look forward to exploring in detail what powers Ministers seek to arrogate to themselves under the terms of the Bill, following the splendid series of points made by my noble friend Lord Moynihan. I point out to noble Lords in passing that if they look at Section 92(3)(b), they will find that Ministers propose by regulation to redefine what is and is not “serious criminal conduct”, which is a proposal I find startling.

None the less, rather than risk being lost in this forest of detail, I wish instead to pan the camera back, look at this Bill as a whole and ask a question that I think has haunted this debate, namely: who owns a football club—Wycombe Wanderers, say, where I have been a season ticket holder for the best part of 10 years? Noble Lords might think the natural answer is that a football club is owned by its owners. Not so fast if you read this Bill, whatever Part 1 or Schedule 1 may say. According to the Bill, an owner is really more like a custodian than an owner and the fans are more like shareholders or co-owners than consumers, because football is judged under the Bill’s terms to be simply too important to fail. There is a heritage objective written into the Bill because it is held, I think quite rightly, that a football club is part of the very life of its community—particularly, say, in an old former industrial town where some of that industry has gone. It is essential to the coherence and well-being of the place.

As a Tory, I have no objection at all to the argument that institutions trump markets, but I cannot help following the arguments of my noble friend Lord Maude—from not quite the Front Bench but the Bench where former Ministers sit—and wondering whether this end might be better and more naturally achieved in a more evolutionary way were football to devise its rules and regulations itself, backed up, if necessary, by statute in a system of co-regulation. But we all know that this is not to be.

The Bill proposes a state licensed regulator, so in addition to Ofwat, Ofgas and the Care Quality Commission we are to have Ofball, Ofgoal, Ofside or whatever the new regulator will be called. But those regulators that I named and all the rest of them are not uncontroversial. They are sometimes accused of mission creep, of regulatory overreach, or sometimes of simply getting it wrong, often in reports composed by distinguished committees of this House. I cannot help looking at this Bill and thinking: on the one hand, a new state regulator, on the other, millions of engaged football fans; what could possibly go wrong?

In fairness and in balance, I have to acknowledge, as someone who is sceptical about the Bill, that it has the Premier League, the Football League and other interested parties more or less lined up in the same place. It is the product of years of work, and aspects of it have been widely welcomed—for example, Part 4, which seeks to deal with rogue owners. Who could possibly quarrel with that?

I must say, however, that the attentions of the Premier League and the Football League are more engaged with Part 6 on the distribution of revenue. If you want to find out what really engages most of those who take an interest in this Bill, follow the old rule of follow the money. I have to say myself, as the fan of a League One team that is currently top of the table, I have no objection whatever to money flowing down the pyramid and I can see why the Bill is widely welcomed. There you have it.

None the less, I have to say to the Government Front Bench that it is of course widely said, and it is true, that fans are angry when the market fails, and I warn the Government that, if the fans are angry when the market fails, they will also be angry if the state regulator fails or is seen to fail. What will fans say if they support an ambitious Championship club and the regulator reproves it for running up debt? What will the fans say if they believe that the fee that the regulator is charging the clubs for its services is too high? What will the fans say if they do not like where the club has got to on ticket prices? And there are myriad similar examples. I will be told that these fears are exaggerated or mistaken. I would reply, “Let’s put that to the test”. Let’s have a review of this regulator after it comes into existence in, say, five years. Let’s even consider writing a sunset clause into the Bill whereby we can review where this Bill is going”.

In conclusion, we are told that the football pyramid is the envy of the world, one of Britain’s great sporting successes—and so it is. But we are simultaneously told that the whole system is so fragile that it needs a state regulator to support it. I find these claims very difficult to reconcile—or, if they can be reconciled, could it be that it is the very fragility of the system, the sense of risk, adventure, innovation and dynamism, that has made the pyramid the success that it is? And could it be that the regulator is putting all that at risk? Let us find that out, have a review and consider putting a sunset clause in the Bill so we can find out in due course whether the fears I have expressed are mistaken and whether the hopes that the supporters of the Bill vest in it have come to pass.

18:52

[Lord Bach (Lab)]

My Lords, like many others in this debate, I am a self-confessed football obsessive. I have been a Leicester City season ticket holder for more years than I care to remember and, even more sadly, I am an addict of Fantasy Premier League, too. I find the Premier League riveting and have admiration for its success over more than 30 years: shown, as we have heard, by its vast global appeal, its world-class players, its huge crowds and its employment of a large number of people. It is intoxicating, so intoxicating that one can be tempted—as many are, I fear, including many young football fans—to think that the Premier League nowadays is all that football is. It is not, and it is because it is not that this cross-party Bill is so necessary.

Many noble Lords will perhaps know the wonderful fictional description of football fans at a Bruddersford United match during the Great Depression. It is at the start of JB Priestley’s wonderful novel The Good Companions. It is too long to remind the House this evening of the full description, but let me use an extract or two. Priestley wrote in 1929 that football turns you

“into a member of a new community, all brothers together for an hour and a half … and there you were, cheering together, thumping one another on the shoulders, swopping judgments like lords of the earth, having pushed your way through a turnstile into another and more splendid kind of life, hurtling with Conflict and yet passionate and beautiful in its Art. Moreover, it offered you more than a shilling’s worth of material for talks during the rest of the week”.

Of course, football, like society, is very different today, but fans’ emotions, as described by Priestley, and their response to a game, whether they are watching Manchester City or the bottom club in the 12th division of a Leicestershire local league are, I would argue, still the same.

I make this point to support the need for sustainability and fairness, which I believe are at the heart of the Bill. It is at this moment of almost total Premier League control and success that we need to take stock, surely, and ask whether this level of success is ultimately sustainable and, perhaps as importantly, whether it is always a good thing for the vast football world that lies beneath the Premier League. Of course, this Bill deals with the top four tiers, but let no one be in doubt that this Bill’s effect will be clearly felt right across English football.

To me, the case for a regulator is overwhelming. An industry as large as this, both in numbers and in money, and as significant to our national life, involving 35 million fans a year and almost 40,000 football clubs, should arguably have had a regulator some years ago. Given the bad experiences, but perhaps even more the near misses, that football has been through in the past few years, it seems important to have a regulator with real powers who is prepared to use them. Of course, no one on either side of this argument wants the regulator to run football, but any signs of weakness will be bad news indeed.

By way of example, the problem of football ownership has to be tackled. So much depends on the owner of a club. My club, Leicester, has been incredibly fortunate. Our owners have been marvellous, model owners, winning the confidence of the fans from an early stage and helping the community around Leicester and its county for years and years. Not many clubs, I admit, have been that lucky. Others have had years of worry and concern for fans. This is where the regulator should be prepared to step in.

I want to say a quick word about parachute payments and how reform is pressing. The present position, as others have said, particularly my noble friend Lord Bassam, is just plain unfair on other Championship teams. I am not against them as a matter of principle, but they are too high in relation to what other Championship clubs receive. Recent figures show one club that had just been relegated receiving £48.9 million in its first year while other clubs in the Championship received £5.8 million in something called solidarity payments. That is too big a distinction and it should change.

There are other big issues in the Bill and I look forward to taking a small part in Committee, but I agree that the abolition of replays in the FA Cup from round one on is a sad occasion. We all grew up, whatever our views and whoever we support, with cup replays in the middle of winter. They were exciting, surprising and very much part of the English game. I still do not know why they have been abolished.

Whether it is true that the existence of football has prevented violent revolution in our country, as we used to be told at school, I do not know, but its importance can hardly be exaggerated and that is why this Bill is so vital.

18:59

[Lord Hannan of Kingsclere (Con)]

My Lords, to what problem is this Bill a solution? That should be the first question we ask of every piece of legislation but, not for the first time, I find that I am the only person —so far, at least—who has asked it. Here we are, a revising Chamber conceived as a check on the necessary radicalism of the popularly elected Chamber. It is precisely our job to uphold the principles of proportionality, propriety and property. As my noble friend Lord Goodman said, of course people are going to be angry about individual market failures now, but it is our job to foresee that their anger will be all the stronger when there are worse failures, as assuredly there will be once the entire business is taken into state regulation.

I ask again: to what problem is this a solution? Are we facing national bankruptcy as a result of the terrible failure of football? On the contrary: every speaker so far has acknowledged the success of English football. The Minister called it our greatest cultural export. I understand that not only is the Premier League the most watched in the world but the sixth most watched is the English Football League, and they are the first and second in terms of takings at the gate. So to what problem is this a solution?

There are plenty of things that need reform—we have a Civil Service that has stopped bothering to show up at the office since the pandemic and a healthcare system that is delivering fewer and fewer procedures despite getting bigger and bigger budgets—yet we seem to be going after all the things that work, whether it is the City of London, private schools or now, outstandingly, what everyone agrees is the most successful football league in the world.

What are we going to solve by doing this? The Bill talks about the one notional problem of clubs closing and being allowed to close. The one that everyone keeps mentioning is Bury, but I cannot help noticing that Bury is still there. It is a wonderful example of what Joseph Schumpeter would have called spontaneous order. Without any regulation, that was solved. Can we be certain that, with the full force of coercive law, we would have improved that situation and made it more likely that we would have had the investment to come back?

I used to work at the Sunday Telegraph—in fact I still write a column for it, as did my noble friend Lord Goodman for a while. We had a former colleague there who is now, sadly, deceased, Christopher Booker, who had the wonderful phrase, “using a sledgehammer to miss a nut”. I am afraid that is exactly what I can see this legislation doing. It is not going to succeed in its declared notional goal but, my word, it is going to have a lot of unintended and unforeseen secondary consequences.

Who has ever known a regulator to say, “Actually, our job is done, we’re going to dissolve ourselves”, or even, “Do you know what? We’re probably doing a bit too much. Let’s take a step back”? Has there ever been an example of any regulator that has volunteered to relinquish its power? Once this one gets going, who can say for sure that we will not have gender quotas, net-zero policies, ticket price fixing and any manner of things beyond the remit originally foreseen? That is what regulators do. One more time, what is the terrible crisis that is so severe that it justifies bringing in a measure of this magnitude?

I was very impressed last week during Questions by the responses of the Minister, the noble Baroness, Lady Twycross. Those who were here will remember that there was a debate about boxing and about male-presenting boxers in female boxing rings. Despite a great deal of moralistic fervour in the Chamber, the Minister quite properly stood by the principle that it was not for Governments to tell independent sporting federations what rules they should follow. That has been a pretty good principle in this country.

[Lord Addington (LD)]

My Lords, if the noble Lord will take an intervention, it was actually about two rival bodies with different definitions of what they were, one of which was corrupt.

[Lord Hannan of Kingsclere (Con)]

None the less, the principle surely applies that these bodies, whether they are for boxing, football or anything else, exist to serve their members, and they have done so extremely well—this is something that sets us apart from a lot of other places in the world—without needing state regulators. It would not occur to somebody setting up a sporting federation now to go to the Government for a licence, and that is in keeping with our common-law traditions, in keeping with the principle of free contract and property and in keeping with the history and temper of this country.

Let us not abandon what should be those core principles that have served us extremely well. Let us defend the freedom of private organisations, which have never asked the Government for a penny in support, to do what they do well. Let us not intervene in something that is working extremely successfully. There is a basic principle that is often attributed to Edmund Burke, and in fact I think you can trace it all the way back to Confucius, but I am going to express it in the words of the third Viscount Falkland, a Civil War royalist who, if he was not exactly the first Tory, may reasonably be said to be the forerunner—let us say the morning star—of Toryism: “If it is not necessary to change, it is necessary not to change”.

19:05

[Lord Mann (Lab)]

If there were no crooks or conmen, Bury Football Club might not have been forced to go to the very bottom of the pyramid rather than staying where they were—a club with a huge history and a huge fan base.

I declare an interest as one of the deplorables. I am elected by the fans of Leeds United Football Club to chair their supporters’ club, the oldest in the world at 105 years old. I am a statistical economist by training, and I calculate that my members have spent in their lifetime between £3 billion and £5 billion following Leeds United Football Club. In reality they are investors in Leeds United Football Club. They meet a few government objectives on the way because, in that 105 years, they have provided green transport and taken cars off the road by providing buses to every fixture, home and away—and I mean every fixture. They have reduced the police bill, not marauding around the streets in any way but going point to point for every single match. That is another contribution.

What do we get for that? Let us look what happens in Germany. Germany was cited as a bad example because there is no competition in Germany, fans have a say and it is a bad model. Let us get our facts right. Here are entrants by success from German football into UEFA competitions for the first time in their history in the last 10 years: Freiburg, Augsburg, Mainz, Union Berlin, Hoffenheim and Heidenheim. The champions of Germany, the Bundesliga, for the first time ever last season were Leverkusen. There is fan involvement—unlike in this country—diversity of success and a growing business model.

Let us jump down the scale. I had to intervene several times to assist the fans of Worksop Town Football Club—the fourth oldest in the world, created in 1861—in preventing it going out of business. No one else was going to intervene—not the football authorities. We had to save the club not once but more than once. For a town like Worksop a football club of that age, however relatively unsuccessful, is fundamental to its very being. Should that club be allowed to disappear? Should Bury have to come in at the lowest possible denominator because of that?

I have some questions for the Minister. If Worksop Town at its low level were to be brought into any regulation, would that require action by the regulator, primary legislation or secondary legislation? If the players’ union had to be consulted, which of those three would that require?

What if women’s football were to be included? I shall cite Solihull Moors. Does the situation four weeks ago at Solihull Moors classify as potential action for the regulator under the legislation or not? If not, which of those would be required—regulation, primary legislation or secondary legislation?

Football has to report on modern slavery but not on footballers. The Commonwealth Parliamentary Association in co-operation with the Kenyan Parliament has a big project on this at the moment. It is a huge issue. If we want to require football to report on footballers, including under-16s, under the modern slavery requirements that apply to all other employees, which of those three does that require?

Paragraphs 8 and 9 of Schedule 5 talk of a requirement to consult representatives elected by fans, but a number of clubs are choosing who the fan representatives on their supporters’ advisory boards are. With the legislation as it stands, will that be superseded by the ability of democratically run fan groups to elect their own representatives?

There is good news on one of my other declared interests—anti-Semitism. In the last four weeks, we have had Jewish Fulham supporters able to go to a Hanukkah event at their club as a Fulham Jewish supporters’ group. Manchester City have agreed to a similar event in the last four weeks and Leeds United will have another Hanukkah event—one of the fastest growing, with significant numbers joining. Orient will have its first-ever such event in a few weeks’ time. Should those fan groups expect that their clubs recognise their existence and speak to them on relevant issues? I suggest that would be rather a good thing for society. How does that fit into how this Bill is worded? I am a Kick It Out ambassador on anti-Semitism. Will the reporting on equalities be better or worse than the requirements we put on the banking sector? They ought to be at least as good. Will they be?

Above all, there are two big questions that the Government have to answer. One is the Bury question. Bury was taken out of existence by a conman, and lifelong fans of Bury wanted to get hold of the assets in order to run it themselves and keep it alive. Will that be possible technically with this Bill? What they required was the asset of the ground, the name and probably a bit of cashflow in whatever capacity—loan or whatever—to keep the show on the road in the league they were in, if they chose to remain in that league. Is that possible?

I shall reference Leeds United Supporters Club for the other big question. We do not want to be called Red Bull Leeds by some of the new investors. We do not want to be like Red Bull Salzburg; in fact, I refuse to wear a shirt with red on. I am happy to wear a red rosette every election—and only a red rosette—but in my football I and many others do not wish to be Red Bull Leeds. Does this legislation give us the power—if we can persuade the rest of the fans—to vote yes or no to such a proposition?

They are the two key tests of this legislation. I hope to hear from the Government that, on both, those powers will be there.

19:14

[Baroness Morris of Bolton (Con)]

My Lords, it is a pleasure to follow the speech of the noble Lord, Lord Mann. I was born into a family of avid Bolton Wanderers supporters, married into another and am a long-standing season ticket holder. I see that, sadly, the noble Lord, Lord Bach, has just left, but my husband and my son both drive me mad every weekend with their fantasy football teams. So, I welcome the opportunity to speak in this Second Reading of the Football Governance Bill and thank the Minister for her clear explanation, despite her reference to the Bolton v Oxford result in the League One play-off final. I also thank her for her warm tribute to Dame Tracey Crouch, who through her work on the fan-led review of football laid the foundations of this Bill.

Like at Leicester, as we heard from the noble Lord, Lord Bach, we are incredibly lucky at Bolton Wanderers that since August 2019 we have had owners in Football Ventures and a chairman in Sharon Brittan who instinctively understand the right way to run a football club. From the inclusion of and communication with fans and the community, to the obvious care and support of staff and players, they have been a breath of fresh air. It has not been easy, and finances are still tight, yet their visibility at events and matches, turning up, showing up and embracing and understanding the highs and lows, have endeared Sharon, in particular, to fans and the wider Bolton family. If all clubs had been run this way, there would be no need for the Bill.

But it has not always been like this. As one of the 12 founding clubs of the Football League—as we have already heard—Bolton has a rich and proud history, but it has never been easy being a Bolton Wanderers fan. We have watched them play in all divisions from the old Division One down to Division Four, go back to the Premiership and play in Europe, and then fall all the way down again through the divisions of the EFL to our current place in League One. But through all these highs and lows we retained hope, and the next season was always going to be the season where things came right.

That was until 2015-16—as we have heard from the noble Baroness, Lady Taylor of Bolton—when things began to go financially wrong and we came under new ownership. We reeled from winding-up orders from HMRC to unpaid wages, player strikes, Marc Iles, a much-respected local journalist, having his credentials withdrawn for asking questions about how the club was being run, threat of expulsion from the EFL and an owner who saw himself as a secured lender rather than a custodian of a much-loved club. So incensed were we that my good friend, the noble Baroness, Lady Taylor, and I wrote a joint statement addressing the then ownership of the club, fearful as we were that our families and future generations of Wanderers’ fans would be denied the pleasures and the pain we had enjoyed.

The long journey back from going into administration to being bought by responsible owners in Football Ventures was plagued by chancers, dreamers and time-wasters, all of whom placed the club in further jeopardy. We were not alone. Many other clubs have been through the same nightmare including, as we have heard, Bury, our next-door neighbour. I know there is a view that if a club is failing it should be allowed to fail, that fans will simply transfer their allegiance somewhere else. But the fortunes of a club have ramifications far beyond the football pitch.

In January last year, John Tribe, a senior lecturer in law at the University of Liverpool, published an article in The Conversation entitled “Football Club Collapses in Lower Leagues: How to Avoid Them for the Good of the Community” in which he said:

“Behind every collapse is a story of people losing their jobs and investors losing money, but the community uniquely suffers too”.


Supporters and wider communities are the lifeblood of football clubs and, correctly, have an interest, even a sense of ownership. Owners of football clubs have a clear responsibility to those supporters and to those communities. Too many failures to meet that responsibility bring us here today.

By instinct, I believe, wherever possible, in self-regulation; nevertheless, I believe a degree of regulation is now necessary. But football clubs are independent businesses, as we have already heard, and the delicate balance between precautionary oversight and stifling over-regulation must be protected.

How we regulate will be as important as what we regulate. Despite the reassurance of the Minister, we must ensure, as my noble friend Lord Parkinson said, that there is not mission creep. It would be tragic if the beautiful game went from being buffeted by the inconsistency and uncertainty caused by some owners and bad league decisions to reeling from the storms of a regulator whose actions smothered the ingenuity and brilliance that makes British football the great game it is.

19:20

[Baroness Jones of Moulsecoomb (GP)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Morris of Bolton. I did not realise she was a football fan. It is amazing how all these football fans have crawled out of the woodwork today. I am delighted I am one of them—I support Arsenal. I am sad to say that I am mostly reduced to listening to matches on the radio these days. Life is too full to do much else.

The Green Party welcomes this Bill but it wants, as others have said, the regulator to address the unfairness of the Premier League clubs getting nearly all the money, when 67 professional clubs share just 8% of the revenue. That does not seem like a logical place to be. We agree with the English Football League that there is enough money in football to ensure that all levels of the game are sustainable and thriving.

As other noble Lords have said, football in this country is part of nearly every park, sports hall, school playground, beach, empty piece of tarmac and patch of grass. It matters to the hundreds of thousands of parents, children and young adults who go along to play on their local pitch, or who travel for a couple of hours to the next match. It matters to the coaches and others who give hours and days to make it happen. It matters to the women’s teams. It matters to the pub teams. Whether it is pensioners or people with Parkinson’s, football is part of their lives and identities.

The Green Party wants to see football grow from the grass roots up. That means reversing the damage done by the last Government at a local level, with nearly 1,000 football pitches being lost since 2010. We want local authorities given the power to invest in their local professional football clubs and to reinvest the dividends back into sports facilities in their communities. We want to ensure that local authorities are able to maintain key sporting infrastructure, such as swimming pools, sports halls and playing fields, that can be used by all sections of the community.

Being a Green, I am going to bring climate change into this. Then noble Lord, Lord Hannan, is not in his place any more, but I agreed with one thing he said: he did not like the idea of net zero. I do not like net zero either. We are way past the time for net zero; we have to think about real zero. I know that this Labour Government have a real problem with understanding climate change. I am very happy to help them out at any time, with tutorials from scientists or meteorologists. In the meantime, this Bill fails to prepare football for one of the biggest challenges that it will face in the future.

Climate change needs to be part of this legislation, because the adapting of facilities to deal with flooding, drought and excessive heat is already starting to be a regular feature of football life. If you think this is a side issue, you should go and talk to soccer schools in Valencia, which are covered in cars, fish and mud.

There are 23 professional teams that can expect partial or total annual flooding of their stadiums by 2050. That probably sounds a long way off, but others will be vulnerable in the meantime. Zurich Insurance found that nearly one in four of the biggest stadia face major building work or crippling insurance bills simply because of trying to face up to climate change. Both the Bundesliga of Germany and the Ligue de Football of France include environmental sustainability as part of their licensing. Why are we not including climate change as a specific issue that our new regulator has to consider and deal with?

When Carlisle United’s Brunton Park was devastated by flooding caused by Storm Desmond in 2015, the club’s insurance covered its substantial losses. Following that claim, the club said it found it nearly impossible to renew its insurance. Climate change is happening, and it is already having a big impact at grass-roots level, where local clubs will need help to find the resources to cope. The chair of the FA, Debbie Hewitt, revealed that:

“We have something like 120,000 games a season cancelled because the pitches are not playable”.

In recent years, grass-roots teams have swung from cancelling games because the ground is baked like concrete to pitches being regularly flooded.

Giving the new regulator of the professional game a specific remit to consider climate change is a reasonable thing to do. It would send a signal to the Football Association that grass-roots football is also going to need resources to adapt to what is now happening to our climate.

19:25

[Lord Harlech (Con)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Jones of Moulsecoomb.

[Baroness Jones of Moulsecoomb (GP)]

Even if I am an Arsenal supporter.

[Lord Harlech (Con)]

Even if she is a Gooner.

This legislation seeks to overhaul football governance structures in England and Wales to make the sport more transparent, financially stable and responsible. Like any significant reform, it has both pros and cons, and has particularly sparked concern from the Premier League.

One of the Bill’s most significant provisions is the introduction of stronger financial regulation for clubs. The Bill aims to prevent the kind of financial mismanagement that has led to the collapse of several clubs in the past. The Premier League has seen several clubs run up huge debts. More than half of Premier League clubs reported losses in recent years. In the 2022-23 season alone, Premier League clubs collectively posted £1.1 billion in losses.

The issue of financial mismanagement is not confined to the Premier League. The English Football League has also seen its fair share of clubs that have gone into financial turmoil, leading to administration or outright bankruptcy. As the noble Lord, Lord Mann, explained, one of the most high-profile examples in recent years is Bury Football Club. In 2019, Bury, one of the oldest clubs in English football, was expelled from the Football League after it failed to meet financial obligations but could not find a buyer to stabilise the club’s finances. The collapse of Bury FC was a stark reminder of the financial vulnerabilities that can plague even historic clubs if the proper oversight is not in place.

As we have heard, clubs such as Bolton Wanderers, Macclesfield Town and Blackpool—clubs that are intrinsic, essential and at the core of their local communities—have experienced financial crises and been forced into administration. These situations affect clubs, their fans, local communities and the broader football pyramid. The Football Governance Bill seeks to address these issues by introducing stronger financial regulations and governance structures to ensure that no other clubs face the same fate as Bury.

The establishment of an independent football regulator is another cornerstone of the Bill. According to the 2021 survey conducted by the Fan Led Review of Football Governance, 92% of respondents supported the idea of an independent regulator, emphasising the desire for greater accountability in football governance. However, I would caveat that: 92% sounds like a lot, but the total number of respondents was 20,000. If you think about how many fans attend football across a weekend—on a Saturday afternoon or a Sunday—that is not a huge number. We have to think about what the fans who did not engage with the review want. That is just a word of caution before we proceed wholeheartedly down this track.

As other noble Lords have said, not all regulators in this country have been successful. While many are called independent, their accountability, particularly to Parliament, has been called into question. Can the Minister say how the Government will ensure this new regulator’s accountability to Parliament?

Proposals for more transparency in club ownership, and implementing a more rigorous owners’ and directors’ test, might help ensure that only financially responsible, ethical owners run clubs. This is particularly relevant given the history of some club owners who have brought financial ruin or unethical practices to their clubs.

An example is the Glazer family’s ownership of the club I support, Manchester United. Since the Glazers bought the club in 2005, Manchester United has been plagued by massive debt and a lack of investment in crucial areas such as infrastructure and youth development. The Glazers financed their acquisition of the club through highly leveraged debt, meaning that Manchester United was saddled with a debt of £500 million at the time of the takeover. Since then, the club has paid hundreds of millions in interest on this debt, money that could have been better spent on improving the club’s facilities or player acquisitions. Moreover, their ownership has been marked by a lack of transparency, with millions siphoned out of the club through dividends and “management fees”. This has sparked widespread fan protests and has contributed to a decline in Manchester United’s competitive edge despite its enormous global fan base. The Glazers’ negative impact on the club exemplifies the need for stricter ownership regulations, which the Bill proposes, to ensure that clubs are run in the best interests of their fans, their communities, and their long-term success.

However, the impact of these reforms will be felt not just in England; Welsh clubs that compete in the English football pyramid will also be affected. Welsh clubs such as Cardiff City, Swansea City and Newport County are integral members of the English Football League. These clubs will be subject to the same regulations and financial reforms as their English counterparts, meaning that they could benefit from increased financial solidarity payments from the Premier League and the EFL as part of the Bill’s redistribution proposals. However, there are concerns about how Welsh clubs will navigate their unique position within the English system. Welsh clubs are governed by the Football Association of Wales, rather than the FA, which adds a layer of complexity to any governance changes.

One of the main concerns from the Premier League is that the Bill represents excessive government intervention in football’s internal affairs. While the Government argue that reform is necessary, the Premier League contends that football should be governed by its authorities, not politicians or bureaucrats. Football, after all, is a global industry with complex dynamics, and many believe that government interference could stifle its autonomy and commercial success. According to a report by the Premier League, over £10 billion of commercial revenue flows into the English game each year, mainly due to the unique, autonomous structure of the league. Any increase in government regulation could jeopardise the commercial appeal of the league and its competitiveness, which might undermine the Premier League as the most profitable in world football.

As eloquently explained by my noble friend Lady Brady, another significant concern is the Bill’s proposed redistribution of football revenue. The Premier League generates substantial income from domestic and international broadcasting deals, and there are proposals to redistribute a more significant portion of this revenue to lower-league clubs. The Premier League earned £10.6 billion from broadcasting deals in the 2022-25 cycle. While this is a crucial source of income for the league, the Premier League argues that a large-scale redistribution could undermine its financial stability. Any reduction in this income could make it harder to maintain that competitive advantage.

In conclusion, while the Bill has some positive aspects, the dangers must be addressed. Redistributing wealth between leagues and introducing stricter ownership tests could have unintended and far-reaching consequences for the entire football pyramid.

19:34

[Lord Hayward (Con)]

My Lords, I feel somewhat of an interloper in this debate. I have learned an enormous amount listening to some very knowledgeable people about football and its structures. As I think many noble Lords are aware, I am committed, like the noble Lord, Lord Addington, to the game of rugby. However, I am an interloper not only because of that—a strong interest in another sport—but also because, unlike all the noble Lords who have been declaring their support for one team or another, I wear with pride my referee’s tie. I seem to be the only person who has an ability to be impartial in relation to elements of this debate.

Although the noble Lord, Lord Mann, is unfortunately not here at this moment, I should add that my brother and his wife are season ticket holders at Leeds. I am old enough that in the days when I did have a team to support it was Headington United—now Oxford United —formerly at the Manor Ground that the noble Baroness, Lady Twycross, referred to in her opening comments.

My concerns are not, as the noble Lord, Lord Hannan, suggested, that there are no problems and therefore we should not do anything; he called into question whether this was the right route to follow. However, I am concerned, for example, by the opening statement in the notes of the overview of the Bill, which describes a

“regulatory regime, with the primary aim of ensuring the long-term sustainability and resilience of English football”.

There is no reference there to its success, about which we have heard over and again from contributors on all sides. Surely that must be an objective of this legislation. If it is not, one has to ask why.

I will not replicate the comments made by many noble Lords—my noble friends Lady Brady, Lord Maude, Lord Moynihan and Lord Goodman—in relation to questions that need to be put to the regulatory process. I have asked colleagues in meetings where I have been over last few days, in which a mixture of different industries were represented, to identify a successful regulator. With only one exception, I had nobody say, “Oh yes, we’re well regulated”. The exception was the MHRA, which has a very special role in regulation. A lot of people here this evening have referred to clubs’ financial problems. Did the road and rail regulator intervene in the failures of the rail companies? Did Ofwat intervene in Thames Water’s failings? We have to be incredibly careful about this regulator, because otherwise what should be in that first paragraph—success in English football—will disappear. I say “success” despite comments from the noble Lord, Lord Triesman, about World Cup victories; I wish England had had far more over the decades. I am referring specifically to the clubs, which are the subject of this Bill and the regulation associated with it.

I echo the comments made by a number of my colleagues, particularly on this side but also on the other side, but I will raise two other things. One was raised by my noble friend Lady Evans earlier. I am disappointed that we do not know what the cost of the regulation will be. That is a burden that will be carried by all the clubs covered by this legislation. Do not believe that they will be imposed just on the Premier League; they will be imposed on all the clubs covered. We need to know urgently what the burden will be— I deliberately use the word “burden” because this is not just financial; it is interventionist—as a result of the cost on all the clubs covered.

I certainly echo the comments of the noble Baroness, Lady Grey-Thompson, and others, on the need to cover women’s football as much as men’s football, because it will happen at some stage of another.

Having agreed with most of my colleagues, and a number of noble Lords on the other side, on different elements of their contributions, I conclude with the form of arbitration, which has been much commented on. I spent many years in industry, negotiating on behalf of management with trade unions. I do not foresee the problem of swing arbitration to the extent that a number of noble Lords identified today. In many cases, it can work incredibly well and is an alternative solution to battling it out in a stalemate that one sees so often.

With those few comments, I echo the view expressed by a number of noble Lords—that if we are to have a regulator, the regulation should be of an extremely light touch. I would not dissent from the suggestion by my noble friend Lord Goodman that we should have a sunset clause or some form of review clause to see how well it is working after a number of years.

19:40

[Lord Birt (CB)]

My Lords, may I take noble Lords back? In the 1980s, I scheduled ITV at the weekend, and among my responsibilities was football coverage of the then First Division. Of course, there was no Premier League then. This was the period that you now see on archive match footage, where the centre forward shoots at goal and the ball gets stuck in mud six yards away. All games were played at 3 pm on a Saturday, and ITV’s pitiful contract allowed us only to show highlights of a few games on Sunday afternoon, 24 hours later, long after the results had been thoroughly digested. Unsurprisingly, the football audience was bored and was drifting away.

ITV, and then the BBC, called time, and no football was shown on British television for some months until the then football authorities finally agreed that some live football could be included in a new deal. Not many years later, a breakaway league was formed, the Premier League; a little later still, Sky Sports made the live broadcast of games the staple of every football fan’s life. Later still, the Premier League became a global force. I hiked high up in the Himalayas with my wife about 10 years ago. There were no roads or vehicles but there was solar power, and in every single village, high up in the Himalayas, young boys, almost all wearing Manchester United or Liverpool shirts, could be found kicking a football around some rocky patch.

Let us be clear: the Premier League’s success is not an accident but an unrivalled achievement, forged over decades. A high proportion of the world’s best footballers play in it; a high proportion of games produce brilliant, scintillating football of extraordinary creativity; and, unlike in some other countries, there are no invincible superpowers. Every team in the Premier League plays to a high standard and, on its day, is able to beat any other team. Thus, in the past 12 months or so we have had Wolves 2-1 Manchester City and Liverpool 0-1 Nottingham Forest. Just this last weekend—the noble Lord, Lord Maude, is not in his place, so I am sparing him a moment of pain—we had Spurs 1-2 Ipswich.

Of course, success brings new problems, and I support the measures in this Bill designed to address them. Clubs are businesses, but they are not just businesses: they have long heritages, many from over a century. As everybody who has spoken today agrees, they are deeply embedded in our local communities; they have been followed by generations of the same family. One of my grandfathers, whom I knew, was brought up in the 1890s, only 200 yards away from Anfield football ground. Perhaps unsurprisingly, all my grandchildren are now impassioned Reds. The noble Lord, Lord Parkinson, has just left the Chamber, but I am mystified that he could have grown up in Whitley Bay in the north-east and managed not to be indoctrinated in the pleasures of supporting Newcastle.

Football’s very success has made clubs targets of responsible, capable, well-funded entities but also, on occasion, of owners with neither the skill, means nor financial acumen to run them properly. There can be no excuse whatever for any club in the world’s richest leagues suffering a loss; that is simply bad management—and the noble Lord, Lord Harlech, has just given us a very vivid example of that. The provisions in the Bill to protect clubs from rogue owners, promote effective board governance, mandate financial prudence and solidify fan engagement are all most welcome. However, I have some significant reservations about the Bill as it stands.

First, it fails to address some critical issues in the game—for example, player welfare, which the noble Baroness, Lady Taylor of Bolton, mentioned earlier. Football is now inducting talented players from a very young age, yet we know that 99% will not finally make it to the top tier. I know from personal encounters that not all clubs are scrupulous about ensuring that young players maintain their studies to the level of their academic ability or about preparing them for what can be the psychological trauma of ending up with no future in football. Moreover, Sheffield Hallam University and others have identified indefensible practices and behaviours in a minority of clubs across the leagues, with apprentices used as cheap labour, facing humiliation, enduring punishment regimes and exposed to homophobia.

The second major shortcoming of the Bill is that it does not explicitly address the issue of fan safety. We have had some narrow escapes in recent years. I feared for my life at the UEFA Super Cup in Istanbul in 2019. We experienced anarchy at Wembley in the 2020 Euros final, and the 2022 Champions League final at the Stade de France, which I also attended, was a well-chronicled episode of near-disastrous failure on the part of all the multiple organisations involved, inadequately supervised by UEFA. Let us heed these warnings: fan safety, at home and abroad, requires regulatory attention. The present system has not been working.

I come to the third shortcoming. Neither the Bill nor the regulator should inhibit the development of football. The proposal for a European Super League by common consent, as an exclusive enclave, was a significant misjudgment, but I see no objection in principle to the emergence of small, tiered European leagues that are purely based on merit. We must allow the game to continue to develop, as I hope my opening observations about life in the 1980s underline and illuminate.

Finally, like a number of noble Lords, I am wholly unconvinced by the mechanism in the Bill for regulating fund flow down from the Premier League to other leagues. The Premier League is not a closed shop: three of 20 clubs go down each year and three go up—and 51 clubs have been in the Premier League since its inception. In 1992, Bournemouth were in the old Third Division; they are currently bang in the middle of the Premier League, and so far this season they have beaten both Arsenal and Manchester City. This is a league where good club governance and effective management at every level can bring success.

In the 2023-24 season, the Premier League distributed around £500 million down the football pyramid, including to the grass roots and the women’s game. That is a seventh of its broadcast media pot, and it is by far the biggest transfer of funds by any league in any sport anywhere. Absent a regulator, that has been a purely voluntary act on the Premier League’s part.

The annual transfer from the Premier League to the Championship is itself a hefty £370 million. With rising revenues of its own, the Championship, as my noble friend Lady Brady reminded us, is now the sixth-richest league in Europe, notably larger than the tier 1 leagues in Portugal, Belgium and the Netherlands.

It is crystal clear that this model is very definitely not broken. Worse still, the method proposed in the Bill for resolving a negotiating impasse between the Premier League and the Championship is a form of Russian roulette. It is simply bizarre and will mightily deter investors of quality. A number of people have spoken on this, including my noble friends Lady Evans and Lady Brady, and the noble Lord, Lord Wood.

[Baroness Wheeler (Lab)]

Time.

[Lord Birt (CB)]

I am on my closing remarks and the time is advisory, as the noble Baroness knows. I am about to conclude.

A regulator-backed land grab of Premier League funds risks undermining the extraordinary success of the Premier League, killing the goose that lays the golden egg and reducing the massive, beneficial impact that the Premier League has had on the whole of English football and on our national life. I ask the Government to think again.

19:51

[Lord Jackson of Peterborough (Con)]

My Lords, the aims of this Bill are laudable. It is legitimate to be concerned about issues such as poor financial and operational management, the inequitable distribution of funds, particularly broadcasting fees, and insufficient input from football fans. I concede that, for most people, their local football club is the heart of their community, town or city; it is part of their history, heritage and culture, and the fabric of everyday life. As a communitarian, I understand and applaud that these clubs are cultural icons and often community champions. One of the most memorable occasions I remember as a Member of Parliament in the other place was attending the civic reception for the back-to-back promotion of Posh at Peterborough Town Hall in 2009.

I am not a devil-take-the-hindmost libertarian; I believe that there is a place for government intervention. It is right to intercede in a dysfunctional marketplace where there is unfairness, oligopoly, monopoly, price gouging or barriers to entry, and it is appropriate to protect the consumer in extremis. However, this Bill, while potentially improving the financial sustainability of individual clubs and English men’s professional football, does so at too high a price, with its encroachment by the state in the form of a behemoth regulator and ministerial fiat into the operation of a free market, broadly successful and lucrative business model, and private associations and private enterprise.

The impact assessment tells us that, over a Parliament, compliance and operational burdens will cost upwards of £140 million. Even the non-monetisable and monetisable social benefits in the impact assessment are essentially unquantified. The Bill represents another example of incremental mission creep that, sadly, we have seen over the last number of years, outsourcing governance and policy to reviews and consultations, and specifically to regulators.

Naturally, I do not blame the present Government for bringing the Bill forward; they actually believe in big government, state interference, regulatory overreach and that Whitehall knows best. But this legislative process began under the Conservative Government, despite it being completely at variance, ideologically and philosophically, with our values as a party of localism, free-market dynamism, minimal regulation and entrepreneurial endeavour in order to deliver profit and tax revenues to drive improved public services.

This Bill should be measured simply against the key tests. Is it proportionate? Is it necessary? Is it justified? I would answer no. Football is not unique. Woolworths was at the heart of the high street when it closed in 2009, but we did not immediately legislate to have a sweet shop regulator in the wake of its closure. Football clubs have always gone bust: Aldershot in 1992, Exeter City in 1994, Chester City in 1998, Crystal Palace in 1999, Swindon Town in 2000, and so on. Invariably, the free market corrects where there is a local demand and community support to re-establish and reconstitute clubs previously in administration and insolvent. This bespoke Bill is therefore not necessary or proportionate.

That does not fetter the discretion of Ministers or their ability to improve the English game using other regulatory or statutory levers. Surely it is not an insurmountable challenge to enhance and strengthen the existing owners’ and directors’ standards and the fan engagement standards.

I will now move from the political and ideological background to the details of the Bill, in particular its earlier parts. As my noble friend Lord Moynihan said, the Bill contains 42 delegated powers and 10 Henry VIII clauses, giving Ministers sweeping powers, notwithstanding the use of the affirmative resolution in respect of statutory instruments.

The creation of a new regulator is for me problematic. Theodore Theodoridis of UEFA is quite right to highlight the dangers of overreach and scope creep:

“While the initial intent of the IFR is to oversee the long-term financial sustainability of clubs and heritage assets, there is always a risk that, once established, the IFR may expand its mandate beyond these areas”.


He warns, rightly, of “government interference”.

Clause 45 is particularly problematic. It is drafted so very loosely, and the Government’s memorandum to the Delegated Powers Committee explicitly references a “strong steer” for the Government in developing regulations on prohibited competitions. Even Dr Jan Zglinski of the LSE, an academic football specialist otherwise supportive of the Bill, believes that the clause will give rise to litigation and disputes due to its opacity.

It is difficult to legislate for something you cannot define. How can you protect and preserve important cultural heritage assets or engage with fans if you cannot define these terms in the Bill? If one consults Schedule 11 and paragraphs 82 and 83 of the Explanatory Memorandum, one finds that neither “fans”, “local community”, nor “heritage of English football” are defined. Perhaps the Minister will consider that issue. Furthermore, Clause 2, which gives the Secretary of State powers to define “specified competition”, is unprecedented.

I am concerned by other aspects of the Bill, such as encompassing investigatory powers and data sharing with public authorities, as well as the onerous powers under Clauses 28 and 29 on the suitability of ownership and officers, and the Minister’s powers therein. I am most concerned about the powers conferred in Part 3, and particularly Clause 22, on varying the discretionary licensing conditions. Clause 22 is particularly wide and loosely drafted, and contains Henry VIII powers to enable the most onerous and far-reaching interference by the IFR into individual clubs’ everyday activities. It would allow Ministers unlimited carte blanche to change and amend the licence conditions on a whim and without appropriate notice.

This brings us inevitably to the Trojan horse: the pernicious woke ideology of identity politics inserted into the Bill at paragraph (7)(2)(d) of Schedule 5—the EDI clause. The last thing football needs is primary legislation to embed identarian zealots into the operation of our national game.

I fear that the Bill is the Dangerous Dogs Act de nos jours; driven by anecdote and special interest, it is well-meaning but egregious. After all, in respect of Clause 49, on changing the crest, shirt colours or name, is this really necessary or enforceable, and is it really appropriate for primary legislation? We all want a successful football industry and we all support the aim of economic growth, but we must be careful about killing the proverbial goose with overregulation and legislative overkill, which I believe the Bill represents.

19:59

[Lord Moynihan of Chelsea (Con)]

My Lords, I refer to my interests and to 65 years of attendance at Stamford Bridge. Your Lordships should oppose this Bill, root and branch. It is badly written, of course—it is a Christmas tree.

However, beyond this one very bad Bill, there is a major problem facing us: far too much regulation, with both major parties over the past two decades having succumbed to the impulse to interfere, to busybody, to regulate. Excess regulation kills economic growth, reduces wealth and suppresses human happiness. Fact-based academic studies from around the world confirm this, but, in the UK, regulation has mushroomed.

We cannot roll out a decent nuclear programme. We have demolished the London Stock Exchange, with so few companies now opting to list there. Policy Exchange cites 25 destructive Human Rights Act impositions, one for each year since its adoption. Then there is the £100 million bat tunnel: noble Lords, over the last few days, have expressed bemusement as to how it came about. People ask why these things happen. It is regulation and regulators—that is what goes wrong. My own recent book on economic growth estimates that reversing all of this would increase GDP per capita by some 13% in a decade.

If most of us agree that there is too much regulation, how come regulation has proliferated so much? It is because those few who love regulation have become adept at pushing it through. First, find yourself a problem—in this case, parachute payments and alleged financial incompetence, although it is odd to assert that about one of the world’s most financially successful industries. In phase one, cry that something must be done, and then create a further panic about diversity or equal pay and get to phase two, “The Government must step in”. Talk something about, “Football, blah, grass roots, blah, women’s football, blah”, and stir up a general feeling that a regulator would be a damn fine thing. Phase three is, “There ought to be a regulator”. So, a football regulator—what could possibly go wrong?

The Bill is actually an attack on the Premier League. It is driven by Willie Sutton’s philosophy, “That’s where the money is”. Are we so sure the Premier League will be unscathed? It pays £4 billion a year in tax and £1.6 billion to lower leagues and grass roots. With overseas TV deals, it is a great export success, and there are 90,000 Premier League jobs. It drives Britain’s soft power around the world: you can have a vivid chat about Arsenal or Liverpool in a taxi from Jakarta to Lagos. All of that raises people’s estimation of this country around the world. There are 3 billion viewers, in 900 million homes, in 189 countries.

Did this happen by accidental circumstance? No, it was private enterprise that created this. Would it have happened had a regulator had been suppressing experimentation and initiative over the past 20 years? You know that it would not. Free markets need competition, fair exchange, no rent seeking, no crony capitalism and private property rights. They wither when subjected to heavy-handed regulators. Do we really want to be known in future times as the Parliament that destroyed the global success of the Premier League?

Establish a compulsory governance code—because, after all, we know best—licences, the imposition of removal orders and disqualifications for life on not-proper owners. Look, I am as anti-oligarch as anyone, but why dissuade a billionaire from dropping a substantial proportion of their wealth into the UK to invest in a football club? Which bureaucratic regulator would be able to distinguish between a good owner and a bad one? Would Sheikh Mansour have been permitted to purchase Manchester City and turn it into one of the greatest teams of the modern era? Would Sir Alex Ferguson’s famous hairdryer have been allowed by an equality, diversity, inclusion-loving regulator? What possibly can the “E” in EDI—equality of outcome—mean in football? Football is a competition. Winning and losing is the whole point. You cannot have equality of outcome—or will the regulator require that all games end in a draw? Or perhaps, if we are to diversity, they will require that 50% of teams be women. That would be difficult when there are 11 in the team, but I am sure they can solve that, too.

Seriously, we know there will be regulatory creep. We have already heard this afternoon from a number of hungry, prowling Peers eager to add their own obsession to the regulatory Christmas tree. We are told that this is a fan-led initiative, but do these busybodies, incidentally demanding that they be put on the board of this regulator, truly represent fans? Public First’s poll asked which kind of regulators were needed. Least wanted of all was a cricket regulator, and second-least wanted was a football regulator.

Of course, with the artfulness of polling, when you offer a list of possible regulations, people say they are in favour of the most absurd things, which could eventually be added by the regulator. Force the whole club to go on mandatory EDI courses, cap footballers’ wages, give equal pay to women footballers, create quotas for English players in Premiership teams—all in favour. Just a few of those would destroy the Premier League’s success. There would be no more global supremacy, no more soft power and far less tax revenue—a depressing future to contemplate.

We must pull back from this overweening belief that we know best. We do not. Hayek’s book, The Fatal Conceit, nailed that error. I recommend it; Lady Thatcher loved it and I am sure noble Lords will, too. It is the free market that knows best. We should back off from so much regulation, and in particular from this attempt to plunder and distort that precious jewel in the economy’s crown, the Premier League.

I end by asking the Minister: has there been a request for a formal evaluation of this proposed regulator’s possible damage, both to football and to the economy? If not, will she conduct one?

20:07

[Lord Hampton (CB)]

My Lords, I declare my interest as a lapsed Torquay United fan and a “606” listener. I thank the Minister for her time, both in the introduction and in her very good briefing beforehand.

This Bill is badly needed and I congratulate both Governments on bringing it forward. It may have been triggered by the breakaway attempt by the ESL, but I genuinely think there is a need to regulate league football in this country. Let us not forget that, in the 1985-86 season, after the Heysel and Bradford disasters, when football barely appeared on television and attendance was at a record low, there was no European football as English clubs were banned. More recently, there were lessons from rugby union in 2022-23, when three of the Rugby Premiership teams—Wasps, London Irish and Worcester—went bust with debts totalling over £155 million. So, however healthy the game may seem now, disaster is only a few unfortunate events away.

According to Fair Game, 58% of the top 92 clubs are technically insolvent. Now, I am not an economist, but my noble friend Lord Londesborough gave us a pretty stark analysis—stark enough to give the noble Lord, Lord Hannan of Kingsclere, some problems to deal with.

Something needs to be done. Everyone has asked the question: can the IFR solve the argument about the levels of payment, let alone parachute payments? In the Bill, the badly needed scrutiny of owners seems to be toothless. The Explanatory Notes say that it can only have power over

“the suitability of an incumbent individual owner or officer where it is in possession of information which provides the IFR with grounds for concern about the individual’s suitability”.

This sounds suspiciously like a “don’t ask, don’t tell” situation. There is no barrier to politically reprehensible countries and no concerns about modern slavery or sportswashing.

We talked about fans when we had the briefing. The Bill enshrines fans’ right to be consulted. This is the best place in the world to be a fan—but what is a fan? It is easier down the leagues, where you can say that it is someone who regularly attends a game. I was passing the Emirates—I did not go in—and took a picture of the display of Arsenal Supporters Clubs. I estimated that there were 140 different clubs, including Japan, Nagpur and the rather unwisely named Iraqi Gunners.

The Explanatory Notes try to define “fans”, referring to them as

“individuals who follow and identify with the club”,

which can

“include (where applicable) but is not limited to: members of any Community Benefit Society”.

They also include

“any fans who regularly attend matches played by the club’s first team”,

which is clear. They add:

“Clubs should have due regard to the views expressed by the representative group of fans but will not, however, be bound by the views of fans”.


How will the IFR police that? Maybe it is for each club to decide what the definition of a fan is—as long as they do not go down the road of Serie A, where the hardline ultras, with their violence and often overt fascism, are courted and sometimes sponsored by the clubs.

As we have heard, one of the main drivers of the Bill seems to have been an attempt to set up a European super league, and it aims include regulating clubs so that they are

“not … able to enter into, be a member of, or participate in a prohibited competition”.

The A22 website now says that the new European super league will have:

“Participation based on sporting merit … No permanent members … Participating clubs stay in their domestic leagues which remain the foundation of European football”.


Could Premier League clubs join the new European super league? I ask the Minister: would the Premier League be able to join, according to the Bill? Far from throwing out English clubs because of the Bill, I think that UEFA will unite with the IFR to challenge any outside competition. As the noble Lord, Lord Triesman, mentioned, there could be a lot of legal work going on fairly soon.

The word “heritage” slightly worries me, too. As Jan Zglinski from the LSE points out:

“The sole issue on which support from a majority of a club’s fans needs to be established is the changing of the home shirt colours”


and the crest. He adds:

“For other changes, which can be just as significant for the fan community, such as a stadium sale or relocation, no such majority is needed”.


The Bill’s overview says:

“Heritage in this context refers to the tangible and intangible elements that define the unique historical identity of English football and its clubs, and which are passed on through generations of fans”.


This sounds less like law and more like a Hovis advert.

There is also a philosophical argument. I presume that the regulator is called the independent football regulator—rather than “Offoot”, the one name that the noble Lord, Lord Goodman, did not suggest—to avoid any taint of government interference. But will it have powers to inspect, rather like the dreaded Ofsted? I speak as a teacher when I say that you cannot accuse Ofsted of lacking teeth. Will it produce one-word judgments of a club’s performance? A RAG rating would be a good choice; it would be a sub-editor’s dream—imagine Man City getting a red card.

Currently, the Bill is a noble attempt to define the indefinable and tame the untameable. For that lucky person who becomes the IFR, three things are certain: they will need the wisdom of Solomon, the brains of Sherlock Holmes and the determination of Boudicca to succeed.

20:14

[Lord Ranger of Northwood (Con)]

My Lords, as a 12 year-old boy, my father took me to my first football match, the 1987 FA Cup final at the old Wembley Stadium: Tottenham Hotspur v Coventry City. It was a classic. I was thrilled just to be there. My father was not a football fan, but he had promised to take me if we got to the final. I inform my noble friend Lord Maude that we lost. Such is the lot of a Spurs fan, but I was besotted by the game and my club. So today I speak as a fan—one who watched this weekend as we lost again, this time to Ipswich.

Football is the beautiful game. It is simple, graceful and physical; fast and slow; and accessible to those who play and for the many who watch, support and listen. It is a game for everyone, which is why it has become the world’s most played and most watched sport. In that context, English football is the pinnacle of successful club football when it comes to commercial success, especially since the advent of Sky TV and its innovative partnership with the Premier League. Billions of pounds of revenue have flowed into English football. This has caught the eye of various types of club owners—some are in the game for their own passion, but, more so now, some wealthy owners seek to utilise football for other purposes, including making themselves wealthier—but the game and the fans have made our football the most watched and admired in the world.

This was never clearer than during Covid, when the world got to watch the Premier League being played without fans in the stadiums. That meant that, although we could hear the thud of boot hitting ball, there was a total absence of atmosphere, making the whole experience like watching a game in zero gravity—no noise and no atmosphere. This demonstrated how important and integral, and how much a part of the fabric of the match experience—or should I say the product?—are the fans and their passion and voices. It was so much of an issue that broadcasters started to play recorded crowd noises for the TV audience. Fans are not just for match days; they are for life.

Our football is steeped in communities, families, generations and the lifeblood of local residents. Clubs now have fan bases that span the globe, but it is the rich history that makes English clubs unique, as well as what fans sing on the terraces. Our football is not some fabricated, franchise-based, Monopoly board model where owners can have absolute power—such as in American sport, which is based on that; Major League Soccer has continued in that vein. Around the world, other sports, notably cricket, have adopted franchise-based models to turbocharge their development of leagues as commercial cash-producing machines, churning out games and merchandise in equal measure. Let me be clear: there is an audience and a market. By all means, create a product—but that is not the nature and history of our game. In our game, fans have power.

Modern-day owners can be loved, if they spend money to buy players and invest in the club—and, most importantly, if the team wins. They will be hated, if they do not win or are seen not to care about the club, and they will be hounded out. It has been said by the Premier League that its clubs have a virtuous-circle approach to their finances, investing in world-class players and facilities, in player development and local communities. But it seems clear that the old analogy to prune juice once made by the noble Lord, Lord Sugar, is still accurate, as ever-increasing amounts of money come in and go out of the game through huge transfer fees, player wages, agents’ fees and more.

So, what is the modern-day owner’s dream? What are they in it for? Maybe it is to buy a small, lower-league club, invest in the ground, buy smart when it comes to players with potential, use technology and data to inform their decisions, build a global fanbase by leveraging social media and even have a fly-on-the-wall TV show—basically, sweat the asset. Then, hopefully, you watch the value of your investment go up, with maybe a promotion or two to keep the fans happy. Is anything wrong with that? Football is now as much a business as it is a sport. We must acknowledge that. But it must still deliver for the fans, who also know that not everyone can win every game—because the magic ingredient of our game is competition and jeopardy.

Taking all this into account, and the unequal success of English football, means that an independent regulator must tread lightly—or, dare I say, it may undermine the magic pyramid. Football fans have already seen how the promised land of good intentions can end up mutilating the beautiful game. I speak of the video assistant referee—VAR. Ask any fan if they would like that genie put back in the bottle: the erosion of the undiluted joy of scoring a goal as fans in the stadium best-guess whether the goal will be disallowed, fans at home wait while watching endless replays, and the poor chaps at Professional Game Match Officials Ltd draw lines on screens. Fans are now rueing what they wished for, and I would go as far as to say that they would rather live with a few human errors than the suspension of the joy of a goal, the increased ambiguity and the removal of power from the official in black to the faceless operators miles away behind a bank of screens. Let us not let the good intentions of the excellent, fan-led review by Dame Tracey Crouch lead us into the unintended consequences of heavy-handed regulation that will potentially do similar damage to our game and its commercial success that is the envy of the sporting world.

20:21

[Lord Shamash (Lab)]

My Lords, I am delighted to be able to follow my dear noble friend Lord Triesman; he is now not in his place, but I was delighted to see him here at all.

I have to congratulate the Government and my noble friend the Minister on introducing this Bill so early in this Parliament. Listening to this debate, it is clear there is considerable interest across the House, and it is clear from the speeches that preceded my contribution that the introduction of the regulator will be, on the whole, welcomed.

I must declare an interest in that I am currently a director of Manchester United Supporters Trust and was its former chairman over the past decade. It is a substantial trust with over 100,000 members. It came into being following the takeover in 2005—which my friend, the noble Lord, Lord Harlech, referred to—by the American family, the Glazers, who used a leveraged buyout to acquire the club. I was the proud owner of a number of shares at the time of the takeover and I felt, like many other fans who held shares, that I owned part of the club—albeit probably only a blade of grass on the pitch, but it was my blade of grass. However, company law required that the minority shares had to be sold to the Glazer family. The funds received by the fans who were shareholders were in a considerable number of cases put into what was then known as the Phoenix fund, and the cash has been managed by our trust for the benefit of the fans as a whole.

In context, following the highly publicised leveraged buyout, the debt at the club at the time was £500 million, which I think was referred to earlier. As I understand from recent reports in the New York Times, that debt at the moment is approaching £1 billion. As I have said, I welcome the creation of the regulatory framework set out in the Bill, but a question I pose for the Minister and indeed the Government is whether the independent regulator would have the power to interfere with such a leveraged buyout of the kind that took place in 2005.

Regulation in football was first raised in 2014 in the lead-up to the 2015 general election. I was involved in setting up a specialist working party to formulate the policy that included fan ownership. Reform of football governance was subsequently in the Labour Party’s manifesto for the 2015 general election, and I subsequently learned that in fact it would have been in the Queen’s Speech if Labour had won that election. As has been discussed this evening, this new Government, following the fan-led review under the chairmanship of Dame Tracey Crouch, have now laid the Bill before this House.

At the core of football are of course the fans. There are many types of fans, and indeed the Bill does not seek to set out the impossible task of trying to define what a fan actually is. Fans range from those who sit on a sofa and watch matches regularly to others like me who have season tickets, have had them for many years and attend games, in my case not just at Old Trafford but at grounds across the country and indeed in Europe. I have been a fan for over 70 years.

The Bill sets out fan consultation as a condition on a club and the issues on which a club must consult. Consultation is to be with

“persons elected by the club’s fans to represent their views, or … persons otherwise appearing to the IFR—

that is, the regulator—

“to represent the views of the club’s fans”.

Quite rightly, the Bill does not seek to be prescriptive. However, it does not refer to the substantial network of supporters’ trusts that exist: of 92 league clubs, 73 have what could be described as community benefit societies in the form of supporters’ trusts. To be added to this number are similar trusts within the National League and below. I ask the Minister to recognise that supporters’ trusts in my experience are democratically elected, have a membership and constitution, and in many cases are regulated by the Financial Conduct Authority and operate under the Co-operative and Community Benefit Societies Act 2014.

Active trusts in many cases properly and fully engage with their clubs, and a growing number of them have fan advisory boards made up of members of the trust and those of the club. I am concerned that, if there is not a properly established trust that the club could deal with, there is the likelihood that a group of fans could set themselves up and the club could deal with them as they may offer a less critical view of the way the club is run. This of course will be a matter for the regulator through guidance and further consultation with those involved in the administration of various fan groups and the club in the future.

I am delighted that the Bill is now before the House and I am aware that most supporters will welcome the creation of the independent football regulator as being to the benefit of football in England, so that football can continue to make a major contribution to the economy of the country with its huge popularity across the globe.

20:27

[Lord Taylor of Warwick (Non-Afl)]

My Lords, I thank the Minister for her opening statement and for giving Peers, including me, the opportunity to discuss the Bill with her last week.

I am originally from Birmingham, which is renowned for its two leading teams, Aston Villa and Aston Villa reserves.

[Noble Lords]

Oh!

[Lord Taylor of Warwick (Non-Afl)]

I see that your Lordships agree.

I declare an interest as one of the founding members, in 2002, of the Independent Football Commission, I have been a patron of the Aston Villa Supporters’ Trust, and I was honoured to play on a number of occasions for the England parliamentary football team and indeed the Sky Sports Aston Villa All Stars team, which plays for various charities.

I support the key aims of the Bill, especially strengthening fan engagement, enhancing financial stability, protecting club heritage assets and stopping breakaway competitions. The issue is whether it will work. I am sceptical, which is why the Government should perhaps consider a sunset clause so that, at some time in the future—maybe in three to five years—the success of the regulator can be assessed.

The financial regulation model that has been chosen is based on the banking world. The Bill introduces a new concept of “backstop powers” to intervene in the distribution of TV revenue, but these are untested powers and could cause uncertainty. Banking is about finance, but football is about finance and romance. I do not hear much about an account holder’s undying love for a bank, but there are fans who will support their football club through thin and thin, through relegation after relegation. That is why I have so much sympathy for Villa’s main rivals, Birmingham City.

I note that women’s football is not currently covered by the Bill. However, I trust that the Government will keep to their promise to take forward the recommendations set out in Karen Carney’s review of women’s football, Raising the Bar. We must not forget that the first senior England team to win a major cup since 1966 was the England women’s team.

I am not in favour of EDI overreach. That is the last thing that I want to see, but we have to accept that prejudice still exists. If it did not, we would not need EDI. I welcome the commitment in the Bill to do more to improve equality, diversity and inclusion within the game. Among the 92 clubs in the top four tiers of English football, there are currently just two black managers. Noble Lords might say, “So what?”, but I do not think that is a good reflection on our multiracial nation. It should be about the colour of the shirt, not the colour of the skin. Furthermore, fewer than 2% of football governing bodies or club boards are black or ethnic minority. Again, I do not think that is acceptable.

The Premier League has many black stars—indeed, 43% of the total number of players. The new regulator’s role has been described as that of a referee. The noble Lord, Lord Hayward, spoke about being a referee, yet football referees are still woefully lacking in racial or gender diversity. Currently, there is only one black Premier League referee, 15 years after the first one.

After my father stopped playing professional cricket for Warwickshire, he became a qualified referee for the Birmingham County FA. I still remember as a small boy in the 1960s being with my father when he turned up to referee his first match in Sheldon Park. There were no dressing rooms, so he got out of his Ford Cortina in his black referee outfit, clutching his whistle. The 22 white players were waiting for the referee, not knowing who had been allocated. I will never forget the stunned look on their faces when they saw this black man coming towards them to be the referee. He said, “I want no nonsense. Get on with the game. I’m blowing my whistle”. During that match, there was not one swear word and none of his decisions was challenged. In fact, in the following months, the local FA would even get requests from club officials for “the black referee” to be appointed to their games. So, if this was possible in the 1960s, why does it remain so difficult more than 60 years later, when the conduct of top referees is in question this very week? I am hoping that the new regulator will at least look at this aspect of the game.

I asked the Minister when we met last week about cost. The cost of the regulator is unclear, and this is quite important because, if litigation results in relation to problems that this new regime might enhance, Manchester City has unlimited revenues.

Perhaps the Minister can confirm that the powers of the new regulator will not in any way conflict with or override the existing regulatory powers of the Premier League, Football Association, UEFA or FIFA. It is reported that, in September this year, UEFA contacted the Government, expressing some concerns that the new regulator would be in breach of UEFA’s rule that there should be no government interference in football.

Hopefully, the new regulator will solve the stand-off between the Premier League and the EFL concerning finance. However, we must not forget that the origin of football was not really about money. About half of the Premier Division clubs were started in the Victorian age by churches—including Villa, Everton, Man City and Southampton. Their remit was not money: it was to keep young men in particular out of pubs and into parks, keeping them physically and mentally fit. Since then, football has become the nation’s most watched and played sport. The Premier League is regarded as the best in the world. Football’s soft power brings nations together. Yes, I accept that it is now so big that this £8 billion industry cannot be left to regulate itself, but regulation must not become so tight that it creates stagnation.

20:34

[Lord Watson of Invergowrie (Lab)]

My Lords, I declare an interest as a long-time season-ticket owner, indeed joint owner, of AFC Wimbledon. I say “joint owner” because AFC means “A fans’ club” and I am one of 4,000 in the Dons Trust, which oversees the general direction of the club, not the day-to-day management of it.

I go to a football match at least once a week—anything from level 2 in the Championship down to level 8, which is the Isthmian and Southern Leagues. I no longer go to Premier matches, for the reason outlined by the noble Lord, Lord Ranger: VAR. In my 65 years of watching football, that is the worst development that has happened. It sucks the spontaneity and excitement out of much of the game and leaves the fans, as the noble Lord said, confused. It is a blight on the game and needs to be removed—but of course it will not be.

I was interested to read the comments recently of Trevor Birch, who is the CEO of the English Football League. When asked about VAR in that competition, he said, “We won’t be having it”. He used a term that I think was very apt when he said, “We’re authentic”. Quite.

I welcome the Bill that noble Lords have been discussing today very much because it stems from the fan-led review and will ensure that the interests of fans are heard in a meaningful way in a sector—I suppose, necessarily—dominated by billionaire clubs. The Bill will introduce the independent regulator, which I believe is necessary, given the fragile nature, to which many noble Lords referred, of too many clubs in the EFL. The word “fragile”, of course, would never be seen in the same sentence as “Premier League”, which, by contrast, is vibrant. Self-styled as the premier league in world football, it is certainly the strongest—financially, at least, though not necessarily in playing terms, something about which I shall say more a little later.

The Premier League, though, is something of an anomaly as an English institution, because only four of the 20 clubs are English-owned and only three have an English manager. Russell Martin at Southampton was born in England, but he represented Scotland as a player. In the 32 seasons that the Premier League has existed, not once has the champion club had an English manager. At the start of the current season, just over a third—36%—of players registered in the Premier League were eligible to play for England. That probably explains why the competition is not called the English Premier League, because it is actually an international league that just happens to be based in England.

That begins to explain why—as highlighted by my noble friend Lord Triesman; what a delight it is to see him participating in this debate—the England team has not been nearly as successful as it should have been. As a Scot, noble Lords will understand that this does not keep me awake at night, but the Premier League makes it harder for the England team to achieve success because of the limited pool of top-level players from which the manager can select. There is an even more limited pool from which the FA can select when choosing the England manager. As far as we know, not one of the three English managers currently with a Premier League club was deemed by the FA to be good enough even to be interviewed for the post that went to Thomas Tuchel.

Therefore, having the world’s strongest league based in England is, to put it mildly, a double-edged sword. Yet even with the considerable number of world-class players that it contains, the Premier League underperforms. Since it was formed in 1992 there have been 32 competitions for the European Cup, now the Champions League. Spanish clubs have won 12, and English clubs have won seven. Only three of the past 12 Champions League semi-finalists have been from England, and last season there was none. It is legitimate to ask where the vast resources generated by the Premier League are going other than in inflated transfer fees and player salaries—and the inflated fees for their agents.

In its briefing for this debate warning against the backstop powers contained in the Bill when agreement on financial distributions cannot be agreed, the Premier League says that they are not necessary because the EFL is thriving, but that is not what the EFL says in its own briefing. The EFL’s briefing points out that its clubs will lose around £450 million this season and are reliant on their owners to fund this shortfall, which is unsustainable and affects not just clubs in the Championship but throughout League 1 and League 2. That is why, although he is not in his place, I say to the noble Lord, Lord Hannan—frankly, he sounded as though he had stumbled into the wrong debate—that everything in English football is not well. An independent regulator is therefore very necessary.

The regulator must have the powers to decide on distribution deals between the Premier League and the EFL, not simply to choose one or the other league’s preferred figure. That assumes a genuinely independent regulator and board members without conflicts of interest, and the tests provided for in the Bill must be robust enough to make that a certainty. It is right that parachute payments, excluded from the first version of the Bill, have now been included. There is no reason why clubs relegated from the Premier League should be given a financial windfall from which to launch their bid to return to the top level, thus distorting the competitive nature of the Championship, which was set out clearly by my noble friend Lord Bassam. The parachute money should be added to the Championship’s existing solidarity payment on the basis of league positions the previous season. This would mean that the three clubs relegated from the Premier League would get the most and the three clubs promoted from League One would get the least, but it would be fairer, more equitable and would lead to a better competition.

The regulator must be genuinely independent and look after the whole of the football pyramid, because the importance of the pyramid cannot be overstated. I would like the Bill extended to level 6, covering the National League North and National League South, and the top two levels of the women’s professional game. It is worth noting that six current Premier League clubs have played at the fourth level in English football and a further four have played at level 3. I say to my noble friend Lord Bassam that although Brighton and Burnley were saved from dropping out of the English Football League on only the last day of season some years ago, prior to 2014 Luton Town spent five years in the National League at level 5; nine years later they were in the Premier League.

That is the most dramatic example of the pathway that the pyramid can provide and highlights why its sustainability is vital. The pyramid is not just about the professional game. There are 11 levels, stretching down to the grass roots, as exemplified by the story of AFC Wimbledon and—I say to the noble Lord, Lord Hannan—the resurrected Bury FC. Without any consideration for its loyal fans, Wimbledon FC relocated 60 miles away. When the fans appealed to the FA, it set up a commission which upheld the decision with the now-infamous opinion that allowing Wimbledon to remain where it had been since 1888 was

“not in the wider interests of football”.

That decision was proved spectacularly wrong because days later the fans formed AFC Wimbledon and the club entered the pyramid at level 9. After just nine years it won promotion to the EFL at level 4. This Bill will ensure that any decisions relating to changes to a club’s location or heritage must be subject to a vote by fans, meaning that the sequence of events that wrenched Wimbledon FC from its roots would be outlawed. Although there is much in this Bill to be welcomed, that alone makes it worthwhile.

That said, the Bill does have a couple of glaring gaps. Schedule 11 has a three- page index of defined terms. “A fan” is not one of them. That needs to be addressed in Committee, as does another glaring omission. This is a Bill about professional football yet not once in its 125 pages does it mention professional footballers. The independent regulator has the potential to impact the careers of those without whom there can be no game. The players have a right to know how the regulator will engage with them, which should be in the Bill. I very much look forward to getting to grips with these and other matters in Committee.

20:42

[Lord Addington (LD)]

My Lords, the first thing that I must do is admit to your Lordships that I am possibly not of your tribe. Of those here, I would lose the least sleep if football disappeared overnight—or at least not very much. However, I am in the minority. I was brought up within earshot of Carrow Road in Norwich and when it was a good day and nothing else much was happening, you could hear the noise coming across.

I know most people identify with a soccer team, and even I still check whether Norwich have done well and wonder what things will be like at home. It does not go further than that—I am a person who thinks that the church might look nice in good light but I do not worship there.

I welcome the Bill, at least in its intentions and approach, because I have covered sport for a long time and am interested in it. For a long time, I have heard about bad managers, bad actors and people taking over clubs. It used to be a property deal: you take over a nice city centre ground somewhere and want to turn it into flats or something else, and you offer the fans a deal that is miles away. The world has moved on and the money is bigger, but that is where I came in on this. There has always been a tradition that football attracts those who are doing deals—and fantasists are in there as well—and who want to take advantage of tradition and structure. If the Bill is about more than a business, we need the regulator. We need something for those people who feel that football and being a supporter of a club is a vitally important part of their lives.

We have a long tradition and a lot of clubs in the English leagues—and in Britain generally, but we are talking about the English leagues here. I recognise the comments that Wales should probably be addressed in Committee. There are five full-time professional leagues. Most countries get away with two—and let us face it, their trophy cabinets are a heck of a lot fuller than England’s most of the time. Look it up. How many times have Spain, Italy and Germany won the European Cup? And let us not talk about the World Cup, as the noble Lord, Lord Triesman, pointed out earlier with incredible simplicity and directness. We have a lot of these institutions, which people cherish, and that is why we need the regulation.

These are not businesses in the traditional sense of the word but something more. They can be sweated as assets, but they are not businesses as most people would understand them. They are institutions. As they are institutions that are part of our society, I would hope that the regulator will be prepared to act; there is no point in having powers unless you act—a regulator that does not act is basically a waste of paper. We will have to have a regulator that goes in when somebody breaks the rules and bites hard enough to leave a scar. They have to remember that it happened. It may not have to do it very often, but if we have a regulator that does not do it or that holds back, we will have problems. It will become bluster or a threat. We all know that, if you want an enforcement capacity, making sure that something happens is infinitely more successful than a big threat or a reference to “maybe sometime in the future”. We will have to do something along those lines.

If anybody here agrees with me—my noble friend Lord McNally should have been here, and the rest of my colleagues do not seem that inspired by this subject—

[Noble Lords]

Oh!

[Lord Addington (LD)]

I thought I would let that one fall.

If we are going to do this, what do we need to do to get out the great social power that this has? I would like to see a little more attention paid to using the great power we have in association football, or soccer—call it what you like—as a positive thread throughout society. If I remember correctly, Clause 1(3)(b) talks about that social power.

Would it not be wonderful if all these clubs that we are giving so much attention to and regulating properly did a little something that steps just outside football? I have a radical suggestion: why not have them run training schemes for people to be treasurers, secretaries and chairmen of voluntary groups and sports clubs—something small like that? That is my starter for 10. This would make sure that these clubs contribute to the society from which they draw their fan base and would make them an even better social asset.

There are many other things that have been suggested to me. For instance, should we be taking on the green agenda, as has been suggested by my own party? The right reverend Prelate the Bishop of Sheffield suggested this also, along with the noble Baroness, Lady Jones, who does not seem to be here at the moment.

[Baroness Jones of Moulsecoomb (GP)]

I am here.

[Lord Addington (LD)]

She is a moving target— I appreciate that. If we are going through this structure, maybe clubs can be used for other social methods, but only if they are properly regulated.

The fact of the matter is that football—particularly at many of the clubs lower down—has been hanging on by its fingernails, and by tradition. What bank manager would have put up with some of the financial stresses we have heard about recently if they were dealing with anything else? Virtually none. There is something special about football. I hope that the regulator will put it on a firmer foundation.

As to my opinion on whether we should have parachute payments, and whether the arbitration is set to go through, football has had a chance to sort this out for itself. We would not be here if football had got a hold of it, spoken to itself—the various bits—and sorted this out. The previous Government brought a Bill forward only because football did not do those things. Football could have addressed this itself, so it should not blame others for its own inactivity. We have a situation where, as all noble Lords have said, a club going down will have greater costs than a club that is already down. Whether we use parachute payments or something else, that has to be addressed. I look forward to suggestions on that.

We have something here where we are trying to make sure that something fundamental to much of our society survives all the way down in its historical structure. That is what we should be worrying about. Yes, we must make sure that it remains a success—it will be much easier with football generating the money—but that social capital, that investment of faith in this game, is something that I hope all sides will say should be preserved. I look forward to discussions at later stages of the Bill but I hope we remember that we are not talking about a business or casual activity. We are talking about something that touches many people’s lives. I know that, and I am not part of it.

20:51

[Lord Markham (Con)]

Like other noble Lords, I begin with a declaration of interest—maybe a bit of a confession—in that I have been a Chelsea season ticket holder for the last 20 years. I also still feel a bit stiff from playing for the parliamentary team against the Army in the Remembrance Day game yesterday. Please do not ask me the score.

I join the noble Lord, Lord Parkinson, in thanking the Minister for her inclusive approach to date. I am sure that will stand us in very good stead as we get into a lot of what I think we would all accept are the quite tricky issues in Committee. I also thank noble Lords for their contributions. As ever, they show how fantastic this House is in breadth of experience. Talking to us tonight have been club directors, former FA chairs, Sport Ministers, sports media experts, supporters’ clubs’ chairmen, and rugby referees—all passionate fans, even if some of us are misguided about our choice of clubs. I will not point those out.

We are all here because we know that, as Bill Shankly famously once said, football is not a matter of life or death; it is much more important than that. I prefer the more fitting phrase that football is the most important of the least important things. Why? It is because, as we all say, it captures our hearts and that often overrules our heads. To paraphrase the noble Lord, Lord Bach, during those 90 minutes all of us feel like brothers together in a community.

We would all agree that football clubs are a unique place. I agree with the noble Lord, Lord Addington, that they are more than just a business. They are part of the social fabric of a community and a force for wonderful social good. That is why I believe there is a general consensus among all the stakeholders—the supporters’ clubs, the FAPL, the English Football League—that there is a role for the football regulator in some of those basic protections. I mean clubs not moving away, as in the MK Dons example, the names, shirts, logos, the fit and proper owners’ tests, and the breakaway league threat—although I note my noble friend Lord Maude’s point that it was the English fans that killed it, unlike those in the other countries.

We also need to be careful in any area where the heart often overrules the head. The noble Baroness, Lady Morris, gave a cautionary tale. We all know that fans can be a fickle bunch. As the noble Lord, Lord Ranger, said, more than anything, fans care about the success of their club. If you ask those Chelsea fans whether they cared about their owner being a Russian, they probably cared the most about being very successful during that time. As the noble Lord, Lord Ranger, asked, how quickly will today’s regulator be seen as tomorrow’s VAR—not the solution to the problem?

The general consensus here is that the regulator should be light touch. The high degree of concern is for overreach—very eloquently put by the noble Lords, Lord Hannan, Lord Jackson and Lord Moynihan—and mission creep. Just in today’s debate, I noted at least eight new powers that noble Lords have suggested, and this is just the start of the process. As the noble Lord, Lord Jackson, pointed out, the £140 million of cost we are talking about for this regulator does not feel like a light-touch situation.

The biggest area for mission creep and the biggest potential involvement is the financial regulator being more and more involved in football financials. As noble Lords have said, the Premier League is the UK’s clear stand-out industry—number one in the world. Unlike any other industry, there is no doubt that it is number one. As mentioned, the Premier League is the richest and the Championship the sixth-richest, richer than the Netherlands, Portugal and Belgium. That has benefited all the clubs and all the tiers; it has led to investment in grass-roots facilities right the way through the game, as the noble Baroness, Lady Jones, mentioned.

The Premier League is the most attended worldwide of all football leagues; the second-most attended, as mentioned, is the English Football League. That is all founded on media rights value. I confess that, like the noble Lord, Lord Birt, I have some experience in TV media rights, having founded a pay TV company and been involved in many sports deals and seen worldwide the power of football. I have had pay TV businesses in Thailand tell me that they are going to have a big increase in subscribers the following year because they have won the English Premier League rights.

Why is the English Premier League so popular? It is because it has so many competitive games. Spain, Italy, Germany and France each has two or three top clubs. We would probably argue over which, but I can think of at least eight big clubs in the Premier League. As pointed out by noble Lords, we have many clubs—the Bournemouths, Leicesters and Brightons of the world—that have come in and shown real upward mobility and won competitions. That volume of competitive games really drives the viewership and the pay TV subscriptions, which drive the TV rights money, which funds everything else we are talking about here.

Fundamental to that, I believe, and if you speak to the Premier League, is the parachute payment element of it all. As the noble Baroness, Lady Evans, said, come February, any club that does not have the comfort—for want of a better word—of a parachute payment will suddenly be thinking that it has to cut back on wages and sell players because it will be in financial oblivion if it gets relegated the following season. It is not just the bottom three clubs but the bottom six, seven or eight that will be in danger of that. All of a sudden, you have a third of the games remaining, probably even more, and they become uncompetitive. The value that the world TV companies are paying for disappears.

Now, things are always a game of two halves. If you speak to the English Football League about this, which I have, it says that the flip side of these parachute payments is that relegated clubs are much richer and that two-thirds of the promoted clubs depend on those parachute payments. That distorts competition in the EFL. As the noble Lord, Lord Birt, said, the Premier League is the most generous in the world in terms of the big solidarity payments, which enables, among other things, the English Football League to be the sixth richest. So, in absolute terms, the English Football League is very rich. However, the English Football League would say that the issue is not about absolute wealth but about relative wealth: because it does not have nearly as much money as the Premier League, it is harder for it to compete.

Among all of this, we are asking the regulator to step in. That is the danger from all this, because we are asking this regulator—unlike any other regulator that I am aware of—to get involved in the redistribution of money from one entity to another. All the other regulators might talk about payments that they have to make, but they do not talk about taking money away from part of the industry and giving it to another part. Yet we are asking the independent regulator to wade into exactly that issue—the use of those powers—like some sort of super-referee. That is the danger, and I believe that we will get some unintended consequences.

There seem to be some elements in some of the detail that will actually prevent deals being done. We will put restrictions on deals being for more than five years. Again, the Premier League will say that if it is longer than five years, it is prepared to pay over more money. Is that not the basis of a potential solution? Maybe it is, maybe it is not, but surely it is not the role of the regulator to put in red lines that could stop those sorts of agreements coming in. I share the concern expressed by the noble Lord, Lord Hayward: surely, if you have only the objective of sustainability and not the objective of the success of the Premier League or the Football League, the predisposition of the regulator must be to think about redistribution between clubs in terms of sustainability, rather than their overall success. Should one of the objectives not be the success of the Football League and the Premier League?

Most of all, anything that reduces the competitiveness of Premier League and Football League games will decrease viewership and TV rights. That is a danger, because the Premier League has no God-given right to be number one. Spain and Italy used to be number one. As the noble Lord, Lord Grantchester, said, the European Champions League has absolutely been set up to try to compete with the Premier League. We really do not have a God-given right and we need to tread very carefully. At the very least, as the noble Lords, Lord Goodman and Lord Taylor, said, we should consider sunset clauses as part of all of this.

Clause 7 says that the regulator must exercise its functions in a way that avoids impacting the sporting competitiveness of any club against another club. Is that not exactly what the parachute payments are doing? They are eliminating competition in the lower half of the clubs towards the end of the season. Is that not exactly what UEFA is concerned about? It says that any member association might

“be suspended if state authorities interfere … in such a significant way that”

the association

“may no longer be considered … fully responsible”.

[Lord Bassam of Brighton (Lab)]

The noble Lord seems to be obsessed with competition at the bottom end of the Premier League towards the end of the football season. What about the distortion in the English Football League as a product of the parachute payments that he accepts have a distorting effect?

[Lord Markham (Con)]

That shows why the subject needs to be considered in detail in Committee. Leagues are deciding payments between themselves and their clubs. We are asking about the regulator and about trying to change that structure—the competition between the clubs and the different leagues. As part of that, there is the risk that UEFA will be concerned about this, so will the Minister meet UEFA to try to get its approval in advance? The last thing any of us want is England being banned from the Euros because we have a Bill which oversteps the mark.

This has been a very good discussion. There has been a lot of passion, as we expect, and a general agreement that there is real social good. But we have the UK’s number one industry here and we need to tread carefully to make sure we have a light-touch regulator without the mission creep and the unintended consequences. I look forward to those discussions in Committee.

21:05

[Baroness Twycross (Lab)]

My Lords, I thank all noble Lords who have spoken today. I share the strong sentiments expressed about the importance of our football clubs and the central importance of fans, which is why we, like the previous Government, are acting in this space. I have particularly enjoyed hearing accounts of what football means to noble Lords on a personal level, and I hope that the noble Lord, Lord Markham, recovers from his recent match soon.

As the noble Lord, Lord Parkinson, outlined in his opening, football means more to fans than politics, which we all forget at our peril. Today’s debate has shown the knowledge and passion in this House for football and for improving governance in the game. It also highlights, as my noble friend Lady Taylor of Bolton articulated better than I can, why the Government have prioritised this legislation. I agree with the noble Lord, Lord Addington, that had football sorted its own house out this legislation would not be required.

I respect the right of the noble Lord, Lord Hannan, to question the need for this legislation but I do not agree with him, and I note that nor did the previous Government, which is why they also bought forward legislation—

[Lord Hannan of Kingsclere (Con)]

I opposed that too.

[Baroness Twycross (Lab)]

Fair enough. As I previously set out, the case for reform and for regulation is clear. Far too many of our clubs have been subject to poor ownership and financial distress, and it is ultimately the fans and communities who suffer when things go wrong. My noble friend Lord Bassam gave a useful overview of some of the issues with the financial distortion that occurs within football, as did the noble Lord, Lord Londesborough. The noble Lords, Lord Moynihan and Lord Maude, had a different view, one that in my view ignores the considerable financial risk that currently exists within the pyramid.

It is clear, with notable exceptions, that there is a degree of consensus across this House on key aspects of this legislation. It has the same motivation as the previous Government’s Bill, with very few changes. A number of noble Lords have raised the importance of preventing rogue owners, giving fans a greater voice, ensuring clubs have stable finances, and stopping another dreaded European super league—a point raised by my noble friend Lord Wood of Anfield. It is these issues that the Bill will deliver on through better regulation, ensuring the financial sustainability of our clubs, and protecting the heritage of the game. The noble Baroness, Lady Morris, gave a powerful description of what the impact can be on a community when things go wrong. Unfortunately, the Bill will not deal with VAR—which is the issue raised by the noble Lord, Lord Ranger—nor is it intended to.

While a number of noble Lords, including the noble Lord, Lord Maude, and the noble Baroness, Lady Fox, question the need for regulation, and others suggested we could have taken a different approach—including, as my noble friend Lord Grantchester said, that we could have gone further—we think this Bill is proportionate and gets the balance right. It will tackle harms where they exist, while ensuring that English football remains the fantastic product we all know it to be. I will respond to as many of the questions and points raised as I can but I am not confident I will get through them all, so where I cannot I will write to noble Lords and place a copy in the Library.

My noble friend Lord Bach raised a number of near misses, as he described them, over the past few years in relation to football and football sustainability, and expressed surprise that the industry has not had a regulator up to now. The noble Lords, Lord Parkinson, Lord Moynihan and Lord Ranger, and the noble Baroness, Lady Evans of Bowes Park, asked whether the regulator might create additional burdens on clubs. The noble Baroness, Lady Fox, questioned whether it was a statist regulation, I think, a point that was echoed by the noble Lord, Lord Hannan, while the noble Lord, Lord Goodman of Wycombe, raised concerns as well. I stress that the regulator really is genuinely designed and required to take a proportionate and flexible approach. That is made clear in the regulatory principles in Clause 8, which the regulator must have regard to in carrying out its functions. I hope that reassures those who are concerned about the regulation in this regard, although I know we will have a further debate on that in Committee.

The licensing provisions in the Bill are designed to deliver a bespoke, tailored licensing system. The requirements on each club should reflect the club’s unique circumstances, such as its size, financial health and risk profile. The noble Baroness, Lady Evans, raised the cost of the levy. That cost will be proportionate to the size of an individual club and the league it plays in. The regime is designed so that, where clubs are already well run, the regulator will not need to lay on extra requirements, so there should be minimal additional burdens.

The noble Lords, Lord Hayward and Lord Jackson, and the noble Baroness, Lady Evans, asked about the cost to clubs of the regulator. The regulator is required to take into account a club’s financial resources and the league it plays in when setting the levy. That should ensure a proportionate approach where no club is asked to pay more than what is fair and affordable, so a National League or League Two club can expect to pay just a fraction of what a Premier League club would pay. The regulator will be committed to providing value for money and only charging costs that are absolutely necessary for it to function effectively. There are numerous checks and balances in the Bill to ensure that, including the requirement to consult the industry on the levy and the tightly defined set of costs laid out in the Bill.

In relation to UEFA, the noble Lords, Lord Moynihan, Lord Jackson, Lord Taylor and Lord Markham, and others raised concerns that might be raised by UEFA. The Government have engaged extensively with relevant stakeholders, including the FA and UEFA, and this week the Minister for Sport had a productive discussion with UEFA and they committed to continuing to work together.

The noble Lords, Lord Moynihan and Lord Harlech, and the noble Baroness, Lady Brady, among others, raised concerns that the regulator could negatively impact investment. This Government are pro-business and want to see football continue to thrive. That is why we have designed a proportionate regulatory system with intervention targeted only where necessary. It is also why the regulator has a specific duty to, where possible, avoid adversely affecting investment in English football.

In response to the noble Lord, Lord Markham, and others, we want football to be successful. Within the Bill, I point noble Lords, including the noble Lord, Lord Hayward, to Clause 72 on the regulator’s general duties.

The noble Baronesses, Lady Evans and Lady Brady, and the noble Lords, Lord Maude and Lord Markham, raised concerns about regulatory involvement in financial matters relating to the backstop between clubs. We do not see the backstop as a first option, and we do not intend for the regulator to view it as such or for the leagues to view it as the first step they would take. Revenue distribution is crucial to the survival of many clubs; as a number of noble Lords referred to, it represents one-third of EFL revenue, and the noble Baroness, Lady Brady, highlighted how important that is to the game. I do not share her dystopian view of the model proposed, but I look forward to discussing that further in Committee.

If football is unable to reach an agreement on that distribution, it is important that the regulator has targeted powers to intervene as a last resort. Those backstop powers have been designed to incentivise an industry-led solution, delivering the right outcomes with the minimum regulatory involvement. However, given the importance of financial flows to the sustainability of the wider pyramid, if football cannot resolve this, the regulator will help to find a solution.

On financial distributions in relation to parachute payments, a number of noble Lords, including the noble Lords, Lord Parkinson, Lord Londesborough and Lord Maude, my noble friends Lord Grantchester and Lord Bach and the noble Baroness, Lady Brady, spoke about changes to parachute payments being included in the regulator’s remit. It is right, in the Government’s view, that the regulator has the right tools available to solve financial sustainability issues. This change does not mean that parachute payments will necessarily be amended or abolished. If the regulator does not have evidence that they are a problem, it will not act. But, if it does have evidence that they are harming wider sustainability, it will have the power to address that through this legislation. There are also safeguards in place with this change to ensure that the financial sustainability of relegated clubs is provided for.

My noble friend Lord Bassam suggested that the “state of the game” report should be published sooner. This came up in discussions with noble Lords ahead of this Second Reading debate. Under changes to the Bill, the regulator will now need to publish its first report as soon as possible and no later than 18 months after the Secretary of State has specified that competition is in scope of regulation. Of course, the regulator could publish sooner than 18 months, but we do not want it to rush this important market study, which will lay the foundations for the regulator’s regime.

My noble friend Lord Wood of Anfield asked whether the regulator would be able to ban matches being played overseas. FIFA is currently reviewing its position on overseas league matches. It has committed to looking at how this may impact supporters and players, among a number of other valuable considerations. While the industry is still considering its position on this matter and there are no current plans to move English matches abroad, we think it is right to ensure that clubs consult with their fans on any changes to match days, including moving the location, rather than imposing a blanket ban.

The right reverend Prelate the Bishop of Sheffield, my noble friends Lady Taylor, Lord Grantchester and Lord Watson and the noble Lord, Lord Taylor of Warwick, raised the importance of more fan involvement in clubs, as did others. My noble friend Lord Mann articulated clearly what fans themselves put into clubs, not just in terms of moral support but in the financial cost to the fans. We have strengthened measures to put fans and communities back at the heart of the game and to protect football heritage.

My noble friend Lord Mann asked what would happen if a club wished to be known by a new name. The Bill sets out a number of protections for club heritage assets, including the club’s name. If, as my noble friend said, the club wishes to be known as Red Bull Leeds or any other new name, the club would be required to get the approval of the FA. The regulator would be able to act as an enforcement backstop for the FA’s approval process. The Bill will look to protect this decision process and protect club heritage.

The noble Lord, Lord Hampton, and my noble friend Lord Watson asked how a fan of a club could be defined. As my noble friend Lord Shamash said, this might be an impossible task. I am sure there are as many views on this across the Chamber as they were noble Lords who spoke this evening—arguably more—and I would encourage colleagues to engage with the regulator on how this aspect of the legislation will be implemented in practice.

It is important, however, that the regulator itself is able to set out guidance on who may count as a fan and where it will vary according to club context. Providing a strict definition in legislation could risk excluding a number of the very fans that make football what it is. This Bill is intended to increase the fans’ say within the game.

The noble Baroness, Lady Grey-Thompson, asked about action on corporate governance and the noble Lord, Lord Taylor of Warwick, asked about equality, diversity and inclusion, with the noble Baroness, Lady Fox, taking a different view—one that, she will not be surprised to hear, the Government disagree with. This Government believe that equality, diversity and inclusion are an important part of good corporate governance and, as the noble Lord, Lord Taylor, said, there is an issue to address.

The requirements on clubs to report on modern slavery was raised by my noble friend Lord Mann. He asked whether action to bring players into scope of modern slavery reporting would require action by the regulator, primary legislation or secondary legislation. The requirements for which organisations should publish an annual statement on modern slavery are set out in existing guidance and legislation. As there is existing legislation on modern slavery, this Bill will not make separate provisions for it, as it is not within scope.

My noble friends Lord Bassam and Lord Mann asked about the scope of the regulator and whether it should or could include lower leagues and grass-roots football. My noble friend Lord Mann asked if extending the scope of the regulator to lower leagues would be via secondary legislation. This would indeed be the case. However, the Government’s view is that the regulator’s scope should be limited to where there are the most significant harms that the market has failed to resolve. Extending the scope further down the pyramid and into the grass roots would risk imposing disproportionate burdens on both the industry and the regulator.

The noble Lord, Lord Addington, the noble Baroness, Lady Jones, and the right reverend Prelate the Bishop of Sheffield raised issues of climate change, the climate emergency and sustainability. This will not be within the scope of the regulator because it will have a tightly defined scope, focusing on the issues causing serious harm to fans and communities and that cannot be solved through market regulation. Environmental issues are therefore not in scope.

On the topic of scope, women’s football was raised by a number of noble Lords, including my noble friends Lady Taylor, Lord Bassam and Lord Watson, and the noble Baroness, Lady Grey-Thompson. It is not currently included as part of the regulator’s remit. Clearly the women’s game has come a long way from when I was not allowed to play football at school, and this is a good thing. Karen Carney led an independent review of women’s football, which was published in July last year. We agree with its recommendation that the women’s game should be given the opportunity to grow and self-regulate, rather than moving immediately to independent statutory regulation. The regulator will be able to engage and share best practice with industry —for example, the Women’s Professional Leagues Ltd, which is responsible for the women’s game. My noble friend Lord Grantchester highlighted this and my noble friend Lord Mann asked if it was the case. If the picture changes, the Secretary of State will be able to conduct a formal review and, if appropriate, extend the scope of the regulator via secondary legislation— I will come to secondary legislation in a moment—to include women’s football.

The noble Lord, Lord Birt, raised player welfare. While this is not an issue that would come under the regulator’s remit, given its tight focus on financial sustainability, we recognise the point about the welfare of players exiting the game. They need to be better protected, particularly at a young age, as a matter of urgency. We are therefore encouraging the football leagues and the FA to work together to develop a consistent programme of support. We will continue to discuss it with them.

A number of noble Lords mentioned delegated powers, including the noble Lords, Lord Moynihan, Lord Goodman of Wycombe and Lord Jackson. They raised issues around the use of delegated powers in the Bill and I look forward to discussing these further in Committee. These powers are constrained through a combination of procedural, affirmative and legislative consultation requirement safeguards.

In determining which matters should be dealt with through delegated legislation, we have aimed to provide detail to give as much clarity to industry as possible at this stage, and to ensure that Parliament can scrutinise the detail of the regime. However, we also recognise the need for the regulator to have the flexibility to determine its own processes, which may need to adapt over time and will be subject to consultation with key stakeholders.

I have a response to the question about Wales, which I will speak to the noble Baroness, Lady Grey-Thompson, about afterwards. I welcome my noble friend Lord Triesman’s contribution and support for the Bill. His recognition that the existing football authorities have failed to tackle the major issues in the game is welcome. That is why we are bringing forward this legislation.

As we bring this debate to a close, I thank all noble Lords again for their contributions. Given the wide-ranging and thorough debate, I know I will not have responded to every point raised by every noble Lord today. I will try to ensure that other points are responded to in writing. In a lot of ways, this has helped us tease out some of the debates we will discuss further in Committee. There are points of broad consensus, even if there are differences in how positively some of the measures are viewed.

This is really important legislation, which the previous Government first introduced. I look forward to working with Peers to ensure that the Government now get the job done. I sincerely hope we do not need the refereeing skills of the noble Lord, Lord Hayward, to work through any of the issues.

A strength of this House is the rigour and scrutiny that noble Lords bring to the issues before them. As we have seen today, that is precisely what noble Lords will bring to this Bill, so that we make sure it is the best possible legislation before it goes to the other place. It is through this legislative process we can ensure that we avoid some of the unintended consequences that a number of noble Lords have warned against today. I am keen to work with all noble Lords across the House as the Bill progresses. I invite noble Lords who wish to talk about any issues related to the Bill to contact me and my officials.

Bill read a second time.

Football Governance Bill [HL]

Wednesday 13th November 2024 Lords Chamber

Commitment and Order of Consideration Motion

Moved by

[Baroness Twycross]

That the Bill be committed to a Committee of the Whole House, and that it be an instruction to the Committee of the Whole House that they consider the Bill in the following order:

Clauses 1 to 3, Schedule 1, Clauses 4 to 5, Schedule 2, Clauses 6 to 9, Schedule 3, Clauses 10 to 18, Schedule 4, Clauses 19 to 20, Schedule 5, Clauses 21 to 24, Schedule 6, Clauses 25 to 67, Schedule 7, Clause 68, Schedule 8, Clauses 69 to 75, Schedule 9, Clauses 76 to 81, Schedule 10, Clauses 82 to 93, Schedule 11, Clauses 94 to 97, Schedule 12, Clauses 98 to 100, Title.

Motion agreed.

House adjourned at 9.26 pm.